THE 16TH INTERNATIONAL MARITIME LAW ARBITRATION MOOT, 2015

NATIONAL LAW UNIVERSITY, JODHPUR

TEAM NO 21

MEMORANDUM FOR THE RESPONDENTS

ON BEHALF OF

LESS DEPENDABLE TRADERS PTE

RESPONDENTS

AGAINST

WESTERN TANKERS INC

CLAIMANTS

TEAM

ASHLESHA MITTAL

LAKSHANA CV

MADHAV TAMPI M

RAJ SURANA

TABLE OF CONTENTS

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TABLE OF CONTENTS

List of Abbreviations .......................................................................................................... 4

Issues for Consideration .................................................................................................... 15

I. Whether this tribunal has jurisdiction to decide the present dispute?....................16

II. Whether or not asa2 was an agent of the respondents? ................................................ 15

III. Whether the respondents are estopped from denying liability for the representations

made by asa2? .................................................................... Error! Bookmark not defined.

IV. Whether the Claimants are liable for tort of conversion of the cargo? .................... 15

Statement Of Facts ............................................................................................................ 16

Arguments Advanced

I. Whether Asa2 was never an agent of the respondents?

________________________________________________________________________

........................................................................................................................................... 27

I. ASA2 was never the authorized agent of the respondents. ..................................... 28

II. None of the actions of the respondents lead to subsequent ratification of asa2 their

agents. ........................................................................................................................... 29

i. Respondents did not have complete knowledge of material facts. ...................... 29

ii. Respondents did not manifest intention to ratify ASA2’s agency. ..................... 30

III. The respondents are not estopped from denying liability for the representations

made by ASA2 ................................................................................................................... 30

i. Representations of ASA2 were not on behalf of the Respondents........................... 31

ii. It was not reasonable for the Claimants to rely on the representations. ............... 31

issue IV : The Respondent Has Not Committed The Tort Of Fraud. ........................... 33

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3

[A] THERE WAS A BREACH OF PROMISE, NOT A FALSE REPRESENTATION. .................. 33

[B] THE BURDEN OF PROOF IS ON THE CLAIMANT. ..................................................... 33

Issue IV : The Claimant Is Liable Under Bailment ...................................................... 35

[A] THE RESPONDENT HAS TITLE TO SUE UNDER BAILMENT. .................................... 35

[B] THERE EXISTS A BAILMENT ON TERMS OF THE TIME CHARTER PARTY BETWEEN

THE CLAIMANT AND THE RESPONDENT. ...................................................................... 36

[C] THE CLAIMANT HAS BREACHED THEIR DUTY AS A BAILEE. ................................. 37

I. The Claimants are liable for tort of conversion of the cargo ...................................... 39

Prayer ................................................................................................................................ 40

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LIST OF ABBREVIATIONS

s. Section

¶ Paragraph

Art Article

ASA2 Atlantic STS Agency

B/L Bill of Lading

BIMCO Baltic and International Maritime Council

BMP4 Best Management Practices for protection

against Somalia Based Piracy , Version 4

Bundle IMLAM Moot Scenario, 2015

Charterers Less Dependable Traders PTE (LDTP).

Cl. Clause

Claimants Western Tankers Inc

HVR/Rules Protocol to Amend the International

Convention for the Unification of Certain

Rules of Law Relating to Bills of Lading

(Hague-Visby Rules)(Brussels 1968)

LDTP Less Dependable Traders Pte.

Lloyd‟s Rep. Lloyd‟s Law Reports.

MT Metric Tonnes

OPL Off Port Limit

Owner Western Tankers Inc

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5

P. Page

PDPR Per Day Pro Rata

Respondents Less Dependable Traders PTE (LDTP)

STS Ship to Ship

USD United States Dollars

WTI Western Tankers Inc.

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INDEX OF AUTHORITIES

Cases

A/S Hansen-Tangens Rederi III v. Total Transport Corporation of Panama (The Sagona)

Q.B.D. (Com.Ct.) .................................................................................................... 30, 32

Abu Dhabi Investment Company v. H Clarkson & Company Ltd [2007] 1 Lloyd’s Rep

264................................................................................................................................. 36

AIC Ltd v. ITS Testing Services (UK) Ltd ( The Kriti Palm) [2007] 1 Lloyd’s Rep 555.. 36

Akerhielm v De Mare [1959] AC 789 ............................................................................... 36

Amalgamated Investment and Property Co Ltd. v Texas Commerce Int’l bank Ltd. [1982]

QB 84 ............................................................................................................................ 32

Amin Rasheed Shipping Corporation v. Kuwait Insurance Co., [1984] A.C. 50. ............ 20

Armagas Ltd.. v Mundogas S.A [1985] 3 All ER795........................................................ 29

Arsanovia Ltd v Cruz City 1 Mauritius Holdings [2013] 2 All ER 1 (Arsanovia). .......... 17

Baker v. Yorkshire Insurance Co. [1892] 1 QB 144 ......................................................... 19

Becken v. Cohen [1973] 1 All ER 120 .............................................................................. 35

Ben Line Steamers Ltd. v Pacific Steam Navigation Co – The “Benlawers” [1989] 2

Lloyd's Rep. 51 ............................................................................................................. 27

Borealis Ab v. Stargas Ltd. and Bergesen D.Y. A/S "Berge Sisar" [2002] 2 AC 205 ...... 37

Brabant & Co. v. King [1895] A.C. 632 ........................................................................... 39

Brink's Global Services Inc v Igrox Ltd [2009] EWHC 1817 (Comm) ...................... 41, 42

British & Commonwealth Holding Plc v. Quadrex Holdings Incorporated (unreported)

10th April 1995 (CA) ..................................................................................................... 36

7

7

Bromley v. Att-Gen. [1968] N.Z.L.R. 75 .......................................................................... 35

c.f. The St. Raphael [1985] 1 Lloyd’s Rep. 403, ............................................................... 19

Cadbury Schweppes Plc v Halifax Share Dealing Ltd. [2006] EWHC 1184 ................... 34

Celtheene Pty Ltd. v WKJ Hauliers Pty Ltd. [1981] 1 N.S.W.L.R 606, ........................... 31

Cf. British Airways Board v. Talyor [1976] 1 W.L.R 13 .................................................. 36

Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd (M/V Saldanha) [2010] EWHC

1340 (Comm) ................................................................................................................ 37

Cosco Container Lines Co. Ltd.. v Robert John Batchford [2013] EWHC 840 (QB) ..... 29

De Bussche v Alt (1878) 8 Ch. D 286 ............................................................................... 30

Derry v. Peek (1889) 14 AC 337 ................................................................................. 35,36

Dollond v The Trustees of the BTG Pension Fund [2011] Pens. L.R. 291 ................. 32, 33

EmpresaCubanaImportada de Alimentos v Iasmos Shipping Co SA – The “Good Friend”

[1984] 2 Lloyd's Rep 586 .............................................................................................. 27

Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd. [1964] 2 QB 480....... 29

G Bosman (Transport) Ltd v. LKW Walter International Transportorganisation AG

[2002] EWCA Civ 850 ................................................................................................. 39

Great China Metal Industries Co Limited v Malaysian International Shipping

Corporation Berhad– The “BungaSeroja” (1998) 72 ALJR 1592 ............................... 28

Gross v. Lewis Hillman Ltd [1969] 3 All ER 1476, CA ................................................... 36

Grundt v Great Boulder Pty Gold Mines Ltd. [1937] 59 CLR 641 .................................. 34

Habas Sinai Ve Tibbi Gazlar Istihsal Andustrisi AS and VSC Steel Company Ltd [2013]

EWHC 4071 (Comm) (Habas)...................................................................................... 17

8

8

Hamburg Houtimport B.V. v. Agrosin Private Ltd (The Starsin) [2003] 1 Lloyd’s Rep.

571................................................................................................................................. 39

Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (House of Lords). ............... 19

Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd. [1990] Ch

237................................................................................................................................. 32

Hogarth v Miller [1891] A.C 48 (H.L) ............................................................................. 24

Home office v. Dorset Yacht Co. Ltd [1970] AC 1004 (HL) ............................................ 37

Hornal v. Neuberger Products Ltd [1957] 1 Q.B. 247 ..................................................... 35

Houghland v RR Low Ltd [1962] 1 QB 694 ..................................................................... 42

Houghland v RR Low Ltd[1962] 1 QB 694 ...................................................................... 41

IFE Fund SA v. Goldman Sachs International [2007] 2 Lloyd’s Rep 449. ...................... 36

International Factors Ltd v Rodriguez [1979] QB 351 .................................................... 37

Ismail v Polish Ocean Lines [1976] QB 893 CA ............................................................. 32

Johnson Matthey and Co. Ltd v. Constantine Terminals Ltd [1976] 2 Lloyd’s Rep 215,

(QB). ............................................................................................................................. 39

Jordan v. Money (1854) 5 H.L.C 185 ............................................................................... 35

Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754, 757 (Bezirksgericht Affoltern

am Albis 1994) (1998) .................................................................................................. 19

Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm.

