20th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION … · SLR Singapore Law Report SMF Singapore Maritime Foundation Sp.A Societa per Azioni, Shared Company ... Canadian Pacific Forest

20th ANNUAL INTERNATIONAL MARITIME LAW

ARBITRATION MOOT COMPETITION 2019

__________________________________________________________________

MEMORANDUM FOR RESPONDENT

ERASMUS UNIVERSITEIT ROTTERDAM

Team 16

__________________________________________________________

ON BEHALF OF

OMEGA CHARTERING LTD

RESPONDENT

AGAINST

PANTHER SHIPPING INC

CLAIMANT

● Counsel ●

Dimitris Tsordas Jord Sanders Sahra Arif

Kata Magyar Galyna Podoprikhina Okeore Ibru

TABLE OF CONTENTS

LIST OF ABBREVIATIONS ......................................................................................................................... 5

LIST OF AUTHORITIES ............................................................................................................................... 7

CASES ............................................................................................................................................................... 7

STATUTES ....................................................................................................................................................... 9

LITERATURE ................................................................................................................................................. 9

OTHER ............................................................................................................................................................. 9

STATEMENT OF FACTS ............................................................................................................................ 10

1. THE TIME CHARTERPARTY ....................................................................................................................... 10

2. THE PERFORMANCE OF THE CHARTERPARTY .......................................................................................... 10

ARGUMENTS ON THE MERITS .............................................................................................................. 13

I. RESPONDENT IS ENTITLED TO RESTITUTION OF USD 375,000.00 DUE TO THE THANOS

QUEST BEING OFF HIRE .......................................................................................................................... 13

1. CLAIMANT must pay the restitution, pursuant to Cl. 17 of the NYPE form. ............................................ 13

2. In all cases, the outbreak of Ebola at West Coast Port and the further possibility of illness of the crew were

unforeseeable events. ....................................................................................................................................... 14

II. RESPONDENT DID NOT BREACH THE CHARTERPARTY BY NOT PERFORMING HULL

CLEANING OF THE THANOS QUEST .................................................................................................... 15

1. RESPONDENT was not required to perform hull cleaning of the Thanos Quest as the conditions required

under Cl. 83 of the Charterparty were not fulfilled. ........................................................................................ 16

Memorandum for Respondent

3

2. Alternatively, if the Tribunal considers that Cl. 83 of the Charterparty nevertheless applied, RESPONDENT

submits that they were entitled to pay a lump sum in lieu of cleaning. ........................................................... 17

2.1. CLAIMANT prevented the parties from arranging inspection and cleaning before the .......................... 17

expiry of the Charterparty. ............................................................................................................................... 17

2.2. RESPONDENT was entitled to make a lump sum payment as they were prevented from cleaning the

Thanos Quest. .................................................................................................................................................. 20

3. In any event, RESPONDENT is not liable for the costs of the voyage to South Island Port. ..................... 21

3.1. The voyage to South Island Port was non-contractual. ............................................................................. 22

3.2. The voyage to South Island Port would only benefit the economic interest of CLAIMANT. ................. 22

4. Furthermore, RESPONDENT redelivered the Thanos Quest in accordance with Cl. 4 of the NYPE 2015

Form. ................................................................................................................................................................ 23

III. RESPONDENT REDELIVERED THE THANOS QUEST IN ACCORDANCE WITH THE

CHARTERPARTY ........................................................................................................................................ 24

1. RESPONDENT redelivered the Thanos Quest prior to the expiry of the Charterparty. ............................. 25

2. Alternatively, RESPONDENT is not liable for damages relating to the loss of hire under the Next Fixture.

.......................................................................................................................................................................... 26

3. In the further alternative, the hire under the Replacement Fixture should be subtracted from the damages.

.......................................................................................................................................................................... 27

IV. CLAIMANT MUST INDEMNIFY RESPONDENT FOR THE CARGO CLAIM ............................ 28

1. CLAIMANT is liable for 100% of the Cargo Claim pursuant to Cl. 8 (a) of the ICA. ............................... 28

1.1. The Cargo Claim arose out of unseaworthiness of the Vessel................................................................. 29

1.2. Alternatively, the Cargo Claim arose out of error or fault in navigation or management of the Vessel. . 30

2. Alternatively, RESPONDENT claims damages in like amount for CLAIMANT’s breach of Clauses 27 and

53 of the Charterparty. ..................................................................................................................................... 31

3. In the further alternative, CLAIMANT is liable for 50% of the Cargo Claim pursuant to Cl. 8 (b) of the

ICA. .................................................................................................................................................................. 32


4

4. RESPONDENT notified CLAIMANT of the Cargo Claim within the notification period of Cl. 6 of the ICA.

.......................................................................................................................................................................... 33

V. PRAYER FOR RELIEF .......................................................................................................................... 34


5

LIST OF ABBREVIATIONS

% percent

& and

AC Appeal Cases

Art. Article

ASBA Association of Ship Brokers & Agents (USA) Incorporated

BIMCO Baltic and International Maritime Council

BV Besloten Vennootschap, Private Limited Company

Cl. Clause

Clark Kent Clark Kent and Sons, Shipbrokers

CLC Commercial Law Cases

Co. Company

Comm. Commercial

CP Charterparty

edn. edition

ejusdem generis of the same kind

ER England Law Reports

EWHC England and Wales High Court

Ex. Court of Exchequer

HVR The Hague Visby Rules

Hulk Hulls Vessel Manager Company

ibid ibidem, in the same source

ICA NYPE Inter Club Agreement

Inc. Incorporated

J. Justice

KB King’s Bench

LJ Lord Justice

Ltd./LTD Limited

M/V Motor Vessel


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MLJ Malayan Law Journal

Moot Scenario International Maritime Law Arbitration Moot 2019 ‘Moot Scenario’

MT Metric Tons

n. note

NYPE New York Product Exchange

NZLR New Zealand Law Reports

p. page

para. paragraph

pp. pages

QB Queen’s Bench

Rep. Report

SA Société Anynoyme

SGHC High Court of Singapore

SLR Singapore Law Report

SMF Singapore Maritime Foundation

Sp.A Societa per Azioni, Shared Company

UK The United Kingdom of Great Britain and Northern Island

UKHL United Kingdom House of Lords

USD United States’ Dollars

v. versus


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LIST OF AUTHORITIES

CASES

o A E Reed & Co Ltd v. Page, Son & East Ltd, [1927] 1 KB p. 743.

o Action Navigation Inc v. Bottiglieri Navigation SpA (The “Kitsa”), [2005] 1 CLC p. 153.

o Aktieselskab Helios v. Ekman & Co., [1872] 2 Q.B. p. 83.

o Alma Shipping Corp. of Monrovia v. Mantovani (The “Dione”), [1975] 1 Lloyd’s Rep. p.115.

o Andre & CIE S.A. v. Orient Shipping (Rotterdam) B.V. (The “Laconian Confidence”), [1997] 1 Lloyd’s

Rep. p. 139.

o Antaios Compania Neviera S.A. v. Salen Rederierna A.B., [1985] 1 A.C. p. 191.

o Arta Shipping Co Ltd v. Thai Europe Tapioca Service Ltd (The “Johnny”), [1977] 2 Lloyd’s Rep. 1.

o Bulfracht (Cyprus) Ltd v. Boneset Shipping Co. Ltd (The “Pamphilos”), [2002] All ER (D) p. 94 (Nov).

o Canadian Pacific Forest Products Ltd v. Belships (Far East) Shipping Pte Ltd, [1999] 4 FC p. 320.

o Chartbrook Ltd v. Persimmon Homes Ltd, [2009] UKHL p. 38.

o Clearlake Shipping Ltd. v. Privocean Shipping Ltd. (The “Privocean”), [2018] EWHC p. 2460 (Comm);

[2018] 2 Lloyd’s Rep. p. 551.

o Continental Pacific Shipping LTD v. Deemand Shipping Co Ltd (The “Lendoudis Evangelos II”), [1997]

1 Lloyd’s Rep. p. 404.

o Dalwood Marine Co v. Nordana Line AS (The “Elbrus”), [2009] EWHC (Comm.) p. 3394; [2010] 2

Lloyd’s Rep. p. 315.

o ENE Kos 1 Ltd v. Petroleo Brasileiro SA (The “Kos”) (No 2), [2012] 2 Lloyd’s Rep. p. 292; [2012] 2 AC

p. 164.

o Eridania SpA v. Rudolf A Oetker (The “Fjord Wind”), [2000] 2 Lloyd’s Rep. p. 191.

o Fleming v. Ramsay, [1905] 25 NZLR p. 596.

o Hadley v. Baxendale [1854] EWHC J70, [1854] 9 Ex. p. 354.


8

o Hyundai Merchant Marine Co Ltd v. Gesuri Chartering Co Ltd (The “Peonia”), [1991] 1 Lloyd’s Rep. p.

