Authored by Vidhi Tiwari and Suman Setty
An outcome of the Brussels Conference on Maritime law held in 1922, [1]this Act governs the carriage of goods from and to India.[2]It was aimed at achieving a uniform law especially regarding rights and liabilities attached to the bills of lading with the international community.[3]
The Act imposes the numerous duties on the carrier of goods by sea from an Indian port like ensuring seaworthiness of the vessel[4], due diligence in handling the goods[5], issuance of the bill of lading[6]. This Act also lays down certain special provisions for these liabilities like in case of un-seaworthiness when the same is not result of the ship-owner[7], no liability of the shipper in case damage arising not due to fault on the shipper’s part[8], carrier not liable for damage in certain specified cases unless it arises out of his own fault[9], liberty to the carrier to surrender his rights as he wishes[10].
The SC in the East And West Steamship case [11]has held that the bill of lading is subject to laws of limitation which is one year as provided by the Act. This one year time limit is also subject to the limitation of one year after the decided date of delivery of the goods. The substantive rights conferred by the COGSA have uniform application to the Indian and foreign ships. No other evidence is needed to demand a reform in the Act.
This Act was introduced to enable the Indian law to deal with the development in contemporary changes in the year 1958[12]repealing most of pre-existing laws. The MSA incorporates many important provisions establishments, power s and functions of various authorities. Moreover it provides many other important laws related to procedural aspect of maritime law. It also provides for fixation of liability and other miscellaneous provisions.
This Act too is not free from the clutches of the shortcomings due to various reasons like literal incorporation of the old Acts’ provision[13], improper implementation of international laws [14]and the extreme inclusive nature of the Act. Supreme Court has dealt with interpretation of this Act in many cases like Shanmughavilas Cashew Industri[15], Sabeeha Faikage and Others v. Union of India and Others[16]where it indicated towards the loopholes in the Act and directed govt. to take Action in many forms through directives, guidelines etc.
This Act was introduced in view of the advanced technologies and their usage in trade[17]and to eliminate its adverse impacts. This Act had an objective of ensuring uninterrupted movement of goods through international political borders in cost saving method. It has provided for many procedural easementsto the ship operators etc along with provisions for determination of jurisdiction related laws.[18]Moreover, the MTG provides for liabilities of the multimodal transport operator.[19]
This Act does not stand free from loopholes despite being a comparatively recent legislation. The factum of limited knowledge of the operator has been ignored blatantly and a very complex system of forums and other laws have been imposed. This limits the operators from initiating legal proceedings to secure their rights. [20]Also, many issues are arising due to diversion of corporate houses into multi-model system. Other flaws in the Act are exclusion of air freight operators, annual renewal requirement of on yearly basis, more burdens of liabilities on multi-model operators etc.
Many scholars have suggested many amendments to improve the implementation of this Act. Primarily few changes should be brought in the Act.
First the title must be amended to make it inclusive of other activities, most importantly imports, rather than keeping it restricted to exports. Secondly, mention of registration number of the licence must be mandatory to be shown on the bills of lading and other documents to ensure visibility of the registration to make task of bankers, shippers etc. easy. Additionally, it can be made mandatory for the operators to show the proof of registration to the custodian of the goods at the port. Similar changes can be made through removal of ambiguity from the provisions. Also application of the Act must commence at the time of grant of registration and not at the time of the contract.
A huge portion of trade in India is handles by various ports and hence management of ports is necessary to e done on a concrete legal ground. In the constitution of India, ports find place in the concurrent list and hence legislations on both state and central level have been enacted. Ministry of shipping looks after the major ports through issuing directives from time to time whereas other ports are governed by state governments’ directives.
This Act is to provide a certain set of rules for administration of ports. It also constitutes authorities responsible to implement these provisions along with power and functions of such authorities. This Act has few shortcomings such as lack of time frame in sale of unclaimed cargoes under Chapter VI of the MPTA , limited powers conferred on the port authorities to enhance the efficiency of administration under Chapter V of the Act[21], lack of uniformity in tariff schedules, scales and service conditions.
There has no effort made to curb the shortcomings and to encourage healthy competition amongst service providers. Also there has not been any liberty to peruse alternative method of dispute resolution to avoid the cumbersome process of dispute resolution through port authorities for investors and users of the port. Hence an independent port authority should be established to investigate and adjudicate the matters related in a just and fair adjudication.
