SIXTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION

MOOT COMPETITION 2015

IN THE MATTER OF AN ARBITRATION HELD IN MELBOURNE

Claimant/Owner

/Counter-Defendant AND

Western Tankers Inc

Respondent/Charterer

/Counter-Claimant

LDT PTE

MEMORANDUM FOR THE CHARTERERS

TEAM NO.8

Georgiana Andreea Ban

Silvia Fernández Castro

Andrea López García de Blas

Álvaro Nieto Gómez

i

TABLE OF CONTENTS

TABLE OF CONTENTS ......................................................................................................... I

LIST OF ABREVIATIONS ................................................................................................. III

LIST OF AUTHORITIES: BOOKS .................................................................................... IV

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS .................................... V

LIST OF AUTHORITIES: LEGISLATION ........................................................................ X

STATEMENT OF FACTS ...................................................................................................... 1

PART ONE: JURISDICTION ................................................................................................ 3

A. THIS TRIBUNAL DOES NOT HAVE JURISDICTION ............................................. 3

I. A VALID ARBITRATION AGREEMENT EXISTS BETWEEN THE PARTIES ...... 3

II. SEAT OF ARBITRATION AND LAW APPLICABLE ARE SINGAPORE AND

SINGAPORE LAW ............................................................................................................... 3

III. THE CLAIM RELATED TO TORT OF FRAUD IS NOT ADMISSIBLE IN THIS

ARBITRATION. ................................................................................................................... 5

PART TWO: MERITS ............................................................................................................ 7

A. PERFORMANCE OF THE CHARTERPARTY .......................................................... 7

I. CHARTERERS DID NOT BREACH THE TERMS OF THE CHARTERPARTY ..... 7

i. ASA2 IS NOT, AND HAS NEVER BEEN, THE AGENT OF THE

CHARTERERS ............................................................................................................. 7

ii. CHARTERERS AT NO TIME ISSUED INSTRUCTIONS TO THE OWNERS

OR THE VESSEL FOR HER TO PROCEED TO AN ALTERNATIVE

DISCHARGE PLACE IN INTERNATIONAL WATERS OFF THE ANGOLAN

COAST .......................................................................................................................... 8

a. THE VOYAGE ORDERS ISSUED ON MARCH 27th

2014 WERE, AT ALL

TIMES, IN FULL FORCE AND EFFECT .............................................................. 9

iii. THERE WAS NO HIRE DUE AND OWING BY THE CHARTERERS

UNDER THE CHARTERPARTY ON JULY 3RD

2014, OR AT ANY POINT

THEREAFTER ........................................................................................................... 10

a. THE CHARTERPARTY WAS FRUSTRATED NO LATER THAN JULY

4TH

.........................................................................................................................10

ii

b. ALTERNATIVELY, THE VESSEL WAS OFF HIRE FOR BREACH OF

ORDERS AND/OR NEGLECT OF DUTY ON THE PART OF THE MASTER 12

B. LIABILITY FOR TORT OF FRAUD ......................................................................... 14

PART THREE: COUNTERCLAIM .................................................................................... 16

A. THE OWNERS BREACHED THE CHARTERPARTY BY PROVIDING A VESSEL

THAT WAS NOT FIT FOR SERVICE, AS REQUIRED BY THE CHARTERPARTY .... 16

I. THE MASTER SHOWED INCOMPETENCE WHEN HE FOLLOWED

INSTRUCTIONS OTHER THAN THOSE GIVEN TO THE VESSEL BY THE

CHARTERER ...................................................................................................................... 16

II. THE OWNERS ALSO FAILED TO FOLLOW ANTI-PIRACY PRECAUTIONS, AS

REQUIRED BY THE CHARTERPARTY AND/OR INDUSTRY PRACTICE RELATING

TO WEST AFRICA ............................................................................................................. 18

i. MASTER FAILED TO DEPLOY, INTER ALIA, RAZOR WIRE AND

OTHER PROTECTIVE MEASURES REQUIRED BMP4 ....................................... 18

ii. MASTER DID NOT COMPLY WITH THE SPECIAL PROVISIONS TO ST4

PRO-FORMA CONCERNING “PIRACY” ............................................................... 21

B. OWNERS BREACHED THEIR DUTY AS BAILEE OF THE CARGO ................... 22

PART FOUR: PRAYER FOR RELIEF .............................................................................. 24

iii

LIST OF ABREVIATIONS

BMP4 : Best Management Practices

Cargo : Cargo transported to Luanda

Charterers : LTD PTE

Charterparty : The Charterparty

Claimant : Western Tankers Inc.

HVR : The Hague-Visby Rules

Owners : Western Tankers Inc.

Respondent : LTD PTE

ST4 : Shelltime 4

STS : Ship to Ship

Vessel : The Western Dawn

Voyage Orders : Voyage orders issued May 27th

WAF : West Africa

iv

LIST OF AUTHORITIES: BOOKS

Ambrose, C. & Maxwell.K (2002). London Maritime Aribitration. LLP.

Baatz, I. (2011). Maritime Law. Southampton: Sweet and Maxwell.

Coghlin, T. B. (2008). Time Charters. London: Lloyd’s Shipping Library.

Cooke, J. Y. (1993). Voyage Charters. London: Lloyd’s of London Press Ltd.

Hedley, S. (2006). Tort. Oxford University Press.

Merkin, R. (2005). Arbitration Act 1996. London Singapore.

Thomas, R. (2008). Legal Issues related to Time Charterparties. London: Informa.

v

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS

A.

Actis Steamship Co Ltd v. The Sanko Steamship Co Ltd (The Aquacharm) [1982] 1 Lloyd’s

Rep. 7 ……………………………………………………...…………………………......12, 19

Amin Rasheed Shipping Co. v. Kuwait Insurance [1983] 2 Lloyd's Rep. 365 (HL)………......4

Andre and Cie SA. v. Orient Shipping (The Laconian Confidence) [1997] 1, Lloyd’s

Rep.139……………………………………………………………………………………12,13

Armagas v. Mundogas (The Ocean Frost) [1986] 2 Lloyd’s Rep. 109 (H.L.)…………...........8

B.

Bank Line Ltd v. Arthur Kapel & Co. [1919] AC 435.……………………..……………...…10

Ben Line Steamers Ltd v. Pacific Steam Navigation Co (The Benlawers) [1989] 2 Lloyd's

Rep.51……………………………………………………………………………………...…19

British Bank of the Middle East v. Sun Life [1983] 2 Lloyd’s Rep. 9…………….………...….8

C.

