
Brief Background:
In the present matter, the Hon’ble Supreme Court of India addressed a critical issue of whether a demise charterparty terminates upon the service of a valid notice of termination, or if it persists until the vessel is physically repossessed. The Hon’ble High Court had initially affirmed the arrest of the Appellant’s vessel, holding that the demise charterer’s status continued until actual physical handover of the vessel, thereby satisfying the jurisdictional requirements for a sister-ship arrest under Section 5 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (“Admiralty Act”). Reversing this position, the Hon’ble Apex Court held that service of a valid termination notice, when read with the relevant contractual provisions, characterized the charterer as a “gratuitous bailee” post-termination, which effectively displaced the charterer’s status as a ‘demise charterer’ of the vessel. Consequently, the Hon’ble Court ruled that the jurisdictional prerequisites for arrest under the Admiralty Act were not satisfied, finding that the contractual scheme did not necessitate physical repossession to consummate the termination, and accordingly vacated the arrest.
Facts in brief:
i. The Appellant in its capacity as the owner of Nereus Progress (“Vessel”) let out the Vessel on ‘demise charter’[1] to Nereides Marine Services, a UAE based shipping operator (“NMS”) vide the Bareboat Charterparty dated 3rd October 2024, executed on the BIMCO BARECON 2017 Form (“BBC”).
ii.Similarly, the Respondent had also let out its vessel , M.V. Bharadwaj (“Respondent’s Vessel”) to NMS, under a separate and independent Bareboat Charterparty dated 24th July 2024 (“Respondent’s BBC”).
iii. Thereafter, in and around August 2025, NMS started defaulting on its obligations to the Appellant under the BBC. Consequently, the Appellants issued a series of demand notices, calling upon NMS to clear the outstanding.
iv. As NMS failed to cure the defaults committed by it under the BBC, the Appellant issued a Anti-Technicality Notice dated 6th November 2025, granting NMS a period of 3 (three) days to regularise the defaults. Upon expiry of the said period, the Appellant issued a Termination Notice dated 13th November 2025 (“Termination Notice”) under Clause 31 of the BBC, calling upon NMS to disclose the whereabouts of the Vessel and place it at the Appellant’s disposal.
v. Additionally, the Appellant also issued a Repossession Notice dated 19th November 2025 under Clause 32 of the BBC, asserting its right to repossess the Vessel upon its berthing at Colombo, Sri Lanka.
vi. However, from the subsequent communication exchanged between the Appellant and NMS, it emerged that the Vessel was facing certain technical issues with the engine and was in the vicinity of the Indian Ocean.
vii. In this regard, NMS informed the Appellant that the Vessel had reached the port at Tuticorin, Tamil Nadu and sought instructions regarding its repossession by the Appellant.
viii. Simultaneously, NMS had also defaulted in complying with its obligations under the Respondent’s BBC. Accordingly, the Respondent preferred Comm. Suit No. 314 of 2025 before the Hon’ble Madras High Court under S. 5 (1)(b) r/w S. 5(2) of the Admiralty Act, seeking arrest of the Vessel on the basis that NMS continued to be its demised charterer, rendering the Vessel liable in rem.
ix. Accordingly, even before the Appellant could complete taking physical possession of the Vessel at Tuticorin, Tamil Nadu, the Respondent obtained an ex-parte interim order from the Hon’ble High Court on 4th December 2025, for the arrest of the Vessel.
x. Consequently, the Appellant filed an application before the Hon’ble High Court seeking recall of the ex-parte interim order dated 4th December 2025. After hearing the parties, the Ld. Single Judge of the Hon’ble High Court, dismissed the recall application, sustained the arrest and held that the Respondent abovenamed had made out a prima facie case for continuation of the arrest. In this regard, the Ld. Single Judge placed reliance on certain decisions of the Singapore High Court[2] and Sri Lankan Court of Appeal[3], holding that a demise charterer’s status under a bareboat charter does not stand extinguished merely upon issuance of a termination or repossession notice and such status would continue to be in effect until actual physical repossession of the vessel.
xi. The order of the Ld. Single Judge was carried in appeal by the Appellant herein before a division bench of the Hon’ble High Court. However, the Division Bench also upheld the order passed by the Ld. Single Judge. Hence, the said order was challenged before the Hon’ble Supreme Court of India by the present Appeal.
Issues framed by the Hon’ble Supreme Court of India:
Ratio Decendi:
[1] A 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 the Agreement.
[2] The Chem Orchid Judgment – [2015] SGHC 50
[3] Navi Bunkering Corp v. M.V. Evangeli – C.A. Case No. CA/REM/02/2018



(Granted Presidential Assent On 6th April 2026)







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