1. ' SHABBIR AHMED, J.---The questions involved in the above appeals are almost common as to the facts, it is, therefore, considered proper to deal with together and to dispose them of by this judgment.
2. ' The above appeals have been filed by the appellants/ plaintiff against the order dated 20-12- 2002, whereby the order of arrest of the respondent No,1 was vacated in Admiralty Suits Nos.61 of 2002 and 62 of 2002.
3. ' In order to facilitate consideration of questions involved in these appeals, it is considered convenient to deal with Appeal No,24 of 2002 and the conclusion arrived on the basis of contentions raised on either side will be applied to both appeals.
4. ' The appeals have arisen in the following circumstances:-- ' The appellants are engaged in providing the finances/loan to the ship owning companies for the purchase, maintenance and improvement of Vessels. It is the case of the appellants that the appellants agreed to advance a sum of US $ 2,450,000 to the respondent No,2 for acquisition of the respondent No,1 by an agreement dated 12-1-1995. The salient features of the agreement are as follows:--
(1) That First Party (appellants) shall release to the Second Party (respondent No,2) the loan amount to his nominated designated bank account in portions (to be mutually agreed upon), starting from 28th January, 1995.
(2) The Second Party agrees that the loan amount should be repayable by quarterly instalments of US Dollars 250,000 (US Dollars Two Millions Four Hundred Fifty Thousand) each instalment, the first instalment to be due and payable on 15th April, 1995, the subsequent instalments to be payable on the 15th day of every following quarter until full and final payment of the loan amount together with the interest as may be accrued thereon.
(3) The Second Party agrees that loan amount shall carry on interest flat rate of months labour plus 2% payable on six months basis:
(4) The Second Party indemnifies the First Party against any losses, costs, claims, counter-claims, whatsoever, and shall keep them harmless.
(5) The Second Party unconditionally and irrevocably agrees that in the event of default in repayment of the loan amount as agreed herein, the First Party shall have their absolute and full claim against the Second Party, their movable, immovable assets the vessels owned by them and the vessel M.T. "Abdoun Discovery" being purchased and to be dry-docked from the proceeds of this loan.
(6) That any single event of default, in repayment of the loan amount and interest therein by the Second Party, such default shall entail any legal action by the First Party against the Second Party, their assets, any and or all vessels owned by them, in any jurisdiction as the First Party deems fit and proper, the Second Party unconditionally agrees to the first charge over the vessel "Abdoun Discovery" and other vessels owned by them.
5. ' The loan agreement was signed in Dubai U.A.E. On 12-1-1995, by Hamid Gul Sharif by proxy on behalf of Tefkros Papakyricou/ the respondent No,2, whereas, on behalf of the appellants their President, Mr. Muhammad Aoun signed the loan agreement. It is the case of the appellants that the loan was provided to the respondent No,2 through four debit advices dated 23-8-1995, 2-10-1995, 7-8-1996 and 3-7-1996. It was further case of the appellants that despite repeated demands and requests for repayment, the respondent No,2, the owners of respondent No,1 failed and neglected in payment of the agreed quarterly instalments and time and again extension for repayment was granted by the appellants. Since the President of the plaintiffs' company was also a shareholder to the extent of 33% shares in the respondent No,2, such extensions were liberally granted and last such extension expired sometime in the year 2001 when the respondent No,2 refused repayment and thereby committed first charge in favour of the plaintiff and default specifically giving rise to maritime lien on the respondent No,
1. Thus the suit for recovery of US$ 2,450,000 by invoking the admiralty jurisdiction of this Court was filed.
6. ' Alongwith plaint, Civil Miscellaneous Application No,3050 of 2002, under rule 731 of the Sindh Chief Court Rules (O.S.) was also filed for arrest of the respondent No,1 berthed at Port Qasim. n supporting affidavit, the plea taken for the arrest, was that plaintiffs are entitled to claim maritime lien on the respondent vessel and it is. Liable to be arrested under the admiralty jurisdiction of this Court, unless the accompanying application is granted, the plaintiff/appellants shall be seriously prejudiced. On 27-11-2002 order of arrest was passed, with condition that in case the bank guarantee in the sum of US$ 2450000 or the same is deposited with Nazir of this Court the vessel would be free to leave with notice to the defendants through Bailiff, registered post A/D.
7. ' On notice the respondents contested the application under rule 731 of the Sindh Chief Court Rules (O.S.), inter alia, on the pleas that (1) the suit is not competently filed for want of authority from the Board of Directors (2) the suit is barred by time and the application for arrest of the respondents vessel is not maintainable.
8. ' The respondents' also pleaded that neither they obtained any loan nor asked for any extension of time for repayment of such loan in instalments. The suit based on alleged loan agreement dated 12-1-1995 is not maintainable for the following reasons:--
(1) That alleged agreement apparently discloses that the execution of the said agreement between the Messrs Abdoun Oil Company S.A., and Messrs Jenga Shipping Co. Ltd., on 12-1-1995 when second party viz. Messrs Jenga Shipping Co. Ltd. Were not in existence at this relevant date, as such, the alleged agreement has been forged, fabricated and concocted. The respondent No,2 was incorporated on 23-2-1995 under the law of Cyprus, as per letter dated 20-2-1995 ' from Central Bank of Cyprus in respect of incorporation of respondent No,2 and certificate of incorporation dated 23-2-1995.
(2) The alleged loan agreement has been purportedly signed on behalf of the Tefkros Papakyricou by his proxy Mr. Hamid Gul Sharif, who was neither authorized by the respondent No,2 nor was Director, Representative, Nominee or duly constituted Attorney of respondent No,2. It was also pleaded that Tefkros Papakyricou is VicePresident/Director of plaintiffs' Company as disclosed in the Certificate of good standing issued on 10-4-1998 by Consulate General, Panama.
(3) Since Messrs Jenga Shipping Co. Ltd. Was not in existence on 12-1-1995, therefore, the seal affixed on the alleged loan agreement by the signatory, is not the seal of the company. It has been either erected or fabricated by some means applied by the appellants or the persons acting under them.
