MV 'TARIK III' Credit Europe Bank N.V. v The Fund Comprising the Proceeds of the Sale of the MV Tarik III and Others (1294/2021) [2022] ZASCA 136; [2022] 4 All SA 621 (SCA) (13 October 2022)

Saflii

Automated Summary

Key Facts

The case concerns claims against a fund established from the judicial sale of the MV Tariq III. The core dispute revolves around whether the bareboat charterparty between Garanti Finansal Kiralama A.S. (Garanti) and Caliskan Ic Ve Dis Ticaret Sanayi A.S. (Caliskan) remained valid at the time of the vessel's sale in February 2015. Garanti and Caliskan agreed the charter was extant until the sale, while the appellant (Credit Europe Bank N.V.) argued it had terminated in June 2014. The court dismissed the appeal, upholding the Referee's findings that the charter was valid and claimants could rely on the deeming provision of the Admiralty Jurisdiction Regulation Act without prior in rem arrest. The fund's proceeds were distributed according to the Referee's recommendations, with the appellant's claim ranking lower than others.

Issues

  • The court addressed if claimants needed to arrest the vessel before its sale to invoke the deeming provision (s 1(3) of the Admiralty Jurisdiction Regulation Act). It concluded that such an arrest was not a prerequisite for claims against the fund, which stands in the stead of the vessel.
  • The court considered the validity under Turkish law of the termination notice (15 April 2014) and revised payment plan (24 April 2014), particularly whether administrator consent was required. Expert legal opinions conflicted, but the majority held that the opposing suppliers' claims were valid as the charter remained extant until the vessel's sale.
  • The court determined that the onus of proving the bareboat charter's termination lies with the party asserting it (the appellant), not the claimants who relied on its continued existence. The opposing suppliers' claims were based on the charter being extant, and the appellant failed to disprove this despite its contentions.

Holdings

  • The court dismissed the appeal with costs, including those of two counsel, as there was no basis to disregard the evidence confirming the bareboat charter remained in effect prior to the vessel's sale. The opposing suppliers' claims against the Fund were upheld, and the appellant failed to prove the termination of the charterparty.
  • The court held that claims against the Fund (constituted from the vessel's sale) did not require prior in rem arrest of the vessel. The Fund's distribution process under the Admiralty Jurisdiction Regulation Act allowed claims to be proven without such arrest, and the opposing suppliers satisfied this requirement.
  • The court determined that the onus of proving the termination of the charterparty rested with the appellant, who failed to adduce direct evidence of termination. The parties to the charterparty (Garanti and Caliskan) consistently maintained its validity, and the evidence supported its continued existence until the vessel's judicial sale.

Remedies

The appeal is dismissed with costs, including those of two counsel.

Legal Principles

The court held that the onus of proving the termination of the bareboat charter lay with the party asserting such termination (the appellant). The majority found that the appellant failed to discharge this burden, while the dissenting opinion argued the opposing suppliers should have proven the charter's continued existence at the time of their claims.

Precedent Name

  • Associated Marine Engineers (Pty) Ltd v Forouna Bank PF
  • CH Offshore Ltd v PDV Marina
  • Cotler v Variety Travel Goods (Pty) Ltd
  • Minister of Land Affairs and Agriculture v D & F Wewell Trust
  • Continental Illinois National Bank and Trust Co of Chicago v Greek Seaman's Pension Fund
  • The Stainless Kobe (No 2) 't Wapen Van Marion BV v The Fund Constituted by the Sale of the MV Stainless Kobe
  • Transnet Ltd v Rubenstein
  • Schloemann v Goldstone Resources Ltd
  • Prinsloo v Van der Linde & Another

Cited Statute

Admiralty Jurisdiction Regulation Act 105 of 1983

Judge Name

  • Zondi
  • T R Gorven
  • Makaula
  • V M Ponnan
  • Chetty

Passage Text

  • [34] If, as it seems to me, it was for the appellant, as the applicant who did not accept the Referee's report on the basis that the agreement had terminated, to establish that fact and not for the opposing suppliers to prove the negative, namely that the agreement had not terminated...
  • [48] In the result, the appeal must fail and it is accordingly dismissed with costs, including those of two counsel.
  • [24] The overarching issue in relation to which the various Turkish lawyers advised is whether, and if so when, the agreement terminated.