THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 104/2025
NAME OF SHIP: MV ‘HARALAMBOS’
In the matter between:
HENGDELI DEYESION INTERNATIONAL
SHIPPING LIMITED APPELLANT
and
MV ‘HARALAMBOS’ FIRST RESPONDENT
NERO OIL INCORPORATED SECOND RESPONDENT
IRON PASHA INCORPORATED THIRD RESPONDENT
Neutral citation: Name of Ship: MV ‘Haralambos’ : Hengdeli Deyesion
International Shipping Limited v MV ‘Haralambos’ and
Others (104/2025) [2026] ZASCA 107 (13 August 2026)
Coram: MBATHA, GOOSEN, SMITH and NORMAN JJA and
PHATSHOANE AJA
Heard: 19 May 2026
Delivered: This judgment was handed down electronically by circulation to the
parties’ representatives by email, published on the Supreme Court of Appeal
2
website and released to SAFLII. The date and time for hand -down is deemed to
be 13 August 2026 at 11h00.
Summary: Maritime Law – vessel association – Admiralty Jurisdiction
Regulation Act 105 of 1983 (AJRA) – standard and burden of proof on
reconsideration under Uniform Rule 6(12) (c) – meaning of ‘control’ under
s 3(7)(a)(iii) of AJRA – purposive construction of the s 3(7) deeming provisions
– evidential weight of third -party vessel -tracing reports – deemed arrest and
submission to jurisdiction under s 3(10)(a)(i) of the AJRA.
3
ORDER
On appeal from: KwaZulu Natal Division of the High Court, Durban (Wallis AJ
sitting as a court of first instance):
1 The appeal is upheld with costs, including the costs of two counsel where so
employed.
2 The order of the high court is set aside and is replaced with the following
order:
‘The reconsideration application is dismissed with costs, including th e costs
of two counsel where so employed.’
JUDGMENT
Mbatha and Norman JJA (Goosen and Smith JJA and Phatshoane AJA
concurring):
Introduction
[1] This is an appeal against the decision of the KwaZulu -Natal Division of
the High Court, Durban, per Wallis AJ, (the high court) (exercising its Admiralty
Jurisdiction), delivered on 2 September 2024. The high court reconsidered an ex
parte security arrest order of MV Haralambos following an order issued by
Harrison AJ on 6 June 2024. Upon reconsideration of the order, Wallis AJ set
aside the security arrest of the vessel and directed the appellant to pay costs. The
appellant is before us with the leave of this Court.
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[2] The appellant, Hengdeli Deyesion International Shipping Ltd (Hengdeli) ,
brought an application seeking an ex parte security arrest of MV Haralambos in
terms of s 5(3)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the
AJRA).1 A letter of undertaking (LOU) was delivered to secure the release of MV
Haralambos. S he remained under a deemed arrest as contemplated in
s 3(10)(a)(i) of the AJRA.2
Background facts
[3] The appellant, formerly known as Deyesion International Shipping
Limited, changed its name on 11 October 2021 to Hengdeli, a company duly
incorporated in accordance with the laws of Hong Kong . It has its registered
offices in Hong Kong.
[4] The first respondent is MV Haralambos, a bulk carrier built in 2009 and
flagged in Liberia. The second respondent is Nero Oil Incorporated (Nero Oil), a
company duly incorporated in the Marshall Islands. Nero Oil is the registered
owner of MV Haralambos. The third respondent is Iron Pasha Incorporated (Iron
Pasha), a company duly incorporated in Marshall Islands. Iron Pasha is cited
because it is the registered owner of MV Argentina , a ship against whom the
appellant’s claim lies (the ship concerned). MV Argentina has since been sold by
Iron Pasha and renamed MV Transworld Navigator . For reasons which shall
1 Section 5(3)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the AJRA) provides:
‘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.’
such arbitration or proceedings.’
2 Section 3(10)(a)(i) of the AJRA provides:
‘Property shall be deemed to have been arrested or attached and to be under arrest or attachment at the instance
of a person if at any time, whether before or after the arrest or attachment, security or an undertaking has been
given to him to prevent the ar rest or attachment of the property o r to obtain the release thereof from arrest or
attachment.’
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become apparent later this sale has no bearing on the disputed issue of
association. We also refer to MV Haralambos and Nero Oil as the respondents,
where the context requires.
[5] Iron Pasha chartered MV Argentina to Hengdeli. The terms of the fixture
recap and charterparty are not in issue. Pursuant to the charterparty, MV
Argentina was delivered to Hengdeli on 16 April 2021. On 14 August 2021 , the
cargo being the ‘iron ore fines’ was shipped on board the MV Argentina at the
loading port of Pepel, Sierra Leone. On or about 16 September 2021, Kingho
Railway and Port Company Limited declared two ports for the discharge of the
cargo, namely Rizhao or Jingtang, both in China.
[6] On 22 September 2021, Iron Pasha addressed an email to Hengdeli through
its brokers, Diamond Shipbroking Ltd , wherein it alleged that while en route to
the discharge port, the hatch covers were opened to check the condition of the
cargo whereupon it was noticed there was a significant amount of water collected
in the cargo holds . Its preliminary investigations indicated that the composition
of the cargo was misdescribed at the load port and that its moisture content was
much higher than the representations made in the shipper’s declaration. The email
further stated that urgent arrangements were being made to call a port of refuge
to discharge the cargo and that Hengdeli would be held liable for any losses,
damages, costs and expenses as a result of the cargo’s liquefaction 3 during sea
passage.
[7] On 23 September 2021, Iron Pasha sent a further email to Hengdeli
informing it that MV Argentina would be ordered to deviate to Keelung, China,
3 Merriam-Webster Dictionary defines Liquefaction as: ‘The process of making or becoming liquid ; or the state
of being liquid.’
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as a port of refuge in order to discharge the cargo. Hengdeli disagreed with Iron
Pasha’s decision to deviate MV Argentina to Keelung in China for a number of
reasons including : (a) That the port was incapable of handling a fully laden
capesize vessel; (b) that there were no endorsements on the Bills of Lading or
Mate’s receipt to highlight or express any objection to the quality or grade of the
cargo after it had loaded; (c) that Iron Pasha and the Master knew, in advance that
MV Argentina was fixed to load a consignment of iron ore fines at Pepel and there
was sufficient time to prepare for its loading; (d) that Iron Pasha and the Master
were, according to the International Ship Management (ISM) Code,4 required to
carry out voyage planning and risk assessments, which included confirmation of
the grade and quality of the cargo and special requirements for loading thereof
via its agent; (e) Iron Pasha had not engaged an expert to assess the state of the
cargo; (f) no steps had been taken to ensure that MV Argentina maintains her
stability in the event that water had been collected mid -voyage; (g) Iron Pasha
had not established the practical stability of MV Argentina regarding its
calculated metacentric height (the height) at the time of sailing, the loss of height
at the time of sailing and the loss of height due to collection of free water; and (h)
that Iron Pasha remained fully responsible for its actions. Further correspondence
was exchanged between the parties regarding the condition of the cargo at the
discharge port.
[8] On 26 September 2021 at 15h12, the MV Argentina tendered its Notice of
Readiness and arrived at the port of Rizhao in China. The berth was congested
and MV Argentina had to wait at the anchorage. On 2 October 2021 at 09h48, MV
Argentina arrived at the designated berth in Rizhao and discharged 112,188
4 International Ship Management (ISM) Code is a set of international regulations and standards for the safe
management and operation of ships and for pollution prevention. The ISM Code became a mandatory law in 1998.
It was added to the United Nations SOLAS (Safety of Life at Sea) Convention. SOLAS is the most important set
of rules for making sure ships are safe.
7
metric tons of the cargo. On 4 October 2021 at 04h39, Iron Pasha sent an email
to Hengdeli alleging that the condition of the cargo in hold H1 and H2 was bad
and that the receivers were not discharging any more cargo from those holds. The
discharge operations were completed at 16h00. On 6 October 2021, Iron Pasha
refused to sail MV Argentina because the condition of the cargo on board and its
post-discharge configuration posed a risk that the reserve stability of MV
Argentina may degrade and potentially be lost . In addition, it alleged that there
was non-compliance with the shipped cargo with the International Maritime Solid
Bulk Cargoes Code (IMSBC Code) as there was failure to accurately declare the
moisture content and total moisture limit; it intended to discuss the impact of the
cargo on the safety of sailing MV Argentina with the vessel’s classification
society and the Flag State . As a result , Hengdeli had to make arrangements for
the discharge of the balance of the cargo in Rizhao, China.