Arb. 703, 706 (Hague Gerechtshof) (1994) .................................................................. 20

Kelly v Fraser, [2013] 1 A.C. 450 .................................................................................... 32

Kim v Chasewood Park Residents Ltd. [2013] EWCA Civ 239....................................... 33

Kopitoff v Wilson (1876) 1 QBD 377 ............................................................................... 26

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Kuwait Airways Corp v Iraqi Airways Co. [2002] UKHL 19 .......................................... 41

Leigh and Sillavan Ltd v. Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785 ... 37

Lewis Trusts v Bambers Stores Ltd [1983] FSR 453 ........................................................ 41

Liverpool Grain Storage and Transit Co Ltd v. Charlton and Bagshaw (1918) 146 LT Jo

20, HL ........................................................................................................................... 39

M.B. Pyramid Sound N.V. v. Briese Schiffahrts GmbH and Co. KG. M.S. “Sina”and

Latvian Shipping Association Ltd. (The “Ines”), [1995] 2 Lloyd’s Rep. 144 .............. 39

Maxine Footwear Co Ltd v. Canadian Government Merchant Marine Ltd [1959] A.C.

589................................................................................................................................. 40

MCC Proceeds Inc v. Lehman Bros International (Europe)[1998] 4 All ER 675 ........... 41

McKew v Holland & Hannen & Cubitts (Scotland) Ltd [1970] SC 20(HL) .................... 37

Micoperi SrL v Shipowners Mutual Protection and Indemnity Ass’n (Luxembourg),

[2011] EWHC 2686 (Comm)........................................................................................ 32

Minoutsi Shipping Corp v. Trans Continental Shipping Services (Pte) Ltd, [1971] SGHC

3..................................................................................................................................... 19

Moorgate Merchantile Co Ltd. v Twitchings [1976] 1 QB 225 CA ................................. 32

Morris v. CW Martin & Sons Ltd [1966] 1 Q.B. 716 ....................................................... 39

National Boat Shows Limited & Anor v Tameside Marine, unreported, 1 August 2001 .. 21

Noble Resources Ltd v Cavalier Shipping Corp (‘The Atlas’) [1996] C.L.C. 1148 ......... 37

Norfolk County Counsil v Secretary of State for the Env’t [1973] 3 All ER 673 ............. 32

Northern Shipping Co. v Deutsche Seereederei G.M.B.H. and Others –The “Kapitan

Sakharov” [2000] 2 Lloyd's Rep. 255 .......................................................................... 27

Petroleo Brasileiro S.A v. E.N.E. Kos 1 Limited [2012] UKSC 17 .................................. 41

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10

Pickard v Sears (1837) 6 Ad & El 469 ....................................................................... 32, 33

Port Swettenham Authority v. T W Wu & Co (M) Sdn Bhd [1979] AC 580 ..................... 39

Prudential Staff Pensions Ltd.. v The Prudential Assurance Co. Ltd.. & Ors [2011]

Pens.L.R. 239 ................................................................................................................ 32

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

QB 567 .......................................................................................................................... 27

R. v. International Trustee for the Protection of Bondholders, [1937] A.C. 500, 529. .... 19

R. v. Sunair Ltd Holidays [1973] 1 W.L.R. 1105, (C.A). ................................................. 35

Rasheed Shipping Corporation v. Kuwait Insurance Co., [1984] A.C. 50. ..................... 20

Re B [2008] UKHL 35 ...................................................................................................... 35

Re Eastgate [1905] 1 K.B. 465 ......................................................................................... 34

Re Exchange Securities & Commodities Ltd. [1988] Ch 46 ....................................... 32, 34

Re Shackleton (1875) L.R. 10 Ch. 446 ............................................................................. 34

Re United Railways of Havana, etc., Warehouses Ltd., [1960] Ch. , 91(C.A.). ............... 20

Royal Greek Government v Minister of Transport [1949] 82 Ll. L. Rep, 196 ................. 28

Samuel & Co. v. West Hartlepool Steam Navigation & Co. (1906) 11 Comm Cas 115 .. 38

Sea Emerald [2008] 1 Lloyd's Rep 96 .............................................................................. 30

Sea Emerald SA v Prominvestbank v Joint Stockpoint Commercial Industrial and

Investment Bank [2008] 1 Lloyd's Rep 96 .................................................................... 30

Shell co of Austl. Ltd. v Nat shipping Bagging Serv. Ltd.. (The Kilmun) [1988] 2 Llyod’s

Rep 1 ............................................................................................................................. 31

Sinokor Merchant Marine Co Ltd v. The Owners and/or Demise Charterers of the Ship or

Vessel “Marcatania” HCAJ 138/2008 ......................................................................... 37

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Smith, Hogg & Co. v. Black Sea & Baltic General Insurance Co [1940] A.C. 997 ........ 40

Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd. [2015] EWHC 718

(Comm) ......................................................................................................................... 30

Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others

[2012] EWCA Civ 638 ................................................................................................. 17

The Aquacharm, [1982] 1 Lloyd's Rep.7 ..................................................................... 24,28

The Berge Sund, [1993] 2 Lloyd's Rep.p. 463 ............................................................. 24,28

The Dunelmia [1970] 1 Q.B. 289...................................................................................... 37

The Fjord Wind [2000] 2 Lloyd’s Rep. 191 ..................................................................... 40

The Laconian Confidence [1997]1 Lloyd’s Rep. 139 ....................................................... 24

The Lorenz Consultancy Ltd.. v Fox-Davies Capital Ltd.. [2011] EWHC 574 (Ch) ....... 31

The Maori King [1895] 2 QB 550..................................................................................... 27

The Okehampton [1913] P 173. ....................................................................................... 38

The Oropesa [1943] 1 All ER 211 .................................................................................... 37

The Petz Schmkidt [1995] 1 LR 202 ................................................................................. 19

The Pythia [1982] 2 Lloyd’s Rep. 160.............................................................................. 26

The Subro Valour [1995] 1 Lloyd’s Rep. 509 .................................................................. 40

The Torenia [1983] 2 Lloyd’s Rep. 210 ........................................................................... 39

The Voltaz [1997] 1 LR 35................................................................................................ 19

The YayeMaru 274 F. 195 (4thCir.), cert. denied, 257 U.S. 638 (1921 ............................ 23

Tillmans & Co. v. S.S. Knutsford [1908] 1 KB 185; ......................................................... 38

Virginia Carolina Chemical Co v Norfolk and North American Steam Shipping Co [1912]

1 KB 229 ....................................................................................................................... 26

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Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.). ........ 19

Vodafone Ltd.. v Gnt Holdings (UK) Ltd.. [2004]EWHC 1526(QB) ............................... 29

Wilson v. Darling Island Stevedoring & Lighterage Co [1956] 1 Lloyd’s Rep. 346 ....... 38

Wilsher v. Essex Area Health Authority [1988] AC 1074 ................................................ 36

Yona Int’l Ltd.. v La Reunion Francaise SA [1996] 2 Lloyd's Rep 84 ............................ 30

Statutes

Section 4 of COGSA Act, 1992 ........................................................................................ 37

Other Authorities

Clause 3.4, Best Management Practices 4 ........................................................................ 42

Francis O’Brien, ‘Freight and Charter Hire’ (1974-1975) 49 Tulane Law Review 956, 22

Guidelines for Owners, Operators and Masters for Protection against Piracy in the Gulf of

Guinea Region, Clause 6, available at

<http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_prote

ction_against_Piracy_in_the_Gulf_of_Guinea_Region.pdf> ....................................... 34

John Weale, ‘The NYPE Off-Hire Clause and Third Party Intervention: Can an Efficient

Vessel be Placed Off-Hire?’ Vol. 33, No. 2, April, 2002 Journal of Maritime Law &

Commerce, 137 ....................................................................................................... 24, 28

Michael Cohen, ‘Confusion in the Drafting and Application of Off –Hire Clauses’(1977-

1978) 9 Journal of Maritime Law &Commerce,343 .................................................... 28

Ratification in Agency Without Knowledge of Material Fact, 15 Yale Law Journal 331

(1906) ............................................................................................................................ 31

Somali pirates as agents of change in international law-making and organization,

C.J.I.C.L. 2012, 1(3), 81-106 ........................................................................................ 34

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Zheng Xia, ‘Measures Would be Taken by the Courts in Deciding whether to Trigger the

Off-hire Clause’ (2009) Vol.3 No.1 Management Science and Engineering, 60-69,

http://50.22.92.12/index.php/mse/article/view/j.mse.1913035X20080301.008/897

<Accessed on 7 February, 2013> ................................................................................. 28

Rules

Article III Rule1 of The Hague-Visby Rules…………………………………………….40

Article III Rule 2, Hague-Visby Rules, 1968 ................................................................... 27

Article III Rule 4 of the Hague-Visby Rules .................................................................... 37

Article III Rule1 of The Hague-Visby Rules .................................................................... 40

Treatises

A M Dugdale and M A Jones (eds) Clerk and Lindsell on Torts (Sweet and Maxwell, 19th

edn, 2006) .......................................................................................................... 35, 36,41

Black's Law Dictionary (9th ed. 2009) ............................................................................. 26

Clare Ambrose and Karen Maxwell, London Maritime Arbitration (3rd edn, Informa,

London 2009) ............................................................................................................... 21

