Introduction:

In an interim ruling, the Gujarat High Court directed the customs authorities at Deendayal Port (Kandla) to arrest the cargo vessel MV SW South Wind I. The court’s order follows a lawsuit filed by Farmart Service Private Ltd., which claims a financial loss of $1.4 million due to delays in the shipment of 2000 metric tonnes of parboiled rice. The plaintiff alleges that the ship’s failure to depart on time led to severe financial damage, including the cancellation of a sales contract with a buyer in West Africa. The court has ordered the vessel’s detention until further notice.

Plaintiff’s Arguments:

Farmart Service Private Ltd. had contracted with ATC Trading SARL, a company based in Benin, West Africa, to export 2000 metric tons of parboiled rice. To facilitate the shipment, Farmart signed a Voyage Charter agreement with OK International Logistics LLC, the owner of the MV SW South Wind I. The rice was loaded onto the vessel by July 27, 2024, and the necessary customs clearances were obtained. Despite being ready to sail with Bills of Lading issued by August 9, the ship remained detained at Kandla Port.

The plaintiff asserts that the delay was caused by issues unrelated to their cargo, specifically the lack of customs clearance for other shipments aboard the vessel. Farmart argues that their fully compliant cargo should not have been affected by this detention. As a result of the delay, Farmart suffered financial losses, including the cancellation of their sales contract with the Beninese buyer and reputational harm, and is seeking $1.4 million in compensation.

The plaintiff contends that this situation qualifies as a maritime claim under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, as it involves loss and damages related to the shipment of goods.

Defendant’s Arguments:

While the vessel’s owners have not yet formally responded, the court’s records include correspondence between the plaintiff and Commodity Care Shipping Pte Ltd., which claims ownership of the vessel. In a letter dated September 9, 2024, the company informed the plaintiff that the ship was detained due to customs issues with other cargo, not the plaintiff’s shipment. However, the company provided no solutions or clarity on when the vessel would be able to sail, leaving the plaintiff in limbo.

With no resolution forthcoming and the ship’s owners remaining unresponsive to the plaintiff’s financial loss claims, the High Court ordered the vessel’s arrest.

Court’s Judgement:

In its interim order dated October 10, 2024, Justice Mauna M Bhatt of the Gujarat High Court ruled that the plaintiff’s maritime claim was valid under the Admiralty Act, 2017. The court ordered the arrest of MV SW South Wind I, instructing the customs and port authorities to ensure the vessel remained detained until further orders. The court also directed that the ship’s Master and Chief Engineer be notified of the warrant of arrest.

The court provided an alternative to avoid the vessel’s arrest, stating that if the defendants or any other interested parties deposit $1.4 million, along with 12% simple interest, into the court, the arrest could be stayed. The court has scheduled a hearing for October 24, 2024, and allowed the defendants to approach the court for an earlier resolution if sufficient notice is provided to the plaintiff.

This ruling underscores the importance of timely resolution in maritime disputes and sets the stage for further proceedings to address the financial damages claimed by Farmart Service Private Ltd.