THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable
Case no: 283/2023

In the matter between:

MV ‘NEW ENDEAVOR’ FIRST APPELLANT
ELLY MARITIME SA SECOND APPELLANT
PORTO EMPORIOS SHIPPING INC. THIRD APPELLANT
and
INDIAN OIL CORPORATION LIMITED RESPONDENT

Neutral citation: MV ‘New Endeavor’ and Others v Indian Oil Corporation

Limited (283/2023) [2024] ZASCA 67 (03May 2024)
Coram: MOLEMELA P and MBATHA, MEYER and WEINER JJA and
SEEGOBIN AJA
Heard: 15 February 2024
Delivered: 03 May 2024.
Summary: Admiralty law – arrest of an associated ship in terms of ss 3(6) and (7)
of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act) – arrest for
security in terms of s 5(3) of the Act – reconsideration in terms of rule 6(12)(c) of
the Uniform Rules of Court – onus of establishing an association in a security arrest
discharged – source of control established where the respondent asserted alternative
sources of power.
 2

ORDER

On appeal from: KwaZulu-Natal Division of the High Court, Durban (Sibiya J,

sitting as a court of first instance):
The appeal is dismissed with costs, such costs to include the costs consequent upon
the employment of two counsel.

JUDGMENT

Mbatha JA and Seegobin AJA (Molemela P and Meyer and Weiner JJA
concurring):

Introduction
[1] This is an appeal against the judgment and order of the KwaZulu-Natal
Division of the High Court, Durban per Sibiya J (the high court) (exercising its
Admiralty Jurisdiction), dated 15 December 2022. The high court dismissed, with
costs, an application for reconsideration brought in terms of rule 6(12)(c) of the
Uniform Rules of Court of an order of arrest made on 30 May 2022. The order of
arrest was in respect of the first appellant, the MV ‘New Endeavor’ (New
Endeavor),1 as an associated ship of the MT ‘New Diamond’ (New Diamond),2 that
was arrested for security in terms of s 5(3) of the Admiralty Jurisdiction Regulation
Act 105 of 1983 (the Act).

Background
[2] On 5 August 2020, the respondent, Indian Oil Corporation Limited (Indian
Oil), concluded a voyage charterparty with the third appellant, Porto Emporios

1
Also referred to as the ‘associated ship’.
2
Also referred to as the ‘ship concerned’.
 3
Shipping Inc. (Porto), for the carriage of 277 564 metric tonnes of crude oil (the
cargo) on Porto’s ship, the New Diamond, to India.

[3] En route from Kuwait to India, the New Diamond caught fire and,
subsequently, salvage services were rendered, a general average was declared, and
the voyage was abandoned. As a result, Indian Oil transhipped its cargo to two other
vessels for onward carriage to India. Part of the cargo was lost, and, Indian Oil
incurred losses in the amount of approximately USD 70 000 000. Consequently,
Indian Oil is seeking payment from Porto in the sum of USD 73 047 429,33 plus
Indian Rupees (INR) 701 361 274,99, together with interest and costs, being
damages suffered by it, as a result of Porto’s breaches of its obligations, under the
bill of lading and charterparty, alternatively as a result of Porto’s negligence or
breach of its obligations to Indian Oil in bailment. Indian Oil is pursuing a claim for
damages against Porto by way of arbitration proceedings in India.

[4] Indian Oil’s claim has been partially secured by Porto through its P & I Club
(Protection and Indemnity) pursuant to a flag arrest of the New Diamond in Panama.
In addition, security was provided, pursuant to the arrest on 19 September 2021, at
Richards Bay, KwaZulu-Natal, of the MV ‘New Elly’ (New Elly). The New Elly is
owned by the second appellant, Elly Maritime SA (Elly Maritime), which has its
registered office in Monrovia, Liberia, and is registered as a foreign company in
Greece.

[5] An urgent application for reconsideration of the order of arrest of the New Elly
was heard by the high court (per Bedderson J), and dismissed with costs. An appeal
against the judgment and order of Bedderson J is currently pending before a full
court of the KwaZulu-Natal Division of the High Court, Durban.
 4
[6] On 30 May 2022, Indian Oil brought an urgent ex parte application before
the high court for additional security for the arrest of the New Endeavor as an
associated ship of the New Diamond in terms of s 3(6) read with s 3(7) of the Act.
The application served before Mathenjwa AJ who granted an order in favour of
Indian Oil. An application by New Endeavor for reconsideration of the above order
in terms of rule 6(12)(c) of the Uniform Rules and for its release was dismissed with
costs by Sibiya J on 15 December 2022. The present appeal serves before us with
leave of the high court.

Issue for determination

[7] The single issue that falls to be determined in this appeal is whether Indian
Oil discharged the onus of establishing, on a balance of probabilities, the alleged
association between the respective ship owning companies of the New Endeavor and
the New Diamond, in circumstances where, rather than alleging a single source of
control, Indian Oil asserted alternative sources of control. There was no dispute that
Indian Oil had established the other requirements for an arrest in terms of s 5(3) 3 of
the Act, namely, a prima facie case and a genuine and reasonable need for security.

3
The relevant parts of s 5(3) of the Act provides as follows:
‘. . .
(3)(a) A court may in the exercise of its admiralty jurisdiction order the arrest of any property for the purpose of
providing security for a claim which is or may be the subject of an arbitration or any proceedings contemplated,
pending or proceeding, either in the Republic or elsewhere, and whether or not it is subject to the law of the Republic,
if the person seeking the arrest has a claim enforceable by an action in personam against the owner of the property
concerned or an action in rem against such property or which would be so enforceable but for any such arbitration on
proceedings.
(aA) Any property so arrested or any security for, or the proceeds of, any such property shall be held as security for
any such or pending the outcome of any such arbitration or proceedings.
(b) Unless the court orders otherwise any property so arrested shall be deemed to be property arrested in an action in
terms of this Act.’
 5
Onus
[8] Contrary to the findings made by the high court in paragraphs 64 and 375 of
its judgment with regard to the issue of onus, it is well established that Indian Oil
bore the onus of proving the alleged association on a balance of probabilities. This
was endorsed by this Court in the decisions of Cargo Laden and Lately Laden on
board the MV Thalassini Avgi v MV Dimitris,6 Bocimar NV v Kotor Overseas
Shipping Ltd,7 and MV Silver Star: Owners of Silver Star v Hilane Ltd (Silver Star).8

