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[2016] ZAKZDHC 59
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Nadella Corporation v MV "Falcon Traveller" and Another (A74/2015) [2016] ZAKZDHC 59 (1 April 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
(Exercising
its Admiralty Jurisdiction)
Case
No: A74/2015
Name
of Ship:
MV "FALCON TRAVELLER"
In
the matter between:
NADELLA
CORPORATION
APPLICANT
and
MV
"FALCON
TRAVELLER"
FIRST
RESPONDENT
NEWBROOK
SHIPPING CORPORATION
SECOND
RESPONDENT
In
an application for setting aside of 1he arrest of the First
Respondent in terms of section 5 (3) of the Admiralty Jurisdiction
Regulations Act No. 105 of 1983 (As amended)
JUDGMENT
POYO
DLWATI J:
[1]
Two applications were argued before me. The fast application
was for the setting aside of the arrest of the first respondent, MV
"Falcon Traveller" (Falcon Traveller) by the applicant,
Nadella Corporation (Nadella). The arrest was pursuant to an
order
granted
ex parte,
in chambers, by Lopes J on 16 September
2015. The arrest was for the purpose of providing security for claims
which Nadella intends
to advance in arbitration proceedings in
Singapore against Falcon Carrier Shipping Limited (Falcon Shipping)
for US$5 247 358.56
plus interest and costs.
[2]
The second application was for an order to execute, pending
appeal, Lopes J's judgment of 23 December 2015 wherein he ordered as
follows:
'(a) the applicant is directed to
provide security for the claims by the second respondent in the sum
of US $827 849;
(b) the registrar of this court is
directed to determine the amount of security for legal costs
appropriate for the second respondent's
defence of the applicant's
application under case number A74/2015;
(c) the applicant is directed to
provide security to the satisfaction of the registrar of this Court,
for the amounts referred to
above, within seven days of this order or
such determination;
(d) the costs of this application for
counter-security are to be paid by the applicant, including the costs
of senior counsel.'
[3]
I will deal with the
application for the setting aside of the arrest first. Nadella sought
an order in terms of section 5(3)(a)
of the Admiralty Jurisdiction
Regulation Act, 1983 (the Act)
[1]
for the arrest of the Falconer Traveller. It alleged that the
Falconer Traveller is an associated ship in respect of the MV "Falcon
Carrier" (the Falcon Carrier). By way of background, Nadella
purchased the
Falcon Carrier
from Falcon Shipping on 1
November 2013. The purchase price payable was the sum of US$601
114.24. Nadella took delivery of the Falcon
Carrier on 11 November
2013. Clause 9 of the sale agreement provided that
'the sellers warrant that the vessel
(Falcon Carrier), at the time of delivery, is free from all charters,
encumbrances, mortgages
and maritime liens, or any other debts
whatsoever. The sellers hereby undertake to indemnify the buyer
against all consequences
of claims made against the vessel which have
been incurred prior to the time of delivery'.
[4]
Nadella alleged that Falcon Shipping breached the warranty
clause in the sale agreement pursuant to which the seller warranted
that,
at the time of her delivery to Nadella, Falcon Carrier would be
free of all liens and encumbrances. This was as a result of Nadella
having received a notice of claims in the sum of US $420 515 plus
interests and costs of £68,500 from the Falcon Carrier's
erstwhile charterer Samchira DMCC (the charterer). Pursuant to this
notice Nadella caused Falcon Shipping to issue a certificate
on 11
November 2013 which read
'Falcon Carrier Shipping Limited
certifies on the 11th November 2013 the vessel Falcon Carrier is free
from all encumbrances; maritime
liens and any other debts and
liabilities of any description whatsoever and indemnifies the Buyers
against consequences of any
claims which have been incurred prior to
the delivery of the vessel'.
The
certificate was signed by Nico Poons (Nico) as a director of Falcon
Shipping and attached as an addendum to the sale agreement.
[5]
Subsequently, between 16 and 18 November 2013 Nadella received
threats of arrest of the Falcon Carrier from the charterer. Falcon
Shipping dismissed these threats as spurious and denied any
liability. It advised Nadella that the matter was between the owner
and the charterer and would be resolved by an arbitration tribunal
and did not concern the vessel (Falcon Carrier). On the strength
of
this assurance, Nadella sold the Falcon Carrier to PHP Ship Breaking
and Re-Cycling Industries Ltd (PHP) on 17 December 2013.
