2010 YEAR IN REVIEW


INTRODUCTION

For the firm the 2010 year was no less active than previous years, but of course the year was dominated by the 2010 World Cup which, although positive for the country as a whole, certainly had an effect on productivity during that magic month.

1. MARITIME LITIGATION

Particularly in the first half of the year there appeared to be an increase in the number of security arrests of Capesize vessels which we were involved, which most likely was attributable to the Rule (b) attachment of funds procedure in the United States no longer being available to creditors and of course also due to the downturn in the global economy. This would have resulted in many breaches of charter party agreements where freight rates simply became unaffordable in the new global economic regime.

On the marine insurance front, the highlight of our year was the victory in the Supreme Court of Appeal in the “Mieke” matter where the Appeal Court confirmed the Cape High Court decision which ordered Lloyds of London to pay out to the owner on a hull policy. The case, like many Appeal Court cases is precedent setting and may have an affect on how foreign insurers place cover in South Africa in the future.

A further interesting trend in this year was the number of marine liquidations the firm was involved in, again due to the downturn in the global economy. Many of the liquidation proceedings were on behalf of financial institutions recovering on marine bonds and as such, trying to secure higher ranking on liquidation rather than in admiralty proceedings.

2. ENVIRONMENT AND FISHERIES

In the fisheries sector the focus of the year was on the performance review process which fishing rights holders were obliged to participate in. Many hours were spent reviewing clients’ submissions and advising thereon. At this stage we are yet to receive the results of the review process from the Department of Agriculture, Forestry and Fisheries (“DAFF”). Notwithstanding the downturn in the global and local economy, there were a number of fishing companies who required us to apply for the entry of new vessels into various sectors which were carried out successfully.

2010 was another year in which frustration has grown with regard to Section 21 rights transfer applications with no Section 21 decisions (that we know of) having been made by the State in any of the commercial sectors. An interesting development were the court applications brought by Oceana and Foodcorp respectively. Oceana’s matter was postponed with the State undertaking to reconsider its policy. In the Foodcorp-matter, the Cape High Court found in favour of the State and effectively extended Section 21 to the transfer of shares within a fishing rights holding company. This decision is now under appeal by Foodcorp. As such, Section 21 still remains a grey area for fishing industry participants and continues to make life difficult in any commercial transactions relating to the use and transfer of fishing rights and/or shares in rights holding companies.

Regarding environmental and policy issues, in 2010 our firm has acted for almost all the industry associations dealing with matters such as the regulation of Marine Protected Areas, contesting proposed environmental authorisations for Eskom’s nuclear power plants on the Eastern Cape Coast and making substantial submissions on the latest small scale fisheries policy published by DAFF.

2010 was also another busy year in our environmental / fisheries compliance department with our firm contesting and negotiating the release of vessels and fish stock from seizure, and defending criminal charges against rights holders, skippers and vessel owners alike.

The extent of our involvement in these compliance matters has escalated to such a degree that our specialist compliance attorney, Alistair Downing, has developed a fully comprehensive power point compliance seminar which during 2010 he has presented to fishing companies and industry associations along the entire South African fishing coast line with very positive feedback from clients and other industry participants.

3. COMMERCIAL

On the commercial side, we continue to be a leading firm with regard to the sale of fishing businesses including rights and vessels, particularly in a year where small to medium fishing operations struggled to make ends meet causing a number of forced sales.

Notwithstanding the downturn in the economy, there was still a steady flow of marine bond instructions from financial institutions and other lenders – in many cases as a result of the restructuring of debt, rather than the granting of new loans.

As the fishing and maritime industry is one which seems to constantly evolve, in 2010 our firm was involved in a number of unique and specialised commercial transactions which required lateral thinking solutions and drafting ability.

4. CONCLUSION

In conclusion 2010 has strengthened our firm’s position and ability with 2011 promising to be another exiting year, particularly with regard to the prospect of a strengthening global economy which will hopefully encourage greater and more productive trading. Locally it will be interesting to see how the new Ministers for the Department of Agriculture, Forestry and Fisheries as well as Environmental Affairs implement new policies / legislation and seek to change old ones.

As a firm, we are continually blessed with challenging and interesting matters from a wide range of varied local and foreign clients. We thank all of our clients and service providers for their continued support as we enter our 15th year in practice and wish everyone an enjoyable festive season and a prosperous 2011.

Yours faithfully

PETER EDWARDS

MANAGING DIRECTOR OF DAWSON EDWARDS & ASSOCIATES – MARITIME AND COMMERCIAL ATTORNEYS