On January 30, 2011, MV Nordlake, owned by a German company, was being closed upon by three approaching vessels. In the confusion that ensued and while contacting each ship vessel, there was a collision between MV Nordlake and INS Vindhyagiri.
The naval ship was taken to the port and it sank at her berth after the collision.
The Indian Navy filed a suit for arresting Nordlake. However, after MV Nordlake deposited ₹33,98,90,00 as security, the vessel was released from arrest.
MV Nordlake filed a cross suit seeking to limit its liability for the said collision. It also sought for the constitution of a limitation fund to limit its liability in the sum of Special Drawing Rights (SDR) 27,89,234, which is equivalent to ₹20,01,86,113 (over ₹20 crore). For this, it sought to withdraw the security amount deposited in the Central government’s earlier suit.
MV Nordlake contended that the damages sought by the Navy in their suit (₹1,397.76 crores) was in excess of the sum which it should pay since it had an absolute right to limit its liability under Section 352A of the Merchant Shipping Act.
It added that, apart from the Navy, no other person had made such claims in any other court in India or elsewhere for loss or damages arising out of a collision between the two vessels.
The Indian Navy opposed the application, contending that the collision was due to negligence solely attributable to MV Nordlake, which had no entitlement to limit its liability. The Navy added that it would suffer irreparable loss if the merchant vessel’s claim were allowed.
Source: Barandbench
