MARITIME LAW: A SHORT GUIDE

Editorial by: Mr. Vivek Sharma (ILS , Pune) and Ms. Achintaya Soni (UILS, PU, Chandigarh)

“Mountain guarded and sea-girt as she is on the north and the south, India as if she had been meant by nature to remain aloof from the rest of the world and to develop her civilization in isolation, untouched by the current that stir humanity abroad.”[1]

One wonders as to what extent the phrase, ‘Her geographical features and history is a mismatch’ is relevant, as, instead Republic of India has had an intriguing and a substantial experience in ship-trading, that the very activity started to act as a backbone of the Indian economy. India has cohered with various Asian and Middle East countries when it came to maritime trade and had a distinguished heritage in various trading and non-trading activities within and beyond its borders. Ship trading is not a new form of trading to India; in fact it is as old as the term “ship”. Approximately 95% of country’s trade by volume (70% in terms of value) is carried through the sea. Geographical factors of vast coastline of 7500 km, and 18 major ports and 187 minor ports bolster the trading and trans-shipment in India.[2] Whether it is in terms of Cruise Tourism, Inland Tourism, singing MOU’s with countries with an effective and harmonized trading (e.g. the Recent MOU with Portugal), Infrastructure development on Ports (e.g. the Multiple Construction on JNPT, Maharashtra), or Signing Sea Pollution Control Conventions, etc., the Centre and States in India have accumulatively expedited substantive amount of time and wealth in making it an ideal place for shipment. Thus, the Maritime Industry has always had a plethora of rules and regulations governing it. For a considerable number of years following independence, the Indian Maritime Industry continued to be governed by the age-old British Maritime Laws, even though the same in the U.K. had progressed rapidly. However, with the intervention of the Supreme Court in the year 1993, the Maritime Laws in India gathered an altogether different manifestation, also defining the required jurisdictions of the courts. But still there exists a lot of disorientation in tracing one end of the tangled thread of applicable maritime law in India. Furthermore, the terminologies act as a ‘Gordian knot’ for many, by creating an undesired wall between our interests and understanding. Therefore, the article aims at providing a basic set of information to help understand the area of Maritime Law.


Defining Maritime Law

Maritime Law; Admiralty Law; Shipping Law, have a similar meaning. In simple words, Maritime Law means “a set of rules and regulations which govern the matters relating to sea and ships.”[3]


Professor Grant Gilmore and Charles L. Black, in their ‘Law of Admiralty’, define maritime or Admiralty Law as, “A corpus of rules, concepts and legal practices governing certain centrally important concerns of the business of carrying goods and passengers by water.”[4]


Black’s Law dictionary defines maritime Law as, “the body of law governing marine commerce and navigation, the carriage at sea of persons and property, and marine affairs in general; the rules governing contract, tort and workers’ compensation claims or relating to commerce on or over water.”[5]


The definitions above cover wide range of maritime related practices, but now with the advancement of Law, the Maritime Law is comprehensive, and it is that branch of jurisprudence that encompasses all the matters relating to sea and ships.


Tracing the History of Maritime Law

The Admiralty Law was developed in England several centuries ago. It is pertinent to note that the branch of law had a very fascinating history in the medieval period. There used to be ‘Admirals’ for different portions of the sea around the British Islands. These Admirals possessed disciplinary powers and they determined the disputes with regard to prize ships. From among these Admirals, there emerged a ‘Lord High Admiral’, who became the judge of English Court of Admiralty. This court had both Civil and Criminal jurisdiction in Maritime causes. These courts often clashed with Common Law Courts whereby, it was noticed that the Admiralty Court encroached upon the jurisdiction of Common Law Courts. As a response, the Common Law Courts started issuing writs, thus prohibiting the Admiralty Courts from exercising jurisdiction. In the light of such clashes, an Act titled “Act concerning what things an Admiral and his Deputy shall meddle” was passed.


Thereafter, ‘Admiralty Courts Act’ was passed in 1840 which gave jurisdiction to High Court of Admiralty in certain maritime causes, which did not include the damage caused by a ship. The scope of the same was expanded by the 1861 Act. In 1860s, it became a common practice of the High Court to club the Common Law Courts and the Admiralty Courts.