[9] On the other hand, Hengdeli contended that Iron Pasha’s allegations were
unfounded as it had failed to provide evidence to support the allegations that MV
Argentina was unsafe to perform her final voyage or that the MV Argentina’s
static or dynamic stability measures showed otherwise. In an email dispatched on
6 October 2021, Hengdeli insisted that MV Argentina continue its voyage to
Jingtang to discharge the balance of the cargo. On the same day Hengdeli sent
another email to Iron Pasha requesting it to instruct the Master to sail to Jingtang
as soon as possible; place the vessel ‘off hire’ due to the Master’s unreasonable
refusal to follow the voyage instructions to sail the vessel to the discharge port;
and reserved its rights to claim any loss from Iron Pasha.
[10] On 7 October 2021, Iron Pasha’s Protection and Indemnity Freight
Demurrage and Defence Insurers, North of England P&I Association , wrote to
Demurrage and Defence Insurers, North of England P&I Association , wrote to
Hengdeli informing it that Iron Pasha was not obliged to follow the Hengdeli
8
orders that MV Argentina should sail to Jingtang, that MV Argentina remained on
hire, and that Hengdeli would be responsible for all consequences of the shipment
of the Cargo . On 22 November 2021 at 22h30, the MV Argentina arrived at
Lanshan, China as per the directions of Iron Pasha, China, and tendered its notice
of readiness. On 23 November 2021 , at 15h48, the MV Argentina berthed and
discharged the remaining cargo.
[11] On 28 November 2021, Brave Maritime Corporation Incorporated (Brave
Maritime), acting on behalf of Iron Pasha , informed Hengdeli that hire was due
on 28 November 2021 and had not been received. Brave Maritime further stated
that if hire was not received within three banking days, Iron Pasha would
withdraw the MV Argentina. Hengdeli rejected the notice on the basis that the
MV Argentina had been placed off-hire from 6 October 2021 at 21h30, until she
resumed sailing on 22 November 2021 at 19h40 (ie 47.2986 days’ worth of off-
hire). On 1 December 2021, Hengdeli wrote to Iron Pasha and reiterated that it
was entitled to deduct the overpaid hire pursuant to clause 36 of the charterparty
or equitable set -off, in the sum of USD 1,216,590.39 (erroneously recorded as
USD 1,126,590.39). As a result, Hengdeli denied that any hire was payable to
Iron Pasha and further threatened that if MV Argentina was wrongfully
withdrawn, Hengdeli would recover all loss and damage, including but not
limited to the repayment of the upfront 50-day hire.
[12] On 2 December 2021, Brave Maritime notified Iron Pasha that it was
withdrawing the MV Argentina, thereby cancelling the charterparty. On the same
day Hengdeli wrote to Iron Pasha confirming that the withdrawal of MV
Argentina was wrongful and a repudiatory breach or renunciation of the
charterparty, which breach or renunciation was accepted by the appellant.
Hengdeli further requested Iron Pasha to return the 50 -day hire payment paid
9
upfront by it within three days, failing which it would take all necessary steps to
recover it. It reserved its right to claim from Iron Pasha the overpaid hire and all
losses and damages resulting from the breaches of the charterparty.
[13] Hengdeli claimed damages arising from Iron Pasha’s alleged breaches of
the charterparty, including wrongful termination or renunciation. It alleged that
Iron Pasha refused to promptly discharge the remaining cargo at Lanshan, China.
As a result, it claimed loss-of-profit damages of USD 2,232,760.00. It further
claimed that Iron Pasha’s breaches caused the loss of a fixture for the sub-charter
of the vessel with Five Ocean Corporation, resulting in a claimed loss of USD
816,128.73. Hengdeli also claimed damages for the alleged wrongful withdrawal
of the vessel and the outstanding balance of hire, in the amount of USD
1,960,060.88. The total amount claimed was thus USD 5,008,949.61.
[14] Subsequently, an arbitration tribunal was constituted . In the arbitration
tribunal, Hengdeli contended that its claim is a maritime claim as envisaged in s
1(1)(j)5 and/or s 1(1)(ee)6 of the AJRA. It further submitted that its claim is sound,
and prima facie sustainable under English law, by way of arbitration proceedings
in London commenced by Hengdeli. It emphasised that its claim is against a shell
company registered in the Marshall Islands with no attachable or disposable
assets.
5 Section 1(1)(j) of AJRA provides:
‘“Maritime claim” means any claim for, arising out of or relating to –
(a)...
.....
(j) any charter party or the use, hire, employment or operation of a ship, whether such claim arises out of any
agreement or otherwise;
...
6 Section 1(1)(ee) of AJRA provides:
‘any other matter which by virtue of its nature or subject matter is a marine or maritime matter, the meaning of
the expression marine or maritime matter not being limited by reason of the matters set forth in the preceding
paragraphs… .’
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[15] Pursuant to that, Hengdeli sought the arrest of MV Haralambos on the
grounds that it is an associated ship of MV Argentina as contemplated in ss 3(6)
and 3(7)7 of the AJRA. It instructed attorneys in South Africa, Bowman Gilfillan
Inc, with the senior associate, Wesley Jude Rajbansi, deposing to a founding
affidavit, dated 5 June 2024, in support of an ex parte application under s 5(3) of
the AJRA. The security arrest order was granted on 6 June 2024 at Richards Bay,
while the MV ‘Haralambos’ was scheduled to load a cargo of magnetite.
Findings of the High Court
[16] The high court , in reconsidering and setting aside the ex parte order of
arrest of MV Argentina, made the following findings. On the issue of association,
it held that it is insufficient to simply allege that there is a family connection
between different entities without establishing, as a matter of fact, that the family
connection is such as to constitute control within the meaning of s 3(7) of the
AJRA. While it accepted that Mr Harry Vafias plays a significant part in the
direction of the two entities (StealthGas and C3IS Incorporated (C3IS) ), the
7 Sections 3(6) and 3(7) of AJRA provide:
‘An action in rem, other than such an action in respect of a maritime claim referred to 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 purposes 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 ion is commenced, by a person who controlled the company which
owned the ship concerned when the maritime claim arose; or
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 subcharterer, 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 cl aim for which the charterer or the subcharterer, and not the owner, is alleged to be
liable.’
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evidence does not show that he has unilateral power to direct the two entities .
Documents upon which Hengdeli relied in alleging control evince that the
majority share-holding in the two entities have been sold to third party investors.
The high court further found that the evidence substantially undermines the case
that the Vafias Group can be treated as an indivisible conglomerate where control,
within the meaning of that term is in s 3(7) of t he AJRA, vests with a ‘family
group’. It found that the evidence confirms that Brave Maritime is the manager
(and possibly commercial operator) of the vessel . The high court concluded by
finding that true ‘sister vessels’ possibly means no more than that the two vessels
are managed as ‘sister vessels’ or may even mean that the two vessels are
constructed to the same specification.
[17] For the purposes of association, the high court held that it is not sufficient
to prove common managerial control and, in this regard, relied on Saga Welco AS
v MV ‘Guo Shu’ (Saga Welco).8 It further held that the evidence relied upon by
Hengdeli was not sufficient to establish control on the balance of probabilities as
envisaged by s 3(7) of the AJRA, and that it was prudent not to address the
question of the letter of undertaking in the order. Finally, the high court concluded
that the absence of any description of how a beneficial owner ’s shareholding is
identified in the Seasearcher report or what it means by control carries little to no
weight at all.
Before this Court
Hengdeli’s submissions
[18] Hengdeli submitted that the high court erred in its approach when applying
the principles in relation to reconsideration as stated in the MV New Endeavor
8 Saga Welco AS v MV Guo Shun [2017] ZAKZDHC 43 (Saga Welco).
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and Others v Indian Oil Corporation Ltd (MV Endeavor).9 It contended that the
reliance by the high court on Saga Welco10 was erroneous as in that case the high
court had misconstrued the dicta in Hasselbacher Papier Import and Export(Body
Corporate) and Another v MV Stavroula (Hasselbacher).11 The high court erred
in its distinction between the concept of proof on a balance of probabilities and a
prima facie case; it erred as regards the weight to be attached to the Lloyd’s List
Intelligence Sea Searcher Report, and wrongly assessed the evidence . Hengdeli
further submitted that the totality of the evidence contained in the founding
affidavit establishes the association contended for on a balance of probabilities,
and by failing to find accordingly, the high court erred. This Court should explain
what it meant in paragraphs 37 and 51 of its judgment in MV ‘New Endeavor’12
and whether the approach adopted by the high court to the evidence adduced by
Hengdeli is sustainable. Hengdeli sought an order upholding the appeal with
costs.
