The long debated issue of whether the possessory rights of a bareboat charterer are capable of being arrested or attached has finally been argued. The Durban court has found, relying on South African law relating to lease, that a bareboat charterer's right to possession of a vessel arises from the contractual terms of the charter party and, as such, is purely personal in nature and located where the owner of the ship resides (being where the right would have to be enforced). For that reason such right is not capable of being arrested within the jurisdiction where the court is located.
Of concern was the court's finding that section 1(3) of the Admiralty Jurisdiction Regulation Act, No 105 of 1983 does not apply to arrests for security in terms of section 5(3) of that Act. That sub-section provides -
"For the purposes of an action in rem, a charterer by demise shall be deemed to be, or to have been, the owner of the ship for the period of the charter by demise."
That was made on the basis that a security arrest is not an in rem proceeding but a “stand alone” procedure.
However, section 5(3)(a) provides -
“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.” (our emphasis)
It is clear from the emphasised wording that one can, so long as all the other requirements are met, arrest for security if the person seeking the arrest has a claim enforceable by an action in rem against such property. As such, arguably section 1(3) does apply in respect of security arrests.
However, as the claim in this case related to an alleged failure by the bareboat charterer to pay hire for charter services on certain off-shore supply vessels the claim was clearly unrelated in any way to the possessory rights of the bareboat charterer in the mt “Rio Canoni” and, consequently, in rem proceedings were not competent. On that basis section 1(3) was not applicable in this case.
mt "Rio Caroni" (previously the mt "Amarylis") CH Offshore Ltd v PDV Marina SA and others (unreported judgment, KZNLD, Durban, Case No A113/2013, 5 November 2013)