100.

o IMT Shipping and Chartering GMBH v. Chansung Shipping Co. Ltd. (”The Zenovia”), [2009] EWHC

(Comm.), [2009] 1 Lloyd’s Rep. p. 139.

o Mareva Navigation Co. Ltd. v. Canaria Armadora S.A. (The “Mareva A.S”), [1997] 1 Lloyd’s Rep. p.

368.

o Martin v. Southwark, [1903] 24 S Ct p. 1.

o MDC Ltd v. NV Zeevaart Maatschappij Beursstraat, [1962] 1 Lloyd’s Rep. p. 180.

o Ocean Tramp Tankers Corp v. V/O Sovfracht (The “Eugenia”), [1964] 2 Q.B. 226, [1963] 2 Lloyd’s Rep.

p. 381.

o Owners of Cargo carried in the Ship ‘Gang Cheng’ v. Owners and/or Persons Interested In the Ship ‘Gang

Cheng’, [1998] 6 MLJ p. 468.

o Owners of Cargo on Board SS Waikato v. The New Zealand Shipping Co Ltd, [1898] 1 QB p. 645.

o Rathbone Brothers & Co v. Maciver, Sons & Co, [1903] 2 KB p. 378.

o Reardon Smith Line Ltd v. Ministry of Agriculture, [1963] A.C. p. 691.

o S.p.A. v. Apollo Corporation (The “Apollo”), [1978] 1 Lloyd’s Rep. p. 200.

o Santa Marta Baay Scheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The “Rijn”), [1981] 2

Lloyd’s Rep. p. 267.

o SIB International SRL v. Metallgesellschaft Corporation (The “Noel Bay”), [1989] 1 Lloyd’s Rep. p. 361.

o Skibsaktieselskabet SNEFONN, Skibsaksjeselskabet Bergehus and SIG. Bergesen D.Y. & Co. v. Kawasaki

Kisen Kaisha Ltd. (The “Berge Tasta”), [1975] Q.B. (Com. Ct.); [1975] 1 Lloyd's Rep. p. 422.

o Stanton v. Richardson, [1874] LR 9 CP p. 390.

o Tattersall v. The National Steamship Co Ltd, [1884] 12 QBD p. 297.

o The Asia Star, [2006] SGHC p. 115.

o Torvald Klaveness A/S v. Arni Maritime Corp (The “Gregos”), [1993] 2 Lloyd’s Rep. p. 335.

o Transfield Shipping Inc v. Mercator Shipping Inc (The “Achilleas”), [2008] UKHL p. 48.


9

o Virginia Carolina Chemical Co v. Norfolk and North American Steam Shipping Co, [1912] 1 KB p. 29.

o Whistler International Ltd v. Kawasaki Kishen Kaisha (The “Hill Harmony”), 1 Lloyd’s Rep. 2001, p.

148.

AWARDS

o London Arbitration, 3/07 (2007) 713 LMLN.

STATUTES

o UK Arbitration Act 1996 (adopted as Act 99, 1996, assented 2 September 1996) (Reprinted 2001).

o International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (The

“Hague- Visby Rules”), adopted in 1968, entered into force on 23 June 1977.

LITERATURE

o Tetley W., Marine Cargo Claims (4nd edn., Carswell 2008).

o Coghlin T., Baker A. Q.C., Julian Kenny J. and others, Time Charters (7th edn., Rutledge 2014).

OTHER

o BIMCO, ASBA and SMF, NYPE 2015 Time Charter, New York Produce Exchange Form (first published

6 November 1913, last amended 3 June 2015).

o The International Group of P&I Associations, Inter-Club New York Produce Exchange (NYPE) Agreement

(concluded 1 September 1996).

o BIMCO, Special Circular No. 3, Hull Fouling Cl. For Time Charter Parties (published 24 June 2013,

updated 16 July 2015).

o School of Law, Murdoch University International Maritime Law Arbitration Moot scenario version 3,

issued 25 March 2019, revised 1 April 2019.


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STATEMENT OF FACTS

1. The Time Charterparty

1. CLAIMANT is Panther Shipping Inc, a shipping company registered in Liberia, and owns the M/V

THANOS QUEST (hereby the “Thanos Quest”). RESPONDENT is Omega Chartering Limited, a

Chartering company registered in Liechtenstein.

2. On 18 March 2016, CLAIMANT and RESPONDENT entered into a time Charterparty for the hire of

Thanos Quest (hereby the “Charterparty”).1 The Charterparty was restricted to one loaded leg from West

Coast via UK to Wahanda range, for a duration of about 50-55 days without guarantee.2

3. The Charterparty incorporated Omega Rider Clauses, including the BIMCO Hull Fouling Clause, which

in particular entitles RESPONDENT to arrange for cleaning of the hull, if the Vessel has remained idle

for a specified period under RESPONDENT’s orders.3

4. The Charterparty further included an amended version of the NYPE 2015 Form to apply subsidiary to the

Rider Clauses.4

2. The Performance of the Charterparty

5. On 29 March 2016, the Thanos Quest was delivered to RESPONDENT at the port of West Coast.5

Thereafter, it proceeded to load 8,600 MT of English Breakfast Tea (hereby the “Cargo”). However, while

ballasting her for departure, CLAIMANT’s crew wrongfully pumped water into the cargo holds instead

of the ballasting holds.6 This severely damaged the Cargo, a fact also confirmed in the preliminary survey

report.7

1 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, pp. 2-5 of the Moot Scenario. 2 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, pp. 3-4 of the Moot Scenario. 3 Cl. 83, Rider Clauses of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 16 of the Moot Scenario. 4 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 5 of the Moot Scenario. 5 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 3; Claim Submissions, 09/11/2018, p. 66,

para. 3 of the Moot Scenario. 6 E-mail on 29/06/2016, Clark Kent Bulk to Hulk Hulls, p. 44, para. 1 of the Moot Scenario; Preliminary Survey Report, 30/06/2016,

Mekon Surveyors Inc., p. 46, para. 2 of the Moot Scenario. 7 Preliminary Survey Report, 30/06/2016, Mekon Surveyors Inc., p. 46, para 1 of the Moot Scenario.


11

6. On 7 May 2016, the Thanos Quest arrived at the discharge port of Wahanda.8 However, she was held at

the anchorage until Port State Control could perform an inspection onboard, due to fear that the crew may

have carried the Ebola virus.9 After finding multiple crew members with high fever, Port State Control

detained her by quarantine for 50 days, from 7 May 2016 until 26 June 2016.10

7. Subsequently, RESPONDENT informed CLAIMANT of the detention and notified them that the Thanos

Quest was to be considered off hire during the above mentioned period.11 However, CLAIMANT,

unjustifiably and contrary to the findings of the Port State Control,12 refused to acknowledge the detention

as an off hire event and dismissed the Ebola concerns.

8. On 8 June 2016, CLAIMANT requested that RESPONDENT make arrangements for inspection and

potential cleaning of the Thanos Quest, since she was expected to spend more than 30 days at the port of

Wahanda due to the detention.13

9. RESPONDENT had already contacted Wahanda Port Services regarding inspection and cleaning

arrangements, but was informed that such services were not available at Wahanda Port.14 Subsequently,

RESPONDENT duly notified CLAIMANT that inspection and cleaning was not possible at Wahanda

Port and therefore offered to pay a lump sum of USD 15,000 in accordance with Cl. 83 (d) of the

Charterparty.15 CLAIMANT rejected this offer.16

8 E-mail, 07/05/2016, Clark Kent Bulk to Hulk Hulls, p. 25, para 1 of the Moot Scenario; Claim Submissions, 09/11/2018, p. 66,

para. 4 of the Moot Scenario. 9 E-mail, 07/05/2016, Clark Kent Bulk to Hulk Hulls, p. 25, para. 1 of the Moot Scenario. 10 E-mail, 11/05/2016, Clark Kent Bulk to Hulk Hulls, p. 24, para. 1 of the Moot Scenario; Defence and Counterclaim Submissions

of RESPONDENT, 17/12/2018, p. 72, para. 8 of the Moot Scenario. 11 E-mail, 11/05/2016, Clark Kent Bulk to Hulk Hulls, p. 24, para. 2 of the Moot Scenario. 12 E-mail, 11/05/2016, Hulk Hulls to Clark Kent Bulk, p. 24, para. 1 of the Moot Scenario; E-mail Correspondence, 08/05/2016,

Hulk Hulls to Clark Kent Bulk, p. 25, para. 2 of the Moot Scenario. 13 E-mail, 08/06/2016, Hulk Hulls to Clark Kent Bulk, p. 29 para. 3 of the Moot Scenario. 14 E-mail, 25/05/2016, Wahanda Port Services to RESPONDENT, p. 26 of the Moot Scenario. 15 E-mail, 08/06/2016, Clark Kent Bulk to Hulk Hulls, p. 29, para. 2 of the Moot Scenario. 16 E-mail, 09/06/2016, Hulk Hulls to Clark Kent Bulk, p. 28, para. 2 of the Moot Scenario.


