THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 1085/ 2019

In the matter between:

MARTRADE SHIPPING AND TRANSPORT GmbH       APPELLANT

and

UNITED ENTERPRISES CORPORATION
FIRST RESPONDENT
MV 'UNITY'

SECOND RESPONDENT

Neutral Citation: Martrade Shipping and Transport GmbH v United
Enterprises Corporation and MV 'Unity' (1341/18) [2020] ZASCA 120 (2
October 2020)
Coram:
NAVSA, MAKGOKA and SCHIPPERS JJA and EKSTEEN
and GOOSEN AJJA

Heard:
31 August 2020
Delivered:  This judgment was handed down electronically by circulation
to the parties’ legal representatives by email, publication on the Supreme
Court of Appeal website and release to SAFLII. The date and time for hand-
down is deemed to be 09h45 on 2 October 2020
Summary: Interpretation of court order – manifest purpose of the order –
consideration of language used in light of ordinary rules of grammar – whole
of the order to be read – where ambiguous a sensible, practical interpretation
to be adopted which fosters purpose for which order granted.

ORDER

On appeal from: The KwaZulu-Natal High Court, Pietermaritzburg (per
Bezuidenhout, Gyanda and Chili JJ) sitting as court of appeal:
1. The appeal is upheld with costs.
2. The order of the court below is set aside and substituted as follows:
‘(a) The appeal is upheld with costs, including the costs related to the
withdrawn cross-appeal;
(b) The order of the court below is set aside and substituted as follows;
“The application is dismissed with costs”.’

JUDGMENT

Goosen AJA (Navsa, Makgoka and Schippers JJA and Eksteen AJA
concurring)

[1] This appeal concerns the proper interpretation of a court order granted
in relation to a claim for security in a maritime dispute. The central question
is whether the order obliged the furnishing of security with a period of 15 days
of the date of granting the order.

[2] The principles which apply to the interpretation of court orders are well-
established.  Trollip JA observed in Firestone South Africa (Pty) Ltd v
Gentiruco AG1 that the same principles apply as apply to construing
documents. Thus,
‘..(T)he court’s intention is to be ascertained from the language of the judgment or order
as construed according to the usual, well-known rules… Thus, as in the case of a document,
the judgment or order and the court’s reasons for giving it must be read as a whole to
ascertain its intention.’

[3] The starting point, it was held in Finishing Touch 163 (Pty) Ltd v BHP
Billiton Energy Coal South Africa Limited and others2, is to determine the
manifest purpose of the order. This was endorsed by the Constitutional Court
in Eke v Parsons3. This court, in Natal Joint Municipal Pension Fund v
Endumeni Municipality4, described the process of interpretation as involving
a unitary exercise of considering language, context and purpose. It is an
objective exercise where, in the face of ambiguity, a sensible is to be preferred
to one which undermines the purpose of the document or order.

The facts

1 Firestone South Africa (Pty) Ltd v Gentiruco AG 1977 (4) SA 298 (A) at 304; [1977] 4 All SA (A) at 604.
2 Finishing Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Limited and others 2013 (2) SA
.204 (SCA) para [13] [2012] ZASCA 49.
3 2015 (11) BCLR 1319 (CC) para [29].
4 2012 (4) SA 593 (SCA) para [18].

[4] The appellant, Martrade Shipping and Transport GmbH (Martrade
Shipping) caused the second respondent (the MV Unity) to be arrested in the
Durban port on 21 February 2014. The arrest was in terms of s 5 (3) of the
Admiralty Jurisdiction Regulation Act 5 (the Admiralty Act) to provide
security for Martrade Shipping’s claims against the first respondent , United
Enterprises Corporation, (United Enterprises) in ongoing arbitration
proceedings in London (the arbitration proceedings). United Enterprises
thereafter gave a letter of undertaking as security for the claims and obtained
the release of the MV Unity from arrest. The MV Unity however, was deemed
to be under arrest in terms of s 3 (10) of the Admiralty Act.

[5] In April 2014 United Enterprises brought an application in the
KwaZulu-Natal Division of the High Court (the high court) to set aside the
arrest of the MV Unity. In the event that the arrest was not set aside, United
Enterprises sought counter-security for its claims against Martrade Shipping
in the arbitration proceedings. The application was dismissed. However, it
granted the application for counter security. It is this order which is the subject
of the interpretation dispute.

