IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

NAME OF SHIP: Olympic Countess

CASE NO. 242/2006 SCA

IN THE MATTER BETWEEN
Fortis Bank (Nederland) NV (Appellant)
and
Orient Denizcilik Turizm
Sanayive Ticaret A S (Respondent)

Judgment: per Scott JA

Ranking of claims in terms of s 11 of Act 105 of 1983 -- s 11 (4)(c)(v) does not include the claim of the person who pays the person who renders services to the ship.
Agents acquire no better rights than suppliers against a shipowner.
In recent judgment by the Supreme Court of Appeal, the court held that an agent will not acquire any better rights than a supplier against a shipowner in respect of the same claim.
Following an arrest of the MV “Olympic Countess” by an agent which was claiming monies due by the shipowner which the agent had disbursed to suppliers, the mortgagee bank, which was the only other creditor, challenged the agent’s claim on two bases. It argued firstly that, where a person (the agent in this case) pays a supplier on behalf of a shipowner, that person’s claim is not a “maritime claim” (as defined in the Admiralty Jurisdiction Regulation Act - AJRA) and only the original supplier’s claim would be a maritime claim. If the claim is not a maritime one, then arguably it would rank behind the mortgagee’s claim, if at all. The SCA dealt this argument short shrift.
The AJRA provides a preferential ranking for suppliers whose claims are brought within a year of them arising. The agent argued that, although the suppliers’ claims had arisen outside the one year time limit, it (the agent) had disbursed monies to the suppliers within the one year time limit ad was therefore entitled to rank ahead of the mortgagee. The mortgagee disputed this and the SCA found that the agent could not acquire any better claim than the suppliers would have had if they had claimed directly against the ship. Accordingly, the agent’s claim was found to rank behind the mortgagee, despite the fact that its disbursement was less than a year old. (full text here)

Summary Courtesy of Andrew Pike Attorneys <andrewpikeattorneys.com>

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Name of Vessel: "mv ROXANA BANK"
full text available (in PDF format)

CASE NO. 369/03
Reportable

In the matter between:
Swire Pacific Offshore Services (PTE) Ltd (Appellant)
and
mv "Roxana Bank" (First respondent)
The cargo Presently on board the mv "Roxana Bank" (Second respondent)

per: Scott, Farlam, Nugent, Conradie et Cloete JJA
Heard: 20 August 2004
Delivered: 16 September 2004

IN THE HIGH COURT OF SOUTH AFRICA NATAL PROVINCIAL DIVISION
(Exercising its Admiralty Jurisdiction and sitting as a Court of Appeal)

Name of ship: mv "Ya Mawlaya"

Appeal Case No: AR 598/97

Delray Shipping Corporation (Appellant)
and
Eridiana Spa (formerly CEREOL ITALIA SRL) (Respondent)

Magid J; Page J; Combrink J
Date delivered: 18 February 1999

Counsel for Appellant: Mr Shaw; Mr Mahomed
Counsel for Respondent: Mr Gordon; Mr Lopes

The Facts:

The Respondent as security for pending arbitration proceedings in London arrested the mv "Ya Rab" (‘the arrested vessel’) owned by the Appellant. The basis for the dispute was damage caused to a cargo of yellow soya beans carried on board the mv "Ya Mawlaya" (‘the guilty vessel); having been the property of the Respondent and having been owned by Vestman Shipping Company Ltd ("Vestman") while the said vessel was under demise charter with Kara Mara Shipping Limited ("Kara Mara") who were alleged to have been breached their contract of carriage by failing to restore the ship to a seaworthy condition prior to the transhipment.

After the vessel’s release from arrest (due to a material non-disclosure in the original ex parte application) the Respondent applied for a rule nisi calling on the Appellant to show cause why the mv "Ya Rab" should be arrested pending the return date or the furnishing of security in terms of section 5(2)(c) of the Admiralty Jurisdiction Regulation Act 105 of 1983 ("the Act").

The Respondent in its founding affidavit stated that Kara Mara was deemed ito s3(7)(c) of the Act to be the owner of the guilty vessel and that ownership and control of Kara Mara and the arrested vessel (owned by appellant) in turn vested in Roshanali R Merali and Hasnain Merali.