9 MV New Endeavour and Others v Indian Oil Corporation Ltd [2024] ZASCA 67; 2024 (6) SA 64 (SCA) (New
Endeavour).
10 Saga Welco fn 8 above para 12.
11 Hasselbacher Papier Import and Export (Body Corporate) and Another v MV Stavroula 1987 (1) SA 75 (C)
(Hasselbacher).
12 [37] In concluding that an association had been established by Indian Oil, the high court relied on the evidence
contained in the founding affidavit. That evidence, so it held, proved, on a balance of probabilities, that Adam
was the central figure of cont rol of NSL and that, at the time the claim arose, the New Endeavor and the New
Diamond were associated ships, both owned by NSL. It mattered not whether Adam exercised such control either
by himself as head of the family or together with his children. The hig h court further held that, whilst no adverse
inference could be imputed to the appellants, their failure to file an answering affidavit was not without
consequences. As we attempt to show hereunder the findings by the high court are unassailable.
[51] For all the reasons mentioned above, we are satisfied that Indian Oil had discharged the onus resting on it on
a balance of probabilities. The high court’s findings on the issue of association were correct. In pleading the issue
of control in the alternative as it did, Indian Oil was perhaps being cautious. This is understandable. It was up to
the appellants to controvert the evidence by placing credible evidence before the court. They failed to do so. This
flows from the well – established principle that less evidence will be required to establish a prima facie case where
the matter is peculiarly within the knowledge of the opposite party.
13
Respondents submissions
[19] The MV Halarambos and Nero Oil oppose the appeal. They submitted that
Hengdeli’s contention that the vessels are associated because they have the same
ship manager, Brave Maritime, is untenable. S hip management does not
constitute the requisite control, nor does operating a number of vessels as a fleet.
It argued that Hengdeli did not adduce any evidence relating to, inter alia, the
shareholding of either of the ship -owning companies (namely Iron Pasha and
Nero Oil) , the identity of the directors or officers of the shipping companies;
whether any shareholders, or other agreements existed which gave persons other
than the shareholders the power to control those companies. They contended that
Hengdeli failed to show any cross-mortgages or corporate guarantees between
the companies or any other indication that they were related. It submitted that
common management of ships is not a necessary condition for common
ownership.
[20] In addressing the allegation that Mr Harry Vafias is the CEO or Managing
Director (MD) of the Vafias Group of which Brave Maritime is alleged to be part,
would not give him the type of control required to found association because he
would be subject to instructions from the general body of shareholders in matters
of strategic importance. Shareholders also have the power to replace him. In this
regard it was submitted that Hengdeli is relying on unsubstantiated facts that are
vague and unverified. As a result, Hengdeli failed to prove that MV Haralambos
is an associated ship of the MV Argentina and thus susceptible to arrest. The
respondents submitted that the high court correctly found that on the facts alleged,
association was not established on a balance of probabilities and correctly set
aside the arrest order. They sought an order dismissing the appeal with costs.
Issues for determination
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[21] The sole issue for determination is whether Hengdeli, discharged the onus
of establishing on a balance of probabilities the alleged association between the
respective ship -owning companies of MV Haralambos and MV Argentina as
contemplated in subsections 3(6) and 3(7) of the AJRA. The question central to
the determination of that issue is: who controls those ships?
The arrest application and the basis for association
[22] Hengdeli relied for its contentions regarding the chain of alleged control
on the following factors:
a) That Nero Oil (owner of MV Haralambos) and Iron Pasha (owner of MV
Argentina) were both controlled by Brave Maritime . The latter was
controlled by the Vafias Group, which was itself controlled by Mr Harry
Vafias.
b) Both vessels are dry bulk carriers. Hengdeli set out the Vafias Group
background as a family-owned shipping enterprise founded in 1972. Brave
Maritime was incorporated in 1987. A S ecurities and Exchange
Commission of the United States share prospectus filed by the Vafias
Group in connection with C3IS Incorporated (C3IS) describes Brave
Maritime as ‘a company controlled by members of the Vafias family ’.
Hengdeli regarded this as a formal regulatory admission that was made by
the Vafias Group itself to the United States Securities and Exchange
Commission.
c) Harry Vafias's accession to control is confirmed by the following media
sources. An article in The Pictet Report (Winter 2013) states: ‘In 2009, his
father decided to end his involvement in shipping, so Harry Vafias took
over Brave Maritime which he now runs along with Stealth Maritime and
Stealth Gas’. A ‘Manager of the Year 2023’ article describes Harry Vafias
as ‘Managing Director of the Vafias Group of Companies ’ and states that
15
‘In 2008 Vafias became CEO of the Vafias Group, which today is one of
Greece's largest shipping groups with 91 vessels ’. A June 2022 Seatrade
Maritime podcast introduced Harry Vafias, without correction from him,
as someone who ‘controls four companies ’ including ‘dry bulk under
Brave Maritime’.
d) The Seasearcher (Lloyd's List Intelligence) vessel reports attached to the
founding affidavit sho wed that for both the MV Haralambos and MV
Argentina the Vafias Group is reflected as the ‘Beneficial Owner’ at the
material times. Both reports list Brave Maritime as the commercial
operator and technical manager.
e) Extracts from the world shipping register show that both Nero Oil and Iron
Pasha share the address ‘c/o Brave Maritime Corp Inc, Building 2, Apollon
Business Centre, 331 Kifisias Avenue, Kifisia, 145 61, Athens’.
f) Both vessels were previously named with the ‘Brave’ prefix: the MV
Haralambos was formerly the ‘Brave Haralambos’ and MV Argentina was
formerly the ‘Brave Argentina ’. The founding affidavit states that the
underlying ownership structure never changed during this period.
g) Common operational documents used by both vessels support an inference
of association. Those are: The MV Argentina’s charterparty was expressly
based on the pro forma time charterparty of the MV Haralambos . Hire
invoices for both vessels at the relevant time bore the identical signature of
Mr Apostolos Kargas, described as ‘Operations Manager’ for both Iron
Pasha and Nero Oil. A letter of authorisation for MV Haralambos dated 15
August 2021, bears the Brave Maritime Corporation Inc logo, as does the
Master's Notice of Readiness under MV Argentina’s charterparty.
h) The ‘sister vessel’ email dated 21 September 2021 from the owners of the
MV Haralambos to Hengdeli reads: ‘Would like to draw Chris attention to
16
the latest info provided by P&Is regarding the i /o fines ex Pepel (below
link for reference) and the findings on the cargo to the sister vessel
Argentina where she loaded her cargo at Pepel in August. This email was
sent by Nero Oil through its brokers. (Emphasis added.)
i) Broker circulars and trade press being: A Fearnleys Hong Kong Limited
circular dated 13 December 2021 listed both vessels as part of Brave
Maritime's fleet in 2021. Baltic Exchange broker circulars in January and
April 2024 confirmed the MV Haralambos remained in Brave Maritime's
fleet. A Tradewinds article dated 3 December 2015 described Iron Pasha
as ‘a ship owning affiliate of the Vafias group's Brave Maritime ’. A 2016
Tradewinds article reported both vessels as being ‘in the fleet of Brave
Maritime’.
Discussion
[23] The requisites for a security arrest were formulated by the Appellate
Division in Cargo Laden on Board the MV Thalassini A vgi v MV Dimitris
(Thalassini),13 as follows. A claimant applying for an arrest order of a ship in
terms of s 5(3)(a) of AJRA, for the purpose of obtaining security in respect of a
claim, which is the subject of contemplated proceedings , to be instituted in a
foreign forum is required to satisfy the Court: (a) that he has a claim enforceable
by an action in rem against the ship in question or against a ship of which the ship
in question is an associated ship; (b) that he has a prima facie case in respect of
such claim which is prima facie enforceable in the nominated forum or forums of
his choice , in the sense explained above; and (c) that he has a genuine and
reasonable need for security in respect of the claim.14
13 Cargo Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A) (Thalassini) at 832 I-J.
14 The same requisites were confirmed in Bocimar NV v Kotor Overseas Shipping Limited 1994 (2) SA 563 (A)
at 579A-E
17
The reconsideration principle
[24] Subsections 3(6) and 3(7) read with s 5(3) of AJRA afford an entitlement
to a claimant to arrest an associated ship instead of the ship that is responsible for
the maritime claim for the purposes of providing security for its claim. The
enquiry into the association of the two vessels is directly linked to ‘the control’
aspect. The findings on those aspects are largely based on facts.
