TEAM 18 - Murdoch University · 2020. 11. 24. · Team 18 Memorandum for Respondent vii Peter Aeberli, “Jurisdictional Disputes under the Arbitration Act 1996: A Procedural Route

TWENTIETH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2019

UNIVERSITAS DIPONEGORO

TEAM 18

MEMORANDUM FOR RESPONDENT’S

IN THE MATTER OF THE ARBITRATION HELD IN ROTTERDAM

ON BEHALF OF AGAINST

PANTER SHIPPING INC OMEGA CHARTERING LTD

CLAIMANT / OWNERS RESPONDENT / CHARTERERS

COUNSEL

NATANAEL DAUD VENDRA WAHID RAKA PERMANA

RESTY SUTRAINY RUTH ARTHASYA DANIEL KANDOU

Team 18 Memorandum for Respondent

ii

INDEX OF ABBREVIATIONS ........................................................................................................................ III

INDEX OF AUTHORITIES .............................................................................................................................IV

1. CASES ......................................................................................................................................................... IV 2. BOOKS AND ARTICLES .............................................................................................................................. VI 3. LEGISLATIONS .......................................................................................................................................... VII

ARGUMENTS ON JURISDICTION ................................................................................................................ 4

I. THIS TRIBUNAL HAS NO JURISDICTION OVER THE PRESENT DISPUTE .................................................... 4 A. There is a valid Arbitration Agreement ................................................................................................ 4 B. The Tribunal has the authority to determine its own jurisdiction ....................................................... 4 C. This Tribunal was not properly constituted .......................................................................................... 4

a. Owners’ appoinment of arbitrators have failed to meet the requirements of the Charterparty ............... 5 b. In any event, Owners have failed to commenced the proceedings appropriately ....................................... 6

D. Alternatively, the Tribunal has the authority to grant Charterers’ claim for damages ......................... 7

ARGUMENTS ON THE MERITS OF CLAIM ..................................................................................................... 8

II. CHARTERERS ARE NOT LIABLE TO THE CLAIMS ARISES OUT OF THE HULL CLEANING ........................ 8 A. Owners were deemed to agree to bear the risk for the hull cleaning cost on its own ......................... 8 B. Alternatively, Charterers would only be liable for the reasonable cost for the hull cleaning ............... 9

a. The reasonable cost for the hull cleaning is USD 33,000. .............................................................................. 9 b. The Charterers are not liable for the travel cost for the hull cleaning ....................................................... 10

III. CHARTERERS ARE NOT RESPONSIBLE TO THE DAMAGES ARISES OUT OF THE LATE RE-DELIVERY ..........................................................................................................................................................11

A. Charterers were only liable for the lost in the period of the overrun ................................................11 a. There isn’t any applicable market rate for differences in the period of overrun...................................... 11 b. In any event, Charterers have already paid hire for the period of overrun accordingly ......................... 11

B. Charterers are not liable to the loss arises out of the Lost Fixture ...................................................12 a. The loss was not under Charterers’ assumed responsibility arises out of the Charterparty ................... 12 b. Charterers had no particular knowledge of the Next Fixture ..................................................................... 13

C. Alternatively, the maximum period of 4 years was too remote ..........................................................14 D. Further in the alternative, Owners must give credit for the profit realized by the Replacement Fixture...........................................................................................................................................................15

IV. ALTERNATIVELY, CHARTERERS ARE ENTITLED TO SET OFF ITS COUNTERCLAIM AGAINST ANY SUMS THEY FOUND IS LIABLE TO THE OWNERS ................................................................................15

ARGUMENTS ON THE MERITS OF COUNTER-CLAIM ................................................................................... 16

V. CHARTERERS ARE ENTITLED TO BE INDEMNFIED FOR THE CARGO CLAIM...............................16 A. The Cargo Claim has been validly raised ...........................................................................................16 B. The Cargo Claim was not time-barred................................................................................................17 C. Owners is liable for 100% of the Cargo Claim ...................................................................................19 D. Alternatively, Owners is liable for the Cargo Claim in like amounts ................................................20 E. Further in the alternative, Owners is liable for 50% of the Cargo Claim .........................................20

VI. CHARTERERS ARE ENTITLED TO RECOVER THE OVERPAID HIRE FOR THE VESSEL HAS BEEN OFF-HIRE .........................................................................................................................................................21

A. The Vessel was off-hire from 07.05.2016 untill 26.06.2016 ..............................................................21 B. The off hire would not be caused by the Charterer’s fault ................................................................22 C. In any event, Charterers is entitled to recover the overpaid hire .......................................................23 D. Alternatively, the Owners are liable to damages arises out of the off hire ........................................24

REQUEST FOR RELIEF ................................................................................................................................ 25


iii

INDEX OF ABBREVIATIONS

Abbreviations Terms

Moot Scenario IMLAM 2019 Moot Scenario

Procedural Order No. 2 IMLAM 2019 Clarification for Procedural Order No. 2

Charterparty Time Charter Agreement dated 18.03.2016

(Comprises of Fixture Recap incorporating NYPE 2015, Rider

Clause, Inter-Club Agreement)

Claimant/Owners Panther Shipping Inc.

Respondent/Charterers Omega Chartering Limited

Charterparties/Parties Owners and Charterers

Vessel M/V Thanos Quest

Managers Hulk Hulls

Brokers Clark Kent & Sons

Champion Champion Chartering Corp

Fairwind Fairwind International

Fixture Recap Omega Chartering Limited Fixture Recap dated 18.03.2016

Rider Clause Omega Chatering Rider Clauses

Next Fixture Champion Chartering Corp Fixture Recap dated 15.06.2016

Replacement Fixture Fairwind International Fixture Recap dated 04.07.2016

NYPE 2015 New York Produce Exchange Time Charter Form 2015

ICA Inter-Club New York Produce Exchange Agreement 1996

(As Amended September 2011)

LMAA Terms 2017 London Maritime Arbitration Act Terms 2017

Cargo (1720 x 5mt big bags) English Breakfast Tea in Bags

FHS Final Hire Statement dated 01.08.2016

Mekon Report Mekon Surveyors Inc Preliminary Survey Report dated

30.06.2016

Receivers Hawkeye Import & Export Pty

P Page

para Paragraph


iv

INDEX OF AUTHORITIES

1. Cases

A/B Helsingfors Steamship Co. v. Rederiaktiebolaget Rex ("The White Rose"), [1969]

1 W.L.R. 1098.

Action Navigation inc v. Bottiglieri Navigation sp, [2005] EWHC 177 (Comm) Case

No: 2004 F. 617

Actis Co. Ltd.V. The Sanko Steamship Co. Ltd. (The "Aquacharm") [1980] 2 Lloyd’s

Rep. 237

Allianz Versicherungs-AG v. Fortuna Co Inc (The ‘Baltic Universal’) [1999] 1 Lloyd’s

Rep. 497

AMEC Civil Engineering Ltd v. Secretary of State for Transport [2015] 1 WLR 2339

Andre & Cie S.A. .v. Orient Shipping (Rotterdam) B.V. (“The Laconian Confidence”)

[1997] 1 Lloyd’s Rep. 139

Ashville Investments Ltd v. Elmer Construction Ltd [1989] QB 488

Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452

Board of Trade v. Temperley (1927) 27 Ll.L.Rep. 230

Boston Bank of Connecticut v European Grain and Shipping Ltd (The Dominique)

[1989] 1 Lloyd’s Rep 431

Capital Trust Investments Ltd v. Radio Design TJ AB [2002] CLC 787

CAHarbour Assurance Co (UK) Ltd v. Kansa General International Insurance Co Ltd

[1993] QB 701

C Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350

Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334

Channel Island Ferries Ltd. V. Cenargo Navigation Ltd. (The "Rozel") [1994] 2

Lloyd’s Rep. 161

Charles M Willie & Co (Shipping) Ltd v Ocean Laser Shipping Ltd (The ‘Smaro’)

[1999] 1 Lloyd’s Rep 225

Compania Financiera "Soleada" S.A., Netherlands Antilles Ships Management

Continental Pacific Shipping Ltd.v. Deemand Shipping Co. Ltd. (The Lendoudis

Evangelos II) [1997] 1 Lloyd’s Rep. 404

Corporation Ltd. And Dammers And Van Der Heide's Shipping And Trading Co.