Douglas Hodgson, The Law of Intervening Causation (Ashgate, 2008) .......................... 37

Francis Wharton , A Commentary on the Law of Agency and Agents 65 (Kay and

Brother, 1876 ) ............................................................................................................... 30

Georgios I. Zekos, International Commercial and Marine Arbitration, Routledge-

Cavendish ,2008 ............................................................................................................ 19

Halsbury‟s Laws (5th edn, 2010) vol 7 ............................................................................ 27

Jason Chuah, The Law of International Trade (3rd edn, 2009) ........................................ 26

John Murphy, Margaret Brazier, Street On Torts, (Butterworths ed., 1999) ............... 41,42

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Julian Cooke et. al, Voyage Charters (Lloyd‟s of London Press, 1993) ..................... 22,26

Norman Lopez, (1992) Bes Chartering and Shipping Terms. 11 Ed., Barker & Howard

ltd, London ............................................................................................................... 23,27

Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa Publishing, 2010) ................ 28

Qingdao Ocean Shipping Mariners College, Practice & Law of Chartering Shipping,

(2010) ............................................................................................................................ 26

Redfern & Hunter ............................................................................................................. 21

Rhidian Thomas , ‘Time charterparty hire: issues relating to contractual remedies for

default and off hire clauses’ in Rhidian Thomas (Ed), Legal Issues Relating to Time

Charterparties, (2008) London ...................................................................................... 24

Robert Merkin, Privity of Contract: The Impact of the Contracts (Taylor and Francis ed.

2013.......................................................................................................................... 30,32

Sean Wilken, Karim Ghaly, The Law of Waiver, Variation and Estoppel (Oxford

University Press, 2012) ................................................................................................. 32

Simon Baughen, Shipping Law, (Cavendish Publishing Limited, 2nd edn, 2001) ....... 26,38

Sir Bernard Eder, Scrutton on Charterparties and Bills of Lading, (Sweet & Maxwell,

22nd edn, 2011) ......................................................................................................... 37,39

Sir Guenter Treitel and F.M.B. Reynolds, Carver on Bills of Lading, (Sweet & Maxwell,

3rd edn, 2011) ..................................................................................................... 37,39, 40

Sir Jack Beatson, Anson’s Law of Contract, (29th ed. Oxford university press, 2010) 30,31

Sir John William Salmond, Salmond’s Law Of Torts, (Sweet & Maxwell, 1945) ........... 41

Terence Coughlin, et.al, (2008) Time Charters, 6 Ed ....................................................... 24

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ISSUES FOR CONSIDERATION

I. WHETHER LONDON IS THE JURIDICIAL SEAT OF ARBITRATION?

II. WHETHER THE TORT OF FRAUD IS WITHIN THE SCOPE OF THE ARBITRATION

AGREEMENT?

III. WHETHER OR NOT ASA2 WAS AN AGENT OF THE RESPONDENTS?

IV. WHETHER THE CLAIMANTS ARE LIABLE FOR TORT OF CONVERSION OF THE CARGO?

V. WHETHER THE RESPONDENTS ARE LIABLE UNDER THE TORT OF FRAUD?

VI. WHETHER THE CLAIMANTS ARE LIABLE UNDER BAILMENT?

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STATEMENT OF FACTS

1. Less Dependable Traders PTE (hereinafter, charterers/ respondents), agreed to charter

the Vessel ‘Western Dawn’ (hereinafter, the ‘vessel’) from Western tankers Inc.

(hereinafter, owners/ claimants) by way of an amended Shelltime 4 standard form

charterparty. The charterparty included the rider clauses dated 26th May 2104 and the

BIMCO piracy clause. The charterparty provided that the Vessel was to depart from PBT

Sinagapore (the Loadport) on the 8th of June and finally arrive at OPL Luanda

(hereinafter, the disport). It would carry a cargo of ‘30,000mt MIN/MAX Jet A1 Plus

70,000mt +/-10% Moloo Gasoil’ (hereinafter, the cargo).

2. Prior to the voyage, the security officer at WTI, Rich Evasion inspected the vessel and

recommended purchase of BMP 4 equipment for delivery to the Master at Durban.

However, the owners failed to deliver the equipment, thereby not complying with BMP4

practices. In violation of the charterparty terms, the Master obeyed instructions issued by

a third party and liaised closely with the Captain of Antelope, William Anya. Subsequent

to the vessel’s entry in the piracy prone Western African region, the Master stopped

communicating with Chris at LDT PTE.

3. The vessel set sail from PBT Singapore on the 8th June. The vessel had 950mt of

bunkers, sufficient for a voyage up to OPL Luanda. The remainder of the bunkers was to

be provided at the alternate discharge location through an STS. Even once the voyage

was undertaken, there was no intimation by the owners as to the vessel being under-

equipped.

4. Subsequent to termination of communication between the Master and Chris, Captain

William Anya directed the vessel to deviate and set off on an alternate course for a

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certain STS area 1. Captain William directed the vessel to move to a location where he

allowed them to drift precariously in an area infested with pirates.

5. The vessel went off the radar for a period of two weeks from 4th to 17th July.

Communication between the master of the vessel and the charterers broke down

absolutely for the period. At this point in time, the owners demanded hire. The charterers

responded promptly intimating that the vessel was off-hire due to lack of communication

the very next day.

6. Pirates off the Angolan coast attacked the vessel and 4 of the crew suffered minor

injuries along with damage to the vessel and cargo being stolen. The Master and his crew

were helpless as the owners failed to provide the necessary equipment to resist any

attacks on the vessel.

7. The owners initiated arbitral proceedings against the charterers through the reference

to the tribunal. The ‘law and litigation’ clause referred ‘all disputes arising out of this

charter’ to be referred to ‘arbitration in London.’

ARGUMENTS ADVANCED

_______________________________________________________________________

ISSUE I : WHETHER LONDON IS THE JURIDICIAL SEAT OF ARBITRATION?

________________________________________________________________________

CLAIMANTS SUBMIT THAT LONDON IS THE JURIDICIAL SEAT OF THE ARBITRATION.

The Claimants submit that as the intention of the parties is a pertinent determinant in a

construction of a charterparty, Singapore is the correct seat and forum of the arbitration

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agreement. A threefold test to determine the seat has been laid down 1 that has

subsequently gained recognition in international commercial arbitration.2

(i) whether the parties expressly chose the law of the arbitration agreement;

(ii) whether the parties made an implied choice of the arbitration agreement; and

(iii) in the absence of express or implied choice, the system of law with which the

arbitration agreement has the “closest and most real connection”.

I. There was no express or implied choice indicative of the law of the arbitration

agreement.

In the present matter, the charterparty3 mentions nothing at all about the law of the

arbitration agreement. Hence, there is no clear and unmistakable evidence that the parties

agreed to apply English arbitrability law. It merely refers to London as a place.

Therefore, the parties’ choice to ‘refer all disputes to arbitration in England’ can be

reasonably assumed to be merely the physical seat and not the juridical seat.

In the absence of express terms, it cannot automatically be assumed that ‘arbitration in

London’ was supposed to refer to London as the juridicial seat.. It is therefore submitted,

London remains the physical place of arbitration and not the juridical seat. By providing

that the arbitral proceedings “shall be held in London”, it is plausible to infer that the

parties agreed for London to be the ‘place of arbitration’ and not the ‘seat of arbitration.’

1 Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ 638. 2 Habas Sinai Ve Tibbi Gazlar Istihsal Andustrisi AS and VSC Steel Company Ltd [2013] EWHC 4071 (Comm) (Habas); Arsanovia Ltd v Cruz City 1 Mauritius Holdings [2013] 2 All ER 1 (Arsanovia). 3 Clause 46(b), Shelltime 4.

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The physical place of arbitration has no real significance for the application of law.4

Therefore, Singapore is the legal seat of arbitration.

Notwithstanding a written arbitration agreement, the same is binding only as long as an

intention to be bound can be ascertained from the surrounding circumstances. 5 It is

submitted, that there was no implied choice either. The contemporaneous correspondence

between the parties6 is conclusively indicative of the parties’ intention in disagreement

with London as the seat. Therefore, the respondents did not agree to London as the

juridicial seat either expressly or implicitly.

II. The arbitration agreement has the closest connection with Singapore law.

It is a fundamental principle of the rule of conflict of laws that intention is the foremost

determinant of the applicable law.7 In the absence of an express choice-of-law provision

regarding the arbitration agreement, the arbitration clause must be interpreted according

to the law of the seat of the Arbitral Tribunal.8 By seating the arbitration in a particular

State, the parties are regarded to have impliedly agreed that the Law of the Arbitral Seat

should govern the arbitration clause.9 In the absence of the parties’ express intention, the

arbitration agreement is governed by the system of law with which the performance has

its closest and most real connection.10 In determining such system of law, factors such as

4 The Voltaz [1997] 1 LR 35; The Petz Schmkidt [1995] 1 LR 202. Georgios I. Zekos, International Commercial and Marine Arbitration p214. Routledge-cavendish ,2008 5 Georgios Zekos, P. 209, International Commercial and Maritime Arbitration; c.f. The St. Raphael [1985] 1 Lloyd’s Rep. 403, Baker v. Yorkshire Insurance Co. [1892] 1 QB 144. 6 Text message from Charles at LDTP to Bill at IMWMB, p. 2 of bundle. 7 Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.). 8 Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754, 757 (Bezirksgericht Affoltern am Albis 1994 (1998); Minoutsi Shipping Corp v. Trans Continental Shipping Services (Pte) Ltd, [1971] SGHC 3; R. v. International Trustee for the Protection of Bondholders, [1937] A.C. 500, 529. 9 Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (HL). 10 Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb. 703, 706 (Hague Gerechtshof) (1994); Amin Rasheed Shipping Corporation v. Kuwait Insurance Co., [1984] A.C. 50.

