EIGHTEENTH ANNUAL INTERNATIONAL MARITIME LAW … · 2021. 7. 20. · eighteenth annual...

EIGHTEENTH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2018

MEMORANDUM FOR CLAIMANT

THE UNIVERSITY OF LE HAVRE-NORMANDY

TEAM 14

ON BEHALF OF: AGAINST:

Cerulean Beans and Aromas (CBA) Dynamic Shipping LLC (DS)

CLAIMANT RESPONDENT

TEAM 14 MEMORANDUM FOR CLAIMANT

II

TABLE OF CONTENTS

TABLE OF CONTENTS ...................................................................................................................... II

ABBREVIATIONS .............................................................................................................................. V

LIST OF AUTHORITIES.................................................................................................................... VI

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

ARGUMENTS ON JURISDICTION .................................................................................................... 2

I. The Tribunal Has Jurisdiction To Determine Parties’ Dispute ....................................................... 2

A. The law of the United Kingdom governs the arbitration agreement ................................... 2

B. The arbitration agreement grants the Tribunal jurisdiction to determine Parties‘ dispute ......... 4

ARGUMENTS ON THE MERITS OF THE CLAIM ........................................................................... 6

I. Respondent’s Deviation Constitutes a Breach of the Charterparty ................................................ 6

A. RESPONDENT was contractually obliged not to deviate ............................................................. 6

B. The deviation was not caused by a Force Majeure Event but by a gross negligence on behalf of

the RESPONDENT ............................................................................................................................. 7

C. The additional delay caused by the Storm is a result of the RESPONDENT action and is not a case

of Force Majeure Event .................................................................................................................. 9

D. The Delivery of the goods was beyond the date fixed by the Charterparty and therefore

constitutes a breach of contract & CLAIMANT is eligible to receive damages for breach of

Charterparty .................................................................................................................................. 10

II. Respondent is Liable for the Damage to the Goods .................................................................... 11

A. The damages occurred before the effective delivery at the discharging port .......................... 11

B. CLAIMANT is eligible to receive extended damages for the damaged goods ........................... 12


III

III. CLAIMANT HOLDS A MARITIME LIEN OVER THE DRAGONFLY ............................... 15

A. The Dagonfly’s crew can enforce a maritime lien ................................................................... 15

B. Maritime lien is held by CLAIMANT because of its action ....................................................... 15

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIMS.................................................... 16

I. Claimant does not owe full freight under the Charterparty ...................................................... 16

A. Delivery was not on 29 but 31 July ................................................................................... 16

B. Upon delivery, ¾ of the cargo were not in merchantable condition ........................................ 16

II. Claimant does not owe reimbursement of Agency fees in Spectre ............................................. 17

A. RESPONDENT’s failure to ask for instructions .................................................................... 17

B. Informing CLAIMANT was possible .......................................................................................... 18

III. Claimant does not owe demurrage ............................................................................................. 18

A. The delay was caused by an unexpected peril ................................................................... 18

B. The event was beyond CLAIMANTs control ............................................................................. 19

C. Delay would not have occurred under normal circumstances ................................................. 19

IV. Claimant does not owe contribution for reparation expenditures to the vessel ......................... 19

A. RESPONDENT’s negligence broke chain of causation ......................................................... 20

B. Unpredictability of the sacrifice broke chain of causation ...................................................... 20

V. CLAIMANT DOES NOT OWE EXPENSES MADE AT DILLAMOND ................................ 21

A. Expenses resulting from a breach of the Charterparty are excluded ................................. 21

B. Charterer did not agree to the expenses ................................................................................... 21

REQUEST FOR RELIEF .................................................................................................................... 22


IV


V

ABBREVIATIONS

Charterer Cerulean Beans and Aromas (CBA) CLAIMANT

Owners Dynamic Shipping LLC (DS) RESPONDENT

Charterparty The voyage charterparty between CLAIMANT and RESPONDENT

Force Majeure Event An event listed in Clause 17 of the Charterparty

Loading Place Port of Cerulean

Dischargind Place Port of Dillamond

Parties CLAIMANT and RESPONDENT

The Dragonfly The MV Madam Dragonfly

Cargo 70 metric tons of speciality grade green coffee

Event 1 The Solar Flares that hit the Madam Dragonfly during the voyage

Event 2 The Storm that hit the region of Dillamond at the end of the voyage

ECDIS Electronics Charts Display Information System


VI

LIST OF AUTHORITIES

CASES AND ARBITRAL AWARDS

Akai Pty Ltd v People’s Insurance Co Ltd (1996)

Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984]

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

Bonython v Commonwealth [1950] 81 CLR 486, 498

British Shipowners v. Grimond

Carboex v Louis Dreyfus [2011] EWHC 1165

Dakin v Oxley (1864) 15 C.B. (N.S.) 646

DalwoodMarine v. Nordana Line (The Elbrus) [2010] 2 Lloyd's Rep. 315.

Emeraldian v Wellmix (The Vine) [2010] EWHC 1411

Evera SA Commercial v North Shipping Co [1956] Lloyd’s Rep. 367

Fletcher v Gillespie [1826] 3 Bing.635

Golden Strait Corp. v. Nippon Yusen Kaisha (The Golden Victory) [2007], 2 A.C. 353;

Hadley v. Baxendale [1854] Voyage charter

Holman v Dasnieres [1886] 2 T.L.R. 480

Knight v. Fleming (1898)

Oceanic Sun Line Special Shipping Co Inc v Fay [1988]

Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2013]

The Saturnia [1987] 2 Lloyd’s Rep. 43

BOOKS

Aleka Mandaraka-Sheppard, Modern Maritime Law (2nd ed, 2007, Routledge Cavendish)

Carver, Colinvaux, Carriage by Sea (London Stevens & Sons, 13th ed, 1982)

Clare Ambrose, Karen Maxwell and Michael Collett, London Maritime Arbitration (4th ed, 2011,

