' This suit for the recovery of Rs, 9,92,800 has been brought against the defendant No, 1 "m. v. Sunrise 1V", which is a foreign vessel plying under Panama flag, and the defendant No, 2, also a foreign company which owns the ship. The vessel was arrested on 20-12-1979 pursuant to the order of the even date passed on the plaintiffs' application under rule 731 of the Chief Court Rules (0. S.) with the direction that she may be released if security or guarantee was furnished by the defendants for the suit amount.
2. The defendants, having been served with the notice of the application under rule 731 of the Chief Court Rules, filed their separate counter-affidavits, opposed the arrest of the vessel and requested for her unconditional release.
3. The application was argued at length by Mr. Sharaf Faridi, Advocate for the plaintiffs and Mr. Salim Akhtar, Advocate for the defendants. After hearing the learned' counsel the order dated 20- 12-1979 was modified on 23-12-1979, to the extent that the ship was ordered to be released on furnishing of security or bank guarantee for the reduced amount of Rs, 4,26,560, for the reasons to be recorded later. The detailed reasons for passing the said order are given bereunder.
4. The plaintiffs' 'case is that they are the assignees/endorsees of a liner and freight prepaid Bill of Lading No, 2 dated 4-8-1979, issued at Hamburg (West Germany) by the Master of the defendant No, 1, for and on behalf of the defendant No, 2, in respect of the cargo of 1540 metric tons of iron and steel scrap which was shipped from the port of Hamburg to the port of Karachi. In the column of the "consignee", the bill of lading mentions "to the order of United Bank Limited". The bill of lading was endorsed by the consignee, United Bank Limited, in favour of the plaintiffs for valuable consideration. The plaintiffs have produced several documents in order to show that the cargo shipped from the port of Hamburg comprised of 1540 metric tons of "iron and steel scrap for re- rolling and comprised purposes". The first document is the liner bill of lading dated 4-8-1979, issued by the Master of the defendant No, 1 at Hamburg, showing the gross weight of the cargo to be 1540 metric tons. The bill of lading bears the remarks "said to contain loose/in bulk", under the column for showing "number and kind of packages, description of goods". The second document is the weight and packing list dated 6-8-1979, issued by the shippers, Messrs Eckhardt & Co., Hamburg, which describes the cargo as "loose/in bulk iron and steel scrap for rerolling and remelting purposes". It bears an endorsement on' the bottom that during loading, the weight of the commodity had been ascertained to be 1540 metric tons by weighing the lorries empty and full at an automatic built-in-weighbridge. The third document is the commercial invoice, issued by the shippers, which too mentions the quantity as 1540 metric tons. The fourth document is the Import General Manifest, which was filed by Messrs Freighter Services Limited with the Custom authorities and in this document also the same quantity of 1540 metric tons was shown. This document has relevance only to the extent that it was prepared in conforMity with the packing list and the commercial invoice referred to above. In support of the claim of short-landing, the plaintiffs have produced a provisional short-landing certificate issued by the Karachi Port Trust mentioning that 1540 metric tons of iron and steel scrap was manifested as per Index No, 2 and there was shortlanding of 248.50 metric tons. The cost of the short-landed quantity of the cargo has been claimed at the rate of Rs, 4,000 per metric ton.
5. Mr. Salim Akhtar, learned counsel for the defendants, could not dispute that the plaintiffs were the assignees/endorsees of the bill of lading. He, however, laid great stress on the words "said to contain loose/in bulk 1540 metric tons of iron and steel scrap for rerolling and remelting purposes", appearing in the bill of lading. This contention has no force in view of the categorical confirmation of the weighment given by the shippers in the weight and packing list. The bill of lading is dated 4- 8-1979, while the weight and packing list was prepared and issued later on 6-8-1979. The case of the defendants themselves, as per counter-affidavit filed by the Master of the vessel, is that the defendants were not concerned with the loading and discharge of the cargo, as the loading of the' cargo was the responsibility of the shippers while the discharge was at the risk and cost of the plaintiffs.
6. It was next contended by Mr. Salim Akhtar that no marks and numbers were given to the cargo and therefore the provision contained in clause (o) of rule 2 of Article 4 of the Carriage of Goods by Sea Act, 1925 was attracted, which reads as under :- "Article IV :
(1) ..........
(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from -
(o) Insufficiency or inadequacy of marks."
