South Africa is one of few jurisdictions that empowers its courts exercising admiralty jurisdiction to order the arrest a vessel for the sole purpose of obtaining security for a maritime claim instituted, or to be instituted, in a foreign jurisdiction, where both the Plaintiff and Defendant are foreigners (peregrini) of South Africa.

Section 5(3) of the Admiralty Jurisdiction Regulation Act (105 of 1983) provides that: “A court may in the exercise of its admiralty jurisdiction order the arrest of any property for the purpose of providing security for a claim which is or may be the subject of an arbitration or any proceedings contemplated, pending or proceeding, either in the Republic or elsewhere, and whether or not it is subject to the law of the Republic, if the person seeking the arrest has a claim enforceable by an action in personam against the owner of the property concerned or an action in rem against such property or which would be so enforceable but for any such arbitration or proceedings.” This section has been described as “novel, unusual and sometimes farreaching” (The MV “Paz” 1984 (3) SA 261 (N) per Friedman J.) It enables a claimant to obtain security in South Africa for a “claim” to be pursued outside of South Africa, where the only connecting factor to South Africa is the presence of the res (usually a ship) within the court’s jurisdiction.

The essential averments necessary to prove an entitlement to a security arrest have developed through case law and can be summarised as follows (Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A)): (a) At a prima facie level: that the claimant has a maritime claim; which claim is enforceable in the nominated forum; (b) On a balance of probabilities: that the maritime claim is enforceable in South Africa, or would have been enforceable but for the foreign proceedings, either by way of an action in rem or an action in personam; that the claimant has a genuine and reasonable for security; that the property to be arrested is the property in respect of which the claim lies, or is an associated ship. The focus of this article is on recent judicial developments regarding the extent to which a prima facie claim must be made out in the application papers in order to obtain, and sustain, a security arrest order in terms of s5(3) of the Admiralty Act.

Security arrests are brought by way of an ex parte application, and accordingly without notice to the respondent. They are invariably instituted on an urgent basis so that the order can be obtained prior to the vessel departing the court’s jurisdiction. There is an onus on an applicant to make full and frank disclosure to the court of all material facts, including the nature of the “claim” brought, or to be brought, in the foreign jurisdiction, and that such a claim meets the prima facie test. A claimant is required to place evidence before a court which, if accepted, could reasonably lead to the conclusion that the claim will succeed, in the foreign jurisdiction (Imperial Marine Company v Pasquale della Gatta; Imperial Marine Company v Filippo Lembo (638/10) [2011] ZASCA per Wallis JA, para 21), both at the level of substantive law and at the level of the claim being enforceable. Ordinarily, under South African law, a prima facie claim can be established if sufficient evidence is put before the court which, if proved, would sustain a cause of action.

The position historically is that our courts have cautioned against engaging in the merits of the case so as to avoid adjudicating on “credibility, probabilities and prospects of success” (Weissglass NO v Savonnerie Establishment 1992 (3) SA 928 (AD)). It is not the function of our court, on this issue, to test the merits of the underlying claim beyond the prima facie level. Recent cases have clarified the extent to which our courts are expected to go in determining this issue. In Imperial Marine Company v Pasquale della Gatta; Imperial Marine Company v Filippo Lembo (638/10)[2011] ZASCA 131 (The Pasquale) in which Wallis JA held: “Whether there is a prima facie case may depend upon issues of both fact and law …”. It appears that reference to “law” is both a reference to English substantive law and South African procedural law. In The Pasquale, two vessels were arrested for claims arising out of various disputes under a charterparty between the disponent owner of a vessel (the MV “George T”) and the time charterer of that vessel. The disputes were to be resolved in London by way of arbitration proceedings. The MV “Fillipo Lembo” and the MV “Pasquale della Gatta” were arrested by Imperial Marine Company for its various claims under the charterparty. Security was put up and both vessels were released.

The Respondent, Deiulemar Compangnia di Navigazione Spain, disputed the claims set out in Imperial Marine’s application papers, and alleged that Imperial Marine had failed to establish a prima facie case when applying for the security arrest of both of the vessels. The success of the arrests rested solely on whether Imperial Marine had established its claims, for purposes of the security arrests, at a prima facie level at the time that the vessels were arrested. Having regard to the developments in law, Wallis JA made extensive reference to the case of Hülse-Reutter & others v Gödde 2001 (4) SA 1336 (SCA) in which Scott JA held that the evidence on which an applicant relies must consist of “allegations of fact” and not “mere assertions”. Our courts appear to allow some latitude in this regard in that inferences which may reasonably be drawn from the [proved] facts alleged may be taken into account, if such inferences, on a balance of probabilities, are those “which seem to be the more natural or acceptable inference[s] drawn” when determining whether a prima facie case has been established.

Hülse-Reutter was a case dealing with a common law attachment to confirm jurisdiction in which Scott JA broadened the test relating to a prima facie claim. The Pasquale arguably takes the enquiry even further in the context of a security arrest, namely: whether evidence placed before the court in an application to set aside the security arrest of a vessel should be taken into account when determining whether a prima facie claim was established at the time of the arrest. In The Pasquale, the court found in favour of this proposition and held that “to do otherwise is to shut one’s eyes to relevant factual material that may fatally undermine the arresting party’s claim and courts do not ordinarily disregard relevant and admissible evidence when reaching their decisions” (The MV “Pasquale della Gatta” op cit at paragraphs 22 – 25). The implications of this judgement seem, at first blush, to extend the threshold of the enquiry relating to the underlying claim, at the time of the arrest, into the realm of probabilities.

This is seemingly in contrast to the purpose of s5(3) which is solely to provide security for a claim to be decided on in a foreign jurisdiction, subject to foreign law. However, upon closer consideration, this is not the case. In effect, the court has emphasised the fact that, notwithstanding the prima facie nature of the test, it still needs to be tested rigorously both at a substantive and procedural level. The strength of the facts and the law, placed before the court to sustain both these enquiries is inextricably linked: a security arrest order should not be granted if it cannot be sustained. In this regard Wallis JA held further that “… being so, it seems incongruous for a court faced with a decision whether to order or sustain such an arrest to ignore materially relevant and undisputed evidence … such evidence does not offend against any basic principle underpinning the traditional approach to proof of a prima facie case …”. The issue of expert evidence is dealt with in the same manner. It is for the court to determine whether the judicial standard of proof has been met, and the opinion of an expert must be based on facts established by the evidence, and are not mere conjecture, but founded on logical reasoning. Our courts will not take an expert opinion at face value.

The opinion must be based on facts which, if proved, can sustain a cause of action in the for- eign forum. Wallis JA also made it clear that with regard to opinions on English law, our courts are quite entitled to have regard to English law directly and would not have to rely on opinions from English solicitors and barristers in regard to English law. What is clear is that our courts must engage in a substantive foreign law enquiry to ensure that the evidence placed before the court meets the requirements in South African procedural law. There is a tendency when dealing with security arrests to overlook this requirement, given the apparent low level of the test. However, maritime attorneys and their clients would be well advised to ensure that proper attention is paid to the issue of a prima facie claim being prima facie enforceable in the nominated forum, when preparing security arrest applications. Scant facts, conjecture and legal opinions from experts on foreign law will not make the grade where not founded upon logical reasoning.

Furthermore, in regard to English law, which is often the relevant foreign law in security arrests, our courts will deal with that directly, as they have done for many years, and will not seek to rely on expert evidence. It is clear, therefore, that our courts will carefully consider the alleged claim and whether it is enforceable under the foreign law in order to determine whether this requirement is satisfied.