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the place of contracting, the place of performance, the place of residence or business of

the parties and the nature and the subject matter of the contract must be considered.11 In

the present factual matrix, the place of business of one of the parties is Singapore as

charterers are a limited liability partnership based in Singapore. Further, the place of

performance is more closely and realistically connected to Singapore than London as the

origin of the voyage was PB terminal, Singapore.12 The subject matter of the contract, the

cargo was also loaded at Singapore. Therefore, the arbitration agreement is most closely

and realistically connected to Singapore law and hence, Singapore is the appropriate seat

and forum.

________________________________________________________________________

ISSUE II : THE ‘TORT OF FRAUD’ IS INADMISSIBLE IN THE PRESENT ARBITRATION.

________________________________________________________________________

I. The ‘tort of fraud’ is outside the purview of the arbitration agreement.

It is well established that the foremost aim in construing the scope of a charterparty

agreement is to give effect to the intention of the parties at the time of signing of the

agreement.13 Arbitration agreements should be carefully and narrowly construed in order

to give effect to the objective intentions of the parties.14

The model arbitration clause recommended in the UNCITRAL Rules owes its origin to English

common law practice and prescribes, “any dispute, controversy or claim arising out of or relating to

11 Re United Railways of Havana, etc., Warehouses Ltd., [1960] Ch., 91(C.A.). 12 Part A, voyage instructions, p. 13 of the bundle. 13 Clare Ambrose and Karen Maxwell, London Maritime Arbitration (3rd edn, Informa, London 2009) p. 57. 14 National Boat Shows Limited & Anor v Tameside Marine, unreported, 1 August 2001, His Honour Judge Michael Kershaw, QC).

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this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in

accordance with the UNCITRAL Rules as at present in force”15 as the model arbitration agreement.

In the present matter, instead of adopting this universally used broad phrase, ‘all disputes arising out

of this charter’ was adopted. When parties intend to include a broad arbitration provision, they

provide for arbitration ‘disputes arising out of and relating to’ the agreement. Because of the absence

of the ‘relating to’ language in the arbitration provision, there is no ambiguity in concluding that

‘arising out of this charter’ is intended to cover a much narrower scope of disputes.

In the present matter, the claims made in tort by the owners relate to alleged fraudulent

misrepresentations by the respondents. Owing to their non-contractual nature, they are outside the

scope of the arbitration agreement. Therefore, the intention of the parties to exclude non-contractual

claims is apparent as the alleged tort claim constituted an ‘independent wrong’ from any breach of

the charterparty, it is not arbitrable under the charterparty.

________________________________________________________________________

ISSUE III: WHETHER OR NOT THE CHARTERERS ARE LIABLE TO PAY THE OWNERS THE HIRE

OWED FOR THE LEASE OF “WESTERN DAWN”?

I. Hire is owed only as far as the earning capacity of the vessel remains intact.

i. The payment of hire is an “intermediate term” of contract.

A time Charterparty when concluded between the Owners of a vessel and the Charterers,

is a a contract for a period or for a trip under which, in return for the payment of hire, the

vessel’s employment is put under the orders of the charterers. 16 The basic form of

15 Para 3-42, Redfern & Hunter. 16Voyage Charters, §1.1.

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compensation in a time Charterparty is hire.17 In the present case, hire owed is calculated

to be USD $19,500 on a PDPR basis.18 Respondents submit that this obligation to pay

hire does not constitute an “absolute condition” of the contract. In other words, the

payment of hire is an intermediate term, which does not impose an absolute or

unconditional obligation upon the Charterers. In the recently concluded Spar Shipping

case19, it was held that the very inclusion of the contractual right to withdraw on any

breach suggested that in its absence there would be no such right. 20 Further, in the

absence of the express right to terminate, it was inconceivable that the parties would be

taken to have intended a delay of a few minutes in the payment of hire to entitle an owner

to withdraw the vessel from a long-term time charter.21 Therefore, it is submitted that the

obligation to pay hire does not constitute an absolute condition warranting mandatory

compliance.

ii. Hire is owed only as far as the Charterers have full commercial control over the

vessel.

In the present case, Respondents submit that the lack of communication with the master

of this vessel for a period of 14 days (4th July, 2014- 17th July 2014)22 hinders the

Charterer’s rights to direct and control the vessel under Clause 12 of the amended

Shelltime 4 Charterparty.23 Therefore, this lack of communication amounts to a curb of

17 Francis O’Brien, ‘Freight and Charter Hire’ (1974-1975) 49 Tulane Law Review 956, p. 956. 18Page 8 of the Bundle. 19 Spar Shipping AS v. Grand China Logistics Holding (Group) Co., Ltd [2015] EWHC 718 (Comm). 20 Spar Shipping AS v. Grand China Logistics Holding (Group) Co., Ltd [2015] EWHC 718 (Comm) para 193-195. 21 Spar Shipping AS v. Grand China Logistics Holding (Group) Co., Ltd [2015] EWHC 718 (Comm)para 201. 22 Pages 40, 41 of the Bundle. 23 Clause 12, Amended Shelltime 4 Charterparty.

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the Respondent’s right to full commercial usage.

II. All the elements of the off hire clause are satisfied.

.If the Charterer is deprived, either in whole or in part of his right to full commercial

usage of the vessel, as a result of some deficiency of the vessel, its equipment or the

crew, 24 then there is no responsibility to pay hire and there is loss of time for the

charterer. This period is known as off hire.25 To bring themselves under off hire, the

charterer must show that there was prevention of the full working of the vessel, caused

by one of the causes or risks listed, and that there was a loss of time.26

i. The De minimis rule stands satisfied.

The threshold rule is a provision in the off hire clause that stipulates that the hindrance

must continue for a number of consecutive hours or days. It is a de minimis condition.27

In the present case, the amended Shelltime 4 Charterparty stipulates that a minimum of

six hours be lost by the event causing off hire.28 However, the Charterers did not receive

any communication from the master of the vessel for a period of 14 days from the 4th of

July, 2014 till the 17th of July, 2014. Therefore, the de minimis condition stands satisfied.

ii. Prevention of full working of the vessel

The provision preventing the full working of the vessel also qualifies the causes listed in

24 The YayeMaru, 274 F. 195 (4thCir.), cert. denied, 257 U.S. 638 (1921). 25 Norman Lopez, (1992) Bes Chartering and Shipping Terms. 11 Ed., Barker & Howard ltd, London, p. 153, p. 110. 26 Terence Coughlin, et.al, (2008) Time Charters, 6 Ed, para 25.6 p. 442. 27Rhidian Thomas , ‘Time charterparty hire: issues relating to contractual remedies for default and off hire clauses’ in Rhidian Thomas (Ed), Legal Issues Relating to Time Charterparties, (2008) London. Chapter 7, Para 7.71 p. 136. 28 Clause 21(a) (i) of the Shelltime 4 Charterparty,amended as in Page 6 of the Bundle.

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the off hire clause.29 The main point with the phrase “full working of the vessel” is when

a vessel is prevented from performing the next operation that the charterer requires of

her, the vessel is deemed to be prevented from working.30 Any cause that results in a

break in the vessel’s also places the vessel off hire.31 This has been expanded to include

actions by the Captain and the Crew if their actions amount to a breach of the Charterer’s

right to full usage of the vessel.32 The question of preventing the full working of the

vessel is always a factual one.33 In the present case, the Master of the vessel did not

communicate with the Charterers continually over a period of 13 days from the 4th of

July, 2014 till the 17th July 2014. This lead to a complete lack of control on the part of the

Charterer and prevented the full efficient working of the vessel.

iii. The Charterparty lists break in communication as an off hire event.

