Notes & Summary 9

Twelveth Edition (2019)

Ship for demolition

Section 2 (1) (l) of the Admiralty Act (2017) defines  vessel which includes any ship, boat, sailing vessel or other description of vessel used or constructed for use in navigation by water, whether it is propelled or not, and includes a barge, lighter or other floating vessel, a hovercraft, an off-shore industry mobile unit, a vessel that has sunk or is stranded or abandoned and the remains of such a vessel.

Explanation. A vessel shall not be deemed to be a vessel for the purposes of this clause, when it is broken up to such an extent that it cannot be put into use for navigation, as certified by a surveyor.

The ship is no longer within the definition of a ship, the nature and category of the res is entirely altered, the court is without jurisdiction as there is no res, the ship has literally ceased to exist from the definition of a ship. A action in rem cannot be maintained in such situation.

The ship should cease to exist as a ship only at the time when beaching of the ship is complete and the ship should be declared dead only thereafter. In almost all instances when ships arrive for demolition are kept waiting at anchorage for being beached, the agent or the new owner or ship breaker or their representative files the bill of entry with the customs, the ship continues to wait at anchorage for high tide or for a convenient date for being beached. The period between arrival of the ship, waiting at anchorage, filing of the bill of entry, ship continuing to wait at anchorage even after filing of bill of entry and actual beaching of the ship are crucial. The ship can still navigate in technical sense until the ship is actually beached for demolition.

If a ship is condemned and is unserviceable at the time of sale and under an agreement, it was sold for breaking and scraping purposes, the condemned and unserviceable ship purchased by the dealer or cash buyer or the end buyer maybe a re-rollable scrap in the form of an 'old ship' for dismantling. In the course of breaking activity, the ship loses its identity but according to Customs Act the ship loses its identity at the time of filing of the Bill of Entry. Every importer is required to file in terms of the Section 46 of the Customs Act an entry which is called Bill of entry for home consumption or warehousing.

Any ships imported for breaking up are obviously old ships, purchased to retrieve the material, particularly steel plates, for disposal in the market for re-rolling or re-cycling purposes. A ship that is able to sail on its own upto the shore where it is to be demolished, it is still a ship in technical sense until it reaches the beach and cannot be pulled out from the beach and for the purpose of distinction cannot be said that such ship which is sold for demolition is a new ship. Remaining afloat is not a sure test for a ship to be called new, because a condemned ship is not always a sunk ship. An old ship sold for demolition that manages to remain afloat is still a ship. Old ships which are sold for demolition is a ship until the ship is beached for demolition.

The claim of the claimant having maritime claim or a lien gets frustrated completely if it is a one ship company more so when that ship does not have any sister ship.

BCAS: 7103-1001