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10. RESPONDENT then offered to clean the Thanos Quest at North Titan Port or pay an increased lump sum

of USD 20.000.17 CLAIMANT once again rejected both these offers and instead demanded that cleaning

take place at South Island Port.18

11. RESPONDENT made clear that a voyage to South Island Port would be non-contractual, since a

redelivery notice had already been tendered. Instead, they repeated a more generous lump sum offer, this

time increased to USD 30.000.19 CLAIMANT again refused the lump sum offer, without any explanation

and repeated that arrangements be made at South Island Port.20

12. RESPONDENT redelivered the Thanos Quest on time, on 30 June 2016.21 CLAIMANT, thereafter,

arranged for her hull to be cleaned at South Island Port, which took place between 1 July 2016 and 3 July

2016 for a total cost of USD 41,000.22

13. On 28 June 2016, Champion Chartering cancelled a charterparty concluded with CLAIMANT for the

hire of the Thanos Quest (hereby the “Next Fixture”) due to the Thanos Quest having missed the laycan.

The daily hire rate for this charterparty was USD 10,500.23

14. However, on 4 July 2016, CLAIMANT chartered the Thanos Quest to Fairwind International for a time

charterparty (hereby the “Replacement Fixture”) of about 50 to 55 days.24 The daily hire rate of this

charterparty was USD 11,000, thus, USD 500 more than the Next Fixture.25

17 E-mail, 27/06/2016, Clark Kent Bulk to Hulk Hulls, p. 39, para. 3 of the Moot Scenario. 18 E-mail, 29/06/2016, Clark Kent Bulk to RESPONDENT, p. 43, para. 2 of the Moot Scenario. 19 Ε-mail, 30/06/2016, Clark Kent Bulk to Hulk Hulls, p. 43, para. 3 of the Moot Scenario. 20 E-mail, 30/06/2016, Clark Kent Bulk to RESPONDENT, p. 42, para. 5 of the Moot Scenario. 21 E-mail, 27/06/2016, Hulk Hulls to RESPONDENT, p. 41, para. 1 of the Moot Scenario; Claim Submissions, 09/11/2016, p. 68,

para. 17 of the Moot Scenario. 22 South Island Port Agency Invoice, 07/11/2016, pp. 50-51 of the Moot Scenario; Claim Submissions, 09/11/2016, p. 68, para. 18

of the Moot Scenario. 23 E-mail, 15/06/2016, Clark Kent Bulk to Champion Chartering Corp., p. 32 of the Moot Scenario. 24 E-mail, 04/07/2016, Clark Kent Bulk to Fairwind International, p. 55 of the Moot Scenario. 25 ibid.


13

ARGUMENTS ON THE MERITS

I. RESPONDENT IS ENTITLED TO RESTITUTION OF USD 375,000.00 DUE TO THE

THANOS QUEST BEING OFF HIRE

15. Upon arrival at Wahanda Port, the Port State Authority prohibited the Thanos Quest from berthing, as

they had reasonable grounds to suspect that one or more crew members were carrying the Ebola virus.26

As a result, the Thanos Quest was detained via quarantine for a period of 50 days.27

16. The quarantine of the Thanos Quest triggers the application of Cl. 17 of NYPE Form as a similar cause of

detention that is preventing the full working of the Vessel. (1)

17. In all cases, the outbreak of Ebola and further illness of the crew members shall be considered as

unforeseeable events. (2)

1. CLAIMANT must pay the restitution, pursuant to Cl. 17 of the NYPE form.

18. When the Thanos Quest was detained via quarantine from 7 May till 26 June 2016 for a total of 50 days,

RESPONDENT immediately notified CLAIMANT that she be considered off hire.28 However,

CLAIMANT wrongfully and in violation of the Charterparty refused to put her off hire for that period.29

19. The Charterparty incorporated the NYPE 2015 standard form.30 Pursuant to Cl. 8 of the Form, the Vessel

is considered off hire if her full working is prevented. This prevention is not solemnly physical, but also

legal.31

20. The term quarantine is not included in the terms of Cl. 8 of the NYPE Form. Nonetheless, the term

“detention by Port State Control”, as well as the general Clause “any similar cause preventing the full

working of the Vessel” have been included. Detention is described as “some [...] constraint upon the

Vessel’s movements in relation to her service under the charter”.32 The two terms, detention and

26 p. 24, para. 1 of the Moot Scenario (n.10); Defence and Counterclaim Submissions of RESPONDENT, p. 72, para. 8 of the Moot

Scenario. 27 Defence and Counterclaim Submissions, 17/12/2018, p. 72, para. 8 of the Moot Scenario. 28 E-mail, 07/05/2016, Clark Kent Bulk to Hulk Hulls, p. 25, para 3. of the Moot Scenario; RESPONDENT’s Memorandum, para.

7. 29 E-mail, 08/05/2016, Hulk Hulls to Clark Kent Bulk, p. 25, para. 2 of the Moot Scenario. 30 E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 2 of the Moot Scenario; RESPONDENT’s Memorandum, para 4. 31 Andre & CIE S.A. v. Orient Shipping (Rotterdam) B.V. (The “Laconian Confidence”) [1997] 1 Lloyd’s Rep. p. 139. 32 Mareva Navigation Co. Ltd. v. Canaria Armadora S.A. (The “Mareva A.S”), [1997] 1 Lloyd’s Rep. p. 368.


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quarantine, have to be considered as of a genus-species relation, as quarantine is a form of constraint upon

the Vessel’s movement, thus a specific form of detention. The proximity is also underlined by the legal

entity that performs the action, this being in both cases the Port State Control. Thus, even if not specifically

stated in the NYPE Form, quarantine and detention are considered of ejusdem generis. Therefore, the

Thanos Quest’s quarantine should be regarded as detention by the Port State, thus triggering the

application of Cl. 17 of the NYPE Form.

21. In addition, the Thanos Quest was unable to proceed with her commercial services for the above mentioned

period. Since hire is the monetary amount RESPONDENT provides to CLAIMANT for these services

of the Vessel, the prevention of such services, especially for such a long period, has to equal a relief for

RESPONDENT from their according obligation to pay hire. As the Thanos Quest could not fulfil its

purpose and, subsequently, could not proceed with its commercial activity under the existing Charterparty,

it should be considered off hire.

2. In all cases, the outbreak of Ebola at West Coast Port and the further possibility of illness of the crew

were unforeseeable events.

22. During the loading operations in the port of West Coast, an unexpected outbreak of Ebola took place. The

occurrence was a fortuitous event, hence triggering the application of the off hire Clause of the NYPE

Form.

23. As was held in The Rijn case, events that are fortuitous, meaning an event of a wholly extraordinary and

unpredictable nature, shall be considered as off hire and will therefore trigger the application of Cl. 17 of

NYPE.33

24. Contrary to CLAIMANT’s allegations, the Port was not contaminated or there was no indication of the

possibility of such an outbreak to occur at the time that the order to sail there was given. This is evidenced

primarily by the fact that CLAIMANT themselves chose it as the port of delivery. Therefore, no suspicion

of Ebola was witnessed at the moment that the Charterparty was concluded by either party.

33Santa Marta Baay Scheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The “Rijn”), [1981] 2 Lloyd’s Rep 267.


15

RESPONDENT just became aware of the Ebola outbreak during the latter stages of loading at the port of

West Coast. This foreshows the unpredictable and extraordinary nature of the event.

25. Furthermore, Cl. 122 of the Charterparty incorporates a specific provision for the outbreak of Zika Virus.

This provision evidences the animus of the parties in considering the outbreak of Zika disease a foreseeable

event, given the geographical range of the Charterparty, but not the outbreak of Ebola. Therefore, no doubt

remains that the Ebola outbreak was an unforeseeable event for both parties during the negotiation of the

Charterparty. Hence, it must be considered extraordinary and fortuitous.

26. In a similar case, The Apollo,34 the Vessel had to undergo port inspection for one day after two members

of the crew had contracted typhus. Accordingly, it was ruled that the action taken by the Port State

authorities to proceed with all the necessary measures for the disease not to be spread, led to the Vessel

being considered off hire. Following the reasoning of the Apollo, the inspection, in the present case, as

well as the detention of the Thanos Quest was a natural consequence of the Ebola outbreak, which ought

to be considered a fortuitous event, hence leading the Thanos Quest to be off hire during this period.

27. Consequently, by applying the test of the Rijn, the Thanos Quest has to be considered off hire.

RESPONDENT rightfully claims restitution USD 375,000.000 from CLAIMANT.

II. RESPONDENT DID NOT BREACH THE CHARTERPARTY BY NOT PERFORMING

HULL CLEANING OF THE THANOS QUEST

28. RESPONDENT was not required to perform hull cleaning because the conditions of Cl. 83 were not

fulfilled. (1)

29. Alternatively, RESPONDENT submits that they were entitled to make a lump sum payment in lieu of

cleaning. (2)

30. In any case, RESPONDENT is not liable for the costs of the voyage to South Island. (3)

31. RESPONDENT redelivered the Vessel in accordance with Cl. 4 NYPE. (4)

34 S.p.A. v. Apollo Corporation (The “Apollo”), [1978] 1 Lloyd’s Rep. p. 200, p. 205.


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1. RESPONDENT was not required to perform hull cleaning of the Thanos Quest as the conditions

required under Cl. 83 of the Charterparty were not fulfilled.