Ca Venezolana De Navegacion v. Bank Line (The "Roachbank") [1987] 2 Lloyd's Rep.

498…………………………………………………………………………………………….12

Christopher Brown Ltd v Genossenschaft Oesterreichischert Waldbesitzer

Holzwirtschaftsbetriebe GmbH [1954] 1 QB 8, 12-3................................................................ 3

Compagnie d'Armement Maritime SA v. Compagnie Tunisienne de Navigation SA (1971) AC

572-609 HL ................................................................................................................................4

Compagnie Tunisienne de Navigation S.A. v. Compagnie D'Armement Maritime S.A. [1969] 3

All E.R. 589 per Denning ..........................................................................................................4

Constantine v. Imperial Smelting [1942 ] A.C. 154(H.L.)…………...…………………….... 11

vi

Cosco Bulk Carrier Co. Ltd. v. Team-Up Owning Co. Ltd. (The Saldanha) [2010] EWHC

1340………………………………………………………………………………...…………13

D.

Davis Contractors v. Fareham U.D.C. [1956] A.C. 696.……………………………..……...10

E.

East West Corp. V. DKBS 1912 [2003] EWCA CW 83, [2003], QB 1509…………….…….22

Edwards v. Skyways Ltd. [1964] 1 W.L.R 349, 355…………………………………..….......18

Eridania SpA v. Oetker (The Fjord Wind) [2000] 2 Lloyd’s Rep ,191 (CA)…….……..........21

F.

Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd [1964] 2 Q.B. 480…….…...8

G.

Garnac Grain Inc.Co. v. HMF Faure and Fairclough [1968] A.C. 1130………..……………8

Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad

(1998) 196 CLR 161…………………………………………………………………………..19

H.

Hall v. Brooklands Auto Racing Club [1933] 1 KB 205………………………….….............17

Hogarth v. Miller [1891] A.C. 48 (H.L.)………………..……………………………………13

Hong Kong Fir Shipping co Ltd v. Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26……………19

Horlock v. Beal [1916] 1 A.C. 486,513…..…………………………………………………..11

Hummingbird Motors Ltd v Hobbs [1986] RTR 276………………………………...………15

Hyundai Merchant Marine Co Ltd v. Furnace Withy (Australia) Pty (the Doric Pride) [2006]

EWCA Civ 599, [2006] 2 All ER (comm.) 188, [2006] 2 Lloyd’s Rep. 175, [2007] 2 CLC

1042…………………………………………………………………………………………...13

vii

J.

J Lauritzen AS v. Wijsmuller BV, (The Super Servant Two) [1990] 1 Lloyd’s Rep. 1……….11

Jackson v. Union Marine Insurance Co. Ltd. (1874), L.R. 10 C.P. 125..................................11

K.

Krell v. Henry [1903] 2 K.B. 740.............................................................................................11

L.

Lemar Towing Co v Fireman’s Fund Insurance Co [1973] AMC 1843……………….…….17

M.

Mareva Navigation Co Ltd v. Canaria Armadora SA [1977] 1 Lloyds Rep. 368……………14

McFadden v. Blue Star Line [1905] 1 KB 697………………………………..……………...19

Morris v. CW Martin and Sons Ltd. [1966] 1 QB 716, 738, CA, per Salman LJ.....................22

Morrison v. Shaw Savill [1916] 2 K.B. 783……...…………………………………………...22

N.

National Carriers Ltd v. Panalpina (Northern) Ltd [1981] AC 675………………….….10, 11

O.

Owners of Cargo on Ship Maori King v. Hughes [1895] 2 Q.B. 550………….……………..20

P.

Pioneer Shipping Ltd v. BTP Tioxide Ltd (The Nema) [1982] AC 724……………..………..10

Papera Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. (The Eurasian

Dream) [2002] 1 Lloyd's Rep. 719………………………………………………...…..……..17

Q.

viii

Queensland National Bank Ltd v. Peninsular and Oriental Steam Navigation Co. [1898] 1

Q.B.)…………………………………………………………………………………………..20

R.

Rhodian River Shipping Co SA and Rhodian Sailor Shipping Co SA v Halla Maritime

Corporation (The Rhodian River and Rhodian Sailor) [1984] 1 Lloyds Rep. 373……..……..8

Rose and Frank Co. v. J.R. Crompton and Brothers Ltd [1923] 2 K.B. 261, 288……….…...18

Royal Greek Government v. Minister of Transport (1948) 82 L.I. L.Rep. 196………………13

S.

Scottish Navigation Co Ltd v. WA Souter & Co [1917] 1 K.B. 222, 228 and 244………..….11

T.

The Berge Sund [1993] 2 Lloyd’s Rep………………………………...……………………..13

The Gang Cheng [1998] 6 MLJ 488…………………………………………………….....…19

The Makedonia [1962] 1 Lloyd’s Rep. 316……………………………………..……………17

The Mastro Giorgis [1983] 2 Lloyd’s Rep. 66, 69………………………..……………….…13

The Roberta [1938] 60 LI l Rep 84…………………...………………………………………17

Torvald Klavenss A/S v. Arni Maritime Corpn. (The Gregos) [1995] 1 Lloyd’s Rep. 1 at

p.7…………………………………………………………………………………………...….9

U.

Union of India v. N.V. Reederij Amsterdam (The Amstelslot) [1963] 2 Lloyd’s Rep.

223…………………………………………………………………………………………….17

V.

Vogemann v. Zanzibar Steamship Company Limited (The Zanzibar) [1902] 7 Com. Cas.

254………………………………………………………………………………………….…13

ix

W.

W. J. Tatem Ltd. v. Gamboa [1939] 1 K.B. 132…………..……………………………….…11

West Bromwich Albion Football Club Ltd v. El-Safty [2006] EWCA Civ 1299..……………18

x

LIST OF AUTHORITIES: LEGISLATION

Arbitration Act 1996

Frustrated Contracts Act 1943

The Hague Visby Rules- The Hague Rule as Amended by the Brussels Protocol 1968

1

STATEMENT OF FACTS

1. The Claimant is Western Tankers Inc (the “Owners”), a long-established and reliable

company incorporated in the BVI. The Owners own, among other vessels, the ‘Western

Dawn’ (the “Vessel”).

2. The Respondent is LDT Pte (the “Charterers”), a reliable company incorporated in

Singapore.

