If it is conclusively shown that necessaries supplied or services
rendered to any ship are prima facie 'necessaries' and are within the
category of necessaries within the scope and ambit of section 5 of
Admiralty Courts Act, 1861, admiralty action will lie.
The concept of "necessaries" contemplated supply of goods or materials
to a particular ship for her operation or maintenance. It is also defined
to mean such as are fit and proper for the vessel upon her voyage now
necessaries includes insurance premium or club cover. For a ship to be
able to trade in commerce and in the present time context, the term
"necessaries" has to be given broad and liberal meaning. The maritime law
has developed over a period of many centuries and is still in process of
development. It cannot be confined to historical characteristic
principles, rules and practices in fast developing international trade and
commerce. The expression necessaries has to be given meaning within the
modern context of shipping and commerce and commercial expedience cannot
be over looked and ignored altogether.
Maritime law, to a great extent is international law and it is
important for commercial reasons that the courts in interpreting its
principles and terms have regard to broader global view and felt
necessities. The expression 'necessaries' or in other words "goods and
materials supplied or services rendered to a ship for her operation and
maintenance" needs to be construed keeping aforesaid position in mind. A
reasonable test to be applied is that goods supplied or services rendered
to the ship must be sufficiently and proximately connected with the
operation of the ship. The words operation of the ship cannot be construed
narrowly and must be viewed as a complete commercial operation. All things
reasonably requisite for a voyage or maritime adventure on which the ship
is bound to be covered and held to come within the term necessaries. The
operation of the ship would necessarily include operation of ship
necessary for voyage. Even in England no distinction is drawn between the
necessaries for the ship and necessaries for the voyage.
"Necessaries" as specified under the provision of the Admiralty Courts
Act, 1861 reads as:
"5. The High Court of Admiralty shall have Jurisdiction over any Claim for
Necessaries supplied to any Ship elsewhere than in the Port to which the
Ship belongs, unless it is shown to the Satisfaction of the Court that at
the Time of the Institution of the Cause any Owner or Part Owner of the
Ship is domiciled in England or Wales : Provided always, that if is any
such Causes the Plaintiff do not recover twenty pounds he shall not be
entitled to any costs, charges or expenses incurred by him therein, unless
the Judge shall certify that the Cause was a fit one to be tried in the
said Court. [As to claims for necessaries]."
Articles 1(k) and 2 of the 1952 Brussels Convention as regards "Maritime
Claim", are as under:
1. "Maritime Claim" means a claim arising out of one or more of the
following:
(k) goods or materials wherever supplied to a ship for her operation or
maintenance;
2. A ship flying the flag of one of the Contracting States may be arrested
in the jurisdiction of any of the Contracting States in respect of any
maritime claim, but in respect of no other claim; but nothing in this
Convention shall be deemed to extend or restrict any right or powers
vested in any Governments or their Departments, Public Authorities, or
Dock or Harbour Authorities under their existing domestic laws or
regulations to arrest, detain or otherwise prevent the sailing of vessels
within their jurisdiction."
The term "necessaries" had not been defined in the Act of 1861. It was
given a meaning by judicial pronouncements.
It stands accepted that having regard to the legislative and executive
policy, England and Wales never considered the arrears of insurance
premium as a 'necessary'. The Courts of England further maintained a
distinction between a maritime claim and maritime lien. English Courts
proceeded on the premise that for the purpose of considering as to whether
any necessary has been supplied to a ship or not must have a sufficient
and direct connection with the operation of the ship.
It is held that unpaid insurance premium is not a maritime claim as it is
not needed to keep it going. [See Queen v. Judge of the City of London
Court (supra), Heinrich Bjorn (supra), The Andre Theodore (supra), The
Aifanourious (supra). The English Courts, thus, refused to put a wide
construction on that term.
A similar view was also adopted by an Australian High Court in Gould v.
Cornhill Insurance Co. Ltd. [1 DLR 4th Ed. 183].
In The Riga [(1869-72) L.R. 3 A&E 516], it is stated:
"The definition of the term "necessaries" given by Lord Tenterden in
Webster v. Seekamp (4 B. & Ald. 352) adopted and applied in proceedings in
Admiralty. Semble, there is no distinction between necessaries for the
ship and necessaries for the voyage."
