Golden Seabird Maritime Inc and Golden Seagull Maritime Inc v Alam Tenggiri Sdn Bhd and Mousaka Incorporated

On 28 August 1997, the appellants purchased two vessels (hull 425 - MT Theano and hull 426 - MT Ludovica) from the second respondent, then under construction in Japan. The appellants alleged that the vessels were to be suitable for carrying MTBE (methyl tert-butyl ether) in all cargo tanks, or alternatively that the second respondent had misrepresented this. The second respondent denied this, stating the specification only provided for MTBE capacity in approximately 25% of tanks. On 3 November 1998, the appellants arrested the first respondent's ship (MV Alam Tenggiri) under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 as security for their claims in London arbitration. The ship was released against two letters of undertaking from P & I Club Skuld, later replaced by Bank of Nova Scotia guarantees. The respondents successfully applied to Hurt J to set aside the arrest on the basis that the appellants failed to prove the Alam Tenggiri was an associated vessel. The judge declined to order return of the bank guarantees, finding he lacked jurisdiction as they conferred jurisdiction on the High Court of Justice in London.

• Whether an arrest order under s 5(3)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 lapses when the arrested ship is released against extra-curial security
• Whether the 'deemed arrest' provisions in s 3(10)(a) of the Act apply to security arrests under s 5(3)(a)
• Whether the appellants discharged the onus of proving that the Alam Tenggiri was an 'associated ship' of the Theano and Ludovica under s 3(7)(a)(iii) of the Act
• Whether the second respondent was the owner of the vessels at the time the maritime claims arose

The appeal was dismissed with costs, including costs consequent upon the employment of two counsel as well as the costs of the application for leave to appeal.

The provisions regarding a 'deemed arrest' in s 3(10)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 apply to security arrests in terms of s 5(3)(a) of the Act. Such an arrest accordingly does not lapse upon the release of arrested property against the provision of an extra-curial guarantee or undertaking. Section 5(3)(b) deems property arrested under s 5(3)(a) to be treated (unless the court orders otherwise) in the same way as property arrested under s 3(5) in an action in rem. A deemed arrest is the notional continuation of the original arrest, and the proper way to terminate it is by setting aside the original arrest order.

The court observed that any anomaly or injustice arising from the application of the deemed arrest provisions to security arrests can be remedied by the court making an appropriate order in terms of s 5(3)(b). The court also commented that questions of foreign law are questions of fact in South African courts, and that judicial notice under s 1(1) of the Law of Evidence Amendment Act 45 of 1988 may only be taken where foreign law can be ascertained readily and with sufficient certainty. The court noted it was obviously correct that oral evidence should not be heard in motion proceedings to resolve complex disputes of fact involving foreign law, ownership transfers, and intentions of parties.

This case is significant in South African admiralty law as it definitively establishes that the deemed arrest provisions in s 3(10)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983 apply to security arrests under s 5(3)(a) of the Act. It clarifies that an arrest does not lapse when arrested property is released against extra-curial security or undertakings, preserving the arrestor's rights. The case also confirms the approach to associated ships and the burden of proof requirements, as well as the treatment of foreign law as questions of fact in South African courts. It demonstrates the practical limits of resolving complex admiralty disputes on motion proceedings where foreign law issues are involved.