Informa Law from Routledge)

Eder, Bernard, Howard Bennett, Stevn Berry, David Foxton and Christopher Smith, Scrutton on

Charterparties and Bills of Lading (22nd ed, 2011, Sweet & Maxwell)

Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014)

Jean-Pierre Beurier, Droits Maritimes (3rd ed, 2015, Dalloz)

John Livermore, Transport Law in Australia (3rd ed, 2017, Wolters Kluwer)

Julian Cooke, Tim Young, Michael Ashcroft, Andrew Taylor, John Kimball, David Martowski,

LeRoi Lambert, Michael Sturley, Voyage Charters (Lloyd's shipping law library, CRC Press, 2014)


VII

Julian Cooke, Tim Young, Michael Ashcroft, Andrew Taylor, John Kimball, David Martowski, LeRoy

Lambert and Michael Sturley, Voyage Charters (4th ed, 2014, Informa Law from Routledge)

Laura WALTHER, Anisa RIZVANOLLI, Mareike WENDEBOURG, Carlos JAHN, Modeling and

Optimization Algorithms in Ship Weather Routing. International Journal of e-Navigation and

Maritime Economy 4 (2016)

Nigel Blackaby, Constantine Partasides, Alan Redfern, and Martin Hunter, Redfern and Hunter on

International Arbitration (Oxford University Press, 6th ed, 2015)

WEBSITES

Legal meanings of delivery https://repub.eur.nl/pub/6943/05.pdf

Lloyd’s List intelligence https://www.lloydslistintelligence.com/llint/print-

article.htm;jsessionid=0D2B5C01A3FE8F987952A152028D9618?documentId=240716&articleTyp

e=rats

CNRS http://www2.cnrs.fr/sites/en/fichier/cp_gabarit_helicite_magnetique_en_web.pdf

SOLAS http://solasv.mcga.gov.uk/

https://worldoceanreview.com/en/wor-1/transport/global-shipping/2/

STATUTES AND CONVENTIONS

Arbitration Act 1996

International Arbitration Act 1974

International Maritime Organisation Convention On Maritime Liens And Mortgage

Safety Of Life At Sea (SOLAS) convention 2002

UNCITRAL Model Law on International Commercial Arbitration

York and Antwerp Rules 2004

https://www.lloydslistintelligence.com/llint/print-article.htm;jsessionid=0D2B5C01A3FE8F987952A152028D9618?documentId=240716&articleType=rats




1

STATEMENT OF FACTS

1. Cerulean Beans and Aromas Ltd. (CLAIMANT) is a company based in Cerulean. It contacted Dynamic

Shipping LLC (RESPONDENT), a company based in Cerulean as well, to charter RESPONDENT’s vessel

(The Madam Dragonfly) for the urgent shipment of high quality coffee beans (‘cargo’) from Cerulean

to Dillamond by 28 July in order to satisfy CLAIMANT’S client.

2. Together, the parties agreed a voyage charter. Clause 27 of this charter provided that “any dispute

arising out of or in connection with this contract, [...], shall be referred to arbitration in London”.

3. Upon a further agreement, CLAIMANT transferred money in order to secure the crew’s wages and the

timely depart of the vessel in a separate bank account.

4. As agreed, on 24 July, the cargo was packed in specially sealed waterproof containers and loaded on

the vessel that departed without delay. The same night, solar flares knocked out communication and

satellite navigation. The vessel deviated to the port of Spectre as this was the only port for which

hardcopy maps were on board.

5. On 27 July, the vessel left the port of Spectre to continue her route to Dillamond. In the early morning

of 28 July the vessel was about to arrive at Dillamond but could not enter it in the reason of an

unexpected storm. While waiting the storm to pass, Master engaged manoeuvres and damage was

caused to the vessel’s hull.

6. Vessel entered the port of Dillamond on 29 July and discharged cargo in the evening. RESPONDENT’s

men waited CLAIMANT to collect cargo until midnight. Congestion caused by the storm hindered

CLAIMANT to get the cargo before 31 July.

7. It was found that 75 % of the cargo was water damaged. CLAIMANT organized replacement coffee and

agreed upon a settlement payment to not lose his client. The appointed expert declared cargo was

damaged in the 24 hours from 30 July’s early morning.


2

8. CLAIMANT commenced arbitral proceedings on 11 August for the payment of damages for the damaged

cargo, the replacement coffee payment and the settlement payment. Further, CLAIMANT alleged to hold

a maritime lien over the vessel.

ARGUMENTS ON JURISDICTION

I. THE TRIBUNAL HAS JURISDICTION TO DETERMINE PARTIES’ DISPUTE

9. According to the principle of kompetenz-kompetenz, the Tribunal has power to determine its own

jurisdiction1 by construing the arbitration agreement according to its governing law.2 The law of the

United Kingdom governs the arbitration agreement (A). Under that law, the Tribunal has jurisdiction

to determine CLAIMANT's claims and RESPONDENT’s counterclaims (B) and the expert determination

provision of the Charterparty is irrelevant to the present dispute (C).

A. The law of the United Kingdom governs the arbitration agreement

10. Parties have not expressly chosen a governing law for the arbitration agreement. In the absence of such

a choice, the system of law with the “closest and most real connection” to the arbitration agreement

governs that agreement.3 This is the law of the United Kingdom (i) and the choice of London as the

arbitral seat reinforces this conclusion (ii).

