A cargo of silver worth more than $43m, sunk off the Seychelles in 1942, belongs to South Africa, the Supreme Court has unanimously held
The SS Tilawa, scuppered by two torpedoes from a Japanese submarine, was carrying 2,364 bars of silver purchased in India by South Africa for minting coinage for South Africa and Egypt. In 2017, the silver was salvaged by Argentum Exploration Ltd and declared to the Receiver of Wreck in Southampton, UK.
Argentum brought a claim for salvage in rem (against the silver) as opposed to in personam (against South Africa, owner of the silver). South Africa sought to strike out Argentum’s claim on the grounds it had immunity under the State Immunity Act 1978.
The case centred on whether the cargo and ship were ‘at the time when the cause of action arose, in use or intended for use for commercial purposes’, under s 10(4)(a) of the 1978 Act. If so, immunity was lost.
In Argentum Exploration v Republic of South Africa [2024] UKSC 16, [2024] All ER (D) 33 (May), the Supreme Court unanimously held South Africa was entitled to immunity from Argentum’s claim. It rejected Argentum’s argument that the cargo was being carried for commercial purposes due to the commercial arrangements in place.
Jonathan Goulding, senior associate, HFW, who was part of the team advising South Africa, said: ‘It is not just the government of South Africa that will be grateful for this landmark and first of its kind ruling.
‘Indeed, governments around the world will be relieved that the court has decided that if the salvaged cargo in question was intended for state use, such as minting currency as in this case, it falls within the remit of state immunity and can be recovered by the state. As we continue to learn more about the ocean seabed, many more historic wrecks have already been targeted by salvors.
‘In light of this ruling, anyone hoping to recover valuable lost cargo, and bring it to the UK to claim ownership of it, will first need to take steps to identify the original owner and make contractual agreements with them to salvage cargo before attempting to do so.’
