STATEMENT OF CLAIMANT’S€¦ · Team 19 Statement of laimant’s ase v INDEX OF SCHOLARS BORN, Gary B. International Arbitration: Law and Practice Kluwer Law International, 2nd

XVIII International Maritime Law Arbitration Moot

2017

In the matter of an arbitration under

the International Arbitration Act (CAP 143A, Rev Ed 2002)

Singapore Chamber of Maritime Arbitration Rules

MASTER PROGRAM IN ARBITRATION AND INTERNATIONAL BUSINESS LAW

UNIVERSITY OF VERSAILLES – PARIS SACLAY

STATEMENT OF CLAIMANT’S CASE

COUNSEL – TEAM NUMBER 19

Arleen Gonzalez Charlotte Hauchard Vérane Pasi

Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa

BETWEEN

FURNACE TRADING PTE LTD

2 Marina Boulevard #19-05

Singapore 0189990

SINGAPORE

&

INFERNO RESOURCES SDN BHD

Suite No. 2, Level 3

South Wing, Pasar Borong Pandan

81100 Johor Bahru

MALAYSIA

(CLAIMANT) (RESPONDENT)

&

IDONCARE BERJAYA UTAMA PTY. LTD.

30 Pacific Street #02-04

Newcastle 2300

NEW SOUTH WALES, AUSTRALIA

(RESPONDENT 2)

Team 19 Statement of Claimant’s Case

i

TABLE OF CONTENTS

Table of Contents ........................................................................................................................ i

Index of Abbreviations ............................................................................................................ iii

Index of Scholars ....................................................................................................................... v

Index of Case Law ................................................................................................................... vii

Index of Legal Sources ............................................................................................................. xi

Introduction ................................................................................................................................ 1

I. Jurisdiction.............................................................................................................................. 5

A. The Arbitral Tribunal has jurisdiction over the present case ............................................. 5

B. The Arbitral Tribunal has the power to order interim relief .............................................. 6

II. Merits .................................................................................................................................... 6

A. Preliminary Issue: Laws of Singapore are applicable to the dispute ................................. 6

B. The Respondent has committed a repudiatory breach of the Voyage Charterparty .......... 7

1. The Respondent failed to nominate a valid discharge port ............................................. 7

a. The violation of the obligation to nominate a valid discharge port ............................. 7

b. The failure to nominate a discharge generated damaging delays ................................ 9

2. The Respondent failed to pay freights .......................................................................... 10

3. The repudiatory nature of the breaches of the Voyage Charterparty ............................ 11

a. The Respondent is liable for a repudiatory breach of the contract ............................ 11

b. The Claimant is entitled to discharge or affirm the Voyage Charterparty ................. 12

C. The Claimant is entitled to the lien over the Cargo and Sub-freight ............................... 13

1. The Claimant is in position to ask for payment to the Shipper ..................................... 13

a. The Shipper is bound by the Time Charterparty ........................................................ 14


ii

b. The Time Charterparty links the Claimant to the Shipper by the lien clause ............ 15

2. The lien on Cargo exercised by the Claimant is valid and shall be enforced ............... 15

a. The lien over the Cargo is valid under the Common Law ......................................... 15

b. The lien over the Cargo is incorporated in all contractual documents entered into

between the Parties and the Shipper .............................................................................. 16

3. The Claimant has also validly exercised a lien over the Shipper’s Sub-Freight ........... 18

a. The lien over the sub-freight is incorporated in all contractual documents entered

into between the Parties and the Shipper ....................................................................... 18

b. The Claimant has the right to intercept freight owed under the Bills of Lading ....... 19

c. The lien over the sub-freight can only be exercised while the freight is still owed ... 19

4. Subsequently, the Arbitral Tribunal shall render an order allowing the Claimant to sell

the Cargo ........................................................................................................................... 20

a. The urgency commands the granting of an interim measure ..................................... 21

b. The interim measure is necessary to preserve the value of the Cargo ....................... 22

Request for Relief .................................................................................................................... 25


iii

INDEX OF ABBREVIATIONS

& And

§/§§ Paragraph/Paragraphs

Agreement Development and Sales Agreement of 1

August 2010

Arbitral Tribunal / Tribunal

Panel consisting of the arbitrators

nominated in accordance with the SCMA

Rules

Art. Article/Articles

Claimant

Furnace Trading Pte Ltd, a company

organised and existing under the laws of

Singapore

E.g. Exempli gratia; “for example”

Ed. Editor/Editors/Edition

Etc. Et cetera; and so on

Fn. Footnote

Ibid. Ibidem, “in the same place”

ICC International Chamber of Commerce

Lex arbitri The procedural law of the seat of arbitration

Ltd. Limited liability company

Memorandum Statement of Claimant’s Case

Model Law

UNCITRAL Model Law on International

Commercial Arbitration of 1985 with the

2006 amendments

Mr Mister

Ms Miss

No./Ns. Number/Numbers


iv

NY Convention

New York Convention of 1958 on the

Recognition and Enforcement of Foreign

Arbitral Awards

p./pp. page/pages

PO1 Procedural Order Number 1



Respondent Inferno Resources Sdn Bhd

Respondent 2 Idoncare Berjaya Utama PTY. LTD

SCMA Singapore Center of Maritime Arbitration

Shipper Idoncare Berjaya Utama PTY. LTD

UNCITRAL United Nations Commission on

International Trade Law

UNCITRAL Rules Arbitration Rules of United Nations

Commission on International Trade Law

USD United States Dollars

v. Versus; against


v

INDEX OF SCHOLARS

BORN, Gary B.

International Arbitration: Law and

Practice

Kluwer Law International,

2nd Ed., 2015

Referred to in:

§21, fn. 28, of the

Statement

[cited as: BORN]

FURMSTON, Olivia

MARHINGER, Silvia

Liens on sub-freight

The Standard

2015

Available at:

http://www.standard-

club.com/media/1774240/defence-class-

cover-liens-on-sub-freight.pdf

Referred to in:

§72, fn. 77 of the

Memorandum

[cited as:

FURMSTON &

MARHINGER]

KAH WAH, Leong

TEO, Ian

A Shipowner’s Lien – Is it an illusory

right?

Rajah & Tann LLP Admiralty and

Shipping Client Update

June 2011

Available at:

http://eoasis.rajahtann.com/eOASIS/lu/pdf

/2011-06-Shipowner-Lien.pdf

Referred to in:

§69, fn. 76; &

§82, fn. 85, of the

Memorandum

[cited as: KAH WA

& TEO]

LIM, Steven Interim Relief in International Arbitration

SIAC Congress, 2014

Available at:

http://www.siac.org.sg/m/2013-09-18-01-

57-20/2013-09-22-00-27-02/articles/444-

interim-relief-in-international-arbitration

Referred to in:

§§82-83, fn. 83,

86 of the

Memorandum

[cited as: LIM]

SING, Toh Kian Commentary on Article 25 of the Shipping Referred to in:

http://www.standard-club.com/media/1774240/defence-class-cover-liens-on-sub-freight.pdf



http://eoasis.rajahtann.com/eOASIS/lu/pdf/2011-06-Shipowner-Lien.pdf

http://eoasis.rajahtann.com/eOASIS/lu/pdf/2011-06-Shipowner-Lien.pdf

http://www.siac.org.sg/m/2013-09-18-01-57-20/2013-09-22-00-27-02/articles/444-interim-relief-in-international-arbitration




vi

BALA, V. Law of Singapore

Available at:

http://www.singaporelaw.sg/sglaw/laws-

of-singapore/commercial-law/chapter-25

§62, fn. 71, of the

Memorandum

[cited as: SING &

BALA]

TOUCHARD, Gabriel Le droit applicable au GNL

Gazette de la Chambre Arbitrale Maritime

de Paris, nº 31

Available at:

http://www.arbitrage-

maritime.org/cpt_download.php?file=gaze

tte31.pdf

Referred to in:

§58, fn. 65, of the

Memorandum

[cited as:

TOUCHARD]

WILSON, John F.

