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Lloyd's Maritime and Commercial Law Quarterly

SOUTH AFRICA

Craig Forrest*

350. CH Offshore Ltd v PDV Marina Sa, The Right, Title and Interest of the First Respondent in and to the Mt Rio Caroni including all Bunkers, Lubricating and other Oils, Spare Parts, Provisions and other Equipment and Others 1

Security arrest—nature of interest under demise charterparty

CH Offshore Ltd (“CHO”), a Singaporean provider of offshore support services, entered into a four-year charterparty for two anchor-handling and supply tugs with PDV Marina SA (“PDV”), a wholly owned subsidiary and the shipping arm of Petroleos de Venezuela SA, Venezuela’s state oil company. PDV assigned the charterparties to Astilleros De Venezuela CA (“Astilleros”), with the agreement of CHO, on the basis that PDV would remain liable, with Astilleros, for payment of the hire charges. Astilleros subsequently defaulted on the hire payments and, when the tugs were eventually redelivered to CHO, its claim for arrear hire, additional hire and demobilisation charges exceeded US$50 million. The claim was not paid and the applicant instituted proceedings in London against PDV and Astilleros. Seeking security in relation to these proceedings, CHO had the MT Rio Caroni, a crude oil tanker lying at anchor outside Durban harbour, arrested. PDV was the demise charterer of the MT Rio Caroni, and sought to have the arrest reconsidered (as it had been made ex parte and in their absence) on the basis that their rights in the vessel were contractual rights and not located within the jurisdiction of the court.
Decision: Application succeeds.
Held: (1) Section 5(3) of the Admiralty Jurisdiction Regulation Act2 provides that a “court may in the exercise of its admiralty jurisdiction order the arrest of any property for the purpose of providing security for a claim which is or may be the subject of an arbitration or any proceedings contemplated, pending or proceeding, either in the Republic or elsewhere, and whether or not it is subject to the law of the Republic, if the person seeking the arrest has a claim enforceable by an action in personam against the owner of the property concerned or an action in rem against such property or which would be so enforceable but for any such arbitration or proceedings”. In an application for a reconsideration of the order for such an arrest, the applicant who obtained the order for the arrest retains the onus of satisfying the court that it was entitled to the order.3

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