Transol Bunker BV v MV Andrico Unity and Others; Grecian Mar Srl v MV Andrico Unity and Others

• Jurisdiction: South Africa
• Judge: Marais J
• Judgment Date: 05 June 1987
• Citation: 1987 (3) SA 794 (C)

Marais J:

During April 1984 the vessel Andrico Unity was arrested in the exercise of the Court's admiralty jurisdiction at the instance of F Transol Bunker BV ('Transol') and Grecian Mar SRL ('Grecian'). Provision was made in the relevant orders of arrest for the release of the vessel upon the furnishing of security and security was duly furnished and the vessel released. The vessel and its owners thereupon launched proceedings in which orders were sought discharging the orders for the arrest of the vessel and ordering the respective applicants for such G orders of arrest to pay the costs. As the issues which arise in both matters are the same, the applications were heard simultaneously. To avoid repetition, I shall deal with the facts in one of the applications only, namely that in which the order of arrest which Transol obtained is attacked.

The order of arrest was sought and granted on the basis that Transol had a maritime claim in terms of s 1(1)(ii)(1) of the H Admiralty jurisdiction Regulation Act 105 of 1983 ('the Act') for bunkers supplied to the vessel in Argentina and that Transol's claim was enforceable in rem in terms of s 3(4)(b) of the Act, it being alleged that J N Andriopoulos Shipping and Commercial Enterprises SA ('Andriopoulos') ordered such bunkers on behalf of the vessel's owner Geranium Maritime SA ('Geranium').

I The ground upon which it was sought to set aside the arrest was that Andriopoulos, in ordering the bunkers, did not represent the owner of the vessel, Geranium, but Sea Endeavour SA, being the demise charterers of the vessel, and that Transol accordingly was not entitled to proceed in rem against the vessel in terms of s 3(4)(b) of the Act.

Transol did not dispute that the basis upon which the order of J arrest had been obtained was not factually well founded. Its attorney, Mr

Marais J

Dyason, stated in an opposing affidavit filed by Transol that A at the time the arrest was sought Transol had no knowledge of the demise charter and that it was thought that Andriopoulos represented the owner in ordering the bunkers. However, an alternative justification for the arrest was put forward, namely the existence of a maritime lien attaching to the vessel B according to the law of Argentina. It is claimed that according to the law of Argentina a 'privileged credit', equivalent to a maritime lien in English law, attaches to a vessel which has been supplied with bunkers in an Argentine port. The precise nature of the alleged maritime lien is described in the following way by the relevant expert on Argentine law in his affidavit:

'2. In terms of art 476 of the Argentine Navigation Act (Law No C 20.094) a creditor is afforded a privileged credit for his claim in respect of goods or materials supplied to a ship for its operation or maintenance. I annex hereto marked "A" a copy of the said article. The supply of bunkers (whether fuel or gas oil) to a ship will accordingly give rise to a privileged credit.

3. A privileged credit in Argentine law is equivalent to a maritime lien in the English law. (In this regard the Argentine D law has adopted the terminology of continental law rather than that of English law.)

The privileged credit arises automatically, independently of contract and by operation of law, from the moment the events occur which give rise to the lien and attaches to the ship without any further formality. It remains enforceable against the ship notwithstanding changes of ownership, even where the subsequent owner acquires the ship without notice of the privileged credit. It is enforceable by the arrest of the ship and creates a preference. It attaches to foreign as well as to E domestic ships.

4. In 1961 Argentina acceded to the International Convention for the unification of certain rules relating to certain liens and mortgages, dated 10 April 1926 ('the Convention'), but the Convention is not part of the domestic law of Argentina. The Convention, however, would be applied in Argentina if the vessel belongs to a contracting State in accordance with art 14 of the Convention.

5. Article 2(5) of the Convention provides that a privileged credit will arise in respect of claims resulting from contracts F entered into or acts done by the master, acting within the scope of his authority, away from the vessel's home port, where such contracts or acts are necessary for the preservation of the vessel or the continuation of its voyage, whether the master is or is not at the same time owner of the vessel, and whether the claim is his own or that of ship-chandlers, repairers, lenders, or other contractual creditors.

A copy of art 2 is annexed to marked "B" (sic ).