9. ' The respondent vessel "M.T. Abdoun Discovery" was purchased on 10-4-1995, the first instalment of alleged loan was paid after about four months of the purchase of the vessel. It Was their case that vessel was purchased under the Bill of Sale dated 10-4-1995. It was also their case that the photocopies of bank advices dated 23-8-1995, 2-10-1995, 7-8-1996, 3-7-1996 are tampered copies of original advices (Annexures D-13 to 16), the original thereof were placed on record in compliance of order dated 10-12-2002. They also maintained that the audit reports do not reflect the alleged outstanding loan, on the contrary the said statement clearly mentioned that Messrs Abdoun Oil owes US $ 110,325.00 to Jenga Shipping Co. Ltd.
10. ' Affidavit in rejoinder was also filed by the appellants, wherein all the averments made in the counter-affidavit were denied being incorrect and misleading and it was also reiterated that agreement dated 12-1-1995 executed by Hamid Gul Sharif on the basis of letter of proxy dated 6-1- 1995, was rectified by respondent No,2 as informed by Tefkros Papakyricou, the respondents are disentitled on the principle of estoppel and utilization of US$ 2,450,000 in pursuance thereof.
11. ' After hearing the learned counsel for the parties, learned Single Judge by short order dated 20-12- 2002 recalled the arrest order and dismissed the application under rule 731 of Sindh Chief Court Rules (O.S.), and recorded the detailed reasons thereof on 21-12-2002, which is impugned in the present appeals.
12. ' Learned counsel for the parties were put on notice that the aforesaid appeals would be heard and would be disposed of finally on merits at Katcha Peshi stage and the learned counsel have argued the appeals for final disposal.
13. ' We have heard Mr. Akhtar Ali Mahmud, learned counsel representing the appellants in both appeals and Mr. Abul Inam, learned counsel representing the respondents, in both appeals assisted by Mr. Muhammad Naeem, Advocate.
14. ' Before proceeding further, it would be proper to refer the provisions of sections 3 and 4 of Admiralty Jurisdiction of High Court Ordinance (LXII of 1980) (in short the Ordinance), which are as follows:-- "3. Admiralty jurisdiction of the High Court.---(1) The Sindh High Court and the High Court of Balochistan shall have and exercise, within their respective territorial jurisdiction, Admiralty jurisdiction as is in this respective territorial jurisdiction, Admiralty jurisdiction as is in this Ordinance, provided and the Lahore High Court and the Peshawar High Court shall, within their respective territorial jurisdiction have and exercise the said jurisdiction in cases in which any question or claim relating to aircraft is to be determined.
(2) The admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following causes, questions or claims:--
(a) any claim to the possession or ownership of a ship or to the ownership of any share therein or for recovery of documents of title and ownership of a ship, including registration certificate, log book and such certificate as may be necessary for the operation or navigation of the ship;
(b) any question arising between the co-owner of a ship as to possession, employment or earnings of that ship;
(c) any claim in respect of a mortgage of or charge on a ship or any share therein;
(d) any claim for damage done by a ship;
(e) any claim for damage received by a ship;
(1) any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or of the wrongful act, neglect or default of the owners, charterers or persons in possession or control of a ship or of the master or crew thereof or of any other person for whose wrongful acts, neglects or defaults, the owners, charterers or persons in possession or control of a ship are responsible, being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or .Discharge of goods, on, in or from the ship or in the embarkation, carriage or disembarkation of persons on, in or from the ship;
(a) any claim for loss of or damage to goods carried in a ship;
(b) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;
(c) any action or claim in the nature of salvage of life from a ship or cargo or any property on board a ship or the ship itself or its apparel, whether services rendered on the high sea or within territorial waters or internal waters or in a port, including any claim arising by virtue of the application by or under section 12 of the Civil Aviation Ordinance, 1960 (XXXII of 1960), of the law relating to salvage to aircraft and their apparel and cargo;
(d) any claim in the nature of towage in respect of a ship or an aircraft, whether services were rendered on the high sea or within territorial waters or internal waters or in a port;
(k) any claim in the nature of pilotage in respect of a ship or an aircraft;
(1) any claim in respect of necessaries supplied to a ship;
(m) any claim in respect of the construction, repair or equipment of a ship or dock charges or dues;
(n) any claim by a master or members of the crew of a ship for wages and any claim by or in respect of a master or member of the crew of a ship for any money or property which, under any of the provisions of the Merchants Shipping Acts, or the Merchant Shipping Act, 1923 (XXI of 1923), is recoverable as wages or in the Court and in the manner in which wages may be recovered;
(o) any clairh by a master, shipper, charterer or agent in respect of disbursements made on account of a ship;
(p) any claim arising out of an act which is or is claimed to be a general average act;
(q) any claim arising out of bottomry or respondentia;
(r) any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, in a ship as a Naval Prize or in violation of customary law of the sea or otherwise, or for the restoration of a ship or any such goods after seizure, or for droits of Admiralty; together with any other jurisdiction of or the grant of such reliefs as are provided under the Merchant Shipping Acts or the Merchants Shipping Act, 1923 (XXI of 1923), any other jurisdiction which was vested in the High Court as a Court of Admiralty immediately before the commencement of this Ordinance or is conferred by or under any other law and any other jurisdiction connected with ships or aircraft in respect of things done at sea, which has by tradition or custom of the sea been exercised by a Court of Admiralty apart from this section.
(3) The jurisdiction of the High Court under clause (b) of subsection (2) includes power to settle any account outstanding and unsettled between the parties in relation to the ship, and to direct that the ship, or any share thereof, shall be sold, and to make such other order as the Court thinks fit.
(4) The reference in clause (i) of subsection (2) to claims in the nature of salvage includes a reference to such claims for services rendered in saving life from a ship or an aircraft or in preserving cargo, apparel of wreck as under any law for the time being in force, are authorized to be made in connection with a ship or an aircraft.