INDIA

The admiralty jurisdiction of the Indian courts began by Clause 32 of the Letters Patent Act, 1862. This Act vested the High Courts of judicature of Madras, Bombay and Fort Williams in Bengal with jurisdiction for trial and adjudication of maritime questions arising in India. In 1890, the Colonial Courts of Admiralty Act was passed in England which empowered the Indian legislatures to declare certain courts in India as colonial courts in admiralty. These courts had the same jurisdiction as the English courts. Therefore, the Colonial Courts of Indian Admiralty Act was passed in 1891, by which the High Courts of Calcutta, Madras and Bombay were declared as courts of Admiralty. It is pertinent to note that in India, these laws along with others such as Admiralty Offences (Colonial) Act 1849, Indian Ports Act 1908, Indian Merchant Shipping Act 1923, The Control of Shipping Act 1947 etc. were followed as on the same paths as they were passed then, even though England progressed and accepted different international conventions for their maritime causes.


It was only in 1993, that the Supreme Court in the case of M.V. Elisabeth and Others v. Harwan Investment and Trading[6] marked the beginning of changing this stance. In this case, a cargo was carried on a ship named ‘Elisabeth’ from Goa to UAE. It was delivered without Bills of Lading, however, the persons who delivered the goods had a claim. When Elisabeth came back to India, it was arrested at Vishakhapatnam. The owner in this case contended that according to the 1861 Act, Every High Court had jurisdiction over every cargo carried into an Indian port and no jurisdiction if cargo is carried out of an Indian port. This anomaly prompted the Supreme Court to review the Admiralty Laws and to set right the misconceptions by following a progressive approach. The Supreme Court held that the Admiralty jurisdiction was not frozen to 1861 Act and that various international conventions to which India was not signatory would become a part of trans-national law and become applicable for enforcement of maritime claims. This urged the parliament to enact a law regarding the same, yet it fruitfully apprehended that any attempt to codify without a proper investigation would be futile. Yet, ‘Elisabeth’ opened up frontiers of jurisdiction and gave room to international conventions. Therefore, the Supreme Court adopted the 1999 convention as a part of domestic law. This convention was related to arrest of ships and recognized maritime claims which were new including claim for oil pollution, environmental damage, insurance premium etc. With this the 1861 Act lost its importance.


SOURCES:

Observing such complexities in the legislation, the Government of India introduced a new consolidated form of legislation, in place of all the previous old legislation which existed for more than 170 years. It is titled as “The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017”, and includes 18 Sections divided in 4 Chapters. The Act contains provisions relating to Admiralty jurisdiction vested with the High Court of Calcutta, High Court of Bombay, High Court of Madras, High Court of Karnataka, High Court of Gujarat, High Court of Orissa, High Court of Kerala, High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh or any other High Court, as may be notified by the Central Government for the purposes of this Act, legal proceedings in connection with vessels, their arrest, detention, sale, maritime claim and maritime lien, etc.


Other Active Laws:

It is pertinent to point out that in addition to the above legislation, there are several other legislation applicable in India which directly or indirectly relate to maritime law. These are:

  1. Indian Merchant Shipping Act, 1958

It includes registration of ships as Indian ships, certification of Indian ships, various requirements that the ship must comply with, in order to trade, various provisions for certification of officers and crew employed on ships, regulation governing navigation, specific types of ships such as passenger ships, nuclear ships, sailing vessels, fishing boats, provides provisions for inquiry, investigation and penalties and it incorporates various conventions in regard to safety of life at sea. Non-compliance with these requirements and absence of valid certification may render the ship un-seaworthy.

In terms of International causes, the Act deals with provisions regarding collisions, salvage, oil pollution, limitation of liability etc.[7]


2. The Indian Carriage of Goods by Sea Act, 1925

This Act mainly describes rights, immunities, responsibilities and liabilities upon the carrier. It is a substantive law where Bills of Lading and other document of title are issued.


3. Indian Bills of Lading Act, 1856

This is the shortest Indian statute ever. However, this forms the lifeblood of international trade and commerce. It creates certain rights in respect of goods carried on border ships which can be transferred by endorsement and delivery.

The bill of lading in simple language is the bill (proof) that the goods have been loaded on the ship (lading). It acts as an evidence of contract for carriage, receipt of goods and document of title to the goods. As an evidence of contract, the bill of lading acts as a proof that the contract of carriage was entered into between ‘Ship owner’ and ‘Carrier’ for the transportation of goods. The Act regulates and confers rights to the parties in terms of Bill of Lading and it further describes Bill of Ladings as conclusive proof of shipment. It sets out the description of goods, the terms and conditions on which goods are carried, the name of the ship, the port of loading, the port of discharge, the name of shipper, the name of consignee.


