1. The petitioners are a company organised under the laws of the United Kingdom and have its office at 24, Lime Street, London. The respondents are a company registered under the Companies Act, 1956 and a statutory body constituted under S. 3 of the Oil and Natural Gas Commission Act, 1959, having principal/registered office at Tel Bhavan, Dehra Dun and regional office at Vasudhara, Bandra (East), Bombay 400051. According to the petitioners they had issued a certificate of insurance in favour of the respondents covering the vessel called M.V Sindhu VII. On 25th July, 1995 the vessel Sindhu VII (hereinafter referred to as “the vessel”) capsized and sank within the precincts of the Port and Harbour of Bombay. The respondents issued a notice of abandonment to their hull and machinery underwriters viz. The National Insurance Company Limited. This notice was not accepted by the National Insurance Company as the claim was treated as constructive total loss. The respondents had also taken out a policy known as protection and indemnity policy with the petitioners. The respondents made a claim under this policy. The petitioners examined the claim of the respondents. The claim was settled according to the petitioners. In view of the settlement, the respondents issued a deed of release on 28th September, 1995. By virtue of this, the respondents irrevocably abandoned and relinquished their right, title and interest in the vessel. It was also agreed to pass all plans, stability data and all the technical details of the vessel to the salvors which may be engaged by the protection and indemnity underwriters. The petitioners appointed Abhay Ocean Projects Limited (hereinafter referred to as “the salvors”) to salvage the wreck. On the same date, the wreck removal contract was entered into between the petitioners, the vessel, the respondents and the salvors. This contract was entered into in conjunction with the deed of release, mentioned earlier. The salvors had taken the responsibility in totality for removal of the wreck from the port precincts. They had also undertaken to comply with all the terms of the Major Port Trusts Act, 1963. These documents were executed for and on behalf of the petitioners by Allied Marine Consultants International. These documents were forwarded to the respondents on 10th October, 1995. They were also brought to the notice of Bombay Port Trust authorities. The salvors were permitted to continue with the salvage operations as they were approved by the Bombay Port Trust authorities. The salvors appointed Asiatic Salvors as sub-contractors. They were also approved by the Bombay Port Trust authorities. Thereafter the disputes arose between the salvors and the subcontractors. Thus, the contract between the salvors and the sub-contractors came to be terminated on 29th March, 1996. The wreck continued to lie in the Port precincts. The petitioners also terminated the contract with the salvors on the same date. Aggrieved against this, the salvors filed an Admiralty Suit No. 61 of 1996. This suit was disposed of in terms of the Minutes of the Order. The suit had been filed by the salvors against the vessel, the petitioners and Allied Marine Consultants International. Prayers made in the suit were to the effect that this Court be pleased to order and declare that the plaintiffs (salvors) are the owners of the vessel and are entitled to the possession thereof without any let or hindrance by the second defendant (Osprey — petitioners herein) and third defendant (Allied Marine Consultants International). Prayer clause (i) was to the effect that the defendants be ordered and decreed to do all such acts, deeds and things as may be necessary to effectively secure the plaintiffs rights. As noticed above, second defendants were the petitioners and the third defendants were the Allied Marine Consultants International, agents of the petitioners. Oil and Natural Gas Commission were not impleaded in this suit. By order dated 26th April, 1996, decree in terms of prayer clauses (c) and (i) was passed. Prayer clauses (c) and (i) are as under:

(c) that this Hon'ble Court be pleased to order and declare that the plaintiffs and the owners of the 1st Defendant Vessel its hull, tackle, engines, etc. and entitled to possession thereof without any let or hindrance by the 2nd & 3rd Defendants.

(i) that the Defendants be ordered and decreed to do all such acts, deeds and things as may be necessary to effectively secure the plaintiffs rights.