The Falcon
Carrier was sailed to Chittagong, Bangladesh where she was to be
delivered to PHP on 28 December 2013. On 31 December
2013, the
charterer instituted arrest proceedings against the Falcon Carrier in
the Supreme Court of Bangladesh, High Court Division.
It claimed an
amount of US$368 563.56 against the Falcon Carrier and or Falcon
Shipping and their agent Reliance Shipping Company
Limited for the
recovery of damages and compensation.
[6]
Nadella alleged that as a result of those arrest proceedings
it sent an email to Clarksons (Falcon Shipping's legal
representatives)
requesting that it be provided with documentation
and information relating to the arbitration in Rotterdam. It further
advised
that Falcon Shipping was in breach of the sale agreement as a
result of the charterer's claims. Clarksons advised Nadella that
Falcon Shipping did not accept that it was in breach of any clauses
of the sale agreement nor was it liable for any claims. It was,
however, prepared to assist Nadella and furnished copies of the
required documents. The Falcon Carrier was however arrested on
3
March 2014 in Bangladesh. Nadella, therefore, could not deliver the
Falcon Carrier to PHP on 5 March 2014 as agreed. After various
extensions, Nadella cancelled the agreement with PHP without
liability.
[7]
However, on 11 March 2014 PHP launched proceedings in the
Bangladesh High Court against the Falcon Carrier and its owners for
damages
and a declaration of proportional ownership of the Falcon
Carrier. PHP also launched an application against Nadella seeking
specific
performance in terms of their agreement. However, these
disputes have since been settled. Attempts to have the Falcon
Carrier's
arrest set aside in Bangladesh were unsuccessful. As a
result Nadella was obliged to tender security for the charterer's
claim
to procure the release of the Falcon Carrier. The Falcon
Carrier was released and was thereafter in the process of being
scrapped.
[8]
In this court, Nadella claims that Falcon Shipping breached
clause 9 of the sale agreement. In its view the warranty provision
extended
to any claim that is enforceable against the Falcon Carrier,
even if the claim might ultimately be demonstrated to be spurious.
It
alleges that were it not for the claim by the charterers and the
arrest of the Falcon Carrier, Nadella would have delivered
the Falcon
Carrier to PHP and would have made a profit on the resale. It alleges
that it has also suffered loss as a result of
costs relating to
maintaining the Falcon Carrier and the costs of settling PHP's claim
together with legal costs associated therewith.
Even though a demand
was made to Nico for the sum of US$3 446, 352.00 no payment was
received. The claim as it stands is US$5 247
358.56 after the capital
amount was recalculated. Nadella therefore intends to institute
arbitration proceedings against Falcon
Shipping for its alleged
claim. It is for these reasons that Nadella sought the arrest of the
Falcon Traveller as security for
costs for such arbitration as it
believes it is an associated ship of the Falcon Carrier as
contemplated in sections 3(6) and 3(7)
of the Act.
[9]
To substantiate this allegation, Nadella avers that at the
time that the charterer's claim arose the Falcon Carrier was owned
100%
by Falcon Shipping whilst the Falcon Traveller was owned 100% by
the second respondent, Newbrook Shipping Corporation (Newbrook).
It
further alleges that on 5 January 2007, Condor Financial Services Ltd
agreed to make a credit facility available to Falcon Shipping,
Newbrook, Falcon Cape Shipping Corporation and Delta Carriers S.A of
up to US$125 million. As a result a second preferred mortgage
was
registered over the Falcon Carrier, the Falcon Traveller and two
other vessels. The junior credit facility agreement attached
to the
second preferred mortgage showed that it was signed by Nico and
Ronald Eli Poons (Ronald) on behalf of the borrowers whilst
the Power
of Attorney was signed by Nico, Ronald and three other persons as
lawful attorneys for Condor.
