Owners of the MV Silver Star v Hilane Limited

Hilane Ltd, owner of the vessel Sheng Mu, concluded a voyage charterparty with Phiniqia International Shipping LLC for the carriage of coking coal. Disputes arose after two sets of bills of lading were issued under letters of indemnity (LOIs), and the first set was not surrendered. Golden Waves, the unpaid seller of the cargo, arrested the Sheng Mu in New Zealand. Hilane incurred losses and obtained a London arbitration award against Phiniqia for indemnities and damages. To enforce its claims, Hilane arrested the MV Silver Star in Port Elizabeth as an associated ship under the Admiralty Jurisdiction Regulation Act 105 of 1983. The registered owner of the Silver Star, Action Partner Ltd, sought the vessel’s release, arguing that an associated ship arrest was impermissible and that association was not proved.

The appeal was dismissed with costs, including the costs of two counsel.

The case confirms that foreign arbitration awards relating to maritime claims may be enforced in South Africa through associated ship arrests. It clarifies that an arbitration award does not destroy the nexus between a maritime claim and the ship concerned, thereby strengthening the effectiveness of South Africa’s associated ship arrest regime.