Sanchayita Lahkar

The High Court of Kerala Single Bench of Justice M.A. Abdul Hakhim permitted the addition of multiple claimants to the admiralty proceeding concerning the sinking of the vessel MSC ELSA 3 off the State’s coast earlier this year. Issuing an interim order on Monday (November 11), the Court allowed impleadment in the suit initiated under Part XA of the Merchant Shipping Act, which governs the limitation of a shipowner’s liability for maritime claims. The Court held that individuals and entities asserting cargo loss, environmental impact, or livelihood-related damage are entitled to participate as persons interested in the eventual constitution and distribution of the limitation fund, while applications from those who disclosed no compensable claim were declined.

The suit was instituted by three plaintiffs connected with the vessel MSC ELSA 3, respectively described as the owner, bareboat charterer, and time-charterer/operator. They approached the High Court seeking constitution of a limitation fund under Part XA of the Merchant Shipping Act, 1958, following the vessel’s sinking on May 25, 2025, approximately 14.6 nautical miles off the Kerala coast during its voyage from Vizhinjam to Kochi. Multiple admiralty suits were subsequently filed by cargo owners, fishermen, boat owners, and the State of Kerala alleging loss of cargo, damage to fishing vessels and equipment, environmental harm, and economic loss.

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Public notice of the present proceeding was issued through newspapers in August 2025, inviting persons with claims arising out of the incident to appear. Thereafter, several third-party applicants sought impleadment, including cargo owners, insurers asserting rights through subrogation, individual fishermen, boat owners, and associations. Some applicants had already instituted admiralty suits, while others stated that they intended to raise claims within the limitation period.

The plaintiffs opposed most impleadment applications, contending that only existing claimants who had filed suits could participate and that the limitation fund was a statutory mechanism not dependent on the number or magnitude of claims. The applicants argued that they were directly affected by the sinking and were entitled to be heard in the proceedings determining liability limitation under Sections 352A to 352C of the Merchant Shipping Act. The evidence before the Court consisted primarily of affidavits filed in support of and in opposition to the impleadment requests.

The Court recorded that “the suit is filed by the Plaintiffs… for the constitution of a limitation fund under Section 352B… for the purpose of limiting their liability arising out of all the claims on account of the sinking of the vessel MSC ELSA 3.” It noted that several admiralty suits were already instituted by cargo owners, boat owners, and the State.

Addressing the scope of Section 352C, the Court stated that “it is a complete code for the constitution of the limitation fund, consolidation of the claims, and distribution of the limitation fund rateably among claimants.” It further recorded that “Section 352C does not refer to any suit… [and] does not say that the claimants have to file suits and establish their claims to claim from the limitation fund.”

The Court observed that once the limitation fund is constituted, “future suits are barred with respect to the claims coming under Section 352B.” It discussed the effect of subsection (3): “after constitution of the limitation fund, no person who is entitled to claim against the fund shall be entitled to exercise any right against any other assets of the owner.”

In interpreting consolidation, the Court stated that “Subsection (4)… provides for making persons interested parties to the proceedings… [and] exclusion of any claims which do not come within a certain time.” It recorded that this “reaffirms the permissibility of raising the claims in the proceedings under Section 352C itself.” The Court added that “the claimants cannot institute separate proceedings… and the claimants have to make the claims in the proceedings under Section 352C itself.”

Referring to the nature of the proceedings, the Court stated that they are “akin to the liquidation proceedings of a joint stock company… transferring the pending proceedings into it, and permitting claims before it for rateable distribution.” It held that consolidation of pending suits into the limitation proceedings is “implicit in the said provision.”

The Court recorded that only applicants having claims listed under Section 352A are “persons interested.” It stated: “Only the persons who are entitled to claim compensation from the limitation fund alone could be said to be affected… and they alone are entitled to contest the proceedings.”

Applications by associations were addressed with the observation that they had “not disclosed any claim… They cannot have any claim out of the limitation fund… They are not persons interested within the meaning of Subsection (4) of Section 352C.” Regarding an individual fisherman without a stated claim, the Court recorded: “he does not state any claim.”

The Court directed that “all the captioned Interlocutory Applications for impleadment, except I.A. Nos.5, 8, 10 & 16 of 2025, are allowed.” It recorded that the applicants in these allowed applications had “stated that they have claims” or had “already filed Admiralty Suits with respect to the claims,” and therefore the applications “are liable to be allowed.”

The Court directed that “I.A. Nos.27, 38, 41, 50 of 2025 filed by owners of Cargo Owners and I.A. Nos.12, 14 & 43 of 2025 filed by Insurance Companies state their claims, and hence these Applications are to be allowed.” Applicants in I.A. Nos.9, 11, 15, 19, 20, 21, 23, 26, 31, 39, 40, 44, 51, 52, 53, 54, 55 & 56 “have stated that they have claims and hence those applications are liable to be allowed.”

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“I.A. Nos. 5, 10 and 16 of 2025 are filed by Associations of boat owners and fishermen… They cannot have any claim out of the limitation fund. They are not persons interested within the meaning of Subsection (4) of Section 352C, and hence, I.A. Nos.5, 10 and 16 of 2025 are liable to be dismissed.”

“I.A. No.8 of 2025 is filed by an individual fisherman, who does not state any claim, and hence, I.A. No.8 of 2025 is liable to be dismissed. Registry is directed to carry out amendment in the cause title of the above suit, incorporating the additional Defendants allowed to be impleaded, giving priority according to the number of the Applications.”

Advocates Representing The Parties

For the Applicants: Sri. V.J. Mathew (Sr.), Merline Mathew, Vipin P. Varghese, Adarsh Mathew, Anirudh G. Kamath, Agustho Norbert, Megha Madhavan, Hari Narayanan, P. Chandrasekhar, Shoby K. Francis, J.R. Prem Navas, Sarin, Ummul Fida.

For the Respondents: M/s. Pranoy K. Kottaram, Sivaraman P.L., Athul Babu, Sreenand Udayan, Joy Thattil Ittoop, Bijish B. Tom, Uthara A.S., Krishna Kumar T.K., Baby Sonia, Karun Mahesh, Megha Joseph, Nevis Cassandra L. Caxton Loretta, Govind Vijayakumaran Nair, Roshni Manuel, Jacob Tomlin Varghese, and the Government Pleader Smt. Parvathy Kottol for the State.

Case Title: All Kerala Fishing Boat Operators Association v. Elsa 3 Maritime Inc. & Others

Neutral Citation: 2025:IO: KER:28

Case Number: I.A. No.5/2025 in Adml. S. No.14 of 2025

Bench: Justice M.A. Abdul Hakhim