Ltd.V. Hamoor Tanker Corporation Inc (“The Borag") [1981] 1 Lloyd’s Rep. 483

Darbishire v. Warrin [1963] 1 W.L.R. 1067


v

Duke of Westminster v. Swinton, [1948] 1 K.B. 524

Empresa Cubana de Fletes v. Aviation & Shipping [1969] 2 Lloyd’s Rep. 257

Federal Commerce LTD v Molena Alpha INC (The” Nanfri”) [1978] 2 Lloyd’s Rep.

132,

Fiona Trust and Holding Corporation v. Privalov [2007] 2 Lloyd’s Rep 267

Flamenco) [2014] EWHC 1547[64].

Fulton Shipping Inc of Panama v Globalia Business Travel SAU (The New

Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360.

Geldof Metaalconstructie NV v Simon Carves Ltd. [2011] 1 Lloyd’s Rep 517

Government of Newfoundland v The Newfoundland Ry Co. (1888) 13 App Cas 199

Hadley v Baxendale (1854) 9 Exch 341

Ipsos S.A. v Dentsu Aegis Network Limited [2015] EWCH 1171 (Comm).

Laminates Acquisitions v BTR Australia Limited [2004] 1 All ER (Comm) 737

Marbienes Cia. Nav. v. Ferrostaal A.G. (“The Democritos”) [1975] 1 Lloyd’s Rep.

386

Minermet SpA Milan v Luckyfi eld Shipping Corporation SA [2004] 2 Lloyd’s Rep 348

(Comm)

Monarch Steamship Co Ltd v Karlshamns Oljefabriker (A/B) [1949] AC 196,

Mulvenna v Royal Bank of Scotland plc [2003] EWCA Civ 1112.

Pan Ocean Co. Ltd. v. Creditcorp Ltd. (The “Trident Beauty”) [1994] 1 Lloyd’s Rep.

365 (H.L.),

Petroleum Shipping Ltd. v, Vatis (trading as Kronos Management) (“The Riza and The

Sun”) [1997] 2 Lloyd’s Rep. 314

Read v. Page, [1927] 1 K.B. 743,

Robophone Facilities Ltd v Blank [1966] 1 WLR 1428

Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981]

Lloyd’s Rep 175

Schiffahrtsgesellschaft M.B.H & Co. (The “Black Falcon”) [1991] 1 Lloyd’s Rep. 77

Shipping Corporation of India Ltd. v. NSB Niederelbe Schiffahrtsgesellschaft M.B.H

& Co. (The “Black Falcon”) [1991] 1 Lloyd’s Rep. 77

SIG Berdesen DY and Co. v. Mobile Shipping (“The Berge Sund”) [1993] 2 Lloyd’s

Rep. 453


vi

SL Sethia Liners Ltd. v. Naviagro Maritime Corporation (The "Kostas Melas") [1981]

1 Lloyd’s Rep. 18

Sotiros Shipping Inc. And Aeco Maritime S.A.V.Sameiet Solholt (The "Solholt") [1983]

1 Lloyd’s Rep. 605

South Australia Asset Management Corpn v York Montague Ltd) [1997] AC 191

Standard Oil v Clan Line [1924] AC 100,

Stewart v. Van Ommeren [1918] 2 K.B. 560

Storer v. Manchester City Council [1974] 1 W.L.R. 1403

Torvald Klaveness A/S V. Arni Maritime Corporation (The "Gregos") [1995] 1 Lloyd’s

Rep 1

Transfield Shipping v. Mercator Shipping (The Achilleas) [2008] 2 Lloyd’s Rep. 275

(H.L.)

Triad Shipping Co. v. Stellar Chartering and Brokerage Inc. (The "Island Archon"),

[1994] 2 Lloyd’s Rep. 227, (C.A.) 237

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528

Villa Denizcilik Sanayi ve Ticaret AS v. Longen SA (The ‘Villa’) [1998] 1 Lloyd’s Rep.

195

Vosnoc Ltd v Trans Global Projects Ltd [1998] 1 Lloyd’s Rep 711

Weir and Others v. Union Steamship Co. Ltd. [1900] A.C. 525

Whistler International Ltd. v. Kawasaki Kisen Kaisha Ltd. ("The Hill Harmony"),

[2001] 1 Lloyd’s Rep. 147

2. Books and Articles

Ahmad Hussam Kassem, The Legal Aspects of Seaworthiness: Current Law and

Development, (Swansea University, 2006)

Alexis Mourre, “The Set-Off Paradox In International Arbitration”, (2008) Arbitration

International, Vol. 24, No.3 LCIA

Bruce Harris, Arbitration Act 1996 Commentary, (Blackwell Publishing, 4th ed., 2007)

Clare Ambrose, London Maritime Arbitration(Routledge, fourth edition, 2018)

International Publishing, Switzerland, 2016)

John Wilson, Carriage of Goods by Sea, (Longman, seventh edition, 2010),

Neil Andrews, Arbitration and Contract Law Common Law Perspectives, (Springer


vii

Peter Aeberli, “Jurisdictional Disputes under the Arbitration Act 1996: A Procedural

Route Map”, (2005) ARBITRATION INTERNATIONAL Vol. 21 No. 3

Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014)

3. Legislations

Arbitration Act 1996

Inter-Club New York Produce Exchange Agreement 1996 (As Amended September

2011)

London Maritime Arbitration Association Terms 2015


1

STATEMENT OF FACTS

1. By a Charterparty dated 18.03.2016 (the “Charterparty”), the Claimant (“Owners”)

chartered the M/V “THANOS QUEST” (the “Vessel”) to the Respondent (“Charterers”) for

a time charter trip of about 50-55 days from West Coast to Wahanda carrying a cargo of

harmless bulk products. The Vessel was delivered into the Charterparty on 29.03.2016 and

loading of the cargo was completed on 20.04.2016, whereupon the Vessel sailed for Wahanda.

2. On 07.05.2016, the Vessel arrived at the discharge port of Wahanda, but she was unable

to proceed immediately to berth and instead waited at the anchorage.

3. On 08.06.2016, an e-mail was sent to Charterers by Owners (via the Vessel’s Managers

and Brokers), respectively Hulk Hulls (“Managers”) and Clark Kent & Sons (“Brokers”)

noting that the Vessel was expected to spend more than thirty days at the port of Wahanda.

4. Owners requested that Charterers confirm the arrangements for cleaning the Vessel’s

hull in accordance with clause 83 of the Charterparty.

5. On the same day, Charterers responded to Owners by e-mail (via Managers and

Brokers) stating that underwater hull cleaning could not be performed at Wahanda and offered

to pay Owners USD 15,000 in lieu of cleaning.

6. On 09.06.2016, an email was sent to Charterers by Owners (via Managers and Brokers)

stating that the extent of any fouling was not possible to know, since no inspection was done.

Therefore, an inspection and cleaning at the next convenient port would be arranged by

Owners, since Owners also could not agree a lump sum for cleaning.

7. On the same day, Charterers responded (via Brokers and Managers) by stating that

Charterers would pay the cost of underwater cleaning against an original invoice.


2

8. On 15.06.2016, the Vessel to Champion Chartering Corp (“Champion”) for a period

of two years, plus a further two years in charterers’ option (the “Next Fixture”) was chartered

by Owners. Delivery under the Next Fixture was to be DLOSP Wahanda with a laycan of 22-

28 June 2016 with daily rate of hire USD10,500.

9. On 18.06.2016, an e-mail was sent to Charterers by Owners (via Managers and Brokers)

reserving their right to claim against Charterers for losses incurred as a result of the Vessel

being redelivered without hull cleaning having been performed.

10. On 26.06.2016, a further e-mail was sent to Charterers by Owners (via Brokers) stating

that the Vessel had been thoroughly fouled during her extended stay at Wahanda and that no

cleaning could take place in East Coast ports and asked Charterers to confirm their intention

with regard to cleaning in accordance with clause 83 of the Charterparty.

11. On 27.06.2016, Charterers responded to Owners (via Brokers and Managers) stating

that Charterers could arrange cleaning at North Titan port if Owners were sailing north and

offered to pay a lump sum of USD20,000 in lieu of cleaning for the alternative.

