Windrush Intercontinental SA and Another v Uacc Bergshav Tankers as the Asphalt Venture

• Jurisdiction: South Africa
• Citation: 2015 (4) SA 381 (KZD)

Windrush Intercontinental SA and Another v Uacc Bergshav Tankers as the Asphalt Venture
2015 (4) SA 381 (KZD)

2015 (4) SA p381

Citation	2015 (4) SA 381 (KZD)
Case No	A 111/2012
Court	KwaZulu-Natal Local Division, Durban
Judge	Olsen J
Heard	August 6, 2014
Judgment	April 9, 2015
Counsel	DA Gordon SC for the applicants.; SR Mullins SC for the respondent.

Flynote : Sleutelwoorde F

Shipping — Admiralty law — Maritime lien — Seaman's lien for wages — Lien for wages for crew captured and abducted by pirates — Claim falling within G scope of maritime lien for wages — Lien transferable by cession or assignment — Admiralty Jurisdiction Regulation Act 105 of 1983, s 1(1)(s).

Headnote : Kopnota

On 28 September 2010 the Asphalt Venture was hijacked by Somali pirates off the Kenya coast. Though a ransom was paid and the ship released on 15 April 2011, the pirates retained seven Indian crew members as hostages. Their H employer, Concord Worldwide Inc, the subcharterer, made payments equivalent to their wages to their dependent families until October 2011, when it ran into financial difficulties. It was common cause that the specified periods of employment of the abducted crew had expired by the time the ship was released.

Bergshav, the respondent in the present case, acting as cessionary of the wage I claims of abducted crew, procured the arrest of Asphalt Venture in Durban in September 2012. The claims were ceded to Bergshav under a settlement agreement concluded between Bergshav and the families, which was approved by the Indian High Court, Mumbai. In its summons in rem in the South African court Bergshav claimed payment of what it had paid to the families. J

2015 (4) SA p382

A The present application was for the release of the Asphalt Venture from its deemed arrest and for the return of the security furnished. The applicants were Windrush, the original bareboat charterer, and the ship itself. The question for the court was whether, given the termination of the employment contracts and the absence of service to the ship after April 2011, there was a valid claim for unpaid wages capable of supporting a maritime lien. An B ancillary question was whether, even if the claims and the maritime liens existed, their transfer by cession or assignment was valid, at least without the sanction of the Mumbai High Court. It was common cause that the abducted crew's employment contracts were governed by Indian law.

Held: Although the employment of the abducted crew had ended in April 2011, C Bergshav was able to show, if only at prima facie level, that Indian law would recognise their wage claims at all material times to date of repatriation. Whether the claims were supported by maritime liens enforceable by an action in rem had to be determined with reference to the lex fori, ie South African law. The issue was in effect settled by the applicants' concession that the claims were 'maritime claims', [*] for in South African law D the liens would follow the claims. The critical factor, therefore, was not the time when a claim arose, but whether it fell within the scope of a maritime lien. It could for present purposes [†] be concluded that crew's prima facie wage claims did give rise to maritime liens, which were, moreover, by their nature capable of being transferred by cession or assignment. And since the Mumbai High Court had, on the applicants' version, indeed sanctioned the E assignment, the court would recognise Bergshav's title. Application dismissed. (Paragraphs [28], [32], [37], [45], [52], [57] and [60] – [68] at 389G – H, 391E – G, 392F – G, 395E, 397G – 398B, 400A – B and 400E – 402A.)

Cases Considered

Annotations F

Case law

Southern Africa

Continental Illinois National Bank and Trust Co of Chicago v Greek Seamen's Pension Fund 1989 (2) SA 515 (D): dictum at 544E – G applied

Fortis Bank (Nederland NV) v Orient Denizcilik Turizm Sanayi Ve Tricaret AS: MV Olympic Countess 2008 (1) SA 376 (SCA): referred to G

Hülse-Reutter and Others v Gödde 2001 (4) SA 1336 (SCA) ([2002] 2 All SA 211): dictum in para [12] applied

Mak Mediterranee SARL v The Fund Constituting the Proceeds of the Judicial Sale of the MC Thunder (SD Arch, Interested Party) 1994 (3) SA 599 (C): dictum at 607H – 608B applied

MT Argun: Master and Crew of the MT Argun v MT Argun 2003 (3) SA 149 (C): explained H

