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EIGHTEENTH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2017

MEMORANDUM FOR CLAIMANT

NATIONAL LAW UNIVERSITY ODISHA

TEAM 02

ON BEHALF OF: AGAINST:

FURNANCE RESOURCES TRADING PTE. LTD. INFERNO RESOURCES SDN BHD

&

IDONCARE BERJAYA UTAMA PTY. LTD.

COUNSEL

ANKITA ANKITA TANMAY VISHESH

DHABU SEN BHATNAGAR MEHROTRA

TEAM 02 -TABLE OF CONTENTS-

MEMORANDUM FOR CLAIMANT Page I

TABLE OF CONTENTS

INDEX OF AUTHORITIES ________________________________________________ V

LIST OF ABBREVIATIONS _____________________________________________ XVI

ISSUES RAISED ________________________________________________________ XIX

STATEMENT OF FACTS ___________________________________________________ 1

ARGUMENTS ADVANCED _________________________________________________ 3

[ISSUE I.] CL. 29 OF THE HEAD VOYAGE CHARTERPARTY BETWEEN CLAIMANT AND

RESPONDENT NO. 1 IS TO BE MADE APPLICABLE TO RESPONDENT NO.2 ______________ 3

A. THE TRIBUNAL HAS THE COMPETENCE TO DECIDE ON ITS OWN JURISDICTION. ______ 3

B. CL. 29 OF THE FIXTURE RECAP, READ TOGETHER WITH CL. 26(C) OF THE STANDARD

CHARTERPARTY CONSTITUTE THE ARBITRATION CLAUSE OF THE HEAD VOYAGE

CHARTERPARTY. ________________________________________________________ 4

C. THE BILL OF LADING INCORPORATES ARBITRATION CLAUSE OF THE HEAD VOYAGE

CHARTERPARTY. ________________________________________________________ 4

C.1 Absence of details required to identify a charter does not invalidate its

incorporation. ________________________________________________________ 5

C.2 The Charterparty incorporated in the bill of lading is the head voyage

Charterparty. ________________________________________________________ 5

C.3 The incorporation clause in the bill of lading expressly incorporates the

arbitration clause. ____________________________________________________ 7


MEMORANDUM FOR CLAIMANT Page II

D. THE DISPUTES IN THE PRESENT CASE ARISE OUT OF OR IN CONNECTION WITH THE HEAD

VOYAGE CHARTERPARTY. _________________________________________________ 8

[ISSUE II.] THE CLAIMANT’S EXERCISE OF LIEN ON SUB-FREIGHT IS VALID ______ 8

A. FURNACE, IS THE CARRIER OF THE GOODS IN THE PRESENT CASE. ________________ 8

A.1 Mere mention of the name of the headowner on the bill of lading is not

conclusive proof regarding the identity of the carrier. ________________________ 9

A.2 Due regard must be given to other factors like, the construction of the bill of

lading, functions carried on by the time charterer. ___________________________ 9

[I.] Importance must be given to the construction of the bill of lading. ________ 9

[II.] Importance must be given to the functions carried on by the time charterer

Furnace. __________________________________________________________ 10

B. FURNACE, BEING THE CARRIER CAN RIGHTFULLY CLAIM FREIGHT THAT IS UNPAID BY

THE IDONCARE. _________________________________________________________ 12

C. IN ARGUENDO, FURNACE HAS A LIEN ON SUB-FREIGHT BY WAY OF EQUITABLE

ASSIGNMENT. __________________________________________________________ 12

[ISSUE III.] THE CLAIMANT’S EXERCISE OF LIEN ON CARGO IS VALID __________ 13

A. FURNACE HAS A POSSESSORY LIEN ON THE CARGO ON BOARD MV TARDY TESSA. __ 13

A.1 Furnace has a valid right to exercise lien on cargo. ___________________ 13

A.2 Furnace has fulfilled the two basic requirements for exercise of lien on

cargo. ______________________________________________________________ 14


MEMORANDUM FOR CLAIMANT Page III

[I.] Furnace has a valid demand for the amount with regard to which the lien is

sought to be exercised. _______________________________________________ 14

[II.] Furnace can exercise such right by virtue of its constructive possession of the

cargo. ____________________________________________________________ 15

B. IN ARGUENDO, FURNACE HAS A RIGHT TO DETAIN THE POSSESSION OF CARGO. ____ 15

C. FURNACE IS ENTITLED TO RECOVER FROM INFERNO, THE COSTS OF EXERCISING THE

LIEN ON THE CARGO. _____________________________________________________ 16

[ISSUE IV.] THE CLAIMANT HAS VALIDLY TERMINATED THE HEAD VOYAGE

CHARTERPARTY DATED SEPTEMBER 1, 2016 __________________________________ 17

A. INFERNO HAS COMMITTED REPUDIATORY BREACH OF THE HEAD VOYAGE

CHARTERPARTY. _______________________________________________________ 17

A.1 Inferno has renounced the head voyage Charterparty. _________________ 17

A.2 The breach of the Charterparty by Inferno is of a nature that would deprive

Furnace of the substantial benefits agreed under the Charterparty. ____________ 18

B. FURNACE HAS ACCEPTED THE REPUDIATION AND HAS THEREFORE VALIDLY

TERMINATED THE HEAD VOYAGE CHARTERPARTY. _____________________________ 20

C. FURNACE CLAIMS DAMAGES FROM INFERNO, ON ACCOUNT OF THE REPUDIATORY

BREACH. ______________________________________________________________ 21

[ISSUE V.] THE APPLICATION MADE BY THE CLAIMANT FOR SALE OF CARGO IS TO

BE GRANTED __________________________________________________________ 22

A. THE TRIBUNAL HAS THE JURISDICTION TO ORDER FOR SALE OF CARGO PENDENTE

LITE. _________________________________________________________________ 22


MEMORANDUM FOR CLAIMANT Page IV

B. FURNACE CONTENDS THAT, IT IS JUST, NECESSARY AND URGENT FOR THE TRIBUNAL

TO ORDER FOR THE SALE OF THE CARGO ON BOARD. _____________________________ 23

B.1 In the present facts and circumstances the cargo demands for an urgent

sale. __________________________________________________________ 23

B.2 The sale of the cargo is just and necessary. _______________________ 23

C. THE RIGHT TO LIEN ON CARGO GETS TRANSFORMED INTO A RIGHT TO PROCEEDS OF

THE SALE OF CARGO. _____________________________________________________ 24

PRAYER _______________________________________________________________ XX

TEAM 02 -INDEX OF AUTHORITIES-

MEMORANDUM FOR CLAIMANT Page V

INDEX OF AUTHORITIES

CASES AND ARBITRAL AWARDS

“The Berkshire”, [1974]1 Lloyd’s Rep 185, 188 11

Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd

And Tex-Dilan Shipping Co Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389,

391

5,12

Bayoil SA v. Seawind Tankers Corp. (“The Leonidas”), [2001] 1 Lloyd’s Rep

533, 536

4

Beverly Hills National Bank Trust Co. v. Compania De Navegacione Almirante

S.A., Panama, (1971) 437 F. 2d 301, 302

15

Canficorp (Overseas projects) Ltd. v. Cormorant Bulk-Carriers Inc. (F.C.A),

[1984] F.C.J. No. 528, 8.

11

Castleton Commodities Shipping Company Pte Ltd. v. Silver Rock Investments,

[2016] 1 Lloyd’s Rep 1, 4

25

Cehave N.V. v. Bremer Handelsgesellschaft m.b.h (“The Hansa Nord”), [1976] 1

QB 44, 59

17

China Pacifiic v. Food Corporation Of India (“The Winson”), [1982] 1 Lloyd’s

Rep 117, 124

17

Cobelfret Bulk Carriers NV v. Swissmarine Services SA (“The Lowlands

Orchid”), [2010] 1 Lloyd’s Rep 317, 323.

4


MEMORANDUM FOR CLAIMANT Page VI

Coulter v. Chief Constable Of Dorset Police, [2004] EWCA Civ. 1259, 1263 13

Damayanti Kantilal Doshi v. Indian Bank, [1998] 3 SLR(R) 851 13

Decro-Wall International SA v. Practitioners In Marketing Ltd., [1971] 1 WLR

361, 380

19

Emilia Shipping Inc v. State Enterprise For Pulp And Paper Industries, [1991] 2

MLJ 379, 386

23

Engineering Company v. Engineering Company, Producer, Final Award, ICC

Case No. 6515 and 6516, Yearbook Commercial Arbitration, Vol. XXIV (1999).