[9] Equally trite, is that security arrests in terms of s 5(3) can be brought by the
arrest of an associated ship to the ship concerned. The arrest of an associated ship is
not an easy task. In the textbook titled The Associated Ship & South African
Admiralty Jurisdiction (The Associated Ship), the author, M J D Wallis, expressed
himself on this issue as follows:
‘The task of proving the association is complicated by the relative inaccessibility of the key
information required to demonstrate the identity of the person or persons who control the two ship-
owning companies . . . In the circumstances an applicant for arrest is confronted with the heavy
burden of proving a disputed matter on a balance of probabilities on the papers when it has no
direct access to the relevant information and may well be confronted with the withholding of
information, disingenuousness and downright dishonesty.’9

4
In para 6, the high court said the following:
‘The onus to show the association in an application for arrest is on the applicant. However, once the arrest has been
authorised the association is taken as established, and the onus is on the respondents to show that the ship arrested and
the vessel concerned have not been shown to be associated ships.’
5
In para 37, it said the following:
‘The applicable standard of proof is the civil standard of the preponderance of probabilities, and not proof beyond a
reasonable doubt. The annexures relied on by the applicant demonstrate, on a balance of probabilities, that the first
respondent and the vessel are associated ships as contemplated in section 3(6) read with section 3(7) of the Admiralty
Act. Having concluded that a prima facie case of association was correctly found to be established, this is sufficient
for the refusal of the reconsideration application, without more.’
6
Cargo Laden and Lately Laden on board the MV Thalassini Avgi v MV ‘Dimitris’ [1989] ZASCA 76; [1989] 2 All
SA 436 (A)1989 (3) SA 820 (A) at 833B-D.
7
Bocimar NV v Kotor Oversea Shipping Ltd [1994] ZASCA 5; [1994] 2 All SA 245 (A); 1994 (2) SA 563 (AD) at
583 E-F.
8
MV Silver Star: Owners of MV Silver Star Owners of the Silver Star v Hilane Ltd [2014] ZASCA 194; [2015] 1 All
SA 410 (SCA); 2015 (2) SA 331 (SCA) (Silver Star) para 39.
9
M J D Wallis The Associated Ship & South African Admiralty Jurisdiction (2010) (The Associated Ship) at 292. This
was subsequently quoted, with approval, by Ponnan JA at para 39 of Silver Star.
 6
Proving an ‘association’
[10] It is not in dispute that Indian Oil proved that it had a maritime claim against
the New Endeavor in terms of ss 1(1)(g), (h), (j), (k), (t) and the all-embracing
s 1(1)(ee) of the Act. The question that requires determination, is whether the
relevant vessels are associated with each other, and, who is the controlling force
behind the companies that own the vessels. It is important that we highlight the
relevant provisions of the Act that set out the requirements for association. Section
3(6) of the Act provides as follows:
‘An action in rem other than an action in respect of a maritime claim referred to in paragraph (d)
of the definition of “maritime claim” may be brought by the arrest of an associated ship instead of
the ship in respect of which the maritime claim arose.’

[11] Section 3(7)(a) recognises three scenarios where the ship is considered to be
an associated ship:
‘(7)(a) For the purposes of subsection (6) an associated ship means a ship, other than the ship in
respect of which the maritime claim arose-
(i) owned, at the time when the action is commenced, by the person who was the owner of the ship
concerned at the time when the maritime claim arose; or
(ii) owned, at the time when the action is commenced, by a person who controlled the company
which owned the ship concerned when the maritime claim arose; or
(iii) owned, at the time when the action is commenced, by a company which is controlled by a
person who owned the ship concerned, or controlled the company which owned the ship
concerned, when the maritime claim arose.
(b) For the purposes of paragraph (a)–
(i) ships shall be deemed to be owned by the same persons if the majority in number of, or of
voting rights in respect of, or the greater part, in value, of, the shares in the ships are owned by the
same persons;
(ii) a person shall be deemed to control a company if he has power, directly or indirectly, to control
the company;
(iii) a company includes any other juristic person and anybody of persons, irrespective of whether
or not any interest therein consists of shares.
 7
(c) If at any time a ship was the subject of a charter-party the charterer or sub-charterer, as the
case may be, shall for the purposes of subsection (6) and this subsection be deemed to be the owner
of the ship concerned in respect of any relevant maritime claim for which the charterer or the sub-
charterer, and not the owner, is alleged to be liable.’

[12] In Silver Star,10 this Court set out the purpose of the Act and the circumstances
in which ships are said to be associated:
‘The purpose of the Act is to make the loss fall where it belongs by reason of ownership, and in
the case of a company, ownership or control of the shares (Berg at 712A). And, as Marais JA
pointed out (albeit in a minority judgment) in MV Heavy Metal: Belfry Marine Ltd v Palm Base
Maritime SDN BHD 1999 (3) SA 1083 (SCA) (Heavy Metal) para 4:
“The way in which this was done was, first, by describing in s 3(7)(a)(i), (ii) and (iii) the
circumstances in which ships were to be regarded as associated and, secondly, by enacting certain
deeming provisions in s 3(7)(b)(i), (ii) and (iii) which are obviously designed not only to defeat
defensive stratagems which ship owners might deliberately deploy to ward off potential arrests of
associated ships by disguising their ownership or their control of such ships, but also to allow it to
be shown even in a case where no such motive existed where power of control really lay.”

Those sections require that in relation to both the ship concerned and the associated ship, a
“person” must be identified who “controls” (or controlled) the companies in question. The level
of control required is that the person must control the overall destiny of the company (The Kadirga
5 (No 1) JA Chapman & Co Ltd v Kadirga Denizcilik ve Ticaret AS SCOSA C12 (N) at C14E).’