[25] The procedural framework for reconsideration applications under
rule 6(12)(c) of the Uniform Rules of Court was addressed by this Court in Afgri
Grain Marketing (Pty) Ltd v Trustees for the time being of Copenship Bulkers A/S
(in Liquidation) and Others (Afgri).15 The Court identified, relevantly, the second
available approach:
‘Rule 6(12)(c) does not prescribe how an application for reconsideration is to be pursued. The
absence of prescription was intentional, and the procedure will vary, depending upon the basis
on which the party applying for reconsideration seeks relief against the order granted ex parte
and in its absence. A party wishing to have the order set aside on the ground that the papers did
not make out a case for that relief, may deliver a notice to this effect and set the matter down,
for argument and reconsideration, on those papers. It may d o the same if it merely wishes
certain provisions in the order to be amended, or qualified, or supplemented. The matter is then
argued on the original papers. It is not open to the original applicant, save possibly in the most
exceptional circumstances, or where the need to do this has been foreshadowed in the original
founding affidavit, to bolster its original application by filing a supplementary founding
affidavit.’16
[26] The most recent and directly relevant authority is New Endeavour. This
Court held that no adverse inference can be drawn from a respondent's election
not to file an answering affidavit in a reconsideration application. 17 This Court
not to file an answering affidavit in a reconsideration application. 17 This Court
15 Afgri Grain Marketing (Pty) Ltd v Trustees for the time being of , Copenship Bulkers A/S (In Liquidation) and
Others [2019] ZASCA 67; [2019] 3 All SA 321 (SCA); 2024 (1) SA 373 (SCA) (Afgri).
16 Afgri above para 12.
17 New Endeavour fn 9 above para 37.
18
adopted the following passage from MJD Wallis, The Associated Ship and South
African Admiralty Jurisdiction, as correctly stating the law:
‘There is always some evidence available to a claimant and as long as it can produce enough
to constitute at least a prima facie case of association that will suffice to force the owners of
the two vessels to produce in response some direct evidence that t hey are not in truth
associated....In the absence of countervailing evidence from the owners of the shares in the
ship-owning companies that will usually suffice to discharge the onus of proof on the claimant
even in the face of a bare denial of the fact of association. This flows from the well-established
principle that less evidence will be required to establish a prima facie case where the matter is
peculiarly within the knowledge of the opposite party.’18
[27] The evidential principle underlying the above quote in New Endeavour
derives from a long line of appellate authority. In Union Government (Minister
of Railways) v Sykes , the Court recognised that where the facts are peculiarly
within the knowledge of one party, less evidence is required of the other to
discharge its burden.19 This principle was applied in Marine & Trade Insurance
Co Ltd v Van der Schyff .20 It was applied to the associated ship context in
Hasselbacher,21 which was affirmed by this Court in Strydom v Engen Petroleum
Ltd, where Wallis JA held that where matters are within the exclusive knowledge
of one party, ‘less evidence is required to be adduced by the other party to
discharge the onus of proof on a point’.22
[28] In Belfry Marine Ltd v Palm Base Maritime SDN BHD Name of Ship: MV
‘Heavy Metal’ (Heavy Metal ), Smalberger JA (for the majority) applied this
principle even in a case where full affidavits were filed, holding that the prima
18 New Endeavour fn 9 above para 51, quoting M J D Wallis, The Associated Ship and South African Admiralty
Jurisdiction (Siber Ink, 2010) (the Wallis text) at 186-187.
Jurisdiction (Siber Ink, 2010) (the Wallis text) at 186-187.
19 Union Government (Minister of Railways) v Sykes 1913 AD 156 at 173-174.
20 Marine & Trade Insurance Co Ltd v Van der Schyff 1972 (1) SA 26 (A) at 39G-H.
21 Hasselbacher fn 11 above at 791J.
22 Strydom v Engen Petroleum Ltd [2012] ZASCA 187; 2013 (2) SA 187 (SCA); [2013] 1 All SA 563 (SCA) para
19.
19
facie case made out by the respondent was ‘enough to overcome Lemonaris ’
express denial that there was a relevant connection in the ownership of the Sea
Sonnet and the Heavy Metal.23
[29] This Court in New Endeavour,24 following the established principles laid
down in Thalassini,25 cemented the issues of onus: that the arresting party bears
the onus of establishing on a balance of probabilities the alleged association
between the respective ship -owning companies, in this case between the MV
Haralambos and MV Argentina.
The associated ships
[30] Section 3(7)(a)(iii) of AJRA provides that:
‘For the purposes of subsection (6) an associated ship means a ship, other than the ship in
respect of which the maritime claim arose-
…
(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.’
[31] Subsections 3(7)(b)(ii) and (iii) provide that:
‘(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;
23 Belfry Marine Ltd v Palm Base Maritime SDN BHD Name of Ship: MV ‘Heavy Metal’ [1999] 3 All SA 337
(A); 1999 (3) SA 1083 (SCA) (Heavy Metal) para 20.
24 New Endeavour fn 9 above para 7.
25 Thalassini fn 13 above.
20
(iii) a company includes any other juristic person and any body of persons, irrespective of
whether or not any interest therein consists of shares.’
[32] A formative analysis of these provisions was conducted by this Court in
Heavy Metal where the concept of control was examined. Smalberger JA (for the
majority) held:
‘The subsection [3(7)(b)(ii)] elaborates upon and refines the concept of control by that person.
Control is expressed in terms of power. If the person concerned has power, directly or
indirectly, to control the company he/she shall be deemed to control the company. 'Power' is
not circumscribed in the Act. It can be the power to manage the operations of the company or
it can be the power to determine its direction and fate. Where these two functions happen to
vest in different hands, it is the latter which, in my view, the Legislature had in mind when
referring to “power” and hence to “control”.’26
[33] In the Heavy Metal judgment, the court in considering the aforementioned
provisions of AJRA, had regard to the language used, the purpose of the
provision, its context and the object of AJRA as a whole. It held that the objects
of the associated ship provisions are to enable the associated ship to be arrested
in respect of the maritime claim and to afford the claimant with an alternative
defendant to enforce its claim. It went on to say that the subsection distinguishes
between “direct” and “indirect” control. Direct power can be exercised by a
person who was wielding power behind the scenes “de facto” or by a person who
was in de jure control of the company. The court recognised this as ‘[the]
extension of “de jure” power to de facto [which] is in line with the objectives of
the section: to prevent the true “owner” by presenting a false picture to the outside
world, from concealing assets from attachment and execution by creditors.’ The
26 Heavy Metal fn 23 above para 8.
21
court concluded that the same approach should be adopted in the deeming
provisions of AJRA, namely, s 3(7)(c), 3(10)(a)(i) and (ii) and (b), and 3(11)(b).
[34] Because maritime claims are often transient, the AJRA provides a
mechanism to ensure that arrests are grounded on control. The respondents
contend that, before a court may find common control by a group of juristic
persons, two requirements must be met: first, the group of companies controlling
each ship-owning company at the relevant time must be identical; and sec ond,
the component parts of that group must be named and identified in relation to
each ship -owning company. On that formulation, unless those entities are
identified, the court cannot conduct the enquiry contemplated by AJRA. That
formulation reflects the respondents’ characterisation of the law, drawn from
Saga Welco. It does not, however, reflect the approach adopted by this Court in
Heavy Metal or Silver Star. Those decisions require the identification of a single
repository of control, but they do not demand formal documentary proof of
shareholding or directorship. Where, as here, the ship -owning companies are
incorporated in a jurisdiction that does not requ ire public disclosure of share
registers, the controlling person may be identified through an accumulation of
credible circumstantial evidence, without the production of the corporate records
themselves.