[10]
Furthermore, Nadella alleges that the Falcon Carrier and the
Falcon Traveller were managed by J. Bekkers CO.Bv (Bekkers), a
company
registered in the Netherlands. The report obtained from
Lloyds List Intelligence Vessel reflects that historically the Falcon
Carrier
was owned by Bekkers whilst the beneficial owner of the
Falcon Traveller is Bekkers. A company search revealed that the
shares
in Bekkers are owned by Stichting Administratiekantoor
J.Bekkers Co (Stichting). The director of Bekkers is Hendrik Jan
Phillipus
Van Blanken (Van Blanken). The director of Stichting is
Ronald. The previous shareholders and directors of Bekkers were
Ronald
and Nico but this has not been the case since 2007. According
to market enquiries conducted it seemed that Ronald and Nico still
retain the ultimate ownership of Bekkers. Nadella therefore, believes
that the plausible inference that can be drawn is that Ronald
and his
son, Nico are beneficiaries of Stichting or at the very least that
they control it hence the irresistible inference is
that Falcon
Shipping, at the time that Nadella's claim arose, was controlled by
the same entity that controls Newbrook, the owner
of the Falcon
Traveller.
[11]
On the other hand, Newbrook in its answering affidavit claims
that the Falcon Carrier and the Falcon Traveller are neither owned
nor controlled by one entity. It alleges that Nadella has not
discharged the onus of proof to justify the arrest. Furthermore
Nadella has failed to establish a prima facie case in relation to the
merits of its alleged cause of action, namely an enforceable
maritime
claim. It has failed to show, on a balance of probabilities, that it
has a genuine and reasonable need for security and
has failed to show
the alleged claim of association. According to Newbrook the Falcon
Carrier and the Falcon Traveller are entirely
subject to different
ownership and control even though at some stage they were subject to
common management. Furthermore Ronald,
through the Atlantic Ocean
Trust (Trust), as he is the only beneficiary of the Trust, owns
Newbrook which owns the Falcon Traveller.
It was further averred that
Newbrook and Falcon Shipping are not, and were not, at the time when
the maritime claim arose, owned
or controlled by the same person or
legal entity. Furthermore Bekkers was only the manager of the Falcon
Traveller and the Falcon
Carrier at some other time. It was averred
that even though Ronald and Nico are father and son, they however run
their respective
companies completely independently of each other.
[12]
On the issue of the cross mortgaging, Newbrook admitted that
the Falcon Traveller was indeed cross mortgaged with the Falcon
Carrier
and other two vessels in a second preferred mortgage. It
averred that at the time of taking out the cross mortgages on the
Falcon
Traveller and Falcon Carrier owned indirectly by Ronald and
Nico respectively, the two were in a healthy family relationship and
did from time to time engage with each other in respect of their
commercial activities and that due to financial benefits they
elected
to cross mortgage the vessels in their own respective fleets. The
cross mortgage was therefore for commercial reasons.
However, on or
about 2012, the relationship between Ronald and Nico deteriorated but
due to technicalities in amending the cross
mortgage instruments, the
documents remained unchanged.
[13]
Ultimately, Newbrook denied that Falcon Shipping was indebted
to Nadella or the charterer in any way. It averred that at the date
of delivery of the Falcon Carrier, 11 November 2013, there were no
claims or debts against the Falcon Carrier and upon delivery
to
Nadella ownership of the Falcon Carrier was transferred to it. It was
further alleged that any claims relating to the sale of
the Falcon
Carrier were as a result of the risks undertaken by Nadella as it
knew before those further agreements that there were
potential claims
against the Falcon Carrier by the charterer. It was further contended
that Nadella had an option to cancel the
sale with PHP but, on its
own, elected to proceed with the sale and it should therefore face
the consequences of its decision.
This was especially so since
Nadella had failed to join Falcon Shipping in all relevant court
proceedings relating to the Falcon
Carrier in Bangladesh. Furthermore
Falcon Shipping had indemnified Nadella against all consequences of
claims against the Falcon
Carrier which had been incurred prior to
the time of delivery, 11 November 2013.
[14]
The issue of whether
Nadella was justified in seeking the arrest of the Falcon Traveller
in terms of the provisions of s 5(3)(a)
of the Act was in my view
dealt with in the judgment of Lopes J dated 23 December 2015 and I
associate myself with the conclusion
he reached in paragraph 46
thereto.
[2]
Furthermore that Nadella has an enforceable maritime claim against
Falcon Shipping is borne out by Newbrook's offer to tender security
to Nadella for the charterer's initial claim of US$368 563.56. This
was the reason for Falcon Carrier's arrest in Bangladesh in
the first
place. I am therefore, satisfied that Nadella has an enforceable
claim against the Falcon Traveller as it has a prima
facie case
against Falcon Shipping and has a genuine and reasonable need for
security in respect of the claim.