[13] The judgment of this Court in MV Heavy Metal: Belfry Marine Ltd v Palm
Base Maritime SDN BHD Belfry Marine Ltd v Palm Base SDN BHD (Heavy
Metal),11 dealt with the interpretation of the provisions of s 3(7)(a), (b) and (c) of the
Act. This Court carefully analysed the provisions in s 3(7)(a)(i), (ii) and (iii) with
regard to the circumstances in which ships were to be regarded as associated and the
deeming provisions in s 3(7)(b)(i), (ii) and (iii) which were designed to defeat

10
Silver Star para 40.
11
MV Heavy Metal: Belfry Marine Ltd v Palm Base Maritime SDN BHD [1999] ZASCA 44; [1999] 3 All SA 337;
1999 (3) SA 1083 (SCA) (Heavy Metal).
 8
defensive strategies deliberately employed by ship owners to ward off potential
arrests of associated ships by disguising their ownership or control of such ships.

[14] In Heavy Metal, this Court, in considering the aforementioned provisions of

the Act, had regard to the language used, the purpose of the provision, its context
and the objects of the Act as a whole. It held that the object of the associated ship
provisions was to enable the associated ship to be arrested in respect of the maritime
claims and the purpose was to afford the claimant with an alternative defendant to
enforce its claim. It went on to say that the subsection distinguishes between ‘direct’
and ‘indirect’ control. Direct control can be exercised by a person wielding power
behind the scenes ‘de facto’ or by a person who was in ‘de jure’ control of the
company. This Court recognised this as ‘[the] extension of de jure power to de facto
power [which] is in line with the objective of the section: to prevent the true “owner”
presenting a false picture to the outside world, from concealing assets from
attachment and execution by creditors’.12 The Court concluded that the same
approach should be adopted in the deeming provisions of the Act, ie s 3(7)(c),
3(10)(a)(i) and (ii) and (b), and 3(11)(b) of the Act.

[15] The question of control is a legal and a factual one. In line with this, the
judgment in Heavy Metal stated as follows:
‘The subsection [3(7)(b)(ii)] elaborates upon and refines the concept of control by that person.
Control is expressed in terms of power. If the person concerned has power, directly or indirectly,
to control the company he/she shall be deemed (“geag . . . word”) to control the company. “Power”
is not circumscribed in the Act. It can be the power to manage the operations of the company or it
can be the power to determine its direction and fate. Where these two functions happen to vest in
different hands, it is the latter which, in my view, the Legislature had in mind when referring to
“power” and hence to “control”.’13

12
Ibid para 10.
13
Ibid para 8.
 9
[16] According to The Associated Ship, the process of comparison that follows
upon this identification is intended to be a simple one. He adds:
‘The maritime claimant identifies the party who controls the company that owned the ship
concerned and identifies the party who controls the company that owns the associated ship that it
seeks to arrest. The result of those exercises is then compared. If they correspond, in the sense that
the same person or persons control both companies, then the requisite association is established.
If they are not the same then the association is not established.’14
Difficulties in establishing control arise where the company, which owns the ship,
may be a shelf company or is owned by a nominee who may be just an agent for a
principal. This is also the case where the shareholding is held at 50/50. As a result,
control cannot be attributed to a 50% shareholder.15 The shareholders also lose
control when the company gets deregistered or is placed in liquidation.

[17] Control is never easy to prove. The Act allows for admission of hearsay
evidence in terms of s 6(3) in order to prove control, hence the reliance on hearsay
evidence from Lloyds list of records, investigative reports and newspaper reports in
this matter. Section 6(3) which provides for the admissibility of hearsay evidence
provides as follows:
‘A court may in the exercise of its admiralty jurisdiction receive as evidence statements which
would otherwise be inadmissible as being in the nature of hearsay evidence, subject to such
direction and conditions as the court thinks fit’.
The Associated Ship points out that:
‘In its original form section 3(7)(a)(ii) referred to ownership or control of the shares of a company
and not to control of the company itself.’16
In support of this, The Associated Ship, refers to a judgment in East Cross Sea
Transport Inc v Elgin Brown & Hamer (Pty) Ltd,17 where the court held that the fact
that two owning companies had a common director, did not mean that the vessels

14
The Associated Ship at 187.
15
MV La Pampelouis Dreffus Amateurs SNC v Tor Shipping [2006] ZAKZHC 3; [2006] 3 All SA 464 (D); 2006 (3)
SA 441 (D) para 54-55.
16
The Associated Ship at 121.
17
East Cross Sea Transport Inc v Elgin Brown & Hamer (Pty) Ltd 1992 (1) SA 102 (D) at 107E-F.
 10
were associated in terms of the Act. This was aptly confirmed in the Heavy Metal
judgment, where this Court held that the only interpretation to be attributed to s
3(7)(b)(ii) is that a person shall be deemed to control a company if he has power
directly or indirectly to control the company.

[18] Control over a company can be exercised even without a majority

shareholding. The learned author, G Hofmeyr, in his textbook titled Admiralty
Jurisdiction Law and Practice in South Africa,18 states that ‘control is not defined in
the Act. It could denote only power to determine the direction and fate of the
company’. He refers to the Heavy Metal judgment where the court succinctly stated
that:
‘In my view, therefore, direct power refers to de jure authority over the company by the person
who, according to the register of the company is entitled to control its destiny; and indirect power
to the de facto position of the person who commands or exerts authority over the person who is
recognised to possess de jure power (i.e. the beneficial “owner” as opposed to the legal “owner”).
This extension of de jure power to de facto power is in line with the objective of the section: to
prevent the true “owner”, by presenting a false picture to the outside world, from concealing his
assets from attachment and execution by his creditors.’19

The reconsideration application

[19] One of the arguments raised before us on behalf of Indian Oil was that an
adverse inference should be drawn against the appellants for their failure to file an
answering affidavit in the reconsideration application in order to counter the
allegations made by Indian Oil concerning the issue of association. Counsel for the
appellants, however, argued that there was no need for the appellants to file any
affidavits as they were entitled to argue, on the basis of the application papers alone,
that no case had been made out for any relief.

