R.F.NARIMAN,J. - (1.) The present appeal raises several interesting questions which arise in admiralty law. The vessel, M.V. Nikolaos-S, was owned by one Third Element Enterprises, a Cyprus company, and was flying the flag of the Republic of Cyprus. The plaintiff in the admiralty suit, who is the appellant before us, supplied bunkers and other necessaries to the said vessel at the port of Durban on terms and conditions agreed between the parties in November, 1999. According to the plaintiff, the bunkers were received by the master of the vessel and services were rendered to the vessel as acknowledged by the master. The plaintiff raised invoices on 26.11.1999 for US$ 94,611.25 which have not yet been paid.
(2.) When the vessel docked in the port of Haldia, the plaintiff filed admiralty suit No.1 of 2000 in the Calcutta High Court praying for an arrest of the vessel because, according to the plaintiff, the necessaries supplied to the vessel would not only amount to a maritime claim but would also be a maritime lien on the vessel. By an order dated 6.1.2000, the vessel was so arrested but nobody came forward for release of the vessel at that point of time. It is only on 25.1.2000 that learned counsel appearing on behalf of the plaintiff approached the learned admiralty Judge expressing the plaintiff's intention not to proceed with the application for arrest as, according to him, the parties had reached an out of court settlement. The order passed on 25.1.2000 reads as follows:- "The Court by an order dated January 6, 2000 directed that the vessel known as M.V.Nikolaos - S was to be arrested. On the returnable date no one appeared on behalf of the respondents. The directions for affidavits had been given on January 10, 2000. Today when the matter was called on for hearing, counsel appearing for the petitioner submitted that an out of court settlement has been reached between the parties and the petitioner was not inclined to proceed with the matter any further. For these reasons, this application is dismissed for non prosecution. All interim orders are vacated. The vessel shall cease to be under arrest as of now."
(3.) It is important at this stage to advert to the agreement that was entered into on 18.1.2000. Since both sides have argued extensively on the aforesaid agreement, it is necessary to set it out completely. The said agreement reads as follows:- "AGREEMENT GUARANTEE In Piraeus and at the offices of "LALLIS OUTSINOS ANAGNOSTOPOULOS" Lawyers Maritime Consultants of 100, Kololotroni Street, Piraeus, this Tuesday the 18th January 2000, by and between: A. CHRISOMAR CORPORATION, a company duly established and operating under the laws of Liberia, maintaining an office in Greece (5 Solomou Str. Kifissia) (hereinafter called Chrisomar), duly represented, for the purpose of this agreement by its authorized lawyer Mr. Dimitrios Voutsinos, B. THIRD ELEMENT ENTERPRISES LTD, a company duly established and operating under the laws of Cyprus (hereinafter called "THE SHIPOWNERS"), duly represented for the purpose of this agreement by the President of the Board of Directors, Mr. Sotirios Soulkas, who also declared that he has the necessary authorization and capacity to bind the company to this agreement by his sole signature. C. Sotirios Soukas, of 145 Filonos Str, Piraeus, the following were stated and agreed. WHEREAS 1. The shipowners are the legal owners of the Cyprus flag vessel Nikolaos S, Int. Sign: P 3 KT 6 ("the vessel") managed in Greece by Suter Shipping and Trading Ltd. 2. Chrisomar has sold and delivered to the vessel in the port of Durban a certain quantity of bunkers, on or about 26th November, 1999, Chrisomar has issued its invoice no. 99232/15.12.1999 for the amount of USD 94,611.25, payable on 26th November, 1999 (Copy of the invoice is attached herewith as app. I). 3. The owners have failed to pay the amount of the above invoice by the 26th November 1999 and consequently, Chrisomar arrested the vessel in the port of Haldia, India for security of the above claim. THE PARTIES AGREE AS FOLLOWS 1. The shipowners hereby confirm that they owe to Chrisomar USD 104,688.60, analysed as follows: USD 94,611.25 for the invoice amount + USD 2,177.35 for interest accrued + USD 7,900.00 for legal costs. 2. The shipowners, through their President Mr. Sotirios Soukas, represent to Chrisomar that (a) their vessel is due to be chartered out for a voyage from Bangkok, Thailand to ports of West Africa as against a freight of about USD 35.00 per metric ton of cargo; (b) that if Chrisomar releases their vessel from the above arrest shall be able to proceed to Bangkok for loading and to perform the intended charter voyage; (c) that the shipowners as soon as their vessel is released from its arrest by Chrisomar shall include in their recap and charter party with the intended charterers of their vessel a clause that part of the freight amounting to USD 104,668.60 shall be paid directly by the charterers to Chrisomar's bank account as follows: ANZ GRINDLAYS BANK 21, Akti Miaouli, 18535 Piraeus Swift: GRNDGRAA, A/C No. 815142 USD 40632 In favour of Chrisomar Corp. 3. The above recap shall be faxed by the shipowners to Chrisomar one (1) working day after its conclusion. 4. The shipowners will not sell their vessel prior to the satisfaction of Chrisomar's above claim and shall provide Chrisomar with a report by fax of the movements of their vessel every five (5) days. 5. The above payment shall be made in full and final settlement of Chrisomar's above claim per capital and costs. 6. If, for any reason the above amount is not paid to Chrisomar within ten (10) working days after the ships sailing from the port of loading Bangkok or, the shipowners are in breach of any of the representations and obligations set out in paras 2, 3 and 4 above then Chrisomar will be entitled to take all the appropriate legal steps including the arrest of the vessel for recovering the above amount or any higher one which they may be entitled to. 7. Sotirios Soukas hereby guarantees to Chrisomar and in favour of the shipowner the due payment of the above amount, working the right of division and exclusion i.e. he admits that he will pay amounts due to Chrisomar without the latter having first to enforce its claim against the shipowners and their vessel. 8. If the vessel is lost, for any reason or if the mortgagee bank or any other claimant arrests the vessel before reaching Bangkok and as a result, the shipowners are unable to proceed for loading to Bangkok, and thus execute the above stated charter voyage, the above obligations of the guarantor shall cease to exist but Chrisomar will maintain its rights of recovery only against the shipowners and the vessel but not against the guarantor. 9. This agreement is subject to Greek law and the exclusive jurisdiction of the Piraeus Courts." ;