RIAA defeats ship arrest at Karachi amid the Strait of Hormuz crisis

The Strait of Hormuz crisis has produced a new wave of shipping disputes, including diverted voyages, stranded cargoes and war-risk invocations, and Pakistan’s admiralty courts at Karachi have become a key forum for them. In that setting, the Sindh High Court has released a bulk carrier held under a ship arrest at Karachi. The Court acted on a jurisdictional challenge brought by RIAA Barker Gillette for the vessel’s voyage charterer. Two questions arose. The first was whether a disponent owner can bring a ship arrest without a claim in personam against the beneficial owner relating to the use or hire of a ship. The second was whether protective discharge can rest on a war-risk case advanced under a time charter that has since been terminated, and that the claimant’s own contemporaneous correspondence contradicts.

The commercial backdrop

Our client fixed the vessel under a voyage charter to carry a bulk cargo to a port in the Gulf. The disponent owner agreed the fixture and took freight. Unknown to our client, the disponent owner’s own time charter contained a trading exclusion that barred the agreed destination and cargo.

The invocation of war risk

The vessel signalled ETAs for the discharge port. Shortly afterwards, however, the disponent owner invoked the war-risk clause, and the vessel proceeded directly to Karachi anchorage. On the same day it served its war-risk notice, the disponent owner’s own correspondence still described the discharge port as the intended port of call. Port records also showed that the port remained operational. War risk was the stated reason; the undisclosed restriction in the head charter was the real one.

The ship arrest

Shortly after strikes in the region triggered the Hormuz crisis, the disponent owner filed suit at the Sindh High Court and obtained an ex parte ship arrest. The next day, RIAA Barker Gillette filed counter-affidavits and a stay application under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.

The jurisdictional defence

Our principal defence attacked the statutory gateway to the ship’s arrest. Section 4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980 requires both a claim in personam and beneficial ownership of the vessel to sit in the same defendant for quasi in rem claims, including those under section 3(2)(h). Under V.N. Lakhani v. M.V. Lakatoi Express (PLD 1994 SC 894), charterers fall outside that category. The registered owner, Vectory Marine Services Inc., had no contractual nexus with Nexus.

The plaintiff’s agency argument that the manager acted for the registered owner failed on the documents. The BIMCO SHIPMAN management agreement had only the technical functions opted in, not commercial management. The NYPE time charter bore the manager’s own signature, named the manager as “Owner,” and directed hire to the manager’s account.

Protective discharge and the liens

Protective discharge could not outlast the arrest, and was self-defeating on its own terms. The plaintiff invoked both the GENCON Clause 8 lien (voyage level) and the mirror NYPE Clause 18 lien (time-charter level) — but both are possessory. Discharge without original bills of lading would also have exposed the registered owner to a misdelivery claim.

Outcome

After several days of argument, the Court on 9 April 2026 passed a short tentative order releasing the vessel, recording that serious questions of maintainability arose. The Court required no security from our client. The plaintiff’s appeal failed to secure a stay. The vessel sailed from Karachi on 17 April 2026. At subsequent hearings, we will be pushing for a hearing on maintainability.

“Disciplined jurisdictional analysis is decisive in admiralty arrest cases,” said Mayhar Kazi, Partner at RIAA Barker Gillette. “Pakistani law requires a claim in personal to be alleged against the beneficial owner as the gateway to arrest for quasi in rem claims, and SHIPMAN-based agency arguments require testing against what the form actually agrees.”

The matter reflects RIAA’s integrated dispute resolution capability across admiralty, international arbitration and sanctions-sensitive trade. It was led by Mayhar Kazi (Partner – Pakistan) supported by Doost Muhammad Jan (Associate).

For further information on admiralty, shipping and sanctions-sensitive trade matters, please contact Mayhar Kazi today.

This article is not legal advice; it provides information of general interest about current legal issues.

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RIAA Barker Gillette is Pakistan’s premier law firm, with an on-the-ground presence in three major cities in Pakistan: Karachi, Islamabad and Lahore, and affiliated offices in Dubai (DIFC) and London. 

The firm practices in all areas of corporate, commercial and dispute resolution law. Leading international legal directories consistently recognise the firm as a top-tier law firm in Pakistan.

RIAA Barker Gillette is the exclusive member firm in Pakistan for Lex Mundi, the world’s leading network of independent law firms with in-depth experience in over 125 countries worldwide.