12. On 28.06.2016, Champion gave notice to Owners that they were cancelling the Next

Fixture, since the Vessel had missed the laycan.

14. On 29.06.2016, an e-mail was sent to Charterers by Owners (via Brokers) calling upon

Charterers to arrange for the Vessel’s hull to be cleaned at South Island following the

completion of discharge at Wahanda.

15. On 30.06.2016, Charterers responded to Owners (via Brokers and Managers) stating

that any voyage to South Island would be non-contractual and that cleaning could not be

performed at Wahanda and offered to pay USD30,000 in lieu of cleaning.

16. In response to Charterers (via Brokers), Owners gave one final opportunity to comply

with the contractual obligations under clause 83 of the Charterparty by arranging for

underwater cleaning prior to re-delivery.


3

17. The Vessel was re-delivered and discharge of the chargo is completed on 30.06.2016.

The Vessel’s hull was cleaned at South Island between 01.07.2016 and 03.07.2016 at a total

cost of USD41,000.

18. On 01.08.2016, Owners presented their Final Hire Statement to Charterers (the “FHS”).

The FHS includes costs of USD97,766.64 in relation to cleaning the Vessel’s hull at South

Island after re-delivery of the Vessel. Charterers have paid the sums USD1,199.22 due under

the FHS.

19. On 04.07.2016, the Vessel to Fairwind International (“Fairwind”) for a time charter trip

of about 50-55 days (the “Replacement Fixture”) was being chartered by the Owners. Delivery

under the Replacement Fixture was to be DLOSP South Island with a laycan of 4-6 July 2016

with daily rate of hire was USD11,000.


4

ARGUMENTS ON JURISDICTION

I. THIS TRIBUNAL HAS NO JURISDICTION OVER THE PRESENT DISPUTE

A. There is a valid Arbitration Agreement

20. Clause 80 of the Charterparty asserts that any disputes arises between Owners and

Charterers shall be referred to “three persons at London”, and that the “arbitration to be in

London”. Consequently, when London is the intended seat for the tribunal, the supplementing

provisions of English law, particularly the Arbitration Act 1996,1 (subject to the agreement has

been concluded in writing)2 and the governing London Maritime Arbitration Association

(LMAA) Terms applies in the present dispute.3

21. Furthermore, the Charterparty incorporates the fixture recap and the Rider Clause with

the New York Produce Form 2015 (NYPE)4 which nevertheless also signify that English Law

in accordance to the Arbitration Act 1996 and the LMAA terms, subject to the intended London

is selected by the parties, is applicable in the present dispute.5 Therefore, the arbitration

agreement has been valid.

B. The Tribunal has the authority to determine its own jurisdiction

22. Under the assertion of Clause 30 (1) of Arbitration Act, the tribunal may rule on the

basis of principle kompetenz-kompetenz, which enables them make at least a provisional

assessment of its own competence or the substantive jurisdiction in the relevant matter.6

Therefore, this Tribunal has the authority to determine its own jurisdiction.

C. This Tribunal was not properly constituted

1 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, P.357-8, [1993] 1 Lloyd’s Rep

291 (H.L.), P.303–4. 2 Arbitration Act 1996, Section 5 (1). 3 LMAATerms 2017, Section 6. 4 Moot Scenario, Fixture Recap, P.5. 5 NYPE 2015, Clause 54 (b). 6 Arbitration Act 1996, section 30 (1); Bruce Harris, Arbitration Act 1996 Commentary, (Blackwell Publishing,

4th ed., 2007), P.151; Neil Andrews, Arbitration and Contract Law Common Law Perspectives, (Springer

International Publishing, Switzerland, 2016) , P.11, P.40; Peter Aeberli, “Jurisdictional Disputes under the

Arbitration Act 1996: A Procedural Route Map”, (2005) ARBITRATION INTERNATIONAL Vol. 21 No. 3, P.253.


5

23. Party may raise any jurisdictional issue and challenge for the lacking of the substantive

jurisdiction of the tribunal if they have not been properly constituted,7 which in any event

would involve the concerns of whether the contractual or statutory requirements governing

appointment of the tribunal have been complied with.8 In the matter at hand, the Charterers

submit that this Tribunal has not been properly constituted for that the Owners have failed to

meet the requirements to properly; (a) appoint the arbitrators and in any event to (b)

commenced the proceedings appropriately.

a. Owners’ appoinment of arbitrators have failed to meet the requirements

of the Charterparty

24. As stipulated in Clause 80 of the Charterparty, the Parties agreed that any disputes

between them: “shall be referred to three persons, one to be appointed by each of the parties

hereto”.9

25. Admitedly, where the arbitration agreemet is to agree on the appointment of three

person, each party shall serves request in writings to the other party to appoint one arbitrator

for themselves.10 The Owners had provided the Charterers with the notice to arbitrate, however

such notice was merely to invite the Charterers to agreed into the appoinment of their

arbitrators, as the sole arbitrator to settle the dispute at hand.11 Therefore, the notice of

arbitration which was sent by the Owners inviting the Charterers to agreed on the nomination

of sole arbitrator has been disregarding the provision of Clause 80 for that the tribunal should

be adjourned by three persons, not a sole arbitrator.

7 Clare Ambrose, London Maritime Arbitration(Routledge, fourth edition, 2018), para. 6.9-10, P.79; Arbitration

Act 1996, Section 31 (1). 8 Clare Ambrose, London Maritime Arbitration(Routledge, fourth edition, 2018), para. 6. 17, P.81; Minermet SpA

Milan v Luckyfi eld Shipping Corporation SA [2004] 2 Lloyd’s Rep 348 (Comm) 9 Moot Scenario, Rider Clause, P.15. 10 Arbitration Act 1996, Section 16 para. 5 (a); LMAA 2015, Section 8 (b) (i). 11 Moot Scenario, Email of 16 October 2018, P.61.


6

26. In any event, if the Owners argues that the appoinment of sole arbitrator was intended

to “limit the cost involved in arbitrating (parties’) disputes” through the Small Claims

Procedure’s mechanism under Clause 102 of the Charterparty,12 the Charterers contends that

in any event Owners would not still be able to resolve the dispute at hand in such manner for

that the value of damages it claimed (worth USD 15,426,567.42)13 would surpassed the

required limits of USD 100,000 under the LMAA Small Claims Procedure.14 Therefore,

Owners’ intended appoinment of sole arbitrators would not be justifiable in any way.

b. In any event, Owners have failed to commenced the proceedings

appropriately

27. Clause 14 (1) of the Arbitration Act 1996 asserts that: parties are free to agree when

arbitral proceedings are to be regarded as commenced15 and, nevertheless, if no such agreement

has been made, the remainings of Clause 14 is to apply.16

28. Accordingly, where the arbitrators are to be appointed by the parties, Clause 14 (4) of

the Arbitration Act 1996 affirms that: “arbitral proceedings are commenced in respect of a

matter when one party serves on the other party or parties notice in writing requiring him or

them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that

matter.”17 Nevertheless what lies in the notice of arbitration would have to be in accordance

with the construed composition of the arbitrators which already been agreed.18

29. Consequently a notice in writing that was sent by the parties is to be regarded that they

were invoking the arbitration agreement and requires the other party to take steps in response

12 Moot Scenario, Rider Clause, P.18. 13 Moot Scenario, Claim Submission, para.22, P.69. 14 Moot Scenario, Rider Clause, P.18; LMAA Small Claims Procedure 2017, Section 1 (a), P.2. 15 Arbitration Act 1996, Section 14 (1). 16 Arbitration Act 1996, Section 14 (2). 17 Arbitration Act 1996, Section 14 (4). 18 Villa Denizcilik Sanayi ve Ticaret AS v. Longen SA (The ‘Villa’) [1998] 1 Lloyd’s Rep. 195; Bruce Harris,

Arbitration Act 1996 Commentary, (Blackwell Publishing, 4th ed., 2007), P.88.


7

to enable the tribunal to be constituted,19 and thus failure to invite the other party to appoint

their arbitrators renders the notice to be invalid.20

30. The Charterers argues that the Owners have failed to properly notify them in initiating

the arbitration for that the notice of arbitration which was sent was merely to invite them to

agreed on the appoinment of Ms. Walker as the sole arbitrator,21 while the agreed terms under

Clause 80 of the Charterparty requires any dispute arises among the Charterparties to be settled

by three persons.22 Therefore, the Owners had failed to properly commenced the proceedings

for that the notice of arbitration that was sent to the Charterers was invalid.

