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Initializing Secure Chambers
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Initializing Secure Chambers
Petitioner: Messrs RESOE INTERNATIONAL TRADING (PRIVATE) LIMITED through Director VS Respondent: Messrs RESOE INTERNATIONAL TRADING (PRIVATE) LIMITED through Director
Court Name: Sindh High Court Judge(s): Muhammad Junaid Ghaffar Title:Messrs RESOE INTERNATIONAL TRADING (PRIVATE) LIMITED through Director
vs Messrs RESOE INTERNATIONAL TRADING (PRIVATE) LIMITED through Director Case No.: Adm. Suit No.11 of 2018 Date of Judgment:2018-11-13 Reported As: PLD 2019 Sindh 344 Result: Order accordingly Judgment ORDER MUHAMMAD JUNAID GHAFF AR, J.---This is an Admiralty jurisdiction Suit under the Admiralty Jurisdiction of High Courts Ordinance, 1980 ("1980 Ordinance") and through C.M.A. No.96/2018, the Plaintif f seeks arrest of the Vessel i.e. Defendant No.4 (M..T Ocean Pirncess-1) and through C.M.A. No. 98/2018, the Defendant No.4 seeks recalling of Order dated 28.06.2018, whereby , ad-interim orders for arrest of Vessel was passed, and so also directions to the Plaintif fs to get the cargo on board discharged and to enable the V essel to sail. 2. Briefly the facts, as stated are, that Plaintif f in order to procure Bitumen Grade 60/70 entered into negotiations with Defendant No.1 and for that a Sale Purchase Agreement was executed on 12.06.2018. The sale was agreed on US $ 1,290,000/ for 3000 Metric Tons, which was paid by the Plaintif f to Defen dant No. 1 vide Invoice Voucher No.2-18-15 dated 12.06.2018 in Dubai, whereas, in Clause 1.3 of the Agreement it was agreed that the Seller shall provide Bitumen having the specification and technical standards as mentioned therein. Thereafter cargo was loaded vide Bill of Lading dated 06.06.2018 from Jabel Ali U.A.E for its discharge at Port Qasirn, Karachi. It is further stated that on 25.06.2018, the Surveyor namely QUA YSIDE Services Enterprises addressed a Letter to the Master of the Vessel forwarding its copy to the Shipping Agent stating therein that at the time of discharge unusual behavior of the cargo was noticed as when temperature reaches 130 degrees centigrade, it overflows from the Tank due to abnormal formation of bubbles and water presence was suspecte d, whereafter they had shown reluctance in continuation with discharge of cargo due to safety reasons. A similar letter was issued by Defendant No.6 and the Plaintif f then filed this Suit on 27.06.2018 along with application at Serial No. 1 claiming damages to the extent of US$ 190 Million and a Judgment and Decree for the entire amount of Invoice i.e. US$ 1,290,000/-. On 28,06.2018 by way of an ad-interim order , the Vessel in question was arrested; however , for reasons not known, no
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simultaneous order for its release agains t security was passed. On receiving notice, counter affidavit and written statements have been filed by some of the defendants, whereas, Defendant No.4 has also filed Application at Serial No.2. 3. Learned Counsel for the Plaintif f has contended that the cargo in question was purchased from Defendant No.1, who had purchased the same from Defendant No.2 and as per the agreement in question, the cargo was supposed to meet the technical specifications as agreed upon and admittedly it is not up to such specifications, therefore, Plaintif f has filed instant claim; that as per the terms of the Bill of Lading the Grade of Bitumen was supposed to be 60/70; that initially when cargo was discharged, it was of the agreed specifications, and therefore, clearance was sought and approved without any objectio ns; that the report of SGS clearly reflects defect in the specification of the cargo as water content is available; whereas, as per -the Report of the Surveyor at the time of loading it had no presence of water; that Plaintif f has never objected to the release of the Vessel upon furnishing security of the claim of the Plaintif f; that under Section 3(2)(g) & (h) of the 1980 Ordinance, the claim is maintainable; whereas, the issue as to who is to be successful is a matter of evidence and cannot be decided at this stage of the proceedings; however , a case to the effect that the cargo is damaged has been made out; that the terms and conditions of the Contract of Affreightment have been violated; that Defendants Nos.1 and 2 have colluded and defrauded the Plaintif f by delivering subs tandard product; that notwithstanding this claim, the Defendant No.4 by way of negligence has allowed water contamination as this was a special cargo and utmost care was required to be maintained; that presently out of the 3000 Tons, the Cargo available is 2458.78 M. Tons and the Vessel in question may be released after furnishing security of US $ 1,057,275/-; whereas, Defen dant No.4 ha& already offered security of US$ 6000,000/-approximately , and therefore, no case is made out in opposing this application; that at least two reports are on record, one by H.E.J. Research Institute of Chemistry , Karachi dated 