' According to' Carver's Commentary on Carriage by Sea, Vol. I, p. 287, the exception in clause (o), reproduced hereinabove, generally excuses the carrier from delivering the actual goods shipped if he can prove (i) that the goods are unidentifiable owing to insufficiency of marks, and (ii) that he has not lost any of them, , or, if he has, that they were lost by some other excepted peril. Assuming that the above provision of the. Carriage of Goods Act was attracted, the defendants cannot succeed without showing that the two conditions as aforesaid were satisfied. The learned counsel further relied upon condition No, 22 printed on the reverse of the Bill of Lading, which is as under :- "22. Iron and steel unpacked.-The ship is not responsible for correct delivery and for all expenses incurred in the port of delivery by insufficient securing or marking. Such will he paid by merchants unless :
(a) Every piece is distinctly and permanently marked with oil paint.
(b) Every bundle is securely fastened distinctly and permanently marked with oil paint and metal tagged so that each piece or bundle can be clearly distinguished at the port of discharge.
(c) Vessel is not to be held responsible for oxidization or discolouration."
' According to him, it was the duty of the shippers to have distinctly marked every piece of scrap iron with oil paint and fasten every bundle securely and on account of their failure to do so, the.
Defendants were not responsible for the alleged short-landing. The reliance on the above condition is misplaced, as apparently the provision contained therein would cover the cases of incorrect delivery of the cargo on account of lack of identification and would not apply to short-landing of the same.
7. The suit on account of short-landing of the goods lies under section 6 of the Admiralty Court Act, 1861 (hereinafter referred to as the Act) and the plaintiffs have rightly brought the same on account of the alleged breach of contract embodies in the bill of lading. In the case of St. Cloud (1) it was held by Dr. Lushington that the statute, that is the Admiralty Court Act, 1861, was remedial and the enactment in the section was intended to operate by enabling the party aggrieved to have recourse to the arrest of the ship bringing goods delivered short or damaged in cases where, from the absence of the defendants in foreign ports, the common law tribunals could not afford effectual redress.
8. Mr. Salim Akhtar, raised a preliminary objection that since the owners of the vessel had also been joined as co-defendants in the suit, such action on the part of the plaintiffs amounted to filing of suit both in rem as well as in personam which, according to him, was barred under section 35 of the Act. In this connection. He placed reliance on two judgments of this Court. In the case of Captain Yousuf Kazi and another v. Phoenix and others (2) at p. 1092 it was held as under :- "There is another serious objection to this suit. The plaintiffs have brought this suit not only against the ship in rem but also against its owner in personam and such a course is not open to the plaintiffs in view of the provisions of section 35 of the Act under which the plaintiffs could proceed either in rem or in personam but they could not proceed both in rem and in personam."
' In another case of Pakistan Burmah-Shell Limited Karachi v. s. s. Phoenix and 4 others (3) it was held that the disputed supplies having been made by the plaintiffs on the credit of defendant No, 3, the suit was not maintainable in rem. The contention of plaintiffs' counsel that the suit had been brought not only in rem but also in personam was repelled and it was held that in an action for the supply of necessaries to the vessel it was not permissible in admiralty jurisdiction to proceed both in rem and in personom in view of the provision contained in section 35 of the Act.
9. Mr. Sharaf Faridi, learned counsel for the plaintiffs, contended that there was no discussion in the above cases regarding the interpretation of section 35 of the Act, as neither any issue was framed nor the counsel had argued anything about the applicability of the section. According to him, there was nothing in the section barring the joining of the owners of the vessel as party to the suit brought in rem as long as the vessel was shown as the principal defendant. He referred to the case of The Germanic (4) in order to show that action in that case had been brought against the ship as well as its owners and those interested in it and was maintained under the admiralty jurisdiction.
He also produced certified copy of an order dated 19-2-1979 passed in Admiralty Suit No, 1 of 1979 by the learned Chief Justice of the Baluchistan High Court, in which, on good legal considerations, the owners of the vessels were allowed to be joined as party to the suit without disturbing the nature of the action taken in rem.
10. I have given anxious consideration to the above-mentioned contentions of the learned counsel, and in order to appreciate the same, it is necessary to refer to section 35 of the Act which is as under : Section 35. Jurisdiction of the Court.-The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised either by proceedings in rem or by proceedings in person am."
