THE A R RES T o F S HIP S I N G E R M A N AND SOU T H BY A F R I CAN LAW MATHIAS PETER SCHLICHTING A thesis submitted to the UNIVERSITY OF NATAL, Faculty of Law (Department of Business Law) in partial fulfillment of the requirements for the degree of Master of Laws. D U R BAN, 1988 H ELL A TO C Eel L I A I record that this thesis is substantially my own work, save in the respect I have acknowledged. I also declare that this thesis has not been submitted for a degree in any other university. A BST RAC T 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 Civi 1 Procedure (as amended) are applicable, in South Africa the major statute is the Admiralty Jurisdiction Regulation Act of 1 November 1983. Sou th Africa has special Admiral ty Courts having jurisdiction in arrest matters. When issuing the arrest in Germany, juri sdiction 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. Ebth 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 directl y 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 Admiral ty 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 Ci viI 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 limi tation of liability is codified in paras 486 to 487e of the Commercial Code (HGB) with reference to the International Convention on Limi tation of Liabili ty for Mar i time 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 li tigan ts and lawyers, ei ther for Sou th Africans in Germany or Germans in South Africa. i FOREWORD I wish to record my appreciation to all those who have assisted me wi th my research. In particular, I thank my girl friend Hella Cecilia, who lovingly gave me every motivation and support throughout this entire project. My supervisor, Professor Hil ton Staniland, has given me inspiration, expert guidance, criticism, encouragement and support in my endeavours. I thank Dr Johannes Trappe, my co-supervisor from Hamburg (West-Germany), for his help and expert advice in connection with the German part of the thesis. I am grateful to my friends and relatives for their encouragement and assistance: In particular Anja Luehrmann for spending so many hours in German libraries to locate and copy material not available in South Africa; Stephen Girvin for proof-reading the drafts and giving me every encouragement; Judy Parker for proof-reading the drafts; Advocate Chris Marnewick for proof reading the drafts and for providing me with materials and information; Messrs Shepstone and Wylie (Attorneys) for providing me with materials and unreported cases; P&l Associates for permission to make use of a letter of undertaking in the Appendix of this thesis; Annette Ell and Jay Forder for advising me how to operate a Personal Computer; the members of the Department of Public Law of the universi ty of Natal for allowing me to use their Personal Computers and my parents, Eleonore and Peter Schlichting and Arnold Amsinck for providing me with financial security. I also wish to record my appreciation for all the assistance given by Heather Green, Librarian of the GMJ Sweeney Law Branch Library and her staff. Mathias P Schlichting Durban, December 1988 ii PREFACE The aim of this thesis is to compare the legal systems of two different countries having differen t languages, namely Sou th Afri ca and the Federal Republic of Germany. As the language of the thesis is English, all German li terature and judgments which are applicable to the thesis, have had to be translated into English. The difficul ties arising from translation are multiplied when translating statutory provisions, judgments, law books and articles. German expressions, terms and concepts more often than not have a specific meaning and cannot be translated into li teral English. Thus, besides reading the translations of most of the German provisions it is necessary to read the original German provisions, which can be found in the Appendices and which are the foundation of the work. The thesis is divided into four parts. PART A deals with the principles of the German law of arrest of ships and at the same time refers to South African law when the proceedings are equivalent or at least similar. Reference is here also made to the chapters in the second part of the thesis (PART B), where the reader will find the relevant provisions of South African law, and where the principles of the South African law of arrest of ships are described. Aside from the principles of the South African law of arrest of ships, PART B refers the reader to German law when the proceedin gs are equivalen t or at leas t similar to South African law. The reader will find there the direct comparison described in PART A. PART C of this thesis is the CONCLUSION. The fourth and final part of the thesis (PART D) contains the APPENDICES with a selection of paragraphs, sections, articles and forms referred to. The classification of this thesis attempts to avoid repetitions which may arise from a legal comparison which tries not only to reproduce the similarities but also the whole of the law of arrest of ships in German and iii South African law. Furthermore J this will enable the lawyer J whether familiar wi th German or South African law J to quickly recognize when the arrest proceedings are equivalent or similar or J al ternatively J when he should pay attention to the peculiari ties of arrest proceedings in the respective countries. iv CON TEN T S FOREWORD PREFACE . . . . . . . . . . . . LIST OF WORKS AND ARTICLES REFERRED TO . TABLE OF CASES . . .. .... .... TABLE OF INTERNATIONAL CONVENTIONS AND STATUTES i ii xvi xxv xxxiii SELECTED LIST OF ABBREVIATIONS . . xxxvii PAR T A GERMAN LAW with reference to South African Law C H APT E R I HISTORICAL PERSPECTIVE AND THE LAW TO BE APPLIED . . . . . . . . . . . .. 2 C H APT E R 11 THE OPPOSING PARTIES AND THE OBJECT OF THE ARREST (c) Sale of vessel Peculiarities of maritime law Principles of the German law of civil procedure 5 5 6 6 8 12 Charter Para 510 HGB - the owner pro tempore(a) (b) ( 1 ) (2 ) v (3) possibilities of limitation of liability and exclusion of (4) Sisterships . . .. .... . . . . (5) International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships of 1952 ..... liability . . . . . . . . . . . . . . . . 13 16 17 C BAP T E RIll LEGAL REQUIREMENTS OF AN ARREST (ACTION IN REM) (1) Particular preconditions •...... (a) Claim for an arrest - para 916 ZPO (types of claims) (i) The preconditions of para 916 ZPO ... (ii) Maritime lien as a claim for an arrest 22 22 22 22 25 (ii i) Maritime claims as a claim for an arrest in terms of the International Convention Relating to the Arrest of Seagoing Ships of 1952 28 (b) Urgent reason for granting an order of civil arrest - para 917 ZPO . (i) (ii) (iii) Writ of attachment in terms of para 917(1) ZPO Writ of attachment in terms of para 917(2) ZPO Further preconditions for the application of para 917(2) ZPO 28 29 33 38 (iv) No writ of attachment within the meaning of para 917(2) ZPO 2. General preconditions ( a) (b) Form for application - para 920(1) and (3) ZPO Establishing a preponderance of evidence for the petition of arrest - paras 920(2),921 (2) (sentence 1) and 751 (2) ZPO 39 43 43 45 vi (c) Competent court - para 919 ZPO (i) principles. . . . . . . . . ... (ii) Particular international competence of German courts . C H APT E R IV 47 47 50 VALUE OF CLAIM AND PRESENT VALUE . . . . . . . . . • . . . . . . . . . .. 55 CHAPTER V ADJUDICATION OF THE COURT OF THE ARREST PETITION . . . . . 57 (1) Court order or judgment - paras 921(1),922 ZPO . . . . . 57 (2) security deposit by the applicant - para 921(2) ZPO 58 (3) Competence of the respondent to avoid the restraint of his ship by lodging of security (p & I-Club) - para 923 ZPo. C H APT E R VI JUDICIAL REMEDIES OF THE RESPONDENT AGAINST THE ORDER OF ARREST (1) Particular legal remedies - paras 924, 925 and 926 ZPO .. (2) Repealing proceeding of para 927 ZPO . 59 62 62" 65 vii C H APT E R VII THE ENFORCEMENT OF CIVIL ARREST IN SHIPS - PARA 928 FF ZPO . . (1 ) (2) Principles . . . (a) Enforcement of arrest in registered ships - para 931 ZPO (b) Enforcement of arrest in non-registered and foreign ships- para 930 ZPO (c) Enforcement of an arrest against a registered ship owned in individual shares Exemption clauses and restrictions on arrest • . (a) Inadmissibility of enforcement of the arrest - para 482 HGB (b) Immunity of state Ships - International Convention of 1926 (C) International Convention Relating to Penal Jurisdiction in Matters of Collision or Other Incidents of Navigation of 1952 67 67 67 71 73 73 73 76 78 (3) Enforcement of foreign arrests in Germany and German arrests abroad . . . . . . . . . . . . . C H APT E R VIII 78 RANKING OF THE CLAIM(S) - PARAS 804 ZPO, 761 HGB . . . . . . . . . . . .. 82 C H APT E R IX ARREST AND INSOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . 85 viii C H APT E R X ARREST OF FOREIGN SHIPS - ARREST CONVENTION OF 1952 AND EEC-CONVENTION .. 87 C H APT E R XI ACTION IN PERSONAM - PARAS 918 AND 933 ZPO . . . . . . . . . . . . . . .. 88 C H APT E R XII LIABILITY FOR DAMAGES OF THE CREDITOR BECAUSE OF UNDUE ARREST - PARA 945 ZPO ART.6 OF THE ARREST CONVENTION OF 1952 . . . . . . . . . .. 91 (1) The right (relating to substantive law) to get indemnification. 91 (2) Indemnification because of the repeal of the arrest according to (3) (4) (5) (6) paras 926(2) and 929(2), (3) ZPO . Compensation for damage Competent court Binding of the judge deciding upon the compensation for damage on other decisions (stare decisis) Art.6 and 7 of the Arrest Convention of 1952 92 92 93 93 94 ix PAR T B SOU T H A F R I CAN LAW with reference to German law C H APT E R XIII HISTORICAL PERSPECTIVE AND THE LAW TO BE APPLIED • . . . . . . . . . . •. 97 C H APT E R XIV THE OPPOSING PARTIES AND THE OBJECT OF THE ARREST (1) Principles (2) Peculiarities ( a) Charter. (i) Charter by demise - beneficial ownership (ii) Time charter ..... (b) Sale of the vessel (3) Sisterships and associated ships - ss 3(6) and (7) of the 1983 103 103 106 106 106 111 119 (4) (5 ) Act Limitation of liability International Convention Relating to the Arrest of Seagoing 123 129 Ships of 1952 . . . . . . . . . . . . . . . . . . . . . . . . . 134 x C H APT E R XV ESSENTIAL CHARACTERISTICS FOR THE ENFORCEMENT OF A CLAIM IN ADMIRALTY PROCEEDINGS (1 ) (2 ) General remarks The claims for an arrest/ attachment - s 1 (1 ) (ii) of the 1983 Act C H APT E R XVI 135 135 138 LEGAL REQUIREMENTS OF AN ACTION IN REM (ARREST) - SS 3(4) AND (5) OF THE 1983 ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 (1) The preconditions of s 3(4)(a) of the 1983 Act - maritime lien 142 (2) The preconditions of s 3(4)(b) of the 1983 Act - liability in action in personam . . . . . . . . . . . . . C H APT E R XVII 153 LEGAL REQUIREMENTS OF AN ACTION IN PERSONAM (ATTACHMENT) - SS 3(1), (2) AND (3) OF THE 1983 ACT .... (1 ) (2 ) Gener~l preconditions Procedure . . . . . . . . . ., . 154 154 158 xi C H APT E R XVIII GENERAL PRECONDITIONS AND REQUIREMENTS FOR AN ARREST 160 (1 ) Power of attorney . . . . . . . . . · · · · · · 160 (2 ) Form of application and procedure . . . . 161 ( a) Certificate in terms of Rule 3(3) . . . · · · · · . · 162 (b) Warrant of arrest - Rules 3 (1 ) and (2) · · . · 164 (c) Summons (in rem) - Rule 2 . . . . · · · · 166 (d) Notice of motion (Rule 16, Rule 6 of the Uniform Rules) and affidavit (3) Caveat - Rules 3(5)(b), (c) and (d) (4) Evidence - s 6(3) of the 1983 Act (5) Competent court 171 172 174 175 (a) Admiralty jurisdiction in terms of s 2 of the 1983 Act 175 (b) Transfer of proceedings - appropriate forum (s 7(1) of the 1983 Act) . (c) Magistrates' Courts - s 14 of the 1983 Act C H APT E R XIX PARTICULAR REASONS FOR APPLYING FOR AN ADMIRALTY ACTION IN REM OR IN 176 178 (3) Attachment to found or confirm jurisdiction (1) Prejudgment security arrest - s 5(3) of the 1983 Act. (2) Anticipated attachment - s 4(4)(b) of the 1983 Act. PERSONAM . . . . . . . . (a) Section 4(4)(a) and 8(2) of the 1983 Act, Rule 4 (b) Arrest of property already under attachment in terms of the common law - s 8(1) of the 1983 Act .... 179 179 183 184 184 187 xii C H APT E R XX TRIAL PROCEDURE AND ADJUDICIATION BY THE COURT . . (1) Preliminary procedure - Rule 12 (2) Pleadings - Rules 1 (1 ) J (7) and (10) (3) Pre-trial procedure - Rules 11 and 14 188 188 189 191 (4) Evidence J discovery of documents J inspections and examinations. 192 (5) Forced sale of the ship - s 9 of the 1983 Act J Rules 19(4) and (5 ) (6) Security or undertaking (p & I-Club) - ss 3(10) and 5(2) (d) of the 1983 Act . . . . . . 195 196 (7) Claim in reconvention - Rule 8 J Rule 24 of the Uniform Rules . . 197 (8) Third parties - Rule 9 . . . . . . . . . . . . 198 (9) Trial and adjudication by the court - Rule 15 and Rule 39 of the Uniform Rules . . . . . . . . . . . . . . . . . 198 C H APT E R XXI JUDICIAL REMEDIES . . . . . . . . . . . . . . . . . . . . . C H APT E R XXII 200 ENFORCEMENT OF ARREST AND ATTACHMENT ... (2) Enforcement of foreign arrests in South Africa .. (3) Immunity of State ships ( 1 ) General rules . . . . . . . . . . . 201" 201 203 204 xiii CHAPTER XXIII LIMITATION OF TIME AND PRESCRIPTION . . . . . . . . . . . . . . . . . . . 206 C H APT E R XXIV DISTRIBUTION OF FUND AND RANKING OF THE CLAIMS - SS 9, 11 OF THE 1983 ACT (1) Distribution of the fund. (2) Ranking of the claims . . . . . . . . 208 208 210 C BAP T E R XXV ARREST/ ATTACHMENT AND INSOLVENCY . . . . . . . . . . . . . . . . . . . . 215 C H APT E R XXVI ARREST/ ATTACHMENT AND ARBITRATION. . . . . . . . . . . . . . . . . . . . 219 C H APT E R XXVII LIABILITY FOR DAMAGES BECAUSE OF UNDUE ARREST OR ATTACHMENT - S 5(4) OF THE 1983 ACT AND RULE 7 (4) . . . . . . . . . . . . . . . . . . . . . . . . 222 xiv PAR T C CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . 225 PAR T D A P PEN D ICE S (A selection of sections, paragraphs, articles and forms) Appendix I Appendix II Appendix III Appendix IV Appendix V Appendix VI Appendix VII German Code of Civil Procedure(ZPO) . A. German .. B. English German commercial Code (HGB) . A. German B. English . The International Arrest Convention of 1952 The EEC-Convention of 1968 The International Immunity Convention of 1926 The International Convention on Limitation of Liability for Maritime Claims of 1976 Compulsory Auction of Immovable Property Act (ZVG) 230 230 248 257 257 267 276 284 291 293 303 Appendix VIII A. B. c. xv Civil Code (BGB) Constitution of Courts Act (GVG) Bankruptcy Law (KO) 308 312 313 Appendix IX Appendix X Appendix XI Appendix XII D. Composition Code of Procedure for Arrangememnts between Debtor and Creditor to avert Bankruptcy (VglO) . . . . Protection of Business Act of 1978 Admiralty Jurisdiction Regulation Act of 1983 Admiralty Proceedings Rules of 1986 Merchant Shipping Act of 1951 315 316 320 330 337 Appendix XIII 1 • SUmmons in the SUpreme Court . . . . . 340 2. Warrant of Arrest in the SUpreme Court 342 3. Certificate in terms of Rule 3(3) . . 344 4. Notice of Motion . . . 346 5. Attachment Order . . . . 348 6. Petition of Arrest (Antrag auf Erlass eines 7. dinglichen Arrests) . Order of Arrest (Arrestbeschluss) 352 360 Appendix XIV P&l - Club: Letter of Undertaking 362 I N D E X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 xvi LIST OF WORKS AND ARTICLES REFERRED TO A. Text books 1. German ABRAHAM HJ FORRESTER IS, GOREN L, ILGEN H-M HAGBERG L, ALBRECHT H-C PRUESSMANN H, RABE D SCHAPS G, ABRAHAM HJ SCHLEGELBERGER F, LIESECKE R SOEHRING K STEIN AN D JONAS THOMAS H, PUTZO H Das Seerecht (3 edition) (1969). The German Civil Code Translation and Introduction ( 1975) . Maritime Law - Volume I: Arrest of Vessels (ed L Hagberg) (1976). Seehandelsrecht (2 edition) (1983). Das Seerecht in der Bundesrepublik Deutschland (Erster Teil Seehandelsrecht) (4 edition ) (1978) . Seehandelsrecht (1959) . Arrest of Ships (ed CHill, K Soehring, T Hosoi and C Helmer) (1985) . Kommentar zur Zivilprozessordnung (20 edi tion) (6th supply) (1981) paras 916 to 945 ZPO by W Grunsky. Zivilprozessordnung (1 4 edi tion) (1986). WUESTENDOERFER H ZELLER F, STOEBER K ZOELLER 2. South Africa and England BAMFORD BR BENEDICT ON ADMIRALTY BREAKHUS S, REIN A DILLON C, VAN NI EKERK JP ERASMUS HJ, BARROW OJ xvii Neuzeitliches Seehandelsrecht (2 edi tion) (1950). Zwangsversteigerungsgesetz (12 edition) (1987). Zivilprozessordnung .(15 edition) (1987) - paras 916 to 945 ZPO by M Vollkommer - paras 324 ff, 802 ff, 858 ff and 870 ff by K Stoeber - Appendix I by R Geimer - Appendix 11 by R Geimer. The Law of Shipping and Carriage in South Africa (3 edition) (1983). Jurisdiction and Principles (ed H Saun, B Chase, J Levine and M Chynsky) (7 edition) (vol 1) (1983). Handbook of P & I Insurance (2 edition) (1979). south African Maritime Law and Marine Insurance: Selected Topics (1983) • Handbook on the Supreme Court Act 59 of 1959 & the Magistrates I Courts Act 32 of 1944 (2 edi tion ) (1988) . FINDLAY & TAIT (ATTORNEYS) HALL CG HARDY IVAMY ER HARE J HERBSTEIN AND VAN WINSEN POWLES D G SILBERBERG AND SCHOEMANN SHAW DJ SINGH N xviii The Enforcement of Maritime Claims in Sou th Afr i c a under the Admiral ty Jurisdiction Regulation Act of 1983 (1987) . Maasdorp's Institutes of South African Law - Volume 11 - The Law of Property (1 0 edi tion) (1976). Payne and Ivamy's Carriage of Goods by Sea (11 edition) (1979). Arrest of Ships (vol 5) (ed M HafizuIIah, R Price, H Langenskiold, J Hare) (1987). The Civil Practice of the Superior Courts in South Africa (ed Louis de ViIliers van Winsen, Johannes Paulus Gardener Eksteen and Andriers Charl Cilliers) (3 edition) (1979). The Mareva Injunction and Associated Orders (1985) . The Law of Property (2 edition) (1983). Admiral ty Jurisdiction and Practice in South Africa (1987) . International Maritime Conventions - vol 3 : Training, Employment and Welfare Environment (1983) - vol 4 Maritime Law (1983). SMITH C SOUTH AFRICAN LAW COMMISSION VENTRIS FM WISWAL FL 1. German ALBRECHT H-C ALBRECHT H-C, LOOKS V BASEDOW J BERNSTORFF C xix The Law of Insolvency (3 edition) (1988). Project 32 on the Review of the Law of Admiralty (15 September 1982). Tanker Voyage Charter Parties (1986) . The Development of Admiralty Jurisdiction and Practice since 1800 (1970) . • B. Journal Articles Die Arrestbeschlagnahrne von Seeschiffen nach deu tschem Rech t und nach d em In terna ti onal en Uebereinkomrnen ueber den Arrest von Seeschiffen, Bruessel, Mai 1952 HANSA 1954, 1142 and 1184. Zum En twurf des Comi te Mari time International fuer die Revision des internationalen Uebereinkommens von 1952 ueber den Arrest in Seeschiffe TranspR 1985, 321. Das forum conveniens der Reeder irn EuGVUE IPRax 1985, 133 Die Eintreibung von Forderungen durch auslaendische Glaeubiger in England RIW 1985, 367 CARL MH xx Arrest und Sicherung von Beweismateria1 im eng1ischen Recht IPRax 1983, 141 DITTMAR R Der Arrestgrund Aus1andsvo11streckung NJW 1978, 1720. d e r GEIMAR R GRUNSKY W GRUNSKY W HERBER R JAYME E, HAACK H KROPPHOLLER J LIESECKE R Eine neue internationa1e Zustaendigkeitsordnung in Europa NJW 1976, 441. Arrestgrund anderer G1auebiger a1s Arrestgrund NJW 1976, 553. Zum Arrestgrund des Paragraphen 917 Ab s . 2 ZP 0 be i de r Vo 11 s t re c k u n g aus1aendischer urtei1e (zu OLG Frankfurt vom 2.3.1983 IPRax 1983,227) IPRax 1983,210. Zur Modernisierung des deutschen Seehande1srechts HANSA 1972, 508. Reziproke Gerichtsstandsk1ause1n EuGVUE und Drittstaaten (zu OLG Muenchen, 8.8 1984 - 7 U 1880/84 IPRax 1985, 341) IPRax 1985, 323. Neues europaeisches Zivi1prozessrecht RIW 1986, 929. Schiffsg1aeubigerrecht und Arrest MDR 1967, 625. SCHLAFEN D SCHLOSSER P SCHWERDTNER P STAHL STRUBE TEPLITZKY 0 THOMASHAUSEN A ZANDER xxi Anmerkung zum Urteil des OLG Kablenz van 2.5.1975 - NJW 1976, 2081 NJW 1976, 2082. Grenzueberschreitende Vallstreckung van Massnahmen des einstweiligen Rech tsschutzes im EuGVUE-Bereich (zu BGH, 27. 1 1 •1984) IPRax 1985, 321. Zur Dogmatik des Arrestprozesses NJW 1970, 222. Sicherung van Anspruechen gegen auslaendische Reeder im Inland, DB 1959, 589. Arrestpfaendung auslaendischer 8eeschiffe HANSA 1981, 1294. Zur Bindungswirkung gerichtlicher Varentscheidungen im Schadensersatzprozess nach Paragraph 945 ZPO NJW 1984, 850. Vallstreckung auslaendischer Ti tel in Suedafrika IPRax 1983, 309. Voraussetzungen fuer einen Arrest gegen eine auslaendische Reederei (zu OLG Bremen, MDR 1955, 749) HANSA 1955, 1772. 2. south Africa and England BECK A BOOYSEN H BRICE G COGHLIN TG COHEN MM FORSYTH C FRIEDMAN DB FRIEDMAN DB HOFMAYR G RYCROFT A xxii Admiralty Jurisdiction: A new Direction 1984 (47) THRHR 472. south Africa I s new Admiralty Act: A Maritime Disaster? (1984) 6 MB 75. Maritime Claims: The European Judgments Convention (1987) 3 LMCLQ 281. Protection & Indemnity Clubs (1984) LMCLQ 403. In defence of the Halcyon Isle (1987) 2 LMCLQ 152. The Conflict Between Modern Roman-Dutch Law and the Law of Admiral ty as Administered by South African Courts (1982) 99 SALJ 255. Mari time Law in Practice and in the Courts (1985) 102 SALJ 45. Mari time Law in the Courts after 1 November 1983 (1986) 103 SALJ 678. Admiralty Jurisdiction in South Africa' 1982 Acta Juridica 30. Changes in South African Admiral ty Jurisdiction (1984) LMCLQ 417. STANILAND H, MC LENNAN JS STANILAND H STANILAND H STANILAND H STANILAND H STANILAND H STANILAND H STANILAND H xxiii The Arrest of an Associated Ship (1985) 102 SALJ 148. Developments in South African Admiralty Jurisdiction and Maritime Law 1984 Acta Juridica 271. The Implementation of the Admiralty Jurisdiction Regulation Act in South Africa (1985) 4 LMCLQ 462. Arrest of Associated Ship not Retrospective in Operation (1986) 3 LMCLQ 279. Is the Admiralty Court to be Turned into a Court of Convenience for the Wandering Litigants of the World? (1986) 103 SALJ 9. The Admiralty Jurisdiction Regulation Act and the Mari time Claim of a Saudi Arabian Necessaries Man (1986) 103 SALJ 359. The Recognition of an American Maritime Claim for services and Disbursements (1986) 103 SALJ 542. The New Carriage of Goods by Sea Act in South Africa (1987) 2 LMCLQ 305 STANILAND H Towage or Salvage? case and Comment (1988) 1 LMCLQ 16. The Manches ter- STANILAND H xxiv Can an Indemnity Issued in Consideration for a Misinterpreta tion in a Bill of Lading Be Enforced in the Admiral ty Court ? (1988) 105 SALJ 322 xxv TABLE OF CASES A. south Africa, England and Canada A The Alkar 1986 (2) SA 138 (C) The Alresford (1942) 1 All ER 503 (CA) American Cotton Products Corporation v Felt and Tweeds Ltd 1953 (2) SA 753 (N) The Andrea Ursula (1971) All ER 821 (PDA) The Andrico unity 1987 (3) SA 794 (C) The Answald 1912 AD 546 The Antiopolis 1988 (3) SA 92 (C) Anton piller KG v Manufacturing Process Ltd and others (1976) 1 All ER 779 (CA) The Antigoni Tsiris 1981 (3) SA 950 (N) Araxos (East London) (pty) Ltd v Contara Lines Ltd and others 1979 (1) SA 1027 (E) The Areti L 1986 (2) SA 446 (C) The Atlantic Victory 1986 (4) SA 329 (D) The Aventicum (1978) 1 Lloyd's Rep 184 QB B Bassa Ltd v East Asiatic (SA) Co Ltd 1932 NPD 386 Barry Colne & Co (Transvaal) Ltd v Jackson's Ltd 1922 CPD 372 The Baumwoll Manufactur von Carl Scheibler v Christopher Furness (1893) AC 8 (HL) The Berg I 1984 (4) SA 647 (N) The Berg 11 1986 (2) SA 700 (A) C D E F xxvi The Bold Buccleugh I (1847-1850) 3 Rob 220 The Bold Buccleugh 11 (1851) 7 Moo PCC 267 (PC) The Brazilia I 1985 (1) SA 787 (C) The Brazilia 11 1988 (1) SA 103 (C) The Colorado (1923) P 102 The Commodore 1943 NPD 27 Crooks & Co v Agricultural Co-Operative Union Ltd 1922 AD 423 The Edward Dawson (1914) 1 KB 419 The Despina R (1979) 1 ALL ER (HL) Dorman Long Swan Hunter (pty) Ltd v Karibib visserye Ltd 1984 (2) SA 462 (C) Easyfind International (SA)(Pty) Ltd v Instaplan Holdings and another 1983 (3) SA 917 (W) The Two Ellens (1872) 4 LR 161 (PC) The Emerald Transporter I 1985 (4) SA 133 (N) The Emerald Transporter 11 1985 (2) SA 452 (D) The England (1973) 1 Lloyd1s Rep 373 (CA) The Maratha Envoy (1977) 1 Lloyd's Rep 301 (HL) The Fabian 1912 CPD 148 The Farandole 1978 (4) AD 272 The Father Thames (1979) 2 Lloyd's Rep 364 QB G H I J K xxvii The Fidias 1986 (1) SA 714 (D) Freightmarine Shipping Ltd v Wainstein & Co (Pty) Ltd and others 1984 (2) SA 425 (D) The Golden OCean 1972 (4) SA 316 (N) The Golden Togo 1986 (1) SA 505 (N) The Halcyon Isle (1981) AC 221 (PC) = (1980) 3 All ER 179 (PC) The Houda Pearl I 1986 (2) SA 714 (A) The Houda Pearl 11 1986 (3) SA 960 (A) House of Jewels & Gems and others v Gilbert and others 1983 (4) SA 824 (W) The I Congreso Del Partido (1977) 1 Lloyd's Rep 536 QB Inter Science Research and Development Services (pty) Ltd v Republica Popular de Mocambique 1980 (2) SA 111 (T) The Jade Transporter I 1987 (1) SA 935 (N) The Jade Transporter II 1987 (2) SA 583 (A) The Kalantiao 1987 (4) SA 250 (D) The Khalij Sky 1986 (1) SA 485 (C) The Kyoju Maru 1984 (4) SA 210 (D) L M N o p xxviii LendaIease Finance (pty) Ltd v Corporation De Merca-Deo Agricola and others 1976 (4) SA 464 (A) The Leonis (1908) 1 KB 499 The London Explorer (1971) 1 Lloyd's Rep 523 (HL) The Luneplate ' 1986 (4) SA 865 (C) The Maria K 1985 (2) SA 476 (C) The Manchester 1981 (2) SA 798 (C) Manica Freight Services (Malawi) Ltd and others v Uni ted States Lines Incorporated (unreported) Case No A 28/87 (D) The Maritime Trader (1981) 2 Lloyd's Rep 153 QB Maruta Machinery Ltd v Capelon Yarns (pty) Ltd 1986 (4) SA 671 (C) Mercantile Bank of India Limited v Davis 1947 (2) SA 723 (C) Minesa Energy (pty) Ltd v Stinnes International AG 1988 (3) SA 903 (D) The NefeIi 1984 (3) SA 325 (C) Nel v Santam Insurance Co Ltd 1981 (2) SA 230 (T) The Johanna Oldendorff (1973) 2 LIoyd's Rep 285 (HL) The Paola (unreported) Case No A 155/87 (D) The Paz 1984 (3) SA 261 (N) The PilIippine Commander 1988 (1) SA 457 (D) All ER 1105 (CA) R s T u v xxix The Radiant (1958) 2 Lloyd's Rep 596 (Adm) Roamer Watch Co SA and another v African Textile Distributors also t/a M K Patel Wholesale Merchants and Direct Importers 1980 (2) SA 254 (W) The Sagona (1984) 1 Lloyd's Rep 194 QB = (1984) LMCLQ 347 QB The Saint Anna (1980) 1 Lloyd's Rep 180 QB The Scaptrade (1983) 2 All ER 703 (HL) The Span Terza (1984) 1 Lloyd's Rep 119 (HL) Stag Line Ltd v Board of Trade (1950) The Stavroula 1987 (1) SA 74 (C) The Strandhill (1926) 1 Ex C R 226 The Atlantic Sunbeam (1973) 1 Lloyd's Rep 482 QB The Tatiana L (unreported) Case No 102/87 (D) Therrno Radiant Oven Sales (Pty) Ltd v Nelspruit Bakeries (pty) Ltd 1969 (2) SA 295 (A) The Tirnna (1970) 1 Lloyd's Rep 409 QB The Torm Helene (unreported) Case No AR 415/86 (N) The Uniworld and The Unisingapore 1987 (2) SA 491 (C) The S.S. Union Carrier 1950 (1) SA 880 (C) Voest Alpine Intertrading Gesellschaft rnbH v Burwill and Co SA (pty) Ltd 1985 (2) SA 142 (W) xxx W The Waikiwi Pioneer II 1977 (1) SA 76 (N) z The Zygos I 1984 (4) SA 444 (C) The Zygos II 1985 (2) SA 486 (C). B. Germany AG AG Leverkusen 16.4.1981, IPRax 1983, 45 LG LG Augsburg 29.9.1975, NJW 1975, 2350 The MS X LG Bremen 30.5.1978, RIW/ AWD 1980, 366 The Kladderadatsch I LG Hamburg 25.4.1908, HGZ 1910, 100 LG Hamburg 10.2.1978, MDR 1978, 764 LG Hamburg 27.11.1978, RIW/ AWD 1980, 287 LG Koeln 8.11.1978, RIW/ AWD 1979, 128 OLG OLG Bremen 17.3.1955, MDR 1955, 749 The Paracas OLG Bremen 23.9.1971, VersR 1972, 250 The Ventuari OLG Bremen 1.9.1981, HANSA 1981, 1294 RG xxxi OLG Duesseldorf 18.5.1977, NJW 1977, 2034 OLG Frankfurt 1.0. 12. 1958, NJW 1959, 1088 OLG Frankfurt 7.9.1977, NJW 1978, 501 OLG Frankfurt 23.9.1980, R1Wj AWD 1980, 799 OLG Frankfurt 2.3.1983, R1W 1983, 289 The Clara I OLG Hamburg 14.7.1903, HGZ 1903, 216 OLG Hamburg 24.4.1907, OLGE 15, 21 The Pennoil OLG Hamburg 1.2.1909, HGZ 1909, 107 The Kladderadatsch 11 OLG Hamburg 27.5.1908, HGZ 1910, 101 OLG Hamburg 13.10.1966, MDR 1967, 50 OLG Hamburg 2.3.1967, MDR 1967, 677 = HANSA 1967, 1805 OLG Hamburg 4.5.1972, VersR 1972, 1114 OLG Hamburg 12.2.1981, VersR 1982, 341 The Clydefirth OLG Hamburg 19.5.1983, VersR 1987, 356 OLG Hamburg 6.9.1984, VersR 1985, 470 OLG Koblenz 2.5.1975, NJW 1976, 2081 OLG Muenchen 18.9.1959, MDR 1960, 146 OLG Muenchen 15.6.1983, R1W 1983, 534 RG 25.2.1881, RGZ 3, 416 RG 27.2.1893, RGZ 31, 370 RG 16.5.1938, RGZ 157, 389 The Clara 11 RG 25.1.1904, HGZ 1904, 168 xxxii BGH BGH 26. 11 . 1956, NJW 1957 , 828 BGH 15. 1 . 1962, NJW 1962, 591 BGH 30.9. 1964, BGHZ 42, 194 NJW 1964, 2350 BGH 9.7. 1969, BGHZ 52, 251 BGH 22.2. 1972 NJW 1972, 1044 BGH 1 .2. 1977, RIW/ AWD 1978, 475 BGH 8. 1 . 1985, VersR 1985, 335 EuGH EuGH 22.2. 1979, NJW 1979, 1772 EuGH 21.5. 1980, NJW 1980, 2016 EuGH 27.11.1984, IPRax, 339 xxxiii TABLE OF INTERNATIONAL CONVENTIONS AND STATUTES A. International Conventions: THE CONVENTION ON JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS, BRUSSELS, 27 September 1968 Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 773 in the version of the JOINING TREATMENT OF 9 october 1978 (EEC-Convention) ef OJ C 97, 11 April 1983 at 2; ef Zoeller Zivilprozessordnung Appendix 11 at 2455. THE INTERNATIONAL CONVENTION FOR THE UNIFICATION OF CERTAIN RULES RELATING TO ARREST OF SEAGOING SHIPS, BRUSSELS, 10 May 1952 (ICRASS) ef Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 655; ef Singh International Maritime Law Conventions vol 4 (1983) at 3101. THE INTERNATIONAL CONVENTION ON LIMITATION OF LIABILITY FOR MARITIME CLAIMS, LONDON, 19 November 1976 (CLLMC) ef Federal Law Gazette (Bundesgesetzblatt) 1986 11, P 786 and p 787; ef Singh International Maritime Law Conventions vol 4 (1983) at 2976. THE INTERNATIONAL CONVENTION FOR THE UNIFICATION OF CERTAIN RULES CONCERNING THE IMMUNITY OF STATE-OWNED SHIPS, BRUSSELS, 10. April 1926 ef Gazette of the Laws of the German Reieh (Reiehsgesetzblatt) 11, p 484. THE INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR OIL POLLUTION DAMAGE, BRUSSELS, 29 November 1969 and PROTOCOL TO THE INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR OIL POLLUTION DAMAGE, LONDON, 19 November 1976 (CLOPD) ef Federal Law Gazette (Bundesgesetzblatt) 1975 11, P 301; ef Singh International Maritime Law Conventions vol 3 (1983) at 2482 and at 2489. THE INTERNATIONAL CONVENTION FOR THE UNIFICATION OF CERTAIN RULES OF LAW RELATING TO MARITIME LIENS AND MORTGAGES, BRUSSELS, 10 April 1926 AND 27 May 1967 ef Singh International Maritime Law Conventions vol 4 (1983) at 3053. xxxiv International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, Brussels, 25 August 1924 (The Hague Rules) cf Singh International Maritime Law Conventions vol 4 (1983) at 3037. Protocol amending the International Convention for the Unification of certain Rules of Law relating to Bills of Lading , Brussels, 23 February 1968 (The Hague-Visby Rules) cf Singh International Maritime Law Conventions vol 4 (1983) at 3050; cf Carriage of Goods by Sea Act 1 of 1986, Schedule. B. German Statutes: MARINE REGISTRY REGULATIONS (SCHIFFSREGISTERORDNUNG) 20 May 1951 cf Federal Law Gazette (Bundesgesetzblatt) I, p 360. MARINE REGISTER IMPLEMENTING ORDER (VERORDNUNG ZUR DURCHFUEHRUNG DER SCHIFFSREGISTERORDNUNG) 24 November 1980 cf Federal Law Gazette (Bundesgesetzblatt) I, p 2169. ACT ON RIGHTS OF REGISTERED SHIPS AND SHIPS UNDER CONSTRUCTION (GESETZ UEBER RECHTE AN EINGETRAGENEN SCHIFFEN UND SCHIFFSBAUWERKEN) 15 November 1940 cf Gazette of the Laws of the German Reich (Reichsgesetzblatt) I, p 1499. Mari time Law Order of Parti tion and Distribution (Gesetz ueber das Verfahren bei der Errichtung eines Fonds zur Beschraenkung der Haftung fuer Seeforderungen/ Seerechtliche Verteilungsordnung) (MLOPD) 25 July 1986 cf Federal Law Gazette (Bundesgesetzblatt) I, p 1130. THE LAW CONCERNING THE RIGHT OF FLAG (FLAGGENRECHTSGESETZ) 8 February 1951 cf Federal Law Gazette (Bundesgesetzblatt) I, p 79. xxxv FIRST MARITIME LAW AMENDING ACT 21 June 1972 cf Federal Law Gazette (Bundesgesetzblatt) I, P 966. SECOND MARITIME LAW AMENDING ACT 25 July 1986 cf Federal Law Gazette (Bundesgesetzblatt) I, P 1120. THE COMPULSORY AUCTION OF IMMOVABLE PROPERTY ACT 20 May 1898 (ZVG) CODE OF CIVIL PROCEDURE (ZPO) COMMERCIAL CODE (HGB) CIVIL CODE (BGB) BANKRUPTCY LAW (KO) COMPOSITION CODE OF PROCEDURE FOR ARRANGEMENTS BETWEEN DEBTOR AND CREDITOR TO AVERT BANKRUPTCY (VGLO) C. South African Acts: THE ADMIRALTY JURISDICTION REGULATION ACT 105 OF 1983 cf Government Gazette, 12 September 1983, No 8891. THE ADMIRALTY PROCEEDINGS RULES 1986 cf Government Gazette, 21 November 1986, No 10522. THE UNIFORM RULES OF THE SUPREME COURT OF SOUTH AFRICA NOT EXCLUDED IN TERMS OF RULE 23 OF THE ADMIRALTY PROCEEDINGS RULES THE MERCHANT SHIPPING ACT 57 OF 1951 CARRIAGE OF GOODS BY SEA ACT 1 OF 1986 COMPANIES ACT 61 OF 1973 THE PROTECTION OF BUSINESS ACT 99 OF 1978 xxxvi INSOLVENCY ACT 24 of 1936 INSURANCE ACT 27 of 1943 INTERPRETATION OF LAWS ACT 33 of 1957 THE SUPREME COURT ACT 59 of 1959 MAGISTRATE'S COURTS ACT 32 of 1944 Territorial Waters Act 87 of 1963 Foreign States Imrnunities Act of 1981 Law of Evidence Act 45 of 1988 AC A AG All ER Art B G B BGH BGHZ C CPD CA CLLMC CLOPD D D B E ed EEC EEC-Convention EuGH GG xxxvii SELECTED LIST OF ABBREVIATIONS Appeal Court Appellate Division (South Africa) Magistrates Court (Amtsgericht) All England Law Reports Article Buergerliches Gesetzbuch (Civil Code) Federal High Court of Justice (Bundesgerichtshof) Reports of the Federal High Court of Justice Cape Provincial Division Court of Appeal International Convention on Limi ta tion of Liabi li ty for Maritime Claims of 1976 International Converition on Civil Liability for Oil Pollution Damage Durban and Coastal Division Der Betrieb Eastern Cape Division Edition European Economic Community (The Common Marke t ) Convention on Jurisdiction and Enforcement of Judgments in Civil' and Commercial Matters of 1968 European Court of Justice (Europaeischer Gerichtshof) Government Gazette G V G HANSA H G B H G Z HL ICRASS IPRax J KO KB LG Lloyd I S Rep LJ LMCLQ LR M D R MB MLOPD Moo PCC NJW No N xxxviii Gerichtsverfassungsgesetz (Constitution of Courts Act) Zeitschrift fuer Schiffahrt Schiffbau - Hafen Handelsgesetzbuch (Commercial Code) Hanseatische Gerichtszeitung House of Lords International Convention Relating to the Arrest of seagoing Ships of 1952 Praxis des Internationalen Privat und Verfahrensrechts Mr Justice Konkursordnung (Bankruptcy Law) King's Bench Division Higher District Court (Landgericht) Lloyd's Law Report Lord Justice Lloyd 's Mari time and Commercial Law Quarterly Law Reports Monatsschrift des deutschen Rechts Modern Business Law Mari time Law Order of Partition and Distribu tion (Seerech tli che· Verteilungsordnung) Moore's Privy Council Cases Neue Juristische Wochenschrift Number Natal Provincial Division OJ xxxix Official Journal of the European Communities OLG Higher Appeal (Oberlandesgericht) court P Para PC PDA QB RG RGZ RIW/ AWD S SA SALJ THRHR TranspR VersR VglO vol Probate Division Page Paragraph Privy Council Probate, Divorce and Admiral ty Division Queen's Bench Division SUpreme Court of the German Reich (Reichsgericht) Repor ts of the Supreme Court of the German Reich Recht der internationalen W i r t s c h aft / Aussenwirtschaftsdienst des Betriebs-Beraters Section South African Law Reports South African Law Journal Tydskrif vir Hedendaagse Romeins Hollandse Reg (Journal of Contemporary Roman-Dutch Law) Transportrecht Versicherungsrecht Vergleichsordnung (Composition Code of Procedure for Arrangements Between Debtor and Credi tor to Avert Bankruptcy Volume W Z P 0 Z V G xl Witwatersrand Local Division Zivilprozessordnung (Code of Civil Procedure) Zwangsversteigerungsgesetz (Corrpulsory Auction of Immovable Property Act) PAR T A 2 C H APT E R I HISTORICAL PERSPECTIVE AND THE LAW TO BE APPLIED A historical consideration of the arrest of seagoing ships1 can only be confined to some general remarks on mari time trade and arrest juri sdiction. This field, besides, remains the preserve of legal historians2 and falls outside the ambit of this thesis. There are no special provision relating to the arrest of ships in German mari time law. 3 What is applicable however is the law relating to civil procedure and the Code of Civil Procedure (ZPO). 'Ibe Code of Civil Procedure with its latest amendments dates back to the Code of Civil Procedure of 1877. In 1898 a supplementary law brought into use a special provision on the enforcement of a civil arrest against marine registered ships. (cf para 931 ZP04). The above-mentioned provision takes into account the particularities of ocean traffic and has, compared wi th common provisions on levy of execution (pfaendungsvorschriften), certain specifics. 5 Besides the common civil procedure provisions, there are numerous references in other statutes, both national and international. Thus one finds in the German Commercial Code (HGB) a provision, which prohibits the execution The thesis only deals with the arrest of seagoing ships and not, for instance, wi th ships on inland waterways and the Inland Waterways (Civil Liabilities) Act or the law governing inland navigation matters. 2 Cf Benedict on Admiralty Jurisdiction and Principles 7ed (vol 1) (1983) Chapter I at 1 ff; G Hofmeyr 'Admiralty Jurisdiction in South Africa' 1982 Acta Juridica 30. 3 For an exception cf para 931 ZPo. 4 Cf Chapter VII (1) (a). 5 Wi th regard to enforcement (Zwangsvollstreckung), compare the following provisions: -para 858 ZPO : Enforcement Into a Ship's Part. Cf also paras 489 ff HGB; -para 864 ZPO : Object of Enforcement of Immovable Property; -para 870a ZPO: Enforcement Against a Ship or a Ship Under Construction. 3 and arrest of ships (para 482 HGB).6 In the Compulsory Auction of Immovable Property Act of 20 May 1898 (ZVG) there are in the second section special regulations which deal with sales by public auction of ships and ships under construction. 7 These national provisions have, because of the scope of international seaborne trade, been supplemented by international conventions. With regard to the arrest of seagoing ships, one has to take account of the International Convention for the Unification of Certain Rules Relating to the Arrest of seagoing Ships of 1 0 May 19528 (the Arrest Convention of 1952). The Federal Republic of Germany became a signatory to the Arrest Convention of 1952 in 1972, twenty years after it came into force. South Africa has not ratified the Arrest Convention of 1952. 9 More than ten years passed before Germany ratified10 the International Convention on Limitation of Liability for Mari time Clains of 19 November 1976 (the 1976 Convention) which also contains rules relating to the arrest of ships for the enforcement of maritime claims. 11 Further, one has to note the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 september 1968 6 7 8 9 1 0 11 Cf International Convention for the Unification of Certain Rules Concerning the Immunity of State-owned Ships of 10 April 1926, Gazette of the German Reich (Reichsgesetzblatt) 11, p 484. Cf paras 162 - 171 ZVG, Appendix VII. Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 655. Cf Singh International Maritime Law Conventions vol 4 (1983) at 3101; Appendix Ill. Cf Part B - Chapter XIV (5). By a Statute of 23 July 1986, Federal Law Gazette (Bundesgesetzblatt) 1986 11, P 786. Cf Art.13 of the 1976 Convention (Bar to Other Actions). 4 (EEC-Convention).12 In relation to the barter of goods and the exchange of goods and services, which is occurring more and more frequently and as loading-times become shorter owing to the use of containers and other modern loading techniques, it has become necessary to have uniform arrest provisions in special and uniform trade provisions in general. Also the ship mortgage banks are very much interested in having uniform arrest provisions in order to distribute the economic ri sks among them and the shipowners significant and just. 13 In the case of Germany, it can be seen, that the legislature has been slow to make allowance for existing international circumstances. The reform of the Arrest Convention of 1952 is no exception. 14 For the ease of seaborne trade it is to be hoped that for the arrest in seagoing ships common binding rules, like the International Arrest Convention of 1952, will be ratified by as many as possible of the seatrading nations. 1 2 1 3 14 Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 773, in the version of the joining treatment of 9 October 1978, Federal Law Gazette (Bundesgesetzblatt) 1983 11, P 802 and of 25 October 1982, Federal Printed Papers (Bundestagsdrucksache-BT) 1 0/537. The EEC-Conven tion came into force between Germany and the United Kingdom on 1 January 1987. H-C Albrecht and V Looks I Zum Entwurf des Comi te International fuer die Revision des internationalen Uebereinkornmens von 1952 ueber den Arrest in Seeschiffe' TranspR 1985, 321 at 323. Ibid 321. Cf I The Draft Revision of the Arrest Convention of 1952 I , TranspR 1985, 363. 5 C H APT E R 11 THE OPPOSING PARTIES AND THE OBJECT OF THE ARREST In order to obtain an arrest successfully, a necessary precondition is (besides the legal requirements for an arrest15), that the petition for an arrest be directed against the correct debtor (opponent of the peti tion or responden t) and to arrest the right ship.16 (1) Principles of the German law of civil procedure In German law, actions for arrest and of enforcement are only allowed agains t the debtor himself or over his own property or the part of property which he owns in common. Accordingly, in principle it is only possible to arrest a ship which is the property of the debtor, ie the owner. It is possible, because the whole property of the debtor is subject to the arre~t, to take execution against every ship that the debtor owns. The debtor can be a shipowner17 or a shipping company. 18 A shipowner (wi thin the meaning of para 484 HGB) can also be a trading association. In principle it is not necessary to point out the object of the arrest itself, ie the ship to be arrested does not have to be pointed out by name.19 15 Cf Chapter Ill. 16 Cf H-C Albrecht 'Die Arrestbeschlagnahme von Seeschiffen nach deutschem Recht und nach dem internationalen Uebereinkommen ueber den Arrest vorr Seeschiffen, Bruessel) Mai 1952 I HANSA 1954, 1142; Soehring Arrest of Ships ed e Hill, K Soehring, T Hosoi, C Helmer (1985) at 53. 17 ef para 484 HGB. 18 ef para 489 HGB. 19 ef Stein and Jonas and Grunsky Zivilprozessordnung 20ed (1981) annotation 16 of para 920 ZPO and Chapter III (2) (a). 6 (2) peculiarities of maritime law Proceeding from the principle described,20 in maritime law the following peculiarities in relation to exceptions exist: (a) Para 510 HGB - the owner pro tempore A shipowner is defined in para 484 HGB as a person who owns a ship and earns living from shipping. In the case where a ship is used for shipping by a person who is not either the owner or the charterer, a shipowner in principle does not exist in terms of private law. This circumstance is taken into account by para 510 HGB.21 In accordance with para 510(1) HGB, someone who employs a ship (but not as owner) in order to live thereby and for his own account, and who ei ther commands it by himself or who entrusts it to a master, is regarded as shipowner in relation to third persons. This so-called owner pro tempore becomes a shipowner, despite the fact that he is not its owner in the real sense (eg the registered shipowner), and he has all rights and duties of a shipowner. He, for instance, has the opportunity to assert by action in court all claims, which arise out of the use of a ship, eg as the result of a collision. If para 510 HGB is applicable, the real shipowner of the ship has no influence in such matters. On the other hand, the owner pro tempore is the debtor in respect of all obligations arising out of the use of the ship. He owes the crew wages because he employs them. The master binds the owner pro tempore because of the authority he exercises. 22 20 21 22 Cf Chapter 11 (1). G Schaps and H J Abraham Das Seerecht in der Bundesrepublik Deutschland (Erster Teil - Seehandelsrecht) 4ed (1978) introduction to para 510 HGB. Cf BGH, NJW 1957, 828. H Pruessmann and D Rabe Seehandelsrecht 2ed (1983) annotation F(1) of para 510 HGB. 7 As a rule claims arising out of the use of a ship can only be brought agains t the owner pro tempore himself,23 because the owner pro tempore in relation to a third party appears as a quas i-shipowner. I-e is therefore liable for the ship and the cargo. 24 It is thus possible to arrest a ship J which is deemed to belong to the owner pro tempore. An arrest is not only competent against the ship over which the owner is the owner pro tempore but also against other ships which he owns as owner. As far as maritime liens25 are concerned, the shipowner himself can provide securi ty against an arrest of his ship J or should the occasion arise, when there is a judicial sale of his ship. Claims by ship's creditors can however either be made against the owner pro tempore or against the owner himself and against the master J 26 as long as the owner pro tempore is in existence. If a creditor wants to enforce a maritime lien against the owner pro tempore, which arose during the use of the ship by the owner pro tempore, the shipowner is27 not permitted to intervene. 28 There will usually be an agreement between the owner pro tempore and the shipowner to the effect, that the former will defray the latter's expenses in relation to maritime liens and other claims, which result from use of the ship by the owner pro tempore. Both the maritime lien and other claims can be brought against the owner pro tempore and the shipowner himself. 29 23 24 25 26 27 28 29 Ibid. Schaps & Abraham op ci t annotation 8 of para 510 HGB; Albrecht op ci t 1143. Cf para 510(2) HGB. Cf para 760(2) HGB. In accordance with para 510(2) HGB. The case would have to be decided in a different way if the shipowner was able to prove that the use of ships by the owner pro terrpore was unlawful J or that the creditor was not bona fide. Cf para 510(2) HGB. Cf para 760(2) HGB. 8 After the return of the ship, the shipowner is further liable for mari time liens, which have arisen when the owner pro tempore held the ship. Any subsequent legal action or application for an arrest therefore has to be directed against the person who is the new owner pro tempore or the shipowner. 30 A maritime lien which arises from the use of the ship during the holding of owner pro tempore follows the ship, and it is therefore of no consequence who possesses the ship, whether this be the owner pro tempore, the shipowner or the new owner pro tempore. 31 In principle one can therefore say that the shipowner is liable for his own debt with his own ship, whilst the owner pro tempore is liable for his own debt with the strange ship.32 (b) Charter The law permits a further exception to the principle that it is only possible to enforce against the property of the debtor. This is the charter. One has to distinguish the case in which a charterer becomes an owner pro tempore within the meaning of para 51 0 HGB and the case, in which a charterer is nei ther the owner pro tempore nor the shipowner but only a third party, who uses the ship for a living. In the cases of a time-charter (with a so-called emplOYment clause) one should note that the time-charterer appears as a carrier by sea when he concludes the contract with a sub-charterer (the party contracting with the time-charterer as a sea-carrier in order to have his cargo transported). He 30 Pruess~ann & Rabe op cit annotation F(2)(b) of para 510 HGB 31 For the relationship between an owner pro tempore in accordance with para 510 HGB and charterparties see Chapter 11 (2) (b). 32 Cf Albrecht op cit 1142. 9 does not become the owner of the ship through the charterparty, which he has, by means of the time-charterparty, hired from the shipowner. 33 The shipowner leases the charterer the ship with the crew (cf Baltime or Deuzeit-Charter). At this time he concedes that the charterer, within certain 1 imi ts, has the legal competence to give directions to the master. 'Ibe master and the crew remain in the employ of the shipowner, who is liable for them, and consequently maritime liens can be created in accordance with para 754 (1) (No 1) HGB. The time-charterer does not become an owner pro tempore within the meaning of para 510 HGB, unless he makes it public (ei ther by words or actions), that he is the owner pro tempore. In this case, he will be fully liable like a shipowner or an owner pro tempore. 34 Para 510 HGB therefore is not applicable to Baltime- or Deuzeit Charter. 35 Arising from the contract of carriage, which the time-charterer concludes with a third party, the time-charterer and not the shipowner will be under obligation as carrier. In this context, when determining the liability under a charterparty, one has to distinguish the relations under a charterparty and those under a Bill of Lading. Usually one is confronted with two contracts, the charter contract linking the owner and the time-charterer (or a charterparty ei ther time or voyage linking the mentioned time-charterer as carrier and a sub-charterer) and the contract linking the consignee (often not the same person as the charterer) and the carrier (ei ther eg the time-charterer or the owner as the case may be). According1y , with a Bi11 of Lading, the time- charterer as a carrier by sea is also liable in relation to the parties 33 R Liesecke 'Schiffsglaeubigerrecht und Arrest' MDR 1967, 625 at 626. 34 Pruessmann & Rabe op cit annotation C(3) of para 510 HGB. 35 The High Court of Justice (Bundesgerichtshof) BGH, NJW 1957, 828 ruled as follows: A time-charterparty on basis of the Bal time (Deuzei t) does not establish an owner pro tempore in accordance with para 510 HGB. This provision cannot be applied correspondingly to Deuzeit-Charterparty with claims of third parties, which are attributable to the fault of the crew. 1 0 concerned with the cargo. 36 The shipowner is not liable for performance of the contract of carriage, especially in accordance with para 559 HGB37 and for damage to cargo in terms of para 606 HGB. 38 One should notice, however, the exception to the rule contained in para 644 HGB, where the shipowner will be liable where the name of the carrier by sea is not specified in the Bill of Lading of the master or the agent of the shipowner. The shipowner is then the carrier by sea as the bills are issued by his agent on his behalf. Claims against a time-charterer (with an employment-clause) have to be raised against the time-charterer as the carrier by sea. 39 It is questionable, whether a creditor can arrest a ship because of claims for which not the shipowner but the charterer is liable to a consignee or a third party. If it is possible to arrest a ship in this case, one would be departing from the principle that only the property of the credi tor can be arrested. 40 Before answering the question it has to be mentioned that under German law a consignee, in view of loss of cargo, has two claims against the carrier, one contractual claim and one based on tort. A third party which has no contractual link with the carrier or the owner has a claim based on tort (eg collision, damage to quay). Departing from this, the time-charterer is not liable when the damage done to cargo is committed by the crew and as far as the nautical scope is concerned, provided the charterer has not given any 36 ef Art.IV of the Hague-Visby Rules concerning the immunity from liability of the owner for loss or damage arising from unseaworthiness. 37 Liability of the carrier by sea for seaworthiness and cargoworthiness. 38 Liability of the carrier. 39 Cf Liesecke op cit 626. 40 Cf Albrecht op cit 1143. 11 directions neither to the crew or master41 . In this case the owner become liable by means of his master and crew and, accordingly, a consignee can arrest the ship. As to performance of the contract of the charterer or compensation for damage arising out of a contractual obligation it is only competent to arrest the ship because of debts of the charterer when the damage or non performance of the contract with the consignee was caused by joint tort of crew and charterer. 42 soehring43 is therefore right when he states that it is especially with time-charterparties important to get sufficient evidence as to the responsibility of the shipowner. This is the surest way for an arrest to being successful. He gives the following example: 44 "Bunkers are very often ordered by the master or an agent on behal f of unknown charterers. In this case a creditor should produce a perfect bunker requisi tion, signed by the master in addition to the charterers order or other documentary evidence showing the joint and several liability of the owners. For cargo claims constituted by the charterers, the Hague Rules may assist the creditors view and hold available a guideline for the German judge. This is because the judge has to decide, whether the creditor's evidence is sufficient in accordance with para 916 ZPO and para 917 ZPO." One has to distinguish between the time-charter and the (pure) I Miet-Charter , (ie I Bareboat Charterparty I or 'Charter by Demise I). These two charter-parties are correspondingly extensive. 45 The owner delivers his ship to the charterer so that the charterer can himself man and equip the unmanned and unequipped ship. The shipowner surrenders his ship to the charterer with full power of disposition over it. 41 Cf Art.IV(2)(a) of the Hague-Visby Rules. 42 Cf para 485 HGB. 43 Op cit 53. 44 Ibid. Cf Part B -.Chapter XIV (a) (ii). 45 Cf F M Ventris Tanker Voyage Charter Parties (1986) at 25. 12 The charterer, in the case of a I Miet-Charter' (eg I Bareboat Charterparty' or 'Demi se Charterparty I) becomes an owner pro tempore, if the remaining preconditions of para 510 HGB are met. 46 The charterer becomes a shipowner and the (real) owner looses his shipowner position and takes a legal position under the rules of civil law. 47 Since the charterer in this case becomes an owner pro tempore, the same principles bind him as described in Chapter 11 (2) (a). In accordance with most charterparties, the charterer has a lien over the vessel for all moneys paid in advance and not earned, and the owners have a lien over all cargos and sub-freight belonging to the time-charterers and any Bill of Lading freight for all claims under the charter. 48 The liens of the charterer over the vessel can be secured by means of an arrest. (c) Sale of vessel Once the vessel has been sold and once the property has passed to the new owner, an arrest against this new owner under certain condi tions is possible. This can be called an exception to the rule that only the property of the debtor can be arrested. As far as mari time liens are concerned the creditor does not lose his rights because of the sale of the ship. The maritime lien creates a real right (statutory lien) over the ship.49 This follows the ship until it is discharged or until ceases to operate for other reasons. The fact, that it is possible to proceed against the new shipowner even after the vessel's sale is governed by para 755(1) (sentence 2) HGB. It is provided here that the lien over the ship can be enforced against each possessor of the ship. The new shipowner is the new possessor and is therefore the debtor for the' 46 Schaps & Abraham op cit marginal note 5 of para 510 HGB. 47 Pruessmann & Rabe op cit annotation C (4) of para 510 HGB 48 Cf also para 623 HGB (Legal Right of Lien of the Carrier by Sea). 49 Cf para 755(1) HGB. 13 maritime lien. 50 (3) possibilities of limitation of liability and exclusion of liability In principle it is possible to take possession of all items of property of the debtor (ie shipowner, owner, charterer, owner pro tempore, salvor) to satisfy the claim. 51 The shipowner is for instance liable52 for damages suffered by a third party and caused by a member of the crew or a pilot, who has been on board the ship. As far as the cargo owners are concerned, the shipowner is only liable insofar as the carrier by sea is responsible for the fault of the crew. If one accepts this unrestricted liability as the basic principle, it is necessary to refer the exceptions to the rul e. In accordance with paras 486 to 487e HGB, in relation to the International Convention on Limitation of Liability for Maritime Clairrs of 1976 (the 1976 Convention)53 for instance, shipowners (that is owner, charterer, manager and operator of a sea-going ship wi thin the meaning of Art. 1 (2) of the 1 976 convention) and a salvor (Art.1(3) of the 1976 Convention) are able to limit their liability for maritime claims. 54 This is the meaning of Art.2 of the 1976 Convention. A responsible person is, however, not allowed to limit his liability if 50 51 52 53 54 with regard to maritime liens see Chapter III (1) (a) (ii). Cf exceptions above in Chapter 11 (2). In accordance with para 485 HGB. Germany acceded to the 1976 Convention on 23 July 1986, cf Federal Law Gazette (Bundesgesetzblatt) 11, p 786 and p 787. Cf Singh op cit vol 4 at 2976. South Africa has not ratified the 1976 Convention; cf Part B Chapter XIV (4). One has to take note of the provisions dealing with the exception of liability of juristic persons and business partnerships in accordance with para 487d HGB. 14 the damage done by him has been on purpose or committed carelessnessly and with the knowledge that such damage will in all probability occur. 55 According to Art.11 of the 1976 Convention, where the person alleged to be liable has deposited money (a fund) with the court or some other authority in any state in which legal proceedings are instituted,56 this will serve as sati sfaction only for claims in which a 1 imi tation of liability is pleaded. After the fund has been constituted, any ship or other property belonging to the person on behalf ,of whom the fund has been constituted, which has been arrested and against which a claim is raised, may be released by order of the court or other competent authority of the state. 57 In accordance with Art.13(2){sentence 2){a)-(d) of the 1976 Convention, however, such a release will always be ordered if the limitation fund has been constituted: (a) at the port, where the occurrence took place, or, if it took place out of port, at the first port of call thereafter; or (b) at the port of disembarkation in respect of claims for loss of life or personal injury; or (c) at the port of discharge in respect of damage to cargo; or (d) in the State where the arrest is made. Liability can also be limited where it is based on the International Convention on Civil Liability for Oil Pollution Damage58 and the Protocol to 55 56 57 58 Cf Art.4 of the 1976 Convention. Cf para 487e HGB in conjunction with Art.14 of the 1976 Convention. Note para 305a ZPO (JUdgment Reserving Maritime Law Liability), wher~ possibly the right of limitation of liability can be disregarded with the legal decision. Likewise note para 786a ZPO (Limitation of Liability in the Scope of Maritime Law) in connection with para 305a ZPO. Brussels, November 29, 1969. Cf Federal Law Gazette (Bundesgesetzblatt) 1975 11, P 301 and Singh op cit vol 3 at 2482. 15 that Convention. 59 Although the liability is subject to a limitation, both, in principle or in terms of the 1976 Convention, it is possible prior to the constitution of the liability deposit60 to arrest a ship of a shipowner according to Art.1 of the 1976 Convention. This resul ts from Art.1 3 of the 1976 Convention, where after constitution of the fund the court or other competent authority releases the ship or property from arrest. As long as the fund has not been constituted, an arrest to secure the cla im (ie the maritime claim wi thin the meaning of the 1976 Convention61 ) is competent. If the ship in respect of which the claim lies is seizable, than it is not permissable to arrest a sistership, for the reason that the sistership is not responsible for the claim as long as the ship which caused the damage is seizable. In the case of carriage of goods by sea, limitations of liability are in existence,62 and in some cases the carrier by sea is allowed to appeal for a complete exclusion of liability (for instance in warlike events, strikes or actions/ omissions of the stevedore or owner of the commodities).63 In these cases, there is no possibili ty of arresting a ship, because there can be no claim for an arrest within the meaning of para 916 ZPO.64 In para 660 HGB the German law of carriage of goods by sea creates the opportuni ty for the carrier by sea to be liable for loss or damage up to a maximum amount, provided that the type and value of goods are not specified by the stevedore before their loading and the details have been drawn up in the 59 London, November 19, 1976. Cf Federal Law Gazette (Bundesgesetzblatt) 1975 II, P 301 and Singh op cit vol 3 at 2489. 60 Cf Art.11 of the 1976 Convention. 61 Cf Art.2 of the 1976 Convention. 62 Cf para 607a HGB. 63 Cf paras 608 and 609 HGB. 64 Cf Chapter III (1) (a). 16 Bill of Lading. In the case of general average65 the party entitled to compensation for instance has a maritime lien because of the contributions which have to be paid by the ship or the cargo. 66 This can be secured by means of an arrest against the owner or shipowner. 67 (4) Sisterships Arising from the principle, that all property of the debtor can be executed against or arrested it is competent to arrest other ships of the shipowner, if the shipowner himself is the debtor of the claim. In principle, only the ship which is let to the owner pro tempore, can be arrested. 68 In the case of a charter, the conditions described previously69 arise. with maritime liens and charterparties which correspond to the owner pro tempore, it is only possible to arrest the ship from which the claim arises and one cannot arrest a sistership. This is because of the peculiarity of the maritime lien - it follows the ship and is not transferable. 65 Cf paras 700 ff HGB. 66 Cf para 726 HGB. 67 Cf Chapter III (1) (a) (iii). 68 Cf the peculiarities relating to the owner pro tempore referred to at Chapter 11 (2) (a). 69 In Chapter 11 (2) (b). 17 (5) International Convention for the Unification of Certain Rules Relating to the Arrest of seagoing Ships of 1952 If the International Convention for the Unification if Certain Rules Relating to the Arrest of seagoing Ships of 1952 (the Arrest Convention of 195270 ) is applicable, the creditor71 can (like in German law)72 arrest either the ship in respect of which the maritime claim73 in accordance with Art.1(1) of the Arrest Convention of 1952 arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship, even though the ship arrested is ready to sail. 74 A ship flying the flag of one of the contracting States may be arrested in the jurisdiction of any of the contracting states in respect of any maritime claim but in respect of no other claim. 75 The Arrest Convention of 1952 has the task of only limiting arrests and does not set grounds for obtaining arrests. In other words the Arrest Convention of 1952 does not give a claim for an arrest, but in accordance with Art.6 and Art. 7 of the Arrest Convention of 1952, the precondi tions relating to the substantive law have to be fUlfilled. 76 The preconditions are determined by national law. In Germany therefore the precondi tions of paras 91 6 and 917 ZPO have to be fulfilled. The mari time claims enumerated in Art.1 (1) of the Arrest Convention of 70 Germany joined the International Convention for the Unification of certain Rules relating to Arrest of Seagoing Ships (Brussels, May 1 0,1952) in 1972, Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 655. 71 •Claimant , in terms of Art.1(4) of the Arrest Convention of 1952. 72 In accordance with Art.3(1) of the Arrest Convention of 1952. 73 The definition of maritime claim can be found in Art.1(1) of the Arrest Convention of 1952. 74 Cf Art.3(1) of the Arrest Convention of 1952 and para 482 HGB. 75 Art.2 of the Arrest Convention of 1952. 76 The Clydefirth OLG Hamburg, VersR 1987, 356. 18 1952 represent pecuniary claims and might become pecuniary claims in accordance with para 916(1) ZPO.77 A number of the mari time claims set out in Art.1 (1) of the Arrest Convention of 1952 correspond to para 754 HGB (mari time lien s). One may emphasize that in accordance with Art.9 of the Arrest Convention of 1952 nothing will be construed as creating a right of action, which, apart from the provisions of the Arrest Convention of 1952, would not arise under the law applied by the court which had seisin of the case, nor as creating any maritime liens which do not exist under such law or under the Convention on Maritime Mortgages and Liens, if the latter is applicable. The lex loci therefore determines whether a maritime lien exists according to its own law. Accordingly, a maritime lien recognized in Germany does not necessarily mean that it will be recognized in England when a creditor wants to enforce his maritime lien by means of arresting a ship in one of the English ports. This can be a disadvantage for the German maritime lien holder because the principle of a maritime lien that it follows the ship will be undermined. Art.9 of the Arrest Convention and the English law contain the same axiom. English law does not recognize a foreign maritime lien which does not arise under its own law. 78 The draft revision of the Arrest Convention of 1952, elaborated by the Corni te Maritime International takes this disadvantage into account. Art.9 of the draft revision reads as follows: 79 IIA state may, when signing, ratifying, accepting or acceding to this Convention, reserve the right to refrain from applying the Convention to ships not flying the flag of a state party. 11 77 Cf Chapter III (1) (a) (i). 78 See Part B - Chapter XVI (1). 79 See the I Draft Revision of the International Convention for the Unification of Certain Rules Relating to the Arrest of sea-going Ships I TranspR 1985, 363 at 365. Cf Albrecht & Looks op cit 323. 19 Proceeding from the above the following maritime claims in Art 1 (1) of the Arrest Convention of 1952 also give maritime liens in accordance with para 754 HGB and therefore I give I a claim for an arrest in cases, where German law is applicable and a German court deals with the matter: _ Art.1(1)(a): damages suffered because of loss or damage to thingsjSO - Art.1 (1)(b): loss of life or personal injuryj S1 _ Art.1(1)(c): salvage and provisions of aid when in distress at seajS2 - Art.1(1)(g): general averagejS3 - Art.1(1)(j): pilotage;S4 - Art.1 (1)(1): harbour dues. S5 It should be mentioned that the Arrest Convention of 1952 is only binding the contracting States such as west Germany and the united Kingdom, but not South Africa having not ratified the Convention. The Arrest Convention of 1952 is only applicable between these and other contracting States. S6 Furthermore, Art.3(1) of the Arrest Convention of 1952 states that it is possible not only to arrest a ship because of the maritime claims in terms of Art.1(1) of the Arrest Convention of 1952, which the claim refers to, but also every other ship of the same shipowner. This is an exception to Art.2 of the Arrest Convention of 1952. A so-called sistership therefore can be arrested, if the owner is personally liable or if the sistership87 itself is liable in rem 80 81 82 83 84 85 86 Para 754(1)(No 3) HGB. Para 754(1)(No 3) HGB. Para 754(1)(No 4) HGB. Para 754(1)(No 4) HGB. Para 754(1) (No 2) HGB. Para 754(1)(No 2) HGB. Cf Art.14 of the Arrest Convention of 1952. 87 I Sistership I is defined in Art. 3 (2) of the Arrest Convention of 1952. Accordingly, ships shall be deemed to be in the same ownership when all the shares therein are owned by the same person or persons. 20 for the maritime claim88 . Art.3(4) of the Arrest Convention of 1952 is applicable to the owner pro tempore. 89 According to this a creditor/ claimant (where an owner pro tempore and not the registered ship is liable in respect of a maritime claim relating to the ship) may arrest such ship or any other ship in the ownership of the owner pro tempore, subject to the provisions of the Arrest Convention of 1952. No other ship in the ownership of the registered owner can be arrested to satisfy such a maritime claim. 90 The permissibility of a security attachment (arrest of a ship) presupposes, that there is in another contracting state sufficient security for the claim to be in existence. Pursuant to Art.3(3) of the Arrest Convention of 1952, a ship will not be arrested, nor will bailor other security be given more than once in anyone or more of the jurisdictions of any of the contracting states in respect of the same maritime claim by the same claimant. Art.3(3) of the Arrest Convention of 1952 reads further as follows: "If a ship has been arrested in anyone of the jurisdictions of the contracting states, or bailor other security has been given in such jurisdiction either to release the ship or to avoid a threatened arrest, any subsequent arrest of the ship or of any ship in the ownership of the same claimant for the same maritime claim will be set aside, and the ship released by the Court or other appropriate 88 Schaps & Abraham op cit Appendix para 482 HGB, marginal note 1 of Art.3 of the Arrest Convention of 1952; cf R Herber I Zur Modernisierung des deutschen Seehandelsrechts' HANSA 1972,510. 89 One should note that the English translation of Art. 3 (4) of the Arrest Convention of 1952 speaks of a charter by demise, whereas in the German translation, the idea of the owner pro tempore (fitter) is used and accordi~gly goes further than wha t corresponds wi th th e Eng lis h translatlon. The charter by demise is, in the meaning of the German law, an owner pro tempore pursuant to para 510 HGB (cf. Chapter 11 (2) (a). Compared to the charter by demise, the owner pro tempore is the generic term, whereas the charter by demise is the subterm. 90 This regulation corresponds to German law - cf Chapter 11 (2) (a). 21 judicial authority of that state. This is unless the claimant can satisfy the Court or other appropriate judicial authority that the bailor other securi ty had been finally released before the subsequent arrest or that there is other good cause for maintaining that arrest." Art.3(3) of the Arrest Convention of 1952 is also applicable to ships under the own flag of a contracting State which has stopped in the flag state. This will occur provided the other preconditions are complied with. 91 91 Schaps & Abraham op cit Appendix para 482 HGB, marginal note 1 of Art.3 of the Arrest Convention of 1952. 22 C H APT E RIll LEGAL REQUIREMENTS OF AN ARREST (ACTION IN REM) (1) Particular preconditions The arrest will be ordered, if (besides certain other preconditions, which will be discussed later) the two particular precondi tions, narrely "claim for an arrest,,92 and "urgent reason for granting an order of civil arrest" 93 are before the court. 94 (a) Claim for an arrest - para 916 ZPO (types of claims) (i) The preconditions of para 916 ZPO In accordance with para 916 ZPO the arrest will generally take place to secure the enforcement of a judgment in relation to movable or immovable property - in this case in relation to ships (and ships under .construction). The arrest therefore has a safety function whereby the creditor can, by the enforcement, utilize his real right obtained by means of the enforcement of the arrest. 95 Para 91 6 sets out the requirements which must be furnished, in order for the application for an arrest to be successful. The claim has to be a pecuniary claim or must be able to become a 92 Para 916 ZPO - see Chapter III (1) (a). 93 Para 917 ZPO - see Chapter III (1) (b). 94 Cf Zoeller and Vollkommer Zivilprozessordnung 15ed (1987) marginal note 1 of para 916 ZPOi H J Abraham Das. Seerecht 2ed (1950) at 67; H Wuestendoerfer Neuzeitliches Seehandelsrecht 2ed (1950) at 109. 95 OLG Hamburg, MDR 1967, 677. ef RG, RGZ 31, 370 at 374. pecuniary claim. 96 23 The latter refers, for example, to cases of either "impossibility of performance" or the cases mentioned in paras 887 and 893 ZPO. Para 887 ZPO relates to cases of so-called "surrogate performance", in which the creditor undertakes the performance of an obligation instead of the debtor. The costs of this performance rests on the debtor. If the debtor, for example, is to hand over a res which he has undertaken to provide or to produce, para 887 ZPO will come into use should he not meet his obligation to make available or produce the fungible thing. The costs arising ou t of the surrogate performance are costs, which97 may become a pecuniary claim. 98 Contrary to this, para 893 ZPO gives the creditor the right to demand performance of the interest instead of the original performance. This would for example be applied if the debtor is not able to hand over the res, because he has alienated it. Alternatively, if the debtor is not able to hand over the res because he has not fulfilled the judgment and the action he· had to perform cannot be enforced,99 para 893 ZPO will also apply. The claim for an arrest is regarded as the principal claim. The enforcement of this principal claim will be secured by the subsequent ratification of the court. 1 00 An arrest within the scope of the provisions relating to the sea trade101 ensures execution against a ship or a ship under construction. The principal claim - for example through judicial sale - will be authorized by the arrest. Thus in the case of the denial of a righ t of 96 Cf L Hagberg and H-C Albrecht Maritime Law - Volume I: Arrest of Ships ed L Hagberg (1975) at 35. 97 within the meaning of para 916(1) ZPO. 98 Cf Zoeller & Stoeber op cit marginal notes 1 and 2 of para 887 ZPo. 99 Ibid marginal note of para 893 ZPO. 100 Pruessmann & Rabe op cit annotation D (2) of para 482 HGBi Zoeller & Vollkommer op ci t marginal note 1 ,of para 916 ZPO. 101 Para 476 HGB ff. 24 execution on a Bill of Lading, an arrest may be possible, because a damage claim could arise from this. 102 In respect of future claims, an arrest is admissable. Thomas and Putz0103 deny that there is the permissibility of securing future cla.ims in terms of para 926 ZPo. This provision prescribes that if the principal claim is not pending, the competent court for arrest proceedings (assuming that an application is filed) will without oral hearing rule that the party who has obtained the arrest order, will be required to bring an action within designated time-limit. In the situation where the judicial order is not obeyed, the court will order the release of the ship from the arrest by means of judgment. once again this depends on an application being filed. In support of their opinion, 'Ihomas and Putzo argue that because the future claim is not yet actionable, it is no way to fulfil the requirements in terms of para 926 ZPo. This provides the mechanism of confirming the arrest contained in the interlocutory order by means of a judgment on the principal claim. Because of this, a future claim will only be actionable, if the claim to be secured has become due. In my opinion this viewpoint cannot be accepted. 104 A conditional claim is frequently not actionable. On the other hand, a declaratory proceeding is competent for future legal relations. One has to weigh-up the interests and examine whether the debtor has an interest which should be protected. This is in order that he can already at this stage secure his claim. This weighing-up of interests has to be done wi th the consideration of a frictionless exchange of commodities as well as of a frictionless exchange of goods and services. It 102 Zoeller & Vollkommer op cit marginal note 5 of para 916 ZPOi dissenting opinion OLG Hamburg, VersR 1982, 341. 103 H Thomas and H Putzo Zivilprozessordnung 14ed (1986) annotation 2 of para 916i cf stein & Jonas & Grunsky op cit marginal note 9 of para 916 ZPO with references to other authors arguing along the same lines. 104 ef stein & Jonas & Grunsky op cit marginal note 9 ff of para 916 ZPo. 25 also has to be done with the consideration that the creditor like the debtor should only be burdened in the least burdensome way. The extra demurrage, when arresting a ship, results in enormous charges, simply because a ship which does not sail does not earn money. Therefore an arrest is competent to secure a claim for reimbursement of the costs and expenses of the action, if it is expected that the prospects of success favour the debtor. 105 In accordance with para 916(2) ZPO, an arrest in a conditional claim and in future claims is explicitly granted leave, with the restriction contained in the second part of the provision. This provides, inter alia, that conditional claims do not require the security of an arrest, unless the condition, because of the remote possibility of the occurrence of the event, has no present pecuniary value. Each case will depend upon its own facts and circumstance s. The debtor will be responsible for this evidence. (ii) Maritime lien as a claim for an arrest A claim for an arrest wi thin the meaning of para 916 (1) .ZPO is also available in respect of a maritime lien in accordance with para 754(1) HGB. 106 This does not appear directly from the Act, but is correctly recognized by the dominant opinion. 107 Rabe108 observes that the holder of a maritime lien is able to establish a claim for an arrest as follows: 105 106 107 108 Cf Zoeller & Vollkommer op cit marginal note 8 of para 916 zPO. See International Convention for the Unification of Certain Rules of Law Relating to Maritime Liens and Mortgages (Brussel s, April 10, 1926 and Bruss~ls, May 27,1967), which has never been accepted by any English speaklng country nor ratified by Germany. For instance Pruessmann & Rabe op ci t annotation D (2) (a) of para 482 HGB; Liesecke op cit 625; Albrecht op cit 1142. For a different opinion cf OLG Hamburg, MDR 1967, 50 and, confirming its legislation, cf MDR 1967, 677; cf also OLG Brernen, MDR 1955, 749. Pruessrnann & Rabe op cit annotation D (2) (a) of para 482 HGB. 26 "As the maritime lien as well as the mortgage of a vessel serves as a pecuniary claim, a claim for an arrest is also given with a maritime lien. Since the one year time-period of preclusion in terms of para 759 (1) HGB only becomes evident by attachment through execution of judgment, it will follow that, if a maritime lien exists, this and not for example the personal claim against the shipowner serves as the claim for an arrest." Mari time liens, which are pecuniary claims within the meaning of para 916(1) ZPO, also need to be secured by means of an arrest like every other pecuniary claim or a claim which might become a pecuniary claim. Indeed, mari time liens enjoy the privilege of being first in time over liens over the ship109 and the credi tor may for example enforce his rights by means of the judicial sale of the ship.110 The above-mentioned assumes that the ship is registered in the ships- register or can be registered in the ships-register. The legal remedies are of no use, if the object of the judicial sale, viz the ship, is not available because it has sailed away. The maritime lien in this case does not offer real security, only the arrest does that. Another opinion in respect of an arrest arising out of a maritime lien is provided by the OLG Hamburg. 111 This court is of the opinion that the maritime lien itself does not establish a claim for an arrest against the shipowner. If the creditor wants to prevent the removal of the ship, he has to put in a claim for an interim injunction and he has simul taneously to sequestrate the ship. In support of its opinion, the court argues that with the securing of maritime liens the peti tion for an interim injunction is only admissable under the 109 Para 761 HGB. 110 ef para 760(1) HGB and para 870a(1) ZPo. 111 OLG Hamburg, MDR 1967, 50 and MDR 1967, 677 = HANSA 1967, 1805i Zoeller & Vollkommer op cit marginal note 10 ff of para 917 ZPOi cf OLG Bremen, MDR 1955, 749. 27 precondi tions of para 935 ZPO wi th the regulation of sequestration112. The reason is that the petition for a temporary injunction and attachment of a claim have no legitimate interest in the proceedings. As an obstacle, the court is of the opinion "that an arrest and its enforcement by means of the levy of execution (cf para 930(1) and (2) ZPO, para 804(1) ZPO) will serve as security for future monetary execution in the scope of the already obtained attachment lien." The application of the attaching credi tor, said the court, is only for the purpose of preventing the departure of the shi p. The applicant in the arrest has no interest in the attachment lien, because a maritime lien has preference (cf para 761 HGB). The court therefore is only allowed to grant an arrest if the creditor, when enforcing his future pecuniary claim, is able to utilize an in rem right obtained by the enforcement of a civil arrest. This opinion is not acceptable to many authorities for reasons already mentioned above. 113 Liesecke114 correctly submitted, contrary to the OLG Hamburg, that para 917 ZPO determines the preconditions of an attachment order impounding the debtor's property in the following way: "This will take place, if wi thout the credi tor I s action the enforcement of the judgment will be defeated or rendered more difficult. The future judgment by obtaining the arrest because of a mari time lien is a judgment in which one suffers execution of the ship (cf para 760(2) ZPO). The enforcement will be rendered more difficult if the ship sails away. The law does not demand that the credi tor generally first obtains an in rem right over the object (here the ship) through the enforcement of a civil arrest." 112 ef para 938(2) ZPo. 113 ef Pruessmann & Rabe op cit annotation D (1)(b) of para 482 HGB; Liesecke op cit 625; stein & Jonas & Grunsky, op cit marginal note 21 of para 917 ZPo. 114 Liesecke op cit 625. 28 Furthermore, the maritime lien gives a so-called statutory lien in terms of para 755(1) HGB. It would be a disadvantage of a lienholder compared with any other credi tor, if the latter can secure his right by means of an arrest provided that the right is a pecuniary claim or might become a pecuniary claim. Not only German maritime liens therefore are claims for an arrest. Also foreign mari time liens have to be recognized as a claim for an arrest. This follows from the principle that, general speaking, rnari time liens are regarded as a claim for an arrest. It is of no consequence where (ie in which country) the rnari time lien arose as long as this rnari time lien is a pecuniary claim or might become a pecuniary claim in terms of para 916 ZPO.115 (iii) Mari time claims as a claim for an arrest in terms of the International Convention relating to the Arrest of Seagoing Ships of 1952 A claim for an arrest will also exist for almost all maritime claims according to Art.1(1) of the International Convention Relating to the Arrest of seagoing Ships of 1952 (the Arrest Convention of 1952).116 (b) Urgent reason for granting an order of civil arrest - para 917 ZPO In order for an arrest to be allowed, the elements of para 917 ZPO also have to be fulfilled. Para 917(1) ZPO states that an order for arrest will be granted if it is apprehended that wi thout the order, the enforcement of the judgment will be defeated or rendered more difficul t. Pursuant to para 917 (2) ZPO, a sufficiently urgent reason for the granting an order of civil arrest will be that the judgment would have to be enforced abroad. 115 Cf Part B - Chapter (2) (b). 116 Cf Chapter 11 (5). 29 (i) writ of attachment in terms of para 917(1) ZPO The applicant has to give evidence if a concrete danger of enforcement of the judgement is given. Further, without the infliction of the arrest, the enforcement against a debtor, not against the ship, must be in danger. This means that the danger of enforcement of the judgment is not determined by the danger of the pledge of the ship, but by the danger of the enforcement of the pecuniary claim. 117 It is not necessary that a judgment has been recorded or other title of execution already lies before the Court. 118 The arrest relates to what will later be secured in respect of the title. If there is to be a writ of attachment, it has to be determined by an objective standard. Thus the personal opinion of the credi tor is of no importance. 119 The court has a 1 imi ted scope in determining whether there should be writ of attachment and it is not a question of the unfettered discretion of the judge. Unfortunately, the statute does not say, 120 in detail, what a "concrete danger" is, aside from the exception contained in para 917(2) ZPO.121 Differing opinions have been given on the effect of these indefinite general legal concepts. Grunsky122 for instance states that the requirements of para 917(1) ZPO will be met, if the creditor is in danger of losing his basis for enforcing his claim owing to the rivalry of other creditors. By way of contrast Thomas and 117 The Pennoil OLG Hamburg, HGZ 1909, 107. 118 By missing: cf para 926 ZPO. 119 Cf Zoeller & Vollkommer op cit marginal note 4 of para 917 ZPo. 120 In accordance with para 917(1) ZPo. 121 See Chapter III (1) (b) (ii). 122 Stein & Jonas & Grunsky op ci t marginal note 1 of para 917 ZPO and W Grunsky lKonkurrenz anderer Glaeubiger als Arrestgrund 1 NJW 1976, 553. Cf LG Augsburg, NJW 1975, 2350. 30 Putzo1 23 are of the opinion that the arrest does not serve the purpose of improving the posi tion of the credi tor in respec t of the propert y 0 f the debtor. Rather, the purposes of the arrest should be to prevent a change for the worse. '!'he rivalry of creditors is not a requirement for a writ of attachment when the property of the debtor is insufficient to all the creditors. The OLG Hamburg124 is of the opinion that in general the imminent rivalry of other creditors is not a reason for a writ of attachment. The decision was based on the following facts: The steamer Clara was towing the barge of the defendant, when the tow chain broke. 'Ihe barge, because of this, ran into the shed of the plaintiff and caused damage. The application for the arrest in this case was based on the fact that the barg~, which was used by the defendant for business purposes, sailed abroad from time to time. The court gave the following reasons for its decision: "The business of shipping with the barge renders unavoidable the creation of new maritime liens, which are, by virtue of the law, ranked before the maritime lien of the plaintiff and consequently endanger his preferential right. The success of the attachment" could be defeated by the future judgment, although the act of attachment itself will not be defeated or rendered more difficul t. 'Ihe poor financial position of the defendant is a sufficient reason for a writ of attachment, because it is uncertain, whether the other property of the defendant will be sufficient to satisfy the claim of the applicant. In general, the rivalry of other creditors does not form a requirement for a writ of attachment. 125 In this case, the matter deals wi th the problem of preventing the devaluation of an already existing right of the applicant against newly forming liens. It normally happens that because of the rivalry of other credi tors 123 Thomas & Putzo op cit annotation 1 of para 917 ZPO; Zoeller & Vollkommer op cit marginal note 9 of para 917 ZPO are of the same opinion.' 124 The Clara I OLG Hamburg, HGZ 1903, 216. 125 RG, RGZ 3, 416. 31 challenging him by the arrest, the applicant will have a preferential claim over these other creditors, which he does not normally have. The execution of the arrest gives rise to the execution lien." Grunsky 126 argues, contrary to the above-mentioned opinions that the rivalry of other creditors will not be a writ of attachment. In my opinion, he correctly states: "Whoever applies for an order of arrest wants to improve his position of preference against the property of the debtor.- He aspires to obtain real security in the form of an execution lien, for which he normally only has a claim under the law of obligations-." The application for an arrest will, however, be successful, if the creditor already has real security to the extent offered by the execution lien. 127 It will therefore be of no consequence if one denies the existence of a writ of attachment or if one proves the result without a legitimate interest in taking legal action. Even the poor financial situation of the debtor will not be sufficient grounds for a writ of attachment. 128 In principle all facts from which the danger results have to be presented. Aside from this it must be shown that a change for the worse in the financial si tuation of the debtor is imminen t. It is unimportant that the applicant has known from the first about the debtor'S poor financial situation. 129 Knowledge of the debtor's poor financial situation does not mean that the applicant loses the security given in terms of para 916 ff of the ZPO.130 126 127 128 129 130 stein & Jonas & Grunsky op cit marginal note 1 of para 917 ZPo. Cf para 804 ZPo. Cf The Clydefirth OLG Hamburg, VersR 1987, 356i Zoeller & Vollkomrner op ci t marginal note 9 of para 91 7 ZPOi Stein & Jonas & Grunsky op ci t marginal note 5 of para 917 ZPOi cf The Pennoil OLG Hamburg, HGZ 1909 107. ' P Schwerdtner 'Zur Dogmatik des Arrestprozesses' NJW 1970, 223. stein & Jonas & Grunsky op cit marginal note 6 of para 917 ZPo. 32 Generally one can say that the danger of a deterioration in the financial situation of the debtor will always occur when he, for instance, wastes or encumbers his assets by mortgaging or transferring them. The mere intention of doing so is sufficient, and it is not necessary for the debtor to have started to do so. One has to distinguish the case of a breach of contract. 131 A wilful and knowing breach of contract normally represents a writ of attachment, but not necessarily delay itself. The failure to fulfil an obligation itself will not form a writ of attachrnent. Likewise also not in cases when performance has occurred after conclusion of the contract. 1 32 with other wilful breaches of contract however, a writ of attachment will normally be granted. Procedural behaviour may also come into question when applying for an arrest and when determining the writ of attachment. An example would be if the debtor, in the main legal proceedings, defended himself with what are proved to be fraudulent (untrue) pleadings or if he denied the authenticity of documents. 133 Natural events or acts of a third party against the debtor may also constitute a writ of attachment, provided the financial collapse of the debtor is imminent. Here one can refer for example to the boycott, which in the case of South Africa has become some significance. It is equally possible for the debtor to be struck and this may cause a deterioration of his financial situation. The institution of composition proceedings to avert bankruptcy134 does not in principle exclude the grant of a wri t of attachment in favour of a 131 ef Zoeller & Vollkommer op ci t marginal note 6 of para 91 7 ZPO i Schwerdtner op cit 225. 132 stein & Jonas & Grunsky op cit marginal note 8 of para 917(1) ZPo. 133 Ibid. 134 Vergleichsverfahren. 33 participating credi tor. However, as long as the institution of composi tion proceedings to avert bankruptcy is pending, there cannot be the danger of an arrest. One has to note that during the institution of composition proceedings to avert bankruptcy the opportuni ty of enforcement of an arrest135 and consequently the keeping of the time-limit referred to in para 929(2) ZPO will not exist. 136 Schwerdtner137 is correct in his assertion that there will plainly be no writ of attachment in this situation. '!he reason for this is the system referred to in para 917(1) ZPo. The legislator has not appropriated the writ of attachment, but rather an indefinite legal conception has been preferred so as to include the multiplicity of possible situations. The circumstances of each particular case will have to be examined by the court . .. No writ of attachment will be granted if the creditor has a title, which has become final and absolute (non-appealable) and which is wi thout security provisionally enforceable. On the contrary, however, if the title is not enforceable wi thout security, a writ of attachment is given if the debtor is unable to provide security.138 (ii) Writ of attachment in terms of para 917(2) ZPO In accordance with para 917(2) ZPO the fact that the jUdgment would have to be enforced abroad will be sufficient reason for the granting an order of civil arrest139 . Para 917(2) ZPO specifies a writ of attachment, and this therefore 135 136 137 138 139 Cf paras 47 and 124 VglO. Cf Schwerdtner op cit 226; Thomas & Putzo op cit annotation 1 of para 917 ZPo. Ibid 225. Cf Zoeller & Vollkommer op cit marginal note 12 ff of para 917 ZPo. Cf The ~lara I OLG Hamburg, HGZ 1903, 216; see also the appeal on points of law ln that case, The Clara 11 RG, HGZ 1904, 168. 34 represents a relief of the enforcement. A sufficient reason for the granting an order of civil arrest in accordance with para 917(2) ZPO is an unconditional writ of attachment. It is questionable whether an order in terms of para 917(2) ZPO will be issued only for domestic (German) judgments, or whether foreign judgments will be included where enforcement is to secured in a German harbour. Some writers are of the opinion, that the relief in para 917 (2) ZPO is only valid for German decisions. 140 The OLG Koblenz141 is of the opinion, that para 917(2) ZPO means that the enforcement of a domestic judgement will be secured within the country, even when sovereign rights play come into consideration. The value of the German title should be kept in the enforcement. This court argues that the wording of para 917 (2) ZPO already indicates, that this can only mean a German title because if one speaks of the enforcement of a judgement abroad, only a domestic judgment could be meant. Some of the courts142 within the scope of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968 (ECC- Convention) make an exception to that principle. In their opinion, para 917(2) ZPO is lirni ted to the enforcement of German judgments. Only after that can one deal with the case of the enforcement of a judgment in a third country. 140 OLG Stuttgart, NJW 1952, 831; OLG Frankfurt, NJW 1959, 1088; OLG Koblenz, NJW 1976, 2081, wi th the consenting opinion of Schlafen 'Anmerkung zum Urteil des OLG Koblenz vom 2.5.1975 (NJW 1976, 2081)' NJW 1976,2082; OLG Hamburg, VersR 1972, 1114; OLG Frankfurt RIW 1983, 289 - cf LG Koeln, RIWj AWD 1979, 128; W Grunsky 'Zum Arrestgrund des Paragraphen 917 Abs.2 ZPO bei der Vollstreckung auslaendischer Urteile (zu OLG Frankfurt, urteil vam 2.3.1983 IPRax 1983, 227)' IPRax 1983, 210; The Clydefirth OLG Hamburg, VersR 1987, 356; cf Soehring op cit 55. 141 OLG Koblenz, NJW 1976,2081. 142 The MS X LG Bremen, RIWj AWD 1980, 366; OLG Duesseldorf, NJW 1977, 2034; OLG Muenchen, RIW 1983, 534 at 535 - and consenting with the court, presumably, Schlafen op cit 2083; cf R Dittmar 'Der Arrestgrund der Auslandsvollstreckung ' NJW 1978, 1720; Grunsky, IPRax 1983, 210. 35 In this connection the OLG Bremen143 decided the following case: The plaintiff in arrest proceedings, a French joint-Stock company (public limited corrpany) with its seat of business in Paris, claimed damages against the defendant in arrest, a Dutch private limited company with its seat of business in Rotterdam. The cause was the considerable damage to cargo by the defendant in arrest proceedings as the carrier, who had been transporting the goods with The MS X. In terms of the judgment of the Tribunal de Commerce de Paris of 1.6.1977 the defendant in arrest proceedings was ordered to make payment. The defendant in arrest proceedings appealed against this judgment on questions of both fact and law. The case was taken on appeal before the Cour d'APPel Paris. Because of his claims the plaintiff in arrest proceedings obtained the order of arrest and an arrest order from the Magistrates Court (Amtsgericht) Bremen to arrest The MS X, which was owned by the defendant in arrest proceedings and which was in the .., dock of the 'Hapag Lloyd-Werft' (dockyard) Bremerhaven. On the objection of the defendant in arrest proceedings, the Magistrates I Court (Arntsgericht) Bremerhaven repealed the order of arrest, because it was of the opinion that the preponderance of evidence in favour of a writ of arrest was missing. The plaintiff in arrest proceedings lodged an appeal and asserted by action in Court that he had an urgent reason for the granting an order of civil arrest in accordance with para 917(2) ZPo. The LG Bremen argued, that it could not follow a restrictive interpretation of para 917(2) ZPO, which was only limited to German judgments. The court said that it could be left undecided, whether para 91 7 (2) ZPO was in former times granted by a consideration of the sovereign right to retain the value of German title by means of security through the possibility of domestic attachment. When interpreting and applying para 917(2) ZPO, one has to concentrate on growing European co-operation in the field of jUdicial relief and in terms of the EEC-Convention. Thus, tradi tional and national State considerations have to be subordinated. The EEC-Convention aims 143 The MS X LG Bremen, RIW/ AWD 1980, 366. 36 at the harmonization of the judicial decisions of the contracting states and provides for their acknowledgment and enforceability by execution in the particular contracting states. 144 Thus, for instance arrests, where these can be obtained at the courts of one of the contracting States, even if the court of another contracting state has jurisdiction for the principal claim. 145 This is the reason why the LG Bremen, in its application of para 917 (2) ZPO to a French principal-claim-judgment found that this did not have to be treated in a different way to German ones. 146 Even the OLG Duesseldorf147 has placed first the European-unity-Idea and refuses to accept the principle that para 91 7 (2) ZPO only deals wi th German judgments at any event within the frame of the EEC-Convention. That principle is opposed to the spirit of the EEC-Convention, because the LG Bremen148 has already ruled that Art.24 of the EEC-Convention presumes that the judgment of the principal claim is issued by another contracting state. The judgments of the contracting States have to be equated with domestic judgments to the extent envisaged by the Convention. On the other hand, the contracting states are also foreign countries according to para 91 7 (2) ZPO, because the EEC-Convention leaves the state borders untouched. The OLG Frankfurt149 has stated that even the EEC-Convention has not changed the fact that, in accordance with para 917(2) ZPO, only the enforcement of a domestic judgment will be rendered. The case in question dealt with an 144 145 146 147 148 149 Cf Art.26 ff and Art.31 ff of the EEC-Convention. Cf Art.24 of the EEC-Convention. The MS X LG Bremen, RIW/ AWD 1980, 366. ?LG Duesseldorf, NJW 1977, 2034; cf AG Leverkusen, IPRax 1983, 45, which lS of the opinion, that Art.24 of the EEC-Convention assumes that the ~udgment in the main issue is rendered in another contracting state as the Judgment in the arrest application. The MS X LG Bremen, RIW/ AWD 1980, 366. RIW 1983, 289. 37 arrest in German-Italian litigation. In the main issue an Italian court had jurisdiction. The court ruled that a person who decides to sue abroad also has to provide for the enforcement of the judgment abroad. The prejudice to the Italian creditor, however, contradicts the sense of the EEC-Convention, in that he has to suffer an arrest of his German property. Dittrnar150 considers that para 917(2) ZPO cannot be applied any longer to the contracting States of the EEC-Convention. If one follows the interpretation of the OLG Duesseldorf, 151 every foreign creditor, who finds an item of property of his debtor in Germany, 152 is able to obtain an order of arrest s imply by establishing suf ficient evidence of his cIa irn. Thus, according to the EEC-Convention, the creditor is able by his own choice to arrest any property of the debtor. However from the point of view of the laws of the EEC, para 917 (2) ZPO is out of date. This is because the Common Market has lead to increasing economic co-operation. The EEC-Convention is a reaction to the free market economy and its requirements, in which the alleviation of the enforcement of judgments has also found its place. It is untenable that a ci tizen of the European Community, who disposes of foreign property, has to realize, that his credi tors, on the basis of s imply establishing probable evidence of their claims, can freely arrest his property both domestic and abroad. The above-mentioned opinions on para 917(2) ZPO cannot be followed. It is necessary to go a step further. It has nothing to do with the origin of title, because the reason for the provision is that the creditor should not be burdened with the duty of enforcement abroad, if he can produce seizable objects of enforcement (eg a ship or a ship under construction) 150 Op cit 1720. 151 NJW 1977, 2034. 152 For example a claim, cf para 23 ZPo. domestically.153 38 It is of no consequence whether the future judgment originated from a German or another foreign court. Grunsky154 is right when he states that the aim is not to relieve the enforcement of German sovereign acts. Rather, the aim is that creditor, who has found property of the debtor within the country should not be forced to seek redress abroad. Thus, for instance, the institution of principal proceedings against a foreign single-ship company only has relevance, if the enforcement of the decision can be secured by an arrest within the country.155 One might mention that the above discussed problem does not only aris e with a view to judgments but also with a view to arbitration awards. Very often, for instance an applican t (eg a time-charterer of a vessel) faces the problem that the charterparty provides for arbitration in London. (iii) Further preconditions for the application of para 917(2) ZPO If one assumes that the general purpose of para 917(2) ZPO is to save creditors from the difficulties which arise from enforcement abroad, it is implicit in this that the judgment in Germany is also recognized and enforceable in accordance with para 328(1)(No 5) ZPO and para 723(2) ZPO. In accordance with the EEC-Convention most judgments will be recognized of courts of contracting countries, without needing a special proceeding. 156 Besides this there exist in relation to Germany and many other states 153 Cf Grunsky op cit 210 who is of the same 0plnl0ni see Pruessmann & Rabe op cit annotation D (2) (a) of para 482 HGBi Soehring op cit 56. 154 Gp cit 210i cf Stein & Jonas & Grunsky op cit marginal note 17 of para 911 ZPo. 155 Cf Pruessmann & Rabe op cit annotation D (2) (a) of para 482 HGB. 156 Cf Art.26 of the EEC-Convention. The members of the EEC-Convention are: Belgium, Denmark, Federal Republic of Germany, France, United Kingdom of Great Britain and Northern Ireland, Italy, Ireland, Luxembourg, Netherlands.- cf Zoeller op cit Appendix 11, annotation 1 of Art.1 of the EEC-Conventlon. 39 international treaties in which mutuality is guaranteed (reciprocity agreement).157 Adjudication in many cases has recognized the guarantee of mutuality, eg between the Republic of South Africa and Germany.158 The citizenship of the parties concerned does not play any role in the application of para 917(2) ZPo. Even if the debtor is a German owning property abroad, an arrest has to be granted. All the parties concerned can be foreigners. 159 However, where a foreigner has all his property in Germany, only' para 917(1) ZPO is applicable. Para 917 (2) ZPO is applicable to all ti tles of execution, besides judgments eg on arbi tration awar ds . There is no need for the existence of security if the creditor has already obtained that security in rem, which he wishes to obtain by means of the enforcement of the arrest. The result will be different if the already obtained security in rem is not sufficient to satisfy the claim. Even with maritime liens in accordance with para 754 HGB160 an arrest can be granted to prevent the ship from sailing out of the harbour, where this would lead to a danger of not being able to realize that right. (iv) No writ of attachment within the meaning of para 917(2) ZPO As already stated, the standard question in accordance with para 917(2) as well as para 917(1) ZPO is whether the future enforcement by reason of a domestic 157 Mutuality is guaranteed for instance between Germany and Australia, China, Japan, Mexico, Sweden, Swi tzerland and the United States of America: cf Zoeller-Geimer op cit Appendix T. 158 Cf BGH, NJW 1964, 2350. 159 OLG Muenchen, MDR 1960, 146. 160 Already discussed above in relation to para 916 ZPo. 40 monetary claim, directed personally against the debtor, will be in danger. This danger does not exist where the debtor owns permanent domestic property and when he gives a guarantee tha t he habi tually brings property, which is sufficient to cover his obligations, to the country. An example would be a shipowner who has a scheduled service with his ships and which calls at a German harbour at regular intervals, and it is expected, tha t this will continue in the future. 161 This principle is not restricted, as adjudication has justifiably extended it. The OLG Bremen162 had to decide a case, in which an insurance company and a Peruvian ship, The Paracas, were involved. The question was, whether the shipping trade maintained a regular scheduled service between Peru and Europe via Hamburg. The court ruled as follows: "It is not decisive that a service qualifies as a regular scheduled service. What is decisive is the situation where, at different intervals, property of the debtor is made available which the creditor can enforce. There must always be a warrant therefore, that the regular scheduled service will be maintained in future. In the case of The Paracas this was dubious, because the economic existence of the shipping line depended on the company's mining output and the sale performance of a single product, that is fish-meal, which was produced by the enterprise of the principal shareholder of the shipping line. In such fish-meal enterprises, the binding arrangement on harbours is not as great as wi th the transport of small consignments, where well-established agencies are responsible for the cargo yield and the shipowner feels obliged, because of this, to call at the s arne ports." This was not the case in The Paracas, because the insecurity was obvious-, namely that it was uncertain whether the ship would call at a European harbour 161 162 OLG Bremen, MDR 1955, 749 - cf Zander 'Voraussetzungen fuer einen Arrest gegen eine auslaendische Reederei (zu OLG Bremen, MDR 1955, 749)' HANSA 1955, 1772; OLG Hamburg, HANSA 1966, 1261. The Paracas OLG Bremen, VersR 1972, 250. 41 or not. A further reason to make an exception to the rule contained in para 917(2) ZPO and not to arrest ships of shipowners supporting a regular scheduled service is, for instance, the age or the condition of the ship. If the case concerns a single-ship company, than an arrest will be ordered in terms of para 917(2) ZPO, if it is feared(that this ship, because of profitability, will be withdrawn from circulation, and it is not certain that the ship will be replaced by a newly built ship or, at least a newer or chartered one. A similar case occurred within the jurisdiction of the OLG Hamburg. 163 The court had to decide whether or not it could be guaranteed in future, that an Ethiopian state shipping line would discharge its cargo, namely coffee, at a German harbour (in this case Hamburg and Bremen). The court had to take into account the fact that the ships were totally out of date. The court ruled that in this special case, the Ethiopian state shipping line, being that of a Third World developing country, maintained a regular scheduled service, in which a ship called at a German port every four weeks and the agent collected freights of more than $ 125.000 per ship. The creditor, on one side, could garnishee these freight claims after ordinary proceedings and was not dependant on the arres t of one of the foreign vessels because, in the courts opinion, the African government would not discontinue its business relations wi th the Hamburg agent in order to evade the creditor's claim of only DM 90.000. On the other hand, because of the low claim, one does not have to fear that the Ethiopian state shipping line would scrap their ships because of their age (built in 1961 and 1966) and that they would not be replaced. As Ethiopia is a developing country, it is unlikely to renounce its freight revenue in US': dollars. Therefore it is to be expected that either the running of the shipping line will be carried on with chartered ships or the old ships will be replaced 163 OLG Hamburg, VersR 1982, 341; cf Thomas & Putzo op cit annotation 2 (a) of para 917 ZPo. 42 by newly built ships (and in this case, the Ethiopian government had pleaded before the court that they planned to award a contract to build five new ships) .164 A further reason for the exception, namely to arrest ships from shipowners or shipping lines maintaining regular scheduled services, is the apprehension t~at a ship might be nationalized. The result would be that the shipowner no longer has disposal arrangements wi th his former ship, and from which the danger arises, that that ship (or the ships) will not call at a German port any longer or, if it is a foreign creditor (for instance a French one) that the ships will neither call at a French port nor a German harbour and consequently evade the enforcement of a claim in the future. The OLG Hamburg, in an already mentioned decision,165 refused to grant an order of arrest even when a ship sailed abroad for a certain time. The court, after considering the facts and circumstances of the case and the interests of the parties involved, did not fear that the ship would remain abroad. In this decision the special situation was mentioned, where a business enterprise was limited to ships sailing only on the River Elbe. The barge of the defendant ran into a shed of the plaintiff after the towing chain broke. The court ruled as follows: "The possibility that the barge in the business enterprise of the defendant sails abroad for a certain time, does not establish the fear that the judgment has to be enforced abroad, because the Bohemian166 stretch of the River Elbe is too short for the barge to be employed there wi th profi t." One has to decide each case individually and to weigh the interests involved. 164 165 166 Cf OLG Hamburg, VersR 1982, 341; see also Soehring op cit 55. The Clara I OLG Hamburg, HGZ 1903, 216; ef also The Clara 11 RG, HGZ 1904, 168, appeal on points of law of the fore-mentioned jUdgment of the OLG Hamburg. Part of Czechoslovakia. 43 No writ of attachment does exist in the case where the debtor gives the credi tor sufficient security, and it is irrelevant whether the security is found domestically or abroad. 167 2. General preconditions (a) Form for application - para 920(1) and (3) ZPO The application for an arrest, known as a petition for an arrest, is what insti tutes the arrest proceeding. The application can either be before the Court office (para 919 ZPO) by means of a report of the proceedings, in which case there is no mandatory representation by lawyers before the Magistrates' Court (Amtsgericht).168 Alternatively, more usually the application can be put in writing,169 either by the applicant or his counsel. In accordance with para 920(1) ZPO, certain minimum requirements have to be met with the arrest application. This will have to contain a description of the arrest claim together with a declaration of the amount, as well the setting out the urgent reason for granting an order of civil arrest. In most cases the following minimum particulars are required on the application (form): (i) The applicant's full name and his registered (or principal) address in the heading of the cas e (Rubrum). (ii) Respondent's full name and address, and this must also appear in the heading of the cas e (Rubrum). Note that where the applicant or the respondent is a body corporate, the full name of one of the directors who is authorized to represent it in litigation should also be denoted. If the applicant is represented by counsel, the full name of the counsel (not only the name of the corrpany or law firm to which he 167 Cf Zoeller & Vollkommer op cit marginal note 15 of para 917 ZPOi Thomas & Putzo op cit annotation 2 (a) of para 917 ZPo. 168 ef para 78(2) ZPo. 169 Hagberg & Albrecht op cit 36. (ii i) 44 belongs) has to be filled in on the application form. 170 The claim for the arrest according to para 916 ZPO together with its establishing facts. (iv) Power of attorney. (v) The amount (monetary value) of the claim for arrest. (vi) The urgent reason for the granting of an order of civil arrest. This means the fact which signifies that the future enforcement is in danger. 171 (vii) Determined objects of arrest must be pointed out because of the principle that if the application for an arrest is submitted to the Magistrates' Court (Amtsgericht), 172 the arrest will vest jurisdiction. '!he order of arrest can, nevertheless, be enforced against the whole property of the respondent and, as far as property outside the judicial district is concerned, even against that. It is sufficient for the attachment order impounding the debtor's property if the application for an arrest order merely mentions "against the property of the debtor", because it is for the creditor to indicate those things he wishes to be arrested. 173 In the case of the arrest of a ship, as a rule the petition for an order of arrest wil1174 be put before the Magistrates' Court (Amtsgericht) in whose harbour the ship at time of the petition for an arrest is located. It is seldom that this is at the court of the principal claim. 175 Where the arrest order is pleaded before the Magistrates' Court (Amtsgericht) ,176 the ship to be arrested has to be indicated by name, and the berth has to be named as well. 170 1 71 172 173 174 175 176 ef para 253(2)(No 1) zPO. Cf paras 917 and 253(2)(No 2) zpo. Para 919 ZPo. Paras 808, 828 and 930 zpo. Cf stein & Jonas & Grunsky op cit marginal note 16 of para 920 zpo. In accordance with para 917 zpo. See Chapter III (2) (c). In accordance with para 919 zpo. 45 The officia~ language used in the court is German. 177 This is the reason, why, in principle, all written documents have to be submitted in German. The courts deal ing wi th shipping matters will, however, especially wi th arrest proceedings, also accept documents supporting the claim if these are in English. 178 (b) Establishing a preponderance of evidence for the petition of arrest- paras 920(2), 921 (2) (sentence 1) and 751(2) ZPO The arrest proceeding is a summary procedure and it is therefore sufficient, if the petitioner179 shows by prima facie evidence the claim for the arrest as well as the urgent reason for granting an order of civil arrest. 180 An exception to this is para 921 (2) (sentence 1) ZPO, where the arrest can be ordered even when the claim for the arrest and the urgent reason for granting an order of civil arrest have not been made credible by the petitioner providing security. The proof by prima facie evidence does not of course exclude documentary evidence, such as a Bill of Lading, a witness or an expert, which can be produced at the court hearing. The main means of proof by prima facie evidence is the affidavit of the peti tioner or the assurance of his lawyer. 181 It is, however, to be recommended that both assurances are recorded because of the resultant greater 177 178 179 180 181 Para 184 GVG. Cf Soehring op cit 56 ff. In accordance with para 919(2) ZPo. Cf OLG Muenchen, RIW 1983, 534; The Kladderadatsch I LG Hamburg, HGZ 1910, 100; The Kladderadatsch 11 OLG Hamburg, HGZ 1910, 101. Cf The MS X LG Bremen, RIW/ AWD 1980, 366. 46 credibility.182 The respondent is allowed to submit a written statement as a precaution (caveat183 ), if he fears an arrest proceeding. In the caveat he can file his observations to the arrest application, in order to render more difficult the petitioner's proof by prima facie evidence. 184 For the rest, there is no change in a summary proceeding with regard to the evidential burden of proof. The respondent has to substantiate his objections and defence pleas. If he fails to do so, the court has to grant the arrest petition. There are cases in which the proof by prima facie evidence gives rise to difficulties. An example is wh~n the real facts and circumstances of a collision usually become evident after a detailed hearing of the evidence. 185 In cases where the petitioner fails to prove by prima facie evidence, para 921 (2) (sentence 1) ZPO and para 751 (2) ZPO grants him the right to obtain the claim for an arrest (as well as the urgent reason for granting an order of civil arrest) by the lodging of security. The lodging of securi ty, however, only substitutes the proof by prima facie evidence of the claim for the arrest and the urgent reason for the granting an order of civil arrest. The facts from which they result have to be submitted conclusively.186 If it is certain from the beginning that there is no claim for an arres t nor an urgent reason for granting an order of civil arrest, then no warrant of arrest in accordance with para 921(2) (sentence 1) ZPO can be granted. 182 Zoeller & Vollkommer op cit marginal note 10 of para 920 ZPO. 183 Schutzschrift. 184 ef Stein & Jonas & Grunsky op cit marginal note 9 of para 920 ZPO. 185 ef The Pennoil OLG Hamburg, HGZ 1909,107. 186 ef Thomas & Putzo op cit annotation 2 of para 921 ZPO. 47 (c) Competent court - para 919 ZPO (i) Principles Para 919 ZPO states that the court of the principal claim is the competent Court for the order of an arrest. 187 On the other hand, the Magistrates' Court (Arntsgericht), in whose jUdicial district the object of the arrest is located, is also competent. 188 The second alternative is normally applicable to the arrest of ships.189 According to para 35 ZPO and para 919 ZPO, the creditor thus has a choice between two legal venues. Contrary to other courts, the ruling of competence in para 919 ZPO is an exclusive one. 190 The court of arrest is also competent to decide the protest proceeding191 and it may give the order s tipula ti ng the time-l imi t wi thi n whi ch the petitioner has to bring his action for the principal claim. 192 It also has the power to repeal the arrest where the peti tioner has failed to meet the deadline193 or because the circumstances have changed. 194 The court can order the return of security,195 and it can also grant a court certificate of enforcibilty (Vollstreckungsklausel).196 187 Para 919(alternative 1) ZPo. 188 Para 919(alternative 2) ZPo. Cf Pruessmann & Rabe op cit annotation D (2) (c) of para 482 HGB; Soehring op cit 56; Hagberg & Albrecht op cit 35. 189 Further than this, there are, in accordance with para 14 GVG, specially admi tted courts for shipping for the rna~ters described in statute, for instance, the Act which deals with the legal procedure relating to inland navigation matters. 190 Cf para 802 ZPo. 191 Widerspruch, cf para 925 ZPo. 192 Para 926(1) ZPo. 193 Para 926(2) ZPo. 194 Cf para 927 ZPO - exception: para 927(2) ZPo. 195 Para 109 ZPo. 196 Paras 929(1) and 731 ZPo. 48 Finally the court is competent to levy execution (Pfaendung) of pecuniary claims in execution of the arrest. 197 The court of the principal claim198 is the court, which has local competence as well as jurisdiction over the matter over the principal claim. The principal claim is the proceeding in which the monetary claim will be secured and from which the claim for an arrest must arise. The parties participating in the proceedings of the principal claim must be the same as in the arrest proceeding. If the principal claim is pending before a court, that court is the court of the principal claim. 199 Likewise with a default summons, the Magistrates' Court at which the default sUInroons has been issued, is the court of the principal claim. The Magistrates' Court will be competent to hear the matter at the choice of the credi tor, if it is wi thin the circuit where the ship to be arrested is located, irrespective of the amount of the claim. 200 Even though the arrest was applied for at the Magistrates' Court, it does not follow that the arrest has to be enforced only within' the circuit of this court. If, for example, the ship sailed to Bremen during the time the application for the arrest was before the Magistrates Court Hamburg, it is possible to enforce a warrant of arrest, ordered by the Magistrates Court Hamburg, in Bremen. 201 In the situation where both alternatives are correct,202 and the ship is 197 Paras 930(1)(sentence 3) and 934 ZPo. Cf Thomas & Putzo op cit annotation 1 of para 919 ZPo. 198 In accordance with para 919(alternative 1) ZPo. See the definition in para 943 ZPo. 199 ef Stein & Jonas & Grunsky op cit marginal note 4 of para 919 ZPOi Thomas & Putzo op cit annotation 2 of para 919 ZPOi Zoeller & Vollkomrner op cit marginal note 3 of para 919 ZPO. 200 Cf para 23 GVG. 201 Stein & Jonas & Grunsky op cit marginal note 12 of para 919 ZPO. 202 In accordance with para 919 ZPo. 49 in the circuit of the principal claim, the credi tor can ei ther apply for the arrest at the Magistrates' Court or, if the value of the claim exceeds the amount of DM 5000,203 at the District Court (Landgericht) competent for the principal claim. An arrest in a German harbour does not imply that the creditor has to be resident in Germany.204 Albrecht205 gives the following hypothetical example: "Imagine that a SWedish creditor arrests an Italian ship in the harbour of Hamburg because of a claim which he has made credible. The reverse is also imaginable, as the other legal systems correspond to the German legal system to the extent that for instance a German ship can be arrested in the harbour of Copenhagen (because of a Swedish creditor) or, as has turned out in practice, a German ship, which has been chartered to a Belgian, can be arrested in an Australian harbour because of a claim which originated in Aden." As the regulation of corrpetence is an exclusive one, an arbi tra tion agreement cannot remove the competence of a court for an arrest application. 206 An agreement which prescribes that an arrest cannot be applied for will not be permitted. A claim for obtaining an arrest is also not renounceable. 207 Stipulations as to venue for the action of the principal claim do not prevent the arrest by the Magistrates' Court of res, eg a ship. By means of an arbitration agreement, the national jurisdiction of German courts is not simply excluded. This remains in existence for the summary arrest proceedings and the interim injunction. The competent court is the court which 203 204 205 206 207 Cf para 23 GVG. If the creditor does not have his residence in Germany: cf para 23 zpo. Op cit 1145. Para 919 zpo. RG, RGZ 31, 370; Pruessmann & Rabe op cit annotation D (2) (c) of para 482 HGB; Albrecht op cit 1145. 50 would be competent in the main proceedings if the ~rbitration agreement were not in existence. 208 No court of arbi tration can adjudicate an arrest application or issue an order of arrest. 209 (ii) Particular international competence of German courts The particular international competence of German courts derives from para 919 ZPO. German courts are therefore competent to order the arrest of a ship if it is in a German harbour. 21 0 (1) Scope of the application of the EEC-Convention In terms of Art.24 of the EEC-Convention,211 the German court of the principal claim, which would be competent to hear the principal claim itself without the regulation contained in Art.2 of the EEC-Convention, is a competent court to order the arrest. 212 Art.24 of the EEC-Convention is an exceptional rule for temporary measures, which concern security of a claim. In principle, the place of litigation stated in para 23 ZPO is excluded by Art.3 of the EEC-Convention, but this not so in the case of an arrest proceeding in accordance wi th Art. 24 of the EEC-Convention.213 208 OLG Frankfurt, NJW 1959, 1088. 209 RG, RGZ 31, 370 at 374 f. 210 Cf Chapter III (2) (i). The LG 211 Cf R Geimar I Eine internationale Zustaendigkei tsordnung in Europa I NJW 1976, 441 and especially Art.5 (No 7) of the EEC-Convention in respect of orders already granted for arrest because of charges for salvage and provision of aid in distress at se a (para 740 HGB). 212 Stein & Jonas & Grunsky op cit marginal note 2 of para 919 ZPO; Thomas & Putzo op cit annotation 2 of para 919 ZPo. 213 AG Leverkusen, IPRax 1983, 45. 51 Bremen214 stated as follows: liThe international and local competence (of the courts of Bremen) for arrest proceedings is governed by paras 23, 919 ZPO, for the reason that the ship to be arrested is presently in the harbour of Bremerhaven. The undisputed corrpetence of the French courts to hear the principle claim does not impair a proceeding for arrest in Germany (in accordance wi th Art. 24 of the EEC-Convention) ." An arrest can be applied for on the grounds of the location of the asset, if the German court in the judgment of the main issue is not competent in terms of the EEC-Convention. The OLG Duesseldorf215 stated the following in the case where a German plaintiff who had worked for an Italian corcpany wished to secure his claim by means of an arrest against his former employer with the Higher District Court (Landgericht) : liThe international competence of the LG Duesseldorf follows from Art.24 of the EEC-Convention. According to this, it is possible to apply for temporary measures which are assigned for in the law of the contracting State (including those measures which are directed towards the security of the claim), with the courts of these states even if for the decision in the principle claim, the court of another contracting state is competent. Consequently, the plaintiff was able to apply for an order of arrest before a German court, irrespective of the dispute between the parties as to whether an Italian court was competent to hear the principal claim in accordance with Art.2(1) and Art.53 of the EEC-Convention. Insofar the national rules of the state remain untouched and the arrest order can be applied for before the court216 , this can be done even where this comes into question after German law as the court of the principal claim. Considering the value 214 The MS X LG Bremen, RIW/ AWD 1980, 366; cf OLG Frankfurt, RIW 1983, 289. 215 NJW 1977, 2034; cf. Thomas & Putzo op cit annotation 2 of para 919 ZPOi cf the dissenting opinion of OLG Koblenz, NJW 1976, 2081 wi th the negative note of Schlafen op cit 2082. 216 In accordance with para 919 ZPO. 52 of the claim, this will be the Higher District Court (Landgericht).1I Besides the competence accorded in Art.24 of the EEC-Convention, it is possible to arrange a legal venue for the principal claim217 by means of a . 218 stipulation as to venue in terms of Art.17 of the EEC-Convent1on. This is binding even if only the arrest applican t has his residence or respective business seat in one of the contracting States. Thus it will be sufficient if one of the contracting parties at the conclusion of the contract has his residence within the area of one of the contracting states. 219 In accordance with Art.5(No 7) of the EEC-Convention, there is a particular arrest venue for litigation concerning salvage money and remuneration for assistance, when the case must deal with a pecuniary claim for mari time salvage done for the benefi t of a cargo or a cargo claim (forum arresti220 ). What is competent is, according to English law, the court in whose sphere of responsibility the cargo or the corresponding cargo claim has been arrested to guarantee payment. 221 the Arrest Convention of 1952. 222 This provision complements Art.7(1)(e) of The provision in Art.5(No 7) of the EEC-Convention is only applicable if it is asserted that the defendant has rights to the cargo or to the cargo claim or had these rights at the time of the salvage service. 217 Within the meaning of para 919 ZPO. 218 Cf BGH, RIWj AWD 1978, 475; OLG Frankfurt, RIWj AWD 1980, 799; OLG Muenchen, RIW 1983, 534; Zoeller & Geimer op cit Appendix 11, Art.17 of the EEC-Convention; J Basedow 'Das forum conveniens der Reeder im EuGVUE' IPRax 1985, 133 at 134. 219 Cf E Jayme and H Haack 'Reziproke Gerichtsstandsklauseln - EuGVUE und Drittstaaten (zu OLG Muenchen, 8.8.1984, IPRax 1985, 323)' IPRax 1985,' 323. 220 Cf G Brice 'Maritime Claims: The European Judgments Convention, 1987 (3) LMCLQ 281 at 287. 221 J Kroppholler 'Neues europaeisches Zivilrecht ' RIW 1986, 929 at 931. 222 See Chapter III (2) (c) (ii) (No 2). 53 In the si tuation when the shipowner of a ship in distres s has concluded a salvage agreement or a rescue contract, all the disputes arising in connection with this are not regulated by Art.5(No 7) of the EEC-Convention but by Art.5(No 1) of the EEC-Convention. 223 Arbitration proceedings do not fall within the ambit of the EEC- Convention. 224 (2) Scope of application of the Arrest Convention of 1952 There are no particulari ties resulting from the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952). This is because225 the proceedings relating to an arrest of a ship, the obtaining of an arrest order and all other proceedings, when an arrest is relevant, are determined by the law of the contracting State in which the arrest has been enforced or applied for. 226 Accordingly, if a creditor wants to secure a maritime claim by means of an arrest under Art.1 of the Arrest Convention of 1952, and this i p in Germany, the particular and general arrest provisions of German law have to be applied. Questions of competence are regulated by para 919 ZPo. German courts are, according to Art. 7 of the Arrest Convention of 1952, competent to decide the principal claim if the arrest has been enforced in Germany and if these courts are competent pursuant to para 919 ZPO. 'Ihus, in accordance with this, the cases enumerated in Art.7(1) of the Arrest Convention of 1952 are: 223 Cf Kroppholler op cit 931. 224 Art.1 (2)(No 4) of the EEC-Convention; cf Zoeller & Geimer op cit Appendix 11, marginal note 9 of Art.1 of the EEC-Convention. 225 In accordance with Art.4 and Art.6(sentence 2) of the Arrest Convention of 1952. 226 ef Albrecht op cit 1145. 54 ( a) (b) (c) (d) if the claimant has his habitual residence or principal place of business in the country in which the arrest was made; if the claim arose in the country in which the arrest was made; if the claims concerns the voyage of the ship during which the arrest was made; if the claim arose out of collision or circumstances covered by Art.13 of . the International Convention for the Unification of certain Rules of Law with Respect to Collision Between Vessels, Brussels, september23, 1910;227 (e) if the claim is for salvage; (f) if the claim relates to mortgage or hypothecation of the ship arrested. If the parties concerned have agreed to the conpetence of another court or concluded an arbitration agreement, it is possible that, pursuant to Art.7(3) of the Arrest Convention of 1952, the court of the circuit in which the arrest has been enforced, can set a time-limit for the applicant. The applicant then has to bring an action for the principle claim before the court agreed upon, or he must bring the matter before an arbitration tribunal. If the applicant does not bring the action before the court agreed upon in time or if he does not bring the matter before an arbitration tribunal in time, the debtor can cancel the arrest or he can demand to be released from suretyship or any other security he has provided. For the rest, arrest proceedings are only available for those claims which can be brought as actions against someone in ordinary litigation procedures. If it is therefore impossible to bring the principal claim before the civil courts, one may not, according to para 91 6 ZPO, apply for an arrest before a civil court. 228 227 Signed on 23 September 1910. 228 Cf. stein & Jonas & Grunsky op cit marginal note 24, preliminary remark of para 916 ZPo. 55 C H APT E R IV VALUE OF CLAIM AND PRESENT VALUE When dealing with arrest proceedings, the value of the claim229 and its present value230 have to be kept separate, and not merely for the purpose of determining court I sand counselor I s fees. According to para 919 ZPO, 231 the present value of the claim will determine which court has jurisdiction over the principal claim. 232 The value of the claim is measured in money. Further, the value of the claim determines the professional charge of the counselor (eg the attorney or advocate) who was representing either the creditor or the debtor in the arrest proceedings or the principal claim. 233 The value of the claim can be lower than the present value. In order to assess the value of a claim, one must distinguish between the main proceedings and arrest proceedings. 234 The main proceedings often concern the enforcement of a monetary claim, whereas arrest proceedings frequently concern the attempt to secure the (asserted) claim. In the main proceedings, title will be effected over the claim, and execution takes place on the basis of this when the occasion arises. The arrest proceedings are, by way of contrast with the main proceedings, merely a summary proceeding. The effect of this is that only substantiation by 229 streitwert. 230 Gegenstandswert. 231 In connection with para 1 ZPO and para 23(No 1) GVG. 232 According to para 23(No 1) GVG, if the present value is over DM 5000, the court of the main proceedings will be the Higher District Court (Landgericht), otherwise the Magistrates' Court (Amtsgericht). 233 Main proceedings. 234 The value of the claim and the present value can correspond. 56 prima facie evidence is required. 235 The procedural requirements are also not as strict as those in the main proceedings. It is possible for the arrest court to adjudicate the arrest application without an oral hearing,236 whereas in the main proceeding only the explicit consent of the parties concerned can waive the court hearing. 237 The arrest proceedings can, however, prepare for the main proceeding if it is no t yet , pending. This has to be taken into consideration when determining the value of the claim. When dealing with the arrest of a ship, the property assets which are terrporarily in the native country will be utilized for the purpose of enforcement. If this is successful, the arrest claim will be fulfilled most of the time without a main proceeding. If the creditor renounces his rights arising from the arrest, it is justifiable if the value of the claim for arrest proceedings corresponds to the arrest cIa im (present value) to its greatest extent. 238 Even if the respondent guarantees or deposits the settlement first, the applicant will be satisfied relatively quickly without the need of instituting the main proceeding. Thus in these cases, the value of the claim should amount to 25 percent of the present value of the main proceeding.239 The court normally determines the value of the claim, and here the provisions of the German Federal Attorneys Act (Bundesgebuehrenordnung fuer Rechtsanwaelte) will have to be observed as well. 235 236 237 Cf para 920 zPO. Cf para 921 zPO. Cf para 128 zPO. 238 Pruessmann & Rabe op cit annotation D (2) (d) of para 482 HGB. 239 Pruessmann & Rabe op cit annotation D (2) (d) of para 482 HGB which contains additional sources. 57 C H APT E R V ADJUDICATION OF THE COURT OF THE ARREST PETITION (1) Court order or judgment - paras 921(1), 922 ZPO The decision on the petition for arrest will occur ei ther by means of a court order (Beschluss) or a judgment (Urteil).240 'Ibe court orders an arrest wi thout having had an oral hearing beforehand on application of the creditor. Then the order is published in the form of an order (Beschluss). The defendant (debtor) may ask the court to have an oral hearing. Then the court (same instance) will issue a judgment either confirming the first arrest order or rejecting the application. This judgment may be appealed. If the court helds an oral hearing (ie because the debtor had filed a caveat241 ), then the court will decide by a judgment either ordering an arrest or rejecting the application. Again, an appeal agains t thi s judgmen t is possible as above. One has to have regard to the fact that arrests by means of a court order, pursuant to Art.25 of the EEC-Convention, are not recognized. 242 Therefore if an arrest applicant is a member of a state which has ratified the EEC- Conven tion, the applicant in his own interest has to see to it that the decision on the arrest is a judgment. He cannot otherwise have the advantages of the EEC-Convention. Whether the decision on the arrest is made with or without an oral hearing is the decision of the court and this has to be decided according to its best judgment. The party who has obtained the arrest, has to serve the court order in. 240 241 242 Para 922 ZPO. Schutzschrift. EuGH, NJW 1980, 2016; cf Zoeller & Vollkommer op cit annotation 1 of para 921 ZPO. 58 which the arrest is directed upon the respondent. 243 (2) security deposit by the applicant - para 921(2) ZPO The court can, according to para 921 (2) (sentence 1) ZPO, even if the claim for the arrest or the urgent reason for granting an order of civil arrest is not credible, order the arrest so long as security is provided by the applican t. This is because of the disadvantages for the respondent which arise out of the arrest. The ship, when the occasion arises, will be "put in irons" ("in die Kette legen") and will not be able to sail away.244 The court is allowed to make the order of arrest contingent upon a security deposit, even if the claim for the arrest and the urgent reason for granting an order of civil arrest are made credible. 245 The securi ty deposi t provided for by para 921 (2) ZPO is not full compensation for the substantiation by prima facie evidence. The court can, if the danger resulting from an order of arrest is equalized by the securing of an eventual indemnification, content with a lower grade of conviction. 246 The court is not allowed, even if the applicant himself has not offered'to provide security, to refuse the arrest petition without having proved, that it is possible to correspond to the arrest peti tion by means of a securi ty deposit. Para 921 (2) (sentence 2) ZPO contains a special provision to protect the respondent. The court can take into consideration the dangers resulting from the enforcement of the arrest by demanding security from the applicant, despite preliminary proof of a claim for arrest and an urgent reason for granting an' 243 Para 922(1) ZPo. 244 Cf Chapter III (2) (a) and para 920(2) ZPo. 245 Cf para 921 (2) (sentence 2) ZPo. 246 Stein & Jonas & Grunsky op cit marginal note 6 of para 921 zPO. 59 order of civi 1 arrest. It may, for instance, be questionable, whe ther the applicant, if the arrest is cancelled and the respondent has a damage claim247 , be able to pay compensation for damage or not. 248 In this case, the court issues two court orders. Firstly, it will issue one in which the applicant has to provide security and, secondly, it will issue the order of (civil) arrest, provided that the applicant has provided security. The value of the security is fixed according to what the court thinks fit and can consist of money which has to be paid into court. en the other hand, security can be provided by the deposit of a pledged item or a suretyship agreement. The value of security will be set sufficiently high so as to include all damage pursuant to para 945 ZPo. The applicant can, if he has applied for an order of arrest without lodging security or if he has not given a statement about the security in his arrest application, file a simple appeal against the court order, should it order him to provide security. The respondent can lodge a protest, if the court orders the arrest without a security deposit by the applicant. (3) Competence of the respondent to avoid the restraint of his ship by lodging of security (P & I-Club) - para 923 ZPo. The competent court for arrest proceedings249 will, in the order of arrest, determine an amount which the respondent has to provide as security. If the respondent pays the money into court, the enforcement of the arrest will be 247 According to para 945 ZPo. 248 Zoeller & Vollkommer op cit marginal note 3 of para 921 ZPOi Stein & Jonas & Grunsky op cit marginal note 7 of para 921 ZPo. 249 Pursuant to para 923 ZPo. 60 stopped and the respondent can legitimately apply for cancellation of the enforcement of the arrest. The respondent accordingly has the right to provide security after the arrest has been ordered and thereby to prevent his ship from being held for a (long) time in a harbour. The value of the security will correspond to the claim together with all subsidiary claims and interest as well as the fees and expenses of the arrest proceeding. The respondent can, by means of proving a security deposit, prevent the enforcement of the order of arrest250 and he is also entitled to apply for the repeal of the enforcement measures at the court which is competent to hear enforcement matters251 . The order of arrest, despite this, will remain effective, so long as the court has not overruled it. After the repeal of the arrest, the security provided by the respondent will be refunded. 252 As a rule, in shipping matters, the respondent will bring as security money,253 a pawn,254 or the registration of a ships mortgage in a German register of ships.255 The value of the security is determined by the court. 256 The respondent of a ship to be arrested can, provided that he is a member of the P & I-Club, offer the credi tor a letter of undertaking from the Club in 250 In accordance with para 923 ZPO and in conjunction with paras 712 and 775(No 3) ZPo. 251 Para 934 ZPo. Cf para 776 ZPo. 252 Cf Thomas & Putzo op cit annotation 2 of para 923 ZPo. 253 Cf as well para 232 BGB. 254 Cf stein & Jonas & Grunsky op ci t marginal note 4 of para 923 ZPO with regard to lodging of security by a third party in favour of the debtor· cf Stahl 'Sicherung von Anspruechen gegen auslaendische Reeder im Inland: DB 1959, 589. 255 Ibid. 256 Para 108 ZPo. 61 exchange for the arrest. 257 "Although the applicant is not bound to accept the security not approved by the court, he will usually do so, provided the wording of the club letter enables him to collect his money without further dif ficul ties as soon as the judgment on the meri ts has been issued in his favour. ,,258 The security by payment into court is regulated by the Court Deposit Regulations (Hinterlegungsordnung). This sets out the grounds by which the applicant259 can obtain a lien over the sum paid into court. The repeal of the executed arrest is done by the court competen t to enforce the arrest. Finally, the amount in accordance with para 923 ZPO forms the maximum amount of the liabili ty of the ship in case of sale of execution by public auction in terms of paras 931(6) and 932(1) zPO. 257 258 259 Cf Appendix XIV. Soehring op ci t 58 f. Cf T G Coghlin I Protection and Indemnity Clubs I (1984) LMCLQ 403; S Braekhus and A Rein Handbook of P&l Insurance 2ed (1979) at 189,255,258,330 and 331. According to para 233 BGB. 62 C H APT E R VI JUDICIAL REMEDIES OF THE RESPONDENT AGAINST THE ORDER OF ARREST (1) Particular legal remedies - paras 924, 925 and 926 ZPO The respondent can lodge an appeal if the arrest has been ordered by judgment. 260 Where the arrest is directed by means of a court order (Beschluss), the respondent has possibilities offered him by para 924 ZPo. Thereafter, protest (Widerspruch) against the order of arrest is possible. The remedy can be sought either by the respondent himself, his counselor or by a legal successor or a trustee in bankruptcy.261 The respondent's protest is not restricted by any time-limi t. This is possible, as long as the order of arrest is in existence. Furthermore, the protest is admissible against an order of arrest which has not yet been served or which has not yet been enforced, even if the time-limit for execution has expired. 262 The court which has authority to the arrest is that court which has jurisdiction over the subject of the matter and is locally competent. 263 The protest can be lodged at the Magistrates Court' (Amtsgericht) in writing or it can be recorded in the court office of the Higher District Court (Landgericht) by a counselor of the debtor. The protest can be withdrawn at any time. The protest does not stop the enforcement of the arrest. 264 The court 260 Cf Chapter V (1). 261 BGH, NJW 1962, 591. 262 Cf para 929 ZPo. 263 Para 919 ZPo. Cf Zoeller & Vollkommer op cit marginal note 6 of para 924 ZPo. 264 This is in accordance with para 924(3) ZPO. 63 can, however, grant a provisional order 265 when, on application of the respondent, the execution (against or without lodging of security) will be temporari ly suspended. Al ternatively, this will only take place with the lodging of security and the enforcement measures will only be suspended once security is lodged. If the protest concerns the lawfulness of the arrest order, this will be the first time that a decision will be made after an oral hearing. 266 The court, ex officio, will without delay fix a date for the hearing following the debtor's protest. 267 When a protest is lodged, the court which granted the order of arrest has to decide whether the arrest was lawful, and will then make a final judgment. 268 The subject-matter of the decision will only be the claim for the arrest and not the principal claim i tsel f . It is not perrnissable to raise objections against the enforcement of the arrest or to raise the question of compensation for damage in the protest proceedings. 269 The court has to decide whether the arrest could be granted, if it has not already done so. In accordance wi th para 925 ( 2) ZPO, the court can confirm the arrest totally or partially, it can amend the arrest, or it can even repeal it. Confirmation, amendment or repeal can be made dependant on the lodging of security by the respondent to the court. Where the arrest is repealed by means of judgment, the respondent can on this grounds have the enforcement measures 270 repealed by the bailiff. 265 Pursuant to para 707 zPO. 266 Para 925 ZPo. Cf Hagberg & Albrecht op cit 36. 267 Para 925(2) (sentence 2) ZPo. 268 Para 925(1) ZPo. 269 Cf Stein & Jonas & Grunsky op cit marginal note 3 of para 925 ZPo. 270 Pursuant to paras 775(No 1) - (No 3), 776 zPO. 64 Alternatively, 271 this can be done at the court competent to enforce matters by lodging memory (Erinnerung) with it. If the applicant wishes to prevent this, he can apply272 for enforcement to take place only on the lodging of security together with an appeal on questions of fact and law. An appeal of facts and law against the judgment resulting from the protest (Widerspruch) is possible. 273 The respondent, however, has a further opportunity to revoke the arrest. Where the principal claim is not yet pending,274 he can apply to the competent court in arrest proceedings to make an order (wi thou t oral hearing) that the applicant should be given a time-limit in which to file his suit. 275 If the applicant who has obtained the arrest does not file suit within the time-limit, the respondent can apply to cancel the arrest by means of a final judgment. The respondent is in fact not bound to wait until the applicant files suit within the time-limit. He himself can become active and apply for a negative declaratory action276 in terms of which he can enforce the decision of the principal claim. Para 926 ZPO corresponds fundamentally to Art.7(2) and (4) of the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952). This states that the court or other appropriate judicial authority of the country in which 271 According to paras 766, 764 ZPo. 272 Pursuant to paras 707, 719 ZPo. 273 Cf Chapter V (1) and para 511 ff ZPo. See para 545(2) ZPO (Revision). 274 Para 926 zPO. 275 The court of the principal claim at which the applicant has to file suit is ~i ther . a cour~ wi thin. the meaning of the ZPO, or a foreign court or an arb,l tra~lon trlbunal lf between the parties in arrest proceedings an arbl tratlon agreement is in existence. Cf RG, RGZ 31, 370 at 375; OLG Frankfurt, NJW 1959, 1088; Hagberg & Albrecht op cit 36. With regard to South African law see Part B - Chapter XXVI. 276 Negative Feststellungsklage. 65 the arrest is made, will fix a time wi thin which the claimant must bring an action before a court having such jurisdiction. 277 If the parties have agreed to subrni t the dispute to the jurisdiction of a particular cour t (other than that within whose jurisdiction the arrest was made) or to arbitration, the court or other appropriate judicial au thori ty wi thin whos e juri sdiction the arrest was made may fix a time wi thin which the claimant must bring proceedings. 278 If, in any of the cases mentioned in Art.7(2) and (3) Arrest Convention of 1952, the action or proceedings are not brought wi thin the time so fixed, the respondent may apply for release of the ship or of the bailor other security which he has been given. 279 (2) Repealing proceeding of para 927 ZPO In accordance wi th para 927 (1) ZPO the respondent can, even after the arres t has been confirmed, legally review the continuance of the arrest. He can apply to cancel the arrest owing to changed circumstances such as the arrest claim having been waived or the provision of security by himself. The competent court for this is the court which has ordered the arrest. If the principal claim is pending, the competent court is the court of the principal claim. 280 Adjudication on the matter is sealed by a final judgment281 . If the order of arrest is not yet a res judicata, the reasons for a repeal can be pleaded even in the protest (Widerspruch) or appellate (Berufung) proceedings. 277 278 279 280 281 Art.7(2) of the Arrest Convention of 1952. Art.7(3) of the Arrest Convention of 1952. Art.7(4) of the Arrest Convention of 1952. The court of the principal claim which eventually repeals the arrest by means of a final judgment in accordance with para 927 (2) ZPO is not an arbitration tribunal, cf RG, RGZ 31, 370 at 375. Para 927(2) ZPo. 66 Various precondi tions and reasons for cancelling an arrest or suspending an enforcement of an arrest are as follows: Changed circumstances Changed circurnstances282 can concern either the urgent reason for granting an order of civil arrest (for instance an unappealable successive judgment in the principal claim), or the claim for an arrest (for instance if it is extinguished, the principal claim is rejected as unfounded and if it is not reckoned that an appeal will be successful).283 Lodging of security The respondent can offer to provide security. The repeal takes place when the security has actually been provided. Further reasons If for instance the enforceability of the arrest is stopped because the time-limit in para 929(2) ZPO has lapsed, the respondent can apply to cancel the arrest'. Likewise, the institution of bankruptcy proceedings stops an arrest284 as does the institution of composition proceedings to avert bankruptcy.285 The court must always cancel not only the order for an arrest, but also its enforcement. 286 282 283 284 285 286 In accordance with para 927(1) ZPo. Cf Zoeller & Vollkornrner op cit marginal note 5 of para 927 ZPO; Thomas & Putzo op cit annotation 2 of para 927 ZPO - these respectively contain additional sources of literature and jurisdiction. Para 14 KO. Cf Chapter IX. Cf paras 47 and 124 VglO and Stein & Jonas & Grunsky op cit marginal note 8 of para 927 ZPo. Thomas & Putzo op cit annotation 2 of para 927 ZPo. 67 C H APT E R VII THE ENFORCEMENT OF CIVIL ARREST IN SHIPS - PARA 928 ff ZPO German arrest provisions, which are general and provide for a mul tiplici ty 0 f particular cases, contain special provisions for the enforcement of an arrest of a ship in para 931 ZPO and para 482 HGB. 287 One has to distinguish between ships registered in a ships register288 and ships which are not registered in a ships register. 289 It should be noted that there are peculiarities relating to the enforcement of arrests in foreign ships. (1) Principles (a) Enforcement of arrest in registered ships - para 931 ZPO Registered seagoing ships 290 are regarded as immovable property for the purpose of the enforcement of an arrest. 291 For practical reasons, seagoing ships fall wi thin the terms of the provisions rela ting to the levy of execution 287 Cf The In ternational Convention for the Unification of Certain Rules Concerning the nnrnunity of state-owned Ships of 1926, Appendix V. 288 Para 931 zpo. Cf Marine Registry Regulations (Schiffsregisterordnung) of 20.5. 1951, Federal Law Gazette (Bunodesgese tzblat t) I, P 360 and Marine Register Implementing Order (Verordnung zur Durchfuehrung der Schiffsregisterordnung) of 24 November 1980, Federal Law Gazette (Bundesgesetzblatt) I, p 2169. 289 Para 930 ZPo. 290 In accordance wi th para 3 (2) of the Marine Registry Regulations all. merchant ships and ships determined as seagoing ships have to be registered, and have, according to paras 1 and 2 of the Law Concerning the Right of Flag (Flaggenrechtsgesetz) 8 February 1951, Federal Law Gazette (Bundesgesetzblatt) I, p 79, to fly the federal flag; cf. Wuestendoerfer op cit para 12 I at 109. 291 In accordance with para 864 zpo. 68 (pfaendung) of movable property together with the law relating to chattels. 292 The enforcement of the arrest therefore takes place in accordance wi th the provisions of paras 808'ff ZPO.293 The following particulars are, however, worth noting: 294 Levy of execution (Pfaendung) will be ordered by the court co~etent to hear arrest proceedings on the application of the applicant. 295 The order which is then granted to the applicant is an official document. The applicant has to submit the off icial document to the bailiff. 296 The wri t of fieri facias (Pfaendungsanordnung) can be included in the order of arrest and will then be ordered by the court competent to hear arrest proceedings; if this is not the case, the judicial officer (Rechtspfleger) is corrpetent to grant the writ of fieri facias (Pfaendungsanordnung).297 The levy of execution (pfaendung) establishes a (statutory) lien over the arrested ship (or ship under construction); 298 this lien gives the credi tor 292 ef para 931(1) ZPo. 293 Enforcement in physical res. 294 ef Thomas & Putzo op cit para 931 ZPo. 295 Para 931 (3) zPO. 296 ef stein & Jonas & Grunsky op cit marginal note 2 of para 931 ZPo. 297 Para 20 (No 16) of the Act concerning the Judicial Off icer (Rechtspflegergesetz) which provides, inter alia, as follows: Folgende Geschaefte im Verfahren nach der ZPO werden dem Rechtspfleger uebertragen: "die Pfaendung von Forderungen sowie die Anordnung der Pfaendung von eingetragenen Schiffen oder Schiffsbauwerken aus einem Arrestbeschluss, sowei t der Arrestbefehl nicht zugleich den Pfaendungsbeschluss oder die Anordnung der Pfaendung enthaelt." ef Zoeller & Vollkommer op cit annotation 1 of para 931 zPO. 298 The priority of the attachment lien is determined by para 804 and para 10 (3) of the Act on Rights of registered Ships and Ships under Construction of 15 November 1940 (Gesetz ueber Rechte an eingetragenen Schiffen und Schiffsbauwerken vom 15 November 1940, Gazette of the Laws of the German Reich (Reichsgesetzblatt) I, p 1499); Pruessmann & Rabe op cit annotation 3 of para 4~2 HGB; Wuestendoerfer op cit para 12 I at 109; Albrecht op cit 1145; Soehr1ng op cit 58. 69 the same rights as a ships mortgagee in proportion to other rights. 299 At the same time, the court competent to hear arrest proceedings has to request the Registry Court300 to enter a priority caution (Vormerkung) 301 on the ships register (or ship under construction register). This priority caution expires if the enforcement of the arrest becomes inadmissible. 302 The attachment lien takes effec t (departing from the principle of para 8(2) Act on Rights of Registered Ships of 1940 in connection with para 3 Act on Rights of Registered Ships of 1940) before registration. The attachment lien would therefore be ineffective against bona fide third parties because of public reliance (oeffentlicher Glaube) in the register. 303 The applicant can therefore demand the rectification of the ships register by the registration of his attachment lien in accordance with para 931 (6) ZPo. The procedure for al teration of the register is governed by paras 23 ff of the Marine Registry Regulations. Para 931(6) ZPO refers to para 867 ZP0304 concerning the registry of the attachment lien. The procedure for the repeal of an arrest is set out in para 870a ZPO (execution against a ship takes place by entry on a ships mortgage) .305 After the court competent to hear arrest proceedings has given the order for enforcement the bailiff can proceed with the arrest. He serves the order of 299 Cf para 931 (2) zpo. 300 Pursuant to para 1 of the Marine Registry Regulations it is the Magistrates' Court (Amtsgericht). 301 To secure the attachment lien. 302 Cf para 931 (3) zPO. 303 Para 16 of the Act on Rights of Registered Ships 1940. Cf Stein & Jonas & Grunsky op cit marginal note 5 of para 931 ZPOi Zoeller & Vollkomrner op cit marginal note 2 of para 931 ZPo. 304 Mortgage registered to enforce judgment debt. 305 Stein & Jonas & Grunsky op cit marginal note 5 of para 931 ZPo. 70 arrest on the master of the vessel306 and takes the ship under guard into his official custody.307 Tradi tionally, for this purpose the ship will be symbolically "put into irons" ("in die Kette legen"). This means that a small chain (which can be locked) with an official seal will be put around the mast or fixed somewhere (for instance on the helm308 ) as an exterior symbol of occupation. 309 The applicant has to pay the costs of guarding in advance. 310 The bailiff has to take suitable measures wi th regard to the guarding and safekeeping of the ship in accordance with para 808 ZPO, para 928 ZPO and para 931 (4) ZPO.311 The port authorities should also be informed in order that they can prevent the ship from sailing from the harbour. 312 At this stage, the respondent has the option of giving security to free his ship. If he provides security at the amount prescribed as ransom money by the arrest order, he obstructs the enforcement of the arrest and can demand the repeal of the arrest. 313 If, at the time of the enforcement of the arrest, sale in execution by public auction of the ship (or ship under construction) has been initiated, the attachment of the ship in these proceedings is considered as Ilfirst levy of execution ll (Erste Pfaendung);314 an attested copy of the bailiff's return 306 Hagberg & Albrecht op cit 37. 307 ef paras 931 (1) and (4), 808 ZPo. 308 et Prues smann & Rabe op ci t annota tion D (3) of para 482 HGB; Wuestendoerfer op cit para 12 I (2) at 109. 309 310 311 312 313 314 ef Part B - Chapter XXII (1). Stein & Jonas & Grunsky op cit marginal note 4 of para 931 zpo. et para 934(2) ZPo. Zoeller & Vollkommer op cit marginal note 1 of para 931 ZPo. ef Pruessmann & Rabe op cit annotation D (3) of para 482 HGB; Soehring op cit 58; Hagberg & Albrecht op cit 36. Para 923 ZPo. In the meaning of para 826 ZPo. 71 (Pfaendungsprotokoll) has to be submi tted to the court competen t to hear enforcement matters. 315 (b) Enforcement of arrest in non-registered and foreign ships - para 930 ZPO According to para 930 ZPO, levy of execution (Pfaendung) against a ship not registered in a ships register follows the principles of levy of execution against movables. 316 Levy of execution establishes a lien with the effect as set out in para 804 ZPo. The applicant has no· right to the satisfaction of his claim from the ship after he has arrested it. He is not permitted to initiate a (judicial) sale of the arrested ship, as the sole object of the arrest is to secure the principal claim. In conjunction with this however, the court competent to hear enforcement matters can order the sale of the ship by public auction (on application of ei ther the applicant or the respondent) ,317 if the ship is in danger of considerable loss of value, or if the "s afe deposi t" of the ship will cause disproportionate costs. After the public sale of the ship,318 the proceeds of the auction are paid into court (fund).319 The same proceedings apply to ships registered in a foreign country.320 Where a foreign ship which is registered in a ships register of its own 315 Para 931 (5) ZPo. 316 Pruessmann & Rabe op cit annotation D (3) of para 482 HGBi cf para 930(1) zpo. 317 Para 930(3) ZPo. 318 The judicial sale by public auction is regulated by para 162 ff ZVG. Cf Appendix VII. see Part B - Chapter XXIV (1). 319 Cf Part B - Chapter XXI(3). 320 Cf LG Hamburg, MDR 1978, 764. For the proceedings of the judicial sale look at para 870a ZPO and para 171 ff of the ZVGi cf F zeller and K stoeber Zwangsversteigerungsgesetz 12ed (1987) para 171. 72 state shall be arrested, the bailiff can enforce the arrest without the normal writ of fieri facias (pfaendungsanordnung) in terms of para 931 (3) ZPo. 321 This matter however is not totally beyond dispute. In practice, such writs of fieri facias are often issued with the argument that such an order is innocuous and at worst redundant. Judges familiar with the practice of arrests of ships wi 11 not issue an extra writ of fieri facias, because they object, it is submitted that para 931 ZPO only refers to ships which are registered in a German ships register. It follows that no writ of fieri facias is necessary.322 The OLG Bremen323 has given the following view on the problem: "A writ of fieri facias according to para 931(3) ZPO is not required for foreign ships which are not registered in a German ships register. This is because levy of execution (Pfaendung) against foreign ships when arrested is governed by para 930 ZPO (without the restrictions of para 931 ZPO) which contains the principles applicable to the levy of execution against movables. Para 870a ZPO and para 1 71 ZVG do not oppose this opinion." In the same way, the LG Hamburg324 adjudicated on the matter as follows: "Just as the special provision of para 870a ZPO is applicable to native registered ships (this refers to the proceedings of execution against real estate), para 930 ZPO is pertinent to seagoing ships as with movable property. This fact is not changed by the possibility stated in para 171 ZVG, which provides that foreign ships (if one applies German law, these have to be registered in a German ships register) have to be sold by auction in special proceedings. The reason is that the legislator has not enacted the restriction contained in para 930 ZPo. Neither did it do so with the insertion of 321 ef Albrecht op cit 1145; Pruessmann & Rabe op cit annotation 3 of para 482 HGB; LG Hamburg, MDR 1978, 764; The Ventuari OLG Bremen, HANSA 1981, 1294. 322 Strube 'Arrestpfaendung auslaendischer Schiffe' HANSA 1981, 1294. 323 The Ventuari OLG Bremen, HANSA 1981, 1294. 324 LG Hamburg, MDR 1978, 764. 73 para 870a ZPO in 1940, nor in the modifications of para 171 ZVG." 325 Accordingly, foreign ships are regarded as movable property and are, in that sense, treated the same as non-registered German ships.326 (c) Enforcement of an arrest against a registered ship owned in individual shares The enforcement of an arrest of the share of a joint owner of a registered German ship is the same as enforcement against the whole ship.327 This rule is however not applicable to the enforcement against the share owned by a shipowning partnership328 where the law of movable property329 is applicable, and in the cases (situations) where the law of immovable property applies. 330 (2) Exemption clauses and restrictions on arrest In principle, every ship of a shipowner can be arrested. 331 There are however two exceptions: (a) Inadmissibility of enforcement of the arrest - para 482 HGB In terms of para 482 HGB the enforcement of an arrest of a ship is not 325 Cf Appendix VII. 326 Cf Albrecht op cit 1145. 327 Para 864(2) ZPO. 328 Para 489 HGB. 329 Para 930 ff ZPO. 330 Paras 858, 857 ZPO. Cf Abraham op ci t para 11 (Ill) at 68. 331 Cf Chapter 11. 74 admissable if the ship is on a voyage and is not in a harbour. This paragraph thus regulates the exemption from arrest and seizure of a ship. South African law goes much further than German law. The Admiral ty Juri sdiction Regulation Act of 1983 allows the arrest of a ship which is "in the territorial waters ll but not in port, even if the ship only travels through the territorial waters without visiting any South African port. 332 Previously the exemption from arrest and seizure began from the moment the ship was ready to sail. 333 The present position is that the exemption is effective from the beginning of the voyage. The change to para 482 HGB was effected by the Maritime Law Amending Act of 21 June 1972. 334 The comparable provision in international law is Art.3(1) of the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952). This provides that a ship which is ready to sail can be arrested. 335 with the latest amendment, a ship (according to para 482 HGB), has to be on a voyage and must not lie in a harbour,336 if it wishes to benefit from the advantages of exemption from arrest and seizure. Para 482 HGB in its latest form does not prevent the order of an arrest, only its enforcement. 337 332 Section 2(2) of the Admiralty Jurisdiction Regulation Act of 1983. Cf Part B - Chapter XIV (1). 333 The term "ready to sail" in the former version of para 482 HGB was interpreted to mean if the ship had started to sai1, the condition IIready to sail" (and wi th that the privilege of exemption from arrest and seizure) continued to persist until the termination of the freight contracts entered into, even when the ship had called at a harbour in distress or at an intermediate harbour; cf Abraham op cit para 11 (V) (2a) at 68; F Schlegelberger and R Liesecke Seehandelsrecht (1959) marginal note 2 of para 482 HGB. 334 Federal Law Gazette (Bundesgesetzblatt) I, p 966. 335 Dissenting opinion, presumably Pruessmann & Rabe op cit annotation B (1) of para 482 HGB, whereas Art. 3 (1) of the Arrest Convention of 1952 and para 482 HGB correspond. 336 To "lie in a harbour" means to lie on the quay or to ride at anchor. 337 Cf Part B - Chapter XIX (2) - "anticipated attachment". 75 The actual determination of the beginning and the end of a voyage has caused some debate. Pruessmann and Rabe338 are of the opinion that a voyage starts if one has commenced to untie the connection with the berth, for instance to haul home the first hawser, or to weigh the anchor in order to leave the harbour. So long as the ship lies moored at the quay, it can be arrested and as long as the ship is moored it is of no consequence if the master has taken precautions to leave the harbour, for example if a tug is alongs ide. Prues smann and Rabe thus give priority to the beginning of the manoeuvre to leave. Schaps and Abraham339 are of the view that the arrival in the harbour and putting to sea of the ship fall under the term "voyage". They do not say exactly when a voyage starts. The end of a voyage will be when the ship lies in harbour is moored or anchored. They determine the conditions when it is permitted to arrest a ship as "arrived ship". It is not clear if the concept "arrived ship" shall be the same as that used in charterparties. proceeding from English and South African law an "arrived ship" in conjunction wi th charterparties means a ship which has reached the port or the berth, as the case may be specified in a charterparty. In the case of a port-charterparty, 'before a ship can be said to have "arrived" at a port she must, if she cannot proceed immediately to a berth, have reached a posi tion wi thin the port where she is at the immediate and effective disposition of the charterer. ,340 It is difficult to follow Schaps and Abraham because they do not determine exactly what the concept "arrived ship" means. Wi th Pruessmann and Rabe one has to accept the following principle in respect of the beginning of the voyage. A ship is docked if all lines 338 339 340 Gp cit annotation B (1) of para 482 HGB. Gp cit marginal notes 4 and 5 of para 482 HGB. The Johanna Oldendorff (1973) 2 Lloyd's Rep 285 at 291 (HL) per Lord Reid. Cf The Leonis (1908) 1 KB 499; Stag Linie Ltd v Board of Trade (1950) 1 All ER 1105 (CA); The Timna (1970) 2 Lloyd I s Rep 409 QB; The Atlantic Sunbeam (1973) 1 Lloyd's Rep 482 QB at 488 per Kerr J; The Maratha Envoy (1977) 2 Lloyd' s Rep 301 (HL). - 76 (Festmacher) which hold the ship to the berth are fastened, ie fore-line, stern-line and spring. A ship has left the quay (or the anchor berth) and is on its voyage when all lines are hauled home (eingehol t), that means, when the last line (the last connection between ship and land) is hauled home or when the anchor is out of the water. As long as that has not happened, a ship can be arrested, even if is ready to leave the harbour and has started to haul home the lines and a connection with land is still maintained. Accordingly, a ship cannot be arrested when all lines are hauled home. Information as to whether these condi tions have been fulfilled or not can be obtained from the port captain. 341 Interruptions of the voyage (for example fastening in a dock of a canal, bunkering oil or taking supplies) do not cancel the exemption from arrest and seizure of the ship. Para 482 HGB is applicable to registered ships, non- registered ships and foreign ships.342 (b) Immunity of state Ships - International Convention of 1926 Claims against sea-going ships owned or operated by German or foreign States, cargos owned by them, and cargos carried on State-owned ships, as well as States which own or operate such ships and own such cargos, can be secured by means of an arrest. The International Convention for the Unification of Certain Rules Concerning the Immunity of State-owned Ships (the Immunity Convention of 1926)343 must be considered here. 344 341 342 343 Cf Schlegelberger & Liesecke op cit marginal note 2 of para 482 HGB. Cf Pruessmann & Rabe op cit annotation C (3) of para 482 HGB; Abraham op cit para 11 (IV) (1) at 68. Law of July 9, 1927, Gazette of the German Reich (Reichsgesetzblatt) 11, p 484, and Supplementary Protocol of April 25, 1934, Gazette of the German Reich 1936 (Reichsgesetzblatt) 11, p 303; cf Singh op cit vol 4 at 3096. South Africa is not a signatory of the Immunity Convention of 1926, cf Part B - Chapter XXII (3). 77 In principle, one has to apply the rules for merchan t ships, cargos and merchant-enterprises owned by private persons to state-owned ships.345 These common law provisions however are not applicable to ships of war, State-owned yachts, patrol vessels, hospital ships) fleet auxiliaries, supply ships and other vessels owned or operated by a state and employed exclusively on Government and non-commercial services at the time when the cause of action arises. SUch ships will not be subject to seizure, arrest or detention by any legal process, nor indeed any proceedings in rem. 346 The same rule will apply to Sate-owned cargos carried on board any of the above-mentioned ships, or state-owned cargos carried on board merchant ships for Government and non- commercial purposes. Nevertheless ,claimants will have the right to proceed before the appropriate courts of the state which owns or operates the ship in the following cases: 347 (i) (ii) (iii) claims in respect of collisions or other accidents of navigation; claims in respect of salvage or in the nature of salvage and in respect of general average; claims in respect of repairs, supplies or other contracts relating to the ship. The state, in such cases, is not entitled to rely upon any immunity as a defence. 348 The provisions of the Immunity Convention of 1926 will be applied349 in each contracting State, but without any obligation to extend the benefit 344 345 346 347 348 349 Brussels, April 10, 1926; Appendix V. Cf Hagberg & Albrecht op cit 37. Cf Art.1 and Art.2 of the Immunity Convention of 1926. Art.3(1) of the Immunity Convention of 1926. Ibid. Cf RG, RGZ 157, 389. Cf Art.3(1) of the Immunity Convention of- 1926. Pursuant to Art.6 of the Immunity Convention of 1926. 78 thereof to non-contracting States. The Irnmuni ty COnvention of 1926, Art.6 has the effect that neither ships owned or operated by that state, nor cargos owned by it, will be subject to an arrest, seizure or detention by a foreign court of law. The claimant however has the right to take proceedings before the appropriate court in accordance with Art.2 and Art.3 of the Irnmunity COnvention of 1926. 350 (c) International Convention Relating to Penal Jurisdiction in Matters of Collision or Other Incidents of Navigation of 1952 Unlike South Africa Germany has ratified the International COnvention Relating to Penal Jurisdiction in Matters of Collision or Other Incidents of Navigation of 1952. 351 What the arrest of ships concerns one has to note Articles 1 and 2. Article provides that in the event of a collision or any other incident of navigation concerning a sea-going ship and involving the penal or disciplinary responsibility of the master or of any other person in the service of the ship, criminal or disciplinary proceedings may be instituted only before the judicial or administrative authorities of the state of which the ship was flying the flag at the time of the collision or other incidents of navigation. In terms of Article 2 no arrest or detention of the vessel shall be ordered in the case provided for in Article 1, even as a measure of investigation, by any authori ties other than those whose flag the ship was flying. (3) Enforcement of foreign arrests in Germany and German arrests abroad An arrest granted in a foreign state can, in principle, only be enforced in 350 For further details see the Immunity Convention of 1926. 351 Federal Law Gazette (Bundesgesetzblatt) 1972 11, P 668. Cf Singh op cit vo 1 4 at 311 1 . 79 Germany in the meaning of paras 328 and 722 ZPO. 352 Para 722 provides, amongst other things, that enforcement of a foreign judgment will only take place, if its admissibility is given by a judicially enforceable judgment. Paras 328 and 722 ZPO presume a foreign judgment (Urteil).353 Following the wording of this provisions foreign orders of arrest (Arrestbefehle) do not fall wi thin the terns of these provisions and therefore cannot be enforced. 'Ihe term "judgment" has to be interpreted widely however. One has to expedite international enforcement possibilities and accordingly, foreign orders of . arrest can be enforced in Germany.354 This result is also in accordance with the EEC-Convention. 355 Pursuant to Art.25 of the EEC-Convention 11 judgment" means any judgment given by a court or tribunal of a contracting state, whatever the judgment may be called, including a decree, order, decision or wri t of execution, as well as the determination of costs or expenses by an officer of the court. A IIjudgment" (for example an order of arrest) given in a contracting state (eg Germany) will be recognized in the other contracting state (eg England) wi thout any special procedure being required. 356 A "judgment" given in a contracting state and enforceable in that State will be enforced in another contracting state when, on application of any interested party, the order for its enforcement has been issued there. 357 Thus an order 352 Para 328 ZPO concerns prov~s~ons dealing with the recognition of foreign judgments. Compare the reciprocity agreements on the enforcement of judgments. Cf Zoeller op cit Appendix I; see also the decision of the LG Hamburg, RIW/AWD 1980, 287 (enforcement of a South African judgment) and the judgments of the BGH, BGHZ 42, 194 and BGHZ 52, 251, dealing with the question of guaranteeing reciprocity between Germany and South Africa. 353 Cf OLG Hamburg, OLGE 15, 21. 354 stein & Jonas & Grunsky op cit preliminary remark, marginal note 34 of para 916 (2) ZPO. OLG Hamburg, VersR 72, 1114 at 1116 f. 355 The ECC-Convention and its regulatory statute are for example applicable between Germany and England. 