1. Civil Petition 56/2024 has been filed by the petitioner Company which is stated to have supplied bunkers for the Vessel "M.V. Global Emerald". It is stated that despite supply and raising of invoice same was not honoured, there existed a maritime claim and to enforce such claim, the petition has been filed.

2. The relief's sought for by the petitioner include:

"a) Directing the respondent Vessel "M.V. Global Emerald" and/or her Master and/or her Owners and/or Managers and/or Operators and all other persons interested in her to pay a sum of Rs.17,84,91,641.64 with future interest of 2% per month from the date of institution of the suit till payment or realisation;

b) To direct that the Vessel "M.V. Global Emerald" along with Hul, Engines etc., be arrested by order of this court.

c) To order that the Vessel along with Hul, Tackle etc., be sold and proceeds from such sale be applied as a security to ensure that award would be satisfied."

3. Along with the petition, the petitioner had filed an application (I.A.-2/2024) under Order XXXIX Rule 1, 2 and 3 r/w Section 5 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (hereinafter referred to as "the Admiralty Act") seeking for arrest of the respondent Vessel.

4. I.A.-3/2024 is also filed under identical provisions seeking for an order detaining/restraining the Ship from sailing out of the port and harbour of the New Mangalore Port or moving out of the waters outside the jurisdiction of this court.

5. I.A.-4/2024 has been filed under identical provisions seeking for appraisal of the Vessel by Marine Surveyors to value the Vessel and put it to sale by public auction free from all existing claims.

6. This court by order dated 01.02.2024 has considered I.A.-2/2024 and had passed an order of arrest of the respondent Vessel reserving liberty to seek for modification/variation of the order.

7. I.A.-7/2024 has been filed seeking for vacation of the order of arrest of the respondent Vessel passed on 01.02.2024 and for a direction to immediately release the respondent Vessel. Objections have been filed to the said application by the petitioner.

8. I.A.-10/2024 has been filed by the respondent seeking for rejection of the petition as being barred by law. Objections to the said application has been filed to the said application by the petitioner.

9. The matter has been heard as regards I.A.-7/2024 and I.A.-10/2024 and reserved for orders.

I WHETHER THE PRESENT PETITION IS BARRED UNDER THE PROVISION OF ORDER XXIII

10. It is the contention of the petitioner that the earlier petition C.P.No.503/2023 which came to be dismissed as withdrawn without expressly reserving liberty and accordingly the present petition is barred by law and consequently the application under Order VII Rule 11 ought to be allowed.

11. The grounds made out to consider application under Order VII Rule 11 do not raise the above contention in the affidavit filed in support of I.A.-10/2024 or in the affidavit filed in support of I.A.-7/2024.

12. Even otherwise, it must be noticed that Civil Petition No.503/2023 though filed with identical reliefs at an earlier point of time, was sought to be withdrawn by a memo dated 04.12.2023 which reads as follows:

MEMO

"The counsel for the Petitioner humbly submits as below:

1. The Respondent Vessel has not docked within the territorial waters of this Hon'ble Court on 04.12.2023 as scheduled.

2. Therefore, the Petitioner seeks to withdraw this Petition, with liberty reserved to file a fresh petition before this Hon'ble Court wherefore this memo, in the interest of justice and equity."

Clearly, what is made out from the memo is: (a) the respondent Vessel has not docked within the territorial waters of the Port on 04.12.2023 as scheduled; (b) petitioner had sought to withdraw with liberty to file fresh petition.

13. The Coordinate Bench had passed an order on the memo as follows:

ORDER

"Learned Counsel for the petitioner files a memo dated 04.12.2023 seeking leave to withdraw the Civil Petition. Memo is placed on record.

The Civil Petition is dismissed as withdrawn."

14. The withdrawal if sought with liberty to re-file as a composite relief, both components viz., withdrawal and liberty to file afresh must be ruled together in the affirmative or application must be dismissed. The question of divisibility of such prayer does not arise. This is based on the premise that a person cannot be placed worse off.

