The Sheriff of Cape Town v The MT Argun, Her Owners and All Persons Interested in Her and Others

The MT Argun was arrested in Table Bay in May 1999 at the instance of various creditors asserting maritime claims, including claims for repairs, bunkers and crew wages, under the Admiralty Jurisdiction Regulation Act 105 of 1983. Security was not furnished and the vessel remained under arrest for an extended period while the arresting parties and the owners (ultimately declared to be the Government of the Russian Federation) litigated. During this time the Sheriff of Cape Town, as custodian of the vessel, incurred substantial expenses to preserve the ship, including costs for bunkers, food, water, berthing and related services. The arresting parties and owners refused to contribute to these expenses. The sheriff applied to the High Court for orders declaring the arresting parties (or alternatively the owners) liable for the preservation expenses and authorising a sale of the vessel if payment was not made. The High Court dismissed the applications, and the sheriff (and in the second matter, the Victoria and Alfred Waterfront Company) appealed.

The first appeal succeeded to the extent that the sheriff was entitled to relief against the arresting parties. The continued arrest at the instance of each arresting party was to be made conditional upon that party reimbursing the sheriff, within a specified time after demand, for reasonable preservation expenses incurred during the period of arrest at its instance. The appeals were dismissed insofar as they sought to hold the owners liable or to authorise a sale of the vessel to recover expenses.

The case is a leading South African authority on the liability for preservation expenses of arrested ships. It clarifies that arresting parties, not shipowners, bear responsibility for reimbursing the sheriff for reasonable preservation costs pendente lite, and affirms the court’s power under section 5(2)(c) of the Admiralty Jurisdiction Regulation Act to protect the sheriff by imposing conditions on arrests.