The Singapore-flagged fuel tanker MT Essien will remain detained in South African waters after the Western Cape High Court refused Ocean Ark Shipping and Astron Energy leave to appeal an earlier ruling allowing the South African Revenue Service (SARS) to retain the vessel, legal advisory firm Tax Consulting South Africa said.
The judgment meant the vessel would remain under detention while the Supreme Court of Appeal (SCA) considered SARS' appeal against an earlier order that would have allowed its release against financial security, the firm said.
According to Tax Consulting SA, the dispute centres on SARS' claim that the vessel should have been declared for home consumption when it entered South African waters and that import VAT was payable. SARS alleges tax liabilities of approximately R124 million, comprising about R94 million in import VAT and a further R30 million in penalties and interest.
The MT Essien, owned by Ocean Ark Shipping and chartered by Astron Energy to transport fuel products between South African ports, was detained by SARS in March 2025 before being formally seized three months later, Tax Consulting SA said.
The case has attracted attention because the vessel is used in South Africa's coastal fuel trade. According to the firm, Astron argued in court papers that the continued detention could disrupt fuel logistics, including the supply of jet fuel to Cape Town International Airport.
Ocean Ark and Astron are challenging SARS' detention, seizure, deemed importation and refusal to release the vessel in separate review proceedings before the Gauteng High Court, Tax Consulting SA said.
Pending that review, the companies obtained an interim order from the Western Cape High Court in April allowing the vessel's release against a R522 million Lombard Insurance guarantee covering the vessel's estimated value and the disputed VAT, penalties and interest. However, SARS applied for leave to appeal that ruling, automatically suspending the release order.
Ocean Ark and Astron later sought an order allowing the vessel to be released despite the pending appeal, arguing that Astron was suffering commercial losses of about R1 million a day through ongoing charter costs and alternative shipping arrangements.
The court accepted that the applicants faced substantial financial losses but found they had not demonstrated that SARS would avoid irreparable harm if the vessel were released, according to Tax Consulting SA. A key concern was that the foreign-flagged vessel could leave South African waters before the legal dispute was resolved, potentially frustrating any future forfeiture order.
The court ruled on July 6 that the refusal to grant interim relief was not ordinarily appealable because it did not finally determine the parties' rights. Leave to appeal was therefore refused.
The matter will now proceed before the Supreme Court of Appeal, which will consider SARS' appeal against the original release order, while the Gauteng High Court will separately determine whether SARS lawfully detained and seized the vessel.
The outcome could provide important guidance on SARS' powers to detain vessels under the Customs and Excise Act, the adequacy of financial guarantees and the circumstances under which assets may be released pending the outcome of customs disputes, Tax Consulting SA said.