(5) The preceding provisions of this section apply--
(a) in relation to all ships or aircraft, whether Pakistani or not and whether registered or not and wherever the residence or domicile of their owners may be;
(b) in relation to all claims, wheresoever arising including; in the case of cargo or wreck salvage, claims in respect of cargo or wreck found on land; and
(c) so far as they relate to mortgages and charges, to all mortgages or charges, whether registered or not and whether legal or equitable, including mortgages and charges created under foreign law; Provided that nothing in this subsection shall be construed as extending to cases in which money or property is recoverable under any of the provisions of the Merchant Shipping Acts or the Merchants Shipping Act, 1923 (XXI of 1923).
4. Mode of exercise of Admiralty jurisdiction.---(1) Subject to the provisions of section 5, the Admiralty jurisdiction of the High Court may in all cases be invoked by an action in personam.
(2) The Admiralty jurisdiction of the High Court may in the cases mentioned in clauses (a) to (d), (1) and (r) of subsection (2) of section 3 be invoked by an action in rem against the ship or property in question.
(3) In any case in which there is a maritime lien or other charge on any ship, aircraft or other property of the amount claimed, the Admiralty jurisdiction of the High Court may be invoked by an action in rem against that ship, aircraft or property.
(4) In the case of such claim as is mentioned in clauses (e) to (h) and (j) to (q) or subsection (2) of section 3, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of the ship, the Admiralty jurisdiction of the High Court may, whether the claim gives rise to a maritime lien on the ship or not, be invoked by an action in rem against:--
(a) that ship, if at the time when the action is brought it is beneficially owned as respects majority shares therein by that person; or
(b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid.
(5) In the case of claim in the nature of towage or pilotage in respect of an aircraft, the Admiralty jurisdiction of the High Court may be invoked by an action in rem against that aircraft if at the time when the action is brought it is beneficially owned by the person who would be liable on the claim in an action in personam.
(6) In the case of claim in the nature of a maritime lien, other than a claim on a bottomry or respondentia bond or to the possession of the ship, the Admiralty jurisdiction of the High Court may be invoked by an action in personam against the owners of the property which would have been arrested if the proceedings had been in rem.
(7) Notwithstanding anything in the preceding provision of this section, the Admiralty jurisdiction of the High Court shall not be invoked by an action in rem in the case of any such claim as is mentioned in paragraph (n) of subsection (2) of section 3 unless the claim relates wholly or partly to wages, including any sum allotted out of wages or adjudged by a competent authority under the relevant law to be due by way of wages.
(8) Where, in the exercise of its Admiralty jurisdiction, the High Court orders any ship, aircraft or other property to be sold, the Court shall have jurisdiction to hear and determine any question arising as to the title to, or priorities of claims in, proceeds of sale.
(9) In determining for the purposes of subsections (4) and (5) whether a person would be liable on a claim in an action in personam it shall be assumed that he has his ordinary residence or a place of business within Pakistan.': ' A perusal of the above quoted section 3 indicates that subsection (1) thereof gives the names of the High Court which will have Admiralty jurisdiction within their territorial jurisdiction. It may further be noticed that subsection (2) enumerates the causes, questions or claims in respect of which the High Courts referred to in subsection (1) shall exercise Admiralty jurisdiction.
15. ' The appellants have invoked the admiralty jurisdiction of this Court by pleading their claim in terms of clause (c) of subsection (2) of section 3 in respect of mortgage/charge on ship.
16. Subsection (2) of section . 4 provides that the Admiralty jurisdiction of the High Court may in cases mentioned in clauses (a) to (d), (i) and (r) of subsection (2) of section 3 be invoked by an action in rem against the ship or the property in question. The expression "Maritime Lien" was coined in English Law by Sir Jevis while rendering the judgment of the Privy Council in case of The Bold Buccleuh ((1851) 7,700 PC 267). The jurists of eminence have differently defined it. Lord Alkin L.J. In the case of Tervaet ((1922) 259 CA) defined it as follows:-- ' .. Of the right by legal proceedings in an appropriate form to have the ship seized by the officers of the Court and made available by sale if not released on bail."
17. ' It may also be stated that proceedings so initiated are called action in rem against "res". The word "res" in the legal parlance in context of an admiralty action connotes a limited number of things such as ships and their cargoes and freights.
18. ' Four clauses of claims are treated as giving rise to the Maritime Lien on Ship, namely, (i) Salvage,
(ii) Collusion, damages, (iii) Seamen wages and (iv) bottomry or respondentia.
19. ' It may also be stated that section 6 of the Ordinance provides limitation for Maritime Lien, that no action shall be brought before the High Court to enforce a Maritime Lien for the damage sustained in consequence of collusion wheresoever occurring or any other Maritime Lien unless proceeding therein are commenced within two years from the date of damages occurring or the Maritime Lien arising subject to the discretion of the High Court to extend this period.
20. ' Mr. Akhtar Ali Mahmud, learned counsel for the appellants has raised the following grounds in support of the appeals:--
(1) That the learned Judge has failed to give reasons for such conclusion,
(2) No case has been made out for the recall of the order.
(3) The grounds favoured for the recall of the order that the parties are litigating at various forums, cannot be the basis of recall of the order of arrest.
(4) From the pleadings/disputed questions have been raised cannot be determined without evidence.
(5) No finding about the lack of jurisdiction has been recorded.
21. ' Learned counsel for the appellants maintained that conditions for arrest order in terms of rule 730 of the Sindh Chief Court Rules (0.S) are that (i) the suit is instituted based on action in rem, (ii) the presence of the ship within the jurisdiction of the High Court, (iii) Once the warrant of arrest of res is passed, the order cannot be recalled.
22. ' Learned counsel though with reluctance conceded that a party seeking the arrest of the ship has to show a prima facie case in his favour and further contended that the burden to show a prima facie case is not so onerous as in cases of an injunctive order in terms of Order 39 of the C.P.C.