32. The Thanos Quest arrived in the port of Wahanda on 7 May 2016 and completed discharge on 30 June

2016.35 Of the 60 days she was idle at the port, the first 50 were a result of her being detained via

quarantine by the Port State Authorities.36 During her prolonged stay, her hull was fouled and

CLAIMANT now seeks to hold RESPONDENT liable for her hull cleaning. RESPONDENT is

however not liable for her hull cleaning under the Charterparty.

33. According to Cl. 83 of the Charterparty, either party may call for inspection and subsequent cleaning of

the underwater parts at RESPONDENT’s expense, if the Thanos Quest remains idle for a period of 30

days in accordance with RESPONDENT’s orders.37 She was, however, not idle in accordance with

RESPONDENT’s orders, during the first 50 days that she was held in quarantine.

34. As held in The Eugenia, a ship chartered under a time charterparty is generally considered to be under a

charterer’s orders throughout the duration of the charterparty, since the shipowners place the ship at the

disposal of the charterer for a certain time against hire.38

35. However, and as submitted above, when the Thanos Quest was detained via quarantine, she was off hire

and consequently no longer at the disposal of RESPONDENT.39 Thus, it is clear that her idleness the 50

days she was quarantined were not in accordance with RESPONDENT’s orders, since she was not even

at the disposal of RESPONDENT during this period.

36. With those 50 days subtracted, the Thanos Quest was therefore only idle for 10 days under

RESPONDENT’s orders. Since Cl. 83 only applies when she has been idle for a period of 30 days under

RESPONDENT’s orders, the requirement is not fulfilled and Cl. 83 does not apply.

35 E-mail, 07/05/2016, from Clark Kent Bulk to Hulk Hulls to, p. 25, para. 1 of the Moot Scenario; Claim Submissions,

09/11/2018, p. 68, para. 17 of the Moot Scenario 36 Defence and Counterclaim Submissions, 17/12/2018, p. 72, para. 8 of the Moot Scenario. 37 Cl. 83 (a) of the Charterparty, p. 16 of the Moot Scenario. 38 Ocean Tramp Tankers Corp v. V/O Sovfracht (The “Eugenia”), [1964] 2 Q.B. 226, [1963] 2 Lloyd’s Rep. p. 381. 39 Whistler International Ltd v. Kawasaki Kishen Kaisha (The “Hill Harmony”), 1 Lloyd’s Rep. 2001, p. 148.


17

37. Consequently, CLAIMANT cannot hold RESPONDENT liable for hull cleaning of Thanos Quest on

the basis of Cl. 83 of the Charterparty.

2. Alternatively, if the Tribunal considers that Cl. 83 of the Charterparty nevertheless applied,

RESPONDENT submits that they were entitled to pay a lump sum in lieu of cleaning.

38. In the event the Tribunal deems Cl. 83 of the Charterparty to be applicable, RESPONDENT holds that

they were prevented by CLAIMANT from performing cleaning before the expiry of the Charterparty (2.1

and 2.2). As a result of this prevention, RESPONDENT was entitled to pay a lump sum in lieu of cleaning,

in accordance with Cl. 83 of the Charterparty (2.3)

2.1. CLAIMANT prevented the parties from arranging inspection and cleaning before the

expiry of the Charterparty.

39. CLAIMANT requested inspection of the underwater parts of Thanos Quest in accordance with Cl. 83 (b),

since she was expected to stay at Wahanda Port for more than 30 days.40 It was, however, impossible to

make such arrangements at the port.41

40. RESPONDENT inquired about the possibility of inspection and cleaning services to be conducted in the

Port of Wahanda,42 but was informed by the competent authorities that these services were not available

due to the current, charge and muddy waters. This is particularly evidenced by the Wahanda Port Service’s

statements “ship owner should choose other port” and “we are unable to arrange it at this port”.43

41. Therefore, RESPONDENT was prevented from making inspection arrangements in the Wahanda Port

due to circumstances out of their control. RESPONDENT, therefore, eagerly proceeded to find alternative

solutions.44 These efforts, however, proved futile due to CLAIMANT’s unresponsiveness.

40 E-mail, 08/06/2016, Hulk Hulls to Clark Kent Bulk, p. 29, para. 3 of the Moot Scenario. 41 E-mail, 08/06/2016, Clark Kent Bulk to Hulk Hulls, p. 29, para. 1 of the Moot Scenario. 42 E-mail, 25/05/2016, RESPONDENT to Wahanda Port Services, p. 27 of the Moot Scenario. 43 E-mail, 25/05/2016, Wahanda Port Services to RESPONDENT, p. 26 of the Moot Scenario. 44 E-mail, 22/06/2016, RESPONDENT to Titan Shipbuilders, p. 36 of the Moot Scenario.


18

42. As an alternative to Wahanda Port, CLAIMANT proposed to arrange inspection at the next convenient

port.45 CLAIMANT, however, realised shortly thereafter that East Coast ports would not allow Thanos

Quest to sail there with a fouled hull.46 RESPONDENT therefore proposed to make arrangements at North

Titan Port.47 CLAIMANT never responded to this proposal, despite knowing that the Charterparty was

about to expire.

43. According to Cl. 83 (b) of the Charterparty “[Inspection] shall be arranged jointly by Owners and

Charterers”.48 CLAIMANT’s unresponsiveness thus ultimately prevented RESPONDENT from

moving further with the arrangements.

44. Furthermore, Cl. 83 (c) provides that either party may request cleaning “as a result of the inspection”.

RESPONDENT could thus not make any cleaning arrangements until the parties jointly had arranged

inspection. Cl. 83 (c) further states that cleaning “(…)shall be undertaken by the Charterers(…)in

consultation with the Owners.” It thus follows that, although cleaning is not a joint obligation like

inspection, CLAIMANT is nevertheless entitled to be consulted by RESPONDENT.

45. Therefore, RESPONDENT was, therefore, unable make unilateral cleaning arrangements at North Island

port, without consulting with CLAIMANT. Since CLAIMANT refused to respond to RESPONDENT’s

proposals, they prevented RESPONDENT from taking any further steps before the expiry of the

Charterparty.

46. As held by Lord Esher M.R in Aktieselskab Helios v. Ekman & Co., on joint acts required in a Charterparty:

“[N]either party is bound to do it alone. It is to be a joint act, and, therefore, if one party is not there

to perform his part in it, that prevents the other party from performing his part.”49

47. Therefore, following the reasoning of Aktieselskab Helios v. Ekman & Co., CLAIMANT’s idleness in

refusing to reply to RESPONDENT’s proposal prevented RESPONDENT from fulfilling their part of

45 E-mail, 09/06/2016, Hulk Hulls to Clark Kent Bulk, p. 28, para. 4 of the Moot Scenario. 46 E-mail, 26/06/2016, Clark Kent Bulk to RESPONDENT, p. 34, para. 2 of the Moot Scenario. 47 E-mail, 27/07/2016, Clark Kent Bulk to Hulk Hulls, p. 39, p. 3 of the Moot Scenario. 48 Cl. 83 (b), Recap of the Charterparty, E-mail, 18/03/2016, p. 16 of the Moot Scenario. 49Aktieselskab Helios v Ekman & Co. [1872], 2 Q.B. 83.


19

the joint obligation. RESPONDENT can therefore not be held liable for not arranging inspection, as they

could not arrange it solely.

48. Furthermore, RESPONDENT tendered their redelivery notice on 29 June 2016, notifying them that the

Thanos Quest would be redelivered the following day in Wahanda Port.50 In response to this,

CLAIMANT demanded that RESPONDENT make arrangements at South Island Port before redelivery,

implicitly refusing the North Titan proposal. However, RESPONDENT was not able to perform hull

cleaning at South Island port, as such a voyage would be illegitimate.51

49. First, the absence of specifications regarding tender of approximate and definite notices in the Cl. 4 of the

NYPE Form must be understood as meaning that the parties would decide later on when such notices

should be tendered. Secondly, a constructive interpretation of the redelivery notice would indicate that it

has to be considered as a definite one. While charterparties require that an approximate redelivery notice

would be tendered at least 5 days prior to the actual redelivery of the vessel,52 in the present case, the

notice was tendered the day before redelivery would take place.

50. Even if the redelivery notice is deemed as “indefinite”, it is an implied term that RESPONDENT must

operate in good faith. This is in accordance with the reasoning in The Zenovia, wherein the tender of an

approximate notice of redelivery prevents charterers from ordering further voyages, that would jeopardize

the meeting of the redelivery date.53 Since the voyage to and from South Island alone would take a day’s

sailing, RESPONDENT would not be able to redeliver her with a cleaned hull in time for the redelivery

the following day at Wahanda port.

