MS Mare Traveller Tebtale Marine Inc v MS Mare Traveller Schiffahrts GmbH & Co KG

• Jurisdiction: South Africa
• Judge: Burger AJ
• Judgment Date: 21 July 2017
• Docket Number: AC 4/2016
• Hearing Date: 21 July 2017
• Counsel: MJ Fitzgerald SC for the applicant. M Wragge SC (with JD McKenzie) for the respondent.
• Court: Western Cape Division, Cape Town

Burger AJ:

[1] These proceedings involve three separate applications, although the F relief sought overlaps to some extent. In broad terms the applicant seeks the setting-aside of the writ, or summons, in respect of the vessel MV Mount Meru, formerly MV Hanjin Cape Lambert (the vessel). I will treat these as three separate applications or issues, each of which must be decided separately.

[2] G The first of these issues is the important and difficult question on which most time was spent, which is essentially a matter of law involving the interpretation of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act). The question (oversimplified and slightly inaccurately) is whether, in respect of the statutory lien provided for in s 3(4)(b), the person who would be liable in personam must be the owner of the H property to be arrested at the time of the issue of process or the time of arrest, where the vessel to be arrested is an associated ship as provided for in s 3(7)(a)(i).

[3] The second issue or application was to set aside the writ of arrest on the grounds that the ship to be arrested is not an 'associated ship', as not I being controlled by the same person as the ship concerned. This is a factual issue. This application was abandoned by the applicant in reply. It is therefore not necessary to deal with this issue other than as to costs.

[4] The third issue or application is for an order that the court decline to exercise its jurisdiction on the basis of an arbitration clause. I will return J to this question later.

Burger AJ

[5] For ease of reference I will refer to the contention that the relevant A time of ownership is the time of arrest as proposition A (applicant's contention), and the time of issue of process as proposition B (respondent's contention, sometimes referred to as the Monica S [1] principle). The issue whether it is proposition A or B can arise both in respect of s 3(4)(b) (against the ship concerned) and in respect of s 3(7)(a)(i) (against the associated ship). In this case the issue has to be decided in B respect of s 3(7)(a)(i).

[6] Mr MJ Fitzgerald SC appeared for the applicant; Mr M Wragge SC with Mr JD McKenzie appeared for the respondent. The argument by counsel was very helpful to me in trying to understand what I consider to be a difficult question. C

[7] The consideration of this issue is somewhat complicated by the fact that Malcolm Wallis in his book [2] expressed a firm view in favour of proposition A, which is different from the position in many Commonwealth jurisdictions. Malcolm Wallis (the author) is also judge of appeal D MJD Wallis of the Supreme Court of Appeal. If the same views had been expressed in a judgment of the Supreme Court of Appeal, the answer would be easy: I would be bound thereby (provided a majority of judges concurred). Unfortunately this is not the case, and I am compelled to grapple with the difficult issue and consider whether or not I agree with the reasoning of Malcolm Wallis (the author). I cannot merely rely on the E authority of the person advancing the proposition (as it was not a pronouncement as a court), but must be persuaded by the reasoning.

[8] The question deals with what is called a 'protective writ' where a warrant of arrest, or in this case a summons, is issued to arrest a vessel where there is no indication that the vessel would come into the F jurisdiction of the court. This is done to interrupt prescription. This practice is commonplace in South Africa — and in many Commonwealth jurisdictions — and appears to have had its origin in the English law, which was discussed at some length in the Monica S, referred to above.

[9] In the notice of motion the applicant sought the following relief G (leaving aside the rule nisi which is no longer relevant):

'2.1

The respondent is interdicted from arresting the MV Mount Meru, formerly MV Hanjin Cape Lambert, in terms of the summons in rem issued under case number AC40/2016.

2.2

The summons in rem issued under case number AC40/2016 be: H

2.2.1

Set aside;

2.2.2

Alternatively and in any event, that the court decline to exercise jurisdiction in terms . . . of section 7(1)(a) alternatively, section 7(1)(b) of the Admiralty Jurisdiction Regulation Act 105 of 1983;

2.2.3

Further alternatively, that reference to the vessel as a I defendant in the action in rem be removed immediately.'

Burger AJ

[10] A This application relates to one vessel. It appears from the record, however, that the parties have agreed that a final unappealable judgment in this application will also apply to other vessels and proceedings in Port Elizabeth, Grahamstown and Durban, where the same issue arises:

'IT IS AGREED AS FOLLOWS

1.

