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ISHVERLAL MADANLAL & CO. v. SS VISHVA MANGAL

April 11, 1973

ISHVERLAL MADANLAL & CO. et al., Plaintiffs,
v.
SS VISHVA MANGAL, her engines, boilers, etc., and the Shipping Corporation of India, Limited, Defendants


Brieant, District Judge.


The opinion of the court was delivered by: BRIEANT

MEMORANDUM AND ORDER

BRIEANT, District Judge.

 Defendants move for summary judgment dismissing the complaint, solely as to plaintiff "Director General of the India Supply Mission for and on behalf of The President of the Union of India" (hereinafter "Supply Mission"), pursuant to Rule 56, F.R. Civ. P., on the ground that there exists between plaintiff Supply Mission and defendants, no real "case or controversy" over which the Court may exercise jurisdiction under Article III, Section 2, Clause 1 of the Constitution.

 There are no disputed issues of material fact. Plaintiffs are the owners of mixed cargo aboard the steamship VISHVA MANGAL. A fire occurred aboard the vessel on October 20, 1967 at Searsport, Maine.

 Jurisdiction is founded on 28 U.S.C. § 1333. The dispute arises out of a maritime contract of carriage evidenced by a bill of lading issued by the Master of the VISHVA MANGAL at Pascagoula, Mississippi for 100,000 bags (5,000 metric tons) of ammonium phosphate owned by Supply Mission for discharge at Madras or Calcutta, India. Liability is founded upon claims of unseaworthiness and negligence.

 Defendant vessel and her owner entered a general appearance in this Court, presumably because the vessel could have been arrested within this District.

 While the action is, at least in name, between the owner of the cargo, and the vessel or her owners, in actuality, as Chief Judge Friendly of this Circuit has remarked [Leather's Best, Inc. v. S.S. MORMACLYNX, 451 F.2d 800, 815 (2d Cir. 1971)], ". . . the cargo insurer [is] admittedly the true plaintiff here."

 Permitting insurers of cargo to sue as subrogees in the name of the owners is a long standing admiralty tradition. As expressed in Colinvaux, Carver's Carriage By Sea, 12th ed. (London, 1971) vol. 2, p. 1183:

 
" Underwriters entitled to benefit. And if the person who has been damnified was insured against such a loss, and has been indemnified by the underwriters, he may still sue for compensation on their behalf. They are entitled to the benefit of his right of action, either against the wrongdoer, or against the shipowner on the contract, where the loss is one for which he has undertaken responsibility; and they may claim to sue in the name of the assured upon properly indemnifying him."

 Against this factual background, defendants assert that because of the peculiar status of the nominal parties, this litigation may not proceed, because it is not an actual "case or controversy" within the meaning of Article III of the Constitution, which limits our jurisdiction. *fn1"

 Plaintiff Supply Mission is an arm of the President of India. *fn2" Supply Mission performs a governmental function, that is acquisition of and delivery to the Indian people of goods such as the instant cargo, needed for relief, economic development or warfare.

 Defendants urge in support of this motion that The Shipping Corporation of India, Limited, owner of the VISHVA MANGAL, is likewise an arm of the Government of India, and that the government can't sue itself, because such a suit would not be a "case or controversy".

 The Shipping Corporation was formed as a result of the merger of a corporation owned solely by President of India, with Western Shipping Corporation Limited ("Western"), a private company. This merger was effected in 1961 by the Indian Government, as an act of state, by an order or decree entitled "The Shipping Corporations Amalgamation Order".

 This order of amalgamation provided [para. 7(i)] that the Western shareholders would receive shares "equivalent in number and value" in the resultant corporation, to the shares they held in Western prior to the merger.

 Articles of Association were issued pursuant to the order, providing for the regulation of the affairs of the resulting company, defendant here. These articles contain several provisions which appear to recognize the existence of present, or possible future beneficial economic interests of private shareholders. For example, under article 9 thereof, the Corporation has a lien on the proceeds of sale of stock by a shareholder. This implies that a shareholder has at least some limited right to sell, on compliance with other provisions which require approval by the President of India. Article 21(1) authorizes the President of India, "so long as he is a member of the Company", to appoint a representative to attend meetings. This provision ...


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