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Updated 07 October 2008 Synopses of Judgments  - 
Cape of Good Hope Division
and
South Eastern Cape Local Division

A synopsis is given of the following judgments of the High Court of South Africa Cape of Good Hope Division and South Eastern Cape Division, some as yet unreported.  Decisions are given in chronological order.  (Some files are in .PDF format -- download Adobe Acrobat Reader here if it's not already on your computer.)

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SOUTH EASTERN CAPE LOCAL DIVISION

IN THE HIGH COURT OF SOUTH AFRICA
(South Eastern Cape Local Division)
In the exercise of its Admiralty Jurisdiction

Name of ship: mv Safmarine Agulhas

CASE NO 1249/07
(related to case nos 1242/07, 1245/07, 1246/07)

per: Sangoni J.

In the matter between:
Merkur Delta Shipping Corporation (First Applicant/Second Defendant)
Safmarine Container Lines NV (Second Applicant/First Defendant
and
Osram (Proprietary) Limited (First Respondent)
Luk Africa (Proprietary Limited (Second Respondent)

CASE NO. 1249/07
(related to case nos 1244/07, 1247/07, 1248/07)

In the matter between
Merkur Delta Shipping Corporation (First Applicant/Second Defendant)
Safmarine Container Lines NV (Second Applicant/First Defendant
and
Aerial Master (proprietary) Limited (First Respondent
Space Television CC (Second Respondent)
Kgalagadi Breweries Limited (Third Respondent)
SAB Miller Africa & Asia (Fourth Respondent)
Pre-form (Proprietary) Limited (Fifth Respondent)

CASE NO. 1258/07
(related to case nos 1253/07, 1254/07, 1255/07, 1256/07, 1257/07)

In the matter between
Merkur Delta Shipping Corporation (Applicant/Second Defendant)
and
WS Lloyd Limited (First Respondent)
Creo Manufacturing (Proprietary) Limited (Second Respondent)
Aberdare Power Cables (Proprietary) Limited (Third Respondent)
Nestl
é South Africa (Proprietary) Limited (Fourth Respondent)
Henkel SA (Proprietary) Limited (Fifth Respondent)
Afrox Limited (Sixth Respondent)
Dampskobsselskabet AF1912 Aktieselskab and
Svendborg t/a Maersk Lines (Seventh Respondent)
AP Moller-Maersk t/a as Maersk Lines (Eighth Respondent)

CASE NO. 1291/2007

In the matter between:
Merkur Delta Shipping Corporation (Applicant/Second Defendant)
and
Stansfield Group Limited (First Respondent)
Dampskobsselskabet AF1912 Aktieselskab and
Aktieselskabet Dampskibsselskabed
Svendborg t/a Maersk Lines (Second Respondent)
AP Moller-Maersk t/a as Maersk Lines
(Third Respondent)
Full text available


IN THE HIGH COURT OF SOUTH AFRICA
(South Eastern Cape Local Division)
In the exercise of its Admiralty Jurisdiction

Name of Ship: "Millennium Amanda"

CASE NO. 1878/01

In the matter between
T M T COAL CO INC — Applicant
and
NORMARINE LIMITED
— Respondent
NOR MARINE A S
— Intervening Respondent

per: Kroon J
Date Delivered: 28.3.2002
Full text available
(.PDF format)

The case concerned an interlocutory application for an order for security for costs brought by an American company (the Applicant) against a company registered in Gibraltar (Respondent). A Norwegian company sought leave to intervene. The main action disclosed a charter party dispute concerning an affreightment of coal transported by the Respondent on behalf of the Applicant. Arbitration was declared by the Applicant in terms of the charter party to be conducted in New York and security was sought, both for the enforcement of the claim and the costs incurred.

Attachment to found jurisdiction

The applicant brought an urgent and ex parte application for the attachment of the bunkers on board the m.v. ‘Millenium Amanda’ docked at Port Elizabeth. The court issued a rule nisi calling on all interested parties to show why the bunkers on board the vessel should not be attached to found jurisdiction; why the property should not be released on condition that the Respondent provides security and why the Applicant should not be granted leave to sue the Respondent in personam. The intervening Respondent stepped in by tendering security for the release of the vessel and making application to intervene. The rule nisi was postponed to 22 November 2001 to afford the intervening Respondent the opportunity to file its so-called answering affidavit and for the Applicant to reply thereto.

The further papers in the main application

The Applicant delivered notice ito URC 47 read with section 5(2)(b) of the Admiralty Jurisdiction Act No 105 of 1983 (‘the Act’) requiring the intervening Respondent to furnish security on the grounds that the intervening Respondent was a peregrinus and had no executable assets within the jurisdiction of the Court. The intervening Respondent complied by delivering a bank guarantee and similarly, the Applicant furnished security to the intervening Respondent for its costs.

A Mr Gran, being the sole shareholder and director of Nor Marine A S, deposed to the affidavit of the intervening Respondent. In essence he stated that the intervening Respondent, and not the Respondent was presently the time charterer of the vessel and that at the time that the attachment was made, the true owner of the bunkers had in fact been another named corporate entity (of which Gran was co-incidentally also the sole shareholder and director) from whom the intervening Respondent had purchased the bunkers subject to a reservation of ownership till full payment had been effected. At the time the attachment was made, payments were still outstanding.

The Applicant’s voluminous response reiterated that the Respondent was the owner of the bunkers on board the vessel at the relevant time and accused Mr Gran of dishonesty in various respects. In the alternative, the Applicant mooted for the hearing of oral evidence. The intervening Respondent then made application for a postponement for leave to file further affidavits to answer the serious allegations of dishonesty. The Applicant opposed the postponement and stated that a referral to oral evidence would be more preferable in resolving the dispute. Furthermore the Applicant requested that if the court allows neither of the above, that the intervening Respondent be ordered to provide the Applicant with security for its attorney and own client costs.

The issue of the rule nisi in respect of the security application

The matter came before Petse AJ on 22 November 2001 and an order was made by consent between the parties that the matter (the issue of the ownership of the bunkers) would be referred to oral evidence. Petse AJ then heard argument on the security for punitive costs and a dispute arose regarding the proper procedure to be followed. Judgement was reserved on the issue. Upon inspection of the file on 30 January 2002, the Applicant discovered an endorsement on the file to the effect that Petse AJ, whose term of office had come to an end and who had returned to his practice in Umtata, had intended a rule nisi to be ordered with the return day 31 January 2002 and had prepared a manuscript calling on the intervening Respondent to show why it should not be directed to furnish the security asked for. The order however was never typed, presumably as a result of some or other oversight. It was established from Petse AJ that it was his intention that the abovmentioned rule nisi be prepared and handed down by another judge.

On 8 Feburary 2002 Jennett J issued the above rule nisi. The return day was set down to be the date of the hearing of this matter before Kroon J. The intervening Respondent invoked two points in limine regarding the invalidity of the order namely that Jennett J had not been seized with the matter and that there had been non-compliance, without application for condonation, with Rule 47 requiring notice to be given to the other side. The court dismissed these two grounds stating that substantive compliance with Rule 47 had taken place and that since the delivery of the order of Petse AJ was a matter of convenience to the parties, "it [did] not lie in the mount of the intervening Respondent [then] to complain of certain alleged antecendent procedural shortcomings or about the constitution of the Court that issued the rule nisi."

The merits

The making out of a prima facie case:
Kroon J reiterated that the requirement that the Applicant establish a prima facie need for security (for costs on an attorney and own client scale) means no more than that the averment of evidence, if accepted, would establish the claim. The Applicant’s case was based on two facets namely that:

  1. the Respondent was the owner of the bunkers at the time of the attachment; and

  2. the Applicant was entitled to an award of costs against the intervening Respondent occasioned by its application for leave to intervene and that this order be taxed on an attorney and own client scale.

The intervening Respondent’s counsel conceded that on the first leg of the Applicant’s case, a prima facie case had been made out. It was also not disputed that the Applicant was entitled to costs simpliciter but counsel strongly argued against a prima facie case in respect of a claim for security on a punitive scale and went as far as to contend that there was no room for such a finding in a matter such as the one at hand. Kroon J stated that he was persuaded that "a court should tread warily and cautiously before finding that a prima facie case on an issue such as that presently under discussion, has been established" but nevertheless found that such a case had been made out. In support of his finding he stated that the intervening Respondent did not contest that the wide ranging allegations against Mr Gran, if established, would reveal dishonesty of an extremely serious and calculated nature which dishonesty would have been in the course of the conduct of the litigation and that such conduct would have fully justified the punitive costs order at issue.

The further test of genuine and reasonable need:
Regarding the further test relating to what the Applicant is required to have established in the matter of its need for security, the court upheld the test of genuine and reasonable need for security, to be proven on a balance of probabilities (see the m.v. Bocimar; the m.v. Leresti; the Catamaran TNT and the m.v. Akkerman). The learned judge rejected the dictum of the m.v.Yu Long Shan which stated that once a prima facie case had been made out, security in respect of a peregrine plaintiff followed as a matter of course. Kroon J preferred to follow the Cape cases of the m.v. Akkerman and the m. v. Heavy Metal which held that the need for security would not follow as a matter of course. He however disagreed with the two Cape cases on the issue of the court’s discretion and stated that whether a genuine and reasonable need had been established amounted to a finding of fact, albeit that a value judgment might have to be made. In other words only after the finding of fact in favour of the Applicant, would the court’s discretion come into play. Counsel for the intervening Respondent relied on the dictum in the Great River Shipping case in which the court said that "to grant a peregrine plaintiff security for its claim and/or costs…is virtually unheard of at common law " and the dictum in the m.v. Leresti in which the court stated that the granting of security to a peregrine claimant is a power that should be sparingly exercised. Kroon J, although not seeing a clear dividing line between the two approaches, instead and again aligned himself with the judgments of the m.v. Heavy Metal and the m.v. Akkerman, which simply recognized the substantial need for caution where costs are sought on a punitive scale.