3. The Owners agreed to let and the Charterers agreed to hire the Vessel. The Charterers

chartered the Vessel on an amended ST4 charterparty with rider clauses dated May 26th

2014 for a period of three months, plus or minus 30 days (the “Charterparty”). The

Charterparty was for a time charter trip to include a voyage from Singapore to OPL

Luanda, West Africa, with re-delivery in the Mediterranean area.

4. Further, pursuant to the terms of the Charterparty, voyage orders were given on 27 May

2014 for the Vessel to load “30,000mt MIN/MAX Jet A1 PLUS 70,000mt +/-10%

MOLOO GASOIL” (the “Cargo”).

5. The Vessel completed loading of the Cargo on June 8th

2014.

6. Bills of Lading for the Cargo were issued on June 8th

2014. Full payment for the Cargo

was received by the Charterers on June 8th

2014.

7. The Vessel was then ordered to proceed to OPL Luanda for discharge of the Cargo.

8. While proceeding towards Luanda, the Master, following the instructions of ASA2,

directed the Vessel to proceed to an alternative discharge place in international waters off

the Angolan coast.

9. While the Vessel was at that alternative discharge place, it was attacked by pirates, leading

to the loss of part of the cargo and damages of the Vessel.

10. As a result of the pirate attack the Vessel suffered material damage.

2

11. In consequence of the above, the Vessel could neither meet the discharge target date at

Luanda nor discharge the full Cargo to Angola Energy Imports as purported within the

voyage instructions and Bills of Lading.

3

PART ONE: JURISDICTION

A. THIS TRIBUNAL DOES NOT HAVE JURISDICTION

I. A VALID ARBITRATION AGREEMENT EXISTS BETWEEN THE PARTIES

1. Having this Tribunal legitimate authority as to rule on its own jurisdiction as is well

established in the principle of international arbitration1, the Respondent argues that a valid

arbitration agreement exists given that both parties agreed in writing2 to submit the contract to

arbitration. The arbitration agreement exists since there is an express mention to the intention

and, thus, agreement of the parties to submit any disputes arising out of this Charterparty to

arbitration. It is as so reflected in the claims3 for arbitration that motivate this procedure.

2. In light of the existing arbitration agreement, the Respondent argues that this Tribunal has no

jurisdiction to hear about the merits of this dispute, as the agreed seat of the arbitration is

Singapore.

II. SEAT OF ARBITRATION AND LAW APPLICABLE ARE SINGAPORE AND

SINGAPORE LAW

3. In this point, the Respondent bases its argument upon the existence of an explicit agreement

to exclude London and English Law as seat of the arbitration and law applicable to the

contract, respectively, and the existence of an implicit agreement to select Singapore and

Singapore Law as such4.

4. The Respondent argues that, within the arbitration agreement lays the implicit choice for

Singapore as seat of arbitration and Singapore Law as law applicable. This implicit choice is

revealed by the intention of the parties as stated in the communications of May 23rd

5 and the

1 Arbitration Act 1996, Section 30; Christopher Brown Ltd v. Genossenschaft Oesterreichischert Waldbesitzer

Holzwirtschaftsbetriebe GmbH [1954] 1 QB 8, 12-3. 2 Arbitration Act 1996, Section 5. 3 Moot Problem, p. 66. 4 Moot Problem, p. 2 5 Ibidem.

4

fact that the seat is left blank in the Fixture Recaps6 by the Owner’s agent, Bill at IMWMB,

which as such binds the Owner with his actions.

5. According to the Law, when constructing a shipping Charterparty there is no actual need for a

formal printed document for the existence and performance of said contract7; negotiation

between the parties and Fixture Recaps shall be considered a formal contract between the

parties as long as the intention of the parties is reflected upon the same and known by both.

6. In the matter at hand, the contract was validly concluded between the parties and as such

reflected in the Fixture Recaps, which among other things included an amended ST4

Charterparty. Therefore, the contractual relationship is formed by the combined existence of

Fixture Recaps and the ST4, which both shall be interpreted in light of previous

communications. However, in neither of those does the true intention of the parties appears.

The Respondent explicitly stated in the communications held with the Owner’s agent that

they refused to appoint London as the seat of arbitration8. By not including such intentions in

the Fixture Recaps and by leaving blank the area designated for appointing the seat of

arbitration and law applicable, the agent agreed to exclude from such London and English

Law.

7. The Respondent, therefore, holds that given the elements stated in the Charterparty and the

true intention of the parties, the seat should be considered to be implicitly appointed and in

reference to Singapore and Singapore Law. Recently, Tribunals9 have come to adopt an

approach to determine the implicitly chosen seat and Law applicable, which takes into

account “the rest of the contract and relevant surrounding facts”10

. Given that Charterers are

6 Moot Problem, p. 6. 7 Arbitration Act 1996, Section 5. 8 Moot Problem, p. 2. 9 Amin Rasheed Shipping Corp. v. Kuwait Insurance [1983] 2 Lloyd's Rep. 365 (HL); Compagnie d'Armement Maritime SA

v. Compagnie Tunisienne de Navigation SA [1971] AC 572-609 HL; Compagnie Tunisienne de Navigation S.A. v.

Compagnie D'Armement Maritime S.A. [1969] 3 All E.R. 589 per Denning. 10 Amin Rasheed Shipping Corp. v Kuwait Insurance [1984] AC 50, [1983] 2 All ER 884, [1983] 2 Lloyds Rep. 365, [1983] 3

WLR 241.

5

located in Singapore and that the performance of the contract was initiated in such location11

,

it is undeniable that the contract and surrounding facts hold a strong enough connection with

Singapore. Therefore, Singapore should be considered as the implicit choice for arbitration in

the Charterparty.

8. Furthermore, and in support of the previous statement, the English Arbitration Act12

states

that “all the relevant circumstances” are to be taken into account when there is an absence of

a designation of the seat of the arbitration. Thus, the Respondent argues that, considering the

lack of explicit designation and in accordance to the true intention of the parties, the seat of

arbitration and the law applicable to the merits of the matter here disputed should be

Singapore and not London.

9. The Tribunal, upon its competence to rule over its own jurisdiction, should refuse to rule on

the merits of the case, as the seat of the arbitration is Singapore. This is the Law and seat

closest to the matter13

hence reflecting the true intentions of the parties in regard of the

construction of the Charterparty as claimed by the Respondent. The Tribunal should

consequently decline its jurisdiction.

III. THE CLAIM RELATED TO TORT OF FRAUD IS NOT ADMISSIBLE IN THIS

ARBITRATION.

10. Only, and only if the Tribunal decides that the seat of the arbitration is London and that the

law applicable thereto is English law, the Respondent argues that the alleged tort of fraud is

beyond the scope of the arbitration agreement and not subject to this Tribunal’s jurisdiction.

