MT 'Argun'

The MT 'Argun', a vessel owned by the Russian Federation, was arrested in Cape Town on three separate occasions by crew members claiming unpaid wages. The first arrest occurred on 14 July 1999 by the master and crew serving on board when the vessel arrived in Cape Town on 25 May 1999 (case no AC127/99). The second arrest occurred on 23 July 1999 by former crew who had served during 25 July 1995 to 31 January 1996 (case no AC134/99). The third arrest occurred on 21 February 2002 by the first twenty-one plaintiffs from the first action claiming wages for the period 1 July to 13 October 1999 (case no AC4/2002). The Sheriff of Cape Town applied for an order declaring the arresting parties liable for preservation expenses and remuneration. This Court ordered on 1 June 2001 that the arrests would lapse if the arresting parties did not reimburse the Sheriff. The first and second respondents did not reimburse the Sheriff, and on 21 June 2002 Foxcroft J declared that the arrests in the first two actions had lapsed. Despite this, Foxcroft J allowed the first and second actions to proceed to trial together with the third action. On 12 September 2002, judgment was granted in favor of all three sets of respondents for unpaid wages, interest at 15.5% per annum from the end of each month for which wages were claimed, and costs including the sheriff's preservation costs and remuneration. The judge also declared that the first and second respondents were entitled to execute their judgments against the vessel.

• Whether an action in rem lapses when the arrest by which it was instituted lapses
• Whether a judgment given in an action in rem after lapse of arrest can be executed against a vessel under arrest in another action
• Whether the court correctly ordered interest to run from the end of each month for which wages were claimed
• Whether the court correctly set the interest rate at 15.5% per annum
• Whether the sheriff's preservation costs and remuneration can properly be included in a costs order as costs of suit
• Whether respondents should pay costs of an additional volume of the appeal record

The appeal was dismissed with costs. The appellant vessel and the Russian Federation were ordered jointly and severally to pay the costs of the appeal. The judgments of Foxcroft J dated 13 August 2002 and 12 September 2002 were upheld, including orders for payment of capital amounts, interest at 15.5% per annum from the end of each month for which wages were claimed, costs of suit (including the sheriff's preservation costs and remuneration), and the declaration that the first and second respondents were entitled to execute their judgments against the vessel.

1. Once jurisdiction has been established by a valid arrest instituting an action in rem, the court retains jurisdiction to the end of the action even if the arrest subsequently lapses, applying the general civil law principle derived from Voet 5.1.64 that jurisdiction, once established at the commencement of proceedings, continues to exist even though the ground upon which it was established ceases to exist. 2. A judgment in rem given by a South African admiralty court against a vessel is directly executable against that vessel while it remains within the court's jurisdiction without the need for a fresh action in rem. 3. Under section 5(2)(f) of the Admiralty Jurisdiction Regulation Act 105 of 1983, the court has a wide judicial discretion to determine the rate of interest and the date from which it should run, and an appellate court will only interfere with the exercise of such discretion if it is satisfied that the court below did not exercise a judicial discretion. 4. The costs of preserving arrested property and the sheriff's remuneration in connection therewith properly form part of the costs of suit in admiralty proceedings, notwithstanding that they are incurred before judgment and are given priority ranking under section 11(4)(a) of the Admiralty Jurisdiction Regulation Act. 5. Under rule 8(3) of the Admiralty Rules, an owner who defends an action in rem (including by bringing an appeal) can be held liable in personam for costs, though not for the substantive claim.

Farlam JA made several obiter observations: 1. The judgment expressly avoided deciding the interesting theoretical questions regarding the procedural theory versus the personification theory of actions in rem, particularly in cases involving maritime liens (as opposed to statutory rights in rem). The Court noted that Lord Steyn in The Indian Grace (No 2) [1998] 1 Lloyds Rep 1 (HL) had put maritime liens to one side as "a separate and complex subject" when discussing these theories, and the Court similarly declined to express a view on these theoretical matters beyond what was necessary to decide the case. 2. The Court noted that there appears to have been a departure in South African admiralty law from a general application of the procedural theory (established in English law by The Dictator [1892] P 304) and an adoption of certain material attributes of the personification theory, as evidenced by rule 8(3) which prevents an appearing owner from incurring personal liability merely by defending an action in rem. 3. The Court observed that the reference in section 6(1) of the Admiralty Jurisdiction Regulation Act to "the High Court of Justice of the United Kingdom" was presumably intended to be a reference to the Supreme Court of England and Wales as constituted by the Supreme Court Act 1981, citing Brady-Hamilton Stevedore Co and Others v MV Kalantiao 1987 (4) SA 250 (D) and MV Stella Tingas : Transnet Ltd v Owners of the MV Stella Tingas and Another 2003 (2) SA 473 (SCA). 4. The Court commented on the historical development of English admiralty law, noting that until the High Court of Admiralty Act 1859 extended the right to practice in the High Court of Admiralty, civilian practitioners of Doctors' Commons had a monopoly of admiralty practice, and that this historical context supported the application of civil law principles to admiralty matters.

This case is significant in South African admiralty law for establishing important principles regarding the relationship between arrests and actions in rem. It clarifies that an action in rem survives the lapsing of the arrest that instituted it, applying general civil law principles of continuing jurisdiction to admiralty proceedings. The case demonstrates the application of Roman-Dutch law principles to modern admiralty practice and clarifies the scope of costs orders in admiralty matters. It also provides important guidance on the court's wide discretion under section 5(2)(f) of the Admiralty Jurisdiction Regulation Act 105 of 1983 regarding interest awards. The judgment is notable for its discussion of the development of the action in rem in English law (including reference to the procedural theory and personification theory) while ultimately deciding the case on civil law principles applicable in South Africa. The case confirms that appearing owners can be held liable in personam for costs (but not for the substantive claim) in admiralty actions in rem, consistent with rule 8(3) of the Admiralty Rules.