Kroon J concurred with the intervening Respondent that the Applicant had not in the papers made the allegation that the intervening Respondent was not in a financial position to meet any claim for costs but went on to say that financial ability to meet a cost award is not the only consideration to which regard may be had. The fact that the intervening Respondent had no assets in South Africa and the Applicant’s averments regarding what the court called the "far-reaching and calculated dishonesty" of Mr Gran (which had been prima facie established) led the court to say that there was every reason to believe that the intervening Respondent, through Gran would avoid satisfying the debt when called on to do so. On this basis the court held that a genuine and reasonable need had been established and exercised its discretion in favour of the Applicant. The intervening Respondent was thus ordered to provide security for the Applicant’s attorney and own client costs, failing which the Applicant could approach the court on an urgent basis and on the same papers. The intervening Respondent was also ordered to pay the party and party costs occasioned by the hearings relating to security.

Rapporteur: Arabella Bennett


CAPE OF GOOD HOPE LOCAL DIVISION

IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)
Exercising its Admiralty Jurisdiction

Name of Ship: The MT "Fotiy Krylov"

REPORTABLE
Case No. 181/06

IN THE MATTER BETWEEN
The MT "Fotiy Krylov" (Applicant)|
and
The Owners of the MT "Ruby Deliverer" (Respondent

Judgement delivered: 12 February 2008
per Davis J.
Full Text Available.

In the recent case of the MT "Foti Krylov" v the owners of the MT "Ruby Deliverer" the court was asked to consider whether the owners of the "Ruby Deliverer" ("Bluebottle") could enforce a maritime lien by way of proceedings in rem against the MT "Fotiy Krylov", an associated ship of the MT "Nikolay Chiker".
Very briefly, the facts were that the tug "Nikolay Chiker" took the "Ruby Deliverer" on tow during August 2005. During the tow a collision occurred between the two vessels. The contract for the towage of the "Ruby Deliverer", together with a submersible oil rig known as "P-22", was on a towhire form between Bluebottle and Tsavliris, the latter being the bareboat charger of the "Nikolay Chiker".
The relevant provisions of the towhire contract for purposes of this case exempted Tsavliris from loss or damage of whatsoever nature caused by or to the tow. In addition, there was a one-year time bar under the towhire contract together with an exclusive jurisdiction clause which conferred jurisdiction on the High Court of Justice in London.
Following the commencement of in rem proceedings agsinst the "Rotiy Krylov" by Bluebottle, alleging that the latter was a ship associated with the "Nikolay Chiker", the "Fotiy Krylov" was arrested and security was established. Tsavliris then appeared on behalf of the "Fotiy Krulov" to set aside the arrest.
The argument of Tsavliris was that, on the fact of the towhire contract, claims for damage were excluded and, in any event, they could rely upon the one-year gime bar and the exclusive jurisdiction clause.
Bluebottle argued, howver, the action in rem lay against the vessel itself in view of the fact that the maritime lien arising from damage cause by a ship attached to the ship which caused the damage. They therefore argued that Tsavliris, as bareboat charterer, was unable to intervene or rely upon the terms of the contract because the contract was not relevant to the in rem proceedings. In other words, they argued that you could not convert in rem into in personam proceedings.
However, the court found that Tsavliris had an interest in the matter and was entltled to rely upon the contractual exclusions by virtue of the principles of the Himalay Clause (i.e. the clause which extended contractual exclusions to sub-contractors etc.). The court said that Tsavliris was in charge of the vessel and therefore entitled to rely upon the contractual exclusions. Accordingly, there was no lien because it had been contractually excluded by the Towhire contract.
There were of course various other points to come out of the case, which judgment is available here. However, what is clear is that no maritime lien will attach in circumstnaces where it has been contractually excluded.

Pike's Law Monthly (February 2008 newsletter, p. 6)


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)
Exercising its Admiralty Jurisdiction

NAME OF SHIP: mv "Snow Crystal"

Case No. AC36/2003

IN THE MATTER BETWEEN:
The Owner of the mv "Snow Crystal" (Plaintiff)
and
Transnet Limited trading as National Ports Authority (Defendent)

Judgment delivered: 9 November 2006
per: Davis J.
Full text available.


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)
Exercising its Admiralty Jurisdiction

NAME OF SHIP: mv "Wisdom C"

Case No. AC131/2006
Related to Case No. AC111/2006

IN THE MATTER BETWEEN:
United Enterprises Corporation (First Applicant)
mv "Wisdom C" (Second applicant)
and
STX Pan Ocean Company Limited (Respondent)

Judgment Delivered: 1 March 2007
per: Cleaver J.
Full Text Available


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)
Exercising its Admiralty Jurisdiction

NAME OF SHIP: mv "Atlantic Pride"

Case No. 146/2003

IN THE MATTER BETWEEN:
Siyadoba Fishing (Pty) Limited (Applicant)
and
Marine Radio Acoustic Devices cc. (Respondent)

Judgment Delivered: 21 November 2003
per: Blignaut J.
Full Text Available


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)
Exercising its Admiralty Jurisdiction

Case No. AC156/2002
and
AC58/2002

IN THE MATTER BETWEEN:
BRIDGE OIL LIMITED (Applicant)
and
THE FUND CONSTITUTING THE PROCEEDS OF
THE SALE OF THE MV "MEGA S"
(First respondent)
G.O. VAN NIEKERK SC, N.O. (Second respondent) and
HAMBURGISHE LANDESBANK-GIROZENTRALE (Third respondent)

per Cleaver J
Judgment 12 June 2003
Full text available


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Provincial Division)
Exercising its Admiralty Jurisdiction

Case No.: AC87/01

IN THE MATTER BETWEEN:
P&O Nedlloyd Limited
(Applicant)
and
United African Lines (Pty) Limited (Respondent)

per: SELIKOWITZ J.
Judgement: 7 July 2003.
Full text available.
Summary to follow.


IN THE HIGH COURT OF SOUTH AFRICA
(Cape of Good Hope Provincial Division)

mv "Sagittarius"

Case No. AC 128/2002

In re Case No. AC 121/2002 (Maviga UK Ltd v Transportes Maritimos de Portugal LDA & Meihuizen Freight (Pty) Ltd

In the matter between:
MEIHUIZEN FREIGHT (PTY) LTD (Applicant)
and
TRANSPORTES MARITIMOS DE PORTUGAL LDA (First Respondent)
MAVIGA UK LIMITED (Second Respondent)
THE SHERIFF OF THE HIGH COURT, CAPE TOWN (Third Respondent)
NEDCOR BANK LTD (Fourth Respondent)

Adv for Applicant: Adv. M. Steenkamp
Attorneys: Dawson Edwards & Assoc.

Adv for 2nd Respondent: Adv. L. Burger
(1st, 3rd & 4th Respondents were not represented)
Attorneys: Deneys Reitz
Date(s) of hearing: 17 October 2002
Date of judgment: 15 November
per: Davis J.
Full text available (in PDF format)


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE DIVISION

(Exercising its Admiralty Jurisdiction)

Name of ship: mv "Fortune 22

Case No AC49/98
Related to AC 145/97

The Owners of the mv "Fortune 22" (Applicants)
and

Keppel Corporation Limited
(Respondent)

Thring J:
Date delivered: 9 June 1998

Counsel for Applicants: Mr Mike Wragge
Counsel for Respondent: Mr Peter Hazell

The Facts:

The Fortune 22 was arrested on 13 October 1997 thereby commencing the action in rem against the vessel. She was arrested in terms of section 3(6) & 3(7) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (‘the Act’) as a vessel associated to the MV "Mount Ymitos" (the "guilty" vessel). The Respondent’s maritime claim against the guilty vessel arose out of repairs done to the vessel for which the Respondent had not been remunerated.

In satisfaction of this claim, the Respondent had issued a writ out of the Supreme Court of Hong Kong against the guilty vessel, had the vessel arrested and put it up for auction. When the claim could not be satisfied from the proceeds of the sale, default judgement was obtained in the Hong Kong Court. This action remained purely an action in rem against the ship as no acknowledgement of service of the writ of summons was obtained from the owners of the demise charterers. Some three months later the associated arrest took place in Cape Town.

It was common cause that the vessels were associated and security was furnished for the release of the vessel. The vessel however remained under deemed attachment ito section 3(1)(a)(i). There was furthermore no doubt that both actions in rem (Hong Kong and Cape Town) were instituted by the same claimant in respect of the same maritime claim.

The question turned on whether the two arrests could be made in respect of the same claim.

Mr Mike Wragge for the Applicant contended that: the associated arrest had to be set aside as the guilty vessel had already been arrested for the same maritime claim for repairs in Hong Kong. In support thereof Mr Wragge looked at the meaning of "instead of" in section 3(6):

"…[A]n action in rem, … may be brought by the arrest of an associated ship instead of the ship in respect of which the maritime claim arose." (my emphasis);

He referred to the ordinary meaning of the words; the dictionary definition; the Afrikaans text; section 3(8) –

"Property shall not be arrested and security therefore shall not be given more than once in respect of the same maritime claim by the same claimant";

the interpretation given by the English Court of Appeal to their, albeit in the somewhat differently worded, sec. 3(4) of the (English) Administration of Justice Act, 1956; the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships, Brussels, 10th May, 1952 – (SA was not a party to the Convention but it was ratified by the United Kingdom.)

