AUTHOR- Samridhi Sharda
Over the past few years, the landscape of corporate law and law of admiralty in India has been reshaped. With the codification of Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (‘Admiralty Act’) and the introduction of Insolvency & Bankruptcy Code, 2016 (‘IBC’) the scenario changed dramatically. The Bombay HC, on 19.05.2020 in the matter of Raj Shipping Agencies V. Barge Madhwa & Anr. finally settled two main issues of debate that have been prevailing among Indian maritime lawyers in India for decades. The court through the judgment passed, finally settled two major questions of debate with respect to Admiralty and Company laws.
Firstly, if there is a conflict between actions in rem filed under the Admiralty Act as well as the provisions of IBC, how is such a conflict to be resolved? And Secondly, whether leave of the company under section 446(1) of Companies Act, 1956 is required for the continuation of an admiralty action in rem, where a winding- up order had been issued, or was the Official Liquidator has been appointed as Provisional Liquidator of the company that owned the ship? The case arose after a multitude of admiralty cases were bought against of GOL Offshore Ltd. And TAG Offshore Ltd., which were subject to liquidation and termination. The court as held it held before in several other matters, upholded its previous judgment made in Pratibha Shipping Co Ltd v. Praxis Energy Agents S.A, 2019 and held that obtaining leave under Section 446(1) of companies act, 1956 is not required. The court thus held, that there is no conflict in allowing maritime claimant to improve his right in rem and this right can be exercised during and before the moratorium is imposed and also when corporate debtor was ordered to be liquidated. In addition the honorable court held that the Admiralty Act shall prevail over the old company law.
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