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Indian law: Personal injury / disability claims

17 December 2020

Introduction

Despite safety protocols and precautions followed/undertaken by shipowners ("Owners") as well as crew, unfortunate personal injuries are a common occurrence onboard ships. This article focuses on the legal (liability) regime in India, to generally guide Owners facing a potential action by an Indian seafarer in India, for a personal injury/disability claim.

Frequent queries

  • What are the applicable Indian laws/labour laws that govern personal injury/disability compensations with respect to an Indian seafarer who has sustained a personal injury onboard a merchant vessel?
  • Is an injured seafarer entitled to bring a claim in tort? What are the provisions covering this aspect under Indian law?

Legal position

In India, a seafarer can claim compensation by way of a contractual claim for injury/disability and/or a tortious claim (by pleading negligence of the Owners). Primarily, there are two ways for a seafarer to claim compensation in India for personal injury/disability. A seafarer can initiate proceedings under the Employees' Compensation Act, 1923 ("EC Act"). Alternatively, he may file a suit for compensation/damages, invoking the Admiralty Jurisdiction, under the Admiralty (Jurisdiction and Settlement of Claims) Act, 2017. In such a suit (under Admiralty Jurisdiction), a seafarer may either claim just the contractual amount, or, may claim more than the contractual amount, if he pleads negligence of the Owners, in which case the onus will be on him to establish negligence of the Owners. The author will cover both the alternatives, as above, in the following paragraphs.

Liability under the Employees' Compensation Act, 1923 ("EC Act")

The EC Act sets out a mechanism for an Indian seafarer to claim compensation for injury/disability caused to him on-board a merchant ship. The proceedings under this Act are conducted before a Commissioner appointed under the said Act. As per Section 2 (dd) (ii) (a) of the EC Act, "a master, seaman or other members of the crew of a ship" are considered as "employee" and thus assume protection under the Act. It provides for compensation in case of injuries caused by accident arising out of and in the course of his employment that causes either death, permanent-total-disablement or permanent-partial- disablement. The damages under the act are contingent on the age, remuneration and the kind of injury to the seafarer and the computation of damages is done by way of a formulae which is specifically provided under the EC Act itself. Heads of damages which would otherwise be considered by courts in a civil suit, are not as such considered while pursuing this remedy. Also, damages awarded under this Act are extremely low, and therefore, this remedy is usually not found attractive by the injured seafarer.

It is important to note that if a seafarer pursues the remedy available under the EC Act, he must submit the claim to a Commissioner appointed under the Act. Once such a claim is submitted to the Commissioner, the seafarer is barred from pursuing any simultaneous and/or subsequent civil proceedings in relation to his injury/disability claim. Additionally, no claim can be brought before the Commissioner under the EC Act, in cases where the seafarer has already pursued civil remedy.

Having said the above, it must be noted this remedy is available to the seafarer only if the employer is an Indian entity/vessel. Therefore, for a foreign flag/owner, this Act will not be applicable. Having said that, there have been cases where the injured/disabled seafarer has initiated proceedings under this Act, by making the Indian Manning agency as a party to the proceedings, so as to get the Commissioner to acquire jurisdiction. If there is no Indian entity involved in employing the seafarer, the seafarer will not be able to pursue this remedy. Even if there is an Indian recruiting agency/entity involved, the liability (to be adjudicated by the Commissioner) will be of the said Indian entity and the foreign shipowner cannot be made a party to such proceedings under this Act.

Claims for compensation can be brought before the Commissioner constituted under the EC Act within two years of occurrence of the accident.

Liability under the Admiralty (Jurisdiction and Settlement of Claims) Act, 2017

As per Section 9 (1) of the Admiralty Act, 2017, "claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel" qualifies as a maritime lien and is second in inter-se priority (comes after crew wages) amongst other maritime liens. Therefore, seafarers who have sustained any personal injury, whether on land or water, so long as it is in direct connection with the operation of the vessel, have a maritime lien over the said vessel.

Maritime lien survives change in ownership of the vessel and is given priority over other maritime claims.

As per Section 3 of the Admiralty Act, 2017, jurisdiction in respect of all maritime claims under Admiralty (Jurisdiction and Settlement of Claims) Act, 2017, vests with the applicable (coastal) High Court and is exercisable over the waters up to and including the territorial waters of the said High Court.

In view of the above, an injured seafarer has a right to arrest the vessel on which he was employed during the time when he got injured, or, he can move to arrest any other vessel (sister vessel) under the ownership of the same Owners, if the vessel (on which injury occurred) is not to be found or is not within the jurisdiction of the High Court. In such an Admiralty suit, the seafarer may claim a much higher amount too (in tort), in excess of what the governing SEA/CBA provides. For adjudicating such a claim, the Court will look into several factors such as – age of the seafarer, remuneration, future wages (in case of partial or total permanent disability), etc. If there is an arbitration clause in the governing employment contract, the Indian Court may refer the dispute to arbitration, whilst retaining security for the claim arising from the injury/disability. The Owners will be entitled to raise their own defenses, to challenge such a claim; for instance, if there is evidence to demonstrate that the seafarer was under the influence of alcohol, or intentionally/knowingly disregarded safety instructions etc.

The limitation period for filing a suit is three years from the date of the accident/incident.

Conclusion

As can be seen from the above, there are two options available (under Indian law) to a seafarer. He is more likely to initiate proceedings under the Admiralty Act 2017, since he would not be in a position to initiate proceedings under the EC Act for want of jurisdiction (in case of foreign Owners) and also because proceedings under the EC Act will get him a much lesser compensation as compared to what he is likely to get in an Admiralty Suit. Having said that, the injured seafarer will be able to file an Admiralty Suit (and move for arrest) in India only if the target vessel is within the territorial waters of India (i.e. within 12 nautical miles).

Preventive steps that may be taken

If the [potential Defendant] Owner's vessels trade to/from/via India, or are likely to come to India any time (within three years) after the accident/incident, an option is available to the Owners for filing a Caveat against Arrest for each such vessel (in the High Court of the state where the vessel is likely to call), before such vessel arrives in the territorial waters of such state. A ship is arrested in India upon filing of an Admiralty Suit (and subsequently moving for arrest) in the High Court of the state within the territorial waters of which state the vessel is found. An Order of arrest is an ex-parte Order, i.e. the Owners will be notified only once the vessel has been arrested. By filing a caveat, the Owners of the vessel undertake to the court that in the event of an arrest application, the Owners will furnish security to the tune of an identified claim amount, upon which, the vessel should stand released immediately. Also, by filing a caveat, the caveator (through their appointed Advocates) will get a notice before the court passes any order of arrest. Therefore, the Owners (caveator) get a chance to even oppose arrest (if there are valid grounds to oppose). If such an opposition is accepted by the court, arrest may not even be granted. If the opposition is not accepted, the Owners should ideally/immediately furnish security in court (either by way of cash/demand draft; or a Bank Guarantee), so that the vessel does not remain under arrest. A P&I Club's undertaking is accepted by the court only if the Plaintiff (arresting party) agrees to accept such an undertaking.

The Association is grateful to Mr. Kumar Abhishek Singh of Anoma Law Group LLP (Anoma Legal) for contributing to this article.

Disclaimer

The above article has been produced by or in co-operation with correspondents or other external sources and is reproduced here with their kind permission for general information purposes only. Reference is made to the Legal disclaimer governing use of this website.