Gujarat High Court Orders Arrest Of Bulk Carrier Over Alleged Short Delivery Of Cargo

The Gujarat High Court has ordered the arrest of the bulk carrier MV Nikator at Kandla Port in connection with a maritime dispute over the alleged short delivery of cargo to a Vadodara-based pharmaceutical company.

In an order passed on Friday, the court directed the Port Officer and Customs Authorities at Kandla Port to arrest the vessel and keep it under arrest until further orders.

The decision came while hearing an Admiralty Suit filed under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.

The court also ruled that the arrest of the vessel would not be carried out if the defendants or parties interested in the vessel deposit a total amount of ₹2.89 crore with the court.

This amount includes the value of the alleged cargo shortage, customs-related charges, and legal costs.

Justice N R Mehta, in an oral order, directed the court’s Registrar to issue a warrant for the arrest of MV Nikator (IMO 9544372), including its hull, engines, machinery, bunkers, equipment, and all related items.

The court stated that the warrant could be executed at any time, including at night, on Sundays, or on public holidays, while the vessel remains within Indian territorial waters at Kandla Port.

According to the order, the defendants can avoid the execution of the arrest warrant by depositing ₹1,98,93,800 towards the value of the allegedly undelivered cargo, ₹15,69,222 towards customs duty, social welfare surcharge, and taxes, and ₹75 lakh towards legal costs.

The total amount comes to ₹2,89,63,022, along with interest at 18 per cent per year from the date the suit was filed until payment is made.

The case was filed by Nandesari Drugs and Pharmaceuticals Pvt. Ltd., a Vadodara-based manufacturer of active pharmaceutical ingredients.

The company approached the court seeking to secure its maritime claim arising from what it stated was a short delivery of cargo.

As recorded by the court, the company submitted that it had purchased Bright Yellow Crude Sulphate in bulk from Komoditas Trading FZC LLC.

The cargo was loaded at Sohar Port in Oman and carried on board MV Nikator under three bills of lading dated January 21.

The court noted that two bills of lading covered 3,250 metric tonnes each, while the third covered 3,300 metric tonnes, making the total cargo loaded 9,800 metric tonnes.

The quantity was stated to have been confirmed by the Master of the vessel through the issued bills of lading, after which the buyer completed payment and other formalities.

The order further noted that when the vessel arrived at the discharge port, the company submitted the bills of lading to take delivery of the cargo.

However, shore-based weighing showed that the cargo was short by 407.3 metric tonnes. The company later contacted the vessel’s agents by email on January 28, seeking clarification on the shortage.

The pharmaceutical company submitted that the short delivery caused financial loss and held the vessel and its owners responsible for the alleged breach of obligations.

Following the hearing, the High Court directed its Registry to send the arrest order to the Port and Customs Authorities at Kandla Port by email. The court also issued notice to the defendants, with the matter scheduled to return on February 6.

Reference: Indian Express