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

• Jurisdiction: South Africa
• Citation: 1989 (4) SA 325 (A)

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

1989 (4) SA p325

Citation	1989 (4) SA 325 (A)
Court	Appellate Division
Judge	Corbett JA, Hoexter JA, Grosskopf JA, Milne JA and Nicholas AJA
Heard	November 7, 1988; November 8, 1988
Judgment	March 29, 1989

Flynote : Sleutelwoorde H

Shipping — Admiralty action in rem — Maritime lien — Recognition of claim as giving rise to maritime lien where claim would not be classified as maritime lien if it had arisen within territorial jurisdiction of Court — I Issue whether classification determined by proper law of contract or by lex fori — Section 6(1)(a) of Admiralty Jurisdiction Regulation Act 105 of 1983 enjoining Court to apply law which High Court of Justice in United Kingdom, exercising admiralty jurisdiction, would have applied on 1 November 1983 — Court finding that English law classifying issue as one J concerning question of jurisdiction and that in English law, a

1989 (4) SA p326

A maritime lien involves rights that are procedural and remedial only — In English law, issue thus to be decided in accordance with domestic rules of lex fori — Court concluding that principle to be applied by South African B Court was that foreign maritime lien not falling within one of categories of lien recognised by domestic rules of English law not accorded status of maritime lien.

Headnote : Kopnota

The classification of a claim as a maritime lien has two important consequences: (a) it constitutes one of the bases upon which a claimant may found an action in rem against the ship concerned; and (b) it affects the status of the claim in the order of priorities in the distribution of a limited fund. There are major differences between the domestic rules of the legal systems of different countries as to C what classes of maritime claims should be recognised as giving rise to maritime liens. Problems consequently arise when certain claims against a ship have arisen within the territorial jurisdiction of foreign countries whose legal systems may assign legal consequences different from the legal consequences which the lex fori would have assigned to those claims had they arisen within the territorial jurisdiction of the Court in which those claims are sought to be enforced.

D In casu, the Court had been asked to recognise the appellants' claims against the respondent ship as having given rise to maritime liens. The appellants had supplied the ship with bunkers and necessaries at ports in Argentina. In terms of the law of Argentina, being the proper law of the contracts, such claims gave rise to maritime liens. In South African admiralty law such claims, had they arisen within the territorial jurisdiction of the South African Courts, would not have been classified as giving rise to maritime liens. The issue was thus whether E the classification of a maritime claim as a maritime lien is to be determined according to the proper law of the contract, or whether it should be determined by the lexi fori. Section 6(1)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 enjoins a South African Court exercising admiralty jurisdiction to apply the law which the High Court of Justice in the United Kingdom in the exercise of its admiralty jurisdiction would have applied as at 1 November 1983. This reference comprehends both its domestic rules of law and the relevant principles of private international law.

F The Court used as its starting point the decision of the Privy Council in Bankers Trust International Ltd v Todd Shipyard Corporation: The Halcyon Isle 1981 AC 221 (PC) ([1980] 3 All ER 197 (PC)). It pointed out that, while the Privy Council was not part of the appellate hierarchy of the English Supreme Court and its decisions were not binding upon the English High Court, the Court of Appeal or the House of Lords, decisions of the Privy Council were regarded as being of great persuasive G force, both in England and in South Africa, and that its decisions were accorded 'the greatest attention and respect' in the English Courts. The Court held that the Halcyon Isle case, though not binding, was nonetheless an authority to which the greatest attention and respect had to be paid when seeking to determine what rule of law would be applied in the instant case by an English Court exercising admiralty jurisdiction.

The majority decision in the Halcyon Isle case was that the issue as H to the recognition of a foreign maritime lien should be determined in accordance with the domestic rules of the lex fori. The Court found that the majority had appeared to advance two basic reasons for reaching its decision, namely (a) that the issue involved a question of jurisdiction and (b) that in English law a maritime lien involved rights that were procedural and remedial only. The Court analysed and explained the majority decision as follows.

