Section 10. Order of priority of maritime claims
(1) The order of maritime claims determining the inter se priority in an admiralty proceeding shall be as follows:—
(a) a claim on the vessel where there is a maritime lien;
(b) registered mortgages and charges of same nature on the vessel;
(c) all other claims.
(2) The following principles shall apply in determining the priority of claims inter se—
(a) if there are more claims than one in any single category of priority, they shall rank equally;
(b) claims for various salvages shall rank in inverse order of time when the claims thereto accrue.
How courts have applied section 10
- Crew wage claims carry a maritime lien under Section 9(1)(a) and rank at No.1 in priority under Sections 9 and 10 of the Admiralty Act, 2017.1,2,3,4
- A registered mortgagee cannot claim priority over the Admiralty Act regime based on Section 52 of the Merchant Shipping Act, 1958; that provision is regulatory.5,6,7
- A crew recruitment agency's claim for reimbursement of wages paid for owners is not a maritime claim under Section 4(1)(o), and ranks after crew wages, port dues and expenses.8
- Port and statutory dues are maritime claims under Section 4(1)(n) read with Section 9(1)(d), and can be decreed where statutory notices go unanswered and unobjected.9,10,11,12,13
- Where a shipowner does not appear or file a written statement despite proper notice, a decree can be granted on implied admission of liability against sale proceeds.14,15
- Crew wage claims rank equally among themselves.8
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The judgements here deal mainly with claims against the sale proceeds of arrested vessels, and courts most often decided who ranks first in the order of priority under Section 10 of the Admiralty Act, 2017. Crew wage claims were repeatedly held to be maritime claims carrying a maritime lien under Section 9(1)(a), and were ranked at No.1 in priority under Sections 9 and 10. Claims for port or statutory dues by a port authority were recognised as maritime claims under Section 4(1)(n) read with Section 9(1)(d), and were decreed against balance sale proceeds where the bills of charges and statutory notices went unanswered and unobjected.1,2,3,4,9,10,11,12,13
Courts applied the order of priority in Section 10 when distributing sale proceeds. In one case, crew wages ranked equally among themselves, port dues were treated as maritime claims with statutory priority, and a crew recruitment agency's claim for reimbursement of wages paid for the owners was held not to be a maritime claim under Section 4(1)(o), so the agency received only the residue after settlement of crew wages, port dues and expenses. A registered mortgagee's attempt to claim priority over the Admiralty Act regime by relying on Section 52 of the Merchant Shipping Act, 1958 was rejected; courts held the Merchant Shipping Act is regulatory.8,5,6,7
Where shipowners failed to appear or file a written statement despite proper notice in admiralty suits, courts granted decrees against sale proceeds based on implied admission of liability, recognising maritime liens under Section 9 for unpaid wages, and awarded interest and costs from the sale proceeds pool. In some cases, summary judgment under Order XIII-A of the CPC was granted to plaintiffs, including crew members and port authorities, after verifying claims through Commissioner reports and finding no real prospect of any successful defence. Courts also decreed suits for amounts with interest and costs, ordering appropriation of sale proceeds towards the decree, costs and poundage, with any balance recoverable separately.14,15,2,9,3,16,17
By court
Outcomes
Judgements applying section 10
The High Court of Gujarat granted a decree on admission to a seafarer claiming unpaid wages against the sale proceeds of an arrested vessel. The Court held that the failure by the vessel's erstwhile owner to file a written statement despite notice amounted to an admission of liability, entitling the claimant maritime…
Any other modeOpenThe High Court granted a decree on admission against the sale proceeds of the vessel Nand Aparna for unpaid crew wages. Relying on the respondent's failure to appear or rebut claims, the court held the dues were admitted and enforced a maritime lien under the Admiralty Act.