23. ' The order of arrest is ex parte order. On notice, the arrest can be contested on behalf of the res and if the Court comes to the conclusion that the plaintiff has failed to make out a case for arrest, the warrant can be recalled. If reference is needed, the following cases can be referred (1) Sui Gas Transmission Co. Ltd. v. M.V. Good Herald 1983 CLC 886, (2) Arshad Corporation v. The Ship Maersk 'Astro' PLD 1988 Karachi 515, (3) Jaffer Brothers (Pvt.) Ltd. v. M.V. Eurobulker 2002 CLD 926. In last case one of us (Mr. Justice Shabbir Ahmed) recalled the warrant of arrest and dismissed the application under rule 731. The order was affirmed in appeal in Jaffer Brothers (Pvt.) Ltd. v. M.V.
24. Eurobulker 2002 CLD 926.
25. ' Learned counsel for the appellants' submission was that the learned Judge has based the order on extraneous material thus has erred in law, in elaborating his contention he pointed out that learned Judge has considered the documents filed through statements dated 13-12-2002, 14-12- 2002 and 16-12-2002. Particularly he referred the letter dated 9th December, 2002 of Barlow Lyde & Gilbert, Solicitors, addressed to Mr. Naeem Ahmed and contended that the tenor of the letter is not only contemptuous but also amounts to influencing, interfering in the decision. The content thereof reads as follows:-- Fax to Naeem AhmadE-Mail 00922 126 25545 From Eurof Lloyd-Lewis (63864-1/MAK/ELL/3.76) blg.co.ukE-Mail elloyd-lewis @ Direct telephone number 020 7643 7447Direct Fax number 020 7071 9601 No. of pages (including this page) Date 13 December, 2002 ' This fax is intended only for the addressee (s) named above. As this fax may contain confidential or privileged information, if you are not a named addressee or person responsible for delivering the message to the named addressee(s) please telephone us immediately. The contents should not be disclosed to any other person no copies taken.
26. ' Bahri and Angeloti v. Aoun Top Urgent ' We enclose a copy of the draft order of the Honourable Mr. Justice Gross. You may inform the Pakistan Court that .Mr. Justice Gross has granted Messrs Bahri and Angelpu's application for an injunction but the order is in draft and has yet to be finally approved by Mr. Justice Gross. The draft order will be placed before Mr. Justice Gross on Monday, 16th December, 2002 for his signature and will then be sealed.
27. ' We would draw your attention to paragraph 1 which states:-- "Until further order ' of this Court (Mr. Aoun) shall forthwith:--
(a) be restrained from taking any steps or causing any steps to be taken in relation to the prosecution of Admiralty Suit No,61 and No,62 of 2002 before the High Court of Sindh at Karachi (the Pakistan proceedings) save as necessary to comply with paragraphs (b) or (c) below;
(b) cause all necessary steps to be taken to secure the release of the vessels Abdoun Discovery and Camaro Pride from arrest in Pakistan; and
(c) cause all necessary steps to be taken to discontinue the Pakistan proceedings.
28. ' Mr. Akhtar A. Mahmud further contended that the aforesaid letter was considered by the learned Judge in the impugned order by referring the last portion of para.9 in the following words:-- "the defendant No,1 has also produced the document which is a fax which shows that a dispute between the partners has been taken before the High Court of Justice Queen's Bench Division, Commercial Court in England."
29. ' We have observed that not from the documents but from the pleadings, it is apparent that the parties are litigating in different Court of different countries i.e. (i) the Judicial Committee of Athens Court of Appeal, Greece, (ii) High Court of Justice, Queen's Bench Division, Commercial Court in England, the same view was taken by learned Single Judge. We are unable to carry us with the contentions raised by learned counsel to observe that on the basis of afdresaid letter, the learned Single Judge was influenced or the impugned order is the result of such influence.
30. ' So far the objection to the documents placed on record by statement dated 30-12-2002 is concerned, the photocopies of these documents were already on record brought through counter- affidavit and the original were placed through statement dated 13-12-2002 in pursuance of order passed on 10-12-2002, therefore, the objection of the learned counsel for the appellants is devoid of any force.
31. ' Elaborating the absence of reasoning for the impugned order, Mr. Akhtar A. Mahmud pointed out the concluding para.11, wherein learned Judge has recorded the finding as follows:-- "I am, therefore, convinced that prima facie no case has been made out for confirmation of arrest orders. The parties are obviously litigating all over the world and there is no doubt in my mind that each side is trying to gain an advantage over the other."
32. ' On the other hand, Mr. Abul Inam, learned counsel for respondents contention was that learned Judge has recorded the reasons and referred to the para. Nos.7, 9 and 10 and pointed out that the learned Judge in para.7 has recorded that the main issues raised viz. Suit barred by time and the claim based on forged document, the reasons are recorded in para.9, his further contention was that para.10 is material, whereby the learned Judge noticed that letter dated 12-12-2002 was produced by Messrs Jenga Shipping Co. Ltd. Respondent No,2 through their counsel, whereby they have admitted full liability though the respondents disowned such letter, and the learned Judge observed that cursory look at the signature compared to the signature available on record shows that it has been signed by one and the same person. He further contended that through letter referred to above the appellants tried to get a decree. The letter dated 12-12-2002 has been filed with the power of Mr. Zafar Hadi Shah, Advocate of this Court. It is written purportedly on respondent No,2's, letter head addressed to Messrs Zafar Shah Ali, Karachi Pakistan, the contents are as follows:-- "Dear Mr. Shah, ' This has reference to the earlier telephone communication with you and the power-of-attorney to you in respect of the Admiralty Suit No,62 of 2002, Messrs Abdoun Oil Company S.A. v. Abdoun discovery owned by Jenga Shipping Co. Ltd. Being before the High Court of Sindh, Karachi.
33. ' You are instructed herewith to inform the Court on our behalf that we do admit full liability of payments of loan in terms of loan agreement dated 12-1-1995 to Messrs Abdoun Oil Co. S.A. That these payments could not be made due to internal financial constrains and in house problems within our company."
34. ' He further contended that if the signatures on the letter and the power of Mr. Zafar Hadi Shah, Advocate are compared with the signature of First Party on loan agreement, it would be evident by naked eye that the signatures on the three documents are by one and the same person and the same observation has been made by the learned Single Judge. Mr. Abul Inam contended that this act on the part of appellant sufficiently demonstrates that the appellants have tried to play fraud on Court and have not come with clean hands.
