$110m lawsuit exposes Transnet's alleged negligence in MV Smart grounding incident

Transnet National Ports Authority (TNPA) is facing a US$110 million (over R1.83 billion) lawsuit over the running aground of a cargo vessel at its Richards Bay harbour more than a decade ago.

MV Smart ran aground in August 2013 near the entrance of the harbour, which led to the vessel losing its cargo.

The owners and underwriters of the MV Smart want to recover damages from TNPA of about US$110m, claiming the loss of the vessel was due to negligence on the Transnet subsidiary’s part.

The TNPA also faces two other lawsuits – one by the charterer of the vessel (Minmetals Logistics Zhejiang Co. Ltd) and the other by the cargo interests, which is a claim relating to the loss of the cargo of coal it carried at the time.

Details of the multi-million U.S. dollar lawsuit emerged at the KwaZulu-Natal High Court, Durban, where the TNPA sought an order directing the owners and underwriters of the MV Smart to produce certain documents and correspondence for the state-owned entity to inspect them.

The matter for which the disclosure of the documents is required is set down to commence in July next year and is set to be heard for over four weeks.

The owners and underwriters of the MV Smart also launched arbitration proceedings against Minmetals Logistics Zhejiang Co. Ltd, in London for substantially the same damages as are claimed against the TNPA.

The TNPA, which serves port users, including terminal operators, shipping lines, ships’ agents, cargo owners and the freight forwarding industry, manages the country’s eight commercial seaports – Saldanha Bay, Cape Town and Mossel Bay in the Western Cape, Gqeberha, Ngqura and East London in the Eastern Cape as well as Durban and Richards Bay in KwaZulu-Natal.

It ensures the national port system is safe, efficient and effective functioning.

Port Nolloth in the Northern Cape, the ninth port, is leased to De Beers Consolidated Diamond Mines and does not handle commercial cargo and the TNPA operates as a landlord authority, providing port infrastructure, marine services and controlling port navigation.

Earlier this week, Judge Peter Olsen directed MV Smart’s owners and underwriters to produce a number of documents in their possession relating to London arbitration proceedings between the owners and the charterers of the vessel as well as the arbitration proceedings between the owners and the cargo interests within 15 days of the date of his order handed down on Monday, December 22.

These include final versions of the pleadings (submissions), including requests for particulars and replies thereto, statements presented as the evidence of factual witnesses called to give evidence and relied upon by the parties at the arbitrations.

Other documents are statements presented as the evidence of expert witnesses called to give evidence and relied upon by the parties at the arbitrations, as well as any reports of expert witnesses (including reports or presentations given by experts in electronic form) which were presented to the arbitrators.

According to the judgment, the owners and underwriters must also deliver full transcripts of the arbitration proceedings, written submissions made to the tribunal by the parties’ counsel (including opening and closing submissions), and arbitration awards, including final awards, interim awards and rulings.

Further documents required include applications for leave to appeal in the charter party arbitration including founding and answering papers, written submissions by counsel, and any judgments or orders therein.

“The first respondent (owners and underwriters of the MV Smart) is directed to deliver a further supplementary discovery affidavit dealing with relevant correspondence (excluding correspondence of a genuinely without prejudice nature) relating to the arbitrations, and exchanged between the owners and the charterers, and between the owners and the cargo interests, (in each case including those parties via their legal representatives) relating to the casualty,” reads Judge Olsen’s order.

Furthermore, the obligation to provide any relevant correspondence will be evaluated based on Judge Olsen's ruling regarding privilege and confidentiality of the documents mentioned in the judgment, which pertains to the privacy of arbitration proceedings

In its defence, the TNPA maintains that the loss of the vessel and cargo was caused by negligence on the part of the master and crew, alternatively contributory negligence.

The TNPA’s instituted its own third party proceedings against the owners in which it seeks, on a conditional basis, an order declaring the owners to be joint wrong-doers in relation to the loss in question.

loyiso.sidimba@inl.co.za