In 2007, the appellant, Galsworthy Ltd (Galsworthy), let and Parakou Shipping Pte Ltd (Parakou) hired the MV Canton Trader (to be renamed the Jin Kang) on a time charterparty. Parakou did not intend to trade the Jin Kang, but concluded a back-to-back five-year charterparty with Ocean Glory at a slightly higher charter rate. However, with the collapse of the charter market in 2008, Ocean Glory went into liquidation. Thereafter, Parakou repudiated the charterparty with Galsworthy. In London arbitration, the arbitrators made two awards in favour of Galsworthy. Galsworthy attempted to enforce payment of those awards by way of an action in rem against the MT Pretty Scene as an associated ship of the Jin Kang. It initially arrested the Pretty Scene on 18 June 2016.

The first respondent, Pretty Scene Shipping SA (PSS), the owner of the Pretty Scene, applied to set aside this arrest. The application came before Vahed J and the arrest was set aside on 31 October 2016. Vahed J refused leave to appeal, but this Court granted leave to appeal to the Full Court of the KwaZulu-Natal Division. In anticipation of an unfavourable judgment from Vahed J, Galsworthy effected a second arrest of the Pretty Scene on 28 October 2016. An application by PSS to set aside the second arrest, and a counter-application for security for a claim for wrongful arrest under s 5(4) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act), were dismissed by Henriques J on 10 August 2017. Reasons were provided on 22 September 2017. Like Vahed J, Henriques J refused leave to appeal, but this Court again granted leave to appeal to the Full Court.

The two appeals were heard in a consolidated hearing on 1 August 2018, and judgment was delivered by the Full Court on 4 March 2019: see The MT Pretty Scene: Galsworthy Ltd v Pretty Scene Shipping SA [2019] ZAKZPHC 10 (CMI442). The appeal against Vahed J’s order was dismissed and that against Henriques J’s judgment upheld. In the result both arrests were set aside and the counter-application for security for costs was granted.

Galsworthy appealed.

Held: The appeal is upheld with costs.

In respect of the first arrest of the Pretty Scene, the summons was not defective. The arrest should not have been set aside at first instance and the Full Court should not have dismissed the appeal against that order. The summons contained 12 paragraphs dealing with the two arbitration awards, both of which were annexed. The defendant therefore knew the nature of the claim against it and the facts on which it was based. It was only necessary for Galsworthy to say that it suffered damages as a consequence of the repudiation of a charterparty, and that these damages had been quantified in the arbitration awards in proceedings between Galsworthy and Parakou. Everything else was surplusage.

As far as the association of the two ships was concerned, the summons made repeated references to the repudiated charterparty between Galsworthy and Parakou. The defendant was apprised of the facts and contentions on which the claim that it was an associated ship was based. It was not entitled to anything more. Accordingly, the summons was not defective on the basis advanced in the application to set aside the arrest.

As to the second arrest of the Pretty Scene, s 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'.

The wording of this section is adapted from the opening words of art 3.3 of the Arrest Convention 1952, which reads:

A ship shall not be arrested, nor shall bail or other security be given more than once in any one or more of the jurisdictions of any of the Contracting States in respect of the same maritime claim by the same claimant: and, if a ship has been arrested in any of such jurisdictions, or bail or other security has been given in such jurisdiction either to release the ship or to avoid a threatened arrest, any subsequent arrest of the ship or of any ship in the same ownership by the same claimant for the maritime claim shall be set aside, and the ship released by the Court or other appropriate judicial authority of that State, unless the claimant can satisfy the Court or other appropriate judicial authority that the bail or other security had been finally released before the subsequent arrest or that there is other good cause for maintaining that arrest.

The context of this provision of the Arrest Convention, which was an agreement between States, was the possibility of multiple arrests in multiple different countries arising out of the same maritime claim. In the United Kingdom and jurisdictions applying English maritime law, an action in rem could only be pursued against the ship in respect of which the maritime claim arose. In other countries, any property could be attached provided it was owned by the person liable on the claim. Article 3.1 of the Arrest Convention 1952 was a compromise between these two situations, in permitting the arrest not only of the particular ship in respect of which the maritime claim arose, but also any other ship owned by the same person as the owner of the particular ship. Article 3.3 of the Arrest Convention was directed at the possibility of multiple arrests in different countries with security having to be furnished several times in respect of the same claim.

The background to s 3(8) of the Act was fundamentally different from that of the Arrest Convention. Prior to the enactment of the Act, if a ship was arrested in rem, either the ship would stand as security, or any bail furnished to secure its release would stand in its stead, precluding a further arrest. Similarly, once a vessel had been attached ad fundandam et confirmandam jurisdictionem, either it remained under attachment, or security would be furnished for its release. Save in unusual circumstances, a second attachment was impermissible. When the Act was enacted, s 3(8) stated the general rule in admiralty, but made it subject to the power of the courts to order increased security and authorise the arrest of property under s 5(2)(d).

Construing s 3(8) as if it were a statutory enactment of art 3.3 of the Arrest Convention 1952 in South Africa is therefore inappropriate. South Africa is not a party to the Arrest Convention and the extensive list of maritime claims in the Act, as well as the associated ship arrest provisions, would preclude South Africa's membership. Section 3(8)'s sole purpose is to govern arrests in South Africa under the Act. If proceedings have been brought elsewhere, a disaffected defendant may raise the defence of lis alibi pendens. If vessels have been arrested, or security furnished, elsewhere, this must be disclosed in the certificate furnished by the attorney for the arresting party in terms of Admiralty Rule 4(3) and may affect the terms of the arrest and the security that may be obtained in that way. It will also be relevant to the exercise by a court of its powers under s 5(2) of the Act in regard to the terms of any arrest, and s 7(1) of the Act to decline jurisdiction or stay proceedings.

This exposition of the purpose and effect of s 3(8) of the Act is necessitated by the fact that, in argument before Henriques J and the Full Court, reliance was placed upon the decision in the MV Fortune 22: Owners of the MV Fortune 22 v Keppel Corp Ltd 1999 (1) SA 162 (C) (The Fortune 22) in support of PSS's arguments. In two respects The Fortune 22 does not correctly reflect the law in relation to s 3(8) and was in consequence wrongly decided. First, it held that English law applied to the application of the section, by virtue of s 6(1) of the Act. Second, it held, on the basis of the international nature of maritime disputes, that the section extended to arrests made in jurisdictions other than South Africa. Neither proposition is correct. The interpretation of s 3(8) is not a matter of English law, but one of the proper construction of a South African statute, by a conventional process of statutory interpretation in terms of South African law. Second, the Act is concerned with the jurisdiction and procedure to be applied in admiralty cases in South Africa. It is a piece of domestic legislation and there is nothing to indicate that its purpose in s 3(8) was to extend its application to arrests occurring in other jurisdictions contrary to the general rule that statutes do not have extra-territorial effect.

Henriques J correctly approached s 3(8) on the basis outlined above. She held that the effect of this section is that a second arrest of the same ship in relation to the same claim is only prohibited where security has been given for that claim. The section prohibits the arrest of the same property more than once. It is only when there has been an arrest of specific property and security has been given 'therefor' that the prohibition applies.

For those reasons, Henriques J correctly dismissed the application to set aside the second arrest. The primary ground upon which the Full Court overturned her decision was that the Pretty Scene was not an associated ship in relation to the Jin Kang. The Full Court erred in upholding the appeal against the judgment of Henriques J.