17TH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT .17TH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION 2016 King’s College London Claimant’s Memorandum Claimant:

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    17TH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION 2016

    Kings College London

    Claimants Memorandum

    Claimant: Zeus Shipping and Trading Company Respondent: Hestia Industries

    Team No: 16

    Daniel Ask Alex Braune

    Cristina Harshman Joshua Thomson

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    TABLE OF CONTENTS

    LIST OF AUTHORITIES....3

    SUMMARY OF THE FACTS....6

    PART I - THE ARBITRATION AGREEMENT............8

    PART II - LAYTIME AND DEMURRAGE15

    PART III FRUSTRATION.20

    PART IV - SALVAGE..24

    PART V - PRAYER FOR RELIEF...29

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    LIST OF AUTHORITIES

    A. LEGISLATION

    Admiralty Act 1988 (Cth) Admiralty Rules 1988 Crimes at Sea Act 2000 Navigation Act 2012

    B. CASES Akerblom v Price, Potter, Walker & Co [1881] 7 QBD 129 Arnold v Britton [2015] UKSC 36 Black Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg [1981] 2 Lloyds Rep 446 C v D [2007] EWCA Civ 1282 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd (HL) [1993] 1 Lloyds Rep 291 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 Codelfa Construction v State Rail Authority of New South Wales [1982] HCA 24 Edwinton Commercial Corp and another v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (The Sea Angel) [2007] EWCA Civ 547 El Oldendorff & Co GmbH v Tradax Export SA [1974] AC 479 Ellis Shipping Corpn v Voest Alpine Intertrading, The Lefthero [1992] 2 Lloyd's Rep 109 Enercon GmbH v Enercon (India) Ltd [2012] EWHC 689 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 Finlay v Liverpool and Great Western Steamship Co (1870) 23 LT 251 Fiona Trust & Holdings Corporation v Privalov [2008] 1 Lloyds Rep 254

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    Geipel v Smith (1872) LR 7 QB 404 Hadley v Clarke 8 T R 25 Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497 Hirsch v The Zinc Corp Ltd (1917) 24 CLR 34 Mitchell Cotts v Steel (The Kaijo Maru ) [1916] 2 K.B 610 National Carriers Limited v Panalpina (Northern) Ltd [1981] AC 675 Napier Park Europe Credit Opportunities Fund Ltd v Harbourmaster Pro-Rata CLO BV [2014] EWCA Civ 984 Rainy Sky SA v Kookmin Bank [2011] UKSC 50 Sailing Ship Garston Co v Hickie (1885) 15 QBD 580 Skype Technologies SA v Joltid Ltd [2009] EWHC 2783 (Ch) Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG [2011] EWHC 3381 (Comm) Sul America Cia Nacional De Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638 The Charlotte (1848) 3 Wm Rob 68 The City of Chester [1884] 9 P D 182 The Jane [1831] 2 Hagg. 338 The Super Servant Two [1990] 1 Lloyd's Rep 1 The Teh Hu [1970] P 106 The Vine [1825] 2 Hagg 1 The Wilhelmine [1842] 1 NoC 376 Union of India v Compania Naviera Aeolus S.A. (The Spalmatori) [1932] 2 Lloyd's Rep Walter Rau Neusser Oel und Fett AG v Cross Pac. Trading Ltd [2006] Aust Fed Ct

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    United Group Rail Services Ltd v Rail Corp New South Wales [2009] NSWCA 177 Francis Travel Mktg Pty Ltd v Virgin Atl Airways Ltd [1996] 39 NSWLR 160 XL Insurance Ltd v Owens Corning [2000] 2 Lloyds Rep 500

    C. OTHER SOURCES

    J Cooke, Voyage Charters (3rd edn Routledge 2007) Kennedy and Rose, Law of Salvage (6th edn Sweet and Maxwell 2002) L Oppenheim, II International Law: A Treatise 202 (H Lauterpacht edn Longman 1952) Redfern and Hunter, International Arbitration (6th edn Oxford University Press 2015)

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    SUMMARY OF THE FACTS

    On 1 July 2014, Hestia Industries (Charterers) made a request to Zeus Shipping and

    Trading Company (Owners) for a proposal for a voyage charter to transport Charterers

    cargo of HLNG from Hades to Poseidon. On 14 July 2014 Owners sent their original

    offer. On 16 July 2014, Charterers accepted the terms of the contract bar one requested

    amendment. They stated that they were only prepared to arbitrate disputes in London

    which arise out of the provisions of the charterparty such as a dispute about demurrage.

    Clause 30 of the charterparty, the arbitration agreement, was duly amended with the

    phrase arising under, and was accepted by charterers on 22 July 2014.