Carriage of Goods by Sea

Pearson Ed.

7th Ed., 2010

Referred to in:

§56, fn. 63; &

§§72-73, fn. 77-

78, of the

Memorandum

[cited as: WILSON]

http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25


http://www.arbitrage-maritime.org/cpt_download.php?file=gazette31.pdf




vii

INDEX OF CASE LAW

SINGAPORE Freight Connect (S) Pte Ltd v. Paragon

Shipping Pte Ltd [2015] SGCA 37

Available at: http://www.singaporelaw.sg/sglaw/laws

-of-singapore/case-law/free-law/court-

of-appeal-judgments/18051-freight-

connect-s-pte-ltd-v-paragon-shipping-

pte-ltd-2015-sgca-37

Referred to in: §38, fn.

42, of the Memorandum

[cited as: Freight

Connect v. Paragon]

Faith Maritime Co Ltd v Feoso

(Singapore) Pte Ltd and another action

[2002] SGHC 229

Available at:

http://www.singaporelaw.sg/sglaw/laws

-of-singapore/case-law/free-law/high-

court-judgments/22074-faith-maritime-

co-ltd-v-feoso-singapore-pte-ltd-and-

another-action



[cited as: Faith

Maritime v. Feoso]

Five Ocean Corporation v. Cingler

Ship Pte Ltd (PT Commodities &

Energy Resources, intervener) [2015]

SGHC 311

Available at:

http://www.uncitral.org/docs/clout/SGP

/SGP_041215_FT.pdf


90; & §§89-90, fn. 96,

of the Memorandum

[cited as: Five Ocean v.

Cingler]

Maldives Airports Co Ltd and another v

GMR Malé International Airport Pte

Ltd [2013] SGCA 16

Available at:

http://www.singaporelaw.sg/sglaw/laws

-of-singapore/case-law/free-law/court-

of-appeal-judgments/15130-maldives-

airports-co-ltd-and-another-v-gmr-mal-

eacute-international-airport-pte-ltd-

2013-sgca-16



[cited as: Maldives

Airports v. GMR Malé]

http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/court-of-appeal-judgments/18051-freight-connect-s-pte-ltd-v-paragon-shipping-pte-ltd-2015-sgca-37





http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/high-court-judgments/22074-faith-maritime-co-ltd-v-feoso-singapore-pte-ltd-and-another-action





http://www.uncitral.org/docs/clout/SGP/SGP_041215_FT.pdf

http://www.uncitral.org/docs/clout/SGP/SGP_041215_FT.pdf

http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/court-of-appeal-judgments/15130-maldives-airports-co-ltd-and-another-v-gmr-mal-eacute-international-airport-pte-ltd-2013-sgca-16







viii

UNITED KINGDOM Kodros Shipping Corporation v.

Empresa Cubana de Fletes [1982] 1

Lloyd's Rep. 334

Available at: https://www.i-

law.com/ilaw/doc/view.htm?id=148728



[cited as: The Evia (No.

2)]

Motor Oil Hellas (Corinth) Refineries

s.a. v. Shipping Corporation of India

[1990] 1 Lloyd's Rep. 391





[cited as: The

Kanchenjunga]

Leeds Shipping Company, Ltd. v.

Societe Francaise Bunge [1958] 2

Lloyd's Rep. 127





[cited as: The Eastern

City]

E. L. Oldendorff & Co. GmbH. v.

Tradax Export S.A. [1973] 2 Lloyd's

Rep. 285





[cited as: The Johanna

Oldendorff]

Hong Kong Fir Shipping Company,

Ltd. v. Kawasaki Kisen Kaisha, Ltd.

[1961] 2 Lloyd's Rep. 478

Available at:

http://www.bailii.org/ew/cases/EWCA/

Civ/1961/7.html



[cited as: The Hong

Kong Fir]

Maredelanto Compania Naviera SA v.

Bergbau-Handel GmbH [1970] EWCA

Civ 4

Available at:


Civ/1970/4.html



[cited as: The Mihalis

Angelos]

https://www.i-law.com/ilaw/doc/view.htm?id=148728








http://www.bailii.org/ew/cases/EWCA/Civ/1961/7.html





ix

Avery v. Bowden, 5 Ellis & Black (85

E.C.L.) 714 Available at:

http://www.commonlii.org/uk/cases/En

gR/1855/842.pdf



[cited as: Avery v.

Bowden]

Fercometal S.A.R.L.v Mediterranean

Shipping Co AS [1989] 1 A.C. 788





[cited as: The Simona]

China National Foreign Trade

Transportation Corporation v. Evlogia

Shipping Co SA of Panama [1979] 2

Lloyd’s Rep. 303




72; §70, of the

Memorandum

[cited as: The Mihalios

Xilas]

Hain SS Co v Tate & Lyle (1936) 41

Com. Cas. 359

Available at: https://i-




[cited as: Hain SS v.

Tate & Lyle]

Santiren Shipping Ltd. v. Unimarine

S.A. [1981] 1 Lloyd's Rep. 159





[cited as: The

Chrysovalandou Dyo]

Tate v Meek (1818) 8 Taunt 280, 129

ER 391

Available at:

Reports of cases argued and

determined in the courts of Common

pleas and Exchequer chamber, with

tables of the names of the cases and the

principal matters

Great Britain. Court of Common Pleas;

Great Britain. Court of Exchequer

Chamber;

Ed. MOORE, John Bayly

1818



[cited as: Tate v. Meek]

http://www.commonlii.org/uk/cases/EngR/1855/842.pdf

http://www.commonlii.org/uk/cases/EngR/1855/842.pdf





https://i-law.com/ilaw/doc/view.htm?id=142321

https://i-law.com/ilaw/doc/view.htm?id=142321




x

Dry Bulk Handy Holding Inc. and

another v. Fayette International

Holdings and another [2013] EWCA

Civ 184

Available at:


Civ/2013/184.html



[cited as: Bulk Chile

case]

Seele Middle East FZE v. Drake &

Scull international Co SA [2014]

EWHC 435

Available at: http://www.bailii.org/ew/cases/EWHC/

TCC/2014/435.html



[cited as: Seele Middle

East v. Drake & Scull]

Cetelem SA v Roust Holdings Ltd

[2005] EWCA Civ 618

24 May 2005



Referred to in: §§90-91,

fn. 95, 98, of the

Memorandum

[cited as: Cetelem v.