3

Ethiopian Oilseeds & Pulses Export Corporation v. Rio Del Mar Foods Inc,

[1990] 1 Lloyd’s Rep 86, 97

8

Faith Maritime Co. Ltd. v. Feoso (Singapore)Pte Ltd, [2002] SGHC 229, 243 24

Federal Bulk Carriers Inc v. C. ITOH & Co. Ltd. And Others (The “Federal

Bulker”), [1989] 1 Lloyd’s Rep 103, 105

7

Federal Commerce And Navigation Co. Ltd. v. Molena Alpha (The” Nanfri”,

“Benfri” and “Lorfri”), [1978] 2 Lloyd’s Rep 132, 139

6

Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”,


19

Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”,


18


MEMORANDUM FOR CLAIMANT Page VII

Fetim B.V. v. Oceanspeed Shipping Ltd. (“The Flecha”), [1999] 1 Lloyd’s Rep

612, 618

10

Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities & Energy

Resources, Intervener), [2015] SGHC 311, 339

6,16

Golden Strait Corp v. Nippon Yusen Kubishika Kaisha (“The Golden Victory”),

[2007] 2 Lloyds Rep 164, 173

22

Government Of Gibraltar v. Kenney, [1956] LR 2 QB 410, 421 8

Gray v. Carr, [1871] L.R. 6 Q.B. 522, 555 14

H.E. Daniel Ltd. v. Carmel Exporters And Importers Ltd., [1953] 2 Lloyd’s Rep

103, 111

8

Harrison v. Huddersfield Steamship Company Ltd., [1903] 19 TLR 386 10

Heyman v. Darwins Ltd., [1942] 72 Lloyd’s Rep 65, 68 8,21

Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd.(“The Hongkong

Fir”), [1961] 2 Lloyd’s Rep 478, 494

19

IM Skaugen SE & Anr. v. MAN Diesel And Turbo SE & Anr, [2016] SGHCR 6,

29

13

International Bulk Carriers (Beirut) S.A.R.L. v Evlogia Shipping Co SA of

Panama (“The Mihalios Xilas”), [1978] 2 Lloyd’s Rep 186, 192

16

Itex Itagrani Export S.A. v. Care Shipping Corporation And Others (“The

Cebu”) (No. 2), [1990] 2 Lloyd's Rep 316, 321

6


MEMORANDUM FOR CLAIMANT Page VIII

K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia

Team"), [1983] 2 Lloyd’s Rep 640, 644

5, 12

Kallang Shipping S.A. Panama v. Axa Assurances Senegal, Comptoir

Commercial Mandiaye Ndiaya (“The Kallang No. 2”), [2009] 1 Lloyd’s Rep

124, 137

6

Kuwait Rocks Co. v. AMN Bulkcarriers Inc. (“The Astra”), [2013] 1 CLC 819,

830

19

Leeds Shipping Co. Ltd. v. Société Française Bunge (“The Easter City”), [1958]

2 Lloyd’s Rep. 127, 131

20

Logistics Management Inc v. One Pyramid Tent Arena, (1996) 86 F. 3d 908, 912 15

Louis Dreyfus Commodities Suisse SA v MT Maritime Management BV, (The

MTM Hong Kong), [2016] 1 Lloyd’s Rep 197, 207

22

Metall Market OOO v. Vitorio Shipping Company ltd. (“The Lehmann Timber”),

[2013] 2 Lloyd’s Rep 541, 557

17

National Navigation Co v. Endesa Generacion SA (“The Wadi Sudr”), [2009] 1

Lloyd’s Rep 666, 697

5

Pacific Molasses Co. & United Molasses Trading Co. v. Entre Rios Compania

Naviera SA (“The San Nicholas”), [1976] 1 Lloyd’s Rep 8, 11

5

Partenreederei M/S Heidberg v. Grosvenor Grain & Feed Co Ltd (“The

Heidberg”), [1994] 2 Lloyd's Rep. 287, 311

5


MEMORANDUM FOR CLAIMANT Page IX

Photo Production Ltd. v. Securicor Transport Ltd., [1980] 1 Lloyd’s Rep 545,

550

21

Rashtriya Chemicals and Fertilisers Ltd. v. Huddart Parker Industries Ltd. (“The

Boral Gas”), [1988] 1 Lloyd’s Rep 342, 349

16

Santiren Shipping Ltd. v. Unimarine SA (“The Chrysovalandou Dyo”), [1981] 1

Lloyd’s Rep 159, 165

14

Skips A/S Nordheim v Syrian Petroleum Co and Petrofina SA (“The Varenna”),

[1983] 2 Lloyd’s Rep 592, 597

7

Spar Shipping AS v. Grand China Logistics Holding (Group) Co. Ltd.(The “Spar

Capella”, “Spar Vega”and “Spar Draco”), [2016] 2 Lloyd’s Rep 447, 461

18

T.D. Bailey, Son & Co. v. Ross T. Smyth & Co. Ltd., [1940] 67 Lloyd’s Rep 147,

159

18

The “Dolphina”, [2012] 1 Lloyd’s Rep 304, 327 14

The “Trade Resolve”, [1999] 4 SLR 424, 439 24

The Rena K, [1978] 1 Lloyd’s Rep 545, 551 7

Uni-Ocean Lines Pte. Ltd. v. C. Trade S.A. (“The Lucille”), [1983] 1 Lloyd’s

Rep 387, 398

20

Vitol SA v. Norelf Ltd. (“The Santa Clara”), [1996] 2 Lloyd’s Rep 225, 229 21

Walter Rau Neusser Oel Fett AG v. Cross Pacific Trading Ltd., [2005] FCA

1102, 1119

8


MEMORANDUM FOR CLAIMANT Page X

Welex A.G v. Rosa Maritime Ltd. (“The Epsilon Rosa”), [2003] 2 Lloyd’s Rep

509, 514

5

Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS (“The

Western Moscow”), [2012] 2 Lloyd’s Rep 163, 168

12

Xiamen Xindaan Trade Co Ltd v. North China Shipping Co Ltd (“The

Mitchalakis”), [2009] EWHC 588

6

BOOKS AND DICTIONARIES

‘Constructive Possession’, Black’s Law Dictionary, Bryan A. Garner, West

Group, 9th Ed. (2009), Pg. 1282

15

Anthony Rogers, Jason Chuah, Martin Dockray, Cases And Materials On The

Carriage Of Goods By Sea, Routledge, 4th Ed. (2016), Pg. 150

18

Cyril Chern, The Law Of Construction Of Disputes, Informa Law Routledge, 2nd

Ed. (2016), Pg. 185

19

G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver

On Bills Of Lading, Sweet & Maxwell, 3rd Ed. (2011), Pg. 127

10

H.G. Beale, W.D. Bishop, M.P. Furmston, Contract: Cases & Materials, Oxford

University Press, 5th Ed. (2007), Pg. 572

19

John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed.

(2010), Pg. 249

7,13


MEMORANDUM FOR CLAIMANT Page XI

John Schofield, Laytime And Demurrage, Informa Law Routledge, 6th Ed. (2011),

Pg. 529

15

Joseph Chitty, H.G. Beale, Chitty On Contracts Vol. 1, Sweet & Maxwell, 31st

Ed. (2012), Pg. 1706

21

Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor,

John D. Kimball, David Martowski, LeRoy Lambert, Michael Sturley, Voyage

Charters, Informa Law From Routledge, 4th Ed. (2014), Pg. 316

6,12,

15,20

Lachmi Singh, The Law Of Carriage Of Goods By Sea, Bloomsbury Professional,

1st Ed. (2012), Pg. 224

12

Melis Ozdel, Bill Of Lading Incorporating Charterparties, Hart Publishing, 2nd

Ed. (2015), Pg. 89

14

Mindy Chen-Wishart, Contract Law, Oxford University Press, 1st Ed. (2007), Pg.

515

21

Peter Gillies, Concise Contract Law, The Federation Press, 1st Ed. (1988), Pg.

222

17

Richard Aikens, Richard Lord, Michael Bools, Bills of Lading, CRC Press, 2nd

Ed. (2015), Pg. 202

5

Stewart C. Boyd, Steven Berry, Andrew S. Burrows, Bernard Eder, David

Foxton, Christopher F. Smith, Scrutton On Charterparties And Bills Of Lading,

Sweet & Maxwell, 21st Ed. (2008), Pg. 72

5


MEMORANDUM FOR CLAIMANT Page XII

Terence Coghlin, Andrew W. Baker Q.C., Julian Kenny, John D. Kimball,

Thomas H. Belknap, Time Charters, Informa Law Routledge, 7th Ed. (2014), Pg.

24

10

Yvonne Baatz, Maritime Law, CRC Press, 3rd Ed. (2014), Pg. 174 13

JOURNAL ARTICLES

A Shipowner 's Lien on Sub-Sub-Freight in England and the United States: New

York Produce Exchange Time Charter Party Clause 18, Kenneth R. O’ Rourke,

Loyola Of Los Angeles International And Comparative Law Review, Vol.

7(1984), Pg. 73, 80

9

Incorporation Of Charterparty Arbitration Clauses Into Bills Of Lading: Recent

Developments, Miriam Goldby, The Denning Law Journal, Vol. 19 (2007), Pg.

171, 171

7

Maritime Liens, The American Law Register, The University Of Pennsylvania

Law Review, Vol. 5 (1857), Pg. 129, 131

15

Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time

Charter, MW Szczepanik, University Of Oslo, Pg. 28, available at

https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1,

last visited: April 6, 2017

18

Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time

Charter, MW Szczepanik, University Of Oslo, Pg. 7, available at

21


MEMORANDUM FOR CLAIMANT Page XIII

https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1,

last visited: April 10, 2017

Repudiation Of Contracts, Samuel Williston, Harvard Law Review, Vol. 14

(1901), Pg. 421, 439

18

The Ambiguous Incorporation Of Charterparties Into Bills Of Lading Under

English Law: A Case Of Too Many Cooks?, Lars Gerspacher, Journal Of

International Maritime Law, Vol. 12 (2006), Pg. 192, 197.

6

The Arbitrator’s Jurisdiction to Determine Jurisdiction, William W. Park, 13

ICCA Congress Series 55, Pg. 25, available at http://www.arbitration-

icca.org/media/4/1653246 3870041/media0124 09326410 520 jurisdiction _to

determine _jurisdiction_w_w_park.pdf, last visited: March 26, 2017.

