The Asphalt Venture Windrush Intercontinental SA and Another v Uacc Bergshav Tankers As

• Jurisdiction: South Africa
• Citation: 2017 (3) SA 1 (SCA)

The Asphalt Venture
Windrush Intercontinental SA and Another v Uacc Bergshav Tankers As
2017 (3) SA 1 (SCA)

2017 (3) SA p1

Citation	2017 (3) SA 1 (SCA)
Case No	556/2015; [2016] ZASCA 199
Court	Supreme Court of Appeal
Judge	Maya DP, Shongwe JA, Wallis JA, Dambuza JA and Makgoka AJA
Heard	September 8, 2016
Judgment	December 6, 2016
Counsel	MJ Fitzgerald SC for the appellants (heads of argument prepared by DA Gordon SC); SR Mullins SC for the respondent.

Flynote : Sleutelwoorde B

Shipping — Ship — Crew — Wages — Protection of wages of crew held hostage C by pirates — Sailor's lien for wages as basis for action in rem — Crew held hostage ashore and unable to render service to ship — Fixed-term contracts expired — No provision for continued payment of wages pending repatriation — Impossibility of performance — No lien and no action in rem.

Shipping — Admiralty law — Maritime lien — Sailor's lien for wages — Lien for D wages for crew captured and abducted by pirates — Crew held hostage ashore and unable to render service to ship — Fixed-term contracts expired — No provision for continued payment of wages pending repatriation — Impossibility of performance — No lien and no action in rem.

Shipping — Admiralty law — Maritime lien — Nature — Applicable law — Court E looking at claim underlying lien and applying South African law — Whether prima facie claim established — Whether claim protected by maritime lien.

Headnote : Kopnota

The court a quo [*] held that the wages of Indian sailors held hostage by pirates F were subject to the seafarer's lien for wages enforceable by an arrest in rem.

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A The court upheld the deemed arrest [*1] of the hijacked ship, the Asphalt Venture, at the instance of Bergshav, cessionary of the sailors' wage claims against charterer Windrush.

Asphalt Venture was hijacked by Somali pirates off the Kenyan coast on 23 September 2010. Though a ransom was paid and the ship released on 15 April 2011, the pirates retained seven sailors (the seven) as hostages. B Their employment contracts, concluded between April and August 2010, specified that employment was governed by Indian law, and terminated after nine months. Experts on Indian law called by Bergshav argued that even though the sailors' specified periods of employment had expired by the time the pirates released the ship, the obligation to pay wages endured. Bergshav also relied on article 19.2 of the contracts, which specified that the C employer would pay wages 'during repatriation for normal reasons'. Windrush, citing the expert opinion of the former chief justice of India, Judge Khare, argued that the contracts were terminated by impossibility of performance.

In an appeal to the Supreme Court of Appeal, the issue was whether there D existed, at the time of the arrest, a maritime lien for wages entitling Bergshav to arrest the ship by way of an in rem arrest under s 3(4)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act).

Held

The enquiry into whether there existed an enforceable claim based on a maritime lien was two-pronged. The court had to determine whether Bergshav had E established (i), on a prima facie basis, the existence of the claims it sought to enforce against Asphalt Venture; and (ii) that those claims were, by reason of their nature, protected by a maritime lien under South African law (see [17]). The source of the obligation to pay the wages of the Asphalt Venture's crew appeared from their employment contracts, and if they envisaged an ongoing obligation to pay wages until repatriation, it was irrelevant whether F employment continued (see [19]).

The court a quo should not have rejected Justice Khare's opinion that the contracts were terminated by impossibility: the doctrine of frustration applied to employment contracts where supervening events rendered their performance impossible or radically different from what was undertaken G when the contract was entered into (see [33]). This was what happened in the present case, when Asphalt Venture sailed without the seven on 15 April 2011: any obligation to repatriate them was rendered impossible (see [28], [33]).

The hallmark of a maritime lien for wages was the benefit to the ship of the crew's service, without which no maritime lien could arise (see [38]). Thus, even H if the seven were entitled to recover wages, such entitlement would not have arisen from service to Asphalt Venture and would not have attracted a maritime lien. The absence of a maritime lien was fatal to the entitlement of Bergshav to arrest the ship (see [38]). Since the situation was far removed from the one contemplated by article 19.2, its provisions were irrelevant (see [40]). There was no obligation on Windrush to pay wages or I repatriation costs beyond 15 April 2011, and no maritime lien existed on 21 September 2012, when Asphalt Venture was arrested. Bergshav could not

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invoke the action in rem, and the deemed arrest would be set aside and an A order made for the release of the security furnished by Windrush (see [42], [44]).

