MT Argun; Master and Crew of the Mt Argun v MT Argun

• Jurisdiction: South Africa
• Judge: Foxcroft J
• Judgment Date: 12 September 2002
• Citation: 2003 (3) SA 149 (C)
• Docket Number: AC127/99, AC134/99 and AC4/02
• Counsel: L Burger for the plaintiffs. M Wragge for the defendant.
• Court: Cape Provincial Division

Foxcroft J:

Three actions in rem against the defendant vessel, the MT Argun, at the instance of three groupings of plaintiffs, have run their course. The claims, based on the maritime liens which seamen have for their wages, all concern unpaid wages to the master and various crews of the H Argun. Although the term 'maritime lien' is not defined in the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Admiralty Act) it is mentioned in ss 1(1), 3(4)(a) and 11.

In the definition section, s 1(1), under the definition of 'maritime claim' is included any claim for, arising out of or relating to 'any maritime lien, whether or not falling under any of the preceding paragraphs'. (Subsection (y).) I

Subsection (11)(4)(e), refers to 'a claim in respect of any maritime lien on the ship not mentioned in any of the preceding paragraphs'.

As Corbett JA (as he then was) said in Transol Bunker BV v MV Andrico Unity and Others 1989 (4) SA 325 (A) at 331D: J

Foxcroft J

'Thus the maritime lien is by definition a type of maritime claim and its importance lies in the facts that: A

(a)

it constitutes one of the bases upon which a claimant may found an action in rem (s 3(4)(a)); and

(b)

it confers a certain preference in the ranking of claims in terms of s 11.'

The definition section was amended subsequent to this judgment so that the wording and numbering of the reference to a maritime lien in the definition section have changed. B

Corbett JA went on to say that:

'(It) suffices to say that in maritime law the term "maritime lien" denotes a legal concept which appears to have originated in the 19th century and which is to be found, sometimes in a slightly different guise or under a different name, in the legal systems of many C maritime countries. . . . Thus for example, English admiralty law has limited the maritime lien to claims relating to (1) salvage, (2) collision damage, (3) seaman's wages, (4) bottomry, (5) master's wages and (6) master's disbursements. Of these bottomry is now obsolete.'

Our Admiralty Act provides that the law to be applied by South African Courts in matters of substance is English admiralty law 'which D would have applied with regard to such a matter at such commencement [1983] insofar as that law can be applied'. (English admiralty law as at 1983 is to be construed as a reference to that law including the relevant principles of private international law (Marcard Stein & Co v Port Marine Contractors (Pty) Ltd and Others 1995 (3) SA 663 (A) at 667C).) E

As Scott JA observed in MT Argun: Sheriff of Cape Town v MT Argun, Her Owners and All Persons Interested in Her and Others; Sheriff of Cape Town and Another v MT Argun, Her Owners and All Persons Interested in Her and Another 2001 (3) SA 1230 (SCA) at 1240B:

'It is accordingly necessary to refer to the English admiralty law as at November 1983. But because the reference is to the law F including the principles of private international law, the nature and effect of the rule sought to be applied must first be classified as one of substance or of procedure. If the former, the English law will apply; if the latter, the English private international rule will direct that the lex fori is to apply, in which event the appropriate law will be that of South Africa.' G

Corbett JA also pointed out in the Andrico Unity that in the United States of America maritime liens arise from a far wider range of maritime claims, both in contract and in tort, while the essential effect of the maritime lien in English admiralty law is that:

'It attaches ex lege to the ship or other property (for convenience I shall merely refer to the ship) in respect of which H the maritime claim arose and it follows the ship, irrespective of changes in ownership or possession, and irrespective of the state of knowledge of the new owner or possessor.'

(At 331H - I.) Despite differences in American admiralty law, there are many common positions. For instance, in the USA the in rem suit is virtually unknown outside the admiralty court. In Gilmore and Black The Law of Admiralty 2nd ed at 35 the I authors state that an understanding of its nature

'is not to be approximated without some conception of the substantive concept that underlies it: the "maritime lien". In American admiralty law, the maritime lien is a necessary condition for success in the suit in rem.' J

Foxcroft J

The Canadian authorities referred to by Tetley Maritime Liens and Claims 2nd ed show that the Canadian approach has A remained very much in keeping, as one would expect, with English admiralty law.

