Supreme Court of India· 25 September 2026

Must a question on which persuasive foreign authorities diverge turn on the express language of the contract, not mechanical importation of one precedent?

Owners and Parties Interested in M.V. Nereus Progress v. Om Freight Forwarders Ltd

2026 INSC 1055 · SLP (C) No. 23834 OF 2026
Coram: Justice Surya Kant · Justice Joymalya Bagchi · Justice V. Mohana

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Answer

A question on which persuasive foreign authorities diverge must turn on the express language of the contract, not mechanical importation of one precedent.

Yes. Neither of two divergent streams of persuasive foreign authority binds the Supreme Court; the answer must be found in the express language of the parties' contract and the relevant facts, rather than mechanically importing one foreign precedent's ratio in preference to the other, particularly where the charterparty text considered in those decisions is not before the Court. Here the High Court erred in treating The Chem Orchid and Navi-Bunkering Corp as determinative without engaging with The Hako Fortress and Mv ‘Trident Dawn’, or with Clause 32, which the former decisions had not dealt with.

Headnote

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)

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In the Court's own words

Paragraph 24At the outset, we may note that the precise question, i.e., whether physical repossession of a vessel is a prerequisite for the effective termination of a demise charter, or whether a notice of termination validly issued under the charterparty is sufficient, does not appear to have been authoritatively settled by an Indian court. In aid of their respective persuasive submissions, both sides have drawn upon the jurisprudence of foreign courts.

Paragraph 27We find ourselves confronted with two divergent streams of persuasive authority, neither of which is binding on this Court. We are of the view that in such a situation, the resolution of the issue must turn upon the express language of the contract between the parties and the facts relevant to the instant case, rather than upon a mechanical importation of the ratio of one foreign precedent over the other. The need for such an approach is particularly relevant where the text of the charterparty considered in those decisions has not been placed before us for comparison, and each was decided in its own peculiar facts.

Paragraph 29However, the High Court does not appear to have engaged with the contrary view taken in The Hako Fortress (Supra) or Mv ‘Trident Dawn’ (Supra). Nor did the High Court consider the specific language of Clause 32 of the BBC, which directly addresses the character in which a charterer holds a vessel after termination but before the owner’s physical repossession. It may be apposite to note that in Chem Orchid (Supra) and Navi-Bunkering Corp (Supra), the foreign Courts were not dealing with a BIMCO BARECON bareboat contract containing Clause 32, which unequivocally states that upon the termination of the contract, the owner shall have the right to repossess the vessel and, pending physical repossession, the charterers shall hold the vessel as a gratuitous bailee to the owner and not demise charterer. The High Court failed to consider this vital distinguishing fact and incorrectly relied on the aforesaid authorities to return an erroneous finding that the Respondent continued to be the demise charterer of the Vessel at the time of the arrest. E.2.1. Maintainability of the Arrest of the Vessel in terms of the Admiralty Act

Acts & Sections

s.5(1)(b) Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017s.5(2) Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017

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Also decided in this judgment

Is physical repossession of the vessel a pre-condition for termination of a demise charter under a BARECON bareboat charterparty?Must Section 5(1)(b)'s conditions be satisfied independently for a vessel arrested in lieu under Section 5(2) of the Admiralty Act, 2017?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections