IN THE MATTER OF AN ARBITRATION HELD IN SINGAPORE … · in the matter of an arbitration held in...
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IN THE MATTER OF AN ARBITRATION HELD IN SINGAPORE CLAIMANT RESPONDENT FURNACE TRADING PTE LTD INFERNO RESOURCES SDN BHD MEMORANDUM FOR THE RESPONDENT TEAM NO. 4 DANIEL GAZZARD ZOE KALIMERIS DONNÉ OOSTHUIZEN DOMENICO ROMEO
Transcript of IN THE MATTER OF AN ARBITRATION HELD IN SINGAPORE … · in the matter of an arbitration held in...
IN THE MATTER OF AN ARBITRATION HELD IN SINGAPORE
CLAIMANT RESPONDENT
FURNACE TRADING PTE LTD INFERNO RESOURCES SDN BHD
MEMORANDUM FOR THE RESPONDENT
TEAM NO. 4
DANIEL GAZZARD
ZOE KALIMERIS
DONNÉ OOSTHUIZEN
DOMENICO ROMEO
TABLE OF CONTENTS
Table Of Authorities ................................................................................................................. i
List of Abbreviations .............................................................................................................. iv
Statement of Facts .................................................................................................................... 1
Part One: Jurisdiction ............................................................................................................. 2
I. The Tribunal Has the Power to Rule on Its Own Jurisdiction ................................................... 2
II. The International Arbitration Act Applies to this Arbitration .................................................. 2
III. Singaporean Law Governs the Arbitration Agreement ............................................................. 3
IV. The Arbitration Agreement is Valid .......................................................................................... 3
A. The Fixture Recap Validly Modified the Coal Orevoy ............................................................. 3
B. The Arbitration Agreement is Valid in Electronic Form ........................................................... 4
C. No Signature is Required to Render the Arbitration Agreement Valid ..................................... 5
I. The Tribunal lacks power to order sale of the cargo ................................................................. 5
A. Interim Orders Can Only Be Granted in Relation to Subject Matter of the Dispute............. 5
B. The Cargo Is Not Subject Matter of the Dispute ................................................................... 6
Part Two: Sale of the Cargo .................................................................................................... 8
I. The Tribunal should balance the interests of both parties ......................................................... 8
II. It is neither necessary nor just to order sale of the cargo pendente lite ..................................... 9
A. RESPONDENT Is Capable of Paying Damages Owing ............................................................ 9
B. Sale of the Cargo pendente lite would disproportionately prejudice the RESPONDENT ........ 9
C. There Is No Urgent Need to Sell the Cargo Pendente Lite .................................................. 10
Part Three: Contractual Liability ........................................................................................ 11
I. Respondent has not breached the Charterparty ....................................................................... 11
A. Freight Was Not Due and Payable to CLAIMANT by 22 October 2016 ................................ 12
B. RESPONDENT Validly Nominated a Discharge Port ............................................................. 13
(i) Busan was a Legitimate Port Nomination ............................................................................... 13
(ii) Busan Did Not Pose a War Risk to the Vessel ........................................................................ 14
(iii) RESPONDENT Is Not Liable for the Delay in Nominating Port Ningbo .................................. 15
II. Claimant had no right to elect to treat the contract as discharged ........................................... 15
A. RESPONDENT had not renounced its obligations under the Voyage Charterparty ................... 16
B. RESPONDENT did not breach a condition of the contract ......................................................... 17
C. RESPONDENT’S conduct did not amount to a repudiation of the Voyage Charterparty ........... 18
D. Claimants notice of termination was without legal justification ............................................. 21
Part Four: Liens ..................................................................................................................... 21
I. Claimant cannot exercise a lien on cargo at common law....................................................... 21
A. Claimant Is Not the Carrier Under the Terms of the Time Charterparty ............................ 22
B. The B/L belongs to the Shipowner ....................................................................................... 23
II. Claimant cannot exercise a contractual lien on cargo. ............................................................ 23
A. The Incorporation Clause is invalid. ................................................................................... 24
PRAYER FOR RELIEF........................................................................................................ 25
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TABLE OF AUTHORITIES
CASES AND ARBITRAL AWARDS
‘The Federal Bulker’ [1989] 1 Lloyd’s rep 103
‘The Sea Urchin’ [2014] SGHC 24
‘The Western Moscow’ [2012] EWHC 1224
Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte Ltd [2009] 4 SLR 602
Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] 3 SLR 857
Astrata (Singapore) Pte Ltd v Tridex Technologies Pte Ltd [2011] 1 SLR 449
Bandung Shipping Pte Ltd v Keppel TatLee Bank Ltd [2002] SGCA 46
Bentson v Taylor, Sons & Co (No 2) [1893] 2 QB 274
Bocotra construction Pte Ltd v AG (1994) 3 SLR(R) 723
Brandt v Morris [1917] 2 K.B 784
Brightside Mechanical & Electrical Services Group Ltd v Hyundai Engineering & Construction Co ltd
[1988] 1 SLR 1
Bunge Corporation New York v Tradax export SA, Panama [1989] 1 WLR 711
Cascade Shipping Inc v Eka Jaya Agencies (S) Pte ltd [1993] SGCA 7
Chan Cheng Kum v Wah Tat Bank Ltd [1971] SGPC 1
Chin Bay Ching v Merchant Ventures Pte Ltd [2005] 3 SLR(R) 142
Chua Chay Lee v Premier Properties Pte Ltd [2000] 2 SLR 464
Colonial Bank v European Grain and Shipping Co Ltd (‘The Dominique’) [1989] 1 Lloyds Rep 431
Concordia Agritrading Pte Ltd v Cornelder hoogewerft (Singapore) Pte Ltd [1999] 3 SLR(R) 618
D’amico Shipping Italia Spa v Endofa DMCC &ANOR [2016] EWHC 2223
Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Sheikh Sultan bin Khalifa
bin Zayed Al Nahyan [2000] 1 SLR(R) 117
Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361
Econ Piling Pte Ltd v GTE Construction Pte Ltd [2009] SGHC 213
FirstLink Investments Corp Ltd v. GT Payment Pte Ltd and others [2014] SGHCR 12
Five Ocean Corporation v Cingler Pte ltd [2015] SGHC 311
Freight Connect (S) Pte Ltd v Paragon Shipping Pte Ltd [2015] 5 SLR 178
Glaholm v Hays (1841) 2 Man & G 257; Bradford v Williams (1872) LR 7 Ex 259
Go Go Delicacy Pte Ltd v Corona Holdings Pte ltd [2008] 1 SLR(R) 16
Hick v Raymond & Reid (1893) AC 22
Homburg Houtimport B.V. v Agrosin Private Ltd and Others (“The Starsin”) [2003] 1 Lloyd’s Rep 571
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisan Kaisha Ltd [1962] 2 QB 26
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] 2 Lloyds Rep 478
Indian Company v Pakistani Bank, Award, ICC Case No. 1512, 1971 in Yearbook 1976, Vol. I
JBE Properties Pte [2011] SLR 47
Jiang Halying v Tan Lim Hui and Another Suit [2009] 3 SLR(R) 13
Karin Vatis Vagres Compania Maritime SA v Nissho-Iwai America Corp (‘The Karin Vatis’) [1988] 2
Lloyds Rep 330
Kirchner v Venus (1859) 12 Moo PC 361
L&M Concrete Specialist Pte Ltd v United Eng Contractors Pte Ltd [2000] 2 SLR(R) 852
Lickbarrow v Mason (1787) 2 Term Rep. 63
Lidgett v. Williams (1845) 4 Hare 456
Maldives Airports Co Ltd v GMR Male International Airport Pte Ltd [2013] 2 SLR 449
Man Financial (S) Pte Ltd v Wong Bark Chuan David [2008] 1 SLR (R) 663
NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] SGCA 5
P.T. Tri-M.G. Intra Asia Airlines (Indonesia) v. Norse Air Charter Limited (Mauritius) [2009] SGHC 13
Photo Production Ltd v Securicor Transport Ltd [1980] 1 Lloyds Rep 545
PT Asuransi jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597
PT Prima International Development v Kempinski [2012] 4 SLR 98
PT Pukuafu Indah v Newmont Indonesia Ltd [2012] 4 SLR 1157
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR (R) 413
Samuel v West Hartlepool SN Co (1906) 11 Com Cas 115
San International Pte Ltd v Kepel Engineering Pte Ltd [1998] 3 SLR (R) 447
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Santiren Shipping Ltd v. Unimarine S.A. (The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep. 159
SIAC Arbitration No. 62 of 2008 (ARB062/OB/JL), unpublished
Singapore Press Holdings Ltd v Brown Noel Trading Ptd Ltd [1994] 3 SLR(R) 114
SK shipping (S) Pte Ltd v Petroexport Ltd (‘The Pro Victor’) [2010] 2 Lloyds Rep 158
Star-Trans Far East Pte ltd v Norske- Tech Ltd [1996] 2 SLR(R) 196
Stelios B Maritime Ltd v Ibeto Cement Co (‘The Stelios B’) [2006] EWHC 672 (Comm.)