50 E-mail, 29/06/2016, Clark Kent Bulk to Hulk Hulls, p. 44, para. 3 of the Moot Scenario. 51 Hyundai Merchant Marine Co v. Gesuri Chartering Co (The “Peonia”) [1991] 1 Lloyd’s Rep 100; Alma Shipping Corp. of

Monrovia v. Mantovani (“The Dione”), [1975] 1 Lloyd’s Rep 115; Torvald Klaveness A/S v. Arni Maritime Corp (The “Gregos”)

[1993] 2 Lloyd’s Rep 335. 52 London Arbitration, 3/07 (2007) 713 LMLN. 53 IMT Shipping and Chartering GMBH v. Chansung Shipping Co. Ltd. (”The Zenovia”) 2009 EWHC (Comm.), [2009] 1 Lloyd’s

Rep. p. 139, p.148.


20

51. Furthermore, as held in The Berge Tasta, time charterparties generally expire “in exactly the same way as

voyage charterparties end, when the last cargo is discharged”.54 Since the parties did not include any

requirements as to when service of redelivery notices in Cl. 4 of the NYPE Form would be done, the

Charterparty expired on 30 June 2016, after discharge was completed.55

52. Despite, RESPONDENT’s willingness to carry out hull cleaning, RESPONDENT was not able in any

way to comply with CLAIMANT’s demands, as this would breach the Charterparty. Consequently,

CLAIMANT’s unresponsiveness prevented RESPONDENT from performing their part of the obligation

to arrange inspection and cleaning of the Thanos Quest before the expiry of the Charterparty.

53. Therefore, CLAIMANT cannot hold RESPONDENT liable for not performing cleaning of her hull.

2.2. RESPONDENT was entitled to make a lump sum payment as they were prevented from cleaning

the Thanos Quest.

54. RESPONDENT was entitled to propose payment of a lump sum, when it became clear that hull cleaning

could not be arranged during the Charterparty. CLAIMANT, however, wrongfully refused

RESPONDENT’s proposals by claiming that a lump sum can only be agreed upon after inspection.56

55. Cl. 83 (d) requires the parties to agree on a lump sum latest on redelivery, when RESPONDENT is

prevented from carrying out cleaning of the hull. As RESPONDENT has submitted above,

RESPONDENT was prevented by CLAIMANT’s unresponsiveness from carrying out cleaning of

Thanos Quest’s hull.

56. The inclusion of “prior to, but latest on redelivery”57 directly imposes an obligation upon CLAIMANT

to agree on the lump sum with RESPONDENT before redelivery. Therefore, CLAIMANT wrongfully

refused to even discuss the sum, and consequently breached the obligation described in Cl. 83 (d).

54 Skibsaktieselskabet SNEFONN, Skibsaksjeselskabet Bergehus and SIG. Bergesen D.Y. & Co. v. Kawasaki Kisen Kaisha Ltd. (The

“Berge Tasta”) [1975] Q.B. (Com. Ct.), [1975] 1 Lloyd's Rep. p. 422, p. 424. 55 Terence Coghlin, Andrew W. Baker Q.C, Julian Kenny and others, Time Charters, (7th edn, Rutledge 2014) p. 9. 56 E-mail, 29/06/2016, Clark Kent Bulk to RESPONDENT, p. 43, para. 1 of the Moot Scenario; E-mail, 09/06/2016, Hulk Hulls to

Cark Kent Bulk, p. 28, para. 2 of the Moot Scenario. 57 Cl. 83 (d), Rider Clauses of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 16 of the Moot Scenario


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57. On the proper construction of the Charterparty, Cl. 83 (d) must be understood to apply also when the

parties were prevented from arranging inspection.58 This interpretation is supported by the reasoning of

Lord Diplock in the The Antaios v. Salen,59 as the opposite understanding would contradict not only the

purpose of Cl. 83 and intention of the parties by incorporating it, but would also flout business common

sense.

58. The Charterparty does not stipulate the amount of the lump sum but only obliges the parties to agree on

the sum to be paid prior to redelivery.60 On the amount of the lump sum, BIMCO explanatory notes to Cl.

83 state that;

“A lump sum agreement may not always reflect the exact amount of the owner’s cost and expenses, as

it will be based on quotes from cleaning companies as opposed to actual invoices.”61

59. RESPONDENT’s final offer of USD 30,000 is based on a quotation for hull cleaning received by Titan

Shipbuilders,62 and even exceeds the quotation by USD 5.000.63 Thus, RESPONDENT’s offer is in full

accordance with Cl. 83 (d) itself and the explanatory notes provided by BIMCO. Furthermore, the offer of

USD 30.000 is identical to the cost actually paid by CLAIMANT for cleaning at South Island Port.64

Thus, RESPONDENT’s offer was a reasonable payment in lieu of cleaning.

60. Therefore, RESPONDENT was entitled to make the lump sum payment of USD 30,000, which

CLAIMANT unreasonably refused.

3. In any event, RESPONDENT is not liable for the costs of the voyage to South Island Port.

61. CLAIMANT arranged for the Thanos Quest’s hull to be cleaned at South Island Port on his own account

after RESPONDENT redelivered her. Therefore, even if RESPONDENT is deemed liable for the costs

58 Lord Hoffman in Chartbrook Ltd v. Persimmon Homes Ltd, [2009] UKHL 38, p. 14. 59 The Antaios Compania Neviera S.A. v. Salen Rederierna A.B, [1985]1 A.C. 191, p. 201. 60 Cl. 83 (d), Rider Clauses of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, pp. 16-17 of the Moot

Scenario. 61 BIMCO Special Circular No. 3, 24 June 2013 (updated 16 July 2015) – Hull Fouling Cl. For Time Charter Parties. 62 Titan Shipbuilders, North Titan Port Quotation, p. 37 of the Moot Scenario; 63 E-mail, 30/06/2016, Clark Kent Bulk to Hulk Hulls, p. 43, para. 3 of the Moot Scenario. 64 Final Hire Statement, 01/08/2016, p. 52, para. 8.2 of the Moot Scenario.


22

of cleaning, CLAIMANT cannot hold RESPONDENT liable for the costs of the voyage to South Island

Port.

3.1. The voyage to South Island Port was non-contractual.

62. As submitted above, the Charterparty expired on 30 June 2016 when the last cargo was discharged.65 Since

RESPONDENT already had made CLAIMANT aware of this on 29 June 2016, CLAIMANT’s demand

to sail to South Island Port would be non-contractual.

63. Since the Charterparty expires when the last Cargo is discharged at Wahanda Port, RESPONDENT would

not be able to give further orders after that moment. Consequently, the voyage to South Island after the

expiry of the Charterparty would be non-contractual.

64. Therefore, RESPONDENT cannot be deemed responsible for the costs of a voyage that stands at variance

with RESPONDENT’s obligations under the Charterparty.

3.2. The voyage to South Island Port would only benefit the economic interest of CLAIMANT.

65. CLAIMANT insisted for the Thanos Quest’s hull to be cleaned in the South Island Port for USD 41,000,66

whereas cleaning at North Titan Port would have cost RESPONDENT only USD 25,000.67 The reasoning

behind this were the already existing negotiations of CLAIMANT for the Replacement Fixture, a

subsequent charterparty with Fairwind International.68 The Replacement Fixture was to commence on 4

July 2016. The port of delivery was the South Island Port.69 RESPONDENT was, in all this time, oblivious

of CLAIMANT’s purely economic motives in choosing this port for the cleaning of the Vessel.

66. Furthermore, CLAIMANT only pursued this alternative port due to their financial benefit. In the Reardon

Smith v Ministry of Agriculture case, Lord Delvin held that charterers may choose to substitute their legal

option of performance of a contractual obligation without being bound to consider the convenience or the

interest of the Ship Owner.70 Following this reasoning in the Thanos Quest case, RESPONDENT may

65 RESPONDENT’s Memorandum, para. 52. 66 Final Hire Statement, 01/08/2016, p. 52, para 8.2 , 8.3 of the Moot Scenario. 67 Titan Shipbuilders, North Titan Port Quotation, p. 37 of the Moot Scenario. 68 E-mail, 04/08/2016, Clark Kent Bulk to Fairwind International BV, pp. 53-56 of the Moot Scenario. 69 ibid, p. 54. 70 Reardon Smith Line Ltd v. Ministry of Agriculture, [1963] A.C. p. 691, p. 730.


23

choose, among the proxime ports in which cleaning operations can be performed, the one that benefits

their interest the most, without taking into account the commercial interests of CLAIMANT.

67. If the cleaning was performed at North Titan Port, CLAIMANT would have paid for the preliminary

voyage expenses of the Replacement Fixture. These would include the consumed bunkers that

CLAIMANT would have to pay for from North Titan Port to the South Island Port, where the

Replacement Fixture would commence. Therefore, CLAIMANT tried to impose costs that they would

normally have to bear on RESPONDENT. Thus, CLAIMANT took advantage of RESPONDENT, in

order to avoid their own commercial expenses.

68. For these reasons, CLAIMANT cannot rely on Cl. 83 nor any other term of the Charterparty against

RESPONDENT, and can, therefore, not hold RESPONDENT liable for the costs of this voyage.