Roust Holdings]

Telenor East Holing II AS v. Altimo

Holdings & Invesments Ltd [2014]

EWHC B5

Available at:

http://cisarbitration.com/wp-

content/uploads/2013/07/Telenor-East-

Holding-II-AS-v-Altimo-ors.pdf



[cited as: Telenor East

v. Altimo Holdings]



http://www.bailii.org/ew/cases/EWHC/TCC/2014/435.html

http://www.bailii.org/ew/cases/EWHC/TCC/2014/435.html



http://cisarbitration.com/wp-content/uploads/2013/07/Telenor-East-Holding-II-AS-v-Altimo-ors.pdf




xi

INDEX OF LEGAL SOURCES

The New York Convention on

Recognition and Enforcement of

Foreign Arbitral Awards of 1958

- http://www.newyorkconvention.org/engli

sh

UNCITRAL Model Law - http://www.uncitral.org/pdf/english/texts/

arbitration/ml-arb/07-86998_Ebook.pdf

Singapore International Arbitration

Act (Chapter 143A) -

http://siac.org.sg/images/stories/articles/r

ules/IAA/IAA%20Aug2016.pdf

The Commercial Law of Singapore,

Chapter 8 on the Law of Contract -



The Commercial Law of Singapore,

Chapter 25 on Shipping Law -



Singapore Merchant Shipping Act

(Chapter 179) -

http://statutes.agc.gov.sg/aol/search/displ

ay/view.w3p;page=0;query=DocId%3A

%22977a0eb4-e902-420e-abbd-

6b95a7d270b1%22%20Status%3Ainforc

e%20Depth%3A0;rec=0

http://www.newyorkconvention.org/english

http://www.newyorkconvention.org/english

http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf

http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf

http://siac.org.sg/images/stories/articles/rules/IAA/IAA%20Aug2016.pdf

http://siac.org.sg/images/stories/articles/rules/IAA/IAA%20Aug2016.pdf





http://statutes.agc.gov.sg/aol/search/display/view.w3p;page=0;query=DocId%3A%22977a0eb4-e902-420e-abbd-6b95a7d270b1%22%20Status%3Ainforce%20Depth%3A0;rec=0






1

Introduction

1. This memorandum is submitted on behalf of Furnace Trading Pte Ltd (hereinafter the

“CLAIMANT”), a company organised and existing under the laws of Singapore, and in

accordance with Rules 8.1 and 9 of the Singapore Chamber of Maritime Arbitration Rules of

2015 (hereinafter the “SCMA RULES”).

2. On 15 February 2016, the CLAIMANT entered into a time Charterparty (hereinafter the “TIME

CHARTERPARTY”) with Imlam Consignorist G.m.b.H (hereinafter the “LEGAL OWNER”) of the

M. V. Tardy Tessa (hereinafter the “VESSEL”).1

3. On 1 September 2016, during an exchange of e-mails, the contents of a voyage charterparty

based on a proforma BIMCO Orevoy Charterparty (hereinafter the “VOYAGE

CHARTERPARTY”) were confirmed between the CLAIMANT (now disponent owner of the

VESSEL) and Inferno Resources Sdn Bhd (hereinafter the “RESPONDENT”).2.

4. On 1 October 2016, a notice of readiness (hereinafter the “NOTICE OF READINESS”) was

tendered by Mr. Tan Xiao Ming (hereinafter the “MASTER” of the VESSEL) to Idoncare

Berjaya Utama PTY. LTD. (hereinafter the “RESPONDENT 2”, or, simply, the “SHIPPER”),

informing that the VESSEL arrived at Kooragang Precint, Australia, and that it was ready to

load 84,000.052 metric tons of Australian Steam Coal in Bulk (hereinafter the “CARGO”).3

5. Following this event, the MASTER issued and signed a bill of lading on 4 October 2016,

making express nomination of the SHIPPER, as well as an express reference to an undated

Charterparty (hereinafter the “Bill of Lading”).4

1 Time Charterparty – Case Scenario, pp. 1-19

2 Voyage Charterparty – Case Scenario, pp. 20-33

3 Notice of Readiness – Case Scenario, p. 39

4 Bill of Lading – Case Scenario, p. 41


2

6. On 10 October 2016, the CLAIMANT informed the RESPONDENT had not received the freight

due on 9 October 2016, inviting the latter to comply with the payment under the VOYAGE

CHARTERPARTY.5 The CLAIMANT also requested the RESPONDENT to nominate a discharging

port before the VESSEL would pass Singapore, in accordance with rider Clause 16 of the

VOYAGE CHARTERPARTY.6

7. On 15 October 2016, the RESPONDENT informed the CLAIMANT that it was unable to indicate

the discharging port as their sub-charterer had yet to pay freight. 7 The CLAIMANT

immediately refused this reasoning and stated that it would consider the failure to nominate

the discharge port to be a breach of the VOYAGE CHARTERPARTY.8

8. On 16 October 2016, the MASTER informed the RESPONDENT that the VESSEL was being kept

adrift without being given any precise instructions or directions.9 The RESPONDENT therefore

nominated the port of Busan, South Korea, in view of the heavy congestion at Chinese ports.

Nonetheless, the CLAIMANT refused to accept the nomination of Busan, in the absence of

explicit authorisation to discharge in any port other than those listed in the TIME

CHARTERPARTY or the VOYAGE CHARTERPARTY.10

9. On the same date, the RESPONDENT repeated its request for disport at Busan, and the

CLAIMANT refused such nomination on the following day, 17 October 2016. The CLAIMANT

expressly opposed to Busan as the discharging port, since the region was under zombie

attacks at that time.11 The RESPONDENT insisted that the port was safe, claiming that the

5 E-mail sent on the 10 of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 50

6 Voyage Charterparty – Case Scenario, p. 21

7 E-mail sent on 15 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 55

8 E-mail sent on 15 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 56

9 E-mail sent on 16 October 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 34




3

Korean military forces had secured the area.12 The CLAIMANT kept asking for the indication

of a legitimate and safe port in the range of those enumerated in rider clause 16 of the

VOYAGE CHARTERPARTY.13

10. On 19 October 2016, the RESPONDENT once again alleged that it could not nominate the

discharge port as it pretended having yet to receive nomination from its sub-charter, the

SHIPPER.14 Unsatisfied, the CLAIMANT gave the RESPONDENT an urgent notice establishing a

deadline to nominate disport by 12:00 Local Time on 20 October 2016.

11. On 20 October 2016, 12:00 Local Time, no answer was received by the CLAIMANT regarding

its notice of the previous day. At 15:21 and 15:24 Local Time, respectively, the CLAIMANT

notified the RESPONDENT and the SHIPPER that it was exercising its rights of lien over the

CARGO and over the Sub-freights owed.15

12. The RESPONDENT sent a late e-mail on 21 October 2016, 13:22 Local Time, nominating the

port of Ningbo, Zhejiang Province in China, for discharge, as well as indicating it was

impossible to provide the payment before the discharge of the Cargo.16

13. On 22 October 2016, the CLAIMANT sent a Notice of Termination 17 of the VOYAGE

CHARTERPARTY to the RESPONDENT, characterizing the latter’s renunciation and repudiatory

breach of the VOYAGE CHARTERPARTY in view of the default over payment of freight. The

RESPONDENT sent an answer 18 considering the Notice of Termination wrongful, and the

CLAIMANT to be in repudiatory breach of the VOYAGE CHARTERPARTY.