1 Nigel Blackaby, Constantine Partasides, Alan Redfern, and Martin Hunter, Redfern and Hunter on

International Arbitration (Oxford University Press, 6th ed, 2015) (‘Redfern and Hunter’), 322, 345;

QH Tours Ltd v Ship Design and Management (Aust) Pty Ltd (1991) 105 ALR 371, 384 (Foster J);

Dallah Real Estate and Tourism Co v Ministry of Religious Affairs of the Government of Pakistan

[2011] 1 AC 763, 830 [84] (Lord Collins of Mapesbury JSC); Ust-Kamenogorsk Hydropower Plant

JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889, 1902 (Lord Mance);

UNCITRAL Model Law on International Commercial Arbitration, Article 16(1); International

Arbitration Act 1974 (Cth), s 16; Arbitration Act 1996 (UK), s 30(1). 2 Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 3 Bonython v Commonwealth [1950] 81 CLR 486, 498; Amin Rasheed Shipping Corp v Kuwait

Insurance Co [1984]; Oceanic Sun Line Special Shipping Co Inc v Fay [1988]; Akai Pty Ltd v People’s

Insurance Co Ltd (1996) 1; Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2013]


3

(i) The law of United Kingdom has the closest and most real connection to the arbitration agreement

11. If the Parties expressly chose the law of New South Wales, Australia to govern their substantive

agreement, the Charterparty4, there is only a presumption that the same law governs the arbitration

agreement and that the Parties intended to see the same law govern any arbitration.5

12. That presumption can be rebutted in the case a different law has a closer and more real connection to

the arbitration agreement6 which is the case in the present dispute and the Tribunal should apply the

law of the United Kingdom to the arbitration agreement as it has the closest and most real connection

to the agreement.

13. Indeed, both Parties are located in Cerulean7 and Cerulean applies all laws of the United Kingdom8

and other complementary factors designates the law of the United Kingdom as the closest to the

arbitration agreement. First, both Parties are located in a state that applies the law of the United

Kingdom9.Second, both Parties executed their counterparts of the Charterparty in states that apply the

law of United Kingdom as Dillamond applies as well the law of the United Kingdom10. Third, the

subject matter of the arbitration agreement is “any dispute arising out of or in connection with this

contract”11, which is an agreement for the voyage of a Cerulean-flagged ship12 between states that

apply the United Kingdom law. Fourth, the arbitration is regulated by a British set of institutional

rules13 and involved preliminary activities14, which took place in states that apply the UK law.

4 Chaterparty Clause 28, Moot Problem at p13 5 Redfern and Hunter 6 Redfern and Hunter 7 Invoice 31 July 2017, Moot Problem at p29; Clarification 1, Procedural Order 2 at p1 8 Background information and assumptions, Moot Problem at p46 9 Idem 10 Idem 11 Chaterparty Clause 27 (a), Moot Problem at p13 12 Points of Claims, Moot Problem at p38 13 Chaterparty Clause 27 (a), Moot Problem at p13 14 Letter from Kensington Mayfair and Associates to Respondent, Moot Problem at p35


4

(ii) The choice of London as the arbitral seat means that English law governs the arbitration

agreement

14. In light of the above demonstration and considering London to have been chosen as the arbitral seat,

CLAIMANT can rebut the presumption that New South Wales, Australian law, as the proper law of the

contract, also governs the arbitration agreement.

15. In any event, a determination that the New South Wales, Australia law governs the arbitration

agreement does not prejudice CLAIMANT’s submission that the arbitration agreement grants the

Tribunal jurisdiction over the present dispute.

B. The arbitration agreement grants the Tribunal jurisdiction to determine Parties‘ dispute

16. The Parties objectively intended all disputes to be arbitrable and to limit expert determination to

technical matters. Expert determination was only intended for technical and limited matters (i) and the

Parties did not intend, as the presumption of “one-stop” dispute resolution (ii), the language of the

arbitration clause (iii) and because the intended technical scope of the expert determination clause

exceeds the current dispute (iv), to limit nor refute the Tribunal’s jurisdiction over technical matters.

(i) Expert determination clause is only intended for maritime, technical and simple issues

17. Expert determination is a form of dispute resolution invoked when there is not a formulated dispute in

which the parties have defined positions that need to be subjected to arbitration but in which parties

only need an independent evaluation on one technical and well-defined issue.

18. Parties clearly intended expert determination provision as an alternative to arbitration in the case of a

simple and limited matter related to a maritime issue as the provision clearly designates “an

independent Master Mariner”15 to act as expert showing that parties intended expert determination to

be limited to technical matters related to the conduct of the vessel and issues in relation to it. In the

15 Chaterparty Clause 27 (d), Moot Problem at p13


5

present case, the scope of the claims made by CLAIMANT exceeds and not all relate to maritime

technical matters. Therefore, making the provision irrelevant to the present dispute.

(ii) Expert determination is irrelevant to the complexity of the present dispute

19. The complexity of the claims and counterclaims of Parties and as the dispute arises from issues that

go beyond a mere technical matter but extends to a legal issue make Expert determination unfit for the

present dispute. RESPONDENT by issuing counterclaims and discussing the legitimacy of the claims

made by CLAIMANT has expressed a clear opposed legal position. Consequently, Arbitration is the

sole way to resolute the present dispute as the writing of Clause 27 (a) suggests it16.

20. Furthermore, the brevity of the terms of the provision makes it unclear and therefore unenforceable.

The scope of the issues reserved to expert determination is unclear and the duty given to the expert is

not specified nor is provided a detailed proceeding. Courts have held that expert determination clauses

will be upheld only if their terms are clear.

(iii) There is a presumption that the Parties intended “one-stop” dispute resolution

21. Reasonable commercial parties intend all disputes between them to be decided in the one place. This

reduces the cost and complexity of dispute resolution, which is a key commercial purpose of

arbitration.

22. Requiring parties to arbitrate legal claims but to leave to expert determination disputes arising from

maritime and technical matters would force Parties to commence multiple proceedings at considerable

expense and complexity, especially when like in the present case the claims are legal and as well

technical. Dividing the dispute when the issues are overlapping could lead to an incoherent resolution

between Arbitrator’s decision and expert determination.

23. Arbitrators must have sole jurisdiction over the entirety of the dispute with the help during proceedings

of experts if needed for the evaluation of technical issues such as the cause of the damages.

16 Chaterparty Clause 27 (a), Moot Problem at p13


6

Furthermore, the use of “however”17 shows that parties intended to use experts in case of technical

matters disputed within any case of arbitration. Parties intended to guarantee contractually the use of

24. Therefore, since the Charterparty expressly provides for arbitration, there is a presumption that the

Parties intended it to resolve all their disputes including the ones arising from technical issues. In

accordance with this intention, the Tribunal has jurisdiction to determine both CLAIMANT’s pleading

for damages and to resolve disputes arising from technical matters in relation to these claims.

(iv) The language of the arbitration clause indicates that technical matters are arbitrable

25. Clause 27(a) provides that “Any dispute arising out of or in connection with this contract, including

any question regarding its existence” is arbitrable.18 That language is very broad and should be

construed widely. Therefore, the Tribunal has a broad jurisdiction over any disputes including the legal

ones arising from technical matters.

ARGUMENTS ON THE MERITS OF THE CLAIM

I. RESPONDENT’S DEVIATION CONSTITUTES A BREACH OF THE CHARTERPARTY

26. RESPONDENT had a contractual duty not to deviate (A) and the deviation was not caused by a Force

Majeure Event but by its own gross negligence (B). The consecutive delay was the effective cause of

the late delivery and not Event 2 (C) and was a breach of the Charterparty (D).

A. RESPONDENT was contractually obliged not to deviate

27. In a voyage Charterparty, it has been established law that, in the absence of any contractual provision

giving liberty to deviate, the law implies “a duty in the owner of a vessel,[...], to proceed without

unnecessary deviation in the usual and customary course" as it is the case in the present situation 19.

17 Chaterparty Clause 27 (d), Moot Problem at p13 18 Chaterparty Clause 27 (a), Moot Problem at p13 19 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 275.


7

Further, during precontractual exchanges, CLAIMANT clearly expressed its desire to have the Dragonfly

follow the most direct route to Dillamond20. By its mere mention, it became a contractual duty for

CLAIMANT to fulfill.

B. The deviation was not caused by a Force Majeure Event but by a gross negligence on behalf

of the RESPONDENT

28. Deviation was not caused by a Force Majeure Event as RESPONDENT was aware that Solar Flares were

happening in the Dillamond Region (i) and that the consequences of them could be mitigated by

navigation and communications systems up to date with industry standards (ii). Therefore, consecutive

deviated route that the RESPONDENT had to take was caused by its own gross negligence (iii).

(i) Solar Flares were predictable

29. As early as a fortnight prior to the departure21, RESPONDENT must have known that Solar Flares were

happening in the region where he operates his usual business22. As a diligent professional,

RESPONDENT could not have ignored this crucial element that was impacting the safety and conduct of

all vessels in the area. Therefore, the Solar Flare that impacted the Dragonfly was not in any way

unpredictable.

Furthermore, Solar Flares predictions have drastically improved in the recent decade making them

almost impossible to qualify as unpredictable and therefore as Force Majeure Events23.

(ii) Solar flares’ consequences were not insurmountable

30. Not only were Solar Flares predictable, their consequences and effects were perfectly surmountable.

As reported, if some vessels were impacted by “unprecedented Solar Flares”, the Cerulean National

Communications Agency stated that the delay in rebooting some communications system had to “be

attributed to old/faulty equipment”24.

20 Letter from CLAIMANT to Respondent, moot scenario p. 2. 21 News article, moot scenario p. 36. 22 Procedural ordre n°2, p. 1. 23CNRS press release, A new approach to forecasting solar flares, press release May 17, 2017. 24 News article, moot scenario p. 36.


8

As shown, modern communications systems would have managed to handle the flares. Consequently,

it shows a lack of investment or a lack of maintenance for The Dragonfly’s overaged systems.

(iii) The deviation was the result of RESPONDENT’s gross negligence

31. Even if communications and navigational systems of the Dragonfly were impacted by Solar Flares,

the Dragonfly was not supposed to be left without any means of navigation as it should have had hard

copies of the maps needed to reach Dillamond25.

32. The Dragonfly was also required by its flag state regulations to always hold hard copies of maps which

in this case is Cerulean26. It has authority to enforce rules and regulations regarding pollution and

safety. As we know Cerulean has adopted all laws of the United Kingdom in order to facilitate trade

with its neighbours. So, in addition, we can assume that they also joined the same international

conventions such as SOLAS.

33. Indeed, the revised version from 2002 of SOLAS convention has been implemented in the legislation

of the United Kingdom by the Merchant shipping Regulations of the same year27. The SOLAS

convention in its Chapter V deals with this particular aspect, regulation 19 paragraph 228 is especially

clear on this topic, all ships should be equipped of nautical charts be it electronic or not and have

backup arrangements if they are using ECDIS.

34. Further, the Charterparty clearly states in Clause 15 regulations regarding duties The law of the

contract is the law of NSW29, the Australian law refers to The Australian navigation act (2012) as a

standard for navigation practice.

25 SOLAS convention, chapter V, rule 19. 26 Moot scenario p. 46. 27 Merchant shipping (safety of navigation) regulation, 2002. 28 SOLAS convention, chapter V, regulation 19, §2.1.4. 29 Charter party clause 28, moot scenario p. 13


9

35. According to the act30, the master or the owner of a foreign vessel must not take it to sea if it is not

supplied with "nautical charts (including charts in electronic form), of a suitable scale and properly

corrected at the time of sailing; and nautical publications"

Finally, the RESPONDENT lacked of diligence as in the precontractual exchanges, CLAIMANT made it

clear to RESPONDENT that in any case of deviation RESPONDENT had to notify CLAIMANT before taking

any decision31.

C. The additional delay caused by the Storm is a result of the RESPONDENT action and is not a

case of Force Majeure Event

36. But for the deviation, the RESPONDENT’s vessel would have not faced the Storm at its peak and

would have been able to deliver the goods on schedule. The fact it had to face the storm was a direct

consequence of the deviation (i); anyway the Dragonfly was at a considerable distance from the port

of Dillamond when it had to stop (ii).

