United Enterprises Corporation v STX Pan Ocean Company Ltd

United Enterprises Corporation, owner of the MV Wisdom C, was involved in London arbitration with STX Pan Ocean Company Ltd arising from a charterparty dispute. United Enterprises claimed unpaid hire and damages following alleged repudiation and damage to the vessel’s crane, while STX Pan Ocean counterclaimed. To obtain security for its counterclaim, STX Pan Ocean procured the arrest of the MV Wisdom C in South Africa under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983. United Enterprises provided a letter of undertaking and sought to set aside the deemed arrest and discharge the security, alternatively seeking an order compelling STX Pan Ocean to provide countersecurity. United Enterprises relied on prior Italian arrest proceedings (which had been set aside), alleged failure to establish a prima facie case, material non-disclosure in the ex parte application, and asserted entitlement to countersecurity.

The appeal was dismissed with costs, and the arrest and security obtained by the respondent remained in force. No order for countersecurity was granted.

The case is significant for South African admiralty law as it clarifies that a prior foreign arrest set aside for lack of a prima facie case does not trigger res judicata. It reaffirms the low threshold for establishing a prima facie case in ship arrest proceedings, the permissibility of extensive hearsay evidence under the Admiralty Jurisdiction Regulation Act, and confirms that countersecurity will only be ordered where a genuine and reasonable need is shown, not merely considerations of convenience or parity.