[6] The relevant part of the order read as follows:

‘2.1
The respondent [Martrade Shipping] is directed to give security in a form
acceptable to the applicants, alternatively to the Registrar of the above Honourable Court
in the event of the parties not reaching agreement, in the amount of US$ 978 868.69 within

5 105 of 1983.

fifteen (15) days of the gran.t of this Order in respect of the first applicant’s [United
Enterprises] claim in the London arbitration proceedings;6
…
2.2
Failing compliance with paragraph 2.1 above within thirty (30) days of the date of
granting this order, the respondent [Martrade Shipping] is directed to return to the
applicants [United Enterprises] the letter of undertaking given by the applicants pursuant
to the arrest order of 21 February 2014, and the arrest of the second applicant [MV Unity],
shall lapse.’

[7] It was common cause that the 15-day period in paragraph 2.1 of the
order expired on 18 January 2017, and that the 30-day period in paragraph 2.2
expired on 5 February 2017. Martrade Shipping’s insurer tendered a letter of
undertaking as security on 17 January 2017. United Enterprises refused to
accept the tendered undertaking. Accordingly, on 18 January Martrade
Shipping referred the determination of the form of security to the registrar for
a decision. The registrar approved the tendered security on 1 February 2017
and it was provided to United Enterprises on that date.

[8] On 22 March 2017 the respondents commenced an application to set
aside the directive issued by the registrar on 1 February. They also sought
orders declaring that the arrest of the MV Unity had lapsed, and directing the
return of the letter of undertaking provided by United Enterprises. That
application was heard by Maharaj AJ who, on 15 March 2018, granted the
relief sought. The order also provided for the reduction of the amount of
security provided by Martrade Shipping to an amount of US$500 000.

6 The other part of the order sets out, in a number of sub-paragraphs, specified claim amounts and specified
interest claims. These are not reproduced here since they are not relevant in determining the purpose and
meaning of the order.

[9] Martrade Shipping appealed against the order of Maharaj AJ declaring
the provision of security out of time and that the arrest had lapsed. United
Enterprises prosecuted a cross-appeal against the order reducing the security
to be provided to US$500 000. The appeal was heard on 7 June 2019. By then
the cross-appeal issue had become moot and it was withdrawn subject to the
costs being costs in the appeal. On 28 June 2019 the full court dismissed the
appeal. The appeal is with the special leave of this court.

The purpose of the order of 23 December 2016
[10] The description of the background to the present appeal points to an
essential underlying purpose of the order to be interpreted. What was before
Henriques J was a common conundrum faced in maritime claims: the
balancing of the interests of contending parties to security for their claims
where the dispute is being adjudicated in a foreign jurisdiction and where the
effectiveness of a future judgment must be ensured.

[11] In MV NYK Isabel; Northern Endeavour Shipping Pte Ltd v Owners of
the MV NYK Isabel and Another 7 this court set out the approach to the
resolution of such conundrums in the exercise of a court’s admiralty
jurisdiction.
‘The [Admiralty] Act is a special statute dealing with maritime matters and it is directed at
meeting the needs of the shipping industry in enforcing maritime claims. It provides the
Court with very extensive powers to deal with maritime cases. In regard to the breadth of
these powers I draw attention to section 5(1), which empowers the Court, to join a person
as a party "notwithstanding the fact that he is not otherwise amenable to the jurisdiction of

7 MV NYK Isabel; Northern Endeavour Shipping Pte Ltd v Owners of the MV NYK Isabel and Another
2017 (1) SA 25 (SCA) para [44] – [45] (Northern Endeavour).

the Court", and to section 5(2) (a), which provides that a Court may decide any matter
arising in connection with a maritime claim "notwithstanding that any such matter may not
be one which would give rise to a maritime claim". These powers take account of the reality
that maritime defendants are mobile and transitory in their presence in any particular
jurisdiction. Perforce they compel maritime claimants to become "wandering litigants of
the world", in the colourful expression of Didcott J recorded in The Paz, but without the
pejorative overtones with which he used it. In order to address this problem the Act
provides wide-ranging powers of arrest, both for the purpose of instituting actions in South
Africa and to enable claimants to obtain security for proceedings in other jurisdictions.
It follows in my view that the provisions of the Act should be given a generous
interpretation consistent with its manifest purpose of assisting maritime claimants to
enforce maritime claims. That construction is also consistent with the right of access to
Courts afforded to everyone in terms of section 34 of the Constitution. There is, however,
a need for balance when the Courts exercise the expansive powers of arrest and attachment
of vessels embodied in the Act. Section 5(2) (b) and (c) give Courts the means to balance
the interests of claimant and defendant by ordering counter-security in appropriate cases
and attaching conditions to orders of arrest or attachment. Thus, it is commonplace for an
arrest to be subject to the provision of security for the costs of an application to set the
arrest aside, or for any loss suffered in consequence of that arrest if it is subsequently set
aside.’ (Footnotes omitted)