In The Edinburgh Castle [(1999) Vol. 2 Lloyd's Law Reports 362], it has
been held:
"To address these concerns, Mr. Charkham helpfully invited my attention to
a number of the authorities and to such discussion as there is on Section
20(2)(m) and its predecessors. Taking the matter very shortly, for present
purposes, the following propositions emerge:
1. The words "in respect of" are wide words which should not be unduly
restricted: The Kommunar, [1997] 1 Lloyd's Rep. 1, at p.5.
2. Section 20(2)(m), which is derived from the equivalent provision in the
Administration of Justice Act, 1956, contains a jurisdiction which is no
narrower than the predecessor jurisdiction in respect of claims for
"necessaries" : The Fairport (No. 5), [1967] 2 Lloyd's Rep. 162; The
Kommunar, sup.
3. No distinction is to be drawn:
...between necessaries for the ship and necessaries for the voyage, and
all things reasonably requisite for the particular adventure on which the
ship is bound are comprised in this category. [Roscoe, The Admiralty
Jurisdiction and Practice, 5th ed., at p. 203: The Riga (1872) L.R. 3 Ad.
& Ecc. 516].
4. The jurisdiction extends to the provision of services: The Equator,
(1921) 9 L1.L.R6. 1: The Fairport (No. 5), sup.
In the light of these propositions, I am satisfied that the plaintiffs
bring their claims within Section 20(2)(m). Provisions for the passengers
were "necessaries" for the particular adventure on which this passenger
vessel was engaged. The provision of services is capable of coming within
the subsection and does so here, given the nature of the services
provided. I should mention that I was referred in addition to The River
Rima, [1988] 2 Lloyd's Rep. 193 (H.L.) and [1987] 2 Lloyd's Rep. 106
(C.A.) but, as I understand it, nothing said there precludes my decision
in favour of the plaintiffs on the facts of this case."
In Nore Challenger and Nore Commander [(2001) Vol. 2 Lloyd's Law Reports
103] the claim relating to supply of crew was held to be "necessary"
stating:
"Before considering whether the concept of necessaries encompasses the
provision or supply of crew, it is important to bear in mind that it has
long been established that no distinction need be drawn between the supply
of necessaries and the payment for such supply."
Identical view has been taken by a Court of Durban in m.v. Emerald
Transporter [1985 2 SALR 448] with reference to the provisions contained
in Admiralty Jurisdiction Regulation Act 105 of 1983 wherein it was held
that services which are insured solely to the benefit of the ship owner
would not be classed as necessaries. The said decision was, however,
rendered in the context of ranking of claims against a fund comprising of
sale proceeds of the vessel m.v. Emerald Transporter.
The House of Lords in The River Rima (supra) considered the provisions of
Article 1(1)(k) of the 1952 Brussels Arrest Convention incorporating
"goods or materials wherever supplied to a ship for her operation or
maintenance" as a maritime claim. Having regard to the provisions
contained in Section 6 of Admiralty Court Act, 1840 and Section 5 of
Admiralty Court Act, 1861 it was held:
"In other words, what is now called a claim in respect of goods or
materials supplied to a ship for her operation or maintenance is the
equivalent of what used to be called a claim for necessaries, but without
the restrictions which formerly applied to such a claim."
(Emphasis Supplied)
The Singapore High Court also in Golden Petroleum (1994 1 SLR 92)
considered the expression "goods supplied to a ship for her operation and
maintenance" in the following terms:
"In my opinion, bunker oil supplied to the ship for sale to other ships
could not be conceived as goods supplied for her operation. The phrase
'operation of the ship' should not be equated with the business activities
of the shipowner and the section as enacted could not cover goods which
are loaded onto two ship only to be unloaded or disposed of soon
thereafter by sale."
Yet again in Gatoil International (supra), it was held:
"An agreement for the cancellation of a contract for the carriage of goods
in a ship or for the use or hire of a ship would, I think, show a
sufficiently direct connection. It is unnecessary to speculate what other
cases might be covered. Each case would require to be decided on its own
facts. As regards the contract of insurance founded on in the instant
appeal, I am of opinion that it is not connected with the carriage of
goods in a ship in a sufficiently direct sense to be capable of coming
within para (e)."
The question, however, is as to whether having regard to the changed
situation unpaid insurance premium should be held to be a commercial
necessity. With a view to answer the question it is necessary to consider
as to whether a failure to insure the security is a matter which would
have a bearing upon the security of the ship.
In Liverpool and London S.P. and I Asson. Ltd -v- m.v. Sea Success I and
Anr, it was held that unpaid insurance premium of the club would come
within the purview of necessaries; Unpaid insurance premium being a
maritime claim would be enforceable in India.