[35] The share prospectus relied upon by Hengdeli, refers to Brave Maritime as
the management company of all vessels and any additional dry bulk carriers
owned by the Vafias family. Brave Maritime Corporation SA or Brave Maritime
was formed by the Vafias Group in 1987. It is controlled by the members of the
Vafias family. Brave Maritime also earns a fee equal to 1.0% of the contract price
for any vessel bought or sold by them on behalf of the Vafias family.
22
[36] The high court found that the concept of a ‘ beneficial owner ’ was not
explained. We do not agree. In the joined cases C -37/20 and C -601/20 which
originated in Luxembourg, the issue of beneficial ownership was central because
it had been introduced by the European Union by way of ‘beneficial ownership
registers’ as part of its efforts to combat money laundering, terrorist financing,
tax evasion and the misuse of legal entities.27 The legality of those provisions was
challenged as they alleged unrestricted public access to beneficial ownership
information maintained in the Luxembourg register of beneficial owners. The se
matters were referred to the Court of Justice of the European Union ( CJEU) for
determination. The CJEU accepted that combating money laundering and
terrorist financing constitutes an objective of general public interest of the highest
importance. However, the CJEU emphasised that even legitimate public interests
must be pursued in a manner consistent with fundamental rights. Those were,
inter alia, Article 7 (respect for private and family life) and Article 8 (protection
of personal data).
[37] The CJEU found that once information becomes publicly available,
beneficial owners effectively lose control over how that information is used and
may expose them to risks including, fraud, kidnapping, identity theft, and other
forms of criminal targeting. It conclu ded that unrestricted public access
constitutes serious interference with fundamental rights. The CJEU, ultimately
declared invalid the provisions of the Fifth Anti-Money Laundering Directive that
granted members of the public unrestricted access to beneficial ownership
information.
27 Court of Justice of the European Union - Judgment of 22 November 2022 in the Joined Cases C-37/20 and C-
601/20 WM (C -37/20) and Sovim SA (C -601/20) v Luxembourg Business Registers C-37/20 (ECLI:EU:C:
2022:912).
23
[38] We mention these cases to demonstrate how difficult it is for anyone who
is not a beneficiary in an entity to obtain information relating to beneficial
owners. In the share prospectus there is an endorsement which reads:
‘Other information
Because we are incorporated under the laws of the Republic of the Marshall Islands, you may
encounter difficulty protecting your interests as shareholders, and your ability to protect your
rights through the U.S. federal.’
[39] In Smyth and Others v Investec Bank Ltd and Another ,28 this Court stated
that:
‘In Sammel & others v President Brand Gold Mining Co Ltd at 666C-D, this court said that a
“nominee” is a person who is nominated or appointed to hold the shares in his name on behalf
of another and that the nominee is in effect simply an agent of the transferee. And that the
reason why ‘nominee’ and not ‘agent’ is used is because the word comes from the English law.
This court went on to state at 666D -E that: “The policy of the law is that a company shall
concern itself only with the registered holder and not the owner or beneficial owner of the
shares”. The nominee does not hold the shares as an agent for another but must himself appear
on the register as the holder of the shares. Henochsberg on the Companies Act Butterworths
Lexis Nexis Service Issue 33 of June 2011 states that the fact that the nominee holds the shares
on behalf of another, generally known as the ‘owner’ or ‘beneficial owner’, does not appear on
the company’s register. This is explained with reference to the decision in Standard Bank of
South Africa Ltd v Ocean Commodities Inc at 289. There, this court said that it is the policy of
the law that a company should concern itself only with the registered owners of the shares. ’
(Own emphasis.)
[40] Having regard to the Smyth decision and those of the Court of Justice of
the European Union , it appears therefrom that a beneficial owner is a natural
the European Union , it appears therefrom that a beneficial owner is a natural
person who either directly or indirectly owns or exercises effective control over
the company.It follows that to expect an arresting applicant to furnish details of
28 Smyth and Others v Investec Bank Ltd and Another [2017] ZASCA 147; [2018]1 All SA 1 (SCA); 2018 (1) SA
494 (SCA) para 21.
24
beneficial owners at the arresting stage would be quite onerous given the
applicable laws on privacy rights in certain jurisdictions. Our courts are alive to
the difficulties facing arresting parties hence they permit reliance on hearsay
evidence. That is consistent with the provisions of s 6(3) of AJRA, which
expressly permits the admission of hearsay evidence in admiralty proceedings.
The appellants herein relied on similar pieces of information or documentation to
prove association.
[41] Our courts accept records from Lloyd ’s list Intelligence and investigative
reports to prove control as was the case in Silver Star. The evidence from Lloyd’s
investigators proved that Silver Star was not owned by the sole shareholder of
Action Partner Limited, Mr Habeeb. It revealed that Stellar Shipping was not only
the operator of the vessel, but a subsidiary of Tradeline. Stellar Ocean was the
beneficial owner of the vessel owned by a group controlled by Tradeline, in which
the so-called ‘sole shareholder’ was the Vice-Chairman. Mr Habeeb held only a
23% share-holding and not a 100% share-holding. The same principle applies to
Hengdeli’s relies on the Seasearcher vessel report from the Lloyd’s List
Intelligence which contained information that was updated on 08 May 2024
reflecting details of MV Haralambos , its movements and ownership. The
beneficial owner is listed as Vafias Group, the registered owner is Nero Oil
Incorporated and Brave Maritime Corporation Incorporated as commercial
operator, technical manager and ISM Manager.
[42] The high court relied heavily on Salga Welco for its finding that the
allegation of beneficial ownership is a matter of opinion and the remainder of the
Seasearcher report is in the nature of hearsay evidence. This case is
distinguishable from Salga Welco in that although the applicant in Salga Welco
relied on the ‘Panama papers’, it failed to attach them. The court therefore had to
25
speculate about their contents since they were not put up. In this case there was
documentation put up including the Seasearcher report. The relevant Seasearcher
report is published by Lloyd’s List Intelligence, and is described in the founding
affidavit as ‘a leading publisher of ship and ship ownership information’ forming
part of the Lloyd’s List Group, and available by subscription. These are not
obscure or unverified sources; they are the most widely used and accepted
commercial vessel-tracing tools in the maritime industry, routinely consulted and
relied upon by shipowners, charterers, P&I clubs and flag state administrations
worldwide.
[43] The Seasearcher report carries full evidential weight on matters that are
factual and directly verifiable from registry and commercial sources . The
information contained therein is reliable. In 2012, according to an Article
published by Manager of the Year, Mr Harry Vafias was awarded by Lloyd’s List
newspaper as the newsmaker of the year . In 2013 he, together with StealthGas
were named by Lloyd’s List as the best tanker company of the year. This supports
the contention that these documents are relied upon in the maritime industry.
Absent a document or evidence contradicting the contents of the Seasearcher
report, the high court by according it ‘little or no weight’, erred.
[44] It was submitted by the respondents that the reason that both Nero Oil and
Iron Pasha share the same addresses is because they are both managed by Brave
Maritime, a management agent . They therefore contended, that does not prove
association. We do not agree. The following extract from the share prospectus
demonstrates that Brave Maritime is clearly controlled by the Board of Directors
of the Vafias family:
‘The Vafias family, of which our Non -Executive Chairman, Harry Vafias, is a member, has
been active in shipping for over 50 years. The Vafias family formed Brave Maritime
been active in shipping for over 50 years. The Vafias family formed Brave Maritime
Corporation SA, or Brave Maritime, in 1987, which is our fleet manager, is responsible for all
26
aspects of our administration and operations under the direction of our Board of Directors. As
of the end of April 2023, Imperial Petroleum and affiliates of our Manager Brave Maritime
owned or partially owned in total 76 vessels (including 19 dry bulk carriers).’
[45] Brave Maritime also owns or partially owns 76 vessels including 19 dry
bulk carriers. It is common cause that both MV Haralambos and MV Argentina
are dry bulk carriers. Both vessels were previously named with the 'Brave' prefix.
The founding affidavit states that the underlying ownership structure never
changed during this naming period.