15. Accordingly, where an applicant seeks for withdrawal with liberty either the court must permit withdrawal with liberty to file afresh and allow the application or dismiss the application itself, thereby permitting the applicant to proceed with the main matter.

16. This appears to be the legal position enunciated by the Division Bench of this court in the case of D.P.Sharma v. Bangalore Mahanagara Palike and Others reported in AIR 2001 KAR 401.

17. The Division Bench has approved the observations made in the case of Bhutha v. Baburao reported in ILR 1974 KAR 814 wherein it is observed as follows:

"The Court ought either to reject as a whole an application under Order XXIII Rule 1(2) CPC to withdraw the suit with permission to file fresh suit on the same cause of action or grant it as a whole. It cannot split up the application and grant part of it and reject the remaining."

The same position has been reiterated in the case of Sampangiramaiah v. M. Ashok Kumar and Others (CRP 548/2015)

18. Though the respondent has relied on the judgment of the Apex Court in the case of Sarguja Transport Service v. State Transport Appellate Tribunal, M.P., Gwalior and Others reported in (1987) 1 SCC 5, the facts of the case before the Apex Court appears to be one where the proceedings first instituted have been abandoned unconditionally. No contention was raised in the said case regarding permission having been sought to file afresh and accordingly, court referring to Order XXIII Sub-rule 4 has held that the fresh proceedings are barred.

19. In the present case, the memo clearly sought for liberty to file afresh, liberty has not been expressly refused, the court while passing the order has observed "dismissed as withdrawn" and further expressly taken note of the memo.

20. In such factual context, the order permitting withdrawal must be read in terms of the relief sought for and that would be the only meaningful manner of construing disposal of a request to permit withdrawal with liberty to file afresh.

21. This appears to be the view of the High Court of Calcutta in the case of Sheikh Golam Mahomed and Others v. Sivendra Pada Banerjee reported in MANU/WB/0320/1908, Para 11 reads as follows:

"11. We have already observed that, on the 30th January 1903, an application was made by the Plaintiff to withdraw from his suit, with liberty to institute a fresh suit, on which an order was passed on the same day giving permission to withdraw from the suit. Although nothing was said in that order, as to the Plaintiff's liberty to institute a fresh suit on the same cause of action, that order ought to be read along with the application on which it was passed. In that application we find a distinct prayer to be allowed to withdraw from the suit with liberty to institute a fresh suit on the same cause of action, and the Deputy Collector appears to have taken particular care in noticing that the application for withdrawal was filed before delivery of judgement, that is to say, before the order of dismissal was passed. In these circumstances, the judgment of the lower Appellate Court is correct, and we therefore dismiss this appeal with costs.”

Accordingly, the contention regarding non-maintainability of the present petition requires to be rejected.

22. As observed above, such plea being mixed question of fact and law has not been raised in the affidavit filed in support of I.A.No.10/2024 or I.A.No.7/2024.

II ARREST AS A SECURITY TILL ARBITRATION PROCEEDINGS ARE CONCLUDED

23. It must be noticed that arrest of the Vessel pursuant to the action in Rem is an accepted remedy till conclusion of arbitration proceedings.

24. The legal position is enunciated in the case of SIEM OFFSHORE REDRI AS -vs- ALTUS UBER reported in (2018) SCC Online Bom 2730. The High Court of Bombay has followed the observations of the Full Bench in the case of J.S.Ocean Liner LLC -vs- M.V.Golden Progress and Anr. reported in (2007) 2 Bom C.R. 1. The observations at Para 78 of the judgment of the Full Bench are as follows:

78. We shall, accordingly, articulate our conclusions thus:

"(i) An application under Section 9 of the Arbitration and Conciliation Act, 1996 is not maintainable for the arrest of the vessel for obtaining security of an Award that may be made in arbitration proceedings. The view to the contrary in M.V. Indurva Valley, to that extent is overruled.

(ii) An action in rem (in admiralty jurisdiction) for recovery of the claim and arrest of the vessel where the parties have agreed to submit the dispute to arbitration can be maintained and in such case if by way of an interim measure, the vessel is arrested or the security provided to obtain the release of the vessel, matter shall proceed in accord with Article VII of the International Convention on Arrest of Ships, 1999.

