Ioannis N K

DMC/SandT/10/17

South Africa

The MV “Ioannis NK”

The owner of the cargo lately laden on board the MV “Ioannis NK” v The Master and Crew & Others (AC 66/2009)

High Court of South Africa (Western Cape High Court, Cape Town) exercising its admiralty jurisdiction: Cleaver J.; 26 August 2009

EXAMINATION OF CREW FOR PURPOSE OF OBTAINING EVIDENCE WHERE DISPUTE SUBJECT TO FOREIGN PROCEEDINGS: EXCEPTIONAL CIRCUMSTANCES UNDER THE ADMIRALTY JURISIDICTION REGULATIONS ACT 1983: FACTORS TO BE CONSIDERED: RIGHTS OF CREW MEMBERS FOLLOWING A CASUALTY

Summary

In this case the Court confirmed a rule nisi granted earlier which was the first to grant leave for evidence to be taken on commission in terms of section 5(5)(a)(i) and (iv) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the “AJRA”), coupled with an order restraining the prospective witnesses from leaving the jurisdiction of the court until their evidence was taken.

Facts

The MV “Ioannis NK” sank some 98 nautical miles off Cape Columbine on her way to a port in India. The ship was Panamanian and her crew were employed by Greek ship managers. The owner of the 22,500 tons of raw sugar cane on board the vessel, valued at US$8,572,500, applied to the court for leave to take evidence from the crew and for an order restraining them from leaving the jurisdiction until their evidence had been taken.

On 6th August 2009, Cleaver J confirmed a rule nisi granted earlier in the terms requested by the applicant. This was the first time that leave for evidence to be taken on commission in terms of section 5(5)(a)(i) and (iv) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the “AJRA”) had been granted.

Section 5( 5) of the AJRA reads:

“(a) A court may in the exercise of its admiralty jurisdiction at any time on the application of the interested person or on its own motion-

(i) if it appears to the court to be necessary or desirable for the purpose of determining any maritime claim, or any defence to any such claim, which has been or may be before a court, arbitrator or referee in the Republic, make an order for the examination, testing or inspection by any person of any ship, cargo, documents or any other thing and for taking of the evidence of any person;…

(ii) …

(iii) ….

(iv) in exceptional circumstances, make such order as it is contemplated in subparagraph (i) with regard to a maritime claim which has been brought before any court, arbitrator, referee or tribunal elsewhere than in the Republic, in which case sub-paragraphs (ii) and (iii) shall then mutatis mutandi apply.

The applicant believed that the vessel’s side platting had parted and that the most probable cause for this was corrosion of the side plating and underlying structure. The applicant sought to commence arbitration proceedings in London against the owner for breach of his obligation to exercise due diligence to provide a seaworthy vessel.

The owners’ stance from the onset was that the South African Maritime Safety Authority (“SAMSA”) did not have the authority to commence a preliminary enquiry by virtue of the fact that the vessel was foreign flagged and had sunk 98 nautical miles off the South African coast, that is, on the high seas.

In order for the provisions of section 5(5)(a)(iv) to operate there had to be “exceptional circumstances” and the Court had to elect to exercise its discretion in favour of the applicant. This was identified by Cleaver J as the “crisp issue” of the matter.

Judgment

Cleaver J read the judgment of “The Urgup” 1999 (3) SA 500 (C) in which Thring J had described the purpose of section 5(5) as providing a litigant or prospective litigant with relief which is more akin to an Anton Piller order. He dismissed the suggestion that Thring J’s comments in “The Urgup” inferred that a claimant must first meet the requirements of the Anton Piller(1) order or that an application under section 5(5)(a)(iv) should be equated with an Anton Piller application.

Cleaver J approved the dictum of “The Ais Mamas”2002 (6) SA 150(C) in which Thring J concluded that “to be exceptional within the meaning of the subparagraph, the circumstances must be ‘markedly unusual or specially different’, and that applying the test must be carefully examined.”

In doing so, Cleaver J rejected the judgment of “The C Tashin” 2002 SCOSA E 129 (E) which proposed that the need to preserve evidence may of itself constitute the very “exceptional circumstances” required by the section. Cleaver J required that the applicant should show that there is, in addition, a real possibility that the specific evidence may be lost.

Cleaver J confirmed the approach by Jones J in “The Askania Nova” 1997 SCOSA E 6 (SE) that, in deciding whether there are “exceptional circumstances”, each case must be considered on its own merits and that the Court must have regard to the whole series of events which led to the application.

The circumstances that Cleaver J noted were that the vessel sank rapidly without any explanation, the scarcity of evidence as to the cause of the sinking other than evidence of the crew, and the uncooperative conduct of the owner and crew

Cleaver J approved the approach adopted in “The C Tashin” in respect of the invasion of crew members’ rights to freedom of movement, dignity and privacy. In that case, the Judge had said:

“There is no indication on the papers when their evidence will be heard, who will hear the evidence, in which manner it will be heard and how long the process will take. In the absence of these particulars and more detailed allegations to justify the invasion of the crew members’ rights for the convenience of litigation, I was and am of the view that the crew should not be restrained from going home to their families and friends as soon as possible to recover from what must have been a rather frightening experience at sea”

In the case at hand, Cleaver J found that the applicant had taken heed of the Courts concern in the “The C Tashin”. The Court noted that the notice of motion made provisions for the following:

• the appointment of counsel who was experienced in maritime matters, as a commissioner to take evidence. The name of the commissioner was furnished and the Court was advised that he was in a position to accept nomination immediately if required,

• for proper arrangement to be made for the taking of evidence as soon as was practically possible after the granting of the order. These arrangements included arrangements for a suitable venue and time and date for the taking of such evidence,

• the appointment of a reputable transcription service,

• for the record of evidence to be transmitted by the commissioner to the applicant.

Owners further argued that evidence of the sinking was available from third parties and that, at the time of contracting, the parties would have contemplated that it would be necessary for witnesses residing outside of English jurisdiction to be available at an arbitration.

However, the Court took notice that the crew and owner had not indicated any willingness to attend the arbitration proceedings and that the owner did not allow the crew members to be interviewed in the presence of the applicant’s representatives prior to the application.

In conclusion, Cleaver J found that there had been exceptional circumstances. He further concluded that the conduct of the owner and crew members after the sinking of the vessel made it likely that the crew members would not give evidence at the arbitration and that the applicant had satisfied the Court that the evidence would be lost if it was not taken on commission.

Comment

The Court’s decision in the MV “Ioannis NK” indicates its willingness, in certain cases, to exercise its jurisdiction to assist a claimant in obtaining evidence for the resolution of a maritime dispute in a foreign jurisdiction and clarifies the factors that it will take into account in exercising its discretion.

(1) An Anton Piller order is a court order that provides the right to search premises and seize evidence without prior warning.