15.9.2018 and other by PERAC Research and Development Foundation dated 27.6.2018 and both of them confirm presence of water; whereas, the original report at Port of Origin had no such presence and so also the agreement also provided that no water should be there; that these Reports warrant allowing the application in question; that Rule 748 of the Sindh Chief Court Rules (0.S) ("SCCR") empowers the Court to exercise its discretion in arrest and release of Vessel, therefore, Defendant No.4 has no justifiable cause to oppose; that presently the only concern of the Plaintif f is that proper security be furnished and Vessel may be allowed to be released as apparently the remaining Product is nothing but useless for the Plaintif f; that a claim in Rem and Personam is simultaneously maintainable under Section 3(2) (g) & (h) of the 1980 Ordinance, read with Section 4(4) thereof, and therefore, the objection of the Defendants is not maintainable; that it is the discretion of the Court under the Admiralty jurisdiction read with Original Side Rules to Order arrest of a Vessel and releasing it upon appropriate security; that C.M.A. No.98/2018 filed by Defendant No.4 regarding the claim and charges incurred by them is without any supporting material and in absence of a proper counter claim, no right accrues to them; that it is for Defendant No.4 to establish that the Vessel was seaworthy or not to carry a special cargo like Bitumen Grade 60/70; that admittedly cargo has been contaminated with water by the Vessel, therefore, claim under the Admiralty Jurisdiction is competent. He has also referred to Carver's Carriage By Sea and Corpus Juris Secundum in relation to effect of unseaworthiness and its definition, The Hague Rules 1968, (Article-III), and Halsbury's Laws of England (Second Edition) for liability of the Ship when it is Chartered, British Shipping Laws, Maritime Liens, Vol.14, for a claim against the Ship which is carrying the cargo, Payne's Carriage of Goods By Sea, Seventh Edition, in respect of the authority of the Master , Maritime Law by Christopher Hill in support of his argument that it is not necessar y to prove the entire claim while seeking arrest of a Vessel, Bill of Lading in International Law and Practice by T.K. Thommen to argue that Bill of Lading is a receipt and acknowledgment of cargo. In support he has further , relied upon the cases reported as Associated Agencies Ltd. and another v. Industrija Masina/T ractora and anothe r (PLD 1983 Karachi 459) and Metal Construction of Greece S.A. (Mekta S.A.). Athens through Attorney v. Owners of the Vessel m. v. Lady Rea (2013 CLD 1829 ). 4. On the other hand, learned Counsel for Defendant No.4 has contended that the case as drafted and pleaded is not a case which could be entertained under the Admiralty Jurisdiction; but is only a claim of damages and recovery under the ordinary civil jurisdiction; that in the plaint, nothing has been stated about the water content at
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the original Port of loading, nor it is so stated in the Agreement in question; that internationally and as per Product Technical Data Sheet of Shell Bitumen which is an authentic source, there can be water content in Bitumen 60/70 to the extent of a maximum of 0.20%; whereas, in the Reports and tests conduct ed at least twice, the content of water has been found less than this specification, and therefore no case is made out; that Bitumen is stored and transported as well as discharged at a temperature of more than 100 degree centigrade, and therefore, scientifically there is no question, of presence of any water content as at this temperature it is evaporated being more than its boiling point; that the Plaintif f has only arrayed the Master of the Vessel and in absence of the Carrier or Charter Party , the Suit under the Admiralty Jurisdiction is not competent; that Suit is in Rem and Personem, therefore, Vessel cannot be arrested; that the claim as setup is only against the Vessel and being in rem, no relief can be sought against the Carrier or Charter Party; that the Suit is otherwise incompetent in terms of Order XXIX C.P.C. as this has been filed without a Board Resolution; that it is only Clause (h) of the 1980 Ordinance, which could be attracted, but in the given facts, the same also does not apply; that no claim is maintainable on the basis of Bill of Lading, which is to be governed under the Bill of Lading Act, 1856; that Defendant No.4 has no concern with the Agreement between Plaintif f and Defendant No.1; whereas, after accepting part cargo from the same Vessel, it appears to be an admitted position that as a whole the cargo was not contaminated; that the objections of the Surveyor was on the basis of inspection on the Trucks and Lorries in which the cargo was being discharged; that it is unique case, wherein, under the Bill of Lading, the Consignee and the Consignor are same parties; that if there is any claim, it is between and against both of them; that the claim is presumptive in nature and Defendant No.4 has been unnecessarily