15 E-mails sent on 20 October from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66


17 Notice of Termination – Case Scenario, p. 68



4

14. The CLAIMANT was therefore entitled to submit its claims in arbitration for recognition of the

enacted liens, as well as damages and any other remedies under the VOYAGE CHARTERPARTY,

according to its Clause 29.

15. On 25 November 2016, two Notices of Arbitration were filed with the SCMA by the

CLAIMANT, against the SHIPPER and the RESPONDENT, pursuant to Clause 29 of the VOYAGE

CHARTERPARTY.19 The Responses to the Notices of Arbitration were filed on the very next

day, denying all claims made by the CLAIMANT. The SHIPPER brought a defence reasoning

that freight, if any, would be due only to the RESPONDENT. The SHIPPER and the RESPONDENT

accepted the jurisdiction of the SCMA arbitration with no objections.20

16. On 1 December 2016, the CLAIMANT filed an urgent application for consolidation and liberty

to sell the CARGO, this application requested the Arbitral Tribunal to consolidate the

proceedings initiated against the SHIPPER and the RESPONDENT, and to issue an interim order

with respect to the liberty to sell the CARGO.

17. Regarding the consolidation, no particular objections were made, where with respect to the

liberty to sell the CARGO, the SHIPPER declined to make any submissions either written or

oral.21 However, the RESPONDENT challenged the interim order sought by the Claimant.

18. On 3 December 2016, the PARTIES filed a Joint Expert Report (hereinafter the “Expert

Report”) signed by a Mr. Caleb Coleman (hereinafter the “Expert”).22


20 Response to Notice of Arbitration – Case Scenario, p. 84

21 Response to Claimant’s urgent application for consolidation and liberty to sell the cargo pendent lite – Case

Scenario, pp. 93; 108, §2(3)

22 Parties’ Joint Expert Report – Case Scenario, pp. 97-102


5

I. Jurisdiction

A. The Arbitral Tribunal has jurisdiction over the present case

19. The PARTIES have agreed on an arbitration agreement, which is incorporated under Clause 29

of the VOYAGE CHARTERPARTY.23 This clause provides that all disputes, arising out of or,

most importantly, in connection with the VOYAGE CHARTERPARTY, shall be resolved through

arbitration. Furthermore, the PARTIES made an express choice of the Singapore Law as the

applicable law, without defining if such choice was to be regarded as the lex contractus or the

lex arbitri. The PARTIES also chose the arbitration to be conducted under the SCMA Rules by

three arbitrators.24 No objections neither to the validity of the arbitration agreement, nor the

jurisdiction of the Arbitral Tribunal, or to the consolidation of the disputes were made.25

20. Under Article 22.1. of the SCMA Rules, the seat of arbitration shall be Singapore whenever

the parties fail to expressly choose a different seat. The Clause 29 of the VOYAGE

CHARTERPARTY is silent regarding such location, reason why the seat of the present

arbitration must be Singapore.26 However, the Clause 29 indicates a choice of law that could

be regarded as a choice of the contractual law applicable to the substance of the dispute, as

recognized by Rule 21 of the SCMA Rules, or as a choice of the arbitration law.27 It is worth

noting that Article 22.1 of the SCMA Rules, establish that if the seat of arbitration is

Singapore, as in the present case, then Singapore Law and the International Arbitration Act

(Cap 143A) (hereinafter “SIAA”) shall apply as the lex arbitri.


24 Coal Orevoy Charterparty, Art. 29 – Case Scenario, p. 24

25 Response to Notice of Arbitration – Case Scenario, pp. 84-89


27 Ibid., fn. 26


6

B. The Arbitral Tribunal has the power to order interim relief

21. In international arbitration, the availability of provisional measures is dealt with principally

by national arbitration legislation and the parties’ arbitration agreement.28 In the present case,

the PARTIES did not make any references in the arbitration agreement regarding the Arbitral

Tribunal’s power to order interim relief, but the lex arbitri expressly confers this power to the

latter. Indeed, paragraph 12(1)(d) of the SIAA provides that an arbitral tribunal have the

powers to make orders for the preservation, interim custody, or sale of any property which

forms part of the subject matter of the dispute.

22. Accordingly, this Arbitral Tribunal shall acknowledge its power to order interim relief and

therefore, as it will be further addressed,29 shall order the sale of the CARGO on board the

VESSEL pendente lite, as requested by the CLAIMANT.30

II. Merits

23. First and foremost, (A) the laws of Singapore are applicable to the dispute. The CLAIMANT

also contends that (B) the RESPONDENT has committed a repudiatory breach of the contract,

and that is why (C) the CLAIMANT is entitled on liens over both the Cargo and the sub-freight.

A. Preliminary Issue: Laws of Singapore are applicable to the dispute

24. The applicable law of the dispute shall be the law expressly chosen by the PARTIES in their

contracts. The VOYAGE CHARTERPARTY, under Clause 29, contains a choice of law provision,

which makes an express reference to the application of the Laws of Singapore as lex

28 BORN, p. 209

29 See hereunder, §§81-96

30 Urgent application for consolidation and liberty to sell the cargo pendent lite – Case Scenario, p. 90


7

contractus. Therefore, the Arbitral Tribunal will find that the Laws of Singapore are

applicable to the merits of the present dispute.

B. The Respondent has committed a repudiatory breach of the Voyage Charterparty

25. Throughout the VOYAGE CHARTERPARTY performance, the RESPONDENT has committed a

series of faulty acts that directly led to the declaration of discharge of all obligations by the

CLAIMANT, once there was a breach of the PARTIES’ agreement. By (1) failing to make a valid

and timely declaration of the discharge port, as well as (2) paying for the freight, (3) the

RESPONDENT has committed a repudiatory breach and must be held liable for all the

consequences of such actions.

1. THE RESPONDENT FAILED TO NOMINATE A VALID DISCHARGE PORT

a. The violation of the obligation to nominate a valid discharge port

26. In order to proceed with the discharge of the CARGO, a discharge port had to be selected and

nominated, according to rider clause 16 of the VOYAGE CHARTERPARTY.31 The selection and

declaration were contractually imparted to the RESPONDENT who did not comply with these

obligations and therefore committed a breach of the contract.32

27. According to the provisions of the VOYAGE CHARTERPARTY, as described the rider Clause 16,

the term “Charterers” refers to the RESPONDENT, which was contractually bound to nominate

a discharge port, all options from Chinese ports, when the VESSEL was to leave Singapore.

28. Numerous e-mails exchanged between the PARTIES demonstrate that the RESPONDENT

31 Urgent application for consolidation and liberty to sell the cargo pendente lite – Case Scenario, p. 90

32 E-mail sent on 1 September 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 21


8

consistently failed to nominate a valid discharge port.33 After several days, the CLAIMANT

finally obtained a nomination. The RESPONDENT designated the port of Busan, South Korea, a

location that, firstly, was not included in the list agreed upon by the PARTIES, and; secondly,

was under an imminent zombie attack at the time of the nomination. The CLAIMANT could

not accept a discharge port likely to put the VESSEL, its crew and the CARGO at high risk.

29. Clause 18 of the VOYAGE CHARTERPARTY enumerates the situations where “war risks” could

have been incurred or foreseen by the PARTIES. It further provides that in case of facing a war

risk, the owners shall first require the charterers to nominate any other safe port within the

range of the discharge port.34

30. The common definition of safety requires a safe port to be one that, in the relevant period of

time, can be reached, used and left by vessels without being exposed to danger that cannot be

avoided by good navigation and seamanship.35 This obligation of safety concerns the crew as

well as the VESSEL and the CARGO themselves: if the crew is exposed to a contagious disease

or other serious health risks or security risks, the port is unsafe.

