Introduction
The Karnataka High Court, in Shipoil Limited versus M. T. Standorf has held that claims against a ship must be pursued in the High Court, under the Admiralty Act of 2017 and not before the Commercial Court. In reaching its decision, the court examined the scope of the Admiralty Act, 2017, specifically its application to maritime claims against vessels. The court recognized that the Act grants the High Court broad jurisdiction, empowering it to adjudicate financial settlements, authorize vessel arrests, and order vessel sales, while generally operating within the procedural framework of the Code of Civil Procedure of 1908.
Factual matrix
The respondent initiated Civil Petition No. 23/2020 under Sections 3 and 5 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. This petition sought a decree against the vessel (M.T. STANDORF) for recovery of EUR 506,512.66 (equivalent to INR 40,521,732.80). This sum represented the outstanding principal amount of EUR 457,149.36, accrued interest, and other related reliefs. Additionally, the respondent sought for the sale vessel by public auction.
Subsequently, an application was filed by the petitioner (respondent in Civil Petition No. 23/2020) praying for the return of the petition. The said application asserted that the matter falls within the definition of a “Commercial Dispute” as defined by the Commercial Courts Act, 2015. Thus , the case should be adjudicated by the designated commercial division of the court.
Question before the court
Does the subject matter of the petition constitute a ‘Commercial Dispute’ under the Commercial Courts Act, 2015, thereby requiring the return, or does it fall within the ambit of the Admiralty Act, 2017,?
Arguments before the court
The petitioner/respondent’s counsel argued strongly that the Commercial Courts Act, 2015 grants the commercial division of the court exclusive jurisdiction over Civil Petition No. 23/2020. To substantiate the argument, the petitioner/respondent emphasized upon Section 2 (1)(c)(iii) of the Commercial Courts Act, 2015. The petitioner further argued that the definition of ‘Commercial Dispute’ in Section 2(1)(c)(iii) of the Commercial Courts Act, 2015, unequivocally includes disputes related to admiralty and maritime law.
Conversely, the respondent/petitioner argued that the dispute falls squarely within the scope of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. The respondent in support of his argument contended that the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, is a special enactment which deals with claims against a ship and therefore, the admiralty provisions should govern the Civil Petition No. 23/2020.
Judgement and rationale
The court held that the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, rightfully applies and governs the maritime claim in question, and therefore, the petition should proceed under the provisions of Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, and not under the provisions of Commercial Courts Act, 2015. The decision of the court was heavily derived from the interpretation of Section 4 of Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
The court further held that the present matter requires the application of the principle of “lex specialis derogat legi generali”. which dictates that a specific law takes precedence over a general law. The court further clarified that the Admiralty Act, 2017, is a specific statute designed to consolidate and regulate admiralty jurisdiction, maritime claims, vessel arrests, and related issues. It specifically addresses legal proceedings concerning vessels and maritime claims, including procedures for vessel arrest, detention, and sale, which are absent in the Commercial Courts Act. The court held that the Commercial Courts Act, 2015, on the other hand, is a general statute aimed at establishing commercial courts and appellate courts for a broad spectrum of commercial disputes.
The court also clarified that the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 came into effect after the Commercial Courts Act, 2015, which further reinforces the position of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 as the specific law in this instance.
Conclusion
The court applied the “lex specialis derogat legi generali” principle, to establish that the Admiralty Act, as a specific enactment focused on maritime matters. Thus, takes precedence over the general commercial legislation. This ruling not only resolves the immediate dispute but also sets a crucial precedent for future cases involving similar conflicts, ensuring that maritime claims are consistently addressed within the specialized framework of the Admiralty Act. However, the evolving complexity of maritime trade raises questions about future jurisdictional overlaps and the continued efficacy of this principle in diverse commercial disputes.
