UNIVERSITAS PADJADJARAN TEAM 23 · 2021. 3. 3. · ananta taqwa universitas padjadjaran team 23 on behalf of cerulean beans and aromas ltd the nineteenth annual international maritime

ANANTA TAQWA

UNIVERSITAS PADJADJARAN

TEAM 23

ON BEHALF OF

CERULEAN BEANS AND

AROMAS LTD

THE NINETEENTH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

CLAIMANT RESPONDENT

MEMORANDUM FOR CLAIMANT

COUNSEL

M IRFAN DIMASYQI PUTRI PARIMARMA YOGI BRATAJAYA

ESTHER CHRISTIE E M

AGAINST

DYNAMIC SHIPPING LLC

AND

THE SHIP ‘MADAM DRAGONFLY’

TEAM 23 MEMORANDUM FOR CLAIMANT

i

TABLE OF CONTENTS

LIST OF ABBREVIATIONS .................................................................................................................... iii

LIST OF AUTHORITIES ......................................................................................................................... iv

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

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE ............................................ 2

A. Clause 27(d) is not applicable ............................................................................................................. 3

B. Alternatively, clause 27(d) shall be set aside ...................................................................................... 4

i. Master Mariner lacks experience in settling the disputed technical matters ..................................... 5

ii. Clause 27 lacks procedural rules for expert determination ............................................................... 5

iii. Resolution of dispute before an expert is a duplication of effort ...................................................... 5

II. RESPONDENT IS NOT PROTECTED BY THE HAGUE-VISBY RULES ................................. 6

A. RESPONDENT has Failed to Provide a Seaworthy Vessel .................................................................... 6

B. RESPONDENT has Breached Article III rule 1 of the Hague-Visby Rules on Seaworthiness .............. 8

C. Alternatively, RESPONDENT Breached Article III Rule 2 on Storage and Care of Goods ................... 8

D. As a Result, RESPONDENT Cannot Rely on the Exceptions Contained within Article IV rule 2 ........ 9

III. RESPONDENT HAS BREACHED THE CHARTERPARTY ....................................................... 9

A. The Deviation to Spectre was Unjustifiable ........................................................................................ 9

B. The Delivery Occured on 31st July ................................................................................................... 10

i. Mere provision of the barcode does not amount to a delivery ........................................................ 11

ii. The discharge to port authority does not amount to delivery .......................................................... 11

iii. The provisions of the barcode does not constitute as symbolic delivery ........................................ 12

iv. RESPONDENT has not divested all of its power to control any physical dealing with the CARGO .. 13

C. RESPONDENT Cannot Rely on the Force Majeure Clause.................................................................. 14


ii

i. The solar flare was a pre-existing condition ................................................................................... 14

ii. The hindrance by the storm has a causal connection with RESPONDENT’s breach of contract ....... 15

IV. RESPONDENT IS LIABLE FOR THE LOSS AND DAMAGES ............................................... 16

A. RESPONDENT is Liable for USD15,750,000 on Account of the Damaged CARGO ........................... 16

B. RESPONDENT’s Liability for the Damaged CARGO is not Limited by The Hague-Visby Rules ........ 16

C. In Any Event, the Limitation of Liability shall be Counted According to the Bags of Coffee......... 17

D. RESPONDENT is Liable for USD9,450,000 for the Replacement Coffee and USD 5,000,000 for the

Settlement Payment.................................................................................................................................. 18

V. CLAIMANT HOLDS A MARITIME EQUITABLE LIEN OVER THE MADAM

DRAGONFLY ............................................................................................................................................. 18

A. RESPONDENT has been Unjustly Enriched......................................................................................... 19

B. CLAIMANT is Subrogated for the Crew’s Maritime Lien for Wages ................................................. 20

VI. CLAIMANT IS NOT LIABLE FOR SUMS CLAIMED BY RESPONDENT ........................... 20

A. CLAIMANT is not Liable for Demurrage ............................................................................................ 20

B. RESPONDENT is not Entitled to Freight .............................................................................................. 21

C. CLAIMANT is not entitled to the cost of repairs to hull ...................................................................... 22

D. CLAIMANT is not Liable for the Agency Fees at the Port of Dillamond ........................................... 24

E. CLAIMANT is not Liable for Agency Fees at the Port of Spectre ....................................................... 24

F. CLAIMANT is not Liable for the Use of Electronic Access Systems at the Port of Dillamond .......... 24

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


iii

LIST OF ABBREVIATIONS

CLAIMANT Cerulean Beans and Aromas ltd.

RESPONDENT Dynamic Shipping LLC

Charterparty The Voyage Charterparty between

Claimant and Respondent

CARGO 70.000 kg Coffee beans

Force Majeure Event An event listed in Clause 17 of the

Charterparty

HVR Hague-Visby Rules 1968

UK Arbitration Act UK Arbitration Act 1996

LMAA Terms 2017 London Maritime Arbitrators Arbitration 2017

Parties Claimant and Respondent

¶ Paragraph


iv

LIST OF AUTHORITIES

Cases

Amies v Stevens, [1795] EngR 38, 1 Str. 128 .............................................................................................. 19

Arnold v Britton [2015] UKSC 36 ............................................................................................................... 30

Asfar v. Blundell [1896] 1 Q.B. 123 ............................................................................................................ 28

Austotel Pty Ltd v Franklins Selfserve Pty Ltd [1989] 16 NSWLR 582....................................................... 17

Badgin Nominees Pty. Ltd. v Oneida Ltd. anor [1998] VSC 188 ................................................................. 9

Bank of Cyprus UK Ltd v Menelaou [2015] UKSC 66 ......................................................................... 25, 26

Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 ............................................... 25, 26

Barker v Corus (UK) plc [2006] 2 W.L.R. 1027 ......................................................................................... 20

Benedetti v Sawiris [2014] AC 938 ............................................................................................................. 25

Bourne v Gatliff [1844] 11 Cl & Fin 45, 70; 8 ER 1019, 1029 ................................................................... 14

British Shipbuilders v VSEL Consortium Plc [1997] 1 Lloyd's Rep. 106. .................................................... 7

Bute (Marquess) v Barclays Bank Ltd [1955] 1 QB 202 ............................................................................. 17

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 ............................................ 17

Channel Tunnel Group v. Balfour Beatty Construction Ltd [1993] A.C. 334 (H.L.).................................... 8

Commonwealth v Verwayen [1990] 170 CLR 394 ...................................................................................... 17

Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All E.R. 540. ...................................................................... 8, 9, 10

CV Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Limited [2007] FCAFC 77 .............. 11, 21

DGT Steel and Cladding Ltd v Cubitt Building & Interiors Ltd [2007] BLR 371 ........................................ 7

Duthie v Hilton [1868] L.R. 4 C.P. 138 ....................................................................................................... 28

E. L. Oldendorff & Co. v. Tradax Export (The Johanna Oldendorff) [1974] A.C. 479 .............................. 27


v

F.C. Bradley & Sons Ltd. v Federal Steam Navigation Co. Ltd. [1927] 27 Ll. L. Rep. 395 ...................... 11

Fairchild v Glenhaven [2003] 1 A.C. 32 ..................................................................................................... 20

Federal Commerce v. Tradax Export (The Maratha Envoy) [1978] A.C. 1 ............................................... 27

Felthouse v Bindley [1862] 11 CB(NS) 869 ................................................................................................ 17

Fiona Trust and Holding Corporation and Others v Privalov and Others [2007] EWCA Civ 20 ............. 10

Fyffes v. Reefer Express (The Kriti Rex) [1996] 2 Lloyd’s Rep. 171 .......................................................... 11

Gard Marine and Energy Limited v. China National Chartering Company Limited and others (Ocean

Victory) [2017] UKSC 35. ................................................................................................................. 29, 30

Gates v City Mutual Association Society Ltd [1986] 160 CLR 1 ................................................................ 23

Gatliffe v. Bourne [1838] 4 Bing. N.C. 314, [1841] 3 M. & G. 643, [1844] 7 M. & G. 850, 11 Cl. & F. 45

.................................................................................................................................................................. 14

Goldman v Thai Airways International Ltd [1983] 1 WLR 1186. .............................................................. 22

Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad [1998]

HCA 65 .................................................................................................................................................... 21

Hadley v Baxendale [1854] 9 Exch. 341 ..................................................................................................... 24

Hilditch Pty Ltd v Dorval Kaiun KK (No 2) [2007] 245 ALR 125 ............................................................. 21

Horabin v British Overseas Airways Corp [1952] 2 Ll LR 450.................................................................. 22

Investment Trust Companies v Revenue and Customs Comrs [2012] STC 1150 ........................................ 25

J. & E. Kish v Charles Taylor, Sons & Co [1912] AC 604 ......................................................................... 13