(i) The Storm faced by the RESPONDENT is the direct consequence of the deviation

37. As unpredictable and irresistible the Storm may have been32, RESPONDENT’s vessel should not have

had to face it had it not deviated. Indeed, the Storm started in the late afternoon on Friday33 and it did

not reach its peak until Friday night around 1 AM34. Consequently, if the Dragonfly had not deviated,

it would have arrived as scheduled at 5PM35 at berths at the Port of Dillamond. Therefore, only facing

the first rains of the Storm and a perfectly manageable weather36. RESPONDENT would have been

30 Australia navigation act, 2012, chapter 3, part 2, division 5. 31 Letter from CLAIMANT to Respondent, moot scenario p. 2. 32 Moot scenario p. 22. 33 Email from Respondent to CLAIMANT, moot scenario p. 19. 34 Moot scenario p. 22. 35 Email from Respondent to CLAIMANT, moot scenario p.15. 36 Laura WALTHER, Anisa RIZVANOLLI, Mareike WENDEBOURG, Carlos JAHN, Modeling

and Optimization Algorithms in Ship Weather Routing. International Journal of e-Navigation and

Maritime Economy 4 (2016)


10

technically able to proceed to discharging and delivery. RESPONDENT created the conditions in which

he had to face the storm.

38. Moreover, RESPONDENT by deviating increased the risks of the adventure, indeed, while on the devious

course, the ship lost precious hours on its way to Dillamond37, only to face the storm while arriving at

Dillamond. Courts have stated that loss or damage can be caused by a deviation when it increases the

risks inherent to the voyage38.

(ii) RESPONDENT was a hundred nautical miles away from the port when facing the storm

39. Breach of contract happened when RESPONDENT was not at berths at 5PM on delivery date as

discharging would have required two more hours39. And as a consequence, the set time for delivery

could not be technically and physically respected. At 5PM, the Dragonfly was 100 nautical miles40 41

from the port and RESPONDENT had breached its contractual duty at this precise time.

40. Nonetheless, breach of contract occurred before Event 2 and therefore, the precise qualification of

Event 2 and its characteristics are of no interest. The Tribunal shall not take into account Event 2 and

its consequences as the effective cause of the breach of contract was the wrongful deviation operated

by RESPONDENT.

D. The Delivery of the goods was beyond the date fixed by the Charterparty and therefore

constitutes a breach of contract & CLAIMANT is eligible to receive damages for breach of

Charterparty

41. The breach of the Charterparty is duly proved as RESPONDENT deviated from the contractual set route

and delivered the goods after the set date and time (31st of July at 1:17pm)42. Thus, CLAIMANT is

eligible to receive damages. These damages should amount to the valuation of the direct consequences

37 Email from Respondent to CLAIMANT, moot scenario p. 19. 38 Hain v. Tate & Lyle, Voyage charter, p. 286 39 Procedural order n°2, p.2. 40 Email from Respondent to CLAIMANT, moot scenario p. 21. 41 https://worldoceanreview.com/en/wor-1/transport/global-shipping/2/ average speed of a container

ship estimated around 15 knots. 42 Email from CLAIMANT to Respondent, moot scenario p. 24


11

of this breach, the late delivery, and the settlement money that CLAIMANT had to pay to its own business

partner who had to suffer from RESPONDENT’s breach of contract43. Accessory damages should follow

main damages as a result of the test of remoteness44.

II. RESPONDENT IS LIABLE FOR THE DAMAGE TO THE GOODS

42. As the damages to the goods occurred before the effective delivery (A), RESPONDENT is liable and

CLAIMANT is eligible to receive all damages (B).

A. The damages occurred before the effective delivery at the discharging port

43. The delivery of the goods occurred at a date and time (i) when goods were still under the guardianship

of the RESPONDENT (ii).

(i) Delivery and transfer of custody of the goods occurred at 1:17PM on July 31th

44. It has been established that delivery takes place when "the goods are so completely under the control

of the consignee that he may do what he likes with them'', or when they are "placed under the absolute

dominion and control of the consignees" 45 Delivery will only occur when the goods are placed in the

hands of an agent of the consignee46. The effect of the requirement that delivery involves the placing

of the goods under the complete control of the consignee or his agent makes delivery a bilateral act,

involving the receipt of the goods by the consignee or his agent as well as the relinquishing of

possession by the carrier and it cannot be effected merely by discharging the goods over the ship's side

at the port of delivery as RESPONDENT is implying in this case.

45. Neither the CLAIMANT nor its representative were able to take delivery of the goods before July 31th,

1:17PM47. Notwithstanding, mentions carried by the access barcode produced by the RESPONDENT

who cannot claim unilaterally delivery has occurred48. The Court of Appeal held that a carrier cannot

43 Moot scenario p.32. 44 (Hadley v. Baxendale (1854) 45 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 217. 46 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 218. 47 Email from CLAIMANT to Respondent, moot scenario p. 25 48 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 289.


12

simply issue a delivery order and consider the goods delivered as he can regain control of them later

on.

46. "The carrier did give delivery of the goods, but he did not do so merely by issuing the delivery order,

since he might have revoked the authority to deliver and might have succeeded in regaining control of

the goods"49.

(ii) Damages occurred on port before established delivery and while goods were still under the

guardianship of RESPONDENT

47. Expert stated that damages to the goods occurred “sometime in the 24 hours from 4:30am on 30 July

2017”50. Therefore, damages occurred at a time and a date that were before the established delivery

and while goods were still under the liability of RESPONDENT.

48. Furthermore, RESPONDENT committed himself contractually to preserve the integrity of the goods

before their delivery and cannot consequently oppose any exemption arising from the sealant used and

its physical characteristics. The sealant used by the RESPONDENT was inappropriate for such a long

exposure to rain or water in general and even with this information and the knowledge that the delivery

was already late the RESPONDENT failed to take any protective measures to make sure that the goods

would stay intact, thus failing even more to show due diligence.