The ST4 states, “all disputes arising out of this Charter shall be referred to Arbitration in

London in accordance with the Arbitration Act 1996”14

; nevertheless, the Respondent argues

11 Moot Problem, p. 1. 12 Arbitration Act 1996, Section 3. 13 (Clare Ambrose, 2002, pp. 42-43).

14 See Shelltime 4 Standard form taking into consideration the ammendments refrenced by the Fixture Recaps (Moot

Problem, p. 5).

6

that this does not extend and was not intended to extend to tort of fraud or any other non-

contractual claims.

11. To this point, the Respondent argues that the widening of the scope of the arbitration

agreement does not apply in the sense described in The Playa Larga (1983)15

nor in that of

The Angelic Grace (1995)16

. It is so since the connection between the contractual claims and

the tortious claims is not sufficiently strong as to uphold the agreement construed in regard of

one being applicable to the other. Hence, the two types of claims shall be treated under

different procedures.

12. Therefore, the wording “arising out of” is not sufficient link and, thus, the claim regarding

tort shall not be included within the scope of this arbitration.

15 Empresa Exportadora de Azúcar v. Industria Azucarera Nacional SA,( The Playa Larga) [1983] 2 Lloyd's Rep. 16 Aggeliki Charis Compania Maritima SA v. Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd's Rep. 87.

7

PART TWO: MERITS

A. PERFORMANCE OF THE CHARTERPARTY

I. CHARTERERS DID NOT BREACH THE TERMS OF THE CHARTERPARTY

13. The Claimant contends that the Respondent breached the Charterparty by giving instructions

without the authorisation of the Owners. The Respondent argues, however, that there was no

such breach given that: (1) ASA2 is not, and has never been, the agent of the Charterers, (2)

the Charterers at no time issued instructions to the Owners or the Vessel for her to proceed to

an alternative discharge place in international waters off the Angolan coast.

i. ASA2 IS NOT, AND HAS NEVER BEEN, THE AGENT OF THE

CHARTERERS

14. The Respondent states that ASA2 does not have authority of any type to act as an agent on

behalf of the Charterers, as they have not been appointed by the latter as such nor have they

made any representations that could be interpreted as an authorisation to act as agents.

15. Firstly, it is necessary to make clear that the Charterers, at no point, nor by any given means,

communicated Owners, implicitly or explicitly, that ASA2 were their agents as can be

concluded from the Voyage Correspondence.

16. In the Voyage Orders sent on May 27th

201417

there is a specific reference to “Atlantic

Services Agency- PIC William – William@asa.com.an” as Disport Agents. By providing such

information it is determined that the agents will act through this unique e-mail address and not

another. Due to the lack of coincidence between the e-mail addresses, messages received by

Captain.William.Anya_GM@asa2.com.an or Captain_Anya_GM@asa2.com.an are not to be

considered received by the agent appointed in the Voyage Orders18

.

17 Moot Problem, pp. 13-15. 18 Ibidem.

8

17. For determining whether ASA2 can be considered the agents of the Charterers it is necessary

to establish where the agent’s authority lays. An agent’s actual authority is that which the

principal has actually conferred to it, and whose exercise by the agent is therefore consented

by the principal. This consent may be given expressly or may be inferred from the conduct of

the principal19

.

18. Considering this and within the scenario presented in the disputed issues, the Charterers, at no

point, by any given means, appointed ASA2 as agents with authority, neither express nor

actual, nor implied or apparent, to act on their behalf in any operation or transaction.

Likewise, the Charterers never did represent that ASA2 were their agents.

19. Thus, the Respondent sustains that ASA2 is not an agent acting on their behalf since there is

no authority based on any representation made nor authorized by principal; there is no

statement or conduct of Charterers on which this authorization can be substantiated upon20

.

Claimant is, therefore, put to strict proof of the contrary.

ii. CHARTERERS AT NO TIME ISSUED INSTRUCTIONS TO THE OWNERS

OR THE VESSEL FOR HER TO PROCEED TO AN ALTERNATIVE

DISCHARGE PLACE IN INTERNATIONAL WATERS OFF THE ANGOLAN

COAST

20. As reflected in the Voyage Correspondence of June 8th

, instructions to redirect the Vessel to

an alternative discharge place located on international waters off the Angolan coast were not

issued by the Charterers21

, but instead by an unlinked person, non-agent of the Charterers,

19 Garnac Grain Inc.Co. v. HMF Faure and Fairclough [1968] A.C. 1130. 20 British Bank of the Middle East v. Sun Life [1983] 2 Lloyd’s Rep. 9; Rhodian River Shipping Co. S.A. and Rhodian Sailor

Shipping Co. S.A. v. Halla Maritime Corporation, (The Rhodian River) [1984] 1 Lloyd’s Rep. 373; Armagas v. Mundogas

(The Ocean Frost) [1986] 2 Lloyd’s Rep. 109 (H.L.); Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd [1964]

2 Q.B. 480. 21 Moot Problem, p. 35.

9

with the following addresses: Captain.William.Anya_GM@asa2.com.an and

Captain_Anya_GM@asa2.com.an.

21. As argued in paragraph a.), ASA2 had no authority to issue such instructions. Therefore, the

Charterers cannot be held liable or accountable for the acts of ASA2, the deviation of the

Vessel to an alternative discharge point instructed by ASA2 nor the consequences from this

derived. Consequently, given that no new orders were issued by the Charterers, the original

Voyage Orders were still in full force and effect.

a. THE VOYAGE ORDERS ISSUED ON MARCH 27th

2014 WERE, AT ALL

TIMES, IN FULL FORCE AND EFFECT

22. Under the contract concluded between the parties to this arbitration, Owners are compelled to

perform any orders within the range encompassed by their promise22

. As contemplated in the

Charterparty, the Master is to strictly comply with the Charterers’ instructions, which include

the Voyage Orders dictated on March 27th

, and should contact the Charterers if unable to do

so.

23. Provided that there is nothing regulated in the Charterparty regarding new orders needed to be

issued in this circumstances, the Respondent argues that the Voyage Orders issued in the first

place were still in full force and effect.

24. According to the BIMCO Piracy Clause, if Owners decide that the Vessel shall not proceed or

continue to or through a certain area, they must immediately inform the Charterers, which

shall be obliged to issue alternative voyage orders. In this precise case, the Master decided

that going through the concrete area was not dangerous, as he did not inform the Charterers.