356 Art. 26 of the EEC-Convention. Cf R Geimar 'Eine neue internationale Zustaendigkeitsordnung in Europa' NJW 1976,441. 357 Art.31 (1) of the EEC-Convention. 80 of arrest issued in England is enforceable in Germany if it is provided with a wri t of execution (Vollstreckungsklausel). An order of arrest which will be enforced in England and Wales, in Scotland, or in Northern Ireland, when, on the application of any interested party, it has been registered for enforcement in that part of the United Kingdom. This interpretation of Art. 25 of the EEC Convention was not beyond dispute. In 1980 the EuGH358 decided that "judgments" which order temporary measures or measures directed to secure and passed ex parte, and which will be enforced without prior service, cannot be recognized in terms of Art.25 of the EEC-Convention. The EuGH however revised its decision and explicitly states now that a foreign order of arrest (Arrestbefehl) is recognizable and enforceable within the country (eg Germany). 359 This is in accordance wi th Art.25 of the EEC-Convention and it is not clear why the EuGH in its former decision distinguished between orders issued ex parte and other orders. According to Art.32 of the EEC-Convention, an application for granting a wri t of execution (Vollstreckungsklausel) in Germany has to be filed with the presiding judge of a chamber of the Higher District Court (Landgericht). In England and Wales this would be the High Court of Justice, and in Scotland the Court of Session. The respondent can lodge an appeal within a month against the decision to allow the execution. 360 In Germany the application has to be directed to the Higher Appeal Court (Oberlandesgericht). In England and Wales this would be to the High Court of Justice, and in Scotland to the Court of Session.361 When an application for granting a writ of execution 358 359 360 361 NJW 1980, 2016. EuGH, IPRax 1985, 339; cf P Schlosser 'Grenzueberschreitende Vollstreckung von Massnahmen des einstweiligen Rechtsschu tzes im EuGVUE-Bereich (zu EuGH, 27. 11 . 1985) I IPRAx 1985, 321. Cf Art.36 of the EEC-Convention. Cf Art.37 of the EEC-Convention. 81 (Vollstreckungsklausel) is refused, the applicant can seek a judicial remedy at the Higher Appeal Court (Oberlandesgericht) in Germany and at the High Court of Justice in England. 362 South African law provides for the enforcement of foreign titles as follows: In August 1978 the Protection of Business Act363 came into force. It makes the enforcement of foreign titles dependant on the approval of the Minister. 364 The comprehensive clause in s 1 is extended by amendments365 and appears to include every title,366 as far as it originates from an action or legal act, which (at any time before or after the coming into force of the law) is connected wi th the production, import trade, export, improvement, possession, use, sale, purchase or ownership of ob jects (no matter what their nature, and whether brought or dealt within or outside of the Republic of South Africa) . 362 363 364 365 366 Art.40 of the EEC-Convention. Act 99 of 1978. Cf Appendix IX. Cf D J Shaw Admiral ty Jurisdiction and Practice in South Africa (1987) at 57. Minister of Economic Affairs. Protection of Business Amendment Acts No 114 of 1979, No 71 of 1984 and No 87 of 1987. Cf A Thomashausen 'Vollstreckung auslaendischer Titel in Suedafrika ' IPRax 1983, 309. 82 CHAPTER VIII RANKING OF THE CLAIM(S) - PARAS 804 ZPO, 761 HGB Paras 804(1) ZPO, 930(1) (sentence 2) ZPO and 931(1) and (2) ZPO state that the creditor will by means of the arrest gain an attachment lien over the ship. The creditor's ranking will be determined by para 804(2) and (3) ZPo. In the case of registered ships, the attachment lien gives the creditor, in proportion to other rights, the same rights as a ship's mortgage. 367 A priority caution (Vormerkung) therefore has to be entered in the ships register to secure the attachment lien. This happens on the motion of the arrest court. In this case, the content and position of the attachment lien is determined by the principles applicable to the ship's mortgage. These are codified by the Act on Rights of Registered Ships and Ships Under Construction of 1940. 368 This law in para 25 determines the ranking, which in turn dePends on the sequence of the entry in the register. 369 Accordingly, in relation to non-registered ships, the attachment lien offers additional security given to the creditor by a ships mortgage by ranking the remaining creditors according to priority. 367 Cf para 931(2) ZPO. 368 Gesetz ueber Rechte an eingetragenen Schiffen und Schiffsbauwerken, Gazette of the Laws of the German Reich (Reichsgesetzblatt) I, p 1499. 369 Para 25 Act on Rights of registered Ships and Ships under Construction reads as follows: (Rangverhaeltnis) (1) 1st ein Schiff mi t mehreren Schiffshypotheken belastet, so bestimmt sich ihr Rangverhael tnis nach der Reihenfolge der Eintragungen. Die Eintragung ist fuer das Rangyerhaeltnis auch dann massgebend, wenn die nach Paragraph 8 Abs. 2, Paragraph 3 zur Bestellung der Schiffshypothek erforderliche Einigung erst nach der Eintragung zustande gekommen ist. (2) Eine abweichende Bestimmung des Rangverhael tnisses muss in das Schiffsregister eingetragen werden. 83 For the ranking between a lien by attachment and a lien by agreement,370 only the time priority of the accrual of the lien is of consequence (the so-called priority-principle (prioritaetsprinzip).371 It follows that an earlier levy of execution (Pfaendung) precedes a later one. Levies of execution simultaneously undertaken have the same ranking. It is of no importance in which sequence the instructions to the bailiff arrive on his desk. In the case of priority, the creditor of the earlier right will be fully satisfied before the creditor who has a later right. The profit (from a sale or venture) will be distributed in proportion to each single claim. 372 The earlier attachment lien has 373 priori ty over later bona fide liens by agreement. Priority over all other liens is enjoyed by maritime liens. 374 The ranking of maritime liens is determined by the sequence of the number by which the claims are enumerated in para 754 HGB. The liens enumerated in para 754 (1)(No 4)HGB375 have priority over all other liens of a ships creditor, whose 370 For example a 'simple ' ships mortgage to secure a claim in accordance with para 8 of the Act on Rights of Registered Ships and Ships Under Construction which reads as follows: (Schiffshypothek) (1) Ein Schiff kann zur Sicherung einer Forderung in der Weise belastet werden, dass der Glaeubiger berechtigt ist, wegen einer bestimmten Geldsumme Befriedigung aus dem Schiff zu suchen (Schiffshypothek). Eine Schiffshypothek kann auch fuer eine zukuenftige oder eine bedingte Forderung bestell t werden. Das Recht des Glaeubigers aus der Schiffshypothek bestimmt sich nur nach der Forderung. (2) Fuer die Bestellung der Schiffshypothek gilt Paragraph 3 sinngemaess. (3) Der Bruchteil eines Schiffes kann mit einer Schiffshypothek nur belastet werden, wenn er in dem Anteil eines Miteigentuemers besteht. 371 372 373 374 375 Cf para 804(3) ZPO. Cf Zoeller & Vollkommer op cit marginal note 5 of para 804 ZPO. In accordance with para 1208 BGB. Cf para 761 HGB in conjunction with para 754 HGB. Costs of salvage and provision of aid in distress at sea, costs of general average and costs arising out of the removal of a wreck. 84 claims arose previously in time. 376 The ranking of the other maritime liens enumerated in para 754 HGB one with another are determined by paras 763 and 764 HGB. 376 ef para 762(2) HGB. 85 C H APT E R IX ARREST AND INSOLVENCY Where the shipowner becomes bankrupt, the creditor will have no opportunity to levy successful execution against the ship. In accordance wi th para 14 KO, arrests and enforcements in favour of individual creditors in bankruptcy do not take place either in relation to property belonging to the bankrupt's estate (the ship), nor in relation to the other property of the common debtor (Gemeinschuldner). According to para 14(2) KO, it is not possible to have a caution entered377 during the duration of bankruptcy proceedings on behalf of an interim injunction in favour of individual creditors in bankruptcy. The trustee in bankruptcy is the only person who is entitled to the right of disposal and of administration over the ship, because with the adjudication of bankruptcy, the common debtor loses the power to administer his property belonging to the bankrupt estate or to dispose of the property.378 Accordingly, a trustee in bankruptcy is entitled to prevent a ship from leaving the harbour, irrespective of para 482 HGB, and he is even competent to initiate the sale in execution by public auction379 in order to provide for the liquidation of the insolvent's estate and secure an even distribution of his assets amongst the credi tors in accordance with the order of preference provided for by the Bankruptcy Law. Bankruptcy proceedings as well as composi tion proceedings to avert 377 This is wi th regard to registered ships and ships under construction belonging to the bankrupt's estate, or wi th regard to the registered rights of the common debtor (Gemeinschuldner) registered against ships and ships under construction, or pursuant to such registered rights. 378 Para 6 KO. 379 Paras 117, 126 KO. Cf Pruessmann & Rabe op cit annotation F of para 482 HGBi Schlegelberger & Liesecke op cit marginal note 1 of para 482 HGB. 86 bankruptcy do not fall wi thin the field of application of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968 (the EEC-Convention).380 The European Court of Justice (Europaeischer Gerichtshof) 381 has stated that bankruptcy and composi tion proceedings wi th credi tors and similar proceedings are proceedings which are based on382 cessation of paYments, inability to pay debt I s (insolvency) or the upsetting of the credi tworthiness of the debtor. These include judicial intervention, which leads to compulsory and collective liquidation of the assets of the debtor, or at least leads to judicial control. Decisions referring to insolvency proceedings only fall under Art.1 (2) (No 2) of the EEC-Convention if they resul t directly from the proceedings, and if they are closely connected with bankruptcy proceedings and composi tion proceedings. The International Convention for the Unification of Certain Rules Relating to Arrest of Seagoing Ships of 1952 does not contain any restrictions. 380 Art. 1 (2) (No 2) of the EEC-Conven tion. Cf EuGH, NJW 1979, 1772; OLG Frankfurt, NJW 1978, 501; Zoeller & Geimer op cit Appendix II, marginal note 17 of Art.1 of the EEC-Convention. 381 EuGH, NJW 1979, 1772. 382 In the laws of each contracting State. 87 C H APT E R X ARREST OF FOREIGN SHIPS - ARREST CONVENTION OF 1952 AND EEC-CONVENTION In the previously mentioned chapters, the particulars relating to the arrest of foreign ships have already been explained. If a foreign ship is arrested in Germany, one has to apply the German provisions already described together with a consideration of the international rules, as far as Germany is bound by them. In particular, one has to mention the International Convention for the Unification of Certain Rules Relating to Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952) and Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968 (the EEC-Convention). '!he Arrest Convention of 1952 restricts the possibili ties of an arres t with regard to seagoing ships flying the flag of a contracting state. The arrest will only be granted for a maritime claim383 against the ship or against a sistership belonging to the same owner. Other claims can only be secured, if the ship's· home port is situated in a non-contracting State. 384 383 Cf Art.1 of the Arrest Convention of 1952. 384 Soehring op cit 52. 88 C H APT E R XI ACTION IN PERSONAM - PARAS 918 AND 933 ZPO Apart from the action in rem, German law offers a further possibility of securing a claim, and this is the action in personam (persoenlicher Sicherheitsarrest) against the debtor. 385 This form of arrest, however, is subordinate to the action in rem, eg the arrest of ships.386 The purpose of an action in personam - like the action in rem - is to secure enforcement over the property of the debtor. 387 Like the action in rem a claim for an arrest388 and an urgent reason for granting an order of civil arrest389 must be established. With the latter one must be sure on the one hand that enforcement against the property of the debtor is in danger, and on the other, that the necessity of the arrest to prevent this danger, is in existence. The main reason for an action in personam would be that the debtor will secretly try to remove his assets (property) abroad. In the maritime field, this will occur if the debtor/ shipowner tries to take his ship abroad and thus tries to escape jurisdiction. An arrest in an action in personam is not possible if it is to urge a shipowner to bring one of his ships to the country and therefore to bring it within the jurisdiction of a German court. The scope of an arrest in an action in personam is limited not only in maritime law. In order to obtain an arrest in an action in personam successfully, the creditor 385 Para 918 ZPO. 386 SUbsidiaritaetsgrundsatz, cf Zoeller & Vollkommer op cit marginal note of para 918 ZPo. see Part B - Chapter XVII. 387 Stein & Jonas & Grunsky op cit marginal note 1 of para 918 zPO. 388 Para 916 ZPO. See Chapter III (1) (a). 389 Para 917 ZPO. See Chapter III (1) (b). 89 has to prove that the debtor has domestic property and he at least has to make it credible. An arrest in an action in rem and an arrest in an action in personam can be applied for simultaneously in the situation where the whereabouts of a ship in German territorial waters is not clear390 and where the applicant fears that the debtor will sail abroad wi th his ship. The difficulty for the applicant lies in proving that a ship of the debtor/ shipowner is actually in German territorial waters. The procedure for an arrest in an action in personam is the same as for an arrest in an action in rem. The fact that the debtor is an incola (eg a German) or a peregrinus (eg a South African) is of no consequence. 391 The Convention on Jurisdiction and the Enforcement of Judgments in civil and Commercial Matters of 1968 (the EEC-Convention) states that an arrest in an action in personam like an arrest in an action in rem can be issued independently of the jurisdiction of the principal claim. 392 The enforcement of an arrest in an action in personam is regulated by para 933 ZPo. The forms of arrest in action in personam are: detention, compulsory registration with the police within a certain time (eg daily or weekly), and the attachment of non-negotiable documents (eg a passport) or house arrest. 393 wi th detention, paras 904 to 91 3 ZPO are applicable, as these contain provisions as to how to accomplish detention. The enforcement of an arrest in an action in personam will be by the bailiff (sheriff's officer) and this is in accordance with paras 753(1), 904ff and 928 ZPO.394 390 And the ship does not fall under para 482 HGB. See Chapter VII (2) (a). 391 Cf Stein & Jonas & Grunsky op cit marginal notes 8 and 9 of para 918 ZPo. 392 Art.24 of the EEC-Convention. 393 stein & Jonas & Grunsky op cit marginal note 1 of para 933 ZPO. 394 Ibid marginal note 2 of para 933 ZPo. 90 If the plaintiff wishes to obtain an arrest in an action in personam, he has to make it clear in the arrest application, and the court granting the arrest has equally to make it clear in the order of arrest. The type of enforcement of an arrest in an action in personam is stipulated either in the order of arrest or (later) in a separate court order by the court competent to hear arrest proceedings. 395 395 Ibid. 91 C H APT E R XII LIABILITY FOR DAMAGES OF THE CREDITOR BECAUSE OF UNDUE ARREST - PARA 945 ZPO AND ART.6 OF THE ARREST ·CONVENTION OF 1952 Where the arrest proves to be unjustified from the outset, or if the regulation ordered in terms of para 926(2) ZPO is to be cancelled (owing to the order of institution of an action not being followed by the party who obtained the arrest), the party who obtained the order (the credi tor/ applicant) is obliged to indemnify the respondent for damage which originates from the enforcement of the arrest or because of having provided security to prevent the arrest or to effect to repeal the arrest (cf para 945 ZPO). The creditor of the damage claim is normally the respondent of the arrest against whom the arrest was originally directed. (1) The right (relating to substantive law) to get indemnification Precondi tion for a damage claim is that the arrest order was unjustified from the beginning. The important point is the moment of the issuing of the arrest. If the principal claim has existed at this time) the credi tor (applican t) is not liable for damages, even if the (principal) claim has retroactively fallen away. 396 The arrest can be unjustified if the claim for an arrest was missing or because the urgent reason for granting an order of civil arrest was not given or because the establishing preponderant evidence for the petition of arrest 396 Stein & Jonas & Grunsky op cit marginal note 19 of para 945 ZPO; Zoeller & Vollk~rnmer op cit marginal note 8 of para 945 ZPO; Albrecht op cit 1185; Soehr~ng op cit 62. 92 was not sufficient. 397 (2) Indemnification because of the repeal of the arrest according to paras 926(2) and 929(2),(3) ZPO A damage claim is awarded independently of the substantive justification of the arrest if the arrest has been cancelled because the creditor has not398 filed sui t for the principal claim. The judge who decides on the damage claim is bound by that. 399 He is himself not allowed to examine whether the claim for an arrest was in existence. What is not regulated is the case where the enforcement of the arrest400 has become invalid or will become invalid. Grunsky401 considers that this situation is comparable with para 926(2) ZPO which deals with the failure to observe the requisite time-limit. What is at stake is to keep the applicant to comply with time-limits by means of the menace of sanctions. 402 Therefore the creditor has to recover damage even in the case of para 929(2) and (3) ZPO. (3) Compensation for damage The nature and extent of the indemnification act is provided for in paras 249 ff of the BGB, irrespective of the fault of the applicant. After this, the person who is liable has to restore the condition which would be in existence 397 Stein & Jonas & Grunsky op cit marginal note 18 of para 945 ZPOi Albrecht op cit 1185. 398 Pursuant to para 926(2) ZPo. 399 Zoeller & Vollkommer op ci t marginal note 12 of para 945 ZPOi Stein & Jonas & Grunsky op cit marginal note 33 of para 945 ZPo. 400 With regard to the time-limits in para 929(2) and (3) ZPo. 401 Stein & Jonas & Grunsky op cit marginal note 34 of para 945 ZPo. 402 In the interest of the debtor. 93 if the circumstance leading to indemni fica tion had not occurred. The indemnification covers lost profits as well. 403 Where both parties are equally at fault, the claim is reduced according to para 254 BGB. Thus, the obligation to indemnify as well as the extent of the compensation depends on the circumstances, especially to what extent the preponderant damage has been caused by the applicant or by the respondent. Contributory negligence of the respondent will, for instance, include the following si tua tions: where he negligently makes believe that there is an urgent reason for granting the order of civil arrest; if he has not specifically pointed out to the applicant the fact, that the execution of that specific ship will cause costs which exceed the normal arrest expenses; if he keeps back legal evidence; if he makes incorrect allegations. 404 The damage claim is dealt with by the statute of Limitations (gesetzliche Verjaehrungsvorschriften) and by applying para 852 BGB mutatis mutandis. (4) Competent court The decision on the damage claim is incumbent on the court in whose circuit the arrest has been enforced. It has jurisdiction at the place set out in para 32 zpo. Para 945 ZPO gives it its international competence. 405 (5) Binding of the judge deciding upon the compensation for damage on other decisions (stare decisis) The court deciding on the damage proceedings is fundamentally free in its. cri tical examination of the ini tial vindication of the arres t or interim 403 Cf para 252 BGB. 404 Albrecht op cit 1185. 405 Cf BGH, VersR 1985, 335; see Chapter X (6). 94 injunction. The court is not bound by the decision in arrest proceedings whether this is issued in a judgment or an order. The reason is that arrest proceedings are a totally different subject of litigation in comparison with the main proceedings, and these therefore cannot have the effect of a res judicata. Zoeller and Vollkommer406 correctly state that the court is not bound because in summary proceedings there is no guarantee of the correctness of the decision. '!be admissable abridgment of procedural rights (in an inadmissable manner) would otherwise continue. The Federal High Court (Bundesgerichtshof) is of a different opinion. It assumes that the judge who decides on the damage is bound, for example, in the case where an urgent reason for granting an order of civil arrest is missing. 407 When a legally binding judgment is given, the case is different. The judge deciding the damage is bound by this. (6) Art.6 and 7 of the Arrest Convention of 1952 In accordance with Art.6 of the International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952), all questions relating to whether the claimant is liable in damages for the arrest of a ship (or for the costs of the bailor other security furnished to release or prevent the arrest of a ship), are determined by the law of the contracting State in whose jurisdiction the arrest was made or applied for. If the arrest proceedings took place in Germany, one thus has to apply para 945 zPO. The international competence of German courts in actions relating to disputes for compensation for damage because of an arrest which has been 406 Gp cit marginal note 9 of para 945 ZPo. 407 VersR 1985, 335. Cf The Clydefirth OLG Hamburg, VersR 1987, 356. See in detail 0 Tepli tzky I Zur Bindungswirkung gerichtlicher Entscheidungen im Schadensersatzprozess nach Paragraph 945 ZPO I NJW 1984, 850. 95 enforced in Germany, is provided for by para 32 ZPO. The provisions contained in Art. 6 and 7 of the Arrest Convention of 1952 do not differ from this regulation. The Federal High Court of Justice (Bundesgerichtshof) has correctly stated that the. contracting States do not have to come to an agreement about the question as to how the liability for damages of the creditor will.be regulated in the case where an arrest is cancelled. 408 408 Cf Schaps & Abraharn op cit Appendix of para 482 HGB, marginal note 1 of Art.6 of the Arrest Convention of 1952. 96 PAR T B 97 CHAPTER XIII HISTORICAL PERSPECTIVE AND THE LAW TO BE APPLIED As pointed out in Chapter I of Part A, a historical consideration of the arrest of seagoing ships can only be confined to some general remarks, because this field remains the preserve of legal historians and hence falls outside the ambit of this thesis. Some remarks on the historical development of admiralty jurisdiction must however be made. 409 By way of contrast with German arrest proceedings whose origins go back to the end of the 19th century, 41 0 south African admiralty law has, especially in the last few years, undergone some epoch-making changes. On 1 November 1983 the Admiralty Jurisdiction Regulation Act (the 1983 Act)411 came into force. The 1983 Act contains the relevant provisions dealing wi th the arrest of ships, and is complemented by the Admiral ty Proceedings Rules (the Rules)412 which regulates the conduct of the admiralty proceedings of the provincial and local divisions of the SUpreme Court of south Africa. Unlike German law, South African law has special provisions dealing with the arrest of ships, whereas in German law the common law relating to civil procedure and the Code of Civil Procedure (ZPO) regulate such arrests. Before the 1983 Act came into operation, the courts had to apply (depending on the nature of the claim) either English maritime law as it was in 409 Cf South African Law Commission Project 32 on the Review of the Law of Admiralty at 1 ff with an overview of the origins of maritime law in general. 410 The German arrest provisions, codified in the Code of Civil Procedure as amended, go back to the COde of Civil Procedure of 1877. 411 Act 105 of 1983. Cf Appendix X. 412 1 December 1986. Cf Appendix XI. 98 189041 3 or the Roman-Dutch law of South Africa. Whilst the English admiralty law had developed steadily since 1890, the South African Admiralty Courts had the jurisdiction of the English Admiralty Courts as it was on 1 July 1891 (the commencement of the 1890 Act) and which was therefore out of date. 414 There was also another unsatisfactory condition which made a new act more than necessary. Despite the fact that there was legally only one/court dealing wi th admiral ty juri sdiction (the SUpreme Court), there were in fact two courts exercising jurisdiction over maritime matters. 415 Firstly, there was the SUpreme Court sitting as an Admiral ty Court, meaning as a Colonial Court of Admiralty exercising jurisdiction by the High Court of Admiralty in England as it existed in 1890 and applying English admiralty law at that date. 416 secondly, there was the SUpreme Cour t sitting as an ordi nary c i vi 1 court administering the ordinary common law, ie Roman-Dutch law. 417 The effect was that the result of a case could differ depending on the court before which the 413 53 & 54 vict c 27. The enactment of the Colonial Courts of Admiralty Act of 1890 made every court of law in a British possession with unl imi ted civil jurisdiction, a Court of Admiralty with the same jurisdiction as the admiral ty jurisdiction of the High Court in England. Cf The Golden Togo 1986 (1) SA 505 (N) i The Houda Pearl I 1986 (2) SA 714 (A); The Houda Pearl 11 1986 (3) SA 960 (A). 414 Cf H Staniland 'Developments in South African Admiralty Jurisdiction and Maritime Law' 1984 Acta Juridica 271, 'The Implementation of the Admiralty Jurisdiction Regulation Act in south Africa' (1985) 4 LMCLQ 462; C Dillon and J P van Niekerk South African Maritime Law and Marine Insurance: Selected Topics (1983) at 27. 415 Cf Dillon & van Niekerk op cit 17; see Crooks & Co v Agricultural Operative Union Ltd 1922 AD 423 at 428; South African Law Commission op cit 10. 41 6 Cf G Hofmeyr 'Admiral ty Jurisdiction in South Africa' 1982 Acta Juridica' 30; H Booysen 'South Africa's new Admiralty Act: A maritime disaster?' (1984) 6 ME 75; D J Shaw Admiralty Jurisdiction in South Africa (1987) at 2. 417 Booysen op cit 75; Shaw op cit 3. 99 action was instituted. 418 Another reason for reform was the fact that most of the international conventions which came into force since 1890 were not incorporated into the south African legislation. The 1983 Act takes into consideration many of the above mentioned unsatisfactory conditions. It is based on several existing laws and international conventions. 419 The International Convention for the Unification of Rules Relating to the Arres t of Seagoing ships of 1 952 (the Arrest Convention of 1952) 420 served as the basis of the definition of a maritime claim421 and English, Scottish and American laws were selectively applied. 422 Conflict between the Admiralty Court and the SUpreme COurt has been abolished because the 1983 Act gives the Admiralty Court exclusive jurisdiction over the defined maritime claims. 423 In some areas the 1983 Act is ahead of international law. An example is the provision relating to the arrest of associated ships, which is, so far, unprecedented in the world,424 and which tries to eliminate the escape of shipowners from responsibility in companies which purport to have as their asset only a single ship. However, the 1983 Act can also be criticized. If, for instance, there is 418 The classic case which shows the clash between the two legal systems was The Waikiwi Pioneer 11 1977 (1) SA 76 (N); see also Crooks & Company v Agricul tural Operative Union Ltd 1922 AD 423 at 428. Cf Staniland 1984 Acta Juridica 271; C Forsyth 'The Conflict Between Modern Roman-Dutch Law and the Law of Admiralty as Administered by South African Courts' (1982) 99 SALJ 255 at 265; Hofmeyr op cit 45. 419 See Dillon & van Niekerk op cit 28. 420 South Africa has not ratified the Arrest Convention of 1952. 421 Cf Staniland 1984 Acta Juridica 271 at 273. 422 Ibid. 423 Dillon & van Niekerk op cit 28. 424 Cf ss 3(6) and (7) of the 1983 Act. 100 no agreement between the parties to the dispute concerning the law which they contend is applicable,425 the judge has to apply s 6 of the 1983 Act. section 6 of the 1983 Act provides that "notwi thstanding anything to the contrary in any law ... " English law, ie English admiral ty law as it is at the commencement of the Admiralty Jurisdiction Regulation Act (1 November 1983), is applicable, or Roman-Dutch law426 , as the case may be, will apply in certain matters. If the matter therefore is one in which a court of Admiralty in SOuth Africa (referred to in the Colonial Courts of Admiralty Act 1890 of the united Kingdom) had jurisdiction before the commencement of the 1983 Act, the law which has to be applied is that which the High Court of Justice of the United Kingdom in the exercise of its admiralty jurisdiction would have applied on 1 November 1983 insofar as that law can be applied. 427 The major head of admiral ty jurisdiction, to which the English law428 will apply, has its origin in the English Admiralty Courts Act of 1840429 and the English Admiralty Courts Act of 1861. 430 These heads of jurisdiction are: booty of war, damage done by a ship, damages for loss of life or personal injury, master's wages and disbursements, mortgages, necessaries, ownership of ships, building, equipping, or repairing of ships, salvage, seamen's wages, towage, damage to cargo imported and damage to ships. 431 The heads of jurisdiction to which Roman-Dutch law will apply 425 426 427 428 429 430 431 Cf s 6(5) of the 1983 Act. Cf The Kalantiao 1987 (4) SA 250 (D) at 253. The Andrico Unity 1987 (3) SA 794 (C) at 801; Cf The Kalantiao 1987 (4) SA 250 (D). In accordance with s 6(1)(a) of the 1983 Act. 3 & 4 vict c 65. 24 & 25 Vict. c 10. Cf for instance The Antigoni Tsiris 1981 (3) SA 950 (N); H Stanl1and 'Can an Indemnity Issued in Consideration for a Misinterpretation in a Bill of Lading Be Enforced in the Admiralty Court?' (1988) 105 SALJ 322. B R Bamford The Law of Shipping and Carriage in South Africa 3ed (1983) at 180 ff; see Dillon & van Niekerk op cit 29 f; Staniland (1985) 4 462 at 466. LMCLQ 101 are432 for instance claims relating to charterparties and marine insurance. Hare433 considers "that s 6 (1) of the 1983 Act is an attempt by the draftsmen to placate the traditional common law jurists of South Africa who are intent on keeping the Roman-Dutch maritime law intact". This law is outdated and, as Dillon and van Niekerk have pointed out, "not easily accessible". 434 The inepti tude of s 6 of the 1983 Act becomes evident especially in the case of marine insurance, as England is more or less the home of marine insurance,435 and Roman-Dutch law has not contributed much to this part of law in the last few decades. Another reason for criticizing s 6(1) of the 1983 Act is the fact that English maritime law is linked to international law whereas the South African Roman-Dutch law has, as far as maritime law is concerned, a more national rather than an international basis. On the other hand, one should not overinterpret s 6(1) of the 1983 Act, because its scope is limited. 436 section 6 of the 1983 Act should be amended as regards the application of English law to give the court a discretion or wider power to apply English maritime law. Aside from the 1983 Act and the Admiralty Proceedings Rules, in principle, no other provisions relating to the arrest of ships have to be ·noted. South Africa has not, unlike Germany, ratified the Arrest Convention of 1952 but it is desirable that it does so to extend its international standard. The first step in the right direction was, however, made with the implementation of the 1983 Act, because, as far as arrest is concerned, it is, to a ceratin extent, based on the Arrest Convention of 1952. However, as will be shown in the following chapters, the 1983 Act offers further opportuni ties for cri tici srn. 432 In accordance with s 6(1)(b) of the 1983 Act. 433 Gp cit 78; see also Barnford op cit 195, n 1; Booysen op cit 82 ff. 434 Op cit 28. See South African Law Commission op cit 10. 435 For instance Lloyd1s of London. See Dillon & van Niekerk op cit 115 ff; D B Friedman 'Maritime Law in the Courts after 1 November 1983 1 (1986) 103 SALJ 678 at 684. 436 Cf Shaw op cit 75. 102 These criticism will hopefully be included in amendments of the 1983 Act. 103 C H APT E R XIV THE OPPOSING PARTIES AND THE OBJECT OF THE ARREST The essential question for a mari time claimant (aside from the legal requirements for an arrest, which will be discussed in the forthcoming chapters) is whether he is permitted to arrest a ship437 of his debtor in South Africa or not. This becomes especially evident if a foreign creditor wants to arrest a ship in South Africa. It is also important to know whether only the ship over which the claim arose rather than other ships can be arrested. This is because the debtor may not be the shipowner himself but a time-charterer or a charterer by demise. (1) principles The Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) allows a person, whether an incola or a peregrinus, to bring actions before the Admiralty Courts and therefore allows every creditor to arrest a ship, subject of course to the general requirements for such arrests. Section 2 (1) of the 1983 Act provides that each provincial and local division (including a circuit local division of the Supreme Court of South Africa) has admiralty jurisdiction to hear and determine any maritime claim438 irrespective of the place where it 437 According to s 1 (1 ) (v) of the 1983 Act ship means: "Any vessel used or capable of being used on the sea or internal waters, and includes any hovercraft J power boat, yacht, fishing boat, submarine vessel, barge, crane barge J floating crane, floating dock, oil or other floating rig,· floating mooring installation or similar floating installation, whether self-propelled or not". South African law does not (unlike German law) include ships under construction. These are therefore excluded from any arrest. 438 Including in the case of salvage, claims in respect of ships, cargo or goods found on land. Cf Chapter XV (2) and ss 1(1)(ii)(a)-(z) of the 1983 Act. 104 arose, of the place of registration of the ship concerned, or of the residence, domicile or nationality of its owner. According to s 2 of the 1983 Act, it is possible for a German credi tor to arrest a ship in South Africa on account of a maritime claim which arose in Australia even though the ship is registered in Liberia. It is not a precondition that a South African is involved ei ther as debtor or as creditor. The only connection South Africa may have with the case is that the ship is in South African territorial waters and this means that it is not necessary for the ship to be berthed in a South African harbour. 439 This follows from s 2(2) of the 1983 Act, as it provides that the area of jurisdiction of an Admiralty Court referred to in s 2(1) of the 1983 Act shall be deemed to include that portion of the terri torial waters of South Africa adjacent to the coastline of its area of jurisdiction. In this respect, the 1983 Act goes much further than the German law which in para 482 HGB prohibits the arrest of a ship when she is on a voyage and is not berthed in a harbour. 440 As pointed out by Hare441 any juristic person may ask the court for relief, whether a local or private individual, or a corporate body registered according to the laws of the state, an association with juristic personality recognised by the laws of the state in which it is resident, and the government of another state442 or a liquidator of a company.443 The Admiral ty Proceedings Rule s (the Rule s) provide in Rul e 2 ( 3) (a) tha t the owner of a ship, cargo or other property in respect of which a maritime claim is made may sue or can be sued as such. The opposing parties (creditor or debtor) are exactly described in this rule and can be anyone already stated 439 Cf Booysen op cit 80i The Fabian 1912 CPD 148 at 149. 440 Cf Part A - Chapter VII (2) (a). 441 Gp cit 68. 442 Ibid. 443 Cf The Alkar 1986 (2) SA 138 (C). 105 above so long as the defendant against whom the claim is made is the~ of the ship to be arrested. Likewise J the owner of a ship or cargo may sue. The Rules indicate that the importance of the origin and name of the parties involved iS J to a certain extent J subordinate and that the claim for an arrest and the object of the arrest are of greater importance. Rule 2(3) (b) in conjunction with Rule 20(4)(a)J for instance J provide that parties may sue or be sued jointly and may (in that event) be described as the owner of a named ship or of the cargo in or formerly in a named shipJ or otherwise in like manner. In any such case J the parties need not be further named or described in the pleadings. The plaintiff or defendant can to a certain extent remain anonymous. Rule 2(4) provides that in the case of an action in rem the property in respect of which the claim lies J as set forth in s 3 (5) of the 1983 Act J shall be described as the defendant. That is for instance the ship 'XYZ'. This rule is especially a relief for the plaintiff who does not have to find out the opponent I s exact name and address as in German law J where it often becomes problematic to find out who the owner is. This problem becomes more complicated when a company is part of a number of interrelated companies. In principle an admiralty action can accordingly be brought against the owner of a ship or the ship itself. 444 Both the 1983 Act and the Rules continually refer to the "owner" J but do not define the word. The word "owner" has different meanings in different other acts. For instance in s 2 of the Merchant Shipping Act J445 owner means If any person to whom a ship or a share in a ship belongs". In s 263 of the Merchant Shipping Act J which deals with the limitation of liabilitYJ the word "owner" in relation to a ship "includes any charterer J any person interested in or in possession of such shipJ and a manager of such ship". A further definition is 444 ef s 3 of the 1983 Act. 445 Act 57 of 1951 as amended. 106 given in s 1 of the Insurance Act,446 where "owner", in relation to a policy, "means the person who is entitled to enforce any benefit for in the policy". However, the definitions of s 263 of the Merchant Shipping Act and s 1 of the Insurance Act are used in a special context, namely limitation of liability and insurance policies. It follows from this that they cannot be applied analogous. Contrary to this the definition of the word "owner" given by s 2 of the Merchant Shipping Act can be applied mutatis mutandis, because it is in accordance with the general meaning of ownership, ie that a res belongs (in the sense of dominum) to a person. (2) Peculiarities Proceeding from the principles described in the previous section, one should note the following: (a) Charter (i) Charter by demise - beneficial ownership en the basis of the defini tion of "owner" given in s 2 of the Merchant Shipping Act it is questionable whether South African law recognizes "beneficial ownership", for instance in the case of the demise charterparty. A ship is "beneficially owned" by a person who is not the legal (registered) owner in the meaning of s 2 of the Merchant Shipping Act but who has lawful possession and control over the ship with the use and economic benefit which are derived from her which a legal (registered) owner would ordinarily have. 447 This is the case wi th a charter by demise, which has to be distinguished from a normal~ 446 Act 27 of 1943 as amended. 447 The Andrea Ursula (1971) 1 All ER 821 (PDA) at 824e. A beneficial owner has to be treated like a (registered) owner. 107 charter in both South African and German law. 448 As pointed out above, a demise charterer is one who hires a ship, normally for a long term, on a "bare boat" basis and is usually responsible inter alia for the insurance, manning, maintenance, repair and operation of the ship.449 The demise charter is a contract for the hire of a ship, as all other charterparties are merely contracts of carriage by sea. 450 Despite the fact that he is not the "real" owner, 451 the charterer by demise has all the responsibili ties and duties of a "real" owner and is treated as such. The 1983 Act and other South African Acts as well as the existing judgments give no concrete answer to the question whether beneficial ownership is recognized,452 especially with a demise charterparty. The answer to this question is important for the attachment and arrest of ships because, on the one hand, ownership is a prerequisite for the attachment in an admiralty action in personam. On the other hand ownership is a precondition in an action in rem. Section 3(4)(b) of the 1983 Act provides that a maritime claim can be enforced by an action in rem "if the owner of the property to be arrested would be liable to the claimant in an action in personam in respect of the cause of action concerned". Furthermore, as will be discussed later, it is important for an arrest applicant to know whether a ship is beneficially owned in relation to the associated ship provisions in ss 3(6) and (7) of the 1983 Act. In order to answer the question whether beneficial ownership is recognized 448 Cf Part A - Chapter VI (2) (b). For the South African law see Bamford op ci t 17. 449 Ibid. Cf F M Ventris Tanker Voyage Charter Parties (1986) at 25; The PhIIlippine Commander 1988 (1) SA 457 (D) at 460. 450 ventris op cit 25; Dillon & van Niekerk op cit 47. 451 He is not, for instance, registered as the owner of the ship in the vessel's ship register in terms of Chapter 11 of the Merchant Shipping Act. 452 German law recognizes beneficial ownership, cf para 51 0 HGB, Part A Chapter 11 (2) (a) and Chapter IT (2) (b). 108 or not one has to look, firstly, at s 3 (4) of the 1983 Act where, as already stated, the 1983 Act provides that a maritime claim can either be enforced "if the claimant has a maritime lien over the property to be arrested", 453 or alternatively, that the owner of the property to be arrested is liable in an action in personam. 454 In accordance with s 3 (4) (a) of the 1983 Act it is of no consequence whether the ship is in possession of the "real" owner or in possession of the demise charterer. once it has attached, in order to arise the maritime lien is independent of ownership and possession in the sense that it travels with the ship into whosesoever possession or ownership the vessel may come. For that reason s 3(4) (a) of the 1983 Act does not help answering the question concerning beneficial ownership. Does the word "the owner" in s 3(4)(b) of the 1983 Act include a demise charterer? If one looks at s 3(7) (c) of the 1983 Act, the law seems to distinguish between owner and charterer (sub-charterer) by demise. Section 3(7)(c) of the 1983 Act reads as follows: "If a charterer or sub-charterer of a ship by demise and not the owner thereof, is alleged to be liable in respect of a mari time claim, the charterer or sub-charterer, as the case may be, shall for the purposes of subsection 6455 and this subsection be deemed to be the owner." As stated by Shaw456 this is a 'clear' distinction between a charterer by demise and the owner. This is true in law, because there is a difference between the registered owner of a ship and the charterer by demise, but only in one main respect, namely, the distinction between ownership and possession. The 453 The 1983 Act, s 3(4)(a). 454 The 1983 Act, s 3(4)(b). 455 Subsection 6 refers to the arrest of associated ships. 456 Gp cit 33. 109 registered shipowner has ownership, whereas possession is obtained and kept by the charterer by demise. 457 There is in fact no difference between a registered owner and a charterer by demise, not only metaphorically but even in reality: liThe charterer becomes for the time being the owner of the ship; the master and crew are, or become to all intents and purposes, his servants, and through them the possession of the ship is in him. The owner, on the other hand, has divested himself of all control either over the ship or over the master and crew. His sole right is to receive the stipulated hire, and to take back the ship when the charterparty comes to an end." 458 Ownership does not pass, but in almost all other respects the charterer by demise will be considered to be in the position of an owner. 459 The 1983 Act draws this distinction exactly when s 3(7) (c) states that the charterer by demise 'shall be deemed to be the owner'. This means that he will be treated 1 ike an owner. In the case of the demise charter, the demise charterer, as pointed out by Lord Herschell LC, "has become, pro hac vice and during the term of the charter, the owner of the vessel, when one is considering the rights and liabilities which arise from the acts of the master, and the crew of the vessel, who during that time are the servants of the charterer, 457 Mc Kinnon L J is therefore wrong when he states that "the ship has at all times been in the possession of the shipowners ... ", because with a charter by demise the registered shipowner "only" keeps ownership but not possession of the ship, see The Alresford (1942) 1 All ER 503 (CA) at 504~ With a charter by demise, the shipowner has to and over possession to the demise charterer by giving him the ship. See also The Phillippine Commander 1988 (1) SA 457 (D) at 460. 458 Nel v Santarn Insurance Co Ltd 1981 (2) SA 230 (T) at 248. 459 Dillon & van Niekerk op cit 47 f. 110 appointed and paid by him. ,,460 The demise charterer therefore has to be treated like an owner. He is, after all, included in the word 'owner' in s 3(4)(b) of the 1983 Act and he would be liable to the claimant in an action in personam in respect of the cause of action concerned. It is possible to arrest the ship which is under a demis e charter and the registered owner has no remedy by which he can avoid the arrest or otherwise intervene. This result is the same as in German law, where a demise charterer is regarded as an 'owner pro tempore', meaning that he is a beneficial owner or an 'owner pro hac vice'. In accordance with para 510 HGB he will be treated as the owner of the ship.461 Proceeding from the above the question arises, how beneficial ownership does relate to the associated ship provisions. 462 As already stated, in terms of s 3(7)(c) of the 1983 Act a charterer by demise is explicitly "deemed to be the owner for the purpose of the associated ship provisions". A creditor therefore can arres t ei ther the ship which the demise charterer owns beneficially and in which the maritime claim arose, or any other ship which he owns as a "real" owner in accordance wi th s 2 of the Merchant Shipping Act and the associated ship provisions. The Sou th African Law Commission, responsible for the Admiral ty Jurisdiction Regulation Act, has missed the opportunity to prevent the problems 460 The Baumwoll Manufactur von Carl Scheibler v Christopher Furness (1893) AC 8 (HL) at 16. Cf The Andrea Ursula (1971) 1 All ER 821 (PDA); The Aventicum (1978) 1 Lloyd' s Rep 184 QB; Bamford op ci t 17; Dillon & van Niekerk op cit 47. The demise charterer is not regarded as owner by the following authorities: The I Congreso Del Partido (1977) 1 Lloyd's Rep 536 QB at 563; The Father Thames (1979) 2 Lloyd's Rep 364 QB. See Shaw op cit 33, where he is of the opinion "that there is therefore certainly room for the argument that the owner in s 3(4) does include the demise charterer". He however does not state whether he follows this statement or not. 461 Cf Part A - Chapter 11 (2) (b). 462 The 1983 Act, ss 3(6) and (7). 111 arising from a charter by demise as the difficulties of characterization as to whether a demise time charterer should be regarded as owner or not were known to English law. 463 The Law Commission should have taken into consideration the provisions of the International Arrest Convention of 1952,464 as the convention served as a basis for the Admiralty Jurisdiction Regulation Act. Future amendments should therefore include a clear definition stating that the word "owner" in the 1983 Act includes the charterer by demise. (ii) Time charter Another question arising from a charter concerns the possibilities of an arrest or attachment of a ship, her stores or bunkers for debts for which the time charterer and not the shipowner is liable to a third party. For example, can a creditor who has a claim which has nothing to do with a charterparty but where the debtor happens to be a charterer under an (ordinary) timecharter agreement, arrest or attach the bunkers paid for by the charterer ? Before answering this question, the following remarks have to be made in order to give an short overview of the principles of time charters. Their nature is international and the principles do not differ whether the law is German, English or South African. Berman AJ 465 opined that the statement of Mc Kinnon LJ (with the concurrence of Goddard and Du Parry LLJ466 ), pointing out that the position with regard to time charterparties 'is of application to all time 463 ef The Baumwoll Manufactur von Carl Scheibler v Christopher Furness (1893) AC 8 (HL) at 16; The Andrea Ursula (1971) 1 All ER 821 (PDA)i I Congreso. Del Partido (1977) 1 Lloyd's Rep 536 QB at 563; The Father Thames (1979) 2 Lloyd's Rep 364 QB. 464 Art.3(4) of the Arrest Convention of 1952 concerns the possibilities of an arrest with a charter by demise. 465 The Maria K 1985 (2) SA 476 (C) at 480. 466 Cf The Alresford (1942) 1 All ER 503 (CA). 112 charterparties (concluded in the standard form) amongst all mari tirre nations, not excluding this country' (ie south Africa). Mc Kinnon LJ had stated following: 467 "The respective rights and obligations of the two parties to this tirre charterparty must depend upon its written terms, for there is no special law applicable to the particular form of contract known as a time charterparty. A time charterparty is, in fact, a document which is of a very misleading nature, because the real nature of what is undertaken by the shipowner is disguised by the use of language dating from a century or more ago - languaga which was then appropriate to a contract of a totally different character. A century ago a time charterparty, then known as a demise charterparty, was an agreement under which the charterer was handed over the possession of the ship of the shipowner to put his servants and crew upon her and to sail her for his own benefi t. '!hat form of charterparty, which, as I say, was called a demise charterparty, has long since been obsolete. '!he modern form of time charterparty is, in essence, one under which the shipowner agrees with the time charterer that, during a certain named period, the shipowner will render service as a carrier by his servants and crew to carry the goods which are put on board his ship by the time charterer.,,468 Berman AJ and Mc Kinnon LJ are to a certain extent correct as to what the time charter concerns. But one cannot agree with the opinion that the demise charter is obsolete. That might have been the case in 1942, when Mc Kinnon LJ gave his judgment, but not in 1988, where there is still a need for the demise charterparty. 469 As pointed out in Part A,470 one of the common forms of the time charter 467 468 469 470 Op cit at 503 f. Cf The Maria K 1985 (2) SA 476 (C) per Berman AJ at 479; The Scaptrade (1983) 2 All ER 763 (HL) per Lord Diplock at 766E ff; The London Explorer (1971) 1 Lloyd's Rep 523 (HL) per Lord Reid at 526; see Shaw op cit 50. Cf Bamford op cit 101; Dillon & van Niekerk op cit 45 ff. Cf Part A - Chapter 11 (2) (b). 113 nowadays is the Bal time-charter. The shipowner leases the charterer the ship with crew, at which time he concedes that the charterer, within certain limits, has the legal competence to give directions to the master. 471 with a charter the charterer can appear as a carrier by sea. This follows from the South African carriage of Goods by Sea Act (the 1986 Act), 472 which provides in s 1 for the application of the Hague-Visby Rules. 473 The Hague- Visby Rules regard either the owner or the charterer as the carrier who enters into a contract of carriage with the shipper. 474 Therefore the charterer - as carrier by sea - will be under obligation to the freighter475 as a consignor. The shipowner is not liable for performance of the contract of carriage if a charterer is acting as a carrier by sea. 476 As far as the liabili ty of a shipowner for claims caused by the charterer is concerned, one has to distinguish between the liability of the charterer, the registered owner and the liabili ty of the ship. '!he 1986 Act applying the Hague-Visby Rules in Art.IV(2) provides that neither the carrier (ie the owner or charterer) nor the ship477 shall be responsible for loss and damage arising and resulting from, for instance, act, neglec t, or defaul t of the mas ter , 471 472 473 474 475 476 477 See 'Beeptime 2' form; The Sagona (1984) 1 Lloyd's Rep 194 QB and (1984) LMCLQ 347 QB. Act 1 of 1986; see H Staniland 'The new Carriage of Goods by Sea Act in South Africa' (1987) 2 LMCLQ 305. The Hague-Visby Rules consist of the original Hague Rules amended by what are called the Visby Amendments but are referred to as 'The Protocol to amend the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading signed at Brussels on 25th August 1924 Brussels 23rd February 1968. The Hague-Visby Rules, Art.I. The party contracting with the sea-carrier to transport the cargo. In accordance with s 1 (a)-(d) of the 1986 Act South African law recognizes I as contract of carriage' not only contracts covered by a Bill of Lading or any similar document (of the Hague-Visby Rules in Art. I (b» but also several other forms of contracts, cf s 1 of the 1986 Act. This means that no maritime lien comes into existence. 114 mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship 478 or any (other) cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier. 479 But if there is, for instance, simultaneous tortious liability of the master or crew of the ship and the time charterer himself the registered owner (and, of course, the charterer) cannot appeal that he is not liable, because he himself participates by means of his crew or his master, whom he employs. In such a case, the registered owner has to suffer an arrest of his ship for loss or .damage to cargo. 480 A further problem wi th a time charterparty arises in relation to the attachment of bunkers, that is the question as to who the owner of the bunkers is, and this can be ei ther the registered owner or the time charterer. An example demonstrating the problem is The Areti L: 481 The applicant was the owner of the mv Areti L which had been employed on a time charter entered into at Singapore wi th a Singapore-based company which subsequently became insolvent. When the ship was delivered for the use of the charterer, it had a certain amount of bunkers aboard which were supplemented by the charterer at Port Kelang and again at Singapore prior to the ship IS arrival at cape Town. The counter-applicant had a claim against the charterer for an amount of R 16000 and sought and obtained an order for the attachment of the bunkers aboard the vessel while it was in Cape Town in order to found jurisdiction in an 478 ef Art.IV(2)(b) of the Hague-Visby Rules. 479 ef Art.IV(2)(q) of the Hague-Visby Rules. The burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. See also the exceptions from liability in Art.IV(2)(b)-(q) of the Hague-Visby Rules. 480 In cases of loss or damage, Art.IV(5)(a) of the Hague-Visby Rules offers a limitation of liability 'exceeding the equivalent of 10000 francs per package or unit or 30 francs per kilo of gross weight of the goods lost or damaged'; cf ss 261 - 263 of the South African Merchant Shipping Act. 481 The Areti L 1986 (2) SA 446 (C). 11 11 5 action in personam which it intended to institute against the charterer. In order to release the ves sel, the applicant lodged a bail bond with the Registrar in the amount of the counter-applicant' s claim wi th the express condi tion that it reserved the right to seek an order declaring that the bunkers aboard the vessel were at all times wholly or partly its property.482 To help decide the question whether the owner or the charterer becomes owner of the bunker one has to look at the respective judgments of English and South African courts. In the English case of The Saint Anna,483 it was held that with a time charter under a Shell time 3_forrn484 the fuel and diesel oil on board the Saint Anna (when she was arrested) was the property of the charterers. The reasons set out by Sheen J were: 485 at the moment of delivering of the vessel to the charterers when, under cl 14, the charterer must <'accept and pay for' all bunker oil on board If the parties merely intended a financial transaction under which the charterers paid in advance for fuel, it would have been sufficient to provide that the charterers must pay for all bunker oil on board. The obligation to accept the bunkers connotes a preexisting contract of sale. The second stage is covered by cl 6, under which the charterers 'shall provide and pay for all fue I (except galley fuel)'. It seems to me that if the charterers purchase fuel, that fuel is their property unless the parties clearly and unequivocally agree that the property shall vest in the owners. This approach is reinforced by the words of cl 22 (quoted above), under which the owners agree to pay for all fuel consumed and all other expenses incurred in the course 482 Aside from this case see The Maria K 1985 (2) SA 476 (C) and The Atlantic Victory 1986 (4) SA 329 (D). See also The Saint Anna (1980) 1 Lloyd's Rep 180 QB and The Span Terza 1984 (1) Lloyd's Rep 119 (HL); Shaw op cit 50 and Hare Arrest of Ships (Volume 5) ed CHill (1987) at 70. 