Devonia Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd Intervening)

• Jurisdiction: South Africa
• Judge: Rose Innes J
• Judgment Date: 19 March 1990
• Docket Number: AC 20/90
• Court: Cape Provincial Division
• Hearing Date: 16 March 1990
• Citation: 1994 (2) SA 363 (C)

Devonia Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd Intervening)
1994 (2) SA 363 (C)

1994 (2) SA p363

Citation	1994 (2) SA 363 (C)
Case No	AC 20/90
Court	Cape Provincial Division
Judge	Rose Innes J
Heard	March 16, 1990
Judgment	March 19, 1990

Flynote : Sleutelwoorde B

Shipping — Admiralty action in personam for security — Claim by shipowner and counterclaim by charterer arising out of charterparty submitted to arbitration in London — Charterer arresting ship as security for C counterclaim in arbitration proceedings — Owner bringing counter- application for provision by charterer of security for owner's claim in arbitration proceedings — Court having power to order security in action in personam provided it has jurisdiction to entertain the action in personam — Section 2(1) of Admiralty Jurisdiction Regulation Act 105 of D 1983 empowering Court to determine any maritime claim, irrespective of place where it arose — Owner's claim in arbitration proceedings and its claim for security both maritime claims as defined in s 1(1)(i) and 1(1)(y) respectively — Any maritime claim, including claim for security, enforceable by way of action in personam in terms of s 3(1), subject to limitations imposed by s 3(2) and (3) — Power of Court in terms of s E 5(2)(b) to order any person to give security may thus be invoked by way of claim in personam in terms of s 3(1) — By bringing application for security in terms of s 5(3) against owner, charterer to be regarded as having chosen, and submitted to, jurisdiction of Court to hear and F adjudicate dispute as to furnishing of security for claims in arbitration proceedings — Charterer thus submitting to any counter-application by owner — Provision in s 3(2)(c) for action in personam to be brought against any person who has consented or submitted to jurisdiction of Court clearly contemplating that such submission or consent sufficient to clothe Court with jurisdiction in maritime claims in personam — Court in such G circumstances thus having jurisdiction to entertain owner's counter-application.

Headnote : Kopnota

The applicant, as charterer, and the intervening respondent, as owner, had concluded a charterparty in terms of which the applicant had hired the respondent ship for a timecharter voyage. At the end of the voyage a dispute arose between the parties which, in accordance with the terms of H charterparty, was submitted for arbitration in London. By 14 August 1989 the arbitrators had been appointed in London, and the owner's points of claim, the charterer's points of defence and counterclaim, the owner's reply and rejoinder had all been lodged with the arbitrators. On 7 March 1990 the charterer brought an ex parte application for the arrest of the respondent ship in respect of security in the sum of US $100 637,09 for its counterclaim in the arbitration proceedings. The application was I granted and the ship was arrested. The owner applied for leave to intervene as a respondent and for the following further relief: (a) that the ship be released upon its providing security of US $100 637,09 in the form of a letter of undertaking; (b) that the charterer provide security in the sum of US $167 947,33 for the owner's claim in the arbitration proceedings; and (c) if the charterer failed to provide such security, that the owner's letter of undertaking be deemed to have been cancelled.

J Observing that it was incongruous for a plaintiff/claimant in pending arbitration proceedings

1994 (2) SA p364

A to claim security against a defendant whom the claimant had elected to sue, the charterer argued that the owner had no right in terms of the provisions of the Admiralty Jurisdiction Regulation Act 105 of 1983 to claim an order for security for its claim and costs in the arbitration proceedings in London and that the Court had no jurisdiction to grant such an order.

Held, that it was inappropriate to apply the practice relating to security under the common law to the practice and jurisdiction to order security B for a claim and costs conferred upon an admiralty Court in terms of the Act: they were distinct jurisdictions and were governed by different considerations of practice. (At 371E-F.)

Held, further, that it was clear that the Court's power to order security was not limited to the circumstances in which it could order a 'security arrest' in terms of s 5(3) (which applies only when the applicant has an action in rem against the ship or other property sought to be arrested): C the Court also had the power to order security in an action in personam, provided that it had jurisdiction to entertain the action in personam. (At 372B/C-C/D.)

