INDIA Law and Practice Contributed by: Gautam Bhatikar, Deeksha Dev Singh and Isha Patil, Phoenix Legal
• a claim on the vessel where there is a mari - time lien; • registered mortgages and charges of the same nature on the vessel; and • all other claims. The following principles shall apply in determin - ing the priority of claims inter se: • if there is more than one claim in any single category of priority, they shall rank equally; and • claims for various salvages shall rank in inverse order of time when the claims thereto accrue. 4.11 Insolvency Laws Applied by Maritime Courts In India, the Insolvency Law is analogous to Chapter 11 of the United States Bankruptcy Code. Under the Companies Act, 1956, the High Court can issue a winding-up order against a ship-owner. The National Company Law Tribunal can also initiate bankruptcy proceedings against a ship-owner, and maritime courts can order the arrest and judicial sale of a vessel owned by that owner. A person with a maritime claim (which includes the higher subset of maritime lien) could proceed against the vessel independent of the owner. Unless the owner entered an appearance and deposited security, the vessel could be sold and the proceeds appropriated amongst different categories of claimants, as per a predetermined waterfall. India codified admiralty law for the first time through the Admiralty Act, largely following extant international conventions and the position in common law. Significantly, this Act continued the treatment of vessels as independent juristic
persons, allowed those vessels to be proceeded against independently, and prescribed a water - fall for the treatment of claimants vis-à-vis the sale proceeds. 4.12 Damages in the Event of Wrongful Arrest of a Vessel The test for wrongful arrest is malafide intention and bad faith by the arresting party. Upon an application by the owners, the Admiralty Court may declare the arrest of the vessel wrongful. The ship-owner will have to prove the losses suffered on account of wrongful arrest, and the court at its own discretion may grant damages in favour of the ship-owner. If it appears that there was not reasonable and probable cause for the provisional detention of a ship, by reason of the condition of the ship or the act or default of the owner or the Master, the central government shall be liable to pay the costs of and incidental to the detention and survey of the ship to the owner of the ship, as well as compensation for any loss or damage sustained by said owner by reason of the detention or survey. 5. Passenger Claims 5.1 Laws and Conventions Applicable to the Resolution of Passenger Claims The following international conventions apply to the resolution of maritime passenger claims in India. The Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea 1974, and the 1990 Protocol This Convention lays down the liability of ship- owners for the death of or personal injury to a passenger, and also for the loss of or damage to passengers’ luggage if the incident causing
217 CHAMBERS.COM
Powered by FlippingBook