Therefore, they were not obliged to issue new orders. Consequently, the Respondent

22 Torvald Klavenss A/S v. Arni Maritime Corpn. (The Gregos) [1995] 1 Lloyd’s Rep 1 at p.7.

10

concludes that the orders issued on May 27th

were in full force and effect, both before and

after any alleged discharge in international waters.

iii. THERE WAS NO HIRE DUE AND OWING BY THE CHARTERERS UNDER

THE CHARTERPARTY ON JULY 3RD

2014, OR AT ANY POINT

THEREAFTER

25. The Respondent claims that there was no hire due and owing under the Charterparty on July

3rd

2014, or at any point thereafter given that: (1) the Charterparty was frustrated by no later

than July 4th

2014, (2) if the Charterparty was not frustrated, the Vessel was off hire for

breach of orders and/or neglect of duty on the part of the Master from July 4th

until the Vessel

was ready to resume service of its voyage from a position not less favorable to Charterers than

that at which such loss of time commenced.

a. THE CHARTERPARTY WAS FRUSTRATED NO LATER THAN JULY 4TH

26. The currently favored test for ascertaining whether the contract is frustrated was laid down by

the House of Lords in Davis Contractors Ltd v Fareham UDC23

. It requires three elements.

First of all, there must be a radical change in the obligations so that it would be unjust to hold

the parties to the literal sense of its stipulations in the new circumstances24

.

27. In this regard, the Charterparty was frustrated because the Vessel was unable to meet her

discharge target date at Luanda. Furthermore, the Vessel was unable to discharge the full

Cargo to Angola Energy Imports in accordance with the voyage instructions and Bills of

Lading.

28. More precisely, the Vessel couldn´t arrive within the delivery date to Luanda (estimated date

of arrival 3, 4 of July). It was predictable at an early stage that this delay would be

23

Davis Contractors v. Fareham U.D.C. [1956] A.C. 696.

24 National Carriers Ltd v. Panalpina (Northern) Ltd [1981] AC 675.

11

frustrating25

. Taking into account the last place and date in which the Vessel reported her

position, the distance from there to Luanda and the speed of the Vessel, it was clear that she

was not going to arrive on time26

.

29. Because of all the above, the commercial purpose for which the Charterer entered the

Charterparty was frustrated. Such purpose can be described as the usage of a Vessel with

which to transport cargo from Singapore to Luanda and the redeliver it to Gibraltar27

. The

delivery of the cargo on time, and therefore the performance of the Charterparty, was capital

for the Charterer. As such, performance became impossible, which effected a dissolution of

the contract28

.

30. With regard to the second element of the aforementioned test, the event that supervenes has to

derive from unforeseen circumstances, in terms of them not being regulated in the contract29

.

Nothing is stated with regard to a frustration of commercial purpose of the Charterparty,

therefore, which complies with this second requirement.

31. Lastly, the occurrence of the event must not be due to either party30

. As will be further argued,

when referring to the tort claim, the Charterers consider that all representations made by them

in that regard were true at the time made. The events which resulted in the subject of those

representations not occurring were events not in the control of Charterers, and in any event

frustrated the Charterparty by no later than July 4th

2014. With regard to the Owners, the

burden is on them to prove that this situation was self-induced, as they are the party arguing

that the doctrine of frustration shall not be applied.31

25 Bank Line Ltd v. Arthur Kapel & Co. [1919] AC 435. 26 (Baatz, pp. 154-157); Pioneer Shipping Ltd v. BTP Tioxide Ltd (The Nema) [1982], AC 724 27 (Cooke, et al., 1993, p. 468). 28Krell v. Henry [1903] 2 K.B. 740; Horlock v. Beal [1916] 1 A.C. 486,513; Scottish Navigation Co Ltd v. WA Souter & Co

[1917] 1 K.B. 222, 228 and 244; Jackson v. Union Marine Insurance Co. Ltd. (1874), L.R. 10 C.P. 125. 29 W. J. Tatem Ltd. v. Gamboa [1939] 1 K.B. 132. 30 National Carriers Ltd v. Panalpina (Northern) Ltd . 31 Constantine v. Imperial Smelting[1942 ] A.C. 154 (H.L.).

12

32. With regard to the events of frustration, the contract is terminated automatically as from the

date in which it happened, both parties are discharged from further performance32

. According

to the Frustrated Contracts Act of 194333

, the effect of a frustrated Time Charterparty may be

summarized as follows: sums paid before the time of frustration are to be repaid and sums

payable before that time cease to be payable.

33. As a result, the Claimant must repay the Respondent the amount of the hire paid for the first

month of the Charterparty. For the rest of the term, hire ceases to be payable.

b. ALTERNATIVELY, THE VESSEL WAS OFF HIRE FOR BREACH OF

ORDERS AND/OR NEGLECT OF DUTY ON THE PART OF THE MASTER

34. From the 4th

of July onwards, the Master stopped communicating to the Charterers the

Vessel’s position, in breach of the terms stated in the Charterparty. In addition, the Master

received orders from a third party, ASA2, and did not refer such instructions to the Charterer

for handling, as required in the Voyage Orders.

35. With regard to the lack of communication, it constitutes a breach of orders as they required

the Master to communicate his position to the Charterers at certain times of the day34

, which

he did not35

. As for the orders received from ASA2, the fact that the Master did not report

them to the Charterers constitutes both breach of orders and an act of negligence. First and

foremost, the Master breached the Voyage Orders as they stated as mandatory reporting

orders from third parties to the Charterers. Secondly, the Master was incompetent when he

followed instructions other than those given to the Vessel by the Charterers.

32 (Coghlin, Baker, Kenny, & Kimball, 2008, p. 490); J Lauritzen AS v. Wijsmuller BV (The Super Servant Two) [1990] 1

Lloyd’s Rep 1. 33 Frustrated Contracts Act of 1943, Section 1.2. 34 Moot Problem, p. 15. 35 Moot Problem, p. 41.

13

36. In order to determine if a vessel was off-hire, two requirements must be fulfilled. First of all,

it has to be established that the full working of the vessel has been prevented. Following this,

it has to examined whether it has been caused by an event within the wording of the clause36

.

37. Related to the qualifying phrase “preventing the full working of the Vessel”, Rix J. argued in

The Laconian Confidence37

that it does not require the Vessel to be inefficient by herself, as a

totally efficient ship may be prevented for working. In this sense, a vessel’s working may be

prevented by legal as well as physical means, and by outside as well as internal causes38

.