6. It is established law in Argentina that, in terms of the G interpretation placed on art 476, a privileged credit arising from the supply of goods such as bunkers will attach to the ship (from the moment the goods are supplied) regardless of whether or not the ship is under charter. Nor does it matter who orders the goods supplied to the ship, provided that the person is authorised to do so by the owner or charterer or their local agents.

7. The position as set out in para 6 above represents the H current Argentine law and is applied in the Courts. It is based upon the accepted and consistently applied interpretation of art 476.

8. Under the interpretation of art 2(5) of the Convention in Argentina, if goods are received by the master without reserve, this would constitute an 'act done by the master' within the meaning of art 2(5) and would give rise to a privileged credit.

9. A privileged credit arising from the supply of bunkers can be enforced in Argentine law by the arrest of the vessel within I one year of the time when the privileged credit arises in terms of art 484(2), a copy of which is annexed marked "C".

10. I am informed that in this case at the time when the bunkers were ordered the ship was under charter to Sea Endeavour SA from the owner Geranium Maritime SA, that the bunkers were ordered by N J Andriopoulos Shipping and Commercial Enterprises SA of Greece (being the charterer's managing agent who represented the charterers in so acting) and J that pursuant to such order the bunker oil was supplied on

Marais J

A 15 and 24 November 1983 at Villa Constituciòn and Buenos Aires respectively and, although due, the purchase price of the bunkers has not been paid. I understand that the bunkers were indeed received by the master without reservations and that the one bunker receipt which is available (that of Destiler럠Argentina de Petròleo SA) is clean, ie it has been signed and stamped by the master without reservations.

11. On the basis of the aforegoing it follows that both under art 476 of the Navigation Act and under art 2(5) of the Convention (if the latter article is applicable) a privileged B credit attached to the ship belonging to Argentine law. However, as the ship belongs to a State which is not a contracting party to the Convention (Panamà), the Convention does not apply. (See art 14 of the Convention annexed hereto marked " D".) It follows that the privileged credit attached under art 476 of the Navigation Act.

12. I have also been informed that art 5(6) of the charterparty between the owners and the charterers of the Andrico Unity provides

C "neither the charterer nor the master of the vessel shall have any right, power or authority to create, incur or permit to be imposed upon the vessel any liens whatsoever except for crew's wages and salvage and current operating expenses not to exceed US $100 000 in the aggregate".

D 13. In Argentine law there is no doubt that, if the supplier of the bunkers had no notice of art 5(6), that article could not prevent a privileged credit from arising. Even if the supplier had notice of art 5(6), that provision would be res inter alios acta vis-à-vis the supplier and similarly could not prevent a privileged credit from arising, which does so by operation of law.'

The vessel and its owners say, firstly, that it is not open to Transol to seek to justify the arrest upon this new ground and, secondly, that, even if such a maritime lien does exist in E Argentine law (which is disputed), there is no corresponding maritime lien in South Africa and that, in such circumstances, the Argentine maritime lien cannot be regarded as a maritime lien of the kind envisaged by s 3(4)(a) of the Act. It followed, so it was contended, that there could be no enforcement of such a claim by an action in rem and therefore no arrest of the vessel.

When the matter was called counsel for the parties handed an F agreement to the Court, the substance of which was that the Court was asked to decide two issues only, namely whether Transol is entitled to rely upon the new ground to justify the arrest of the vessel and, if so, whether the lien which allegedly exists in Argentine law is a maritime lien within the meaning of s 3(4)(a) of the Act and enforceable as such by an G action in rem. It was also agreed that if either of these two questions should be answered in the negative, the arrest should be set aside. If both should be answered in the affirmative, it was agreed that the applications to set aside the arrest should be dismissed. In the latter event, it was agreed that the further question as to the existence and nature of such a lien in Argentine law would be investigated at the trial action if H not settled previously by agreement, I agreed to this course being followed. I turn then to the first question.

Mr Wallis, who appeared for the vessel and its owners, contended that the situation is akin to one in which an applicant in motion proceedings seeks to make a new case in I reply and he cited the familiar authorities in support of his submission that this is only countenanced, if at all, in highly exceptional circumstances. He pointed out that the possibility of the existence of a maritime...