South Africa loses state immunity claim over cargo of silver bars

Quadrant Chambers has reported that Liisa Lahti was part of the legal team that successfully resisted South Africa’s claims of state immunity in respect of a cargo of silver bars (current value: £32m) in the case of Argentum Exploration Limited v The Silver [2020] EWHC 2323 (Admlty).

Sir Nigel Teare, sitting as a judge of the high court, noted that the silver was being carried on the SS Tilawa – a privately-owed merchant ship – during World War II.  The Tilawa was sunk in international waters by Japanese torpedoes as she made the crossing from Mumbai to Durban, carrying (among other cargo) the silver for use by the South African Mint. The silver sank to depths which until recently had precluded salvage.

Argentum salved the silver in 2017 and brought it to Southampton, where it was declared to the Receiver of Wreck. Argentum also commenced proceedings in rem claiming salvage from the owner of the silver. South Africa claimed ownership of the silver, but argued that it was immune from the proceedings in rem due to sovereign immunity.

Sir Nigel said that resolution of the matter hinged on whether, for the purposes of s 10(4)(a) of the State Immunity Act 1978 (SIA), the silver and the Tilawa could be said to be “in use, or intended for use for commercial purposes” in 2017, being the time at which Argentum’s cause of action against South Africa arose.

Stephen Hofmeyr QC, Liisa Lahti and Cameron Miles (instructed by Tatham & Co) appeared for the Claimant, while Christopher Smith QC and Jessica Wells (instructed by HFW LLP) appeared for the Defendant.

Judgment was handed down on 16 December 2020. Sir Nigel held that, for the purposes of s 10(4)(a) SIA, the Tilawa and the silver were in commercial use when the wreck was salved, He noted that, on sinking, the ship was a merchant vessel and its cargo was being shipped under a commercial contract of carriage. Nothing had happened between 1942 and 2017 to alter the status of either.

He said that therefore s 10(4)(a) applied and South Africa was not immune from proceedings in rem claiming salvage in respect of the silver.

Argentum v The Silver is the first case ever to consider SIA s 10(4)(a) – and only the second in which SIA s 10 has been considered. 

Liisa was instructed by Stephen Askins of Tatham & Co. She was led by Stephen Hofmeyr QC (7KBW). The other members of the counsel team were Cameron Miles (3VB) and Tom Nixon (Quadrant Chambers).