483 (1980) 1 Lloyd's Rep 180 QB. 484 On an analysis of the clauses by Sheen J. 485 Op cit 182 f. 116 of going to a special port of periodical docking. The owners are not required to 'provide and pay for such fuel'. It is provided by the charterers and paid for by the owners. Such a provision in the charterparty would be unnecessary if the fuel was the property of the owners ... The final stage occurs at the moment of redelivery. This is deal t wi th in cl 14, under which the owners shall pay for all bunkers oil remaining on board at prices therein set out ..... Such an agreement is consistent only wi th the bunkers being the property of the charterers until the owners purchase it.1! In a further English case, The Span Terza,486 it was held that a time charter under the New York Produce Exchange (NYFE)-form although not identical were similar to the corresponding clauses in the Shell time 3 time charter in The Saint Anna487 and that the bunkers were the property of the charterers. The clauses provided inter alia: I!(cl 2) (cl 3) That the charterers shall provide whilst on hire and pay for all the fuel except galley and lubricating oil ... That the charterers at the port of delivery and the owners at the port of redelivery shall take over and pay for all fuel remaining on board the vessel ... ." The reasons set out by Lord Diplock LJ were as follows: "In cl 2 the words 'provide ... and pay forti in cl 3 the words: 'take over and pay for' and the references to 'price', seem to me to be wholly inconsistent with the property in the bunkers being vested 486 (1984) 1 Lloyd's Rep 119 (HL). This was an appeal by the interveners/ sub-" charterers from the judgment of the Court of Appeal, (1983) 1 Lloyd's Rep 441, dismissing their appeal from the judgment of Mr Justice Sheen, (1982) 2 LI~yd I ~ Rep 72,' given in favour of the owners of The Span Terza and holdlng lnter alla that the risk in the bunkers passed to the owners on the cancellation of the charter. The bunkers on The Span Terza (at the time of her arrest and at the time of cancellation of the charterparty) had all been paid for by the charterers. 487 (1980) 1 Lloyd's Rep 180 QB. 117 in anyone other than the charterers. The words I have underlined would otherwise be meaningles s. Possession of all bunkers once they are on board the vessel is no doubt vested in the shipowners as bailees who are under a duty to procure that they are used by the - master in carrying out the orders which the charterers are authorized by the charterparty to give him as to the employment of the vessel488 . For this uncomplicated reason, involving as it does no more than the appli~ation of basic principles of the common law of bailment, I would allow this appeal (by the sub-charterers}.,,489 As these two judgments show, in English law, the charterer is in principle regarded as the owner of the fuel which he has bought and with which he has filled the tanks of the ship. In South African law, in two judgments of Berman AJ,490 the learned judge pointed out that he could not follow the above two cited English decisions and bunkers brought on board by the charterers become the property of the shipowner or are jointly owned property of both of them (ie the shipowner and the charterer). In The Maria K491 Berman AJ held that: liThe con tract between the applicant492 and I 493 was a time charterparty a contract sui generis and whereby the possession and the control of the vessel is exercised through the master and crew employed by the owner and remains with the latter, the fuel required for the vessel's engine would in the normal course of events be, and would remain, the property of the owner ... that delivery of the fuel had never been effected to the charterer and that to constitute such delivery there would have had to be a parting wi th the whole possession and control of the vessel merely 488 The Span Terza (1984) 1 Lloyd's Rep 119 (HL) at 122. 489 Ibid. 490 The Maria K 1985 (2) SA 476 (C) and The Areti L 1986 (2) SA 446 (C). 491 1985 (2) SA 476 (C) . 492 Owner of the ship. 493 Charterer. 11 8 providing that the charterer was to pay for the fuel oil to be consumed on the voyage, indicated that the parties contemplated no more than a financial transaction (and not a purchase) under which the charterer paid for the fuel oil. Accordingly, as the onus rested on the respondent to prove delivery or sale of the fuel oil to the charterer , that it had not di s charged it. 11 In the Areti L,494 which served as an example in the above case, Berman AJ held that: IIWhere the charterers have provided and paid for fuel put aboard the vessel chartered by them, such fuel was and remained their property unless there was a clear and unequivocal agreement to the contrary or the evidence showed that the fuel was otherwise obtained ... • '!hat / the bunkers that had been attached were what was left of the inseparable mixture of those bunkers which were on the vessel when it was delivered to the charterers and those supplied by the charterers, and the bunkers were accordingly owned jointly by the applicant495 and the charterer: The counter-applicant was entitled as a creditor of the charterer to attach such jointly-owned property. 11 The English decisions are in principle right. 496 If the charter-clauses provide that 'charterers provide and pay for the bunkers I, the charterers become the owners of the fuel. It is of no consequence that the fuel is stored in the tanks of the ship. One cannot support Berman AJ in The Maria K when he speaks of a 'mere financial transaction'. The meaning of the words 'provide' and I pay I are clear, otherwise that clause in charterparties would have no meaning and would be useles s. It is true that in the case where the tanks are already filled to a certain extent and where the charterer (only) supplements the fuel J a mixture of both can come into being. Bu t technical da ta can determine how much fuel has been in the tanks and how much the charterer has 494 1986 (2) SA 446 (C) at 447. 495 Shipowner. 496 Hare op cit 72 is of the same opinion. 119 refueled. If there is anything left of the charterers part (fuel), than a third party to whom the charterer is a debtor is allowed to attach only that part of the fuel which belongs to him. It does not matter that the fuel which the owner has left has already been used up. The part belonging to the owner remains in a figurative sense even if the charterer refuels the tanks several times during existence of the charterparty. The quantity of the shipowner I s fuel will normally have been stated at the beginning of the charterparty and that remains in his ownership as a unit of account. If there is a maritime claim against the owner pursuant to s 3(4) of the 1983 Act, the remaining part belonging to the owner can be enforced by either an action in rem or in personam, even during the time when the ship is under a charterparty. The part of the charterer in this case however cannot be arrested. This was, in principle, the correct resul t in the English judgments and the SOu th African cases should have been the same, because the question whether the fuel is mixed does not result in the answer of 'joined property lira ther, it le ads to the answer that the parts of bunkers can be clearly named. The part of the fuel in a figurative sense (either the one of the owner or the one of the charterer) is the object of the decision as to how much bunker (for instance of the owner) can be attached. On the other hand, the part of the fuel belonging to the charterer can be attached by every creditor of the charterer. The attachment of the bunkers in The Maria K was therefore lawful and the decision on this point is therefore wrong. But Berman AJ is right when he states that the onus lies on a creditor to prove delivery or sale of the fuel oil either to the owner or the charterer. (b) Sale of the vessel The sale of a vessel does not affect the rights of holder of a maritime lien and he can thus arrest a ship which gave rise to a maritime lien, even if it has been sold. A maritime lien, which has its origin in the common law and 120 which will be discussed later on in more detail,497 follows the ship.498 The rnari time lien is inchoate from the moment the claim attaches, "and when carried into effect by legal process, by a proceeding in rem, relates back to the period when it first attached.,,499 Dillon and van Niekerk500 correctly describe the nature of a maritime lien as follows: 11 The maritime lien arises automatically, by operation of law and without any agreement or formality, and comes into existence from the moment when the circumstances giving rise to the maritime lien occurs. It attaches to the res secretly and without any record or registration, is not dependent upon possession of the res501 by the lienholder, and remains so attached if the res is thereafter alienated for value to a bona fide alienee without notice of the lien. " Further, Dillon and van Niekerk consider the maritime lien as a real right. The contrary view was held in The KalantiaoS02 and the Andrico unity,503 viz that the rnari time lien is a mere procedural remedy. These differing opinions as to the nature of a maritime lien will be discussed more fully later. 504 At this stage one can, however, already say that the concept of a maritime lien as a procedural remedy cannot be accepted. It contravenes the above principle that 497 See Chapter XVI (1). 498 The Bold Buccleugh 11 (1851) 7 Moo PCC 267 at 284 fi Shaw op cit 87. See also The Fidias 1986 (1) SA 714 (C)i The Andrico Unity 1987 (3) SA 794 (C)i The Halcyon Isle (1981) AC 221 (PC) at 250i The Colorado (1923) P 102 at 11 O. 499 The Bold Buccleugh 11 (1851) 7 Moo PCC 267 at 285. 500 Op cit 13. 501 For example the ship. 502 1987 (4) SA 250 (D). 503 1987 (3) SA 794 (C). 504 Cf Chapter XVI (1). 121 the maritime lien travels wi th the ship and is inchoate frcxn the moment it attaches to her, regardless of in whose possession or ownership she may be. The decisions are contradictory. On the one hand they recogni2e the principles of a mari time lien as stated above. On the other hand they do not recognize a foreign maritime lien because the lien is regarded as a (mere) procedural remedy. It follows from the above judgments that a foreign maritime lien becomes invalid when the ship to which it is attached sails into South African territorial waters. Presumed, a South African creditor has a maritime lien on a German ship because of a claim for loss of or damage to things in accordance with para 754(1)(No 3) HGB insofar, as these claims arose from the use of the ship. According to the decisions of The Kalantiao and The Andrico Unity the South African creditor would not, if the ship were attached by him and a South African mortgagee in a South African port, enjoy a better ranking in the distribution of the proceeds of the vessel sold by order of court than the South African creditor. He would, however, have a better ranking if, for example he had a maritime lien because of a salvage claim. Furthermore, the South African maritime lien holder could not enforce the maritime lien in terms of s 3(4)(a) of the 1983 Act by an arrest of the German ship. This result is in conflict with not only the principles of a mari time lien recognized by the above quoted decisions but also the common law principles of a real right. The pecul iari ty of a real right, distinguished for example from a personal or procedural right, "is that it adheres or is attached to the property which is its object so closely that it may be enforced by the person who is entitled to it against any person who infringes it, and not merely against a particular person who is under a special obligation to recognize it. This is achieved by' an action in rem. So closely indeed is a ius in rem bound up with the property to which it is attached that it ceases ipso facto with its destruction." 505 505 C G Hall Maasdorp's Institutes of South African Law - Volume 11 (The Law of Property) 10ed (1976) at 10. 122 Both, in South African and German law, real rights run, for example in the case of a hypothec or a lien, with the land. 506 These rules become ineffective when regarding the maritime lien as a procedural remedy. The position in German law is as adopted by Dillon and van Niekerk, viz that the maritime lien is a real right. The maritime lien gives a so-called statutory lien in terms of para 755 (1) HGB. Furthermore, in terms of para 91 6 (1) zpo a foreign maritime lien is recognized as a claim for an arrest. A precondition of an arrest in German law is that the claim is a pecuniary claim or a claim which can become a pecuniary claim. For this purpose it is of no consequence where (ie in which country) the maritime lien arose. What is irrportant is the fact that the maritime lien is a claim in terms of para 916 Zpo, viz a claim which can become a pecuniary claim. 507 Accordingly, the purchaser has to ensure that he obtains certainty from the vendor as to the freedom of the ship from maritime liens and other debts (for example mortgages). This he must do because of the nature of the maritime lien as stated above. He otherwise, as the new owner of the vessel, may have to endure the arrest of his ship because of a maritime lien which attached to her before the purchase. These principles are referred to by Dr Lushington in his judgment in The Bold Buccleugh 1,508 although he is not speaking directly about a mari time lien: 11 It is quite manifest that a mere change of property does not exonerate a ship from liability of being sued; neither can a sale of a vessel after a collision produce any such effect; if it were so, the owners of a vessel doing a damage would have nothing to do but to sell her, and would thereby deprive the party aggrieved of his best securi ty for compensation ... As regards the subsequent purchase of 506 Ibid. Cf Silberberg & Schoeman The Law of Property 2ed (1983) at 49. 507 Cf Part A - Chapter 11 (2) (b). 508 (1847-1850) 3 Rob 220 at 229. 123 the vessel, there is no evidence even to the effect that the present owner knew anything as to the action or bail at the time he made the purchase ... What he did know is left, I am sorry to say, very much in the dark. If he knew that there has been a collision, he certainly might have protected himself, either by not making the purchase, or by some other protection." The principle that a maritime lien follows a ship even after she has been sold509 is, as pointed out above, the same as in German law, where para 755(1) HGB gives a so-called statutory right over the ship and this right follows the ship until it is, for example, discharged. A bona fide purchaser also has, after all, to endure an arrest because of a claim which gave rise to a maritime lien notwithstanding the fact that he had no notice of the lien and that he has no personal liability on the claim fran which the lien arose. 510 In the South African context this English and German principle accords, like mentioned above, with that of a real right. 511 The only way to get compensation for damage resulting fran the arrest out of a maritime lien which arose before the purchase of the ship without knowledge of the purchaser is to claim against the vendor. These rules are effective not only for mari time liens but also for any other claim which came into existence before the purchase of the vessel. (3) Sisterships and associated ships - ss 3(6) and (7) of the 1983 Act In German law one can arrest other ships of the shipowner even though these are not referred to in the claim and this is known as the arrest of a so-called 509 510 511 See Booysen op cit 81 in respect of the purchase of associated ships and South African Law Commission op cit 8. Cf The Halcyon Isle (1981) AC 221 (PC) at 234; The Khalij Sky 1986 (1) SA 485 (C) at 489B. See Part A - Chapter III (1) (a) (ii). The Khalij Sky 1986 (1) SA 485 (C) at 489B. 124 sistership.512 In terms of Art. 3 (3) of the Arrest Convention of 1952, a claimant can arrest ei ther the particular ship in respect of which the claim arose or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship. !I'his means that the arrest of a sistership is also possible. 513 Because of the principles pointed out supra 'a stratagem was adopted' in order to defeat the arrest of sisterships.514 A proliferation of 'single-ship' conpanies - variously described as 'asset-poor' or 'brass-plate' concerns- occurred. 515 These had the advantage that their vessel could not be subject to arrest for claims against ships owned, not by the same conpany, but by 'sister companies'. In these 'sister companies' the shares were either immediately or ul timately controlled by the same person who owned the shares in the conpany owning the ship in question. 516 An action in rem in South African law can in principle be brought about by the arrest of a so-called 'associated ship' instead of the ship in respect of which the maritime claim arose. A definition of what has to be understood as an associated ship is given by the 1983 Act in s 3(7)(a): An associated ship shall be a ship - (i) owned by the person who was the owner of the ship concerned at the time when the maritime claim arose; or (ii) owned by a company in which the shares, when the maritime claim arose, were controlled or owned by a person who then controlled or owned the shares in the company which owned 512 ef Part A - Chapter 11 (4). 513 Cf Part A - Chapter 11 (5). 514 H Staniland and J S Mc Lennan 'The Arrest of an Associated Ship I (1985) 102 SALJ 148. 515 Ibid. 516 Shaw op cit 36. 125 the ship concerned. Ships will be deemed to be owned by the same persons if all the shares in the ship owing companies owned by the same persons. 517 A person will be deemed to control a company if he has power to control the company directly or indirectly.518 The provisions of the arrest of associated ships are unique to South Africa and have resulted in many judgments and comments since coming into force in 1983. 519 There are exceptions such as claims relating to the ownership of a share in a ship, and claims in respect of a mortgage, hypothec, right of retention or pledge of, or charge on, a ship when the attachment of an associated ship will not be allowed520 . Another exception is referred 'to by s 3(9) of the 1983 Act, where the Minister of Justice can exclude (by notice in the Sou th African Government Gazette and subject to such condi tions as he may prescribe), any ship owned by a company named in the notice from being arrested as an associated ship. 521 This provision can be criticized. Firstly, no hint is given why some companies should be excluded and secondly, what class of company 517 The 1983 Act, s 3(7)(b)(i). 518 The 1983 Act, s 3(7)(b)(ii). 519 The Nefeli 1984 (3) SA 325 (C); The Kyoju Maru 1984 (4) SA 210 (D); The Zygos I 1984 (4) SA 444 (C); The Berg I 1984 (4) SA 647 (N); The Zygos II 1985 (2) SA 486 (C); The Emerald Transporter I 1985 (4) SA 133 (N); The Berg II 1986 (2) SA 700 (A); The Stavroula 1987 (1) SA 74 (C); The Jade Transporter II 1987 (2) SA 583 (A); Shaw op cit 37 ff; Hare op cit 72; Dillon & van Niekerk op cit 32; A Rycroft 'Changes in South African Admiralty Jurisdiction' (1984) LMCLQ 417 at 419; Booysen op cit 81; Staniland 1984 Acta Juridica 271 at 276, (1986) 3 LMCLQ 279, (1985) 4 LMCLQ 462 at 467; Staniland & Mc Lennan op cit 148; D B Friedman 'Maritim~ Law in Practice and in the Courts' (1985) 102 SALJ 45 at 55 ff, (1986) 103 SALJ 678 at 685. 520 The 1983 Act, s 3(6). Cf Booysen op cit 81. 521 See for instance: South African Marine Corporation Ltd and Unicorn Lines (pty) Ltd R 267 in GG 9582 of 8 February 1985, corrected by R 482 in GG 9609 of. 1 March 1985;. Mobil Refiner owned by Petroleum Transport Internatl0nal (Pty) Ltd ln GG 10414, Notice 1825 of 5 September 1986. 126 shall be excluded (perhaps only state-owned companies?). Finally, as Booysen 522 has correctly pointed out, such a provision may lead to discrimination. rrhe work of the administration of justice is complete at that moment when an act comes into force. Thereafter there is only the application and interpretation of the law by the courts who have to determine what is right or wrong and who can be sued and sentenced or not. One fears that the application of s 3(9) of the 1983 Act may produce high-handed decisions. Another area of criticism of the associate-provisions is expounded by Friedman523 and concerns the question of I association I J which has to be determined at the time when the maritime claim arises. 524 If therefore, says Friedman, there is a bona fide sale of an associated ship subsequent to the claim arising, the purchaser is in no way protected against a possible arrest of the vessel J and this J in turn, can conceivably give ris e to hardship. Consideration should perhaps be given to some form of protection of a bona fide purchaser of a ship liable to be arrested as an associated ship. As stated earlier,525 the nature of the maritime lien does not provide for exceptions to the rule that it follows the ship, even if sold to a bona fide purchaser. The fact that the purchaser is bona fide may not lead to discrimination against the lienholder. A further lack of clarity pertains to s 3(7)(a) of the 1983 Act. As Staniland and Mc Lennan526 have correctly stated, a loophole in the law occurs if the owner of the I ship concerned I is an individual while J the owner of an alleged associated ship is a company. They give the following example: 522 Op cit 82. 523 (1986) 103 SALJ 678 at 686 f. 524 The 1983 Act, s 3(7)(a). 525 Chapter XIV (2) (b). 526 Op cit 150. 127 IIShip A is owned by Mr X, who owns all the shares in X Co, and this corcpany owns ship B. Clearly the two ships are associated, but the wording of para (a)(ii) does not actually cover this situation. The reason is that shares in X Co are owned and controlled not by any 'company which owned the ship concerned': the owner of that ship (A) is Mr X himself. If B is the ship concerned, the loophole is the more apparent. When one considers that anything from a yacht to a submarine is a 'ship' as defined on s 1, it is apparent that this lacuna is not merely of academic importance. 1I section 3 (a) of the 1 983 Act does not deal wi th ships owned by partnerships or other unincorporated associations. 527 The Legislature's attention is demanded by these considerations and should include these aspects in an amendment. Another problem arising from the associated ship provisions concerns the question of evidence. More often than not the construction of companies is non- transparent and it will therefore be difficult to prove the requirements of s 3(7) (b)(ii) of the 1983 Act, which provides that 'the companies are controlled and owned by the same person (s) '. Control means the power, either direct or indirect, of controlling the company.528 It is common cause that the onus of proof rests upon the plaintiff/ applicant to justify the arrest. 529 He has to show that the person (s) agains t whom it is sough t to invoke admiral ty jurisdiction by arresting 'his' ship is the person who 'owns and controls' in terms of s 3(7) (b) (ii) of the 1983 Act. The difficulties which can arise are shown by The Nefeli,530 the first reported case to deal with the arrest of an 527 Friedman (1986) 103 SALJ 678. 528 The 1983 Act, s 3(7)(b)(ii). 529 See American Cotton Products Corporation v Felt and Tweeds Ltd 1953 (2) SA 753 (N) at 755B-E; Lendalease Finance (pty) Ltd v Corporation De Merca Deo Agricola and others 1976 (4) SA 464 (A) at 489B; The Aventicurn (1978) 1 Lloyd's Rep 184 QB at 186; The Maritime Trader (1981) 2 Lloyd's Rep 153 QB at 157; The Kyoju Maru 1984 (4) SA 210 (D) at 2141. 530 1984 (3) SA 316 (C). associated ship.531 128 In order to satisfy the requirements of s 3(7)(b)(ii) of the 1983 Act, it was not possible for the applicants to prove the necessary common ownership. Reliance had thus been placed on the fact of common control. King AJ532 pointed out that it was not sufficient that the ships had the same managing agents because this does not necessarily lead to overall control. The applicants could prove I that each of the companies which owned one of the alleged sisterships had as its presiden t/ director the same individual, who could sign and act on behalf of the corporation and with his signature bind the corporation. ,533 A further factor common to all companies could be found in the person of the director/ secretary. King AJ was satisfied that the power to directly control the several companies had been shown and that the ships were associated ships. One must note that the associated ship provisions are not retrospective in their operation. one cannot thus follow Leon J in The Kyoju Maru534 where he held that the 'provisions are procedural and retrospective in the absence of express provisions to the contrary'. A contrary decision, which one should follow, was given in The Berg 1,535 where Milne JP delivering the majority judgment held that ss 3(6) and (7) of the 1983 Act 'did not merely create a new remedy but imposed an obligation upon persons who had no obligations in law before, the section referred to a matter of substantive rights and not merely procedure. I The application of s 3(6) of the 1983 Act retrospectively 'would 531 Staniland & Mc Lennan op cit 149; Staniland 1984 Acta Juridica 271 at 276. 532 The Nefeli 1984 (3) SA 325 (C) at 326; The Stavroula 1987 (1) SA 74 (C) at 78. 533 Ibid. 534 1984 (4) SA 210 (D) at 214G. 535 1984 (4) 647 (N) at 648F; Milne JP I s judgment was confirmed in the Appellate Division in The Berg 11 1986 (2) SA 700 (A). Cf Staniland 'Arrest of Associated Ship Not Retrospective in Operation' (1986) 3 LMCLQ 279, (1985) 4 LMCLQ 462 at 476. Cf The Atlantic Victory 1986 (4) SA 329 (D) • 129 interfere with vested rights with a vengeance .• 536 Thi s resul t corresponds wi th the principles of German law in which new acts or statutes are not retrospective in their operation. However, after the commencement of a new or amended act there is a "transitional time" in which a claim brought into court before the commencement of the new act or its amendment os governed by the old law, whilst actions instituted after the coming into force of the new act or its amendment are adjudicated upon the law of the new act. So it might happen that in the "transitional time" cases wi th the same facts are decided under different laws. This is however not an unjustified condition because every case will be held under the law which was or is applicable under the accrual of the actionable claim. For the purposes of legal security, in South Africa the law which was applicable at the accrual of the actionable claim should be taken as the basis for the judgment. The provisions of associated ships do apply to a demise charterer who, for the purposes of an associated ship arrest, is deemed to be the owner of the chartered ship. Thus, a ship owned by a demise charterer can be arrested as an associated ship to enforce claims against the demise charterer which arose in connection with the demise chartered ship. Lastly, the associated ship provisions do not apply wi th regard to attachments in personam. (4) Limitation of liability The principle of the limitation of the shipowner's liability is limited in both Sou th African and German law. The possibili ty of 1 imi ting the liability will probably lead to the arrest not fUlfilling its aim, either because the damage is not fully covered or because a complete limitation which excludes any 536 The Berg I 1984 (4) SA 647 (N) at 662. 130 compensation for a damage applies. South Afr ica, unl ike Germany, 537 has not ratified the International Convention on Limitation of Liability for Maritime Claims of 1976. 538 The principles of limitation of liability are contained in ss 261 to 263 of the Merchant Shipping Act. 539 section 261 of the Merchant Shipping Act gives the owner of a ship the right to limit his liability in accordance with the rule which is generally accepted, namely, that the damage should be caused without his actual fault or privity. The Merchant Shipping Act, s 263(2) provides 'for the purpose of s 261 Merchant Shipping Act to extend the word owner to include any charterer, any person interested in or in possession of such a ship and a manager or operator of such ship'. The Merchant Shipping Act does not cover the master, the crew or other servants of the owner. 540 Section 261 of the Merchant Shipping Act limits liability to an amount equivalent to 2635 gold francs for each ton of ship's tonnage in respect of loss of or personal injury.541 In respect of loss of or damage to property, liability is limited to an amount equivalent to 850 gold francs for each ton of ship's tonnage. 542 Finally where both types of damage are claimed543 liability is limited to an amount equivalent to 2635 gold francs for each ton of the ship's tonnage with a prescribed preference in favor of the former. 544 If one compares the South African provisions wi th the International 537 Cf Part A - Chapter II (3). 538 Appendix VI. 539 Act 57 of 1951 as amended, Appendix XII. Cf Rule 21(2) of the Admiralty Proceedings Rules. 540 Dillon & van Niekerk op cit 94. 541 The Merchant Shipping Act, s 261(1)(a). 542 The Merchant Shipping Act, s 261(1)(b). 543 The Merchant Shipping Act, s 261(1)(c). 544 Cf Bamford op cit 68; Dillon & van Niekerk op cit 89; Shaw op cit 121 f. 131 convention on Limitation of Liability of 1976 one notices that there are certain similarities. The amounts set out in s 261 of the Merchant Shipping Act will be specified pursuant to s 261 (5) of the Merchant Shipping Act by the Director- General: Transport Affairs. He will from time to time give notice in the Government Gazette as to what amounts in Rand will be equivalent to 2635 and 850 gold francs respectively.545 The 1983 Act contains a provision in s 1 (1)(ii) relating to the limitation of liabili ty. Under s 1 (1) (ii) (t) of the enumerated maritime clairrs one finds that a maritime claim includes: It any claim relating to the limi tation of the liability of the owner of a ship or of any other person entitled to any similar limitation of liability." This mari time claim can be enforced546 by means of an action in rem, ie an arrest. When the question of limitation of liability arises it is up to the defendant owner to raise the issue in his plea, 'the onus than being on him to establish the absence of his actual fault or privity and the tonnage of the vessel, when he wants to seek to limit his liability. 1547 As s 261 of the Merchant Shipping Act is based on s 503 of the Bri tish Merchant Shipping Act548 the South African courts will have regard to the English law and judgments dealing wi th the question as to the meaning of 545 546 547 548 Cf Dillon & van Niekerk op cit 93. In accordance with s 3(4) of the 1983 Act. Bamford op cit 69. Cf The Luneplate 1986 (4) SA 865 (C); The England (1973) 1 Lloyd's Rep 373 (CA); The Edward Dawson (1914) 1 KB 419. 57 & 58 Vict c 60; cf Dillon & van Niekerk op cit 87. 132 'caused wi thoutactual f aul t or privity'. Van Heerden J549 in the first reported case concerning s 261 Merchant Shipping Act reasoned as follows: "There does not appear to be any reported South African case in which the question has been considered as' to whether the claimant's loss was 'caused without the actual fault or privity' of the owner of the ship within the meaning of s 261 of Act 57 of 1951, but the question has been extensively dealt with by the English courts in relation to s 503 of the English Merchant Shipping Act of 1894. The reason for introducing a provision for such limitation in our legislation would appear to be the same as in the case of English law, namely to enable our ships to trade on equal terms with those of other nations, and there seems to be no valid reason why the similar provision should not be construed in accordance with the English authorities550 on the subject." Thus if one looks at the English judgments, Buckley LJ551 has, for instance, defined the words 'actual fault and privity' as follows: liThe words 'actual fault or privity' in my judgment infer something personal to the owner, something blameworthy in him, as distinguished from constructive fault or privity such as the privity of his servants or agents. But the words 'actual fault' are not confined to affirmative or positive acts by way of fault. If the owner be guilty of an act of omission to do an 'actual faul t' than if the act had been one of commission. To avail himself of the statutory defence, he must show that he himself is not blameworthy for having ei ther done or omitted to do something or been privy to something. It is not necessary to shew knowledge. If he has means of knowledge which he ought to have used and does not avail himself of them, his omission 549 The Luneplate 1986 (4) SA 865 (C) at 875H-I. The facts were as follows: In terms of an oral agreement between the parties, the defendant undertook to tow an unmanned vessel owned by the plaintiff from Ijrnuiden to Bremerhaven on the terms and conditions embodied in the Unterweser towage agreement. The plaintiff I s vessel ran aground during the journey when both the towline and emergency line utilized by the defendant I s tug for the tow parted. 550 The England (1-973) 1 Lloyd's Rep 373 (CA). 551 The Edward Dawson (1914) 1 KB 419 at 432. 133 so to do may be a fault, and, if so, it is an actual fault and he cannot claim the protection of the section." Another case, The England,552 dealt with the 'actual fault or privity' of managers/ directors of a shipping company. The relevant facts of the case were that a collision took place on the River Thames during the hours of darkness in the early morning of December 20, 1963 between The England and The Aletta. The Aletta navigated without a pilot. Her master failed to give a single whistle signal required by the Port of London river by-laws. These by-laws were totally unknown to the master of The Aletta. The questions was whether the director of The Aletta was not negligent in not providing the ship with the by-laws and, if so, it must be regarded as having been relevantly causative for the collision. In trying to give an answer as to the 'faul t' may have been, Sir Gordon Willner, giving one of the judgments in The England,553 quoted a sentence in a case called The Radiant554 which he thought appropriate .to The England: "The fundamental faul t in respect of which I am disposed to blame Mr B (the manager) is that he never had.any proper comprehension of what his duty as managing director of a fleet of this sort was." Finally in The Luneplate, the actual fault or privity of the managing director was described as follows: 555 actual fault or privity on the part of the defendant556 has been shown in regard to his lack of instruction and supervision concerning (i) (ii) (iii) the inspection of towing stretchers; the fitness for use of towing stretchers; and the use of a polypropylene line as a towing line; 552 ( 1973) 1 Lloyd's Rep 373 (CA) . 553 Op cit 383. 554 (1958 ) 2 Lloyd's Rep 596 QB at 615. 555 1986 (4) SA 865 (C) at 881D per van Heerden J. 556 Towage contractor. '134 its lack of instruction to its masters to report on and comply with any qualification attached to a seaworthiness certificate of the object being towed and its failure in appropriate circumstances to enquire as to the existence of any such qualification; its failure to prevent the commencement of the towage notwithstanding that the master had failed to comply wi th his obligation to report on the prevailing weather condi tions; and its failure in appropriate circumstances to enquire as to weather conditions and the towing equipment being used in the circumstances." The cases thus show that it will depend on the individual case as to what 'actual fault and privity' will mean. The cases thus merely give guidelines. (5) International Convention relating to the arrest of seagoing ships 1952 (ICRASS) Despi te the fact that the Admiralty Jurisdiction Regulation Act (aside from other sources) is based on the principles set out in the Arrest Convention of 1952(ICRASS), South Africa has, up to now, not ratified the Arrest Convention of 1952. As the trend is more and more towards international uniformity, it is to be hoped that South Africa will not hesitate too long before ratifying the Arrest Convention of 1952. 135 C H APT E R XV ESSENTIAL CHARACTERISTICS FOR THE ENFORCEMENT OF A CLAIM IN ADMIRALTY PROCEEDINGS (1) General remarks Before the particularities of the action in rem, ie the arrest of a ship, are discussed in detail, some general remarks wi th regard to the principles of South African admiralty jurisdiction and procedure have to be made. '!he essentials which are discussed more fully in the following chapters may be summarized as follows: If a creditor wants to bring a claim in admiralty proceedings he must, firstly, have a cIa im which is a 'nari time cIa i.m ' as defined in s 1(1)(ii) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) and, secondly, the court must have or be conferred with jurisdiction which, in an action against a foreigner, is generally effected by an arrest or attachment of the vessel or other property in South Africa or within its territorial waters. 557 Pursuant to s 2 of the 1983 Act, neither the place where the claim arose nor the place of registration of the ship (her flag), nor the residence, domicile or nationality of its owner or of the claimant is relevant to the question whether or not the South African courts, ie each provincial and local division of the Supreme Court (including a circuit local division) has jurisdiction. The divisions mainly dealing with admiralty matters in South Africa are: 558 The Cape Provincial Division Cape Town, Walvis Bay, Saldanha Bay The South Eastern Cape Local Division: Mosselbay, Port Elizabeth The Eastern Cape Division East London 557 Cf Territorial Waters Act 1963 (Act 87 of 1963). 558 Cf Hare op cit 58. 136 The Durban and Coast Local Division The Natal Provincial Division Durban, Richards Bay Durban, Richards Bay The 1983 Act offers a claimant two different forms of proceedings, namely, the action in personam (s 3(1) of the 1983 Act) and the action in rem (s 3(4) of the 1983 Act). In an action in personam, the person of the debtor or wrongdoer is cited as the defendant and in actions in rem the ship, cargo, bunker (each of them separately or together) are the object of the arrest and ci ted as defendant. Proceeding from the wording 'action in rem' and 'action in personam' one might think that with an action in rem only a res (for instance ship, cargo or freight) is the object of the arrest whereas with an action in personam a person (for instance the shipowner) is to be arrested. This is in fact the case in German law559 and seems, by reading the 1983 Act verbatim, the same for South Africa. The 1983 Act, s 3 reads as follows: - s 3(2) - s 3(5) An action in personam may only be instituted against a person. An action in rem shall be instituted by the arrest •.. concerned of property of one or more of the following categories against or in respect of which the claim lies: (a) The ship, with or without its equipment, furniture, stores or bunkers; (b) the whole or any part of the equipment, furniture, stores or bunkers; (c) the whole or any part of the cargo; (d) the freight. However legal authorities in South Africa do not follow this wording and, consequently the foreign litigant, familiar wi th statutory law and used to be the wording of an Act or Statute as being the basis for legal findings, is easily confused. Legal practice in South Africa concerning the action in personam and the action in rem is as follows: The action in rem is instituted 559 Paras 916 and 918 zPO. 137 by an arrest for instance of a ship560 and is directed against a res, as in German law. 561 With an action in personam, however, the aim of the applicant is not really directed at a person (for instance a shipowner) but at the whole property of that person and, again, a res like in an action in rem is the object of an admiralty action. This interpretation differs from the wording of the German provisions because with an action in personam in German law a person is not only called the defendant, he is in fact the defendant. This means that he can for instance be arrested and put in jail. 562 An action in rem in German law is (as in South African law) directed at the res of the owner of the ship or company and in fact his whole property, not only the ship, cargo or freight can be sued by an action in rem or an action in personam. The main difference in South African law between an action in rem and an action in personam seems to be the characterization of the defendant: with an action in rem it is the ship and with an action in personam, it is a "person" as set out in s 3(2) of the 1983 Act. Accordingly on has to distinguish between an action in personam and an action in rem, the first enforced by attachment563 the latter by an arrest. As it will be shown later,564 the legal procedure to 'found and confirm jurisdiction' is called an attachment as well and is ruled by the provisions of the action in personam. The question whether to proceed in an action in rem or in an action in 560 The 1983 Act, s 3(5). 561 See however The Commodore 1943 NPD 27 and The Fabian 1921 CPD 148. 562 Cf Part A - Chapter XI. 563 See however The Answald 1912 AD 546. 564 See Chapter XIX (3). 138 personam or in both565 depends on the individual case. One must bear in mind that with the arrest of a ship one only arrests the 'value of a ship after a judicial sale I. This value is the basis for compensation of the claim. If the ship is an old small one, it might happen that the money from the sale of the ship is not sufficient enough to discharge the claim, especially when there are other claimants with maritime liens of a better ranking. On the other hand, the action in rem gives the plaintiff the advantage of claiming against the ship as defendant and then he does not have the burden of proving the ownership as required in an action in personam. The action in personam has the advantage that the attachment over the whole property of the owner (defendant) is possible and the full claim can be sued, this not being dependent on the value of the shi p. However, as already stated above, the claimant has the onus of proving ownership of the res at the time of the attachment. If therefore the proceeds of a (fictitious) judicial sale will be sufficient enough, an action in rem is the most efficient and recommended admiralty procedure. If there is, however only the slightest doubt that the proceeds could be not enough, either an action in personam or both an action in personam and an action in rem are the recommended admiralty procedures. (2) The claims for an arrest/ attachment - s 1 (l)(ii) of the 1983 Act As mentioned earlier, an essential for the enforcement of a maritime claim in south Africa, either by an action in personam or an action in rem, is that the claim must be a 'maritime claim ' as defined in s l(l)(ii) of the 1983 Act. However, even if a claim is not a maritime claim as defined, an action under the common law would lie in favour of an incola plaintiff, who can attach property to found or confirm jurisdiction in proceedings similar to an application for attachment prior to an action in personam. Such an action 565 Rule 20(5) of the Admiralty Proceedings Rules (the Rules). 139 would, of course, not be brought in the Admiral ty Court, but in one of the parochial courts. The maritime claims listed in ss 1 (1)(ii)(a) to (z) of the 1983 Act which are subject to the admiralty jurisdiction of the SUpreme court, include all the maritime claims enumerated in the International Convention of Arrest of Sea- going Ships of 1952566 and the heads of admiralty jurisdiction as set out in s 20 (2) of the Uni ted Kingdom Supreme Court Act of 1981. 567 described briefly568 as follows: 569 They can be (a) and (b) (c) (d) (e) (f) (g) (h) and (i) ( j ) (k) (1) (m) (n) (0) (p) (q) (r) (s) ( t) (u) (v) (w) ownership and possession mortgages damage caused by a ship damage to a ship loss of life and personal injury loss or damage to goods carriage of goods and charterparties570 salvage571 towage or pilotage572 materials and services construction and equipment wages573 disbursements general average bottomry and respondentia marine insurance forfeiture limitation of liability distribution of fund in Court maritime lien oil pollution 566 567 568 569 570 571 572 573 Appendix Ill. Cf Shaw op cit 10 ff. C 54. ef The Public General Acts and General Synod Measures (1981) Part 11 at 1138. Cf Shaw op cit 10 ff. In detail see ss 1(1)(ii)(a)-(z) of the 1983 Act. Cf The Zygos I 1984 (4) SA 444 (C). Cf The Brazilia 111988 (1) SA 103 (C); The Manchester 1981 (2) SA 798 (C); H Staniland I Towage or salvage? The Manchester - case and canment' (1988) 1 LMCLQ 16. Ibid. The Antigoni Tsiris 1981 (3) SA 950 (N). (x) ( y) 140 arbitration awards indemnity and contribution. 574 AI though the Colonial Courts of Admiral ty Act 1890 has been repealed as regards its application in South Africa,575 the 1983 Act keeps the heritage of colonial jurisdiction. In accordance with s 1 (1) (ii) (z) of the 1983 Act all claims which could have been heard under the Colonial Courts of Admiralty Act 1890 prior to 1983 are defined as maritime claims. Booysen576 levels the cri tici srn that this article, having been enacted as a catch-all provision to cover every possible contingency, 'reflects an extremely cautious and unsure legislature or draughtsman. Even after 1983 the English Admiral ty Court Acts of 1840 and 1861 and the inherent common law jurisdiction of the Colonial Courts of Admiralty therefore remains relevant to a determination of SOuth African admiralty court jurisdiction in so far as they bestow a wider jurisdiction than the Admiral ty Jurisdiction Regulation Act'. l3ooysen's criticism is correct as to the application of the colonial jurisdiction, but one cannot agree that the catch-all provision reflects an 'extremely cautious and unsure legislature or draftsman'. Perhaps it is a little bit unfortunate to create a catch-all provision (which principally is necessary to ensure that shipping matters not listed in s 1(1)(ii) of the 1983 Act will be heard by an admiralty court) which refers to what can be called the old jurisdiction. It might have been better to create a catch-all provision which gives the Admiralty Courts jurisdiction to hear any maritime claim, whether or not specifically defined as such in the 1983 Act. with regard to German law, the 1983 Act gives a much wider description of claims which can be heard before the courts. However, one must remember that the German law does not offer special Admiral ty Courts. In shipping matters 574 The Zygos I 1984 (4) SA 444 (C). 575 See s 16 of the 1983 Act (repeal of laws, schedule). 576 Gp cit 76. 141 there are special chambers of the Higher District court (Kammer fuer Handelssachen am Landgericht) and for arrest proceedings,577 usually the Magistrates' Courts (Amtsgerichte) are the competent courts. 577 Cf Part A - Chapter III (2) (c). 142 C H APT E R XVI LEGAL REQUIREMENTS OF AN ACTION IN REM (ARREST) - SS 3(4) AND (5) OF THE 1983 ACT An arrest will be allowed, if (besides other preconditions which will be discussed later) the preconditions of s 3 (4) of the Admiral ty Juri sdiction Regulation Act 105 of 1983 (the 1983 Act) are fulfilled. Section 3(4) of the 1983 Act provides that, without prejudice to any other remedy that may be available to a claimant or to the rules relating to the joinder of cause of action, a maritime claim578 may be enforced by an action in rem: (a) if the claimant has a maritime lien over the property to be arrested; or (b) if the owner of the property to be arrested would be liable to the claimant in an action in personam in respect of the cause of action concerned. Furthermore s 3(5) of the 1983 Act provides that an action in rem shall be insti tuted by an arrest within the area of the jurisdiction of the court concerned of property of one or more of the following categories against or in respect of which the claim lies: (a) The ship, with or without its equipment, furniture, stores or bunkers; (b) the whole or any part of the equipment, furniture, stores or bunkers; (c) the whole or any part of the cargo; (d) the freight. (1) The preconditions of s 3(4)(a) of the 1983 Act - maritime lien In terms of s 3 (4) (a), the 1983 Act provides that a mari time claim can be enforced by an action in rem (an arrest) if the claimant has a maritime lien 578 As set out in the previous chapter. 143 over the property (eg the ship)} even though the owner of the vessel is not liable for the debt which gives rise to the claim. The 1983 Act does not however define a maritime lien. 579 The only references to a maritime lien are to be found in ss 3 (4) (a), 1 (1 ) (i i) (v) and 11 (1 ) (e) of the 1983 Ac t. In order to find the meaning of a maritime lien one therefore has to look at English law. This follows from s 6(1) of the 1983 Act where English law as it stood on November 1983 is applicable. 580 The English admiralty law recognizes six categories of maritime liens, namely: 581 (i) (ii) (iii) (iv) (v) (vi) Salvage Collision damage Seaman's wages Bottornry582 Master's wages Master's disbursements cf s 11(1)(c)(vi) of the 1983 Act cf s 11(1)(c)(iii) andlor (iv) of the 1983 Act cf s 11(1)(c)(ii) of the 1983 Act cf s 11(1)(c)(i) of the 1983 Act cf s 11 (1) (c) (i) andl or (v) of the 1983 Act. This numerus clausus is restricted to debts incurred in respect of or occasioned by the vessel and which may arise, as stated by Nienaber J,583 ex contractu (for instance seaman's and master's wages), ex delicto (collision 579 See the definition of Dillon & van Niekerk op cit 13. Cf Chapter XIV (2) (b) wi th regard to the recognition of a foreign rnari time lien and the position thereto in German law. 580 Cf H Staniland 'The Recognition of an American Maritime Claim for Services and Disbursements' (1986) 103 SALJ 542 at 543; Hare op cit 61; The Fidias 1986 (1) SA 714 (C) at 716B; T~alantiao 1987 (4) SA 250 (D) at 253D-F. "Roman-Dutch law does not know the maritime lien. It recogn izes certai n tacit hypothecs over ships but these are greatly diminished by the rule that they are extinguishable on alienation because Roman-Dutch law, differing from civil law holds to the maxim mobiles non habent sequelam," Shaw op cit 88. See Bamford op cit 21 ff. 581 Cf Hare op cit 61; H Staniland 'The Admiralty Jurisdiction Regulation Act and the Maritime Claim of a Saudi Arabian Necessaries Man' (1986) 103 SALJ 350 at 352; The Fidias 1986 (1) SA 714 (C) at 717B. 582 This is (now) an obsolete lien in English law as well as in German law. Cf The Halcyon Isle (1981) AC 221 (PC) at 232H. See Federal Law Gazette (Bundesgesetzblatt) 1972 I, at 966. 583 The Fidias 1986 (1) SA 714 (C) at 715F. 144 damage) or quasi ex contractu (for instance master's disbursements). The discussion with regard to maritime liens goes back to the 19th century and Jervis CJ584 tried to give the first definition of a maritime lien, when he said that this was meant to be .. the foundation of the proceeding in rem, a process to make perfect a right inchoate from the moment a lien attaches; and whilst it must be admitted that where such a lien exists, a proceeding in ~ may be had, it will be found to be equally true, that in all cases where a proceeding in rem is the proper course, there a rnari time lien exists, which gives a privilege or claim upon the thing, to be carried into effect by legal process. This claim or privilege travels with the thing, into whosesoever possession it may come. It is inchoate from the moment the claim or privilege attaches, and when carried into effect by legal process, by a proceeding in rem, relates back to the period when it first attached." The last sentence of Jervis' defini tion has been the cause of a controversy which continues to this' days. The word 'inchoate' according to one opinion,585 leads to the conclusion that the maritime lien is a procedural remedy. A contrary opinion states that the reference of Jervis CJ to the maritime lien as an 'inchoate' right has mistakenly been interpreted to mean that a rnari time 584 The Bold Buccleugh 11 (1851) 7 Moo PCC 267 at 284. The facts of the case were as follows: The steamship Bold Buccleugh ran down and sank the barque William in the Humber in 1848, was seized under process in Leith in an action against her owners upon that cause in the Court of Session in Scotland in January 1849, was bailed, released and sold to a bona-fide purchaser without notice of the cause or claim pending, was sent to Hull by her new owner in August, 1849, and was arrested by warrant of the High Court of Admiralty. The new owner appeared under protest, alleging a lis pendens in Scotland; the Scottish action was subsequently abandoned, and Dr Lushington overruled the protest and found for the owners of the William. The cause was taken on appeal to the Privy Council, which held that the Scottish action - being in personam with collateral seizure could not bar a suit in rem in the Admiralty Court, and, in regard to a second defence asserted below but not considered by Or Lushington, that the collision lien survived even a bona-fide sale without notice, cf F L Wiswall The Development of Admiralty Jurisdiction and Practice since 1800 (1970) at 155 f. 585 See for instance The Halcyon Isle (1981) AC 221 (PC). 145 lien is procedural, and that a mari time lien has to be regarded as a substantive right. 586 The question is accordingly whether the maritime lien is a substantive right or merely a procedural remedy. This question became a real problem with regard to the recognition of a foreign maritime lien, for instance in the cases The Two Ellens,587 The Colorado,588 The Halcyon Isle,589 The Khalij Sky,590 The Fidias,591 The Andrico uni ty592 and The Kalantiao. 593 According to English law the issue of whether a maritime claim attracts a maritime lien will be resolved by the lex fori on the basis of a general choice-of-law rule that matters of procedure are decided according to the law of the forurn. 594 In South African law, because there is no clear existing definition, it has to be determined, firstly, which classification a maritime lien has and, secondly, whether or not Sou th African courts will recognize a maritime lien created by the law of a foreign state in circumstances in which the South African law would not confer such a lien. 595 As pointed out above, s 6 of the 1983 Act provides that South African Admiral ty Courts must apply the law which the High Court of Justice of the Uni ted Kingdom in the exercise of its admiralty jurisdiction would have 586 See for example Staniland (1986) 103 SALJ 542 at 547. 587 (1872) 4 LR (PC) 161. 588 (1923) P 102. 589 (1981 ) AC 221 (PC). 590 1986 (1 ) SA 485 (C) . 591 1986 (1 ) SA 714 (D) • 592 1987 (3) SA 794 (C) . 593 1987 (4) SA 250 (D) • 594 Staniland (1986 ) 103 SALJ 542 at 543. Cf The Halcyon Isle (1981 ) AC 221(PC) . 595 The Kalantiao 1987 (4) SA 250 (D) at 253B. 146 applied596. But the question then arises: What law would a (notional) court in England (including the highest court) apply? The House of Lords has not yet spoken on the point in question. Only the Privy Council, the final court of appeal for the colonies, has decided on this point in The Halcyon Isle. 597 However, the Privy Council is not part of the appellate hierarchy of the supreme Court. Its decisions do not bind either the High Court of Appeal or the House of Lords598 . Its decisions are of ' great persuasive value', 599 but no more. It follows from this that the decision of the Privy Council in The Halcyon Isle does not bind the Admiralty Courts in South Africa. Accordingly, having relinquished the burden of having to follow the decision of the Privy Council in The Halcyon Isle, one has to look at the House of Lords, which is part of the appellate hierarchy of the Supreme Court. 600 As already stated one I will find that the House of Lords has not yet decided on the matter. Therefore, one has to look at the Court of Appeal for the decision of The Colorad0601 and to consider the meaning of that judgment. Having done that, one has to look at the Privy Council decision Halcyon Isle if one is not sure whether to follow The Colorado or not. This in principle was the path followed by Leon J in The Kalantiao, where the facts were as follows: The Registrar of the court issued a warrant of arrest on behalf of the plaintiffs, directing the Sheriff to arrest the ship Kalantiao and keep it under arrest until further order. Subsequent to 596 597 . 598 599 600 601 The Fidias 1986 (1) 714 (D) at 718Hi The Kalantiao 1987 (4) SA 250 (D) at 253B. (1981) AC 221 (PC). The judgment will be discussed later. References for the fact that the decisions of the Privy Council are not binding can be found in The Kalantiao 1987 (4) SA 250 (D) at 255Fi cf Hare op cit 62. Leon J in The Kalantiao 1987 (4) SA 250 (D) at 255F. Cf Staniland (1986) 103 SALJ 542 at 543. Appellate Jurisdiction Act. See Halsbury's Laws of England 4ed (1982) (vol 37) para 71 0 at 545. (1923) P 102. 147 the arrest, security was filed by the defendants and the ship was allowed to sail. The plaintiffs had a valid claim against the time charterers of the Kalantiao, in respect of stevedoring services rendered to the vessel in ports of the united states of America in pursuance of an agreement concluded in the USA. The proper law of the contract was the federal law of the United States of America. In terms of that law the plaintiffs enjoyed a maritime lien. Leon J looked at the judgment in The Colorado, 602 a ship which was registered in France. The appellants were ship repairers in Cardiff who had effected repairs to the ship, and, failing to obtain payment of their claim, had arrested the vessel in an action in rem and obtained judgment and an order for sale in November 1921. The vessel was sold by the Marshal and the proceeds paid into court. The question which fell to be decided by the court was whether the holders of a French mortgage which was in the nature o~ a hypothec, should rank above or below a necessaries man in respect of the proceeds of the sale of the ship. Under French law a hypothec ranked below a claim by a necessaries man. In English law a mortgage does not enjoy a maritime lien at all but only has a statutory right in rem. The Court of Appeal held that the holder of the French registered mortgage had priori ty over the necessaries man. The quintessence of The Colorado was the lex loci should determine the nature of the claim and thereafter the lex fori should govern the priorities. 603 Bearing this result in mind, one looks at The Halcyon Isle604 and notes that this case has a minority and a majority judgment. The minority referred to The Colorado as support and held that the maritime lien created by the lex loci had to be recognised as such, and that the maritime lien was a substantive property right 602 Ibid. 603 The Colorado (1923) P 102 at 110 f. Cf Staniland (1986) 103 SALJ 542 at 547. 