“Demise Charter is a legal agreement where a Shipowner leases an empty Vessel to a Charterer, who assumes full possession, operational control and financial responsibility for the Ship during the period of agreement.” Appellant let out M.V. Nereus Progress on a Demise Charter to Nereides Marine Services and Respondent let out M.V. Bharadwaj.
Appellant issued a Termination Notice, on 13.11.2025. Parallelly, Respondent instituted a Commercial Suit invoking Section 5(1)(b) read with Section 5(2) of The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. Nereides, on 02.12.2025, informed Appellant, M.V. Nereus Progress had reached Tuticorin. Before Appellant could complete taking physical possession, Respondent, on 04.12.2025, obtained arrest of M.V. Nereus Progress.
For the arrest to sustain under Section 5(2) read with Section 5(1)(b), Respondent was required to demonstrate, Nereides continued to be a Demise Charterer on 04.12.2025. The arrest cannot be sustained. Nereides held M.V. Nereus Progress only as a gratuitous bailee pending physical repossession. We cannot lose sight of practical consequences of treating physical repossession as a pre-condition for termination, rather than its consequence.
– Hon’ble Chief Justice of India, Hon’ble Justice Surya Kant, Owners and Parties, M.V. Nereus Progress v. Om Freight Forwarders Ltd., [Special Leave Petition (Civil) No. 23834 of 2026]
