In the wake of the MSC Elsa 3 container ship’s sinking off Kerala’s coast on May 25, 2025, the Kerala High Court is examining an admiralty limitation suit filed under Part XA of the Merchant Shipping Act, 1958. The suit seeks to cap the shipowners’ liability for environmental, economic, and cargo-related claims. Following the disaster, multiple parties—including the state government and private entities—filed maritime claims. Sister vessels such as MSC Polo II, MSC Manasa F, and MSC Akiteta II have been arrested to secure these claims.
In court, senior counsel confirmed that the plaintiffs aim to establish a liability fund, calculated per the ship’s tonnage, amounting to approximately US $14 million, and compliant with international conventions on limitation of liability. The fund is designed to allow equitable distribution of compensation on a pro‑rata basis if total claims exceed the cap. At least seven parties have already filed claims, leading to arrests of sister vessels and raising logistical challenges for the shipping company in securing insurance and freight.
The registry raised a procedural objection: the designation of Defendant No. 8—described simply as “all persons claiming or entitled to claim damages”—which the Court flagged for lacking specificity. In response, counsel clarified reliance on the Bombay High Court’s model rules, under which naming at least one defendant and a general “public notice” defendant is permissible to afford potential future claimants access to the limitation fund. After submission of this rationale, the matter was listed for further consideration.
Meanwhile, relief has already been granted in related cases: the Kerala government, pursuing a ₹9,531 crore admiralty suit for environmental and economic loss, obtained a conditional arrest order for MSC Akiteta II, a sister ship of Elsa 3. The court confirmed that sequestration would remain in force unless adequate security was furnished. That arrest was later extended through August 6 while pleadings remain open. The State’s claim includes pollution cleanup, environmental restoration, and compensation to affected fishermen and communities.
In separate commercial suits, three cashew importers secured interim relief when the owners of MSC Manasa F deposited ₹6 crore with the High Court registry; the court then allowed interest-bearing deposit to be placed and deferred further hearings.
Importantly, the High Court has recognized that fishermen’s economic losses—such as diminished fish catch due to marine contamination—constitute compensable harm arising from the vessel disaster. It has appointed Advocate Arjun Sreedhar as amicus curiae in a public-interest case, and allowed petitions seeking a broader compensation package to proceed with hearings set in September. The Court also ordered public disclosure of the cargo manifest for Elsa 3 to enhance transparency.
The limitation suit, while yet to be formally numbered, is now under consideration of whether Part XA procedures may be invoked despite registry objections. Once procedural formalities are resolved, the suit will establish a capped compensation mechanism, intended to balance claimants’ rights with limitations imposed by maritime conventions.
The Kerala High Court’s handling of these matters reflects a calibrated application of admiralty and maritime legislation, aimed at consolidating claims, arresting sister vessels for security, and ensuring equitable channeling of available funds for relief. The Court continues to monitor both environmental damage proceedings and creditor claims, while structuring a statutory liability framework under the Merchant Shipping Act.
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