dragged in this case, as the said claim is not competent under the Admiralty Jurisdiction of this Court; that it is only the Master , who has been arrayed as a Defendant and if the Master is dismissed from service, no claim remain s insofar as the carrier and owner of the Vessel is concerned; that the interim order has been obtained through misrepresentation; whereas, the Vessel is detained since June 2018 and has incurred a very heavy cost at the outer Anchorage for which the Plaintif f is liable and be directed to deposit the amount as security being claimed by Defendant No.4; that the test report relied upon by the Plaintif f originating from loading Port is silent about the water content, and therefore, the presumption is that presence of water content is immaterial; that even otherwise the water content is within the permissible limits; that as per Petroleum Rules, a Vessel carrying any petroleum product before entering the Port premises is supposed to carry out test and only thereafter Customs Authority can only allow berthing and discharge of the same; whereas, in this case though Defendant No.4 is not in possession of any such report, but it must be with the Plaintif f or Defendant No.1 find it has been concealed from the Court, that even otherwise the total cargo on the vessel was approximately 3,992 M. Tons and according to defendant No.4 more than 1500 Tons has been discharged and accepted and the Bill of Lading in dispute is of 3000 M.Tons; hence the security , if any, without prejudice , can only be demanded for the remaining balance out of these 3000 Tons; that Plaintif f ought to have placed on record test report from the cargo already discharged and accepted, so as to establish that there was no water content in the said cargo, and only then their claim, without prejudice, could have been entertained; that the report of Defendant No.6 has been relied upon to mislead the Court as the said Company was only engaged to measure and ascertain the quantity , and not the quality and specifications, and in support thereof he has referred to their written statement; that as per Nazir's Reports dated 08.08.2018 and 12.09.2018 all along the Plaintif f has shown reluctance in drawing samples for tests and has raised objections, which delayed the matter; that Plaintif f has come with unclean hands, hence not entitled for any relief as prayed for; that it is not a matter which can be decided only through evidence but so also on a tentative assessment of the record available at this stage, including the pleadings and the test reports on record; that through C.M.A. No.106/2018 till its filing, the Defendant 4 has claimed an amou nt of US$ 1.42 Million and as of today , it has exceeded to US $ 2.0 Million and Plaintif f may be directed to provide such security while dismissing their injunction application; that even otherwise, the Plaintif f Company is a non-resident Company having foreign shareholding and they do not have a permanent office in Pakistan, therefore, even otherwise they are liable to furnish security before the Court; that the import otherwise is not legal inasmuch as the entire payment of the import Invoice has been paid in Dubai, and therefore, it is in violation of Chapte r 13.6 of the Foreign Exchange Manual, hence no bona fide case is made out. He has also referred to various test methods of Bitumen by Civil
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Blog.org and nptcl.ac.in to support of his argument that in all test methods, water content to the extent of 0.20% is available as well as permissible. In support he has further relied upon the cases of Dabinovic (Monaco) S.A.M Authorized Agent of Nfian Naviera-Y Financiera LTDA, San Jose (Costa Rica) v. In. v Pluton 1, Yugoslavian Flag through its Captain and 2 others (1993 MLD 1587 ), Jaffer Brothers (Pvt.) Limited V. M.V. Eurobulker II Presently Berthed at Moorings in Karachi Port to be served through Master (2002 CLD 926), Messrs. Sun Line Agencies Ltd. v. Vessel M. V. "PSILORITIS" and 2 others 1984 CLC 1553 and Alan Ernest Sykes v. James Walker Taylor -Rose [20041 EWCA Civil 299. 5. Learned Counsel for Defendant No.2 has contended that insofar as the present applications are concerned, there is no relief sought as such against this Defendant, and therefore, presently no counter affidavit has been filed; whereas, even otherwise in the entire pleadings there is no case against this Defendant and for that an appropriate application is being filed for deletion of the name; that the agreement in question is silent about water content and its percentage, therefore, presumption would arise that its presence to the permissible extent was agreed upon, hence no case is made out; that the Shipper and the Buyer are same parties, therefore, the relief, if any is to be granted and settled by themselves and not by other Defendants; that burden to establish a prima facie case rests upon the Plaintif f; whereas, on the basis of material placed on record no such case is made out within the parameters of Order XXXIX, Rules 1 and 2 C.P.C.; that the test reports on record clearly provides that water content is even otherwise within the permissible limit;, hence no justification arises for refusing and/or accepting the cargo; that at 100 degrees centigrade, the water boils and evaporates and it is not possible that at the time of discharge which is done at more than 130 degree centigrade, water is present; that almost 1533 M. Tons of cargo has already been offloaded from the said Vessel and accepted as well, whereas, it is liquid cargo in bulk, hence the question and possibility of water content does not arise, and if so, then it must also have been present in the cargo already received, therefore, the Plaintif f is not entitled for any relief. 