The second element to be satisfied is the prior listing of the event or a similar event as

causing the vessel to go off hire in the Charterparty. 34 In the present case, Clause

21(a)(2) of the Shelltime 4 Charterparty specifically states that , “breach of orders or

neglect of duty on the part of 349 the master, officers or crew.” Therefore, as the

29John Weale, ‘The NYPE Off-Hire Clause and Third Party Intervention: Can an Efficient Vessel be Placed Off-Hire?’ Vol. 33, No. 2, April, 2002 Journal of Maritime Law & Commerce, 137 p. 140 footnote 29 ; Terence Coughlin, et.al, (2008) Time Charters, 6 Ed para 25.7 p. 442. 30 The Laconian Confidence [1997]1 Lloyd’s Rep. 139, 141(Rix L.J); The Aquacharm [1982] 1 Lloyd’s Rep 7, 9. ; The Berge Sund [1993] 2 Lloyd’s Rep 453,459 (C.A.), (Staughton, L.J.), Hogarth v Miller [1891] A.C 48,56,57 (H.L) ( Lord Halsbury) 31The Laconian Confidence [1997]1 Lloyd’s Rep. 139,150 (Rix, J); Terence Coughlin, et.al, (2008) Time Charters, 6 Ed Para 25.15 p. 444 32 Rhidian Thomas , ‘Time charterparty hire: issues relating to contractual remedies for default and off hire clauses’ in Rhidian Thomas (Ed), Legal Issues Relating to Time Charterparties, (2008) London. Chapter 7, para 7.73 p. 136.; para 7.87, p.141 33The Laconian Confidence [1997]1 Lloyd’s Rep. 139 p. 150 (Rix, J.). 34 Terence Coughlin, et.al, (2008) Time Charters, 6 Ed, para 25.6 p. 442; Rhidian Thomas , ‘Time charterparty hire: issues relating to contractual remedies for default and off hire clauses’ in Rhidian Thomas (Ed), Legal Issues Relating to Time Charterparties, (2008) London. p. 140.

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Charterparty has already included neglect on the part of the Master and the crew

constituting off hire, the second element stands satisfied.

iv. The charterers suffered a net loss of time

Finally, it must be shown that time was lost to the charterers as a consequence of the

prevention of the full working of the vessel.35 Loss of time includes both ‘loss of a period

in service’36 and a “delay to the progress of the adventure.” 37

‘Net loss of time’ clauses are clauses where loss of time is interpreted to mean both loss

of a period of service and delay to the progress of adventure. 38 In the present case,

Respondents submit that the lack of communication with the vessel over a period of 14

days impaired the Charterers’ right to fully control the working of the vessel.39 It also

consequently resulted in a serious delay in the voyage to be undertaken. Respondents

therefore submit that this satisfies the elements for “loss of time” and caused the vessel to

go off hire.

III. The vessel provided was not seaworthy.

Under Article III Rule 1 of the Hague Visby Rules, a carrier must take due diligence to

provide a ship that is seaworthy i.e. the ship must be “properly equipped”, “sufficiently

strong”40 and “in a condition to perform the voyage then about to be undertaken”.41 In

35Rhidian Thomas , ‘Time charterparty hire: issues relating to contractual remedies for default and off hire clauses’ in Rhidian Thomas (Ed), Legal Issues Relating to Time Charterparties, (2008) London. para 7.75 p. 136; Qingdao Ocean Shipping Mariners College, Practice & Law of Chartering Shipping, (2010) Chapter 4, Sections 3 &4, p. 189. 36Terence Coughlin, et.al, (2008) Time Charters, 6 Ed, Para 25.53 p. 452. 37 The Pythia [1982] 2 Lloyd’s Rep. 160 at p. 168. 38 Terence Coughlin, et.al, (2008) Time Charters, 6 Ed, para 25.54 p. 453. 39 P. 40,41 of the Bundle. 40Black's Law Dictionary (9th ed. 2009), seaworthy . 41Kopitoff v Wilson (1876) 1 QBD 377, 380 (Field J.); Virginia Carolina Chemical Co v Norfolk and North American Steam Shipping Co [1912] 1 KB 229; Simon Baughen, Shipping Law (T and F Publishing, 4th edn, 2009) 88; Julian Cooke et. al, Voyage Charters (Lloyd‟s of London Press, 1993) 162; Jason Chuah, The Law of International Trade (3rd edn, 2009) 234.

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effect, the vessel should be “reasonably fit to withstand the perils which may foreseeably

be encountered on the voyage”.42

i. The Captain was incompetent as he followed instructions other than those given by

the Charterer.

Clause 12 of the Charterparty clearly vests the Charterers with responsibility to direct and

instruct the master of the Vessel.43 Further, the under Part II (Incident Reporting) of the

Voyage Orders dispatched to the master of the ship, detailed instructions regarding the

manner of communication are laid down.44 However, the master chose to deviate from

the voyage order by taking instructions from Captain William Anya45 in violation of the

voyage orders. This is indicative of incompetency on the part of the Master.

ii. The Captain failed to follow requisite anti-piracy precautions relating to West Africa.

When the ship is delivered, her condition has to be “in every way fitted” and operational

for the employment that the charterer has in mind.46. To comply with this provision, a

carrier must employ “the standards of a reasonable ship owner taking into account

international standards and the particular circumstances of the problem at hand”.47 It is

42EmpresaCubanaImportada de Alimentos v Iasmos Shipping Co SA – The “Good Friend” [1984] 2 Lloyd‟s Rep 586; Ben Line Steamers Ltd. v Pacific Steam Navigation Co – The “Benlawers” [1989] 2 Lloyd's Rep. 51; Halsbury‟s Laws (5th edn, 2010) vol 7, ¶465. 43 Clause 12 , Amended Shelltime 4 Charterparty. 44Page 13 of the Bundle. 45 Page 35 of the Bundle. 46 Norman Lopez, (1992) Bes Chartering and Shipping Terms. 11 Ed., Barker & Howard ltd, London, p. 153 ; The Maori King [1895] 2 QB 550; Queensland National Bank Ltd v Peninsular and Oriental Steam Navigation Co [1898] 1 QB 567. Article III Rule 2, Hague-Visby Rules, 1968. Northern Shipping Co. v Deutsche Seereederei G.M.B.H. and Others –The “Kapitan Sakharov” [2000] 2 Lloyd's Rep. 255; Article III Rule 2, Hague-Visby Rules, 1968. ; Simon Baughen, Shipping Law (T and F Publishing, 4th edn, 2009) 88; Article III Rule 2, Hague-Visby Rules, 1968. 47Northern Shipping Co. v Deutsche Seereederei G.M.B.H. and Others –The “Kapitan Sakharov” [2000] 2 Lloyd's Rep. 255 (Auld, LJ.); Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad– The “BungaSeroja” (1998) 72 ALJR 1592; Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa Publishing, 2010) 1.114.

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submitted that the non employment of the BMP4 equipment 48 amounts to non

compliance with industry standards and therefore fails the reasonable precautions test.

IV. Arguendo, Off hire operates independent of any breach of contract by the owners.

The off hire clause operates independently of fault or breach on the part of the owners.49

As the objective of an off hire clause is to relieve the charterer of the obligation to pay

hire when he has no use of the ship, fault attributable to the owners is not required,

instead the emphasis is on the allocation of risk 50 Therefore it is not necessarily a fault of

the ship-owner that triggers the off-hire clause.51 It is a ‘no-fault’ provision.52 Therefore,

even if the Master had complied with the directions issued to him by the Charterers, the

prolonged absence of communication would nevertheless render the ship off hire.

________________________________________________________________________

ISSUE IV : WHETHER ASA2 ACTED AN AGENT OF THE RESPONDENTS?

________________________________________________________________________

An ‘agent’ is defined as one who represents and acts for another (principal) under the

contract or relation of agency.53

48 Page 30, 31 of the Bundle. 49Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa Publishing, 2010) 1.114. 50The Berge Sund, [1993] 2 Lloyd's Rep.p. 463 (per Steyn J). ; John Weale, ‘The NYPE Off-Hire Clause and Third Party Intervention: Can an Efficient Vessel be Placed Off-Hire?’ Vol. 33, No. 2, April, 2002 Journal of Maritime Law & Commerce, 137,p. 138 footnote 26,; The Aquacharm, [1982] 1 Lloyd's Rep.7 at p. 9. 51 Zheng Xia, ‘Measures Would be Taken by the Courts in Deciding whether to Trigger the Off-hire Clause’ by (2009) Vol.3 No.1 Management Science and Engineering, 60-69, http://50.22.92.12/index.php/mse/article/view/j.mse.1913035X20080301.008/897 <Accessed on 7 February, 2013> p. 61Royal Greek Government v Minister of Transport [1949] 82 Ll. L. Rep, 196 at p. 199 P.196. 52Michael Cohen, ‘Confusion in the Drafting and Application of Off –Hire Clauses’(1977-1978) 9 Journal of Maritime Law &Commerce,343, P.343. 53 Black's Law Dictionary (9th ed. 2009),‘agent’

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I. ASA2 was never the authorized agent of the respondents.

To establish agency, the principal must make a representation expressing the authority of

the agent.54 A mere representation made by Atlantic STS Agency (ASA2) as an agent of

the Respondents is insufficient to establish the agency.55 The Respondents had appointed

‘Atlantic Services Agency-PIC WILLIAM – William@asa.com.an’56 as their discharge

port agent under their authority57. The representations made by ASA258, directing the

vessel to an alternate discharge location and promising bunkers and discharge of cargo

were not on the behalf of the Respondents59. In absence of express instructions by the

Respondent, the Claimant could not have placed reliance on a representation relating to

the course of voyage from a third party60. Arguendo, the scope of a discharge port agent’s

authority was limited to directing the ship to Luanda and ensuring that the cargo was

offloaded.61 The agent was not authorized to give directions to the Vessel62 and allocate

an Alternate Discharge Location. ASA2 had acted beyond his authority.

