The high court ruled that since it has been beached and cleared for dismantling, it cannot be considered a vessel any longer. Because the ship is no longer in the territorial waters of India, but is beached on an intervener's plot, it becomes goods. Hence the court's admiralty jurisdiction cannot be invoked.
On its last voyage to Alang, a container carrier M V ACX HIBISCUS with Panamanian flag was anchored near Colombo in April. The ship was anchored in dangerous vicinity of the submarine cables owned by Sri Lanka Telecom PLC.
The company even warned the ship and asked it to shift its position, but the vessel damaged its submarine cables.
As the ship started sailing towards Alang, the telecom company moved the high court in May seeking arrest of the vessel and to not permit it to be dismantled till it paid a compensation of $ 2.2 million for damages done to the cable.
The company sought immediate action saying that the ship was heading for dismantling at Alangship-breaking yard and once it was broken; there was no scope to extract money. The company also claimed that the ship was owned lately by Tastec Yokohama, Japan.
The high court immediately ordered for arrest of the vessel. But this brought the ship breaker -Bhuval Industries to court, which stated that the ship could not be arrested because, before the court's order of arrest, it was beached. Hence the admiralty suit was not maintainable before a beached vessel.
The ship breaker also contended that the vessel was in a dilapidated condition and there was a possibility of oil spillage, therefore the intervener be permitted to remove the bunkers and sell them. It also assured that the amount from the sale would be kept in a separate account. The intervener purchased the vessel for $ 3.78 million.
After the arguments, Justice Abhilasha Kumari rejected the suit saying that the customs duty has been paid by an independent importer. The vessel is no longer a foreign vessel. And above all, it is not a floating vessel.