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12 August 2015
The South African courts witnessed a flurry of judicial ship sales in the first half of 2015.
It began with the auction in Durban of the Turkish flagged and owned bulk carrier Tarik 3 in early February 2015, followed by the Iskandar (bulk carrier), Altai (crude oil carrier), Mar Sik Ryong (forest product carrier) and Glory Morning (bulk carrier). In July 2015 the Durban High Court ordered the judicial sale of the Aetos (bulk carrier), which should take place within six weeks.
In the case of the Aetos, the owners attempted to resist the sale at first, citing the closure of Greek banks as a main factor preventing the flow of funds earmarked to pay for victuals, fresh water and crew claims, and to settle claims of various other arresting creditors.
Given this state of affairs, it is useful to highlight the key features of the South African admiralty jurisdiction in the context of ship sales:
While South Africa is not necessarily a favoured jurisdiction for mortgage enforcement in terms of the priority afforded to a mortgagee, the ease with which vessels can be arrested in a bad market for a wide variety of claims often paralyses owners and forces the hand of banks to foreclose. However, once the enforcement process is underway, it functions on a sound legal foundation and in a transparent and effective manner.
For further information on this topic please contact Jeremy Prain at Bowman Gilfillan Inc by telephone (+27 21 480 7800) or email (email@example.com). The Bowman Gilfillan website can be accessed at www.bowman.co.za.
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