35. ' Learned counsel for the appellant has contended that the agreement and in pursuance thereof, the amount has been paid through the vouchers, whether Hamid Gul Sharif was authorized or not is a matter of evidence as such, the plaintiffs cannot be non-suited without an opportunity to prove the agreement and the payment. His further contention was that by another agreement dated 12- 8-1999 (annexure 'P-15') between Muhammad Ali Aoun, Muhammad Hassan Bahri or Muhammad Chassan Al Bachri and Mr. Costas Angelou, to facilitate the resolution of disputes enumerated in clauses (A) to (D), parties agreed for appointment of Firm of International Auditors to carry out "forensic audit of Adboun and all related companies as set oUt in schedule 'B' and such report also reflects the amount advanced to the respondent No,2. The disputes between the parties to agreement were as follows:--
(a) Disputes have arisen between the parties hereto as shareholders in certain ship owning and ship management companies (the companies, a list of which is set out in schedule 'A' hereto).
(b) Mr. Aoun and Mr. Bahri have disputes relating to the business of Abdoun Oil Company S.A. Of Panama (Abdoun), arising out of the agreement between them dated 13 March, 1997.
(c) The parties hereto wish to record their agreement regarding the repayment to Mr. Angelou by Mr. Aoun and Mr. Bahri of a loan and interest thereon he has made to Abdoun at the request of Mr. Bahri in the total original principal amount of US$ 5,000,000.
(d) The parties hereto also wish to make certain arrangements in relation to the disputes between them (without prejudice to their rights under any existing agreement binding on them or any of them), on the following basis: ' On the basis of above agreement, the report dated 3-12-1999 of Messrs Ernst & Young Auditors in respect of the forensic audit has been placed, which has been referred by Mr. Akhtar A. Mahmud to demonstrate that the investment of the appellants. Company in "Abdoun Discovery" in the sum of US$ 2,450,000 to show the liability on the part of the respondents. Learned counsel for the respondent, with vehemence urged that the audit report has no relevance with the cause on two counts firstly that agreement was not between the party in present proceedings but between three individual and the loan agreement was not one of disputes under clauses (a) to (d).
36. ' Be that as it may, the audit report is at variance as to the amount of investment under heading 2.2. Source of Funds against "Abdoun Discovery", the plaintiffs' investment has been shown in US$ 2,450,000, whereas, in Appendix A under Galaxy Shipping Group, Analysis of Capital, the investment has been claimed in US$ 2563018 (Page 419), whereas, a sum of US$ 110324 was found payable to Abdoun Oil Company by the auditors in their report dated 3rd December, 1999 (Page 359) with further observation that the balance has not moved since July 1, 1998, which requires written confirmation of the balance by management representation as to their intention to pay this balance.
37. ' Mr. Abul Inam, learned counsel for the respondents has pointed out that the purported agreement was signed on 12-1-1995, whereas, the respondent No,2 Messrs Jenga Shipping Co. Ltd. Was incorporated on 23-2-1995. He pointed out the letter of Central Bank of Cyprus dated 20-2-1995 (page 133), whereby permission, under section 10 of the Exchange Control Law for the subscription, was granted and certificate of Registration (page 137). By referring these documents, Mr. Abul Inam's contention was that the agreement appears to be a manipulated one when the company a legal identity, was not in existence how can it enter into an agreement through proxy or otherwise.
38. He further contended that it is not the case of the appellants that the agreement was between the sponsors and the appellants. He also pointed out from the certificate dated 10-4-1998, issued by the General Counsul of the Republic of Panama in Greece (page 131) that Mr. Tefkros Papakypricou is Vice President of Abdoun Oil Company S.A. i.e. The appellants (Annexure 'D-2') as on 24-1-1994, :the following were Directors of the Company:--
1. Muhammad Ali Aoun President/ Director
2. Tefkros Papakyriacou Vice-President/Directo
3. Elena Papkyriacou Secretary/ Director
4. Sama Aoun Treasurer/ Director ' He also pointed out that said Tefkros Papakyriacou became the Director of respondent No,2 on 3- 9-1999 (page 167). Therefore, he had no legal authority to authorize any person including Hamid Gul Sharif to sign the loan agreement. He pointed out that the appellants have claimed that first payment was made on 25-8-1995, whereas respondent No,1 vessel was purchased on 10-4-1995 and referred the bill of sale in respect of the respondent vessel and on 13-4-1995. Maritime lien was created in favour of the Bangue Bruxelles Lambert by creating mortgage in the sum of US$ 4,550,000. He also pointed out that the photocopies of advices dated 23-8-1995, 2-10-1995, 7-8- 1996 and 10-7-1996 were filed by the appellants to show the disbursement of loan. The original of the same have been placed on record by the respondents under the Court's order which are available on the R&P of Suit No, 61 of 2002, if both copies and original of bank advices are compared, then it would be evident without any further proof that the photocopies of advices placed on pages Nos.59 to 69 are the result of modern mechanical manipulation.
39. ' We have placed the photo-copies with original of the bank advices produced by appellants and the respondents in juxta position as a result thereof not only the under-lined contents are missing from the photo-copies produced by appellants but also name of the appellant has been substituted in three advices in place of Messrs Jenga Shipping Co., the addressee. There is also manipulation in the amount in advice dated 2-10-1995 US$ 630510.77 instead of US$. By above manipulation in advice an attempt has been made on the part of the appellants to show the payment under the agreement, by the appellant whereas the originals negate the same as the nature of payments in original advices are different than pleaded by appellants.
40. APPELLANTS' PHOTOCOPIES RESPONDENTS' ORIGINALS BADOUN OIL COMPANY LTD ALKYON AVENUE 131 GR-166 73 VOULA/ATHENES S12 G95021948968 23-8-95 Ref./RW:558/CO37968.0001/58947 CO- 101, 257.0 DEBIT ADVICE WE HAVE DEBITED YOUR ACCOUNT AS FOLLOWS: ORDER: FAX DU 22-8-95 IN FAV. OF ACC. 112001394 USD AMOUNT 300,000 CHARGES40 D300,040 VAL24-8-1995 DETAILS OF PAYMENT: "ABDOUN DISCOVERY"BADOUN OIL COMPANY LTD.