38. In light of this, Respondent states that the Vessel was prevented from working as a result of

the Master’s behavior39

, in terms of him not communicating and mishandling third parties’

orders. In consequence, the Vessel was unable to fulfill the obligations required40

. These

obligations were no other than the normal development of the charter and the discharge of the

cargo.

39. Given that it has been determined that the Vessel was prevented from working, the burden is

on the Charterers to show that the off hire clause operates in the relevant circumstances41

.

These circumstances can be situated within the scope of the off hire clause contained in the

ST4. It states that in the event of an undisputed loss of time as a result of breach of orders or

neglect of duty on the part of the Master, the Vessel shall be off-hire from the commencement

of such loss of time until she is again ready and in an efficient state to resume her service

from a position not less favorable to the Charterers than that at which such loss of time

commenced.

36 (Coghlin, Baker, Kenny, & Kimball, pp. 445-446); Actis Co. Ltd v. The Sanko Steamship Co. Ltd (The Aquacharm) [1982]

1 Lloyd’s Rep. 7; The Roachbank[1987] 2 Lloyd’s Rep. 498, 507; Andre and Cie SA. v. Orient (The Laconian Confidence)

[1997] 1 Lloyd’s Rep 139. 37 Andre and Cie SA. v. Orient Shipping (The Laconian Confidence). 38 [1997] 1 Lloyd’s Rep. 139. 39 The Mastro Giorgis [1983] 2 Lloyd’s Rep. 66,69. 40 Hogarth v. Miller [1891] A.C. 48 (H.L.); The Berge Sund [1993] 2 Lloyd’s Rep. 41 Royal Greek Government v. Minister of Transport [1948] 82 L.I. L.Rep. 196; Hyundai Merchant Marine Co Ltd v.

Furnace Withy (Australia) Pty (The Doric Pride) [2006] EWCA Civ 599, [2006] 2 All ER (comm.) 188, [2006] 2 Lloyd’s Rep

175, [2007] 2 CLC 1042; Cosco Bulk Carrier Co. Ltd. v. Team-Up Owning Co. Ltd. (The Saldanha) [2010] EWHC 1340.

14

40. In this case, it is obvious that no dispute arises with regard to the loss of time, to the extent

that as a result of these events the Vessel could not meet the discharge target date at Luanda42

.

Finally, and as mentioned above, when the Vessel reaches a position no less favourable than

the one she occupied when the loss of time started, hire would be payable again43

.

41. As a result of the aforementioned events, the Vessel can be considered off hire, as during that

period she was unable to render to the Charterers the service then required from her. In

consequence, hire is not payable for the time so lost 44

.

B. LIABILITY FOR TORT OF FRAUD

42. The Respondent does not accept the Claimant’s allegations of liability to pay damages arising

from the tort of fraud since no fraudulent misrepresentation was made and, therefore, the

Claimant lacks the entitlement to do so.

43. Consequently, the tort of fraud is not actionable because (1) no false statement was made by

the Respondent regarding the rebunkering and (2) no false statement was made by ASA2 on

behalf of the Respondent.

44. (1) All representations made by Charterers were true at the time they were made. When

stating that rebunkering would be available passing Durban or Cape Town, the Respondent

did not make a false statement. The Respondent had negotiated with their bunker provider,

Equator Bunkers, and had the possibility to provide with more bunkering. When talking about

extending the credit line to purchase more bunkers in the future, the bunker provider stated,

“once we’ve got the first trades out of the way we will be happy to extend that line towards

the million”45

. Therefore, when informing the Captain about the future availability of

42 Statement of Facts 11. 43 Vogemann v. Zanzibar Steamship Company Limited (The Zanzibar) [1902] 7 Com. Cas. 254. 44 Mareva Navigation Co Ltd v. Canaria Armadora SA [1977] 1 Lloyd‘s Rep 368. 45 Moot Problem, p. 21.

15

rebunkering, the Charterers honestly believed the statement were making. In Derry v. Peek46

,

the House of Lords held that for an action for deceit, it was necessary to “show fraud”. This

meant that a false representation must be proved to have been made (1) knowingly; or (2)

without belief in its truthfulness; or (3) recklessly, carelessly whether it be true or false. On

the facts, the court decision leaves clear that the claimant cannot be held liable because they

honestly believed the truth of their statement in the moment that they made it. In our case,

when stating that bunkers would be available when passing Durban or Cape Town, the

Charterers honestly believed the truthfulness of the statement and had negotiated the future

availability of rebunkering. There is no evidence at all that proves Charterers were not honest

with regard to their statements about bunkering thus falling the burden of proof of the

contrary upon Claimant. In addition, the Charterers’ statement was an accurate representation

of their knowledge and belief in that precise moment47

. Additionally, the events, which

resulted in the subject of those representations not occurring, were events not in the control of

Charterers. Therefore, fraud cannot be held and the tort of deceit is not actionable.

45. (2) For the Respondent to be liable by a false representation made by a third party, it is

necessary that the third party acts on behalf of the Respondent as its agent. ASA2 is not, and

has never been, agent of the Charterers. Therefore, the Respondent is not liable for any

possible representations made by ASA2.

46 Derry v. Peek [1889] LR 14 App. Cass 337. 47 Hummingbird Motors Ltd v. Hobbs [1986] RTR 276.

16

PART THREE: COUNTERCLAIM

A. THE OWNERS BREACHED THE CHARTERPARTY BY PROVIDING A

VESSEL THAT WAS NOT FIT FOR SERVICE, AS REQUIRED BY THE

CHARTERPARTY

46. The Respondent contends that the Charterparty was breached by the Owners, as the Vessel

was not fit for service in the following aspects: (1) The Master showed incompetence when he

followed instructions other than those given to the Vessel by the Charterer, (2) The Owners

also failed to follow anti-piracy precautions, as required by the Charterparty and/or industry

practice relating to West Africa.

I. THE MASTER SHOWED INCOMPETENCE WHEN HE FOLLOWED

INSTRUCTIONS OTHER THAN THOSE GIVEN TO THE VESSEL BY THE

CHARTERER

47. The Respondent considers necessary to mention that the Hague-Visby Rules apply as per the

content of Clause 27 paragraphs a) and c) of the ST448

governing this charter contract, as the

claim here upheld arises out of the loss of part of the cargo.

48. Article III, rule 1 of the HVR imposes a duty on the carrier to exercise due diligence before

and at the beginning of the voyage to make the vessel seaworthy and to properly man, equip

and supply the vessel. The Respondent argues that the Claimant breached Article III, rule 1 of

the HVR because the Owners failed to provide a seaworthy vessel, as well as to exercise such

due diligence until proved otherwise.