6. Learned Counsel for Defendant No.6 has contended that initially they were not made a party but the Court on 28.06.2018 joined them as a Defendant; whereas, their primary responsibility was only for the purposes of quantity and not quality , therefore, they are not responsible for any alleged loss of the Plaintif fs. 7. While exercising the right of rebuttal, learned Counsel for the Plaintif f has contended that this is a case of a joint cause i.e. in rem as well as personam and in view of the Judgment of the Hon'ble Supreme Court reported as Yukong Ltd, South Korean Company , Seoul, South Korea v. M.T Eastern Navigator and 2 others (PLD 2001 SC 57), this issue stands resolved; that mere bad drafting or non-joining or proper joining o' a party does not disentitles the Plaintif f from the relief being claimed as it is not fatal to the entire case and would not defeat the cause; that the objection regarding Board Resolution is also immaterial at the injunctive stage and can only be taken up at the evidence and at the trial for which reliance can be placed on the cases of Pakistan National Shipping Corporation v. AMLV. LE CONG through Agents and 2 others (2009 CLD 234) and N.V. Nutricia v. Messrs Nutricia Foods International (Private) Limited through Chief Executive Director/Secretary and another (2000 CLC 866); that a case of Rem and Personam can go together in view of the Judgment reported as C. V. "Lemon Bay" v. Sadniddin and others (2012 SCAM 1267); that no Charter Party Agreement has been brought on record; whereas, the Carrier s defending this case on behalf of the Vessel and it is only through 'he Master that the Vessel has been arrayed, being an employee / servant. of the carrier , hence the argument regarding non-joining of owner or carrier is meaningless; that damage has been done to the cargo by the vessel, therefore, it is a fit case under the Admiralty jurisdiction; that sampling/testing has been done and water content is present; whereas, in the original agreement there was no mention of any water conte nt, hence the cargo has been contaminated; that claim against Vessel is competently maintainable under 1980 Ordinance read with case reported as Trading Corporation of Pakistan (Pvt.) Ltd. v . M. V . "AVIONA" and 2 others (2014 CLD 1327 ). 8. 1 have heard all the learned Counsel and perused the record placed before the Court. At the very outset and before proceeding any further , I may record that the plaint as well as pleading of facts in this matter has been done very poorly , and is of no help to this Court while hearing and deciding the listed applications. It appears to the Court that all parties before k have not brought the entire facts, for reasons best known to them. And this observation of the Court is based on the fact that certain very vital and crucial links are apparently missing in the pleadings of all
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the parties. The disclosure of facts on record does not corroborate with ground realities surfaced during the proceedings and hearings before the Court. Nonetheless, the decision on the listed application(s) is being rendered on the basis of whatever is said in the pleadings as this is what the law requires. The claim as setup in this matter is on two accounts. The plaintif f has filed its claim against its supplier(s), as well as the Vessel i.e. Defendant No.4. It is the case of the plaintif f that a Sale and Purchase Agreement was entered into with Defendant No.1 for 3000 Tons of Bitumen 60/70 grade and more specifically as mentioned in clause 1.3 of the said agreement dated 12.6.2018. At the same time it is a matter of admitted position that the Vessel in question is or was carrying 3992 M.T. of the said product. This fact has not been disclosed in the entire plaint, nor does the same appears to be the very part of the agreement in question. While arguing the case and on a Court query an effort has been made through a Statement that for some 900 M.T. there was a separate Bill of Lading. How this Bill of Lading came into existence, and why it was not part of the pleadings is not clear . At the same time the stance of Defendant No.4 on this aspect is also vague and silent. It is to be noted that the cargo on Vessel is in bulk and is supposed to be stored commonly in the Tanks, and there isn't a possibility that cargo of two Bills of Lading is stored