'The arresting
creditors are the ones who should be liable'
THE SHERIFF of Cape Town has just won a Supreme Court of Appeal case which should help him get reimbursement of his costs in keeping the Russian Federation-owned ship, the MT Argun, under arrest in Cape Town for two years.
This has run up to quite a sizeable bill, according to Mark van Velden of Shepstone & Wylie's international transport and trade division - with the sheriff having to fork out for port costs, crew wages, bunker fuel (for lighting and emergency power) and the like.
All this so that he fulfilled his obligations under Rule 21 of the High Court Rules, Van Velden told FTW, and took "all such steps as the court may order or as appear to the sheriff to be appropriate for the custody and preservation of the property".
He has done for some 24-months, but also began to get a bit worried about what guarantees he had on who was going to pay him back.
So the sheriff first brought an application before the Cape court. This, said Van Velden, for an order that either the owners or the arresting creditors were liable. But it failed on both counts, so the sheriff took the decision on appeal.
And the Supreme Court of Appeal has just decided that the arresting creditors are the ones who should be liable.
"Now," said Van Velden, "you might find it strange that an owner can simply leave his ship unattended and expect a third party to look after her and the crew."
But you'll see why from the Appeal Court findings.
They found that the sheriff was not expending monies "for the benefit or enrichment" of the vessel owners, Van Velden told FTW.
"Rather," he said, "they had unwillingly had their ship arrested in a foreign jurisdiction by claimants - and these claims are still being disputed."
Take it a step further, Van Velden added. While the vessel remained under arrest the owners were deprived of its use and therefore enjoyed no benefit from the expenditure incurred.
"The vessel was in fact being maintained for the benefit of the arresting parties - at whose instance she was sitting at Cape Town."
What it all boils down to is that the sheriff may now look to the arresting creditors for reimbursement for expenses incurred prior to the sale of a vessel. "But it is likely that in most future cases, he will still wait till the vessel is sold to recover his cost."
But the judgment has clarified what was previously a legal grey area, he added, and is unlikely to be off-putting for those wishing to arrest ships in SA.