3

The Concept Of Possession In The Common Law:Foundations For A New

Approach, A. E. S. Tay, Melbourne University Law Review, Vol. 4 (1964), Pg.

476, 489

15

The Embiricos Principle And The Law Of Anticipatory Breach, J.W. Carter, The

Modern Law Review, Vol. 47 (1984), Pg. 422, 422

17

The Identity Of Carrier Problem Under Time Charters: Diversity Despite

Unification Of Law, Caslav Pejovic, Journal Of Maritime Law And Commerce,

Vol. 31 (2000), Pg. 379, 398

9



Vol. 31 (2000), Pg.379, 380

11


MEMORANDUM FOR CLAIMANT Page XIV



Vol. 31 (2000), Pg.379, 399

9

The Identity Of The Carrier Under Bills Of Lading, J. Bassindale, Clifford

Chance Maritime Review, Vol. 11 (1992), Pg. 1, 4

10

The Incorporation Of A Charterparty Arbitration Clause In The Bill Of Lading :

Binding Effect Of Contract Without Consent, Sandra Lielbarde, Faculty Of Law

Lund University, Pg. 30, available at

http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1698465&file

OId=1698466, last visited: March 26, 2017

7

The Treatment, by the Federal Court of Canada, of Demise and Equivalent

Identity of Carrier Clauses in Liner Bills of Lading, David F.H. Marler, Tulane

Maritime Law Journal, Vol. 26 (2002), Pg. 597, 600

11

STATUTES AND CONVENTIONS

§ 10(2), International Arbitration Act (Ch. 143A), 1994 3

§12 (1)(d), International Arbitration Act (Ch. 143A), 1994 23

RULES

Art. III, R.2, Hague-Visby Rules, 1968 11


MEMORANDUM FOR CLAIMANT Page XV

R. 2, SCMA Rules, 3rd Ed. (2015) 22

R. 20, SCMA Rules, 3rd Ed. (2015). 3

OTHERS

Commentary On The 3rd Edition Of The Rules Of SCMA, Singapore Chamber

Of Maritime Arbitration, Pg. 1, available at

http://www.scma.org.sg/pdf/rules_201510_commentary.pdf, last visited: April

11, 2017

22

London Arbitration 16/91, LMLN (August 1991), Pg. 1 15

TEAM 02 -LIST OF ABBREVIATIONS-

MEMORANDUM FOR CLAIMANT Page XVI

LIST OF ABBREVIATIONS

§ Section

¶ Paragraph

Art. Article

Bundle IMLAM Moot Scenario December 9, 2016

Ch. Chapter

Cl. Clause

CLC Commercial Law Cases

Co. Company

Ed. Edition

EWCA England And Wales Court Of Appeal

EWCA Civ. England And Wales Court Of Appeal, Civil

Division

EWHC England And Wales High Court

FCA Federal Court Of Australia

F.C.J. Federal Court Judgment

ICC International Chamber of Commerce

Lloyd’s Rep Lloyd’s Reporter


MEMORANDUM FOR CLAIMANT Page XVII

LMLN Lloyd’s Maritime Law Newsletter

LR Law Reports

Ltd. Limited

MLJ Malayan Law Journal

No. Number

Pg. Page

QB Queen’s Bench

R. Rule

SCMA Singapore Chamber Of Maritime

Arbitration

SGHC High Court Of Singapore

SGHCR High Court Of Singapore Reporter

SLR Singapore Law Reports

SLR(R) Singapore Law Reports Reissue

spsb Safe Port, Safe Berth

TLR Times Law Reports

v. Versus

Vol. Volume


MEMORANDUM FOR CLAIMANT Page XVIII

WLR Weekly Law Reports

TEAM 02 -ISSUES RAISED-

MEMORANDUM FOR CLAIMANT Page XIX

ISSUES RAISED

ISSUE I

Whether or not Cl. 29 of the head voyage Charterparty between the Claimant and Respondent

No. 1 be made applicable to Respondent No.2?

ISSUE II

Whether or not the Claimant’s exercise of lien on sub-freight is valid?

ISSUE III

Whether or not the Claimant’s exercise of lien on cargo is valid?

ISSUE IV

Whether or not the Claimant has validly terminated the head voyage Charterparty dated

September 1, 2016?

ISSUE V

Whether or not the application made by the Claimant for sale of cargo be granted?

TEAM 02 -STATEMENT OF FACTS-

MEMORANDUM FOR CLAIMANT Page 1

STATEMENT OF FACTS

Formation of Charterparties and Issue of the Bill of Lading:

The Claimant, Furnace Trading Pte Ltd. (“Furnace”) entered into a ‘time Charterparty’ with

IMLAM Consignorist GmbH (“IMLAM”) on February 15, 2016 for the charter of the vessel,

MV Tardy Tessa. Furnace subsequently entered into a voyage charter (‘head voyage

Charterparty’) with Respondent No. 1, Inferno Resources Sdn Bhd (“Inferno”) on September

1, 2016 for carriage of Australian Anthracite coal from Newcastle, New South Wales, Australia

to one of eight Chinese ports at the charterer’s option. Inferno further sub-let the charter to

Respondent No. 2, Idoncare Berjaya Utama Pty. Ltd. (“Idoncare”). After loading of the coal, a

bill of lading dated 4th October 2016, incorporating the terms of voyage charter, was issued to

Idoncare.

Non-Fulfilment of the Head Voyage Charterparty Obligations by Inferno:

The bill of lading had been signed by the Master of MV Tardy Tessa on October 4, 2016. As

per the head voyage Charterparty, Inferno was under obligation to pay freight to Furnace within

5 days of signing of the bills of lading, but failed to do so. Further, the vessel arrived at

Singapore for bunkering on 10th October 2016, but Inferno failed to nominate the port of

discharge.

Repeated Reminders Given by Furnace:

Despite repeated reminders from Furnace, Inferno failed to pay freight or nominate the disport.

On October 16, 2016, Inferno nominated Busan, South Korea as the discharge port, which was

rejected by Furnace on account of it being unsafe and not within permitted range under the

head voyage Charterparty and the time Charterparty between Furnace and IMLAM. On

October 18, 2016, Furnace informed Inferno of the freight and other charges due and warned

that Furnace is preparing for a lien if Inferno continues its failure to perform. An urgent notice

TEAM 02 -STATEMENT OF FACTS-


was mailed to Inferno on October 19, 2016 by Furnace requiring Inferno to nominate a

legitimate disport and to pay the freight due by 1200H LT on 20th October 2016, failing which

their conduct would be considered to be a renunciation of the head voyage Charterparty.

Notices of Lien Served by Furnace:

After getting no satisfactory response from Inferno, Furnace sent Notices of Lien on Cargo and

Sub-freight to Inferno and Idoncare, respectively, on October 20, 2016.

Notice of Termination by Furnace:

As a consequence of the inaction by Inferno, Furnace issued a Notice of Termination on

October 22, 2016 accepting the renunciation of the head voyage Charterparty by Inferno.

Notices of Arbitration:

Furnace sent Notices of arbitration to Inferno and Idoncare on November 25, 2016. Inferno and

Idoncare sent their own Responses to the Notices of arbitration sent to them on November 26,

2016. Furnace has also made an urgent application for the sale of coal on MV Tardy Tessa,

pendente lite, on December 1, 2016, considering the condition of the cargo as evident from the

Master’s Report dated November 30, 2016.

Inferno through its Response dated December 2, 2016, has denied all claims including that of

sale of cargo, while Idoncare has denied all claims, other than sale of cargo, and has objected

to the jurisdiction of the arbitral panel to determine the claim.

The arbitral tribunal has issued Procedural Order no. 1 dated December 11, 2016, Procedural

Order No. 2 and No. 3 dated February 17, 2017. Thereby, the oral arguments have been

scheduled for July 1-5, 2017.

TEAM 02 -ARGUMENTS ADVANCED-


ARGUMENTS ADVANCED

[ISSUE I.] CL. 29 OF THE HEAD VOYAGE CHARTERPARTY BETWEEN CLAIMANT AND

RESPONDENT NO. 1 IS TO BE MADE APPLICABLE TO RESPONDENT NO.2

[¶1.] It is submitted before the Tribunal that the Claimant, that is, Furnace accepts the

competence of the Tribunal to decide on its own jurisdiction. [A] It thereby submits that Cl. 29

of the fixture recap, read with Cl. 26(c) of the standard Charterparty, that is, the “COAL-

OREVOY” Standard Coal and Ore Charterparty constitute the arbitration clause of the head

voyage Charterparty between Furnace and Respondent No. 1, that is, Inferno. [B] This

arbitration clause has been incorporated effectively in the bill of lading issued to Idoncare. [C]

Further, the disputes in the present case arise out of and in connection with the head voyage

Charterparty. [D]

A. THE TRIBUNAL HAS THE COMPETENCE TO DECIDE ON ITS OWN JURISDICTION.

[¶2.] It is submitted that according to the principle of ‘competence-competence’ an arbitral

tribunal has the authority to decide issues relating to its own jurisdiction.1 This principle is

considered as one of the basic principles in the area of International Commercial Arbitration.2

In the present case, the law in Singapore empowers the arbitration tribunal to rule on its own

jurisdiction.3 The procedural rules governing the arbitration also uphold the principle of

competence-competence.4 Hence, Furnace submits to the competence of the arbitral tribunal

to decide on its own jurisdiction.

