Sea Melody Enterprises SA v Bulktrans (Europe) Corporation (The ‘Merak S’) - High Ct (Durban and Coast Local Div)(Niles-Duner J) - 25 February 2000

Arrest of vessel to provide security in London arbitration - Shipowner arranging for bank guarantee to be provided to enable vessel to be released - Whether court had jurisdiction to order substitution of guarantee in lesser amount

Disputes arose under a charter of the vessel Merak S. The charterers intended to bring arbitration proceedings in London. On 17 March 1999 the charterers applied under section 5(3) of the Admiralty Jurisdiction Regulation Act, 105 of 1983 (‘the 1983 Act’) for the arrest of the Merak S as security for the claims they intended to make in the London arbitration. On the same day the court ordered that ‘in terms of section 5(2)(c) of [the 1983 Act] this order and any arrest effected in terms hereof be subject to the condition that the vessel be released from the arrest either with the consent of [the charterers] or on depositing security with the Registrar for the [charterers’] claim’.