MV Orient Stride Asiatic Shipping Services Inc v Elgina Marine Co Ltd

• Jurisdiction: South Africa
• Judge: Scott JA, Streicher JA, Heher JA, Combrinck JA and Leach AJA
• Judgment Date: 23 September 2008
• Citation: 2009 (1) SA 246 (SCA)
• Docket Number: 487/07
• Hearing Date: 25 August 2008
• Counsel: D Gordon SC for the appellant. DJ Shaw SC for the respondent.
• Court: Supreme Court of Appeal

Scott JA:

[1] On 24 March 2006 Elgina Marine Co Ltd (to which I shall refer as Elgina) sought and obtained ex parte in the Durban High Court an order in terms of s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act) for the arrest of the bunkers on board the MV Orient G Stride and of the right to certain freight held by agents on behalf of Asiatic Shipping Services Inc (to which I shall refer as Asiatic). The purpose of the arrest was to provide security for Elgina's claims against Asiatic in arbitration proceedings in London.

[2] Elgina is a company registered according to the laws of Cyprus and H carries on business as a ship owner in Limassol, Cyprus. Asiatic is a Panamanian-registered company and carries on the business of ships' charterers in Kuala Lumpur, Malaysia. Elgina's claims against Asiatic are for a total of US$404 228,47, including costs and interest, and arise out of the charter to Asiatic of the MV Columbine Express. I

[3] On 4 April 2006 security by way of a guarantee was furnished on behalf of Asiatic to procure the release of the property arrested and to permit the Orient Stride to continue on her voyage. The guarantee was conditional on its being of no force and effect in the event of the court ordering that Elgina was not entitled to arrest the property in question. J

Scott JA

A [4] In the mean time, on 31 March 2006 Asiatic launched an application for an order setting aside the arrest. The application was opposed by Elgina and on 5 February 2007 it was dismissed by Patel J with costs. The appeal is with the leave of this court.

[5] Although Elgina was the respondent in that application it was B common cause that it bore the onus of justifying the arrest. (See eg Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A) at 834C - F.) In seeking to do so it was not confined to the allegations made in its ex parte application. It was entitled to rely on all the information properly placed before the court in the subsequent C application to set aside the arrest. (Weissglass NO v Savonnerie Establishment 1992 (3) SA 928 (A) at 936H.) For reasons which are no longer relevant, material correspondence and other documents came to light at a late stage and after the court a quo had given judgment. By agreement between the parties these were placed before this court and admitted as D part of the record.

[6] In Thalassini Avgi at 832I - 833A this court set out what was required to be established by a party seeking to justify an arrest for the purpose of obtaining security. However, the court was then concerned with the Act before its amendment in 1992 which broadened the scope of s 5(3). The E requirements, as modified by the amendment, are now conveniently listed in Hofmeyr Admiralty Jurisdiction Law and Practice in South Africa at 92. In the present case it was ultimately common cause, or not in dispute, that the bunkers were the property of Asiatic and that Elgina had established a prima facie case against Asiatic. The only issue that remained was whether F Elgina had discharged the burden of establishing on a balance of probabilities that it had a genuine and reasonable need for security.

[7] The requirement that the need for security must be 'genuine and reasonable' does not appear in the Act. The formulation is that of Didcott J in a separate but concurring judgment in Katagum Wholesale Commodities Co Ltd v The MV Paz 1984 (3) SA 261 (N) at 270A. It was G subsequently endorsed by this court in Thalassini Avgi at 833A and in Bocimar NV v Kotor Overseas Shipping Ltd 1994 (2) SA 563 (A) at 583E - F...