Asian Natural Resources (I) Ltd. vs Vitol S.A.

R.S. Dalvi, J.—This Chamber Summons is taken out for payment of various varied charges claimed from the award holder by the award debtor pursuant to order passed by this Court in respect of the attachment levied on the cargo which was imported by the applicant into the Bombay port on 27th October, 2014.

The cargo was sought to be attached by the award holder. It belonged to the award debtor. However, the attachment was upon the specific condition that the cargo which would have to be stored in the Mumbai Port Premises would be stored at the cost of the award holder. No other costs were to be incurred by award holder.

The order dated 27th October, 2014 has been passed to protect the cargo which would be attached in execution. It is also to facilitate the discharge of the cargo so that needless charges for not allowing the discharge are not incurred. Since the award holder applied for ad-interim relief of injunction, which came to be granted, it was directed to pay storage charges after the discharge. Both the award holder and the award debtor were represented on that date though the award debtor was not served a copy of Chamber Summons. All the parties and all authorities were directed to act upon the copy of the order uploaded on the Internet.

It would be material to set out the relevant part of the order to understand the directions and the ambit of the order. The relevant part in paragraphs 3 and 4 are run thus :

3.The respondent / Award debtor shall not deal with, dispose off or part with possession of the cargo pending the Chamber Summons. The cargo shall, however, be allowed to be discharged. The claimant / Award holder shall bear the costs, if any, of the storage of the cargo after discharge, pending the Chamber Summons and / or pending the attachment by the Sheriff in enforcement of above award.

Parties and all authorities shall act upon the copy of this order uploaded on the Internet.

It may be clarified that the possession of the cargo was not to be parted, that cargo was not to be disposed of. The cargo was allowed to be discharged. The claimant had to bear the cost of storage. That would be only after the discharge of the cargo. All parties were required to act upon the copy of the order uploaded on the Internet.

Even before the order was uploaded on the Internet the advocates of the award holder wrote a letter inter-alia to the Mumbai Port Premises informing them about the order. That letter specifically mentioned that the award debtor could not remove the cargo imported from the port premises. It specified in paragraph 3 of the letter that the order was against removal of the cargo outside the port limits but the order did not in any manner whatsoever prohibit the discharge of the cargo from the ship and the vessel was free to leave the port after discharge.

It is, therefore, made clear that the cargo could not be removed from the port premises. The cargo therefore, could be removed from the jetty to any place where it had to be stored. Until such time that that was done there was, therefore, no liability upon the award holder. Once the cargo was stored, at whatever place in the port premises, that storage would be incurred. That would be due to the attachment that was levied on the cargo and the award holder would have to pay the storage charges.

There was nothing done by the award debtor between 27th October, 2014 to 30th October, 2014. Part of the cargo was discharged. It was lying at the jetty. The jetty was overcrowded with that cargo. The remainder of the cargo could not be discharged from the ship. The order of the court as also the letter of the award holder would make it clear that the cargo could not be removed but could be discharged from the ship.

On 30th October, 2014 the award debtor wrote to the Commissioner of Customs and neither to the advocates of the award holder nor to the Mumbai Port Trust officials themselves stating that it would obey and comply with the order of this Court dated 27th October, 2014. The award debtor fairly admitted, acknowledged and accepted what it had to comply that order. The order showed that the goods could be discharged from the vessel but could not be removed from the port premises. The award debtor specifically stated that the cargo could be discharged. That aspect was therefore known to the award debtor. In any event it was known from the 27th October, 2014 itself, since it was represented by its lawyers at the time of the hearing and could have obtained the copy of the order uploaded on the Internet.

The Judgment Debtor however, wanted to remove the cargo. That would be feasible as also reasonable. It had to be removed from the jetty onto any specified place in the port premises. It was given certain space where their cargo could be stored. The award debtor called upon, not the award holder or the port authorities, but the Assistant Commissioner of Customs that the cargo could be removed to the allotted plot. The plot was allotted to the award debtor to facilitate the discharge and the movement of the cargo. This slight modification could have been made by the Court. It could have been made by consent of the of the parties even without reference of the Court. For that purpose the award debtor must inform the award holder. It would require to apply to the Court for modification, as needed. That was not done from 27th October, 2014.