[3]
[15]
However, that is not the
gist of the matter nor is it the end the enquiry. The next issue I
must decide is whether the Falcon Traveller
is an associated ship to
the Falcon Carrier. It is trite that for this court to find that the
Falcon Traveller was an associated
ship to the Falcon Carrier, I must
be satisfied, on a balance of probabilities that the two vesselss
were, at the time that Nadella's
claim arose, owned and or controlled
by one person or entity. Nadella bears the onus and this was common
cause between the parties.
[4]
Section 3(7)(a) of the Act defines an associated ship as 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 owed the ship concerned, or
controlled
the company which owned the ship concerned, when the
maritime claim arose.'
And
subsection 3(7)(b) states as follows:
'(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 person;
(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 anybody of persons,
irrespective of whether or not any interest therein consists
of
shares.'
[16]
It is evident in the papers before me that there can be no
dispute as to who owned the two ships at the time when the maritime
claim
arose, namely, 11 November 2013. The Info Spectrum report,
(annexure 'ARV 22' to Nadella's founding affidavit at page 120 of the
indexed papers) which seems not to be disputed by the parties
suggests that the Falcon Carrier was owned, at the time that claim
arose, by Falcon Shipping whose sole director is Nico. The Falcon
Traveller was owned by Newbrook which was owned by the Trust
whose
sole beneficiary according to its trust deed is Ronald. This is
further confirmed in the certificate of ownership and encumbrance
attached to Nadella's founding affidavit at pages 124A and 1258
respectively. Although Bekkers is shown as the beneficial owner
in
some of these printouts, I am satisfied that these are not accurate.
[17]
I say so because if one has regard to annexure 'ARV 22', at
page 122 the report confirms that the two vessels were held under the
management of Bekkers. Furthermore in annexure '24' at page 194 of
the indexed papers the beneficial owner is described as
'being deemed to be the ultimate
owning entity or representative thereof (either individual, or
company, group or organisation).
The beneficial owner may be the
vessel's management company or the trading name of a group, both of
which are generally perceived
to represent the ultimate owners of the
vessel'.
On
perusal of those pages, it is evident that Bekkers is reflected as
the beneficial owner and Newbrook Shipping Corporation as
the
registered owner.
[18]
Furthermore an agreement of general agency between Newbrook
and Bekkers dated 1 September 2014 attached to Newbrook's affidavit
at page 245 is the further evidence that the Falcon Traveller was not
owned by Bekkers but by Newbrook. If Bekkers owned it, there
would
not have been a need for the agreement. That Bekkers were merely
managers of the two ships is further confirmed by the affidavits
of
Roeland Golterman, a legal advisor of Bekkers and Van Blanken, a
director of Bekkers. To put this matter to rest, annexure 'PJF
21',
(on page 481 of indexed papers) annexed to Nadella's answering
affidavit, states the following
'the orders have been credited to
Dutch firm J Bekkers but it is understood the firm is acting as
technical manager and new building
supervisor on the order'.
I,
therefore, am satisfied that Bekkers was not the owner of either the
Falcon Carrier or the Falcon Traveller at the time that
Nadella's
claim arose but was its managers.
[19]
Perhaps whilst dealing with Bekkers, it is convenient at this
stage to deal also with the question of whether Bekkers controlled
the two vessels. Bekkers is fully owned by Stichting. Ronald was the
sole registered shareholder of Bekkers until November 2008
when the
shareholding was transferred to Stichting. Nico has never been a
shareholder of Bekkers but a director and this, accords
with the
evidence that at times ship owners would be directors of the
management companies to look after their interests. The only
director
of Stichting is Ronald. It is not in dispute that the duties
performed by a management company are those of a professional
nature
to the owners of the vessels. These include, but not limited to
ensuring that the ship complies with international rules
and
regulations; is run in a safe and cost efficient manner and that the
environment is taken care of.
[20]
They also perform
technical, commercial and crew management of the ship. This, however,
does not mean that they own or control the
direction and fate of the
vessel but manage it and act as agents for the owners.
[5]
To illustrate this point Smalberger JA in
MV
Heavy Metal
supra held that
"'Power" is not
circumscribed in the Act. It can be power to manage the operations of
the company and power to determine
direction and fate of the company.
Where these two functions happen to vest in different hands, it is
the latter which the Legislature
had in mind when referring to power
and hence the control. In South African legal terminology, that means
the person who controls
the shareholding in the company'.
