Supreme Court frees ship M.V. Nereus Progress: a valid termination notice ended the demise charter before arrest

A three-judge bench led by Chief Justice Surya Kant vacated the arrest of the vessel M.V. Nereus Progress at Tuticorin Port, setting aside a Madras High Court judgment. The owner had let the vessel on demise charter to Nereides Marine Services, a UAE operator, under a bareboat charterparty on the BIMCO BARECON 2017 form. When Nereides kept defaulting on hire, the owner served an anti-technicality notice and then, on 13 November 2025, terminated the charter. Nereides had separately chartered another ship from Om Freight Forwarders and defaulted there too.

On 4 December 2025, before the owner could take physical possession, Om Freight obtained an arrest of the vessel under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, on the footing that Nereides was still its demise charterer and the ship could be arrested as a sister ship. The Court held that the termination complied with the charter's pre-conditions and was valid. A valid termination notice alone ended the demise charter, and physical repossession only completed the handover. Nereides' own messages acknowledging the termination confirmed this.

From 13 November 2025, Nereides held the vessel only as a gratuitous bailee awaiting handover, not as demise charterer. Since the arrest rested on the premise that Nereides was still the demise charterer on 4 December 2025, the arrest could not stand.