Jack L. Israel Ltd. v Ocean Dynamic Lines and Ocean Victory Ltd. [1982] 2 Lloyd’s Rep. 88 ................. 24

Jones v Sherwood Computer Services Plc [1992] 1 W.L.R. 277 .................................................................. 7

Kamilla Hans-Peter Eckhoff KG v AC Oerssleff’s EFTF A/B (The "Kamilla") [2006] EWHC 509 (Comm)

.................................................................................................................................................................. 20

Kodros Shipping Corp. v. Empresa Cubana de Fletes (The Evia) (No. 2) [1983] 1 A.C. 736 (H.L.). ....... 29


vi

Kyokuyo Co Ltd v AP Moller – Maersk A/S (t/a Maersk Line) [2017] EWHC 654. ................................... 23

Low v Bouverie [1891] 3 Ch 82 CA ............................................................................................................ 17

Lowe v Lombank [1960] 1 WLR 196 CA ..................................................................................................... 17

Maxine Footwear v Canadian Government Merchant Marine [1959] A.C. 589 ........................................ 21

McFadden v Blue Star Line [1905] 1 KB 697 ....................................................................................... 11, 20

Monarch Steamship Co Ltd v Karlshamms Oljefabriker [1949] AC 196. .................................................. 13

Montedison S.p.A. v. Icroma S.p.A. (The Caspian Sea) [1980] 1 Lloyd’s Rep. 91 ..................................... 28

Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 ........................................................................ 17

MSC Mediterranean Shipping Company S. A. v Glencore International AG [2017] EWCA Civ 365 . 14, 16

National Grid Plc v M25 Group Ltd [1999] 1 E.G.L.R. 65 .......................................................................... 7

Nippon Menkwa Kabushiki Kaisha (Japan Cotton Trading Co Ltd) v Dawson’s Bank Ltd [1935] 51

Lloyd’s Rep 147 PC ................................................................................................................................. 17

Norwich Union Life Assurance Society v P&O Property Holdings Ltd [1993] 1 E.G.L.R. 164 ................... 7

Owners of CARGO lately on board the River Gurara v. Nigerian National Shipping Line Ltd (The River

Gurara) [1997] 4 All E.R. 498. ............................................................................................................... 22

Pavey & Matthews Pty Ltd v Paul [1987] HCA 5 ....................................................................................... 26

President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278 ................................................. 11

Proctor, Garratt, Marston v Oakwin Steamship Co [1926] 1 KB 224........................................................ 15

Re Craven’s Estate [1937] Ch 423 .............................................................................................................. 16

Reardon Smith Line v Black Sea and Baltic General Insurance [1939] AC 562 ........................................ 12

Rio Tinto v Seed Shipping [1926] 24 LlL Rep 316 ...................................................................................... 12

Sang Stone Hamoon Jonoub Co Ltd v. Baoyue Shipping Co Ltd (Bao Yue) [2015] EWHC 2288 (Comm).

.................................................................................................................................................................. 15

Sellers Fabrics Pty Ltd v Hapag-Lloyd AG [1998] NSWSC 474 ............................................................... 22


vii

Sempra Metals v HMRC [2007] UKHL 34 ................................................................................................. 26

Shipping Corporation of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd [1980] HCA 51 ..................... 21

Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529 CA .................... 17

Smith Hogg and Co. Ltd. v Black Sea and Baltic General Insurance Co. Ltd. [1940] A.C 997. ................ 20

SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1988] 92 FLR 231 ....................................................... 22

Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s rep 441. .................................... 9, 10

The "Berge Sisar" [2001] 1 LLR 663. ......................................................................................................... 14

The A.P.J. Priti [1987] 2 Lloyd’s Rep. 37 ................................................................................................... 29

The Eastern City [1957] 2 Lloyd’s Rep 153 ................................................................................................ 29

The Empire Jamaica [1957] AC 386 ........................................................................................................... 19

The Evaggelos Th. [1971] 2 Lloyd’s Rep. 200 ............................................................................................ 29

The Heron II [1969] 1 AC 350 .................................................................................................................... 24

The Leonidas D [1985] 2 All ER 796 .......................................................................................................... 17

The Ocean Victory [2015] EWCA Civ 16 ................................................................................................... 30

The Pegase [1981] 1 Lloyd’s Rep. 175 ....................................................................................................... 24

The Reborn [2009] 2 Lloyd’s Rep. 639 ....................................................................................................... 29

The River Gurara [1997] 4 All E.R. 498 ..................................................................................................... 23

The Thomas Cook Group Ltd v Air Malta Co Ltd [1997] 2 Lloyd’s Rep 399 ............................................ 22

Thor Navigation Inc v Ingosstrakh Insurance Company Ltd [2005] EWHC 19 (Comm) ........................... 17

Trade and Transport Incorporated v Iino Kaiun Kaisha Ltd (The Angelia) [1973] 1 WLR 210 ............... 18

Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48 ................................. 24

Transoceanic Petroleum Carriers v. Cook Industries Inc. [1981] 2 Lloyd’s Rep. 272 ........................ 29, 30

Turner, Not & Co v Lord mayor of Bristol [1928] 31 Ll LR 359................................................................ 15


viii

Union of India v NV Reederij Amsterdam [1963] 2 Lloyd’s Rep 223 ......................................................... 11

Waltons Stores (Interstate) Ltd v Maher [1988] 164 CLR 387 ................................................................... 17

Woodhouse AC Israel Cocoa Ltd v Nigerian Produce Marketing Co Ltd [1972] AC 741 ......................... 17

Statutes

Admiralty Act 1988 ...................................................................................................................................... 25

Australian Marine Order 27 (Safety of Navigation and Radio Equipment) 2016. ................................................ 11

International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968 .. 11,

20, 21, 22

London Maritime Arbitrators Association Terms 2017 ................................................................................. 6

New York Produce Exchange 1993 ............................................................................................................. 28

UK Arbitration Act 1996 ..................................................................................................................... 3, 6, 10

Other Authorities

André J. Faurès, Improving Procedures for Expert Testimony, in Planning Efficient Arbitration

Proceedings: Law Applicable in International Arbitration XVII 154–160 (Albert Jan Van den Berg ed.,

1994). ....................................................................................................................................................... 11

Andrew Burrows QC, The Law of Restitution, 3rd ed (2011) ..................................................................... 28

Carver on Bills of Lading, 3rd ed ................................................................................................................ 24

Charles Taylor, Guide to Hull Claim, (Witherby & Co Ltd, London, 2003) .............................................. 32

Coughlin, T., Baker, A.W., Kenny, J., Kimball, J.D., Time Charters, informa, 6th ed, (Londo: 2008) 32, 33

Dicey, Morris & Collins on the Conflict of Laws (Lord Collins of Mapesbury et al eds) 15th ed (Sweet &

Maxwell, 2012) ........................................................................................................................................ 11

Erasmus University Repository, Carrier’s Remedies When Consignee Fails to Take Delivery ................. 34

Gard AS, Guidance to Masters 2nd edition, (Norway : Colorprint, 2006). .................................................. 10

Jui-Sheng Chou, Expert Systems with Applications, 40 El Sevier (2013) ................................................... 12


ix

Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014) 9, 12, 13, 19, 21,

22, 24

Lars Gorton, Nordic Law in the Early 21st Century – Maritime Law, (Stockholm Institute for

Scandanavian Law, 2010) ........................................................................................................................ 33

Merriem Webster Dictionary ....................................................................................................................... 10

Pierre A Karrer, The Law Applicable to The Arbitration Agreement, (2014) 26 SAcLJ 849 ..................... 11

Richard Aikens, Richard Lord and Michael Bools, Bills of Lading, 2nd ed (New York:Routledge, 2016) 23

Robert Hunt, The Law Relating to Expert Determination, April 2008 ....................................................... 12

Rupert Harris, Jonathan Andrews and Gary Field, Charterer’s Liability, (London: Steamship Insurance

Management Services Limited, 2005) ..................................................................................................... 31

Tetley William, Marine Cargo Claims, third edition, International Shipping Publications BLAIS: 1988 . 17


1

STATEMENT OF FACTS

PERFORMANCE OF THE CHARTERPARTY

1. Cerulean Beans and Aromas LTD (CLAIMANT) is a coffee bean supplier based in Cerulean. Dynamic

Shipping LLC (RESPONDENT) is the shipowner of the vessel Madam Dragonfly (VESSEL), a small

container ship. Both entered into a voyage Charterparty dated 22 July 2017 for the urgent delivery of

rare coffee beans (CARGO) from Cerulean to Dillamond. Box 9 specifically stated that discharge must

be by 7pm 28 July 2017.

2. On 24 July 2017 the VESSEL had finished loading and was on its way to the Port of Dillamond, when

a solar flare knocked out its communication and navigation systems. This caused the VESSEL to

deviate from the agreed route and make an intermediate stop at the Port of Spectre.