4. Furthermore, RESPONDENT redelivered the Thanos Quest in accordance with Cl. 4 of the NYPE

2015 Form.

69. CLAIMANT cannot rely on Cl. 4 of the NYPE 2015 Form against RESPONDENT for redelivering

Thanos Quest without prior hull cleaning, as the parties incorporated Cl. 83 specifically to cover hull

fouling.

70. In ENE Kos 1 Ltd v Petroleo Brasileiro SA,71 Lord Sumption held the following regarding a shipowners‘

indemnity for marine fouling:

The purpose of an indemnity is to protect them against losses arising from risks or costs which they

have not expressly or implicitly agreed in the charterparty to bear. What risks or costs the owners

have agreed to bear may depend on the construction of other relevant provisions of the contract

(…).”72

71. Similarly as in The Kos, CLAIMANT and RESPONDENT incorporated Cl. 83 to specifically allocate

and divide the risks and costs arising from marine fouling. Questions on marine fouling are therefore not

to be determined on the basis of NYPE 2015 Form but based on Cl. 83.

71 ENE Kos 1 Ltd v. Petroleo Brasileiro SA (The “Kos”) (No 2), [2012] 2 Lloyd’s Rep. p. 292; [2012] 2 AC, p. 164. 72 ibid, para. 11.


24

72. Furthermore, this understanding is supported by the BIMCO’s Explanatory Notes to the Clause, which

state that it: “comprehensively sets out the circumstances and points in time when responsibility for

cleaning of the hull passes from the owners to the charterers”.73 Therefore, the Clause covers all

circumstances, where RESPONDENT will be responsible for hull cleaning of the Thanos Quest.

73. Accordingly, if RESPONDENT is not responsible for hull cleaning under the Clause, RESPONDENT

may not be responsible for hull cleaning under other Clauses in the Charterparty.

74. The Charterparty furthermore includes the term “Otherwise” for the application of the NYPE Form.74 This

signifies that the NYPE Form only applies to matters that are not covered by the Rider Clauses. In all

cases, the Rider Clauses take precedent over the general standard Clauses in NYPE.

75. Therefore, RESPONDENT did not breach Cl. 4 of the NYPE 2015 Form, by redelivering the Thanos

Quest with a fouled hull.

III. RESPONDENT REDELIVERED THE THANOS QUEST IN ACCORDANCE WITH THE

CHARTERPARTY

76. RESPONDENT redelivered the Thanos Quest prior to the expiry of the Charterparty as the duration of

the Charterparty was agreed to be about 50 to 55 days without guarantee. Therefore, there is no maximum

period to the Charterparty and redelivery occurred on time. (1)

77. Alternatively, if this Tribunal decides that redelivery was late, RESPONDENT is only liable for the

difference between the charter rate and the market rate for the period overrun. (2)

78. Finally, in the remote hypothesis that this Tribunal decides that RESPONDENT is liable for damages

relating to the loss of the Next Fixture, the hire under the Replacement Fixture should be subtracted from

the damages. (3)

73 BIMCO Special Circular No. 3, 24 June 2013 (updated 16 July 2015) – Hull Fouling Cl. For Time Charter Parties. 74 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 5 of the Moot Scenario.


25

1. RESPONDENT redelivered the Thanos Quest prior to the expiry of the Charterparty.

79. The Thanos Quest was delivered to RESPONDENT on the 29th of March 2016. Redelivery occurred on

30 June 2016, discharge of the Cargo having been completed on the same day.75 Therefore, the Thanos

Quest was redelivered after a period of 94 days.

80. The Charterparty was concluded for a period of about 50 to 55 days without guarantee.76 The term ‘without

guarantee’, provided in the time Charterparty following an estimative duration of a voyage between two

ports, means that there is no minimum or maximum period as long as the estimate is made in good faith.77

According to Longmore J. the test of good faith requires that RESPONDENT genuinely believed at the

time of fixing that the voyage would take about 50 to 55 days.78

81. That the estimate in the Charterparty was indeed made in good faith follows from the date of arrival at the

discharge port of Wahanda. The Thanos Quest arrived on 7 May 2016, giving it plenty of time to discharge

the Cargo completely, 79 and accordingly be redelivered within 55 days.

82. The redelivery outside the original estimation in this case was due to an unforeseen outbreak of Ebola

virus in the city of West Coast.80 Concern in relation to this outbreak caused the Port Authorities of

Wahanda to quarantine the Thanos Quest, making it impossible to proceed to berth immediately and

forcing the Vessel to wait at the anchorage instead.81

83. The outbreak of Ebola in the city of West Coast only became known on 18 April 2016.82 Therefore,

RESPONDENT had no reason to believe that the voyage would take longer than about 50 to 55 days at

the time of fixing the Charterparty. Consequently, RESPONDENT is not liable for late redelivery but

only under an obligation to pay hire at the agreed rate, which they did.

75 Claim Submissions, 09/11/2018, p. 68, para. 17 of the Moot Scenario. 76 Recap of the Charterparty, E-mail, 18/03/2016, Clark Kent Bulk to RESPONDENT, p. 4 of the Moot Scenario. 77 Continental Pacific Shipping LTD v. Deemand Shipping Co Ltd (The “Lendoudis Evangelos II”), [1997] 1 Lloyd’s Rep. p. 404. 78 ibid. 79 E-mail, 08/06/2016, Hulk Hulls to Clark Kent Bulk, p. 29, para. 1 of the Moot Scenario. 80 West Coast Daily Echo, 18/04/2016, p. 22 of the Moot Scenario; E-mail, 11/05/2016, Clark Kent Bulk to Hulk Hulls, p. 24, para.

1 of the Moot Scenario. 81 E-mail, 07/06/2016, Clark Kent Bulk to Hulk Hulls, p. 25, para. 1 of the Moot Scenario; Claim Submissions, 09/11/2018, p. 72,

para. 8 of the Moot Scenario. 82 West Coast Daily Echo, 18/04/2016, p. 22 of the Moot Scenario.


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2. Alternatively, RESPONDENT is not liable for damages relating to the loss of hire under the Next

Fixture.

84. Contrary to CLAIMANT’s wrongful claim for damages regarding late redelivery, RESPONDENT holds

that they are not liable for damages consisting of loss of hire under the Next Fixture for the amount of

USD 15,330,000.00.

85. RESPONDENT is not liable as damages consisting of loss of hire under a Next Fixture are too remote a

consequence of a breach of contract. The test of remoteness provides that damages for breach of contract

can be recovered either: (1) if the loss could fairly and reasonably be considered to arise naturally from

the breach; or, (2) if the loss could reasonably be supposed to have been in the contemplation of both

parties at the time at which the contract was made.83

86. In Transfield Shipping Inc v Mercator Shipping Inc, Lord Walker argues that this test has developed and

is now no longer stated in terms of two rules, but rather in terms of a single principle.84 Consequently, in

order for RESPONDENT to be held liable both conditions have to be fulfilled. Therefore, it must be

considered whether RESPONDENT assumed contractual responsibility for loss arising from the loss of

a following fixture. This involves the interpretation of the contract as a whole against its commercial

background.85

87. In the same case Lord Hoffman argues that loss arising from the loss of the following fixture is a type of

loss for which a charterer does not assume contractual responsibility.86 Such a risk is unquantifiable as a

charterer has no knowledge of the length, hire rate or other terms of a future fixture at the time of fixing a

charterparty.87 Instead, if orders are accepted and the voyage overruns, an owner is entitled to be paid for

the overrun at market rate.88

83 Hadley v. Baxendale, [1854] EWHC J70, [1854] 9 Ex. p. 354. 84 Transfield Shipping Inc v. Mercator Shipping Inc (The “Achilleas”), [2008] UKHL p. 48, para. 66-70. 85 ibid, para. 25. 86 ibid, para. 23. 87 ibid. 88 ibid.


27

88. Furthermore, Lord Hoffman stated that there have been no previous cases in which a claim for the loss of

a profitable Next Fixture, caused by late delivery, has been awarded.89 Instead, there has been a uniform

series of dicta over many years, in which judges have said or assumed that the damages for late delivery

are the difference between the charter rate and the market rate.90

89. Similarly, CLAIMANT and RESPONDENT, contracting against the background of market expectations,

would not have considered losses arising from the loss of the following fixture a type of loss for which

CLAIMANT was assuming responsibility. Although it was likely that CLAIMANT would at some time

during the currency of the charter enter into a forward fixture, RESPONDENT would not have known

when that would be done or what its length, hire rate or other terms would be.

90. Therefore, RESPONDENT is not liable to pay for the loss of CLAIMANT’s Next Fixture, but merely

for the use of the vessel and for the number of days it was late at the market rate at the time. As

RESPONDENT has already paid for the use of the Thanos Quest until the day of redelivery,91

RESPONDENT is not liable to pay more.

3. In the further alternative, the hire under the Replacement Fixture should be subtracted from the

damages.

91. In the event that this Tribunal deems RESPONDENT liable for damages relating to the loss of the Next

Fixture, the profits that CLAIMANT made under the Replacement Fixture should be subtracted.

