Martrade Shipping and Transport GmbH vs. United Enterprises Corporation and MV Unity - (02 Oct 2020)

When order is ambiguous, a sensible interpretation of the order is to be preferred instead of an impractical approach

Civil

The matter concerned the interpretation of a Court order regarding security and the release of the MV ‘Unity’ from arrest. On 23 December 2016, the KwaZulu-Natal Division of the High Court, directed Martrade Shipping to provide counter-security for certain maritime claims made by Union Enterprises in ongoing arbitration proceedings in London . The high Court stipulated a 15-day time period in relation to the provision of security in the first paragraph of its order. It provided that, in the event of non-compliance with the first paragraph of the order within 30 days, the arrest of the MV Unity would lapse. Security in a form determined by the registrar was provided outside of the 15-day time period. Union Enterprises brought an application in the high Court to set aside the registrar’s determination and to declare that the arrest of the MV Unity had lapsed. The high Court granted the orders. Martrade Shipping appealed against the order. The appeal was heard by a full court, the full court dismissed the appeal.

The principles which apply to the interpretation of court orders are well-established. In Firestone South Africa (Pty) Ltd v Gentiruco AG it was observed that, the Court’s intention is to be ascertained from the language of the judgment or order as construed according to the usual, well-known rules. Thus, as in the case of a document, the judgment or order and the court’s reasons for giving it, must be read as a whole to ascertain its intention.

The Court is enjoined, where ambiguity presents itself, to interpret a document or order so as to avoid impractical, un-business-like or oppressive consequences which would undermine the purpose of the order. The SCA found that the order was ambiguous. In these circumstances, it held that a sensible interpretation of the order was to be preferred to one that would lead to impractical, un-businesslike or oppressive consequences, or that would undermine the purpose of the order.

The purpose of the order, it held, was to balance the interests of the parties in the ongoing arbitration proceedings and to ensure the effectiveness of any orders made in those proceedings. It held that, the 15-day period provided in the first paragraph of the order was to enable the parties to agree upon the form of security to be provided. The 30-day period in the second paragraph of the order was the period within which the security was to be furnished. Therefore, since the security was provided within this latter period, Martrade Shipping had complied with the order. In the result, the appeal by Martrade Shipping was upheld and the SCA substituted the high Court’s subsequent order with one dismissing the application brought by Union Enterprises with costs. It also ordered the latter to pay the costs of the appeal.

Tags : COURT’S ORDER COMPLIANCE INTERPRETATION