Golden Seabird Maritime Inc and Anr v Alam Tenggiri Sdn Bhd and Anr (The "Alam Tenggiri") - Supreme Court of Appeal of South Africa (Hefer ACJ, Scott, Mpati, Mthiyane JJA and Conradie AJA) - 25 September 2001

Admiralty jurisdiction - Vessel subjected to security arrest in terms of section 5(3) of Admiralty Jurisdiction Regulation Act - Vessel released from arrest pursuant to court-ordered acceptance of P&I Club letters of undertaking - Whether the ?deemed arrest? provisions in section 3(10)(1)(a) of Act apply to security arrest - Whether arrest lapsed on release of vessel against provision of extra-curial guarantee

Disputes arose between the buyers and the sellers of two new building product carriers, the Theano and the Ludovica. The disputes were to be arbitrated in London. In order to obtain security for their claims in the arbitration, the buyers arrested the vessel Alam Tenggiri under section 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 on the basis that it was an associated vessel of Theano and Ludovica. Letters of undertaking were tendered by a P&I Club in order to secure the release of the Alam Tenggiri. No authorised officer of the buyers could be reached in time to grant their attorneys authority to accept the letters of undertaking. The sellers, and the owners of the Alam Tenggiri accordingly applied to the court and were granted an order by Nicholson J that the buyers accept the letters of undertaking as security for their claims against the sellers, and that the letters of undertaking be substituted with bank guarantees from a first class South African or London Bank in precisely the same format within 30 days. Once the letters of undertaking had been accepted, the Alam Tenggiri was released from arrest.