Meskin J had held that even though the Respondent had not established in the founding papers that Roshanali R Merali and Hasnain Merali personally controlled the companies that owned the two vessels, it had nevertheless been proven on a balance of probabilities on the founding papers that the ultimate beneficial ownership and control of the charterers and Delray was, at all times, vested in the same person or persons and that therefore the vessels were associated. This finding was based on the allegations in the Respondent’s replying affidavits (alleging that the Merali family in general owned/controlled the vessels) coupled with a failure of the Appellant to respond thereto and to identify who controlled the two vessels, having previously averred that he knew who they were.

On Appeal:

The Appellants did not seriously dispute that the requirements for a security arrest in terms of s5(3)(a) of the Act had been fulfilled save for the association criteria. (The requirements having been set out by Botha JA in the Cargo Laden & Lately Laden on Board the MV Thalassini AVGI v MV Dimitris 1989 (3) SA 820 (A) at 832I-833A as being (1) that there is a claim enforceable by an action in rem against the guilty ship or a ship associated to the ship in question (2) that a prima facie case had been established which is prima facie enforceable in the nominated forum and (3) that there is a genuine and reasonable need for security in respect of the claim). With regard to the association criteria, Mr Shaw for the Appellant stated that the deeming provision of s3(7)(c) was not applicable as the owner of the guilty vessel, being "Vestman" would be liable to the Respondent. (This point, in view of the court’s finding did not have to be decided).

The full bench reversed the findings of the court a quo in that it stated that the averments made by the Respondent in the replying papers regarding the Merali family in general controlling the two vessels was inadmissible and that association was not proven in the founding papers alone. The court argued that it was an elementary principle of motion proceedings that an application must stand or fall by its founding affidavit [SA Railways Recreation Club & Another v Gordonia Liquor Licensing Board 1953 (3) SA 256(C) at 260 D-E; Director of Hospital Services v Mistry 1979 (1)SA626 (A) at 635H-636B].

The court acknowledged Mr Gordon, for the Respondent’s, reliance on the dictum of Marais J in Transol Bunker BV v MV Andrico Unity and Others 1987 (3) SA 794 (C) in which the judge stated

"I can see no good reason why, if further grounds which would justify the arrest are thought to exist the party seeking to perpetuate the arrest should be prevented from advancing them in his opposing affidavits" and "[i]t would serve no good purpose to set aside an arrest, knowing full well that a sound basis for the arrest does indeed exist, merely because the party who obtained the order failed to rely upon it initially."

but held that the principle of the Andrico Unity should not be applied in the present case which was an application for the arrest and not the release of an associated vessel.

The court found that association had not been proven in the founding papers alone and stated that "the respondent committed itself to proving that the two persons named were indeed in control of the companies which owned the two vessels. As it failed to do so it was not entitled in reply to change course in order to claim that some other person or persons was or were in control thereof."

The appeal was upheld with costs including the costs of two counsel.

I disagree with finding about not allowing allegations in replying papers as not think correct interpretation of Andrico Unity.

Rapporteur: Arabella Bennett

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Name of Vessel: "MERAK S"
full text available (in PDF format)

CASE NO. 178/2000
Reportable

In the matter between:
Sea Melody Enterprises SA (appellant)
and
Bulktrans (Europe) Corporation (respondent)

per: Hefer AP, Nienaber, Farlam, Mpati JJA et Lewis AJA
Heard: 15 February 2002
Delivered: 27 March 2002

This was an appeal from the judgement of Niles-Dunér J in the Durban and Coast Local Division of the High Court who dismissed the appellant’s application for the reduction in the amount of the bank guarantee furnished to the respondent for the release of the ‘Merak S’ from arrest and for an order calling upon the respondent, at whose instance the vessel had been arrested, to furnish counter-security for the appellant’s proposed claim against the respondent.

Since the judgment of the court a quo, it became apparent that the respondent had not proceeded with its claims in the arbitration and that the appellant had obtained an order for the return of the bank guarantee furnished to the respondent. The appellant approached this court to exercise its discretion ito section 21A of the Supreme Court Act 59 of 1959 to hear the appeal and to dispose thereof by way of a declaratory order. Due to the ‘live issues’ involved, the court saw fit to exercise its discretion ito the abovementioned rule.