D. Alternatively, the Tribunal has the authority to grant Charterers’ claim for

damages

31. If nevertheless, this Tribunal decided for themselves that they bear the substantive

jurisdiction to rule and to settle this present dispute, the Charterers submit that Clause 80 of the

Charterparty would extend to any “dispute arise between Owners and the Charterers”.

Accordingly, an arbitration agreement would needed to be seen as a agreement to submit

present or future dispute to arbitration, whether they are contractual or not.23 Furthermore,

English law consolidates a modern pattern of liberal interpretation of arbitration agreements

which consequently would allow to covers a wide set of disputes concerning contract and its

19 Allianz Versicherungs-AG v. Fortuna Co Inc (The ‘Baltic Universal’) [1999] 1 Lloyd’s Rep. 497 20 Vosnoc Ltd v Trans Global Projects Ltd [1998] 1 Lloyd’s Rep 711, P.712; Allianz Versicherungs-AG v. Fortuna

Co Inc (“The Baltic Universal”) [1999] 1 Lloyd’s Rep 497, P.503; Charles M Willie & Co (Shipping) Ltd v Ocean

Laser Shipping Ltd (The ‘Smaro’) [1999] 1 Lloyd’s Rep 225. 21 Moot Scenario, Email of 16 October 2018, P.61. 22 Moot Scenario, Rider Clause, P.15. 23 Arbitration Act 1996, Section 6 (1).


8

performance.24 Hence, in this Case, the claims for damages raised by the Charterers, including

to raise set-off against Owners’,25 are arbitrable before this Tribunal.

ARGUMENTS ON THE MERITS OF CLAIM

II. CHARTERERS ARE NOT LIABLE TO THE CLAIMS ARISES OUT OF THE HULL

CLEANING

A. Owners were deemed to agree to bear the risk for the hull cleaning cost on its

own

32. Shipowners may sought to be indemnified for damages suffered as consequences of

complying with the charterers’ order so long as it would only be extended to orders that exposes

them to risks it have not been consented to bear.26 Nonetheless, what risks that the Owners be

reckoned to bear must be depend on the true construction of the Charterparty.27

33. Clause 83 (d) of the Charterparty asserts that if the Charterers are to ever been prevented

from performing the hull cleaning prior to the redelivery, both parties shall “agreed a lump

sum in full and final settlement of Owners’ expenses” in lieu for the cost arises from the

aforementioned.28

24 Capital Trust Investments Ltd v. Radio Design TJ AB [2002] CLC 787, para.[50] -[52]; Fiona Trust and

Holding Corporation v. Privalov [2007] 2 Lloyd’s Rep 267, para. [17]; Ashville Investments Ltd v. Elmer

Construction Ltd [1989] QB 488; CAHarbour Assurance Co (UK) Ltd v. Kansa General International

Insurance Co Ltd [1993] QB 701, CA; AMEC Civil Engineering Ltd v. Secretary of State for Transport [2015] 1

WLR 2339, P. 31. 25 Alexis Mourre, “The Set-Off Paradox In International Arbitration”, (2008) Arbitration International, Vol. 24,

No.3 LCIA, P.396. 26 Triad Shipping Co. v. Stellar Chartering and Brokerage Inc. (The "Island Archon"), [1994] 2 Lloyd’s Rep. 227,

(C.A.), P.237, Action Navigation inc v. Bottiglieri Navigation sp, [2005] EWHC 177 (Comm) Case No: 2004 F.

617, para. [25]-[30], Whistler International Ltd. v. Kawasaki Kisen Kaisha Ltd. ("The Hill Harmony"), [2001] 1

Lloyd’s Rep. 147, P.158, A/B Helsingfors Steamship Co. v. Rederiaktiebolaget Rex ("The White Rose"), [1969] 1

W.L.R. 1098. 27 Triad Shipping Co v Stellar Chartering & Brokerage Inc (The Island Archon) (CA) [1994] 2 Lloyd’s Rep 227,

P.236. 28 Moot Scenario, Rider Clause, P.16


9

34. The Charterers were indeed been prevented from performing the hull cleaning

obligations for the Wahanda port was unable to do so,29 and further, the Owners had never

acknowledged Charterers’ offer to have the Vessel be cleaned at the North Titan Port.30

Furthermore, the Owners had been repeatedly rejected the preposition which Charterers had

made for the lump sump in lieu for the cleaning of the Vessel.31 As both parties have been

explicitly consented to the terms governed under the Charterparty,32 the Owners are deemed to

agreed to bear the costs for the hull cleaning by themself and was not entitled to be indemnified

for such costs.

B. Alternatively, Charterers would only be liable for the reasonable cost for the

hull cleaning

a. The reasonable cost for the hull cleaning is USD 33,000.

35. Damages accrued for the purpose of making good of the loss should be based on

‘reasonableness’ and if the interest charges were unreasonable, they were not damages for

which the other party is to be liable.33 Furthermore, damage would not be reasonable if it was

charged in greater sum than those which he reasonably needs to expend for the purpose of

making good the loss.34

36. The Owners submit that the proper cost for the hull cleaning of the Vessel would be

those which they’ve spent for the service of such in the South Island at the price of USD

41,000.00 (and an additional USD55,567.42 for the cost to travel there), while they would have

29 Moot Scenario, First and Second Email of 25 May 2016, P.26; Procedural Order No.2, para.6, P.81. 30 Moot Scenario, Third Email of 27 June 2016, P.39. 31 Moot Scenario, Second Email of 8 June 2016, Third Email of 27 June 2016, First Email of 30 June 2016, P.29,

P.39, P.42-3. 32 Storer v. Manchester City Council [1974] 1 W.L.R. 1403, P.1408H. 33 Compania Financiera "Soleada" S.A., Netherlands Antilles Ships Management Corporation Ltd. And Dammers

And Van Der Heide's Shipping And Trading Co. Ltd .v. Hamoor Tanker Corporation Inc (“The Borag") [1981] 1

Lloyd’s Rep. 483, P.488, P.491; [1981] 1 W.L.R. 274, P.281, P.285. 34 Darbishire v. Warrin [1963] 1 W.L.R. 1067, P.1075


10

been able to done the same in the North Titan at the lower price of USD 33,000.35 Under the

consideration that both South Island and North Titan would have been able to provide hull

cleaning service of the Vessel,36 and the fact that North Titan would’ve been able to provide

such service at a much reasonable price of USD 33,000, the Charterers submit that they would

only be liable to the reasonable cost of the hull cleaning at the price of USD 33,000.

37. Further, if the Owners wish to assert that the proper cost of the hull cleaning would

worth USD 41,000.00 (and an additional USD55,567.42 for the cost to South Island) under the

basis of ‘cost of cure’, the Charterers submit that they would have not be able recover those

damages on a ‘cost of cure’ basis if that cost is disproportionate to the financial consequences

of the deficiency.37

b. The Charterers are not liable for the travel cost for the hull cleaning

38. Shipowners are not entitled to recover expenses incurred for the course of ordinary

navigation eventhough such expenses would be those which arises out of its compliance to the

charterers orders, for such connection are deemed to be too remote.38 The Owners argues that

the Charterers are liable for the USD55,567.42 expenses arises out of the cost of the voyage to

South Island in order to perform hull cleaning,39 however the loss in such amount is not

recoverable since it would only be incurred as usual expenses in its ordinary course.

39. Furthermore, the recoverable loss in any case is limited to that which can be said to be

"properly caused by the defendant’s breach of duty”.40 In this Case, the loss arises out of the

cost to the South Island would not be properly caused by the failure of the Charterers to perform

35 Moot Scenario, Email of 23 June 2016, P.35. 36 Procedural Order No.2, para.6, P.81. 37 Channel Island Ferries Ltd. V. Cenargo Navigation Ltd. (The "Rozel") [1994] 2 Lloyd’s Rep. 161, P.168, 38 Actis Co. Ltd.V. The Sanko Steamship Co. Ltd. (The "Aquacharm") [1980] 2 Lloyd’s Rep. 237, P.244-P.245;

Weir and Others v. Union Steamship Co. Ltd. [1900] A.C. 525; Triad Shipping Co.V. Stellar Chartering &

Brokerage Inc. (The "Island Archon") [1994] 2 Lloyd’s Rep. 227, P.235. 39 Moot Scenario, Claim Submission, para.22(2), P.69. 40 Sotiros Shipping Inc. And Aeco Maritime S.A.V.Sameiet Solholt (The "Solholt") [1983] 1 Lloyd’s Rep. 605,

P.608; Duke of Westminster v. Swinton, [1948] 1 K.B. 524, P.534.


