The respondents were German companies that owned vessels chartered to Hanjin Shipping Co Ltd. They had claims for unpaid charter hire. On 1 September 2016, Hanjin Shipping entered rehabilitation proceedings. On 2 September 2016, the respondents issued protective writs (summonses in rem and warrants of arrest) against various associated ships, including the Hanjin Gdynia. At the time of issue, the Hanjin Gdynia was owned by J O O Shipping SA, a one-ship company controlled by Hanjin Shipping. On 14 December 2016, the mortgagee caused J O O Shipping to sell the vessel to Seaspan Holdco 1 Limited (first appellant). Delivery occurred on 29 December 2016, and the vessel was renamed the Seaspan Grouse. This sale was bona fide and occurred before the vessel was arrested. On 23 August 2017, nearly a year after issuing the protective writs, the respondents arrested the Seaspan Grouse in Durban. Security was provided and the appellants applied to set aside the arrest.
The appeal was upheld with costs, including costs of two counsel. The arrests of the Seaspan Grouse were set aside. The Registrar was directed to release the security held for the respondents' claims to the appellants' attorney within five court days. The respondents were ordered to pay the costs of the application in the High Court.
Section 1(2)(a) of the AJRA provides a flexible standard for determining when an admiralty action commences, with the appropriate commencement date depending on the relevant purpose for which the enquiry is made. For the purpose of arresting an associated ship under s 3(7), the action commences by service of the process instituting the action under s 1(2)(a)(i), which coincides with the arrest. Section 3(7) requires that the associated ship be owned "at the time when the action is commenced" by a person identified in the subsection. When that relevant purpose is arresting an associated ship, the commencement date is the date of service/arrest, not the date of issue of the protective writ. The owner of the property to be arrested under s 3(4) must be the person liable in personam at the time of arrest. The Monica S principle, allowing arrest notwithstanding intervening changes in ownership, does not form part of South African admiralty law under the AJRA.
The court observed that the issue of protective writs and service when a vessel comes within jurisdiction remains permissible, but such writs give no protection against an intervening bona fide change of ownership. The court noted that accepting the respondents' interpretation would create significant anomalies, including situations where actions would have commenced without any court being seized of the matter, and inconsistencies between the treatment of arrests in rem and attachments in personam. The court suggested that if there is a bona fide change in ownership between obtaining an attachment order and its execution, it would no longer be lawful to attach the ship. The court declined to explore whether s 6(1) of the AJRA required resort to English law for interpreting s 1(2), finding that s 6(2) required application of the express provisions of the AJRA. The dissenting judgment would have held that the Monica S principle remained part of South African law by virtue of s 6(1) and that the practice of issuing protective writs was entrenched rather than abolished by the AJRA.
This case is significant because it definitively resolves the question of when an admiralty action in rem commences for the purposes of arresting an associated ship in South African law. It clarifies that s 1(2)(a) of the AJRA provides different commencement dates depending on the relevant purpose, rejecting a single fixed commencement date approach. The judgment limits the utility of protective writs in South Africa by holding that they do not protect claimants against changes in ownership of vessels between issue and arrest. This represents a departure from the English law position in the Monica S and from the practice in several Commonwealth jurisdictions. The judgment emphasizes the need to construe the AJRA in accordance with ordinary principles of statutory interpretation and to give effect to the express requirements of s 3(7) that ownership must exist "at the time when the action is commenced." The case also highlights the interplay between actions in rem and actions in personam with attachment, requiring consistency in how ownership requirements are applied.