Applicant’s request for the reduction in the amount of the bank guarantee furnished to obtain the release of the vessel

The court a quo ruled that the guarantee furnished to the respondent did not constitute security in respect of which the court had the power ito section 5(2)(d) of the Admiralty Jurisdiction Regulation Act, 1983 (‘the Act’) to reduce the security. (see summary of reported High Court decision for details)

The appeal court stated that it was unfortunate that the legislature used the words ‘security’ and ‘undertaking’ without drawing a distinction between ‘security’, personal security in the form of a third party’s undertaking and an undertaking made by a debtor. The court a quo was however not correct in deciding that the guarantee furnished did not constitute security ito the Act for the following reasons:

• Ordinary language demands that the interpretation of a guarantee constitutes security, at least in the form of personal security;

• in England in 1973 a guarantee, which was acceptable to the plaintiff, was regarded in maritime legal circles as security;

• before the coming into operation of our 1983 Act, the English courts had the power to reduce the amount of bail or the amount of the guarantee provided instead of bail;

• it was common practise in South Africa in 1983 that vessels were released on the furnishing of P & I Club letters or bank guarantees. Bail bonds, cash deposits and the giving of guarantees to the court were seldom, if ever, encountered in practise;

• from a practical perspective, guarantees, as furnished by the appellant, constituted security as effectual as cash deposits and bail bonds and there was no compelling reason why Parliament would want to restrict the ordinary meaning of the word ‘security;’ and

• finally, the court reasoned that section 3(8) provides that "property shall not be arrested and security shall not be given therefore more than once in respect of the same maritime claim by the same claimant" and that it cannot be suggested that it was the intention to authorize the arrest or re-arrest of a property after a club letter of undertaking or a guarantee had been provided.

Held: The word ‘security’ as used in the Act also applies to bank guarantees as furnished. By contrast the word ‘undertaking’ must be taken to refer to undertakings which do not constitute personal security.

The applicant’s claim for counter-security

Niles-Dunér J relied on 3 grounds for rejecting the appellant’s claim for counter-security namely:

1. She argued that since the bank guarantee did not constitute security as envisaged by the Act, there no longer existed (ito section 5(2)(c)) ‘anything done’ or ‘to be done’ which the court might make conditional upon the provision of security to the appellant.

Held: The Appeal court, as stated above, was of the opinion that the guarantee given, constituted security for the purposes of the Act.

2. The court a quo agreed with the submissions of the respondent that the arrest of the appellant’s vessel was deemed to be continuing.

Held: The arguments advanced by the respondent were the same as the submissions made in the mv ‘Alam Tenggiri’ case and should be rejected for the same reasons that they were rejected in the ‘Tenggiri’ case.

3. Niles-Dunér reasoned that section 5(3) of the Act did not contemplate that it should be a condition of the arrest under section 5(3) or security in respect of an arrest that the other party’s counterclaim should be secured where it was not related to the arrest.

Held: A security arrest under section 5(3) should not be immune from the imposition of conditions under section 5(2)(c) which speaks of "any arrest…" The court in exercising its admiralty jurisdiction has been given wide powers by this section in order to achieve ‘a high degree of commercial convenience’ (The ‘Yu Long Shan’).

In the circumstances court a quo’s second basis for rejecting the appellant’s claim for counter-security was also not be upheld.

Ordered:

The appeal was allowed with costs and the order of the court a quo was set aside.

The court declared:

1. the bank guarantee furnished by the applicant for the release of the vessel, constituted security for the purposes of section 5(2)(d) and the court accordingly had jurisdiction to order the reduction of the security; and

2. it was within the powers of the court to order that the respondent give counter-security for the appellant’s proposed arbitration proceedings against the respondent in London.

Rapporteur: Arabella Bennett

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Name of vessel: ALAM TENGGIRI
full text available (in PDF format -- Adobe Acrobat Reader required.)