Suisse Atlantique Société d’Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361
Sulamerica Cia Nacional De Seguros S.A. & Ors v Enesa Engenharia SA & Ors [2012] EWCA Civ 638
Tan Wee Fong v Denieru Tatsu F&B Holdings Pte Ltd [2010] 2 SLR (R) 298
The ‘Turtle Bay’ [2013] SGHC 165
The “Dolphina” [2011] SGHC 273
The “Epsilon Rosa” [2002] 2 Lloyd’s Rep 81
The “Star Quest” and other matters [2016] 3 SLR 1280
The Bulk Chile [2013] 2 Lloyd’s Rep. 38; [2013] EWCA Civ 184
The Channel Ranger [2014] 1 Lloyd’s Rep 337
The Engedi [2010] 3 SLR 409
The Exeter Carrier Case (1702) 2 Ld Raym 867
The Hermosa [1982] 1 Lloyds Rep 570
The Mathew [1990] 2 Lloyd’s Rep 323 (QB)
The ‘Rainbow Spring’ [2002] SGHC 255
The Spiros C [2000] 2 Lloyd’s Rep 319
The Starsin [2003] UKHL 12
The STX Mumbai and Another Matter [2015] 5 SLR 1
The Swan [1968] 1 Lloyd’s Rep. 5
Thomas Heiton & Co Ltd v LMS Railway Company [1926] 24 LL.L.Rep 479
Thyssen Inc M/V/Markos N aff’d sub nom Thyssen Inc v Calypso Shipping Corp SA 310 F 3d 102 (2d Circ
2002)
Universal Cargo Carriers Corp v Citati [1957] 2 Lloyds Rep 72
Wehner v Dene [1905] 2 K.B. 92
Woodar Investments Pty Ltd v Wimpey Construction (UK) Ltd [1980] 1 WLR 277
STATUTES AND CONVENTIONS
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) International Arbitration Act (Cap 143A, 2002 Rev Ed)
UNCITRAL Model Law on International Commercial Arbitration
BOOKS
Andrew Phang, Contract Law in Singapore (Academy Publishing, 2012)
Andrew Phang, Contract Law in Singapore (Walter Kluwer, 2012)
Bernard Eder, et al, Scrutton on Charterparties and Bills of Lading (Thompson Reuters (Professional UK Ltd) David Joseph QC and David Foxton QC, Singapore International Arbitration: Law & Practice (LexisNexis,
2014)
Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial
Arbitration, (Kluwer Law International, 1999)
Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014)
J W Carter, Carters Breach of Contract (Hart Publishing , 2012)
Julian Lew et al., Comparative International Commercial Arbitration (Kluwer Law International, 2003)
Lord Collins of Mapesbury et al (eds), Dicey, Morris & Collins on the Conflict of Laws (Sweet & Maxwell,
15th ed, 2016)
Moser & Choong (eds) Asia Arbitration Handbook
Nigel Blackaby, Constantine Partasides et al, Redfern and Hunter on International Arbitration (Oxford
University Press, 6th ed, 2015)
Simon Baughen, ‘Shipping Law’ (6th Edition, Routledge,2015)
Sir Bernard Eder, Howard Bennett et al.,Scrutton on Charterparties and Bills of Lading ( 23rd Ed, Sweet and
Maxwell, 2015)
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JOURNAL ARTICLES
Christopher Huntley, (2005) ‘The Scope of Article 17: Interim Measures Under the UNCITRAL Model Law’
Vindobona J. Int’l Com. L. & Arb. 9
Mahdev Mohan, Tay Eu-Yen, “The New International Arbitration (Amendment) Bill- A Broader Framework
for Interim Relief or just a tune up? (2010) 22 SAcLJ, 331
Tao Xu, De-Ming Wang & Qi-Lin He ‘The Study of the Critical Moisture Content at Which Coal Has the Most
High Tendency to Spontaneous Combustion’ International Journal of Coal Preparation And Utilization, Vol. 33,
Iss. 3, 2013
OTHER AUTHORITIES
GA Res 2205 (XXI), UN GAOR, 40th sess, 112th plen mtg, UN Doc A/40/17 (21 June 1985)
Introductory Recitals to UN General Assembly Resolution 40/72 (1985).
Lawrence Boo, “Interim measures and the arbitral Institution: A Singapore Perspective”, paper presented at ICC
International Court of Arbitration and SIAC Symposium on Institutional Arbitration in Asia on 18-19 February
2005
Sandra Lielbarde, The Incorporation of a Charterparty Arbitration Clause in the Bill Of Lading: Binding Effect
of Contract Without Consent (Masters Thesis, Lund University, 2010) Sapna Jhangiani, Conflicts of Law and International Commercial Arbitration – Can Conflict Be Avoided?,
BCDR International Arbitration Review, (© Kluwer Law International; Kluwer Law International 2015,
Volume 2 Issue 1)
SCMA Rules 3rd Edition (October 2015) Steven Lim, Interim Relief in International Arbitration, (Paper Presented at SIAC Congress 2014).
UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (New York, 1958) 2016 Ed, UN Doc (September 2016)
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LIST OF ABBREVIATIONS
The Shipowner IMLAM Consignorist GmbH
CLAIMANT Furrnace Trading Pty Ltd
The Time Charterparty The Charterparty between CLAIMANT and the
Shipowner
RESPONDENT Inferno Resources Trading Pte Ltd
The Voyage Charterparty The Charterparty between CLAIMANT and
RESPONDENT
The Vessel The M.V. Tardy Tessa
The Cargo 84,000 MT of Molloo Australian Steam coal
The Master Tan Xiao Ming
The Shipper Idoncare
The Broker Eric Yan
Moot problem The 2017 International Maritime Law
Arbitration Moot Scenario
The parties CLAIMANT and RESPONDENT
CLAIMANT’S Representative Gordon Grill
The Shipowner’s Representative Peter Girvin
Arbitration Clause Clause 29 of the Fixture Recap
B/L The Bills of lading said to be in possession of
the Shipper
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STATEMENT OF FACTS
THE TIME CHARTERPARTY
1. On 15 February 2016, Furnace Trading Pte Ltd (‘CLAIMANT’) contracted with Imlam Consignorist
GmbH (‘the Shipowner’) to hire the M.V. Tardy Tessa (‘the Vessel’) for a period of two (2) years
pursuant to a time charterparty (‘the Time Charterparty’). The Time Charterparty included a clause
granting CLAIMANT the liberty to sub-let the Vessel.