(1) (1863) 8 L T 54 (2) PLD 1978 Kar. 1052
(3) PLD 1979 Kar. 789 (4) 8ARMC (N.S) 116 ' The marginal note against the section is "Jurisdiction of the Court" A plain reading of the section shows that the provision contained therein relates to the exercise of jurisdiction by the Court either by proceedings in rem or by proceedings in presonam. The section is not procedural and h nothing to do with the manner of institution of the suit by a party, either in rem or in pursonam. The admiralty jurisdiction is exerciseable in rem a well as in personam. The question, therefore, is as to how the said jurisdiction is to be exercised.
11. The admiralty jurisdiction exerciseable by this Court is the same which was formerly exercised by the High Court of Admiralty in England. According to practice in England, the action in rem in the admiralty jurisdiction was commenced with the issuance of writ for the arrest of the vessel which was intended to cause notice to all the world with regard to the claim endorsed upon the writ (Halsbury's Laws of England, 4th Edn., Vol. I, paras. 360 & 365 at pages 245 and 247). After the service of the writ, the owners of the property proceeded against and all persons directly interested in the cause were then entitled to appear and defend, without filing any affidavit and showing their interest, at any time before the judgment. Further, even a person not named in the writ could intervene in an admiralty action in rem and appear by leave of the Court (Halsbury's Laws of England, 5th Edn., Vol. 1, para. 375). In the case of the' Banco (1) Lord Denning M. R. Observed as under :- "When a plaintiff brings an action in rem the jurisdiction is invoked not when the writ is issued, but when it is served on the ship and the warrant of arrest is executed. The reason is because it is an action in rem against the very thing itself, and does not take effect until the thing is arrested."
' In a suit filed in rem, the prime action lies against the res or the property itself and in the exercise of the said jurisdiction it is left to the Court t exercise the same either by proceedings in rem or by proceedings in personam. The ship after all is an inanimate object and cannot defend itself, and, o necessity, the action is to be defended by the Master, the owner or any person interested in the vessel irrespective of the fact whether they were joined a a party to the suit or not. The plaint itself may also mention the name o D the owners without formally impleading them as party to the suit.
In the case of "The Germanic", referred to earlier, the suit had been filed not only against the ship but also against the owners of the vessel and those interested in it. At a later stage, the plaintiffs, who had impleaded, inte alia, compulsory pilotage, applied to the Registrar of Liverpool District Registry for leave to add the pilot of the Germanic as the defendant. The Registrar refused the application. The plaintiffs thereupon appealed to the President of the Probate, Divorce, and Admiralty Division in chambers and their appeal was allowed and leave was granted to join the pilot as a defendant to the action. The defendants took up the matter to the Court of Appeal which was decided as per above-cited report of the case. The discussion in the judgment shows that according to practice, a new defendant could be impleaded to an action instituted in rem on sound legal considerations. The appeal was accepted by the Court of Appeal on the ground of unseemliness and inconvenience of the trial. Because while the case as between the two ships and the owners of the two ships could be tried by the Judge and Assessors, the case between the ship, to which the pilot did not belong, and the pilot was
(1) (1971) 1 All E R 524 triable by the Judge and the Jury. The facts in the case of "The St. Cloud" also show that the suit had been instituted against the foreign barque St. Cloud and her owner. In the case of The Pieve Superiore (1), it was held by the Judicial Committee of the Privy Council as under : "If the jurisdiction of the Court of Admiralty over the claim once attached, that Court, in their Lordships' opinion, would be competent at any subsequent time to entertain a suit either in personam or in rem by arrest of the ship whenever it came within reach of its process. They therefore think, assuming the jurisdiction to have once attached, that it was competent to arrest the ship in the suit on her arrival upon a new voyage at Cardiff. The arrest, however, there being no maritime lien, could not avail against any valid charges on the ship, nor against a bona fide purchaser ; for, as already stated, the object of the statute is only to found a jurisdiction against the owner, who is liable for the damage, and to give the security of the ship, the res, from the time of the arrest. This is clearly explained by Dr. Lushington in The Alexander (1 W Rob. 288-294), and The Pacific (Br. & Lush. 243), and by this committee in The Two Ellens (ubi sup.)."
12. From the above discussion, it is'clear that a suit filed in rem in the admiralty jurisdiction will not fail merely on account of joinder of the owner of the vessel as party to the same and such interpretation also does not follow from section 35 of the Act itself. If the owner of the res arrested under the admiralty jurisdiction comes forward to defend the action seeking release of the res, he makes himself liable by such voluntary appearance to be proceeded against in personam also.