49. As a matter of fact, damages occurred before the delivery and the transfer of custody of the goods to

the CLAIMANT or its representatives. Consequently, RESPONDENT is liable to all damages caused to the

goods as a result of his inability to perform the contract.

B. CLAIMANT is eligible to receive extended damages for the damaged goods

50. RESPONDENT shall pay damages that amount to the value of the damaged goods (i) and cannot benefit

from any limited liability clause or statutes (ii). Furthermore, RESPONDENT must repair the direct

49 Great Eastem Shipping Co. Ltdv. Far East Chartering Ltd (The Jag Ravi) [2012] l Lloyd's Rep. 638 50 Moot scenation, p.43.


13

consequences of the damages: the cost of the replacement coffee (iii) and the awarded settlement

money (iv).

(i) Damages amount to the value of the damaged goods

51. The “compensatory principle” can be used51 as a guideline to make sure that the CLAIMANT is

restored in its rights and that he will be put in the same situation that would have been his had the

contract been performed correctly which is with an intact product retaining is high commercial value

which the RESPONDENT was made aware of in the pre contractual exchanges52. Consequently,

RESPONDENT should pay damages amounting to the commercial value of the goods53.

(ii) RESPONDENT cannot claim any limited liability benefits

52. The RESPONDENT cannot limit his liability as he committed a gross negligence, the deviation itself

being a breach of the charter, he cannot benefit from any exemption clause. Even if the clause

Paramount of the charter party was to be in effect, the Hague and Visby rules clearly state that “Neither

the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness

unless caused by want of due diligence on the part of the carrier to make the ship seaworthy”54. We

already established precedently that the carrier lacked due diligence to make the ship seaworthy prior

to the voyage by failing to supply backup maps in case of ECDIS failure.

53. Nonetheless, the Charterparty carries an imprecise and vague reference to a limited liability system

that a casual professional like CLAIMANT could not understand and therefore the Tribunal should be

interpreted in favor of CLAIMANT.55 The RESPONDENT is fully responsible without any limitations for

the damages caused to the CLAIMANT.

51 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 616. 52 Letter from CLAIMANT to Respondent, moot scenario p. 2. 53 Moot scenario, p.27. 54 The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968, article iv 55 See "Contra preferentem doctrine"


14

(iii) RESPONDENT must repair the direct consequence of the damages: replacement coffee

54. Repairing the damages done by the breach of the charter do not stop only at awarding damages solely

for the damaged coffee. The full scope of the damage can only be apprehended in the context of the

contract that the CLAIMANT had with a third party named “Coffees of the world”.

55. As the RESPONDENT was made fully aware of the circumstances surrounding the urgent shipment of

coffee for a festival and the consequences of delivering late56.

56. At the date of the contract, the potential consequences of a late delivery and the urgency of the

shipment was perfectly foreseeable for the RESPONDENT and cannot be considered too remote of a

damage to be left out of the compensation owed to the CLAIMANT57.

(iv) Settlement money is a direct compensation for the damage done to CLAIMANT

57. Damages for the breach shall be calculated based on this direct and known consequence of the breach.

The damages asked by the CLAIMANT are rather reasonable: they are mere compensatory damages.

They place the CLAIMANT in the same position as if the delivery had been on time: the business relation

would be saved, the goods would have been delivered and sold, etc. The settlement payment can be

seen as a mere compensation of what it took to save the future of the business venture, it compensates

(and preserve) the outcomes they would have been able to expect if the delivery had been made on

time.

58. "Where a breach of contract gives rise to a claim against a contracting party by a third party and that

claim is "reasonably settled'', then the amount of the settlement is generally recoverable as damages"58.

56 Letter from CLAIMANT to Respondent, moot scenario p. 2. 57 Cooke et al,Voyage Charters (Lloyd's shipping law library, CRC Press, 2014) p. 628. 58 John F. Hunt Demolition v. Asma Engineering Ltd [2008] Cooke et al,Voyage Charters (Lloyd's

shipping law library, CRC Press, 2014) p. 648.


15

III. CLAIMANT HOLDS A MARITIME LIEN OVER THE DRAGONFLY

59. Prior to the voyage and as an accessory to the Charterparty, CLAIMANT paid USD100,000 into a

separate Bank account59. Both parties intended this money to become payable to the crew following

the voyage60.

RESPONDENT has not paid the crew’s wages for the voyage and has not repaid the USD100,000 to the

CLAIMANT. A maritime lien is enforceable (A) and it lays in the hands of the CLAIMANT (B).

A. The Dagonfly’s crew can enforce a maritime lien

60. A maritime lien is a privileged charge on maritime property. Under British law61 and International

Conventions signed by Australia62, a claim on seamen’s wages is recognized as giving rise to a

maritime lien.

61. Wages of the Dragonfly’s crew were not paid by RESPONDENT for the voyage and therefore, a maritime

lien can be enforced by the crew.

B. Maritime lien is held by CLAIMANT because of its action

62. The CLAIMANT, prior to the voyage, paid the crew on a separate bank account because of the financial

difficulties experienced by the RESPONDENT and in order to secure the voyage. This money was

intended by both Parties to constitute the wages of the seamen.

63. By its action, CLAIMANT acted as a substitute to RESPONDENT paid the wages prior to the voyage as

a way to secure the crew work. Consequently, the actual wages were to be paid back directly to

CLAIMANT as a reimbursement for its action.

Therefore, CLAIMANT holds a maritime lien over the Dragonfly by its action nonetheless the effective

use of the money and the fact that the crew were not paid effectively by RESPONDENT.