Any other modeOpenAdmiralty priorities; registered mortgage versus maritime lien; Section 52 Merchant Shipping Act 1958 versus Sections 9(2), 9(4) and 10 Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; sale proceeds represent the ship; action in rem continues against sale proceeds;
DisposedOpenAdmiralty priorities; registered mortgage versus maritime lien; Section 52 Merchant Shipping Act 1958 versus Sections 9(2), 9(4) and 10 Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; sale proceeds represent the ship; action in rem continues against sale proceeds;
DisposedOpenAdmiralty priorities; registered mortgage versus maritime lien; Section 52 Merchant Shipping Act 1958 versus Sections 9(2), 9(4) and 10 Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; sale proceeds represent the ship; action in rem continues against sale proceeds;
DisposedOpenAdmiralty priority determination; inter se priority of maritime liens and maritime claims; Section 9 Admiralty Act 2017 crew wages first priority; Section 10 order of maritime claims — maritime lien, registered mortgage, other claims; claims in same category rank equally; MT AEON IMO 9576818 sale proceeds;
DisposedOpen
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Competing claims to a vessel's sale proceeds concerned unpaid crew wages, port dues and recruitment-agency reimbursement. The court decreed wage claims and apportioned proceeds towards port dues and expenses. It held the agency's reimbursement claim was not maritime, but awarded it the residue and accrued interest.
DecreedOpen
Admiralty summary judgment; Order XIII-A CPC; crew wages; maritime claim s.4(1)(o); maritime lien s.9(1)(a); Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; priority of claims ss.9 and 10; MT Aeon IMO 9576818 ex-MT Selene; sale proceeds; Prothonotary and Senior Master release;
DisposedOpenBombay High Court (Admiralty and Vice Admiralty Jurisdiction), Abhay Ahuja, J. — Summary judgment under Order XIII-A of the CPC granted to the Board of Mumbai Port Authority for its maritime claim of port/statutory dues under Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of…
DisposedOpenOrder XIII-A CPC summary judgment in an admiralty suit; Bombay High Court Admiralty & Vice-Admiralty Jurisdiction (Commercial Division), Abhay Ahuja J.; Raj Shipping Agencies Limited v. Barge Madhwa; decree of Rs. 1,88,67,826 with further 12% interest and Rs. 8,50,000 costs;
DisposedOpenBombay High Court (Admiralty and Vice Admiralty Jurisdiction), Abhay Ahuja, J. — Summary judgment under Order XIII-A of the CPC granted to the Board of Mumbai Port Authority for its maritime claim of port/statutory dues under Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of…
DisposedOpenAdmiralty summary judgment; Order XIII-A CPC; crew wages; maritime claim s.4(1)(o); maritime lien s.9(1)(a); Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; priority of claims ss.9 and 10; MT Aeon IMO 9576818 ex-MT Selene; sale proceeds; Prothonotary and Senior Master release;
DisposedOpenBombay High Court (Admiralty and Vice Admiralty Jurisdiction), Abhay Ahuja, J. — Summary judgment under Order XIII-A of the CPC granted to the Board of Mumbai Port Authority for its maritime claim of port/statutory dues under Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of…
DisposedOpen
Show 4 more
Bombay High Court (Admiralty and Vice Admiralty Jurisdiction), Abhay Ahuja, J. — Summary judgment under Order XIII-A of the CPC granted to the Board of Mumbai Port Authority for its maritime claim of port/statutory dues under Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of…
DisposedOpenBombay High Court (Admiralty and Vice Admiralty Jurisdiction), Abhay Ahuja, J. — Summary judgment under Order XIII-A of the CPC granted to the Board of Mumbai Port Authority for its maritime claim of port/statutory dues under Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of…
DisposedOpenAdmiralty summary judgment; Order XIII-A CPC; crew wages; maritime claim s.4(1)(o); maritime lien s.9(1)(a); Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017; priority of claims ss.9 and 10; MT Aeon IMO 9576818 ex-MT Selene; sale proceeds; Prothonotary and Senior Master release;
DisposedOpenOrder XIII-A CPC summary judgment in an admiralty suit; Bombay High Court Admiralty & Vice-Admiralty Jurisdiction (Commercial Division), Abhay Ahuja J.; Raj Shipping Agencies Limited v. Barge Madhwa; decree of Rs. 1,88,67,826 with further 12% interest and Rs. 8,50,000 costs;
DisposedOpen