604 (1981) AC 221 (PC). Cf M M Cohen 'In defence of the Halcyon Isle' (1987) 2 LMCLQ 152. 148 attaching to the claim as soon as the cause of action arose. 605 The judgment in The Halcyon Isle concerned two claims competing for priority ranking against the proceeds of the sale of the ship the Halcyon Isle. One claim was that of a mortgagee and the other was the claim of a US repairman asserting that he had acquired a maritime lien under US law in circumstances which English law would not have recognised as giving rise to a lien. The Halcyon Isle has, as already stated, produced two controversial opinions. One is the minority judgment of Lord Salmon and Lord Scarman606 who were of the opinion that: " the English Court of Appeal in The Colorado adopted the approach which is correct in principle. A maritime lien is a right of property given by way of security for a maritime claim. If the Admiralty Court has, as in the present case, jurisdiction to entertain the claim, it will not disregard the lien. A maritime lien validly conferred by the lex loci is as much part of the claim as is a mortgage similarly valid by the lex loci. Each is a limited right of property securing the claim. The lien travels with the claim, as does the mortgage: and the claim travels with the ship. It would be a denial of history and principle, in the present chaos of the law of the sea governing the recogni tion and priority of maritime liens and mortgages, to refuse the aid of private international law." The minority} hence, classified the maritime lien as a substantive right. It considered the applicabili ty of the decision of The Colorado and came to the 605 Cf Staniland (1986) 103 SALJ 542 at 547; Shaw op cit 86. 606 The Halcyon Isle (1981) AC 221 (PC) at 250C-E. The facts of the case were as follows: Mortgagee held a mortgage on a British ship dated April 27, 1973. In March 1974 American ship-repairers carried out repairs to the' ship in New York. Under USA law they were entitled to a maritime lien for the price of the repairs. The ship sailed from New York. In August 1974 both the ship-repairers and the mortgagees started admiral ty actions in rem against the ship in the High Court of Singapore. In September the ship was arrested in Singapore in the mortgagees action and in March 1975 she was sold by order of the Court. The proceeds of sale were insufficient to satisfy all the claims made by the owner's creditors. The ship-repairers applied to the High Court for a declaration that they were entitled to a mariti~e l~en for ~he ,price of the repairs. The mortgagees applied for a determlnat10n of pr1or1ty of payments from proceeds of the sale. 149 conclusion " (that) the case is a neat illustration of the application of two principles of the law. The court looks to the lex loci to determine the nature of the claim. Having established its nature, the court applies the priorities of its own law, the lex fori." 607 In accordance with the minority judgment, Munnik JP in The Khalij Sky 608 came to the same conclusion. 609 contrary to the minority judgment the majority held (per Lord Diplock610 ) that a maritime lien arose in circumstances which, had they occurred in England, would not have given rise to a maritime lien in English maritime law, and would not be recognised and applied in considering questions of priorities among claimants to proceeds of the sale of the ship.611 The majority thus regards the maritime lien as a procedural remedy and not as a substantive right. The court looks at the lex fori to determine the nature of the claim. The ship-repairers lien was therefore not enforceable and the mortgagees claim 607 The Halcyon Isle (1981) AC 221 (PC) at 248G-H. 608 1986 (1) SA 485 (C) at 493G. The facts of the case were as follows: Both applicants individually entered into contracts with the head charterer and for the sub-charterer of the respondent vessel whilst it was in the port of New Orleans in the State of Louisiana in the USA, a port other than its home port, the contracts being respectively for agency services and disbursements for necessaries in the case of first applicant and stevedoring in the case of second applicant. First applicant performed the services contracted for and in the result the head charterer and! or sub charterer became liable for the payment of certain sums of money specified in the papers but not admitted by respondent. It is common cause that according to United States law, both applicants have a maritime lien on the vessel in respect of the services and disbursements in ques tion enforceable by an action in rem and this is so irrespective of whether credit was given to the vessel or to the charterer. 609 The minority judgment has been approved by certain writers, such as Staniland (1986) 103 SALJ 542 and Shaw op cit 86 ff. In support of the minority judgment see also the Canadian case The Strandhill (1926) 1 Ex CR 226. 610 The Halcyon Isle (1981) AC 221 (PC) at 229D ff. 611 The Andrico Unity 1987 (3) SA 794 (C) at 802D-G. 150 was entitled to priority.612 The majority judgment in The Halcyon Isle has been approved in South Africa in the cases of The Andrico uni ty613 (per Marais J) and The Kalantiao614 (per Leon J). Marais J615 pointed out that in his respectful opinion the view of the majority in The Halcyon Isle "was not in conflict with prior English authority and rested upon readily understandable considerations of policy". He opined further as follows: "As far as I am aware, the majority's discussion has not been repudiated or criticized in any subsequent case in England. Whatever the position may be in other jurisdictions, the law of England at the relevant date appears to me to be that which is reflected in the decision of the majority in The Halcyon Isle. A notional High Court of Justice exercising admiralty jurisdiction on 1 November 1983 would therefore have declined to recognize the Argentine lien and would have refused to arrest the vessel in rem. If the vessel had already been arrested, it would have ordered that the arrest be discharged. 11616 Leon J617 explained his decision to follow the majority judgment in The Halcyon Isle as follows: 1 . The House of Lords has not yet spoken on the point. 2. The Privy Council, which has highly persuasive force, has and has decided by a majority in favor of the lex fori. 3. The Colorado, which is the relevant decision in the Court of Appeal, does not in my judgment support the minority in The 612 The Halcyon Isle (1981) AC 221 (PC) at 235D, 238H - 239A, 241 F-G and 242 A-G. 613 1987 (3) SA 794 (C) . 614 1987 (4) SA 250 (D) . Cf Cohen op cit 152. 615 The Andrico unity 1987 (3) SA 794 (C) at 821I-J. 616 Ibid. 617 The Kalantiao 1987 (4) SA 250 (D) at 264A-D. 151 Halcyon Isle case. 4. There are no decisions subsequent to The Halcyon Isle in England which have in any way called into question the majority view in The Halcyon Isle. 5. As Marais J has shown, the majority view in The Halcyon Isle is clearly defensible and would therefore continue to be of persuasive force in England. 6. The English cases spanning more than 100 years before The Halcyon Isle all support the conclusion of the majority in that case. 7. An English court faced with 1-6 above would therefore in all probability follow the majority in The Halcyon Isle. Conclusion: It is submi t ted that the minority decision in The Halcyon Isle should be favored but for different reasons to those mentioned. One is the assumption that the maritime lien is a substantive right and not simply a procedural remedy. Jervis CJ's definition or prescription of the maritime lien in The Bold Buccleugh 11618 has been interpreted from the starting-point of the word 'inchoate'. But reading the whole definition, one finds that Jervis CJ states that when a maritime lien exists, it gives a privilege or claim upon the thing, to be carried into effect by legal process. In other words, the maritime lien gives a claim (a substantive right) which can be enforced by legal process, ie in an action in rem (arrest). This conclusion is in accordance with German law619 where a maritime lien is recognised as a claim for an arrest. This means as a substantive right, which is in principle enforceable by an incola and a peregr inus . The classification of a mari time lien by the majority of The Halcyon Isle as a procedural remedy and not as a substantive right would have the effect, as Munnik JP 620 correctly pointed out 618 (1851) 7 Moo PCC 267 at 284 f. 619 See Part A - Chapter III (1) (a) (ii). 620 The Khalij Sky 1986 (1) SA 485 (C) at 488. 152 "that no action in rem against the vessel could ever succeed where the forum in which it is brought is governed by English admiralty law and where the action is based upon facts which, although giving rise to a maritime lien under the lex loci, do not give rise to a maritime lien under the lex fori.,,621 One has to agree with staniland622 that this, "in turn, would have had the effect of encouraging so-called forum shopping, since the ship, as she navigates through various jurisdictions of the world, would either attract or discard maritime liens in terms of the lex fori." Another reason for following the minority is that it is contradictory for the majority to accept in principle that 'this claim (the maritime lien) or privilege travels with the thing (the ship), into whosesoever possession she may come' and on the other hand to deny a maritime lien not recognised by English law. That means that the principle is not a 'real ' principle because it is only applicable to maritime liens recognised by English law. As far as foreign maritime liens are concerned the principle stops at British territorial waters,623 ie English jurisdiction. The majority furthermore refuses to apply the established rule of private international law that a substantive right will be recognised under its lex causa. 624 But this resul t follo~ed only because the majority regarded the maritime lien as a procedural remedy and not as a substantive right. A further reason for following the minority in The Halcyon Isle is that the majority decision would effect an injustice. The ship-repairers would be depri ved of their mari time 1 ien , val id as it appeared to be throughout the 621 Op cit 488D-E. 622 (1986) 103 SALJ 542 at 548. 623 Or the territorial waters of the countries (Colonies) which are connected with English admiralty law. 624 The Kalantiao 1987 (4) SA 250 (D) at 263 per Leon J. 153 world. Wi thout this, they would obviously never have allowed the ship to sail when a dollar had not been paid for the important repairs625 on which the ship- repairers had spent a great deal of time and money and from which the mortgagees obtained substantial· advantages. It follows from the above tha t a foreign mari time lien, being a substantive right, should be recognised by South African Admiralty Courts, which are free to decide and follow the minority in The Halcyon Isle. As pointed out above, the decision of the Privy Council has only 'persuasive value' and is not binding. (2) The preconditions of s 3(4)(b) of the 1983 Act - liability in action in personam Another way that a maritime claim can be enforced by an action in rem is if the owner of the property to be arrested (for example a ship) 'would be liable' to the claimant in an action in personam in respect of the cause of the action concerned. 'Would be liable' refers to being sued in an action in personam. 626 The liability originates either ex contractu, ex delicto or quasi ex contractu. Owner does not mean only the registered shipowner but also the beneficial owner. 627 625 The Halcyon Isle (1981) AC 221 (PC) at 246. Cf Staniland (1986) 103 SAW 542 at 549. 626 Shaw op ci t 32. The requirements of an action in personam will be discussed in the following chapter. 627 See Chapter XIV (2) (a) (i) . 154 C H APT E R XVII LEGAL REQUIREMENTS OF AN ACTION IN PERSONAM (ATTACHMENT) - SS 3(1), (2) AND (3) OF THE 1983 ACT (1) General preconditions In terms of s 3 (1) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) any maritime claim, subject to the provisions of the 1983 Act, may be enforced by an action in personam. 628 As pointed out in the previous chapter, an action in personam will, in the first place, be directed against all or any of the property of the debtor or wrongdoer (defendant) and includes all the items set out in s 3(5) of the 1983 Act ie the ship, her cargo, freight or bunkers. Any property can be attached, whatever its nature and value,629 including incorporeal property (such as the right to claim payment of debts, provided that the Deputy Sheriff can make an effective attachment) or pledged goods. 630 As noticed earlier631 the defendant's liability originates either from contract, quasi contract or tort. Pursuant to s 3 (2) of the 1983 Act, an action in personam may only be instituted against a person: (a) resident or carrying on business at any place in South Africa;632 (b) whose property wi thin the court's area of jurisdiction has been attached to found or confirm jurisdiction;633 628 Cf The Andrico Unity 1987 (3) SA 794 (D) at 795A. 629 Even of 'trivial value', see Thermo Radiant Oven Sales (Pty) Ltd v Nelspruit Bakeries (Pty) Ltd 1969 (2) SA 295 (A). 630 Shaw op cit 50. Cf Mercantile Bank of India Limited v Davis 1947 (2) SA 723 (C). 631 Cf Chapter XVI (1). 632 The 1983 Act, s 3(2)(a). 633 The 1983 Act, s 3(2)(b). 155 (c) who has consented or submitted to the jurisdiction of the court;634 (d) in respect of whom any court in South Africa has jurisdiction in terms of Chapter IV of the Insurance Act (Act No 27 of 1943);635 (e) in the case of a company, if the company has a registered office in South Africa. 636 A 'person' against whom the action in personam may be instituted includes any juristic person, whether a local or private individual, or a corporate body. 637 In ss 3(2)(a) and (e) the 1983 Act refers to 'companies' either carrying on business at any place in Sou th Africa or if the conpany has a registered office in South Africa. The word 'company' refers to the Companies Act, 638 which in s 1 (1) defines a company as "a company incorporated under Chapter IV Companies Act639 and includes any body which immediately prior to the commencement of the Companies Act was a company in terms of any law repealed by the Companies Act 1973." The words 'carrying on business at any place in South Africa' refer to s 1 (1) 634 635 636 637 638 639 The 1983 Act, s 3(2)(c). Cf The Atlantic Victory 1986 (4) SA 329 (D) at 333E ff. The 1983 Act, s 3(2)(d). The 1983 Act, s 3(2)(e). A person is defined in s 2 of the Interpretation Act 33 of 1957 (as amended) as (a) any divisional council, municipal council, village management board, or like authority; (b) any company incorporated or registered as such under any law; (c) any body of persons corporate or unincorporated. Cf Chapter XIV (1) and Rule 14 of the Uniform Rules of the SUpreme Court' of South Africa (proceedings by and against partnerships J firms and associations). Act 61 of 1973 as amended. Chapter IV of the Companies Act deals with the formation obJ'ects , ' J capacl. ty J powers J names J registration and incorporation of companies J matters incidental thereto and deregistration. Cf ss 32 to 73 D of the Companies Act. 156 of the Companies Act which provides that 'place of business· means It any place where the company transacts or holds itself out as transacting business and includes a share transfer or share registration office. It The words •registered office· lead to s 170 (1) of the Companies Act which provides that every company including every external company shall have a postal address in South Africa to which all communications and notices may be addressed640 and a registered office to which all communications and notices may be addressed and at which all process may be served. 641 The maritime divisions of the Supreme Court have jurisdiction over external companies because the Companies Act also applies to external companies. 642 The fact that s 3(1)(e) of the 1983 Act refers to the 'company·s registered office· does not mean that every company having a registered office in South Africa must necessarily be resident or carry on business in South Africa, or that every company resident or carrying on business in South Africa will have a registered office in South Africa. 643 Section 3(2)(e) of the 1983 Act refers to Chapter IV of the Insurance Act 1943. 644 Chapter IV of the Insurance Act includes s 60 which sets out the requirements in respect of business underwritten by underwriters at Lloyd' s. 640 The Companies Act, s 170(1)(a). 641 The Companies Act, s 170(1)(b). 642 The Companies Act, s 2(2). See s 1(1) of the Companies Act which defines ~n external company as It a company or other association of persons J lncorporated outside the Republic (of South Africa), the memorandum of which was lodged wi th the Registrar under the repealed Act, or which, since the commencement of the (Companies) Act, has established a place of business in the Republ ic (of Sou th Africa) It. Cf also ss 322 to 336 of the com~a,nies ,Act, dealing wi th •external companies', their registration, admlnlstratlon and other duties. 643 Shaw op cit 45. 644 Act 27 of 1943 as amended. 157 Section 60(1) of the Insurance Act provides as follows: "The following provisions shall apply in connection with business underwritten by underwriters at Lloyds and any person who does any act in the Republic (of South Africa) relating to the receiving of applications for policies or the issue of policies or the collection of premiums in respect of such business; and any such person shall, for the purpose of this section, be deemed to be carrying on insurance business in the Republic (of South Africa); •... " section 60 (1 ) (a) of the Insurance Act provides further that every person has to have a license to carry on insurance business. 645 Any person carrying on insurance business must in terms of s 60 (1) (d) of the Insurance Act have an office in South Africa at which process in connection with a policy effected through its agency may be served. The Insurance Act, s 60(1)(g) provides that the Committee of Lloyd' s shall appoint in a person in South Africa who is authorized to act on its behalf and on behalf of underwriters at Lloyd' s, and such person shall lodge with the Registrar of Insurance646 a notice of the address of his office and of any change in such address. Accordingly, any Admiralty Court has jurisdiction in personam in respect of any Lloyd's policy referring to South Africa. 647 The 1983 Act provides that an action in personam may generally only be instituted in a court whose area of jurisdiction is adjacent to the territorial waters of South Africa. 648 However, the 1983 Act allows exceptions from this rule: (a) in the case of a claim contemplated in ss 1(1)(ii)(a) and (b) of the 645 The Insurance Act, s 6(1)(e). 646 Cf s 1 of the Insurance Act for the definition of 'registrar' and s 2 of the Insurance Act. 647 Shaw op cit 46; Hare op cit 63. 648 The 1983 Act, s 3(3). For further details with regard to s 3(3) of the 1983 Act see Shaw op cit 46 and Booysen op cit 78. 158 1983 Act (relating to ownership and possession), s 1 (1) (ii)(i) of the 1 983 Act (relating to charterparties) or s 1 (1 ) (ii) ( j) of the 1983 Act (marine insurance), if the claim arises ou t of an agreement concluded within the area of jurisdiction of that courti 649 (b) in the case of a claim contemplated in s 1(1)(ii)(g) of the 1983 Act (relating to loss or damage to goods) or in s 1 (1) (ii) (h) of the 1983 Act (relating to carriage of goods), if the goods concerned are or were shipped under a bill of lading to or from a place wi thin the area of jurisdiction of that courti 650 and finally (c) if a maritime claim concerned relates to a fund within, or freight payable in, the area of jurisdiction of that court. 651 This category refers to cases where there has been a claim in an action in rem insti tuted by the arrest of cargo or of the freight in terns of s 3 (5) (c) or (d) of the 1983 Act, or where any security given is located in the area of jurisdiction of the inland divisions concerned. (2) Procedure Arrests in actions in rem and in personam have, in principle, the same procedural requirements. However, there are peculiari ties which have to be observed. Unlike an action in rem, with an action in personam, the application must be made to a court652 for an order for attachment. This is done on the strength of a notice of motion supported by an affidavit, a draft order and a writ of attachment prepared by the attorney and submitted by the advocate. 653 649 650 651 652 653 The 1983 Act, s 3(3)(a). The 1983 Act, s 3(3)(b). The 1983 Act, s 3(3)(c). In an action in rem with the Registrar, cf Rule 3(2)(a) of the Admiralty Proceedings Rules. See Chapter XIX (1). 159 The affidavit contains the following essential allegations654 : that the claim is a maritime claim for which the defendant is liable and that the court will have jurisdiction pursuant to the proposed attachment; that the property sought to be attached is property belonging to the defendant or in respect of which he has an attachable interest; whether any security has been given in respect of the claim and the reasons for the court's aid being required; the source of the signatory's information and that the contents of the affidavit are true and correct; the reasons, if any, for urgency. with regard to the requirements of power of attorney, evidence, security and release of attachment see the following chapters. 655 Further procedural details are dealt with the action in rem. 656 The procedural requirements of an attachment to found or confirm jurisdiction are dealt wi th in Rule 4 of the Admiral ty Proceedings Rules and will be discussed more fully later. 657 654 655 656 657 Findlay & Tait The Enforcement of Maritime Claims in South Africa (1987) at 3 f. Chapters XVIII and XIX. Chapter XVIII. See Hare op cit 89 f. See Chapter XIX (3). 160 CHAPTER XVIII GENERAL PRECONDITIONS AND REQUIREMENTS FOR AN ARREST (1) Power of attorney South Africa follows the Sri tish system of a separate bar. One has to distinguish between attorneys who have no right to appear in the SUpreme Court and the advocates who have that right. As in German law, a creditor/ applicant does not need to appoint an attorney when issuing a summons, third party notice or warran t of arres t . 658 The arrest is obtained on the strength of a certificate by the applicant or his attorney. In the case where the applicant appoints an attorney, a formal power of attorney is usually not required at the arrest stage,659 because the action in rem (or in personam) is a summary proceeding, most of the time accorrpanied by urgency, especially in shipping matters. The applicant contacts an attorney who applies for an arrest order wi th the Registrar of the court. At this stage an advocate is not yet necessary. When the matter is heard in open court, either from the time of application for attachment in personam or when the pleadings are to be prepared in an action in rem after the arrest has been ordered, an advocate must be briefed by the attorney.660 All pleadings after the writ of summons have to be signed by both the attorney and the advocate. The advocate has the advantage of being presented with a prepared case by the attorney. Rule 20(4)(a) of the Admiralty Proceedings Rules (the Rules)661 provides 658 Cf Rule 20(3) (a) of the Admiralty Proceedings Rules and Rule 16 of the Uniform Rules of the SUpreme Court of SOuth Africa (the Uniform Rules). 659 The requirements for filing a power of attorney are set out in Rule 20(2). 453 Hare op cit 84. In important matters, a party may decide to brief Senior Counsel, either with or without Junior Counsel to assist him. See Findlay & Tait op cit 21. 661 Appendix X. See also Rule 20(4)(c). 161 that where the parties are described generally by description rather than by name,662 the power of attorney may describe the parties as they are described in the action. In that event, the attorney filing the power of attorney must file an undertaking to pay costs and any damages awarded in terms of s 5(4) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) (wrongful arrest) against the party represented by him. 663 Further requirements of a power of attorney are provided by Rul e 7 of the Uniform Rules of the SUpreme Court. (2) Form of application and procedure Unlike in Germany, no application for an arrest to court is required. The arrest is obtained on the strength of a 'certificate' in terms of Rule 3(3)664. The warrant of arrest is issued by the Registrar of the court and served by the Sheriff or his Deputy on the ship to be arrested,665 "informing" the defendant/ respondent (the ship) that the property arrested will be released upon security in a sum representing the amount of the value of the relevant property (eg ship) or the amount of the claim, whichever amount is lower. 666 The Deputy Sheriff is the equivalent of the German bailiff. Normally the application procedure is as follows: The plaintiff himself or his attorney will file with the Registrar667 a draft 'warrant of arrest ,668 662 Rule 2(3). Cf Shaw op cit 106. 663 Shaw op cit 106. 664 Cf Chapter XVIII (2 ) (a) . 665 Cf Rule 5(4) and Chapter XXIII (1 ) • 666 Cf Rule 3(5) (a). 667 Cf Rules 6(4)(a) and (5) of the Uniform Rules. 668 Cf Rules 3 and 5(4) APR. See also Form 2 of the Rules - Appendix XIII (2). 162 (which only the registrar has to sign) and a 'summons in rem· 669 in respect of the applicants name, accompanied by a •certificate , in terms of Rule 3(3).670 It is advisable to combine the certificate wi th an affidavit as to the facts upon which the applicant relies for relief and, if at that stage available, to annex essential documents supporting the application. 671 Notwithstanding this procedure, in general no pleadings are required in an action in rem unless notice of intention to defend the arrest is delivered by the defendant. 672 Every application, however, must be brought on notice of motion673 (except in cases of urgency) supported by an affidavit and must state the time within which the respondent must deliver any affidavits and the date for the hearing of the application. (a) Certificate in terms of Rule 3(3) In accordance with Rule 3 (3), a Registrar will, save where the court has ordered the arrest of property, issue a warrant of arrest only if summons in the action has been issued and a certificate signed by the party causing the warrant (this may be the unrepresented plaintiff himself or his attorney) to be issued is submitted to him. Rule 3(3) requires674 that the certificate states the following: 675 669 670 671 672 673 674 675 Cf Rules 2 and 5(2). See also Form 1 of the Rules - Appendix XIII (1). For 'summons' with regard to actions in personam see Rule 5(3). Rule 3(3) provides that the Registrar shall issue a warrant of arrest only if summons in the action has been issued and a certificate signed by the party causing the warrant to be issued is submitted to him. Hare op cit 89. Rule 7. Rule 16 in conjunction with Rule 6 of the Uniform Rules. As already referred to in Chapter XVIII (2) (a). An example of a certificate in terms of Rule 3 (3) is given in Appendix XIII (3). (i) (ii) (iii) (iv) 163 That the claim is a maritime claim and that the claim is) or that on the effecting of the arrest the claim will be, one in respect of which the court has or will have jurisdictioni 676 that the property sought to be arrested is property in respect of which the claim lies or, where the arrest is sought in terms of s 3(6) of the 1983 Act, that the ship is an associated ship which may be arrested in terns of the said sectioni 677 whether any securi ty or undertaking has been given in respect of the claim of the party concerned, or to procure the release, or prevent the arrest or attachment of the property sought to be arrested and, if so, what security or undertaking has been given and the grounds for seeking arrest notwi thstanding tha t any such securi ty or undertaking has been giveni678 that the contents of the certificate are true and correct to the best of the knowledge, information and belief of the signatory and what the source of any such knowledge and information is. 679 Rule 3(3)(a) refers to the maritime claims in s 1(1)(ii) of the 1983 Act and the certificate has to state whether one (or more) of the maritime claim(s) is the claim for an arrest. Rule 3 (3) (b) only requires the statement that the ship is an associated ship in terms of s 3 (6) of the 1983 Act. N::> further particulars set out in section 3(7) AJRA have to be presented at the stage of the arrest application, especially the ones which prove common ownership and common control. 68D Rule 3(3)(c) refers to cases where security probably has been given but 676 Rule 3(3)(a). 677 Rule 3(3)(b). 678 Rule 3(3)(c). 679 Rule 3(3)(d). 68D Cf Chapter XIV (3). In general, no order is required for the issue of a 164 might be not sufficient enough to cover the claim and interest (for instance a claim referring to collision damage or salvage). Rule 3(3)(d) refers to the fact that the attorney has to show that his knowledge is from instructions of different sources, either from the plaintiff himself or if the plaintiff is for example a foreigner (eg a German) and represented by 'his' foreign (German) counselors, from the counselors representing the plaintiff in Germany, or from any other sources of information. (b) Warrant of arrest - Rules 3(1) and (2) Pursuant to Rule 3(1), an arrest in an action in rem must be effected by the service of a warrant of arrest. '!he warrant of arrest must be issued by the Registrar and must be in a form corresponding to Form 2 of the First Schedule of the Rules. 681 warrant. 682 The Registrar may refer to a judge the question of whether a warrant should be issued. 683 Any such question must be so referred if it appears from a certificate contemplated in Rule 3(3),684 or if the Registrar otherwise has knowledge, that security or an undertaking has been given in terms of s 3 (10) (a) of the 1983 Act to prevent arrest or attachment of the property in question. 68S If a question has been so referred to a judge, the judge may authorize the Registrar to issue a warran t of arres t, or may gi ve such directions as he thinks fit to cause the question of whether a warrant of 681 Rule 3(2)(a). See Appendix XIII (2) . 682 Except in the case of s 5(3) of the 1983 Act. 683 Rule 3(2) (b). 684 Cf Chapter XVIII (2) (a) . 685 Rule 3(2)(c). 1G5 arrest should be issued to be argued. G8G If a question has been so referred to a judge, no warrant will be issued unless the judge has authorized the Registrar to issue the warrant of arrest. G8? The warrant of arrest is directed against the respondent and is to the effect that notice has to be taken that summons has been issued in an action in rem, and that by the service of the warrant the ship is arrested and is kept in the custody of the Sheriff or his Deputy in terms of Rule 19. Furthermore, the respondent is summoned by the warrant to give sati sfactory security for the amount of the claim or the value of the property arrested (whichever is the lesser), if he wants to obtain release of the property (eg the ship) from arrest. In the event of a dispute as to the security, the respondent can make an application to court for the resolving of that dispute. The respondent is also entitled to ask the court to impose conditions with regard to the arrest. Finally, the warrant of arrest contains a section which is directed to the Sheriff or his Deputy, normally in the following terms (order of execution): "You are authorized by the warrant of arrest to arrest and keep under arrest the property named herein and you are hereby required duly to serve this warrant and return the original to the Registrar with your Return of Service." The warrant is prepared by the plaintiff or his attorney.G88 686 Rule 3(2)(d). G87 Rule 3(2)(e). G88 Every warrant of arrest must be signed by the attorney or the party himself if not represented by an attorney and thereafter be 'signed and issued by the Registrar - Rule 20(3)(a) - and every warrant of arrest must contain an address of the attorney or party such as referred to in Rule 17(3) of the Uniform Rules which provides as follows: "Every summons shall be signed by the attorney acting for the p~aintiff and shall. bear an attorney's address, wi thin eight kllometers of the offlce of the registrar, or, if no attorney is acting, it shall be signed by the plaintiff, who shall in addition append an address wi thin eight kilometers of the office of the registrar at which he will accept service of all subsequent documents 166 (c) Summons (in rem) - Rule 2 A summons must be in the form corresponding to Form 1 of the First Schedule of the Rules689 and must set forth a statement of the 'nature of the claim' and the 'relief' or 'remedy' required and the 'amount' claimed, if any, 690 and includes edictal citation. 691 The 'nature of the claim' means any maritime claim in accordance with s 1 (1 ) (i i) of the 1983 Act and can include, for example, the damage to cargo shipped on board a vessel, 692 or damage to ship caused by collision with another ship or tug. The method of enforcing the claim may be invoked either by an action in personam or an action in rem. Where the relief or remedy is one sounding in money the amount can ei ther be stated in rands or in whatever currency the plaintiff/ applicant thinks fit. When, for instance, a towage contract is on a US-dollar basis, than the amount can specified in us-dollars. In accordance with s 5(2)(g) of the 1983 Act the court may grant a judgment in foreign currency, for instance the US-dollar. 693 Section 5(2)(g) of the 1983 in the suit; and shall thereafter be signed and i,ssued by the registrar and made returnable by the sheriff to the Court through the registrar: Provided that such address where the attorney or the plaintiff, as the case may be, will accept service of documents in the suit may be further than eight kilometers from the office of the registrar but within the magisterial district in which such office is si tuated if such attorney or the plaintiff is a person who is in terms of any law prohibited from being the occupier of land or premises wi thin the distance of eight kilometers of such office." For the further requirements of filing, delivery and preparation of papers see Rule 20. 689 Appendix XIII (1). 690 Rule 2(1) APR. 691 Rule 1 APR. 692 If there is damage done to cargo, the statement of the 'nature of claim' should include details concerning the kind of cargo, the name of the ship, the port of lading and the port of destination and details of the Bill of Lading. Further, the attorney should state that the plaintiff was at all times the owner of the cargo and the holder of the Bill of Lading and was, accordingly, entitled to the delivery of the cargo. 693 Cf The Torm Helene (unreported) Case No AR 415/86 (N). 167 Act reads as follows: "A court may in the exercise of its admiralty jurisdiction - subject to the provisions of any law relating to exchange control, order payment to be made in such currency other than the currency of the Republic as in the circumstances of the case appears appropriate, and make such order as seems just as to the date upon which calculation of the conversion from any currency to any other currency should be based. ll According to s 5(2)(g) of the 1983 Act the court has a discretion as to whether to apply the section or not. Thus far there are no reported cases in terIIB of s 5(2)(g) of the 1983. 694 The question arises what the words "appropriate", II just" and llin the circumstances of the case" have to have for an influence on the courts decision. Shaw695 opined llthat in each case the endeavour must be to choose the currency which is appropriate in order to conpensate the plaintiff for his loss, or to pay him what he was contracted for, or what is due to him." In a case concerning the ordinary jurisdiction van den Heever J696 held that where a foreign creditor sought to enforce implementation of a contract stipulating payment in Japanese Yen in Tokyo "that there was no absolute bar to its ordering a South African debtor to effect such payment in the stipulated foreign currency ... that the date on which the conversion from South African rand into the stipulated foreign currency should be made is the da te when payment is actually effected and not when payment is due." In Voest Alpine Intertrading Gesellschaft mbH v Burwill and Co SA (pty) Ltd697 694 The Houda Pearl 11 1986 (3) SA 960 (A) is not applicable because the facts fall under the admiralty proceedings in terms of the Colonial Courts of Admiral ty Act 1890. 695 Op cit 84. 696 Maruta Machinery Ltd v Capelon Yarns (pty) Ltd 1986 (4) SA 671 (C). 697 1985 (2) SA 149 (W). Cf The Despina R (1979) 1 All ER 421 (HL). 168 Nestadt J held: "In a contractual claim for damages (for repudiation of a contract), damages would be due when the breach occurred. Though only quantified by the judgment, the damages are assessed at this date. Even although the price of goods was payable in US dollars, the defendant IS liability must likewise be determined. Subsequent fluctuations in the value of currency are to be ignored. In a case such as the present, defendant's refusal then to pay (some three years before the date of trial) will of course have led to plaintiff sustaining a large loss. It may be that this could be claimed as a further head of damages. It could not, however, justify the quite fortuitous and often del ayed date of judgment, which may only be established on appeal, being taken as the relevant date for converting defendant's dollar liability to rands. 1I In Barry Colne and Co (Transvaal) Ltd v Jackson's Ltd698 Gardiner J held, on the strength of Roman-Dutch authorities, "that where the price of goods sold is given in a foreign currency, in the absence of any term in the contract to the contrary, payment may be made in local currency of the place of payment of a value equivalent to the price agreed upon at the rate of exchange ruling at the date when payment falls due. ,,699 The authorities quoted above show how inconsistent the courts have been in deciding whether or not to grant judgment in a foreign currency and what the day of conversion should be. When exercising its discretion in terms of s 5 (2) (g) of the 1983 Act a court should use Shaw' s defini tion as a foundation. Each case depends on its owns merits, whether based on contract or delict. In, for example, a contraqt 698 1922 CPD 372. 699 Cf Bassa Ltd v East Asiatic (SA) Co Ltd 1932 NPD 386 at 390 where Hathorn J held that "therefore the parties mus t have contempla ted tha t the conversion should take place when the bill (of exchange) came into existence." 169 between two South Africans based on a US dollars agreement the debtor's dollar liability has to be converted at the day of due date because the disadvantage of fluctuations in the exchange rate lies on the debtor having missed to pay. The same rule applies, for example, with wages of a South African seaman under a contract with the shipowner (or charterer by demise) based on US dollars. One cannot agree with van den Heever J that the date on which the conversion from South African rand into the stipulated foreign currency or vice versa should be made is the date when "paYment is actually effected" because the creditor will be placed at a disadvantage twice. Firstly, because he cannot use the money owed by the creditor for further business activities700 and, secondly, he has to bear possible disadvantageous exchange rates. In the case of a towage and salvage contract, for example, the date of conversion would be the date when the contract is performed. Furthermore, it seems incongruous that a credi tor who recei ves payment after years of protracted litigation should find himself in a worse posi tion than one who is paid on due date. 701 The principles considered for claims of contract is applicable for claims of damage for breach of contract and all other kinds of damages which may arise in terms of s 1(1)(ii) of the 1983 Act. The fact that damages for breach of contract must be assessed at date of that damage does not mean that those damages must be assessed and quantified in South African currency as at that date. Where a loss is in fact suffered in a foreign currency there is no reason not to assess and quantify the damag~ in that currency. "Indeed not to do so might be to deny a plaintiff the amount of his actual loss." 702 This amount prevails and should be the standard when deciding in terms of s 5(2)(g) of the 700 Many debtors owing money quite often have caused the bankruptcy of their creditor. 701 Cf The Torm Helene (unreported) Case No AR 415/86 (N). 702 Ibid. 170 1983 Act. Besides the requirements of a summons set out above and that provided by Rule 20, the summons contains an instruction about the defendant 's righ~ of appearance to defend and the time for such appearance. The summons must then contain the following statements, directed at the defendant: 703 If you wish to defend the action you must within ten days give notice of your intention so to defend. 704 That notice must be served to the Registrar and on the plaintiff's attorney and must contain an address in accordance with Rule 19 of the Uniform Rules. 70S If you do not give that notice within the time set out, or within any extended time which the court may allow, if you make application for an extension of time, or if you do not thereafter deliver your plea or a claim in reconvention as provided by the Rules regulating the conduct of the admiralty proceedings,706 proceedings may continue and judgment may be given against you without further notice. The summons also contains a request to the Sheriff or his Deputy to effect service of the summons and return the original to the Registrar with his return of service. 703 In this example the plaintiff is represented by an attorney. 704 Rule 6(2). 70S Rule 19(3) of the Uniform Rules reads as follows: When the defendant delivers notice of inten tion to defend, he shall therein give his full residential or business address and shall appoint an address, not being a post office box or poste restante within eight kilometers of the office of the registrar, or if he is a person who is in terms of any law prohibited from being the occupier of land or premise~ within such distance of eight kilometers of such office, he may appoint an address further than eight kilometers from such office but within the magisterial district within which such office is situated, for the service on him thereat of all documents in such action, and service thereof at the address so given shall be valid and effectual, except where by any order or practice of the Court personal service is required. 706 Rule 8 and Rule 24 of the Uniform Rules. 1 71 (d) Notice of motion (Rule 16, Rule 6 of the Uniform Rules) and affidavit Where summons has been issued in an action in rem, any person having an interest in the property concerned can, at any time before the expiry of ten days from the service of the summons, give notice of intention to defend and can defend the said action. Any interested party can enter an appearance, for example the shipowner, the beneficial owner, the charterer, or the master of the ship. In accordance with Rule 16 (2), a notice of motion in an application on notice shall state: the time within which the respondent must deliver any affidavits and ·the date for the hearing of the application. Rule 16(1) provides that Rule 6 of the Uniform Rules is to apply to applications subject to the provisions of Rule 16. The main effect of Rule 6 of the Uniform Rules is that, in terms of Rule 6(2), the applicant is entitled to state the time wi thin which the respondent is to file the respondent's affidavits and the application is, from the beginning, set down for hearing on a specific day.707 The notice of motion must be in a form corresponding to Appendix XIII(4), which gives an example of a notice of motion in the matter of an application for the confirmation of the issue of a warrant of arrest and summons in rem. An affidavit must, for example in the matter of an application for the confirmation of the issue of a warrant of arrest and summons in rem, contain the following: The name of the attorney filing the affidavit and declaration of the contents of the affidavit under oathi 708 707 Cf Shaw op cit 110. 708 The Commissioner of Oath certifies as follows: 'I HEREBY CERTIFY that the Deponent of this Affidavi t (normally the 172 the full address of the attorney; the authorization by the applicant to depose the affidavit and to make the application; that the matters to which he deposes in the affidavit, insofar as they are wi thin his personal knowledge, are true and correct and insofar as they are not within his personal knowledge are to the best of his knowledge true. The attorney has to itemize the sources of his knowledge, for instance instructions of his mandator or from documents; the name of the applicant and his address; the respondents name (name of the ship and where she is presently berthed) ; further details to the previous procedure, information in respect of an associated ship (eg an extract from Lloyd's Maritime Directory) and other facts and documents. Being a matter of urgency the arrest procedure is always ex parte,709 that is without notice, unless the applicant applies to court on notice to the ship.710 This is only done in extraordinary cases. (3) Caveat - Rules 3(5) (b), (c) and (d) It may happen that a claimant desires to bring proceedings against property which is already under attachment or arrest (, first arrest/ attachment I). In accordance with Rule 3(5)(b) any person who intends to institute an action in rem against any property (eg a ship) which has been arrested (in an action in rem) or attached (in an action in personam), may file with the Registrar and plaintiffs attorney) has acknowledged to me that he knows and understands the contents hereof which was signed and sworn to by him before me at (for example) Durban on the 7th of May 1988 the Regulations contained in Government Notice No R 1258 dated 21th July 1972, as amended by Government Notice No 1648 dated 19 August 1977 having been complied with. 709 Whether by way of petition or upon notice to the registrar supported by an affidavi t. 710 The Stavroula 1987 (1) SA 75 (C) at 76E. 173 serve711 a notice of the said intention (caveat).712 When any such notice has been filed, the property will not be released from arrest or attachment unless the person desiring to obtain the release of the property (ship) has given notice to the person who has filed any such notice (caveat) that he desires to obtain the said release of the property (ship) from arrest. If a caveat has been given in terms of Rule 3(5) (b) and the person concerned has not consented to the release of the ship or any other· property in accordance wi th s 3 (5) of the 1983 Act, the property is not to be released from arrest or attachment (, second arrest/ attachment') unless the court so orders. 713 The Rules do not give a time-limi t providing within which a court can refuse to release the ship from the 'second arrest! attachment'. ttle caveat does not commence proceedings for the caveat-holder. His objection in terms of Rule 3(5) (d) only delays the release of the ship under the custody of the Sheriff because of the 'first arrest/ attachment'. In the case where the prerequisi tes of the 'first arrest/ attachment' have become void, the court cannot postpone the release of the ship from arrest for an unlimited time. The caveat-holder should therefore be prepared within a reasonable time to approach the court for an order. Pursuant to Rule 3(5)(b), the person who intends to institute an action in rem against any property set out in s 3(5) of the 1983 Act may serve the notice in accordance with Rule 5 (2) , 714 and this means in the case of an intended action against a ship (her equipment, furniture, stores or bunkers) by affixing a copy of the caveat (the notice of the intention to institute an action in rem 711 In accordance with the provisions of Rule 5(2). 712 ef Shaw op cit 108; Hare op cit 85 f. 71 3 Rul e 3 ( 5) (d) . 71 4 Rule 5 (2) refers to Rule 5 (4) - how to serve a warrant in an action in rem. 174 against the property) to the mast, or on the outside, or any suitable part of the superstructure of the ship, and by handing a further copy to the master or other person in charge of the ship.715 Accordingly, Rule 3(5)(b) indicates who has to be given notice of the caveat and accordingly one must disagree with Hare,716 when he says that the Rules make no mention of who should be given notice of the caveat. If one follows Hare, it is not clear why the claimant who has already obtained an arrest (, first arrest/ attachment') should be served wi th a copy of the caveat by the Deputy Sheriff. Hare states that the (first) claimant will then at least be aware that there are others "waiting in the wings to whom he must give the necessary notice." 'Ibe interest of the first plaintiff in receiving notice of a caveat is that he than knows that there are other creditors who might prevent him from realizing his full claim because of a better ranking in terms of s 11 of the 1983 Act. The really interested 'person' who should receive notice of the caveat is the ship, ie the shipowner, because he needs to be informed that a 'second arrest/ attachment' is possible which would cause further delays to the ship's voyage. (4) Evidence - s 6(3) of the 1983 Act At the stage of the arrest application the requirements concerning evidence are relatively low. This is because the arrest proceedings are proceedings determined by the fact of urgency. 717 The 1983 Act takes this circumstance into account. In accordance with s 6(3) of the 1983 Act, the court may receive 715 In the case of an action against cargo, freight or in terms of s 3(10)(a) of the 1983 Act see Rules 5(4) (b), (c) and (d). 716 Gp cit 85 f. 71 7 See Rule 6 (1 2) (a) of the Uniform Rules which provides that in urgent applications the court or a judge may dispense wi th the forms and service provided for in the Uniform Rules of the Supreme Court and may dispose of such matter at such time and place and in such manner and in accordance with such procedure (which shall as far as practicable be in terms of the Uniform Rules) as to it seems meet. 175 as evidence statements which could otherwise be inadmissable as being in the nature of hearsay evidence, subject to the directions and conditions that the court thinks fi t. In cases of urgency, the attorney will get the necessary information ei ther by telephone, telex or telefax, or from the plaintiff himself. The affidavi t, made under oath by the plaintif fs attorney (or the plaintiff himself if he is not rePresented) and giving the relevant facts is, in principle, sufficient evidence at this stage. For further details concerning evidence and trial procedure see Chapter XX (3) and (4). (5) Competent court (a) Admiralty jurisdiction in terms of s 2 of the 1983 Act As already mentioned, 718 the 1983 Act grants admiralty jurisdiction to each provincial and local division (including a circui t local division) of the Supreme Court of South Africa. These courts have admiralty jurisdiction 11 to hear and determine any maritime claim (including in the case 0 f salvage, claims in respect of ships, cargo or goods found on land), irrespective of the place where it arose, of the place of registration of the ship concerned or the residence, domicile or nationality of its owner. 719 In principle the Supreme Court720 has jurisdiction concerning all maritime claims enumerated in s 1 (1)(ii) of the 1983 Act. 721 718 Chapter XV (1). 719 The 1983 Act, s 2(1). The area of jurisdiction of a court referred to in s 2(1) of the 1983 Act shall, in accordance with s 2(2) of the 1983 Act, be deemed to include that portion of the territorial waters of South Africa adjacent to the coastline of its area of jurisdiction. 720 The divisions having admiralty jurisdiction are listed in Chapter XV (1). 721 Cf Chapter XV (2). 176 (b) Transfer of proceedings - appropriate forum (s 7(1) of the 1983 Act) A court may decline to exercise its admiral ty jurisdiction in any proceedings instituted or to be instituted, if it is of the opinion that the action can more appropriately be adjudicated upon by another court in South Africa or by any other court, tribunal 722 or body elsewhere. 723 This means that an Admiralty Court can refuse to exercise its admiralty jurisdiction because it is of the opinion that either another court exercising admiralty jurisdiction, or exercising ordinary jurisdiction in South Africa or any other court could hear the action more appropriately. The Admiralty COurt can even transfer the action to a court outside South Africa, for example Germany.724 If the matter is one in terns of s 1 4 of the 1983 Act, the Admiral ty Court can transfer the action to a Magistrates' Court. 725 Pursuant to s 7(1)(b) of the 1983 Act the Admiralty Court may stay proceedings if the parties concerned agree that the matter in dispute be referred to arbitration in South Africa or elsewhere, or if for any other sufficient reason the court is of the opinion that the proceedings should be stayed. A further provision dealing with the competence of Admiralty Courts is s 7 (2) of the 1983 Act. 726 When in any proceeding727 of the Supreme Court of South Africa the question arises as to whether a matter pending or proceeding before that court is one relating to a maritime claim, the court must forthwith decide that question. If the court decides that the matter is one relating to a 722 723 724 725 726 727 Cf Chapter XXVI. The 1983 Act, s 7(1). Cf Booysen op cit 77. The 1983 Act, s 7(2) (b). Cf Chapter XVIII (5) (c). Cf Chapter XXVI. Before a provincial or local division, including a circuit local division, see s 7(2) of the 1983 Act. 177 maritime claim, it must be proceeded with in a court competent to exercise its admiralty jurisdiction, and any property attached to found jurisdiction shall be deemed to have been attached in admiralty proceedings. 728 The 1983 Act, however, does not indicate •when I the question may be raised whether a matter pending or proceeding before that court is one relating to a maritime claim. Booysen729 is of the opinion that it seems to be possible for such a question to be raised as late as in concluding argumen t. If one adopts the view that every mari time claim must be heard in a court exercising admiral ty jurisdiction, it might happen that as the procedure and law applicable differ depending on the type of jurisdiction exercised by a court, a sudden change of law and procedure in the middle of the proceedings could bring discredit upon a party I S case. In respect of evidence, for example, in the Supreme Court exercising its ordinary jurisdiction nei ther, the plaintiff nor the defendant can base their respective cases on hearsay statements. 730 If the case is proceeded with in an Admiralty Court, however, these statements may suddenly be admissable. 731 The court therefore should determine its competence meru motu at the beginning of the procedure as in German law to eliminate any prejudice, to preserve certainty in the law, and to ensure that the case will be decided by a legally competent judge, 732 especially because no appeal against any decision or order made under s 7(2) of the 1983 Act is possible. 733 728 The 1983 Act, s 7(2) (a). Is the matter not one relating to a maritime claim, the action shall proceed in the division having jurisdiction in respect of the matter. For further details see s 7(2)(b) of the 1983 Act. 729 Gp cit 78. 730 See the Law of Evidence Amendment Act which came into force on 1 October 1988 (Act 45 of 1988) which provides that in civil and criminal proceedings hearsay evidence shall be admitted in certain circumstances provided for in the Act, eg when each party against whom the evidence is to be admitted agrees to the admission thereof. 731 Ibid. Cf Chapter XVIII (4). 732 See also ss 7(3) and (5) of the 1983 Act. 733 The 1983 Act, s 7(4). 178 (c) Magistrates Courts - s 14 of the 1983 Act The 1983 Act, s 1 4 itself does not derogate from the juri sdiction which a Magistrates Court has under ss 131, 136 and 151 of the Merchant Shipping Act.734 The 1983 Act retains the Magistrates l Courts jurisdiction concerning seamen. 735 Section 131 of the Merchant Shipping Act concerns the rights of suing on allotment notes, s 136 of the Merchant Shipping Act concerns the proceedings for wages, and s 151 concerns the property of deceased seaman which may be recovered as wages. If, however, the Magistrates Court is the competent court in terms of s 14 of the 1983 Act, only the Magistrates l Courts Act736 with its Rules of Court737 are applicable. For the rest, the Admiralty Courts remain the competent courts of maritime claims by a master or member of the crew of a ship arising from the emploYment. 738 734 Act 57 of 1951 as amended. Cf Appendix XII. 735 Cf Booysen op cit 78. 736 Act 32 of 1944 as amended. 737 The Rules came into force on 30 April 1968; see H J Erasmus and 0 J Barrow Handbook of the Supreme Court Act, 59 of 1959 and the Magistrates' Courts Act 32 of 1944 2ed (1988) at 332. 738 The 1983 Act, s 1(1)(ii)(n). 179 C H APT E R XIX PARTICULAR REASONS FOR APPLYING FOR AN ADMIRALTY ACTION IN REM OR IN PERSONAM The basic reason for a claimant proceeding in an admiralty action is, normally, to enforce a mari time claim. But there are some particular motives for instituting the admiralty proceedings described as follows: (1) Prejudgment security arrest - s 5(3) of the 1983 Act If, for example, a German claimant is already engaged in arbitration or legal proceedings in Germany (eg in Hamburg) for a claim based on a German cause of action and subject to German law, the Admiral ty Juri sdiction Regulation Act 105 of 1983 (the 1983 Act) empowers a South African court on application of the German qlaimant to arrest the defendant's ship presently berthed in a South African harbour as a security for the claimant's claim. In other words, s 5(3) of the 1983 Act empowers a court to arrest, at the instance of a foreigner, a ship, owned by a foreigner, as a security for a claim pending in some foreign country which is based on a foreign cause of action and is subject to a foreign law. 739 Section 5(3)(a) of the 1983 Act requires: (i) that the person seeking the arrest has a claim enforceable by an action in rem;740 and (ii) that the claim is or may be subject to arbitration or other proceedings contempla ted, pending or proceeding ei ther in Sou th Afr i c a or elsewhere. 