31. The “relevant period of time”36 implies that the port does not have to be immediately safe as

the Charterer nominates it, though it has to be prospectively safe: the vessel shall be able to

use the port when it arrives.37

32. The CLAIMANT was informed that hordes of zombies were arriving from Seoul to Busan on a

train when the RESPONDENT nominated it as a discharge port. A zombie attack falls must be

considered as encompassed by the definition of War Risks pursuant to Clause 18 of the

33 E-mail exchanges between Gordon Grill and Eric Yan from 10 October 2016 to 19 October 2016 – Case

Scenario, pp. 51; 56; 58; 60 & 62

34 Voyage Charterparty, Art. 18 – Case Scenario, p. 30

35 The Eastern City

36 Ibid., fn. 35

37 The Evia (No 2), §§314; 756; The Kanchenjunga


9

VOYAGE CHARTERPARTY, in view of the discretion of the Master and/or the Owners to define

such situation as endangering to the VESSEL, its crew and the CARGO.

33. If Busan were a safe port when the RESPONDENT nominated it, the information received by

the RESPONDENT was still implying that zombies were on their way to Busan, making the port

prospectively unsafe by the time the VESSEL would have arrived there, especially considering

that there was not enough time to take necessary security measures.38

34. If the VESSEL, the CARGO and the crew were likely to be exposed to such war risks, the

process of an alternative discharge port and further cancellation of the CHARTERPARTY could

have been set in motion by the shipowners, the disponent owners, the charterers or any

person in charge of the management of the VESSEL.

35. In the case at hand, the CLAIMANT rightfully declared that Busan was an unsafe port to

discharge the CARGO and asked for the RESPONDENT to nominate another port on 17 October

2016.39 The RESPONDENT did not comply with this contractual obligation until 21 October

2016, despite the forty-eight hours deadline imposed by the VOYAGE CHARTERPARTY.40

36. As a result of the violation of its contractual obligation by the RESPONDENT, the VESSEL was

left adrift in open seas and under harsh climatic conditions for days on end, unable to

discharge, causing damages to the crew, to the CARGO and to the VESSEL itself.

b. The failure to nominate a discharge generated damaging delays

37. Consequently, from 10 October 2016 until the issuance of the Notice of Termination on 22

October 2016,41 the VESSEL was kept adrift. The CARGO was supposed to be discharged on

38 E-mail sent on the 17 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58

39 E-mail sent on the 17 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58




10

10 October 2016. The delays generated had an important and negative impact on the CARGO,

the crew and the VESSEL.

38. Pursuant to Article 25.3.8 of the Singapore Shipping Law, if the risks of delay lie with the

ship-owner for the voyage, the charterer is held responsible for loading and discharge

operations. To proceed to these operations, the vessel must be an “arrived vessel”, meaning

that it has reached the “contractual destination and is in all respects ready to receive or

discharge the cargo and has tendered a notice of readiness”.42

39. In the case at hand, the VESSEL was unable to reach its contractual destination because of

RESPONDENT’s failure to nominate a discharge port,43 which led to a second breach of

contract: the noncompliance with the dates settled by CLAIMANT to pay the freight due and to

nominate a Chinese port. Preventing the smooth running of the discharging operation for

which it is solely responsible, RESPONDENT is liable for the delays and ought to repair them.

2. THE RESPONDENT FAILED TO PAY FREIGHTS

40. As evidenced by the numerous requests of the CLAIMANT in its several e-mails sent to Eric

Yan; and the RESPONDENT’s response to that particular matter, the latter failed to comply

with his obligation to pay freights.44

41. Clause 19 of the Voyage Charterparty45 provides that 100% of the freight must be paid within

five banking days after the completion of loading, the signing of the Bill of Lading marked

“freight payable as per charterparty”, and the reception of the Invoice by the Owners.

42 Freight Connect v. Paragon; The Johanna Oldendorff

43 See above, §§23-24

44 E-mail sent on 10 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 51; E-mails sent on 20

October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66; E-mail sent on 21 October 2016 from

Eric Yan to Gordon Grill – Case Scenario, pp. 67-68

45 Voyage Charterparty, Art. 19 – Case Scenario, p. 22


11

42. In the present case, the Bill of Lading was released on 4 October 201646 and the Invoice

received by Gordon Grill, sitting in for the CLAIMANT, on 9 October 2016. The RESPONDENT

had consequently until 14 October 2016 to remit the freight which he did not do and never

did,47 violating yet another contractual obligation.

3. THE REPUDIATORY NATURE OF THE BREACHES OF THE VOYAGE CHARTERPARTY

43. The RESPONDENT failed to nominate a valid discharge port and to pay freight, breaching

severely the VOYAGE CHARTERPARTY. It is therefore (a) liable for a breach of contract that

can be qualified as repudiatory and (b) is entitled to terminate the VOYAGE CHARTERPARTY.

a. The Respondent is liable for a repudiatory breach of the contract

44. The RESPONDENT is responsible for several breaches of the VOYAGE CHARTERPARTY. A

breach, under the commercial law of Singapore, can be of a general or repudiatory nature and

must therefore be distinguished.48

45. On the one hand, the law states that the aggrieved party has the power to discharge the

contract for breach if the contractual term, which has been breached, is a condition or if the

breach of the said-obligation substantially deprives it of the benefit of the contract. It is then

considered as a repudiatory breach of the contract.49

46. On the other hand, said party has no such power of election if the contractual term, which has

actually been breached, is a warranty or if the breach does not substantially deprive it of the

aforementioned benefit. In such a case, the contract will persist despite the breach.

47. In the case at hand, the absence of nomination of a discharge port led to precarious delays


47 E-mail sent on 14 October 2016 – Case Scenario, p. 54

48 Commercial Law of Singapore, Art. 8.8.11 & 8.8.1

49 The Hong Kong Fir


12

that induced a massive increase of additional costs, up to USD 101.666,67,50 and damages

both moral and material for the crew, the CARGO and the VESSEL.51

48. The simple fact that the VESSEL was not able to call at port in one of the locations laid down

by the VOYAGE CHARTERPARTY to proceed to the discharging of its CARGO compromises the

entire operation consisting in carrying coal from Australia to China. The CARGO has not been

discharged yet and the costs are increasing every passing day. It is thus indisputable that this

contractual term that has been breached is a condition that deprives the CLAIMANT of its

substantial expectations under the contractual terms agreed upon by the PARTIES.