Held, further, that in terms of s 2(1) of the Act, the Court had the jurisdiction to hear and determine any maritime claim, irrespective of the place where it had arisen, of the place of registration of the vessel concerned, or of the owner's residence, domicile or nationality; that the owner's claim in the arbitration proceedings was a maritime claim as D defined in s 1(1)(i); that the owner's claim for security was also a maritime claim as defined in s 1(1)(y); and that the fact that the owner's claim for security had arisen by reason of arbitration proceedings pending in London did not inhibit the Court's jurisdiction to determine a claim for security as a maritime claim. (At 372D/E read with C/D-D/F and F/G.)

Held, further, since in terms of s 3(1) of the Act any maritme claim, and thus a claim for security, may be enforced by an action in personam (subject to the limitations on the institution of actions in personam E imposed by ss 3(2) and 3(3)), it was clear that the power of the Court in terms of s 5(2)(b) to order any person to give security for costs or for any claim could be invoked in or by way of a claim in personam in terms of s 3(1). (At 372G-H.)

Held, accordingly, that the owner was not precluded from claiming security by way of an action in personam. (At 372H/I.)

Held, further, as to whether any of the limitations imposed by s 3(2) and F (3) applied to the owner's claim for security, that, by bringing its application in terms of s 5(3) for security against the owner in the Cape Provincial Division, the charterer had to be regarded as having chosen, and having submitted to, the jurisdiction of that Court to hear and adjudicate upon the dispute between the parties as to the furnishing of security for their claims in the arbitration between them, and had thus submitted to any counterclaim or counter-application which the owner wished to bring. (At 372I/J-373B.)

Held, further, that, in contrast to other civil proceedings between G peregrini where an action cannot be entertained solely on the ground that the defendant has submitted to the jurisdiction of the Court, the provision in s 3(2)(c) that an action in personam may be brought against a person who has consented or submitted to the jurisdiction of the Court clearly contemplated that such submission or consent sufficed to afford the Court jurisdiction in a maritime claim in personam. (At 373F/G-G/H.)

Held, further, that the owner had been entitled to bring a H counter-application against the charterer and that the Court in such circumstances had the jurisdiction to entertain such counter-application, even though it might not ordinarily have had jurisdiction to do so (at 373H/I): the charterer's objection to the jurisdiction of the Court to entertain the owner's counter-application for security accordingly had to fail.

The Court found, on the evidence, that each party had shown that its need for security was genuine and reasonable. The owner's application was therefore granted.

Case Information

Application by a shipowner for leave to intervene in proceedings brought I by a charterer for arrest of ship as security for the charterer's counterclaim in arbitration proceedings and counter-application for security for the shipowner's claim. The facts and the nature of the issues appear from the reasons for judgment.

B Hoberman SC (with him R G Goodman) for the applicant.

M Wragge for the intervening respondent. J

1994 (2) SA p365

A [The order was granted on 16 March 1990 and the following reasons for judgment were handed down on 19 March 1990.]

Judgment

Rose Innes J:

On 26 August 1988 a charterparty was concluded in London between Yeoman Shipping Co Ltd of Cyprus, the owner of the vessel Luis, and a company called Devonia Shipping Ltd of London. In terms of the B charterparty the owner let and Devonia Shipping Ltd hired the Luis for a timecharter voyage from Dar-es-Salaam to the Far East. The charterparty provided that any dispute which might arise between the owner and the charterer should be submitted to arbitration in London. At the end of the voyage a dispute arose between the owner and the charterer as to the C amount payable by the charterer to the owner for the hire of the vessel and various expenses incurred in connection with the ship. The charterer invoked additional clause 58 of the charterparty which provided that, if the vessel's performance should fall short of the speed warranty in the description clause of the charterparty, the charterer had the right to adjust loss of hire and bunkers from the hire payment due to the owner. D The charterer also disputed liability for certain expenses incurred in connection with the ship. Arbitrators were appointed in London and on 28 March 1989 the owner of the vessel lodged its provisional statement of account for the hire of the vessel with the arbitrators with the request that the statement should serve as its points of claim in the arbitration. The charterer's points of defence, including a counterclaim, the owner's E reply, and the owner's rejoinder were lodged with the arbitrators by 14 August 1989.

On 7 March 1990 an ex parte application was brought in this Court...