3VB’s Liisa Lahti and Cameron Miles were successful before the Court of Appeal in resisting South Africa’s appeal from a judgment of the High Court holding South Africa was not immune in respect of a cargo of 2,391 bars of silver in Argentum Exploration Limited v The Silver  EWCA Civ 1318.
In 1942, the SS Tilawa – a privately-owed merchant ship – was struck by Japanese torpedoes as she made the crossing from Mumbai to Durban, carrying the silver for use by the South African Mint. She sank in international waters northwest of the Maldives. In 2017, the Claimant salved the silver and brought it into Southampton, where it was declared to the Receiver of Wreck.
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” at the time at which the Claimant’s cause of action against South Africa as owner of the silver arose.
At first instance, Sir Nigel Teare, sitting as a judge of the High Court, agreed with the Claimant that s 10(4)(a) applied to remove South Africa’s immunity on the basis that the ship and the cargo were in commercial use at the time the vessel sank. A majority of the Court of Appeal (Lord Justice Popplewell and Lady Justice Andrews) agreed with this conclusion – noting in addition that even if this was not the case under ordinary principles of statutory construction, South Africa would not be immune from such a claim for salvage under customary international law, such that s 10(4)(a) would need to be ‘read down’ under s 3 of the Human Rights Act 1998 under the principles set out by the Supreme Court in Benkharbouche v Embassy of The Republic of Sudan  UKSC 62. Lady Justice Elisabeth Laing disagreed, and dissented accordingly.
Argentum v The Silver remains the only case in the 44 years since the State Immunity Act 1978 was passed to consider s 10(4)(a). The first instance judgment is already a useful item of state practice concerning state immunity in Admiralty proceedings, and the Court of Appeal’s judgment will be of additional interest to international and foreign relations lawyers worldwide. The Court of Appeal’s judgment also contains useful comments on the interpretation of the Convention for the Unification of Certain Rules Relating to the Immunity of State-Owned Vessels and, following an intervention by the Secretary of State for Transport and the Receiver of Wreck, the Merchant Shipping Act 1995.
Liisa and Cameron were led by Stephen Hofmeyr KC of 7KBW. They were instructed by Stephen Askins of Tatham & Co. The judgment can be found here. 3VB’s report on Sir Nigel’s decision at first instance can be found here.