International Marine Transport SA v MV ‘Le Cong’ and Another

The appellant, International Marine Transport SA, owner of the mv Gaz Progress, obtained an ex parte order in the Durban High Court for the arrest of the mv Le Cong under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983. The arrest was sought to obtain security for a maritime claim for unpaid charter hire against Shantou Sez Chemical Industry and Petroleum Gaz General Company, to be pursued by arbitration in London under English law. Shantou Sez was the charterer by demise of the Gaz Progress and was deemed to be its owner for purposes of the associated ship provisions. The Le Cong was owned by Guangzhou Ocean Shipping Company. Both Shantou Sez and Guangzhou were state-owned enterprises of the People’s Republic of China. The appellant contended that the vessels were ‘associated ships’ because both enterprises were controlled by the Chinese state. After a letter of undertaking was provided, Guangzhou applied to intervene and to set aside the arrest. The High Court set aside the arrest, finding that the vessels were not associated ships, and the appellant appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the order setting aside the arrest of the mv Le Cong was confirmed.

The case is significant for South African admiralty law because it clarifies the application of the associated ship provisions where foreign state-owned enterprises are involved. It confirms that common ownership by a foreign state is insufficient; what must be proved is common control in the sense of power over the direction and fate of the enterprises. The judgment also provides important guidance on the treatment of foreign law in motion proceedings and reinforces the evidentiary burden on parties seeking ship arrests.