3. On 29 July 2017 the VESSEL was struck by a “once in a lifetime” storm that forced the VESSEL to wait

outside the Port of Dillamond. The storm also caused damage to the hull.

4. When the CARGO was finally delivered on the 31st of July 2017, 3 out of the 4 containers were found

to be completely water damaged. This led CLAIMANT to urgently source other coffee beans and make

a settlement payment towards its client.

THE MARITIME EQUITABLE LIEN

5. On 19 July 2017, prior to the finalisation of the Charterparty RESPONDENT requested USD100,000

from CLAIMANT to be put in a separate bank account to pay for crews’ wages as the crew will not sail

before this occurs. CLAIMANT complied given the urgency of the shipment.

6. On 5 August 2017 The Dillamond Weekend Times reported that the crew of the VESSEL employed by

RESPONDENT were walking away from the company after reports that they had not been paid their

wages since the first week of June. Also, RESPONDENT has not repaid the USD100,000 within the

separate bank account.


2

7. CLAIMANT has submitted a claim for a maritime equitable lien over the VESSEL.

ARBITRATION

8. CLAIMANT gave notice towards RESPONDENT 11 August 2017 to refer the dispute to arbitration,

claiming USD30,200,000 for damages in respect of the damaged CARGO, the replacement coffee

payment, and the settlement payment. RESPONDENT denies any liability and counterclaimed for

freight, demurrage, and other damages.

ARGUMENTS ON JURISDICTION

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE

9. The parties concluded the contract for the carriage of rare, high quality grade green coffee from

Cerulean to Dillamond.1 After the CARGO was received by CLAIMANT, it was found that most of the

CARGO was water damaged.2 Subsequently, CLAIMANT initiated the arbitration proceedings to

respectfully request the arbitral tribunal to grant the damage claim.3 However, RESPONDENT has

raised a challenge to the jurisdiction of the tribunal to decide the respective claim.4

10. The parties agreed that LMAA terms 2017 governs the procedure of the arbitration proceedings.5

Further, as England is the seat of the arbitration,6 the lex arbitri is UK Arbitration Act.7 Pursuant to

section 30 of UK Arbitration Act,8 the tribunal has power to rule on its own jurisdiction.

11. The arbitration clause of the Charterparty contains a number of tiers of a dispute resolution

procedure.9 The first tier, under clause 27(d) involves a resolution procedure by an Independent

1 Moot Scenario, p. 2, 3. 2 Moot scenario, p. 25, 27, 30. 3 Moot Scenario, p. 34. 4 Points of Defence, ¶1-2, Moot Scenario, p. 40. 5 Charterparty, Cl. 27(a), Moot Scenario, p. 12. 6 Charterparty, Cl. 27(a), Moot Scenario, p. 12. 7 London Maritime Arbitrators Association Terms 2017, Sec. 6(a). 8 UK Arbitration Act 1996, Sec. 30


3

Master Mariner,10 and the second tier, pursuant to clause 27(a) involves a resolution through

arbitration.11

12. Here, the dispute must directly be referred to this arbitral tribunal, since Clause 27(d) is not applicable

(A). Alternatively, clause 27(d) shall be set aside (B).

A. Clause 27(d) is not applicable

13. RESPONDENT alleged that the inquiries lodged to Simon Webster constitutes as disputes as to technical

matters and should be referred to expert determination.12 This is false, since the technical matters in

question are not within the knowledge of a Master Mariner.

14. An expert can only make decisions within its jurisdiction depending on the construction of the terms

of the contract between the parties.13 On the proper construction of the Charterparty, the parties

intended to refer to a Master Mariner disputes associating with technical aspects of the performance

of the CHARTERPARTY, such as the vessel’s route, loading of cargo, storage conditions, and other

matters which can reasonably be considered to be within his expert technical knowledge.14

15. Given that no specific background nor specialisation of the appointed expert are provided under

Clause 27(d), hence, it is reasonable to prejudge the knowledge of the appointed master mariner in

accordance with any other ordinary master mariner’s knowledge: as a captain of a merchant ship,15 an

ordinary Master Mariner is obliged to master only the basic aspects of the vessel he is in charge of,

starting from the commencement of the voyage until it is completed.16

9 Charterparty, Cl. 27(e), Moot Scenario, p. 12. 10 Charterparty, Cl. 27(d), Moot Scenario, p. 12. 11 Charterparty, Cl. 27(a), Moot Scenario, p. 12. 12 Charterparty, Cl. 27(d), Moot Scenario, p. 12. 13 DGT Steel and Cladding Ltd v Cubitt Building & Interiors Ltd [2007] BLR 371; Jones v Sherwood Computer Services

Plc [1992] 1 W.L.R. 277; Norwich Union Life Assurance Society v P&O Property Holdings Ltd [1993] 1 E.G.L.R.

164; National Grid Plc v M25 Group Ltd [1999] 1 E.G.L.R. 65; British Shipbuilders v VSEL Consortium Plc [1997] 1 Lloyd's

Rep. 106. 14 Charterparty, Cl. 27(g), Moot Scenario, p. 12. 15 Merriem Webster Dictionary 16 Gard AS, Guidance to Masters 2nd edition, (Norway : Colorprint, 2006).


4

16. Presently, the relevant technical matters within this dispute are those present within the expert opinion

by Simon Webster,17 which are not within the scope of a Master Mariner’s knowledge. This is such

since a degree of specialisation, related to the condition of waterproof sealant on the CARGO, is

required.18 Consequently, this would elevate the presented inquiry to another level of complexity,

which could not be simply resolved by an ordinary master mariner. Therefore, the disputed technical

matters are not within the knowledge of the master mariner and reference should not be made to

clause 27(d).

B. Alternatively, clause 27(d) shall be set aside

17. CLAIMANT acknowledges that the Charterparty stipulates that arbitration proceedings may not be

commenced unless an expert determination has been conducted.19 However, the expert determination

can be set aside. In Channel Tunnel Group v Balfour Beatty Construction Ltd,20 it was held that those

who make agreements for the resolution of disputes must show good reasons to depart from them and

hence setting aside provided procedures in an agreement is permitted by law.21 What constitutes as a

“good reason” is not absolute and heavily depends on the relevant circumstances of each case.22 Case

laws have evidently considered at least three reasons as a basis of departing from an expert

determination agreement, i.e. the expert who had been appointed did not appear to have any

experience in the areas of dispute, 23 the absence of elaborated rules or principles pursuant to which

the expert was to approach or determine the dispute, 24 and the resolution before an expert is a

duplicate of effort.25

17 Moot Scenario, p. 43. 18 Moot Scenario, p. 2. 19 Charterparty, Cl. 27(e), Moot scenario, p 12; 20 Channel Tunnel Group v. Balfour Beatty Construction Ltd [1993] A.C. 334 (H.L.). 21 Dicey, Morris & Collins on the Conflict of Laws (Lord Collins of Mapesbury et al eds) 15th Ed (Sweet & Maxwell, 2012) at

831, para 16-004; Pierre A Karrer, The Law Applicable to The Arbitration Agreement, (2014) 26 SAcLJ 849, at 863. 22 André J. Faurès, Improving Procedures for Expert Testimony, in Planning Efficient Arbitration Proceedings: Law Applicable

in International Arbitration XVII 154–160 (Albert Jan Van den Berg ed., 1994). 23 Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All E.R. 540. 24 Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All E.R. 540. 25 Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s rep 441.


5

i. A Master Mariner lacks experience in settling the disputed technical matters

18. In commencing a successful expert determination it is compulsory to consider the experience of the

expert before appointment.26 This is to avoid erroneous determination and unsatisfactory result. in

Cott UK Ltd v FE Barber Ltd,27 the expert determination was set aside since it was held that an expert

was inapt to resolve the disputed breach of contractual obligation.

19. As previously elaborated in [8] – [10], a Master Mariner does not possess the required knowledge to

resolve the disputed technical matter. It follows that the incompetence of a Master Mariner would

render the determination prone to error.

ii. Clause 27 lacks procedural rules for expert determination

20. Expert determination clauses operate on a contractual basis and is not backed up by any statute or

procedural rules. Consequently, its practice is highly dependent on a clear elaboration of procedural

rules in the contract. The required procedural rules in ensuring its practicability are, inter alia, who

has to pay the costs of an expert, the extent to which an expert was entitled to call for documents, and

as to whether or not the other party was allowed to inspect them.28 Clause 27 of the Charterparty did

not lay down, nor incorporate any rules or principles on how the expert was to approach and

determine the dispute.29 In light of these facts, it would be impractical to refer the dispute to expert

determination.

iii. Resolution of dispute before an expert is a duplication of effort

21. An effective dispute resolution mechanism is essential in a commercial relationship.30 Accordingly,

the authority in Thames Valley Power Ltd v Total Gas & Power Ltd advises parties to avoid

26 Jui-Sheng Chou, Expert Systems with Applications, 40 El Sevier (2013) 2263, at 2264; Robert Hunt, The Law Relating to

Expert Determination, April 2008, at 20; Badgin Nominees Pty. Ltd. v Oneida Ltd. anor [1998] VSC 188 – 18 Dec 1998 –

unreported. 27 Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All E.R. 540. 28 Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All E.R. 540. 29 Charterparty, Cl. 27, Moot Scenario, p. 12. 30 Fiona Trust and Holding Corporation and Others v Privalov and Others [2007] EWCA Civ 20..