Whilst there was no application to court or information to the award holder the goods continued to remain at the jetty. The goods were not stored. Other goods were not discharged though they were allowed to be discharged known to the award debtor. This position of the stalemate, therefore, continued thanks to the award debtor itself.

On 31st October, 2014 the award debtor addressed a letter to the Deputy Sheriff of Mumbai putting on record the same facts. It repeated that it would obey and comply with the order of the Court and that the cargo was allowed to be discharged. It required permission of the Deputy Sheriff of Mumbai to remove the cargo to another area in the port premises being the plot area nominated / allotted to the award debtor to facilitate fresh cargo arriving on the other vessel to the discharged and removed. It again undertook that it would not remove or take delivery of the cargo from such place where it would be stored.

Indeed the cargo had to be stored in the port premises; it could not be left at the jetty. That was neither the application of the award holder nor the order of the Court. Consequently the award holder had to incur only storage charges. The storage charges could be incurred only after the cargo is stored. The cargo had to be stored at whatever place that was allotted by the authorities at the Mumbai port. The cargo was until then not stored. The storage charges were not incurred. Other charges would have been incurred including demurrage charges. Those charges were not directed to be paid by the award holder. They had to be paid in the normal course of the business of importing the cargo by the importer or the award debtor.

Since the letter was written to the Deputy Sheriff of Mumbai without any copy to the advocate of the award holder, the Deputy Sheriff of Mumbai on the next day Friday, 31st October, 2014 forwarded a copy of the letter to the award holders advocates for information and necessary action.

This letter is stated to have been received in the evening by the award holder''s advocate. The award holder wrote to the Sheriff of Mumbai on Monday 3rd November, 2014 that any clarification for the attached goods which remained in custody of Sheriff of Mumbai would have to be obtained from the Court but they had no objection to the cargo being shifted to the present location anywhere within the port premises; it should only not leave the port''s jurisdiction or the port premises.

As late as on 3rd November, 2014 the advocates of the award debtor wrote their first letter to the advocates of the award holder in this respect. It stated that the cargo was discharged. It was lying at the jetty. The jetty had no more space and further cargo could not be discharged. It stated that the cargo had to be removed to the adjacent plot near the jetty and that it may be moved. It mentioned about the letter to the Custom department on 31st October, 2014 and it accused the advocate of the award holder that they were withholding their consent till date and the vessel continued to suffer demurrage and detention at the port which would be claimed from them because the cargo was not removed form the jetty to the plot allotted to the award debtor. The letter states that the advocates of the award debtor suggested and reiterated to give the consent. The suggestion was for the first time. The reiteration never was. On that date itself the award holder''s advocates had already written to the sheriff that they had no objection to the cargo being shifted if any clarification was sought from the Court for the modification of its order.

On the next day, Tuesday 4th November, 2014, the advocates of the award holder emailed the advocates of the award debtor that they were not posed any question by the office of the sheriff, and that the award debtor had more than one week for obtaining clarification of the Court. They, of course, refuted the claim to pay demurrage. They reiterated their consent to remove the cargo within the port premises. They also reiterated that the vessel was free to leave the port after discharge as per order of the Court and as per their first letter to the port authorities.

It is, therefore, seen that the order dated 27th October, 2014 has only attached the cargo which arrived in the Mumbai port imported by judgment debtor for and in execution of the award sought by the award creditor / award holder. The order as also the very first letter of information of the award holder''s advocates to the port authorities shows specifically that the goods could be discharged from the ship and ship was free to leave the port. All the charges which had to be paid by the judgment debtor as the importer of the goods, therefore, had to be paid by judgment debtor. There was no order, and there could have been none, for the award holder to pay the charges. All that the award holder sought and the court had granted was the attachment of the goods, the storage of the goods and the consequent liability upon and after storage of the goods. Until the goods are stored no liability could be incurred. After the goods are stored the liability incurred by the award holder was for the storage charges. The award holder would only be liable to pay such charges. That would arise upon the attachment and the storage of the goods and no other.