41. ALKYON AVENUE 131 GR-166 73 VOULA/ATHENES S12 695021948968 ZV ZV 23-8-95 Ref /RW:558/CO 37968.0001/58947 CO- 101, 257.0 DEBIT ADVICE WE HAVE DEBITED YOUR ACCOUNT AS FOLLOWS: ORDER: FAX DU 22-8-95 IN FAV. OF ACC. 112001394 USD AMOUNT GALAXY SHIPPING AGENCY 300,000.00 CHARGES 40.83 TRANSFER THROUGH: CITIBANK N.A.
42. P.O. BOX 749 DUBAI UNITED ARAB EMIRATES ACCT: CITIBANK N.A. NEW YORK ABDOUN OIL COMPANY LTD ALKYON AVENUE 131 GR-166 73 VOULA/ATHENES CURRENT USD 1063920/000/333 TRANSACTION DATE 2-10-1995 DEBIT ADVICE TO CITIBANK N.A. USD 630.77 DUBAI-U.A. E.
43. IN FAVOUR OF GALAXY REFERENCE M/T ABDOUN DISCOVERY TO YOUR DEBIT USD 630,510.77 VALUE ________________ YOURS SINCERELY SINCERELY BRUXELLES LAMBERT (SUISSE) SA (ADVICE WITHOUT SIGNATURE)D 300,040.83 VAL24-8-95 DETAILS OF PAYMENT MANAGEMENT FEES & EXPENSES FOR "ABDOUN DISCOVERY"
44. TRANSFER THROUGH CITIBANK N.A.
45. P.O. BOX 749 DUBAI UNITED ARAB EMIRATES ACCT: CITIBANK N.A. NEW YORK FORM WITHOUT SIGNATURE JENGA SHIPPING CO. LTD.
131. ALKYONIDON AVE & NAFSIKAS STR GR-166 73 VOULA/ATHENES CURRENT ACCOUNT USD 1063920/000/333 ADVICE No.63 TRANSACTION DTE 2-101995 EXECUTION OF YOUR PAYNMENT INSTRUCTION TO CITIBANK N.A.
46. DUBAI-U.A.E. USD 203,000.00 IN FAVOUR OF GALAXY SHIPPING AGENCY REFERENCE M/T 'ABDOUN DISCOVERY CHARGES 28.00 TO YOUR DEBIT USD 203,028.00 VALUE 2-10-1995 YOURS SINCERELY BANQU E BRUXELLES LAMBERT (SUISSE) SA (ADVICE WITHOUT SIGNATURE)
47. ABDOUN OIL COMPANY SA MUSABEH AHMAD DARWISH BLED B.5 OFFICE No. 103 AL KARAMA AREA P.O.BOX No.25603.
48. DUBAI U.A.E.
49. CURRENT ACCOUNT USD 1063637/000/333 TRANSACTION DATED 7-3-1996 EXECUTION OF YOUR PAYMENT INSTRUCTION USD 351,814 REFERENCES M/T ABDOUN DISCOVERY CHARGES 28 TO YOUR DEBIT USD 351,842 VALUE 8-8-1996 YOURS SINCERELY BANQU E BRUXELLESJENGA SHIPPING CO. LTD.
131. ALKYONIDON AVE & NAFSIKAS STR, GR-166 73 VOULA/ATHENES CURRENT ACCOUNT USD 1063920/000333 ADVICE. No.74 TRANSACTION DATE 7-8-1996 EXECUTION OF YOUR PAYMENT INSTRUCTION TO CITIBANK N.A.USD 351,814 UNITED ARAB EMIRATES IN FAVOUR OF GALAXY SHIPPING AGENCY REFERENCES M/T ABDOUN DISCOVERY' & LPG/C CHARGES 28 TO YOUR DEBIT USD 351,842 VALUE 8-8-1996 LAMBERT SUISSE) SA (ADVICE WITHOUT SIGNATURE)YOURS SINCERELY BANQU E BRUXELLES LAMBERT (SUISSE) SA (ADVICE WITHOUT SIGNATURE)
50. ABDOUN OIL COMPANY SA MUSABEH AHMAD DARWISH BLED B.5 OFFICE No. 103 AL KARAMA AREA P.O.BOX No.25603 DUBAI U.A.E.
51. CURRENT ACCOUNT USD 1063637/000/333 TRANSACTION DATED 3-7-1996 EXECUTION OF YOUR PAYMENTJENGA SHIPPING CO. LTD.
131. ALKYONIDON AVE & NAFSIKAS STR.
52. GR-166 73 VOULA/ATHENES CURRENT ACCOUNT USD 1063920/000/333 ADVICE No.61 TRANSACTION DATE 3-7-1996 EXECUTION OF YOUR PAYMENT INSTRUCTION TO CITIBANK N.A.USD 125,000 INSTRUCTION USD 125,000 REFERENCES M/T ABDOUN DISCOVERY CHARGES 28 TO YOUR DEBIT USD 125,028 VALUE 5-7-1996 YOURS SINCERELY BANQU E BRUXELLES LAMBERT (SUISSE) SA (ADVICE WITHOUT SIGNATURE)DUBAI-U.A.E.
53. IN FAVOUR OF GALAXY SHIPPING AGENCY REFERENCES M/T'ABDOUN DISCOVERY'
54. MANAGEMENT CHARGES 28 TO YOUR DEBIT USD 125,028 VALUE 5-7-1996 YOURS SINCERELY BANQU E BRUXELLES LAMBERT (SUISSE) SA (ADVICE WITHOUT SIGNATURE)
55. The original advices were brought on record under Court order, there was no attempt on the part of appellants to produce the originals of the photo-copies of the advices produced by them. The aforesaid documents coupled with the letter dated 12-12-2002 leads to irresistible conclusion that the appellants have not come with clean hands and attempted to obtain an order by placing the manipulated documents, the same is nugatory to the existence of prima facie case in their favour.