In spite of the above order, the salvors took no steps to remove the wreck. Thus, the Port authorities by a letter dated 23rd September, 1996 made a demand on the petitioners, the respondents, Allied Marine Consultants International, and the salvors for removal of the wreck and called for a security deposit in the sum of Rs. 3.50 crores. The petitioners disputed this demand by the Port authorities as the salvors had taken over the wreck in October, 1995. This position was confirmed by the consent order passed in Admiralty Suit No. 61 of 1996. Without prejudice to their rights and contentions that they are not liable to remove the wreck they undertook to remove the wreck which the Port authorities rejected. The petitioners, therefore, lodged contempt petition against the salvors for having committed contempt of the Court's order dated 26th April, 1996. Even though the contempt petition is pending, the respondents have filed Admiralty Suit No. 110 of 1997 on 24th October, 1997. In the suit, the respondents are seeking a declaration that the deed of release is valid and payment of Rs. 3.50 crores, in the event the respondents have to pay the same to the port authorities.

2. It is submitted by Mr. Rebello that the suit filed by the respondents is not maintainable. The insurance cover issued by the petitioners in favour of the respondents contain an arbitration clause. The said arbitration clause is as under:—

“Notwithstanding anything else to the contrary, this insurance is subject to English law and practice and any dispute under or in connection with this insurance is to be referred to Arbitration in London, one Arbitrator to be nominated by the Assured and the other by Osprey on behalf of Underwriters. The Arbitration shall be conducted pursuant to exclusive supervision of the English High Court of Justice. In case the Arbitrators shall not agree, then the dispute shall be submitted to an Umpire to be appointed by them. The award of the Arbitrators or the Umpire shall be final and binding upon both parties. In the event of a conflict between this clause and any other provision of this insurance, this clause shall prevail and the right of either party to commence proceedings before any Court or Tribunal in any other jurisdiction shall be limited to the process of enforcement of any award hereunder.”

3. Relying on this Arbitration clause, the petitioners have issued a notice to the respondents to appoint the Arbitrator on 20th January, 1998. The present petition was filed on 27th January, 1998 with a prayer that the disputes be referred to arbitration in accordance with the Arbitration Clause reproduced above. Prayer clause (b) is for stay of the proceedings in Admiralty Suit No. 110 of 1997 during the pendency of this petition and during the pendency of any arbitration proceedings. Mr. Rebello appearing on behalf of the petitioners has submitted that the Arbitration clause is so widely worded that it will encompass all the disputes which have been raised by the respondents in an Admiralty Suit No. 110 of 1997. Therefore, all the disputes mentioned in an Admiralty Suit No. 110 of 1997 ought to be referred to arbitration. Further more since the continuance of the Admiralty suit would result in multiplicity of the proceedings, therefore, the same ought to be stayed.

4. Mr. Dada appearing for the Oil and Natural Gas Corporation submitted that this plea is not open to the petitioners at all. It is submitted that the Admiralty Suit pending in this Court is a proceeding in rem. Thus, the same cannot be referred to arbitration. The rights of the parties mentioned in the suit will have to be decided in the said suit. Since it would be a decision in rem, it would not only be binding on the parties, but also it would be binding on the whole world, as it would be ajudgment in rem. In support of these submissions, the learned counsel relies on two judgments on the Supreme Court, in the case of M.V Elisabeth v. Harwan Investment & Trading Pvt. Ltd. Goa reported in AIR 1993 SC 1014: (1993 AIR SCW 177) and Chiranjilal Shrilal Goenka v. Jasjit Singh reported in (1993) 2 SCC 507: (1993 AIR SCW 1439).