49. Therefore, the breach of the contract was of a repudiatory nature, and the RESPONDENT shall

answer for all the damages resulting from such breach.

b. The Claimant is entitled to discharge or affirm the Voyage Charterparty

50. In accordance with the Singaporean contractual law,52 the party which suffered damage as a

result of a contractual breach, in line with its own best interest, can either terminate the

contract,53 which then ceases to bind the PARTIES from the time the election is effectively

communicated to the other contracting party. Following an effective discharge, the parties are

released from all outstanding contractual obligations, or the aggrieved party can affirm the

contract, giving the party-in-breach another opportunity to rectify the situation, and the entire

contract is kept alive but the aggrieved party loses the right to have the contract terminated.54

51. The CLAIMANT was entitled to decide between these two options, having requested the

termination of the contract considering the extent of damages triggered by RESPONDENT's


51 E-mail sent on 30 November 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 37

52 Commercial Law of Singapore, Art. 8.8.14 & 8.8.15

53 The Mihalis Angelos

54 Avery v. Bowden; The Simona


13

failure to perform its contractual obligations, in line with its repudiatory nature.55

C. The Claimant is entitled to the lien over the Cargo and Sub-freight

52. The RESPONDENT has continuously avoided its obligations under the VOYAGE

CHARTERPARTY leading to its repudiatory breach. These breaches centre around

RESPONDENT’s obligation to pay the full price of the freight due on 21 October 2016 in the

amounts of USD 101.666,67.56

1. THE CLAIMANT IS IN POSITION TO ASK FOR PAYMENT TO THE SHIPPER

53. The RESPONDENT failed to timely nominate a valid discharge port, constituting a first breach

of the contract.57 This breach was followed by a second one, namely the noncompliance with

the dates agreed upon, and the consequential damaging delays that occurred. The CLAIMANT

seeks compensation for these two breaches, but insofar as the RESPONDENT incapacity to

repair these breaches, the CLAIMANT may as well call upon payment from the SHIPPER.

54. A contractual link connects the CLAIMANT and the SHIPPER, as evidenced by (a) the Notice of

Readiness58 and the Bill of Lading59, signed by the LEGAL OWNER through the MASTER,

binding the SHIPPER to the TIME CHARTERPARTY;60 and (b) the SHIPPER is also linked to the

CLAIMANT through the lien clause 61 contained in the VOYAGE CHARTERPARTY and

incorporated by the Bill of Lading.

55 See above, §§44-49


57 See above, §§26-36




61 Coal Orevoy Charterparty, Part II, Art. 19 – Case Scenario, p. 31


14

a. The SHIPPER is bound by the TIME CHARTERPARTY

55. With respect to the Bill of Lading,62 which has been released on 4 October 2016 by the

CLAIMANT and signed by the SHIPPER and the MASTER of the VESSEL, it was stipulated in its

first clause: that all terms and conditions, liberties and exceptions of an undated charterparty,

were to be incorporated to the Bill of Lading.

56. The Bill of Lading refers to a charterparty, but there is no precision about which charterparty

it alludes to. The purpose of a bill of lading is to formalize the contract of transport, and

therefore display all the rights and obligations on the freight transport. When the shipper is

not the charterer, the bill of lading either evidences or contains the contract of carriage.63 As

it was determined in The San Nicholas, a reference to a charterparty is construed as a

reference to the head charterparty, which in the present case is the TIME CHARTERPARTY.

57. In the case at hand, the NOTICE OF READINESS was released by the LEGAL OWNER, on 1

October 2016, and was signed by the MASTER of the VESSEL and addressed to the SHIPPER. It

also refers to an undated charterparty.64

58. The Notice of Readiness matches the end of the transport and has a contractual value since it

transmits the shipment costs and risks from the owner to the charterer and to the shipper.65

Here, the charterparty that it is referred to is the transport contract, namely the TIME

CHARTERPARTY signed by the CLAIMANT and the LEGAL OWNER. The SHIPPER is, hence, also

bound to the TIME CHARTERPARTY by reference to this NOTICE OF READINESS.

59. Considering that the SHIPPER is bound by the Bill of Lading and the NOTICE OF READINESS,

which refer to the TIME CHARTERPARTY, the SHIPPER is also linked to this latter contract.


63 Singapore Shipping Law – Chapter 25, §4(a)(2); WILSON, p. 129


65 TOUCHARD, p. 5, §2


15

b. The TIME CHARTERPARTY links the CLAIMANT to the SHIPPER by the lien clause

60. The TIME CHARTERPARTY entrusts the CLAIMANT with the ability to sublet the VESSEL. In

accordance with clause 1(e),66 the CLAIMANT sublet the VESSEL to the RESPONDENT by means

of the VOYAGE CHARTERPARTY.67 This agreement does not prohibit the possibility for the

sub-charterer to sublet the VESSEL.

61. It is alleged that the VESSEL was subsequently sub-voyage chartered by the RESPONDENT to

the SHIPPER. To frame this sub-voyage chartering, the VOYAGE CHARTERPARTY stipulates a

lien clause,68 which allows the Owners to have a lien on the cargo for freight amongst other

things. This clause makes the CLAIMANT eligible to require the payment of the sub-freights

from the SHIPPER by using this clause, in relation to the TIME CHARTERPARTY.

2. THE LIEN ON CARGO EXERCISED BY THE CLAIMANT IS VALID AND SHALL BE ENFORCED

62. The CLAIMANT informed the RESPONDENT of its intention to exercise a lien over the CARGO

on 20 October 2016.69 As previously mentioned, the PARTIES have expressly decided to apply

Singaporean Law to their VOYAGE CHARTERPARTY. 70 Accordingly, such choice of law

encompasses the Common Law, the Carriage of Goods by Sea Act and the Bills of Lading

Act.71 The lien over the CARGO is acknowledged both under (a) the common law and (b) the

contractual rights established by the PARTIES.

a. The lien over the Cargo is valid under the Common Law

66 Time Charterparty, Art. 1(e) – Case Scenario, p. 2

67 Coal Orevoy Charterparty – Case Scenario, p. 24

68 Coal Orevoy Charterparty, §19 (a) & (b) – Case Scenario, p. 24

69 Notice of Lien on Sub-freight – Case Scenario, pp. 65-66

70 See above, §20

71 SING & BALA


16

63. The CLAIMANT’s right to exercise a lien at common law arises independently of contract and

is based exclusively on the ability of the ship-owner to retain possession of the goods

concerned. The essence of the exercise of a lien is to deny possession of the CARGO to

someone who is entitled to it,72 thus forcing the interested party in paying the freight to the

lien possessor.

64. The right is restricted and is available at common law in three cases only: (i) for the recovery

of a general average contribution due from cargo; (ii) for expenses incurred by the ship-

owner in protecting the cargo; and (iii) to recover the freight due on delivery of the CARGO

under either the charter or bill of lading contract of carriage.73.

65. This last case is the one where the CLAIMANT grounds its request for the lien over the CARGO,

in view of the presence of a default in payment on the RESPONDENT’s end of the contractual

obligations.

b. The lien over the Cargo is incorporated in all contractual documents entered into

between the Parties and the Shipper

66. The lien is also a contractual creation of the PARTIES, being, thus, only enforceable against a

party to the contract of carriage. Usually, a lien incorporated in a charterparty to provide

security for unpaid hire is not enforceable against cargo of third parties shipped under a bill

of lading even where such third parties have notice of the existence of the charterparty at the

time their cargo was shipped.74 Such a lien would be enforceable if the charterparty clause

was incorporated by a specific term in the bill of lading issued to the third-party shipper.75

72 The Mihalios Xilas, p. 191

73 Hain SS v Tate & Lyle

74 The Chrysovalandou Dyo

75 Ibid., fn. 74


17

67. The Bill of Lading, however, made express reference, in its first clause, to the incorporation

of all terms set out by the TIME CHARTERPARTY. Therefore, the SHIPPER, by means of

contractual connection between the Bill of Lading and the TIME CHARTERPARTY, is also

bound to the lien clause and, thus, to the CLAIMANT’s demand of a lien over the CARGO.