741 739 The Paz 1984 (3) SA 261 (N) at 263E; The Berg I 1984 (4) SA 647 (N); The Berg 11 1986 (2) SA 700 (A); The Stavroula 1987 (1) SA 74 (C); The Tatiana ~ (unreported) Case No A 102/87 (D); Shaw op cit 42 ff. 740 The 1983 Act, s 5(3)(a)(i). 741 The 1983 Act, s 5(3)(a)(ii). 180 The first reported case was The Paz. 742 The case before the court had no connection with South Africa apart from the fact that the ship involved was berthed in the harbour of CUrban. The applicant was a Nigerian corrpany, the defendant the ship The Paz, registered in Panama and owned by a Panamanian company. The applicant's claim against the ship related to loss of or damage to cargo conveyed from Antwerp to Lagos almost five years before the application. Litigation over the claim was pending in Hong Kong where an action in rem had been started in the High Court. Because the ship was due to call at I)lrban in order to refuel, the applicant applied as a matter of urgency for an order for the arrest of the ship so as to provide it with security for the judgment which it hoped would one day be awarded in Hong Kong. The matter was referred to the full bench by Didcott J who considered that the application raised an important question of judicial policy, namely whether or not the court should, as he put it, allow itself to be "transformed into some sort of judicial Liberia or Panama", to be "turned into a court of convenience for the wandering li tigants of the world." Didcott J feared that should an arres t in terms of s 5 ( 3) of the 1983 Act become too freely available, ships would not use South African ports and in turn that would damage local commerce. 743 Section 5(3) of the 1983 Act in fact gives the court a discretion whether or not to exercise jurisdiction by providing that it "may" order the arrest and not that it "shall" order the arrest. The majority judgment in The Paz (per Friedman J and Kriek J) held that the claimant must satisfy the court prima facie that he has a reasonable prospect of success in the main proceedings in Hong Kong and, in addition, why he needs the assistance of a South African court to obtain the securi ty he requires and cannot obtain such security in the other contemplated or pending 742 1984 (3) SA 261 (N). 743 Ibid 270B. arbi tration or proceedings. 744 181 Further, the majori ty referred to the corresponding section to s 5 (3) of the 1983 Act on which the Sou th African provision is based, namely s 26 of the English Jurisdiction and Judgment Act. This had come into being as a result of judicial dissatisfaction with the lack of jurisdiction to attach for purposes of security in such situations. The applicant had, notwithstanding the existence of s 5(3) of the 1983 Act, the possibility of commencing a 11 fresh" action in rem in South Africa, in which event the courtls discretion to refuse to entertain that action would not be a general discretion but that circumscribed by s 7(1) of the 1983 Act. 745 Didcott J agreed with the principles espoused by the majority, but disagreed that the court should be inclined to grant such applications. He opined that despite the fact that s 5(3) of the 1983 Act had been modelled on s 26 of the English Civil Jurisdiction and Judgments Act, this was irrelevant for South African courts. 746 Ships should not be scared away because attachments were allowed too freely. On the other hand, undue reluctance to permit actions under s 5 (3) of the 1983 Act could encourage the necessary commencement of actions in rem to achieve the same purpose. He therefore said that a satisfactory balance would have to be achieved between these extremes. 747 The majority judgment is to be preferred because Didcott J IS fear that, should attachments be allowed too freely, this would be bad for South African business is not likely to occur. A shipowner knows that his ship can be arrested in nearly any port she happens to be in. Shipowners will consequently make arrangements to put up securi ty, and if they have reasons to call at a 744 The Paz 1984 (3) SA 261 (N) at 268B. 745 Ibid 267B. Cf A Beck IAdmiralty Jurisdiction: A New Direction?' 1984 (47) THRHR 472; Friedman (1985) 102 SALJ 45 at 56; H staniland lIs the Admiralty Court to Be Turned into a Court of Convenience for the Wandering Litigants of the World?' (1986) 103 SALJ 9, (1985) 4 LMCLQ 462. 746 The Paz 1984 (3) SA 261 (N) at 268H ff. 747 Ibid 270C-F. Cf Beck op cit 473. 182 South African port, they will do so. Another reason for applying s 5(3) of the 1983 is the international aspect. In Art.7(2) the International Convention on Arrest of Sea-going Ships of 1952 provides a similar procedure to s 5(3) of the 1983 Act when it contemplates that a court, which stays an action on the ground that the dispute should be decided by another tribunal, will have the power to retain any security obtained in the action to sati~fy any judgment or award of the other tribunal. The jurisdiction of the South African courts in terms of s 5(3) of the 1983 Act is wider than Art.7(2) of the International Arrest convention of 1952. By avoiding s 5(3) of the 1983 Act, SOuth Africa could find itself isolated yet again, because it has not ratified the International Arrest Convention of 1952. To promote international uniformity and comity in the interests of maritime commerce, s 5(3) of the 1983 Act should be applicable in the manner that the majority in The Paz has shown. 748 An applicant accordingly needs to present the following to the court to get the writ of attachment: He must explain why he needs the court's assistance, including the reason why he needs security that he has not already obtained and why he cannot obtain security in the main proceedings; he must satisfy the court prima facie that he has reasonable prospects of success in the main proceedings. In a second case749 concerning s 5(3) of the 1983 Act, it was held that the provisions regarding the arrest of an associated ship are applicable to an arrest under s 5(3) of the 1983 Act. Lastly, ss 5(3)(b) and (c) of the 1983 Act provide that any property 748 749 Staniland (1985) 4 LMCLQ 462 at 476; Beck op cit 472. The Berg I 1984 (4) SA 647 (N). This decision was confirmed by the Appellate Division in The Berg 11 1986 (2) SA 700 (A). Cf Staniland (1986) 3 LMCLQ 279, where the writer comments on The Berg I in relation to whether ~s 3(6) and 5(3) of the 1983 Act are to be applied ~etrospec~lvel~. He concludes that these provisions are not retrospective ln operatlon, le not applicable for clairm which arose before 1 November 1983, the commencement of the 1983 Act. 183 arrested in terms of s 5(3) (a) of the 1983 Act is deemed to be property arrested in an action in terms of the 1983 Act and that a court may order that any security for or the proceeds of any such property shall be held as security for any such claim pending the outcome of the arbitration or proceedings. For foreign plaintif fs and their lawyers, s 5 (3) of the 1983 Act is a particularly useful procedure for claiming successfully. (2) Anticipated attachment - s 4(4)(b) of the 1983 Act In a fundamental deviation from the common law rule requiring physical presence of the property to be arrested within the court's jurisdiction, the 1983 Act offers a claimant the possibility of arresting a ship in anticipation. This means that the court will grant an order of attachment on the application of the plaintiff. This order will be served immediately when the ship arrives in the court's area of jurisdiction. This opportunity is offered by s 4(4)(b) of the 1983 Act750 which provides as follows: "A court may make an order for the attachment of property not within the area of jurisdiction of the court at the time of the application or of the order, and such an order may be carried into effect when that property comes wi thin the area of jurisdiction of the court." The court will usually order that there be no publication of the arrest until service, and may order the port captain concerned to report the vessel's arrival to the Sheriff who may then serve the warrant. 751 For the applicant, s 4(4) (b) of the 1983 Act is of interest especially when he needs to stay one step ahead of the respondent. This is the case for example if he wants to attach the cargo or the freight of the ship and fears that cargo and freight may be unloaded before he can get the order of arrest. 750 The S.S. Union Carrier 1950 (1) SA 880 (C) at 885. 751 Hare op cit 67. 184 However there might be some reasons for attaching the ship i tsel f in an anticipatory attachment, especially if the applicant fears that the ship could leave the territorial waters so quickly that he will not be able to serve the order of attachment by the Sheriff or his Deputy in time. The 1983 Act provides that the anticipatory attachment has to occur by means of an admiralty action in personam, ie an attachment. Hare therefore is inaccurate when he writes that a "claimant may ask the court to issue an arrest in anticipation of the vessel1s arrival within its jurisdiction.,,752 The result is the same, but the procedure differs to a certain extent as already shown above. The terminus technicus "arrest" is particular to the admiralty action in rem, whereas the "attachment" is particular to the admiralty action in personam. For legal precision these termini have to be kept separate. The same principle applies in German law. This does not contravene para 482 HGB because this provision only prohibits placing a ship under distraint (if she is on a voyage and is not lying in a port) and not the ord~r of an arrest. (3) Attachment to found or confirm jurisdiction (a) Section 4(4)(a) and 8(2) of the 1983 Act, Rule 4 In accordance with s 4(4)(a) of the 1983 Act in conjunction with Rule 4 of the Admiralty Proceedings Rules (the Rules), an Admiralty Court may make an order for the attachment of property to found753 or confirm jurisdiction although the claimant is not an incola either of the area of jurisdiction of that court or 752 Ibid. 753 An example of an order to found jurisdiction is to be found in The Areti L 1986 (2) SA 446 (C). Cf C~apter XIV (2) (ii). See too The Atlantic Victory 1986 (4) SA 329 (D) and Mlnesa Energy (pty) Ltd v Stinnes International AG 1988. (3) SA 903 (D); The Paola (unreported) Case No A 155/87 (D); Manica Frelght Services (Malawi) Ltd and others v United States Lines Incorporated (unreported) Case No A 28/87 (D). 185 of the Republic of South Africa. 754 An attachment to found jurisdiction is, however, not possible over claims which otherwise do not exist. 755 The application for an order to found or confirm jurisdiction is regulated by the provisions for an action in personam. 756 The attachment to found jurisdiction is for attachment of the property of either someone who is domiciled and resident in a foreign country (eg Germany) , or who is a South African not resident in the area of jurisdiction of the court (peregrinus).757 The reason for attachment is in order to establish the jurisdiction of the court, and to provide security for judgment. 758 The property can only be attached while it is in the jurisdiction of the court from which the attachment order is issued, and the effect of the attachment is either to confirm the jurisdiction which the court already has in the sui t between the parties, or to afford it jurisdiction it would not otherwise have had in the matter. 759 jurisdiction. 760 The attachment gives the court The distinction between the attachment to found and confirm jurisdiction is that wi th the first the existence of any ground of jurisdiction is not necessary, whilst with the latter the existence of such a ground is essential. Accordingly, the Admiralty Court may entertain the claim of a peregrinus 754 755 756 757 758 759 760 Cf A Rycroft 'Changes in South African Admiralty Jurisdiction' (1984) LMCLQ 417 at 421; Friedman (1985) 102 SALJ 45 at 55; Bamford op cit 156; Shaw op cit 25; see also The Maria K 1985 (2) SA 476 (C) and The Atlantic Victory 1986 (4) SA 329 (D). The Farandole 1978 (4) SA 263 (A) at 277. Cf Bamford op cit 157; Araxos (East London) (pty) Ltd v Contara Lines Ltd and others 1979 (1) SA 1027 (E). The Atlantic Victory 1986 (4) SA 329 (D) at 3301. D G Powles The Mareva Injunction and Associated Orders (1985) at 124. Herbstein and van Winsen The Civil Practice of the SUperior Courts in South Africa 3ed (1979) at 782. If the court has already jurisdiction there is no need to attach a ship to found jurisdiction, The Commodore 1943 NPD 27 at 28. 186 ("foreigner" in terms of s 4(4)(a) of the 1983 Act761 ). A German plaintiff, for example, can seek to attach the property of an English defendan t to found jurisdiction in a South African court in whose jurisdiction the property of the defendant is. An application for the attachment of property to found or confirm jurisdiction is usually made ex parte, unless the court otherwise orders. 762 The applicant must satisfy the court mutatis mutandis with regard to the facts and matters referred to in Rules 3(3)(a) and (c).763 The order of the court on an application to found or confirm jurisdiction results, inter alia, in the attachment of the property in question and further calls upon all interested persons to show cause on a date stated in the order why the order for attachment should not be confirmed. 764 If property has been attached to found or confirm jurisdiction, the person desiring to obtain the release of the property may, subject to Rule 3(5)(c) and any order made in terms of s 5 (2) of the 1983 Act, obtain such release on giving security for the claim (eg by a P & I - Club's letter of undertaking) to the person causing the property to be attached. 765 Where property has been attached to found or confirm jurisdiction relating to a maritime claim, ss 9, 10 and 11 of the 1983 Act will apply just as if the property had been arrested in an action in rem, whether or not the property has been arrested in terms of the 1983 Act. 766 This means that these sections apply even where property has been attached to found or confirm jurisdiction 761 762 763 764 765 766 Rycroft op cit 421. Rule 4 (1 ) • Cf Chapter XVIII (2) (a). Rule 4(3). Pursuant to Rule 4(4)(b). Rule 19 will apply mutatis mutandis in respect of security given in terms of Rule 4(4) (a) . The 1983 Act, s 8(2). 187 under the common law. (b) Arrest of property already under attachment in terms of the common law - s 8(1) of the 1983 Act A peculiarity of the action in personam concerning the attachment to found or confirm jurisdiction is provided by s 8(1) of the 1983 Act. Where property has been attached to found or confirm jurisdiction at common law, that property may nevertheless be arrested in connection with a maritime claim in an admiralty action, subject to such directions as the court thinks fit. 767 This means that the Admiralty Courts obtains jurisdiction over property already under attachment and over which an ordinary court so has jurisdiction. The result is that two courts have jurisdiction over one special kind of property because of different claims, ie maritime claims and ordinary claims. 767 The 1983 Act, s 8(1). 188 CHAPTER XX TRIAL PROCEDURE AND ADJUDICATION BY THE COURT (1) preliminary procedure - Rule 12 In general, admiralty proceedings commence by filing the warrant of arrest, the summons and the certificate in terms of Rule 3 (3) of the Admiral ty Proceedings Rules (the Rules).768 In an action in rem, a defendant may, where summons has been issued and at any time before the expiry of ten days from the service of the summons, give notice of intention to defend. 769 A plaintiff or a defendant, whether in convention or reconvention770 or a third party771 may, after being served with a summons or giving or receiving notice of intention to defend,772 or receiving a claim in reconvention or a third party notice, request the party issuing or delivering such document and any other opposing party to attend a conference 'in terms_of Rule .1.2(2)(a)(i). At the conference, the party requiring the conference may require any opposing party773 to disclose and make available all documents and. give such particulars as the opposing party is then able to make available or give as to 768 Cf s 1(2) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) and Chapter XVIII (2). 769 Rule 6(2). 770 Rule 8. Cf Chapter XX (7). 771 Rule 9. Cf Chapter XX (8). 772 Cf Rule 6. 773 For the purpose of Rule 12, any plain·tiff) any defendant who has given notice of intention to defend, or any third party who has delivered any pleadings shall be deemed to be an 'opposing party'. 189 the claim or defence upon which the opposing party relies,774 "thereby enabling the parties to know the strengths or weaknesses of their cases at an early stage of the proceedings and before any significant costs are incurred.,,775 If any party fails to attend a conference or to corrq:>ly wi th any reques t made to it, any other party may apply to court for an order that the said party attend such conference or comply with the request. 776 (2) Pleadings - Rules 1 (1), (7) and (10) The conduct of a case is determined by the "pleadings". Pursuant to Rule 1 (1 ) , a "pleading" includes particulars of claim, plea, claim in reconvention, third party notice and pleadings consequent upon the foregoing, but excludes a request for particulars or answer thereto in terms of Rule 11. There are some general rules as to pleading prescribed by the Rules. Rule 7 provides, inter alia, that no pleadings are required in an action in rem or in personam unless the defendant has delivered notice of intention to defend. Once notice of intention to defend has been delivered, the plaintiff must within ten days thereafter deliver particulars of the claim to the defendant,777 "furnishing him with particulars of the claim setting forth the nature of the claim, the conclusions of law on the facts alleged and a prayer for the relief claimed. ,,778 This will contain somewhat more detail than the concise statement of claim incorporated in the summons, but is nevertheless 774 Rule 12(2)(b)(i). Any opposing party may in like manner "require-the party requiring the conference and any other opposing party presentat the conference to disclose and make available all documents and give such particulars as he is then able to make available -or give concerning his claim or defence: Rule 12(2)(b)(ii). 775 Findlay & Tait op cit 19. 776 Rule 12(3). 777 Rule 7(2)(a). 778 ef Findlay & Tait op cit 19. 190 restricted to essential allegations and does not contain detailed evidence such as required in German law779 once the main proceedings have commenced. 780 The defendant must wi thin ten days after the delivery of the particulars of claim deliver a plea. 781 Consequent on a pleading filed by another party to the action, a party may deliver any further pleading wi thin ten days after the delivery of the proceeding pleading provided that no replication or subsequent pleading which would be a mere joinder of issue or bare denial of allegations in the previous pleading would be necessary.782 For further requirements with regard to general rules of pleading see Rule 7, especially where damages are to be claimed,783 where a pleading is vague or embarrassing,784 where a pleading lacks averments which are necessary to sus tain an action or defence785 and when there are vexatious or irregular proceedings. 786 Pleadings will close when the time has expired for the delivery of any further pleadings after the plea and no such pleadings have been delivered, or when a pleading has been filed joining issue without the addition of any further pleading. 787 At any time after the close of pleadings a party may, pursuant to Rule 11 (1), deliver a request for further particulars with regard to the pleading of 779 780 781 782 783 784 785 786 787 Ibid. See paras 355 to 494 ZPO. See para 926 ZPO. Rule 7(2)(b). Rul e 7 ( 2) (c) . Rule 7(4). Rule 7(5)(a). Rul e 7 ( 5) (b) (i) . Rules 7(7) and 18 APR. For further details see Shaw op cit 114. Rule 10. 191 any other party to the action for the purpose of enabling the party delivering the request to prepare the trial. 788 (3) Pre-trial procedure - Rules 11 and 14 proprio motu the court may, in order to expedite the trial, from time to time make an order or orders on application of any party. It may give directions for the more effectual carrying out of its order arising from the failure to answer, the inadequacy of any answer to any request for further particulars, or the failure to make any admission requested in such respec t, or for the purpose of amplifying any such answer,789 or arising from any dispute as to the adequacy of any discovery of documents. 790 A court may also order any person who is not a party to the action to produce documents relating to any question which may arise in the action which may be in his possession and to permit the same to be copied. 791 Other pre-trial procedures include questions of admission of hearsay eVidence,792 or the taking of evidence on commission, 793 or the holding of (any) conference with regard to curtailing the proceedings and limiting the issues, and the determination of the documents to be placed before the court at the trial. 794 "Many of these matters can be regulated by agreement between the parties) failing which it is necessary to apply to court for an appropriate 788 See also Rules 11(2), (3) and Rule 14(4). 789 Rule 14 (1 ) (a) (i). Cf Shaw op cit 118. 790 Rule 14(1) (a) (ii). 791 Rule 14(1)(b). 792 Rule 14(1)(c). See Chapter XX (4) . 793 Rule 14(1)(d). See Chapter XX (4) . 794 Rule 14(1)(f) in conjunction with Rule 37 of the Uniform Rules. 192 order. ,,795 The court may order any person who fails to answer any question satisfactorily or to make sufficient discovery of documents to produce for further particulars or to answer questions from such failure on oath, on affidavit, or otherwise as the court thinks fit. 796 (4) Evidence, discovery of documents, inspections and examinations In order to obtain all relevant facts, ei ther because they are of interest to the parties concerned, or because they are necessary for the court's decision, both the court and the parties involved in admiralty proceedings have several legal remedies concerning evidence, discovery of documents, or inspection and examination of the res in respect of which the maritime claim arose. Some remarks with regard to how to obtain evidence and evidential requirements have to be made. Firstly, the 1983 Act contains "rules of evidence" in ss 6(3) and (4). Section 6(3) of the 1983 Act provides that an Admiralty Court may receive as evidence statements which would otherwise be inadmissable as being in the nature of hearsay evidence, subject to such directions and conditions the court thinks fit. 797 The court may take evidence on commission, and this corresponds to para 375 ZPO in German law. The parties have several opportuni ties of obtaining and presenting evidence, depending on whom the burden of proof lies. with regard to actions in 795 Findlay & Tait op cit 20. 796 Rule 14(1) (a). Any order with regard to any matter referred to in Rule 14(1) (a), (d) or (f) shall be made only after the close of pleadings, unless the court in its discretion is of the opinion that an order should be made before the close of pleadings: Rule 14(4). 797 Cf Rules 14(1)(c) and 12(1)(b). 193 personam and the question of "ownership" at the time of the arrest, sources of evidence of ownership may be Lloyd' s Register of Shipping and Lloyd' s Annual Yearbook, updated to the time of the application by Lloyd I s Intelligence Service or Lloyd's Confidential Index or an extract of the port registry of the port of registration. 798 If the plaintiff has to prove common "ownership" or "control" with regard to the arrest of an associated ship,799 such evidence can be found in several sources. Hare800 gives detailed illustrations which help to prove the requirements of the associated ship provisions and serve as an indicator of ownership: The company register where the owning companies are registered, especially if share ownership details are also required to be registered; the port register; the register of directorships and office bearers of the owning c orrpanie s ; registered fleet cross-mortgages and more particularly their supporting documents where these are required to be lodged with the Registrar of Ships (these sometimes contain declarations of common beneficial ownership); Lloyd's Annual Yearbook; charterparty documents; f actual evidence of common managers, the same hull and funnel colours, common trading schedules, group discounts with victuallers, fleet insurance negotiations and cover, interchange of officers and crew fran one vessel to another, common manning agencies and shared premises. Rule 13 contains regulations wi th regard to the discovery of documents before and after the close of pleadings. 801 The court can order such discove~y 798 Hare op cit 86. 799 See Chapter XIV (3). 800 Op cit 87. 801 See para 142 ZPO in German law. 194 from any party whether before or after the close of pleadings in an action. In accordance with s 5(5) of the 1983 Act and Rule 12(1)(a), the court may at any titre on the application of any interested person or of its own motion make an order for the examination, testing or inspection by any person of any ship, cargo, document or any other thing, if it appears to the court to be necessary or desirable for the purpose of determining any maritime claim which has been or may be brought, or any defence thereto. 802 In this connection, another procedural device in the form of an interlocutory injunction has emerged, to protect and preserve certain items of evidence vital to the plaintiff's case from destruction by the defendant. This injunction is the so-called "Anton Piller Order" where, without notice to the person whose property or documents are to be examined, the Sheriff or his Deputy may seize. this evidence. In South African law it differs from the order granted in English law where it has its origin. 803 The court may also make an order that any record, notes or recording whether in existence or not, should be translated or transcribed. 804 It is thus possible to file documents in a language other than English, for example German. 802 See para 144 ZPO in German law. 803 Cf Powels op cit 92; C Bernstorff 'Die Eintreibung von Forderungen durch auslaendische Glaeubiger in England' RIW 1985, 367 at 373; M H Carl 'Arrest und Sicherung von Beweismaterial im englischen Recht' IPRax 1983, 141; Roamer Watch Co SA and others v African Textile Distributors also t/a M K Patel Wholesale Merchants and Direct Importers 1980 (2) SA 254 (W). Easyfind International (SA) (pty) Ltd v Instaplan Holdings and anothe~ 1983 (3) SA 917 (W); House of Jewels & Gems and others v Gilbert and others 1983 (4) SA 824 (W); Anton Piller KG v Manufacturing Processes Ltd and others (1976) All ER 779 (CA). 804 Section 5(5)(b) of the 1983 Act. Cf para 142(3) ZPO. 195 (5) Forced sale of the ship - s 9 of the 1983 Act, Rules 19(4) and (5) Section 9 of the 1983 Act805 provides that a court in the exercise of its admiral ty juri sdiction may at any time order that any property which has been arrested be sold, and that the proceeds thereof be held as a fund806 in the court or otherwise dealt with. 807 The corresponding provision in German law is para 930 (3) ZPo. rrhe 1983 Act does not give reasons why the court should sell the property, eg a ship or the cargo. Reasons such as the deterioration of the property, that the safe deposi t of a ship or a cargo will cause dis- proportionate costs, that the security given (which might be not sufficient or safe enough) may influence the court's discretion. 808 In accordance with s 5(2) (c) of the 1983 Act, the court can order any sale or any order for sale to be subject to such conditions as to the court appears just. 809 The court has the power to give the directions for the sale. 810 Whereas in German law the sale procedure will be always the same, because of the above mentioned provisions in South Africa, the sale procedure is laid down by the court and can therefore differ from jurisdiction and from case to case. The proceeds of any sale will be invested in such manner as the parties may agree or as the court may order, and this order may be made notwi thstanding the fact that the parties have agreed otherwise. 811 805 806 807 808 809 810 811 Cf s 8(2) of the 1983 Act. Cf The Uniworld and the Unisingapore 1987 (2) SA 491 (C); The Jade Transporter 11 1987 (2) SA 583 (A). See Chapter XXIV in respect of the distribution of the fund. Shaw op cit 68; Hare op cit 79; Findlay & Tait op cit 13 ff. Cf The Brazilia I 1985 (1) SA 787 (C); The Jade Transporter I 1987 (1) SA 935 (N); The Jade Transporter 11 1987 (2) SA 583 (A); The Brazilia 11 1988 (1) SA 103 (C). Shaw op cit 68. See Rule 19(4). In German law the public auction of a vessel lS regulated by paras 162 ff ZVG. see Appendix VII. Rules 19(5) and (6). 196 (6) Security or undertaking (p & I-Club) - ss 3(10) and 5(2) (d) of the 1983 Act In order to obtain release of the ship from arrest or attachment, security can be given in terms of s 3(10) of the 1983 Act. 812 The debtor (defendant) can by this avoid a longer delay of the voyage of his ship. securi ty does not only mean money, pawns or ships-mortgage because the respondent can also give an undertaking, for example a letter of undertaking813 of his P&l-Club if he is a member. As the 1 983 Act does not specify wha t sort of securi ty and undertaking may be given, it is814 within the discretion of the court to decide what kind of security or undertaking must be given. 815 Pursuant to Rule 3{S) (a), any person desiring to obtain the release of a ship from arrest, may also obtain such release with the consent of the person who caused the arrest to be effected. The security or undertaking will be in a sum representing the amount of the plaintiff's claim or the value of the ship, whichever amount is lower. This amount must be deposited as security with the Registrar and be dealt with in terms of Rule 19. 816 Security given will (for the purposes of ss 9 and 10 of the 1983 Act) be deemed to be the freight or the proceeds of the sale of the property, and this means that the said sections shall apply, mutatis mutandis, in relation to security or any undertaking having been given. A court may order that any security given should be increased, reduced or discharged subject to such condi tions as to the court appears just and, for the 812 813 814 815 816 In German law this provlslon finds its equivalent in para 923 ZPo. See Part A - Chapter V (3). Appendix XIV. Cf Part A - Chapter V (3). In accordance with s 5(2){c) of the 1983 Act. Booysen op cit 82. See Rule 4(4) in conjunction with security in the case of an attachment to found or confirm jurisdiction. Rule 3(5)(a). Cf Rule 3(6). 197 purpose of an increase of securi ty, authorize the arrest of a ship or any other property. This is notwithstanding s 3 (8) of the 1983 Act which states that property will not be arrested and securi ty therefore will not be given more than once in respect of the same maritime claim by the same claimant. 817 This exception to the Rule is necessary because it might hapPen that in a collision, for example, an unforeseen increase of damage occurs and the security, originally given in order to release the ship fran arrest is not sufficient enough anYm0re. In accordance with s 5(2) (d) of the 1983 Act, it is also possible to arrest a ship al though securi ty for a maritime claim has been given. Unlike German law,818 the 1983 Act does not protect the respondent from the possibility that a applicant (once the arrest is cancelled and the debtor has a damage claim) is not able to pay compensation for the damage819 because of his poor financial situation. This inconvenience should lead to an amendment of the Act. A draft amendment could read as follows: "The court may at any time make an order for the arrest or attachmen t if the applicant gives security to protect the respondent from any damage which may arise out of the arrest or attachrnen t." (7) Claim in reconvention - Rule 8, Rule 24 of the Uniform Rules A defendant may at any time claim in reconvention against the plaintiff, either alone or wi th any other person. 820 A defendant who counterclaims) must, together with his pleas, deliver a claim in reconvention setting out the 817 The 1983 Act, s 5(2)(d). 818 Cf para 921 (2) (sentence 2) ZPO and Part A - Chapter V (2). 819 Cf s 5(4) of the 1983 Act and para 945 ZPo. 820 Rule 8. See Shaw op cit 113. 198 material facts thereof. 821 The claim in reconvention must be set out either in a separate document or in a portion of the document containing the plea, but headed 'Claim in Reconvention 1 • 822 With regard to German law see para 33 and 347 ZPO. (8) Third parties - Rule 9 If a party alleges that he is entitled to claim a contribution or indemnification against any other person not a party (a nthird partyn) or that any issue or question in the proceedings to which he is a party has arisen or will arise between him and the third party and should be determined in the proceedings, he may cause a notice to be issued and served upon that third party823. For further details of procedure see Rules 9(2) to (6) and relative to German law para 72 ZPO. (9) Trial and adjudication by the court - Rule 15 and Rule 39 of the Uniform Rules Pursuant to Rule 15, the procedure in respect of setting down and hearing of any trial shall be in accordance wi th the procedure regulated in the Uniform Rules824 and any rules regulating the conduct of proceedings in the division in respect of which the court is constituted, or as ordered by the court, save that the Registrar, if he thinks fit, or with the authority of a judge in chambers, may assign fixed dates for any trial. 821 Rule 24(1) of the Uniform Rules. 822 Ibid. For further details see Rules 24(2), (3) and (4) of the uniform Rules. 823 824 Rule 9 (1 ). Rule 13 of the Uniform Rules, which applies to third party proceedings, is excluded in admiralty proceedings in terms of Rule 22. See Rule 39 of the Uniform Rules. 199 The trial takes place in the SUpreme Court before a judge. He normally decides the case without a jury or assessors. Once the case is in open court, the plaintiff is (as is the defendant) represented by an advocate, assisted by the plaintiff's attorney.825 Evidence will be produced orally, followed by examination, cross examination and re-examination of the witness. Where a matter is dealt with under the 'application' procedure, in which the court can resolve the issue on the affidavits filed by both parties, oral evidence will not be received. 826 'Ibe judge will grant (or refuse) judgment on the maritime claim which is the subject matter of the action. The arrest and attachment are merely incidental matters which vest the court wi th effective jurisdiction, that is, they vest the court with the power to decide the case and thereafter to ensure that its judgment is made effective by execution against the property arrested or attached. 825 See Chapter XVIII (1). 826 Findlay & Tait op cit 21. Cf Hare op cit 91. 200 C H APT E R XXI JUDICIAL REMEDIES In terms of s 1 2 of the Admiral ty Juri sdiction Regulation Act 105 of 1983 (the 1983 Act), a judgment or order of a court in the exercise of its admiralty jurisdiction may be subject to appeal just as if such judgment or order were that of a provincial or local division of the Supreme Court of South Africa in civil proceedings. The 1983 Act, s 12 refers to both ss 20 and 21 of the Supreme Court Act827 . Section 20 of the SUpreme Court Act provides that an appeal from a judgment or order of the court of a provincial or local division will normally be heard by the Appellate Division. In accordance with s 21 of the Supreme Court Act, the Appellate Division has jurisdiction to hear and determine an appeal from any decision of the court of a provincial or local division. The procedure for an appeal is set out, inter alia, in Rule 49 of the Uniform Rules of the SUpreme Court and in the Rules Regulating the Conduct of Proceedings of the Appellate Division of the Supreme Court of South Africa. 828 The decision of the court on the question whether or not a matter pending or proceeding before it is a maritime claim is not appealable. 829 827 Act 59 of 1959 as amended. 828 See Erasmus & Barrow op cit 172 ff. 829 Section 7(4) of the 1983 Act. 201 C H APT E R XXII ENFORCEMENT OF ARREST AND ATTACHMENT (1) General rules In an action in rem execution830 of the warrant of arrest is regulated by Rule 5(4) of the Admiralty Proceedings Rules (the Rules). In the case of an action against a ship, her equipment, stores or bunkers, a warrant of arrest must be served by affixing a copy of the warrant of arrest to any mast, or the outside, or any sui table part of the superstructure of the ship, and by handing a further copy to the master or other person in charge of the ship.831 The order of execution is included in the warrant of arrest. 832 The warrant is served by the Sheriff or his Deputy. He has to forthwith notify the port captain of the arrest (or attachment) in the port in order to prevent the ship from sailing illegally out of the harbour. 833 The Registrar also has to notify the port captain of any release of the ship or any property in terms of s 3 (5) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) from arrest or attachment. 834 In the case of an action against cargo, the warrant of arrest is served and execution effected if the Sheriff or his Deputy hands a copy of the warrant 830 Execution here differs from the levy of execution after judgment where the court has to give directions for the levy of execution, usually by making an order in terms of s 9 of the 1983 Act (sale of arrested property). What is referred to in this chapter is the •service' of the warrant of arrest or order of attachment rather than the 'levy of execution ' . The 1983 Act contains no procedure for execution of judgments, as opposed to the Supreme Court Act of 1959 or the Magistrates' Court Act of 1944. 831 For instance on the local agents of the vessel, The 5.5. Fabian 1921 CPD 148 at 149. 832 ef Chapter XVIII (2) (b). 833 Rule 5(6). 834 Ibid. 202 to the person in charge of the cargo and, unless the said person does not permi t access to the cargo J or the cargo has not been landed, or it is not practicable so to do, if the Sheriff or his Deputy has affixed a further copy to the carg0835 . In the case of an action against freight, the warrant of arrest is served by handing a copy of the warran t to the person by whom the freigh t is payable. 836 The court has a discretion to order any manner of serving the warrant of arrest. B37 Unlike German law, 838 the arrest or attachment of a ship does not establish a lien on the arrested or attached ship or indeed any other right (for instance the same rights as a ship I s mortgage in proportion to other rights. 839 After the arrest or attachment, the property has to be kept in the custody of the Sheriff or his Deputy840. These officials have the discretion to take such steps as appear to them (or as the court orders) to be appropriate for the custody and preservation of the property, including the removal and storage of any cargo if still on board and especially disposal and storage of perishable goods which have been arrested or attached, or which are on board any ship which has been arrested or attached. 841 With the enforcement of arrest, South African law does not distinguish 835 Rule 5(4)(b). 836 Rule 5(4)(c). 837 Rule 5(4)(d). 838 Cf Part A - Chapter VII (1) (a) . 839 Cf para 931(2) zPO. 840 Part A - Chapter VII (1). Cf paras 931 (1) and 808 zPO. 841 Rule 19(1). 203 between registered and non-registered ships like German law. 842 In this respect, South African law is easier to apply than German law. In South African law, however, there is, like in German law, a distinction between registered and non-registered ships, because in accordance wi th s 1 3 of the Merchant Shipping Act there is an obligation to apply for the registry of a ship of 25 or more gross tons. Pursuant to Rule 3(4), one has to note the peculiarity in respect of the arrest of foreign ships because of a claim concerning any claim by a master or a member of the crew of a ship arising from his employment. 843 Before arresting the foreign ship,. notice of the intention so to arrest the ship has to be given to the consular representative, if any, of the country where the ship is registered at the port where the ship is to be arrested or, if there is no such representative at the port in question, to the chief representative of that country in South Africa. Further, in the certificate in terms of Rule 3(3)844 it must be stated that the said notice has been given and when and to what person such notice was given. This is not merely a formality, because the consular representative may be helpful in matters such as the maintenance of the crew pending proceedings and their subsequent repatriation. 845 (2) Enforcement of foreign arrests in South Africa The enforcement of foreign (arrest) titles in South Africa is regulated by the Protection of Business Act846 . 842 843 844 845 846 Para 930 and 931 ZPO. Cf Part A - Chapter VII (1) (a) and (b). Section 1(1)(ii)(n) of the 1983 Act. Cf Chapter XVIII (2) (a). Shaw op cit 108. Act 99 of 1978 as amended. with regard to that see Part A - Chapter VII (3) • 204 (3) Immunity of state ships south Africa has not ratified the Immunity of States-Ship Convention of 1926 (Immunity Convention of 1926).847 Immunity of foreign State-ships is, however, provided for in the Foreign states Immunities Act (the Immunity Act).848 In accordance with s 2 of the Immuni ty Act a foreign state will be immune from the jurisdiction of the courts of South Africa except as provided in the Immuni ty Ac t . with regard to admiralty proceedings a foreign State will not be immune from the admiralty jurisdiction of any court of South Africa in an action in ~ against a ship belonging to the foreign State, 849 or in an action in personam for enforcing a claim in connection with such a ship, if, at the time when the cause of action arose,850 the ship was in use or intended for use for commercial purposes. Furthermore, a foreign state will not be immune from the admiralty jurisdiction of any court in South Africa in an action in rem against any cargo belonging to the foreign State if both the cargo and the ship carrying it were, at the time when the cause of action arose, in use or intended for use for commercial purposes. 851 A foreign state will not be immune from admiralty jurisdiction in an action in personam for the enforcment of a claim in connection wi th any such cargo if the ship carrying it was, at the time when the cause of action arose, in use or intended for use for commercial purposes. 852 847 Cf Part A - Chapter VII (2) (b); Shaw op cit 59; Inter-Science Research and Development Services (pty) Ltd v Republica Popular de Mozambique 1980 (2) SA 111 (T). 848 Act 87 of 1981 as amended. 849 The Immunity Act, s 11(1)(a). 850 The Immunity Act, s 11(1)(b). 851 The Immunity Act, s 11(2)(a). 852 The Immunity Act, s 11(2)(b). 205 Sections 11 (1) and (2) of the Irnmuni ty Ac t are in line wi th the Irnmun i t Y Convention of 1926, limiting the liability of State-owned ships. To extend its international standard South Africa should ratify the Irnmuni ty Convention of 1926. Finally, for the purpose of this thesis, a foreign State which has agreed in writing to submit a dispute which has arisen, or may arise, to arbitration, will not be immune from the jurisdiction of Admiralty Courts in any proceedings which relate to the arbitration. 853 The aforesaid does not apply if the arbitration agreement provides that the proceedings shall be brought in courts of a foreign State, or if the parties to the arbitration agreement are foreign states. 854 853 The Immunity Act, s 10(1). 854 The Immunity Act, s 10(2). 206 CHAPTER XXIII LIMITATION OF TIME AND PRESCRIPTION In order to determine prescription of or limi ta tion of time for the commencement of an action, suit, claim or proceedings, an admiralty action will be deemed to have commenced in terms of the Admiral ty Juri sdiction Regulation Act 105 of 1983 (the 1983 Act): (a) By the making of an application for the attachment of property to found jurisdiction if the application is granted and the attachment carried into effect;855 (b) by the issue of any process for the institution of any action in rem if that process is thereafter served;856 (c) by the service of any process by which an action is instituted. 857 This general rule concerning prescription or limitation of time is complemented by several provisions of the Admiralty Proceedings Rules (the Rules). In accordance with Rule 5(1) for example, no summons or warrant will be served if more than one year has expired since the date when it was issued. 858 Further rules of limitation of time or prescription can be found in Rule 6(2),859 Rule 7(2)(a)860 or Rule 20(2)(b).861 855 The 1983 Act, s 1(2)(a). 856 The 1983 Act, s 1 (2)(b). 857 The 1983 Act, s 1(2)(c). 858 Save with the leave of the court, which is granted almost as a mere formality. 859 860 861 with regard to notice of intention to defend see Chapter XX (1). with regard to general rules to pl~adings see Chapter xx (2). Wi th regard to filing, delivery and preparation of papers, especially power of attorney, see Chapter XVIII (1). 207 Rule 17(1) gives the court the discretion862 to abridge or extend any period of time, to advance or postpone any date in respect of any matter for which a time or date is laid down in the Rules, the Uniform Rules of the Supreme Court of South Africa (the Uniform Rules) as applicable to admiralty proceedings, any notice, order of court, or otherwise. 863 862 863 On application of any person, not ex officio. With regard to limitation of time and 'ranking of claims' see s 11(1)(c) of the 1983 Act. 208 CHAPTER XXIV DISTRIBUTION OF FUND AND RANKING OF THE CLAIM (S) - SS 9 AND 11 OF THE 1983 ACT (1) Distribution of the fund As already pointed out864 a court may, in accordance with s 9 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) and in the exercise of its admiralty jurisdiction, at any time order that any property which has been arrested in terms of the 1983 Act be sold and the proceeds thereof be held as a fund in the court or otherwise dealt with. The usual procedure after an arrest is for a judicial sale of a ship to be held and for the proceeds thereof to be paid into a fund in the court. After the fund has been constituted every creditor of the defendant, in accordance wi th s 11 of the 1983 Act, has to file a claim against the fund in order to participate in the distribution thereof. The 1983 Act, and especially s 11, does not indicate how claims are to be proved, and the practice so far has been to refer the proof of claims to a referee. This recognizes, inter alia, the fact that some of the claims proved may be claims other than maritime claims. This occurs more frequently in the case where the property, the proceeds of which are being dealt within terms of s 11 of the 1983 Act, is not the proceeds of a ship. The general rule with regard to execution is that only claims with regard to which there is a writ of execution will rank unless the claim is a secured claim which is dealt with by a special procedure. Therefore the court, after the fund has been constituted, appoints referee for the purpose of receiving, considering and reporting to the court on the claims filed against the fund. The referee is usually an advocate acting on behalf of the court. 864 Cf Chapter XX (5). 209 It follows from the above that all claims against the defendant have to be filed against the fund. This means that even the applicant who sought the arrest of the vessel (and eventually her judicial sale) has to file his claim with the referee. After the referee has been appointed he will give notice to all creditors of the arrested and sold ship (ie all creditors of the defendant) to file their claims within a time-limit set by the court. In order to give creditors who are not known to the referee the opportunity to participate in the distribution of the fund, the court order which provides for the appointment of the referee and the time-l imi t will be published in national and international newspapers eg Lloyd's List of London. These official steps are necessary especially in shipping matters as the parties involved are often spread over the whole world. The creditors have to file their claims with the referee supported by an affidavit and by such documentation as is appropriate to prove the said claim. This is to make sure that only creditors with a legal claim participate in the distribution of the fund. When a creditor, for whatever reason, has not filed his claim with the referee within the time-limit ordered by the court, he is required to wait until all other creditors have been paid out. Only then he can attach the owner's "residual interest" in the fund, ie the money which is left after the distribution of the fund. This has to be done by filing summons in an action in personam against the fund. The procedure described above is in certain fields similar to German law. When the court which had heard the arrest proceedings orders the sale of the ship by judicial auction, the court competent to execute the judicial sale of the ship is the Magistrates' court in whose jurisdiction the vessel is arrested. 865 However, in deviation from South African law, all creditors are requested to reply for registration of their claims before the judicial auction 865 ef para 163(1) ZVG. 210 takes place and before a fund has been created. 866 A maritime lienholder who has not filed his claim in time, will lose his lien and will not have his lien and cons idered of course all other rights when the proceeds of the judicial sale are. Maritime liens, in other words, loose their right of priority when not filed in the time required in accordance with para 37(4) ZVG. The request to file claims will be published in suitable shipping journals. The referee, after the lapse of the time-limit and after having received (all) claims, will report to the court on the claims filed against the fund consti tuted by the proceeds of the sale of the ship. In this report he will give a brief description of the identity of each claimant, the nature of the claims and the priority claimed. The ranking of the claims, is regulated by s 11 of the 1983 Act. 867 Furthermore, the referee recommends whether or not a claim is entitled to priority under s 11 of the 1983 Act. Finally the referee recommends insofar as any claim may need to be converted into a currency other than in which it was lodged for the purpose of payment the way of conversion. This has to be done by the principles set out above. 868 The court then will decide how the fund has to be distributed. (2) Ranking of the claims The ranking of claims is regulated by s 11 of the 1983 Act,869 and this gives the order in which the maritime claims of s 1(1)(ii) of the 1983 Act870 rank against the fund created in terms of the 1983 Act or security given in respect 866 Cf para 1 67 (2) in conjunction with para 37(4) ZVG. 867 See the following section. 868 Cf Chapter XVIII (2) (c) . 869 Cf Appendix x. 870 Cf The Fidias 1986 (1 ) SA 714 (D) • 211 of property sold pursuant to an order or in the execution of a judgment of an Admiralty court. 871 section 11 of the 1983 Act is based, inter alia, on the International conventions for the Unification of certain Rules relating to Maritime Liens and Mortgages of 1926 and of 1967. 872 The 1983 Act, s 11(1)(a) to (f) gives the ranking of the maritime claims, and s 11 (2) of the 1983 Act provides for the 'ranking' in between the 'ranking' in ss 11(1)(a) to (f) of the 1983 Act in a rather confusing manner. section 11 (2) of the 1983 Act means as follows: Claims in respect of costs and expenses incurred to preserve the property or to procure its sale, and in respect of the distribution of the proceeds of the sale,873 rank before all other claims referred to in s 11(1)(b)-(f) of the 1983 Act. 874 Earlier possessory liens rank before all later claims except salvage claims, claims of removal of wreck and contribution in respect of general average acts or sacrifice. 875 A salvage claim and claims of removal of wreck and contribution in respect of a general average act or sacr ifice, whether or not more than a year old, rank before any claim which came into being earlier. 876 All other claims referred to in s 11 (1 ) (c) of the 1983 Act enjoy 871 The 1983 Act, s 11(1). Cf The Brazilia I 1985 (1) SA 787 (C); The Brazilia 11 1988 (1) SA 103 (C). 872 Cf Singh International Maritime Law Conventions vol 4 (1983) at 3053 and 3059. See Rycroft op ci t 421; Friedman (1985) 102 SAW 45 at 56 with regard to the influence of English and American law ons 11 of the 1983 Act; Shaw op cit 95; Hare op cit 80. 873 The 1983 Act, s 11(1)(a). 874 The 1983 Act, s 11(2). 875 The 1983 Act, ss 11(2)(a), 11(1)(b) and (c)(vi). 876 The 1983 Act, ss 11 (2)(b) and 11(1)(c)(vi). 212 equal ranking. 877 Claims in respect of mortgages, hypothecations, rights of retention of, and other charges on, the ship rank in accordance with the law of the flag of the ship.878 All other maritime liens not mentioned above rank among themselves in their priority according to law. 879 All other claims rank in the order of preference to the law of insolvency. 880 If s 11(2) of the 1983 Act does not provide for the ranking of any maritime claim, claims rank in the order set forth in s 11(1) of the 1983 Act. 881 For the purpose of matters concerning ranking in s 11(2) of the 1983 Act, salvage claims or claims in connection wi th the removal of a wreck will be deemed to have accrued when the salvage operation or the removal of the wreck terminated, and a claim in connection with contribution in respect of general average, when the general average act was performed. 882 Concerning the judicial sale and any proceeds thereof, an Admiralty Court can, on application of any interested person, make an order declaring how any claim against the proceeds of the sale of the property (eg a ship) will rank. 883 A judgment or an arbitration award ranks in accordance with the claim in 877 section 11(2)(c) of the 1983 Act. Cf Art.4 of the International Convention relating to Maritime Liens of 1967 i The Emerald Transporter 1985 (4) SA 133 (N) at 142F-G. 878 The 1983 Act, ss 11 (2)(d) and 11(1)(d). 879 The 1983 Act, ss 11(2)(e) and 11(1)(e). 880 881 882 883 The 1983 Act, ss 11 (2)(f) and 11(1)(f). See ss 99 ff of the Insolvency Act 24 of 1936 (as amended). The 1983 Act, s 11 (2)(g). The 1983 Act, s 11(3). Section 11(4) of the 1983 Act. Cf The Emerald Transporter I 1985 (4) SA 133 (N) at 135. 213 respect of which it was given or made. 884 Interest on any claim or the costs of enforcing a claim are part of the main claim. 885 section 11 (8) of the 1983 Act provides that where the fund arise s by reason of an action in rem against an associated ship, claims in respect of the ship whose sale gave rise to the fund (I direct claims I) will be paid before claims in respect of any other ship in relation to which the ship was sold was an associated ship (Iassociated ship claims l ).886 The 1983 Act, s 11(8) gave rise to several judgments. 887 In The Emerald Transporter 1,888 Howard J stated that s 11(8) of the 1983 Act provided, in effect, for a marshalling of all the claims against the fund, the direct claims against the vessel (ranked according to s 11 of the 1983 Act) being placed in the first queue for payment and the associated ship claims (also ranked in accordance with s 11 of the 1983 Act) being relegated to the second queue. In the Jade Transporter 11 it was held889 IIthat s11(8) of the 1983 Act must be interpreted in accordance 884 885 886 887 888 889 wi th the ordinary meaning of the language employed by the Legislature. The subsection brings about a queuing where a fund in the Court arises by reason of an action in rem against an associated ship. Therefore, when a claimant, having instituted an action in rem against a ship (ship B) which is an associated ship vi s-a vis the ship against which the claimant has a direct claim (ship A), applies for and obtains a court order under s 9 of the 1983 Act for the sale of ship B and the creation of a fund in the court, and a second claimant lodges a claim against the fund in respect of a direct claim against ship B, then the provisions of s 11(8) of the 1983 Act apply, section 11(6)of the 1983 Act. section 11(7) of the 1983 Act. Cf The Emerald Transporter I 1985 (4) SA 133 (N) at 138F-H. The Berg I 1984 (4) SA 647 (N)i The Emerald Transporter 11 1985 (2) SA 452 (D)i The Jade Transporter 11 1987 (2) SA 583 (A). 1985 (4) SA 133 (N) at 138F-H. See The Berg I 1984 (4) SA 647 (N) at 656G 657Di The Jade Transporter 11 1987 (2) SA 583 (A). 1987 (2) SA 583 (A). 214 and in accordance with those provisions, the second claimant's claim will fall into the first queue against the fund, while the original claimant's claim will fall in the second queue against the fund. The fact that s 11 (8) of the 1983 Act does not make provision for si tuations where applicants under s 9 of the 1983 Act have only direct claims in rem and/ or direct claims in personam or only associated claims against the fund does not jus tify the court's departure from the clearly expressed intention of the Legislature". wi th regard to the last sentence of the above quotation, it is for the Legislature to remedy the casus omissus as well as to afford greater clarity in terms of s 11 (8) of the 1983 Act. 890 Notwithstanding the provisions as to ranking, any undertaking or security given with respect to a particular claim will be applied in the first instance in satisfaction of the claim. 891 Lastly, s 11 (10) of the 1983 Act provides that any balance remaining after payment of the claims referred to in ss 11(1)(a) to (e) of the 1983 Act has to be paid over to the trustee, liquidator or judicial manager. 892 890 891 892 Ibid. ef Shaw op cit 99 f; Hare op cit 80 ff. Section 11(9) of the 1983 Act. Cf Hare op cit 83. With regard to arrest/ attachment and insolvency see Chapter XXV. 215 CHAPTER XXV ARREST/ ATTACHMENT AND INSOLVENCY Where arrest or attachment and insolvency proceedings are concerned, one has to distinguish between arrest or attachments prior to commencement of bankruptcy proceedings and arrest or attachments commenced after insolvency proceedings893 have commenced. Where a ship or any other property has been arrested or attached prior to commencement of bankruptcy proceedings in terms of s 3 (5) of the 1rlmiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) the bankruptcy laws are excluded. The property (eg the ship) does not form part of the insolvent estate and no admiral ty action is affected by insolvency proceedings, ie no proceedings are stayed by reason of any sequestration, winding-up or judicial management with respect to that owner or person. 