18
G Hofmeyr Admiralty Jurisdiction Law and Practice in South Africa 2 ed (2012) (Admiralty Jurisdiction Law and
Practice) at 141-142.
19
Heavy Metal para 10.
 11
[20] A similar debate ensued between the parties in Afgri Grain Marketing (Pty)
Ltd v Trustees for the time being of Copenship Bulkers A/S (in liquidation) and
Others.20 In addressing this issue this Court said the following:
‘Rule 6(12)(c) does not prescribe how an application for reconsideration is to be pursued. The
absence of prescription was intentional and the procedure will vary depending upon the basis on
which the party applying for reconsideration seeks relief against the order granted ex parte and in
its absence. A party wishing to have the order set aside, on the ground that the papers did not make
a case for that relief, may deliver a notice to this effect and set the matter down, for argument and
reconsideration, on those papers. It may do the same if it merely wishes certain provisions in the
order to be amended, or qualified, or supplemented. The matter is then argued on the original
papers. It is not open to the original applicant, save possibly in the most exceptional circumstances,
or where the need to do this has been foreshadowed in the original founding affidavit, to bolster
its original application by filing a supplementary founding affidavit.

The party seeking reconsideration is not confined to this route. It may file an answering affidavit,
either traversing the entire case against it, or restricted to certain issues relevant to the
reconsideration. In many instances such an affidavit will be desirable. Even if an affidavit is filed,
however, it does not preclude the party seeking reconsideration arguing at the outset, on the basis
of the application papers alone, that the applicant has not made out a case for relief. That is a well-
established entitlement in application proceedings and there is no reason why it should not be
adopted in reconsideration applications.

If an affidavit is filed in support of the application for reconsideration then the party that obtained
the order is entitled to deliver a reply thereto, subject to the usual limitations applicable to replying
affidavits. When that is done, and the party seeking reconsideration does not argue a preliminary
point at the outset that the founding affidavit did not make out a case for relief, the case must be
argued on all the factual material before the judge dealing with the reconsideration proceedings.
That material may be significantly more extensive and the nature of the issues may have changed
as a result of the execution of the original ex parte order.’

20
Afgri Grain Marketing (Pty) Ltd v Trustees of Copenship Bulkers A/S (in liquidation) [2019] ZASCA 67; [2019] 3
All SA 321 (SCA); 2024 (1) SA 373 (SCA) paras 12-16.
 12
The proper approach to this appeal is, therefore, to have regard to the factual material that was
placed before the high court for the purposes of reconsidering the order originally granted by
Mashile J.’(Emphasis added.)(Footnotes omitted.)

[21] Before considering the nature of the evidence presented by Indian Oil, it is
necessary to point out that proceedings in admiralty should be given a generous
interpretation consistent with its manifest purpose of assisting maritime claimants to
enforce maritime claims. This point was made in NYK Isabel, MV: Northern
Endeavour Shipping Pte Ltd v Owners of the MV NYK Isabel:21
‘It follows in my view that the provisions of the Act should be given a generous interpretation
consistent with its manifest purpose of assisting maritime claimants to enforce maritime claims.
That construction is also consistent with the right of access to courts afforded to everyone in terms
of s 34 of the Constitution. There is, however, a need for balance when the courts exercise the
expansive powers of arrest and attachment of vessels embodied in the Act. Sections 5(2)(b) and
(c) give courts the means to balance the interests of claimant and defendant by ordering counter-
security in appropriate cases and attaching conditions to orders of arrest or attachment. Thus it is
commonplace for an arrest to be subject to the provision of security for the costs of an application
to set the arrest aside, or for any loss suffered in consequence of that arrest if it is subsequently set
aside.’

The evidence
[22] The evidence relied on by Indian Oil was based on information obtained from
documents, emails and other correspondence provided to it by Mr Mark Lloyd (Mr
Lloyd), a partner at Kennedys Law Firm in London. Mr Lloyd acts on behalf of
Indian Oil on instructions from WE Cox Pty Ltd, a recovery and loss adjusting
company, which was, in turn, instructed directly by the insurers of Indian Oil.
Information was also obtained from Francisco Carrera-Pitti, an attorney admitted in
1976 in Panama and practising as Carrera-Pitti Attorneys and from Captain Rajiv

21
NYK Isabel, MV: Northern Endeavour Shipping Pte Ltd v Owners of the MV NYK Isabel [2016] ZASCA 89; [2016]
3 All SA 418 (SCA); 2017 (1) SA 25 (SCA) para 45.
 13
Thakar, a casualty and complex claims director at WE Cox Claims Group
(Europe) Ltd.

[23] Reliance was also placed on a report compiled by Gray Page (the Gray Page
report) that was commissioned by Indian Oil. Gray Page is a specialist consulting
group that investigates, inter alia, the ownership and control of vessels. On
instructions from Indian Oil, Gray Page carried out an investigation into the
ownership and control of the New Diamond as well as the ownership and control of
several other ships potentially associated with her, including the New Endeavor. The
Gray Page report, together with certain relevant annexures, was attached to the
founding affidavit. Reliance was also placed on two newspaper articles, namely the
2013 TradeWind’s article and the 2014 Espresso article.22 The contents of these
articles will be dealt with here below.

[24] Ms Barnwell stated as follows:

‘89. As set out in detail below, the applicant respectfully submits that the first respondent is an
associated ship to the vessel on the basis that there is the same single repository of control in
respect of the vessel as the “ship concerned” and the: First Respondent at the times stipulated in
the Act on the following basis:
89.1 At the time the maritime claim arose, the vessel was owned by the Third Respondent;
89.2 At the time when the maritime claim arose, the Third Respondent was owned or controlled
by New Shipping Limited which was in turn owned or controlled by Adam Polemis on his own,
alternatively Adam Polemis together with his children;
89.3 At the time of this application, the First Respondent is owned by the Second Respondent;
and
89.4 At the time of this application, the Second Respondent is owned or controlled by New
Shipping Limited which is in turn owned and controlled by Adam Polemis on his own,
alternatively Adam Polemis together with his children.’

