Most Read Contributor in South Africa, September 2016
Hilane arrested the mv "Silver Star" as an associated
ship to commence in rem proceedings for the recognition and
enforcement of a London arbitration award. Owners applied to
have the arrest set aside on the basis that the vessel was not an
associated ship. That application failed, as did an
application for leave to appeal, the position at the time of the
hearing and judgement in this application being that owners had
indicated its intention to apply to the Supreme Court of Appeal for
Shortly after the arrest of the vessel owners ceased paying the
on-going costs of the preservation of the vessel and, consequently,
the sheriff was obliged to do so in terms of his obligation to
preserve vessels under arrest in his custody. The sheriff is
entitled to look to the arresting creditor for payment of his
expenses in this regard. Consequently, Hilane applied for an
order that owners be obliged to pay the costs of provisions and
supplies to the vessel, fresh water and bunkers, alternatively to
furnish security for such expenses. Owners opposed this
application and counter applied for an order that Hilane pay the
wages of the crew whilst the vessel was under arrest. Hilane
had at the time of the hearing of the application also applied for
the sale of the vessel but such application was adjourned to be
heard on a later date.
On the day of the hearing Hilane conceded that it was not
entitled to the primary relief sought. The court referred to
the judgment in the matter of Sheriff of Cape Town v MT Argun
("The Argun") 2001 (3) SA 1230 (SCA) on the basis that
the principle that owners could not be compelled to pay the
Sheriff's disbursements and fees relating to the preservation
of the vessel was uncontestable.
With regard to Hilane's claim for security for such costs,
the court confirmed that in exercising its discretion in this
regard it was necessary for Hilane to establish a prima facie case
and, on a balance of probabilities, that there be a need for such
security. The court found that Hilane had established a prima
facie case but, in the light of the fact that preservation costs
have a preferred ranking against the arrested vessel, that no need
for security existed.
The court found further that crew wages are preservation costs
and, consequently, ordered the sheriff to pay the wages of the crew
and Hilane to repay the Sheriff such wages at the end of each and
every month the vessel is under arrest.
mv "Silver Star" : Hilane Limited v mv
"Silver Star" and Others (unreported judgment, ECLD, PE,
Case No A2282/2013, 14 November 2013)
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