Cameron Miles successfully acts for ‘treasure hunter’ in unusual state immunity case under s 10(4)(a) of the State Immunity Act 1978

3VB’s Cameron Miles was part of the legal team that has successfully resisted South Africa’s claims of state immunity in respect of a cargo of 2,391 bars of silver (current value: £32 million) in Argentum Exploration Limited v The Silver [2020] EWHC 2323 (Admlty).

The silver was salved from the wreck of the SS Tilawa in international waters northwest of the Maldives. In 1942, the Tilawa – a privately-owed merchant ship – was sunk by Japanese torpedoes as she made the crossing from Mumbai to Durban, carrying the silver for use by the South African Mint.  In 2017, the Claimant salved the silver and brought it into Southampton, where it was declared to the Receiver of Wreck.

In due course, South Africa came forward claiming ownership of the silver, but also claiming that it was immune from any proceedings in rem brought by the Claimant with respect to the same – such that South Africa was (in effect) entitled to take possession as owner of the silver without being susceptible to a claim for the cost of the salvage.  Resolution of the matter hinged on whether, for the purposes of s 10(4)(a) of the State Immunity Act 1978, the silver and the Tilawa could be said to be “in use, or intended for use for commercial purposes” in 2017, being at the time at which the Claimant’s cause of action against South Africa as owner of the silver arose.

Judgment was handed down on 16 December 2020.  Sitting as a judge of the High Court, Sir Nigel Teare held that (for the purposes of the provision) the Tilawa and the silver were indeed in commercial use when the wreck was salved, noting that, on sinking, the ship was a merchant vessel and its cargo was being shipped under a commercial contract of carriage – and that nothing had happened between 1942 and 2017 to alter the status of either.  As such, SIA s 10(4)(a) applied and South Africa was not immune from proceedings in rem in respect of the silver.

Argentum v The Silver is the first case ever to consider SIA s 10(4)(a) – and only the second in which SIA s 10 has been considered.  It is therefore likely to become a useful item of state practice concerning state immunity in Admiralty proceedings, and will be of particular interest to international and foreign relations lawyers worldwide.

Cameron was led by Liisa Lahti, 3VB, and Stephen Hofmeyr QC of 7KBW. He was instructed by Stephen Askins of Tatham & Co. Read the judgment. Read an article in The Times on the case (paywall).