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2026 INSC 1055 · 25 September 2026 · 19 min read
Owners and Parties Interested in M.V. Nereus Progress v. Om Freight Forwarders Ltd
Coram: Surya Kant, Joymalya Bagchi, V. Mohana
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 — s.5(1)(b) — s.5(2) — Arrest of vessel — Demise charterer — Termination of bareboat charterparty — Gratuitous bailee
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 — s.5(2) — Sister-ship arrest — Conditions of s.5(1)(b)
Held: The power under Section 5(2) to arrest a vessel in lieu of the vessel against which the maritime claim arose is subject to sub-section (1); Section 5(1)(b)'s conditions must be satisfied independently in respect of the vessel sought to be arrested. (¶31, 32)
BIMCO BARECON 2017 — Clauses 31 and 32 — Termination — Physical repossession not a pre-condition
Held further: A validly issued notice of termination under Clause 31(a) of a BARECON bareboat charter is sufficient to end the demise charter; physical repossession is only its consequence, and pending repossession the charterer holds the vessel as a gratuitous bailee, not as demise charterer. (¶35, 36, 37, 43)
Persuasive foreign authority — Divergent streams — Language of the contract
Held further: Where persuasive foreign authorities diverge, the question turns on the express language of the contract and the relevant facts, not on a mechanical importation of one foreign precedent over the other. Arrest of the vessel vacated; appeal allowed. (¶27, 44, 45)
Is physical repossession of the vessel a pre-condition for termination of a demise charter under a BARECON bareboat charterparty?
No. Under Clauses 31 and 32 of the BIMCO BARECON 2017 form, termination takes effect upon service of notice under Clause 31, and repossession is treated as a consequence flowing from a termination already accomplished. Clause 32 provides that, pending physical repossession, the charterers hold the vessel only as a gratuitous bailee to the owners, which is manifestly inconsistent with continuing demise charterer status, since a gratuitous bailee has no right of use, control or commercial employment. The deemed repossession on boarding only fixes when the owners resume operational responsibility. Treating repossession as a pre-condition would hold the owner's right of termination hostage to the very default that occasioned its exercise.
¶ 35, 36, 37, 38, 39, 43 — tap the paragraph number and land where the Court says it
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