4. The Marine Insurance Act, 1963

As per Section 3 of the Act, a contract of Marine Insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure. The Act in particular discusses about all the terms of the contract of marine insurance, insurable interests, disclosure and representations, policies, the voyage of the ship is pre-defined and the Act ensures that the insurer would be discharged with the liability if there is voluntary change to the route of the ship, further discusses about the losses, partial losses, salvage charges, indemnity and its charges, payment of premium, etc.


5. Customs Act, 1962

The Customs Act of 1962 is the most crucial Act that provides for the implementation and collection of duty on goods imported and exported in the country. It also deals with the Import and Export procedures, Prohibitions on importation and exportation of goods, penalties, offences and much more.


6. Lighthouse Act, 1927

It was enacted to consolidate and amend the law relating to the provision, maintenance and control of lighthouses by the Government. This Act levies charges for the navigation of the ships and now the Ministry is trying to repeal the Act by the Aide to Navigation Bill, 2020.


7. The Major Port Trusts Act, 1963

It is an Act which vests power for the formation of port authorities, Trusts, Appointment of officers, etc. for certain major ports in India. It further describes power to the authority for administration, control and management of such ports in such authorities and for matters connected therewith. It also describes the powers to sell and dispose of the unclaimed and unclear cargoes, works and services to be provided at Ports, etc.


8. The Multimodal Transportation of Goods Act, 1993

This Act recognises multimodal transportation of goods carried under a single transport document which covers all the modes of transport and the multimodal transport operator remains liable and responsible to the cargo owner, liability if the operator if the goods are damaged when under their control, etc.


Few other Ancillary Acts:

  1. The Maritime Zones of India (Regulation of Fishery by Foreign Vessels) Act, 1981

  2. Territorial Waters Continental Shelf-Exclusive Economic Zone and Others Maritime Zones Act, 1976

  3. Inland Vessels’s Act, 1917

  4. Indian Ports Act, 1908

  5. Obstruction in Fairways Act, 1881

Applicable General Laws:

  1. The Indian Contract Act, 1872;

  2. Employment Laws

  3. The Sale of Goods Act, 1930;

  4. The Evidence Act, 1872;

  5. The Indian Penal Code, 1860;

  6. The Transfer of Property Act, 1882;

  7. The Civil Procedure Code, 1908;

  8. The Criminal Procedure Code, 1973;

  9. The Limitation Act, 1963;

  10. The Companies Act, 1956;

  11. The Arbitration and Conciliation Act, 1996

Starter Kit- Basic terminologies to start understanding Maritime Law

A basic understanding of the terms used is the first step to understand a law. Following are the basic terms governing Maritime Law, to assist in applying the law effectively.

  • Ship-

Ship is a general term for a large seagoing vessel of considerable size.[8]As soon as the keel of the ship touches the water, the ship will be subjected Admiralty laws.

  • Vessel-

As per the Admiralty Act, 2017 a vessel includes any ship, boat, yacht, dredgers, sailing vessel or other description of vessel used or constructed for use in navigation by water. It also includes vessels which are sunk or abandoned and the remains of such vessels.

  • Shipper -

Shipper is a party who has the cargo and is finding a ship to transport the cargo, the shipper can be either seller or buyer of the cargo.

  • Charterer

Charterer is a party who has chartered (hired or rented or leases) the vessel. Usually Ship-owners make an arrangement with the Charterer who is the middleman between shipper and ship-owner, the arrangement is known as “Charter party agreements”. The charterer’s job is to find a vessel for the cargoes they receive from different shippers and maximizing the space on ship which they plan to hire.[9]

  • Bill of ladin

It is a title document issued as a proof that the cargo is loaded in the ship by the carrier, issued by Ship-owner. Bill of lading document contain details such as the name of Consignor, Consignee, Cargo details, Port of Discharge, etc.


  • Maritime Claim

As per Section 4 of the Admiralty Act, 2017 Maritime claim includes any disputes between vessel co-owners about the employment or earnings of the vessel, claims regarding mortgages or charges on a vessel, loss or damage caused by the operation of a vessel (including environmental damage), loss of life or personal injury, loss or damage to or in connection with any goods.