11

the hull cleaning of the Vessel, but merely arises out of the Owners’ own intention to have the

Vessel be cleaned at the South Island, after it has been re-delivered.41 Hence, the Charterers

are not liable to the travelling cost for the South Island.

III. CHARTERERS ARE NOT RESPONSIBLE TO THE DAMAGES ARISES OUT OF THE LATE

RE-DELIVERY

A. Charterers were only liable for the lost in the period of the overrun

a. There isn’t any applicable market rate for differences in the period of

overrun

40. Damages incurred out of late re-delivery of a vessel shall be restricted to those arises

from the differences out of the charter hire rate and the market hire rate for the overrun period.42

Particularly, such differences shall only be construed upon the market hire rate similar to the

voyage on which the ship was engaged at period of the overrun.43 In the Case at hand, with

absence of plea from the Owners to such applicable market rate, such estimation should not be

stand.

b. In any event, Charterers have already paid hire for the period of overrun

accordingly

41. Nevertheless, where there are no equivalent market hire rate to be compared during a

certain period of the overrun, the damages shall be extend in the same financial position as if

the charter had been performed, as if the vessel had been re-delivered on the last permissible

day.44 Consequently, as evinced by the Full Hire Statement,45 the Charterers have appropriately

completed the payment for the hire up to the period where the Vessel had been re-delivered

on the 30.06.206.

41 Moot Scenario,FHS, P.52. 42 Transfield Shipping v. Mercator Shipping (The Achilleas) [2008] 2 Lloyd’s Rep. 275 (H.L.) , P.2. 43 Ibid. 44 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), P.103. 45 Moot Scenario, FHS, P.52.


12

B. Charterers are not liable to the loss arises out of the Lost Fixture

42. The Owners argues that Charterers were to be held liable for the loss resulted from the

Lost Fixture. However, for a breaching party to be deemed liable for such damages, it must

be held that; (a) such loss was within the assumed reponsibility arises out of the Charterparty

from the start,46 and (b) such loss would be within their particular knowledge.

a. The loss was not under Charterers’ assumed responsibility arises out of

the Charterparty

43. The extent of responsibility shall only be implied upon the expressed contractual

obligation47 construed at the making of the contract.48 Such liability in any way cannot be

imposed to a breaching party on greater risk than what they could reasonably have thought be

undertaken.49

44. The express contractual duty of the Charterparty, precisely stipulates that the period of

trip was for about “50-55 days WOG”,50 hence it must be seen that their assumption of

responsibility the Charterers had been undertaken was restricted to the fixing of the trip in such

duration.51 Nowherere in the Charterparty that governs any additional responsibility for the

Charterers should there been any breach of obligations that would affects Owners’ performance

of its future fixture.

45. Assuming otherwise that there would be any occurence of late re-delivery, the

Charterers submit that, at best, such obligations would only be restricted to the reponsibility

46 Transfield Shipping v. Mercator Shipping (The Achilleas) [2008] 2 Lloyd’s Rep. 275 (H.L.) para.12, P.8; South

Australia Asset Management Corpn v York Montague Ltd [1997] AC 191,P.211-2; Satef-Huttenes Albertus SpA

v Paloma Tercera Shipping Co SA (The Pegase) [1981] Lloyd’s Rep 175, P.183; Mulvenna v Royal Bank of

Scotland plc [2003] EWCA Civ 1112. 47 South Australia Asset Management Corpn v York Montague Ltd [1997] AC 191, P.212. 48 Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] Lloyd’s Rep 175, P.183. 49 South Australia Asset Management Corpn v York Montague Ltd [1997] AC 191, at 212.; C Czarnikow Ltd v

Koufos (The Heron II) [1969] 1 AC 350, P.382-3. 50 Moot Scenario, Fixture Recap, P.4. 51 Continental Pacific Shipping Ltd.v. Deemand Shipping Co. Ltd. (The Lendoudis Evangelos II) [1997] 1 Lloyd’s

Rep. 404, P.406.


13

arises out of the ordinary circumstances from the occurence of the breach iself,52 which would

extend merely to the liability for the hire in the period of overrun.53 Hence, the Charterers are

not to be held liable for the loss arises out of the Lost Fixture, since it was beyond its assumption

of responsibility it was undertaking.

b. Charterers had no particular knowledge of the Next Fixture

46. Charterers might be held liable to the loss arises out of special circumstances, i.e,

extraordinary circumstances beyond the reasonable prevision of the parties,54 only if they had

particular knowledge to the occurence of such circumstances, which would have been

communicated between the parties.55

47. Particularly, knowledge for the special circumstances should be those which enables

them to reasonably foresse loss that would arises as a result from a breach,56 which usually can

be seen if the Owners drews the Charterers’ attention to the existence of a forward charter of

many months’ duration for which the vessel had to be delivered on a particular date.57

48. The only information the Charterers had acquired on the fixing of the Vessel for the

Next Fixture was the one that provided on the 26.06.2016, which merely asserted that the

Vessel would be “fixed for her next voyage (to load East Coast range)".58 Nowhere however

that it expressly asserts any particular laycan date of the Next Fixture, or even to notify the

duration of the Next Fixture and the potential loss of fixture it might harm from the late re-

delivery.

52 Hadley v Baxendale (1854) 9 Exch 341, P.354; Transfield Shipping v. Mercator Shipping (The Achilleas) [2008]

2 Lloyd’s Rep. 275 (H.L.) para.36., P.14; Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB

528, P.539-40.

Transfield Shipping v. Mercator Shipping (The Achilleas) [2008] 2 Lloyd’s Rep. 275 (H.L.), P.2. 54 Monarch Steamship Co Ltd v Karlshamns Oljefabriker (A/B) [1949] AC 196, P.221. 55 C Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350, P.411A-C; Hadley v Baxendale (1854) 9 Exch 341,

P.354-6; Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, P.474-5. 56 Robophone Facilities Ltd v Blank [1966] 1 WLR 1428, P.1448 57 Transfield v Mercator (House of Lords), [2008], para.59 58 Moot Scenario, Email of 26 June 2016, P.34.


14

49. Furthermore, eventhough the fixture had been concluded by the Owners long before at

15.06.2016, the information was merely provided to the Charterers two days before the laycan

would have elapsed, which was on 28.06.2016. Therefore, the Charterers submit that they could

not have reasonably foreseen the loss arises out of the Next Fixture for they doesn’t have any

particular knowledge of it.

C. Alternatively, the maximum period of 4 years was too remote

50. In any event, if this Tribunal wish to asserts that the Charterers are to be held liable to

the loss arises out of the Next Fixture, the Charterers argues that they would only be liable for

the loss in the relevant period of the minimum of two years and not to the maximum period of

four year, for that such damage in the latter will be deemed as too remote.59

51. For certain loss to be deemed not too remote, there must exist direct causative

connection between the breach occurs to the benefits realized,60 and it cannot be for merely

provides such opportunity to occurs.61 The contracts undertaken by the Owners under the Next

Fixtures asserts that the fixing of the trip would be “FOR 2 YR CHARTER WITH 2 YR

EXTENSION IN CHOPT”.62 In the case where, the charter period was described as two

alternative lengths of time it was generally assumed that the the shorther period was the primary

or default period.63

52. Here, eventhough the occurence of late re-delivery of the Vessel corresponds to the

performance of the Next Fixture, it would only directly affects the certain fixing for the

minimum period of 2 years. The maximum period of 4 is not directly affected by such

occurence of late re-delivery since the fixing of trip is likely to occurs only if Champions chose

59 Mulvenna v Royal Bank of Scotland Plc [2003] EWCA Civ 1112; [2004] CP Rep 8, para.[33]. 60 Fulton Shipping Inc of Panama v Globalia Business Travel SAU (The New Flamenco) [2014] EWHC 1547,

para.[64]. 61 Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360. 62 Moot Scenario, Next Fixture, P.31. 63 Empresa Cubana de Fletes v. Aviation & Shipping [1969] 2 Lloyd’s Rep. 257; Shipping Corporation of India

Ltd. v. NSB Niederelbe Schiffahrtsgesellschaft M.B.H & Co. (The “Black Falcon”) [1991] 1 Lloyd’s Rep. 77


15

to asserts so.64 Hence, the Charterers are not liable since such breach are not directly affects

the benefits realized in the maximum period.

