MS Mare Tracer Schiffahrts GmbH & Co KG (the first respondent) and MS Mare Traveller Schiffahrts GmbH & Co KG (the second respondent) owned the Mare Tracer and the Mare Traveller respectively, and chartered them to Hanjin Shipping Co Ltd (Hanjin). Each respondent had a claim for unpaid charter hire against Hanjin.

Hanjin was granted an order by the Seoul Central District Court on 1 September 2016 to commence rehabilitation proceedings. On 2 September 2016, the respondents made applications for summons in rem and warrants of arrest to be issued out of the High Court in an endeavour to enforce their claims, citing various associated ships, including the Hanjin Gdynia, as defendants. At that time, the registered owner of the Hanjin Gdynia was a one-ship company named JOO Shipping SA, controlled by Hanjin.

JOO Shipping SA sold the Hanjin Gdynia to Seaspan Holdco 1 Ltd (the first appellant) pursuant to a Memorandum of Agreement dated 14 December 2016, with delivery occurring on 29 December 2016. The first appellant, without knowledge of the respondents' protective writs, became the registered owner of the Hanjin Gdynia, now renamed the Seaspan Grouse. This purchase occurred before Hanjin declared bankruptcy on 17 February 2017.

Subsequently, the respondents arrested the Seaspan Grouse in Durban pursuant to the protective writs, but the arrest was discharged after cash security was lodged with the Registrar of the Durban High Court. The first appellant applied to set aside the arrest and to procure repayment of the security.

The respondents had an in personam claim against Hanjin based on obligations arising under the two charterparties. All of the vessels named in the protective writs were controlled by Hanjin at the time of issue. Maritime claims may be pursued under the Admiralty Jurisdiction Regulation Act 105 of 1983 (AJRA) in two ways: an action in personam against the person liable in respect of the claim; or an action in rem. The respondents elected to proceed by way of an action in rem.

The commencement of an admiralty action (s 3(7)(i)-(iii), AJRA) can be triggered by different circumstances (s 1(2)(a)(i)-(iv), AJRA). The parties differed over when the action was commenced. The first appellant submitted that this was when the summons and warrant of arrest were served (the respondents would therefore not be entitled to arrest the vessel because it was no longer owned by the relevant person). The respondents submitted that this was when the protective writs were issued (the change in ownership of the Seaspan Grouse was therefore irrelevant as it occurred after their actions had commenced).

The first appellant argued that the correct construction of s 1(2) of the AJRA should preserve the underlying purpose of the associated ship - liability should be imposed where it properly lies by virtue of common ownership or common control. It submitted that the proper interpretation of s 1(2) was a matter only of South African law in accordance with established principles of interpretation of statutes. The scope of operation for s 1(2) of the AJRA would cover international maritime Conventions such as the Hague Rules and its successors, principally the Hague-Visby Rules, and the Salvage Convention 1989, that contain limitation or time bar provisions, the operation of which is dependent upon when claimants commence an action to pursue their claims, which may be compulsorily applicable to maritime contracts. There was thus no need to have regard to English or other foreign authority to interpret s 1(2). In addition, notwithstanding that the purchaser of a vessel might be unaware of the existence of a maritime lien, it was inappropriate to extend the potential liabilities of purchasers to statutory rights in rem arising from a lengthy and indeterminate list of maritime claims, going considerably beyond those identified in the Arrest Convention 1952.

The respondents argued that s 1(2)(a)(i) was not applicable to proceedings in rem. In English admiralty law, the right of the claimant to assert a statutory right of action in rem arose from the time of the issue of the writ (bringing of the action) and was enforceable by the arrest of the named vessel. A subsequent change of ownership made no difference to the claimant’s entitlement to arrest the vessel (hence such writs were referred to as protective writs: see The Monica S [1967] Lloyd’s Rep 113 (QB Adm)). The respondents submitted that the English position should form part of South African admiralty law.

At first instance, Gyanda J, sitting in the KwaZulu-Natal Division of the High Court, found in favour of the respondents, holding that The Monica S correctly reflected the legal position in South Africa. The opposite conclusion was reached by the Western Cape Division of the High Court in a case on the same issue. It fell to the Supreme Court of Appeal to decide which approach was correct.

Held: (Wallis and Schippers JJA, with Maya P and Molemela JA concurring; Makgoka JA dissenting.) Appeal upheld and order of the High Court set aside. Arrest of the Seaspan Grouse to be set aside and security refunded.

The majority held that the relevant purpose was the arrest of the Seaspan Grouse as an associated ship. That required that, at the commencement of the action, the Seaspan Grouse was owned by a company controlled at that time by Hanjin. Whether that was so depended on whether, for that relevant purpose, the date of commencement of the admiralty actions was the date of issue of the protective writs or the date of the arrest. In the majority's view, it was the latter.

The original narrower formulation of s 1(2)(a) of the AJRA was drafted with art 3.6 of the Hague and Hague-Visby Rules in mind. This issue was the subject of an earlier ruling of the Supreme Court of Appeal in The Jute Express (CMI826). The Court in that case did not decide that an arrest, actual or deemed, was unnecessary in order to institute an action in rem. Nor did it express any view on the consequences of issuing a summons, beyond saying it was the commencement of an action, and accordingly necessary for the purpose of bringing suit in terms of art 3.6 of the Hague Rules. These Rules applied by statute in many countries in relation to contracts for the carriage of goods from those countries and, as such, the question of when 'suit is brought' was one well recognised in maritime circles in South Africa when the AJRA was enacted. As amended and broadened, however, s 1(2)(a) of the AJRA now provides a flexible standard for determining when an action commences, depending upon the relevant purpose for which that enquiry has to be made. Both textually and contextually therefore, the approach to s 1(2)(a) advanced by the first appellant was preferable. It gave effect to all the words used and avoided the anomalies inherent in the approach of the respondents. In addition, s 39(2) of the Constitution required the court to prefer an interpretation that best gives effect to the spirit, purport and objects of the Bill of Rights. Given that the contentions by the respondents potentially raise a question of their compatibility with the provisions of s 25 of the Constitution, that provides a further reason for preferring the construction advanced by the first appellant. In applying the section, the court must first identify the relevant purpose under consideration and then select the appropriate commencement date.

The reliance placed by the respondents on The Monica S was misplaced. Accepting that the decision correctly reflected the English law under the Colonial Courts of Admiralty Act, and therefore South African admiralty law prior to 1983, the AJRA defined the circumstances in which an action in rem can be brought, whether against the ship concerned or an associated ship. It also preserved the action in personam based on the Roman-Dutch attachment ad fundandam et confirmandam jurisdictionem, which does not exist in English law. The arrest provisions of the AJRA are incompatible with the decision in The Monica S and therefore that judgment cannot apply in South African admiralty law, whether in relation to the arrest of the ship concerned or an associated ship. That does not mean that protective writs cannot be issued in South Africa and served when the vessel comes within the jurisdiction. It merely means that such a writ gives no protection to a claimant against an intervening bona fide change of ownership.

Makgoka JA disagreed, finding that there was nothing in the AJRA that suggested that the legislature intended a radical departure from the prevailing law as at the date of its enactment. Given that the Monica S principle reflected the law at that date, it should be applied. He agreed with counsel for the respondents that the process of issuing protective writs was entrenched, rather than done away with, in the AJRA, and regarded the construction contended for by the first appellant as being a radical departure from the existing law. Absent a clear indication that the legislature intended to place South Africa on a radically different trajectory in admiralty law from Commonwealth jurisdictions, it must be presumed to have intended to continue with the English practice.