THE VOYAGE CHARTERPARTY
2. On 1 September 2016, Inferno Resources Sdn Bhd (‘RESPONDENT’) entered into a charterparty with
CLAIMANT for the transport of 84,000 MT of MOLOO Australian Steam Coal (‘the Cargo’) on the
Vessel from Newcastle, Australia, to a discharge port to be nominated in China (‘the Voyage
Charterparty’). The Voyage Charterparty was fixed on an amended BIMCO Standard Coal and Ore
Charterparty as evidenced in an email dated 1 September 2016 (‘the Fixture Recap’).
3. RESPONDENT then sub-chartered the Vessel to Idoncare Berjaya Utama Pty Ltd (‘the Shipper’) to
transport the Cargo. The notice of readiness was tendered on 1 October 2016, and the Vessel sailed for
Singapore on 4 October 2016.
4. Shortly after the Vessel arrived at Singapore for bunkering, CLAIMANT was notified that RESPONDENT
was unable to nominate a Chinese discharge port due to congestion.
5. RESPONDENT made repeated requests to have the Vessel divert to Busan, South Korea (‘Busan’).
CLAIMANT denied all requests by RESPONDENT.
6. CLAIMANT then sent an email to RESPONDENT demanding payment of freight and threatening to
terminate the Voyage Charterparty if payment was not made before 20 October 2016.
7. RESPONDENT was unable to make payment of freight by 20 October 2016 as it had not received its
payment of sub-freight from the Shipper. RESPONDENT communicated this to CLAIMANT in three
separate communications.
8. On 22 October 2016, CLAIMANT elected to terminate the Voyage Charterparty due to non-payment of
freight. CLAIMANT then commenced arbitral proceedings on 23 October 2016 against RESPONDENT and
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the Shipper for payment of sub-freight, payment of detention charges as a result of the failure to
nominate a legitimate discharge port until 21 October 2016, and the liberty to sell the cargo on board the
Vessel pendente lite. RESPONDENT denies all claims made by CLAIMANT and argues that CLAIMANT was
itself in repudiatory breach of the contract on 22 October 2016.
PART ONE: JURISDICTION
I. THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION
9. An arbitral tribunal has the power to rule on its own jurisdiction, due to the kompetenz-kompetenz
doctrine.1 There is no evidence that gives rise to a challenge of the competence of this Tribunal.
II. THE INTERNATIONAL ARBITRATION ACT APPLIES TO THIS ARBITRATION
10. The International Arbitration Act2 (‘IAA’) will apply to arbitrations where, at the conclusion of the
arbitration agreement, at least one of the parties had its place of business in any State other than
Singapore.3 CLAIMANT’S business address is in Singapore; however, RESPONDENT’S business address is
in Malaysia. This is evident from the initial notice of arbitration 4 and the terms of the Voyage
Charterparty.5 As such, the IAA will apply to this case.
11. Section 3 of the IAA gives force of law to the UNCITRAL Model Law on International Commercial
Arbitration 1985 (‘the Model Law’). The Model Law was designed to harmonise international arbitration
legislation globally, in order to promote predictability and efficiency in international trade law.6 It was
also drafted so that it could easily be inserted as domestic legislation to all nations that have ratified the
convention.7
12. Singapore has only given legislative effect to Article 17J of the 2006 Model Law Amendments,8 through
1 International Arbitration Act (Cap 143A, 2002 Rev Ed) s 3; Art 16 UNCITRAL Model Law on International Commercial
Arbitration; r 20 (a) SCMA Rules 3rd Edition (October 2015). 2 (Cap 143A, 2002 Rev Ed) 3 International Arbitration Act (Cap 143a, Rev ed 2002) Singapore, s 5(2)(a). 4 Moot problem, 82. 5 Ibid, 20.. 6 ‘Introductory Recitals’ GA Res 40/72 (XXI), UN GAOR, 40th sess, 112th plen mtg, UN Doc A/40/17 (21 June 1985). 7 Ibid. 8 UNCITRAL Model law on International Commercial Arbitratioin 1985 with Amendments as Adopted in 2006.
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section 12A of the IAA.9 As such, bar section 12A, the scope of the IAA is limited to the provisions of the
Model Law that were in effect as of 1985.
III. SINGAPOREAN LAW GOVERNS THE ARBITRATION AGREEMENT
13. The law applicable to an arbitration agreement (the ‘lex arbitri’) may be determined by express reference
within an arbitration agreement itself.10
14. RESPONDENT submits that Clause 26 of the Coal Orevoy, titled ‘DISPUTE RESOLUTION’ as amended
by Clause 29 of the Fixture Recap (‘the Arbitration Agreement’), is a written term of the Voyage
Charterparty and represents an agreement to arbitrate between CLAIMANT and RESPONDENT.11
15. The Arbitration Agreement provides for ‘Singapore law and arbitration’,12 and CLAIMANT submits that
this constitutes an express nomination of Singaporean law as the lex arbitri.
IV. THE ARBITRATION AGREEMENT IS VALID
16. The International Arbitration Act (Cap 143A) (‘IAA’) governs international arbitration agreements that
are subject to Singaporean law.13 Under the IAA, once an arbitration agreement is shown to exist, it is
presumed to be valid unless proven otherwise.14
17. RESPONDENT submits that the Arbitration Agreement is found in Clause 29 of the Fixture Recap, which is
a written term of the Voyage Charterparty. Therefore, it should be presumed to be valid.
18. RESPONDENT submits that there are no issues that should affect this presumption including, but not
limited to A) the Fixture Recap validly modified the Coal Orevoy; B) the arbitration agreement is valid in
electronic form and; C) no signature is required to render the arbitration agreement valid.
A. The Fixture Recap Validly Modified the Coal Orevoy
9 In relation to court-ordered interim measures. 10 Sulamerica Cia Nacional De Seguros S.A. & Ors v Enesa Engenharia SA & Ors [2012] EWCA Civ 638, [25](Moore-Bick LJ);
Indian Company v Pakistani Bank, Award, ICC Case No. 1512, 1971 in Yearbook 1976, Vol. I,128; Art 35(1) UNCITRAL Model
Law on International Commercial Arbitration; Nigel Blackaby, Constantine Partasides et al, Redfern and Hunter on International
Arbitration (Oxford University Press, 6th ed, 2015) 186-187; Lord Collins of Mapesbury et al (eds), Dicey, Morris & Collins on
the Conflict of Laws (Sweet & Maxwell, 15th ed, 2016) 16-017. 11 Moot problem, 23. 12 Ibid 23. 13 International Arbitration Act (Cap 143A, 2002 rev ed).s 5. 14 International Arbitration Act (Cap 143A, 2002 rev ed) s 6(2); FirstLink Investments Corp Ltd v. GT Payment Pte Ltd and others
[2014] SGHCR 12, [7] (Shaun Leong Li Shiong AR).