6

duplication of effort in resolving their dispute,31 since the dispute has been settled in court, a stay of

proceedings was refused as there was no chance of adding new evidence for the dispute and

conducting another proceeding before a chosen expert will represent a complete duplication of time,

effort, and expense.32

22. Pursuant to section 37 of the UK Arbitration Act, it is within the arbitral tribunal’s power to appoint

an expert to assist them in resolving disputes.33 The present arbitral tribunal has appointed Simon

Webster, a maritime engineer specialising in safe carriage of rare cargo, to provide insight on what

caused damage to the CARGO.34 The competency of Simon Webster is unquestionable, proven by the

tribunal’s satisfaction to his curriculum vitae. His occupation as a maritime engineer further indicates

that he possesses the technical knowledge and experience on the special condition of the CARGO

shipped, making the resolution provided by him sufficient.35

23. Hence, it follows that referring the disputed technical matters to a master mariner will not add any

new evidence since it has been answered by Simon Webster. Any result from another expert

determination would be unnecessary. Thus, conducting another expert determination will only

represent a complete duplication of time, effort, and expense.

ARGUMENTS ON THE MERITS OF THE CLAIM

II. RESPONDENT IS NOT PROTECTED BY THE HAGUE-VISBY RULES

A. RESPONDENT has Failed to Provide a Seaworthy Vessel

31 Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s rep 441; Cott UK Ltd. v. FE Barber Ltd. [1997] 3 All

E.R. 540. 32 Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s rep 441 ¶ 55; Cott UK Ltd. v. FE Barber Ltd. [1997] 3

All E.R. 540. 33 UK Arbitration Act 1996, Sec. 37. 34 Moot Scenario, p. 43. 35 Moot Scenario, p. 43.


7

24. Article III, rule 1 of the HVR provides an overriding obligation on a carrier to exercise due diligence

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

supply a vessel.36 The extent of “due diligence” is one of fact depending on numerous factors, inter

alia, the state of knowledge at the beginning of the voyage to prepare the vessel to encounter

foreseeable perils37 and provisions of regulatory codes,38 with lack of due diligence amounting to

negligence.39 RESPONDENT did not exercise due diligence. This is evidenced by two reasons.

25. First, the VESSEL failed to comply with the relevant regulatory codes. The regulatory codes applicable

within this case are provisions within the Australian Navigation Act, as provided by Clause 15 of the

Charterparty. The Australia Navigation Act gives power to the Australian Maritime Safety Authority

(AMSA) to issue marine orders. Marines Order 27 provides that the International Convention on

Safety of Life at Sea (SOLAS) is to apply. 40 Regulation 19 annex 3 and 27 of the SOLAS Convention

provides that a vessel must be equipped with back-up arrangements including hardcopy maps of the

current voyage. Since the VESSEL did not carry the hardcopy maps to the Port of Dillamond, the

VESSEL did not comply with Regulation 19 of SOLAS Convention.

26. Second, before the commencement of the voyage, The Cerulean Mail published an article warning of

upcoming solar flares and advising those in the Cerulean region to provide back-up arrangements.41

Still, RESPONDENT fails to prepare the VESSEL to encounter the foreseeable solar flare by not

equipping the VESSEL with a required hard copy map, and simultaneously not updating the VESSEL’s

navigational systems, leading to unnecessary 13 hours of system reconnection.

36 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968, Article III rule 1 37 CV Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Limited [2007] FCAFC 77; Fyffes v. Reefer Express (The

Kriti Rex) [1996] 2 Lloyd’s Rep. 171; F.C. Bradley & Sons Ltd. v Federal Steam Navigation Co. Ltd. [1927] 27 Ll. L. Rep.

395; President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278; McFadden v Blue Star Line [1905] 1 KB 697 38 F.C. Bradley & Sons Ltd. v Federal Steam Navigation Co. Ltd. [1927] 27 Ll. L. Rep. 395; The Amstelslot [1963] 2 Lloyd’s

Rep. 223, 230. 39 Union of India v NV Reederij Amsterdam [1963] 2 Lloyd’s Rep 223 at 235 per Lord Devlin; Ankergracht [2007] FCAFC 77

at 403-404 [224]. 40 Australian Marine Order 27 (Safety of Navigation and Radio Equipment) 2016. 41 Moot Scenario, p. 35.


8

27. Therefore, RESPONDENT has failed to provide a seaworthy VESSEL since it did not comply with the

relevant regulatory codes, nor was it apt to withstand the foreseeable perils of the voyage.

B. RESPONDENT has Breached Article III rule 1 of the Hague-Visby Rules on Seaworthiness

28. As previously elaborated in [16] – [19], RESPONDENT has breached Article III rule 1 of HVR by

failing to exercise due diligence and providing an unseaworthy vessel. However, before establishing a

breach of Article III rule 1, it must be asked if the loss could not have arisen but for that

unseaworthiness.42 A breach of the seaworthiness obligation only has to be a cause of the loss or

damage to enable the cargo interests to recover.43 In the present case, the unseaworthiness not only

caused the deviation, but also lead to the damage suffered by the CARGO.

29. The “but for” is a necessary method for determining causation of damage since damage is rarely

caused by an event if it would have happened nonetheless.44 Applying this method, had RESPONDENT

not breached Article III rule 1 and provided a VESSEL equipped with the proper hardcopy maps to the

Port of Dillamond, she would not have needed to deviate to Spectre once her systems were knocked

out by the solar flare.45

30. Furthermore, but for the deviation’s occurrence, the VESSEL would not have been struck by the storm

at the Port of Dillamond and would lead to the delivery being completed on time, further preventing

the CARGO from being damaged by the subsequent heavy rain and flooding at the Port of Dillamond.

For these reasons, RESPONDENT has breached Article III rule 1 of the HVR.

C. Alternatively, RESPONDENT Breached Article III Rule 2 on Storage and Care of Goods

42 Smith Hogg and Co. Ltd. v Black Sea and Baltic General Insurance Co. Ltd. [1940] A.C 997. 43 Kamilla Hans-Peter Eckhoff KG v AC Oerssleff’s EFTF A/B (The "Kamilla") [2006] EWHC 509 (Comm); McFadden v Blue

Star Line [1905] 1 K.B. 697 703 44 Fairchild v Glenhaven [2003] 1 A.C. 32; Barker v Corus (UK) plc [2006] 2 W.L.R. 1027; See also Richard Aikens, Richard

Lord and Michael Bools, Bills of Lading, 2nd ed (New York: Routledge, 2016), para.10.147. 45 Moot Scenario, p. 18.


9

31. Article III rule 2 provides that the carrier shall properly and carefully load, handle, stow, carry, keep,

care for and discharge the goods carried.46 This obligation includes the duty of proceeding on the

contractual voyage with due dispatch where the cargo is perishable.47 The waterproof sealant applied

on the CARGO only lasts for five days, upon which the CARGO would be under the threat of water

damage, making it perishable. This imposes the necessity for due dispatch. Hence, RESPONDENT’s

delaying of the voyage, despite the perishable nature of the CARGO, amounts to a breach of Article III

rule 2.

D. As a Result, RESPONDENT Cannot Rely on the Exceptions Contained within Article IV rule 2

32. Article IV rule 2 provides a list of perils for which a carrier will not be liable if loss or damage results.

However, where there is a causative breach of the “overriding” Article III rule 1 and 2 obligation, the

carrier cannot rely on the provisions of Article IV rule 2.48 Since RESPONDENT has breached Article

III rule 1 and 2, it cannot rely on the exceptions listed in Article IV.

III. RESPONDENT HAS BREACHED THE CHARTERPARTY

A. The Deviation to Spectre was Unjustifiable

33. Under common law, the vessel has duty, at any rate when sailing upon an ocean voyage from one port

to another, to take the usual route between those two ports or a specific route be prescribed by the

charterparty or bill of lading.49 Thus, when a vessel voluntarily departs from the prescribed route, it is

deemed as a deviation.50

46 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968, Article III rule 2. 47 Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014), at para 85.117; See also Carver on

Bills of Lading, 3rd ed, para. 9.149. 48 Maxine Footwear v Canadian Government Merchant Marine [1959] A.C. 589; Shipping Corporation of India Ltd v Gamlen

Chemical Co A/Asia Pty Ltd [1980] HCA 51; Great China Metal Industries Co Ltd v Malaysian International Shipping

Corporation Berhad [1998] HCA 65; Ankergracht [2007] FCAFC 77; Hilditch Pty Ltd v Dorval Kaiun KK (No 2) [2007] 245

ALR 125. 49 Reardon Smith Line v Black Sea and Baltic General Insurance [1939] AC 562, p. 584. 50 Rio Tinto v Seed Shipping [1926] 24 LlL Rep 316.