[46] The following circumstantial evidence demonstrates substantial
connections between Nero Oil and Iron Pasha, supporting the inference that they
were subject to a common repository of control:
a) The world shipping register records Nero Oil Inc., under “Activity”, as
“Owner, Manager”, care of Brave Maritime Corp Inc, Building 2, Apollon
Business Centre, 331 Kifisias Avenue, Kifisia, 145 61 Athens. The same
information appears in respect of Iron Pasha Inc.
b) Nero Oil and Iron Pasha issued two debit notes, on two different dates,
addressed to the same entity, Deysion International Shipping Limited. One
debit note was issued in relation to the MV Haralambos and the other one
related to MV Argentina . Nero Oil and Iron Pasha also share the same
address: Trust Company Complex, Ajeltake Road, Ajeltake Island, 96960,
Marshall Islands.
c) The hire invoices for both vessels bore the identical signature of Apostolos
Kargas, described as “Operations Manager”, who signed in the same
manner for both Iron Pasha and Nero Oil. The MV Argentina charterparty
was also based on a pro forma document similar to the one of MV
Haralambos charterparty, indicating a common operational origin.
27
[47] A conclusion that Brave Maritime is only a management agent is
inconsistent with the facts that were put up by the Vafias family in the share
prospectus. It is also contrary to what Brave Maritime put out in the shipping
register where it is identified as ‘owner, manager’ of both Nero Oil and Iron
Pasha. Hengdeli also relied on an article published by Trade Winds dated 3
December 2015, where the following was published:
‘Judge orders HNA – related assets seized in Louisiana Vafias group’s Brave
Maritime affiliate seeks to recover allegedly unpaid charter hire for the Capesize
bulker GCL Argentina.’ (Own emphasis.)
[48] In the Brave Maritime Handy Bulk it is recorded ‘Brave Maritime
Corporation Inc. is the dry bulk shipping arm of the Vafias Group’. Hengdeli
attached to its papers an advertisement campaign for Brave Maritime Corporation
Inc and Brave Bulk Transport Ltd published on the Vafi as Group News. In an
interview transcribed in the Seatrade Maritime; The Maritime Podcast , in
conversation with Harry Vafias on 22 June 2022 it is stated: ‘Harry controls four
companies US listed gas shipping companies, stealth gas tankers under Stealth
Maritime, dry bulk under Brave Maritime , US listed tanker company, Imperial
Petroleum’. (Own emphasis.)
[49] In an email from Nero Oil’s shipbroker, Diamond Shipbroking to SH Lee:
Subject Re: MV Haralambos/Deyesion, stated the following:
‘1...
2...
3. Would like to draw Chrts attention to the latest info provided by P&Is regarding the i/o fines
ex Pepel (below link reference) and the findings on the cargo to the sister vessel Argentina
where she loaded her cargo at Pepel in August. We strongly recommend Chrts prior concluding
any fixture, to consult their P&I and their resources for potential risks and keep Owners
informed.’ (Own emphasis.)
28
[50] The high court found that it was possible that ‘sister vessels’ as contended
by Hengdeli in the email was an admission that the two vessels are ultimately
owned by the same party. In the same breath, the high court ruled out that
possibility and found that ‘sister vessels’ may mean no more than that the two
vessels are managed as ‘sister vesse ls’. It found that the potential range of
meanings may mean that the two vessels are constructed to the same
specification. In this regard the high court relied on the provisions of s 226(2) of
the Merchant Shipping Act 57 of 1951 , treating the statutory concept of ‘sister
ships’ as support for a broader, non-ownership-based understanding of the phrase.
[51] This finding is not supported by any facts. The respondent elected not to
file an answering affidavit. Where a court reconsiders an ex parte order it must
have regard to the papers filed and is not at liberty to assume facts that are not
before it. Courts should avoid advancing possibilities unsupported by the
evidence, as that approach is impermissible.
[52] Our courts have consistently held that control may be inferred from a group
of factors, including common management, shared corporate officers, fleet
branding, financing arrangements, and the use of common ship managers. Where
such evidence points to a unified commercial operation, the abs ence of direct
rebuttal evidence from the shipowner may tip the balance in favour of association.
[53] In Heavy Metal,29 this Court held:
‘The subsection elaborates upon and refines the concept of control by that person. Control is
expressed in terms of power. If the person concerned has power, directly or indirectly, to
control the company he/she shall be deemed (“geag ... word”) to control the company. “Power”
is not circumscribed in the Act. It can be the power to manage the operations of the company
29 Heavy Metal fn 23 above para 8.
29
or it can be the power to determine its direction and fate. Where these two functions happen to
vest in different hands, it is the latter which, in my view, the legislature had in mind when
referring to “power” and hence to “control”. In South African lega l terminology that means
(essentially for the reasons given by the court a quo at …at 492 C - F (“the reported
judgment”); see also sec 195(1) of the Companies Act 61 of 1973) the person who controls the
shareholding in the company. Foreign law is a question of fact. If the appellant wished to make
out a case that the law of the Republic of Cyprus differed significantly from the law of South
Africa, it should have adduced evidence to that effect. It did not do so. Consequently, there is
no reason to surmise that the applicable law in Cyprus differs materially from that of South
Africa (cf Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd and Another 1998(3)
SA 938 (A) 954 B- E).’
[54] We also refer to the decision of this Court. In Dole Fresh Fruit
International Ltd v MV Kapetan Leonidas and Another that a person may control
a company without controlling all the shares in the company and control over a
company can be exercised even without a majority shareholding.30
[55] All these factors, taken together, establish clearly that Brave Maritime is
either the owner or in control of Iron Pasha and Nero Oil. Iron Pasha and Nero
Oil own the MV Haralambos and MV Argentina, respectively. Brave Maritime is
controlled by the Vafias family and in particular by Harry Vafias, as stated in the
podcast. The control chain required by s 3(7) (a)(iii) is accordingly established.
Harry Vafias controls the Vafias family group; the Vafias family controls Brave
Maritime, which the World Shipping Register identifies as owner/manager, not
merely agent, of both Iron Pasha and Nero Oil; and Iron Pasha and Nero Oil are
the registered owners of the MV Argentina and the MV Haralambos respectively.
the registered owners of the MV Argentina and the MV Haralambos respectively.
The person who controls Brave Maritime therefore controls, directly or indirectly
within the meaning of s 3(7)(b)(iii), both ship owning companies.
30 Dole Fresh Fruit International Ltd v MV Kapetan Leonidas and Another 1995 (3) SA 112 (A) at 119F-G.
30
[56] On 2 December 2021, when Hengdeli accepted the withdrawal of the MV
Argentina and the maritime claim arose, Iron Pasha was controlled by Harry
Vafias through the Vafias family ’s control of Brave Maritime. This finding is
grounded on the following evidence. First, Brave Maritime wrote to Hengdeli on
behalf of Iron Pasha as late as 28 November 2021, four days before the claim
arose, demonstrating that Brave Maritime was exercising operational authority
over Iron Pasha at the material t ime. Second, the Fearnleys Hong Kong broker
circular of 13 December 2021, eleven days after the claim arose, lists both vessels
as part of Brave Maritime ’s fleet, consistent with the control structure being
unchanged at and around 2 December 2021. Third, the Pictet Report (2013) and
the Seatrade podcast (June 2022) bracket the claim date and establish a
continuous period of Vafias control over Brave Maritim e from at least 2009 to
mid-2022. No evidence before the Court suggests any change in the control
structure of Iron Pasha between April 2021 and 2 December 2021.
[57] On 6 June 2024, when the arrest was affected and these proceedings
commenced, Nero Oil was controlled by Harry Vafias through the same Vafias
family control of Brave Maritime. The C3IS prospectus of 30 June 2023,
approximately eleven months before the arrest, confirms that Brave Maritime is
controlled by members of the Vafias family and is responsible for all aspects of
the fleet’s administration and operations. The Baltic Exchange broke r circulars
of January 2024 and April 2024 confirm that the MV Haralambos remained in
Brave Maritime’s fleet within months of the arrest. The Seasearcher report at the
date of arrest reflects the Vafias Group as beneficial owner of the MV
Haralambos and Brave Maritime as the commercial operator and technical
manager. The re is no evidence to suggest any change in Nero Oil ’s control
structure between the prospectus of June 2023 and the arrest of June 2024. The
31
true ownership structure of Nero Oil is a matter exclusively within the
respondents’ own knowledge; their election not to adduce any evidence
addressing it carries the evidential consequence described above.
