National Iranian Tanker Co v MV Pericles GC

• Jurisdiction: South Africa
• Judge: Corbett JA, Van Heerden JA, Nienaber JA, Howie JA, Nicholas AJA
• Judgment Date: 30 September 1994
• Docket Number: 726/92
• Court: Appellate Division
• Hearing Date: 02 September 1994
• Citation: 1995 (1) SA 475 (A)

Corbett CJ:

The Admiralty Jurisdiction Regulation Act 105 of 1983 ('the Act') came into operation on 1 November 1983. It repealed the Colonial H Courts of Admiralty Act 1890 of the United Kingdom insofar as it applied in relation to the Republic of South Africa. It also introduced into our admiralty law a novel concept, the 'associated ship'.

Section 3(5) of the Act prescribed that an action in rem to enforce a maritime claim should be instituted by the arrest, within the area of I jurisdiction of the Court concerned, of property against or in respect of which the claim arose. Included among the categories of property which could be so arrested was

'the ship, with or without its equipment, furniture, stores or bunkers'.

This ship, ie the ship against or in respect of which the claim lay, may J conveniently be referred to as 'the guilty ship'.

Corbett CJ

A Section 3(6) introduced another category of property which, save in certain exceptional instances not presently relevant, might be arrested, instead of the guilty ship, in the process of instituting an action in rem, viz the associated ship. Such a ship was defined in s 3(7), the relevant portion of which read:

'(a)

B For the purposes of ss (6) an associated ship means a ship, other than the ship in respect of which the maritime claim arose -

(i)

owned by the person who was the owner of the ship concerned at the time when the maritime claim arose; or

(ii)

owned by a company in which the shares, when the maritime claim arose, were controlled or owned by a person who then controlled or owned the shares in the company which owned the ship concerned.

(b)

C For the purposes of para (a) -

(i)

ships shall be deemed to be owned by the same persons if all the shares in the ships are owned by the same persons;

(ii)

a person shall be deemed to control a company if he has power, directly or indirectly, to control the company.'

D (I shall call this 'the original definition'.)

In 1992 the Act was amended by, inter alia, the Admiralty Jurisdiction Regulation Amendment Act 87 of 1992, which came into effect on 1 July 1992. I shall refer to this Act as 'the amending Act'. In terms of the amending Act the above-quoted definition of associated ship was altered to read:

'(a)

E For the purpose of ss (6) an associated ship means a ship, other than the ship in respect of which the maritime claim arose -

(i)

owned, at the time when the action is commenced, by the person who was the owner of the ship concerned at the time when the maritime claim arose; or

(ii)

owned, at the time when the action is commenced, by a person who controlled the company which owned the ship concerned when F the maritime claim arose; or

(iii)

owned, at the time when the action is commenced, by a company which is controlled by a person who owned the ship concerned, or controlled the company which owned the ship concerned, when the maritime claim arose.

(b)

For the purposes of para (a) -

(i)

G ships shall be deemed to be owned by the same persons if the majority in number of, or of voting rights in respect of, or the greater part, in value, of, the shares in the ships are owned by the same persons;

(ii)

a person shall be deemed to control a company if he has power, directly or indirectly, to control the company;

(iii)

a company includes any other juristic person and any body of persons, irrespective of whether or not any interest therein consists of shares.' H

(I shall call this 'the new definition'.)

It will be seen that the original definition described two distinct situations in which a ship, other than the guilty ship (the guilty ship is referred to in the Act as 'the ship concerned'), could be an associated ship, viz -

(i)

I where a person (say 'X') was the owner of both the associated ship and the guilty ship at the time when the maritime claim arose; and

(ii)

where, at the time when the maritime claim arose, X owned or controlled the shares in a company (A Coy) which owned the associated ship and at the same time X owned or controlled the J shares in a company (B Coy) which owned the guilty ship.

Corbett CJ

A Thus situation (i) dealt with the case of direct ownership of both the guilty ship and the associated ship by the person concerned (X); whereas situation (ii) dealt with a form of indirect, or beneficial, ownership achieved through companies the shares in which were owned or controlled by X.

A comparison of the original definition with the new definition shows that B three main changes have come about as a result of the amending Act. These are:

(a)

A new situation, not specifically provided for by the Act, was introduced, viz the case where X owns the associated ship directly and also 'owns' the guilty ship indirectly through a company.

(b)

C The time when X or the company, as the case may be, is required to own the associated ship is the time when the action is commenced, instead of, as it was under the original definition, the time when the maritime claim arose.

(c)

Where there is the interposition of a company between the person concerned (X) and either the associated ship or the guilty ship, X is D required to control the company, in contrast to controlling or owning the shares in the company, as was the position under the original definition.

Another innovation introduced by the Act was the so-called security arrest. This was originally provided for by s 5(3) of the Act. Under the E amending Act a new s 5(3) has been substituted. The original s 5(3) read as follows:

'(a)

A Court may in the exercise of its admiralty jurisdiction order the arrest of any property if -

(i)

the person seeking the arrest has a claim enforceable by an action in rem against the property concerned or which would be F so enforceable but for an...