1 The Arbitrator’s Jurisdiction to Determine Jurisdiction, William W. Park, 13 ICCA Congress Series 55, Pg.

25, available at http://www.arbitration-icca.org/media/4/1653246 3870041/media0124 09326410 520

jurisdiction _to determine _jurisdiction_w_w_park.pdf, last visited: March 26, 2017. 2 Engineering Company v. Engineering Company, Producer, Final Award, ICC Case No. 6515 and 6516,

Yearbook Commercial Arbitration, Vol. XXIV (1999). 3 § 10(2), International Arbitration Act (Ch. 143A), 1994. 4 R. 20, SCMA Rules, 3rd Ed. (2015).



B. CL. 29 OF THE FIXTURE RECAP, READ TOGETHER WITH CL. 26(C) OF THE STANDARD

CHARTERPARTY CONSTITUTE THE ARBITRATION CLAUSE OF THE HEAD VOYAGE

CHARTERPARTY.

[¶3.] It is submitted that if the inconsistency between negotiated and incorporated standard

terms is reconcilable, they must be read together in a commercially suitable and sensible

manner.5 Thus, any potential conflict must be read in the aforementioned approach so that the

general clause applies, subject to the agreed terms between the parties.6

[¶4.] In the present case, Cl. 26(c) of the standard Charterparty says that the Charterparty

would be governed by the law of the place mutually agreed between the parties.7 Cl. 29 of the

fixture recap specifically mentions Singapore law and SCMA Rules as the governing law.

Hence, the general provision of the standard Charterparty must be qualified by the expressly

agreed ‘law and dispute resolution’ clause of the fixture recap. They must be read together

sensibly and thereby constitute the arbitration clause in the head voyage Charterparty.

C. THE BILL OF LADING INCORPORATES ARBITRATION CLAUSE OF THE HEAD VOYAGE

CHARTERPARTY.

[¶5.] It is respectfully submitted before the Tribunal that the absence of details required to

identify a Charterparty does not invalidate its incorporation in a bill of lading. [C.1] Here, the

Charterparty incorporated in the bill of lading is the head voyage Charterparty. [C.2] Further,

the incorporation clause in the bill of lading expressly incorporates the arbitration clause. [C.3]

5 Cobelfret Bulk Carriers NV v. Swissmarine Services SA (“The Lowlands Orchid”), [2010] 1 Lloyd’s Rep 317,

323. 6 Bayoil SA v. Seawind Tankers Corp. (“The Leonidas”), [2001] 1 Lloyd’s Rep 533, 536. 7 “COAL-OREVOY” Standard Coal and Ore Charterparty, Pg. 32 of Bundle.



C.1 Absence of details required to identify a charter does not invalidate its

incorporation.

[¶6.] It is submitted that incorporation of a Charterparty in a bill of lading is not invalidated

due to absence of the date identifying the Charterparty.8 Unfilled blanks in the incorporation

clause with respect to the date of the Charterparty and name of the parties thereof, do not

invalidate the incorporation.9 This is because omission to fill up the blanks does not indicate

an intention to negative the incorporation of the Charterparty.10 Thus, non-identification of the

Charterparty sought to be incorporated in the bill of lading does not prove fatal to such

incorporation if the Charterparty can be otherwise identified properly.11

[¶7.] In the present case, the incorporation clause in the bill of lading mentions does not

specify the date or parties of any Charterparty. However, such failure to specify details for

identification of the Charterparty does not negative its incorporation into the bill of lading.

C.2 The Charterparty incorporated in the bill of lading is the head voyage

Charterparty.

[¶8.] It is respectfully submitted that where a series of charterparties exist, it is presumed that

the head Charterparty is incorporated in the bill of lading.12 This is based on the general rule

that the shipowner who issues the bill of lading is only a party to the head Charterparty.13

However, this general presumption does not extend to situations where there is a chain of

Charterparties containing a time Charterparty as the head Charterparty, followed by a voyage

8 Welex A.G v. Rosa Maritime Ltd. (“The Epsilon Rosa”), [2003] 2 Lloyd’s Rep 509, 514. 9 Pacific Molasses Co. & United Molasses Trading Co. v. Entre Rios Compania Naviera SA (“The San

Nicholas”), [1976] 1 Lloyd’s Rep 8, 11. 10 Stewart C. Boyd, Steven Berry, Andrew S. Burrows, Bernard Eder, David Foxton, Christopher F. Smith,

Scrutton On Charterparties And Bills Of Lading, Sweet & Maxwell, 21st Ed. (2008), Pg. 72. 11 National Navigation Co v. Endesa Generacion SA (“The Wadi Sudr”), [2009] 1 Lloyd’s Rep 666, 697. 12 K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia Team"), [1983] 2 Lloyd’s Rep

640, 644. 13 Richard Aikens, Richard Lord, Michael Bools, Bills of Lading, CRC Press, 2nd Ed. (2015), Pg. 202.



Charterparty.14 In such cases the provisions of the relevant voyage Charterparty are

incorporated.15 General terms of a time Charterparty like period clause, clauses relating to off-

hire, withdrawal etc. are inconsistent with a voyage.16 Further, the use of the word ‘freight’

indicates that the Charterparty sought to be incorporated is a voyage Charterparty, the terms of

which are more relevant to a bill of lading.17 Moreover time charterparties do not generally use

the term ‘freight’,18 thereby nullifying the possibility of incorporation of a time Charterparty.

[¶9.] In the present case, the incorporation clause in the bill of lading fails to identify the

Charterparty. The head Charterparty between IMLAM and Furnace, being a time charter, is

unsuitable for a subsequent voyage. Further, the use of the term ‘freight’ in the bill of lading is

indicative of the incorporation of a voyage charter.19 Hence, it is clear that the Charterparty

incorporated is not the head time Charterparty but a relevant voyage Charterparty.

[¶10.] Further, if there are multiple voyage charterparties, the Charterparty that is incorporated

in the bill of lading is the head voyage Charterparty.20 Even though the head voyage charter

does not have the shipowner as the party or the shipper is a sub-sub-charterer, the time charterer

usually has a commercial incentive as well as the shipowner’s lawful authority to issue and

sign bills of lading.21

14 Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd And Tex-Dilan Shipping Co

Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389, 392. 15 Partenreederei M/S Heidberg v. Grosvenor Grain & Feed Co Ltd (“The Heidberg”), [1994] 2 Lloyd's Rep.

287, 311. 16 Federal Commerce And Navigation Co. Ltd. v. Molena Alpha (The” Nanfri”, “Benfri” and “Lorfri”), [1978]

2 Lloyd’s Rep 132, 139. 17 Kallang Shipping S.A. Panama v. Axa Assurances Senegal, Comptoir Commercial Mandiaye Ndiaya (“The

Kallang No. 2”), [2009] 1 Lloyd’s Rep 124, 137; Itex Itagrani Export S.A. v. Care Shipping Corporation And

Others (“The Cebu”) (No. 2), [1990] 2 Lloyd's Rep 316, 321. 18 The Ambiguous Incorporation Of Charterparties Into Bills Of Lading Under English Law: A Case Of Too

Many Cooks?, Lars Gerspacher, Journal Of International Maritime Law, Vol. 12 (2006), Pg. 192, 197. 19 Bill Of Lading, Pg. 41 of Bundle. 20 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities And Energy Resources, Intervener),

[2015] SGHC 311, 321; Xiamen Xindaan Trade Co Ltd v. North China Shipping Co Ltd (“The Mitchalakis”),

[2009] EWHC 588. 21 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David

Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law Routledge, 4th Ed. (2014), Pg.

511.



[¶11.] In the present case, there exist two voyage charterparties, namely those between

Furnace and Inferno and between Inferno and Idoncare. The former is the head voyage

Charterparty and is therefore identified as the Charterparty incorporated in the bill of lading.

C.3 The incorporation clause in the bill of lading expressly incorporates the

arbitration clause.

[¶12.] It is submitted that in case of bills of lading, a strict rule has to be followed while

incorporating an arbitration clause,22 after proper reference to the operative words contained in

the bill of lading.23 The use of the expression ‘all conditions and exceptions’ does not

automatically incorporate an arbitration clause, which is considered to be collateral24 and

ancillary to the primary objective of the contract.25 An arbitration clause is however

incorporated in a bill of lading by the use of express terms,26 such as ‘including the arbitration

clause’.27

[¶13.] In the present case, the bill of lading uses the phrase ‘including the Law and Arbitration

Clause/Dispute Resolution Clause, are herewith incorporated’.28 Hence, through the use of

such express reference, the arbitration clause, that is, Cl. 29 of the head voyage Charterparty

has been validly incorporated in the bill of lading.

22 Federal Bulk Carriers Inc v. C. ITOH & Co. Ltd. And Others (The “Federal Bulker”), [1989] 1 Lloyd’s Rep

103, 105. 23 Incorporation Of Charterparty Arbitration Clauses Into Bills Of Lading: Recent Developments, Miriam

Goldby, The Denning Law Journal, Vol. 19 (2007), Pg. 171, 171. 24 Skips A/S Nordheim v Syrian Petroleum Co and Petrofina SA (“The Varenna”), [1983] 2 Lloyd’s Rep 592,

597. 25 John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed. (2010), Pg. 249.249. 26 The Incorporation Of A Charterparty Arbitration Clause In The Bill Of Lading : Binding Effect Of Contract

Without Consent, Sandra Lielbarde, Faculty Of Law Lund University, Pg. 30, available at

http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1698465&fileOId=1698466, last visited:

March 26, 2017.. 27 The Rena K, [1978] 1 Lloyd’s Rep 545, 551.. 28 Bill of Lading- Conditions of Carriage, Pg. 42 of Bundle.



