This was an appeal from MV 'MSC Susanna' v National Ports Authority of South Africa [2020] ZAKZPHC 51 (CMI1026).

On 10 October 2017, during a severe storm, the MSC Susanna broke its moorings in the port of Durban and collided with several vessels, including the FNS Floreal. The Floreal was a French naval vessel under the control of the second respondent, the Ministère des Armées (the Ministry) of the French Republic. The MSC Susanna also allided with cranes and other infrastructure owned by the first respondent, Transnet (SOC) Ltd - The National Ports Authority of South Africa (the NPA). The NPA sued the appellants (the owners and underwriters and the demise charterer of the MSC Susanna) for damages of ZAR 23 million. The appellants applied for a declaration of non-liability in relation to the damages to the Floreal. The Ministry lodged a counterclaim for nearly EUR 10 million.

On 7 November 2019, the appellants commenced a limitation action against the NPA under s 261(1)(b) of the Merchant Shipping Act 57 of 1951 (the MSA), and sought the joinder of the Ministry to the limitation action. This application was resisted by the Ministry on the ground that limitation did not apply to the Floreal, as a foreign naval vessel, by virtue of s 3(6) of the MSA. That argument was upheld by Mngadi J in the Court below. The appellants appealed to the Supreme Court of Appeal.

Section 261(1)(b) of the MSA provides:

The owner of a ship, whether registered in the Republic or not, shall not, if ... any loss or damage to any property or rights of any kind, whether movable or immovable, is caused without his actual fault or privity -

(a) ...

(b) if no claim for damages in respect of loss of life or personal injury arises be liable for damages in respect of loss of or damage to property or rights to aggregate amount exceeding 66.67 special drawing rights for each ton of the ship’s tonnage.

The Ministry contended that s 261 did not apply in relation to its claim against the appellants. Section 3(6) of the MSA states that the 'provisions of this Act shall not apply to ships belonging to the defence forces of the Republic or of any other country'. The Floreal was part of the French navy, and therefore part of the French defence force.

However, the appellants argued that s 261(1)(b) conferred an internationally recognised right upon the owners of the MSC Susanna to limit their liability, and that they were invoking limitation against the Ministry, as the party making a claim against them, and not against the Floreal. They submitted that the right to limit is conferred in relation to claims for loss of life or personal injury, or any loss of or damage to any property of any kind, whether movable or immovable. The effect of the Ministry's contention was to introduce an unwarranted qualification to the broad and unqualified words 'any property of any kind' by adding 'save a naval vessel owned by the defence force of any nation'.

Held: The appeal is upheld. The order of the High Court is set aside and replaced by the following order:

The rule nisi is confirmed in the following terms:

1. The Ministry is joined as a defendant in the limitation action instituted by the appellants.
2. The appellants are granted leave to amend the pleadings to plead their cause of action against the Ministry.
3. The Ministry is ordered to pay costs.

The right of shipowners and certain other parties to limit their liability for damages arising from the operation of the vessel is an ancient one. Legislation providing for shipowners to limit their liability to the value of the vessel is to be found in statutes dating from the 1600s in various parts of Europe, particularly the Netherlands. It was introduced in England in 1733 by the Responsibility of Shipowners Act, which limited the liability of shipowners to the value of the ship, its equipment and any freight due for the voyage. Similar legislation was introduced in the USA in 1851. Three international Conventions on limitation of liability by shipowners were concluded in the last century, although complete uniformity has not been achieved. Limitation has been described as 'a time honoured and internationally endorsed practi[c]e' which is now embodied in domestic legislation: Nagos Shipping Ltd v Owners, Cargo Lately Laden on Board the MV Nagos 1996 (2) SA 261, 271G-H (D) (CMI1051). Until the passage of the MSA in 1951, South Africa did not have domestic legislation dealing with limitation. The Merchant Shipping Act 1894 (UK) remained of application in South Africa.

The issue is the proper interpretation of ss 261(1)(b) and 3(6) of the MSA. The terms of s 261(1)(b) are clear and comprehensive. The right to limit is given to the owner of a vessel, an expression given an extended meaning in s 263(2), in respect of all loss or damage to any property or rights of any kind, whether movable or immovable. That language encompasses all types of property, without qualification. It is clearly wide enough to include the loss or damage embodied in the claim by the Ministry. That means that the focus must necessarily fall on the effect of s 3(6).

It is indisputable that s 3(6) excludes the bulk of the provisions of the MSA from application to both South African and foreign vessels forming part of their country's defence forces. These vessels can conveniently be referred to as naval vessels, although it is conceivable that there might be vessels forming part of branches of the defence force other than the navy. Other areas of the MSA are more problematic. In its original form, the MSA included in Ch VII (ss 293-306 of the MSA) provisions in respect of wreck and salvage, that have now been repealed by the Wreck and Salvage Act 94 of 1996, which incorporates the provisions of the Salvage Convention 1989 into domestic law. The Wreck and Salvage Act is binding on the State, but art 4.1 of the Salvage Convention excludes warships and all non-commercial vessels owned or operated by States and entitled at the time of salvage operations to sovereign immunity, unless the State decides otherwise. The effect is that a salvor in relation to such a vessel does not enjoy the protection of the Convention. That does not, however, mean that a salvor may not provide salvage services or receive a salvage reward. It merely means that the salvor must deal with the State concerned in relation to such services.

Chapter 5, Pt IV of the MSA differs from these other provisions in that, save in respects of two matters of no relevance to vessels other than South African-registered vessels, it is not concerned with the operation of vessels, the treatment of crew, or issues of safety. Its primary focus is on two areas of shipowner liability. First, it deals with the division of loss between shipowners in the event of a collision under s 255; liability for personal injury under s 256; and claims for contribution against joint wrongdoers in relation to the latter claims under s 257. Second, under s 261 it provides for the right of a shipowner and certain other parties to limit their liability arising out of an incident causing loss of life or physical injury to persons, or loss of or damage to property, or a combination of both, where these were caused without the actual fault or privity of the shipowner. These two areas of liability are not concerned with regulating the operation of the vessel or vessels involved in that incident. In the case of a collision the question is who, and if more than one vessel is involved, in what proportions, those responsible for the collision shall bear the loss. Where personal injury has been caused, it is the liability for damages and rights of contribution between joint wrongdoers that are regulated. In the case of limitation, the concern is with the extent of the liability of the owner of the harm-causing vessel.

It is noteworthy that each of these is concerned with the liability of owners of ships to third parties, and claims against and between owners of ships. That the claims arise out of the operation of the ships is incidental. The focus is on the legal liability of the owners and, in the case of limitation claims, other parties such as charterers, managers and operators of ships. These are purely commercial matters concerning the rights and obligations of owners of ships. This is important in the light of the wording of s 3(6), because it says that the provisions of the MSA shall not apply 'to ships'. It does not say that its provisions will not apply to the owners of ships. Much less does it say that the MSA does not apply to defence forces, so as to preclude owners of merchant ships from invoking its provisions by, for example, seeking an order for the division of loss after a collision, or a contribution to the damages arising from jointly caused personal injury, or an order limiting their liability.

Linguistically, s 3(6) of the MSA is not apt to exclude the invocation of limitation by the owners of the MSC Susanna. That straightforward view is the same as that of Kerwin and Estey JJ of the Supreme Court of Canada in construing a similarly worded provision in the Canada Shipping Act 1934 in Her Majesty the Queen v Nisbet Shipping Co Ltd 1953 CanLII 77 (SCC), [1953] 1 SCR 480, 492 (SCC). Section 261 is concerned with the liability of an owner of a ship, not the ship itself. Whatever the precise nature of an action in rem, the underlying liability will be borne by the owner of the ship. Where the action is in personam, the position is even clearer. As to the damaged ship, the claim arising from that damage is the claim of that ship's owner. Ships do not bring claims.

The Ministry also argued that the title of the MSA - the Merchant Shipping Act - and the long title 'To provide for the control of merchant shipping and matters incidental thereto' indicated that it was not concerned with naval vessels. It said that this purpose was manifested in s 3(6) of the MSA. The difficulty with this submission is that it overlooked the words 'and matters incidental thereto'. One matter of great concern to owners of merchant ships is the possibility of claims arising against them in the course of the operation of their ships. Chapter 5, Pt IV deals with that issue in a manner that is consistent with international practice in maritime matters. The MSC Susanna is a merchant ship and was engaged in merchant shipping at the time of the incident giving rise to the claims against the appellants. Its owners invoked a provision of the MSA that in terms they are entitled to invoke. Allowing the appellants to limit their liability in relation to the claims in this case is clearly something incidental to merchant shipping.

No discernible reason of policy supports a different construction of s 261(1)(b). Limitation of liability exists as a matter of policy. None of the Conventions on limitation exclude its invocation in respect of claims arising from damage done to or by naval vessels. The Court was not referred to any provisions in the laws of any other maritime State that would preclude a claim in respect of damage done to a naval vessel from being required to participate along with other creditors in the distribution of a limitation fund. France was an original signatory to the LLMC 1976, which contains no exemption from the invocation of limitation for naval vessels: see The Heidberg, Court of Cassation, Commercial Chamber, 22 September 2015 (CMI203). Sixty-three other States, including virtually all major maritime nations, with the exception of the United States of America, are either signatories to, or have ratified, the Convention. An exemption from the right to invoke limitation in respect of claims by naval vessels would therefore be inconsistent with international practice.

There are also incongruities arising from the Ministry's argument. Section 261 deals with three situations, namely, an occurrence causing loss of life or personal injury; an occurrence causing loss or damage to property or rights; and an occurrence that causes both loss of life or personal injury and loss or damage to property or rights. Had the incident giving rise to this case resulted in loss of life or personal injury to naval personnel on the Floreal, they and/or their dependents could have brought actions against the appellants to recover damages. These claims would have been subject to limitation. Nothing in s 3(6) suggests that the officers and crew of the Floreal would enjoy some special exemption from the application of limitation. It seems incongruous to say that the Ministry, as the owner of the Floreal, can do what its officers and crew cannot, and escape the application of limitation. A second incongruity is that the effect of the Ministry's construction would be that vessels belonging to the defence force of South Africa or another State, would be able to resist any limitation of their claims under s 261, but other vessels owned by the South African State or any foreign State would not.