22
Shipping publications.
 14
[25] Placing reliance on the information contained in the Gray Page report, the
following allegations were made:
‘91. In March 2013, the vessel was purchased by Porto Emporios Shipping Inc. of Liberia, the
Third Respondent and named the mt Diamond Warrior.
92. At that time, her technical managers and commercial operators were reflected as being
Polembros Shipping Limited (PSL) of 57A Poseidonos Avenue, Moschato, 183 44, Athens,
Greece.
93. PSL is a family-owned ship management company that has been operating in London since
1974. The company was established by Greek brothers Spyros and Adam (Avamantios) Polemis
in the 1970s and over the next 20 years Polembros grew to become one of the ten largest Greek
shipping groups. These facts were reported in the TradeWinds daily shipping newspaper on 1 June
2014 and 23 May 2014.
94. In 2014, new reports reflected that after 40 years of partnership running PSL, Spyros and
his younger brother, Adam, intended splitting their shipping interests. The reports reflected that
the decision was driven partly by their intention to accommodate the two brothers’ children and
grandchildren who will one day succeed them and who would play a role in the future management
of the business. Spyros and his children would keep the name of PSL, which Spyros would run
together with his son, Leonidas.
95. Adam and his two children, Leonidas and Alina would transfer their ships from PSL to
New Shipping Limited (NSL) which is another family interest company founded in 2005. NSL is
a company with limited liability established in accordance with the laws of Greece, which carries
on business at 57A Poseidonos Avenue, Moshcato, Athens, Greece. According to Gray Page’s
local repositories in Greece, familiar with the Polemis family, Adam uses NSL to manage his
shipping interests for the benefit of his two children Leonidas and Alina.
96. Copies of the aforesaid news articles are attached, marked “O” and “P” respectively.
Pertinently, these news articles report that:
2013 Article (annexure O) - TradeWinds
96.1 “Polembros is taking advantage of attractive prices for secondhand assets and demolition
sales in a continuing rejig of its fleet [”];
96.2 “This week the company was again reported to have bought the 300,000 dwt tanker
Ikomasan (built 2000), this time for US$27.3m”;
96.3 PSL is referred to as “the Greek owner”;
 15
96.4 “The owner has also moved onto dry bulk buying and selling” (details of the purchase
of various bulkers are given);
96.5 PSL has scrapped two bulkers that year, on favourable terms;
96.6 “This year the company will start taking delivery of a series of 205,000 dwt bulker new
buildings”.
2014 Article (annexure P):
96.7 The brothers are going to “divide their property” and separate their fleet;
96.8 Spyros will continue “to run” PSL together with his son;
96.9 Adam and his children will “pass their respective ships . . .” to NSL, another “family
interest company”;
96.10 PSL has bought several ships since the beginning of the year (2014) “some of which – as
it seems – are destined for the New Shipping fleet”;
96.11 Adam informed shipping circles that his part of the fleet to be held under NSL will number
about 23 ships.’

[26] Ms Barnwell further stated:

‘97. It is evident from these news articles that PSL and NSL are not mere ship-management
companies but are used as vehicles to control the companies which own the ships in the fleets
managed by them. As reported by Gray Page, each ship is registered in the name of a separate
ship-owning company. These companies are effectively single-purpose vehicles (“SPVs”) whose
sole function is to own a ship. It is evident that PSL and NSL exercise control over the SPVs, not
only in the sense of day-to-day management but the control of their ultimate fate and destiny. It is
reported that:
97.1 PSL and NSL make strategic decisions to expand and contract their fleets from time to time
by purchasing, selling and scrapping vessels.
97.2 Control of PSL and its fleet initially vested in both brothers, who in 2014 made the strategic
decision to separate the fleet into two branches, which they implemented by moving the
management of certain vessels across to NSL.
97.3 In this way the Polemis family beneficially owns and controls the fleet of ships which it
has acquired over the years.
97.4 Although the Polemis family owns the ships through the vehicles of separate companies, it
controls those companies through PSL (Spyros and family) and NSL (Adam and family).’
 16
[27] Ms Barnwell concludes that the ships which ‘the Applicant alleges are
associated ships for the purposes of this application, (viz the Vessel and the First
Respondent) are both ships within the NSL stable’. The following allegations are
also made by Ms Barnwell:
‘100. In May 2014, the vessel’s name was changed to mt New Diamond but it remained in the
ownership of the Third Respondent.
101. The Third Respondent is a Liberian company, with its registered address at 80 Broad Street,
Monrovia. This is the registered address for the hundreds of ship-owning companies registered in
Liberia. Liberian law is such that the applicant is unable to obtain details of the company’s
shareholding and corporate officers. However, the bill of sale for the purchase of the mt Diamond
Warrior, (subsequently renamed mt New Diamond) reflects that the attorney in fact acting for the
purchaser was Eftstratios Gogis. He is a person known to be connected to the Polemis family and
acts as a director of the family’s hotels and tourism business in Greece, Hydra Hotels Hellas SA,
which has the same registered address as PSL and NSL – as reflected in the attached extract from
the Kompass database for this company marked “Q”.
102. Gogis is reflected as the secretary of the Third Respondent, according to the articles of
amendment of that company, which also reflects the President as being Antonis Stellas.
103. NSL is a Liberian-registered entity which carries on business in Greece and is accordingly
registered under Law 89/1967 as a foreign company operating in Greece. As reflected above,
NSL’s registered address in Greece is the same as for PSL.
104. On 24 February 2011, NSL filed a Certificate of Election and Encumbrance in Greece
which reflects Evangelos Stathopoulos as President/treasurer and Pandelis Pangalos as Vice-
President and secretary.
105. Pangalos remains the general manager of NSL in Greece and was formerly a director of
PSL in London until 2017.
106. On 30 November 2018, NSL filed a further document amending the company’s Articles of
Incorporation. This is the same date as a similar filing for the Third Respondent. The amendment
reflected that the new corporate officers of NSL were Stellas as President and Gogis as secretary.
Stellas is the operations manager for NSL, as recorded in the attached LinkedIn profile marked
“R”.
107. The Ministry of Merchant Shipping reflects that Gogis has been the legal representative of
NSL in Greece since 1 April 2014. Prior to this, Pangalos held the position. NSL’s Board of
 17
Directors as recorded in the Law 89 Register in Greece, is comprised of Georgios Vakirtzis (as
Chairman/director) and Gogis (as secretary/director).
108. The Third Respondent was placed under the management of NSL on 7 May 2014 and the
person signing the letter of assignment of behalf of the Third Respondent was Gogis.
109. The management of the Third Respondent by NSL ceased on 31 December 2020, after the
applicant’s claim arose, and around the time that the Vessel was scrapped.
110. NSL is reflected as being the managers of 19 tankers and 15 bulk carriers each owned by
separate single purpose ship-owning companies. Of these ships, 14 are registered in Panama, 2 in
the Marshall Islands and 19 in Liberia.
111. In preparation for the arrest of the mv New Elly, Gray Page originally carried out
investigations into seven of the companies registered in Panama being the owners of the mt Karo,
mv New Amorgos, New Andros, New Dynasty, New Naxos, Paros, Trident Hope and New Hydra.
The investigation did not include the mv New Endeavor because, at that stage, she did not seem to
be trading to South Africa.
112. In every case, the Liberian Companies Register reflects the President of each owning
company as Stellas and the Secretary as Gogis.’