CASE NO. 159/2000
Reportable

In the matter between:

GOLDEN SEABIRD MARITIME INC (First appellant)
GOLDEN SEAGULL MARITIME INC (Second appellant)
and
ALAM TENGGIRI SDN BHD (First respondent)
MOUSAKA INCORPORATED (Second respondent)

CORAM: Hefer ACJ, Scott, Mpati, Mthiyane JJA and Conradie AJA
Date of Hearing: 3 September 2001
Delivery Date: 25 September 2001

The Alam Tenggiri had been arrested by the appellants, to obtain security for their claims against the second respondent. These claims related to a dispute between the parties regarding two vessels, the Theano and the Ludovica, bought by appellants from second respondent, which they (the appellants) since maintained not to be suitable to carry a corrosive cargo. Appellants had The Alam Tenggiri arrested, on the basis of her being associated to the two vessels. Respondents offered two letters of undertaking from Skuld P&I, later to be replaced by Scotia Bank guarantees, upon which The Alam Tenggiri was released. Subsequent to the release, respondents moved Hurt J to grant an order setting aside the arrest holding that the Alam Tenggiri was in fact not associated to the Theano or the Ludovica. Hurt J refrained from ordering the return of the Scotia Bank guarantees, holding that he had no jurisdiction in respect of the guarantees, since the parties conferred such on the High Court of Justice in London. Whilst respondents sought an order in the UK declaring that the guarantees fell away upon the setting aside of the arrest, appellants, wanting to protect the integrity of the guarantees, approached the Supreme Court of Appeal for a reversal of the order of Hurt J.

It was argued on behalf of the appellants that upon the release of the vessel from arrest, the security arrest order lapsed, hence there existed no arrest order to set aside, which resulted in the order of the court a quo being a futility.

In denying the appeal, Held: Where security is lodged with the registrar, such security notionally replaces the arrested ship and may be dealt with in the same way as the ship might have been had it been kept under arrest. Where no security is lodged with the registrar, but a private agreement to refrain from arrest or to release a vessel from arrest is reached, although nothing remains under the control of the court, the AJRA provides in s 3(10)(a) for such a private undertaking to be equated with security lodged with the court This section uses the device of the "deemed arrest" to preserve the arrest where the vessel is released from arrest, or where the arrestor refrains from arresting, after security has been lodged or where a private undertaking has been given by the arrestee. A private undertaking, such as a Club Letter, will therefore invoke the deeming provisions of sec 3(1)(a).

It was also argued by appellants that s 3(10)(a) of the AJRA was not applicable to a security arrest, and that accordingly s5(3)(b) only served to bring property arrested as security within the ambit of s3(8), (9) and (10).

In rejecting this argument, Held further that: Property arrested as security, is to be treated in the same way as property otherwise arrested under section 3(5) of the AJRA. This is to be concluded from section 5(3)(b) of the AJRA. Nothing in the Act supports a narrower construction.

On the question of whether there had been association of the vessels, the Supreme Court of Appeal concurred in the judgement in the court a quo.

Rapporteur: Johan H. Botes

Name of Vessel:  mt ARGUN
Full text available (in PDF format - Adobe Acrobat Reader required).

CASE NO: 166/2000

In the matter between:

THE SHERIFF OF CAPE TOWN -- Appellant
an
THE MT ARGUN, HER OWNERS AND
ALL PERSONS INTERESTED IN HER -- First Respondent
SEA-TECH PTE LIMITED -- Second Respondent
OFFSHORE BUNKERING GROUP LIMITED -- Third Respondent
THE MASTER & CREW OF THE MT ARGUN -- Fourth Respondent
THE FORMER CREW OF THE MT ARGUN -- Fifth Respondent

CASE NO: 309/2000

In the matter between:

THE SHERIFF OF CAPE TOWN -- First Appellant
VICTORIA & ALFRED WATERFRONT CO (PTY) LTD -- Second Appellant
and
THE MT ARGUN, HER OWNERS AND ALL
PERSONS INTERESTED IN HER -- First Respondent
THE GOVERNMENT OF THE RUSSIAN FEDERATION -- Second Respondent

Judgement: 1st June 2001

Liability of arresting parties to Sheriff for expenses incurred in preserving ship arrested in terms of Act 105 of 1983 – On the facts, Sheriff not entitled to order for sale of ship to recover such expenses.

SCOTT JA:

Two appeals set down for hearing together, both concerned with expenses incurred in preserving MT Argun first arrested at Table Bay 25th May 1999. No security put up to procure the release of the vessel. Sheriff of Cape Town obliged to make necessary disbursements and incur liability in large amounts to preserve the vessel.

Sheriff made application to High Court in Cape Town for an order stating that arresting parties be jointly or severally liable or alternatively that the vessel or her owners be liable for the sum of R 78 908,10 already incurred and for expenditure reasonably incurred in the future. Also that in the event of any arresting party not paying his arrest would lapse or in the event of the owner not paying the Sheriff would be entitled to apply for the sale of the vessel.