49. According to ISM Code49

, competence of the crew and Master on board and in charge of the

Vessel is one of numerous requirements as to the seaworthiness of a vessel put on sea being

the incompetence of the crew and/or Master a premise of unseaworthiness50

.

48 See Shelltime 4 Standard form taking into consideration the amendments referenced by the Fixture Recaps (Moot

Problem, p. 5).

17

50. The Respondent’s argument here lies upon the lack of competence of the Master as in failing

to comply with the tasks and actions required from a person of his rank51

under circumstances

such as the ones described thus labeling him incompetent under casualness and lack of effort

regarding his due diligence upon the matter52

.

51. In relation to this argument, to further support the Master’s incompetence, the Respondent

refers to the “reasonable man test”53

. It is common knowledge that a company generally uses

a same domain for all members of the company, therefore given that the agent’s domain is

“asa.com.an”54

and the non-agent’s is “asa2.com.an”55

, it is reasonable to assume that the

order was given by a different company. Precisely, the Respondent argues that a reasonable

man would have, in the least and as a precautionary measure, verified with the Charterers the

authority of the purported agent acting on their behalf. Hence, following such orders was, not

only a breach of due diligence, but also a sufficient evidence of incompetence.

52. The Master’s incompetence implies the unseaworthiness of the Vessel, thus rendering the

latter unfit for service as required in the Charterparty56

. Under the Hague-Visby Rules, and

since the Vessel’s unseaworthiness resulted in the loss of part of the cargo, Owners are liable

to compensate Charterers for such loss.

49 International Safety Management Code, 2012 – section 5: Master’s Responsability and authority. 50 Lemar Towing Co v. Fireman’s Fund Insurance Co [1973] AMC 1843. 51 Union of India v. N.V. Reederij Amsterdam (The Amstelslot) [1963] 2 Lloyd’s Rep. 223 at p. 230 per Lord Reid; [1938]

60 Ll. L. Rep. 84. Lord Justice Greer at p. 86. 52 Papera Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. (The Eurasian Dream) [2002] 1 Lloyd's Rep.

719; The Makedonia [1962] 1 Lloyd’s Rep. 316. 53 Hall v. Brooklands Auto Racing Club [1933] 1 KB 205. 54 Moot Problem, pp.13-15. 55 Moot Problem, p.35. 56 The Roberta [1938] 60 LI l Rep 84; Lemar Towing Co v Fireman’s Fund Insurance Co.

18

II. THE OWNERS ALSO FAILED TO FOLLOW ANTI-PIRACY

PRECAUTIONS, AS REQUIRED BY THE CHARTERPARTY AND/OR

INDUSTRY PRACTICE RELATING TO WEST AFRICA

53. The Respondent also holds that the Claimants breached Article III, rule 1 of the HVR, as the

Vessel was not properly equipped. The Master failed to follow anti-piracy precautions, as

required by the Charterparty and/or industry practice relating to West Africa given that: (1)

the Master failed to deploy, inter alia, razor wire and other protective measures required

BMP4, (2) the Master did not comply with the special provisions to ST4 pro-forma

concerning “piracy”.

i. MASTER FAILED TO DEPLOY, INTER ALIA, RAZOR WIRE AND OTHER

PROTECTIVE MEASURES REQUIRED BMP4

54. It is true that BMP4 are merely guidelines product of the industry practice. Therefore, their

compliance is in general not mandatory. However, the very moment the contract states that

they have to be followed, they become contractual obligations and mandatory. It is clear that

both parties intended their agreement to impose legal obligations upon each of them, this

being one of the elements of the contract57

. These precise obligations were imposed to the

Owner in the special provisions to ST4 pro forma, and as a result the instalment of the

referred security devices is a contractual obligation.

55. In addition, in cases of this nature the onus is on the party who asserts that no legal effect was

intended, “and the onus is a heavy one”58

. Therefore, it would be for the Owners to prove that

no contractual relation was intended with regards to the BMP4.

57 West Bromwich Albion Football Club Ltd v. El-Safty [2006] EWCA Civ 1299; Rose and Frank Co. v. J.R. Crompton and

Brothers Ltd [1923] 2 K.B. 261, 288. 58 Edwards v. Skyways Ltd. [1964] 1 W.L.R 349, 355.

19

56. In this sense, the Claimant has not exercised his due diligence to provide a seaworthy vessel

under the Charterparty. Seaworthiness is to be determined according to “the conditions the

vessel will encounter… depending on the whole nature of the adventure … Fitness for the

voyage may also encompass other considerations as, for example, the fitness of the vessel to

carry the particular kind of goods”59

. Therefore, the test of unseaworthiness is an objective

one, as the ship must be fit to encounter the perils of the sea for the contractual voyage and

not any other voyage60

.

57. For a vessel to be seaworthy for the purposes of the obligation and exception in question, she

and her equipment, master and crew included, must be reasonably fit to withstand the perils

which may foreseeably be encountered on the voyage and also fit to keep the cargo

reasonably safe from those perils61

.

58. In the special provisions added to ST4 pro forma, the Piracy Clause states that if the vessel

proceeds to or through an area in which there is a current risk of piracy, verified by a

competent international authority, owners will at all times adhere to the latest version of best

management practices, which at the time was BMP4.

59. In reference to the above, the Respondent would like to refer to the International Chamber of

Commerce, a competent authority, and its IMB Piracy & Armed Robbery Map 201462

. It

shows the piracy and armed robbery incidents that have been reported to the IMB Piracy

Reporting Centre during the year 2014, including a concentration of piracy incidents in the

Gulf of Guinea, which to all effects includes the place of delivery of the Charterparty, Angola.

Furthermore, other reputable sources as the UN have expressed repeatedly that West Africa is

59 Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad [1998] 196 CLR 161; Hong Kong

Fir Shipping co Ltd v. Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. 60 (Thomas, 2008, p. 138); McFadden v. Blue Star Line [1905] 1 KB 697. 61 The Good Friend above n 32, 592 (per Staughton J); Actis Steamship Co Ltd v. The Sanko Steamship Co Ltd (The

Aquacharm) [1982] 1 WLR 119 (CA); The Gang Cheng [1998] 6 MLJ 488; Great China Metal Industries Co Ltd v

Malaysian International Shipping Corp Berhad; Ben Line Steamers Ltd v. Pacific Steam Navigation Co (The Benlawers)

[1989] 2 Lloyd's Rep 51. 62 ANEX ****: https://icc-ccs.org/piracy-reporting-centre/live-piracy-map/piracy-map-2014.