"… [I]f a ship has been arrested in any one of such jurisdictions, or bail or other security has been given in such jurisdiction… any subsequent arrest of the ship or of any ship in the same ownership by the same claimant for the same maritime claim shall be set aside, and the ship released…’ (Lord Denning’s emphasis of the Convention in "The Banco" at 532f))

and further at 532g of the "Banco" –

"It was agreed that one ship might be arrested, but one. It might either be the offending ship herself or any other ship belonging to the same owner, but not more." (Lord Denning’s emphasis)

Mr Peter Hazell for the Respondent alleged that a different interpretation should be given to the meaning of "instead of". He said "notwithstanding the fact that, as in the case here, the offending ship has already been arrested in a foreign jurisdiction, an associated ship may nevertheless, and in addition, be arrested here". For this contention he relied on Miller A J’s judgment in Euromarine International of Mauren v. The Ship "Berg" and Others 1986 92) SA 700 (A) at 712 C-D in which the learned judge stated that sec. 3(6) read with sec. 5(3)

"provides the claimant not only with a method of recovery but with an additional or alternative defendant."

He also said that sec. 3(8) applied only within the jurisdiction of a South African court and that sec. 5(2)(d) allowed additional property to be arrested for additional security.

The court held that:

  1. The Respondent’s contentions lacked a sound foundation and had to fail. The "Banco" case was held to have accurately reflected English law, allowing for the arrest of only one ship in respect of any one claim. The judge went on to say that:

"[P]roceedings in rem are often international in their operation…it frequently happens…that peregrini find themselves litigating with one another in foreign courts… Why, the, would our legislature don blinkers… and confine itself in enacting sec.3(6) of the Act entirely to arrests within the jurisdiction of a South African Court? Our common law recognizes foreign judgements…"; that nothing in our act was materially inconsistent with the "Banco" case and that our legislature must have been aware of the Convention when it passed the Act – see Great River Shipping Inc. v. Sunnyface Marine Ltd, 1992 (2) SA 87(C) when it used the words "instead of," being entirely consistent with the Convention;

  1. the Respondent’s submissions based on the "Berg" case read to much into what was said in the case and that the issue of multiple actions for the same claim was not a question which had arisen for decision in the case;

  2. it was unable to agree with the Respondent that the legislature could have intended sec. 3(8) to have been of only local application; and

  3. sec. 5(2)(d) did not assist the Respondent as the "Fortune 22" was not arrested in terms of the section.

The appeal was upheld with costs.

Rapporteur: Arabella Bennett


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE DIVISION

In the matter between
Liberty Life Association of South Africa
— Applicant
and
Prof G.C. Kachelhoffer N.O and Others 2001 JDR 0276(C)
— Respondents
per: VAN REENEN et JALI JJ
Date delivered: 12 April 2001

The facts:

The applicant was a public company active in the life insurance industry and the employer of the second and further respondents. The respondents were retrenched on the basis of operational requirements and were of the view that their retrenchment constituted unfair labour practice. After failure by the conciliation board to resolve the dispute, the matter was referred to the industrial court. The court decided that certain employees of the applicant had to be reinstated and compensated for their losses. The applicant noted an appeal to the Labour Appeal Court (established ito s 167(1) of the Labour Relations Act of 1995). While the appeal was pending, the applicants instituted review proceedings in the Cape Town High Court. The second and further respondents opposed the application on the basis that:

(1) the High Court did not have jurisdiction to review the proceedings of the industrial court case;

(2) the fact that the applicant noted an appeal to the Labour Appeal Court prior to instituting review proceedings in the High Court and whilst the prosecution of the appeal was being persisted with precluded the applicant from instituting and pursuing the review proceedings; and

(3) that the applicant did not comply with the provisions of rule 53 relating to making available the "record of proceedings."

The law:

Point (1):

The applicant relied on section 17B of the 1956 Labour Relations Act as the basis for the High Court’s jurisdiction in review proceedings. Since the 1956 Act was wholly repealed by the Labour Relations Act of 1995, save only for schedule 7 item 22(3) [section 212 (3) of the 1995 Act] which was preserved for the limited purpose of finalising pending appeals, the applicants’ reliance on section 17B was misguided. The court however allowed the applicants to argue that the High Court had jurisdiction under common law to entertain the application.

Held (1): The onus of establishing the court’s jurisdiction law with the applicant. The High Court as a non-specialist Labour court had jurisdiction to entertain the review application. This jurisdiction was however concurrent with the attenuated powers of review vested in the present Labour Appeal Court, a specialist tribunal. The consequence of this was that there was no appeal to the Supreme Court of Appeal from the High Court but there was from the Labour Appeal Court. The court pointed out that this clearly militated against the legislature’s intention that a specialised forum should deal with labour-related disputes but that this was an unavoidable and unfortunate consequence of inept draftmanship on the part of the legislature. Fortunately this is now of pure academic interest as the transitional provisions of the Labour Relations Act of 1995 are no longer applicable.

Point (2):

Since the court was imbued with jurisdiction, the respondents urged the court to decline jurisdiction on the ground that the High Court was not an appropriate forum for settling the cause of action. The respondents argued inter alia that the

institution of review proceedings should be moved to the present Labour Appeal

Court by application of the principle of forum (non) convenience.

The court stated that the applicant could not be blamed for having preferred the High Court as the forum in which it wished to enforce its right of review against the respondents as the basis, relief and advantages of reviews are different to those of appeals. Regarding the principle of forum (non) convenience, the court reasoned that the removal of the proceedings to the Labour Appeal court was not competent for three reasons namely that:

  1. (the principle only empowers the court to stay its own proceedings so as to enable another court of competent jurisdiction to exercise it;

  2. the High Court does not possess the power to transfer the matter to the Labour Appeal Court which is a court of higher hierarchy; and

  3. as the Labour Appeal Court is not a division of the High Court, it is not competent for the latter court to order the removal of the matter based on convenience or suitability ito section 9(1) of the Supreme Court Act, 24 of 1936. Whether s149(1) of the Insolvency Act, 24 of 1936 and s 7 of the Admiralty Jurisdiction Regulation Act, 105 of 1983 is applicable to the general body of law is contentious. The court in obiter stated that it seems to be generally accepted that convenience is not a general connecting factor but may be weighed with other factors to establish jurisdiction. In this instance, the inconvenience experienced by respondents lost force when weighed against the effective remedy which the applicant would have forfeited if the court were to have declined to exercise its powers of review and to have stayed the proceedings. The court emphasised that it was reluctant to decline to exercise jurisdiction for fear that doing so might have constituted an infringement of the applicant’s fundamental right of access to the courts.

Held (2): The court exercised its discretion in favour of the applicant.

Held (3): It was not possible at this juncture to decide whether there was compliance with Rule 53(3) as regards the furnishing of certified copies of the record to the registrar.

The question of costs was to stand over for later determination.

Rapporteur: Arabella Bennett


IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
Exercising its Admiralty Jurisdiction

Case No. AC5/2000 Reportable

Name of Ship: mv "Ivory Tirupati" 
Judgment per Davis J -- 29 August 2001
Summary below
(Full text available as PDF file -- Adobe Acrobat Reader needed to view and print

In the matter between:
mv "IVORY TIRUPATI" (Applicant)
and
BADAN URUSAN LOGISTIK (also known as BULOG) (Respondent)

The Facts:

Respondent caused the vessel the "Amer Prabha" to be arrested for damage done to the respondent’s cargo. Following the arrest, the vessels’ P&I insurer, Ocean Marine Insurance Association Limited (‘Ocean Marine’) issued a letter of undertaking on the proviso that the respondent release the vessel in question and refrain from taking any action resulting in the arrest of the "Amer Prabha" or any associated ship with associated management or control for the purpose of founding jurisdiction and/or obtaining security iro any claims of the cargo owners. In terms of the undertaking Ocean Marine was obliged to file an acknowledgement of service of the court proceedings which it failed to do. In response, the respondent caused a summons in rem to be issued out of Hong Kong. The Hong Kong High Court granted an order compelling the owners of the vessel to serve their list of documents within seven days from the date of the order. When the defendants failed to comply with the terms of the court order, the claim was struck out and judgement entered against the owners of the vessel.

At the time, it was common cause that Ocean Marine was in provisional liquidation. When the company failed to effect payment of the judgement amount, the respondent caused the applicant vessel ("the Ivory Tirupati") to be arrested, thereby bringing proceedings in rem to enforce the judgement granted by the Hong Kong High Court or alternatively damages. A letter of undertaking was furnished to procure the release of the "Ivory Tirupati".

The applicant then brought an application setting aside the respondent’s arrest of the vessel and directing the respondent to return the letter of undertaking for the release of the ‘Ivory Tirupati’ to the applicant. The application was based on three grounds namely:

  1. the arrest effected was that of an associated ship arrest ito s3(6) and 3(7) of the Admiralty Jurisdiction Regulation Act 105 of 1983.

  2. the respondent was precluded from effecting the arrest by the provisions of s3(6); & s3(8) of the act; and

  3. by the provision of security in the form of the letter of undertaking

The court held that the respondent retains the onus of satisfying the court that it was entitled to arrest the applicant. The respondent thus bears the onus of persuading the court that each of the grounds upon which the applicant attacked the arrest should fail.

1. Association

The court drew a strong inference from the facts put before the court by the respondent which pointed to overwhelming probabilities that the ‘Amer Prabha’ was associated to the ‘Ivory Tirupati.’ The evidence placed before the court, traced the nexus between the holding company, the ‘Amer Reefer Co’, which conducted its operations through wholly owned single purpose subsidiaries such as Pembroke, the subsidiary owning the ‘Ivory Tirupati’ at the time of the arrest AND the ‘Amer Prabha’, owned by Casterbridge.

