Admiralty and Maritime Matters in Bangladesh: A Brief Overview

Navigating the legal waters of admiralty and maritime affairs in Bangladesh involves a central concern: the jurisdiction of the Admiralty Court. The High Court Division of the Supreme Court of Bangladesh holds original jurisdiction to address admiralty cases related to ships or vessels anchored at any port in the country. Interestingly, individuals from any part of the world can initiate a lawsuit in the Bangladesh Admiralty Court against a vessel or its owner. The legal framework, encompassing laws like the Bangladesh Merchant ShippingOrdinance 1983, the Bangladesh Flag Vessels (Protection) Ordinance, 1982, the Admiralty Court Act 2000, etc., is designed to foster the growth of shipping in Bangladesh.

⦿ ADMIRALTY JURISDICTION OF THE HIGH COURT DIVISION

The High Court Division of the Supreme Court of Bangladesh is the Court of first instance, having admiralty jurisdiction as outlined in the Admiralty Court Act, 2000. According to Section 3 of the Act, the High Court Division serves as a Court of Admiralty, possessing the authority to hear and decide matters related to Admiralty law in Bangladesh. This includes disputes over ship possession or ownership, recovery of documents such as registration certificates and logbooks, and resolving conflicts among co-owners regarding the use or income of a ship. Additionally, the court has jurisdiction over claims involving the salvage of life from a ship or its cargo, whether on the high seas, within territorial waters, inland waters, or in a port. This jurisdiction extends to cases falling under the Civil Aviation Ordinance, 1960, as specified in Section 12 of the ordinance.

The High Court Division's admiralty jurisdiction can be exercised in two ways: in personam and rem, subject to certain conditions. In personam jurisdiction involves legal action against a specific person, while in rem jurisdiction allows the court to act against the ship, aircraft, or property itself.

The Admiralty Court holds jurisdiction to address and settle various matters, including disputes related to:

• The possession or ownership of a ship
• Disputes among co-owners of a ship regarding possession, employment, or income
• Claims concerning mortgages of or charges on a ship or its shares
• Claims for damage caused by a ship
• Claims for damage sustained by a ship
• Claims for loss of life or personal injury due to defects in a ship
• Claims for loss of or damage to goods carried in a ship
• Disputes arising from agreements regarding the carriage of goods in a ship or the use/hire of a ship
• Claims of salvage in the rescue of life from a ship
• Claims related to the towage of a ship or an aircraft
• Claims for the forfeiture or condemnation of a ship or its goods.

⦿ INSTITUTION OF SUIT

To initiate a legal action or suit in the High Court Division, a plaint (formal written statement of a plaintiff's case) must be prepared, signed, and verified in accordance with the Code of Civil Procedure, 1908. According to section 7 of the Admiralty Act 2000, the maximum court fee for Admiralty law in Bangladesh suits is set at Taka 1,00,000 (One Lac), with the exception of claims made by the master or seamen for wages earned on board.

⦿ POSSESSION OR OWNERSHIP OF THE SHIP

A common issue related to ship possession or ownership arises when a purchaser discovers that the ship they bought has been pledged as security to a bank by the previous owner. In such cases, both the bank and the purchaser can initiate legal proceedings in rem in the Admiralty Court. Additionally, they can seek a ship arrest to recover essential documents such as the registration certificate, logbook, and other certificates required for the ship's operation and navigation. This legal recourse helps address disputes and secure the rightful possession and ownership of the ship in situations involving financial encumbrances from the previous owner.

To avoid future ownership disputes, parties involved in a Ship Sale and Purchase agreement should thoroughly negotiate and include terms safeguarding both buyers and sellers. The agreement must outline obligations, payment terms, ship quality, materials, termination clauses, and breach remedies. Legal verification of the seller's ownership documents by lawyers is crucial for the purchaser's future security.

⦿ DAMAGE CAUSED BY THE SHIP

In the event of a ship sustaining or causing an accident, the ship's owner or master is required to submit a report to the Director-General of Shipping within three days of the incident or as soon as possible thereafter. This report must detail the accident, the damage incurred, and the likely cause, along with any other pertinent information. In cases involving a foreign-flagged ship in Bangladesh waters, the ship's agent is obligated to transmit a report to the Director-General within 24 hours of the incident. Failure to comply with these reporting requirements can result in a fine of up to fifty thousand taka.

To prevent collisions at sea, ship owners or masters must adhere to collision regulations, ensuring proper lighting and signalling. Given the frequent occurrence of casualties in the shipping industry due to various perils, marine insurance becomes crucial. This insurance covers losses or damages to ships, cargo, terminals, and other transportation elements throughout the journey. The marine insurance contract, involving the insurer, ship owner, or goods supplier, must be carefully drafted to address potential situations and prevent fraudulent claims. Key elements of a marine insurance contract include general terms, insurable interest, indemnity, good faith, proximate cause, subrogation, warranties, policy assignment, return of premium, etc. Brokers or insurers can initiate proposals for marine insurance.


⦿ ARREST OF SHIP

Bangladesh is considered highly advantageous for ship arrest proceedings. This is primarily because Bangladesh has not ratified any arrest conventions, providing flexibility in the reasons for which a ship can be arrested. The arrest can be carried out irrespective of the flag of the ship and can occur for various purposes, including security concerns, actions in rem or personam, enforcement of maritime liens or claims, and even the arrest of cargo or other property under the jurisdiction of the Admiralty Court.