D. THE DISPUTES IN THE PRESENT CASE ARISE OUT OF OR IN CONNECTION WITH THE HEAD

VOYAGE CHARTERPARTY.

[¶14.] It is submitted that in a case where parties have contractually agreed to refer any dispute

that arises out of the contract to arbitration, such agreement between the parties must be

construed broadly.29 The expression ‘arising out of’ can be interpreted to include non-

contractual claims that are closely linked with the contract or are incidental to such contract.30

This expression reflects that disputes that arise not only out of contractual obligations and

rights, but also out of practical considerations in the performance of the contract, fall under the

ambit of ‘arising out of’ the contract.31 The use of words ‘arising out of’ covers all disputes

except a dispute as to the existence of the contract itself.32

[¶15.] In the present case, the head voyage Charterparty dated September 1, 2016 uses the

expression ‘arising out of or in connection with this Charter Party’.33 Hence, the use of this

expression demands a broad interpretation such that it covers all disputes in the present case.

[ISSUE II.] THE CLAIMANT’S EXERCISE OF LIEN ON SUB-FREIGHT IS VALID

[¶16.] It is submitted before the Hon’ble Tribunal that the Claimant, that is, Furnace is the

carrier of the goods with respect to the shipper, that is, Idoncare. [A] Thus, Furnace can rightly

claim the freight unpaid by Respondent No. 2, that is, Idoncare. [B] In arguendo, Furnace has

a lien on sub-freight by equitable assignment. [C]

A. FURNACE, IS THE CARRIER OF THE GOODS IN THE PRESENT CASE.

[¶17.] It is respectfully submitted before the Tribunal that the mere mention of the name of

29 Ethiopian Oilseeds & Pulses Export Corporation v. Rio Del Mar Foods Inc, [1990] 1 Lloyd’s Rep 86, 97.. 30 Government Of Gibraltar v. Kenney, [1956] LR 2 QB 410, 421;; Heyman v. Darwins Ltd., [1942] 72 Lloyd’s

Rep 65, 68.. 31 Walter Rau Neusser Oel Fett AG v. Cross Pacific Trading Ltd., [2005] FCA 1102, 1119.. 32 H.E. Daniel Ltd. v. Carmel Exporters And Importers Ltd., [1953] 2 Lloyd’s Rep 103, 111.. 33 “COAL-OREVOY” Standard Coal and Ore Charterparty: Cl. 26(c), Pg. 32 of Bundle.



the headowner on the bill of lading is not conclusive proof regarding the identity of the carrier.

[A.1] Thus, in order to identify the carrier one must give due regard to other factors like, the

construction of the bill of lading and functions carried on by the time charterer. [A.2]

A.1. Mere mention of the name of the headowner on the bill of lading is not

conclusive proof regarding the identity of the carrier.

[¶18.] It is submitted that mention of an entity’s name as heading on the bill of lading is not

conclusive proof as to the identity of the carrier.34 Banner headings are considered of lesser

importance as compared to other potential indicators.35 This is because the heading on the bill

of lading may trace down to a person who might have no link with the contract itself.36

In the present case, the bill of lading mentions the headowner IMLAM’s name, as its heading.

However, mere mention of the headowner’s name does not designate to it the role of the carrier.

A.2. Due regard must be given to other factors like, the construction of the bill of

lading, functions carried on by the time charterer.

[¶19.] It is respectfully submitted before the Tribunal that due regard must be given to the

construction of the bill of lading, including the surrounding circumstances. [I] Also, importance

must be given to the functions carried on by the time charterer. [II]

[I.] Importance must be given to the construction of the bill of lading.

[¶20.] It is submitted that to determine whether a bill of lading is a charterer’s bill or a

34 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav

Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg. 379, 398.379, 398. 35 A Shipowner 's Lien on Sub-Sub-Freight in England and the United States: New York Produce Exchange

Time Charter Party Clause 18, Kenneth R. O’ Rourke, Loyola Of Los Angeles International And Comparative

Law Review, Vol. 7(1984), Pg. 73, 80.73, 80. 36 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav

Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg.379, 399..



shipowner’s bill, importance must be given to the construction of the bill,37 for which, the it

must be examined as a whole, and not in isolation.38 If the construction is such that it

incorporates a Charterparty, recourse must be taken to the terms of such Charterparty for

identification of the carrier.39 Thus, importance must be accorded to ‘surrounding

circumstances’ like, provisions of the relevant Charterparty.40 If the incorporated provisions of

such Charterparty allow the Master to sign bills of lading on behalf of a charterer, such charterer

is to be considered as the carrier.41

[¶21.] In the present case, the head voyage Charterparty has been validly incorporated in the

bill of lading, as per which the Master would sign the bill of lading on behalf of Furnace.42

Hence, Furnace is the carrier of the goods as per the construction of all terms of the bill of

lading that incorporates the provisions of the head voyage Charterparty.

[II.] Importance must be given to the functions carried on by the time charterer Furnace.

[¶22.] It is submitted that in a time charter although the navigational control of the vessel rests

in the shipowner, it is the time charterer who controls the commercial functions of the vessel.43

He can freely utilize the vessel for transportation of cargo owned by him or by a third party,

thereby becoming the common carrier.44 The time charterer, being in charge of the commercial

functions of the vessel, is the party that enters into contract with the shipper.45 In the present

37 G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver On Bills Of Lading, Sweet &

Maxwell, 3rd Ed. (2011), Pg. 128.128. 38 Fetim B.V. v. Oceanspeed Shipping Ltd. (“The Flecha”), [1999] 1 Lloyd’s Rep 612, 618.. 39 The Identity Of The Carrier Under Bills Of Lading, J. Bassindale, Clifford Chance Maritime Review, Vol. 11

(1992), Pg. 1, 4.1, 4. 40 G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver On Bills Of Lading, Sweet &

Maxwell, 3rd Ed. (2011), Pg. 127.127. 41 Harrison v. Huddersfield Steamship Company Ltd., [1903] 19 TLR 386.. 42 Fixture Recap: Cl. 26, Pg. 22 of Bundle. 43 Terence Coghlin, Andrew W. Baker Q.C., Julian Kenny, John D. Kimball, Thomas H. Belknap, Time

Charters, Informa Law Routledge, 7th Ed. (2014), Pg. 24.24. 44 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav

Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg.379, 380.. 45 The Treatment, by the Federal Court of Canada, of Demise and Equivalent Identity of Carrier Clauses in

Liner Bills of Lading, David F.H. Marler, Tulane Maritime Law Journal, Vol. 26 (2002), Pg. 597, 600.597, 600.



case, Furnace being the time charterer, entered into contracts with shippers.

[¶23.] Further, it is submitted that under the Hague-Visby Rules, the duties in relation loading,

stowing, handling, carrying, discharging and so on rest with the carrier.46 As a corollary, if a

time charterer carries on the aforementioned functions, it is a relevant factor to be considered

while identifying the carrier of the goods.47 Presence of terms such as, bringing the Master

under the control and directions of the charterers, charterer’s power to request removal of the

Master, to provide the Master with sailing directions, etc indicate the charterer’s control over

the vessel’s movement, thereby putting him in the position of the carrier with regard to the

obligations that he has assumed.48 It is important to note that the presence of the clause which

says that the Master would “sign bills of lading for cargo as presented, in conformity with

Mate's or Tally Clerk's receipts” indicates that the bill of lading was signed on behalf of the

shipowner unless something manifestly inconsistent is provided for in the bill.49

[¶24.] In the present case, crucial functions like that of loading, stowing and so on are being

carried on by the time charterer, Furnace.50 Thus, as per the time Charterparty between IMLAM

and Furnace, certain obligations have been assumed by Furnace that puts it in the position of

the carrier. Also, despite the presence of Cl. 31 in the time Charterparty providing for the master

to sign bills of lading as presented, IMLAM cannot be termed as the carrier. This is because

the bill of lading here incorporates the terms of the head voyage Charterparty that allows the

master to sign bills on behalf of Furnace, which is manifestly inconsistent with the

interpretation that allows the shipowner, that is, IMLAM to be the carrier.

46 Art. III, R.2, Hague-Visby Rules, 1968.. 47 Canficorp (Overseas projects) Ltd. v. Cormorant Bulk-Carriers Inc. (F.C.A), [1984] F.C.J. No. 528, 8.. 48 Ibid. 49 “The Berkshire”, [1974]1 Lloyd’s Rep 185, 188.. 50 Time Charterparty: Cl. 8, 14, Pg. 3, 8 of Bundle.



B. FURNACE, BEING THE CARRIER CAN RIGHTFULLY CLAIM FREIGHT THAT IS UNPAID BY THE

IDONCARE.

[¶25.] It is submitted that the phrase ‘freight payable as per Charterparty’ enables the carrier

to have against the holder of the bill, a legal right to receive freight due under the bill.51 Thus,

the carrier can claim from the bill of lading holder, the freight that may be payable under a

charter to which the carrier is a party52, or a sub charter to which the carrier is not a party.53 If

the bill of lading is signed by the Master on behalf of the charterer, then the charterer being the

carrier, will be entitled to freight directly from the shipper.54

[¶26.] In the present case, Furnace is the carrier under the bill of lading issued to Idoncare.

