The LexGaze Weekly - DECIPHER

DISPUTE RESOLUTION IN THE MARITIME SECTOR

Saksham Grover

Issue 15 | September 28, 2020

The market for the maritime industry in India is becoming a tough commercial force. It is becoming more attractive as efforts are being made by the government to increase trade. According to the Ministry of Shipping, approximately 95 per cent of India's trading by volume and 70 per cent by value is done through maritime transport. Thus, it is safe to say that ports and shipping industries play a pivotal role in sustaining the growth of the country’s trade and commerce.


Activities in the maritime sector are managed by several different government bodies such as the Ministry of Shipping, Ministry of Road, Transport and Highways, each with distinct rights, responsibilities and jurisdictions. However, ambiguity in responsibilities and overlapping jurisdictions have led to exploitation of laws and dispute resolution mechanisms. Such a state of affairs has spurred the Indian government to act on it in order to restructure the outdated laws and mechanisms.


Society for Affordable Redressal of Disputes – Ports (SAROD-Ports)


On September 10 2020, the Union Minister of State for Shipping launched the SAROD-Ports for dispute resolution in the maritime sector, terming it as a game-changer for the port sector of India. The rollout of this mechanism aimed at facilitating affordable and timely resolutions of disputes for the maritime sector.


Over the last few decades, there have been several disputations, with major issues being facilities, revenue share, volumes and maintenance. Such disputes have been dragged on for years, with the outcome being high litigation and arbitration costs for all parties involved. The SAROD-ports mechanism is believed to be advantageous for both parties, in order to resolve conflicts in a speedy manner. Moreover, there have been conflicts about the expertise of arbitrators in the field. The SAROD machinery resolves this issue by providing experts in the arbitration process.


Arbitration


In maritime agreements, arbitration is one of the most common dispute resolution mechanisms. Established in 1965, the Indian Council of Arbitration formed the basic rules of appointment and administration with regards to Maritime Arbitration in India. Additionally, to meet the international standards of arbitration, the Indian Parliament brought in several amendments to the Arbitration Act of 1996. A rehabilitated interpretation of provisions relating to “interim relief”, inter-alia further consolidated the Maritime Arbitration mechanisms in India.


The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017


The new Admiralty Act was introduced with aims to amalgamate existing laws regarding civil matters of admiralty jurisdiction and proceedings relating to maritime claims, liens, arrest and detention of vessels, amongst others. The much-awaited legislation was finally brought into force in 2018 to redesign the archaic laws governing maritime disputes. The Act provides jurisdiction to respective High Courts and empowered the Central Government to extend such jurisdictions. Moreover, along with the right to appeal, the jurisdiction has been specified in regards to maritime claims, the arrest of ships, and other similar matters. Moreover, designated courts have been empowered with the admiralty jurisdiction.. These High Courts, which include the High Court of Bombay, Madras, and Calcutta derive their authority from the Colonial Court of Admiralty Act, 1891. Interestingly, an order of the Bombay High Court is executable across all Indian territorial waters. Simply stated, a ship can be “arrested” anywhere in India with an order of the Bombay High Court. On the other hand, Madras, Gujarat, Calcutta, Andhra Pradesh and Orissa High Courts have Admiralty Jurisdiction over their state territorial waters only.

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