Court of Appeal holds that the Receiver of Wreck has no power to determine the amount of a salvage award

Court of Appeal holds that the Receiver of Wreck has no power to determine the amount of a salvage award

CategoryNews Author Christopher Staker Date

The Court of Appeal has handed down judgment in Argentum Exploration Ltd v The Silver and All Persons Claiming To Be Interested In And/or To Have Rights In Respect Of, the Silver [2022] EWCA Civ 1318.  By majority, the Court of Appeal dismissed an appeal against the judgment of the Admiralty Court in Argentum Exploration Ltd v The Silver [2020] EWHC 3434 (Admlty).

This case concerned a cargo of 2,364 bars of silver which, while being carried by a commercial vessel from Bombay to Durban during the Second World War, sank to the bottom of the Indian Ocean when the ship was hit by Japanese torpedoes.  The silver bars had been intended for use by the South African Mint to produce coins.

In 2017 the silver bars were salvaged by the respondent and brought to the United Kingdom, where they were held to the order of the Receiver of Wreck pursuant to s. 236 of the Merchant Shipping Act 1995.  In 2019, the respondent commenced an action in rem in the Admiralty Court, seeking a declaration that it was the owner of the silver or, in the alternative, a salvage award.

The Republic of South Africa, the owner of the silver, applied for an order that the action be struck out or stayed on the grounds that it was entitled to immunity from the claim pursuant to the State Immunity Act 1978 and Article 25 of the International Maritime Organization International Convention on Salvage 1989.

The Admiralty Court (Sir Nigel Teare) held that the Republic of South Africa was not immune from the in rem claim.  The Court of Appeal by majority (Popplewell and Andrews LJJ) agreed and dismissed the appeal.  Laing LJ considered that s 10(4)(a) of the State Immunity Act 1978 was in the circumstances a bar to proceedings in rem, but that s 10(4)(b) of the State Immunity Act 1978 would permit an action in personam.

The Secretary of State for Transport and the Receiver of Wreck intervened in relation to certain questions not considered by the Admiralty Court.  These were in particular whether the Receiver of Wreck has the power to determine the amount of salvage, and has an obligation only to release property against a payment of salvage or provision of security, even if the owner can invoke state immunity in court proceedings.  This required consideration of various provisions of the Merchant Shipping Act 1995, and its predecessor legislation, the Merchant Shipping Act 1894.  The Court of Appeal held unanimously (at [108], [127], [207]) that the relevant provisions of the legislation do not confer any power on the Receiver to decide whether salvage is due, or how much salvage is due, and do not require the Receiver to continue to detain a wreck if a State successfully invokes state immunity in response to a claim for salvage.

The interveners were represented by Christopher Staker, instructed by the Treasury Solicitor.

Nothing in this news item should be interpreted as expressing the views of counsel instructed or the parties.



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