No
evidence has been adduced, on a balance of probabilities, that
Bekkers had power to control the fate of the two vessels and
therefore Nadella has failed to discharge this onus.
[21]
During argument, Mr Mullins SC on behalf of Nadella argued
that if there had been a fall out between Ronald and Nico, Nico would
not have left the management of his ship in his father's company. He
argued that if anything it seemed that the fallout did not
affect the
business relations of the two. However, as I alluded to above,
Bekkers is merely a management company and does not control
the fate
of either the Falcon Traveller or the Falcon Carrier. Its director is
Van Blanken and I would imagine that he directs
the day to day
operations of the company. There is no suggestion that Ronald attends
to them. I therefore do not see anything sinister
in leaving the
Falcon Carrier to be managed by Bekkers especially if he knew that he
was going to sell it or that he was not going
to meet Ronald all the
time that he deals with Bekkers. I remain unpersuaded by this
argument.
[22]
I now come to the issue as to whether the two vessels were
associated by virtue of the cross mortgaging. As alluded to in para 9
supra, Nadella's assertion is that by a second preferred mortgage
dated 5 January 2007, Falcon Shipping mortgaged the Falcon Carrier
as
security for a loan or facility in the sum of US$125 million provided
by Condor Financial Services Ltd (Condor) of Tortola,
British Virgin
Islands. On the same date, also, by a second preferred mortgage
Newbrook cross mortgaged the Falcon Traveller as
security for the
same loan or facility in the sum of US$125 million provided by
Condor. According to the Info Spectrum report provided
by Nadella
five (5) ships were part of this mortgage. Nico is the person that
signed the junior credit facility agreement forming
part of the said
second preferred mortgage, whilst five persons including Nico and
Ronald signed the Power of Attorney issued by
Condor annexed to the
bond.
[23]
However, according to Newbrook the cross mortgaging was done
for commercial reasons. Furthermore, at the time of taking out the
cross mortgagees Ronald and Nico were in a healthy family
relationship and did, from time to time, engage with each other in
respect
of their commercial activities and that due to financial
benefits they decided to cross mortgage the vessels in their
respective
fleets. However, the relationship between Ronald and Nico
deteriorated during 2012 due to family problems and they are no
longer
collaborating in their businesses. It was explained by
Newbrook that due to the technicalities involved with the cross
mortgage
instruments, the mortgages were never changed after the
breakdown in their relationship.
[24]
This breakdown was evidenced by a letter addressed to Nico by
Ronald's Belgian lawyer where he accused Nico of various
improprieties.
Contrary to what Nadella averred and what was argued
on their behalf, the letter seems to bear out the fact that Ronald
still wants
to be very much involved in the control of his assets.
This letter was written on or about 4 November 2013 before the Falcon
Carrier
was delivered to Nadella and that was before the claim arose
and before the Falcon Traveller was arrested. Importantly though,
there is no allegation in that letter that Nico had taken control or
had the power over the Falcon Traveller at any stage.
[25]
Whilst I agree that cross mortgaging of the various vessels
might be a strong indication of association, that can be so if the
cross
mortgaging has not been explained. In this instance, I am
satisfied with the explanation tendered by Newbrook that the cross
mortgaging
was for commercial reasons and that the mortgage documents
could not be easily amended after the fallout in the relationship.
This
is also borne out by the fact that even the Trust Deed that
appoints Nico as the successor to Ronald has not been amended after
the breakdown in their relationship. We also do not know much about
the other two vessels that were mortgaged with the Falcon Carrier
and
the Falcon Traveller. However, it seems to me that the fact that each
of the owners of the five vessels signed the power of
attorney to the
mortgage documents shows that each of them controlled and were
responsible for their own vessels.
[26]
Furthermore the cross mortgaging was executed in 2007 before
the maritime claim arose and before the fall out in the relationship
between Ronald and Nico. Even if Nico would have been in control of
all the vessels which were part of the cross mortgagees, which
I do
not accept as there is no evidence to substantiate this, this would
have changed after 2012 when his relationship with Ronald
deteriorated. It could be so that perhaps the plan was for Nico to
take control of the family empire as argued by Mr Mullins SC
but
there is no doubt that this changed after Ronald's new wife came into
the picture. If anybody would have had control of these
entities it
would have been Ronald but there is not an inch of evidence that
suggests that he controlled Falcon Shipping at any
stage. In my view,
therefore, whilst suspicion has been generated that the cross
mortgaging might be an indication of some control,
this is not
sufficient to discharge the onus on a balance of probabilities.
