On 8 May 2024, the Supreme Court handed down judgment in Argentum Exploration Ltd v Republic of South Africa [2024] UKSC 16.
When the SS Tilawa was sunk by enemy action in the Indian Ocean in November 1942, few would have predicted that some 75 years later its cargo of silver bars would be recovered from the seabed. Fewer still could have envisaged that it would trigger a legal battle that would delve into the WWII archives (including a top secret telegram from Foreign Secretary Anthony Eden), require an intervention from the Receiver of Wreck and culminate in a two-day hearing in the Supreme Court.
The Claimant, Argentum, who claimed to have salved the silver, brought it to the United Kingdom, declared it to the Receiver of Wreck and claimed an award for voluntary salvage under the Salvage Convention 1989 – bringing an in rem claim against the silver. The owner of the silver was the Government of South Africa.
South Africa contested the jurisdiction of the English Court, claiming that it was entitled to immunity under section 1 of the State Immunity Act (“the SIA”) and Article 25 of the Salvage Convention. Argentum contended that the exception to immunity in section 10(4)(a) of the SIA was engaged. This provides that a State is not immune as respects an action in rem against a cargo belonging to the State if both the cargo and the ship carrying it were, at the time when the cause of action arose, in use or intended for use for commercial purposes.
By the time the case reached the Supreme Court, it was common ground that, in assessing the use and intended use of ship and cargo, it was in this case necessary to look at the position in 1942 when the ship sank. It was also common ground that, in 1942, the ship was in use for commercial purposes and the silver was intended for the predominantly sovereign purpose of making South African coins. The central issue on appeal was therefore whether, in 1942 when the silver was on board the SS Tilawa, it was in use for a commercial purpose.
Teare J and the majority in the Court of Appeal had held that the silver was in use for the commercial purpose of fulfilling the underlying contracts of sale and carriage. The Supreme Court unanimously rejected this approach and approved the reasoning of Elizabeth Laing LJ in dissent – that when the silver was on board it was not in use at all, it was simply being carried.
In reaching this conclusion (and allowing South Africa’s appeal) the Supreme Court addressed, amongst other issues, the correct interpretation of the Brussels Convention of 1926, the nature of the maritime lien, the distinction between in rem and in personam claims, and the development of the restrictive theory of immunity in English and international law.
Christopher Smith KC, Samuel Wordsworth KC and Jessica Wells, instructed by HFW LLP, acted for the Republic of South Africa. Naomi Hart also acted for the Republic in the Court of Appeal.