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34. RESPONDENT was instructed to take the most direct route to Dillamond to ensure the punctuality of the

delivery.51 The VESSEL, however, deliberately went to Spectre due to its preventable malfunction of

its navigational system. This deviation would not have occurred had RESPONDENT exercised due

diligence by equipping the VESSEL with a hardcopy map to encounter the occurring solar flare which

had been strong enough to disrupt radio and satellite communications.

35. The deliberate change of route was not justifiable as it was caused by the VESSEL’s unseaworthiness.

Contending that the deviation was made to remedy the unseaworthiness would be false because of

two reasons. First, the deviation was caused by the failure of RESPONDENT to ensure the

seaworthiness of its VESSEL hence justifying the deviation would be to permit RESPONDENT to take

advantage of his own wrong.52 Second, a deviation to make remedy of a vessel’s unseaworthiness can

only be deemed as justifiable when the cause of the unseaworthiness was unknown to the carrier at

the time of the sailing and it could not be reasonably mitigated.53

36. Conclusively, the change of route to Spectre shall be deemed as an unjustifiable deviation.

B. The Delivery Occured on 31st July

37. On 29 July 2017, RESPONDENT discharged the CARGO in Dillamond.54 This was done albeit the

absence of CLAIMANT to be present at the time of the discharge due to heavy congestion at the port

subsequent to the massive storm. Despite an absence of express provision in the Charterparty and

without the consent of CLAIMANT, RESPONDENT issued a barcode for entry and further insists that this

operation constituted as the delivery of the CARGO.55 In the view of the law, this conduct does not

discharge RESPONDENT’s obligation of delivery since the issuance of the barcode (i) and discharge to

port authority (ii) do not constitute as delivery, the issuance of the barcode is not a symbolic delivery

51 Moot Scenario, p. 2, 18, 37. 52 J. & E. Kish v Charles Taylor, Sons & Co [1912] AC 604. 53 Monarch Steamship Co Ltd v Karlshamms Oljefabriker [1949] AC 196. 54 Moot Scenario, p. 22, 23. 55 Moot Scenario, p. 23.


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(iii), and RESPONDENT has not divested all of its power to control any physical dealing of the goods

(iv). Claimant is not estopped from asserting that Respondent’s delivery by barcode is invalid (v).

i. Mere provision of the barcode does not amount to a delivery

38. A delivery must be made in accordance with the form of delivery the contract contemplated. 56

Whether or not delivery of a means of access to goods constitutes the delivery required by such a

contract must depend on the context and terms of the contract. In the event of the lack of such context

and terms, delivery usually means actual delivery, not delivery of a means of access.57 Provision of

PIN codes only serves as an instruction to the terminal to permit delivery rather than constituting

delivery as required and therefore would breach the carrier’s obligation to undertake delivery.

39. Applicably, mere issuance of the barcode as an access authority pass would not be sufficient to

constitute delivery. The barcode provided by RESPONDENT is therefore insufficient to constitute

delivery.

ii. The discharge to port authority does not amount to delivery

40. Discharge and delivery are distinct aspects of the international carriage of goods.58 Delivery is the

voluntary transfer of the goods to the consignee or a designated agent of the consignee,59 and so the

obligation cannot be discharged by merely discharging the cargo from the vessel and leaving them on

the dockside.60 Although discharging the cargo to the port authority may sufficiently constitute

delivery, the carrier must first give reasonable time for the consignee to take the goods before the

discharge.61

56 MSC Mediterranean Shipping Company S. A. v Glencore International AG [2017] EWCA Civ 365, at 35 (Christopher

Clarke). 57 MSC Mediterranean Shipping Company S.A. v Glencore International AG [2017] EWCA Civ 365, at 31 (Christopher

Clarke). 58 The "Berge Sisar" [2001] 1 LLR 663. 59 Tetley William, Marine CARGO Claims, 3rd edition, (International Shipping Publications BLAIS, 1988) at 569. 60 Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014), at para 10.4; Gatliffe v. Bourne

[1838] 4 Bing. N.C. 314, [1841] 3 M. & G. 643, [1844] 7 M. & G. 850, 11 Cl. & F. 45 61 Bourne v Gatliff [1844] 11 Cl & Fin 45, 70; 8 ER 1019, 1029 (Lord Lyndhurst LC),


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41. There is no general rule which dictates what is considered as reasonable time as it is dependent on

specific facts of each case.62 In the instant case, there are mainly two reasons why the discharge of the

goods to the port authority fails to be justified as delivery.

42. First, RESPONDENT did not give reasonable time for CLAIMANT to take personal delivery of the goods.

At the time of the discharge, Dillamond was occupied with constant heavy rain, floods, and

congestion following the closure of the port.63 Nevertheless, RESPONDENT gave notification only two

hours before the discharge and would only wait for five hours for CLAIMANT to take the delivery

before discharging the goods to the port authority.64 Seven hours is by no means enough for

CLAIMANT to get to the port considering there was heavy congestion at the port. CLAIMANT could

finally collect the CARGO forty-five hours after RESPONDENT arrived, indicating that the period of the

congestion is disproportionate compared to the time RESPONDENT gave.

43. Second, the carrier did not discharge the goods in good faith. Hastily discharge to the port authority

was justified when the carrier did so in order to protect the consignee from higher amount of

demurrage which have accrued with the expiry of laytime.65 Contrarily, there is no facts that indicate

RESPONDENT’s intention to minimize the amount of demurrage.

44. In light of the two reasons, the discharge to port authority does not amount to delivery.

iii. The provisions of the barcode does not constitute as symbolic delivery

45. An argument attempting to perceive the issuance of the barcode as symbolic delivery would be

invalid. A symbolic delivery is when a sort of metonym of the cargo is given to the receiver.66

62 Turner, Not & Co v Lord mayor of Bristol [1928] 31 Ll LR 359; Proctor, Garratt, Marston v Oakwin Steamship Co [1926] 1

KB 224 63 Moot Scenario, p. 36 64 Moot Scenario, p. 22, 23 65 Sang Stone Hamoon Jonoub Co Ltd v. Baoyue Shipping Co Ltd (Bao Yue) [2015] EWHC 2288 (Comm). 66 MSC Mediterranean Shipping Company S. A. v Glencore International AG [2017] EWCA Civ 365, at 25.


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Symbolic delivery suffices only when the parties agree that delivery would take place when the

symbol is delivered.67

46. Here, there is an absence of agreement made by both parties that the physical delivery would be

replaced by a symbolic delivery. Hence, a contention of symbolic delivery is unfounded.

iv. RESPONDENT has not divested all of its power to control any physical dealing with

the CARGO

47. Delivery only occurs when the shipowner has divested or relinquished all of its power to compel any

dealing in or with the cargo which could prevent the true consignee from obtaining possession

towards it.68 Where there are two or more keys and the deliveror retains one, no transfer of possession

to the deliveree has taken place, since the deliveror retains control over the goods.69 The practical

ability, as opposed to legitimate entitlement to do so, to prevent the consignee on taking possession

was the criterion to determine whether delivery has occurred.70

48. In this case, RESPONDENT provided a barcode as an access to obtain the discharged CARGO.71

However, the facts show that the electronic system is accessible by any party with the barcode. The

barcode was sent by e-mail, which means that the RESPONDENT still owns the very same barcode at

least on its sent mail section. This implies that RESPONDENT still has the practical ability to deal with

physical dealing with the goods which may prevent CLAIMANT from collecting it. Since RESPONDENT

has not relinquished its power to control any physical dealing with the goods, delivery has not

occurred.

v. CLAIMANT is not estopped from asserting that issuance of the barcode does not

constitute as delivery

67 MSC Mediterranean Shipping Company S. A. v Glencore International AG [2017] EWCA Civ 365, at 39. 68 Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014), para. 18.161. 69 Re Craven’s Estate [1937] Ch 423. 70 MSC Mediterranean Shipping Company S. A. v Glencore International AG [2017] EWCA Civ 365, at 40 (Christopher

Clarke). 71 Moot Scenario, p. 23.


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49. An estoppel arises only when an unequivocal and clear representation of a party has been relied by

the second party to its detriment.72 A representation is deemed to be clear and unequivocal when it is

highly unlikely that any reasonable person would have interpreted it differently.73 Silence by itself

will inevitably be equivocal, in that it will be impossible to tell objectively whether the offeree has

decided to accept or reject the other party’s conduct.74 Applicably, CLAIMANT stayed silent after

receiving RESPONDENT’s correspondence, which contains the intention to use the electronic access

systems to constitute delivery of the CARGO,75 thus estoppel does not arise.

