This civil appeal arose from a maritime dispute concerning the continued arrest of the vessel M.V. Nereus Progress under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. The respondent, a creditor of the vessel’s erstwhile demise charterer (Nereides) under a separate charter, obtained an ex-parte arrest order against the appellant’s vessel as a sister-ship on the premise that Nereides remained the demise charterer. The Supreme Court held that a validly issued notice of termination under a standard BIMCO BARECON 2017 form brings the demise charter to an end upon service, and physical repossession operates merely as a practical mechanism to transfer control. Furthermore, because Clause 32 of the charter stipulated that the charterer holds the vessel solely as a “gratuitous bailee” pending physical handover, Nereides ceased to be a demise charterer prior to the arrest date. Consequently, the Supreme Court set aside the High Court judgments and vacated the arrest of the vessel.
- Validity of Contractual Termination: A termination notice issued after exhausting successive demand notices and complying with an anti-technicality grace period is proper, valid, and operates according to its terms.
- Termination Independent of Physical Repossession: A notice of termination under a bareboat charterparty is capable of operating of its own force upon service, and physical repossession is not a mandatory pre-condition for the termination to take legal effect.
- Effect of Gratuitous Bailee Status: Under standard clauses like Clause 32 of the BIMCO BARECON form, pending physical repossession after termination, the charterer holds the vessel strictly as a gratuitous bailee, which fundamentally displaces and terminates any continuing status as a demise charterer.
- Statutory Pre-conditions for Arrest: Under Section 5(1)(b) read with Section 5(2) of the Admiralty Act, a valid sister-ship arrest requires the targeted entity to remain the demise charterer at the time the arrest is effected, a condition that fails once the charter is terminated.
- Protection Against Defaulting Tactics: The law will not allow a charterer’s own delay, technical issues, or uncooperative conduct to hold an owner’s right of termination hostage or artificially extend the charterer’s demise status.



