Kerala High Court Orders Rs. 1,227.62 Crores Security in Maritime Pollution Case
Court Modifies Arrest Order of MSC AKITETA II, Ensures Security for Environmental and Economic Damages
The Kerala High Court, in a significant ruling, addressed the maritime suit filed by the State of Kerala against the vessel MSC AKITETA II in connection with the sinking of its sister vessel, MSC ELSA 3. The court, presided over by Justice M.A. Abdul Hakhim, modified the initial arrest order of the vessel, determining a security deposit of Rs. 1,227.62 crores, substantially reducing the initial demand of Rs. 9,531 crores.
The case, pivotal in addressing compensation for environmental damages and economic losses, arose from the sinking of MSC ELSA 3, which caused oil and cargo pollution, affecting marine life and the livelihood of fisherfolk. The court found that the State of Kerala was competent to file the admiralty suit under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, even though the incident occurred outside India's territorial waters.
After thorough consideration, the court justified the arrest of the sister vessel MSC AKITETA II, citing the need for security against claims related to oil and cargo pollution, as well as the economic impact on local communities. The court was convinced of the prima facie case for pollution and economic loss, though it emphasized the necessity of evidence in determining specific compensation amounts.
In its detailed analysis, the court rejected the Letter of Undertaking from a P & I Insurance Club as security, citing enforceability concerns. Instead, the court emphasized the importance of tangible security to ensure that any eventual decree could be executed effectively.
The judgment underscores the court's commitment to balancing the need for environmental protection with economic realities, ensuring that the security demanded is neither excessive nor oppressive. The decision also highlights the complexities of maritime law, particularly in cases involving international conventions and cross-border environmental impacts.
The State of Kerala has been granted the liberty to seek additional security if further evidence supports an increase, ensuring ongoing protection against potential future damages.
Bottom Line:
Admiralty Law - The Kerala High Court addressed the issue of compensation for environmental damage and economic losses caused by the sinking of the vessel MSC ELSA 3, including oil pollution, cargo pollution, and its impact on marine life and fisherfolk - The court determined the reasonable amount of security to be demanded from the sister vessel MSC AKITETA II for the release of the arrested vessel.
Statutory provision(s): Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, Merchant Shipping Act, 1958, Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976, Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.
State of Kerala v. M V MSC Akiteta II, (Kerala) : Law Finder Doc Id # 2784458
