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Maritime Law

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Browsing Maritime Law by Subject "Arrest of ships."

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    15 years on, has the legal Pandora's Box yet to be sealed? : a critical analysis of the majority in the Heavy Metal case and determination of the correct interpretation of the concept of 'control' as it relates to associated ship arrests.
    (2015) Mohamed, Faried.; Gevers, Christopher Carl.
    In respect of company law, there are two main principles that govern it. The first principle is that a company is a juristic person, having a separate legal identity and thus existing separately from the individuals who stand behind the corporate veil and enjoy the benefits of the company. The second principle is that of limited liability. Collectively, these two principles aim to promote capital investment whilst limiting the liability of potential investors. In the maritime industry however, these two principles serve an entirely different purpose. Ship-owners form ‘one-ship’ companies where each vessel within the same fleet is registered under the name of a different shipping company. Hence due to the separate legal identity of companies, claimants could only proceed against the guilty ship. In 1983 South Africa enacted its reform legislation by introducing the Admiralty Jurisdiction Regulation Act with the aim to provide consistency and certainty within the legal sphere of the maritime industry. In doing so, the legislature saw the opportunity to remedy the mischief created by ‘one-ship’ companies by introducing the associated ship provisions which based the central enquiry in such arrests on ‘common-control’ rather than ‘common ownership’. Thus, the purpose of the provision was to provide claimants with a mechanism to penetrate complex corporate structures so as to locate and hold the true debtor in a maritime dispute liable. The general understanding therefore in associated ship cases was that the provisions concerned themselves with the ultimate or actual control of a shipping company. The leading case in interpreting the term ‘control’ is the Heavy Metal wherein the SCA adopted a restrictive and narrow understanding of ‘control’ which centralised the enquiry on the registered shareholder of a ship-owing company and in doing so, allowed for the existence of two repositories of control. It therefore allowed an association to be formed on the basis that the companies in question shared a common majority nominee shareholder without considering the fact that such a person may hold the said shares for two different entities. In this manner, the judiciary opened a ‘legal Pandora’s box’ in the sense that it created confusion and uncertainty in respect of the meaning to be acquainted to the term ‘control’. This dissertation will trace the background and history of the associated ship provisions so as to determine its nature, scope and underlying purpose. It will also conduct an investigation of the provisions and the relevant case law in order to determine what is meant by the term ‘control’. Lastly the dissertation will determine the correctness of the Heavy Metal case and its legal impact on courts applying its ratio.
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    The arrest of ships in German and South African law.
    (1988) Schlichting, Mathias Peter.; Staniland, Hilton.; Trappe, Johannes.
    This thesis compares the arrest-of-ship proceedings of the Republic of South Africa and the Federal Republic of Germany. In German law the more than a century old provisions of the Code of Civil Procedure (as amended) are applicable, in South Africa the major statute is the Admiralty Jurisdiction Regulation Act of 1 November 1983. South Africa has special Admiralty Courts having jurisdiction in arrest matters. When issuing the arrest in Germany, jurisdiction is vested in the court dealing with the principal matters, as well as in the Magistrate Court (Amtsgericht) in which district the property (such as the ship which is to be arrested) is located. Both German and South African law provide that a creditor who wishes to arrest a ship must have a "claim for an arrest." In South African law such a claim is called a "maritime claim." South African admiralty law contains some special and even unique provisions such as those regarding the arrest of an "associated ship." These provisions attempt to defeat the strategy against sister-ship-arrests and enable the courts to arrest ships owned by the person who was the owner of the ship concerned at the time the maritime claim arose. The court can also arrest a ship owned by a company in which the shares were controlled or owned by a person who then controlled or owned the shares in the company which owned the ship concerned. Ships will be deemed to be owned by the same Persons if all the shares in the ship are owned by the same persons. A person furthermore will be deemed to control a company if he has the power to control the company directly or indirectly. Deviating from common law principles which require the physical presence of the property to be arrested, the South African courts can order anticipated arrests of a ship not yet within the area of jurisdiction of the court at the time of application. Such an order may be brought into effect when the property (in this case, the ship) comes within the area of jurisdiction of the court. The same principle is applicable in German law and does not contravene para 482 HGB because this provision only prohibits placing a ship under distraint and not the order for an arrest. In German law an action in personam is only directed against a person whereas in south African law a res, eg a ship or her bunkers, is the object of the admiralty action in personam. The Admiralty Jurisdiction Regulation Act of 1983 attempts at uniformity with international law as it is based on several existing laws and international conventions, for example the International Convention for the Unification of Certain Rules Relating to Arrest of Seagoing Ships of 1952. Unlike Germany, South Africa is not, however, a signatory to the International Arrest Convention of 1952. When applying German law, it has to be noted that Germany has ratified the Convention on Jurisdiction and the Enforcement of Judgments in CiviI and Commercial Matters of 1968 (the EEC-Convention) - this is particularly so when trying to enforce the arrest of ships. Regulations Concerning the limitation of liability in South Africa can be found in ss 261 to 263 of the Merchant Shipping Act of 1951. In German law limitation of liability is codified in paras 486 to 487e of the Commercial Code (HGB) with reference to the International Convention on Limitation of Liability for Maritime Claims of 1976 (the 1976 Convention). This thesis shows that in certain fields South African and German provisions do not deviate or are at least substantially similar. This fact makes the application of both laws easier for litigants and lawyers, either for South Africans in Germany or Germans in South Africa.