[12] The court went on to state that where the requirements for security and
counter-security are established and the merits of the claims are evenly
balanced ‘considerations of fairness suggest that either both parties should
have security or neither’.8

[13] It is in the light of these general principles that the order of Henriques
J must be understood. She stated in her judgment that the requirements of s 5

8 Northern Endeavour par [58].

(3) of the Admiralty Act were met. She was therefore satisfied that an order
be made in terms of s 5 (2) (c) of that Act.  The section provides that a court
may, in the exercise of its admiralty jurisdiction,
‘(c) order that any arrest or attachment made or to be made or that anything done or to be
done in terms of this Act or any order of the court be subject to such conditions as to the
court appears just, whether as to the furnishing of security or the liability for costs,
expenses, loss or damage caused or likely to be caused, or otherwise;’
It is apparent therefore that Henriques J considered that counter-security for
United Enterprises’ claims should be provided.

The meaning and effect of the order
[14] The appellant’s argument was that the 15-day period provided in
paragraph 2.1 of the order was not to be read as the period within which the
security was to be furnished. Paragraph 2.2 qualifies paragraph 2.1 by
providing for compliance within 30 days of the date of the order.

[15] Counsel for the respondents however, argued that paragraph 2.1 of the
order must be read to mean that Martrade Shipping was obliged to deliver
security for the amount stipulated within 15 days of the date of the order. The
15-day time period was one that applied to both circumstances envisaged by
the order, irrespective of whether the form of security was agreed between the
parties or it was determined by the registrar.

[16] Clause 2.2 of the order, if seen in this light, relates not to the provision
of security but to the re-delivery of the letter of security which had been
provided to secure the release of the MV Unity from arrest. Thus the 30-day
period stated in the order is not to be construed as a period within which

security could be furnished, nor as upon expiry of which the arrest lapsed. The
30-day period was therefore to enable the administrative process of
surrendering the letter of undertaking to occur.

[17] There are, as I shall demonstrate, several difficulties with this
construction. There is nothing in the record or indeed in the prevailing
circumstances to suggest that re-delivery of the letter of undertaking required
any elaborate administrative process. Nor was it a matter which the court was
called upon to consider and to which it applied its mind. Counsel conceded
that in this instance no such ‘administrative’ considerations arise. It was also
conceded that the terms of the letter of undertaking are such that upon the
lapsing of or release from the arrest, the causa upon which the letter could be
perfected falls away. The re-delivery or return of the letter of undertaking
carried no consequence.

[18] Moreover, there are textual difficulties with the construction advanced
on behalf of the respondents. Paragraph 2.1 employed the word
‘alternatively’. In doing so it posited two options or possibilities which
governed the furnishing of security. The first option was the provision of
security in a form acceptable to United Enterprises, ie in a form agreed
between the parties. The second option arose in the event that agreement was
not reached. In that event the registrar was to determine the form of security.
These options accord with the practice that governs the provision of security.
The textual difficulty arises with the phrase ‘within fifteen days of the grant
of the order’. It either qualified the giving of security in a form which was
agreed or gave rise to a textual conflict with paragraph 2.2 of the order.

[19] Paragraph 2.1 of the order dealt with two distinct issues, namely the
obligation to furnish security, and the determination of the form in which
security was to be provided. Paragraph 2.2 on the other hand, dealt with the
consequences of non-compliance with the obligation to furnish security. It
also dealt with two distinct issues, namely the lapsing of the arrest of the MV
Unity and the return of the letter of undertaking.

[20] Counsel for the respondents suggested the 30-day period concerned
only the delivery of the letter of undertaking. That is not how the order reads.
The phrase ‘within 30 days of the date of this order’ qualifies ‘the failure to
comply’ with paragraph 2.1 of the order. It does so in a grammatical structure
that describes the consequences of non-compliance, namely the directive to
return the letter of undertaking and the lapsing of the arrest of the MV Unity,
as flowing from that failure to comply.

