The MV Zlatni Piasatzi: Frozen Foods International Ltd v Kudu Holdings (Pty) Ltd and Others

• Jurisdiction: South Africa
• Judge: Conradie J
• Judgment Date: 07 December 1993
• Citation: 1997 (2) SA 569 (C)
• Docket Number: AC 213/93
• Hearing Date: 08 November 1993
• Counsel: D Irish for the applicant R W F MacWilliam for the first respondent
• Court: Cape Provincial Division

Conradie J:

This case is about the Court's power to order security for the applicant's claim and costs in an envisaged arbitration in London. The arbitration, for which arbitrators have already been appointed, will be conducted between the applicant, a company incorporated in Monte Carlo and the first respondent, a Namibian company. D

The dispute between them concerns a voyage charter party in terms of which the applicant contracted with the first respondent to carry a cargo of frozen fish to Nigeria. The trouble was that when the fish was loaded onto the vessel, the MV Zlatni Piasatzi, no purchaser for the fish had yet been found, so the ship could not sail E immediately. In fact, it took about six weeks for a purchaser to be found, by which time the first respondent had become anxious about payment of storage charges for serving as a floating refrigerator. The first respondent contended that it had been agreed that the applicant would pay for the storage, although the charter party made no provision for this. The applicant denied liability. The first respondent then arrested F the cargo of fish as security for its claim against the applicant, alleging that the fish belonged to the applicant. The applicant contended that the fish belonged, not to it but to three Estonian companies. Williamson J found, in an application by the three Estonian companies to have the arrest of the fish set aside, that the first respondent had G an enrichment lien over the fish and so had been entitled to arrest the cargo, even if it did not belong to the applicant. Shortly before judgment in that application was given, there was a flurry of correspondence. On 31 March 1993 the first respondent's attorneys advised the applicant's attorneys that the applicant was considered to have repudiated the charter party. The first respondent intimated that it accepted what in its H view was a repudiation. It advised the applicant that it would hold it liable for the ensuing damages.

On the same day the third respondent,

'in consideration of your releasing the above cargo from arrest and in further consideration of your refraining from attaching or arresting in any jurisdiction, any vessel or other property in the same or associated ownership, management or control of: I

(1)

Frozen Foods International Ltd c/o Juno Management Services SAM;

(2)

Lenribprom;

(3)

Ookean Ltd; and

(4)

Novorosslykskrybrom;

in connection with any claim you may have arising out of or in connection with the voyage charterparty concluded on 7 January 1993 in respect of the MV J

Conradie J

Zlatni Piasatzi (other than for the purposes of execution after judgment has A been obtained), we the French Bank of Southern Africa Ltd undertake that we will make payment to you of all sums being due to you in respect of an alleged breach by any of the aforementioned parties of the voyage charter party'

provided security for the first respondent's claim for the storage charges, but this was no longer enough since the first respondent now threatened to arrest the cargo to B provide security for the first respondent's claims for the alleged repudiation of the charter party. The third respondent on behalf of the applicant and the three owners then, still on 31 March 1993, provided security in the same terms as those set out above for these claims as well. The cargo was now deemed to be under arrest in terms C of s 3(10) of the Act. It was transshipped to another reefer. The applicant, which denies having repudiated the charter party, and instead regards the first respondent as having been in breach of its obligations, maintains that it is entitled to recover from the first respondent the advance payment of half the freight which it had made in terms of the charter party as well as the cost of the transshipment. It intends to cross-claim in D the arbitration for these amounts, which together come to US$152 113,43 (US$212 763 if interest and costs are brought into account).

On 13 September 1993 the applicant brought an application ex parte before King J who ordered the arrest in terms of s 5(3)(a) of the Admiralty Jurisdiction Regulation E Act 105 of 1983 ('the Act') of an amount held in trust by the second respondent, the first respondent's attorneys, on the latter's behalf, and authorised the applicant to proceed on the same papers for an order directing the first respondent to furnish security to the applicant for the difference between US$212 763 and the value of the arrested property. The amount arrested, R2 410,08, was much too small to serve as...