Supreme Court of India· 25 September 2026

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?

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

Section 5(1)(b)'s conditions must be satisfied independently for a vessel arrested in lieu under Section 5(2) of the Admiralty Act, 2017.

Yes. Section 5(2) allows another vessel to be arrested in lieu of the one against which the maritime claim arose, but expressly subject to sub-section (1), so Section 5(1)(b)'s jurisdictional pre-conditions must be met independently in respect of the vessel sought to be arrested. The claimant must show that the person liable was the demise charterer of that vessel when the maritime claim arose and continued to be its demise charterer (or owner) when the arrest was effected. Here the charterer had ceased to be the demise charterer of the arrested vessel before the arrest, so the arrest could not be sustained.

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)

Headnote

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In the Court's own words

Paragraph 31It may be seen that Section 5(1)(b) of the Admiralty Act permits arrest of a vessel where “the demise charterer of the vessel at the time when the maritime claim arose is liable for such claim and is the demise charterer or the owner of the vessel when the arrest is effected.” Section 5(2) extends this power to permit arrest of a sister vessel “in lieu of” the vessel against which the maritime claim has actually arisen, but expressly makes this power subject to the provisions of sub-section (1). The effect of this qualification is that the jurisdictional pre-conditions of Section 5(1)(b) must be independently satisfied qua the vessel sought to be arrested.

Paragraph 32Applied to the case at hand, for the arrest of the Vessel to sustain under Section 5(2) read with Section 5(1)(b), the Respondent was required to demonstrate: (i) that Nereides was the demise charterer of the Vessel, as distinct from M.V. Bharadwaj, at the time the Respondent’s maritime claim arose; and (ii) that Nereides continued to be the demise charterer of the Vessel on 04.12.2025, the date on which the arrest was effected.

Paragraph 33As we proceed to examine, the Respondent’s claim falls short on the second count for two reasons. First, as discussed in the preceding part, the BBC between the Appellant and Nereides stood validly terminated with effect from 13.11.2025, which is well before the date of arrest. Second, independently of the question of termination, Clause 32 of the BBC expressly provides that once the Appellant sought repossession, Nereides would hold the Vessel only as a gratuitous bailee pending physical repossession. E.2.2. Requirement of Repossession as a Condition Precedent to the Termination

Paragraph 44It follows that the foundational premise on which the arrest of the Vessel had proceeded at the behest of the Respondent, namely, that Nereides continued to be the demise charterer of the Vessel on 04.12.2025, stands displaced. As a logical corollary, the order of arrest resting on a contrary and unsustainable footing cannot be sustained and is liable to be vacated. F. CONCLUSION AND DIRECTIONS

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

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