The bill of lading contains on its face, the phrase “freight payable as per Charterparty”.55

Hence, Furnace is entitled to claim from Idoncare, the amount of freight that is unpaid by

Idoncare.

C. IN ARGUENDO, FURNACE HAS A LIEN ON SUB-FREIGHT BY WAY OF EQUITABLE ASSIGNMENT.

[¶27.] It is submitted that a lien on sub-freight can be exercised by assignment of the freight

that is due to a charterer, such lien being a security against such freight.56 Such lien on sub-

freight can be exercised in the form of equitable assignment, in the absence of an express

provision in writing.57 A claim of lien on sub-freight by equitable assignment must be

supported by an intention to assign the same58 that can be inferred from the conduct of the

51 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David

Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law From Routledge, 4th Ed. (2014),

Pg. 316.316. 52 K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia Team"), [1983] 2 Lloyd’s Rep

640, 644.. 53 Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd And Tex-Dilan Shipping Co

Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389, 391.. 54 Lachmi Singh, The Law Of Carriage Of Goods By Sea, Bloomsbury Professional, 1st Ed. (2012), Pg. 224.224. 55 Bill of Lading, Pg. 41 of Bundle. 56 Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS (“The Western Moscow”), [2012] 2

Lloyd’s Rep 163, 168.. 57 IM Skaugen SE & Anr. v. MAN Diesel And Turbo SE & Anr, [2016] SGHCR 6, 29.. 58 Coulter v. Chief Constable Of Dorset Police, [2004] EWCA Civ. 1259, 1263..



parties.59

[¶28.] In the present case, Inferno has not raised any objection against the notice of lien on

sub-freight that has been sent to Idoncare, by Furnace. This evinces an intention on part of

Inferno to assign to Furnace, the right to exercise lien on sub-freight. Hence, Furnace can

exercise a valid lien on sub-freight by way of equitable assignment, notwithstanding the

absence of a term in writing providing for such assignment.

[ISSUE III.] THE CLAIMANT’S EXERCISE OF LIEN ON CARGO IS VALID

[¶29.] It is submitted before the Tribunal that, the Claimant, that is, Furnace, can validly

exercise a possessory lien on cargo. [A] In arguendo, Furnace has a right to detain the

possession of cargo. [B] Also, Furnace is entitled to recover from Respondent No. 1, that is,

Inferno, the costs of exercising the lien on the cargo. [C]

A. FURNACE HAS A POSSESSORY LIEN ON THE CARGO ON BOARD MV TARDY TESSA.

[¶30.] It is submitted before the Tribunal that Furnace has a valid right to exercise lien on

cargo. [A.1] It has fulfilled the two basic requirements for exercise of lien on cargo. [A.2]

A.1. Furnace has a valid right to exercise lien on cargo.

[¶31.] It is submitted that lien on cargo is a possessory lien60 which can arise out of common

law or by an express contractual term.61 A contractual right of such lien can be exercised against

the cargo of third party shippers if the Charterparty lien clause has been stipulated expressly62

or validly incorporated in the bill of lading issued to the shipper.63 Words of incorporation like

‘all terms, conditions and exceptions of the Charterparty’ incorporate such provisions of the

59 Damayanti Kantilal Doshi v. Indian Bank, [1998] 3 SLR(R) 851.. 60 Yvonne Baatz, Maritime Law, CRC Press, 3rd Ed. (2014), Pg. 174.174. 61 John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed. (2010), Pg. 303.303 62 Melis Ozdel, Bill Of Lading Incorporating Charterparties, Hart Publishing, 2nd Ed. (2015), Pg. 89.89. 63 Santiren Shipping Ltd. v. Unimarine SA (“The Chrysovalandou Dyo”), [1981] 1 Lloyd’s Rep 159, 165..



Charterparty that are germane to carriage, delivery of goods and freight payment.64 This

indicates that such a phrase validly incorporates the Charterparty lien clause into the bill of

lading. Even the narrowest forms of expressions are sufficient to incorporate a Charterparty

lien clause.65

[¶32.] In the present case, the head voyage Charterparty Furnace and Inferno, provides an

express right of lien on cargo to Furnace.66 This right of lien is exercisable over the goods

owned by Idoncare, by virtue of a valid incorporation of the lien clause contained in the voyage

Charterparty into the bill of lading issued to Idoncare. Hence, Furnace has a valid contractual

right to exercise lien on cargo for the freight unpaid to it by Inferno.

A.2. Furnace has fulfilled the two basic requirements for exercise of lien on

cargo.

[¶33.] It is submitted before the Tribunal that Furnace has a valid demand for the amount with

regard to which the lien is sought to be exercised. [I] Also, Furnace is in continuous

constructive possession of the cargo. [II]

[I.] Furnace has a valid demand for the amount with regard to which the lien is sought to be

exercised.

[¶34.] It is submitted that for a valid lien to be exercised, it is imperative that a demand is

made for the amount with respect to which lien is sought to be exercised.67 Further, a valid lien

can be exercised only when the lienee has served a notice of exercise of such lien.68

[¶35.] In the present case, Furnace has made numerous demands from Inferno for payment of

64 The “Dolphina”, [2012] 1 Lloyd’s Rep 304, 327.. 65 Gray v. Carr, [1871] L.R. 6 Q.B. 522, 555.. 66 “COAL-OREVOY” Standard Coal And Ore Charterparty: Cl. 19, Pg. 31 of Bundle. 67 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David


468.468. 68 London Arbitration 16/91, LMLN (August 1991), Pg. 1.1.



freight69 and has also served upon Inferno a notice for exercise of lien on the cargo. Hence,

Furnace has made a valid demand for the amount with respect to which lien is sought.

[II.] Furnace can exercise such right by virtue of its constructive possession of the cargo.

[¶36.] It is submitted that in order to maintain a possessory lien, the person claiming the lien

must have actual or constructive possession of the cargo.70 Constructive possession of cargo

refers to an element of control on the cargo.71 This essentially entails some degree of power

that can be exercised over the object.72 A possessory lien on cargo can thus be claimed by one

who has control of the ship and thereby constructive possession of the goods.73 Such lien can

be exercised at any place other than the discharge port if there exist practical difficulties in

exercising the lien at the disport.74

[¶37.] In the present case, Furnace, by virtue of its employment instructions can instruct the

master to not unload the cargo.75 Moreover, Furnace has the assistance of IMLAM, in

exercising the lien.76 It is evident that Furnace has some form of control over the cargo, thereby

giving it constructive possession of the cargo. Hence, Furnace can validly exercise lien on

cargo.

B. IN ARGUENDO, FURNACE HAS A RIGHT TO DETAIN THE POSSESSION OF CARGO.

[¶38.] It is submitted that a disponent owner gets a beneficial or equitable right that is derived

69 E-mail Conversation Dated October 10, October 14, October 15, October 18, October 19, Pg. 51, 54, 56, 62,

64 of Bundle. 70 Logistics Management Inc v. One Pyramid Tent Arena, (1996) 86 F. 3d 908, 912;; Beverly Hills National Bank

Trust Co. v. Compania De Navegacione Almirante S.A., Panama, (1971) 437 F. 2d 301, 302.. 71 ‘Constructive Possession’, Black’s Law Dictionary, Bryan A. Garner, West Group, 9th Ed. (2009), Pg.

1282.1282. 72 The Concept Of Possession In The Common Law:Foundations For A New Approach, A. E. S. Tay, Melbourne

University Law Review, Vol. 4 (1964), Pg. 476, 489.476, 489. 73 Maritime Liens, The American Law Register, The University Of Pennsylvania Law Review, Vol. 5 (1857), Pg.

129, 131.129, 131. 74 John Schofield, Laytime And Demurrage, Informa Law Routledge, 6th Ed. (2011), Pg. 529.529. 75 Time Charterparty: Cl.8, Pg. 3 of Bundle. 76 E-mail Conversation Dated October 20, 2016, Pg. 36 of Bundle.



from the exercise of lien by the headowner who is in actual possession of the cargo.77 This

gives the charterer as disponent owner, a right to detain possession of the cargo.78 A lien in

essence, is the denial of possession of goods to one who wants such goods.79 Further, as against

the voyage charterer, the disponent owner would have a right of lien under the voyage

Charterparty. As against the shippers it would act as beneficiary of a true lien in favor of the

carrier and it can direct the vessel to not unload the cargo.80

[¶39.] In the present case, Furnace is the beneficiary of the true lien that can be exercised by

the head owner IMLAM. IMLAM has assured its full assistance to the Claimant in order to

exercise lien on the cargo.81 Thus, although Furnace may not be able to exercise a lien in the

strict sense, it gets a right to detain the possession of the cargo.

C. FURNACE IS ENTITLED TO RECOVER FROM INFERNO, THE COSTS OF EXERCISING THE LIEN ON

THE CARGO.

[¶40.] It is submitted that a shipowner’s exercise of lien for non-payment of freight is not due

to any fault of his own.82 Such exercise of lien on cargo protects not only his own interest, but

also benefits the cargo interests through continuous care of the cargo.83 A cargo interest would

therefore, be liable to pay the storage costs incurred by the shipowner while exercising the

lien.84 Thus, in the present case, Inferno is liable to pay the costs of exercising the lien to the

Furnace.