D. Further in the alternative, Owners must give credit for the profit realized by

the Replacement Fixture

53. Shipowners is not entitled to recover any damages incurred a consequences for

repudiation by the charterers when the wrongful acts would have enabled the shipowners to

make a profit on a more lucrative subsequent fixture or even having their ship free in the right

place at the right time to take a spot fixture on a rising market.65 Accordingly, as the results of

missing the hiring for the Next Fixture to the Champion in the daily hire rate of USD 10,500,66

the Owners have been able manage to secure a more lucrative Replacement Fixture from the

Fairwind at the daily hire rate of USD 11,000.67 Therefore, the Owners are not entitled to

charges the Charterers for the loss incurred for they should have take credits for the profit

realized from the Replacement Fixtures.

IV. ALTERNATIVELY, CHARTERERS ARE ENTITLED TO SET OFF ITS COUNTERCLAIM

AGAINST ANY SUMS THEY FOUND IS LIABLE TO THE OWNERS

54. Charterers have the rights to deduct or set off against claims for damages brought by

the Owners where there is a breach of the Charterparty, on the Owners’ account, which had

deprived them or prejudiced them in their use of the ship in whole or in part.68 In this Case, the

Charterers have the right to set off its claim for damages against Owners’ for the fact that; first,

64 Moot Scenario, Next Fixture, P.31. 65 Torvald Klaveness A/S V. Arni Maritime Corporation (The "Gregos") [1995] 1 Lloyd’s Rep 1, P.10; Transfield

Shipping v. Mercator Shipping (The Achilleas) [2008] 2 Lloyd’s Rep. 275 (H.L.), para.57,P.21. 66 Moot Scenario, Next Fixture, P.32. 67 Moot Scenario, Replacement Fixture, P.55. 68 SL Sethia Liners Ltd. v. Naviagro Maritime Corporation (The "Kostas Melas") [1981] 1 Lloyd’s Rep. 18, P.26


16

such claims arises out of the same transaction69 and second, they have been deprived or

prejudiced in the use of the Vessel.70

55. First, claims for set off would only be invoked to the cross-claim which was flowed out

of and was inseparably connected with the dealings and arise out of the same transactions

giving rise to the claim,71 and in any event it would be manifestly unjust to allow him to enforce

payment without taking into account the cross-claim.72 In this Case, similar to the claims

brought by the Owners, the Charterers wish to set off its counter-claim against Owners’ which

were resulted from the transactions under the Charterparty, particularly, for the occurence of

off hire, under the assertion of Clause 17 of the Charterparty, and to the Cargo Claims, which

arises under Clause 27 and 53 of the Charterparty.

56. Second, that the charterers have been deprived or prejudiced in the use of the ship.73 In

the Case at hand, Owners have been acting in breach of the Charterparty which resulting into

the the Charterers to deprived and subsequently claiming for damage for the occurence of off-

hire and damage to the cargo.74

ARGUMENTS ON THE MERITS OF COUNTER-CLAIM

V. CHARTERERS ARE ENTITLED TO BE INDEMNFIED FOR THE CARGO CLAIM

A. The Cargo Claim has been validly raised

57. Clause 4 of the ICA stipulates provision for which cargo claims are to be deemed as

validly apportioned. Accordingly, under the assertion of Clause 4 (a), (b) and (c), a cargo claim

would be validly raised where, in sequence, first, such claim was; “made under a contract of

69 Boston Bank of Connecticut v European Grain and Shipping Ltd (The Dominique) [1989] 1 Lloyd’s Rep 431,

P.438. 70 Federal Commerce LTD v Molena Alpha INC (The” Nanfri) [1978] 2 Lloyd’s Rep. 132, P.140. 71 Government of Newfoundland v The Newfoundland Ry Co. (1888) 13 App Cas 199.; Boston Bank of Connecticut

v European Grain and Shipping Ltd (The Dominique) [1989] 1 Lloyd’s Rep 431, P.438. 72 Federal Commerce & Navigation Co Ltd v Molena Alpha Inc (The Nanfri) [1978] 2 Lloyd’s Rep 132, P.140.;

Geldof Metaalconstructie NV v Simon Carves Ltd. [2011] 1 Lloyd’s Rep 517, para 43. 73 Federal Commerce Ltd. v. Molena Alpha INC (The” Nanfri”) [1978] 2 Lloyd’s Rep. 132, P.140-1 74 Moot Scenario, Counterclaim, para. 15 (1) and (2), P.74.


17

carriage, whatever its form”75, second, that “the cargo responsibility clauses in the

charterparty have not been materially amended…”,76 and third, that such claim has been

“properly settled or compromised and paid.”77 Here, the Charterers are to submit that the

Cargo Claim which was to be raised against the Owners has been in compliance with such

requirements.

58. First, that the claim was made under the assertion of contract of carriage. In the present

Case, the Cargo Claims has been validly purported by both the Charterers and the Receivers,

under the agreed terms of the Bills of Ladings.78

59. Second, that cargo responsibility has not been materially amended. Accordingly, only

amended terms such as the addition of “cargo claims” to the second sentence of clause 26 of

the Charterparty would only be regarded as such materially amandment which prevail a cargo

claim,79 and accordingly such amandment has not been done so in the present dispute.

60. Third, that the claim has been properly settled and paid. As governed under the

provision of Clause 3 (c) of the ICA, “settlement of the claim made by the original person”

would be regarded as sufficient for a cargo claim to be validly raised.80 In this Case, the

Receivers had validly raise the cargo claim within the granted provided by the Charterers and

in doing so the Charterers and the Receivers had both agreed on the quantum of Receivers’

claim in respect of the claims which are to be raised by the Charterers against the Owners.

B. The Cargo Claim was not time-barred

61. Under the assertion of Clause 6 of the ICA, recovery under the provision is deemed to

be waived if it has not been properly served with the written notification in doing so under the

24 months limitations of the re-delivery, which shall comprises of the“details of the contract

75 ICA, Clause 4 (a). 76 ICA, Clause 4 (b). 77 Ibid., Clause 4 (c). 78 Moot Scenario, Email of 23 November 2017, P.57. 79 ICA, Clause 4 (b) (ii). 80 Ibid., Clause 3 (c).


18

of carriage, the nature of the claim and the amount claimed.”81 In the Case at hand, the

Charterers submit that they have validly invoke such written notification just before the

limitation for such had elapsed, on the 30th of June 2018, by the means of the Mekon Report’s

attached, the bills of ladings and the letters provided to the Owners, which all have been sent

as latest as 23 November 2017.82

62. Accordingly, nature of the claim is to be seen where the notification provide “what is

being claimed and the basis of it by reference to – namely the form and substance of the

claim”.83 In this case, the Charterers have already explicitly mentioned, and also attached a

report, that the extent of the damage of the cargo and those being being claimed are to be

referred to the based on the findings of the Mekon Report.84 Furthermore, the Charterers and

Owners have already agreed that the Cargo Claim is to be settled under the references of the

mechanisms for Cargo Claims recognized under the Charterparty which is the ICA.85

63. Furthermore, what is regarded as amount claimed refers to calculation on the part of

of the loss which is allegedly suffered.86 Wherein even if cargo interests have not been

accompanied with details of the claim amount, the estimation for the extent of damage can be

calculated from alternative sources of the information, such as market price information for the

cargo.87. In this case, the figure of the damage claimed had been had been calculcated at the

estimation of USD 60 to USD 65 per kilo, by the findings of the Mekon Report.88

64. Therefore, proving that the written notification have been delivered just before the time

extension expires and the written notification provided had been in compliance extent to the

nature of the requirement under provision of Clause 6 of the ICA.