(iii) If the proceedings are brought within the time so ordered by the Court before the arbitral tribunal, any final decision resulting there from shall be recognised and given effect with respect to the arrested ship or to the security provided in order to obtain its release provided that the defendant has been given reasonable notice of such proceedings and a reasonable opportunity to present the case for defence and in accord with the provisions contained in Arbitration and Conciliation Act, 1996.

(iv) With regard to clauses (ii) and (iii), it is, however, clarified that retention of security shall remain a matter of discretion and it shall be for the court to pass appropriate order in that regard after taking into consideration all relevant circumstances."

The High Court of Bombay in SIEM OFFSHORE (SUPRA) has further observed which observations are of relevance in the present context and read as follows:

22. The reasons given by the Full Bench for its conclusions articulated in paragraph 78 are extremely important. These are set out in paragraphs 72, 73 and 77. Of particular importance is what the Full Bench has stated in paragraph 73 which reads as under:

“the application of Article VII of 1999 Arrest Convention in admiralty jurisdiction in our view would be purposive and preferable. The applicability of Arrest Convention, 1999 in the absence of any domestic law or inconsistency with the domestic law would be more in regard to the international general principles and interaction between the arbitration agreement and in rem action. Such purposive interpretation would be in consonance with broadly accepted international procedure by which the security obtained by the arrest of the ship in the action in rem is retained to satisfy the judgment and award of arbitral tribunal …………..”.

22. The view of the Full Bench in paragraph 77 is equally important. It said:

“We are of the view, absent explicit legislation providing that action in rem may be used to obtain and retain security even though the merits of the dispute are to be determined in the arbitration proceedings and that subject matter of the dispute falls with admiralty jurisdiction, some procedure which is not prohibited and that is also not inconsistent with the law be devised which helps in advancing the cause of justice in accord with Article VII of the Arrest Convention, 1999”.

23. Thus what the Full Bench has done is to devise a procedure which is not prohibited and is also not inconsistent with the law and which helps in advancing the cause of justice. This is the touch stone of the judgment in Golden Progress (Supra) and the emphasis of the Full Bench is on a purposive interpretation in consonance with broadly accepted international procedure by which security obtained by the arrest of the ship in an action in rem is retained to satisfy the judgment and the award of arbitral tribunal. Thus what the Full Bench has done is to evolve a procedure which is neither prohibited nor inconsistent with domestic law with a view to advancing the cause of justice. …

25. A single judge of the Calcutta High Court in the case of Alexandras Dryron S.A. v. M.V. Prapti12 was faced with a similar situation where plaintiff had commenced arbitration against the charterer for breach of charter-party in London and subsequently commenced an action in rem in the Calcutta High Court for arrest of a vessel to secure their maritime claim against the charterer under the charter-party. The claim in arbitration and the claim in the suit were similar. In paragraph 9 of the judgment the Ld. Judge relied upon English cases including the case of The Jalamatsya13 and adopted the principle of allowing a Claimant in an arbitration to secure the claim by issuing a writ in rem which was a principle based on common law procedure. This also shows that allowing a Claimant to arrest the vessel for securing a claim which is the subject matter of arbitration is a principle based on common law procedure. Consistent with this common law procedure is the procedure devised by the Full Bench in Golden Progress (Supra) for retention of security in such cases where arbitration is pending or yet to be commenced and an action in rem is filed to obtain security in respect of a maritime claim.

26. The Ld. Judge held that there was no abuse of process of the Court by instituting the admiralty suit to secure a claim made in the pending arbitration already commenced in London.

27. As observed by the Hon'ble Apex Court in M.V. Elizabeth (Supra) “Procedure is but a handmaiden of justice and the cause of justice can never be allowed to be thwarted by any procedural technicalities”.