separately in such a situation. This has been noted for the reason that in case if the Court comes to the conclusion that a case for arrest is made out, then appropriate security is to be asked for, and that can only be ascertained on the basis of the balance cargo for which the Vessel is liable. Another aspect of the matter is also alarming as well as surprising in that the Agreement is dated 12.6.2018; but the Bill of Lading is of 6.6.2018. This is not enough, as again the shipper and consignee are same, wherea s, the case as setup in the plaint is also against Defendants Nos.1 and 2. An attempt has been made to argue that the name of consignor and consignee is same due to some arrangement at load port. Why this was done and how it could be, is a matter of surprise as well as mystery . The agreement provides that the specification of the cargo should be as per clause 1.3, and apparently , it has no term(s) regarding water content or its presence. The second document which has been relied upon on behalf of the plaintif f is a report of GEO-Chem, Dubai, UAE, dated 4.6.2018, which is a Certificate of Quality , and states that it has been issued at Tehran, Iran, (But the document itself shows its address as of UAE), but nonetheless, it again does not speaks of any water content. This document further reflects that it was issued to the Consignee which is Defendant No.2, perhaps when cargo was being sold or shipped to Defendant No.2, and may be on board vessel it has been sold to the Plaintif f who has been named as the Notify Party . These are very confusing as well as incomplete facts which were required to be so stated before proceeding further as to the merits of the listed applications. 9. However , before proceeding further , there are two objections so raised on behalf of Defendant No.4, which are to be addressed first. The first of these objections is regarding maintainability of the Suit being non-compliant as to Order XXIX of Civil Procedure Code. The learned Counsel for Defendant No.4 has argued that Suit has been filed without a proper Board Resolution and is therefore incompetent. However , at the very outset, I may observe that this is not an issue which ought to be decided at this stage of the proceedings. It is only an application for arrest of Vessel filed under Rule 731 of SCCR, which is being considered by the Court. Whereas it is only an objection without any supporting application to that effect. Nonetheless, even otherwise on examination of the record, it appears that an Authority Letter has been placed before the Court on behalf of Director of the Company , who has also referred to the agreement in question and seeking legal remedy thereof; hence it would not be appropriate to non-suit the Plaintif f at this stage of the proceedings, which can more appropriately be taken up at the trial of the Suit and evidence, and for this reliance may be placed on the case of Pakistan National Shipping Corporation and N. V. Nutricia v. Messrs Nutricia Foods International (Private) Limited (supra). Moreover , the Memorandum and Articles of Association of the Company have been placed on record which reflects that Plaintif f is a two (2) Directors Company , one authorizing the other; hence, the intentness of this objection is also annihilated to a very large extent. The other objection, which has been raised on behalf of Defendant No.4 is to the effect that the claim as setup on behalf of the Plaintif f does not fall within the ambit of Sections 3(2) (g) and (h) and Section 4(4) of the 1980 Ordinance; hence liable to be rejected. According to the learned Counsel this provision does not apply inasmuch as firstly , it is only the Master of the Vessel in question, who has been arrayed as a Defendant and the Ship owner or the Charter Party , is not before the Court. Secondly , according to him the dispute is between the Plaintif f and
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Defendants Nos.1 and 2 regarding quali ty of the goods in question, and therefore, even otherwise it is not a fit case, wherein, Admiralty Jurisdiction of this Court could be invoked for arresting the Vessel i.e. Defendant No.4. However , it may be appreciated that by now it is settled law that a claim under the Admiralty Jurisdiction, if it falls within the ambit of Section 3(2) (g) & (h) of 1980 Ordinance read with Section 4(4) thereof, (this will he dealt with in detail hereinafier) can be entertained by the Court even in absence of the Ship-owner or the Charter Party in question. It is a matter of record that Defendant No.4 (Master of the Vessel to be precise) has come before the Court to defend the lis, and he has done as an employee of the Ship-owner or Charter Party; hence the stance so taken as to the non-impleadment of the Ship-owner and Charter Party is not convincing but is meaningless. It has rather died and gone with the defence so taken in this Suit. Reliance in this regar d may be placed on the case of Yukong Limited, South Korean Company (Supra), wherein the Hon'ble…
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