CA directs HC to proceed with trial against Indian shipping firm in case filed by Colombo Commercial

Tuesday, 27 May 2014 00:12 - - {{hitsCtrl.values.hits}}

By S.S.Selvanayagam In a landmark judgment, the Court of Appeal set aside the impugned judgment of the High Court and directed it to proceed with the trial against the Motor Vessel SCI Mumbai. Justice A.W.A. Salam, with Justice Sunil Rajapaksha agreeing, held that the High Court Judge was in error when he dismissed the action of the Plaintiff Colombo Commercial Fertiliser Ltd. against the Defendant Motor Vessel SCI Mumbai. The High Court had dismissed the said action on the ground that the Provisions of Section 5 of the Arbitration Act applies to proceedings initiated under Section 2 of the Admiralty (namely Maritime) Jurisdiction Act. Being aggrieved, the Plaintiff Colombo Commercial Fertiliser Ltd. filed its petition challenging the said order of the High Court. Chandaka Jayasu-ndera with R.A. Almeida instructed by K. Ganeshayogan appeared for the Petitioner Colombo Commercial Fertiliser Ltd. Shibly Azeez PC with Dushantha De Silva and A. Kaluarachchi instructed by Julius & Creasy appeared for the respondent. The Petitioner company instituted action against MV Mumbai before the High Court seeking a writ of summons in rem and a warrant of arrest against the vessel. The claim was based in terms of Section 2(1)(g) and (h) of the Admiralty Jurisdiction Act, being a claim for loss and damage to cargo carried on board a ship. The Defendant vessel entered an unconditional appearance and made an application to the High Court requesting that the said vessel be released in place of a guarantee issued from the Bank of Ceylon for the sum of $ 320,000 being tendered into court, subsequent to which the said vessel was released. The Petitioners claimed that there was no reservation or objection raised by Respondent vessel whatsoever to Court. Thereafter the Petitioner company filed its petition, the Respondent vessel raised a preliminary issue with regard to whether the High Court has jurisdiction to hear and determine the action in view of an arbitration clause in the relevant charter party. The High Court Judge made order dismissing the action of the Petitioner company.

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