C. RESPONDENT Cannot Rely on the Force Majeure Clause

50. Clause 17 of the Charterparty excludes liability where a Force Majeure Event causes a failure or

delay in performance.76 While there were two external forces that hindered the voyage, i.e., the solar

flare and the storm, RESPONDENT cannot benefit from the protection of the clause. This is because the

solar flare was a pre-existing condition (i), the hindrance by the storm has a causal connection with

RESPONDENT’s breach of contract (ii).

i. The solar flare was a pre-existing condition

51. In Trade and Transport Incorporated v Iino Kaiun Kaisha Ltd,77 a party could not rely upon a pre-

existing cause as force majeure if first, the pre-existing cause was inevitably doomed to operate on the

adventure and second, the existence of facts which showed that the excepted cause was bound to

72 Low v Bouverie [1891] 3 Ch 82 CA at 113; Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1

QB 529 CA per Denning LJ at 540; Lowe v Lombank [1960] 1 WLR 196 CA per Diplock J at 205; Nippon Menkwa Kabushiki

Kaisha (Japan Cotton Trading Co Ltd) v Dawson’s Bank Ltd [1935] 51 Lloyd’s Rep 147 PC (India) per Lord Russell at 151 col

2; Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 per Lord Wilberforce at 902; Bute (Marquess) v Barclays Bank

Ltd [1955] 1 QB 202 per McNair J at 213; Thor Navigation Inc v Ingosstrakh Insurance Company Ltd [2005] EWHC 19

(Comm) per Gloster J at para 68; Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134 (Denning J);

Waltons Stores (Interstate) Ltd v Maher [1988] 164 CLR 387, 428–9 (Brennan J); Commonwealth v Verwayen [1990] 170 CLR

394, 502 (McHugh J); Austotel Pty Ltd v Franklins Selfserve Pty Ltd [1989] 16 NSWLR 582, 610 (Priestly JA). 73 Woodhouse AC Israel Cocoa Ltd v Nigerian Produce Marketing Co Ltd [1972] AC 741 74 The Leonidas D [1985] 2 All ER 796; Felthouse v Bindley [1862] 11 CB(NS) 869; See also Richard Stone, The Modern Law

of Contract, 8th ed, (New York: Routledge-Cavendish, 2009), p. 70-71. 75 Moot Scenario, p. 22. 76 Moot Scenario, p. 9. 77 Trade and Transport Incorporated v Iino Kaiun Kaisha Ltd (The Angelia) [1973] 1 WLR 210.


15

operate were known to the parties at the time of entry into the contract.78 Accordingly, a party cannot

rely on a force majeure clause when its inability to perform the contract had existed at the time the

charterparty was concluded and it would have been able to overcome the cause had they taken an

ordinary business precaution.79

52. We refer this tribunal to paragraph [25] – [28], it has been shown that RESPONDENT was negligent to

the fact that the VESSEL has to be equipped with the backup hard-dopy maps. If RESPONDENT had

adhered to this precaution, the VESSEL would have been able to overcome the solar flares. Thus,

RESPONDENT cannot invoke the force majeure clause for the solar flare as a defense for its deviation.

ii. The hindrance by the storm has a causal connection with RESPONDENT’s breach of

contract

53. The delivery was originally estimated to happen on 5pm 28 July 2017.80 The VESSEL deviated from

its original route for seventeen hours and only proceeded with the contracted voyage on 7:17am on 27

July 2017.81 However, once the VESSEL returned to its intended route after deliberately deviating from

it, a storm rolled in before VESSEL could reach the port of Dillamond. As a result, VESSEL arrived at

the port of Dillamond on 8:58am 29 July 2017.

54. A party would not be excused for an unfortunate event that was occasioned by the act of God if his

wrongful act had him involved in it.82 In The Empire Jamaica,83 the causal connection is established

by asking what the course of events would have been had the defendant acted lawfully.

55. Applying the test to the current dispute, one would have to ask what would have happened had the

vessel been seaworthy. Objectively, if the RESPONDENT prepared the back up arrangements in the

form of a hard copy, it did not have to deviate to the port of Spectre and would have arrived in

78 The Angelia [1973] 1 WLR 210 at 227. 79 The Angelia [1973] 1 WLR 210. 80 Clarification, ¶7, 8 81 Moot Scenario, p. 17, 18 82 Amies v Stevens, [1795] EngR 38, 1 Str. 128 per Pratt, C. J. 83 The Empire Jamaica [1957] AC 386


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Dillamond by 5pm before the storm occured since the storm did not occur until later than 4:58pm.84

Had they complied with the route, the VESSEL would have arrived by 5pm, spared by the storm.

56. Thus, RESPONDENT cannot benefit from the protection of the force majeure clause for the delay

arising from the storm since it resulted from RESPONDENT’s own deviation and unseaworthiness.85

IV. RESPONDENT IS LIABLE FOR THE LOSS AND DAMAGES

57. RESPONDENT’s breach of contract in failing to deliver the CARGO within the specified time has caused

CLAIMANT to incur significant losses. In Gates v City Mutual Life Association Society Ltd, it was held

that the plaintiff is entitled for loss of bargain and damage suffered, including expenditure incurred, in

reliance on the contract.86 RESPONDENT must compensate CLAIMANT for damages in respect of

USD1,750,000 for the damaged CARGO (A) and the USD14,450,000 for the replacement coffee and

settlement payment towards CLAIMANT’s client (B).

A. RESPONDENT is Liable for USD15,750,000 on Account of the Damaged CARGO

58. CLAIMANT refers this Tribunal to paragraphs [20] – [32] and argues that since lawful delivery had

only occurred once CLAIMANT took physical possession of the CARGO at approximately 1:55pm on 31

July 2017, RESPONDENT is liable for the damaged CARGO amounting to USD15,750,000. Hence,

RESPONDENT is liable to compensate for the damaged CARGO worth USD 15,750,000.87

B. RESPONDENT’s Liability for the Damaged CARGO is not Limited by The Hague-Visby Rules

59. Article IV rule 5(e) of the Rules provides that, “Neither the carrier nor the ship shall be entitled to the

benefit of the limitation of liability provided for… if it is proved that the damage resulted from an act

or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that

84 Moot Scenario, p. 19. 85 Memorandum of Claimant, ¶ 25-32. 86 Gates v City Mutual Association Society Ltd [1986] 160 CLR 1 at 11-12. 87 Moot Scenario, p. 37.


17

damage would probably result.”88 The latter part of the rule denies the carrier from relying on

limitation of liability where a person is aware of a risk that goods in his care may be lost or damaged,

he deliberately goes ahead and takes the risk when it is unreasonable for him to do so.89

60. RESPONDENT was fully aware of how long the waterproof sealant lasts and that the CARGO is highly

susceptible to water damage,90 yet RESPONDENT still discharged the CARGO into a position where it

would be left unprotected during heavy rain and flooding.91 This conduct is consistent with the latter

part of Article IV rule 5(e) of the HVR and thus RESPONDENT cannot benefit from it.

C. In Any Event, the Limitation of Liability shall be Counted According to the Bags of Coffee

61. The description of the CARGO within the original Charterparty which provided “1000 x 70kg bags of

coffee beans”92 had to be changed on the dock receipt to “4 containers” of coffee beans for the sake of

data input.93 Article IV rule 5(a) of the HVR provides that, “Neither the carrier nor the ship shall in

any event be or… liable for any loss or damage to… the goods in an amount exceeding 666.67 units

of account per package or unit”.94 In the case of The River Gurara, Philips L.J. stated that the

undoubted objective of the Rules was to establish a minimum floor below which carriers could not

reduce their liability for cargo damage, and prevent ridiculously low limits of liability by

shipowners.95 In the event RESPONDENT is able to rely on Article IV rule 5(a), the phrase “per

package or unit” in this current case refers to the description of “1000 bags of coffee beans” rather

than “4 containers”.96

88 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968, Article IV rule 5(e). 89 The Thomas Cook Group Ltd v Air Malta Co Ltd [1997] 2 Lloyd’s Rep 399, 408; Horabin v British Overseas Airways Corp

[1952] 2 Ll LR 450, 459; SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1988] 92 FLR 231; Sellers Fabrics Pty Ltd v

Hapag-Lloyd AG [1998] NSWSC 474; Goldman v Thai Airways International Ltd [1983] 1 WLR 1186. 90 Moot Scenario, p. 2, 14. 91 Moot Scenario, p. 22, 36. 92 Moot Scenario, p. 3. 93 Moot Scenario, p. 14, 16. 94 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968, Article IV rule 5(a). 95 Owners of CARGO lately on board the River Gurara v. Nigerian National Shipping Line Ltd (The River Gurara) [1997] 4 All

E.R. 498. 96 The River Gurara [1997] 4 All E.R. 498; Kyokuyo Co Ltd v AP Moller – Maersk A/S (t/a Maersk Line) [2017] EWHC 654.