[58] Applying the test stated in Silver Star : the person who controlled Iron
Pasha on 2 December 2021 is Harry Vafias, through the Vafias family ’s control
of Brave Maritime as owner or manager of Iron Pasha. The person who controls
Nero Oil on 6 June 2024 is Harry Vafias, through the same Vafias family control
of Brave Maritime as owner or manager of Nero Oil. Those controllers
correspond. The same person controls both companies. Association is
accordingly established within the meaning of s 3(7) (a)(iii) read with s
3(7)(b)(iii) of AJRA.
[59] The high court addressed the burden of proof question at paragraphs 15 to
30 of its judgment. The high court acknowledged that New Endeavour confirmed
that a failure to file an answering affidavit was ‘not without consequences’. The
high court recorded that it understood Hengdeli to be arguing that the reference
to ‘tipping the balance’ suggested ‘some modification to the historic requirement
that association be established on a balance of probabilities’. The high court
rejected that reading, giving two reasons. First, that s 6(3) of AJRA’s permissive
approach to hearsay already affords a considerable advantage to the arresting
party. Second, that a reconsideration application confers a wide discretion on the
court. Section 6(3) of AJRA provides that:
‘[a] court may in the exercise of its admiralty jurisdiction receive as evidence statements which
would otherwise be inadmissible as being in the nature of hearsay evidence, subject to such
directions and conditions as the court thinks fit.’
[60] Before this Court, Hengdeli submitted that the high court misconstrued
Hengdeli’s argument, since it never argued for a standard lower than the balance
32
of probabilities. There is therefore agreement that the standard of proof is on a
balance of probabilities and it is consequently not necessary to revisit that issue.
It follows that the high court correctly restated the standard of proof as set out in
New Endeavour, and that is on a balance of probabilities.
[61] Hengdeli’s contention, which is entirely consistent with New Endeavour,
is that where a prima facie case of association is established on the founding
papers and the respondents elect not to place countervailing evidence before the
court, the prima facie case, if accepted, will ordinarily constitute proof o f
association. This is because, in those circumstances, the inference of association
becomes the most natural and plausible conclusion on the evidence as it stands,
without lowering the standard. The mechanism that explains this result is the
principle established in Sykes, referred to above , regarding the peculiar
knowledge of the respondent, and applied to the associated ship context in
Hasselbacher, Heavy Metal, and New Endeavour. Where the facts bearing on
association are exclusively within the knowledge of the respondents, less
evidence is required of the applicant to discharge its onus. Where the respondents
elect not to place any countervailing evidence before the court, the a pplicant's
prima facie case is assessed at its full weight, undiminished by any competing
version. In those circumstances, a prima facie case that is accepted by the court
as credible and reliable will ordinarily constitute proof on a balance of
probabilities. This is not a departure from Thalassini: it is the application of
Thalassini’s standard to the specific evidence landscape addressed in New
Endeavour.
[62] The two reasons given by the high court do not withstand scrutiny. The
permissive approach to hearsay under s 6(3) applies to all admiralty proceedings,
not only to reconsideration applications. It does not explain why an unanswered
33
prima facie case, if accepted, cannot justify a conclusion that there was an
association. Similarly, the width of the court's discretion on reconsideration is a
procedural consideration that does not alter the applicable standard of proof.
(Own emphasis.)
[63] The respondents’ counter argument is that where there is only one version
before the court, there is ‘no balance to be tipped’ and the question is simply
whether the evidence meets the balance of probabilities standard on its own. This
undervalues the spec ific guidance in New Endeavour , which was directed
precisely at the situation where there is only one version. The passage quoted
from the Wallis text holds that a prima facie case ‘will usually suffice’ in the
absence of countervailing evidence, where the relevant facts are peculiarly within
the opposing party's knowledge. To accept the respondents’ argument would
render that guidance meaningless in the scenario it was designed to address.
[64] The correct synthesis of the authorities is this. The balance of probabilities
standard applies throughout all stages of an associated ship arrest, including at
the reconsideration stage. That standard does not change. What the New
Endeavour established is consistent with the dictum in Thalassini.
[65] In Twende Africa Group (Pty) Ltd t/a TAG Marine v MFV Qavak ,31 this
Court set out the following standard of proof:
‘In terms of s 3(4)(b) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the AJRA) an
action in rem in pursuit of a maritime claim may be instituted by the arrest of a vessel, where
the owner of the vessel to be arrested would be liable in personam in respect of the claim giving
rise to the arrest. In order to sustain its arrest of the Qavak, TAG bore the onus to prove that it
had a personal claim against Fisherman Fresh and that the claim was a maritime claim. The
31 Twende Africa Group (Pty) Ltd t/a TAG Marine v MFV Qavak [2019] ZASCA 9 para 6.
34
standard of proof required to discharge that onus was no more than a prima facie case, a test
that is satisfied if there is evidence, which, if accepted, will establish a cause of action.’
This standard is the same as that which is explained in Thalassini.32
[66] The perceived confusion referred to in the submissions before the high
court relates to the following . In Thalassini reference to a prima facie case is a
standard to be met where an arresting party is to prove that it has a personal claim
and that the claim is a maritime claim. That prima facie case does not on its own,
without more, morph into a standard on a balance of probabilities. It is only where
the prima facie case consists of evidence, and if such evidence is accepted, it will
establish a cause of action.
[67] We do not understand Thalassini to advocate for a standard of proof that if
there is a prima facie case and that prima facie in reconsideration is not
controverted, then an arrestor would have discharged the standard on a balance
of probabilities . That is correct as a general statement. It does not, however,
preclude the result described above. The distinction is this: Thalassini does not
lower the standard where a prima facie case is left unanswered. What it does is to
permit the court, in applying the balance of probabilities standard, to assess the
prima facie evidence. If the evidence which was put up to satisfy a court at the
initial stage of the inquiry, that is, when the standard to permit an order of arrest
to be made was a prima facie case, is not countered by any countervailing
evidence (as happens when no affidavits are filed), then the court must consider
whether the uncontroverted evidence is sufficient to establish the balance of
probabilities. In doing so it takes cognisance of t he fact that the evidence is
entirely uncontroverted and it accepts the facts as stated . It must still ask itself
entirely uncontroverted and it accepts the facts as stated . It must still ask itself
32 Thalassini fn 1 3 above at 834F -G; MV Wisdom C: United Enterprises Corporation v STX Pan Ocean Co
Ltd [2008] ZASCA 21; 2008 (3) SA 585 (SCA); [2008] 3 All SA 111 para 16; Thalassini at 831G-832C.
35
whether those facts are sufficient to sustain the conclusion, on a balance of
probabilities. (Emphasis added.)
[68] There are several reasons that militate against Hengdeli’s understanding of
the rationale of Thalassini. First, a prima facie case must still be tested against
the evidence adduced to support it or to contrast it. Second, a court would be
abdicating its responsibility of putting the arresting party to the proof of its
allegations of association and should not lightly infer an association not least
because of the undoubted prejudice an arrest of a ship can cause to those who
seek to make a living from her plying the seas, unfettered by the chains of the
debt of others with whom they may have no legal or commercial truck. 33 Third,
to embrace that approach would relieve the arresting party from putting up a case
supported by credible and reliable evidence when seeking an arrest order; instead,
a party affected by the arrest would be compelled to put up evidence to challenge
the arrest in circumstances where the arrestor did no more than put up a prima
facie case.
[69] New Endeavour does not create the ambiguity suggested by the
respondents. Ambiguity arises only if the burden of proof is conflated with the
prima facie threshold. A prima facie case is an initial evidentiary threshold: it
requires evidence sufficient to support a claim or fact, and, if accepted and not
rebutted, may be enough to establish a cause of action. The reconsideration of the
arrest order concerned association only. It did not require a determination of
whether a maritime claim exists.
33 Hare J. (2016). Shipping Law and Admiralty Jurisdiction in South Afric a. 2nd edition, Juta & Co. Ltd, pages
113- 114.
36
[70] The high court was correct to hold that no adverse inference arises from
the failure to file an answering affidavit. But it erred in concluding that this
procedural choice is ‘not without consequences’ only in a trivial sense. The
consequences identified in New Endeavour ‘constitute a substantive evidential
consequence’. That consequence is the operation of the fact that the respondents
have peculiar knowledge of the relevant identity of who controls the ships. No
adverse inference is drawn against the respondents from their silence. The scales
do not tip by reason of an inference against the respondents; they tip because the
appellant's side carries full weight and the respondents' side is empty. This is
precisely the mechanism described in the passage from the Wallis text adopted in
New Endeavour34 and applied in Heavy Metal.35
[71] The question for this Court is not whether the standard is met in the
abstract, but whether Hengdeli has discharged the onus resting on it on a balance
of probabilities. If so, whether the information or evidence relied upon by
Hengdeli is evidence that would be within the peculiar knowledge of the
respondents? If so, whether this Court should draw any adverse inference against
the respondents for their failure to deal with allegations on matters that fell
squarely within their knowledge.
