INTRODUCTION

Admiralty procedure in Pakistan is governed by Chapter XXXII (Rules Under Colonial Courts Of Admiralty Act, 1890) of the Sindh Chief Court Rules[1]. In addition to these admiralty specific rules, it has been held that all the rules relating to civil proceedings are also applicable to the proceedings in suits filed in Admiralty Jurisdiction of the High Court so long as they are not in conflict with or contrary to SCCR (Sindh Chief Court Rules) .[2] Further, the Karachi High Court has held that, it is apparent that SCCR does not provide the procedure for conducting the trial of a suit. In the absence of such procedure the Court would be justified in applying the principles of C.P.C. (Civil Procedure Code, 1908) or following the provisions of C.P.C. to conduct the proceedings as long as they are reasonable and not contrary to principles of equity and natural justice. [3] Even when an admiralty suit is compromised and withdrawn on the basis of a compromise then it has been held that a subsequent application, alleging fraud and misrepresentation on part of any party to compromise, is maintainable under Civil Procedure Code, 1908.[4]

Institution of an Admiralty Suit

As the plaintiff is not readily personally available, therefore, a power of attorney from the plaintiff is mandatory for institution of an Admiralty Suit. Such power of attorney must be duly notarized and legalized. The essential documents that are required comprise: Proof of ownership of the ship, details of ship s port of call, and documents demonstrating the plaintiff s in rem claim.

Issuance and Service of Warrant, and Arrest of Ship

A suit in rem may be instituted in accordance with the requirements of the Civil Procedure Code, 1908,[5] and a party to such suit may, on filing an affidavit, obtain a warrant for the arrest of the property proceeded against.[6] Of course, the affidavit must disclose a proper cause of action constituting a maritime claim because it has been held by Karachi high Court[7] that the allegation of fraud without damage gives no cause of action, therefore, the application for arrest of vessel could not be granted in such circumstances.

Every warrant shall be served by the Nazir (i.e. Custodian) of the High Court or the bailiff of the High Court. The party obtaining the order for the issue of warrant shall, within six days of service thereof, file affidavits or other evidence necessary to prove the service thereof in the registry[8]. A warrant against ship, freight or cargo on board is to be effected by nailing or affixing the original warrant on the main mast or single mast of the vessel.[9]

Once the Court bailiff reported that the name of the ship has been changed and the claimant contended that the same has been recently changed after filing of the Admiralty suit, therefore, the Karachi High Court held that a ship even if it is sold or name changed any dues payable by the vessel or by the owner of the said vessel the ship is liable to be arrested. Further,[10] the Karachi High Court has also held that if a defendant was truly aggrieved by the order of arrest and was satisfied that such a claim did not fall within the Admiralty jurisdiction of this Court then such an objection should have been raised immediately and/or appeal should have been filed against the order. [11]

Cost and Fee in AN Admiralty Suit

The Court Costs for institution of an admiralty suit are Rs. 15,000/- (Approx. US$ 290). Other miscellaneous costs and expenses in arranging the arrest vary according to the nature of urgency, and services of the law firm arranging the arrest. The lawyer s fee is not regulated by any professional association rules in Pakistan. Such fee can on hourly basis or fixed sum basis.

Release from Arrest on Security

The provisions of Admiralty Jurisdiction of High Courts Ordinance, 1980 (AJHCO 80) maintain that an arrested ship can only be released by the order of the Admiralty Court.[12] Normally, to order a release of an arrested ship, the Admiralty Courts require furnishing of security for the amount for which the suit has been instituted. The Karachi High Court has also ruled that there must be some material before the Court to tentatively adopt a figure for the security amount.[13] Once the trial Court had given no basis for fixing the low amount of security for the release of ship, therefore, the appellate Court increased the amount of security to the extent of the amount as shown to have been received by supplier as a result of alleged fraudulent entry in the bill of lading.[14]

Sale of Ship and Ranking of Claims

Every sale under the decree of the Admiralty Court is made in a manner similar to a sale of movable property in execution of a decree in an ordinary civil suit.[15] All proceeds from the sale of ship are brought into the Court. The ranking of the competing claims, if there is more than one decree, is decided by the Court. As it has been held by Karachi High Court that, if an action in rem is filed against a vessel, any person who claims an amount against her or any interest in the said vessel may intervene in the proceeding and make his claim or object to the claim of the plaintiff. The Admiralty Court would be justified to entertain such claim or objection and if both the claims are found valid and proper and duly proved then the Court will have to determine their priority. [16]