The following factors placed before the court, were held to have established this nexus namely:

  1. The ‘Amer Prabha’ shares the same prefix with most of the vessels of the ‘Amer Reefer’ fleet save for the applicant vessel;

  2. The owner of the ‘Amer Prabha’ and the ‘Amer Reefer’ both had registered places of business at the offices of the firm Loikis Papaphilippou, who held a majority of the shareholding in Amer Reefer’s subsiduaries. (Quantoc Shipping Investments Ltd (QSIL) owns all the outstanding stock of the ‘Amer Reefer’ which has been set up to own all the outstanding capital stock of the Vessel Owning subsiduaries. The shares of QSIL are held by the Trustees of a Cypriot trust which was established for the benefit of the descendants of the late Chotre Lal Mehotra. Sashi Mehora, CEO of Amer Reefer is among the class of trust beneficiaries who collectively own 100% of the Company’s outstanding stock.)

  3. The ‘Amer Prabha’ and the ‘Amer Reefer’ were both managed by the same mangaging agents namely Amer Shipping Ltd (ASL);

  4. All shares in ASL were registered in Elpico Nominees and Elpico Managers, the majority shareholding of both of which companies was registered in the name of Ms Athienitic, Mr Papaphilippou’s daughter;

  5. The majority shareholding in Casterbrigde was registered in the name of Andreas Phellas, the registered owner of 4 out of the 7 vessels owned by ‘Amer Reefer’. Phellas was also believed to be related to Mr Papaphilippou;

  6. In the matter of the Amer Whitney the Forsight group was held to be controlled by Ravi Kumar Mehrothra. (Amer Reefer, the ASL and the Amer Ship Management (ASM) to whom the ASL subcontracts its technical management, are all members of the Forsight group, Foresight Ltd handling Amer Reefer’s general agency responsibilities.); and

  7. A negative inference was drawn from the refusal of the applicants to deal with these averments save to record a bare denial insofar as ownership is concerned.

Held:

The registered shareholders of Casterbridge were the nominees of Papaphilippou, ‘Amer Reefer’ or beneficiaries of the trust established for the descendants of the late Mehotra. The beneficial owners of the shares of Pembroke and Amer Reefer either controlled Casterbridge or possessed the power to control the latter company. Alternatively Pembroke and Amer Reefer were controlled by the same persons who controlled Casterbridge at the time the Amer Prabha was arrested. Therefore, on a balance of probabilities, the evidence justified the conclusion that the applicant vessel and the ‘Amer Prabha’ were associated ships ito sections 3(5) and 3(7) of the Act.

2. Section 3(6) & section 3(8) precluding the arrest

Section 3(6): The respondent contended that while the 'Amer Prabha' was arrested iro a cargo claim, the applicant ship was arrested to enforce a judgement. Because the claim differed, section 3(6) had no application.

The court quoted section 1 para (g) of the AJRA referring to "loss or damage to goods…" and to para (aa) referring to "any judgment or arbitration award relating to a maritime claim, whether given or made in the Republic or elsewhere." The court stated that the Act presupposes two separate claims and that it was therefore satisfied that the enforcement of the judgment is a maritime claim with a separate and distinct existence which is recognised expressly by the Act. The court went on to refute counsel for the applicant’s contention that because the enforcement of the judgement is an action in personam, it could not form the basis of an action in rem against the applicant vessel. The court stated that this refuted the effect of section 3(4)(b) which considers the enforcement of a maritime claim as defines as an action in rem if the owners of the applicant vessel would have been liable to a claimant in an action in personam iro the cause of action concerned, that is the enforcement of the judgment. Hence even if it were correct that the Hong Kong judgment constituted an action in personam, would not come to the assistance of the applicants.

Section 3(8): Section 3(8) states that property shall not be arrested and security therefore shall not be given more than once iro the same maritime claim by the same claimant. The court relied on the Durban and Coast Local Division’s decision of the Merak S to support the contention that the word "security" in section 3(8) does not include the kind of contractual undertaking given by Ocean Marine for the release of the ‘Ivory Tirupati.’ The Merak S decision has since been overturned on appeal.

Held:

The applicant vessel was not arrested in iro the same maritime claim as the claim which formed the subject matter of the arrest of the ‘Amer Prabha’ and the proceedings in rem arising therefrom.

3. The Letter of Undertaking

The applicant submitted that the terms of the letter of undertaking demonstrated that it was intended that an English court would have exclusive jurisdiction as opposed to a South African court, whether arising out of any further arrest or otherwise.

Held: The wording of the undertaking did not preclude the respondent from arresting the ‘Amer Prabha’ or any associated ship for the purpose of enforcing the Hong Kong judgement. At best for the applicant, the undertaking only precluded the respondent from arresting the 'Amer Prabha' "in respect of any claim of the Cargo Owners concerning the cargo". The court stated that since the claim was based on the enforcement of the judgment, it was outside the scope of the undertaking. The court then pointed to two further difficulties with the undertaking: the first being that the undertaking was of a reciprocal nature and that the applicant had not honoured its obligations thereunder; the second being that the possible inability of the applicant to honour the undertaking due to the applicant's insolvency absolved the respondent from honouring the promise not to arrest the vessel. The court concluded that the undertaking had become a "worthless piece of paper" and could not be relied upon for the argument that the respondent should be precluded from arresting the applicant vessel.

Thus the court ordered that the arrest of the 'Ivory Tirupati' had been validly effected and was not precluded by either the provisions of the Admiralty Act or the terms of the letter of undertaking. The application was dismissed with costs.

Rapporteur: Arabella Bennett


IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
Exercising its Admiralty Jurisdiction

Name of Ship: Oil Rig "South Seas Driller"
Judgement by Conradie J -- 28 November 2000 -- Case No. AC26/2000
(Full text available as PDF file -- Adobe Acrobat Reader needed to view and print)

Case no: AC26/2000

In the matter between:
THE SHERIFF OF THE HIGH COURT FOR THE
MAGISTERIAL DISTRICT OF THE CAPE
Plaintiff
and
PRIDE FORAMER S.A. -- First Defendant
FORAMER S.A. -- Second Defendant
SOMASER S.N.C. -- Third Defendant

Admiralty action in personam

CONRADIE J:

On 10/02/1999, the drilling rig “South Seas Driller” broke its moorings in Table Bay harbour during a south-easterly gale and drifted across the harbour colliding with various ships and a harbour crane. One of the ships it collided with was the M.V. Limb. The Limb had been arrested on 23/12/98 and was sold by public auction on 16/03/99.

Plaintiff alleges that it was the fault of the Master, officers or crew that the moorings broke and that the defendants, as charterers of the rig, are liable for their negligence. Plaintiff alleges that due to the damage to the vessel caused by the collision, the vessels sale realised a far reduced price. Plaintiff paid the crew of the vessel and took cession of their claims against the vessel. He also bore the cost of their repatriation. Plaintiffs claim is for the amount he failed to recover, as due to the collision, the sale of the vessel did not yield enough to reimburse him for the claims and expenses incurred.

Counsel for the defendant argued that this was a claim for pure economic loss.

Held Plaintiff claiming for a loss which although tied to the reduction in the value of the vessel, does not correspond to it. It is not the type of loss which the owner would have been able to claim from the defendants.

Counsel for plaintiff contended in the alternative that South African law recognised a duty of care owed by the defendants to the plaintiff in such circumstances. Argued that the plaintiff, as a creditor of the vessel was a foreseeable plaintiff.

Held the test for liability for pure economic loss is whether the wrongdoer owed the injured person a duty of care to avoid negligent conduct causing him pure economic loss.

South African law has not recognised the right of a creditor to sue a wrongdoer for damage caused to his debtors estate, even where the damage is caused to an asset of the debtor over which the creditor has established security for his claim.

When the damaged vessel was sold the owners right of action to claim damages was not attached. Therefore the right to claim damages remains with the erstwhile owner. The right to sue is an asset in the estate of the former owner which can be attached by a creditor. Plaintiff therefore has that remedy.

Held that Aquilian liability should not be extended to impose liability for pure economic loss on the defendants in this case.

Plaintiffs particulars of claim set aside and plaintiff given leave to substitute amended particulars of claim.

Rapporteur: Lindsay Hussey


IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

Name of Ship: Kalamos
Judgment by Thring J -- 1 October 1999
(Full text available) (as a .PDF file -- you will need Adobe Acrobat Reader to view this file).

Case No. AC 156/1998

Name of Vessel: MV "KALAMOS"

The Golden Island Shipping Company Ltd SA (Applicant)
and
ENE Kalamos Ltd
(Respondent)

On 7th May 1997 the "KALAMOS" was arrested at Cape Town and proceedings in rem were commenced against her for damages which the Applicant contended it suffered as a result of a collision between the "KALAMOS" and the "LUCKY RIVER". On the following day the Respondent's attorneys tendered a Club letter of undertaking to the Applicant's attorneys in order to procure the release of the "KALAMOS". The Applicant's attorneys did not accept the letter of undertaking as they were unable to obtain instructions from their clients who were situated in China.

The Respondent then brought an urgent application pursuant to which it was ordered by Judge Traverso that the Applicant release the "KALAMOS" and that the letter of undertaking stand as security in terms of Section 3(10)(a)(i) of the Act. The letter of undertaking stipulated, inter alia, that the release of the "KALAMOS" was in "consideration of (the Applicant) refraining from attaching or arresting in any jurisdiction, the said vessel …".

On 14th May 1997 an Appearance to Defend was entered on behalf of the Respondent and thereafter the Applicant's Particulars of Claim were served on 28th August 1998. The Respondent then launched an application for an order setting aside the arrest and seeking the return of the letter of undertaking on the basis of Section 3(10)(a)(ii) of the Act which provides that a deemed arrest lapses if no further step in the proceedings is taken within a year.