59 Internal Memo, Moot Problem at p2 60 Points of Claims, Moot Problem at p38 61 62 International Maritime Organization Convention On Maritime Liens And Mortgage


16

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIMS

I. CLAIMANT DOES NOT OWE FULL FREIGHT UNDER THE CHARTERPARTY

64. Under a Charterparty, freight is due when the service in respect of which freight was contracted has

substantially been performed. 63 This service, according to Clause 1 of the Charterparty is the delivery

of the agreed cargo at the point of destination. 64

65. When CLAIMANT took receipt of the cargo, 75 % of it was water damaged. By this, CLAIMANT argues

RESPONDENT does not deserve full freight because upon delivery (A) the cargo was not the cargo

agreed upon in the Charterparty (B).

A. Delivery was not on 29 but 31 July

66. The obligation of delivery means that cargo has to be handed out to a “specified an identifiable

person”.65 The invoice issued by the RESPONDENT could not replace his obligation to deliver cargo to

an identifiable person representing CLAIMANT’s interests.

For reasons of congestion at the Port of Dillamond, cargo was delivered in its legal meaning not before

31 July by 1.55pm. Only then, there was physical delivery of the goods permitting CLAIMANT to

inspect the cargo.

B. Upon delivery, ¾ of the cargo were not in merchantable condition

67. To give right on payment of freight, the cargo delivered must be the same as the cargo agreed upon in

the Charterparty. 66 Accordingly to the Charterparty and confirmed by the dock receipt, the cargo to be

delivered was Speciality Grade Coffee ready for immediate sale. 67

63 Dakin v Oxley [1864] 15 C.B. (N.S.) 646, per Willes J at pp. 664-665 64 Moot scenario p. 4, Clause 1 65 Chapter 2 Legal meanings of delivery; Carver’s Carriage by Sea, 13rd ed, 1982, para. 1655

66 Scrutton, p. 469, 16-001 67 Moot scenario p.3; Moot scenario p.16


17

68. In Asfar v. Blundellit it was held that cargo condemned by water contact was no longer in a business

sense the thing shipped and that no freight was payable; the question being whether the thing became

a “total loss”.68

69. When the cargo was effectively delivered to the CLAIMANT on 31 July 2017 by 1.55pm, the ¾ of the

cargo was already, as stated by the expert, water damaged. 69 The ¾ of the cargo became unusable and

unfit for being sold or consumed. It is a total financial and business loss.

As a result, charterer is not liable to pay full freight.

II. CLAIMANT DOES NOT OWE REIMBURSEMENT OF AGENCY FEES IN SPECTRE

70. In the event of Solar flares knocking out communication and navigation systems, the vessel deviated

to the Port of Spectre. RESPONDENT claims reimbursement of agency fees occurred thereby.

71. CLAIMANT is not liable to undertake such reimbursement because RESPONDENT missed his obligation

to inform CLAIMANT about the events (A) and RESPONDENT cannot excuse his failure by the fact that

informing CLAIMANT was impossible (B).

A. RESPONDENT’s failure to ask for instructions

72. As first agent of the CLAIMANT, the Master of the voyage’s (forming one with RESPONDENT) primary

duty is “to carry on the cargo safely in the same bottom”.70 Further he must, especially in exceptional

circumstances, inform the charterer to get his instructions. 71

73. The person keeping CLAIMANT up to date about the voyage was the RESPONDENT. He had to inform

CLAIMANT about the news’s that he had or received about the ongoing of the voyage.

74. Solar flares knocked out vessel’s communication and navigation systems for 17 hours starting by 9.30

pm on 24 July, meaning that they stopped at latest by 2.30 pm on 25 July.72 Even if RESPONDENT has

68 Asfar & Co v Blundell [1896] QB at pp.127-128 69 Moot scenario p.43. 70 Scrutton, p. 329, 12-005 71 Idem 72 Moot scenario p.35; Moot scenario p.17


18

not been aware of the exact situation until communication systems had reconnected, he failed in his

obligation to inform CLAIMANT as he did it only on 26 July by 2.32 pm.73

B. Informing CLAIMANT was possible

75. There was nothing hindering RESPONDENT to ask CLAIMANT for instructions, namely not after 25 July

by 2.30pm when communication systems were completely reconnected and RESPONDENT could get

back in touch with the vessel. Saying that RESPONDENT did not want to worry CLAIMANT can be seen

as moral impossibility but to excuse his failure the existence of a real, objective impossibility is to be

proven.

76. As a result, RESPONDENT failed to his obligation to inform CLAIMANT and CLAIMANT cannot be held

liable to reimburse agency fees at the Deviation port.

III. CLAIMANT DOES NOT OWE DEMURRAGE

77. When the vessel arrived at the port of Dillamond, Charterer could not take delivery of the cargo before

31 July in the afternoon because there was impossibility to access cargo due to congestion at the port

caused by the storm.

78. RESPONDENT is not entitled to claim demurrage because the delay was caused by an unexpected peril

(A) that was beyond CLAIMANT’s control (B) and that would not have occurred under normal

circumstances (C).

A. The delay was caused by an unexpected peril

79. If delay is caused by an unexpected peril, there is possibility for demurrage not to count.74 As stipulated

by clause 8 (e) of the Charter Party, laytime is interrupted by reasons of “congestion of shipping [...]

consequent upon any one of the aforesaid causes”, including rain and bad weather.75

73 Moot scenario p.17 74 The Saturnia [1987] 2 Lloyd’s Rep. 43. 75 Moot scenario p.6, clause 8


19

80. Congestion as consequence of the storm at the discharging port hindered Charterer to access the cargo.

Storm includes bad weather as well as rain. Therefore, the reason why Charterer took delivery on delay

is within the scope of an unexpected peril.

B. The event was beyond CLAIMANTs control

81. The event must have been beyond CLAIMANTs control, meaning that he could not have any influence

on the happening of such event. 76

82. CLAIMANT could not prevent the storm nor could he take influence by reasonable legal methods on the

congestion of the port to access the cargo earlier than he did.

C. Delay would not have occurred under normal circumstances

83. Delay is only excused if under normal circumstances there would not have been delay. 77 CLAIMANT

was ready to take delivery of the cargo, waiting at the port of destination since 28 July. Under normal

circumstances, there would not have been demurrage as CLAIMANT was most interested in taking

delivery on time.