[28] Under the heading ‘Information Relating to the First Respondent’, Ms

Barnwell states that ‘[t]he Second Respondent is the registered owner of the First
Respondent. This is reflected in the attached Lloyd’s List Intelligence report marked
“S1”.’ This report, which bears the heading ‘Vessel Report’ (Your Vessel Report for
‘New Endeavor’), is significant as it reflects Adam Polemis (Adam) as the beneficial
owner of the New Endeavor, with its registered owner being Elly Maritime SA and
its technical manager and commercial operator being NSL.

[29] With regard to information pertaining to the second appellant, Elly Maritime,
Ms Barnwell avers that it is the registered owner of the New Endeavor. On 25 May
2022, Gray Page was instructed by Indian Oil to conduct an investigation into the
New Endeavor and Elly Maritime and to consider whether the New Endeavor was
an associated ship of the third appellant, Porto.
 18
[30] According to the further investigations conducted by Gray Page, the New
Endeavor is currently registered with the Panama Flag administration and was first
registered in Panama on 19 May 2011. A bill of sale evidences proof of the transfer
of ownership of the New Endeavor to Elly Maritime on 18 May 2011. The first
preferred mortgage deed for the New Endeavor was dated 2 June 2011 and one, Effie
P Paraskevopoulou, was a signatory thereto on behalf of Elly Maritime. This deed
was cancelled on 24 October 2019 and, at the time of preparing the founding
affidavit, there were no further mortgages registered with the Panama
Administration for the New Endeavor.

[31] The Gray Page report further states that the Articles of Amendment of the Elly
Maritime filed in Liberia in November 2018 reflect that Stellas is the President and
Gogi is the secretary of Elly Maritime. This is the same position as with the other
Liberian companies that own the vessels managed by NSL in the NSL fleet. Ms
Barnwell drew the high court’s attention to the fact that many of the vessels in the
NSL fleet, including the New Endeavor and the vessel owned by Porto, bear the
prefix ‘new’, being the same as the prefix in NSL. In addition, all these vessels bear
the same logo on their funnel. We point out that flags of convenience are very
common in shipping business empires. Panama and Liberia are the most common
owners of ships though they do not own any fleets of ship.23 Flags of convenience
are used for various purposes, including lower taxes, avoiding strict regulations and
avoiding legal action as nominee directors are used in registering the ship in these
countries.24

[32] Ms Barnwell asserts that:

‘On the basis of the information set out above, it is respectfully submitted that the applicant has
established, on a totality of the evidence, that it is more probable than not that the first respondent

23
The Associated Ship at 41-42.
24
Ibid at 42-43.
 19
is an associated ship to the vessel, as contemplated by sections 3(6) and 3(7) of the Act. More
particularly, it has established on a balance of probabilities that the companies that owned the
vessels at the relevant times are ultimately owned or controlled by the same person or persons
being NSL, which is in turn controlled by Adam Polemis on his own, alternatively Adam Polemis
together with his children.’

[33] The founding affidavit concludes with the following:

‘128. The Gray Page report and the founding affidavit both state that the ship-owning companies
in question are controlled by Adam Polemis through the vehicle of NSL and that Adam has brought
his children into the business, who will one day succeed him as owner. Whether and to what extent
Adam Polemis is assisted by his children is irrelevant to the inquiry. The identical repository and
manner of control applies to each ship-owning company. This factual conclusion satisfies the test
for association.
129. In any event, it is submitted that it is not necessary to determine who controls NSL. Once
it is found that each ship-owning company is controlled by NSL, this establishes common control
and there is no need to go further and establish who in turn controls NSL.
130. Even if the way in which the NSL fleet was controlled was one out of three different
alternatives, provided each ship-owning company was controlled in the same way, this would
suffice. There is no question of any of the ship-owning companies in the NSL fleet being subject
to control by a different “person” to the others. Control is the same for both at the stipulated times.’

Appellants’ submissions
[34] The appellants contended that, on a sensible construction of the founding
affidavit, what is alleged is that Adam, on his own, or, separately with his children,
control the respective ship owning companies. It was accordingly submitted that, the
attempt in the founding affidavit to assert that NSL owned or controlled the
respective ship owning companies, is misguided. This is so, because Indian Oil
asserts that NSL ‘is in turn controlled by Adam on his own, alternatively Adam
together with his children’. The significance of this is that NSL itself is an object of
control.
 20
[35] It was emphasized that Indian Oil’s case on association must be confined
to the control exercised by Adam ‘on his own’ alternatively, ‘together with his
children’. It was submitted that the use of the word ‘alternatively’ serves to introduce
another option of control in circumstances where the alternatives postulated are
inconsistent: it is either one or the other, they cannot co-exist as repositories of
control or power. The conclusion by the high court that ‘Adam controls NSL and
that he exercises such control personally’ simply ignores, so it was submitted, the
fact that such control is stated to be in the alternative. This implies, at the very least,
that it is either Adam on his own, or Adam, together with his children, who exercise
actual control. In other words, both cannot exercise control independently. It was
thus contended that, by alleging alternative powers of control, Indian Oil failed to
prove a single locus of control and, therefore, failed to establish the association
asserted on a balance of probabilities.