The occasion for doing so, however, would arise only in a case when the value of the res proceeded against falls short of the claim of the plaintiff and satisfaction of the decree is sought from other property of the owner of the res. In the case of Dupleix (2) the owners of a British ship had instituted an action in rem to recover the damages they had sustained as a result of collision between their vessel and a French barque. The French barque was arrested and her owners, foreigners, had entered appearance in the action and given bail to obtain the release of the vessel, amount of the bail being equal to the appraised value of the barque and the agreed amount of the freight. The foreign owners defended that action and counter-claimed for the damage they had sustained. On the hearing of the action, the French barque was held alone to blame and a decree was drawn up condemning the defendants and their bail in the amount of the damage sustained by the plaintiffs with the costs of the claim and counter claim. The defendants thereupon applied for the amendment of the decree by limiting its terms so that the plaintiffs should not be entitled to recover more under it than the appraised value of the vessel, the freight and the costs. The proposition of the defendants was that in an admiralty action in rem in which the defendants appear and contest the action, the plaintiffs cannot obtain judgment for, or recover, more than the value of the res, that is, the ship found to blame, and which was, arrested, and her freight or the bail that represents the ship and freight together with the costs. The objection of the defendants was overruled and reference was made to the observations of A. L. Smith L. J. Of the Court of Appeal in the case of "The Gemma" 'which read as under:- - "Now, apart from authority, it appears to me that when persons, whose ship has been arrested by the marshal of the Admiralty Court, think
(1) 2ARMC (N S) 319 (2) 12 ARMC (N S) 122 fit to appear and fight out their liability before the Court, the form of the proceedings in the Admiralty Court show and it is not disputed that the forms I have referred to are those which have been in use, according to the practice of the Court, from olden times that the persons so appearing, as the defendants have done in the present case, become parties to the action, and thereby become personally liable to pay whatever in the result may be decreed against them ; and the action though originally commenced in rem becomes a personal action against the defendants upon appearance. For what purpose does a party appear to an action in rem ? There are, as it seems to me, three reasons for the appearance ; first, to release the ship, so that it may go on trading for the owner ; secondly, to contest the plaintiffs' allegations that the ship had been in default ; and, thirdly, in order to prevent its being sold. The President, in a judgment full of learning and research, in which he dealt with all the cases from the earliest time, whether in conflict or not with each other, has held in the case of "The Dictator" that a person appearing in an action in rem becomes personally liable, and considering that no real argument was addressed to us to impeach this judgment, and having considered it, and the principles appertaining to the present case, I do not doubt that the President came to the correct conclusion, and I adopt it."
' In the case of "The Dupleix", it was further held as under : "Regarding the matter historically, and legally, the form of judgment, which has been adopted for generations, where owners appear in an Admiralty action in rem, whether in cases of collision or otherwise, is right in fixing liability upon the owners personally to the full extent of the claim established in the action."
13. In the case of The Banco the following observations were made by Lord Denning M. R. With regard to the consequence of the appearance of the defendant in the action in rem : "I ought to pause here to add a word so as to avoid confusion. If the defendant enters an appearance, the action in rem proceeds just as an action in personam. If judgment is entered against the defendant, it can be executed against any of his property within the jurisdiction, be it his other ships or any other goods. A writ of fled facias, or other writ of execution, can be issued against his property, but only after judgment has been obtained ; see The Dictator, The Gemma and The Dupleix. If no appearance is entered, however, the action remains, as it began, an action in rem only, operating only against the ship arrested. If judgment is entered in default of appearance, it can be enforced by sale of the ship, but not against the defendant personally ; of Castrique v.
Imrie."
14. As a result of the above discussion, the objection raised on behalf of the defendants with regard to the maintainability of the suit in rem is rejected as not tenable. In any case, the question of proceedings in personam against the defendant No, 2 will not arise in this case because, even if the suit was ultimately decreed for the claim amount, the value of the defendant vessel will be sufficient to satisfy the decree. It may further be mentioned that the suit itself is yet to be proceeded with and by virtue of rule 9 of Order I, P. P. C. The same cannot be defeated by reason of misjoinder of the parties and the plaintiffs can always apply for the striking off the name of the second defendant.