5. It is further submitted by Mr. Dada, the learned Additional Solicitor appearing for the respondents that the security has been offered only to avoid the numerous ships belonging to the Oil and Natural Gas Corporation Limited being arrested on their frequent trips to and from Bombay High. The reason for which the security has been given is, however, not relevant for the purpose of the decision of this petition. The respondents had no alternative but to file Admiralty Suit No. 110 of 1997. In this suit, the petitioners herein are impleaded as the defendant No. 1, Allied Marine Consultants International as the defendant No. 2, the vessel as the defendant No. 3, the salvors as the defendant No. 4 and the Board of Trustees of the Port, Bombay as the defendant No. 5. Prayer in this case is to the effect that the deed of release dated 28th September, 1995 is valid and is enforceable against the defendants Nos. 1 and 2. Thus, it is prayed that the defendants Nos. 1 and 2 are liable to remove the wreck of the vessel, impleaded as the defendant No. 3. It is also prayed that in the event the plaintiffs are required to pay the fifth defendants a sum of Rs. 3.5 Crores, then the defendants Nos. 1 and 2 be ordered to repay the said amount to the plaintiffs with interest thereon.

6. In view of the observations made and the law laid down by the Supreme Court, I find little justification in the prayers which have been made by the petitioners. Apart from this, it is to be noticed that in the earlier Admiralty Suit No. 61 of 1996, by consent of the parties, it had been agreed that the ownership of the vessel shall vest in Abhay Ocean Projects Limited. Clause 4 of the consent terms, emphatically states that all authorities concerned, shall be bound by the order. This clause specifically provides that “It is understood that a copy of this order shall operate as a notice of transfer of ownership of the said vessel “Sindhu-VII” in favour of the plaintiffs via-a-vis all authorities concerned who shall be bound to act on it.” A copy of this order was sent to the Bombay Port Trust authorities and the respondents herein, being Oil and Natural Gas Corporation Limited. The aforesaid clause clearly re-enforces the submission of Mr. Dada that the orders passed in Admiralty Suits are orders in rem and therefore, they are binding on all the authorities concerned. The submissions made by Mr. Dada, the learned Additional Solicitor General are fully supported by the judgments of the Supreme Court in M.V Elisabeth (AIR 1993 SC 1014) (supra) and Chiranjilal (1993 AIR SCW 1439) (supra). In paragraph 45 of Elisabeth's case (AIR 1993 SC 1014) (supra), the Supreme Court observes as under:—

“45. “………In admiralty the vessel has a juridical personality, an almost corporate capacity, having not only rights but liabilities (sometimes distinct from those of the owner) which may be enforced by process and decree against the vessel, binding upon all interested in her and conclusive upon the world, for admiralty in appropriate cases administers remedies in rem, i.e, against the property, as well as remedies in personam, i.e, against the party personally……” Benedict, The Law of American Admiralty, 6th ed. Vol. I p. 3.”

Thus, it becomes quite clear that the proceedings in Admiralty Suit No. 110 of 1997 are proceedings in rem and any findings given therein will be conclusive upon the world. In Chiranjilal's case (1993 AIR SCW 1439) (supra), the Supreme Court observes as follows in paragraphs 20 and 21:—

“20. On a conspectus of the above legal scenario we conclude that the probate Court has been conferred with exclusive jurisdiction to grant probate of the will of the deceased annexed to the petition (suit); on grant or refusal thereof, it has to preserve the original will produced before it. The grant of probate is final subject to appeal, if any, or revocation if made in terms of the provisions of the Succession Act. It is a judgment in rem and conclusive and binds not only the parties but also the entire world.”

“21. From this perspective, we are constrained to conclude that the arbitrator cannot proceed with the probate suit to decide the dispute in issues 1 and 2 framed by him. Under these circumstances the only course open in the case is that the High Court is requested to proceed with the probate suit No. 65 of 1985 pending on the probate jurisdiction of the High Court of Bombay and decide the same as expeditiously as possible.”

In view of the law laid down in the aforesaid two judgments, it becomes clear that the disputes which have been raised in Admiralty Suit No. 110 of 1997 cannot be referred to arbitration.

7. In view of the above, I find no merit in this petition. The same is hereby dismissed with no order as to costs.

Certified copy expedited.

Petition dismissed.