Respondent’s submissions
[36] Indian Oil contended that the appellants’ argument was based on certain
mischaracterisations and illogicality. It listed three respects in which the appellants
had mischaracterised its case. The first was that Indian Oil had never deviated from
its central allegation, namely, that there was at all material times a single source of
control. It merely said that the identity of the single source was one or the other. This
was mainly because the appellants had refused to disclose who was in control. The
second, was that, when Indian Oil had alleged that NSL was in turn controlled by
Adam, either by himself or together with his children, the appellants took the view
that Indian Oil’s case on association, therefore rested on two mutually destructive
alternatives. According, to Indian Oil, however, there was no question of who the
two different repositories of control of each ship owning company were. Control of
both companies was exercised through a single source of control, namely, NSL. The
third mischaracterisation was to the effect that there was nothing in the founding
 21
papers to demonstrate the degree to which Adam controls his children. Indian
Oil’s answer to this was that the founding affidavit makes it clear that it is Adam
who controls and who ‘has brought his children into the business, and who one day
will succeed him as owner. . .whether and to what extent Adam is assisted by his
children is irrelevant to the inquiry.’

[37] In concluding that an association had been established by Indian Oil, the high
court relied on the evidence contained in the founding affidavit. That evidence, so it
held, proved, on a balance of probabilities, that Adam was the central figure of
control of NSL and that, at the time the claim arose, the New Endeavor and the New
Diamond were associated ships, both owned by NSL. It mattered not whether Adam
exercised such control either by himself as head of the family or together with his
children. The high court further held that, whilst no adverse inference could be
imputed to the appellants, their failure to file an answering affidavit was not without
consequences. As we attempt to show hereunder the findings by the high court are
unassailable.

Analysis and findings

[38] The Associated Ship points out that, whilst ownership was recognised as a
basis for association, the broader concept of control provides the principal focus of
the associated ship jurisdiction in practice. Dealing with a single controlling interest
under the heading of ‘the statutory provisions’ he says the following:
‘Sections 3(7)(a)(ii) and (iii) contain three references to the control of a company in similar but
not identical terms. Thus both subsections refer to a “person who controlled the company which
owned the ship concerned” and sub-section (iii) refers, in relation to the associated ship, to “a
company which is controlled by a person.”. . . They do convey, on the face of it quite
unequivocally, that in applying these provisions the search is for a single locus of control . . . All
that the sections require is that in relation to both the ship concerned and the associated ship a
“person” must be identified who “controls” or “controlled” the companies in question. The process
 22
of comparison that follows upon this identification is intended to be a simple one. The maritime
claimant identified the party who control the company that owned the ship concerned and identifies
the party who controls the company that owns the associated ship it seeks to arrest. The result of
these exercise is then compared. If they correspond, in the sense that the same person or persons
control both companies, then the requisite association is established. If they are not the same then
the association is not established. The proper conclusion from the language of section 3(7)(a) is
that the legislature was of the view that for each company it would be possible to identify a single
person or persons who controlled that company at the statutorily relevant time.’25

[39] It is important to have regard to what is said by The Associated Ship in a

footnote emanating from the above extract. The footnote reads as follows:
‘This should not be understood as saying that it is essential to the proof of association that a specific
natural person or persons must be identified as controlling the two companies. It will suffice if the
chain of control in both instances leads back to a common source of control, even if the applicant
is unable to identify that source. The source may itself be corporate. What is important is that it is
common to both ship-owning companies.’26 (Our emphasis.)

[40] The Associated Ship goes on to state that:

‘Lastly and at its most general control may refer to actual or ultimate control of the company’s
activities, however exercised, and irrespective of the controller’s economic stake in the company.
This control is distinct from managerial control in that it has within itself the power to control the
manager and direct what they do. It consists in a general oversight of the activities of the company
and hence the vessel and the power to continue or alter or discontinue its activities, to lay up the
vessel or to sell it. It is the ability to control and direct that is significant here not the actual day to
day activities of the person in whom that power vests.’27

[41] In Heavy Metal,28 Smalberger JA said that ‘[t]he principal purpose of the Act
is to assist the party applying for arrest rather than the party opposing it’. The

25
The Associated Ship at 186-187.
26
Ibid fn 4 at 187.
27
Ibid at 188.
28
Heavy Metal para 13.
 23
Appellate Division (as it then was), in Euromarine International of Mauren v The
Ship Berg and others,29 accepted the explanation by the draftsman of the Act that:
‘. . . the purpose of the Act was to make the loss fall where it belonged by reason of ownership,
and in the case of a company, ownership or control of shares.’

[42] In concluding on the concept of control, we quote from The Associated Ship
once more, where Wallis stated as follows with regards to the proper meaning of
control:30
‘It is submitted that the following are features of the concept of control that emerge from a correct
analysis of the statutory provisions governing associated ship arrests. Firstly, what must be sought
is a single repository of control. Secondly, and flowing from the first, it is actual control that must
be identified. Thirdly, the subject matter of control must be the direction and policy of the ship-
owning company, not necessarily its day to day management. In other words, what is sought is the
directing mind and will behind the company. Fourthly, it matters not whether control is exercised
directly or indirectly. What is important is that the actual repository of the power to control the
company must be identified. Fifthly, the court is not in general concerned with the niceties of the
corporate law of the jurisdiction where the company is incorporated. The fact that for the purposes
of the domestic law of the company recognition is only given in regard to its affairs to a person’s
status as registered shareholder will not matter if in fact the person concerned acts on the directions
of a third party who is by some legal means entitled to give those directions.’

[43] Indian Oil’s case from the outset was that the person who exercised ownership
and control in the requisite sense of the New Endeavor and the New Diamond at the
time the claims arose, was Adam and that he did so through the mechanism of NSL.
The factual evidence contained in the Gray Page report dated 15 September 2021 as
well as the 2013 TradeWinds and the 2014 Espresso articles all point to Adam being
the central controlling figure.