54 Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd. . [1964] 2 QB 480 at 505; Vodafone Ltd.. v Gnt Holdings (UK) Ltd.. [2004]EWHC 1526(QB); Armagas Ltd.. v Mundogas S.A [1985]3All ER795. 55Cosco Container Lines Co. Ltd.. v Robert John Batchford [2013] EWHC 840 (QB); Armagas Ltd.. v Mundogas S.A. , [1986] A.C. 717. 56 Page 15 of moot problem (Clause 4.0 of Voyage Order). 57 Clause 7, Shelltime 4 Charteparty. 58 Page 35 of the moot problem (E-mail sent by ASA2 to Master of Western Dawn on 28th June 2014 at 18:02(UTC+1)). 59 Page 41 of the moot problem ( email sent by Respondents to claimants on 04 July 2014 12:24 (UTC+8)). 60 Page 13 of moot problem. 61 A/S Hansen-Tangens Rederi III v. Total Transport Corporation of Panama (The Sagona) - Q.B.D. (Com.Ct.) (Staughton J.) - 3 November 1983, ROBERT MERKIN, PRIVITY OF CONTRACT: THE IMPACT OF THE CONTRACTS 156 (Taylor and francis ed. 2013) 62 Clause 12 Shelltime 4 Charterparty Line 219.

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II. None of the actions of the respondents lead to subsequent ratification of asa2

their agents.

Ratification is a person's binding adoption of an act already completed without producing

a legal obligation or done by a third party having at the time no authority to act as the

person's agent.63 The person ratifying the conduct of a third party must know of all the

material circumstances under which the action took place 64 and must manifest

unequivocally an intention to adopt the act in question.65

i. Respondents did not have complete knowledge of material facts.

The Respondent was not cognizant of the source of representation, the assertion of ASA2

being an agent and the specified alternate discharge coordinates66 while confirming the

supply of bunkers at STS Area 1 and directing liaison with STS coordinator67. In absence

of complete knowledge of material information, no expression, silence or conduct of the

Respondents can be implied to have ratified the agency of ASA2.68

63 Black's Law Dictionary (9th ed. 2009),‘ratification’. 64 SIR JACK BEATSON, ANSON’S LAW OF CONTRACT 691 (29th ed. Oxford university press, 2010), De Bussche v Alt (1878) 8 Ch. D 286, Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd. [2015] EWHC 718 (Comm), Sea Emerald SA v Prominvestbank v Joint Stockpoint Commercial Industrial and Investment Bank [2008] 1 Lloyd's Rep 96, FRANCIS WHARTON , A COMMENTARY ON THE LAW OF AGENCY AND AGENTS 65 (Kay and Brother, 1876 ) . 65 Spar Shipping [2015] EWHC 718 (Comm); Sea Emerald [2008] 1 Lloyd's Rep 96, Yona Int’l Ltd.. v La Reunion Francaise SA [1996] 2 Lloyd's Rep 84. 66 Page 38 of the moot problem (E-mail sent by Master of Western Dawn to the Respondents on 03 July 2014 16:28 (UTC+1)). 67 Page 40 of the moot problem (E-mail sent by Charterers to Master of Western Dawn on 4th July 2014 at 09:52(UTC+8)). 68 Ratification in Agency Without Knowledge of Material Fact, 15 Yale Law Journal 331 (1906); SIR JACK BEATSON, ANSON’S LAW OF CONTRACT 691 (29th ed. Oxford university press, 2010), De Bussche v Alt (1878) 8 Ch. D 286 , Spar Shipping [2015] EWHC 718 (Comm), Sea Emerald [2008] 1 Lloyd's Rep 96, FRANCIS WHARTON , A COMMENTARY ON THE LAW OF AGENCY AND AGENTS 65 (Kay and Brother, 1876 )

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ii. Respondents did not manifest intention to ratify ASA2’s agency.

In the absence of complete knowledge of material facts and in the case of silent

ratification, an intention must be manifested for Ratification. 69 The Respondents had

clarified their intention to direct the ship to STS Area 1 and then to Bonny. 70 The

subsequent email asking the Master to continue liaison with STS Coordinator does not

establish beyond doubt that there is adoption of the alternate representation of ASA2.71

Hence, the Respondents submit that ratification of ASA2, as agent cannot be established

in absence of complete knowledge and unequivocal intention to acknowledge the

representations of ASA2. Therefore, the Respondents contend that ASA2 was never an

agent of the Respondents.

III. The respondents are not estopped from denying liability for the representations

made by ASA2

According to the principle of estoppel, a person making a statement, promise or

assurance is estopped from denying or going back on it, if another to the detriment72 of

69 Sea Emerald [2008] 1 Lloyd's Rep 96, Yona Int’l Ltd.. v La Reunion Francaise SA [1996] 2 Lloyd's Rep 84, The Lorenz Consultancy Ltd.. v Fox-Davies Capital Ltd.. [2011] EWHC 574 (Ch), Celtheene Pty Ltd. v WKJ Hauliers Pty Ltd. [1981] 1 N.S.W.L.R 606, Shell co of Austl. Ltd. v Nat shipping Bagging Serv. Ltd.. (The Kilmun) [1988] 2 Llyod’s Rep 1 70 Page 34 of the moot problem (E-mail sent by Charterers to Master of Western Dawn on 28 June 2014 18:43 (UTC+8)). 71 Page 40 of the moot problem (E-mail sent by Charterers to Master of Western Dawn on 4th July 2014 at 09:52(UTC+8)). 72 Norfolk County Counsil v Secretary of State for the Env’t [1973] 3 All ER 673, Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd. [1990] Ch 237, Dollond v The Trustees of the BTG Pension Fund [2011] Pens. L.R. 291; Kelly v Fraser, [2013] 1 A.C. 450

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that another person acts 73 upon that reliance and if it was reasonable to rely on the

representation74.

i. Representations of ASA2 were not on behalf of the Respondents

To establish an estoppel against a party, it is important to show that they or their

authorized 75 agents made 76 a representation, which was relied upon. The alleged

representations77 were made by ASA2, who were neither the agents of the Respondents

and nor were they authorized to provide voyage related instructions78 to the Claimants.

The Respondent never intended the Claimant to follow ASA2’s directions and act on

them. Any promise thereof was binding on ASA2, and not the Respondents.

ii. It was not reasonable for the Claimants to rely on the representations.

To bind a person under estoppel, it must be reasonable for the Claimants to rely and act

upon the representation made by them 79 subject to the cumulative effects of the

statements80.The Claimant had relied on the instructions of ASA2 regarding routing in a

high-risk piracy zone81 without reviewing it82 and without informing the Respondents83.

73 Amalgamated Investment and Property Co Ltd. v Texas Commerce Int’l bank Ltd. [1982] QB 84, Micoperi SrL v Shipowners Mutual Protection and Indemnity Ass’n (Luxembourg), [2011] EWHC 2686 (Comm) 74 Pickard v Sears (1837) 6 Ad & El 469; Prudential Staff Pensions Ltd.. v The Prudential Assurance Co. Ltd.. & Ors [2011] Pens.L.R. 239 75 SEAN WILKEN, KARIM GHALY, THE LAW OF WAIVER, VARIATION AND ESTOPPEL 141 (Oxford University Press, 2012), Moorgate Merchantile Co Ltd. v Twitchings [1976] 1 QB 225 CA, Ismail v Polish Ocean Lines [1976] QB 893 CA 76 SEAN WILKEN, KARIM GHALY, THE LAW OF WAIVER, VARIATION AND ESTOPPEL 141 (Oxford University Press, 2012), Re Exchange Securities & Commodities Ltd. [1988] Ch 46 77 Page 35 of the moot problem (E-mail sent by ASA2 to Master of Western Dawn on 28th June 2014 at 18:02(UTC+1)). 78 A/S Hansen-Tangens Rederi III v. Total Transport Corporation of Panama (The Sagona) - Q.B.D. (Com.Ct.) (Staughton J.) - 3 November 1983, ROBERT MERKIN, PRIVITY OF CONTRACT: THE IMPACT OF THE CONTRACTS 156 (Taylor and francis ed. 2013) 79 Pickard v Sears (1837) 6 Ad & El 469, Kim v Chasewood Park Residents Ltd. [2013] EWCA Civ 239 80 Dollond v The Trustees of the BTG Pension Fund [2011] Pens. L.R. 291 81 Page 2 of the Procedural Order 2 point 8 82 Clause 7.8, Best Management Practices, Page 8 of Moot Problem (Piracy Clause)

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In a situation of shortage of fuel84, the Claimant proceeded to a farther area appointed by

the third party than that advised by the Respondents85. Thus the Respondents contend that

in presence of reliable and viable directions by the Respondents, it was unreasonable for

the Master to rely on third party instructions.

iii. The Claimant incurred damages due to their conduct.

The detriment or harm from which the principle seeks to give protection is that which

would flow from the change of position if the assumption were deserted that led to it.86

The Master had made the vessel vulnerable to pirate attacks by not complying with the

BMP4 guidelines, 87 sending noon reports, ship movement and intentions to a third

party,88 and drifting89 in West African waters90. None of the damages were attributable to

the Respondents.