20

a dangerous location in terms of piracy. The United Nations Office on Drugs and Crime stated

in 2013 that the aforementioned area is highly affected by piracy as a result of the disorder

that surrounds the regional oil industry63

. Lastly, the International Maritime Organization

(IMO) has recorded about 50 successful attacks annually for the entire region in recent years.

The International Maritime Bureau (IMB), however, considers that the real number of pirate

attacks is at least twice as high as the official figure64

.

60. This should constitute sufficient proof that the trajectory established within the Charterparty

included passing through a high risk piracy area, and as such, for the precise voyage to WAF,

special security equipment was necessary.

61. With regard to the equipment of the Vessel, and as stated before, it has to be reasonably fit to

meet and undergo the perils which are likely to be encountered and to keep the cargo in sound

condition. Thus, a reefer ship with a refrigerated cargo was held unseaworthy because of

defects in her refrigeration machinery 65

and a vessel with an insecure bullion room was held

unseaworthy for the carriage of gold bullion66

. In consequence, a vessel chartered to go

through a piracy risk area that does not comply with the security measures required in that

regard has to be considered unseaworthy.

62. Even if compliance of BMP4 is not considered a contractual obligation, seaworthiness must

also be judged by the standards and practices of the trade in question, at least so long as those

standards and practices are otherwise reasonable67

. The standards and practices at hand in

these situations are those included in the BMP4, which were not complied with.

63. The aforementioned BMP4 requires an array of security measures that include razor wire,

upper deck lighting, as well as other different devices. In the Fjord Wind, Clarke CJ stated,

63 UNODC,” Transnational Organized Crime in West Africa: A Threat Assessment”, February 2013. 64 “IMB Piracy Report and Implications for Nigerian Shipping”, Daily Independent (Lagos), 4 February 2010. 65 Owners of Cargo on Ship Maori King v. Hughes [1895] 2 Q.B. 550. 66 Queensland National Bank Ltd v. Peninsular and Oriental Steam Navigation Co. [1898] 1 Q.B. 67 (Cooke, et al., p. 160).

21

“Seaworthiness is concerned with the state of the vessel rather than whether the owners acted

prudently or with due diligence. The only relevance of the standard of the reasonably prudent

owner is to ask whether, if he had known of the defect, he would have taken steps to rectify

it”68

. Therefore, it is clear that the Owners, knowing of the defect of the Vessel, did nothing to

rectify it, acting with complete disregard to the due diligence to him required and breaching

the Charterparty as a result.

64. The Ship Protection Measures described in BMP are the most basic that are likely to be

effective. As a result, it is recommended that Owners make further alterations to the Vessel

beyond that scope as a means of further reducing the risk of piracy attack. In this sense, it is

necessary to stress the fact that the Owners did not manage to implement even the most basic

security measures regarding piracy. A very enlightening evidence of this is the email sent on

June 29th

from the Master of the Vessel to Rich Evasion69

. As stated before, the Master was

completely aware of the noncompliance of the security measures required.

65. Even if they had managed to install the items referenced in the email from Rich Evasion CSO

to Lucius at Purchasing WTI70

, they were not all the devices regulated in the BMP4.

Therefore, it would not have been enough to comply with that obligation.

ii. MASTER DID NOT COMPLY WITH THE SPECIAL PROVISIONS TO ST4

PRO-FORMA CONCERNING “PIRACY”

66. Apart from compliance with BMP4, the aforementioned special provisions require the owners

to assure the safety and protection of crew and vessel. It is for them to determine the level of

threat and the measures considered appropriate to discharge that obligation (Sub clause 6).

The Owners did not deploy any measure in this regard and, obviously, failed to protect the

crew and the vessel, breaching the Charterparty as a result.

68 Eridania SpA v. Oetker (The Fjord Wind) [2000] 2 Lloyd’s Rep 191 (CA). 69 Moot Problem, p. 36. 70 Moot Problem, p. 27.

22

B. OWNERS BREACHED THEIR DUTY AS BAILEE OF THE CARGO

67. The Respondent claims that Owners breached their duty as bailee of the cargo in respect of the

part removed during the pirate attack and Article III, rule 2 of the HVR, which imposes a duty

on the carrier to properly and carefully carry, keep and care for the cargo.

68. When facing a bailment case, and regardless of the type of bailment encountered, the test of

the reasonable person is applied as to determine the degree of duty of care upon the bailee. In

other words, bailee, under all possible and reasonable circumstances, is bound to take the best

possible care of the cargo to him entrusted as per the terms in the contract established71

.

69. The general accepted view upon this is materialized in the fact that, given the situation, the

carrier holds the goods as a common carrier and is hence liable, under all circumstances, for

any damage and/or loss suffered by cargo under its custody with the exception of causation by

acts of God, inherent vice or Queen’s enemies72

.

70. In the scenario presented in the matter at hand, the cargo in custody of the bailee (Owners)

suffered damages as consequence of the alteration of the established course by the Master,

following orders from alleged agents of the Charterers. As stated before, the Master was

incompetent when he followed instructions other than those given to the Vessel by the

Charterers. This resulted in an attack suffered at hands of pirates, who stole part of the cargo

via STS operations. In addition and as stated before, the Master did not comply with the due

diligence required regarding the anti-piracy security equipment of the Vessel. Not only had

none of these facts fall under the exceptions listed in Art. IV HVR, but also the cause of the

damage, in addition to the aforementioned unseaworthiness of the vessel, was the Master’s

negligence.

71 Morris v. CW Martin and Sons Ltd. [1966] 1 QB 716, 738, CA, per Salman LJ; East West Corp. v. DKBS 1912 [2003]

EWCA CW 83, [2003], QB 1509. 72 Morrison v. Shaw Savill [1916] 2 K.B. 783.

23

71. Considering all the above, the Respondent claims that the Owners are liable for the loss of part

of the cargo as per the contractual breach and consequent breach of care of duty since the

quantity of cargo remaining does not coincide with the one specified in the Bills of Lading

presented and signed at the moment of charge of the Vessel. Falling the burden of proof upon

the Owners, the Respondent holds the Bill of Lading as evidence of the mentioned

inconsistencies.

24

PART FOUR: PRAYER FOR RELIEF

For the reasons set out above, the Charterers request to this Tribunal:

(a) Declaration of no liability.

(b) Damages as particularized in the phase relating to quantification of damages.

(c) Interest.

(d) Costs.

(e) Further or other relief as the Tribunal considers fit.