An effort was made by the Ministry of shipping in form of introduction of a new draft law which was a combination of the MPT Act and the Indian Ports Act, 1908. It was aimed at simplification of the Maritime law and to unify it in a single legislation. The bill however is yet to get approved by the parliament.
Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981 [‘Act’] was enacted to prevent growing exploitation of fishing in maritime zones by foreign vessel. The Act is in consonance with the United Nations Agreement for Implementation of the Provisions of the United Nations Convention on the law of sea.
Usage of foreign vessel in maritime zones of India is prohibited unless a license or a permit for the same has been approved by the Central Government under the Act. The term ‘Maritime Zones’ has been defined under the Act meaning to be territorial waters of India or exclusive economic zones. The Act provides for granting license to owners of foreign vessel. The absence of such license will not allow such foreign vessel to fish in maritime zones of India. License to an Indian citizen using a foreign vessel is granted by the Central Government only on satisfaction that such usage is in public interest. The pre-condition for obtaining license was further made stringent by introducing Maritime Zones of India (Regulation of fishing by Foreign Nationals) Rules 1982 [‘The Rules’]. For instance, under the Rules in order to get a license the owner of foreign vessel had to furnish details regarding the vessel and a relevant enquiry is mandated. It is mandatory for owner of foreign vessel to notify the authorities about approximate time of entry and its schedule before entering the maritime zones of India.
The Central Government is empowered to suspend or cancel the license granted to a foreign vessel if there is any reasonable cause to believe that holder of any license has made any false or misleading statement in application for such license. The Act also empowers the concerned officials to implement and enforce the provisions of the Act. Specific power of arrest and seizure vest with the local police officials in the coastal states. Interestingly, the Act does not require prior sanction of the Government to initiate prosecutions for the various offences.
However, the Act has certain major loopholes. There are several offences such as unauthorized research activity, acts aimed at collecting information to the prejudice of the security of India, unauthorized operation of vessel in the offshore development area which are not covered under the ambit of this Act or any other statutes. Moreover, Operations of deep sea fishing vessels with foreign crew have made the Indian coastal regions vulnerable to nefarious activities and therefore the Act needs immediate revision to make it stronger and efficient.
Suppression of Unlawful Acts against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act, 200 [“The Act”] is basically an anti-piracy law which was enacted to deal with illegal which jeopardize the safety of sea navigation and the protection of persons with property. It extends to the territorial waters, the continental shelf, the exclusive economic zone and any other maritime zone of India. The Act provides for imprisonment for persons who illegally and deliberately commits act of aggression against a person on ship. Moreover, any person who destroys or spoils maritime navigational methods is also punished under this Act.
The Central Government under the Act can confer power to arrest, inquiry and prosecution to any Gazetted officer under the Coast Guard. Further, the State Government shall specify the Sessions Court to be designated Court and such designated court shall follow the proceedings according to the Code of Criminal Procedure.
The Act was recently invoked against the Italian marines who shot dead two Indian fishermen. However, it sparked controversy since the procedure laid down in the Act was not followed. Moreover, the insistence of National Investigation Agency on invoking this Act delayed the prosecution, since the Italian marines objected to their categorization as ‘pirates’. Therefore, to align with the emerging forms of crimes committed in the national and International waters, the Act has to be amended.
Proclamations issued by the President of India governed India’s territorial waters and continental shelf for several decades. In 1976, TWCS Act was enacted and accordingly land, minerals and other resources underlying the ocean, within the continental shelf and the exclusive economic zone became the exclusive property of Union of India. The limit of the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India is provided under the Act. The Territorial waters of India extend up to 12 nautical miles from the baseline on the coast of India and includes gulf, harbour, creek or tidal river. On the other hand, India’s continental shelf extends to 200 nautical miles from the baseline. India’s application to extend the same to 350 nautical miles is pending before the UN Commission on the Limits of the Continental Shelf.
The legal framework specifying the nature, scope and extent of India’s rights, jurisdiction and control of various maritime zones is specified in the Act. The offenders under the Act might face punishment with imprisonment which may extend to three years or fine or both. Prior sanction of the Central Government is mandatory before instituting prosecution against such persons. The Central Government is empowered under the Act to make rules to carry out the purposes of this Act in general. However, SHOCKINGLY till date the government has not notified any rules.