28. All of the above shows that the retention of security method devised by the Full Bench in Golden Progress (Supra) is only a practical procedural device to do substantial justice to a Claimant who is seeking security in respect of a maritime claim which is required to be arbitrated. ……

40. Following the arrest of a vessel in an action in rem, in the event the disputes are to be arbitrated (whether the arbitration has commenced or is yet to be commenced), once the retention of security method as devised by the Full Bench is adopted, the suit is required to be stayed and the security retained for the benefit of the arbitration and the final award that may be passed. The successful Claimant who obtains an award would then have to satisfy the High Court that the award is enforceable under the provisions of the Arbitration Act, 1996. Once the award is declared enforceable then the security retained by the High Court pursuant to the action in rem will be made available to the Claimant in satisfaction of the judgment of the High Court declaring the award enforceable as a decree of the High Court. This is also made clear by the Full Bench in paragraph 78(iii) where the Court refers to recognition of the final decision of the tribunal in accord with the provisions contained in the Arbitration Act, 1996.

.25. Where there is a maritime claim, which in the present case is stated to be a claim against a Vessel arising out of supply of goods bunker fuel, same would fall within maritime claim as envisaged under Section 4 (1) (l) of the Admiralty Act. In such a case, an action in rem for arrest could be initiated. Though as in the present case the dispute could be adjudicated before the Arbitrator in light of the Arbitration Clause in terms of the observations of the Bombay High Court extracted above, an action for arrest to obtain security till arbitration proceedings are concluded is maintainable. The exposition of law by the Bombay High Court merits acceptance without any reservation.

26. Irrespective of the finding recorded relating to institution of proceedings in the second instance, an action for arrest could be maintainable on consequent occasions as and when the Vessel enters the territorial jurisdiction. The movement of the Vessel in and out of the territorial waters itself would be construed to be successive fresh causes of action to initiate proceedings for arrest in an action in rem.

27. If that were to be so, even if it is held that a second round of litigation is instituted seeking arrest of the vessel when on an earlier occasion proceedings have been withdrawn, it can be stated that the second round of litigation seeking for an order of arrest in light of the maritime claim would be permissible as and when recurring causes of action arise viz., whenever the Vessel enters the territorial waters.

28. Accordingly, though earlier petition was filed in C.P.No.503/2023 which came to be withdrawn as the Vessel had not docked within the territorial waters of the court, it would still be permissible for the petitioner to maintain the present petition on the same maritime claim as sought to be put forward in C.P.No.503/2023 when the Vessel re-enters the territorial water giving raise to a fresh cause of action to seek for arrest. The right to seek for arrest as a security pending adjudication in arbitration proceedings would continue to be invoked every time the Vessel enters the territorial waters and would be a recurring cause of action.

III APPLICATION UNDER ORDER VII RULE 11 OF CPC

29. It must be noticed at the outset that the affidavit filed in support of the application under Order VII Rule 11 (d) merely refers to the petition being barred by law.

30. The affidavit only states at para 3 that the Civil Petition has been filed with malafide intention for extracting money by making false and frivolous claims.

31. Though there is a reference in the affidavit filed in support of the application that reference may be also made to the affidavit filed in support of the application under Order XXXIX Rule 4 i.e., I.A.-7/2024, a close scrutiny of the said affidavit also does not reveal as to under what law the petition is barred.

32. An application filed seeking rejection of a petition as being barred by law must state the law which bars the petition. In the absence of any such ground being taken in the affidavit filed in support of I.A.-10/2024 or the affidavit filed in support of I.A.-7/2024, application is liable to be rejected.

33. Though the affidavit filed in support of I.A.7/2024 refers to many factual assertions of absence of privity between the petitioner and the respondent, it must be noticed that all such assertions are factual in nature and cannot be decided while considering an application under Order VII Rule 11 of CPC.

34. It is also settled position that an application under Order VII Rule 11 must be decided on the strength of the application itself without even adverting to the defence raised. Even on this score the respondent has not made out any ground for consideration of the application under Order VII Rule 11.

