Delhi HC Quashed Notification on Commercial Rights of Ships

Published: June 5, 2019

The Delhi High Court has quashed the notification under the ‘Make in India’ program which provided preferential commercial treatment to ‘Indian built ships’.

Notification of Central Government

The notification stated that the chartering of ships/vessels through the open/global tender process should give preference to bidders who offer Indian built ships. As a result, the Indian-built ship could get commercial rights higher than an Indian flag vessel in securing Indian business.

What did the High Court Say?

  • It creates a scenario wherein a foreign-built, foreign-owned, foreign flag vessel is treated on the same pedestal as a foreign-built, Indian-owned and Indian flag vessel.
  • The notification is against the provisions of the Merchant Shipping Act 1958 since Act governs ownership of and not where the ship is built.
  • The Merchant Shipping Act 1958 promotes Indian Flag vessels and promotes an increase in Indian tonnage. The notification seeks to do away totally with the existing protection which is provided to Indian Ships to have a right to do Indian business by matching the lowest rate quoted by the Foreign Flag Ships.
  • The provision has no nexus to the purported and ostensible objective of the impugned notification which is to further the interest of the Ship Building Industry in India.
  • Indian Ships are a Class by themselves and equalisation of Indian Ships with Foreign Flag Ships amounts to treating unequals equally which is violative of Article 14.

The High Court also noted that globally coasting trade is exclusively reserved for National ships bearing the national Flag of that jurisdiction and that no country in the world gives the same treatment to the National ships compared with Foreign Flag Vessels.

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