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62. Consistent with Article IV rule 5(d), the unit of account mentioned in this Article is the Special

Drawing Right as defined by the International Monetary Fund. Multiplying 666.67 units of account

by 1000, and converting the amount to US dollars, RESPONDENT would be liable for

USD999,618.1814.

D. RESPONDENT is Liable for USD9,450,000 from the Replacement Coffee and USD 5,000,000

for the Settlement Payment

63. As a result of RESPONDENT’s failure to deliver the CARGO on time, CLAIMANT had to provide

replacement coffee in the amount of USD9,450,000 and subsequently pay USD5,000,000 in

settlement payments towards Coffees of the World Ltd so as to not incur any legal action.97 The

principle of remoteness provides that the innocent party may only recover damages or loss only when

all loss flows naturally from the breach and was in the contemplation of the parties at the time the

contract was made as a probable result of the breach.98

64. RESPONDENT was made well aware that it was crucial for the CARGO to be delivered by 7pm at 28

July99 so that CLAIMANT could supply its client’s festival which ran from 29 July until 31 July.100

RESPONDENT’s late delivery meant that CLAIMANT had to quickly source alternative coffee to fulfill

the festival’s supply, and make settlement payments for the breach of contract.101 Hence,

RESPONDENT is liable for the loss and damages arising from fees for the supply of replacement coffee

and settlement payments.

V. CLAIMANT HOLDS A MARITIME EQUITABLE LIEN OVER THE VESSEL

97 Moot Scenario, p. 28, 29. 98 Hadley v Baxendale [1854] 9 Exch. 341; Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48;

The Heron II [1969] 1 AC 350; Jack L. Israel Ltd. v Ocean Dynamic Lines and Ocean Victory Ltd. [1982] 2 Lloyd’s Rep. 88;

The Pegase [1981] 1 Lloyd’s Rep. 175. 99 Moot Scenario, p. 2, 3. 100 Clarifications, ¶6. 101 Moot Scenario, p. 29, 37, 38.


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65. Prior to the conclusion of the Charterparty, a preliminary agreement was made between both parties

where RESPONDENT requested CLAIMANT to pay the crew’s wages by storing USD100,000 into a

separate bank account as ‘the crew will not sail before this occurs’.102 However, upon completion of

the voyage it was reported that RESPONDENT did not pay the crew nor did they repay the

CLAIMANT.103 RESPONDENT’s conduct amounted to unjust enrichment (A) which entitles CLAIMANT

to be subrogated for the crew’s maritime lien for wages (B).

A. RESPONDENT has been Unjustly Enriched

66. In Benedetti v Sawiris, the Supreme Court of England recognised that when faced with a claim for

unjust enrichment four questions must be asked.104 These are: (1) Has the defendant been enriched?

(2) Was the enrichment at the claimant’s expense? (3) Was the enrichment unjust? (4) Are there any

defences available to the defendant? If the first three questions are answered affirmatively and the

fourth negatively, the claimant will be entitled to remedy and that those four elements “constitute the

fundamental conceptual structure of an unjust enrichment claim”.105

67. It has come to CLAIMANT’s attention that the USD100,000 paid into the separate account has been

spent. However, the crews’ wages have not been paid nor has RESPONDENT repaid the money to

CLAIMANT.106 This comes after revelations of corruption, nepotism and fraud occurring within

RESPONDENT’s company.107 This clearly proves that RESPONDENT has been unjustly enriched at the

expense of CLAIMANT.

68. In reference to the last question, RESPONDENT cannot use the defence that the preliminary agreement

cannot be enforced. In the case of Pavey & Matthews Pty Ltd v Paul, it was held that mere oral

102 Moot Scenario, p. 1. 103 Moot Scenario, p. 36, 38. 104 Benedetti v Sawiris [2014] AC 938; Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221; Investment Trust

Companies v Revenue and Customs Comrs [2012] STC 1150; Bank of Cyprus UK Ltd v Menelaou [2015] UKSC 66. 105 Investment Trust Companies v Revenue and Customs Comrs [2012] STC 1150; Bank of Cyprus UK Ltd v Menelaou [2015]

UKSC 66; Andrew Burrows QC, The Law of Restitution, 3rd ed (New York: Oxford University Press, 2011), at 27. 106 Clarifications, ¶20. 107 Moot Scenario, p. 36.


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agreements were deemed to be enforceable.108 Hence, RESPONDENT is legally bound to repay

CLAIMANT the USD100,000 pursuant to the preliminary agreement made by both parties.109

Therefore, the test established in Benedetti v Sawiris has been fulfilled.

B. CLAIMANT is Subrogated for the Crew’s Maritime Lien for Wages

69. CLAIMANT seeks remedy for the unjust enrichment by being subrogated to the crews’ maritime lien

for wages against the VESSEL. Section 15(1) of the Admiralty Act provides that a proceeding on a

maritime lien in respect of a ship may be commenced as an action in rem.110 The maritime lien

includes a reference to a lien for:111 (a) salvage; (b) damage done by a ship; (c) wages of the master,

or of a member of the crew, of a ship; or (c) master’s disbursements.

70. As previously mentioned, the USD100,000 provided by CLAIMANT that was initially intended to be

used by RESPONDENT to pay the crew’s wages has been misused for the benefit of RESPONDENT.112 In

Bank of Cyprus UK v Menalou, Lord Clarke held that the remedy of subrogation would essentially be

used to reverse the unjust enrichment.113 Since RESPONDENT has been unjustly enriched at the

expense of CLAIMANT, CLAIMANT is entitled to be subrogated to the crew’s maritime lien for wages

ARGUMENTS ON THE COUNTERCLAIM

VI. CLAIMANT IS NOT LIABLE FOR SUMS CLAIMED BY RESPONDENT

71. On 7th August 2017, RESPONDENT sent an invoice consists a list of sums payable by CLAIMANT to

RESPONDENT.114 CLAIMANT is not liable to pay for all the sums claimed by RESPONDENT.

A. CLAIMANT is not Liable for Demurrage

108 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5. 109 Moot Scenario, p. 1. 110 Admiralty Act 1988, section 15(1). 111 Admiralty Act 1988, section 15(2). 112 Moot Scenario, p. 1, 36. 113 Bank of Cyprus UK Ltd v Menelaou [2015] UKSC 66; Sempra Metals v HMRC [2007] UKHL 34; Banque Financiere de la

Cite SA v Parc (Battersea) Ltd [1999] 1 A.C. 221. 114 Moot Scenario, p. 32


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72. CLAIMANT is not liable for the demurrage that accrued at the discharge port since the laytime did not

commence from 7am.

73. Clause (8)(c)(ii) of the Charterparty provides that laytime is calculated .5WWD from when the vessel

arrives at the discharge port, and demurrage to accrue if discharge operations exceed the laytime

permitted.115 Contrary to RESPONDENT’s statements,116 the VESSEL did not arrive at the discharge port

from 7am as it was outside of the port limits. The test derived from The Johanna Oldendorff provides

that a vessel does not need to directly proceed to a berth to be considered an “arrived ship”, however,

it was further mentioned that the vessel must have reached a position “within the port”.117 This was

further reinforced in The Maratha Envoy, where the House of Lords denied to consider a vessel an

“arrived ship” since the place where she came to rest was not within the port.118 In this present case

the VESSEL was located ~100nm outside Dillamond when it was stuck waiting for a berth.119 The

VESSEL could not be considered as an “arrived ship” since its waiting place was outside the discharge

port and thus laytime only commenced later in the day.

B. RESPONDENT is not Entitled to Freight

74. Contained within the invoice sent by RESPONDENT on 1 August 2017 was a demand for freight at

USD125,000/container amounting to USD500,000.120 RESPONDENT is not entitled to receive the

whole sum of freight since 3 out of the 4 containers received by CLAIMANT was completely water

damaged.121

115 Moot Scenario, p. 6-7 116 Moot Scenario, p. 20 117 E. L. Oldendorff & Co. v. Tradax Export (The Johanna Oldendorff) [1974] A.C. 479; Julian Cooke, Voyage Charters, 4th ed

(New York: Informa Law from Routledge, 2014) at 388 118 Federal Commerce v. Tradax Export (The Maratha Envoy) [1978] A.C. 1. 119 Moot Scenario, p. 20 120 Moot Scenario, p. 32, 44 121 Moot Scenario, p. 25.


