Lloyd's Maritime and Commercial Law Quarterly
EX AFRICA SEMPER ALIQUID NOVI: ASSOCIATED SHIP ARREST IN SOUTH AFRICA
Hilton Staniland*
Introduction
Pliny’s observation, which has been cited by Berman, J., within the context of ship arrest under South Africa law,1 applies aptly to the arrest of an associated ship. When the associated ship arrest provisions, which lift the corporate veil between companies that own ships, were enacted in the Admiralty Jurisdiction Regulation Act 105 of 1983,1A they attracted academic comment2 and were frequently invoked—mostly by peregrini—to provide security for arbitration or litigation pending or proceeding in London. As a result, South Africa soon acquired a reputation as a most convenient forum for the arrest of ships. Since the provisions have been substantially amended,3 it is appropriate to comment on the amendments4 which relate to the plugging of gaps in the provisions; the meaning of
* Professor of Maritime Law and Director, Institute of Maritime Law, University of Natal, Durban.
1. Owners of the MFV Georg Lurich v. Centro Latino Americano De Comercio Exterior S.A., 1994 (1) S.A. 857 (C), 860H.
1A. The original associated ship provisions in s. 3 of the 1983 Act read as follows:
“(6) Subject to the provisions of subsection (9) an action in rem, other than such an action in respect of a maritime claim contemplated in paragraph (a), (b) or (c) of the definition of ‘maritime claim’, may be brought by the arrest of an associated ship instead of the ship in respect of which the maritime claim arose.
(7)(a) For the purposes of subsection (6) an associated ship means a ship, other than the ship in respect of which the maritime claim arose (i) owned by the person who was the owner of the ship concerned at the time when the maritime claim arose; or (ii) owned by a company in which the shares, when the maritime claim arose, were controlled or owned by a person who then controlled or owned the shares in the company which owned the ship concerned.
(b) For the purposes of paragraph (a)–(i) ships shall be deemed to be owned by the same persons if all the shares in the ships are owned by the same persons; (ii) a person shall be deemed to control a company if he has power, directly or indirectly, to control the company.
(c) If a charterer or subcharterer of a ship be demise, and not the owner thereof, is alleged to be liable in respect of a maritime claim, the charterer or subcharterer, as the case may be, shall for the purposes of subsection (6) and this subsection be deemed to be the owner.”
2. See, e.g., Hilton Staniland: “The Arrest of an Associated Ship” with J. S. McLennan (1985) 102 S.A.L.J. 148; “The Implementation of the Admiralty Jurisdiction Regulation Act in South Africa” [1985] LMCLQ 462; “Arrest of Associated Ship not Retrospective in Operation” [1986] LMCLQ 279; “Enforcement of Maritime Claims” in W. A. Joubert (ed.), The Law of South Africa, vol. 25 (1991) 99–115.
3. In terms of the Admiralty Jurisdiction Regulation Act 87 of 1992 and General Law Amemdment Act 139 of 1992 which came into force on 7 August 1993.
4. Section 3(6)–(7) of the 1983 Act, as amended, provides that:
“(6) Subject to the provisions of subsection (9), an action in rem, other than such an action in respect of a maritime claim contemplated in paragraph (d) of the definition of ‘maritime claim’, may be brought by the arrest of an associated ship instead of the ship in respect of which the maritime claim arose.
(7)(a) For the purpose of subsection (6) an associated ship means a ship, other than the ship in respect of which the maritime claim arose—(i) owned, at the time when the action is commenced, by the person who was the owner of the ship concerned at the time when the maritime claim arose; or (ii) owned, at the time when the action is commenced, by a person who controlled the company which owned the ship concerned when the maritime claim arose; or (iii) owned, at the time when the action is commenced, by a company which is controlled by a person who owned the ship concerned, or controlled the company which owned the ship concerned, when the maritime claim arose.
(b) For the purposes of paragraph (a)–(i) ships shall be deemed to be owned by the same persons if the majority in number of, or of voting rights in respect of, or the greater part, in value, of, the shares in the ships are owned by the same persons; (ii) a person shall be deemed to control a company if he has power, directly or indirectly, to control the company; (iii) a company includes any other juristic person and any body of persons, irrespective of whether or not any interest therein consists of shares.
(c) If at any time a ship was the subject of a charter-party the charterer or sub-charterer, as the case may be, shall for the purposes of subsection (6) and this subsection be deemed to be the owner of the ship concerned in respect of any relevant maritime claim for which the charterer or the subcharterer, and not the owner, is alleged to be liable.”
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