92. In assessing the actual loss suffered by CLAIMANT all profits under the substitute fixture must be

examined. In recent cases such as the Elbrus and Noel Bay the Courts decided that the principles relating

to the mitigation of loss require the Tribunal to take account of the benefits obtained by CLAIMANT as

a result of action taken to mitigate their loss.92

89 ibid, para. 10. 90 Lord Denning MR in Alma Shipping Corp. of Monrovia v. Mantovani (The “Dione”), [1975] 1 Lloyd’s Rep. p. 115, p. 117-118;

Lord Denning MR in Arta Shipping Co Ltd v. Thai Europe Tapioca Service Ltd (The “Johnny”), [1977] 2 Lloyd’s Rep. p. 1, p. 2;

Bingham LJ in Hyundai Merchant Marine Co Ltd v. Gesuri Chartering Co Ltd (The “Peonia”), [1991] 1 Lloyd’s Rep. p. 100, p.

118. 91 Claim submissions, Moot Scenario, p. 68, para. 19. 92 Dalwood Marine Co v. Nordana Line AS (The “Elbrus”), [2009] EWHC (Comm.) p. 3394, [2010] 2 Lloyd’s Rep. p. 315; SIB

International SRL v. Metallgesellschaft Corporation (The “Noel Bay”), [1989] 1 Lloyd’s Rep. p. 361.


28

93. The Replacement Fixture was concluded by CLAIMANT due to the cancellation of the Next Fixture.

Therefore, it follows that the Replacement Fixture should be taken into account when assessing the losses

suffered by CLAIMANT due to the missing of the Next Fixture.

94. As the daily hire rate of the Replacement Fixture was higher than the daily hire rate of the Next Fixture,

CLAIMANT has suffered no loss due to the missing of the laycan. To the contrary, CLAIMANT

benefitted from the rise in the market rate. Therefore, RESPONDENT is not liable to pay for

CLAIMANT’s damages relating to the loss of the Next Fixture as the missing of the Next Fixture did not

result in any loss for CLAIMANT.

IV. CLAIMANT MUST INDEMNIFY RESPONDENT FOR THE CARGO CLAIM

95. CLAIMANT is liable for 100% of the Cargo Claim pursuant to Cl. 8 (a) of the ICA since the claim arose

from either unseaworthiness of the Thanos Quest or error or fault in her management. (1)

96. Alternatively, CLAIMANT is liable for damages in like amount for their breach of Clauses 27 and 53 of

the Charterparty. (2)

97. In the further alternative, CLAIMANT is liable for 50% of the Cargo Claim pursuant to Cl. 8 (b) of the

ICA, as the claim arose from improper loading and stowage of the Cargo. (3)

98. RESPONDENT validly notified CLAIMANT of the Cargo Claim in accordance with Cl. 6 of the ICA.

(4)

1. CLAIMANT is liable for 100% of the Cargo Claim pursuant to Cl. 8 (a) of the ICA.

99. Upon discharge of the Cargo at Wahanda, the Cargo was found to be severely wet damaged.93 The cause

of the damage was negligence on the part of the crew. In particular, the crew negligently pumped water

into the cargo hold while ballasting prior to leaving the berth at West Coast.94 As a result of the wet damage,

the receivers of the Cargo brought a claim against RESPONDENT. This Cargo Claim was made validly

by the receivers, within the time extensions granted to them.95

93 Preliminary Survey Report, 30/06/2016, Mekon Surveyors Inc, p. 46, para. 1 of the Moot Scenario; E-mail, 27/06/2016, Clark

Kent Bulk to Hulk Hulls, p. 38 of the Moot Scenario. 94 Preliminary Survey Report, 30/06/2016, Mekon Surveyors Inc, p. 46, para. 1 of the Moot Scenario. 95 Procedural Order No.2, 15/03/2019, p. 82, para. 10 of the Moot Scenario.


29

100. Pursuant to Cl. 8 (a) of the ICA, 100% of the Cargo Claim is for CLAIMANT, if it arises out of

unseaworthiness and/or error or fault in navigation or management of the Vessel. Therefore,

RESPONDENT is entitled to be indemnified by CLAIMANT in an amount to be quantified.

1.1. The Cargo Claim arose out of unseaworthiness of the Vessel.

101. The severe damage to the Cargo was due to the Cargo holds being wet due to the crew’s negligence of

opening the wrong valve while ballasting.96 The crew was ballasting the Thanos Quest at West Coast,

Challaland, to make her ready for departure once the previously carried Cargo had been discharged.

Therefore, the Cargo holds were wet prior to the delivery of the Thanos Quest to RESPONDENT.

102. The Cargo was shipped from West Coast, Challaland, whose laws closely resemble the laws of the

United States.97 Therefore, the Hague-Visby Rules were incorporated into the Bill of Lading that was

issued to the receivers of the Cargo.98 Furthermore, CLAIMANT is identified as the carrier in the contract

of carriage, as evidenced by the Bill of Lading.99 Therefore, unquestionably, CLAIMANT had to exercise

due diligence at the beginning of the voyage with respect to the seaworthiness of the Thanos Quest.100

103. One of the aspects of seaworthiness under the Hague-Visby Rules is that CLAIMANT must exercise

due diligence to make the holds of the Thanos Quest fit and safe for the reception, carriage and preservation

for the specific Cargo.101 Accordingly, it was CLAIMANT’s obligation to exercise due diligence make

sure the Thanos Quest was seaworthy in relation to the Cargo that he had undertaken to carry.102

96 Preliminary Survey Report, 30/06/2016, Mekon Surveyors Inc, p. 46, para. 1 of the Moot Scenario. 97 Procedural Order No.2, 15/03/2019, p. 81, para. 1 of the Moot Scenario. 98 Cl. 2 of the Bill of Lading, 18/03/2016, p. 48 of the Moot Scenario. 99 Cl. 17 of the Bill of Lading, 18/03/2016, p. 48 of the Moot Scenario. 100 Art. 3 (1) of the HVR. 101 Art. 3 (1) (c) of the HVR; A E Reed & Co Ltd v. Page, Son & East Ltd, [1927] 1 KB p. 743, p. 756; Stanton v. Richardson ,[1872]

LR 7 CP p. 421. 102 At 435 (Brett J). Affirmed, [1874] LR 9 CP p. 390, p. 392; Tattersall v. The National Steamship Co Ltd, [1884] 12 QBD p. 297,

p. 300; Owners of Cargo on Board SS Waikato v. The New Zealand Shipping Co Ltd, [1898] 1 QB p. 645, p. 647; Rathbone Brothers

& Co v. Maciver, Sons & Co, [1903] 2 KB p. 378, p. 386; Martin v. Southwark, [1903] 24 S Ct p. 1, p. 3; Fleming v. Ramsay, [1905]

25 NZLR p. 596; Virginia Carolina Chemical Co. v. Norfolk and North American Steam Shipping Co, [1912] 1 KB p. 229, pp. 243‐

244; AE Reed & Co Ltd v. Page Son & East Ltd,[1927] 1 KB p. 743, p. 754; MDC Ltd v. NV Zeevaart Maatschappij Beursstraat,

[1962] 1 Lloyd’s Rep p. 180, p. 186; Owners of Cargo carried in the Ship ‘Gang Cheng’ v. Owners and/or Persons Interested In

the Ship ‘Gang Cheng’ , [1998] 6 MLJ p. 468, p. 488; Canadian Pacific Forest Products Ltd v. Belships (Far East) Shipping Pte

Ltd, [1999] 4 FC p. 320, p. 334; Eridania SpA v. Rudolf A Oetker (The ”Fjord Wind”), [2000] 2 Lloyd’s Rep p. 191, p. 198; The

Asia Star, [2006] SGHC p. 115.


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104. As the error in ballasting took place before the voyage began, the fact that water entered the Cargo

hold of the Thanos Quest amounts to unseaworthiness at the beginning of the voyage.103 The Thanos Quest

was not fit to receive the Cargo, as the holds were wet and this led to damage, a fact also evidenced by the

Preliminary Survey Report.104 Therefore, the burden of proving the exercise of due diligence with respect

to seaworthiness lies with CLAIMANT.105 Until CLAIMANT manages to prove the exercise of due

diligence, it must be presumed that the unseaworthiness of the Thanos Quest was due to the lack thereof.

105. Cl. 8 (a) of the ICA provides that claims that arise out of the unseaworthiness of the Vessel are 100%

for the Owners. Therefore, the Cargo Claim is 100% for CLAIMANT, as the damage to the Cargo was

caused by the unseaworthiness of the Thanos Quest with respect to the Cargo that was undertaken to carry.

Consequently, CLAIMANT should indemnify RESPONDENT for 100% of the Cargo Claim that was

brought by the Receivers of the Cargo.

1.2. Alternatively, the Cargo Claim arose out of error or fault in navigation or management of the

Vessel.

106. If this Tribunal finds that the ballasting of water into a cargo hold does not make the Thanos Quest

unseaworthy, CLAIMANT is responsible for this action as an error in management of the Vessel.