81 Ibid., Clause (6). 82 Moot Scenario, Email of 7 July 2016, Mekon Reports, Emails of 23 May-23 November 2017, P.45-6, P.57-8. 83 Laminates Acquisitions v BTR Australia Limited [2004] 1 All ER (Comm) 737. 84 Moot Scenario, Email of 7 July 2016, P.45. 85 Moot Scenario, Rider Clause, para.53, P.10. 86 Laminates Acquisitions v BTR Australia Limited [2004] 1 All ER (Comm) 737 87 Ipsos S.A. v Dentsu Aegis Network Limited [2015] EWCH 1171 (Comm). 88 Moot Scenario, Mekon Report, P.46


19

C. Owners is liable for 100% of the Cargo Claim

65. Pursuant to Article 8 (a) of the Inter-Club NYPE Agreement (ICA), in case of a

“unseaworthiness and/or error or fault in navigation or management of the vessel”, the cargo

claims shall be apportioned 100% for the Owners’s account.89

66. Accordingly, a seaworthiness is to be regarded when the vessel, her crew and her

equipment is sound and able in encountering and withstanding the ordinary perils of the sea

during the contemplated voyage, which particullarly can be seen where the damages to the

cargo arose out of the negligence of the crew, in failing to perform at the standard reasonably

expected on them,90 and that the vessel shall be suitable to carry the contract cargo, or cargo-

worthy.91 Whereas presence of seawater in the hold are normally treated as prima facie

evidence of unseaworthiness.92

67. The fact that seaworthiness is a combination of two factor, can mean that the vessel is

seaworthy with regards to physical, human and documentary seaworthiness but is uncargo-

worthy93 or vice versa, therefore if such vessel was delivered at the port of loading, the fact

that it is seaworthy in one respect but not the other will mean that the shipowners has failed to

exercise his duty to make the vessel seaworthy.94

68. In the Case at hand, the damage to the cargo occurs due to the improper use of ballasting

system by the crew wherein the crew opened the wrong valves during the ballasting operation

prior to the discharhing of the cargo, resulting into water ingress towards the lower hold No.2,

causing damage towards the cargo.95 Therefore, the Charterers submit that the Owners are to

liable for 100% of the Cargo Claim under the provision of Clause 8 (a) of the ICA.

89 ICA , Clause 8 (a). 90 Standard Oil v Clan Line [1924] AC 100, P.121. 91 Actis Co. Ltd.V. The Sanko Steamship Co. Ltd. (“The Aquacharm”) [1982] 1 Lloyd’s Rep. 7, P.11 92 John Wilson, Carriage of Goods by Sea, (Longman, seventh edition, 2010), P.13 93 Read v. Page, [1927] 1 K.B. 743, P. 754 94 Ahmad Hussam Kassem, The Legal Aspects of Seaworthiness: Current Law and Development, (Swansea

University, 2006), P.53. 95 Moot Scenario, First Email of 27 June 2016,P.38, Mekon Report, P.46.


20

D. Alternatively, Owners is liable for the Cargo Claim in like amounts

69. If this Tribunal is to find that the Owners are not liable to the apportionment for 100%

of the Cargo Claims under the provision of Clause 8 (a) of the ICA, the Charterers contended

that in any event the Owners would still be liable to damages in like amount.

70. Pursuant to Clause 27 and Clause 53 of the Charterparty both the Owners and the

Charterers agreed that any liability for cargo claims “shall be apportioned as specified” under

the mechanisms of the ICA.96 Accordingly, as asserted in the sub-argument VI (B) of this

written submission, the Respondent submits that the Cargo Claims solemnly arise out of

damages to the cargo97 resulting from the unseaworthiness of the Vessel for which, under the

provision of Clause 8(a) of the ICA, shall be apportioned 100% for the Owners’ account.98

Consequently, Owners are liable towards the damage of the cargo in like amounts (to be

quantified) for the unseaworthiness and/or error or fault in management or the navigation of

the vessel, pursuant to the agreed provision of Clause 27 and 53 of the Charterparty.

E. Further in the alternative, Owners is liable for 50% of the Cargo Claim

71. The liability for the cargo claims under the provision of Clause 8(b) of the ICA incurs

where claims in fact arising due to the: “loading, stowage, lashing, discharge, storage or other

handling of the Cargo.”

72. Furthermore, Clause 8 (b) of the ICA asserts that where there is an amandment to the

Charterparty, adding words "and responsibility" to Clause 8 of the Charterparty or any similar

amendment making the Master responsible for cargo handling, hence the shipowners were

deemed liable to the 50% of the cargo claim.99 Accordingly, the addition of these words

resulted into a prima facie transfer of liability from the charterers back to the shipowners if

there was ever any case of negligence occurs during the process of loading, stowage, trimming

96 NYPE 2015, Clause 27; Moot Scenario, Rider Clause, P.10. 97 Moot Scenario, Mekon Report, P. 46. 98 ICA, Clause 8 (a). 99 ICA, Clause 8 (b).


21

or discharging of the cargo, unless it shown otherwise that the charterers have in fact intervened

and in doing so have caused the relevant loss or damage.100

73. In the Case at hand, the Charterparty has been amended with the words “and

responsibility” added after “under the supervision”101 making the Owners liable under the

apportionment of Clause 8 (b). Subsequently, the damage to the cargo was resulted due to the

negligence of the crew during the process of ballasting prior to the discharging of the cargo

and the Charterers have not caused any intervention in the process of such. Consequently, the

Owners are liable for 50% of the Cargo Claim.

VI. CHARTERERS ARE ENTITLED TO RECOVER THE OVERPAID HIRE FOR THE VESSEL

HAS BEEN OFF-HIRE

A. The Vessel was off-hire from 07.05.2016 untill 26.06.2016

74. Clause 17 of the Charterparty asserts that in the case of “loss of time from deficiency

and/or default and/or strike of officers or ratings… or detention by Port State control or other

competent authority for Vessel deficiencies… or by any similar cause preventing the full

working of the Vessel”, the payment of hire shall cease.102 Admittedly, in asserting that the

Vessel would be off-hire under the operative of Clause 17, the Charterers are to elucidate three

reasons:103

75. First, that the Vessel has been prevented from fully working for one of the causes listed

in the Clause 17,104 which in this Case arises from the“detention by Port State control or other

100 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), P.361 101 Moot Scenario, Rider Clause, P.5. 102 NYPE 2015, Clause 17. 103 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para.25.6, P.442. 104 Ibid.


22

competent authority for Vessel deficiencies”,105 reflected through the order to quarantine the

Vessel under the authorization of Wahanda’s Port State Control.106

76. Second, that the full working of the Vessel have been prevented.107 The Charterers

submit that as a result of the quarantine ordered by the Wahanda’s Port State Control, the

Vessel have been prevented from fully working on 07.05.206 up to 26.06.2016.108

77. If nevertheless this Tribunal would not be satisfied with the latter, the Charterers

submits that the operative clause “or by any similar cause preventing the full working of the

Vessel” would also extend to legal or administrative action by a port or other lawful authority

properly or reasonably pursuant to the (suspected) ineficiency or incapacity of the vessel or her

crew.109 Hence, the decision of Wahanda’s Port State Control to having Vessel be quarantined

after the findings of numbers of crew which have been carrying such diseases110 would fell into

the ambit of “by any similar cause preventing the full working of the Vessel”.

78. Third, there has been loss of time as to the occurence of such events.111 Loss of time is

to be understood as interruption or delay in the performance of the service immediately

required.112 Accordingly,the discharging of the cargo in Wahanda was not yet to began from

the moment the Vessel was berthed on 07.05 untill 26.06, where it finally obtain the free

pratique and was finally proceed to discharged the cargo.113 Therefore, such period would

amount to ‘loss of time’.

B. The off hire would not be caused by the Charterer’s fault

105 NYPE 2015, Clause 17. 106 Moot Scenario, First Email of 11 May 206, P.24. 107 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para.25.6, P.442. 108 Moot Scenario, Email of 7 May 2016, P.25; Procedural Order No.2, para.7, P.81. 109 Andre & Cie S.A. .v. Orient Shipping (Rotterdam) B.V. (“The Laconian Confidence”) [1997] 1 Lloyd’s Rep.