I A maritime lien is conferrred, not by contract, but by operation of law, and a maritime lien is a right which assumes content only when the lienee institutes an action in rem against the ship or when priorities have to be determined in regard to a limited fund arising from the sale of a ship. It is a settled rule of English admiralty law that the order of priority in the ranking of claims to a limited fund is that fixed by the lex fori. There is a close correlation between priorities, on the one hand, and according a particular kind of maritime claim the status of a maritime lien, on the other hand. Since priorities are governed J by the lex fori, the recognition of a claim as giving rise

1989 (4) SA p327

A to a maritime lien should likewise be governed by the lex fori. Furthermore, the question of who is entitled to bring a particular kind of proceeding in an English Court (for example, an action in rem) is a question of jurisdiction which, under English rules of conflict of laws, falls to be decided by English law as the lex fori. Finally, when accorded in respect of a contractual claim, the lien forms no part of the contract. It is extrinsic thereto and affects the rights of strangers to the contract. The recognition of a contractual claim as B a maritime lien is really a personal privilege dependent upon the lex fori.

The Court concluded that, taking into account the unique nature of a maritime lien and of the rights which it confers, the difficulty of distinguishing substance and procedure in conflicts cases, the object underlying such distinction, the general approach of the English Courts to the application of such distinction in practice, and taking into account general policy considerations, the majority in the Privy Council had not erred, in principle, in holding that a maritime lien should C be classified as a matter of procedure rather than of substance. It held that, while it was true that it was a borderline situation, rights arising from a maritime lien were more closely allied to remedies and procedures rather than to substantive rights. The Court held, accordingly, that according to English admiralty law, as it was on 1 November 1983, a foreign maritime lien not falling within one of the categories of lien recognised by the domestic rules of English law was not accorded the status of a maritime lien in an English Court, D either for the purposes of founding an action in rem or for the purpose of ranking priorities, and that this principle therefore had to be applied by a South African Court exercising admiralty jurisdiction. The Court refused to recognise the appellants' claims as having given rise to maritime liens and dismissed their appeals.

The decision in Transol Bunker BV v MV Andrico Unity and Others; Grecian-Mar SRL v MV Andrico Unity and Others 1987 (3) SA 794 (C) confirmed. E

Case Information

Appeal from a decision in the Cape Provincial Division (Marais J) reported at 1987 (3) SA 794. The facts appear from the judgment of Corbett JA.

G R de M Hofmeyr SC and D G Scott SC for the appellants referred to the following authorities: As to whether the decision in The F Halcycon Isle [1980] 2 Ll LR 325 (PC) is binding upon the South African Court, see the Admiralty Jurisdiction Regulation Act 105 of 1983; Shaw Admiralty Jurisdiction and Practice in SA at 73; Gentiruco AG v Firestone SA (Pty) Ltd 1972 (1) SA 589 (A) at 617F; but cf Van der Linde v Calitz 1967 (2) SA 239 (A) at 259A; ss 1(1) and 5 of the Supreme Court Act 1981 (UK); Halsbury's Laws of England vol 37 at 545 para 710; G Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd and Others [1958] 2 All ER 947 (PC) at 958B - E; Ellison Kahn (1967) 83 SALJ at 329 n 6. As to the fact that decisions of the Privy Council are not binding on the High Court of Justice, the Court of Appeal or the House of Lords, see Dulieu v White & Sons [1901] 2 KB 669 at 677; Diamond Alkalai H Export Corporation v Bourgeois [1921] 3 KB 442 at 452; Venn v Todesco [1926] 2 KB 227 at 234 - 5; Port Line Ltd v Ben Line Steamers [1958] 2 QB 146 ([1958] 1 All ER 787 at 797); Leask v Scott Brothers (1877) 2 QBD 376 (CA) at 380; Stephenson v Thompson [1924] 2 KB 240 (CA) at 246; Fanton v Denville [1932] 2 KB 309 (CA) at 332; Worcester Works Finance Ltd v Cooden Engineering Co Ltd [1971] 3 All ER 708 (CA) at 711g - h ; I London Joint Stock Bank v Macmillan Arthur [1918] AC 777 (HL) at 807; at Halsbury Laws of England vol 26 at para 584 at 306; E Kahn (1967) 83 SALJ 328 - 30; 1967 Annual Survey of SA Law at 379. As to the fact that decisions of the Privy Council are not binding upon a South African Court, see Van der Linde v Calitz (supra); Hoffmann and Zeffertt SA J Law of Evidence at 12; E Kahn

1989 (4) SA p328

A (op cit at 330); Jean Davids (1967) 83 SALJ 249; Annual Survey of SA Law (op cit); Shaw (op cit at 74); Naidoo v Marine & Trade Insurance Co Ltd 1978 (3) SA 666 (A); Dulieu v White & Sons...