Updated: Dec 15, 2020
India has a sizeable experience in ship trading, which is almost as old as the word “ship”. Owing to its valuable geographical factors such as a vast coastline of 7500 km,18 major ports and 187 minor ports, the activity of ship trading started to act as a backbone of the Indian economy. Approximately 95% of the country’s trade by volume and 70% in terms of value is carried through the sea. The Centre and States have collectively contributed a substantive amount of time and wealth in making India an ideal place for the establishment of the Shipping industry, be it Cruise Tourism, Inland Tourism, signing MOUs with other countries, infrastructure development on Ports, or Signing Sea Pollution Control Conventions, etc. This is why the Maritime Industry has always had a number of rules and regulations governing it.
Origin of Maritime law in India
Even though India has a history of sea trade even before the start of the colonial rule, the history of Maritime or Admiralty law majorly revolves around the British rule in India. The Letters Patent Act, 1862 marked the beginning of Admiralty jurisdiction in India and vested the High Courts in Bombay, Madras and Fort William in Bengal with jurisdiction for trial and adjudication of maritime disputes arising in India. Various other laws such as the Admiralty Offences (Colonial) Act 1849, Indian Ports Act 1908, Indian Merchant Shipping Act 1923, the Control of Shipping Act 1947, etc. were also made and were followed even though England progressed and accepted different international conventions relating to maritime causes.
However, in 1993, in the case of M.V. Elisabeth and Others v. Harwan Investment and Trading, the Supreme Court of India reviewed the Admiralty law and took a more progressive view. In this case, a cargo ship named “Elisabeth” was delivering goods from Goa to UAE without bills of lading (legal document containing details of the cargo). When a dispute arose, and the ship was arrested, the owner of the ship contended that according to the 1861 Act, every High Court had jurisdiction over every cargo carried into an Indian port and no jurisdiction if the cargo is carried out of an Indian port. The Supreme Court then laid down that there is no reason to think that the High Courts in India are superior courts of records with unlimited jurisdiction and inherent and absolute powers to decide on their own jurisdiction to redress grievances accordingly. Therefore, with this case, with respect to the view that there was no Indian Statute governing the Courts’ jurisdiction to regard maritime claims, the Supreme Court made the principles of International Conventions on Maritime Laws applicable in India as a part of its common law.
Current Maritime Laws in India
The Government of India, to get rid of such complexities, introduced a new consolidated form of legislation to replace all the previous old legislation which existed for more than 170 years. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 contains provisions relating to Admiralty jurisdiction of the High Courts, legal proceeding with respect to ships, their arrest, detention, sale, maritime claim, maritime lien and so on. In addition to the above legislation, there are a number of other legislation which directly or indirectly relate to maritime law. Some of the important legislations are:
1. Indian Merchant Shipping Act, 1958
This legislation contains provisions relating to the National Shipping Board, registration and certification of Indian ships; requirements that need to be complied with by the ship; certification of officers and crew employed on the ships; navigation; types of ships; their inquiry, investigation and penalties, and so on. It also incorporates numerous conventions with respect to the safety of life at sea.
Even though it appears as if the Act is comprehensive and updated, it is far from being so. This is because firstly, some provisions have been carried forward verbatim from the older Acts and secondly, the legislation is outdated as compared to the position of the law in other developed countries.
2. Multimodal Transportation of Goods Act, 1993
This legislation provides for the multimodal transportation of goods carried under a single transport document. This Act was introduced to reduce interruptions in the continuous movement of goods from their origin to their ultimate destinations, simultaneously reducing costs and delays and improving the quality of the transport system. It applies to all cases where two or more modes of transport are used in the course of transportation. The multimodal transport operator remains liable and answerable to the cargo owner in case there is damage to the cargo, only as long as the action is brought against him within nine months from the date of delivery of goods, or from the date when the Goods should have been delivered.
One of the drawbacks of this legislation is that there are numerous modes of transportation involved, both domestically and internationally and there is a lot of red-tapism in the whole process. Further, it also becomes very cumbersome for any operator or the consignee to litigate in forums and lower Courts with inadequate knowledge or experience in dealing with such subjects. These factors dissuade people from entering this segment and it continues to be dominated by the big players who can afford litigation costs, both monetary and mental.
3. Marine Insurance Act, 1963
The Act closely follows the UK Marine Insurance Act, 1906, with a few exceptions. According to Section 3 of the Act, marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses incidental to marine adventures. The Act deals with all aspects of the contract of insurance, insurable interests, disclosure and representations, policies, losses, salvage charges, indemnity and its charges, payment of premium, etc.
The Act is considerably clear in dealing with matters relating to marine insurance. However, the Act does not provide for losses that occur while the ship is in international waters. This limitation is unfavourable, especially to oil tankers and heavy cargo ships.
4. The Indian Carriage of Good by Sea Act, 1925
The object of this legislation was to secure uniformity of laws with respect to rights, liabilities and immunities of carriers by sea and the rules regarding bills of lading. It is noteworthy that this Act applies equally to foreign merchant ships as well as Indian merchant ships.
5. Customs Act, 1962
This legislation provides for the implementation and collection of duty on imported and exported goods in the country. It also deals with the procedure, prohibition, penalties, offences, etc. with respect to import and export in India.
6. The Major Port Trusts Act, 1963
The Act provides for the formation of port authorities, the appointment of officers, etc. for certain major ports in India. It also describes the powers given to the authorities for administration, control and management of such ports. Further, it also describes the works and services to be provided at the ports, powers to sell and dispose of the unclaimed cargoes, etc.
The Indian maritime law is not limited to these legislations. There are numerous other Ancillary Acts as well as general provisions of law which are applicable to the maritime industry.
Conclusion- What is the current situation?
It should be kept in mind that the law needs to evolve with the evolution of time and society. At the international level, most developing countries following sea trade have updated and extensive maritime legislations. Many legislations under Indian Maritime law, on the other hand, are still very much in line with the old English laws and would benefit from re-enactments and amendments. It is time for the law to become more novel. The Admiralty Act, 2017, Aids to Navigation Bill 2020 (to substitute the 93 years old Lighthouse Act), the Anti-Maritime Piracy Bill, 2019, etc. are examples of how the Indian maritime law is still in its developing phase, trying to get rid of what is outdated.