68. Thus, the freight under the VOYAGE CHARTERPARTY is due and payable and the

enforceability at the discharge port is impossible, leaving Singapore as the bunkering port.

69. The debt in question shall be ‘due’ and ‘payable’ at the time the lien is to be exercised.76 As

constantly evidenced by the case files, during the exchange of e-mails, the PARTIES have

continuously updated the amounts due as a result of the RESPONDENT’s failure to comply

with its obligation, and such sums were never contested. The RESPONDENT therefore cannot

avoid being held liable for the payment of the sums due for freight.

70. The lien should be exercised when the VESSEL is at, or anchored off, the discharge port.

However, exceptional circumstances may allow an owner to prove that a lien at the discharge

port would be impossible and the lien would be lost if the VESSEL proceeded to the port, as

evidenced in the Mihalios Xilas, where the owners halted the ship at a bunkering port mid-

voyage. In this instance, it was acceptable for the owner to halt the VESSEL outside the port,

as it was impossible and commercially impracticable to exercise the lien at the discharge port.

71. These exceptional circumstances must also be understood to be present in the present case.

The VESSEL is in no condition to discharge at the port nominated by the RESPONDENT.

Moreover, RESPONDENT has failed to comply with the nachfrist proposed by the CLAIMANT,

nominating the port of Ningbo too late. The VESSEL is still in a condition where it is anchored

in Singaporean shores, and the CARGO, as well as the crew, are facing imminent danger. The

CLAIMANT’s lien over the CARGO, requesting Singapore to be the relevant place to take place

76 Tate v. Meek; KAH WAH & TEO


18

must be understood as an enabling condition to practice the lien at the present stage.

3. THE CLAIMANT HAS ALSO VALIDLY EXERCISED A LIEN OVER THE SHIPPER’S SUB-

FREIGHT

72. The CLAIMANT notified a lien over sub-freight to the SHIPPER on 20 October 2016, before any

sums were paid to the RESPONDENT. Many time charters provide that the lien for hire shall

extend not only to cargo but also to sub-freights belonging to the charterers. This term

presumably covers not only freight payable by the charterers under the terms of the Bill of

Lading, but also freight due by sub charterers.77 The term sub-freight (a) is also present in the

TIME CHARTERPARTY, making it (b) an incorporated term in all subsequent contracts, as well

as (c) leaving CLAIMANT with the right to exercise such kind of lien, which is still owing.

a. The lien over the sub-freight is incorporated in all contractual documents entered

into between the Parties and the Shipper

73. The lien shall be understood as being extended by the signing parties to cover “sub-hires”

from sub-time charters.78 Unlike a lien on cargo, the lien on freight is not a possessory lien: it

is not a right to retain possession of something already in the owner’s possession but rather a

right to intercept funds which are moving from a third party to the charterer. The lien on sub-

freight gives an owner a contractual right to claim the cost of freight.

74. In the case at hand, the Bill of Lading refers to an undated Charterparty.79 The Bill of Lading

was signed between the MASTER and the SHIPPER. The MASTER signed in the name of the

LEGAL OWNER, meaning that the MASTER was the agent of the LEGAL OWNER, as determined

77 WILSON, p. 303; FURMSTON & MARHINGER

78 Ibid. fn. 77



19

by Clause 31 of the TIME CHARTERPARTY.80 Moreover, as the CLAIMANT is the Disponent

Owner, Clause 23 of the TIME CHARTERPARTY is also applicable to him and the CLAIMANT

can thus exercise a lien on freight.

b. The Claimant has the right to intercept freight owed under the Bills of Lading

75. When an owner’s Bill of Lading is marked “freight payable as per charter-party”, this

incorporates the provisions of the VOYAGE CHARTERPARTY regarding payment of the freight.

The charterer will usually collect freight. However, if the charterer defaults on the payment of

hire, the owner is entitled thereafter to direct the shipper to pay them the freight directly,

bypassing the charterer. The England and Wales Court of Appeal concluded that the third

party is to be regarded as the owner’s agent, who collects the freight on the owner’s behalf.81

76. English courts have held that this is the natural consequence of a Bill of Lading being a

contract between the owner and the shipper. A provision that freight is “payable as per

Charterparty” does not exclude that right. The freight is still due to the owner,

notwithstanding that it may be payable to someone else.

77. In the Bill of Lading, special instructions are held: “Freight payable as per Charterparty”.

Thus, the CLAIMANT can ask directly the SHIPPER to pay the freight in view of the

RESPONDENT’s noncompliance with its obligations. Moreover, the Bill of Lading created a

contractual link between the CLAIMANT and the SHIPPER and there is no possibility to exclude

the right to exercise a lien on freight.

c. The lien over the sub-freight can only be exercised while the freight is still owed

78. The CLAIMANT, as the disponent owner, has the right to intercept sub-freights before they are

80 Time Charterparty – Case Scenario, p. 12, §31

81 Bulk Chile case


20

paid to the RESPONDENT. This is achieved by notifying the Bill of Lading holder, the SHIPPER

in the present case, that any freight due from him should be paid directly to the CLAIMANT.

There are no particular requirements regarding the notice as per the agreements.

79. However, the lien can only be exercised in respect of hire already accrued and due at the time

that it is exercised while the freight is still owing. Once the freight is paid, the lien is lost.

80. The present Bill of Lading was signed between the SHIPPER and the MASTER. Thus, the legal

right to freight is in the RESPONDENT’S hands but the CLAIMANT can exercise lien over cargo

and also lien over sub-freight because neither the RESPONDENT nor the SHIPPER have paid the

freights. Thus, the freight is still owing and the CLAIMANT has the right to intercept it.

4. SUBSEQUENTLY, THE ARBITRAL TRIBUNAL SHALL RENDER AN ORDER ALLOWING THE

CLAIMANT TO SELL THE CARGO

81. It has been established that according to the SIAA, this Arbitral Tribunal has the power to

order interim relief.82

82. However, the SIAA does not lay any test to order these measures.83 The SIAA provides for

the possibility to order the sale of any property, which is or forms part of the subject matter of

the dispute.84 This is also foreseen by the Singapore Merchant Shipping Act.85 The SIAA

provides this possibility without establishing a framework in which the reliefs shall be

granted. Therefore, the Arbitral Tribunal has the authority to determine this framework.

83. To establish which test an arbitral tribunal will use in order to assess needs to grant interim

relief, it may either apply the one used by the courts of the forum, or the one used by the

82 See above, §21

83 LIM, §4

84 SIAA, §12(1)(d)

85 Singapore Merchant Shipping Act, Art. 130; Faith Maritime v. Feoso; KAH WAH & TEO


21

courts of the lex arbitri.86

84. Since both the forum and the lex arbitri refer to Singapore law, the present Arbitral Tribunal

shall use the test used by the courts of Singapore.