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19. It is common practice in international trade for parties to use standard form agreements produced by
professional bodies.15 These standard form agreements may then be modified or extended by agreement
of the parties. When parties modify a standard form agreement, greater weight should attach to the terms
that the parties have specifically chosen to include.16
20. RESPONDENT submits that the Fixture Recap found in the email sent from the Broker to the CLAIMANT on
1 September 2016 validly modified the Coal Orevoy, including its dispute resolution provision found in
Clause 26.
21. The Fixture Recap is referred to as being ‘clean’.17 In chartering ‘fixed clean’ is an expression used to
indicate a concluded fixture.18 In this email, the Broker also asked for confirmation of the final nature of
the Fixture Recap,19 which CLAIMANT then confirmed.20
22. Therefore, the valid dispute resolution clause will be Clause 26 of the Coal Orevoy as modified by Clause
29 of the Fixture Recap.
B. The Arbitration Agreement is Valid in Electronic Form
23. Under the IAA arbitration agreements in the form of electronic communication will satisfy the writing
requirement.21 Email is considered to be a form of ‘Electronic communication’.22
24. RESPONDENT submits that the Arbitration Agreement was communicated by email from All’s Good
Brokerage Pte Ltd (‘the Broker’) as agents for the RESPONDENT on 1 September 2016.23 Therefore, the
Arbitration agreement satisfies the writing requirement.
15 UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York,
1958) 2016 Ed, UN Doc (September 2016); Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on
International Commercial Arbitration, (Kluwer Law International, 1999) 271 [491]. 16 Homburg Houtimport B.V. v Agrosin Private Ltd and Others (“The Starsin”) [2003] 1 Lloyd’s Rep 571, 577 [11] (Lord
Bingham); Indian Oil Corporation v. Vanol Inc [1992] 2 Lloyd's Rep 563 (Webster J) cited in P.T. Tri-M.G. Intra Asia Airlines
(Indonesia) v. Norse Air Charter Limited (Mauritius) [2009] SGHC 13.
17 ‘The Rainbow Spring’ [2002] SGHC 255, [24] (Ang JC).
18Ibid.
19Moot problem, 20. 20Ibid. 21International Arbitration Act (Cap 143A, 2002 rev ed) s 2A(5); Julian Lew et al, Comparative International Commercial
Arbitration (Kluwer Law International, 2003) 131 [7-10]. 22Ibid s 2A(10). 23Moot problem, 22.
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C. No Signature is Required to Render the Arbitration Agreement Valid
25. Though an arbitration agreement must be in written form in order to be considered valid,24 there is no
formal requirement for the agreement to be signed by both parties.25 Provided that the terms of the
agreement are readily ascertainable, the agreement will be enforceable.26 In particular, there is no need
for a charterparty to be reduced to a single written document and signed to be valid.27
26. RESPONDENT submits that the terms of the arbitration agreement found in Clause 29 of the Coal Orevoy
are readily ascertainable as they clearly specify the location, the governing law and the procedural rules
of the arbitration. 28 Therefore, despite the lack of signature on the Fixture Recap, the Arbitration
Agreement remains valid.
I. THE TRIBUNAL LACKS POWER TO ORDER SALE OF THE CARGO
27. RESPONDENT argues that the Tribunal lacks power to order sale of the cargo because (A) the IAA may
only grant the sale of cargo in relation to subject matter of the dispute; and (B) the content of the
submission suggests the cargo is not subject matter to the dispute.
A. Interim Orders Can Only Be Granted in Relation to Subject Matter of the Dispute
28. Under section 12(1)(d) of the IAA, an arbitral tribunal is granted power to order the preservation, interim
custody or sale of any property which is or forms part of the subject matter of the dispute.29
29. Here, the Cargo is clearly property. As such the only point of contention as to whether or not the Tribunal
24International Arbitration Act (Cap 143A, 2002 Rev Ed) s 2A(3); Art 2 Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (New York, 1958); Julian Lew et al, Comparative International Commercial Arbitration (Kluwer Law
International, 2003) 130 [7-27]. 25Lidgett v. Williams (1845) 4 Hare 456 cited by The “Epsilon Rosa” [2002] 2 Lloyd’s Rep 81, 86 (Tuckey LJ); Sandra Lielbarde,
The Incorporation of a Charterparty Arbitration Clause in the Bill Of Lading: Binding Effect of Contract Without Consent
(Masters Thesis, Lund University, 2010) 18; Julian Lew et al, Comparative International Commercial Arbitration (Kluwer Law
International, 2003) 138 [7-7]. 26Freight Connect (S) Pte Ltd v Paragon Shipping Pte Ltd [2015] 5 SLR 178, 188 (Menon CJ , Chao JA and Chan SJ); Sandra
Lielbarde, The Incorporation of a Charterparty Arbitration Clause in the Bill Of Lading: Binding Effect of Contract Without
Consent (Masters Thesis, Lund University, 2010) 18. 27Freight Connect (S) Pte Ltd v Paragon Shipping Pte Ltd [2015] 5 SLR 178, 188 (Menon CJ , Chao JA and Chan SJ); Lidgett v.
Williams (1845) 4 Hare 456, cited with approval in The ‘Epsilon Rosa’ [2002] 2 Lloyd’s Rep 81, 86 (Steel J); Gary Born,
International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 801. 28 Moot problem, 29. 29 UNCITRAL Model Law on International Commercial Arbitration GA Res 2205 (XXI), UN GAOR, 40th sess, 112th plen mtg,
UN Doc A/40/17 (21 June 1985).
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has power to order sale of the Cargo pendente lite, is whether the Cargo constitutes subject matter of the
dispute for the purposes of this section.
B. The Cargo Is Not Subject Matter of the Dispute
30. The scope of the subject matter of the dispute is determined by reference to the parties’ submission to
arbitration,30 which is comprised of the notice of arbitration and the response to it.31 An arbitral tribunal
has no jurisdiction to resolve disputes that have not been referred to it in the submission to arbitration.32
31. Singaporean courts and tribunals have adopted a narrow interpretation of the submission to arbitration in
defining subject matter to the dispute in the past. 33 There is also strong support for this narrow
interpretation in international arbitration literature.34
32. RESPONDENT submits the Tribunal should adopt a narrow interpretation in this case.
33. In this case, CLAIMANT sent references to arbitration to the Shipper and RESPONDENT on 25 November
2016, 35 who subsequently sent responses to CLAIMANT on 26 November 2016 (‘Submission to
Arbitration’). 36 included a section entitled ‘BRIEF STATEMENT OF THE NATURE AND
CIRCUMSTANCES OF THE DISPUTE’. 37 Within this section, CLAIMANT describes the manner in
which RESPONDENT breached the Voyage Charterparty in significant detail.38 The Cargo is mentioned
during the discussion regarding the terms of the Voyage Charterparty, however no more beyond that.
34. In the case of Bocotra Construction Pte Ltd v AG (‘Bocotra’),39 Bocotra involved a contractual dispute,
whereby Bocotra were contracted to complete works for the Singapore Public Works Department
30 PT Prima International Development v Kempinski [2012] 4 SLR 98, 101(Chan Sek Keong CJ). 31 PT Prima International Development v Kempinski [2012] 4 SLR 98, 103 (Chan Sek Keong CJ). 32 PT Prima International Development v Kempinski [2012] 4 SLR 98, 101 (Chan Sek Keong CJ). 33 Lawrence Boo, “Interim measures and the arbitral Institution: A Singapore Perspective”, paper presented at ICC International
Court of Arbitration and SIAC Symposium on Institutional Arbitration in Asia on 18-19 February 2005 at p 210; Mahdev Mohan,
Tay Eu-Yen, “The New International Arbitration (Amendment) Bill- A Broader Framework for Interim Relief or just a tune up?