77 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities And Energy Resources, Intervener), [2015]

SGHC 311, 327. . 78 Ibid at 328. 79 International Bulk Carriers (Beirut) S.A.R.L. v Evlogia Shipping Co SA of Panama (“The Mihalios Xilas”),

[1978] 2 Lloyd’s Rep 186, 192.. 80 Castleton Commodities Shipping Company Pte Ltd.v, Silver Rock Investments (“The Clipper Monarch”),

[2016] 1 Lloyd’s Rep 1,4. 81 E-mail Conversation Dated October 20, 2016, Pg.36 of Bundle. 82 Rashtriya Chemicals and Fertilisers Ltd. v. Huddart Parker Industries Ltd. (“The Boral Gas”), [1988] 1

Lloyd’s Rep 342, 349.. 83 China Pacifiic v. Food Corporation Of India (“The Winson”), [1982] 1 Lloyd’s Rep 117, 124.. 84 Metall Market OOO v. Vitorio Shipping Company ltd. (“The Lehmann Timber”), [2013] 2 Lloyd’s Rep 541,

557..



[ISSUE IV.] THE CLAIMANT HAS VALIDLY TERMINATED THE HEAD VOYAGE

CHARTERPARTY DATED SEPTEMBER 1, 2016

[¶41.] It is submitted before the Tribunal that there has been repudiatory breach of the head

voyage Charterparty on the part of Respondent No. 1, that is, Inferno. [A] The Claimant, that

is, Furnace has accepted such repudiation and has therefore validly terminated the head voyage

Charterparty. [B]

A. INFERNO HAS COMMITTED REPUDIATORY BREACH OF THE HEAD VOYAGE CHARTERPARTY.

[¶42.] It is submitted before the Tribunal that Inferno has renounced the head voyage

Charterparty. [A.1] Also, the breach of the Charterparty by Inferno is of a nature that would

deprive Furnace of the substantial benefits agreed under the Charterparty. [A.2]

A.1. Inferno has renounced the head voyage Charterparty.

[¶43.] It is respectfully submitted that when a party, before performance becomes due, evinces

an intention to not perform85, and be no longer bound by the contract86, it amounts to an

anticipatory breach of the contract. It is based on the idea that commercial men need not wait

for the actual non-performance, they are allowed to act on commercial probabilities.87 Such

anticipatory breach operates through a mode of renunciation of the terms of the contract by a

party.88 Renunciation refers to a conduct from which a party reasonably infers that the opposite

party does not intend to perform a future obligation, such that the non-performance would lead

to repudiation.89 Thus, it is important to determine the intention of the party alleged to have

85 Cehave N.V. v. Bremer Handelsgesellschaft m.b.h (“The Hansa Nord”), [1976] 1 QB 44, 59.. 86 Peter Gillies, Concise Contract Law, The Federation Press, 1st Ed. (1988), Pg. 222.222. 87 The Embiricos Principle And The Law Of Anticipatory Breach, J.W. Carter, The Modern Law Review, Vol.

47 (1984), Pg. 422, 422.422, 422. 88 Anthony Rogers, Jason Chuah, Martin Dockray, Cases And Materials On The Carriage Of Goods By Sea,

Routledge, 4th Ed. (2016), Pg. 150.150. 89 Spar Shipping AS v. Grand China Logistics Holding (Group) Co. Ltd.(The “Spar Capella”, “Spar Vega”and

“Spar Draco”), [2016] 2 Lloyd’s Rep 447, 461..



renounced the contract. Such intention may not expressly reveal its unwillingness to perform

the contract, but rather indicate the performance of the contract in a manner that is substantially

inconsistent with the contractual obligations.90 In such a circumstance, the innocent party may

make inferences from the actions of the other party and not from its subjective desires.91

Intention of a party must not be judged on the basis of individual words and actions but on the

basis of a sum total of such words or actions.92 If the intention of the party in breach is such as

to abandon the performance of the contract, a charge of repudiation would be justified against

such party.93 Thus, if a party reveals an intention to not be bound by the contract, the conduct

of the party is considered to be repudiatory.94

[¶44.] In the present case, Inferno has not paid the freight due to Furnace. It has also not

nominated a valid disport even after the vessel passed Singapore for bunkering. It has later

requested Furnace for payment of freight after discharge and has also nominated an unsafe

port. It is evident that Inferno’s intention has been to perform the Charterparty in a manner

substantially inconsistent with its obligations under the Charterparty.95 Hence, Inferno can be

said to have renounced the terms of the head voyage Charterparty, thereby constituting

repudiatory breach.

A.2. The breach of the Charterparty by Inferno is of a nature that would deprive

Furnace of the substantial benefits agreed under the Charterparty.

[¶45.] It is submitted that non-compliance of a term in a contract will amount to repudiation

if such breach is fundamental in nature, such that the innocent party is denied of ‘substantially

90 T.D. Bailey, Son & Co. v. Ross T. Smyth & Co. Ltd., [1940] 67 Lloyd’s Rep 147, 159.. 91 Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”, “Benfri” and “Lorfri”), [1979]

1 Lloyd’s Rep 201, 208.. 92 Sk Shipping (S) Pte Ltd v. Petroexport Ltd(“The Pro Victor”), [2010] 2 Lloyd’s Rep 158, 173. 93 Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time Charter, MW Szczepanik,

University Of Oslo, Pg. 28, available at

https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1, last visited: April 6, 2017.. 94 Repudiation Of Contracts, Samuel Williston, Harvard Law Review, Vol. 14 (1901), Pg. 421, 439.. 95 E-mail Conversation Dated October 16, 2016, October 21, 2016, Pg. 57, 58, 68 of Bundle.



the whole benefit’ that it should have obtained as consideration for performing his undertakings

as agreed under the contract.96 An innocent party may also treat a breach by the other party to

be repudiatory, if the breach is such that it deprives the former of a ‘substantial part of benefit’

that it is entitled to under the contract.97 This brings out a common principle that if a breach

goes to the root of the contract, that is, it is a fundamental breach98, it entitles the innocent party

to treat the contract as repudiated.99 It is then immaterial whether the term belongs to specific

category of condition, warranty or innominate term.100

[¶46.] In the present case, Inferno, has failed to pay to Furnace the freight due under the

Charterparty within five banking days after completion of loading and signing the bills of

lading, as required by the head voyage Charterparty.101 Despite several reminders and a final

notice dated October 19, 2016, being given by Furnace, Inferno failed to make the payment.

The breach of the payment of freight clause of the head voyage Charterparty deprives Furnace

of freight that is the consideration it was to receive as per the agreed terms of the contract.

Hence, Furnace is being deprived of substantial benefit under the Charterparty and is thereby

entitled to treat the Charterparty as repudiated.

[¶47.] Further, where a delay in nominating a port is such that it goes to the root of the

Charterparty or is coupled with renunciation of the Charterparty, the innocent party is entitled

to terminate such Charterparty.102 Such nomination of port by the charterer must be in

accordance with the terms of the Charterparty. If a Charterparty provides for nomination of a

96 Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd.(“The Hongkong Fir”), [1961] 2 Lloyd’s Rep

478, 494.. 97 Decro-Wall International SA v. Practitioners In Marketing Ltd., [1971] 1 WLR 361, 380.. 98 Cyril Chern, The Law Of Construction Of Disputes, Informa Law Routledge, 2nd Ed. (2016), Pg. 185.185. 99 Kuwait Rocks Co. v. AMN Bulkcarriers Inc. (“The Astra”), [2013] 1 CLC 819, 830;; Federal Commerce And

Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”, “Benfri” and “Lorfri”), [1979] 1 Lloyd’s Rep 201, 207.. 100 H.G. Beale, W.D. Bishop, M.P. Furmston, Contract: Cases & Materials, Oxford University Press, 5th Ed.

(2007), Pg. 572.572. 101 Fixture Recap: Cl. 19, Pg. 22 of Bundle. 102 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David


653.653.



safe port, nomination of a port by the charterer that is politically unsafe will not amount to a

valid nomination under the Charterparty.103 This is because, safe port refers to a port that a ship

can reach to and also return from it, without facing any abnormal occurrence or such danger

that is not capable of being avoided by good seamanship.104

[¶48.] In the present case, Inferno was bound to nominate a discharge port from among the

eight ports named in the Charterparty, when the vessel passed Singapore for bunkering.105

However, Inferno failed to nominate the discharge port even though the vessel already sailed

past Singapore.106 The ports that were nominated by Inferno later, were politically unsafe107

and did not fulfill the ‘spsb’ requirement of the head voyage Charterparty. Thus, the failure to

nominate a valid discharge port by Inferno kept the vessel drifting outside Singapore OPL,

thereby obstructing a smooth voyage. The failure to nominate a valid disport by Inferno is

going to the root of the Charterparty dated September 1, 2016, it being a voyage Charterparty.

Hence, Furnace is justified in treating such failure by Respondent No. 1 as a repudiatory breach

of the voyage Charterparty.

B. FURNACE HAS ACCEPTED THE REPUDIATION AND HAS THEREFORE VALIDLY TERMINATED

THE HEAD VOYAGE CHARTERPARTY.

[¶49.] It is submitted that in order to terminate a Charterparty on the ground of breach of the

Charterparty, the other party must accept the repudiation by the defaulting party.108 Such

acceptance of repudiation by the innocent party need not be in any particular form.109 The

acceptance is usually done by communicating to the defaulting party, the decision to

103 Uni-Ocean Lines Pte. Ltd. v. C. Trade S.A. (“The Lucille”), [1983] 1 Lloyd’s Rep 387, 398.. 104 Leeds Shipping Co. Ltd. v. Société Française Bunge (“The Easter City”), [1958] 2 Lloyd’s Rep. 127, 131.