139, P.151; Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para 25.39.P.450. 110 Moot Scenario, First Email of 11 May 2016, P.24. 111 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para 25.6, P.442. 112 Ibid., para 25.55, P.454. 113 Moot Scenario, Email of 7 May 2016, P.25; Procedural Order No.2, para.7, P.81.


23

79. The Charterers may not rely on an off-hire clause only if there had been breach of an

express or implied term of the contract properly caused by them which resulted into the loss of

time,114 or if the Charterers was to properly responsible by ommiting to a breach.115

80. Accordingly, a breach of an express or implied term of the contract on the narrower

position would means that the working of the Vessel has been prevented by something which,

under the Charterparty, was the Charterers’ duty to supply.116 In the Case at hand, the

Charterers had accordingly complied with all of their required obligations “to Provide” under

Clause 7 of the Charteparty.

81. If nevertheless this Tribunal would find that the Charterers are ommitting to the fact

that spreading of ebola in the West Coast would have been properly known by them,117 the

Charterers accordingly submit that fault which prevail its off hire claim would only refers to

those which causally connected to the time thereby lost118 which would not be the case here

since the fact of the dissemination of the ebola among the crew was not properly known right

until the Wahanda’s Port Control finally declared so and subsequently took the Vessel to be

quarantined.119 Therefore, the off-hire was not been properly caused by Charterers’ fault.

C. In any event, Charterers is entitled to recover the overpaid hire

82. Subject to Clause 20 of the Charterparty: “should the Vessel be lost, money paid in

advance and not earned (reckoning from the date of loss or being last heard of) shall be

returned to the Charterers at once.”120

83. Accordingly, in the occurence of an off-hire, the Charterers are entitled to recover the

unearned hire on the ground that the consideration for the unearned hire has wholly failed under

114 Board of Trade v. Temperley (1927) 27 Ll.L.Rep. 230, P.232. 115 SIG Berdesen DY and Co. v. Mobile Shipping (“The Berge Sund”) [1993] 2 Lloyd’s Rep. 453, P.462. 116 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para 25.49, P.452. 117 Moot Scenario, News of 18 and 21 April 2016, P.22-3. 118 SIG Berdesen DY and Co. v. Mobile Shipping (“The Berge Sund”) [1993] 2 Lloyd’s Rep. 453, P.462. 119 Moot Scenario, First Email of 11 May 2016, P.24. 120 NYPE 2015,Clause 20.


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the occurence of Clause 20.121 Furthermore, if the Owners argues that hire is not recoverable

for the fact that it has been paid in advance, the operative of Clause 20 asserts that hire in

advance is a ‘conditional’ which would means no more than that the payment is not final since

under the contract there is an obligation, express or implied, to repay to the Charterers any part

of the hire payment which has not been earned,122 and give rise to contractual debt in relevant

circumstances by the Owners to the Charterers.123 Therefore, the Charterers are entitled to

recover those overpaid hire, under the provision of Clause 20, for that the hire of the Vessel

which has been paid in advance, in the period where it was been off-hire, was deemed to be

failed.

D. Alternatively, the Owners are liable to damages arises out of the off hire

84. Alternatively, if this Tribunal found that the Charterers would not be able to recover

the overpaid hire under the terms of Clause 20 of the Charterparty, the Charterers submit that

an off-hire which arises out of the breach would in law be entitled to damages.124 Accordingly,

an off- hire clause would not cut down any right that the charterers might have to claim

damages from the Owners if an off hire event has been caused by the Owners’ breach of

charter.125 In the matter at hand, the Charterers submit that the Owners bears with the obligation

to “maintain the Vessel’s class and keep her in a thoroughly efficient state in hull, machinery

and equipment for and during the service”126 and that in the occurence of an off-hire “the

payment of hire and overtime, if any, shall cease for the time thereby lost.”127 Therefore,

121 Stewart v. Van Ommeren [1918] 2 K.B. 560, P.564; Pan Ocean Co. Ltd. v. Creditcorp Ltd. (The “Trident

Beauty”) [1994] 1 Lloyd’s Rep. 365 (H.L.), P.368; Petroleum Shipping Ltd. v, Vatis (trading as Kronos

Management) (“The Riza and The Sun”) [1997] 2 Lloyd’s Rep. 314, P.320-1. 122 Pan Ocean Co. Ltd. v. Creditcorp Ltd. (The “Trident Beauty”) [1994] 1 Lloyd’s Rep. 365 (H.L.), P.369. 123 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), P.280. 124 Marbienes Cia. Nav. v. Ferrostaal A.G. (“The Democritos”) [1975] 1 Lloyd’s Rep. 386, P.401. 125 Terence Coghlin et.al, Time Charters, (Informa Routledge, seventh edition, 2014), para 25.74, P.459. 126 NYPE 2015, Section 6 (a). 127 NYPE 2015, Section 17.


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Charterers are entitled to claim damages arises out of the Owners’ breach of the Charterparty

in the occurence of an off-hire.

REQUEST FOR RELIEF

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

DECLARE that this Tribunal has no jurisdiction to hear the merits of the Owners’s claims;

FIND that the Charterers are not liable to the damages arises out of the hull cleaning cost and

the damages arises out of the late re-delivery, and that the Charterers is entitled to set off its

claims.

FIND that the Owners is liable 100% of the Cargo Claim (to be quantified), alternatively

damages in like amount, and liable the overpaid hire or alternatively damages in like amount

for the occurence of off hire; and

AWARD claims for liability to the Charterers, or alternatively damages, and interest on the

amounts claimed.

INDEX OF ABBREVIATIONSINDEX OF AUTHORITIES1. Cases2. Books and Articles3. Legislations

ARGUMENTS ON JURISDICTIONI. This Tribunal has no Jurisdiction over the Present DisputeA. There is a valid Arbitration AgreementB. The Tribunal has the authority to determine its own jurisdictionC. This Tribunal was not properly constituteda. Owners’ appoinment of arbitrators have failed to meet the requirements of the Charterpartyb. In any event, Owners have failed to commenced the proceedings appropriately

D. Alternatively, the Tribunal has the authority to grant Charterers’ claim for damages

ARGUMENTS ON THE MERITS OF CLAIMII. Charterers are Not Liable to the Claims arises out of the Hull CleaningA. Owners were deemed to agree to bear the risk for the hull cleaning cost on its ownB. Alternatively, Charterers would only be liable for the reasonable cost for the hull cleaninga. The reasonable cost for the hull cleaning is USD 33,000.b. The Charterers are not liable for the travel cost for the hull cleaning

III. Charterers are Not Responsible to the Damages arises out of the Late Re-deliveryA. Charterers were only liable for the lost in the period of the overruna. There isn’t any applicable market rate for differences in the period of overrunb. In any event, Charterers have already paid hire for the period of overrun accordingly

B. Charterers are not liable to the loss arises out of the Lost Fixturea. The loss was not under Charterers’ assumed responsibility arises out of the Charterpartyb. Charterers had no particular knowledge of the Next Fixture

C. Alternatively, the maximum period of 4 years was too remoteD. Further in the alternative, Owners must give credit for the profit realized by the Replacement Fixture

IV. Alternatively, Charterers are Entitled to Set Off its Counterclaim Against Any Sums They Found is Liable to the Owners

ARGUMENTS ON THE MERITS OF COUNTER-CLAIMV. Charterers are Entitled to be Indemnfied for the Cargo ClaimA. The Cargo Claim has been validly raisedB. The Cargo Claim was not time-barredC. Owners is liable for 100% of the Cargo ClaimD. Alternatively, Owners is liable for the Cargo Claim in like amountsE. Further in the alternative, Owners is liable for 50% of the Cargo Claim

VI. Charterers are Entitled to Recover the Overpaid Hire for the Vessel has been Off-HireA. The Vessel was off-hire from 07.05.2016 untill 26.06.2016B. The off hire would not be caused by the Charterer’s faultC. In any event, Charterers is entitled to recover the overpaid hireD. Alternatively, the Owners are liable to damages arises out of the off hire

REQUEST FOR RELIEF

Documents

TEAM 18 - Murdoch University · 2020. 11. 24. · Team 18 Memorandum for Respondent vii Peter Aeberli, “Jurisdictional Disputes under the Arbitration Act 1996: A Procedural Route