Claims in connection with agreements relating to the carriage of goods or passengers and agreements relating to the use or hire of a vessel, arising out of any goods supplied or services rendered to a vessel for its operation, management, preservation or maintenance, disputes arising out of contracts for sale of a vessel, claims regarding the payment of seamen’s wages and insurance related matters all falls under the meaning of Maritime claim.


These lists of Maritime Claims are similar to the Maritime Claims defined under the International Convention in relation to the Arrest of Sea-Going Ships 1952 and the International Convention on the Arrest of Ships, 1999[10].

  • Maritime lien

A lien is a claim or legal right against assets that are typically used as collateral to satisfy a debt. In case of non-payment of debt, the creditor may be able to seize the asset. [11]

A maritime lien is a privileged claim upon a maritime property in respect of services done to or injury caused by it.[12] Properties such as the ship, its cargo, apparel, furniture, tackle or freight may be kept as security and it can be sold to recover the losses in case of non-payment of debt.

  • Ship Arrest

A ship arrest is basically the custody of vessel; ordering not to sail till the further order is issued. A High Court can order for arrest of any vessel if there is any maritime claim against the ship as per Section 4 of the Admiralty (Jurisdiction and Settlement of claims) Act, 2017.

  • Charter party agreement

Charter party contract is entered between Charterer and Ship Owner. It contains details regarding voyage of vessel, agreed freight between the parties, brokerage charges if any, etc. Charterer is the middleman which connects shipper with the ship owner with Contract of Carriage.

  • Contract of Carriage -

It is one of the primary documents between Shipper and Ship-owner.

  • Inco-terms

‘Inco-terms’ is an acronym standing for International Commercial terms.[13] These are terms and conditions which are essential terms of trade for the sale of goods and for participating in the import and export of global trade on a daily basis. Labelling a shipment for freight transport, preparing a certificate of origin, purchase order, packaging, freight charges, etc. are few examples of Inco-terms.


Conclusion- The Current Scenario

Ships can’t have brakes” and so does the Shipping Sector.

Although, the industry might be occasionally facing issues such as crew changes, wages of the employee, disturbed supply-chain, disruption of transportation from Port, high transportation costs, port delays, poor turnaround time of coastal ships on account of over-aged vessels, and inadequate mechanical handling maritime crime, piracy, etc. due to current situation of COVID -19 but the trading never stopped. Lot of complexities did arise due to the changing pace of the time; however, ‘the law must evolve’ with the advancement in the business. One wonders if all the ineffective Colonial Laws have been replaced with the required up-gradation. Nevertheless, this era demands the re-enactment or substitution of the ‘dilapidated’ with the ‘novel’, like the Admiralty Act 2017, Aids to Navigation Bill 2020 (to substitute 93 years old Lighthouse Act), The Anti-Maritime Piracy Bill, 2019 etc. India, currently in its developing phase needs to lower its colonial baggage and get rid of what is out-dated and over-mature.


[Disclaimer- The views expressed in the article are personal views of the author]

[1] “A History of Indian Shipping and Maritime History Activity From The Earliest Times” by Radhakumud Mookerji; Chapter 1, Page 1, Para 2

[2]https://eximmitra.in/en/information-data-on-exports/research-and-publications/others-information/ports-and-shipping

[3]https://www.mondaq.com/india/marine-shipping/817974/ship-arrests-and-indian-maritime-law

[4]https://www.abyssinialaw.com/about-us/item/1071-definition-scope-and-characteristics-of-maritime-law#:~:text=The%20famous%20legal%20dictionary%20%E2%80%93%20Black’s,relating%20to%20commerce%20on%20or

[5] Ibid.

[6] 1993 AIR 1014

[7] Part 10 of the Indian Merchant Shipping Act, 1958

[8] http://www.gibsonrobb.com/pdf/MarineGlossary.pdf

[9] https://www.myseatime.com/blog/detail/laytime-and-voyage-charter-party

[10] https://www.ukpandi.com/knowledge-publications/publications/article/legal-article-india-admiralty-jurisdiction-settlement-of-maritime-claims-act-2017-145425/

[11] https://www.investopedia.com/terms/l/lien.asp

[12] https://www.mondaq.com/india/marine-shipping/208090/maritime-lien-in-india

[13] https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-2020/

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