Serva Ship Limited v Discount Tonnage Limited (In re: M.V. Snow Delta)

Both parties were foreign companies (peregrini). Discount Tonnage Limited (DTL), based in Jersey, alleged it had a maritime claim for damages against Serva Ship Limited (SSL), based in the Isle of Man, arising from a breach of contract wholly unconnected to South Africa. DTL obtained an ex parte order in the Cape High Court attaching SSL’s alleged rights in the MV Snow Delta, which happened to be in Cape Town, to found admiralty jurisdiction. DTL initially believed SSL held the vessel under a demise charter, but it later emerged that SSL was only a time charterer and had sub-chartered the vessel. The High Court discharged the attachment, holding that SSL’s contractual rights under a time charter were not property situated within the court’s jurisdiction. On appeal, the Full Court reversed that decision and confirmed an attachment of SSL’s rights to use and employ the vessel under the time charter. SSL appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the Full Court was set aside and replaced with an order dismissing the appeal to that court with costs. The original order discharging the rule nisi and attachment was reinstated.

The case is a leading authority in South African admiralty and jurisdictional law on the situs of incorporeal rights. It confirms that rights under a time charter-party are not property located where the vessel is and cannot be attached merely because the ship is present in South Africa. The judgment reinforces doctrinal clarity on jurisdiction over peregrini, limits forum shopping in admiralty matters, and affirms the continued application of Grotius’s rule on the localisation of incorporeal rights.