[72] The practical significance is acute. Ship owning companies incorporated
in the Marshall Islands are not required to disclose their share registers publicly.
The true ownership structures of Nero Oil and Iron Pasha are matters exclusively
within their own knowledge. Hengdeli, as an external creditor, relied on
circumstantial evidence, public information, and commercial database sources.
Had Nero Oil and Iron Pasha wished to rebut the prima facie case, they possessed
34 New Endeavour fn 9 above paras 17 and 18.
35 Heavy Metal fn 23 above para 10.
37
far greater access to the dispositive corporate information than Hengdeli. Their
election not to file that information carries, under New Endeavour, the evidential
weight the high court declined to give it.
[73] In Heavy Metal , the majority distinguished between direct and indirect
control:
‘The subsection clearly distinguishes between “direct” and “indirect” power. That distinction
must be given a meaning. Indirect power can only refer to the person who de facto wields
power through, and hence over, someone else. The latter can only be someo ne who wields
direct power vis-à-vis the company and the outside world and who therefore, in the eyes of the
law (ie de jure), controls the shareholding and thus determines the direction and the fate of the
company. On the facts of the present case Lemonaris is the person in that situation. Of course,
the same person may in given circumstances exercise both de facto and de jure control.
In my view, therefore, direct power refers to de jure authority over the company by the person
who, according to the register of the company is entitled to control its destiny; and indirect
power to the de facto position of the person who commands or exerts authority over the person
who is recognised to possess de jure power (ie the beneficial “owner” as opposed to the legal
“owner”). This extension of de jure power to de facto power is in line with the objective of the
section: to prevent the true 'owner', by presenting a false picture to the outside world, from
concealing his assets from attachment and execution by his creditors.’36
[74] The level of control required was defined in The Kadirga 5 (No 1): JA
Chapman & Co Ltd v Kadirga Denizcilik ve Ticaret AS SCOSA, C12(N) at C14E-
G: the person must control the ‘overall destiny’ of the company, not merely its
‘day to day affairs’. This formulation was adopted in EE Sharp and Sons Ltd v
MV Nefeli37 and endorsed in Heavy Metal. Both authorities were relied on by the
MV Nefeli37 and endorsed in Heavy Metal. Both authorities were relied on by the
respondents themselves in their heads of argument. Having regard to an article
published by Manager of the year 2023, Mr Harry Vafias is described as the
36 Heavy Metal fn 23 above paras 9-10.
37 EE Sharp and Sons Ltd v MV Nefeli 1984 (3) SA 325 (C); [1984] 2 All SA 294 (C) at 326IC-E.
38
person who founded Stealth Maritime Corp in 1999 , which has invested in new
generation newbuilds for the renewal of its tanker fleet.
[75] This Court in Silver Star affirmed the purpose of the associated ship
provisions, and quoted the MJD Wallis text on the intended simplicity of the
inquiry:
‘The maritime claimant identifies the party who controls the company that owned the ship
concerned and identifies the party who controls the company that owns the associated ship that
it seeks to arrest. The result of those exercises is then compared. If t hey correspond, in the
sense that the same person or persons control both companies, then the requisite association is
established. If they are not the same then the association is not established.’38
[76] This Court in New Endeavour additionally confirmed that ‘family control
is sufficient to establish association, and this kind of control is prevalent in Greek
shipping’.39 The Court endorsed the proposition that common control within a
family group, if established on the facts, constitutes a cognisable form of control
under s 3(7).
[77] The most recent authority of this Court bearing on the construction of the
s 3(7) deeming provisions is MV ‘Tai Harmony’ and Another v Sure Success
Steamship S.A and Another (Tai Harmony).40 Although Tai Harmony arose under
s 3(7)(c) (the time-charterer deeming provision) rather than under s 3(7) (a)(iii)
(common control), it confirms a principle of general application: the s 3(7)
deeming provisions serve a procedural enforcement purpose and do not alter
private law rights between owners and charterers. This Court stated that the
38 MV Silver Star: Owners of the MV Silver Star v Hilane Ltd [2014] ZASCA 194; [2015] 1 All SA 410 (SCA);
2015 (2) SA 331 (SCA) (Silver Star) para 40 quoting the MJD Wallis text at 187.
39 New Endeavour fn 9 above para 40.
40 MV ‘Tai harmony’ and Another v Sure Success Steamship S.A and Another [2026] ZASCA 60; [2026] 2 All
SA 460 (SCA) (Tai Harmony).
39
deeming provisions ‘enable procedural enforcement’ and that the associated ship
arrest mechanism ‘prevents the frustration of a maritime claim’. It further
confirmed that s 3(7)(c) encompasses all types of charterparties, holding that the
scope of the provision is to be construed consistently with its legislative purpose.
That purposive approach applies with equal force to s 3(7)(a)(iii): the court’s task
is to identify whether the person who controls the companies owning both vessels
is the same person, reading ‘control’ and ‘company’ in light of the object the
section was enacted to achieve, namely preventing concealment of assets from a
claimant through the interposition of corporate forms.41
[78] Although Tai Harmony arose under s 3(7)(c), the purposive construction it
endorses applies to s 3(7) (a)(iii) because both provisions serve the same
legislative object: preventing a person who controls two ship owning entities
from insulating the associated ship from arrest by interposing separate corporate
forms. Section 3(7) (b)(iii), which extends the deeming of control to indirect as
well as direct power, confirms that the Legislature intended all sub-provisions of
s 3(7) to be read in light of this anti-evasion purpose.
[79] The high court’s approach is subject to two observations. First, the court
treated the absence of formal corporate documentation as a hurdle that
circumstantial evidence could not overcome. This is difficult to reconcile with
the decisions in Heavy Metal and Silver Star. Second, the court applied Saga
Welco to find that the evidence amounted to speculation, while declining to give
meaningful effect to the guidance in New Endeavour (a judgment of this Court)
41 Tai Harmony above paras 25 and 36. See also MV Nyk Isabel Northern Endeavour Shipping Pte Ltd v Owners
of MV Nyk Isabel and Another [2016] ZASCA 89; 2017 (1) SA 25 (SCA) paras 29-34, confirming that the deeming
provisions enable procedural enforcement without altering private law rights.
40
that an unanswered prima facie case based on accepted evidence will ordinarily
tip the balance in favour of the association.
[80] Taking all those factors into account, including the established standard of
proof on a balance of probabilities, Hengdeli succeeded in discharging the onus
resting on it. We heed the caution from this Court in Weissglass N O v Savonnerie
Establishment42 where it was stated that ‘[a court] must be careful not to enter
into the merits of the case or at this stage to attempt to adjudicate on credibility,
probabilities or the prospects of success’.
[81] The high court erred in its reconsideration of the arrest order and in
discharging it in circumstances where there was sufficient evidence to support a
conclusion of association between the two vessels, MV Haralambos and MV
Argentina. We are also satisfied that all the requirements of ss (3), including the
genuine and reasonable need for security , were proved by Hengdeli , as it is
accepted that in security arrest, not only association must be proved.
[82] It follows that the appeal should succeed. There is no reason to depart from
the general rule that costs should follow the result.
[83] In the circumstances, we make the following order:
1 The appeal is upheld with costs, including the costs of two counsel where so
employed.
2 The order of the high court is set aside and is replaced with the following
order:
42 Weissglass N O v Savonnerie Establishment 1992 (3) SA 928 (A) at 938H.
41
‘The reconsideration application is dismissed with costs, including the costs
of two counsel where so employed.’
___________________
Y T MBATHA
JUDGE OF APPEAL
_________________
T V NORMAN
JUDGE OF APPEAL
42
Appearances:
For the Appellant: M Fitzgerald SC
Instructed by: Bowman Gilfillan Inc., Johannesburg
Webbers Attorneys, Bloemfontein
For the First and Second
respondents: L M Mills
Instructed by: Edward Nathan Sonnenbergs Inc., Durban
Honey Attorneys, Bloemfontein.