The award debtor was represented at the time the application was made. It is argued that the application was made without notice to the award debtor. Indeed all such applications are made without notice. In this case there were other applications on the board of the Court at that time. Hence the award debtor was present and had even been represented. The award debtor knew of the order passed and was a free to download it from the Internet once the order was uploaded on the Internet, the parties as also all authorities having been directed to act upon the order uploaded on the Internet. The award debtor seems to have done just that.

The award holder acted upon the order and informed about the order. The information is correct and accurate. The information was to be given to the port authorities which has been given. The award holder rested at that.

The award debtor appears to have swung into action only four days after the order was passed and the port authorities were informed. It stated about its intention to comply with the order of the Court and mentioned about the fact that the goods were allowed to be discharged. This would mean that the goods would be discharged upon whatever terms that goods are normally discharged. The only difference was that the order did not allow removal of goods from the port premises. Indeed even without any other modification and direction of the Court the award debtor could have stored the goods at any particular place which they were allotted for such storage. The storage charges, once the goods were stored, would have to be borne by the award holder. The order is clear. The order is only against removal of goods from the port premises and the charge incurred upon such non removal. It is seen that up to 31st October, 2014 the cargo was not stored and the storage charges were not incurred. Other charges were not payable. Other charges may have been incurred. Those would have to be payable by the award debtor.

Even after such delay the award debtor failed to inform the award creditor to give the consent to remove the goods from the jetty to the plot in the port premises where the goods were to be stored. Damages and demurrage could have been incurred which could be only on the account of judgment debtor.

Only as late as on 3rd November, 2014 the judgment debtor did what it should have done from 28th October, 2014 or at least 30th October, 2014 when it appears to have been under some pressure from the port authorities for the removal of the goods from the jetty. The consent sought was given naturally thereafter. The first letter of the award debtor addressed to Sheriff of Mumbai was on Friday. The letter was sent by the Sheriff of Mumbai to the award holder also on Friday, 31st October, 2014. Its reply being sent on the forthcoming Monday cannot be stated to have been delayed in view of the delay by the award debtor itself.

It is argued that the office of the advocates would work over the weekend. I see no reason why the office of the advocate of the award holder should have worked over the weekend when the office of the advocate of the award debtor and the award debtor itself did not work during the earlier week itself.

The gross delay is of the award debtor. It appears that it is a perverse delay. The delay was sought to be caused to claim further charges from the award holder. Even the storage charges themselves could not have been claimed until the goods were stored. The award debtor must thank itself for not informing the award holder and later informing it via the office of the Deputy Sheriff of Mumbai which was constrained to send the copy of the letter to the advocates of the award holder instead of the award debtor directly emailing them to obtain their consent.

The award holder is seen not to be liable for any charges until the goods are stored. The charges under several heads claimed in prayers ''a'' and ''b'' of the Chamber Summons are most misconceived. The award holder is not liable to pay any demurrage or detention charges of the vessel, well known to the award debtor itself which were mentioned in the order as also in the first letter of the award holder to the port authority and has been stated and reiterated by the award debtor in its own first two letters. Consequently prayer ''a'' cannot be granted.

The detention charges, the port charges, plot rent charges, stevedoring charges, demurrage charges, shifting charges idling charges of the vessel and machines, jetty holding charges, cargo and other linked expenses etc are not payable under the aforesaid order at all. Only the expenses linked to the storage of the cargo and not the cargo itself are payable by the award holder. They shall be paid by the award holder once the goods are stored for and on its behalf and in consequence of the attachment levied upon the cargo not enabling it to be removed from out of the port premises.

The Chamber Summons is misconceived and is accordingly dismissed with costs of Rs.50,000/-.