For effective implementation of maritime security in India, the Act should provide powers to to Indian navy and Indian coast guard to search and seize vessel without prior approval of the Government. This will expedite the process of bringing the offenders before the competent Court. Such amendments will also curb terrorism and will ensure that Mumbai attacks of 26/11 are never repeated.
Marine insurance business is a form of business which gives effect to contracts of insurance on vessels irrespective of any description, including freights, cargoes, goods,wares, merchandise and property of whatsoever description insured for transit by water. It may also include warehouse risks or any form of similar risk which can be incidental to such transit and also includes any other risks which are customarily included among the risk clause in marine insurance policies.
Marine Insurance is one of the most vibrant branches under the ambit of insurance laws, the objective behind the act is to provide protection to the interests of ship owners’, buyers’ and sellers’ of cargoes. This Act codifies the law relating to marine insurance, while it closely follows the UK Marine Insurance Act, 1906 it also has a few exceptions. The primary purpose of this act is to ensure that the ship owner, buyer and seller of goods to operate their business and if their property is lost or damaged as a resultant of risks of the high seas, the financial burden of the same is covered under the insurance policy. It adds the element of financial security in case any accident during the transit of goods and cargoes, essentially it provides cover for losses and damages suffered due to marine perils.
Before this Act came into operation, the Indian courts followed the principles of English law, it adjudicated on the basis of principles and provisions of Marine Insurance Act, 1906. Marine insurance under this act has various essential features and principles. Although there is a national legislation to deal with this regime but in view of the fact that there is no uniformity in the international conduct of marine insurance and this would impede the very objective behind trade through sea.
References:
[1] Shukla D. S., Manual of Merchant Shipping Laws 393, 4th edn., (Allahabad: Dwivedi Law Publications, 2012).
[2] S.2, the Carriage of Goods by Sea Act, 1925.
[3] Ibid
[4] Art. III, ibid.
[5] “Law Relating to Sea Carriage”, http://www.lawyersnjurists.com/resource/course-materials/business-law/a-k-sen/commercial-law-law-of-carriage-by-sea-chapter-v/, [accessed on 3th April 2017].
[6] “Law Relating to Sea Carriage”, ibid. The Merchant Shipping Act, 1958 and theInternational Convention for the Safety of Life at Sea, 1960.
[7] S.3, The Merchant Shipping Act, 1958.
[8] Art. IV, ibid.
[9] Ibid.
[10] Art. V, ibid.
[11] The East and West Steamship v. S. K. Ramalingam Chettiar, AIR 1960 SC 1058.
[12] Hemant B. Bhattbhatt, ‘Overview of Maritime Sector in India’, paper presented at National Conclave on Shipping, organized by Deloitte, India, 2012, available at http://www.deloitte.com/assets/Dcom-India.
[13] British India Steam Navigation Company Co. Ltd. v. Shanmughavilas Cashew Industries, (1990) 3 SCC 481.
[14] World Tanker Carrier Corporation v.SNP Shipping Services Pvt. Ltd. and Others, AIR 1998 SC 2330.
[15] Sabeeha Faikage and Others v. Union of India and Others, (2013) 1 SCC 262.
[16] “An Overview of the Law of Multimodal Transportation”, http://www.scribd.com/doc/19300648/An-Overview-of-Law-of-Multi-Modal-Transportation-of-GoodsResearch-Paper, [accessed on 5th April 2017].
[17] The Multimodal Transport of Goods Act, 1993.
[18] Multimodal Transportation of Goods Act, 1993 http://www.dgshipping.com/dgship/final/notices/mto_concept_note.pdf, [accessed on 5thApril 2017].
[19] Department of Economic Affairs, Ministry of Finance, Government of India, The Port Sector in India 2, 2009, available at http://164.100.52.24/pdf/ppp_position_paper_ports_122k9.pdf.
[20] Sundar S., “Port Restructuring in India”, http://www.teriin.org/upfiles/pub/papers/ft22.pdf, [accessed on 4th April 2017].
[21]Shipping Min ready with draft of proposed new Ports Act’, The Economic Times, http://articles.economictimes.indiatimes.com/2011-07-24/news/29809848_1_major-ports-minor-ports-tariff-authority, [accessed on 6thApril 2017]