    Protests to stop HLNG production were being planned on that 20 July 2014. When the

    Vessel arrived at the Port of Hades at 0914 on 3 October 2014, the Master noted

    troubling events including protests relating to the Charterer and the HLNG cargo. The

    loading was completed by 2350 on 6 October 2014.

    Following protests and public opposition to the Charterers export of HLNG Opposition

    Leader of Hades, Jacqueline Simmons, seized control of the Parliament on 7 October

    2014 and ordered the Coast Guard to intercept The Athena. The Coast Guard intercepted

    the Athena, at some time on 7 October 2014. It is unclear whether the Athena was still

    within the Port and the territorial waters of Hades. The Coast Guard, the Master and the

    Law Institute of Hades Journal are all uncertain as to whether this was within the Coast

    Guards jurisdiction. The Athena returned to the Berth at Hades on 8 October 2014.

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    During the period that the Athena was detained at the Port of Hades, the Charterers

    sought other HLNG carries to undertake the voyage from Hades to Poseidon, but no ships

    available. The Athena was released 5 October 2015 upon which it resumed the voyage.

    On 5 October 2015 the vessel was released by the Coast Guard and subsequently towed

    by Hestug into open water. When the tow lines were released the vessel began to drift

    due to a defective propeller. The pilot tugs, which had previously towed the vessel,

    reconnected their lines and towed the vessel back to anchorage.

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    I. PRELIMINARY ISSUE OF JURISDICTION

    1. Clause 30 of the Charterparty contains an arbitration agreement designating

    London as the place of arbitration. This is an express choice of venue, and it is

    submitted, expresses the contrary intention of the parties for the purposes of

    Section 2 of the Maritime Law Association of Australia and New Zealand

    Arbitration Rules (The Rules). Thus, the reference to arbitration in Clause 30

    is not limited to the geographical locations listed in Section 2(a) or (b) of The

    Rules, and can therefore extend to arbitration in London, England. Since both

    Parties are signatories of the New York Convention States, international arbitral

    theory indicates that Art.V(1)(a),(d), and (e) of the Convention, and Article 1(2)

    of the UNCITRAL model law, both support a clear territorial link between the

    place of arbitration and the seat of arbitration, which in turn determines the lex

    arbitri. 1 Further, it is submitted that this territorial link has been similarly

    followed in English arbitral jurisprudence. See Enercon GmbH v Enercon (India)

    Ltd.2 Therefore, it is submitted that the lex arbitri is the English Arbitration Act

    1996 (the Arbitration Act), and pursuant to Section 30 of the Arbitration Act

    this Tribunal has jurisdiction to rule upon its own jurisdiction under the

    competence-competence principle.

    1 Redfern and Hunter, International Arbitration, (6th edn Oxford University Press 2015). 2 Enercon GmbH v Enercon (India) Ltd [2012] EWHC 689.

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    A. THE LAW APPLICABLE TO THE ARBITRATION AGREEMENT

    2. It is submitted that the law governing the Arbitration clause in the Charterparty,

    that is to say, the law governing the construction of Clause 30 itself, is English

    Law.

    3. Following the doctrine of separability established under S.7 of the Arbitration

    Act, it does not necessarily follow that the law governing the main Charterparty

    should also govern the arbitration clause. The Court of Appeal held in Sul

    America v Enesa Engenharia3 that in principle the proper law of an arbitration

    agreement which itself formed part of a substantive contract might differ from

    that of the contract as a whole4. Although the Court thought it fair to start from

    an initial assumption that the parties may intend the substantive law of the

    contract to also govern the arbitration agreement, this could be displaced by any

    indication to the contrary.5

    4. The Court of Appeal in Sul America therefore established a three-stage test for

    determining the applicable law.

    5. The Court held that The proper law of the arbitration agreement was to be

    determined in accordance with the established common law rules for ascertaining

    the proper law of any contract. Those required the court to recognise and give

    effect to the parties choice of proper law, express or implied, failing which it was

    necessary to identify the system of law with which the contract had the closest

    and most real connection. 6

    3 Sul America Cia Nacional De Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638. 4 Ibid, 672. 5 Ibid, 679. 6 Ibid, 671.

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    6. It is submitted that the Parties cannot satisfy the first stage, which requires an

    express choice of law clause governing the arbitration agreement itself. This is to

    be distinguished from a choice of law clause governing the substantive contract.

    The distinction is made clear in Sul America as the express choice of Brazilian

    law for the policy did not constitute an automatic express choice of law for the

    arbitration agreement, but rather, pointed towards a possible implied choice.7

    7. It is submi