The Kingston (1991) SCOSA D80 (D): referred to

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

2015 (4) SA p383

England A

Bankers Trust International Ltd v Todd Shipyards Corporation: The Halcyon Isle [1981] AC 221 (PC) ([1980] 3 All ER 197): applied

Horlock v Beal [1916] 1 AC 486 (HL): considered

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

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

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

The James W Elwell (1921) 15 Aspinall 418: referred to

The Petone [1917] P 198: referred to

The Sparti [2000] 2 Lloyd's Rep 618: discussed

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

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

India

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

Statutes Considered

Statutes

The Admiralty Jurisdiction Regulation Act 105 of 1983, s 1(1)(s): see D Juta's Statutes of South Africa 2013/14 vol 1 at 2-92.

Case Information

DA Gordon SC for the applicants.

SR Mullins SC for the respondent.

An application for the setting-aside of the arrest of the Asphalt Venture. E The application is dismissed (para [82]).

Judgment

Olsen J:

[1] On 21 September 2012 the vessel Asphalt Venture (now the second applicant) was arrested at the instance of UACC Bergshav Tankers AS F (now the respondent). Security was furnished in order to secure the release of the Asphalt Venture. The first applicant (Windrush Intercontinental SA, the bareboat charterer of the Asphalt Venture) now joins the second applicant in an application to set aside the resultant deemed arrest of the second applicant, and for an order for the return of the security furnished. G

[2] In the action in rem instituted against the second applicant by the respondent it claims to be cessionary of the rights of seven members (or former members) of the crew of the Asphalt Venture. A discussion of the cause of action pleaded, and of the basis upon which it is challenged in the current proceedings, is best preceded by an outline of the facts. H

[3] In May 2008 the first applicant entered into a bareboat charterparty with the registered owner of the Asphalt Venture, Bitumen Invest A/S (Bitumen), in terms of which the first applicant took the vessel on charter from 7 May 2008 to 7 November 2015. The first applicant in turn entered into a sub-bareboat charterparty with Concord Worldwide Inc I (Concord) for the same period.

[4] Concord (represented by its ship managers) entered into contracts of employment with the complement of 15 crew members of the Asphalt Venture. (The contracts relating to the seven crew members who are central to the current dispute were concluded between April and August J

2015 (4) SA p384

Olsen J

A 2010.) The vessel was at that stage employed under a time charterparty to carry bitumen, apparently principally between Durban and the Indian Ocean islands.

[5] On 28 September 2010 the vessel was hijacked by Somali pirates when it was about 100 nautical miles east of Mombasa. The vessel and B its crew became prisoners of the Somali pirates. Concord then followed what, according to the founding affidavit, has become standard practice in such matters, by engaging with its insurers, instructing solicitors, consulting security advisers and, most importantly, appointing a negotiator to deal with the pirates.

C [6] By these means an agreement was reached which resulted in a ransom of some USD 3,4 million being paid to the pirates on about 15 April 2011 in exchange for the promised release of the vessel and the 15 crew members. The vessel was released with eight of the crew members. The pirates reneged on the negotiated arrangement by retaining seven Indian crew members as hostages. They offered the release of these seven D remaining crew members against the release of some 120 Somali detainees held in India awaiting trial, presumably on charges of or relating to piracy. Unfortunately, from the perspective of the seven Indian hostages, their government does not negotiate with pirates. The seven crewmen remained in captivity.

E [7] Each of the seven crew members had been employed by Concord in terms of a written agreement specifically for service on the Asphalt Venture. The contracts were concluded at different times between April 2010 and August 2010, and the fixed periods of employment varied between four months and nine months. The latest expiry date among the F seven contracts was the end of February 2011. Accordingly the specified period of employment of each of the seven hostages had terminated by the time the vessel was released in mid-April 2011. Notwithstanding this Concord continued to pay the wages of all the crew up to 15 April 2011, when the ship and eight crew members were released. The eight crew G members who were released were discharged from the vessel and Concord paid for their repatriation. Concord then continued to pay amounts equivalent to the wages of the seven detained crew members to their families up to and including October 2011. It is said that this was done on a voluntary basis. But at that stage Concord ran out of money and paid no more to or for the benefit of the seven hostages.

H [8] Concord had run into difficulties before the end of October 2011. It could not meet its obligations in terms of the sub-bareboat...