(2010) 22 SAcLJ, 331; Bocotra Construction Pte Ltd v AG (1994) 3 SLR(R) 723 [49] (Goh Joon Seng J); JBE Properties Pte
[2011] SLR 47 [6] (Chan Sek Keong CJ) ; Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Sheikh
Sultan bin Khalifa bin Zayed Al Nahyan [2000] 1 SLR(R) 117, 121 (Chao Hick Tin JA). 34 Christopher Huntley, (2005) ‘The Scope of Article 17: Interim Measures Under the UNCITRAL Model Law’ Vindobona J.
Int’l Com. L. & Arb., 9, 69-71;Mahdev Mohan, Tay Eu-Yen, “The New International Arbitration (Amendment) Bill- A Broader
Framework for Interim Relief or just a tune up? (2010) 22 SAcLJ, 331. 35 Moot problem, 70-82. 36 Ibid 83-88. 37 Ibid 78. 38 Ibid 78-80 39 [1995] 2 SLR(R) 282.
7
(‘SPWD’), and Bocotra furnished a performance guarantee for the works. Due to administration errors by
SPWD, works were delayed, and Bocotra commenced arbitration against SPWD for damages for delay.
SPWD gave notice to Bocotra calling on the performance guarantee, however the tribunal granted an
interim measure restraining SPWD from calling on the performance guarantee. Subsequently, the Court
of Appeal held that the disputes relating to the proper construction of the guarantee were peripheral to the
primary reference to arbitration. The court then refused to enforce the injunction on the basis the
arbitrator had exceeded the scope of their power provided by the terms of the submission to arbitration.40
35. Similarly here, on a narrow construction of the Submission to Arbitration, the primary dispute concerns
RESPONDENT’S alleged breach of contract for unpaid freight and failure to nominate a legitimate
discharge port. 41 The dispute as to urgency of sale of the cargo is separate to the dispute as to
RESPONDENT’S purported breach.
36. CLAIMANT raised no issues that suggest granting sale of the Cargo pendente lite is necessary within the
Submission to Arbitration. CLAIMANT merely asserted the pendente lite sale as a remedy sought, without
describing the issues giving rise to such a claim.42
37. Courts have held that any fact or dispute arising after the submission to arbitration, of which all parties
are aware, need not be explicitly pleaded.43 There is no evidence that RESPONDENT was aware of any
‘urgent’ matters relating to the cargo, or crew aboard the vessel. CLAIMANT received a message regarding
these matters from the Shipowner, however this email was not forwarded to RESPONDENT on any
occasion.44
38. Any issues relating to the need to order an interim measure for sale of the cargo pendente lite, are purely
peripheral to the primary dispute in question, fall beyond the scope of the parties’ reference to arbitration,
and are not subject matter to the dispute.
39. By granting liberty to CLAIMANT to sell the cargo pendente lite, the Tribunal would overextend the reach
40 Bocotra Construction Pte Ltd v AG [1995] 2 SLR(R) 282, 284. 41 Moot problem, 79. 42 Ibid 81, 90. 43PT Prima International Development v Kempinski Hotels SA [2012] 4 SLR 98, 162 (Chan CJ) citing PT Asuransi Jasa
Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597, 604 (Phang Boon Leong JA). 44 Moot problem, 37.
8
of it’s jurisdiction, by granting an order based on issues which were not remotely considered within the
parties’ Submission to Arbitration, and moreover not known by RESPONDENT.
40. Thus, the Tribunal has no power to order the sale of the cargo pendente lite under the IAA.
PART TWO: SALE OF THE CARGO
41. RESPONDENT argues the Tribunal should not sell the Cargo pendente lite because (I) the Tribunal should
determine whether or not the Cargo should be sold pendente lite based on the ‘balance of the interests’
of the parties; and (II) it is neither necessary nor just to order sale of the Cargo pendente lite.
I. THE TRIBUNAL SHOULD BALANCE THE INTERESTS OF BOTH PARTIES
42. An arbitral tribunal has a broad discretion in deciding which standards apply in granting interim
measures.45 Singapore has not implemented the 2006 UNCITRAL Model law amendments, in which s
17A outlines the test to be applied in determining whether or not the tribunal should grant an interim
measure.46 As such, there is no statutory guidance as to the application of interim measures by tribunals.47
43. In lieu of statutory guidance, Singaporean tribunals with the arbitral seat in Singapore have frequently
applied the lex arbitri (the law governing the procedure of the tribunal) in determining whether or not to
grant an interim measure.48
44. Five Ocean Corporation v Cingler Ship Pte Ltd,49 considered the pendente lite sale of cargo, where the
Singaporean High Court considered it appropriate to determine the matter based on a ‘a fair balance of
the respective interests of the parties’50
45. Based on the flexibility of the approach, RESPONDENT submits that the Tribunal should apply the balance
of interests approach in this case.
45 David Joseph QC and David Foxton QC, Singapore International Arbitration: Law & Practice (LexisNexis, 2014) 233. 46 Art 17A, UNICITRAL Model Law on International Commercial Arbitration 1985 with Amendments as Adopted 2006. 47 David Joseph QC and David Foxton QC, Singapore International Arbitration: Law & Practice (LexisNexis, 2014) 234. 48 David Joseph QC and David Foxton QC, Singapore International Arbitration: Law & Practice (LexisNexis, 2014) 49; Sapna
Jhangiani, Conflicts of Law and International Commercial Arbitration – Can Conflict Be Avoided?, BCDR International
Arbitration Review, (Kluwer Law International 2015, Volume 2 Issue 1) pp. 114; Steven Lim, Interim Relief in International
Arbitration, at 29, 30 (Paper Presented at SIAC Congress 2014). 49 [2015] SGHC 311. 50 Five Ocean Corporation v Cingler Pte Ltd [2015] SGHC 311 (Ang J).
9
II. IT IS NEITHER NECESSARY NOR JUST TO ORDER SALE OF THE CARGO PENDENTE LITE
46. RESPONDENT argues that a pendente lite sale of the Cargo should not be ordered, because (A)
RESPONDENT is capable of paying any damages owing; (B) sale of the Cargo would disproportionately
prejudice RESPONDENT; and (C) there is no urgent need to sell the Cargo pendente lite.
