The Alina II judgment handed down by the Western Cape High Court under case number AC47/2010 in January 2013 is important as it highlights the robust approach taken by our courts with regard to evidence of ownership when it comes to arrests.
Notably, the judgment extensively explored the conclusions that can be drawn from a charterer describing itself as disponent owner. Kumba Shipping Kong Hong ("Kumba") arrested the bunkers of Prima Shipping Company Limited ("Prima") on board the Alina II for security for a London arbitration. In Prima's application to set aside the arrest, it was alleged that Prima had voyage chartered the vessel and the bunkers were accordingly owned by Pompey Shipping ("Pompey").
The judge, Gamble J, at the outset, notes that the Prima/Kumba charter party did not contain an express term that Prima was liable to pay for the bunkers on board the vessel, furthermore, that the type of charter party (voyage/time/bareboat) was not apparent ex facie the document and, lastly, that Prima was described therein as "disponent owner". The type of charter party under which Prima had chartered in the vessel from Pompey, prior to then chartering the vessel out to Kumba, was critical to determining the ownership of the bunkers. Charterers under a time charter normally are obliged to supply and therefore usually own the bunkers, whereas charterers under a voyage charter do not (bunkers being owned by the "owner" under their charter party.)
It was alleged by Andrew Pike, representing Kumba, that the referral to Prima as 'disponent owner' would normally indicate that Prima was either a time or demise charterer under its head charter with Pompey and, secondly, that both time and demise charter parties normally place the obligation of supplying (and therefore owning) bunkers on the charterer (Prima), who was in this case in turn the disponent owner under the sub (voyage) charter entered into with Kumba. The court held this be a reasonable ground on which to infer ownership by Prima:
In my view Mr. Pike's allegation in the founding affidavit of ownership of the bunkers vesting in Prima in the light of the fact that the contract between it and Kumba was a voyage charter party was entirely reasonable in the circumstances. He was not privy to the legal or factual basis upon which Prima had been designated "disponent owner", and he assumed that the customary import of the use of that term applied. Indeed, it was of little consequence whether Prima had taken the vessel on a time or demise charter, sinceeither would ordinarily have obligated it to bunker the vessel.
In rebuttal of this Prima relied heavily on the Prima/Pompey charter party, which it alleged was a voyage charter party on back to back terms with the Prima/Kumba charter party (as opposed to a time charter party). The witness for Prima admitted under cross-examination that the Prima/Pompey charter party was only created after the arrest, due to a request for proof of such charter party from Prima's legal representatives – up until that point, said the witness, the agreement had been merely an oral one. He also admitted that he had never told anyone (including their legal representatives) of this late creation of the charter party and that it was probably misleading to have done so. For this reason, among others, the court concluded that the witness' evidence should be treated with "utmost caution" and further stated that the creation of such document, and 'back-dating' it as if it had been so agreed upon on an earlier date, amounts to nothing but fraud.
As to the veracity of there ever being an oral agreement, as alleged by the Prima witness, the court found:
To suggest that a contract as important as a charter party (the very life blood of such an enterprise) is concluded orally and is only reduced to writing when called for by lawyers in a distant jurisdiction, beggars belief. Were this is a case involving a local long line fishing vessel operating out of one of many of the small harbours that dot our coast-line, the argument may begin to make sense. But to suggest that the Polemis family went about business in a similar fashion borders on farcical.
Originally published in July 2013
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