107. Ballasting water is related to the safety of the Vessel, since it assists to her stability and prevents her

from capsizing. This procedure is reasonably required during loading, in order to keep her upright. An

error in ballasting has been attributed by courts as an error in the management of the Vessel.

108. In a recent case, The Privocean,106 requirement of additional cargo straps in a cargo hold was held to

be an operation linked with the management of the Vessel. Their operation was the enhancement of the

Vessel’s safety and stability. Thus, it was ruled that as a procedure it relates to the Vessel herself and not

the cargo. Otherwise, there would be a possibility of the ship capsizing. It needs to also be emphasized

103 William Tetley, Marine Cargo Claims (4th edn., Carswell 2008) p. 177. 104 Preliminary Survey Report, 30/06/2016, Mekon Surveyors Inc., p. 46 of the Moot Scenario. 105 Art. 4 (1) of the HVR. 106 Clearlake Shipping Ltd. v. Privocean Shipping Ltd. (The “Privocean”), [2018] EWHC 2460 (Comm); [2018] 2 Lloyd’s Rep.

551.


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that ballasting operations are a standard practise of merchant Vessels, regardless of the existence of cargo

in their holds.

109. Under this decision, the important test to be applied is whether the action taken relates primarily to the

safety of the Vessel and as a secondary aftermath, to the safety of the Cargo. The court in The Privocean

foresaw that, regardless of the straps being used for the Cargo, the operation’s main purpose was to keep

the Vessel stable and secure.

110. Consequently, since ballasting is also considered a standard practice that enhances stability of the

Vessel, it need be categorized as above. CLAIMANT wrongfully inserted ballasting water in the Cargo

holds of the Thanos Quest, at the port of delivery. The ballasting operations would keep the Cargo stable,

but primarily were carried out for the safety of the Thanos Quest.

111. As a result, this constitutes an error in the management of the Vessel, and RESPONDENT holds

CLAIMANT liable for the whole amount of the Cargo claim, pursuant to Cl. 8 (a) of the ICA.

2. Alternatively, RESPONDENT claims damages in like amount for CLAIMANT’s breach of Clauses

27 and 53 of the Charterparty.

112. As set out in the arguments above CLAIMANT is liable for 100% of the Cargo Claim in accordance

with the ICA. However, CLAIMANT denies liability for this claim. Consequentially, RESPONDENT

suffers damages in the amount of the Cargo Claim.

113. Rider Cl. 53 and Cl. 27 of the NYPE 2015 Form provide that Cargo claims as between the Owners and

Charterers shall be settled in accordance with the ICA. Accordingly CLAIMANT should accept liability

for 100% of the Cargo Claim for reasons set out in the previous arguments in accordance with Cl. 8 (a) of

the ICA.

114. As CLAIMANT refuses to indemnify RESPONDENT for the Cargo Claim, RESPONDENT suffers

damages in the amount of the claim, that they otherwise would not have suffered. This constitutes a breach

of Rider Cl. 53 and Cl. 27of the NYPE 2015 Form, which require Cargo Claims to be settled in accordance


32

with the ICA. Therefore, RESPONDENT claims damages in the amount of the Cargo Claim for breach

of Clauses 27 and 53 of the Charterparty.

3. In the further alternative, CLAIMANT is liable for 50% of the Cargo Claim pursuant to Cl. 8 (b) of

the ICA.

115. If the tribunal finds that the wet damage to the Cargo was not caused by unseaworthiness or an error

in the management of the Thanos Quest, it must have been caused by negligence in the loading and

stowage of the Cargo. As described in the previous arguments, the crew pumped water into the Cargo

holds while ballasting the Thanos Quest in the port of West Coast, Challaland. As a result the Cargo holds

were wet prior to the loading and stowage of the Cargo. Nevertheless, the Cargo was loaded and stowed

in those same holds, leading to severe wet damage.

116. Pursuant to Cl. 8 (b) of the ICA, Cargo claims shall be apportioned 100% charterers when they arise

out of the loading, stowage, lashing, discharge, stowage or other handling of the Cargo. Nevertheless, they

shall be apportioned 50% charterers 50% owners when the words “and responsibility” are added to Cl. 8

or there is a similar amendment making the Master responsible for Cargo-handling.107

117. Such an amendment was made by CLAIMANT and RESPONDENT when the Charterparty was

concluded, as Cl. 8 of the NYPE 2015 Form reads:

“[T]he Charterers shall perform all Cargo handling, including but not limited to loading, stowing,

trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and

expense, under the supervision and responsibility of the Master […]”

118. Consequently, the Master was responsible for overseeing the handling of the Cargo when they were

loaded and stowed aboard the Thanos Quest. Therefore, any claims resulting from the improper loading

and stowage of Cargo must result in 50% liability for CLAIMANT. RESPONDENT is thus entitled to

be indemnified for 50% of the Cargo Claim.

107 Cl. 8 (b) of the NYPE Agreement 1996.


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4. RESPONDENT notified CLAIMANT of the Cargo Claim within the notification period of Cl. 6 of

the ICA.

119. In their reply and defence to the counterclaim submissions CLAIMANT alleges that RESPONDENT

failed to give written notification of the Cargo Claim required by Cl. 6 of the ICA. As such, they claim the

Cargo Claim is time-barred. However, RESPONDENT rightfully gave a written notification of the Cargo

Claim, within the period stated in the ICA.

120. Cl. 6 of the ICA provides that recovery under this agreement is barred unless written notification of

the Cargo Claim has been given to CLAIMANT within 24 months of the date of delivery of the Cargo.

Delivery of the Cargo was completed on 30 June 2016. Therefore, the notification period ran until 30 June

2018. Furthermore, CLAIMANT granted RESPONDENT a three month extension on two separate

occasions, thereby extending the period until 30 December 2018.108

121. RESPONDENT first notified CLAIMANT of the Cargo Claim on 7 July 2016, well within the

notification period provided by the ICA. This notification was made in writing and included a preliminary

survey report of the damage to the Cargo. Furthermore, CLAIMANT was already aware of the contract

of carriage between RESPONDENT and the receivers as the Bill of Lading was signed by the Master of

the Thanos Quest, in accordance with Cl. 31 of the NYPE 2015 Form.109 Moreover, CLAIMANT was

identified as the carrier in this contract of carriage, as is evidenced by Cl. 17 of the Bill of Lading,110 and

as such should have been aware of this contract.

122. It was impossible to provide all details on the claim as the quantum of damage was not clear yet.

However, details relating to the value of the Cargo and the nature of the claim were provided as far as they

were known at the time in the Preliminary Survey Report. The findings of this report were later confirmed

by CLAIMANT’s own investigations.111

108 E-mail, 29/05/2017, Clark Kent Bulk to RESPONDENT, p. 58 of the Moot Scenario; E-mail, 28/08/2017, Clark Kent Bulk to

RESPODENT, p. 57 of the Moot Scenario. 109 Bill of Lading, 18/03/2016, p. 49 of the Moot Scenario. 110 Cl. 17 of the Bill of Lading, 18/03/2016, p. 48 of the Moot Scenario. 111 Procedural Order No.2, 15/03/2019, p. 81, para. 9 of the Moot Scenario.


34

123. Furthermore, RESPONDENT made clear that their message should be treated as a formal notice of

claim, as they would revert once further details of the claim became clear.112 These further details on the

contract of carriage, the nature of the claim and the amount claimed were provided during the directions

hearing of 7 March 2019.113

124. In conclusion, the notification of claim of 7 July 2016 included all the details of the Cargo Claim that

were known at the time. Further details were provided when they became clear. Therefore,

RESPONDENT notified CLAIMANT of the Cargo Claim within the notification period and the

information given was sufficient for the purposes of Cl. 6 of the ICA.

V. PRAYER FOR RELIEF

For the reasons set out above, RESPONDENT humbly requests the arbitral tribunal to decide that:

a. CLAIMANT is liable to pay a restitution of USD 375.000,00 due to the Thanos Quest being off hire.

b. CLAIMANT should indemnify RESPONDENT for 100% of the Cargo Claim.

c. RESPONDENT did not breach the Charterparty by redelivering the Thanos Quest without prior hull

cleaning .

d. RESPONDENT redelivered the Thanos Quest prior to expiry of the Charterparty.

e. CLAIMANT is not entitled to damages for the costs of hull cleaning.

f. CLAIMANT is not entitled to damages for the cost of the voyage to South Island .

g. CLAIMANT is not entitled to damages for loss of hire under “Next Fixture”.

h. CLAIMANT is liable for the costs of arbitration and interest.

112 E-mail, 07/07/2016, Clark Kent to Hulk Hulls, p. 45, para. 2 of the Moot Scenario. 113 Procedural Order No.2, 15/03/2019, p. 82, para. 15 of the Moot Scenario.

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20th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION … · SLR Singapore Law Report SMF Singapore Maritime Foundation Sp.A Societa per Azioni, Shared Company ... Canadian Pacific Forest