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Supreme Court decide that South Africa is entitled to sovereign immunity in respect of an in rem claim by salvors of 2nd World War silver

8th May 2024

Argentum Exploration Ltd (Respondent) v Republic of South Africa (Appellant) [2024] UKSC 16

Stephen Hofmeyr KC, represented the Salvors of 2364 bars of silver recovered from the wreck of the SS TILAWA which was sunk in the Indian Ocean on 23 November 1942, on an appeal to the Supreme Court by the owners of the silver, the Government of the Republic of South Africa, against the decision of the Court of Appeal dismissing South Africa’s claim to immunity from suit pursuant to the State Immunity Act 1978 and the Salvage Convention 1989.

The Government of the Union of South Africa purchased the silver from the Government of India in 1942 for use in the South African Mint. They arranged for the carriage of the silver from Bombay to Durban on board SS TILAWA, a merchant ship owned by the British India Steam Navigation Company. Early in the morning of 23 November 1942 the vessel was torpedoed by the Japanese submarine I-29 and sank in deep water northwest of the Maldives.

For more than 70 years the silver lay on the seabed at a depth of some 2.5 kms. However, in 2017 the Salvors successfully recovered the silver, brought it to Southampton, delivered it to the Receiver of Wreck and claimed salvage.

The Government’s response to the Salvor’s claim was that both it and the silver are entitled to immunity in accordance with section 10(4)(a) of the State Immunity Act 1978 and Article 25 of the Salvage Convention 1989. The key issue was whether SS TILAWA and the silver were “in use or intended for use for commercial purposes” when the cause of action in salvage accrued. The application and subsequent appeals engaged two different competing interests, the interests of the Salvors in access to justice and the interest of the Government in being immune from jurisdiction of the Admiralty Court.

There has been no previous decision on section 10(4)(a) of the State Immunity Act 1978 or Article 25 of the Salvage Convention 1989.

Sir Nigel Teare (sitting as a Judge of the Admiralty Court) concluded that the Government was not entitled to immunity. He held that, at the time of the sinking, both the ship and the silver were “in use … for commercial purposes”.   The Court of Appeal (by a majority) upheld Sir Nigel’s decision.

The Supreme Court, however, came to the opposite conclusion, interpreting section 10 of the State Immunity Act, despite its being located in a part of the Act dealing with adjudicative jurisdiction, as “a hybrid provision making specific provision concerning immunity from both adjudicative and enforcement jurisdiction in Admiralty proceedings”.  Having interpreted section 10 in this way, the Supreme Court was able to treat section 10 and in rem proceedings as an exception to the restrictive theory of state immunity: “there are compelling reasons why more stringent criteria should be satisfied before immunity is denied in the case of actions in rem”.

The judgment, which can be viewed here, is particularly important because of its careful consideration of the State Immunity Act 1978, the restrictive theory of state immunity in public international law and claims to state immunity in the context of Admiralty proceedings in rem.

A press report from UKSC can be seen here.

Stephen Hofmeyr KC was assisted by Liisa Lahti and Cameron Miles and instructed by Stephen Askins of Tatham & Co.