23 March, 2022

Post Arrest Maintenance Expenses: Recognized as Sheriff's Expenses

The recent ruling by the Division Bench of the Bombay High Court in the Swedish Club v. V8 Pool Inc. and others brought relief to P&I Clubs, resolving a dispute over (i) crew wages incurred post-arrest and (ii) a P&I Club's claim for crew wages and provisions supplied. The judgment settled the debate surrounding the status of crew wages after an arrest and the Club's subrogation claim for wages paid.

The case arose from appeals filed by crew members aboard the vessel MT GP Asphalt I ("Vessel") and The Swedish Club, the P&I Club for the vessel. The crew challenged an order by the Ld. Single Judge of the Bombay High Court, which rejected their application to recover wages accrued post-arrest of the Vessel as Sheriff’s expenses.

The Appeal Court determined that:

• The Sheriff isn't required to file a report to claim expenses as Sheriff’s expenses. Any party can apply for expenses through the Sheriff, prioritizing the well-being of the crew members. Therefore, the Club's expenses, submitted through an application and willing to route its payment through the Sheriff, should be considered as Sheriff’s expenses.
• Crew wages post-arrest should be treated as Sheriff’s expenses without the need for a lawsuit, proving claims, obtaining a decree, determining priorities, and seeking payment out. Any doubts or objections regarding the claims' validity can be verified by the Sheriff or the Commissioner for Taking Accounts.
• Since crew wages post-arrest are deemed Sheriff’s expenses, the Club's payment under the MLC qualifies as such.
• A Sheriff’s report can be filed upon application by a party seeking payments for vessel and crew preservation, with corresponding orders issued. Additionally, due to the ambiguity surrounding the steps to be taken if a vessel is abandoned post-arrest, the Court established guidelines for Admiralty Courts to follow in such instances.