Factual background

The MT Argun is a medium sea tanker used primarily for replenishment of other vessels whilst at sea. Captain Korolev, who testified at the trial, confirmed that this was so and that after her B launching and until 1994 the ship was registered in the name of a Russian State company in the Vladivostok Marine Fishing Port. He testified that the ship was under the control of the Russian Auxiliary Pacific Ocean Fleet ('TOF').

It was common cause that in or about 1992 the ship was chartered out C by TOF to a company by the name of National Pacific Ltd (NPL) in the British Virgin Islands. That company operated the ship in and around various ports in the Far East.

After repairs in Singapore and the failure to pay for those repairs, the MT Argun was arrested in Singapore in or about 1994 and was then transferred by TOF into the ownership of a Russian Joint Stock D company by the name of 'Inaqua'.

Captain Korolev was referred to his contract of employment, which appears as annexure ARG2.1 at p 34 of the particulars of claim in case No AC 134. The same annexure appears in the pleadings in the other actions before me, and I refer to it only to show that there was no E dispute, since Captain Korolev was not cross-examined as to the truth of this contract of employment. The contract is dated 25 July 1995 and was for a period of six months, capable of being extended to seven or reduced to five months for operational convenience. (Paragraph 6 of the contract.) F

The ship remained under arrest in Singapore and Captain Korolev and the new crew had to attend to various duties, including the refitting and refurbishment of the ship, outside their normal duties as sea-going crew. The chairman of Inaqua, a certain Mr A Malyshev, agreed with Captain Korolev that he and his crew would be employed in accordance G with written contracts, which were concluded. The contracts all appear in the pleadings as annexures.

Captain Korolev confirmed that his crew had worked in accordance with their contracts and he testified that he had checked the portage bills. He confirmed the correctness of the calculations showing the amount due in wages to himself and to the crew. He also said that after six months H there had been no replacement for him and no engineer officer to replace him as master, and work had simply continued. No one had come from the Inaqua company to tell the crew to cease work and to leave the vessel, and the crew all carried on working.

Captain Korolev also referred to a settlement agreement which had I come about in July 1996 when he, Captain Korolev, was informed that there was going to be payment of half of the amount due to him and his crew in Russia. The offer to pay these wages was conditional upon the withdrawal of the crew's action in rem in Singapore for wages. Eventually a settlement agreement was reached in the sum of US$530 300 to the J

Foxcroft J

crew in full and final settlement, but neither the instalment of US$18 300 nor any of the equal A monthly instalments for the balance were paid. (Record p 57.)

After the vessel was released from Singapore, it continued to trade without any further legal difficulty until 25 May 1999. On that day, Sea Tech Pte Ltd of Singapore, one of the ship repairers in Singapore, arrested the ship in Cape Town under case No AC 89/99. The arrests and actions by first and second plaintiffs under cases Nos AC B 127/99 and 134/99 soon followed.

A great deal of litigation ensued, and Mr Burger, who appeared for plaintiffs, submitted that the owner of the vessel, being the Russian Federation, had been successfully delaying the payment of wages of the crew for more than three years, and had still paid them C nothing. He pointed out that the crew's claims were initially not even defended and that the crew of the vessel in both cases - AC 127 and AC 134/99 - had obtained default judgments. These judgments were set aside only in February 2002, after the plaintiffs in the trial actions had set down the defendant's applications for rescission. He also referred to the fact that Captain Korolev had testified that he had been threatened by D a Mr Sokolov, who had telephoned him on two or three occasions from Russia, telling him that he - Sokolov - represented the Russian Government Property Committee and saying that if the crew continued with their action against the vessel and attempted to sell it, E

'the crew members and he will be prosecuted by criminal procedure in Russia, first. Secondly, they make the threats for crew members and to our families, that our families will have the problem in Russia in view of this and I check this information, because that same day I go to my wife at home and she confirmed me that some guys from Oil Compact come into my home and threat my wife with the problem to (indistinct) to my children in case I not withdraw the case here in Cape Town and in F case I will - don't (indistinct) order of Oil Compact. I make the statement about this threats and blackmail and this statement somewhere in file and it was signed by radio officer and (indistinct) officer which presented on the bridge when I'm talking by phone with this guy, sorry with this gentleman, Mr Sokolov.'

(Record p 99 - 100.) Captain Korolev went on to...