56. ' This brings us to the plea raised by the respondents that the claim of the appellants does not fall within the ambit of admiralty jurisdiction of this Court as pleaded under section 3(2)(c) of the Ordinance. Secondly, the suit is barred by limitation as provided under section 6 of the Ordinance.
57. ' The claim in suit is in respect of the amount allegedly paid by the plaintiff for purchase of vessel "Abdoun Discovery" and the respondent No,2 have created charge on the vessel as follows:-- "The Second Party unconditionally and irrevocably agrees that in the event of default in repayment of the loan amount as agreed herein, the First Party shall have their absolute and full claim against the Second Party, their movable, immovable assets the vessels owned by them and the vessel M.T.
58. "Abdoun Discovery" being purchased. And to be dry-docked from the proceeds of this loan."
59. ' Learned counsel for the appellants on the basis of above premises, has contended that the claim of the appellants fall under clause (c) of subsection (2) of section 3. His further contention was that under section 4(2) of the Ordinance, an action in rem can be instituted against the ship or the property on which Maritime Lien has been claimed by the appellants.
60. ' On the other hand, Mr. Abul Inam's contention was that on the day when agreement was purportedly signed on behalf of the respondent No,2, it was not incorporated as juristic identity and to support of his contention has referred the certificate of incorporation of the respondent No,2 evidencing its incorporation on 23-2-1995. His further contention was that it is the case of the appellant that through bank advices, the amount of loan was paid to the respondent No,2 in instalments. First instalment was allegedly paid on 23-8-1995. Without admitting the contents of the advices, learned counsel for the respondents' contention was that respondent-ship was purchased much before the first instalment as is evident through Bill of Sale dated 10-4-1995.
61. Therefore, the alleged claim of the appellants does not fall under clause (c). Mr. Abul Inam contended that mortgage or charge on ship can be created even after the purchase but it is the case of the appellants that the amount was paid for purchase of the respondent vessel which has been belied by their own documents.
62. ' An action in rem can be instituted against the ship or the property on which Maritime Lien is claimed by the appellants. It is to be seen whether the plaintiff has Maritime Lien which is a privilege calim which a claimant exercises over the res (ship) in respect of which it arises and can be enforced by legal process. A Maritime Lien or his privileged claim or charge upon Maritime property in respect of the services rendered to it (repairs) or purchase or damage done to the ship, it occurs the moment, cause of action arises and attaches to the property to which the cause has accrued. It travels with the property secretly and unconditionally and can be enforced by an action in rem. The Maritime property means, a ship, cargo and freight irrespective of the Nationality. The claim which are recognized as giving rise to the Maritime Lien seamen, Master's charged and disbursement, damage done by ship to the salvage and respondentia. The appellants' claim falls under respondentia, a legal term applied to Maritime contract mortgaging the ship and their cargo for money advance. It is the case of the appellants that the amount was paid in instalment for purchase of the respondent-ship and for repayment, the respondent No,2 had created charge over the respondent No,
1. From the documents produced, the respondent No,1 was purchased much before the alleged payment. It has not been established that ship was purchased from the alleged loan, even the respondent No,2 was not in existence as legal identity, therefore, the appellants cannot claim maritime lien over the respondent vessel, nor the action in rem can be brought against the ship based on action in personam against the respondent No,2 in terms of subsection
(4) of section 4 of the Ordinance for the reason that the respondent No,2 was not incorporated when the loan agreement was allegedly executed.
63. ' Contention of the learned counsel for the appellants was that the appellants cannot be non- suited unless the opportunity is provided to them to lead evidence on disputed facts and also contended that in terms of Order 6, rule 2 only material facts are to be stated in the pleadings it does not require the evidence through which such material facts is to be proved shall also be stated in the pleadings and to support his contention, the reliance in this regard has been placed on cases of (1) Amir Jan & others v. Haji Ghulam Muhammad PLD 1997 SC 883 and (2) Sar Anjam v.
64. Abdul Raziq 1999 SCM R 2167. In the later case, the apex Court approved the view taken by Calcutta High Court in Moti Lal Poddar v. Judhistir Das Tear AIR 1916 Calcutta 658, that:- "it is absolutely essential that the pleading, not to be embarrassing to the defendants, should state those facts which will put the defendants on their guard and tell them what they will have to meet when the case comes on for trial. This much the plaintiff is bound to do, though he need set out the evidence whereby he proposes to prove the facts which given him the title."
65. ' It was further observed that every pleading shall contain and contain only a statement in a concise form of the material facts on which the party pleading relies for his claim of defence as the case may be but not the evidence by which they are to be proved.
66. ' There is no cavil to the proposition enunciated in above cases on the interpretation of Order 6. We are hearing the appeals against the order passed under rule 731 of Sindh Chief Court Rules (O.S.).
67. Such applications are to be disposed of on the basis of affidavits which have been filed with documents and the same are to be considered.
68. ' It has also been contended by the appellants' counsel that the Ordinance, 1980 conferring the admiralty jurisdiction this Court is a remedial in nature, is to be construed liberally and to support his contention he referred the case of Sui Gas Transmission Co. Ltd. v. M.V. "Good Herald" and 3 others 1983 CLC 886. No doubt such provision is a remedial in nature requires liberal interpretation but simultaneously, exercise of such jurisdiction should not be so harsh as to cause injustice to the other party or violence to the Statute.
69. ' Learned counsel for the appellants also made a feeble attempt to canvass that though in suit filed in rem, prime action lies against the res or the property and the Court while exercising admiralty jurisdiction can exercise the same either by proceeding in rem or by proceeding in personam Ahmed Investment Ltd. v. M.V. Sun Rise-4 PLD 1980 Karachi 229, a decision rendered under the provisions of Admiralty Court Act, 1861. The position under the provisions of Admiralty jurisdiction of High Court Ordinance, 1980 is confined to cases convened by subsection (4) of section 4 of the Ordinance, that puts certain conditions for invoking the admiralty jurisdiction of the High Court whether the claim gives right to maritime lien on the ship or not by an action in rem against:--
(a) the ship if at the time when the action is brought, it is beneficially owned as respects majority share therein by that person; or
(b) any other ship which at the time when the action is brought is beneficially owned as aforesaid: ' Provided it is shown that the claim in the suit falls in any one of the categories of cases mentioned in clauses (e) to (h) and (j) to (q) of subsection (2) of section 3 of the Ordinance; a claim arises in respect of a ship; and on the date of accrual of the cause of action, the person who would be liable in action in personam was either owner or charterer of or in possession or in control of the ship.
