Hilane arrested the mv “Silver Star” as an associated ship to commence in rem proceedings for the recognition and enforcement of a London arbitration award. Owners applied to have the arrest set aside on the basis that the vessel was not an associated ship. That application failed, as did an application for leave to appeal, the position at the time of the hearing and judgement in this application being that owners had indicated its intention to apply to the Supreme Court of Appeal for such leave.
Shortly after the arrest of the vessel owners ceased paying the on-going costs of the preservation of the vessel and, consequently, the sheriff was obliged to do so in terms of his obligation to preserve vessels under arrest in his custody. The sheriff is entitled to look to the arresting creditor for payment of his expenses in this regard. Consequently, Hilane applied for an order that owners be obliged to pay the costs of provisions and supplies to the vessel, fresh water and bunkers, alternatively to furnish security for such expenses. Owners opposed this application and counter applied for an order that Hilane pay the wages of the crew whilst the vessel was under arrest. Hilane had at the time of the hearing of the application also applied for the sale of the vessel but such application was adjourned to be heard on a later date.
On the day of the hearing Hilane conceded that it was not entitled to the primary relief sought. The court referred to the judgment in the matter of Sheriff of Cape Town v MT Argun (“The Argun”) 2001 (3) SA 1230 (SCA) on the basis that the principle that owners could not be compelled to pay the Sheriff’s disbursements and fees relating to the preservation of the vessel was uncontestable.
With regard to Hilane’s claim for security for such costs, the court confirmed that in exercising its discretion in this regard it was necessary for Hilane to establish a prima facie case and, on a balance of probabilities, that there be a need for such security. The court found that Hilane had established a prima facie case but, in the light of the fact that preservation costs have a preferred ranking against the arrested vessel, that no need for security existed.
The court found further that crew wages are preservation costs and, consequently, ordered the sheriff to pay the wages of the crew and Hilane to repay the Sheriff such wages at the end of each and every month the vessel is under arrest.
mv “Silver Star” : Hilane Limited v mv “Silver Star” and Others (unreported judgment, ECLD, PE, Case No A2282/2013, 14 November 2013)