Chapter 16

Tenth Edition (2017)

Necessaries Supplied or Services rendered to any Ship

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.

The High Court of Admiralty should have jurisdiction to decide all claims and demands for salvage for services rendered to any sea-going vessels, or for necessaries supplied to any foreign ship or sea-going vessel, and to enforce the payment thereof, whether such ship or vessel may have been within the bay of a country or upon the high seas at the time the services were rendered, or damage received, or necessaries furnished, in respect to which such claim is made.
 
"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.
 
 
 
BCAS: 7103-1001
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