Asiatic Shipping Services Inc v Elgina Marine Company Limited

Elgina Marine Company Ltd, a Cypriot ship owner, arrested bunkers and freight on board the MV Orient Stride in Durban under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 to obtain security for claims being pursued against Asiatic Shipping Services Inc, a Panamanian charterer, in London arbitration. The claims arose from the late redelivery of another vessel, the MV Columbine Express, chartered to Asiatic. Asiatic applied to set aside the arrest, arguing that Elgina lacked a genuine and reasonable need for security. Evidence showed that Asiatic was closely associated with Pacific Inter-Link Sdn Bhd (PIL), which appeared to hold the assets of the enterprise and distanced itself from liability in the arbitration, while Asiatic failed to disclose details of its own assets.

The appeal was dismissed with costs, and the order of the High Court refusing to set aside the arrest was upheld.

The case clarifies the origin, meaning, and application of the requirement of a ‘genuine and reasonable need for security’ in security arrests under South African admiralty law. It confirms that the test is flexible, fact-specific, and does not require proof of insolvency, thereby guiding future applications for and challenges to security arrests.