127, 131. 105 Fixture Recap: Cl.16, Pg. 21 of Bundle. 106 E-mail Conversation Dated October 11, 2016, Pg. 50 of Bundle. 107 E-mail Conversation Dated October 17, 2016, Pg. 58 of Bundle. 108 Heymans v. Darwins Ltd., [1942] 72 Lloyd’s Rep 65, 68.. 109 Vitol SA v. Norelf Ltd. (“The Santa Clara”), [1996] 2 Lloyd’s Rep 225, 229..



terminate.110

In the present case, Furnace has communicated to Inferno, its decision to terminate the head

voyage Charterparty through a Notice of Termination.111 Hence, Furnace has accepted

Inferno’s repudiation of the Charterparty and has thereby validly terminated the same.

C. FURNACE CLAIMS DAMAGES FROM INFERNO, ON ACCOUNT OF THE REPUDIATORY BREACH.

[¶50.] It is submitted that when a breach of contract occurs, it entitles the aggrieved party to

damages by the party in breach.112 Upon termination of a contract, both parties are discharged

from performance of their primary contractual obligation, but the breaching party is now under

a secondary obligation due to its non-performance.113 The aggrieved party’s right to claim

damages is co-related with this secondary obligation of the party at fault, to pay compensation

for loss suffered by the innocent party as a result of the breach.114 The object behind such

payment of damages is to put the innocent party in the position that he would have been, in

case the contract had been performed on agreed terms.115 Thus, when a repudiatory breach has

been committed by one party, the other party can claim damages for such repudiation.116

[¶51.] In the present case, Inferno has breached the head voyage Charterparty by non-payment

of freight and by not nominating the discharge port. Hence, Furnace is entitled to damages on

account of repudiatory breach of Charterparty by Inferno.

110 Joseph Chitty, H.G. Beale, Chitty On Contracts Vol. 1, Sweet & Maxwell, 31st Ed. (2012), Pg. 1706.1706. 111 E-mail Dated October 22, 2016– Notice Of Termination, Pg. 68 of Bundle. 112 Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time Charter, MW Szczepanik,

University Of Oslo, Pg. 7, available at

https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1, last visited: April 10, 2017.. 113 Mindy Chen-Wishart, Contract Law, Oxford University Press, 1st Ed. (2007), Pg. 515.515. 114 Photo Production Ltd. v. Securicor Transport Ltd., [1980] 1 Lloyd’s Rep 545, 550.. 115 Louis Dreyfus Commodities Suisse SA v MT Maritime Management BV, (The MTM Hong Kong), [2016] 1

Lloyd’s Rep 197, 207.. 116 Golden Strait Corp v. Nippon Yusen Kubishika Kaisha (“The Golden Victory”), [2007] 2 Lloyds Rep 164,

173..



[ISSUE V.] THE APPLICATION MADE BY THE CLAIMANT FOR SALE OF CARGO IS TO BE

GRANTED

[¶52.] It is submitted before the Tribunal that it has the jurisdiction to order for sale of cargo

pendente lite. [A] The Claimant, that is, Furnace contends that, it is just, necessary and urgent

for the Tribunal to order for the sale of the cargo on board. [B] Also, the right to lien on cargo

gets transformed into a right to proceeds of the sale of cargo. [C]

A. THE TRIBUNAL HAS THE JURISDICTION TO ORDER FOR SALE OF CARGO PENDENTE LITE.

[¶53.] It is submitted that the applicability of the SCMA Rules extends to such arbitration

agreements where the parties have agreed on the same.117 According to these Rules, if the

juridical seat of arbitration is in Singapore, the International Arbitration Act (Chapter 143A)

of Singapore would apply to such arbitration, irrespective of the nationalities of the parties.118

Under the International Arbitration Act, the arbitral tribunal is empowered to issue interim

measures, including an order for interim custody, preservation or sale of a property which

forms a part of subject matter of the dispute that has been referred to arbitration.119

[¶54.] In the present case, the parties to the head voyage Charterparty have agreed upon the

application of SCMA Rules on a dispute that arises out of or is in connection with the head

voyage Charterparty.120 The International Arbitration Act is thus applicable to the present

dispute and empowers the arbitral tribunal to issue any interim measure ordering sale of the

cargo on board MV Tardy Tessa.

117 R. 2, SCMA Rules, 3rd Ed. (2015).). 118 Commentary On The 3rd Edition Of The Rules Of SCMA, Singapore Chamber Of Maritime Arbitration, Pg.

1, available at http://www.scma.org.sg/pdf/rules_201510_commentary.pdf, last visited: April 11, 2017.. 119 §12 (1)(d), International Arbitration Act (Ch. 143A), 1994.. 120 Fixture Recap: Cl. 29, Pg.23 of Bundle.



B. FURNACE CONTENDS THAT, IT IS JUST, NECESSARY AND URGENT FOR THE TRIBUNAL TO

ORDER FOR THE SALE OF THE CARGO ON BOARD.

[¶55.] It is submitted before the Tribunal that in the present facts and circumstances, the cargo

demands for an urgent sale. [B.1] Also, the sale of the cargo is necessary. [B.2]

B.1 In the present facts and circumstances the cargo demands for an urgent sale.

[¶56.] It is submitted that factors like master’s comments and opinion regarding condition of

the cargo on board, living conditions of crew on board, weather conditions, and safety of the

vessel indicate the urgency of the situation, thereby justifying an immediate sale.121 Also, a

shipowner incurring heavy storage costs along with other charges in protecting the cargo

becomes an important factor to be considered for allowing sale of cargo concerned.122

[¶57.] In the present case the cargo was at risk of self-ignition due to overheating, weather

conditions were unfavorable, the crew was running out of supplies with substantial

deterioration in their living conditions.123 These factors indicate the urgency of the situation,

thereby justifying the application made by the Claimant for an interim sale for the cargo on

board MV Tardy Tessa.

B.2 The sale of the cargo is just and necessary.

[¶58.] It is submitted that, if a cargo is found to be deteriorating and the situation is such that

certain sums that continue to accrue will reduce the value of the cargo, a sale of such cargo

must be favored.124 If the condition of the cargo is such that, if it is not allowed to be sold, the

value of the deteriorating cargo will be insufficient to act as security that the lien sought to

achieve, sale of such cargo is necessary. With respect to a cargo of coal, increased oxidation

121 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities & Energy Resources, Intervener), [2015]

SGHC 311, 339.. 122 Emilia Shipping Inc v. State Enterprise For Pulp And Paper Industries, [1991] 2 MLJ 379, 386.. 123 E-mail Conversation Dated November 30, 2016, Pg. 37 of Bundle. 124 Stelios B Maritime Ltd. v. Ibeto Cement Co. (“The Stelios B”), (2007) 711 LMLN 2, 2.



and persistent weathering leads to a loss of calorific value of the coal, indicating deterioration

in its condition.125 In such circumstances, sale of the cargo becomes necessary.

[¶59.] In the present case, the vessel has been stranded at Singapore OPL126 due to delay in

nomination of the disport and payment of freight by Inferno. Due to this delay, the cargo

containing coal is becoming increasingly prone to oxidation, thereby resulting in the loss of its

calorific value. This, coupled with signs of overheating of the cargo is indicative of

deterioration of its condition. Such deterioration erodes the value of the cargo and thereby

makes the sale of such cargo necessary.

C. THE RIGHT TO LIEN ON CARGO GETS TRANSFORMED INTO A RIGHT TO PROCEEDS OF THE

SALE OF CARGO.

[¶60.] It is submitted that a lien on cargo can be equated with an entitlement to the cargo,

thereby giving the lienor a right over the proceeds of the sale of the cargo.127 Thus, a right to

exercise lien over a cargo that existed prior to the proposed sale, can be transformed to a right

over the sale proceeds of the cargo.128

[¶61.] In the present case, Furnace has a valid lien over the cargo. Hence, it can get

transformed to a right over the proceeds of the sale of the cargo.

125 Gimpex Ltd v Unity Holding Business Ltd and Others, [2013] SGHC 224, 236. 126 E-mail Conversation Dated October 12, 2016, Pg. 52 of Bundle. 127 The “Trade Resolve”, [1999] 4 SLR 424, 439;; Faith Maritime Co. Ltd. v. Feoso (Singapore)Pte Ltd, [2002]

SGHC 229, 243.. 128 Castleton Commodities Shipping Company Pte Ltd. v. Silver Rock Investments, [2016] 1 Lloyd’s Rep 1, 4..

TEAM 02 -PRAYER-

MEMORANDUM FOR CLAIMANT Page XX

PRAYER

In response to the Procedural Orders issued by the TRIBUNAL and in light of the above

submissions, CLAIMANT respectfully requests this TRIBUNAL to find and DECLARE that:

1. The TRIBUNAL has jurisdiction to try this dispute between the CLAIMANT and

RESPONDENT NO. 2.

2. The exercise of the lien over sub-freight is a valid and lawful one.

3. The exercise of the lien over cargo is a valid and lawful one.

4. The CLAIMANT is entitled to damages for detention, and costs and expenses incurred

while exercising lien to recover Freight.

5. The CLAIMANT is entitled to damages from RESPONDENT NO. 1 for breach of

Charterparty obligations.

6. The CLAIMANT be at liberty to appraise and sell the cargo presently lying on board the

M.V. Tardy Tessa.

7. Award any other interests & costs in favour of the CLAIMANT.

Dated this 19th day of April 2017 by the Counsel for CLAIMANT, Furnace Trading Pte Ltd.