573. The “Seaspan Grouse” 2018 (5) SA 284 (KZD); 2019 (4) 483 (SCA)

Associated ship arrest provisions of the South African AJRA – when “action is commenced”

The facts

Two German single-ship owning companies arrested this vessel as an associated ship in respect of charter claims against Hanjin as it was going into liquidation.

As in the Mare Traveller change of ownership  took place before arrest but after issue of the protective writ.

The critical issue was whether “action [had] commenced” for the purposes of section 3 (7) when the target vessel was arrested.

If action had commenced by the issue of the protective writ, association would be established but not otherwise.

Findings

Section 1(2)(a) gives 4 possible commencement of action times, one of which is the issue of a writ. A straightforward application of the wording of the statute yields the result that the action had commenced at the time of the arrest, establishing the association. This is what Gyanda J found.

The majority of the SCA, however, accepted an alternative argument whereby the provision of 4 possible commencement times in section 1(2)(a) was to be qualified by the context. For instance, commencement would be different for the purposes of section 3(7) on the one hand and ranking of claims on the other hand: for the purposes of section 3(7) action did not commence by the issue of a writ.

Discussion

The prevailing argument is contrived, involves a wholesale modification of the language of the statute and borders on the absurd.

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