On 27th September 1999 Cleaver J granted absolution from the instance with costs against the Sheriff. Vessel remained under arrest. By March 2000 expenses incurred by the Sheriff were approximately R1.2 million. Sheriff again approached the court together with Victoria & Alfred Waterfront Company (Pty) Ltd as second applicant. A rule nisi was issued calling on the vessel, her owners and all persons interested in her as first respondent and the Government of the Russian Federation (owner) as second respondent to show cause why the vessel should not be sold and a referee appointed to receive claims against a fund established with the proceeds of the sale. On 13th June 2000 Erasmus AJ discharged the rule with costs.

Appeals against judgements of Cleaver J and Erasmus AJ respectively.

Admiralty Rule 21 (1) provides that property arrested shall be kept in the custody of the Sheriff “who may take all such steps as the court may order or as appear to the Sheriff to be appropriate for the custody and preservation of the property…” Notwithstanding the word “may” the Rule is construed as imposing a duty on the sheriff.

The consequences of Cleaver J’s judgement was to place the Sheriff in an untenable position. Although an incola and an officer of the court he was obliged to incur liability for and pay out large sums of money in order to preserve a foreign vessel while the parties who are all peregrini litigate at their leisure. Litigation had already been under way for two years. Neither the Act nor the Rules contain express provisions protecting the Sheriff in such a situation. S11 (4) (a) only applicable once a fund has been established.

Remedies available to a Sheriff pendente lite or prior to the establishment of a fund to be considered. 

Held, that in considering his rights against the arresting parties, the Sheriff was entitled to be reimbursed for his expenses regardless of whether Roman Dutch or English Admiralty law as at 1983 is to be applied.

Held that the Sheriff was entitled to an order declaring each arresting party to be jointly and severally liable in respect of the period during which the vessel was under arrest at the instance of that party, with other arresting parties, to the extent that the vessel was under arrest at their instance during the said period, for all the Sheriff’s expenditure reasonably incurred in the preservation of the vessel as contemplated in Admiralty Rule 21(1).

Section 5 (2) (c) of the Act affords the court wide discretion to order any arrest to be subject to such conditions as to expenses as appears to the court to be just. The continued arrest of the MT Argun at the instance of each arresting party ought to have been made conditional upon that party reimbursing the Sheriff within 10 days of demand for the latter’s reasonable expenses for the preservation of the vessel as contemplated in Rule 21 (1).

First appeal against arresting parties therefore successful.

With regard to whether pendente lite and while the vessel is still detained owners can be compelled to pay the Sheriff’s disbursements and fees relating to the preservation of the vessel. A ship is arrested and kept in custody not for the benefit of the owners but for the benefit of the arresting parties. Owners would not in the normal course of business have incurred the expenditures claimed. Owners have not been enriched at the Sheriffs expense. Held therefore that the Sheriff cannot succeed on this ground.

As to the argument that the Sheriff was acting as a negotiorum gestio in preserving the vessel, it is apparent that the Sheriff was managing the affairs of the arresting parties by preserving their security, not the owner’s.

Therefore as far as the claim against the owners is concerned the first appeal must fail.

With regard to the second appeal brought by the Sheriff and the Victoria & Alfred Waterfront Company, this appeal was based on the grounds that the owners had no defence to their claim and had entered an appearance to defend merely for the purpose of delay and also that as a result of the decision in the first application the appellants were in an intolerable position financially without any further remedy.

Found that as the Sheriff had the ship as security he would ultimately be paid. The value of the vessel was such that the appellants claim would remain adequately secured for a considerable time. The appellants were therefore not without remedy and the relief sought against the arresting creditors was wrongly refused, there is no basis therefore for holding Erasmus AJ’s decision not to order the sale to be incorrect.

Second appeal accordingly failed.

Held that but for the refusal of the relief sought against the arresting parties in the first application the appellants would not have arrested the vessel to recover their expenses. Therefore the appellants ought not to be liable for any contribution towards those expenses.

