Argentum Exploration Ltd (Respondent) v Republic of South Africa (Appellant) [2024] UKSC 16

Liisa Lahti and Cameron Miles represented Argentum Exploration, the Salvors of 2364 bars of silver recovered from the wreck of the SS TILAWA, on an appeal to the Supreme Court by the owners of the silver, South Africa, against the decision of the Court of Appeal dismissing South Africa’s claim to immunity from suit pursuant to the State Immunity Act 1978.

In 1942 South Africa purchased silver from the Government of India for use in the South African Mint. On 23 November 1942 the vessel carrying the silver to South Africa (the SS TILAWA) was torpedoed by a Japanese submarine and sank in deep water northwest of the Maldives.

For more than 70 years the silver lay on the seabed at a depth of some 2.5 kms. However, in 2017 Argentum successfully recovered the silver, brought it to Southampton, delivered it to the Receiver of Wreck and claimed salvage.

South Africa’s response to Argentum’s claim was that both it and the silver are entitled to immunity in accordance with section 10(4)(a) of the State Immunity Act 1978. The key issue was whether SS TILAWA and the silver were “in use or intended for use for commercial purposes” when the cause of action accrued.

At first instance Sir Nigel Teare concluded that South Africa was not entitled to immunity. He held that, at the time of the sinking, both the ship and the silver were “in use … for commercial purposes”. The Court of Appeal (by a majority) upheld Sir Nigel’s decision.

The Supreme Court, however, came to the opposite conclusion, interpreting section 10 of the State Immunity Act, despite its being located in a part of the Act dealing with adjudicative jurisdiction, as “a hybrid provision making specific provision concerning immunity from both adjudicative and enforcement jurisdiction in Admiralty proceedings”. Having interpreted section 10 in this way, the Supreme Court was able to treat section 10 and in rem proceedings as an exception to the restrictive theory of state immunity: “there are compelling reasons why more stringent criteria should be satisfied before immunity is denied in the case of actions in rem”.

The Judgment is important because there has been no previous decision on section 10(4)(a) of the State Immunity Act 1978 and because of its careful consideration of the act and the restrictive theory of state immunity in public international law.

View the judgment. Read the press report from the UKSC.

Liisa Lahti and Cameron Miles were led by Stephen Hofmeyr KC and instructed by Stephen Askins of Tatham & Co.