85. According to the relevant provisions of the SIAA applicable in the matter at hand, arbitral

tribunals are entitled to order interim reliefs provided that (a) the case is one of urgency, and

(b) the judge determines that the relief is necessary for the purpose of preserving evidence or

assets.87

a. The urgency commands the granting of an interim measure

86. As previously seen, the SIAA allows for the interim relief for the sale of the subject matter of

the dispute.88 The relevant provisions of the SIAA do not lay out any guidance regarding the

interpretation of the urgency, which is therefore left to the judge or arbitrator’s discretion.89

87. In a recent case, a court of Singapore ruled that there “was a clear case of urgency” when the

crew lacked fresh food, water and medical supplies and the overheating of the cargo

generated a risk of self-ignition and explosion.90

88. In the matter at hand, the MASTER’S report91 evidences that the VESSEL, the CARGO and the

crew are in an identical situation, the Arbitral Tribunal shall therefore find that the present

case fulfils the same conditions, requiring that urgency measures shall be ordered. In the

absence of such measures, severe human and property damages will be inflicted to the

VESSEL, the CARGO and the Crew.

86 LIM, §§7-11

87 SIAA, §12A(4)

88 Ibid., fn. 84; See above, §21

89 Seele v. Drake & Scull

90 Five Ocean v. Cingler, §59



22

89. In fact, the crew is in urgent need of basic supplies, as they are out of fresh food provisions,

water, and medicines, with even peril of human life.92 Moreover, the VESSEL and the CARGO

are compromised as they are incurring irreparable damages. Considering the extreme weather

conditions, the VESSEL is at high risk of being damaged and its CARGO lost. Indeed, the

MASTER noticed signs of overheating of the CARGO, which may lead to its self-ignition and

explosion.93 In the present case, the conditions being nearly identical to those in the Five

Ocean v. Cingler case, which granted urgent relief.

b. The interim measure is necessary to preserve the value of the Cargo

90. As established by the provisions of the SIAA, by which the interim measure sought should be

necessary for the purpose of preserving assets,94 the Singapore Court of Appeal considered in

Cetelem v. Roust Holdings95 that the “asset” in question was the value of the cargo and not

the cargo per se. The same interpretation was held in Five Ocean v. Cingler.96 Hence in the

case at hand, preserving the asset means preserving the value of the coal on board.

91. Moreover, the Singapore Court of Appeal has a very narrow construction of the term

“necessary”.97 In Cetelem v. Roust Holdings98, it held that in order to be necessary to preserve

the assets, no other remedies should be available; otherwise the court would have no

jurisdiction to order interim reliefs. Besides, in accordance with a High Court of Justice

Judgement in which an application for an interim injunction was made,99 the respondent

92 Ibid., fn. 91


94 SIAA, §. 12A(4)

95 Cetelem v. Roust Holdings

96 Five Ocean v. Cingler, §48

97 Maldives Airports v. GMR Malé

98 Ibid., fn. 95

99 Telenor v. Altimo Holdings


23

should not have given suitable undertakings in respect of the assets. Presently, the

RESPONDENT did not give such undertakings and the only way to preserve the value of the

CARGO, still loaded on the VESSEL, is to allow the CLAIMANT to sell it.

92. In addition to the fact that the CARGO on board is at significant risk of being damaged or

lost,100 it is incurring a loss of its value, as the Chinese coal market has been structurally

falling in line as it is stated in the Expert Report.101 Moreover, the EXPERT put the Chinese

market in perspective with the benchmark Newcastle NSW according to which the prices

have risen 9,85% between 04 October 2016 and 30 November 2016.102

93. The EXPERT filed his report on December 2016, using the information publicly available at

that moment. By using the same sources of his report,103 one can observe that the prices have

substantially dropped from November 2016 to April 2017, losing a quarter of its value. Thus,

according to both China coal market and Australia prices, the current market conditions are

worsening. There is no doubt that the value of the CARGO will continuously depreciate.

94. Furthermore, the valuation of the CARGO is based on the water content of the coal, as stated

by the Expert:104 relying on the load port quality certificate105 that was provided, the EXPERT

added USD 0,50 per tonne to adjust from 37% total moisture of the Coalspot Benchmark to

30.10% being the total moisture of the coal in this case. But this consideration has been

overtaken by the fact that the VESSEL has been kept adrift in open seas during the monsoon

season 106 for a considerable period and the CARGO exposed to great seasonal humidity.

100 See above, §78

101 Expert report of Caleb Coalman – Case Scenario, p. 99

102 Ibid., fn. 101, p. 100

103 CoalSpot.com, Australian Coal Index - from October 2016 to April 2017

104 Expert report of Caleb Coalman –Case Scenario, p. 100

105 Carbon Investigators Certificate of Sampling and Analysis for the full specification – Case Scenario, p. 40



24

During that period, temperature can rise up to 30°C, while rainfall can reach 288mm in a

month, leading to more than 96,4% of relative humidity.107 This exposure has an impact on

the total moisture of the coal on board. Besides, a long exposure of the CARGO to such

climatic conditions will result in an increase of the water content of the coal rendering the

load port quality certificate out-dated and leading to Cargo’s inevitable devaluation.

95. The Expert Report states that the level of the discount of a distressed cargo depends on the

level of the buyers’ knowledge of the seller’s predicament.108 The EXPERT applied three

different discount rates to the value of the CARGO, stressing that the discount could be more

in this case.109 The longer the CARGO is delaying discharge, the more the information about

the CLAIMANT will spread, which will result in increasing the discount on the CARGO’S value,

leading to its increasing damaging depreciation.

96. Such depreciation needs to be assessed in the light of the increase in expenses in maintaining

the CARGO abroad the VESSEL, i.e. 10,000 USD per day.110 On 21 October 2016, the overall

costs on charterers account have already reached USD 101.666,67.111 In compliance with the

estimation112 made regarding the value of the CARGO, which is worth between 2,527,561.56

USD and 2,824,921.75 USD, the sum due to the CLAIMANT, at the time the Tribunal will

render its award, would eventually exceed the CARGO’s value. Therefore, the Arbitral

Tribunal ought to order the sale of the CARGO pendent lite in order the preserve the CARGO’S

value.

107 www.weather.gov.sg – Long Term Climate Averages

108 Expert report of Caleb Coalman - Case Scenario, p. 101

109 Ibid., fn. 108, p. 101



112 Expert report of Caleb Coalman – Case Scenario, p. 102

http://www.weather.gov.sg/


25

Request for Relief

97. For the reasons described above, CLAIMANT respectfully requests the Arbitral Tribunal to:

I) Recognize it has jurisdiction over the present disputes, the PARTIES, and the SHIPPER, by

virtue of Clause 29 of the VOYAGE CHARTERPARTY;

II) Declare that RESPONDENT has committed a repudiatory breach of the VOYAGE

CHARTERPARTY, by failing to nominate the discharge port and pay freight due to CLAIMANT,

causing material and moral damages to the CLAIMANT, to be assessed in a further stage of

these proceedings;

III) Declare that CLAIMANT has validly exercised its rights of lien over the CARGO and over

Sub-Freight;

IV) Grant the CLAIMANT the requested interim order allowing the sale of the CARGO; and

V) Declare that all expenses incurred in this arbitration shall be borne by the RESPONDENT.

On behalf of Furnace Trading Pte Ltd.,

Versailles, 19 April 2017

Arleen Gonzalez Charlotte Hauchard Vérane Pasi

Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa

Documents

STATEMENT OF CLAIMANT’S€¦ · Team 19 Statement of laimant’s ase v INDEX OF SCHOLARS BORN, Gary B. International Arbitration: Law and Practice Kluwer Law International, 2nd