Before this application could be heard, the "KALAMOS" returned to Cape Town and the Applicant applied for and was granted an order in terms of which she was attached for the purpose of founding, alternatively confirming, the jurisdiction of the Cape of Good Hope Provincial Division of the High Court. The Respondent opposed the confirmation of the attachment on the basis that the attachment was in breach of the Applicant's undertaking to refrain from effecting an attachment of the "KALAMOS".

Held : If the order created reciprocal obligations, once the club's obligation to pay fell away by reason of the security having lapsed in the manner in which it did, so the reciprocal obligation of the Applicant not to re-arrest or attach ceased to exist.

Held : Alternatively, if the effect of the order was to create non-reciprocal obligations, it was unlikely that Traverso J could have intended to impose an out-and-out, unqualified, non-reciprocal prohibition on the Applicant against re-arrest or attachment of any kind, under any circumstances.

Obiter : It may well have been that Traverso J exceeded her powers in granting the order in the terms in which it was couched.

Order for attachment confirmed, Respondent to bear costs of the application.

[Rapporteur: Darryl Cooke, Fairbridge Arderne & Lawton]


Name of Ship: YUNG CHUN No. 17
Judgment by Davis J -- 1 September 2000
(Full text available) (as a .PDF file -- you will need Adobe Acrobat Reader to view this file). 

Case No. AC 30/97]

REPORTABLE

In the matter between
YUNG CHUN FISHERY COMPANY LIMITED (Plaintiff)
and
TRANSNET LIMITED t/a PORTNET (Defendant)

On the 24th September 1995, the Taiwanese fishing vessel, Yung Chun No.17, while under pilotage into Cape Town port, struck A-berth spur. It was contended by the plaintiffs that the defendants were vicariously liable for the damage to the vessel on the basis that the incident was caused solely by the fault of the pilot, being the defendants' servant.

The defendants alleged that the pilot had not been negligent, but even if negligence could be proved, they would escape liability in terms of Section 10(7) of the Legal Succession to the South African Transport Services Act, which excluded the defendants' liability for loss or damage caused by a negligent act or omission on the part of the pilot.

The plaintiffs contended that the pilot's actions amounted to gross negligence, and as such the defendants were not able to avail themselves of the protection afforded in terms of Section 10(7).

The court considered the distinction between negligence and gross negligence, accepting, on the authority of previous judgments that such a distinction did exist; gross negligence amounting to a blatant disregard for the consequences of one's actions. The court further stated that section 10(7) should be construed strictly, and should not be read as including wilfull or reckless acts.

The court found that the pilot's failure to make use of the appropriate radar in the circumstances (the visibility at the time was zero) constituted an act of gross negligence, and the defendant was therefore held liable.

[Rapporteur: E. Greiner]


IN THE SUPREME COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

Name of Ship: mv  "AKKERMAN"
(full text available -- in PDF format --
you will need Adobe Acrobat Reader to view this file.)

[Case No. AC 155/98]

In the matter between:
Fullwood Shipping SA (First Applicant)
The MV "Akkerman" (Second Applicant)

and

Magna Hellas Shipping SA (Respondent)

The respondent was a ship repairer who had done certain repairs to the MV "Nikita Mitchenko", and had arrested the MV "Akkerman" as an associated ship in terms of section 3(6) and 3(7) of the Admiralty Jurisdiction regulation Act 105 of 1983 in order to institute proceedings for the recovery of the balance of the repair contract price. The vessel was released upon security being furnished for the respondents claim.

The applicants then brought an application for security for costs in respect of the action instituted both here, and in London by the respondent. The matter was referred to the registrar where the respondent was ordered to furnish security in respect of both anticipated actions. The respondents failed to furnish the security within the specified time, and the applicants the obtained a court order compelling the respondent to furnish security. The respondent once again failed to provide the necessary security and the applicants brought the present application to dismiss the respondents claim on these grounds.

The respondent resisted the application on the basis that it had sought the review of registrars decision as to the amount of security by the court. The issue then before the court was whether or not the judgment which it had previously given in respect of security was final, or whether or not it could be varied. If it were the former then the respondents application for review would be ineffectual and as such its grounds for resisting the application would be without substance.

The court stated, in accordance with the decision in Shepstone & Wylie and Others v geyser, N.O. 1998 (3) SA 1036 (SCA), that an order in respect of, or refusing security, was a final judgment within the meaning of section 20(1) of the Supreme Court Act, 59 of 1959. As such it could only be varied or set aside on grounds of justus error or fraud.

held that the order staying the operation of the order (with respect to the security in favour of the applicant) would serve no purpose.

The respondent alternatively applied for an extension of the time frame given in the original order, arguing that Admiralty Rule 19(1) vested the court with the power to make such an order. The court found that, so long as the applicant was not prejudiced by such an order (and that such prejudice could not be rectified by the making of an appropriate costs order), that it was indeed empowered by Rule 19(1) to extend the time limits provided for in the original order, and accordingly extended the time limit by a further 15 days.

Applicants claim for security for its claim in reconvention:

The applicants claimed the capital amount of US$ 300 000, being the deposit paid in terms of the repair contract, from the respondents on the basis that the repair contract was void ab initio in terms of Ukranian law, alternatively that the respondents were liable for the capital amount of US$ 79 312 in respect of certain penalties for late completion of the repairs.

This application was brought in terms of section 5(2) (a)-(c) of the Admiralty Jurisdiction regulation Act. The court approved of the dictum in the matter of the "Heavy Metal" 2000 (1) SA 286 (C), the rartio of which can be summarised as follows:

  • The section vests the court with a wide power to order security or counter security.

  • In respect of counterclaims the court invariably has jurisdiction.

  • The applicant must show a prima facie claim in respect of its counterclaim(s)

  • The applicant must show a genuine and reasonable need for security.

  • The court has a discretion which should not be unduly circumscribed.

Held in considering the applicants main claim in reconvention concluded that on the facts before it that the applicants had not demonstrated that they had a prima facie claim in this respect. The court did however find that the applicants had mate out a prima facie case in respect of their alternative counterclaim, and further that their need for security in this regard was genuine and reasonable. In this regard evidence was lead that the respondent was a foreign peregrinus with no assets within the courts jurisdiction, nor did it appears to have a strong financial position elsewhere. As such the court granted the applicants counter security in respect of this claim.

(Rapporteur: E. Greiner)


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

Case Number AC17/2000

Name of Vessel: MV "AIS MAMAS"

SEATRANS MARITIME v THE OWNERS OF THE MV "AIS MAMAS" AND ONE OTHER

Application in terms of Section 5(5)(a)(i) and S5(5)(a)(iv) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act);- Charterparty, breach of - Security Arrest.

The Applicants were the time charterers of the vessel, and the first respondents were her owners. During a Voyage to India the vessel began taking water in her number one hold and eventually had to be towed into the port of Saldahna Bay. As a result the voyage was abandoned. The Applicants thereafter arrested the vessel in Saldahna in terms of Section 5(3) of the Act in order to provide security for arbitration proceedings it intends to institute against the first respondent in London for the alleged breach of the charterparty, averring that the first respondent had failed to maintain the vessel in a seaworthy condition for the duration of the charterparty.

The first respondents had caused a survey of the vessel to be done by the vessel’s classification society and the Applicants had requested a copy of the surveyor’s report. It was the refusal of this request which lead to the present application.

Applicant’s attorneys contended that the report is relevant to the applicants claim in that it may constitute evidence as to the first respondents alleged negligence. Although the respondents admitted that the document was not privileged, they merely averred that the applicants were not entitled to the report under section 5(5).

Held: that the application fell within the ambit of Section 5(5)(iv), and as such the applicants had to show that "exceptional circumstances" existed for the granting of the order. The court then sought to define what the term "exceptional circumstances" entailed, concluding no more then that it meant "markedly unusual or different", each case to be decided on the facts at hand. In the context of Section 5(5)(a)(iv), the court approved of the judgment in the matter of The Cargo Laden on Board the MV "Askania Nova" v the Mv "Askania Nova" (Unreported) where the court stated that:

"It seems to me that the purpose of requiring exceptional circumstances where the proceedings may take place in a different jurisdiction from our own is to ensure that no inroads are made in the rules of practice and procedure of some other jurisdiction, and for that reason the court should be slow, and indeed very careful to order an inspection and survey in the circumstances of this case in the absence of exceptional circumstances."

Held: that, unless the applicant could show that the respondent had the intention of acting mala fidei in respect of the report, no exceptional circumstances existed, especially in light of the fact that the applicant would more then likely be able to obtain the report through discovery proceedings in London. The court concluded that no exceptional circumstances existed, and the application was dismissed with costs.


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

Case No AC 120/99
AC 109/99

NAME OF VESSEL: "THE PEREGRINE III"
Judgement by Davis J – 15 July 1999

LISNAVE ESTALEIROS NAVAIS SA (Applicant)
and
FALCON DRILLING COMPANY (Respondent)
and/or
R&B FALCON DRILLING (US) INC as it is known

Shipping – Application to set aside arrest of vessel arrested to provide security in terms of section 5(3) of the Admiralty Jurisdiction Regulation Act – Dispute over how much security for costs is required – Court must accept computation of costs calculated by the Respondent unless it does not provide a clear and rational justification for its version of the quantum – Issue of the financial status of the Respondent is not a matter which should significantly alter the conclusion to an inquiry based upon the ordinary principles to whether a genuine and reasonable need for security for a claim has been shown.

An application to set aside the arrest of a vessel arrested to provide security in terms of section 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983. The issue before the court was whether the applicant had a genuine and reasonable need for security for its claim and further whether it was necessary for applicant to obtain additional security in the form of the arrest of the vessel in circumstances when it already had sufficient security. The Respondent claimed first of all that the amount of security the Applicant claimed to cover its costs in the Arbitration hearing was excessive and that the court was obliged, in the circumstances, to accept the Respondents figures in this regard. It claimed further that the applicant had undervalued the Respondent’s assets in its control, that once again the court should accept the Respondents figures. Finally, the Respondent claimed that the Applicant had no need for further security because the Respondent was a financially viable company which could "stand good" for any shortfall in security.