[21] Thus, when paragraph 2.2 is read as it was written, the different time
periods in 2.1 and 2.2, sensibly interpreted, must mean that the court intended
that a period of 15 days be available to the parties to reach agreement as to the
form of security and a further 15 days within which to provide security in a
form acceptable to the registrar. A court is enjoined, where ambiguity presents
itself, to interpret a document or order so as to avoid impractical, unbusiness-
like or oppressive consequences which would undermine the purpose of the
order. 9

9 Endumeni para [26].

[22] Henriques J afforded the parties an opportunity to agree to the form of
security to be provided. This, in my view, is what paragraph 2.1 was intended
to allow. When the order is read as a whole and is considered in context, the
construction applied by the full court cannot be sustained. That interpretation
was based upon a misreading of paragraph 2.2 of the order. At para 13 of its
judgment the full court held that:
‘Paragraph 2.2 of the order provides that if security was not provided within the 15 day
period the letter of undertaking must be returned and grants a further period of 15 days to
do so.’

[23] That is not what paragraph 2.2 states. For the reasons set out above,
such interpretation does not accord with the grammatical structure of the
language used in both paragraphs of the order. It follows that the appeal must
succeed.

The order
[24] As indicated at the outset, the cross-appeal was abandoned before the
full court. It was agreed that the costs be costs in the appeal. Paragraph 4 of
the order granted by Maharaj AJ accordingly need not be addressed.

[25] In the result:

1. The appeal is upheld with costs.
2. The order of the court below is set aside and substituted as follows:
‘(a) The appeal is upheld with costs, including the costs related to the
withdrawn cross-appeal;
(b) The order of the court below is set aside and substituted as follows;

“The application is dismissed with costs”.’

________________________
G GOOSEN
ACTING JUDGE OF APPEAL

Appearances

For appellant:
L M Mills
Instructed by:
Bowmans, Durban
Matsepes Inc, Bloemfontein

For respondent:
P J Wallis

Instructed by:
Shepstone & Wylie
Webbers Attorneys, Bloemfontein.
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM:
The Registrar, Supreme Court of Appeal
DATE:
2 October 2020
STATUS:
Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal.

Martrade Shipping and Transport GmbH v United Enterprises Corporation and MV
Unity (Case no 1085/2019) [2020] ZASCA 120 (2 October 2020)

Today the Supreme Court of Appeal (the SCA) handed down judgment in an appeal by
Martrade Shipping and Transport GmbH (Martrade Shipping) against an order of the
KwaZulu Natal Division of the High Court, Pietermaritzburg. The matter concerned the
interpretation of a court order regarding security and the release of the MV ‘Unity’ from
arrest.

On 23 December 2016 the KwaZulu-Natal Division of the High Court, Durban (Henriques
J) directed Martrade Shipping to provide counter-security for certain maritime claims made
by Union Enterprises in ongoing arbitration proceedings in London (the high court order).
The high court stipulated a 15-day time period in relation to the provision of security in the
first paragraph of its order. It provided that in the event of non-compliance with the first
paragraph of the order within 30 days, the arrest of the MV Unity would lapse. Security in
a form determined by the registrar was provided outside of the 15-day time period provided
in the first paragraph of the order. Union Enterprises brought an application in the high
court to set aside the registrar’s determination and to declare that the arrest of the MV Unity
had lapsed. The high court (Maharaj AJ) granted the orders.

Martrade Shipping appealed against the order of Maharaj AJ declaring the provision of
security out of time and that the arrest had lapsed. The appeal was heard by a full court
(Bezuidenhout, Gyanda and Chili JJ) of the KwaZulu-Natal Division, Pietermaritzburg. On
28 June 2019, the full court dismissed the appeal.

On further appeal to the SCA, the central question to be determined was the proper
interpretation of the high court order. The SCA found that the order was ambiguous. In
these circumstances it held that a sensible interpretation of the order was to be preferred to
one that would lead to impractical, un-businesslike or oppressive consequences, or that
would undermine the purpose of the order. The purpose of the order, it held, was to balance
the interests of the parties in the ongoing arbitration proceedings and to ensure the
effectiveness of any orders made in those proceedings. It held that the 15-day period
provided in the first paragraph of the order was to enable the parties to agree upon the form
of security to be provided. The 30-day period in the second paragraph of the order was the
period within which the security was to be furnished. Therefore, since the security was
provided within this latter period, Martrade Shipping had complied with the order.

In the result, the appeal by Martrade Shipping was upheld and the SCA substituted the high
court’s subsequent order with one dismissing the application brought by Union Enterprises
with costs. It also ordered the latter to pay the costs of the appeal.