A. RESPONDENT Is Capable of Paying Damages Owing
47. In assessing whether the balance of interests favours granting the interim measure, a respondent’s ability
to pay damages is an important consideration.51
48. In Five Ocean Corporation v Cingler Ship Pte Ltd,52 the court found the balance of interests favoured the
plaintiff and the pendente lite sale of the cargo as it was evident the defendant did not have the ability to
pay the damages owed for freight and demurrage.53 The defendant was in debt to numerous creditors, and
was the subject of numerous winding up operations.54 Here, there is no evidence suggesting RESPONDENT
was unable to pay the freight purportedly owed to CLAIMANT. On the contrary, RESPONDENT went to
great lengths to reassure CLAIMANT of their intention to pay freight, to the extent that they offered to pay
CLAIMANT at an amended rate on an open book basis at the discharge port.55
49. Thus, there is no evidence to suggest that RESPONDENT was not capable of paying.
B. Sale of the Cargo pendente lite would disproportionately prejudice the RESPONDENT
50. The Tribunal must consider whether or not the harm suffered by RESPONDENT by granting the interim
measure, would be outweigh the harm suffered by CLAIMANT if the interim measure were granted.56
51. RESPONDENT submits that sale of the cargo pendente lite would disproportionately harm RESPONDENT, as
it would likely reduce the amount that RESPONDENT could receive by selling the coal in the future under
51 Maldives Airports Co Ltd v GMR Male International Airport Pte Ltd [2013] 2 SLR 449, 471 (Menon CJ). 52 [2015] SGHC 311. 53 Five Ocean Corporation v Cingler Pte Ltd [2015] SLR 1159, 1181 (Ang J). 54 Five Ocean Corporation v Cingler Pte Ltd [2015] SLR 1159, 1181 (Ang J). 55 Moot problem, 58. 56 Singapore Press Holdings Ltd v Brown Noel Trading Ptd Ltd [1994] 3 SLR(R) 114, 118 (Karthigesu JA); Astrata (Singapore)
Pte Ltd v Tridex Technologies Pte Ltd [2011] 1 SLR 449, 468 (Pillai J); Maldives Airports Co Ltd v GMR Male International
Airport Pte Ltd [2013] 2 SLR 449, 471 (Menon CJ); Chin Bay Ching v Merchant Ventures Pte Ltd [2005] 3 SLR(R) 142, 147
(Chao Hick Tin JA).
10
different circumstances.
52. The Expert Report suggests that the global downturn in the Chinese coal market, in addition to the
firming of the Newcastle coal price, would be unlikely to have any substantive effect on the value of the
coal.57 However, the Expert Report did suggest the Cargo would sell for less, if the buyer were aware that
the Cargo was subject to legal proceedings.58
53. Undoubtedly, the buyer would be aware the Cargo was subject to legal proceedings if the sale was court-
ordered. Further, any urgent sale of the Cargo is unlikely to fetch the highest price possible, due to the
time pressures of the sale.
C. There Is No Urgent Need to Sell the Cargo Pendente Lite
54. Tribunals should only grant interim measures where there is a sense of urgency.59
55. There is strong evidence to suggest that the Cargo is unlikely to self-ignite.
56. In the email between Gordon Grill and Peter Girvin, Peter Girvin relayed a message from the crew
aboard the Vessel, expressing concerns the Cargo would self ignite.60 Case law suggests that where the
subject matter is less perishable in nature, the urgency of sale will be reduced,61 and tribunals will be less
inclined to grant an interim measure preserving the value of the subject matter.62
57. The Expert Report suggests that the moisture content in coal will negatively affect the value of the coal.63
However, the report does not suggest the impact that moisture content will have on the ‘combustibility’
(the potential for the coal to self ignite) of the coal.64 The literature in this area suggests, that for sub-
bituminous coal, higher moisture content will reduce the risk of the coal’s combustibility. 65
57 Moot problem, 100. 58 Ibid 101. 59 NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] SGCA 5, 585 (Rajah JA). 60 Moot problem, 37. 61 Five Ocean Corporation v Cingler Pte ltd [2015] 311 [53] (Ang J); Stelios B Maritime Ltd v Ibeto Cement Co (‘The Stelios B’)
[2006] EWHC 672 (Comm.); The ‘Sea Urchin’ [2014] SGHC 24 (Ang J); The ‘Turtle Bay’ [2013] SGHC 165.(Ang J). 62 Five Ocean Corporation v Cingler at [53]; Stelios B Maritime Ltd v Ibeto Cement Co (‘The Stelios B’) [2006] EWHC 672
(Comm.); ‘The Sea Urchin’ [2014] SGHC 24 (Ang J); The ‘Turtle Bay’ [2013] SGHC 165. 63 Moot problem, 101. 64 Ibid. 65 Tao Xu, De-Ming Wang & Qi-Lin He ‘The Study of the Critical Moisture Content at Which Coal Has the Most High Tendency
to Spontaneous Combustion’ International Journal of Coal Preparation And Utilization, Vol. 33, Iss. 3, 2013.
11
58. Both the Sampling Analysis,66 and the Expert Report,67 states that the moisture content of the coal in this
case is 30.1%. This is more than double the benchmark standard stated in the Expert Report for sub-
bituminous coal.68 The high moisture content of the Cargo renders it far less likely to self-ignite than
standard sub-bituminous coal, and thus reduces the risk of the Cargo dissipating prior to the resolution of
the dispute.
59. Further, CLAIMANT’S conduct does not suggest the sale of the Cargo could not wait to be resolved at a
hearing of the merits. RESPONDENT acknowledges that CLAIMANT took reasonable steps in submitting the
disputes to arbitration, however there were alternative methods of dispute resolution available to
CLAIMANT, which CLAIMANT did not attempt to utilise.
60. CLAIMANT could have arranged for an emergency arbitrator prior to the constitution of the tribunal,69 to
have the interim measure implemented in an expeditious manner. Further, CLAIMANT could have applied
to the court for sale of the Cargo, as courts has far greater coercive powers to order interim measures in a
far more efficient manner compared to tribunals, in which any order must receive leave from the court
before they can be enforced.70
61. RESPONDENT submits that on balance of the parties’ respective interests, the Tribunal should hold that it
is neither necessary nor just to order sale of the cargo pendente lite.
PART THREE: CONTRACTUAL LIABILITY
I. RESPONDENT HAS NOT BREACHED THE CHARTERPARTY
62. RESPONDENT submits that they are not liable for any breach of the Voyage Charterparty because: (A)
freight was not due and payable to CLAIMANT by 22 October 2016; and (B) RESPONDENT validly
nominated a discharge port. Further respondent argues that: (C) CLAIMANT had no right to terminate the
contract.
66 Moot problem, 40. 67 Ibid 100. 68 Ibid, 99. 69 David Joseph QC and David Foxton QC, Singapore International Arbitration: Law & Practice (LexisNexis, 2014) 230. 70 Ibid, 257.
12
A. Freight Was Not Due and Payable to CLAIMANT by 22 October 2016
63. As a general rule in contracts of affreightment, unless parties have agreed otherwise, freight is to be paid
upon the delivery of cargo at the discharge port.71
64. Clause 19 of the Voyage Charterparty provides that 100% of the freight was to be paid within five
banking days after completion of loading and the signing/releasing of the B/L and receipt of CLAIMANT’s
invoice, but in any event before breaking bulk.72 The phrase ‘before breaking bulk’ is defined as the point
in time before discharge operations have commenced.73
65. Loading of the Cargo commenced on 2 October 201674 and was completed on 4 October 2016.75 The B/L
were also signed/released on 4 October 2016.76 On 9 October 2016, CLAIMANT issued an invoice to
RESPONDENT for the payment of freight.77 The invoice did not specify the exact date on which payment
was to be made. On the contrary, the invoice simply requested that the RESPONDENT ‘kindly remit freight
at [their] earliest’.78 RESPONDENT submits that the inclusion of this request implies that the date on which
freight became due and payable was not fixed.
66. Five banking days after the issue of the invoice, CLAIMANT considered freight to be due and payable.
This is evident by a series of emails sent from CLAIMANT to RESPONDENT in which CLAIMANT requests
that freight be paid within five banking days of the completion of the loading of the Cargo.