B That a final unappealable judgment in the [Western Cape Division] Application [AC 4/2017 and AC 6/2017] shall bind the parties to this agreement in relation to the PE writs, the Grahamstown writs and the Durban writs.

2.

Pending the final determination of the WCD Application and any appeals therefrom, the parties agree that:

2.1

C This agreement shall not preclude MTS from exercising its alleged rights to arrest the Vessel or any other vessel and to proceed with the claims advanced in terms of the protective writs issued in the Republic;

2.2

The applications brought by Tebtale in Port Elizabeth and Durban seeking to set aside the PE writs and Durban writs D respectively, shall be stayed (the stay of proceedings); and

2.3

The stay of proceedings shall be recorded in a court order to be taken by agreement between the parties at the hearing of the Port Elizabeth and Durban proceedings on 24 and 25 April 2017 respectively.'

[11] E The parties also agreed that the issue be decided in case No AC 4/2016 only, as the issues in case Nos AC 4/2016 and AC 6/2016 are substantially identical. The original summons in case No AC 40/2016, to which this application relates, has a list of 72 defendant vessels, presumably being all the vessels in the former Hanjin fleet.

Factual F background

[12] I will briefly set out the factual background, insofar as it is relevant.

[13] The respondent's claim is for payment of charter hire in respect of a vessel chartered to Hanjin Shipping. The respondent alleges in the summons that Hanjin Shipping is deemed to be the owner of the vessel G MV Mare Traveller, being the vessel concerned (or the ship 'in respect of which the maritime claim arose'), and that the vessel to be arrested, formerly MV Hanjin Cape Lambert (defined as 'the vessel' above), is an associated ship of the vessel concerned (MV Mare Traveller) and is therefore liable to arrest. The respondent issued the summonses in the various jurisdictions in South Africa so that it can arrest the vessel should H it (or any of the 70-odd other vessels) come to South Africa in the future.

[14] I At the time that the summons was issued, on 2 September 2016, the vessel was owned by HOB Shipping SA. Because of the applicant's concession regarding factual association, the vessel was an associated ship of the ship concerned (MV Mare Traveller) at that time.

[15] The vessel was subsequently sold, on 1 February 2017, by HOB Shipping SA to the applicant and delivered to the applicant on 13 February 2017, when ownership passed.

[16] Subsequently, after this application was brought on 1 March 2017, J the vessel was on-sold to a nominee of Songa Bulks AS by memorandum

Burger AJ

of agreement dated 12 April 2017, for delivery at the end of July 2017, A after the hearing of this application. This memorandum of agreement contains the following clause which would include the claim against the vessel arising out of the protective writ at issue here:

'The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been B incurred prior to the time of delivery.' [3]

Respondent's preliminary arguments

[17] Before dealing with the consideration whether to accept proposition A or B, I must first consider the respondent's preliminary arguments:

[17.1]

The relief sought is in the nature of final interdictory relief and C that the requirements for an interdict have not been met.

[17.2]

The issue cannot be decided until the vessel is in fact arrested, as the facts pertaining to ownership at the time of arrest will only be known at the time of arrest, which might never occur.

Final interdictory relief D

[18] It is so that the applicant originally sought an interdict and that such interdict would operate as an interim interdict pending the rule nisi. At the hearing of the matter the applicant indicated that it only seeks relief for the deletion of the name of the vessel from the list of vessels and does not require the whole of the summons to be set aside, essentially E persisting only with the relief set out in para 2.2.3 of the draft order (leaving aside the relief in 2.2.2 dealing with s 7(1) for the moment). This was after the respondent pointed out that the whole of the writ of summons should not be set aside where the application is based on the facts relating to one vessel only. The respondent argued that, in spite of F the applicant leaving out the interdictory relief originally sought, the substance of the relief sought is still of an interdictory nature.

[19] I am not persuaded. It might be so that deletion of the reference to the deletion of the vessel from the list attached to the summons would have the same effect as an interdict against arresting the vessel, but that G does not make the relief now sought in the nature of an interdict. This is also the case whenever a writ of arrest is set aside before a vessel is arrested. In my view this does not make the relief now sought interdictory relief to which the requirements for obtaining a final interdict would apply. It...