The legal dispute between Ocean Ark Shipping Ltd ("Ocean Ark"), Astron Energy (Pty) Ltd ("Astron"), and the South African Revenue Service (SARS) over the detention of a multimillion-rand fuel-transportation vessel continues. The Western Cape High Court recently refused the applicants leave to appeal an earlier ruling that allows SARS to detain the vessel. 

The judgment, handed down on 6 July 2026, means that the Singapore-flagged MT Essien will remain detained in South African waters while SARS’ appeal proceeds to the Supreme Court of Appeal (“SCA”).

Nearly three years after the vessel first entered South African waters, and more than a year after SARS detained it, the dispute remains far from over.

The stakes are high: 

• a detained vessel worth almost R400-million;
• a R522-million financial guarantee by Astron in respect of the value of the vessel and any Valued-Added Tax (“VAT”), penalties and interest claimed by SARS; and 
• alleged tax liabilities of approximately R124-million.

Since Ocean Ark and Astron first approached the court, the case has attracted attention not only because of the amounts involved, but also because the vessel is used in coastal transportation of fuel products in South Africa. Astron alleged that the continued detention of the vessel could affect fuel logistics, including the supply of jet fuel to Cape Town International Airport.

The Dispute Behind the Vessel’s Detention

The MT Essien is owned by Ocean Ark and chartered by Astron to transport fuel products between South African ports.

In March 2025, approximately 18 months after the vessel entered South African waters, SARS detained the vessel and its cargo. Thereafter, SARS subsequently seized the vessel in June 2025. The dispute arose because no customs entry was made declaring the vessel for home consumption and no import VAT was paid.

SARS argues that the vessel was deemed to have been imported under section 10(1)(e) of the Customs and Excise Act, No. 91 of 1964 (“the Customs Act”). SARS contends the amount at stake to be approximately R124-million, comprising about R94-million in import VAT and a further R30-million in penalties and interest.

Shortly after, SARS detained the vessel and the fuel on board under section 88(1)(a) of the Customs Act. SARS later escalated matters and formally seized the vessel under section 88(1)(c), on the basis that it was liable to forfeiture under section 87 of the Customs Act.

Ocean Ark and Astron dispute SARS’ position and have instituted review proceedings in the Gauteng High Court challenging SARS’ detention, seizure, deemed-importation and refusal-to-release decisions. The latter concerns section 93 of the Customs Act, which allows the Commissioner, in appropriate circumstances, to release detained or seized goods. Those underlying review proceedings have not yet been determined.

The R522-million Guarantee

Pending that review, they approached the Western Cape High Court for interim relief that the vessel be released against financial security instead of remaining physically detained.

On 24 April 2026, the Western Cape High Court granted that relief. The Court ordered the release of the MT Essien against a Lombard Insurance guarantee totalling over R522-million. That guarantee covered the estimated value of the vessel and the alleged import VAT, penalties and interest.

Ocean Ark and Astron argued that SARS did not need to keep physical control of a vessel worth about R400-million where it had been offered financial security covering both the value of the vessel and the alleged tax exposure.

Astron also alleged that the continued detention was causing them major commercial harm, costing approximately R1-million per day, through ongoing charter costs and alternative shipping arrangements. 

Why the Vessel Still Could Not Sail

Before the vessel could be released as per the 24 April 2026 court ruling, SARS applied for leave to appeal the release order. Under section 18(1) of the Superior Courts Act 10 of 2013 an application for leave to appeal generally suspends the operation of the order being appealed. In practical terms, SARS’ application paused the release order.

Ocean Ark and Astron then brought an application under section 18(3) of the Superior Courts Act. That provision allows a court, in exceptional circumstances, to order that its judgment may still be enforced despite a pending appeal.

To succeed, Ocean Ark and Astron had to show three things: exceptional circumstances, irreparable harm to them if the vessel remained detained, and no irreparable harm to SARS if the vessel was released.

Although the Court reaffirmed that the applicants would suffer “catastrophic financial losses”, the application failed because the loss was not enough to overcome the Court’s concern that the vessel could “sail beyond the court’s reach”.

The Court’s Main Concern

The key issue was not simply whether the R522-million guarantee was sufficient. SARS argued that if the MT Essien was released and sailed beyond South African waters, it could move beyond the practical reach of the Court. If SARS later succeeded in the appeal or in the pending review, SARS could be left without the physical vessel and without an effective forfeiture remedy.

The Court accepted that this risk could not be ignored, and that concern was strengthened by the fact that the MT Essien is a foreign-flagged vessel, and Astron’s time charter was nearing expiry. 

The Court was not satisfied that Ocean Ark and Astron could, as a practical matter, ensure that the vessel would remain in South African territorial waters. Ocean Ark and Astron argued that the R522-million guarantee protected SARS, providing the tax authority financial security equivalent to the vessel’s value and the alleged tax exposure.

But for purposes of the section 18(3) application, the Court was not persuaded that the guarantee removed the risk of irreparable harm to SARS. 

The Latest Judgment

On 6 July 2026 the Court held that a refusal of section 18(3) relief is not ordinarily appealable. It is an interim procedural ruling. It does not finally decide the rights of the parties, and it does not determine whether SARS’ underlying customs decisions were lawful.

The Court also found that granting Ocean Ark and Astron leave to appeal would not necessarily release the vessel. The fate of the MT Essien now depends primarily on the SCA’s decision in SARS’ appeal against the April release order, and ultimately on the Gauteng High Court review.

Leave to appeal was therefore refused.

The Final Word Is Still to Come

The matter is not finalised. The SCA must still determine SARS’ appeal against the original release order, while the review court must separately decide whether SARS’ underlying customs decisions, including its deemed-importation, detention, seizure and refusal-to-release decisions, were lawful.

The SCA judgment is awaited, particularly for the guidance it may provide on the adequacy of financial security, the Commissioner’s discretion under section 93 of the Customs Act, and the circumstances in which a court may direct the interim release of an asset detained by SARS.

Written by Richan Schwellnus, Team Lead: Tax Controversy & International Tax at Tax Consulting SA; and Dylan Jacobs, Tax Attorney at Tax Consulting SA