In Brief
Chrisomar Corporation supplied bunkers worth USD 94,611.25 to the vessel M.V. Nikolaos-S in Durban in November 1999. When the vessel reached Haldia, Chrisomar filed an admiralty suit and obtained arrest of the vessel. On 18 January 2000, the parties entered a settlement agreement whereby payment would be made from freight earnings if the vessel sailed to Bangkok. When this did not materialize, Chrisomar obtained a second arrest on 2 May 2000. The respondent MJR Steels, claiming to have purchased the vessel, contested the second arrest. The Supreme Court held that the settlement agreement did not extinguish the original contract but merely provided an alternative mode of payment under Section 63 of the Indian Contract Act. It also held that claims for necessaries supplied to vessels, though maritime claims, do not create maritime liens, and that ownership must be assessed at the date of arrest, not institution of suit. The respondent failed to prove it owned the vessel on the arrest date. The appeal was allowed and Chrisomar's decree for the original amount was restored.
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