Held, that the court is obliged to accept the Respondent’s calculations of the amount of security which the Applicant requires in respect of costs as the Respondent provided a clear and rational justification for its version of the quantum.

Held, that the court must similarly follow the Respondent’s calculations as to the value of the Respondent’s assets already under the control of the Applicant unless the figure provided is based on substantially incorrect information or valuations so far fetched or untenable that the court is justified in rejecting them on the papers. In this case however the figure provided by the Respondent can be rejected on this basis and the court accordingly accepts the valuation provided by the Applicant as it is based on strong evidence.

Held, that there is insufficient evidence for the court to take into account likely deterioration and depreciation of the vessels in question as was orally argued by the Applicant. The court therefore accepts the figure offered in Respondent’s replying papers as being the value of security presently available.

Held, that the issue of the financial status of the Respondent is not a matter which should significantly alter the conclusion to an inquiry based upon the ordinary principles to whether a genuine and reasonable need for security for a claim has been shown. However, in the light of the finding about the amount of security presently held by the applicant, this issue becomes irrelevant due to the size of the shortfall.

Held, accordingly that the Applicant has shown that it has a genuine and reasonable need for security over and above the amount presently held.

Order for arrest confirmed, Respondent to bear costs of the Application. Amount of security to be provided by the Respondent to be reduced.


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

NAME OF SHIP: "THE HEAVY METAL#2"
Per Comrie J, Cape Town  7 May 1999

Case No: AC 74/98

In the matter between
BELFRY MARINE LIMITED (Applicant)
and
PALM BASE MARITIME SDN BHD (Respondent)

Shipping - Application for counter-security following arrest in terms of S(5)(3) of the Admiralty Jurisdiction Regulation Act 1983 - For a counter-security order the Applicant must show that it has a prima facie claim as well as a genuine and reasonable need for security - Decision in the discretion of the court - Applicant unable to show that the Respondent had demanded excessive security or that the order for arrest was obtained without reasonable or probable cause and therefore unable to show that it has a prima facie claim.

An Application for counter security arising from the arrest in terms of section 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 of the vessel "Heavy Metal" by the Respondent. This arrest was for the purpose of obtaining security in arbitration proceedings in London in respect of the sale of an alleged associated ship of the "Heavy Metal". The Applicant requiring counter-security for a claim which it intended to institute for damages arising from the arrest of the vessel. (i.e. not strictly a counter-claim.) Two legs to the application: That in the arrest application and subsequently the Respondent demanded and required excessive security and that the Respondent allegedly obtained the arrest of the vessel "without reasonable and probable cause".

Held, that S5(2)(a)(c) of the Act gives the court the discretion to order that counter-security be furnished. The requirements for such an order are that the Applicant must show that it has a prima facie claim as well as a genuine and reasonable need for security. It was conceded by the Respondent that the second requirement had been met. In order to show that it has a prima facie claim the Applicant was required to show that there was an absence of "reasonable and probable cause" in the arrest application. The evidence adduced by the Applicant falls short of establishing prima facie that there was a want of reasonable and probable cause.

Held, with respect to the second leg of its application (regarding the allegation of excessive security), that the security obtained by the Respondent was related to the amount of its claim. The fact that a plaintiff does not succeed in its claim does not mean that the claim was per se excessive. It is difficult to assess, well before a matter comes to trial, whether or not a claim is excessive. Applicant should not be encouraged, by afforidng it counter-security, to institute an action which may well turn out to be premature. The alternative basis for the Applicant’s claim of excessive security was that the Respondent unreasonably refused to agree to the release of the vessel against the provision of satisfactory security in the amount of the vessel’s true value. Applicant failed to establish a prima facie case for this alternative basis.

Application dismissed with costs.

[Rapporteur Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

NAME OF SHIP: "The Rizcun Trader#3"
Per Knoll AJ, Cape Town 26 April 1999

Case Number: AC171/98

In the matter between
MANLEY APPLEDORE SHIPPING LTD
(Applicant)
and
mv RIZCUN TRADER
(First Respondent)
LATIF MARINE LIMITED (Second Respondent)

Shipping - Interlocutory application for discovery in terms of Uniform Rule 35(2) – Exceptional circumstances should be present for discovery to be ordered in respect of motion procedures – Granting an order for discovery inappropriate where applicant bears onus in the main application to justify arrest – Would allow applicant to go on a "fishing expedition" and almost have effect of reversing the onus.

An interlocutory application for discovery in the context of an application to have an arrest set aside. Claim by the applicant that the respondents were withholding information and documentation relating to the ownership of the arrested vessel and that discovery would enable the applicant to deal with the discovery documents in its answering affidavit and for the respondent in turn to deal therewith in reply. Respondents opposed discovery as being premature.

Held, that Rule 15 of the Admiralty Rules makes Uniform Rule 35 applicable to admiralty procedures. In terms of this rule a court direction is required before discovery can be obtained in application procedures. A discretionary decision which should only be granted when exceptional circumstances are present (particularly before all affidavits are filed). No such exceptional circumstances exist. Should any reasonable doubt exist after the filing of all affidavits as to the correctness of the respondent’s allegations with regard to the controlling interests in the vessel, then, at that stage, there may be a case for the matter to be referred to oral evidence and perhaps for discovery to be granted. It would be inappropriate at this stage to grant an order for discovery as the applicant bears the onus in the main application to justify the arrest of the vessel and discovery would almost have the effect of reversing the onus and allow the applicant to go on a "fishing expedition".

Application for discovery dismissed with costs.

[Rapporteur Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

NAME OF SHIP: "THE RIZCUN TRADER #2"
Per Knoll AJ, Cape Town 26 April 1999

Case Number: AC146/98

In the matter between
MANLEY APPLEDORE SHIPPING LTD
(Applicant)
and
The mv RIZCUN TRADER
(Respondent)

Shipping - Interlocutory application for security for costs in opposing application to have arrest of vessel set aside -Operation of s 5(2)(b) and (c) and s 5(3) of Admiralty Jurisdiction Regulation Act 105 of 1983 - s 5(2)(b) gives power to order the person causing an application to be brought to provide security - Power to order provision of security for costs in terms of s 5(2)(b) a discretionary power and common law considerations of fairness and justice should be taken into account - A court would be slow to order security for costs to be provided by a shipowner who stands to the defence of a vessel.

Interlocutory application for security for costs incurred in opposing Respondent’s application to have the arrest of the vessel "Rizcun Trader" set aside. Section 5(2)(b) and (c) of the Admiralty Jurisdiction Regulation Act 105 of 1983 allows the court a wide discretion to act in ordering any person to give security for a claim. Section 5 (3) of the Act as well as various judicial decisions give context to this discretion.

Held, that the important distinction between Section 5(3) and Section (5)(2)(b) is that Section 5(3) is aimed at obtaining property and is thus analogous to an action in rem while Section 5 (2)(b) gives the court the power to order "any person" to give security. The court is therefore empowered to order security for costs against a person who may not be cited as a party to the proceedings but may have some legal liability in personam to the claimant in the proceedings to pay the costs of the proceedings.

Held, that it is the person who causes the application to be brought on behalf of the arrested vessel who attracts in personam liability for the costs of the application and that such a person can be ordered to provide security for costs in an appropriate case.

Held however, that the relief asked for is that the Respondent (being the vessel "Ruzcun Trader") provide security. The Respondent is clearly not a "person" and therefore the provisions of Section 5(2)(b) would not allow an order to be granted as sought.

Held, that the full value of the Respondent is represented in the letter of undertaking accepted by the Applicant in lieu of the vessel and the security provided in terms of this undertaking does not cover the costs of any proceedings in this court. In a Section 5(3) application the security which the vessel provides cannot extend beyond its value and the Respondent cannot therefore be looked to stand as security for any further purpose.

Held, that it may have been possible to order Latif Maritime Limited, being the person who caused the main application to be brought, to provide security without a specific amendment to the application being sought, but this issue did not need to be decided because there were reasons militating against the granting of such an order.

Held, that the power to order security for costs to be provided in terms of Section 5(2)(b) or (c) is a discretionary power but that such discretion was not unlimited and that some considerations of common law do apply insofar as they are based on considerations of fairness and justice. In this regard the Respondent is in the position of a foreign defendant and a distinction should be made between a foreign defendant and a foreign plaintiff. A foreign defendant cannot chose not to come to our court and may find himself debarred from putting his case before the court if forced to provide security in excess of the value of the attached property.

Held, that in all the circumstances of the instant case, including considerations of commercial convenience, a court would be slow to order that security for costs be provided by a shipowner who stands to the defence of its vessel.

Application dismissed with costs.

[Rapporteur Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

NAME OF SHIP: MV LIMB
Per Donen AJ, Cape Town, 15 March 1999

Case No: AC 45/99

In the matter between
THE SHERIFF FOR THE MAGISTERIAL DISTRICT OF THE CAPE
(Applicant)
and
SOUTH SEAS DRILLER, HER OWNERS AND ALL OTHER PARTIES INTERESTED IN HER
(First Respondent)
THE OWNERS OF THE MFV "LIMB", HER CREDITORS AND ALL OTHER PARTIES INTERESTED IN HER (Second Respondent)

Judgement delivered on 15 March 1999

Shipping - Whether Sheriff has locus standi to pursue a claim for damages in respect of collision damages caused to a ship under attachment - Powers vested in sheriff pursuant to Admiralty Rule 21(1), and in terms of the order ordering sale in execution does not allow for authorisation to litigate - No evidence of any remaining creditors of the vessel except the applicant or evidence that the applicant’s claim will not be satisfied by the sale of the vessel .

