MV 'Tai Harmony' and Another v Sure Success Steamship S.A and Another

The dispute arises from two consolidated matters. Sure Success Steamship S.A. (owner of the MV 'Ever Success') concluded a time charterparty with Perfect Bulk Limited (PBL). PBL defaulted on hire and failed to pay for bunkers supplied to the vessel. Sure Success settled the bunker claim with the suppliers for USD 350,000. On 18 August 2023, Sure Success arrested the associated vessel MV 'Tai Harmony' (owned by Tai Harmony Maritime Ltd) in Gqeberha under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983, to secure the unpaid hire claim for arbitration in London. A Gard Letter of Undertaking (LOU) for USD 876,000.84 was furnished and the vessel released. Sure Success reserved the right to seek increased security for the bunkers claim. After the bunker claim crystallised, Sure Success applied for 'top-up' security of USD 435,508.50 under s 5(2)(d) of the Admiralty Act. Rossi AJ granted the order. Separately, in the application to set aside the arrest (per Zilwa J), the issue of association was referred to oral evidence. Leave to appeal that referral was refused. The appellants appealed the topping-up order and sought leave to appeal the referral order, together with an application to adduce further evidence on appeal.

• Whether s 5(2)(d) of the Admiralty Jurisdiction Regulation Act 105 of 1983 was correctly construed and whether the court a quo correctly ordered increased security to cover the unpaid bunker claim.
• Whether the High Court had jurisdiction to entertain a topping-up application without reconsidering the validity of the original associated ship arrest or the issue of association.
• Whether a security arrest and the furnishing of security brings the vessel's owner within the jurisdiction of the South African court for purposes of a topping-up application.
• Whether the amount of security under the Admiralty Act is limited to the value of the arrested vessel (the res).
• Whether an order referring an issue in opposed motion proceedings to oral evidence is appealable.
• Whether an application to adduce further evidence on appeal under s 19 of the Superior Courts Act 10 of 2013 should be granted.

1. The appeal under case number 953/24 is dismissed with costs, including the costs of two counsel where so employed. 2. The interlocutory application to adduce further evidence under case number 923/24 is struck off the roll with costs, including the costs of two counsel where so employed. 3. The application for leave to appeal under case number 923/24 is struck off the roll with costs, including the costs of two counsel where so employed.

Section 5(2)(d) of the Admiralty Jurisdiction Regulation Act 105 of 1983 vests the High Court with a wide discretion to increase security where it has already exercised admiralty jurisdiction; it is not required to reconsider the validity of the original arrest or the issue of association at the topping-up stage. A claimant seeking additional security must establish on a prima facie basis that the existing security is insufficient and that there is a genuine and reasonable need for further security. By furnishing security to obtain release of a vessel and entering an unqualified appearance to defend (including applying to set aside the arrest), an owner submits to the jurisdiction of the court for purposes of a topping-up application; no separate attachment to found jurisdiction under s 3(2) is required. The amount of security is governed by the value of the claim and is not capped by the value of the arrested vessel (the res). An order referring an issue to oral evidence under Rule 6(5)(g) of the Uniform Rules of Court is procedural and interlocutory, lacking the finality required for an appealable order under the Zweni principles, absent exceptional circumstances where the interests of justice demand otherwise.

The Court observed that the minority view in MV Heavy Metal; Belfry Marine Ltd v Palm Base Maritime SDN BHD should not be followed and that the majority judgment remains binding authority under the doctrine of stare decisis. The Court made non-binding observations regarding the principles in The Monica S and The Dictator, noting academic criticism that they are not compatible with the Admiralty Act or the Constitution, because South African law has tailored security-arrest principles to serve their specific purpose without automatically imposing full liability on ship owners. The Court also made obiter remarks about the 2024 Annual Returns sought to be introduced as further evidence, noting that the evidence was not practically conclusive and contained anomalies. Additionally, the Court commented on the use of special purpose vehicles in charterparty arrangements and the opaque nature of certain jurisdictions.

This judgment is significant for South African maritime jurisprudence because it clarifies that a court may increase security under s 5(2)(d) of the Admiralty Jurisdiction Regulation Act 105 of 1983 without revisiting the validity of the original arrest or the issue of association. It confirms that furnishing security and entering an appearance to defend (including bringing an application to set aside arrest) constitutes submission to the court's jurisdiction for purposes of topping-up. It also establishes that security arrest and topping-up are procedural enforcement mechanisms that do not require separate jurisdictional foundations under s 3(2), and that the quantum of security is not strictly limited to the value of the arrested vessel but by the value of the claim. Additionally, the judgment reaffirms that an order referring disputed facts to oral evidence in motion proceedings is interlocutory and generally not appealable.