Accordingly, CLAIMANT cannot held be liable for payment of demurrage.

IV. CLAIMANT DOES NOT OWE CONTRIBUTION FOR REPARATION EXPENDITURES TO THE VESSEL

84. RESPONDENT claims for contribution for the expenses he made to repair the vessel’s hull that was

damaged while waiting out the storm that raged over Dillamond. RESPONDENT is not entitled to claim

contribution to general average because the chain of causation between the damage and the

RESPONDENT’s action has been broken by RESPONDENT’s own negligence (A) and further because the

sacrifice was not foreseeable (B).

76 Emeraldian v Wellmix (The Vine) [2010] EWHC 1411 (Comm); [2011] 1 Lloyd’s Rep. 301 77 Carboex v Louis Dreyfus [2011] EWHC 1165; [2011] 2 Lloyd’s Rep. 177 at [62]; [2012] EWCA

Civ 838; 2 Lloyd’s Rep. 379.


20

Clause 19 paragraph 1 of the Charter Party stipulates clearly applicability of York and Antwerp Rules

in case of general average.78 Thus, “any law and practise inconsistent therewith” are excluded to be

applied.79

85. Accordingly to Rule C of The York and Antwerp Rules, “only such losses, damages or expenses which

are the direct consequence of the general average act shall be allowed as general average“; the burden

of showing a break in the chain of causation being on the CLAIMANT.80

A. RESPONDENT’s negligence broke chain of causation

86. The chain of causation can be broken if the expenses claimed are the result of the perpetrator’s own

negligence. 81 If RESPONDENT’s crew had acted as they are supposed to by their obligation of due

diligence, the ship would not have stranded on the coral bed. Besides, during a storm it cannot be a

good idea to anchor in the middle of the sea.

B. Unpredictability of the sacrifice broke chain of causation

87. Chain of causation can also be broken if the sacrifice has not been foreseeable by the master. In

Australian Coastal Shipping vs. Green82 it was held that “if the master, when he does ‘the general

average act’, ought reasonably to have foreseen that a subsequent accident of the kind might occur –

or even that there was a distinct possibility of it – then the subsequent accident does not break the chain

of causation”. By contrast, if the “subsequent incident [...] was only a remote possibility”, there could

be a breach of the chain of causation.

88. By application of the provisions made in this decision, the question is whether the master could have

foreseen that by his action he is going to make a sacrifice. RESPONDENT’s crew was not aware of the

78 Moot scenario p.10, clause 19 79 York Antwerp Rules, Rule of Interpretation 80 Lloyd’s List Intelligence, Chapter 15, point 2.2 81 Lloyd’s List Intelligence, Chapter 15, point 2.3

82 1971, Lloyd's Rep. 16


21

coral bed “on which the ship inadvertently stopped on”.83 Thus, they cannot say that they made a

sacrifice: that the ship was damaged was nothing but a coincidence and not foreseeable by the crew.

89. This is why this Tribunal should find that there was no act of general average and thus no liability for

the CLAIMANT to contribute hereto.

V. CLAIMANT DOES NOT OWE EXPENSES MADE AT DILLAMOND

90. When vessel arrived on 29 July at Dillamond, RESPONDENT decided to make use of electronic access

system to produce an access authority constituting delivery of the cargo. RESPONDENT claims for

reimbursement for expenses made thereby. CLAIMANT does not owe reimbursement of these expenses

because they result in RESPONDENT’s breach of the Charterparty for delay in delivery (A) and because

CLAIMANT did not agree to such expenses (B).84

A. Expenses resulting from a breach of the Charterparty are excluded

91. As examined above, RESPONDENT breached the Charterparty by deviating unreasonably from his route

to Dillamond, causing delay in the delivery of cargo.

Regarding shipowner’s obligation to load on time, it was hold that if they do not arrive when they were

supposed to, extra expenses were on their cost.85 By analogy, if shipowner’s are already on delay on

arrival and it is by their fault that they do so, extra-costs incurred thereby must be on their cost, too.

92. RESPONDENT was supposed to deliver by 28 of July, hence he did not fulfil his obligation and expenses

incurred in this context cannot be for CLAIMANT’s account.

B. Charterer did not agree to the expenses

93. Still it is possible if Charterer agrees expressly upon shipowner’s demand to take such expenses, that

they are for Charterer’s account. 86, 87

83 Moot scenario p. 20. 84 Scrutton p. 182, 9-006

85 Evera SA Commercial v North Shipping Co [1956] 2Lloyd’s Rep. 367 86 Holman v Dasnieres [1886] 2 T.L.R. 480; affirmed at 607. In Fletcher v Gillespie [1826] 3 Bing.635 87 Scrutton p. 204, 9-116


22

94. RESPONDENT decided by himself to make use of electronic access systems at Dillamond, without

asking for CLAIMANT’s opinion or waiting for him to agree.

Therefore, there was no agreement on CLAIMANT’s behalf and he cannot be held liable for these

expenses. As a result, it is on RESPONDENT to bear these extra-expenses.

REQUEST FOR RELIEF

For the reasons pleaded above we ask that this Tribunal:

a) Declare that it has jurisdiction to hear CLAIMANT's pleading of breach of the Charterparty;

b) Award CLAIMANT the sum of USD 30,200,000 as damages;

c) Declare that CLAIMANT is not liable to pay neither the amount on the invoice presented by the

RESPONDENT, nor any damages for failing to pay the aforementioned amount, and;

d) award further or other relief as the Tribunal considers fit.

EIGHTEENTH ANNUAL INTERNATIONAL MARITIME LAW … · 2021. 7. 20. · eighteenth annual...

Documents

Transcript of EIGHTEENTH ANNUAL INTERNATIONAL MARITIME LAW … · 2021. 7. 20. · eighteenth annual...