The applicants, MS Bonanza Schiffahrtgesellschaft mbH & Co KG (Bonanza) and Fortysixth Phoenix Shipping Inc (Fortysixth), were the owners and bareboat charterers respectively of the ship Julian. Bonanza was a German corporation and Fortysixth was a Liberian corporation. On 30 April 2017, the Julian allided with the ‘quay and ship loading appliance’ in the port of Durban. The applicants sought a declaratory order that they had the right to limit their liability in respect of any claims of any parties that might have suffered loss arising from the allision.

The Julian had been given permission to enter the port to berth by the Durban harbour master. At the time of the allision the ship was under the control and command of a pilot employed by Transnet (SOC) Ltd (the second respondent) with two tugs made fast to the ship by lines to the ship. The tugs were crewed by employees of Transnet. The allision caused substantial damage to the vessel, the quayside and the bulk loading appliance and resulted in multiple claims.

Transnet sued the applicants in South Africa for damage to the quayside and for an indemnity in respect of any claims the first respondent (Bulk Connexions) might have against it. Bulk Connexions sued the applicants both in Germany and Hong Kong. The applicants sued Transnet in South Africa for damage to the ship and for an indemnity in respect of any claims Bulk Connexions might have had against them.

Section 261(1) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (AJRA) provides that the owner of a ship shall not, if damage is caused without its actual fault of privity, be liable for damage in respect of loss or damage to property or rights to an aggregate amount of exceeding 66.67 SDR for each ton of the ship’s tonnage. At the time, the maximum liability of the applicants would be ZAR 45,677. In Germany limitation is calculated in terms of the LLMC 1976 as amended by the Protocol of 1996 (LLMC 1996). The maximum liability of the applicants would be ZAR 431,458,946.90.

The applicants contended that, despite the first respondent instituting action in the German court, the s 261 AJRA limitation applied to its claim because the allision took place in South Africa and the first respondent is a South African entity subject to the law of South Africa. The s 261 AJRA limitation is substantive law to be applied by the German Court and therefore they were entitled to declaratory relief to this effect. The first respondent opposed the application.

Held: Application dismissed.

Section 261 of the AJRA envisages claims arising from the same collision in South Africa being dealt together, but that must be confined to claims lodged in South Africa relating to the collision. The AJRA does not restrict forum shopping. The establishment of a limitation fund in South Africa cannot be used to deprive a person who has no intention of suing in South Africa of its right to sue in any court with jurisdiction. Section 261 AJRA cannot be used to compel other persons to institute their claims in South Africa.

The critical question is whether s 261 AJRA is substantive law or procedural law. If it is substantive, it may justify granting declaratory relief. However, the German and Hong Kong courts are the forums better placed and it is in the interests of justice that they are the forums to determine the issue.