Application by sheriff for declaration of locus standi to pursue a claim for damages, and to claim on behalf of creditors, in respect of collision damages caused to a ship under attachment. No opposing papers filed.

Held, that the order by the court authorising the sale of the vessel simply reaffirmed an aspect of the applicant’s powers in terms of Admiralty Rule 21(1). In this context the order limits the applicant to taking steps to ensure the continued operation of the vessel and well-being of the crew, and does not contemplate the authorisation of a mandate to litigate. In addition, the order does not give the applicant the authority to encumber the vessel, or the fund created by its sale, with the costs of pursuing an action for damages.
Held, that there was nothing on record to show that the applicant’s claim would not be satisfied by the proceeds of the sale. The applicant would, in any case, be entitled in due course to recover any damages suffered by him from the party who negligently and unlawfully caused such damage. No declaratory order was therefore necessary.
Held, that in any event the court was unable to pronounce upon the issue because there was no evidence on record to show how the collision occurred and demonstrating, even prima facie, who was responsible. No conclusion could be reached as to any existing future or contingent right or obligation or whether the applicant has a direct or substantial interest in the vindication thereof.
Held, with respect to his locus standi to claim for damages on behalf of creditors of the vessel that no case had been made out that other creditors existed or why such creditors should not themselves proceed against the person or persons who may be liable to them should they suffer damages.
Held, that on arrest the applicant assumes custody of the vessel and not possession. His responsibility ends with prevention of the collision and does not extend to curing unless he has been at fault in failing to prevent damage. The court has not been referred to any legislation, treaty, custom or other source of law which expressly vests the applicant with the power and authority which he presently seeks.

Relief  prayed for refused except with regard to costs, ordering that the costs of the application be costs of the applicant’s preservation costs.

[Rapporteur Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIIVISION

NAME OF SHIP: "THE RIZCUN TRADER #1"
Per Conradie J, Cape Town 11 December 1998

Case Number: AC146/98
AC59/98

In the matter between
The MV RIZCUN TRADER
  (Applicant)
And
MANLEY APPLEDORE SHIPPING LTD  
(Respondent)

Shipping - Interlocutory application for security for application setting asside arrest - Respondent contends that obligation to furnish security conditional on applicant furnishing security for its costs in present and main application - Respondent’s obligation to provide security arises from operation of law and not conditional on applicant furnishing security - Application should not be delayed by respondent’s insistence on being accomodated.

Interlocutory application arising from application by the Applicant to set aside the arrest of the vessel "Rizcun Trader" by the Respondent. Applicant seeking security for its costs in the main action. Respondent does not dispute its obligation to provide security but avers that this obligation is conditional on applicant furnishing security for its costs in both the present and the main application.

Held, that there was no reason to invoke the provisions of S5(2)(b) and (c) of the Admiralty Jurisdiction Regulation Act, 105 of 1983 which allows a court exercising its admiralty jurisdiction to order any person to give security for costs. Instead, the respondent had a perfectly acceptable remedy in Rule 47 of the Uniform Rules of Court which requires a party desiring security for costs to deliver a notice setting out the grounds upon which securuty is claimed.

Held, that the applicant’s entitlement to security for costs should not by delayed by the respondent’s insistence on being accomodated.

Held, that it was not yet even clear whether the respondent had a good claim for security and it was not appropriate at this stage to say anything about the merits of the respondent’s claim.

Application granted.

[Rapporteur Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION

NAME OF SHIP: "THE HEAVY METAL #1"
Confirmed on Appeal 31 May 1999

Case Numbers: AC48/1988 and AC54/1998

In the matter of
PALM BASE MARITIME SDN BHD (
Applicant)
and
DAHLIA MARITIME LTD. (
First Respondent)
BRAVE MARITIME CORPORATION INC. (
Second Respondent)
BELFRY MARITIME LTD. (
Third Respondent)

Security Arrest of an Associated Ship - Application to set aside;
Effect of the Associated ship provisions:

The associated ship provisions, s 3(6) and 3(7) provide an extension of the remedy provided by s 3(5) and an alternative action in rem -- the decision of the NPD in The Fayroux IV confirmed. The amendment of s 5(3) to include claims in personam does not prevent the applicant from arresting an associated vessel in rem, where the applicant has no claim in rem aginst the guilty ship, but only a claim in personam against its owner.

Effect of section 3(7)(b)(ii):

In this instance a Cypriot advocate, as the nominee of two different beneficial owners, held the majority of shares in the companies which owned the guilty ship and the associated ship respectively. The Defendant argued that it was the beneficial owners who controlled the shares for the purposes of s 3(7)(b)(ii).

Held:

That in law the majority registered shareholder controls a company. Here the Cypriot advocate was the majority registered shareholder and, regardless of whether he had agreed with others that he exercise his powers according to their instructions, direct control of the companies vested in him. In terms of 3 (7)(b)(ii), he was deemed to control both owning companies. The Heavy Metal is hence a ship associated with the guilty ship.

The application to set aside the arrest was dismissed.
[
Confirmed on Appeal]

Rapporteur: Adams and Adams.


IN THE HIGH COURT OF SOUTH AFRICA
CAPE PROVINCIAL DIVISION

NAME OF SHIP: "THE SNOW DELTA"
Per Thring J. Cape Town, 2 February 1998

Case No: A316/97

In the matter between
DISCOUNT TONNAGE LTD  
(Appellant)
and
SERVA SHIP LTD 
(Respondent)

Shipping - Court’s jurisdiction continues to exist and it can entertain an appeal even though the vessel which was attached to found jurisdiction had long since sailed, the rule nisi having been discharged - Respondent’s rights as a time charterer are enforceable in Cape Town when the vessel concerned is in Cape Town and can therefore be said to be situated within the jurisdiction of the court and to be therefore attachable.

Appeal from the single judge decision of Foxcroft J in which a rule nisi was dismissed with costs and the vessel concerned (the "Snow Delta") accordingly released from attachment. The original attachment order was to attach the Respondent’s rights in the vessel in terms of a demise charterparty. In fact the nature of the charterparty was a time charter and it was the respondents rights under this type of charterparty which the court had to consider on the appeal.

Held, that although the vessel had already sailed and there was no property within the court’s jurisdiction to give effect to the ruling of the court, it could still hear the appeal since, as long as the attachment had been adequate to found jurisdiction, that jurisdiction would continue to exist until the end of the appellant’s action. Should the discharge of the rule nisi be set aside and the rule be confirmed, that order would take effect from the date of the order of the court a quo.

Held, that in granting the rule nisi, the court a quo had intended that all and any interest which the respondent might enjoy in the vessel arising our of any charter should be attached. For this reason the rule nisi was not a nulity simply because it was founded on the appellant’s incorrect reliance on a demise charterparty as was contended by the Respondent.

Held, that the Appellant’s rights arising from the time charterparty are incorporeal in nature. The general rule is that an incorporeal in the form of a right of action is deemed to be situated at the place where the debtor concerned resides or is domiciled as this is the place where the creditor’s rights can be enforced against the debtor. However, if the right can be enforced as effectively some other place it may equally be deemed to exist there. The Respondent’s rights under the head charterparty are as enforceable, after attachment, in Cape Town as anywhere. Therefore, during the period the vessel spends in Cape Town, the Respondent’s rights where amenable to attachment here (as rights in personam relating to the vessel).

Order of the court a quo set aside and the rule nisi confirmed.

[Website note:  The procedure of attachment in South African law should be distinguished from the arrest in rem.  The latter procedure names the vessel as the defendant in the action to which the arrest relates. An attachment, in contrast, founds the jurisdiction of the court against the defendant in personam, and also provides security for the claim. Release from arrest requires only the value of the vessel to be lodged as security (if the claim be higher than that value) whereas release from attachment requires the full amount of the claim to be secured.
An appeal has been filed to this judgement.]

[Rapporteur: Roger Wallace]


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION
(Exercising its Admiralty Jurisdiction)

NAME OF SHIP: "BOS 400" [Special Plea]

Case No. AC 10/95

Bouygues Offshore and the H&M underwriters of the BOS 400 vs Caspian, Owners of the MT Tigr and Ultisol Transport Contractors.

In a special plea to the claim of Bouygues (as owners of the BOS 400) and its H&M underwriters, Caspian, the owners of the tug Tigr, averred that Sec 7(1)(a) of the SA Admiralty Jurisdiction Regulation Act should be invoked for the Cape High Court to decline to exercise its jurisdiction in favour of the High Court of England upon grounds of forum non conveniens.

Held:

That Defendant bears the onus of establishing, on a balance of probability, that there is a more appropriate court;
That the appropriate forum is established by reference to the connecting factors of the case which point to the forum which has the most real and substantial connection;
That such connecting factors can be found in consideration of the "natural forum", where the BOS 400 was lost by grounding and where the Tigr has been attached; of the "anticipated evidence", the preponderance of which is located in Cape Town; of the parallel action commended in Cape Town against Portnet, the Port Authority (over whom the English Court would not have jurisdiction) and to which action Portnet has joined Caspian and Ultisol;
That notwithstanding the decision of the English High Court to hear the action between Buoyges and Ultisol (the then charterers of the Tigr) in England in pursuance of the Towcon exclusive jurisdiction clause, Buoygues is entitled to invoke the Cape Town High Court Jurisdiction for its claim against Caspian;
That the judicial advantage to Buoygues in proceeding in this forum where the 1956 Limitation Convention applies (with a lower but comparatively less impenetrable limitation) rather than in England where the 1976 Convention, a higher but more unbreakable limit, applies , is a legitimate reason for it choosing to sue here, and is in no way opprobrious;
That there is no reason why the limitation action and an action on the merits should not be determined in different jurisdictions -- particularly where different parties are involved;
That (en passant) there is nothing vexatious about Buoyuges bringing its action in the Cape High Court which has applied English Admiralty Law for over 100 years. The court and the practitioners who appear before it are experienced in the field, and its procedures are unobjectionable;
That the court is unpersuaded that the contract between Bouygues and Ultisol (which claim is before the English Court) makes England the appropriate forum for Bouygues' claim against Caspian.