894 with regard to the stay of proceedings, the 1983 Act departs from ordinary civil proceedings, whereas legal proceedings are stayed until the appointment of a trustee. 895 However, where any money is left after admiralty proceedings against a shipowner or a shipping company (who made bankrupt after the arrest of a ship), this has to be paid over to the trustee, liquidator or judicial manager. 896 A different legal situation applies if bankruptcy proceedings have already been commenced because it is then not possible to arrest or attach a ship.897 The Insolvency and the Companies Acts are applicable because the Insolvency Act deals with a person or partnership or the estate of a person or partnership, 893 le winding-up. 894 This follows from s 10 of the 1983 Act. Cf Booysen op cit 82. 895 Cf s 20(1)(b) of the Insolvency Act and s 358 of the Companies Act. 896 The 1983 Act, s 11(10). 897 This is in accordance with the Insolvency Act and the Companies Act. 216 whereas the Companies Act898 deals with a body corporate or a company or other association of persons which may be placed under liquidation. This distinction has to be drawn because not all ships belong to shipping companies; they are also owned by (single) persons and partnerships. If bankruptcy proceedings have already commenced899 against a shipping company, it is not possible to arrest or attach a ship, and any arrest or attachment of a ship already obtained is void. This is in accordance with s 359(1) (b) of the Companies Act. section 359 of the Corrpanies Act reads as follows: 900 ( 1) When the court has made an order for the winding-up of a company or a special resolution for the voluntary winding up of a company has been registered in terms of s 200- (a) all civil proceedings by or against the company concerned shall be suspended until the appointment of the liquidator; and (b) any attachment or execution put in force against the estate or assets of the corrpany after the commencement of the winding-up shall be void. (2) (a) Every person who, having instituted legal proceedings against a company which were suspended by a winding up, intends to continue the same, and every person who intends to institute legal proceedings for the purpose of enforcing any claim against the company which arose before the commencemen t of the winding-up, shall wi thin four weeks after the appointment of the liquidator give the liquidator not less than three weeks I notice in writing before continuing or commencing the proceedings. 898 899 900 In terms of s 339 of the Companies Act the law of insolvency is, in so far as it is applicable, to be applied mutatis mutandis in respect of any matter not specially provided for in the Companies Act. In terms of s 348 of the Companies Act, a winding-up of a company by the court shall be deemed to commence at the time of the presentation to the court of the application for the winding-up. Cf paras 14, 117, 126 KO and Part A - Chapter IX. 217 (b) If notice is not so given the proceedings shall be considered to be abandoned unless the court otherwise directs. section 359(1) (b) of the Companies Act speaks of any 'attachment' or 'execution' and thus one might conclude that admiralty actions in rem do not fall under this provision. Berman J held in The Alkar901 that the arrest of the vessel was an 'attachment' within the meaning of the word used in s 359(1) (b) of the Companies Act. However, it is not necessary to try to subsume arrest under attachment because s 359(1)(b) of the Companies Act provides that any 'attachment' or 'execution' shall be void. According to this, the execution of arrest shall be void, not the order for 'an arrest itself. 902 The result is consequently the same: The attachment or arrest of a vessel cannot be enforced when the (civil) court has already made an order for the winding-up of a company or when a special resolution for the voluntary winding-up of a company has been registered in terms of s 200 of the Companies Act. 903 The aforesaid is, as already mentioned, only valid for arrest/ attachment proceedings instituted after insolvency proceedings have commenced. The same results from the sequestration of the insolvent estate of a (single) person or a partnership. In terms of s 20(1)(c) of the Insolvency Act, a Sheriff or Messenger, whose duty it is to execute any judgment given against a person (not yet insolvent) or partnership, as soon as he becomes aware of the sequestration of the insolvent's estate, has to stay the execution of an arrest or attachment, unless the court otherwise directs. In turn, the Deputy-Sheriff, as soon as he has received a sequestration order, attaches the property of the insolvent I s estate. Every Officer having charge of a register of ships must enter a caveat against the transfer of every ship or share in a ship or the 901 1986 (2) SA 138 (C). 902 Cf Shaw op cit 91. 903 Ibid. 218 cancellation or cessation of every deed of mortgage of a ship registered in the name of or belonging to the insolvent or his or her spouse. 904 904 section 17(3) bis of the Insolvency Act. Cf smith The Law of3ed (1988) at 83. Insolvency 219 CHAPTER XXVI ARREST/ ATTACHMENT AND ARBITRATION A court may in the exercise of its admiralty jurisdiction order the arrest 0 f any property if the claim is or may be the subject of an arbitration pending or proceeding either in South Africa or elsewhere and whether or not it is subject to the law of South Africa. 90s The Admiralty Courts have in two c~rcumstances the inherent right to send admiral ty actions to an arbitration tribunal. Firstly, the Admiralty COurt can decline to exercise its admiralty jurisdiction in any proceedings if it is of the opinion that the action can more appropriately be adjudicated upon by another court, tribunal or body elsewhere. 906 From this it follows that although no arbitration clause exists, the Admiralty Courts can refer an action in rem or in personam to an arbitration tribunal. Secondly, the Admiralty Courts can stay any proceedings in terms of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) if it is agreed by the parties concerned that the matter in dispute be referred to arbitration in South Africa or elsewhere. 907 Shaw908 is of the opinion that I inferentially therefore it appears that the court, tribunal or body referred to in s 7(1)(a) of the 1983 Act is not an arbitration tribunal l • With respect, this conclusion cannot be followed. section 7(1) (a) of the 1983 Act concerns the fact that a court may 905 section s(3)(a)(ii) of the 1983 Act. 906 section 7(1)(a) of the 1983 Act. 907 Section 7(1)(b) of the 1983 Act. 908 Op cit 54. Cf Staniland 1987 (2) LMCLQ 305 at 313 who agreesewith Shaw and says: IIIf this was accepted, then, of course, it follows that the Admiralty Court cannot, in terms of s 7(1)(a) (of the 1983 Act), decline to exercise its admiralty jurisdiction in any proceedings instituted or to be instituted, even if the court would be of the opinion that the action could more appropriately be adjudicated upon by means of arbi tration in London. 11 220 decline to exercise its admiralty jurisdiction in any proceedings instituted or to be instituted; s 7(1)(b) of the 1983 Act concerns the fact that a court may stay any proceedings and refer them to arbitration, if agreed by the parties. In the first case, the court makes its decision without having regard to any agreement which the parties concerned may have made, whereas in the second alternative the court makes its decision only if there is an agreement between the parties concerned. Both, ss 7(1)(a) and (b) of the 1983 Act therefore deal with arbitration. If the Carriage of Goods by Sea Act of 1986 (the 1986 Act) 909 is applicable, one has to note s 3 of the 1986 Act which provides for an exception to s 7(1)(b) of the 1983 Act and reads as follows: " (1) Notwi thstanding any purported ouster of jurisdiction, exclusive jurisdiction clause or agreement to refer any dispute to arbitration, and no twi thstanding the provisions of the Arbitration Act, 1965 (Act No. 42 of 1965), and of s 7 (1 ) (b) of the 1983 Act, any person carrying on business in the Republic and the consignee under, or holder of, any bill of lading, waybill or like document for the carriage of goods to a destination in the Republic or to any port in the Republic, whether for final discharge or for discharge or for discharge for further carriage, may bring an action relating to the carriage of the said goods or any such bill of lading, waybill or document in a corrpetent court in the Republic." (2) The provisions of subsection (1) of this section shall not apply to arbi tration proceedings to be held in the Republic which are subject to the provisions of the Arbitration Act, 1965. The Carriage of Goods by Sea Act of 1986 preserves the effectiveness of arbi tration clauses calling for arbitration in South Africa in relation to cargo claims so that the court's jurisdiction may be validly ousted by a South African arbitration clause or agreement. 91 0 Sections 3(1) and (2) of the 1986 909 Act 1 of 1986. 910 Cf Staniland 1987 (2) LMCLQ 305 at 312; Hare op cit 79. 221 Act seem to exclude each other because s 3 ( 1) of the 1986 Act provides that notwithstanding the provisions of the Arbitration Act 1965 any person may bring an action relating to the carriage of goods referred to in that paragraph and to any Bill of Bading, whereas s 3(2) of the 1986 Act provides that s 3(1) of the 1986 Act is not applicable to arbitration proceedings which are subject to the provisions of the Arbitration Act. The South African Legislature should take steps to clear-up this apparent contradiction. The possibility that South African courts may refer any proceedings to arbi tration tribunals ensures that a case can be adjudicated by the venue mos t familiar wi th the law to be applied. As an example, when German law is applicable, the proceedings can be referred to a German arbitration center like Hamburg. Finally, arbitration procedures are, usually, cheaper than ordinary Court proceedings. Wi th regard to German law arrest proceedings and arbitration are linked wi th para 926 (1) ZPO. If the principal matter is not pending the commencement of arrest proceedings, the court issuing the anticipatory seizure can, upon application, order that the party who has secured the order of anticipatory seizure bring an action within a time-limit to be determined. The court of the principal claim at which the applicant has to file sui t is ei ther a court wi thin the meaning of the ZPO or of a foreign country or an arbitration tribunal if an arbitration agreement is in existence between the parties in arrest proceedings. 911 As the aim of the arrest proceedings is to secure the principal claim but not to decide upon the merits thereof the appropriate forum has to be the one which the parties would have chosen had no arrest proceedings been instituted. SUch a forum includes an arbitration tribunal. 911 Cf Part A - Chapter VI (1). 222 CHAPTER XXVII LIABILITY FOR DAMAGES BECAUSE OF UNDUE ARREST OR ATTACHMENT - S 5(4) OF THE 1983 ACT AND RULE 7(4) Any person who makes an excessive claim or requires excessive security or wi thout good cause obtains an arrest of property or an order of court, is liable to any person suffering loss or damage as a result thereof for that loss or damage. 91 2 This provisions has i ts equivalent in German law in para 945 ZP0913 although there are slight differences between the two provisions. It is therefore not true that s 5(4) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the 1983 Act) has no equivalent in any other legislation in the world as was incorrectly stated in The Atlantic Victory.914 The party who obtained the order of arrest in German law is obliged to indemnify the respondent for damage which originates from the enforcement of the arrest or because of having provided security to prevent the arrest in the case where the arrest proves to be invalid from the outset, or if the regulation in terms of para 926(2) ZPO is to be cancelled. Para 945 ZPO includes the South African part of s 5 (4) of the 1983 Act "obtained an arrest of property or an order of court wi thout good cause", because all wrongful arrests are included. Insofar the German provision is wider than the South African one, because the latter only includes "arrests obtained wi thout good cause" whereas the German law includes all arrests, either obtained for any reason include the reason 'without good cause'. Furthermore, para 945 ZPO like s 5(4) of the 1983 Act includes claims for damages against a person who has made an excessive claim or required excessive security. However, South African 912 Section 5(4) of the 1983 Act. 913 ef Part A - Chapter XII. 914 1986 (4) SA 329 (D) at 334C. 223 law in this respect might go further than German law, because s 5 (4) of th e 1983 Act only requires that an excessive claim or excessive security was required, without the necessity of any damage followed by the demand. The meaning and interpretation of the indefinite legal terms "without good cause" depends on the actual cause. In this respect, an example is provided by The Atlantic victory:915 "The defendant companies, both peregrini, were sued for damages by the owners of cargo which had been carried in their vessel and which was allegedly damaged through the faul t of plaintiff, also a peregrinus, who had chartered the vessel owned by the defendants. In order to pursue the claim, the defendants attached the bunkers on board a vessel The Atlantic Victory, then under charter to plaintiff in harbour at Dlrban, in order to found jurisdiction in a South African court. The defendants were subsequently notified that the plaintiff would apply for the order of attachment to be set as ide and the bunkers to be released. The defendants thereafter withdrew the attachment and the plaintiff thereafter insti tuted an action by issuing a writ of summons in personam contending that the attachment had been without good cause within the meaning of s 5(4) of the 1983 Act." "wi thout good cause" covers cases where the attachment or arrest ought not to have been granted either because of action or because the basis of the defendant's claim had not been properly and correctly investigated. 916 Where damages are claimed it is not necessary to state particulars of damage, provided that the amount and nature of the damages claimed and the amount of any consequential loss claimed and the alleged basis therefor will be stated. 917 915 1986 (4) SA 329 (D). 916 ef The Atlantic Victory 1986 (4) SA 329 (D) at 332J. 917 Rule 7(4) of the Admiralty Proceedings Rules. 224 PAR T C 225 CON C L U S ION The arrest-of-ship provisions in German and SOuth African law try to effect uniformity with regard to the international nature of maritime law. Although the arrest of ships in German law is regulated by the canmon civil procedure and not by a special act like the Admiralty Jurisdiction Regulation Act of 1983 (the 1983 Act) in South African law, the arrest proceedings in German law are as effective as the South African ones. However in German law there is the advantage that a creditor can se ize the whole property of the debtor. By comparison, in South African law, the creditor who wishes to enforce a maritime claim in terms of s 3(5) of the 1983 Act is restricted to the arrest or attachment of the ship, bunkers, cargo or freight. '!he 1983 Ac t, which was long overdue in SOuth African maritime law, is no t always sufficiently clear. Admittedly the practicability of a new act is only tested when it is applied in court and inaccuracies can removed by subsequent amendments. These amendments should, for example, include s 6 of the 1983 Act and the problem of which law is to be applied. In order to give the south African Admiralty Courts greater flexibility, s 6(1) of the 1983 Act should be amended as regards the application of English law because this is one of the difficulties which has to be faced by a foreign litigant (or his lawyer) when applying for the arrest of a ship. These difficulties are historical and originate from the fact that South Africa was once a British Colony and is still linked by the heritage of that time. Consequently, one not only has to look at South African law but also English and Roman-Dutch law when these are applicable in terms of section 6 AJRA. German law on the other hand is based on statute law which is more than a century old, and which has been amended. It therefore meets all the requirements which are necessary for the purpose of international traffic and cargo trade and international maritime law. Turning to international conventions, South Africa has not, unlike 226 Germany, ratified the International Convention for the Unification of certain Rules Relating to Arrest of Seagoing Ships of 1952 (the Arrest Convention of 1952). It is highly desirable that Sou th Africa in this respect follows the German example. When applying German law, it has to be noted that Germany has joined the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968 (the EEC-Convention) - this is particularly so when trying to enforce the arrest of ships. SOuth Africa unlike Germany has also not ratified the Convention on Limitation of Liability for Maritime Claims of 1976 (the 1976 Convention). Regula tions concerning the 1 imi ta tion of liability in South African law 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 HGB with reference to the 1976 Convention. South Africa has special Admiral ty Courts which have jurisdiction in arrest matters. In Germany, when issuing the arrest, jurisdiction is vested in the Court dealing wi th the principal matter, as well as in the Magistrates' Court (Arntsgericht) in whose district the property which is to be arrested is located. 918 It is necessary to distinguish between the action in rem and the action in personam. In South Africa, when bringing an action in personam, the aim of the applicant is not directed at a person but the whole property of that person. As with an action in rem, a res is the object of an admiralty action. An action in personam in German law however is only directed against a person. An action in personam can take one of the following forms: detention, compulsory registration with the police within a certain time limit or the attachment of a passport. An action in rem in both German and South African law is directed against a res. South African and German law presume a "claim for an arrest" in order to obtain an order for arrest. In German law the claim has to be a pecuniary claim 918 Para 919 zPO. 227 or the claim must be able to become a pecuniary claim. 919 south African law enumerates the maritime claims justifying an order of arrest in s 1 (1) (ii) of the 1983 Act and gives a numerus clausus whereas para 916 ZPO enables the court to subsume any pecuniary claim or claim which might become a pecuniary claim within the terms of para 916 ZPO. In this respect then, German law is more extensive than South African law. Wi th regard to the arrest of ships other than the one in which the maritime claim arose, German law offers the opportunity of arresting a sistership. South African .law offers the opportunity of arresting of a so called "associated ship" in terIffi of ss 3(6) and (7) of the 1983 Act, a unique provision which attempts to defeat the strategy of sisterships (ie single-ship companies) and enables the South African 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. ~deed, 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 will further be deemed to control a company if he has the power to control the company directly or indirectly. South African and German law both allow the possibility of "anticipated arrests. 11 The courts can order the anticipated arrest of 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 ship comes within the area of jurisdiction of the Court. In German law this principle does not contravene para 482 HGB because this provision only prohibits placing a ship under distraint (if she is on a voyage and is not lying in a port) and not the order of arrest. With the arrest of ships per se South African law (unlike German law) does not distinguish between registered and non-registered ships. In German law this 919 Para 916 ZPo. 228 distinction is of vital importance when enforcing an arrest. Execution against non-registered ships follows the principles of levy of execution (pfaendung) against movable things. 920 For practical reasons, registered seagoing ships subsume the provisions relating to the levy of execution of movable property with that of the law of the chattels. 921 Unlike Germany, in south African law the execution against a ship does not establish a lien over the arrested or attached ship. Finally, one has to take cognisance of the South African and German particulars concerning arrests and insolvency of the debtor. In both jurisdictions there are similarities concerning the liability for damages owing to unlawful arrest. This thesis has thus shown that in certain fields German and South African law do not differ or are at least substantially similar. This fact makes the application of both laws easier for litigants and lawyers, whether from Germany or from SOuth Africa. 920 Para 930 zPO. 921 Para 931(1) zPO. 229 PAR T D A. German: 230 A P PEN D I X I GERMAN CODE OF CIVIL PROCEDURE (ZPO) para 23 para 32 para 35 para 78 (Besonderer Gerichtsstand des Verrnoegens und des Streitgegenstandes) Fuer Klagen wegen verrnoegensrechtlicher Ansprueche gegen eine Person, die irn Inland keinen Wohnsi tz hat, ist das Gericht zustaendig, in dessen Bezirk sich Verrnoegen derse loon oder der rni t der Klage in Anspruch genornrnene befindet. Bei Forderungen gil t als derselbe Ort, wo das Verrnoegen sich befindet, der Wohnsitz des Schuldners und, wenn fuer die Forderungen eine Sache zur Sicherheit haftet, auch der Ort, wo die Sache sich befindet. (Besonderer Gerichtsstand der unerlaubten Handlung) Fuer Klagen aus unerlaubten Handlungen ist das Gericht zustaendig J in dessen Bezirk die Handlung begangen ist. (Wahl unter mehreren Gerichtsstaenden) Unter mehreren zustaendigen Gerichten hat der Klaeger die Wahl. (Anwaltsprozess) (1) Vor den Langerichten und vor alIen Gerichten des hoeheren Rechtszuges muessen die Parteien sich durch einen bei dem Prozessgericht zugelassenen Rechtsanwal t als Bevollmaechtigten vertreten lassen (Anwaltsprozess). (2), (3), (4). para 108 (Art und Hoehe der Sicherheit) (1) In den Faellen der Bestellung einer prozessualen Sicherheit kann das Gericht nach freiem Ermessen bestimmen, in welcher Art und Hoehe die Sicherhei t zu leisten ist. Sowei t das Gericht eine Bestimrnung nicht getroffen hat und die Parteien ein anderes nicht vereinbart haben, ist die Sicherheitsleistung durch Hinterlegung von Geld oder solchen Wertpapieren zu bewirken, die nach Paragraph 234 Abs.1 ,3 des Buergerlichen Gesetzbuches zur Sicherheitsleistung geeignet sind. (2) Die Vorschriften des Paragraphen 234 Abs.2 und des Paragraphen 235 des Buergerlichen Gesetzbuches sind entsprechend anzuwenden. 231 para 109 (Rueckgabe der Sicherheit) (1) 1st die Veranlassung fuer eine Sicherheitsleistung weggefallen, so hat auf Antrag das Gericht, das die Bestellung der Sicherheit angeordnet oder zugelassen hat, eine Frist zu bestimmen, binnen der ihm die Partei J zu deren Gunsten die Sicherhei t geleistet ist, die Einwilligung in die Rueckgabe der Sicherheit zu erklaeren oder die Erhebung der Klage wegen ihrer Ansprueche nachzuweisen hat. (2) Nach Ablauf der Frist hat das Gericht auf Antrag die Rueckgabe der Sicherhei t anzuordnen, wenn nicht inzwischen die Erhebung der Klage nachgewiesen ist i ist die Sicherheit durch eine Buergschaft bewirkt worden, so ordnet das Gericht das Erloeschen der Buergschaft an. Die Anordnung wird erst rnit der Rechtskraft wirksarn. (3) Die Antraege und die Einwilligung in die Rueckgabe der Sicherheit koennen vor der Geschaeftsstelle zu Protokoll erklaert werden. Die Entscheidungen koennen ohne rnuendliche Verhandlung ergehen. (4) Gegen den Beschluss, durch den der in Absatz 1 vorgesehene Antrag abgelehnt wird, steht dern Antrags teller, gegen die irn Absa tz 2 bezeichnete Entscheidung steht beiden Teilen die sofortige Beschwerde zu. para 128 (Grundsatz der Muendlichkeit) (1) Die Parteien verhandeln ueber den Rechtsstrei t vor dern erkennenden Gericht rnuendlich. ( 2 ) Mi t Zus tirnrnung der Parteien, die nur bei einer wesentlichen Aenderung der Prozesslage widerruflich ist, kann das Gericht eine Entscheidung ohne rnuendliche Verhandlung treffen. Es bestimmt alsbald den Zei tpunkt, bis zu dern Schriftsaetze eingereicht werden koennen, und den Terrnin zur Verkuendung der En tscheidung . Eine Entscheidung ohne rnuendliche Verhandlung ist unzulaessig, wenn seit der Zust~ung der Parteien rnehr als drei Monate verstrichen sind. (3) Bei Streitigkeiten ueber verrnoegensrechtliche Ansprueche kann das Gericht von Arnts wegen anordnen, dass schriftlich zu verhandeln ist, wenn eine Vertretung durch einen Rechtsanwalt nicht geboten ist, der Wert des Strei tgegens tandes bei Einreichung der KLage fuenfhundert Deutsche Mark nicht uebersteigt und einer Partei das Erscheinen vor Gericht wegen grosser Entfernung oder aus sonstigern wichtigen Grunde nicht zuzumuten ist. Das Gericht bestirnrnt rnit der Anordnung nach Satz 1 den Zei tpunkt, der dern Schluss der rnuendlichen Verhandlung entspricht, und den Terrnin zur Verkuendung des Urteils. Es kann hierueber erneut bestirnrnen, wenn dies auf Grund einer Aenderung der Prozesslage geboten ist. Es kann auch ohne Einvers taendni s der Parteien nach Paragraph 377 Abs.4 verfahren. Die Anordnung nach Satz 1 ist aufzuheben, wenn die Partei, zu deren Gunsten sie ergangen ist, es beantragt oder wenn das persoenliche Erscheinen der Parteien zur Aufklaerung des Sachverhalts unumgaenglich erscheint. 232 para 139 (Richterliche Aufklaerungspflicht) (1) Der Vorsitzende hat dahin zu wirken, dass die Parteien ueber alle erheblichen Tatsachen sich vollstaendig erklaeren und die sachdienlichen Antraege stellen, insbesondere auch ungenuegende Angaben der geltend gemachten Tatsachen ergaenzen und die Beweismittel bezeichnen. Er hat zu diesem Zwecke, soweit erforderlich, das Sach- und Streitverhaeltnis rnit den Parteien nach der tatsaechlichen und der rechtlichen Seite zu eroertern und Fragen zu stellen. (2) Der Vorsitzende hat auf die Bedenken aufmerksarn zu machen, die in Ansehung der von Arnts wegen zu beruecksichtigenden Funkte obwalten. (3) Er hat jedem Mitglied des Gerichts auf Verlangen zu gestatten, Fragen zu stellen. para 253 (Klagschrift) (1) Die Erhebung der Klage erfolgt durch Zuste11ung eines Schriftsatzes (Klagschrift). (2) Die Klagschrift muss enthalten: 1. die Bezeichnung der Parteien und des Gerichts; 2. die bestirnrnte Angabe des Gegenstandes und des Grundes des erhobenen Anspruchs, sowie einen bestirnrnten Antrag. (3) Die KLagschrift solI ferner die Angabe des Wertes des Strei tgegenstandes enthalten, wenn hiervon die ZUstaendigkei t des Gerichts abhaengt und der Streitgegenstand nicht in einer bestirnrnten Geldsurnrne besteht, sowie eine Auesserung dazu, ob einer Uebertragung der Sache auf den Einzelrichter Gruende entgegenstehen. (4) Ausserdem sind die allgemeinen Vorschriften ueber die vorbereitenden Schriftsaetze auch auf die Klagschrift anzuwenden. (5) Die Klagschrift sowie sonstige Antraege und Erklaerungen einer Partei, die zugestell t werden sollen, sind bei dem Gericht schriftlich unter Beifuegung der fuer die Zustellung oder Mitteilung erforderlichen Zahl von Abschriften einzureichen. para 278 (Haupttermin) (1) Im Haupttermin fuehrt das Gericht in den Sach- und Strei tstand ein. Die erschienenen Parteien sollen hierzu persoen1ich gehoert werden. (2) Der strei tigen Verhandlung solI die Beweisaufnahme unrni ttelbar f01gen. Im Anschluss an die Beweisaufnahme ist der Sach- und Streitstand erneut mit den Parteien zu eroertern. (3) Auf einen rechtlichen Gesichtspunkt, den eine Partei erkennbar uebersehen oder fuer unerheb1ich gehalten hat, darf das Gericht, soweit .nicht nur eine Nebenforderung betroffen ist, seine Entsche1dung nur stuetzen, wenn es Gelegenheit zur Aeusserung dazu 233 gegeben hat. (4) Ein erforderlicher neuer Termin ist moeglichst kurzfristig anzuberaumen. para 30Sa (Urteil unter Vorbehalt der seerechtlichen Haftungsbeschraenkung) Unterliegt der in der Klage gel tend gemachte Anspruch der Haftungsbeschraenkung nach Paragraph 486 Abs. 1 oder 3, Paragraphen 487 bis 487d des Handelsgesetzbuchs und macht der Beklagte geltend, dass 1. aus demselben Ereignis weitere Ansprueche, fuer die er die Haftung beschraenken kann, entstanden sind und 2. die Summe der Ansprueche die Haftungshoechstbetraege uebersteigt, die fuer diese Ansprueche in Artikel 6 oder 7 des Haftungsbeschraenkungsuebereinkommens (Paragraph 486 Abs.1 des Handelsgesetzbuchs) oder in den Paragraphen 487, 487a oder 487c des Handelsgesetzbuchs bestimmt sind, so kann das Gericht das Recht auf Beschraenkung der Haftung bei der Entscheidung unberuecksichtigt lassen, wenn die Erledigung des Rechtsstreits wegen Ungewissheit ueber Grund oder Betrag der weiteren Ansprueche nach der freien Ueberzeugung des Gerichts nicht unwesentlich erschwert waere. In diesem Fall ergeht das Urteil unter dem Vorbehalt, dass der Beklagte das Recht auf Beschraenkung der Haftung geltend machen kann, wenn ein Fonds nach dem Haftungsbeschraenkungsuebereinkommen errichtet worden ist oder bei Geltendmachung des Rechts auf Beschraenkung der Haftung errichtet wird. para 328 (Anerkennung auslaendischer Urteile) (1) Die Anerkennung des Urteils eines auslaendischen Gerichts ist ausgeschlossen: 1 • 2. 3. 4. S. wenn die Gerichte des Staates, dem das auslaendische Gerich t angehoert, nach den deutschen Gesetzen nicht zustaendig sind; wenn dem Beklagten, der sich auf das Verfahren nicht eingelassen hat und sich hierauf beruft, das verfahrensleitende Schriftstueck nicht ordnungsgemaess oder nicht so rechtzeitig zugestellt worden ist, dass er sich verteidigen konnte; wenn das Urteil mi t einem hier erlassenen oder einem anzuerkennenden frueheren auslaendischen Urteil oder wenn das ihm zugrundeliegende Verfahren mit einem frueher hier rechtshaengig gewordenen Verfahren unvereinbar ist-I , wenn die Anerkennung des Urteils zu einem Ergebnis fuehrt, das mit wesentlichen Grundsaetzen des deutschen Rechts offensichtlich unvereinbar ist, insbesondere wenn die Anerkennung mit den Grundrechten unvereinbar ist; wenn die Gegenseitigkeit nicht verbuergt ist. (2) Die Vorschr ift der Nummer 5 steht der Anerkennung des Urteil s nich t en tgegen, wenn das Urteil einen nichtvermoegensrechtlichen 234 Anspruch betrifft und nach den deutschen Gesetzen ein Gerichtsstand im Inland nicht begruendet war oder wenn es sich urn eine Kindschaftssache (Paragraph 640) handelt. para 511 (Zulaessigkeit der Berufung) Die Berufung findet gegen die im ersten Rechtszuge erlassenen Endurteile statt. para 545 (Zulaessigkeit der Revision) ( 1) Die Revision findet gegen die in der Berufungsinstanz von den Oberlandesgerichten erlassenen Endurteile nach Massgabe der folgenden Vorschriften statt. ( 2) Gegen Urteile, durch die ueber die Anordnung, Abaenderung oder Aufhebung eines Arrestes oder einer einstweiligen Verfuegung entschieden wird, ist die Revision nicht zulaessig. Dasselbe gilt fuer die Urteile ueber die vorzeitige Besitzeinweisung im Enteignungsverfahren oder im umlegungsverfahren. para 707 (Einstweilige Einstellung der Zwangsvollstreckung bei Wiedereinsetzungs- und Wiederaufnahmeantrag) (1) Wird die Wiedereinsetzung in den vorigen stand oder eine Wiederaufnahme des Verfahrens beantragt oder wird der Rechtsstreit nach der Verkuendung eines Vorbehaltsurteils fortgesetzt, so kann das Gericht auf Antrag anordnen, dass die Zwangsvollstreckung gegen oder ohne Sicherheitsleistung einstweilen eingestellt werde oder nur gegen Sicherheitsleistung stattfinde und dass die Vollstreckungsmassregeln gegen Sicherheitsleistung aufzuheben seien. Die Einstellung der Zwangsvollstreckung ohne Sicherheitsleistung ist nur zulaessig, wenn glaubhaft gemacht wird, dass der Schuldner zur Sicherhei tsleistung nicht in der Lage ist und die Vollstreckung einen nicht zu ersetzenden Nachteil bringen wuerde. (2) Die Entscheidung kann ohne muendliche Verhandlung ergehen. Eine Anfechtung des Beschlusses findet nicht statt. para 712 (Abwendung der Vollstreckung durch Sicherheitsleistung) (1) Wuerde die Vollstreckung dem Schuldner einen nicht zu ersetzenden Nachteil bringen, so hat ihm das Gericht auf Antrag zu gestatten, die Vollstreckung durch Sicherhei tsleistung oder Hinterlegung ohne Ruecksicht auf eine Sicherheitsleistung des Glaeubigers abzuwendeQ. 1st der Schuldner dazu nicht in der Lage, so ist das Urteil nicht fuer vorlaeufig vollstreckbar zu erklaeren oder die Vollstreckung auf die in Paragraph 720 a Ab s. 1 ,2 b ezei chnete n Massregel n zu beschraenken. (2) Dem Antrag des Schuldners ist nicht zu entsprechen, wenn ein ueberwiegendes Interesse des Glaeubigers entgegensteht. In den Faellen des Paragraph 708 kann das Gericht anodnen dass das Urteil nur gegen Sicherheitsleistung vorlaeufug vollstreckbar ist. 235 para 719 (Einstweilige Einstellung bei Rechtsmittel und Einspruch) (1) Wird gegen ein fuer vorlaeufig vollstreckbar erklaertes urteil der Einspruch oder die Berufung eingelegt, so gelten die Vorschriften des Paragraph 707 entsprechend. Die ZWangsvollstreckung aus einern Versaeurnnisurteil darf nur gegen Sicherheitsleistung eingestellt werden, es sei denn, dass das Versaeurnnisurteil nicht in gesetzlicher weise ergangen ist oder die saeurnige Partei glaubhaft rnacht, dass ihre Saeumnis unverschuldet war. (2) Wird Revision gegen ein fuer vorlaeufig vollstreckbar erklaertes Urteil eingelegt, so ordnet das Revisionsgericht auf Antrag an, dass die Zwangsvollstreckung einstweilen eingestellt wird, wenn die Vollstreckung dern Schuldner einem nicht zu ersetzenden Nachteil bringen wuerde und nicht ein ueberwiegendes Interesse des Glaeubigers entgegensteht. Die Parteien haben die tatsaechlichen Voraussetzungen glaubhaft zu machen. (3) Die Entscheidung kann ohne muendliche Verhandlung ergehen. para 722 (Vollstreckbarkeit auslaendischer Urteile) (1) Aus dern Urteil eines auslaendischen Gerichts findet die Zwangsvollstreckung nur statt, wenn ihre Zulaessigkeit durch ein Vollstreckungsurteil ausgesprochen ist. (2) Fuer die Klage auf Erlass des Urteils ist das Amtsgericht oder Landgericht, bei dern der Schuldner seinen allgemeinen Gerichtsstand hat, und sonst das Amtsgericht oder Landgericht zustaendig, bei dem nach Paragraph 23 gegen den Schuldner Klage erhoben werden kann. para 723 (Vollstreckungsurteil fuer auslaendische Urteile) (1) Das Vollstreckungsurteil ist ohne Pruefung der Gesetzmaessigkeit der Entscheidung zu erlassen. (2) Das Vollstreckungsurteil ist erst zu erlassen, wenn das Urteil des auslaendischen Gerichts nach dern fuer dieses Gericht gel tenden Recht die Rechtskraft erlangt hat. Es ist nicht zu erlassen, wenn die Anerkennung des Urteils nach Paragraph 328 ausgeschlossen ist. para 731 para 751 (Klage auf Erteilung der Vollstreckungsklausel) Kann der nach dern Paragraph 726 Abs.1 und den Paragraphen 727 bis 729 erforderliche Nachweis durch oeffentliche oder oeffentlich beglaubigte Urkunden nicht gefuehrt werden, so hat der Glaeubiger bei dem Prozessgericht des ersten Rechtszuges aus dern Urteil auf Erteilung der Vollstreckungsklausel Klage zu erheben. (Bedingungen fuer Vollstreckungsbeginn) (1) 1st die Geltendmachung des Anspruchs von dern Eintri tt eines Kalendertages abhaengig, so darf die Zwangsvollstreckung nur 236 beginnen, wenn der Kalendertag abgelaufen ist. ( 2) Haengt die Vollstreekung von einer dem Glaeubiger obliegenden sicherhei tsleistung ab, so darf mi t der zwangsvolls tree kung nur begonnen werden oder sie nur fortgesetzt werden, wenn die Sieherhei tsleistung dureh oeffentliche oder oeffentlich beglaubigte Urkunde naehgewiesen und eine Absehrift dieser Urkunde bereits zugestellt ist oder gleichzeitig zugestellt wird. para 758 (Durehsuehungi Gewaltanwendung) (1) Der Geriehtsvollzieher ist befugt, die Wohnung und die Behaeltnisse des Sehuldners zu durchsuchen, sowei t der Zwec k der vollstreckung dies erfordert. (2) Er ist befugt, die versehlossenen Haustueren, Zimmertueren und Behaeltnisse oeffnen zu lassen. (3) Er ist, wenn er Widerstand findet, zur Anwendung von Gewalt befugt und kann zu diesem Zweeke die Unterstuetzung der polizeilichen Vollzugsorgane nachsuehen. para 764 (vollstreekungsgerieht) (1) Die den Geriehten zugewiesene Anordnung Vollstreekungshandlungen und Mi twirkung bei solchen gehoert zustaendigkeit der Amtsgeriehte als Vollstreekungsgeriehte. von zur (2) Als Vollstreckungsgerieht ist, sofern nicht das Gesetz ein anderes Amtsgerieht bezeiehnet, das Amtsgerieht anzusehen, in dessen Bezirk das Vollstreekungsverfahren stattfinden soll oder stattgefunden hat. (3) Die Entseheidungen des Vollstreekungsgerichts koennen ohne muendliehe Verhandlung ergehen. para 766 (Erinnerung gegen Art und weise der Zwangsvollstreekung) (1) Ueber Antraege, Einwendungen und Erinnerungen, welche die Art und Weise der Zwangsvollstreekung oder das vom Geriehtsvollzieher bei ihr zu beobaehtende Verfahren betreffen, entseheidet das Vollstreckungsgericht. Es ist befugt, die im Paragraph 732 Abs.2 bezeiehneten Anordnungen zu erlassen. (2) Dem Vollstreekungsgerieht steht auch die Entscheidung zu, wen!l ein Gerichtsvollzieher sich weigert, einen Vollstreckungsauftrag zu uebernehmen oder eine Vollstreckungshandlung dem Auftrag gemaess auszufuehren, oder wenn wegen der von dem Gerichtsvollzieher in Ansatz gebraehten Kosten Erinnerungen erhoben werden. para 775 (Einstellung und Besehraenkung der Zwangsvollstreekung) Die Zwangsvollstreckung ist einzustellen oder zu beschraenken: 237 1 . wenn die Ausfertigung einer vollstreckbaren Entscheidung vorgelegt wird, aus der sich ergibt, dass das zu vollstreckende Urteil oder seine vorlaeufige Vollstreckbarkeit aufgehoben oder dass die Zwangsvollstreckung fuer unzulaessig erklaert oder ihre Einstellung angeordnet ist; 2. wenn die Ausfertigung einer gerichtlichen Entscheidung vorgelegt wird, aus der sich ergibt, dass die einstweilige Einstellung der Vollstreckung oder einer Vollstreckungsrnassregel angeordnet ist oder dass die Vollstreckung nur gegen Sicherhei tsleistung fortgesezt werden darf; 3. wenn eine oeffentliche Urkunde vorgelegt wird, aus der sich ergibt, dass die zur Abwendung der Vollstreckung erforderliche Sicherheitsleistung oder Hinterlegung erfolgt ist; 4. wenn eine oeffentliche Urkunde oder eine von dem Glauebiger ausgestell te Privaturkunde vorgelegt wird, aus der sich ergibt, dass der Glaeubiger nach Erlass des zu vollstreckenden Urteils befriedigt ist oder Stundung bewilligt hat; 5. wenn ein Postschein vorgelegt wird, aus dern sich ergibt, dass nach Erlass des urteils die zur Befriedigung des Glaeubigers erforderliche Summe zur Auszahlung an den letzteren bei der Post eingezahlt ist. para 776 Aufhebung von Vollstreckungsrnassregeln) In den Faellen des Paragraph 775 Nr.1,3 sind zugleich die bereits getroffenen Vollstreckungsrnassregeln aufzuheben. In den Faellen der Nurnrnern 4,5 bleiben diese Massregeln einstweilen bestehen; dasselbe gilt in den Faellen der Nurnmer 2, sofern nicht durch die Entscheidung auch die Aufhebung der bisherigen Vollstreckungshandlungen angeordnet ist. para 786a (Seerechtliche Haftungsbeschraenkung) (1) Die Vorschriften des Paragraph 780 Abs.1 und des Paragraph 781 sind auf die nach Paragraph 486 Abs.1 ,3, Paragraphen 487 bis 487d des Handel sgese tzbuche s eintretende beschraenkte Haf tung en tsprechend anzuwenden. (2) 1st das Urteil nach Paragraph 305a unter Vorbehalt ergangen, so gel ten fuer die ZWangsvollstreckung die folgenden Vorschriften: 1 . Wird irn Gel tungsbereich dieses Gesetzes die Eroeffnung eines Seerechtlichen Verteilungsverfahrens beantragt, an dem der Gl aeubiger rni t dern Anspruch teilnimmt, so entscheidet das Gericht nach Paragraph 5 Ab s. 3 der Seerechtlichen Verteilungsordnung ueber die Einstellung der Zwangsvollstreckung; nach Eroeffnung des Verteilungsverfahrens sind die Vorschriften des Paragraph 8 Abs.4 und 5 der Seerechtlichen Verteilungsordnung anzuwenden. 2. 1st n a c h Art i k e 1 des 238 Haftungsbeschraenkungsuebereinkommens (Paragraph 486 Abs.1 des Handelsgesezbuches) von dem Schuldner oder fuer ihn ein Fonds in einem anderen Vertragsstaat des Uebereinkommens errichtet worden, so sind, sofern der Glaeubiger den Anspruch gegen den Fonds gel tend gemacht hat, die Vorschriften des Paragraph 34 der Seerechtlichen Verteilungsordnung anzuwenden. Hat der Glaeubiger den Anspruch nicht gegen den Fonds geltend gemacht oder sind die Voraussetzungen des Paragraph 34 Abs. 2 der Seerechtlichen Verteilungsordnung nicht gegeben, so werden Einwendungen, die auf Grund des Rechts auf Beschraenkung der Haftung nach Paragraph 486 Abs.1 ,3, Paragraphen 487 bis 487d des Handelsgesetzbuches erhoben werden, nach den Vorschriften der Paragraphen 767, 769, 770 erledigti das gleiche gilt, wenn der Fonds in dem anderen Vertragsstaat erst bei Gel tendmachung des Rechts auf Beschraenkung der Haftung errichtet wird. (3) 1st das Urteil eines Gerichts, das seinen sitz ausserhalb des Geltungsbereichs dieses Gesetzes hat, unter dem Vorbehalt ergangen, dass der Beklagte das Recht auf Beschraenkung der Haftung nach dem Haftungsbeschraenkungsuebereinkomrnen gel tend machen kann, wenn ein Fonds nach Artikel 11 des Uebereinkommens errichtet worden ist oder bei Geltendmachung des Rechts auf Beschraenkung der Haftung errichtet wird, so gel ten fuer die Zwangsvollstreckung wegen des durch das Urteil festgestellten Anspruchs die Vorschriften des Absa tzes 2 entsprechend. para 802 (Ausschliessliche Gerichtsstaende) Die in diesem Buche angeordneten Gerichtsstaende sind ausschliessliche. para 804 (Pfaendungspfandrecht) (1) Durch die Pfaendung erwirbt der Glaeubiger ein pfandrecht an dem gepfaendeten Gegenstande. (2) Das pfandrecht gewaehrt dem Glaeubiger im Verhaeltnis zu anderen Glaeubigern dieselben Rech te wi e ei n durch Vertrag erworbenes Faustpfandrechti es geht pfand- und Vorzugsrechten vcr, die fuer den Fall des Konkurses den Faustpfandrechten nicht gleichgestellt sind. (3) Das durch eine fruehere Pfaendung begruendete pfandrecht geht demjenigen vor, das durch eine spaetere Pfaendung begruendet wird. para 808 (Pfaendung beim Schuldner) (1) Die Pf aendung der im Gewahrsam des Schuldners befindlichen koerperlichen Sachen wird dadurch bewirkt, dass der Gerichtsvollzieher sie in Besitz nimmt. (2) Andere Sachen als Geld, Kostbarkeiten und wertpapiere sind im Gewa?rs.am des Schuldne~s zu belassen, sofern nicht hierdurch die BefrJ.edJ.gung des GlaeubJ.gers gefaehrdet wird. Werden die Sachen irn 239 Gewahrsam des Schuldners belassen, so ist die Wirksamkeit der Pfaendung dadurch bedingt, dass durch Anlegung von Siegeln oder auf sonstige Weise die Pfaendung ersichtlich gemacht ist. (3) Der Gerichtsvollzieher ha t den Schuldner von der erfolgte n Pfaendung in Kenntnis zu setzen. para 826 (Anschlusspfaendung) ( 1) Zur pfaendung bereits gepfaendeter Sachen genuegt die in das Protokoll aufzunehrnende Erklaerung des Gerichtsvollziehers, dass er die Sachen fuer seinen Auftraggeber pfaende. (2) 1st die erste Pfaendung durch einen anderen Gerichtsvollzieher bewirkt, so ist diesem eine Abschrift des Protokolls zuzustellen. (3) Der Schuldner ist von den weiteren Pfaendungen in Kenntnis zu setzen. para 828 (Zustaendigkeit) (1) Die gerichtlichen Handlungen, welche die Zwangsvollstreckung in Forderungen und andere Vermoegensrechte zum Gegens tand haben, erfolgen durch das Vollstreckungsgericht. (2) Als Vollstreckungsgericht ist das Amtsgericht, bei dem der Schuldner im Inland seinen allgemeinen Gerichtsstand hat, und sonst das Amtsgericht zustaendig, bei dem nach Paragraph 23 gegen den Schuldner Klage erhoben werden kann. para 857 (Zwangsvollstreckung in andere Vermoegensrechte) (1 )Fuer die Zwangsvollstreckung in andere Verrnoegensrechte, die nicht Gegenstand der Zwangsvollstreckung in das unbewegliche Vermoegen sind, gel ten die vorstehenden Vorschriften entsprechend. (2) 1st ein Drittschuldner nicht vorhanden, so ist die Pfaendung mit dem Zei tpunkt als bewirkt anzusehen, in welchem dem Schuldner das Gebot, sich jeder Verfuegung ueber das Recht zu enthalten, zugestellt ist. (3) Ein unveraeusserliches Recht ist in Ermangelung besonderer Vorschriften der Pfaendung insowei t unterworfen, als die Ausuebung einem anderen ueberlassen werden kann. (4) Das Gericht kann bei der Zwangsvollstreckung in unveraeusserliche Rechte, deren Ausuebung einem anderen ueberlassen werden kann, besondere Anordnungen erlassen. Es kann insbesondere bei der Zwangsvollstreckung in Nutzungsrechte eine Verwal tung anordnen; in diesem Falle wird die Pfaendung durch Uebergabe der zu benu tzenden Sache an den Verwalter bewirkt, sofern sie nicht durch Zustellung des Beschlusses bereits vorher bewirkt ist. (~) 1st die Veraeusserung des Rechts selbst zulaessig, so kann auch dlese Veraeusserung von dem Gericht angeordnet werden. 240 ( 6) Auf die Zwangsvollstreckung in eine Reallast, eine Grundschuld oder eine Rentenschuld sind die Vorschriften ueber di~ Zwangsvollstreckung in eine Forderung, fuer die eine Hypothek besteht, entsprechend anzuwenden. (7) Die Vorschrift des Paragraph 845 Abs. 1 Satz 2 ist nicht anzuwenden. para 858 (Zwangsvollstreckung in Schiffspart) (1) Fuer die ZWangsvollstreckung in die Schiffspart (Paragraph 489 ff. des Handelsgesetzbuches) gil t Paragraph 857 mi t folgenden Abweichungen: (2) Als Vollstreckungsgericht ist das Amtsgericht zustaendig, bei dem das Register fuer das Schiff gefuehrt wird. (3) Die Pfaendung bedarf der Eintragung in das Schiffsregisteri die Eintragung erfolgt auf Grund des Pfaendungsbeschlusse s. Der Pfaendungsbeschluss solI dem Korrespondentreeder zugestell t werden i wird der Beschluss diesem vor der Eintragung zugestellt, so gilt die Pfaendung ihm gegenueber mit der Zustellung als bewirkt. (4) Verwertet wird die gepfaendete Schiffspar t im Wege de r Veraeusserung. Dem Antrag auf Anordnung der Veraeusserung ist ein Auszug aus dem Schiffsregister beizufuegen, der alle das Schiff und die Schiffspart betreffenden Eintragungen enthaelti der Auszug darf nicht aelter als eine Woche sein. (5) Ergibt der Auszug aus dem Schiffsregister, dass die Schiffspart mit einem pfandrecht belastet ist, das einem anderen als dem betreibenden Glaeubiger zusteht, so ist die Hinterlegung des Erloeses anzuordnen. Der Erloes wird in diesem Fall nach den Vorschriften der Paragraphen 873 bis 882 verteil ti Forderungen, fuer die ein pfandrecht an der Schiffspart eingetragen ist, sind nach dem Inhalt des Schiffsregisters in den Teilungsplan aufzunehmen. para 864 (Gegenstaende) (1) Der Zwangsvollstreckung in das unbewegliche Vermoegen unterliegen ausser den Grundstuecken die Berechtigungen, fuer welche die sich auf das Grundstueck beziehenden Vorschriften gelten, die im Schiffsregister eingetragenen Schiffe und die Schiffsbauwerke, die im Schiffsbauregister eingetragen sind oder in dieses Register eingetragen werden koennen. (2) Die Zwangsvollstreckung in den Bruchteil eines Grundstuecks, einer Berechtigung der im Absatz 1 bezeichneten Art oder eines Schiffes oder Schiffsbauwerks ist nur zulaessig, wenn der Bruchteil in dem Anteil eines Miteigentuemers besteht oder wenn sich der Anspruch des Glaeubigers auf ein Recht richtet, mit dem der Bruchteil als solcher belastet ist. 241 para 866 (Arten der Vollstreckung in ein Grundstueck) (1) Die Zwangsvollstreckung in ein Grundstueck erfolgt durch Ein tragung einer Sicherungshypothek fuer die Forderung, durch Zwangsversteigerung und durch zwangsverwaltung. (2) Der Glaeubiger kann verlangen, dass eine dieser Massregeln allein oder neben den uebrigen ausgefuehrt werde. (3) Eine'Sicherungshypothek (Absatz 1) darf nur fuer einen Betrag von rnehr als fuenfhundert Deutsche Mark eingetragen werdeni Zinsen bleiben dabei unberuecksich tigt, sowei t sie als Nebenforderung geltend gemacht sind. Auf Grund mehrerer demselben Glaeubiger zus tehender Schuldtitel kann eine einheitliche Sicherungshypothek eingetragen werden. para 867 (Zwangshypothek) (1) Die Sicherungshypothek wird auf Antrag des Glaeubigers in das Grundbuch eingetrageni die Eintragung ist auf dem vollstreckbaren Titel zu vermerken. Mit der Eintragung entsteht die Hypothek. Das Grundstueck haftet auch fuer die dem Schuldner zur Last fallenden Kosten der Eintragung. (2) Sollen mehrere Grundstuecke des Schuldners mi t der Hypothek belastet werden, so ist der Betrag der Forderung auf die einzelnen Grundstuecke zu verteileni die Groesse der Teile bestimrnt der Glaeubiger. para 870a (Zwangsvollstreckung in Schiff oder Schiffsbauwerk) (1) Die ZWangsvollstreckung in ein eingetragenes Schiff oder in ei n Schiffsbauwerk, das im Schiffsbauregister eingetragen ist oder in dieses Register eingetragen werden kann, erfolgt durch Eintragung einer Schiffshypothek fuer die Forderung oder durch ZWangsversteigerung. (2) Paragraph 866 Abs.2,3, Paragraph 867 gelten entsprechen. (3) Wird durch eine vollstreckbare Entscheidung die zu vollstreckende Entscheidung oder ihre vorlaeufige Vollstreckbarkeit aufgehoben oder die Zwangsvolls treckung fuer unzulaessig erklaert oder deren Einstellung angeordnet, so erlischt die Schiffshypotheki Paragraph 57 Abs.3 des Gesetzes ueber Rechte an eingetragenen Schiffen und Schiffsbauwerken vom 15. November 1940 (Reichsgesetzbl. I S.1499) ist anzuwenden. Das gleiche gilt, wenn durch eine gerichtliche Entscheidung die einstweilige Einstellung der Zwangsvollstreckung und zugleich die Aufhebung der erfolgten Vollstreckungsmassregeln angeordnet wird oder wenn die zur Abwendung der Vollstreckung nachgelassene Sicherheitsleistung oder Hinterlegung erfolgt. para 887 (Vertretbare Handlungen) (1) Erfuell t der Schuldner die Verpflichtung nicht, eine Handlung vorzunehmen, deren Vornahme durch einen Dri tten erfolgen kann, so ist 242 der Glaeubiger von dem Prozessgericht des ersten Rechtszuges auf Antrag zu ermaechtigen, auf Kosten des Schuldners die Handlung vornehmen zu lassen. (2) Der Glaeubiger kann zugleich beantragen, den Schuldner zur Vorauszahlung der Kosten zu verurteilen, die durch die Vornahrne der Handlung entstehen werden, unbeschadet des Rechts auf eine Nachforderung, wenn die Vornahme der Handlung einen groesseren Kostenaufwand verursacht. ( 3) Auf die Zwangsvollstreckung zur Erwirkung der Herausgabe oder Leistung von Sachen sind die vorstehenden Vorschriften nicht anzuwenden. para 893 (Klage auf Leistung des Interesses) (1) Durch die Vorschriften dieses Abschni tts wird das Rech t des Glaeubigers nicht beruehrt, die Leistung des Interesses zu verlangen. (2) Den Anspruch auf Leistung des Interesses hat der Glaeubiger im Wege der Klage bei dem Prozessgericht des ersten Rechtszuges gel tend zu machen. para 909 (Verhaftung) Die Verhaftung des Schuldners erfolgt durch einen Gerichtsvollzieher. Der Haftbefehl muss bei der Verhaftung dem Schuldner vorgezeigt und auf Begehren abschriftlich mitgeteilt werden. para 916 (Arrestanspruch) (1) Der Arrest findet zur Sicherung der Zwangsvollstreckung in das bewegliche oder unbewegliche Vermoegen wegen einer Geldforderung oder wegen eines Anspruchs statt, der in eine Geldforderung uebergehen kann. (2) Die Zulaessigkeit des Arrestes wird nicht dadurch ausgeschlossen, dass der Anspruch betagt oder bedingt ist, es sei denn, das s der bedingte Anspruch wegen der entfernten Moeglichkeit des Eintritts der Bedingung einen gegenwaertigen Vermoegenswert nicht hat. para 917 (Arrestgrund bei dinglichem Arrest) (1) Der dingliche Arrest findet statt, wenn zu besorgen ist, dass ohne dessen Verhaengung die Vollstreckung des Urteils vereitelt oder wesentlich erschwert werden wuerde. (2) Als ein zureichender Arrestgrund ist es anzusehen, wenn das Urteil im Ausland vollstreckt werden muesste. 243 para 918 (Arrestgrund bei persoenlichem Arrest) Der persoenliche Sicherhei tsarres t findet nur sta tt, wenn er erforderlich ist, um die gefaehrdete Zwangsvollstreckung in das Vermoegen des Schuldners zu sicher~. para 919 (Arrestgericht) Fuer die Anordnung des Arrestes ist sowohl das Gericht der Hauptsache als das Amtsgericht zustaendig, in dessen Bezirk der mi t Arrest zu belegende Gegenstand oder die in ihrer persoenlichen Freihei t zu beschraenkende Person sich befindet. para 920 (Arrestgesuch) (1) Das Gesuch solI die Bezeichnung des Anspruchs unter Angabe des Geldbetrages oder des Geldwertes sowi e di e Bezei chnun 9 des Arrestgrundes enthalten. (2) Der Anspruch und der Arrestgrund sind glaubhaft zu machen. (3) Das Gesuch kann vor der Geschaeftsstelle zu Protokoll erklaer t werden. para 921 (Entscheidung ueber das Arrestgesuch) (1) Die Entscheidung kann ohne muendliche Verhandlung ergehen. (2) Das Gericht kann, auch wenn der Anspruch oder der Arrestgrund nicht glaubhaft gemacht ist, den Arrest anordnen, sofern wegen der dem Gegner drohenden Nachteile Sicherheit geleistet wird. Es kann die Anordnung des Arrestes von einer Sicherhei tsleis tung abhaengig machen, selbst wenn der Anspruch und der Arrestgrund glaubhaft gemacht sind. para 922 (Arresturteil und Arrestbeschluss) (1) Die Entscheidung ueber das Gesuch ergeh t im Falle einer muendlichen Verhandlung durch Endurteil, andernfalls durch Beschluss. (2) Den Beschluss, durch den ein Arrest angeordnet wird, hat die Partei, die den Arrest erwirkt hat, zustellen zu lassen. (3) Der Beschluss, durch den das Arrestgesuch zurueckgewiesen oder vorherige Sicherhei tsleistung fuer erforderlich erklaert wird, ist dem Gegener nicht mitzuteilen. para 923 (Abwendungsbefugnis) In dem Arrestbefehl ist ein Geldbetrag festzustellen, durch dessen Hinterlegung die Vollziehung des Arrestes gehemmt und der Schuldner zu dem Antrag auf Aufhebung des vollzogenen Arrestes berechtigt wird. 244 para 924 (Widerspruch) (1) Gegen den Beschluss, durch den ein Arrest angeordnet wird, findet Widerspruch statt. (2) Die widersprechende Partei hat in dem Widerspruch die Grueqde darzulegen, die sie fuer die Aufhebung des Arrestes geltend machen will. Das Gericht hat Termin zur muendlichen Verhandlung von Amts wegen zu bestimmen. 1st das Arrestgericht ein Amtsgericht, so ist der Widerspruch unter Angabe der Gruende, die fuer die Aufhebung des Arrestes geltend gemacht werden sollen, schriftlich oder zum Protokoll der Geschaeftsstelle zu erheben. (3) Durch Erhebung des Widerspruchs wird die Vollziehung des Arrestes nicht gehemmt. Das Gericht kann aber eine einstweilige Anordnung nach Paragraph 707 treffeni Paragraph 707 Abs.1 Satz 2 ist nicht anzuwenden. para 925 (Entscheidung auf Widerspruch) (1) Wird Widerspruch erhoben, so ist ueber die Rechtmaessigkeit des Arrestes durch Endurteil zu entscheiden. ( 2 ) Das Gericht kann den Arrest ganz oder teilweise bestaetigen, abaendern oder aufheben, auch die Bestaetigung, Abaenderung oder Aufhebung von einer Sicherheitsleistung abhaengig machen. para 926 (Anordnung der Klageerhebung) (1) 1st die Hauptsache nicht anhaengig, so hat das Arrestgericht auf Antrag ohne muendliche Verhandlung anzuordnen, dass die Partei, die den Arres tbefehl erwirkt hat, binnen einer zu bestimmenden Frist Klage zu erheben habe. (2) Wird dieser Anordnung nicht Folge geleistet, so ist auf Antrag die Aufhebung des Arrestes durch Endurteil auszusprechen. para 927 (Aufhebung wegen veraenderter Umstaende) (1) Auch nach der Bestaetigung des Arrestes kann wegen veraenderter Umstaende, insbesondere wegen Erledigung des Arrestgrundes oder auf Grund des Erbietens zur Sicherhei tsleistung die Aufhebung des Arrestes beantragt werden. (2) Die Entscheidung ist durch Endurteil zu erlasseni sie ergeht durch das Gericht, das den Arrest angeordne t ha t, und wenn die Hauptsache anhaengig ist, durch das Gericht der Hauptsach~. para 928 (Arrestvollziehung) Auf die Vollziehung des Arrestes sind die Vorschriften ueber die Zwangsvollstreckung entsprechend anzuwenden, soweit nicht die nachfolgenden Paragraphen abweichende Vorschriften enthalten. 245 para 929 (Vollstreckungsklausel; Vollziehungsfrist) (1) Arrestbefehle beduerfen der Vollstreckungsklausel nur, wenn die Vollziehung fuer einen anderen als den in dem Befehl bezeichneten Glaeubiger oder gegen einen anderen als den in dem Befehl bezeichneten Schuldner erfolgen solI. (2) Die Vollziehung des Arrestbefehls ist unstatthaft, wenn seit dem Tage, an dem der Befehl verkuendet oder der Partei, auf deren Gesuch er erging, zugestellt ist, ein Monat verstrichen ist. (3) Die Vollziehung ist vor der Zustellung des Arrestbefehls an den Schuldner zulaessig. Sie ist jedoch ohne Wirkung, wenn die Zustellung nicht innerhalb einer Woche nach der Vollziehung und vor Ablauf der fuer diese im vorherigen Absatz bestimmten Frist erfolgt. para 930 (Vollziehung in bewegliches Vermoegen und Forderungen) (1) Die Vollziehung des Arrestes in bewegliches Vermoegen wird durch Pfaendung bewirkt. Die Pfaendung erfolgt nach denselben Grundsaetzen wie jede andere Pfaendung und begruendet ein pfandrecht mi t den im Paragraph 804 bestimmten Wirkungen. Fuer die Pfaendung einer Forderung ist das Arrestgericht als Vollstreckungsgericht zustaendig. (2) Gepfaendetes Geld und ein im Verteilungsverfahren auf den Glaeubiger fallender Betrag des Erloeses werden hinterlegt. (3) Das Vollstreckungsgericht kann auf Antrag anordnen, dass eine bewegliche koerperliche Sache, wenn sie der Gefahr einer betraechtlichen Wertveringerung ausgesetzt ist oder wenn ihre Aufbewahrung unverhael tnismaessige Kosten verursachen wuerde, versteigert und der Erloes hinterlegt werde. para 931 (Vollziehung in eingetragenes Schiff) (1) Die Vollziehung des Arrestes in ein eingetragenes Schiff oder Schiffsbauwerk wird durch pfaendung nach den Vorschriften ueber die Pfaendung beweglicher Sachen mit folgenden Abweichungen Bewirkt: (2) Die Pf aendung begruendet ein pfandrecht an dem gepfaendeten Schiff oder Schif fsbauwerk; das Pfandrecht gewaehrt dem Glaeubiger im Verhael tnis zu anderen Rechten dieselben Rechte wie eine Schiffshypothek. (3) Die Pfaendung wird auf Antrag des Glaeubigers vom Arrestgericht als Vollstreckungsgericht angeordnet; das Gericht hat zugleich das Registergericht urn die Eintragung einer Vormerkung zur Sicherung des Arrestpfandrechts in das Schiffsregister oder Schiffsbauregister zu ersuchen; die Vormerkung erlischt, wenn die Vollziehung des Arrestes unstatthaft wird. (4) Der Gerichtsvollzieher hat bei der Vornahme der Pfaendung das Schiff oder Schiffsbauwerk in Bewachung und Verwahrung zu nehmen. (5) 1st zur Zei t .der Arrestvollz.iehun