Cases cited

Southern Africa

Atlantic Harvesters of Namibia (Pty) Ltd v Unterweser Reederei GmbH of Bremen B 1986 (4) SA 865 (C): dictum at 874E – G applied

Continental Illinois National Bank and Trust Co of Chicago v Greek Seamen's Pension Fund 1989 (2) SA 515 (D): dictum at 530I – 533E applied

MV Pasquale Della Gatta; MV Filippo Lembo; Imperial Marine Company v Deiulemar Compagnia di Navigazione SPA 2012 (1) SA 58 (SCA) ([2011] ZASCA 131): dicta in paras [25] – [27] applied C

Oriental Commercial and Shipping Co Ltd v MV Fidias 1986 (1) SA 714 (D): dictum at 717I – J applied

Phillips v SA Reserve Bank and Others 2013 (6) SA 450 (SCA) ([2012] 2 All SA 518; 2012 (7) BCLR 732; [2012] ZASCA 38): dictum in para [64] applied

Schlesinger v Commissioner for Inland Revenue 1964 (3) SA 389 (A): D dictum at 396G applied

Transol Bunker BV v MV Andrico Unity and Others; Grecian-Mar SRL v MV Andrico Unity and Others 1989 (4) SA 325 (A): referred to

Van der Merwe v Road Accident Fund and Another (Women's Legal Centre Trust as Amicus Curiae) 2006 (4) SA 230 (CC) (2006 (6) BCLR 682; [2006] ZACC 4): dictum in para [43] applied E

Windrush Intercontinental SA and Another v UACC Bergshav Tankers AS: The Asphalt Venture 2015 (4) SA 381 (KZD): reversed on appeal.

England

Davis Contractors Ltd v Fareham UDC [1956] AC 696 (HL) ([1956] 2 All ER 145): referred to F

Horlock v Beal [1916] 1 AC 486 (HL): discussed and applied

Prest v Petrodel Resources Ltd [2013] 2 AC 415 (SC) ([2013] UKSC 34): referred to

The Arosa Star [1959] 2 Lloyd's Rep 396: referred to

The Castlegate [1893] AC 38: referred to

The Ever Success [1999] 1 Lloyd's Rep 824: applied G

The Father Thames [1979] 2 Lloyd's Rep 364: referred to

The Halcyon Skies [1977] 1 QB 14 ([1976] 1 Lloyd's Rep 461): referred to

The Tacoma City [1991] 1 Lloyd's Rep 330 (CA): referred to

The Westport (No 4) [1968] 2 Lloyd's Rep 559: referred to.

India H

Konavalov v Commander, Coast Guard Region (2006) 4 SCC 620: discussed.

New Zealand

Karelrybflot v Udovenko [2000] 2 NZLR 24 (CA): applied.

Case Information

MJ Fitzgerald SC for the appellants (heads of argument prepared by I DA Gordon SC).

SR Mullins SC for the respondent.

An appeal against a decision of the Durban High Court, reported as Windrush Intercontinental SA and Another v UACC Bergshav Tankers AS: The Asphalt Venture 2015 (4) SA 381 (KZD). J

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Order A

1.

The appeal is upheld with costs.

2.

The order of the court a quo is set aside and replaced with the following:

'(a)

The deemed arrest of MT Asphalt Venture is hereby set aside.

(b)

The security furnished on behalf of Windrush Intercontinental SA B shall be released to it forthwith.

(c)

UACC Bergshav Tankers AS shall pay the costs of the application, including —

(i)

the costs attendant upon the further argument as a consequence of the court's request for responses to C queries;

(ii)

the costs of the application for leave to appeal; and

(iii)

the costs of the application to set aside the arrest of MT Asphalt Venture.'

Judgment

Maya DP (Shongwe JA, Wallis JA, Dambuza JA and Makgoka AJA concurring):

[1] This appeal is against the refusal of the KwaZulu-Natal Local Division of the High Court, Durban (Exercising Admiralty Jurisdiction) (Olsen J), to set aside the deemed arrest of the second appellant, the MT Asphalt Venture, owned by Bitumen Invest AS (Bitumen), leave to appeal E having been granted by the High Court. The first appellant, Windrush Intercontinental SA (Windrush), is a company duly registered and incorporated in accordance with the laws of Panama, carrying on business in Sharjah in the United Arab Emirates. The respondent is UACC Bergshav Tankers AS (Bergshav), a company duly incorporated F and registered in accordance with the laws of Norway and carrying on business, inter alia, as the registered owner of the MT UACC Eagle in Dubai in the United Arab Emirates.

[2] Windrush was the Asphalt Venture's bareboat charterer in terms of a bareboat charterparty it concluded with Bitumen in May 2008 for the G period 7 May 2008 to 7 November 2015. The bareboat charterparty was part of an adapted sale-and-leaseback arrangement between Concord Worldwide Inc (Concord), Bitumen and Windrush, under which Concord, which was then the vessel's owners, sold the Asphalt Venture to Bitumen and Windrush bareboat chartered it from Bitumen. The charter H was on the Barecon 2001 form for seven and a half years, at the end of which Windrush was obliged to purchase the vessel. [1] Windrush concluded a sub-bareboat charterparty with Concord for the same period. [2]

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Maya DP

Between April and August 2010 Concord, through...