29
Euromarine International of Mauren v The Ship Berg and Others [1986] ZASCA 4; [1986] 2 All SA 169 (A); 1986
(2) SA 700 (A) at 712A-B.
30
The Associated Ship at 222.
 24
[44] The Gray Page report and the further evidence set out in the founding
affidavit establish conclusively that the ship owning companies in question are
controlled by Adam through the vehicle of NSL. The high court correctly found that
the extent to which Adam is assisted by his children is irrelevant to the inquiry. The
identical repository and manner of control applies to each ship-owning company.
This factual conclusion, in the absence of any evidence to the contrary from the
appellants, satisfies the test for association. This Court, in Wright v Wright and
Another,31 stated that ‘[l]itigants are required to seriously engage with the factual
allegation they seek to challenge and to furnish not only an answer but also
countervailing evidence, particularly where the facts are within their personal
knowledge’. The appellants failed to do so in the present instance.

[45] As the Gray Page report details, Polembros Shipping Limited (PSL) is a large
shipping company that was established in the 1970’s by Greek brothers Spyros and
Adam. In 2014, Spyros and Adam decided to split the shipping interest between
them in order to facilitate the succession of their children. It was decided that Spyros
would run PSL together with his son whilst Adam would transfer his fleet of ships
from PSL to NSL. Adam currently uses NSL to manage and control his shipping
interests for himself and for the benefit of his two children Leonidas and Alina. It is
evident from the evidence adduced by Indian Oil, in the founding affidavit, that PSL
and NSL continue to make the strategic decisions to purchase, sell and scrap vessels
in their fleets.32

[46] In the 2013 TradeWinds article, PSL (prior to the split) is referred to as a
‘Greek owner’. Details are provided in the article of PSL’s recent purchases of five
different vessels (one of which is the Ikomasan which later became the New

31
Wright v Wright and Another [2014] ZASCA 126; 2015 (1) SA 262 (SCA) para 15; see also Wightman t/a JW
Construction v Headfour (Pty) Ltd & Another [2008] ZASCA 6; 2008 (3) SA 371 (SCA) para 13.
32
This is also confirmed by the Gray Page investigative report especially para 12 thereof.
 25
Diamond). PSL is reported to have ordered another ten new build bulkers from
two different shipyards. PSL is also said to be buying and selling dry bulk vessels as
well as tankers. PSL is reported to have scrapped two Capesized vessels in that year.

[47] In the 2014 Espresso article, the following is reported. Brothers Spyros and
Adam are dividing their property and separating their fleet. Adam and his children
will pass their ships and others assets to NSL which is described as ‘another family
interest company’. Adam has informed shipping circles that NSL will own about 23
ships.

[48] It seems that family control is sufficient to establish association, and this kind
of control is prevalent in Greek shipping. The Associated Ship explains family
control as follows:
‘. . . the operation of the fleet as a single entity managed by a single manager (often itself a family
company) indicates that there is sufficient measure of common control for the vessel in the fleet
to be associated ships. This may be especially the case where certain key members of the family
are in effect responsible for all decision in regard to the conduct of the business of the fleet . . . it
matters not in that situation whether one says that the key members of the family directly control
the ship owning companies or that the family as a collective entity controls the entire group of
companies.’33

[49] The high court was referred to the above passage in the reconsideration
application. The high court no doubt relied on the passage when it found that ultimate
control of both ship-owning companies at the relevant times vested in Adam and that
it made no difference as to whether Adam exercised this alone (as the ultimate
controller) or acted together with his children.

33
The Associated Ship at 223-224.
 26
[50] The single repository of common control of the two ship-owning
companies at the material times is also evident from the following facts. Elly
Maritime (second appellant) and Porto (third appellant) have the same President
(Antonis Stellas) and Secretary (Efstratios Gogis). Stellas and Gogis are also the
President and secretary of NSL. Gogis is also the legal representative of NSL in
Greece. Stellas is NSL’s operations manager. Gogis further signed important
documents on behalf of Porto, including the bill of sale for the purchase of the New
Diamond and the letter of assignment to place her under NSL’s management. Gogis
is also the director of the Polemis family’s hotel business in Greece, Hydra Hotels
Hellas SA. This commonality of officers is no coincidence – the Polemis family
controls its shipping empire through the two management companies with the
brothers Spyros and Adam being ultimately in control.

Concluding remarks
[51] For all the reasons mentioned above, we are satisfied that Indian Oil had
discharged the onus resting on it on a balance of probabilities. The high court’s
findings on the issue of association were correct. In pleading the issue of control in
the alternative as it did, Indian Oil was perhaps being cautious. This is
understandable. It was up to the appellants to controvert the evidence by placing
credible evidence before the court. They failed to do so. This was sufficient to tip
the balance in favour of Indian Oil. As The Associated Ship explains:
‘There is always some evidence available to a claimant and as long as it can produce enough to
constitute at least a prima facie case of association that will suffice to force the owners of the two
vessels to produce in response some direct evidence that they are not in truth associated . . . In the
absence of countervailing evidence from the owners of the shares in the ship-owning companies
that will usually suffice to discharge the onus of proof on the claimant even in the face of a bare
denial of the fact of association. This flows from the well-established principle that less evidence
 27
will be required to establish a prima facie case where the matter is peculiarly within the
knowledge of the opposite party.’34

[52] As a result, the following order is made:

The appeal is dismissed with costs, such costs to include the costs consequent upon
the employment of two counsel.

__________________________
Y T MBATHA
JUDGE OF APPEAL

__________________________
R SEEGOBIN
ACTING JUDGE OF APPEAL

34
The Associated Ship at 129-130.
 28
Appearances

For the appellants M Fitzgerald SC

Instructed by: Bowman Gilfillan Inc, Cape Town
Webbers Attorneys, Bloemfontein

For the respondent: G D Harpur SC with L M Mills

Instructed by: Norton Rose Fulbright South Africa Inc, Durban
Lovius Block Attorneys, Bloemfontein.