IV APPLICATION UNDER ORDER XXXIX RULE 4 OF CPC

35. Insofar as application under Order XXXIX Rule 4 is concerned, the main ground made out in the affidavit is that on 30.06.2023, a contract for sale of Very Low Sulphur Fuel Oil (VLSFO) was entered into between Ahmed-Al-Sharif on behalf of Ashraf-Al-Sharif trading Refined Oil Products LLC, Dubai (Annexure-R3) and the respondent and payments were made in terms of vouchers at Annexure-R4 and copy of Bill of Lading at Annexure-R5.

36. It is contended that there is no privity between the owner of the Ship and the petitioner and that there was no privity between the two.

37. At the outset, it must be noticed that the contention raised is factual and a matter for trial. However, even on a prima-facie view the petitioner has taken a specific view that there was a concluded contract between the respondent and the petitioner as is evidenced from Bunker Confirmation (AnnexureG) and Bunker Delivery Note (Annexure-J) which bears the seal of the respondent Vessel and signature of the Master as well as credentials of the supplier including his seal.

38. As compared to such documents, though the respondent has relied on Annexures-R3 to R6 to contend that the Ship had entered into separate contract, however, petitioner has produced document at Annexure-W issued by "Ashraf-Al-Shariff" dated 03.03.2024 which reads as follows:

"TO WHOM IT MAY CONCERN

We the undersigned, Ashraf Al Sharif trading Refined Oil Products LLC, a company duly established in the UAE with license No.561278 since 2004 (Trading license of our company is annexed to this letter) and duly represented by its manager, Mr. Ashraf Khalil Ibrahim Alsharif, hereby confirm that the alleged contracts submitted by Global Emerald Shipping Line Inc to the High Court of Karnataka as Annexures R-3 and R-6, being:

- a contract for the sale of VLSFO - Qty 3,000 MT (+/-5%) concluded on 30/06/2023 between our company and Global Emerald Shipping Lines INC; and

- a contract of sale of VLSFO concluded on 5/7/2023 between our company and Synergy petrochem FZE; and attached to this letter are forged documents and are not signed by our company.

We did not deal with Global Emerald Shipping Line Inc, and / or Synergy Petrochem FZE and we did not have any signed contractual relationships with these companies in respect of the above alleged / invalid / unstamped contracts, which also were not issued on our letterhead / official documents.

In addition, we confirm that our trading activity for which we are licensed in Off shore Refined Oil Product Trading and not chartering as Global Emerald Shipping Line Inc is alleging.

Finally, we would like to inform you that we are consulting our lawyers in the UAE to initiate legal proceedings against Global Emerald Shipping Line Inc and / or Synergy Petrochem FZE and others in the UAE for forgery and / or other criminal offenses in this regard.

Yours sincerely

For and behalf of Ashraf Al Sharif Trading Refined Oil Products LLC

Sd/-

Ashraf Khalil Ibrahim Alsharif"

Clearly and unequivocally the author of Annexure-R3 to R6 has denied execution of Annexure-R3 to R6 specifically taking a stand that the said letters are "forged documents and not signed by our Company."

39. If that were to be so, prima-facie the defence as sought to be put up in Order XXXIX Rule 4 is not sustainable and on the other hand the claim of the petitioner regarding conclusion of the contract by reliance on Annexure-G, J and K is prima-facie evidence of supply and requires acceptance. The petitioner has made out a reasonably arguable best case that requires to go for trial.

40. Once the supply of Bunkers as stated above appears to be a prima-facie acceptable version, the defence that there is no privity, that there is no evidence to establish that the Agent-was a duly constituted Agent of the petitioner are all matters to be established during trial as observed in the case of Socar Turkey Petrol Enerji Dagitim v. MV Amoy Fortune and her Owners (2018 SCC Online Bom 1999). For the present, arguable case is made out for consideration.

41. Accordingly, the final adjudication is one during trial and the applications (I.A.No.7/2024 and I.A.No.10/2024) filed by the respondents are rejected.

42. As the present action is one in rem, the maintenance of the Vessel and the costs to the port authority is to be borne by the Respondent till conclusion of proceedings.

List the matter in due course.