[27]
Mr Mullins SC further argued that because of Ronald's age he
probably is not able to control his maritime fleet. However there is
no evidence to substantiate this claim. Contrary it seems that assets
in the Poon's family are being pulled from all directions,
namely, by
Ronald's new wife and Nico on the other side. There is no evidence of
a joint family empire controlled by Nico. Mr Mullins
SC also made
much about what Mr Golterman said in his letter, namely that 'Ronald
has no control over these things happening'.
My understanding is that
this means that he cannot control a bad or poor relationship between
his new wife and Nico. Mr Mullins
SC also took issue about the
absence of Ronald's confirmatory affidavit in these proceedings. This
was only raised in his heads
of argument and during argument. I will
address this issue only for the sake of completeness as it was not
raised in any affidavits
filed before me and therefore Newbrook did
not have an opportunity to respond appropriately to it. Mr Golterman
as the legal advisor
to Ronald has filed an affidavit on his behalf.
Also both parties have relied heavily on hearsay evidence as allowed
in s 6(3)
of the Act, there is no reason why this should not be
allowed and accepted in respect of Newbrook. I therefore accept that
Golterman
is duly authorised to act on behalf of Newbrook especially
in the absence of any evidence to the contrary and there is therefore
no need for Ronald's affidavit.
[28]
Finally Mr Mullins SC argued that in the event that I am not
satisfied that association has been proved on the papers I must refer
the matter for oral evidence. However, I agree with Mr Harpur SC that
this will be another fishing expedition by Nadella. There
are no
serious disputes of facts and in any event as this is an application
I have borne in mind that whether there is a dispute
of facts the
test as laid down in
Plascon-Evans Paints Ltd v Van Riebeeck
Paints Pty Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) is still applicable. In my
view the probabilities favour Newbrook and I am not persuaded that
the balance of probabilities
would be materially disturbed by oral
evidence. This will further cause an inordinate delay in finalising
this matter and Newbrook
will be continually mulcted with the costs
of maintaining an arrested ship. I therefore decline to refer the
matter to oral evidence.
[29]
I have been advised that I no longer have to decide the second
application as the application for leave to appeal has since been
dismissed by the Supreme Court of Appeal. I therefore make the
following order:
Order
(a)
The arrest of the MV "Falcon Traveller" is hereby set
aside;
(b)
The applicant is ordered to pay the costs of the respondents
including the costs of the application to arrest which costs
include
those consequent upon the employment of Senior Counsel.
______________________
Poyo
Dlwati J
APPEARANCES
Case
Number: A74/2015
Applicant:
Nadella Corporation
Represented
by: Mr Mullins SC
Applicant's
Attorneys: Clyde & Co - 021 286 0353 (Cape Town)
C/o
Cox Yeast - 031 536 8520 (Durban)
First
Respondent: MV "Falcon Traveller"
Second
Respondent: Newbrook Shipping Corporation
Represented
by: GD Harpur SC
Respondent's
Attorney: Norton Rosefulbright South Africa Inc
031
582 5600
Date
of Hearing: 04 February 2016
Date
of Judgment: 01 April 2016
[1]
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.
[2]
'I am no means persuaded that Newbrook has established, even at a
prima facie level, that the mv 'Falcon Traveller' was arrested
without reasonable and probable cause. The long standing dispute
between the parties regarding the agreement of the sale of the
mv
'Falcon Traveller evidences that Nadella has a subjectively honest
belief that it was entitled to arrest the ship as security
for its
claim.
[3]
See, Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v
MV Dimitris
1989 (3) SA 820
(A) at 831 and confirmed in Bocimar MV v
Ko/or Overseas Shipping Ltd 1994 (2) SA 563 (A).
[4]
See, Cargo Laden supra at 834D-F and Bocimar at 5818-E and confirmed
in MV Silver Star; Owners of/he MV Silver Star v Hilane
Ltd
2015 (2)
SA 331
(SCA) para 39.
[5]
See MV Heavy Metal; Belfry Marine Ltd v Palm Base Maritime SON BHD
1999 (3) SA 1083
(SCA) at para 8 of Smalberger JA's judgment.