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

In the matter of
THE MV “FORUM VICTORY”
AND THE FUND CONSTITUTING THE PROCEEDS OF
THE SALE OF THE MV “FORUM VICTORY”

Between:
DEN NORSKE BANK ASA -- Appellant
And
HANS K MADSEN C V -- 1st Respondent
F.I.M.H. LIMITED -- 2nd Respondent
I SEBAGLOU – S KAKARINOS OE -- 3rd Respondent
GRIFFIN MARINE SA -- 4th Respondent

Admiralty – S11 (4) (c) Admiralty Jurisdiction Regulation Act 105 of 1983 – when does a claim ‘arise’ for the purposes of the Act.

SCOTT JA.

MV “Forum Victory” had been arrested at the instance of 1st Respondent and sold in pursuance of an order in terms of S 9 of the Act. A fund was constituted with the proceeds of the sale and a referee appointed to investigate all claims. Referee then lodged a report on the ranking of claims in terms of S 11 of the Act.

The appellant, Den Norske Bank ASA (the ships mortgages) objected to the ranking on the grounds that the claims of various creditors, including those of the respondents, arose more than one year before the commencement of proceedings to enforce them or before submission of proof to the referee. Appellant contended that these claims therefore did not constitute claims within the meaning of S 11 (4) (c) (v) and should be ranked after the appellants claim. However, appellants claim was substantial and would leave nothing in the fund for the claims ranking after it.

Natal Provincial Division (Full bench) found in favour of respondents, that a claim arises when it becomes due and payable, not when it comes into existence.

ON APPEAL:

Claims participating in a fund are listed in S 11 (4), and their order of ranking in S 11 (5). The claims of the respondents fall under S 11 (4) (c) (v) of the Act. If they arose when they became due and payable they would have arisen “not earlier than one year before the commencement of proceedings …. or before the submission of proof” and would therefore constitute claims within the meaning of S 11 (4) (c). However, if they arose earlier than one year before the commencement of proceedings to enforce it or before the submission of proof they would be ranked under S 11 (4) (f) – “any other maritime claim”.

A claim of a mortgagee falls under S 11 (4) (d).

Claims falling within the ambit of S 11 (4) (c) clearly include those which are due and payable, and hence enforceable. This is clear from the words, “before the commencement of proceedings to enforce it”.

Reference to “the submission of proof” in S 11 (4) (c) relates to the submission of claims to a referee as per S 10 A. No doubt that a claim submitted to a referee falls within the ambit of S 11 (4) (c).

But per S 10 A (4) (a) a claim submitted to a referee need not yet be enforceable, therefore a claim referred to in S 11 (4) (c) need not yet be enforceable.

Held – Reading S 11 (4) (c) together with S 10A (4) (a) suggests that the expression “a claim which arose” in S 11 (4) (c) is to be understood as referring to a claim which came into existence, and not a claim which became enforceable.

This is supported by the recognition in our law of a distinction between a claim arising and a claim which is due and payable.

The appeal accordingly succeeded.

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Name of Vessel: MV "Recife"

Case No. 584/97

In the matter between:
Control Chemicals (Appellant)
And
Safbank Line Limited and Three others (Respondents)
(full text available in .PDF format)

The MV Recife had aboard a container of Klorman Chlorine cartridges which are listed in the International Maritime Dangerous Goods Code within class 5.1 – Oxidizing substances. This information therefore had to, and indeed was communicated to the first respondent as Carrier.

The respondent’s claim against the shipper was founded both in contract and delict. The respondents abandoned there claim in delict however, and, rightly according to the court, only pursued their claim in contract.

The contract was governed by the Hague Visby rules as incorporated in the South African Carriage of Goods by sea Act 1 of 1986, and in terms of section 6(1) of the Admiralty jurisdiction regulation Act, Roman Dutch law was to apply. The respondents had based their claim on the basis that, although they were properly informed of the contents of the container, the contents of the container were defective or had been improperly stowed in the container. Thus it was alleged that the agent or master of the carrier had not consented to the shipment of the goods "with the knowledge of the nature of their character" as contemplated by Article IV, rule 6 of the Hague Visby rules.

The respondents had thus to prove that on a balance of probabilities, the fire was caused due to the defective or contaminated state of the chlorine cartridges. If this could be proved, it had to then be decided whether the consent of the carrier or master was vitiated by reason of the defective or contaminated state of the product or its improper stowage.

Held: that the respondents had failed to discharge the burden of proof that the explosion was caused by the defective or contaminated state of the cargo, and had thus failed to prove that shipment of the goods was without the consent of the carrier, master or agent. The court thus granted the applicants absolution from the instance.