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75. A carrier will not be entitled to freight if damage incurred by the cargo amounted to a “total loss” of

the commercial identity of the cargo.122 “total loss” was defined by Lord Esher M.R. as cargo that is

so changed in its nature by the perils of the sea as to become an unmerchantable thing, which no

buyer would buy and no honest seller would sell.123 In our present case 3 out of the 4 containers of

coffee have been inspected by DSM Surveyors to be “completely water damaged” and CLAIMANT

could not in good conscience hand it to their client Coffees of the World Ltd.124

76. The fact that CLAIMANT has accepted and physically received the CARGO125 does not render the

defense as void. Such an acceptance is not an affirmation of the contract and involves no

acknowledgement that the shipowner has performed the contract so as to be entitled to freight.126

Hence RESPONDENT may only be entitled to freight for the remaining undamaged container

amounting to USD125,000.

C. RESPONDENT is not entitled to the cost of repairs to hull

77. The extent of the charterer’s liability for damage to the hull will depend on who or what caused the

damage.127 Under common law, the common grounds to hold the charterer liable for damage to the

hull are damages that result from nomination of an unsafe port, incompetent stevedores, bad bunkers,

or the CARGO carried on board.128

78. Out of the four grounds, RESPONDENT can only reasonably rely on the nomination of an unsafe port,

since the other three grounds is not disputed in the present case: the event of the tangling anchor is not

122 Duthie v Hilton [1868] L.R. 4 C.P. 138; Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge,

2014) at 328. 123 Asfar v. Blundell [1896] 1 Q.B. 123; Duthie v Hilton [1868] L.R. 4 C.P. 138. 124 Moot Scenario, p. 25, 27, 44. 125 Moot Scenario, p. 24. 126 Asfar v. Blundell [1896] 1 Q.B. 123; Montedison S.p.A. v. Icroma S.p.A. (The Caspian Sea) [1980] 1 Lloyd’s Rep. 91; Julian

Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014) at 330. 127 Rupert Harris, Jonathan Andrews and Gary Field, Charterer’s Liability, (Steamship Insurance Management Services

Limited, London, 2005) at 11. 128 Julian Cooke, Voyage Charters, 4th ed (New York: Informa Law from Routledge, 2014), at 285, 597, 1256; Charles Taylor,

Guide to Hull Claim (London: Witherby & Co Ltd, 2003), at 47.


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affiliated with acts of stevedores i.e. stowing, loading/unloading, or discharging,129 the loading of

CARGO has no synchronization of time with the tangling anchor since it is completed in Cerulean on

24 July 2017,130 the unloading and discharging was not executed yet when the hull was damaged, and

there are no act of bunkering at all in our present case. In light of this fact, our present dispute has no

relevance with stevedores, least of which bad bunkers and the cargo on board.

79. Further, RESPONDENT’S argument regarding unsafe port is unacceptable. A port will not be safe unless

the particular ship can reach it, use it, return from it without, in the absence of abnormal occurrence,

being exposed to danger which cannot be avoided by good navigation and seamanship.131 According

to, Gard Marine and Energy Ltd v. China National Chartering Company Ltd,132 owners are

responsible for loss caused by a danger due to an abnormal occurrence. The time for judging whether

an occurrence is “abnormal” must be by the time of the giving of the order133 and must not be the

normal characteristics of the port.134

80. Here, CLAIMANT ordered the VESSEL to the Port of Dillamond which was prospectively safe by the

time the nomination,135 since such storm was “abnormal” or in other words out of the ordinary course

and unexpected.136 The storm which occurred was certainly unpredicted137 and outside the normal

characteristics of the port138 which constitutes the storm as an abnormal occurrence.

129 Coughlin, T., Baker, A.W., Kenny, J., Kimball, J.D., Time Charters, 6th ed (London: informa, 2008) at 217. 130 Moot Scenario, p. 3, 15. 131 The Eastern City [1957] 2 Lloyd’s Rep 153. 132 Gard Marine and Energy Limited v. China National Chartering Company Limited and others (Ocean Victory) [2017] UKSC

35. 133 Kodros Shipping Corp. v. Empresa Cubana de Fletes (The Evia) (No. 2) [1983] 1 A.C. 736 (H.L.). 134 Transoceanic Petroleum Carriers v. Cook Industries Inc. [1981] 2 Lloyd’s Rep. 272, p. 278. 135 Charterparty Cl. 11, Moot Scenario, p.3, 7; The Evaggelos Th. [1971] 2 Lloyd’s Rep. 200; The A.P.J. Priti [1987] 2 Lloyd’s

Rep. 37; The Reborn [2009] 2 Lloyd’s Rep. 639; Coughlin, T., Baker, A.W., Kenny, J., Kimball, J.D., Time Charters, 6th ed

(London: informa, 2008) at 217; Lars Gorton, Nordic Law in the Early 21st Century – Maritime Law, (Stockholm Institute for

Scandanavian Law, 2010), at 104. 136 The Ocean Victory [2015] EWCA Civ 16. 137 Moot Scenario, p. 21, 36. 138 The Ocean Victory [2017] UKSC 35; Transoceanic Petroleum Carriers v. Cook Industries Inc. [1981] 2 Lloyd’s Rep. 272,

at p. 278.


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81. The facts laid out above validates that CLAIMANT is not liable since the damage does not result from

CLAIMANT’S order to send the VESSEL to an unsafe port.

D. CLAIMANT is not Liable for the Agency Fees at the Port of Dillamond

82. There are two provisions regulating the matters of agency fee in this particular case; Clause 2 of the

Charterparty provides that the agency fee at port of loading is borne by RESPONDENT as the ship

owner.139 Whilst under clause 12, the language used is ambiguous, and needs further interpretation to

determine which party should be held liable to pay for the agency fees at the port of discharge and

any port the vessel calls in distress.140

83. When such ambiguity arises, Lord Neuberger in Arnold v Britton141 suggested that the meaning of the

ambiguous term should be assessed in the light of any other relevant provision under the same

contract. Hence, the ambiguous term incorporated under clause 12 should be assessed in accordance

with the meaning of clause 2. Thus, the agency at Port of Dillamond must be borne by RESPONDENT.

E. CLAIMANT is not Liable for Agency Fees at the Port of Spectre

84. As established in paragraphs [76] – [77], Clause 12 of the Charterparty should be interpreted so that

RESPONDENT is liable to pay for the agency fee at Port of Discharge and any port the vessel calls on

passage in distress. Therefore, the claim that CLAIMANT should pay for the Agents of Spectre is

meritless and should not be granted.

F. CLAIMANT is not Liable for the Use of Electronic Access Systems at the Port of Dillamond

85. According to the Charterparty, the delivery of the CARGO must be completed by 7 pm, 28th July

2017.142 At the time of the expected delivery, CLAIMANT had already provided agents to be ready at

the Port of Dillamond from 4.30 until midnight.143 The VESSEL arrived the next day. By that time,

139 Moot Scenario, p. 4. 140 Moot Scenario, p. 7. 141 Arnold v Britton [2015] UKSC 36. 142 Charterparty, ¶9, Moot Scenario, p. 3. 143 Moot Scenario, p. 19.


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CLAIMANT’s agents were unavailable.144 Subsequently, RESPONDENT unilaterally decided to use an

electronic access system as a way of discharging the CARGO without a clear contractual basis.145

86. The entitlement of the carrier for any reasonable and necessary cost will arise only if the consignee

fails to take the delivery.146 Here, CLAIMANT did not fail to take the CARGO’s delivery for two

reasons; first, CLAIMANT’s failure to collect the CARGO by 29 July 2018 was not due to its fault but

due to the congestion at Port of Dillamond. Second, at the time the delivery was supposed to be made,

the agents of CLAIMANT had been waiting at the Port of Dillamond147 and thus had done its part of the

agreement properly. Conclusively, the sum arising from the use of electronic systems in Dillamond

must be borne by RESPONDENT.

REQUEST FOR RELIEF

From the submissions above, CLAIMANT requests that this Arbitral Tribunal:

a) Declare that it has jurisdiction to hear the disputes;

b) Declare that RESPONDENT is liable for damages amounting to USD30,200,000; in respect of

i. USD15,750,000 for the damaged CARGO

ii. USD9,450,000 for the replacement coffee payment

iii. USD5,000,000 on account of the settlement payment

c) Declare that CLAIMANT holds a maritime equitable lien over the Madam Dragonfly;

d) Declare that RESPONDENT is not entitled to freight, demurrage, damage to hull, agency fees and

use of electronic systems; and

e) Award further or other relief as The Tribunal considers fit.

144 Moot Scenario, p. 22. 145 Moot Scenario, p. 19,20. 146 “Carrier’s Remedies When Consignee Fails to Take Delivery”, Erasmus University Repository, 244 at 260. 147 Moot Scenario, p. 19.

Documents

UNIVERSITAS PADJADJARAN TEAM 23 · 2021. 3. 3. · ananta taqwa universitas padjadjaran team 23 on behalf of cerulean beans and aromas ltd the nineteenth annual international maritime