This is an appeal from two conflicting judgments delivered on 31 October 2016 and 22 September 2017 by Vahed J and Henriques J respectively in the KwaZulu-Natal Local Division of the High Court, sitting as a court of admiralty, in terms of the Admiralty Jurisdiction Regulation Act 1983 (the Act). In the first judgment Vahed J in an application brought by Pretty Scene Shipping SA and MT Pretty Scene (the Pretty Scene parties) against Galsworthy Ltd (Galsworthy) set aside the writ of summons in rem and warrant of arrest in respect of the vessel and ordered it to be released. In the second judgment involving the same parties, Henriques J dismissed the application by the Pretty Scene Shipping parties to set aside a second arrest of the MT Pretty Scene at the instance of Galsworthy and dismissed the counter-application for security brought by Pretty Scene Shipping SA. In both matters leave to appeal was sought but the applications for leave to appeal were dismissed by Vahed J and Henriques J respectively. However, having petitioned the Supreme Court of Appeal, leave to appeal was granted to the Full Court, KwaZulu-Natal Division of the High Court, Pietermaritzburg, in respect of both matters. The two appeals were consolidated for hearing before the Full Court.

Held: Galsworthy was not entitled to pursue any claim against the Pretty Scene parties. The arrests of the MT Pretty Scene were unlawful. The Pretty Scene parties have a genuine and reasonable need for security to pursue a claim for damages for wrongful arrests against Galsworthy. Appeal in respect of first judgment to be dismissed with costs. Appeal in respect of second judgment to be upheld with costs. The arrests of the MT Pretty Scene to be set aside.

One of Galsworthy's claims was based on a breach of a charterparty in respect of the Jin Kang. The issue was therefore whether the MT Pretty Scene was associated to the Jin Kang. The Court noted that the purpose of the Act, which is built on the Arrest Convention 1952 and English law, is to provide for a far-reaching mechanism that the loss falls where it belongs in terms of ownership or control and to provide the claimant with an alternative defendant in the form of the associated ship.

The Court found that the ownership and control of Parakou Pte (in liquidation), the owner of the Jin Kang, lay with Liu Cheng Chang and Chik Sau Kam (the parents) only. The liquidators were in de jure control of Parakou Singapore. At the time when the claim arose, the parents' son, Liu Por, was not a shareholder in Parakou Singapore. The court further found that the legal shareholder and controller of the Pretty Shipping Co was not Liu Cheng Chang but Liu Por. Liu Por was also the de jure owner of Pretty Scene Shipping SA. It had been advanced, based on the Equasis records, that the MT Pretty Scene was owned by Pretty Scene Shipping SA. Pretty Scene Shipping SA formed part of the various entities owned or controlled by Liu Por. It was therefore not proven on a balance of probabilities that Liu Cheng Chang was the deemed owner of the MT Pretty Scene. Similarly, in the earlier Pretty Time case, the court had found that Galsworthy had failed to prove that Liu Cheng Chang was the power behind the scenes. The Court therefore held that the MT Pretty Scene was not associated to the Jin Kang.

The Court then had to consider whether the rearrest of the MT Pretty Scene was unlawful. Section 3(8) of the Act provides that: '[p]roperty shall not be arrested and security therefor shall not be given more than once in respect of the same maritime claim by the same claimant'. This provision is subject to the provision of s 5(2)(dA) which provides that: 'notwithstanding the provisions of section 3(8), order that, in addition to property already arrested or attached further property be arrested or attached in order to provide additional security for any claim, and order that any security given be increased, reduced or discharged, subject to such conditions as to the court appears just'.

The territorial scope of s 3(8), as interpreted by Wallis, is that s 3(8) of the Act is 'likewise subject to territorial limitation but the limitation is even narrower than those under the Arrest Convention'. The limitation is that it is only concerned with the arrest of property in South Africa in terms of the Act and the giving of security for that property, because the general principle in the interpretation of statutes is that legislation is presumed not to have an extra-territorial application. The language of the Act indicates that it is concerned with the arrest of the 'property' and s 3(5) sets out what property can be arrested. This is a limited group of property, unlike under the Arrest Convention. The language used does not indicate that it is applicable elsewhere other than in South Africa; it is applicable to arrests and the provision of security only in South Africa.

However, where the arrest is for purposes of obtaining security, the arrest will not be obtained where security has been provided. In terms of s 5(2)(c) of the Act, a court is empowered to order that any arrest be subject to such conditions as appear just, whether as to the furnishing of security or liability for costs, or damage caused and likely to be caused. It is trite that security is restricted to those claims in respect of which the claimant is entitled to such security to pursue a claim in South Africa or in a foreign jurisdiction. Galsworthy has pursued its claim against Parakou in Singapore and there was no need for it to pursue the same claim in South Africa. On that basis, the Pretty Scene parties have a prima facie case against Galsworthy for the wrongful arrest of the MT Pretty Scene.

[For the successful appeal to the Supreme Court of Appeal, see MT Pretty Scene: Galsworthy Ltd v Pretty Scene Shipping SA [2021] ZASCA 38 (CMI1378).]