Once the Karachi High Court held that, there are no rules framed by this Court under the Colonial Courts of Admiralty Act, 1890, on the question of priorities in respect of the decrees passed in Admiralty suits in the absence of any such rules it will be just and proper to follow the rules as to priorities a laid down by the British Courts, until the rules are framed under Ordinance No. XLII of 1980. Alternatively, in the absence of such rules or any law the Court has to follow the rules of justice, equity and good conscience .[17]

Once the Supreme Court of Pakistan also gave the guide lines as to the determination of ranking of rival claims and held that, The ranking of rival claims are determined with reference to consideration of equity, public policy and commercial expediency with object of justly settling the claims. The crew members and Master have preferential, higher and prior right on equitable ground and public policy to protect the seamen s right which has always been of great concern to Admiralty Courts all over the world. [18]

Therefore, as per the rankings determined by the Pakistani Courts first, the decrees on account of wages will be satisfied, second, the decrees on account of Master s wages and disbursement, if any, will be satisfied, then the decree on mortgage, forth, necessaries and repairs and last, [t]he ordinary decree will be satisfied. [19] Further, necessaries usually has a very low priority. Such claim is preceded by the claim of Martial Charges, expenses in respect of maintenance of ship by the plaintiff during arrest, possessory lien, salvage, damage, wages and mortgage created prior to the arrest of ship .[20]

It has also been held that, The fact that any interest accrued to the sale proceeds should in all circumstances be rateably distributed amongst the claimants does not seem to be correct. The lienee or a decree-holder can claim satisfaction of what has been awarded to him. The Court holds the sale proceeds for satisfaction of the claims/decrees and not for rateable distribution of the surplus amount left in hand after satisfaction of the decrees amongst the claimants an decree-holders. [21]

However, when the plaintiffs have a possessory lien over the vessel then the Karachi High Court has held that, possessory lien takes priority over all claims arising after the ship has been taken into possession but will be subordinate to those liens which were created earlier. Such lien holder has no power to realize the security or sell the ship but he can hold possession till his dues are paid. If the Court dispossesses him in exercise of its Admiralty jurisdiction and the vessel is sold, then out of the sale proceeds he will be paid his dues subject to the rules of priorities. [22]

[1] Rules 729 to 775 of Rules and Forms of the Chief Court of Sind on the Original Side in its Several Jurisdictions , also called Sindh Chief Court Rules

[2] Alexander G. Tsavliris & Sons v m. v. Rice Traders & Another (1986 CLC 2626)

[3] Jehanzeb Aziz Dar v Maersk Line & Others (PLD 2000 K 258)

[4] Dada Steel Mills (Pvt.) Limited v m. v. I. Van & Others (1997 MLD 866)

[5] Rule 730 of Sindh Chief Court Rules

[6] Rule 731 of Sindh Chief Court Rules

[7] Haji Mohammad Ismail Mills Ltd v Yulius Fuchik & Others (PLD 1995 K 44)

[8] Rule 734 of Sindh Chief Court Rules

[9] Rule 735 of Sindh Chief Court Rules

[10] Bulk Handling Company, Karachi v m. v. Cemre-II, Karachi & Another (2000 YLR 1111)

[11] Global Venture Ltd v m. v. Rio G. & Others (2001 YLR 1115)

[12] Rule 743 of Sindh Chief Court Rules

[13] m. v. Dal Carrier v Alexander G. Tsavliris & Sons (1987 MLD 674)

[14] Convell Laboratories Ltd v m. v. Alexanders Faith (PLD 1983 K 459)

[15] Rule 759 of Sindh Chief Court Rules

[16] Maratos & Co v Rice Trader and Others (PLD 1989 K 94)

[17] Twaha v m. v. Asian Queen & Others (PLD 1982 K 749)

[18] Hong Leong Finance Limited v m. v. Asian Queen (PLD 1991 SC 1021)

[19] Twaha v m. v. Asian Queen & Others (PLD 1982 K 749); Inham Refrigeration v Owners of F. T. Parivash (PLD 1989 K 65)

[20] Note 16 above

[21] Note 18 above

[22] Poong San Fisheries Company Ltd v m. v. Zohra-I & Others (PLD 1988 K 390)