83 Page 13 of moot problem (Voyage Order) 84 Page 32 of the moot problem (E-mail sent by Master of Western Dawn to the Respondent on 25th June 2014 at 11:02 (UTC+3)). 85 Page 34 of the moot problem (Line 3 of E-mail sent by Master of Western Dawn to the Respondent on 28th June 2014 at 11:42 (UTC+2)), Page 35 of the moot problem (Line 5 of E-mail sent by Master of Western Dawn to the Respondent on 28th June 2014 at 19:50 (UTC+2)) 86 SEAN WILKEN, KARIM GHALY, THE LAW OF WAIVER, VARIATION AND ESTOPPEL 141 (Oxford University Press, 2012), Grundt v Great Boulder Pty Gold Mines Ltd . [1937] 59 CLR 641; Re Exchange Securities & Commodities Ltd. [1988] Ch 46; Cadbury Schweppes Plc v Halifax Share Dealing Ltd. [2006] EWHC 1184 87 Somali pirates as agents of change in international law-making and organization, C.J.I.C.L. 2012, 1(3), 81-106. 88 Guidelines for Owners, Operators and Masters for Protection against Piracy in the Gulf of Guinea Region, Clause 6, available at <http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_protection_against_Piracy_in_the_Gulf_of_Guinea_Region.pdf> 89 Page 40 of the moot problem (E-mail sent by Master of Western Dawn to Oliver at WTI on 04 July 2014 05:20 (UTC+1)) 90 Guidelines for Owners, Operators and Masters for Protection against Piracy in the Gulf of Guinea Region, Clause 7, available at <http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_protection_against_Piracy_in_the_Gulf_of_Guinea_Region.pdf>

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________________________________________________________________________

ISSUE IV: WHETHER THE RESPONDENT HAS COMMITTED THE TORT OF FRAUD?

_______________________________________________________________________

I. There was a breach of promise, not a false representation.

Every promisor impliedly represents that he has, at the moment of making the promise,

the intention of fulfilling the obligations that he is undertaking.91 If such intention was

eventually not manifested, it is neither evidence of non-existence of the intention, nor is it

a misrepresentation,92 since he could have subsequently changed his mind93. In such a

case, the other party considers the initial offer that was made, as a promise, not as his

intention.94 Therefore, any loss consequently sustained will be caused the breach of that

promise, remedied under Contract Law.95 In the present case, it was promised by the

Respondent that bunkers would be provided and cargo would be discharged at ‘STS Area

1’.96 Therefore, the Respondent is not liable under torts.

II. The burden of proof is on the claimant.

It is for the Claimant to prove the facts that give rise to the fraud, including the state of

mind of the person making the representations and reliance on the same.97 It cannot be

91 Re Shackleton (1875) L.R. 10 Ch. 446; Re Eastgate [1905] 1 K.B. 465. 92 A M Dugdale and M A Jones (eds) Clerk and Lindsell on Torts (Sweet and Maxwell, 19th edn, 2006) 717.

93 Jordan v. Money (1854) 5 H.L.C 185.

94 A M Dugdale and M A Jones (eds) Clerk and Lindsell on Torts (Sweet and Maxwell, 19th edn, 2006) 717.

95 Becken v. Cohen [1973] 1 All ER 120; R. v. Sunair Ltd Holidays [1973] 1 W.L.R. 1105, (C.A).

96 Page 33 of the moot problem (E-mail sent by Charterers to Master at Western Dawn on 28th June, 2014 at 16:27 (UTC+8)). 97 Derry v. Peek (1889) 14 AC 337, 376 (Lord Hershell).

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assumed by the Claimant that ASA2 was the Respondent’s agent or that the Respondent

did not have any intention of discharging the cargo or providing bunkers. Clear proof has

to be provided.98

III. Arguendo, the representations were not false in nature.

The Respondent made the representations with an honest belief in its truth99. There is no

deceit if the statement of fact involved in the promise was true. 100 If however, the

representations were true when made and became untrue when relied upon, there is no

deceit unless the representor became aware at the time of inducement that the

representations are untrue.101 Since bunkers could not be provided at Durban, it was

communicated to the Claimant that bunkers would be provided at STS Area 1.102 Before

bunkers could be provided the Claimant took instructions from third parties 103 and

consequently was attacked by pirates; at no fault of the Respondent. ASA2 was never the

agent of the Respondent.

IV. The claimant did not suffer damage acting on the representations.

98 Hornal v. Neuberger Products Ltd [1957] 1 Q.B. 247; followed in Bromley v. Att-Gen. [1968] N.Z.L.R. 75; Re B [2008] UKHL 35 (Lord Hoffman). 99 Derry v. Peek (1889) 14 AC 337, 376 (Lord Hershell). 100 Cf. British Airways Board v. Talyor [1976] 1 W.L.R 13; Gross v. Lewis Hillman Ltd [1969] 3 All ER 1476, CA; Akerhielm v De Mare [1959] AC 789 (Lord Jenkins); A M Dugdale and M A Jones (eds) Clerk and Lindsell on Torts (Sweet and Maxwell, 19th edn, 2006) 723 ¶14-20 101 British & Commonwealth Holding Plc v. Quadrex Holdings Incorporated (unreported) 10th April 1995 (CA) 35-36, 54-57; AIC Ltd v. ITS Testing Services (UK) Ltd ( The Kriti Palm) [2007] 1 Lloyd’s Rep 555, ¶296 (Rix LJ); Abu Dhabi Investment Company v. H Clarkson & Company Ltd [2007] 1 Lloyd’s Rep 264 ¶231-32 (Tomilson J); IFE Fund SA v. Goldman Sachs International [2007] 2 Lloyd’s Rep 449, ¶72-78 (Gale LJ). 102 Page 32 of the moot problem (E-mail sent by Charterers to Master of Western Dawn on 28th June 2014 at 16:27(UTC+8)). 103 Page 35 of the moot problem (E-mail sent by ASA2 to Master at Western Dawn on 28th June, 2014 at 18:02 (UTC+1)).

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The Claimant has the burden of proof to show that the alleged breach of duty materially

increased the risk of injury.104 In the present factual matrix, piracy breaks the chain of

causation.

i. Piracy acts as novus actus intervieniens.

Where there are several potential causes of harm, some of which are tortious and some of

which are natural, the basic rule is that the Claimant can succeed only if he or she proves

on the balance of probabilities that the loss and damage is attributable to the tort.105

Piracy106, being an unwarrantable, extraneous107 new cause, disturbs the sequence of

events, breaking the chain of causation. 108 Hence, the Respondent is not liable for

damage arising out of such intervening acts109 like piracy. .

________________________________________________________________________

ISSUE V : WHETHER THE CLAIMANT IS LIABLE UNDER BAILMENT?

_______________________________________________________________________

The title to sue under bailment is based on the right to constructive possession of the

goods.110 In the present case, the Respondent has constructive possession of goods.111

104 Wilsher v. Essex Area Health Authority [1988] AC 1074. 105 Wilsher v. Essex Area Health Authority [1988] AC 1074. 106 Douglas Hodgson, The Law of Intervening Causation (Ashgate, 2008) 77. 107 Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd (M/V Saldanha) [2010] EWHC 1340 (Comm) (Gross J). 108 The Oropesa [1943] 1 All ER 211. 109 McKew v Holland & Hannen & Cubitts (Scotland) Ltd [1970] SC 20(HL) (Lord Reid); Home office v. Dorset Yacht Co. Ltd [1970] AC 1004 (HL) (Lord Reid). 110 Borealis Ab v. Stargas Ltd. and Bergesen D.Y. A/S "Berge Sisar" [2002] 2 AC 205, 219-222, ¶ 19, 22. ; International Factors Ltd v Rodriguez [1979] QB 351, 357. 111 Point 22 of Procedural Order No: 2 (2015).

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I. There exists a bailment on terms of the time charter party between the claimant

and the respondent.

The bailment to the ship owner is created by delivery of the goods to him by the

charterer.112 This results in a bailment on terms of the time charter party113. The bill of

lading acts as an evidence of this receipt of goods.114 In the present case, the delivery of

cargo to the vessel was completed on 8th June, 2014.115 Hence a bailment on terms of the

charter party has been created between the Claimant and the Respondent.

i. The Claimant is the contractual carrier.

The identity of the carrier is determined by the relevant documents and the circumstances

applicable to each case.116 Banner headings are given lesser value while other factors,

like mode of signature, are significant indicators.117

a. The bill of lading is signed by the Respondent or their agents ‘on behalf’ of the

Master.

The general rule is that when the bill of lading is signed by the charterer’s agents ‘on

behalf of the Master’ as in the present case,118 the ship owner will be the contractual

112 Leigh and Sillavan Ltd v. Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785, 818; Sir Guenter Treitel and F.M.B. Reynolds, Carver on Bills of Lading, (Sweet & Maxwell, 3rd edn, 2011) 47 ¶2-008. 113 Sinokor Merchant Marine Co Ltd v. The Owners and/or Demise Charterers of the Ship or Vessel “Marcatania” HCAJ 138/2008. 114. Noble Resources Ltd v Cavalier Shipping Corp (‘The Atlas’) [1996] C.L.C. 1148 (Longmore J); The Dunelmia [1970] 1 Q.B. 289; Sir Bernard Eder, Scrutton on Charterparties and Bills of Lading, (Sweet & Maxwell, 22nd edn, 2011) 92; Article III Rule 4 of the Hague-Visby Rules; Section 4 of COGSA Act, 1992. 115 Page 29 of the moot problem (E-mail sent by Charterers to Master of Western Dawn on 8th June 2014 at 11:02 (UTC+8)). 116Samuel & Co. v. West Hartlepool Steam Navigation & Co. (1906) 11 Comm Cas 115. 117 Samuel & Co. v. West Hartlepool Steam Navigation & Co. (1906) 11 Comm Cas 115. 118 Page 44 of the moot problem.