70. ' Last contention raised was that of limitation that the suit is barred by time, such plea is based on section 6 of the Admiralty Ordinance, 1980 which says that no action shall be brought before the High Court to enforce a maritime lien for the damage sustained in consequence of collision wheresoever occurring or any other maritime lien unless proceedings therein are commenced within two years from the date of the damage occurring or the maritime lien arising subject to the discretion of the High Court to extend this period.
71. ' A bare reading of the above provision would show that an action to enforce a maritime lien is to be commenced within two years from the date of damage occurring or the maritime lien arising. In the present case, it is not a case of damage but the maritime lien based on agreement dated 12-1- 1995 and in pursuance thereof the payment claimed to have been made through four bank debit advices dated 23-8-1995, 2-10-1995, 7-8-1996 and 7-11-1996. It is the appellants' own case that not a single penny has been paid. The loan agreement stipulates that any single event of default, in repayment of the loan amount and interest therein by the second party, shall entail any legal action by the first party against the second party, their assets, any and or all vessels owned by them, in any jurisdiction as the first party deems fit and proper, the second party unconditionally agrees to the first charge over the vessel "Abdoun Discovery" and other vessels owned by them.
72. ' Para. 6 of the plaint pertains to cause of action, which has been pleaded as follows:-- "despite repeated demands and requests for repayment, the respondent No,2, the owners of respondent No,1 failed and neglected in payment of the agreed quarterly instalments and time and again extension for repayment was granted by the plaintiff. Since the President of the plaintiffs' company was also a shareholder to the extent of 33% shares in the respondent No,2, such extensions were liberally granted and last such extension expired sometime in the year 2001 when the defendant No,2 refused repayment and thereby committed first charge in favour of the plaintiff and default specifically giving rise to maritime lien on the respondent No, 1."
73. ' The extension in limitation has been pleaded through extension granted by the appellants in payments of instalments by putting himself in duel position creditor and debtor, on assertion that the appellants' company President is also shareholder to the extent of 33% in the respondent No,2.
74. ' According to the loan agreement, the loan amount was to be released in portions to be mutually agreed upon starting from 28-1-1995 with repayment by quarterly instalments of US$ 2,50,000 first payable on 15-4-1995. According to the appellants' own documents, the first portion was released on 23-8-1995 and the last instalment on 7-8-1996, therefore, 1st quarterly instalment in repayment was due and payable after three months, on or before 7-11-1996 which has not been paid.
75. ' Mr. Akhtar Ali Mahmud tried to plead extension on the basis of letters addressed by Galaxy Maritime Enterprises S.A. Addressed to the plaintiffs' President dated 10-7-1997, 3-11-1997 and 9-5- 1998, whereby the promise was made for repayment of outstanding amount in due course. It was contended by Mr. Akhtar A. Mahmud that Galaxy Maritime Enterprises are the Shipping Managers of the respondent No,2 which has been disputed by the respondents' counsel by contending that the letters addressed by Galaxy Maritime Enterprises will not give the extension in limitation absence of any letter of acknowledgment and promised to pay by the respondent No,2 in terms of section 19 of the Limitation Act. It was also canvassed by Mr. Akhtar A. Mahmud that in terms of agreement dated 12-8-1999 between Muhammad Ali Aoun, Muhammad Hassan Bahri and Mr. Costas Angelou "forensic audit" was conducted by Messrs Ernst & Young Auditors and through their audit report dated 3-12-1999, the outstanding amounts were shown. Though the audit report has been commented upon by us. Even if audit report dated 3-12-1999 is taken for extension of time then the suit should have been filed within two years on or before 3-12-2001, whereas, the suit has been filed on 27-11-2001 beyond the period of two years. It has also been contended that appellants have given unilateral extension of time for repayment, a concept against the law.
76. ' Subsection (2) of section 29 of the Limitation Act provides that where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the First Schedule, the provisions of section 3 shall apply, as if such period were prescribed therefore in that Schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law:--
(a) the provision contained in section 4, sections 9 to 18 and section 22 shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law; ' Therefore, section 19 of the Limitation Act has been made applicable which provides that where before the expiry of period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was signed. Subsection (2) further provides that where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it is signed.
77. Explanation II further explains the term 'signed' means signed either personally or by an agent duly authorized in this behalf. Therefore, the extension as contended is neither provided under the law nor a case for condonation by Court has been pleaded with reasonable/justifiable grounds. If such law is in vogue in the country of respondents domicile, then such plea being based on foreign law must have been pleaded by the appellants as ruled by the apex Court in Atlantic Steamer's Supply Company v. M.V. Titisee and others PLD 1993 SC 88, that there seems to be consensus of view that question, whether a particular foreign law is applicable in a particular foreign country, is a question of fact and it was further held that since the question, whether a particular foreign law in a particular foreign country is a question of fact, in our view, it is to be pleaded expressly as a material question of fact and as the fact constituting cause of action in terms of the provisions of the C.P.C. Mr. Akhtar A. Mahmud, also urged that the question of limitation is mixed question of law and fact and the applicant may not be non-suited without opportunity to lead evidence. No doubt the limitation is mixed question of law and fact but in case the pleading and the documents filed lead to the conclusion that the suit is barred, the question has to be addressed in terms of section 3 of the Limitation Act even if such plea has been raised.
78. ' As a result of the above discussion, no exception can be taken to the view taken by the learned Single Judge in recalling the warrant of arrest by impugned order. The appeals have no merit, liable to be dismissed, while affirming the impugned' order we dismiss the appeals in limine, however, with no order as to costs.