Lloyd's Maritime and Commercial Law Quarterly
THE ASSOCIATED SHIP JURISDICTION IN SOUTH AFRICA: CHOICE ASSORTED OR ONLY ONE BITE AT THE CHERRY?
The Fortune 22
The innovative provisions of the Admiralty Jurisdiction Regulation Act,1
providing for the arrest of associated ships both to commence in rem
proceedings in South Africa2
and to obtain security for proceedings before courts or arbitration tribunals in other countries,3
have proved a boon to maritime claimants in endeavouring to recover payment from elusive debtors. However, a recent judgment in the Cape Provincial Division of the High Court restricts the operation of these useful provisions. This note considers that decision.
The facts and the litigation
The facts were commonplace. A shipyard performed repairs on the m.v. Mount Ymitos
. Payment was not forthcoming and negotiations to recover it ensued but only a portion was recovered. The shipyard commenced proceedings in rem
against the vessel in Hong Kong. It was arrested and sold under a judicial order but this did not result in any payment to the shipyard. A mortgagee having a prior claim scooped the pool, leaving the shipyard empty handed. The shipyard looked elsewhere and its eye fell on South Africa and the associated ship provisions of the AJRA.
If the owner of the Mount Ymitos
was the party liable to pay for the repairs,4
there were prospects for recovery in South Africa because it was one of a number of vessels owned by “one ship” companies but controlled by a single corporate entity. All of these vessels were associated ships under the AJRA. On that basis the shipyard commenced proceedings in rem
in the High Court in Cape Town and the Fortune 22
was arrested and released after a suitable guarantee had been furnished to secure the claim.
The owners of the Fortune 22
launched proceedings to set aside the arrest on the grounds inter alia
that such an arrest was precluded because of the prior arrest in Hong Kong of the Mount Ymitos.
That contention succeeded.5
The court held that the AJRA only permitted a claimant a single arrest anywhere in the world. It could arrest either the ship in respect of which the claim had arisen or an associated ship, but only one. This position was not limited to South Africa. The court held that an arrest anywhere in the world of the ship in respect of which the claim had arisen debarred a subsequent arrest of either that ship or an associated ship in South Africa.
The judgment caused some consternation in maritime law circles in South Africa. Since the inception of the AJRA there have been many examples of multiple arrests in South Africa involving either the arrest of the ship in respect of which the claim had arisen and one or more associated ships or the arrest of more than one associated ship by the same
1. Act 103 of 1983, as amended (hereafter “AJRA”). The introduction of the Act was the subject of articles by A.Rycroft [1984] LMCLQ 417 and H.Staniland [1985] LMCLQ 462.
2. AJRA, s. 3(6).
3. Ibid.,
s. 5(3).
4. A dispute existed between the parties as to whether the owner or the charterer was liable for the repairs but that dispute is irrelevant for the purposes of this note.
5. m.v. Fortune 22: Owners of the
m.v. Fortune 22
v. Keppel Corp. Ltd
1999 (1) S.A. 162(C).
CASE AND COMMENT
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