Special Plea thus dismissed with costs, the action Bouygues v. Caspian to proceed in the Cape High Court.


IN THE SUPREME COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
Exercising its Admiralty Jurisdiction

NAME OF SHIP: M/T "TIGR"

Appeal No: 472/96

In the matter of the appeal of:
Appellant: THE M/T "TIGR", HER OWNERS AND ALL OTHER PARTIES INTERESTED IN HER
and
First Respondent: BOUYGUES OFFSHORE
Second Respondent: THE HULL AND MACHINARY UNDERWRITERS OF THE "BOS 400"

Shipping-Sale pendite lite-Admiralty Jurisdiction Regulation Act 105 of 1983, s 9(1)-Discretion to order sale in s 9(1)-Court will not exercise its discretion unless there is a good reason to do so-Where owner is agreeable to sale or in default, court will more readily find good reason-Where owner opposes sale, court will be more critical in its examination of reasons advanced for order-Factors to be taken into account in determining whether good reasons exists.

This is an appeal against an order of a single judge of the Cape Provincial Division. The order was one authorising, pendite lite, the sale by public auction of the motor tug TIGR and the constituting of a fund from the proceeds of the sale for eventual distribution to proved creditors. It was common cause that the court of appeal had jurisdiction to substitute its own exercise of the discretion conferred by s 9(1) on the basis that it considers its own exercise of the discretionary power to be wiser or more appropriate in the circumstances.

Held. an order for sale pendite lite is a draconian one and will not be made without good reason.

Held, a court will more readily grant an order for sale pendite lite where the owner is either agreeable thereto or is in default of appearance.

Held, if the owner opposes the granting of the order, the court should examine, more critically than it would normally do in a default action, the question of whether good reason for making the order exists or not.

Held, that there are a number of factors to be considered in order to determine whether good reason exists or not. i) Cost of maintaining arrest and consequent deterioration of the applicant’s security. ii) Whether there is a reasonable prospect that the owner will be able to show that the ground for the arrest or attachment is not a good one. With regard the prospects of success of the claim against the vessel the court commented that at this interlocutory stage, it is unable to assess even prime facie the merits of the contending cases, and this was a reason why a sale pendite lite is usually only ordered with the agreement of the owner or on his default. iii) Deterioration of the vessel and consequently the applicant’s security. iv)The disparity between the amount of the claim and the value of the security. v)The costs of maintaining the vessel. vi) The risk of the vessel escaping from the arrest or attachment. v)The potential prejudice to the owner. vi)The state of the market for second hand vessels. vii) The loss of revenue from the vessel.

Held, the non provision of security by the owner,was not a factor to be taken into account in determining whether good reason exists.

Held, sufficient reason for the sale pendite lite was not shown to exist.


IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION
(Exercising its Admiralty Jurisdiction)

NAME OF SHIP: MV SEA JOY

CASE NO: A 106/92
DATE: 7 August 1997
Per The Hon Thring J.

In the matter between
OWNERS OF THE CARGO LATELY LADEN ON BOARD THE MV "SEA JOY (Applicant)
and
The MV "SEA JOY" (Respondent)

Shipping - admiralty action in rem:
Cargo claim under bill of lading claused FIOS; applicability of SA COGSA enactment of Hague Visby Rules; application of sec 6 of the Admiralty Jurisdiction Regulation Act in relation to "cargo carried inwards" to SA.
Art IV Rule 2(q) and Art III Rule 2 of the Hague Visby Rules "properly and carefully load" etc considered; liability of carrier for improper stowage considered in relation to a clausing of the bill of lading FIOS and to the effect of charterer's obligations to load and stow the vessel; Art III Rule 8 and effect of clauses purporting to lessen the carrier's liability considered;
Carrier found liable to shipper for damage to goods notwithstanding FIOS clausing (quaere whether such clausing would per se contravene Art III Rule 8); intention of parties in formulating FIOS clausing considered.
Judgement awarded in US$ and sec 6 of the AJRA considered in relation to applicability of SA Presribed Rate of Interest Amendment Act, 1997. Court discretion applied to fix rate of interest and date from which it shall run.

The MV Sea Joy loaded 270 pallets of supawood in Durban bound for Turkey. En route down the SA East coast, the cargo shifted and was damaged to an extent which necessitated discharge at Cape Town.

Loading was conducted by stevedores employed by charterer's Durban agents in pursuance of charterer's obligation under the NYPE to load cargo. In fact, loading should have been done by shipper's own stevedores in view of the clausing of the Bill of Lading that the shipment would be carried FIOS - free in and out stowed. Owing to a misunderstanding, shipper's agents failed to carry out their mandate. In the result, there was no "act or omission on the part of the shipper of the goods, his agent or representative" per Art IV Rule 2(1) of the Rules.

The Master, exercising his supervisory capacity in terms of clause 8 of the NYPE, played an active role in loading and stowing, and complained at the inadequacies of the stowage of the supawood. He nevertheless allowed the cargo to be carried as stowed and authorised issuing of the Bill of Lading. Though the stowage was not done by him or his owners, the master, in putting to sea with the cargo as stowed by the charterers, was in fault or neglect which contributed to the damage, and the carrier can therefore not rely on Art IV Rule 2(q).

Nor does the clausing of the Bill of Lading FIOS avail the owners as carrier: the effect of this clausing was not to relieve the carrier of its liability for failure to "properly and carefully load, stow etc" the goods carried. The object of the Rules is "to define, not the scope of the contract service, but the terms on which that service is to be performed" (Pyrene co Ltd v Scindia Steam Navigation Co Ltd [1954]2All ER 158(QB) affirmed).

Where the shipper undertakes that the cargo shall be "free in and out stowed" he undertakes to arrange and pay for loading and stowing of the cargo. The Rules do not invalidate such an agreement which transfers the responsibility for these operations to the shipper. Such an agreement is therefore not in contravention of Art III Rule 8 which precludes the carrier from lessening his liability below the benchmark of the Rules.

However, an agreement that the shipper will load and stow does not relieve the carrier of the overriding or residual obligation to ensure that the cargo is properly and carefully loaded and stowed per Art IV Rule 2(i). To achieve that result, something more is required than that the shipper will simply arrange and pay for loading and stowage. (Though such an agreement purporting to remove of lessen the liability of the carrier for loading and stowage which the judgement would be outlawed by Art III Rule 8 of the Rules).

English law, which is applicable to the issue by reason of the cargo having been carried inwards to SA (albeit in a port of refuge discharge) per sec 6 of the Admiralty Jurisdiction Regulation Act read with the 1861 English High Court of Admiralty Act, (and contrary to the views expressed by Tetley) entitles the shipper vis a vis the carrier to protect himself by a clause stating that the carrier is not responsible for stowage carried out by the shipper. But the FIOS clausing is not sufficient clausing for that purpose. Particularly in this case, as evidence indicated that the parties did not intend that FIOS should go further than to apply to who should make arrangements and pay for loading and stowage of the supawood. The FIOS clausing was inserted under the "freight" details, and the carrier was given a residual right to containerise the cargo.

As to the effect of clause 8 of the NYPE imposing on the charterer the responsibility to load, English law has ample authority (canvassed in the judgement) supporting the contention that the owner may contract with the charterer that the charterer shall load and stow, and shall bear the responsibility and liability therefor. This would not displace the owner's obligation to exercise overall supervision of the stowage to ensure the safety of ship and the remainder of the cargo. But the charterparty provisions do not apply to the owner's responsibilities vis a vis the shipper (not a party to the charterparty): the carrier retains the obligation in terms of the Rules to ensure proper loading and stowage of all cargo.

This obligation may be relieved by Art IV Rule 2(i) where the loss is caused by the actions of the shipper, for example in an FIOS situation, without the fault or privity of the carrier (who was here found to have been at fault).

In the premises, notwithstanding the FIOS inscription on the bill of lading, the carrier retained an overriding or residual obligation to ensure that the plaintiff's cargo was properly and carefully stowed in the vessel. As a finding of fact, the carrier did not contract out of liability for breach of that obligation, and to have contracted out of liability would have fallen foul of Art III Rule 8 of the Rules.

[Website note: there appears some equivocation and contradiction in the judgement as to the ability of a carrier to contract with the shipper to lessen the carrier's liability for loading and stowage vis a vis the shipper. Tetley's caution that such practice would contravene Art III Rule 8 is questioned by the learned judge who indicates first that such an agreement should be sustainable, and then finds that it would be outlawed by Art III Rule 8].

Plaintiff thus succeeds in its claim for cargo damages, judgement being awarded in US$.

With regard to interest, sec 6 of the Admiralty Jurisdiction Regulation Act preserves the "provisions of any law of the Republic applicable to any of the matters contemplated" as matters to which English law would otherwise apply. Such a matter is the calculation of interest. Although the English Admiralty law allows the English courts wide discretion in awarding interest on principles of equity, the SA Prescribed Rate of Interest Amendment Act, 1997 would have application. That act also gives the court a discretion "to make such order as appears just" in respect of interest on an unliquidated debt. In the exercise of such a discretion, interest was awarded at the lower prescribed rate of 15,5% which came into effect shortly after full particular of claim were served, such interest to date from the service of the full particulars of claim from which the defendant could reasonably quantify plaintiff's claim


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