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carrier.119 Also, Master’s signature box indicates agents of the Respondent are signing for

the Claimant.120

b. The indemnity clause in the charter party gives the Respondent and their agents

authority to sign bills of lading on behalf of the Claimant.

The Charterer is indemnifying the Owner against all consequences arising from signing

Bills of Lading in accordance with the directions of Charterer or their agents.121

Therefore, taking a holistic view of the documents and the circumstances,122 the Claimant

is the contractual carrier. In such a situation, the Master remains for the purpose of

performing the carriage operation (which includes possession of the cargo) the employee

of the Claimant.123

II. The claimant has breached their duty as a bailee.

When the goods are lost or stolen124, while they are in the bailee’s possession,125 he is

held liable.126

(i) The Claimant is liable for loss of cargo under Article III Rule 2 of HVR.

The duties under Article III Rule 2 to keep, care for, and discharge the cargo properly and

carefully represent the common law duties of a bailee’s duty of care of cargo.127 In the

119 Simon Baughen, Shipping Law, (Cavendish Publishing Limited, 2nd edn, 2001) 31; Wilson v. Darling Island Stevedoring & Lighterage Co [1956] 1 Lloyd’s Rep. 346 at 364 (Fullagar J); Tillmans & Co. v. S.S. Knutsford [1908] 1 KB 185; The Okehampton [1913] P 173. 120 Page 44 of the moot problem. 121 Clause 13(a) of the SHELLTIME 4 Charter Party. 122 M.B. Pyramid Sound N.V. v. Briese Schiffahrts GmbH and Co. KG. M.S. “Sina”and Latvian Shipping Association Ltd. (The “Ines”), [1995] 2 Lloyd’s Rep. 144. (Clarke J). 123 Sir Guenter Treitel and F.M.B. Reynolds, Carver on Bills of Lading, (Sweet & Maxwell, 3rd edn, 2011)430 ¶ 7-027. 124 Johnson Matthey and Co. Ltd v. Constantine Terminals Ltd [1976] 2 Lloyd’s Rep 215, (QB). 125 The Torenia [1983] 2 Lloyd’s Rep. 210 at 214. 126 Morris v. CW Martin & Sons Ltd [1966] 1 Q.B. 716, (Diplock L.J.) at 726; Sir Bernard Eder, Scrutton on Charterparties and Bills of Lading, (Sweet & Maxwell, 22nd edn, 2011) 274. 127 Hamburg Houtimport B.V. v. Agrosin Private Ltd (The Starsin) [2003] 1 Lloyd’s Rep. 571 (Lord Hobhouse of Woodborough).

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present case, the Claimant breached their duty to exercise reasonable care for the safety

of goods128 and protect the cargo against unexpected danger129. The Respondent and the

buyer named in the bill of lading did not receive 28,190MT of gasoil130 that was removed

from the Vessel.

(ii) The Claimants cannot rely on the exceptions mentioned under the Article IV of

the Hague-Visby Rules.

When unseaworthiness131 is the cause of the loss of cargo, the immunities under Article

IV cannot be relied upon.132

a. The Claimant failed to exercise ‘due diligence’ to make the vessel seaworthy.

It is submitted that due diligence refers to proper care being taken133 to prevent the loss

from occurring. It also includes considering what procedures should be reasonably

followed, the state of knowledge of the time and the standards laid down world maritime

organisations.134 In the present case, failure to follow the latest BMP4 practices resulted

in unseaworthiness of the vessel ultimately causing theft of cargo by pirates.

(iii) The duties of a bailee do not end on frustration of the charter party.

Once the charter party had been frustrated, the contractual bailment also came to an end

but there remains an obligation on the Claimant to take reasonable care of the cargo until

128 G Bosman (Transport) Ltd v. LKW Walter International Transportorganisation AG [2002] EWCA Civ 850; Port Swettenham Authority v. T W Wu & Co (M) Sdn Bhd [1979] AC 580. 129 Liverpool Grain Storage and Transit Co Ltd v. Charlton and Bagshaw (1918) 146 LT Jo 20, HL; Brabant & Co. v. King [1895] A.C. 632 at p. 641. 130 Page 42 of the moot problem (E-mail sent by Master of Western Dawn to Charterers on 17th July 2014 at 23:25 (UTC+1)). 131 Article III Rule1 of The Hague-Visby Rules. 132 Maxine Footwear Co Ltd v. Canadian Government Merchant Marine Ltd [1959] A.C. 589 (Lord Somervell of Harrow); Smith, Hogg & Co. v. Black Sea & Baltic General Insurance Co [1940] A.C. 997 at 1004-1005, (Lord Wright). 133 The Subro Valour [1995] 1 Lloyd’s Rep. 509 at 517 (Clarke J); The Fjord Wind [2000] 2 Lloyd’s Rep. 191 at 203. 134 Sir Guenter Treitel and F.M.B. Reynolds, Carver on Bills of Lading, (Sweet & Maxwell, 3rd edn, 2011) 667, ¶ 9-138.

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such time as arrangements were made to discharge it. 135 Assuming the contract is

frustrated on the 4th of July, 2014, it cannot be submitted that the bailment contract ended

as well; the duty to take care of the cargo as a reasonable person exists.

________________________________________________________________________

ISSUE VI: WHETHER THE CLAIMANTS ARE LIABLE FOR TORT OF CONVERSION OF THE

CARGO?

________________________________________________________________________

The wrong of conversion extends to the commission of any act of willful interference

with a chattel, done without lawful justification, whereby any person entitled thereto is

deprived of the use and possession of it.136 A bailee is liable for conversion when he

allows loss or destruction of goods in breach of his duty to take care.137

I. The Claimants have breached their duty to take care of the Cargo.

The Claimants took voyage related instructions from a third party. 138 Despite prior

knowledge of the risk of piracy,139 the Claimant failed to follow the BMP4 practices140

resulting in the loss of cargo to the pirates.141 The reduction of speed of the vessel in the

135 Petroleo Brasileiro S.A v. E.N.E. Kos 1 Limited [2012] UKSC 17. 136 SIR JOHN WILLIAM SALMOND, SALMOND’S LAW OF TORTS, 279 (Sweet & Maxwell, 1945), Kuwait Airways Corp v Iraqi Airways Co. [2002] UKHL 19, Lewis Trusts v Bambers Stores Ltd [1983] FSR 453, 459, MCC Proceeds Inc v. Lehman Bros International (Europe)[1998] 4 All ER 675 137 JOHN MURPHY, MARGARET BRAZIER, STREET ON TORTS 59 (Butterworths ed., 1999) ; Houghland v RR Low Ltd[1962] 1 QB 694 ; Brink's Global Services Inc v Igrox Ltd [2009] EWHC 1817 (Comm); MARGARET BRAZIER , CLERK & LINDSELL ON TORTS , 13-12 (Sweet & Maxwell ed., 17 ed. London 1995 ) 138 Page 35 of the moot problem (E-mail sent by ASA2 to Master of Western Dawn on 28t h June 2014 at 18:01(UTC+1)). 139 Page 21 of the moot problem (E-mail sent by Oliver at WTI to Master of Western Dawn on 27th May, 2014 at 16:59 (UTC+1)). 140 Page 36 of the moot problem (E-mail sent by Master of Western Dawn to Oliver at WTI on 29th June 2014 at 11:59(UTC+1)). 141 Page 42 of the moot problem (E-mail sent by Master of Western Dawn to Chris at LDTP on 17th July 2014 23:25 (UTC+1)).

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piracy risk zone raised their probability of being attacked.142 Therefore, the Claimant

breached their duty as a bailee143 and is liable under the tort of conversion.

PRAYER

In light of the above submissions, the Respondents request the Tribunal to declare:

1. That this tribunal does not have jurisdiction to decide the present dispute.

2. That the alleged tort of fraud is outside the ambit of the arbitration agreement.

3. That the Respondents are not liable to pay hire for the lease of the vessel

“Western Dawn”

4. That the vessel provided was not seaworthy.

5. That ASA2 is not and has never been an agent of the Respondents and therefore,

the principle of estoppel does not apply.

6. That the Respondents are not liable for the tort of fraud.

7. That the Claimants are liable for the loss of goods under bailment.

8. That the Claimants are liable for the tort of conversion.

142 Clause 3.4, Best Management Practices Version 4. 143 John Murphy, Margaret Brazier, Street On Torts, (Butterworths ed., 1999) 59 ; Houghland v RR Low Ltd [1962] 1 QB 694 ; Brink's Global Services Inc v Igrox Ltd [2009] EWHC 1817 (Comm).