The process of ship arrest in Bangladesh is known for being efficient, cost-effective, and accessible. The court's jurisdiction operates 24/7, eliminating time constraints. Unlike in some jurisdictions, there is no requirement for the court to provide counter security for the arrest, making it a quicker and less burdensome process. Furthermore, there is no established practice of awarding damages for wrongful arrest. Given these factors, ship arrest becomes a convenient and attractive option for those seeking remedies under admiralty law in Bangladesh

➤ Procedure - Arresting a Ship

When initiating the process of ship arrest in Bangladesh, certain documents need to be submitted along with the suit and application for arrest. These documents include:

• Power of Attorney executed by the client.
• The suit is allowed to be filed initially with a scanned copy of the Power of Attorney, under the condition that the original is submitted after authentication by the Ministry of Foreign Affairs and payment of stamp duty.
• All documents necessary to support the claim.
• Correspondence between the parties that can support the claim.

Once all the necessary documents are received, it typically takes 48 hours to obtain an order of arrest. This indicates a relatively quick turnaround time for the court to process the arrest order. However, it's important to note that the original documents mentioned above must be filed at the time of the trial.

➤ Procedure - Releasing the arrested ship

Releasing a ship from arrest in Bangladesh can be facilitated through the issuance of a bank guarantee by a local bank, serving as security for the claimed amount, including interest and costs. Typically, the entire claimed amount needs to be covered by the bank guarantee. However, the court may consider reducing the amount of security if the defendants can demonstrate prima facie evidence that the claim is overstated.

In cases where it is established that the vessel has been wrongly arrested and holds no liability to the plaintiff, the arrest can be lifted without requiring security. However, the process of proving wrongful arrest and obtaining a court decision on the matter can take 3 to 4 days. Upon receipt of the required security, the release order can be obtained within a day.

Another option available to the defendant against ship arrest is to contest the arrest by filing a vigilance or warning. This serves two purposes: preventing wrongful arrest by fraudulent claimants and minimizing the amount of security needed for the ship's release by providing the court with a detailed explanation of the actual circumstances. Although there is a provision under Admiralty law in Bangladesh rules for providing an undertaking along with a caution or caveat, it is not currently required by the Bangladesh court.

These options and procedures provide a legal framework for ship owners and defendants to efficiently handle ship arrests in Bangladesh, offering avenues to secure release and contest wrongful arrests when necessary.


⦿ MARITIME LIEN

In Bangladesh, the concept of maritime lien, particularly for seamen's wages, is established under sections 477 and 478 of the Merchant Shipping Ordinance 1983. A maritime lien is a legal claim that can be invoked, especially in situations where seamen have not received their wages for an extended period.

When seamen face prolonged non-payment of wages, they can seek recourse through a maritime lien. In such cases, the court typically issues an order for ship arrest, effectively holding the ship until the outstanding wages are settled. This legal mechanism ensures that seamen have a means to enforce their right to timely payment, providing them with a form of security and legal remedy when facing payment issues related to their employment on a ship in Bangladesh.

Furthermore, maritime lien allows the arrest of a ship for a claim, even if the ownership has changed, and the claim survives such changes. In contrast, for maritime claims, the ship cannot be arrested if ownership changes before the lawsuit is filed. The distinction lies in the ability to arrest a ship based on the nature of the claim and the timing of the ownership transfer.


⦿ ENFORCEMENT OF JUDGMENT

In the legal framework of ship arrests in Bangladesh, upon the court's satisfaction with a well-founded case and issuance of a judgment, payment can be enforced through various means. If a caveat is entered, attachment against the concerned party is an option, while in its absence, payment may be enforced by seizing the property. The court can order a sale, typically conducted by the Marshal, following established procedures for movable property sales unless otherwise specified.

Practically, if a bank guarantee is provided, it can be encashed in favour of the judgment debtor to satisfy the judgment amount. Moreover, foreign judgments and arbitration awards are recognized and enforceable in Bangladesh, facilitating the enforcement of international judgments and awards within the country. This legal framework ensures effective execution of judgments and awards, fostering the enforcement of legal decisions in the context of ship arrests and related legal proceedings in Bangladesh.


⦿ SHIP MANAGEMENT

Contemporary practices often involve ship owners entering into Ship Management Agreements with third-party ship management companies to oversee these responsibilities. This shift necessitates careful contract drafting, given that these third-party entities assume responsibility for maintaining the ship's seaworthiness and operational fitness.

The Ship Management Agreement should meticulously outline the delegated management responsibilities, specifying each party's roles and obligations. Key terms, such as financial arrangements, maintenance protocols, and technical supervision, should be clearly defined. The contract must articulate the circumstances under which the ship management company is accountable for any defects arising from inadequate maintenance. It should also address situations where the ship owner remains responsible for issues detected in the vessel, even after delegating management duties to a third party. This comprehensive and well-defined agreement is crucial to ensuring the efficient and reliable operation of the ship while mitigating risks and liabilities for both parties.


⦿ PREVENTING LITIGATION

Admiralty law in Bangladesh necessitates that companies adhere to laws, rules, and regulations for smooth business operations. To ensure compliance, parties can engage lawyers to negotiate and draft agreements tailored to their needs. These agreements should encompass terms for various events, including unforeseen circumstances during contract performance. Critical contracts in the shipping industry cover the sale and purchase of ships, transportation services, ship management, vessel rental, export and import, marine insurance, seafarer employment, and freight forwarding. Crafting comprehensive agreements is essential for navigating the complexities of Admiralty and Maritime laws.