Lloyd's Maritime and Commercial Law Quarterly

South African Maritime Law

Craig Forrest *

274. Asiatic Shipping Services Inc v. Elgina Marine Co Ltd1

Arrest of ship—security in relation to arbitration proceedings pursued in London—the origin and meaning of the requirement in a security arrest in terms of Admiralty Jurisdiction Regulations Act No 105 of 1983, s 5(3) that there be a “genuine and reasonable need for security”
In order to obtain security in relation to arbitration proceedings in London, Elgina Marine Co Ltd (“Elgina”) sought and obtained ex parte the arrest of the bunkers on board the MV Orient Stride and the right to certain freight held by the agents of Asiatic Shipping Service Inc (“Asiatic”). The dispute concerned the charter to Asiatic of the MV Columbine Express. Upon the commencement of arbitration proceedings, a defence and counterclaim were filed in which Asiatic asserted that it was the chartering arm, and agent, of Pacific Inter-Link Sdn Bhd (“Pacific”) and sought to have Pacific joined in the proceedings. Elgina indicated that it would consent to having Pacific joined as co-respondent for the arbitration as undisclosed principle of Asiatic on the condition that security for its claim against Pacific be lodged. However, Pacific rejected being joined as co-respondent (and the provision of security) and wished to be joined to the proceedings only in relation to the counterclaim. An application to set aside the arrest was then lodged by Asiatic, but dismissed. The dismissal was appealed. It was common cause that the bunkers belonged to Asiatic and that Elgina had established a prima facie case against Asiatic. In dispute was whether Elgina had discharged the burden of establishing on a balance of probabilities that it had a genuine and reasonable need for security.
Decision: Appeal dismissed.
Held: (1) In discharging the burden of establishing on a balance of probabilities that it had a genuine and reasonable need for security, Elgina was not confined to the allegations made in its ex parte application and could rely on further information placed before the court in the subsequent application to have the arrest set aside.2 (2) The requirement that the need for security be “genuine and reasonable” requires that the applicant satisfy, on a balance of probabilities, that a genuine and reasonable apprehension exists that the party whose property is arrested will not satisfy a judgment or award in favour of the arresting party.3 In light of the reluctance of Pacific to be joined in the proceedings other than in the



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