67. RESPONDENT disputes this. Instead, RESPONDENT submits that, in accordance with Clause 19 of the
Voyage Charterparty, freight was due and payable before breaking bulk, being any time prior to the
commencement of discharge operations.
68. Further, due to complications in the nomination of a discharge port, discharge operations never
commenced. This means that freight did not actually become payable at any time prior to CLAIMANT’s
71 Karin Vatis Vagres Compania Maritime SA v Nissho-Iwai America Corp (‘The Karin Vatis’) [1988] 2 Lloyds Rep 330, 332
(Lloyd J); Colonial Bank v European Grain and Shipping Co Ltd (‘The Dominique’) [1989] 1 Lloyds Rep 431, 436 (Lord
Brandon); Bernard Eder, et al, Scrutton on Charterparties and Bills of Lading (Thompson Reuters (Professional UK Ltd), 2015)
406 [16.005]. 72 Moot Problem, 22. 73 See for example, D’amico Shipping Italia Spa v Endofa DMCC &ANOR [2016] EWHC 2223 (Comm) where the court noted
that there is a clear temporal difference between ‘before breaking bulk’ and ‘on breaking bulk’. 74 Moot Problem, 50. 75 Ibid, 47. 76 Moot Problem, 41. 77 Ibid 49. 78 Ibid.
13
termination of the contract on 22 October 2016.
69. Hence, RESPONDENT did not breach Clause 19 of the Voyage Charterparty.
B. RESPONDENT Validly Nominated a Discharge Port
70. Clause 16 of the Voyage Charterparty provided a list of ports in China to which the Cargo may have been
delivered. Clause 16 provides that the RESPONDENT may nominate any of the listed ports.
71. On or before 16 October 2016, RESPONDENT became aware that there was congestion at all of the
Chinese ports listed in Clause 16. Due to this congestion, RESPONDENT chose to nominate Busan, South
Korea, as the preferred discharge port, rather than any of the ports listed in Clause 16.79 On 16 October
2016, CLAIMANT rejected this nomination, and has since claimed that Busan was not a valid port
nomination and that Busan posed a war risk to the Vessel.
72. On 21 October 2016, RESPONDENT nominated Port Ningbo as the preferred discharge port; however,
CLAIMANT rejected this nomination due to alleged non-payment of freight by the RESPONDENT.
73. RESPONDENT argues that it cannot be held liable for a breach of Clause 16, and further, that CLAIMANT is
directly responsible for the delay incurred in nominating a legitimate discharge port because: (i) Busan
was a legitimate port nomination; (ii) Busan did not pose a war risk to the Vessel; and (iii) RESPONDENT
is not liable for the delay in nominating Port Ningbo.
(i) Busan was a Legitimate Port Nomination
74. Under Clause 16 of the Voyage Charterparty, RESPONDENT was required to nominate a legitimate port for
discharge of the Cargo. Though Clause 16 listed several possible ports of discharge, there is no evidence
to suggest that this list was exhaustive upon the RESPONDENT. Further, the Time Charterparty provided
that the Vessel may be sent to any port within the Asia Pacific region80 and it was the port where the
vessel was to be re-delivered.81
75. After becoming aware of congestion at each of the listed Chinese ports, RESPONDENT validly elected not
to nominate a discharge port in China. Instead, RESPONDENT nominated Busan, South Korea.
79 Ibid 57. 80 Ibid 1. 81 Ibid 2.
14
RESPONDENT was willing to amend the freight rate to deal with the extra distance to the discharge port.
(ii) Busan Did Not Pose a War Risk to the Vessel
76. On 17 October 2016, CLAIMANT rejected the nomination of Busan as discharge port due to the zombie
threat occurring at the time of nomination. CLAMANT claimed that this threat constituted a war risk under
the Voyage Charterparty.
77. According to Clause 18 of the Voyage Charterparty, the master and or the owners of the cargo may
refuse to perform their obligations under the charterparty if ‘in the reasonable judgement of the Master
and/or the Owners, performance of the Charter Party, or any part of it, may expose, or is likely to expose,
the Vessel, her cargo, crew or other persons on board the Vessel to War Risks’.82
78. The term ‘owner’ in Clause 18 is broadly defined to include the disponent owner of the vessel. In the
present case, CLAIMANT is the disponent owner of the Vessel83 and, therefore, may rely on Clause 18.
79. A ‘war risk’ is defined very broadly in the Voyage Charterparty and includes any ‘civil commotion…by
any…body’.84
80. RESPONDENT submits that the judgement of the CLAIMANT in considering Busan as a war risk was not
reasonable because (a) the zombie threat was never substantiated, and (b) the South Korean military had
secured the area.
(a) The Zombie Threat Was Never Substantiated
81. According to CLAIMANT, the reason for the refusal to have the Vessel discharge at Busan was due to ‘the
arrival of zombies from Seoul’, and further, that there was ‘insufficient time to arrange for security, razor
wire and antidotes’.85 By CLAIMANT’S very own admission in its email on 16 October 2016, these were
merely rumours’.86 RESPONDENT submits that it would not be reasonable for a master to consider an
unsubstantiated threat as a war risk for the purposes of the Voyage Charterparty.
(b) The South Korean Military Had Secured the Area
82 Ibid 30. 83 Ibid, 21. 84 Ibid 30. 85 Ibid 58. 86 Ibid 58.
15
82. Though CLAIMANT had refused to accept Busan as the discharge port on 16 October 2016, CLAIMANT
received reassurance as to the safety of the port on 17 October 2016. In an email on 17 October 2016, the
master of the Vessel reported that Busan was no longer a threat for the crew or the Vessel as ‘Korean
military had secured the area’.87 CLAIMANT then responded to that email again refusing to accept Busan.
RESPONDENT submits that this refusal was not based on the reasonable judgement of the CLAIMANT.
83. Therefore, RESPONDENT submits that Busan did not pose a war risk to the Vessel or its crew.
(iii) RESPONDENT Is Not Liable for the Delay in Nominating Port Ningbo
84. There is an implied obligation in contracts of affreightment that a charterer will prosecute the voyage
within a reasonable time and without unreasonable delay. This obligation is fulfilled if any delay was
caused by intervening circumstances beyond the control of either party and neither party acted
negligently or unreasonably in the circumstances.88 In determining what is reasonable, the Court must
have regard to the circumstances which exist at the time for performance, as well as the customary mode
of performance.89
85. In this case, RESPONDENT is not responsible for the delay that occurred in nominating Ningbo as the port
of discharge, as the delay was caused by CLAIMANT’S unreasonable refusal of Busan as discharge port.
II. CLAIMANT HAD NO RIGHT TO ELECT TO TREAT THE CONTRACT AS DISCHARGED
86. In its email dated 21 October 2016, RESPONDENT nominated port Ningbo as the discharge port.90 While
this nomination was not accompanied by the payment of freight, RESPONDENT promised CLAIMANT that
payment of freight would be made after the cargo was delivered at the discharge port.91 Despite this,
CLAIMANT elected to treat the contract as discharged on the grounds that RESPONDENT had committed a
repudiatory breach of the contract by failing to pay freight, and sent its notice of termination on 22
October 2016 wherein it stated ‘... we accept your renunciation and repudiatory breach of the contract’.92
87 Ibid 60. 88 Hick v Raymond & Reid (1893) AC 22; Thomas Heiton & Co Ltd v LMS Railway Company [1926] 24 LL Rep 479, 484 (Swift
J). 89 Ibid. 90 Ibid 67, 69. 91 Ibid. 92 Ibid 69.
16
87. UNDER Singapore law, there is no automatic legal right conferred on an innocent party to terminate a
contract where there has been a breach.93 The Singapore Court of Appeal in RDC Concrete94 stated that
there are four situations that will entitle an innocent party to terminate the contract based on the other
parties (the defaulting parties) breach.95
88. RESPONDENT argues that CLAIMANT had no right to elect to treat the contract as discharged on 22 October
2016 because: (A) RESPONDENT had not renounced its obligations under the Voyage Charterparty; (B)
RESPONDENT did not breach a condition of the contract; (C) RESPONDENT’s conduct did not amount to a
repudiation of the Voyage Charterparty; and therefore, (D) CLAIMANT’S notice of termination on 22
October 2016 was without legal justification.
A. RESPONDENT had not renounced its obligations under the Voyage Charterparty
89. An innocent party may elect to terminate a contract ‘where one party, by words or conduct, simply
renounces the contract in as much as it clearly conveys to the other party that it no longer intends to be
bound by the contract at all’.96 Short of an express refusal to perform, whether a party has renounced the
contract is determined objectively in light of the surrounding circumstances.97 Such intent must be clearly
evident on the facts of the case.98 Any doubts will tend to be resolved in favour of the promiseor who, in
this case, is the RESPONDENT.99
90. RESPONDENT’S email on 21 October 2016 100 cannot possibly be construed as an express refusal to
93 RDC Concrete Pte Ltd v Sato Kogyo (S) PteLtd [2007] 413, 444 (Phang J); Alliance concrete Singapore Pte Ltd v Comfort
Resources Pte Ltd [2009] 4 SLR 602, 613 (Phang); Andrew Phang, Contract Law in Singapore (Academy Publishing, 2012) 1173
[17.007]. 94 RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR (R) 413 (Phang J). 95 RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR 413, 445, 446 (Phang J); Approved in Man Financial (S) Pte Ltd
v Wong Bark Chuan David [2008] 1 SLR (R) 663, 720 (Phang J); see also, Alliance Concrete Singapore Pte Ltd v Comfort
Resources Pte Ltd [2009] 4 SLR (R) 602, 613 (Phang J); Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] 3
SLR 857, 870, 874, 875 (Phang J); The STX Mumbai and Another Matter [2015] 5 SLR 1, 32 (Phang); Andrew Phang, above n
94, 1197 [17.057]. 96 San International Pte Ltd v Kepel Engineering Pte Ltd [1998] 3 SLR (R) 447, 459(Karthigesu JA); RDC Concrete Pte Ltd v
Sato Kogyo (S) Pte Ltd [2007] 4 SLR 413, 445, 446 (Phang J); see also, Econ Piling Pte Ltd v GTE Construction Pte Ltd [2009]
SGHC 213, affirming the definition of renunciation as cited by the Court in RDC Concrete. 97 San International Pte Ltd v Keppel Engineering Pte Ltd [1998] 3 SLR (R) 447, 459 (Karthigesu JA); Econ Piling Property Pte
Ltd v GTE Construction Property Ltd [2009] SGHC 213 at [30]; Andrew Phang and Goh Yihan, Contract Law in Singapore
(Walter Kluwer, 2012) [611] 1290. 98 RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd 4 SLR 413, 445, 446 ( Phang JA); see also, The Hermosa [1982] 1 Lloyds Rep
570, 572 (Donaldson LJ); Woodar Investments Pty Ltd v Wimpey Construction (UK) Ltd [1980] 1 WLR 277, 288, 295, 298 (Lord
Wilberforce); Andrew Phang and Goh Yihan , above n 98, 1177 [17.015]. 99 J W Carter, Carters Breach of Contract (Hart Publishing , 2012) 371 [8-15]. 100 Moot problem 67, 68.
17
perform the Voyage Charterparty. RESPONDENT never disabled itself absolutely from performance. On
the contrary, RESPONDENT was willing to modify the contract by making payment of freight after the
delivery of the cargo at the discharge port.101 This showed a willingness to perform the contract and not
renounce it.102
91. Additionally, there is no evidence in the relevant correspondence between the parties prior to the date of
termination on 22 October 2016 that would convey to a reasonable person in the position of CLAIMANT
that RESPONDENT no longer intended to fulfil its obligations under the contract at all.103 RESPONDENT
always intended to fulfil its contractual obligations. This is evidenced by its email on 21 October 2016
wherein it promised that freight would be paid.104
92. RESPONDENT was unable to make payment at an earlier date because it had not received the payment of
sub-freight from the shipper of the Cargo. This was also clearly communicated to CLAIMANT on two (2)
separate occasions.105 As such, RESPONDENT submits that the email dated 18 October 2016 demanding
payment by 20 October 2016 was simply designed to create a semblance of refusal to pay that was purely
artificial.106
93. Accordingly, CLAIMANT had no right to treat RESPONDENT’S conduct as a renunciation.107
B. RESPONDENT did not breach a condition of the contract
94. A breach of a condition or a serious breach of an intermediate term that goes to the root of the contract
entitles a party to elect to terminate the contract and claim damages.108 This principle is expressed in
situation 3 (A) of RDC Concrete and is known as the ‘condition warranty approach’.109 Whether or not a
101 Ibid. 102 J W Carter, Carters Breach of Contract (Hart Publishing, 2012) 371. 103 San International Pte Ltd v Keppel Engineering Pte Ltd [1998] 3 SLR(R) 447; Econ Piling Pte Ltd v. NCC International AB
[2007] SGHC 17 see also, Universal Cargo Carriers Corp v Citati [1957] 2 Lloyds Rep 72 (Devlin J); SK shipping (S) Pte Ltd v
Petroexport Ltd (‘The Pro Victor’) [2010] 2 Lloyds Rep 158, 173 (Flaux J). 104 Moot problem, 68, 69. 105 Ibid 56, 62. 106 See e.g. The STX Mumbai [2015] 5 SLR (R) 1. 107 RDC Concrete, 444 (Phang JA). 108 RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR 413, 447(Phang JA); Hong Kong Fir Shipping Co Ltd v
Kawasaki Kisan Kaisha Ltd [1962] 2 QB 26, 66 (Diplock LJ) (‘Hong Kong Fir’); Bunge Corporation New York v Tradax Export
SA, Panama [1989] 1 WLR 711 (Lord Wilberforce); Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR
361, 380 (Buckley LJ); Suisse Atlantique Société d’Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 (Lord
Upjohn); Photo Production Ltd v Securicor Transport Ltd [1980] 1 Lloyds Rep 545, 554 (Diplock LJ). 109 RDC Concrete, 448 (Phang J).
18
term of a contract is a condition is based on ‘... [t]he objective intention of the parties themselves by
construing the actual contract itself... in light of the surrounding circumstances’.110 Here, the alleged
breach of Clause 19 of the Voyage Charterparty does not amount to a breach of a condition within the
ambit of situation 3 (A) giving rise to a right of termination.111
95. When considering Clause 19 of the Voyage Charterparty in the context of the contract as a whole, it is
apparent that the parties did not consider the time for payment of freight by 14 October 2016 to be a
condition of the contract. On the contrary, RESPONDENT submits that the inclusion of the phrase ‘but in
any case before breaking bulk’112 indicates that the parties intended for Clause 19 to be applied with
some flexibility and leeway. This means that it was not a strict condition the freight was to be paid by this
time.
96. Additionally, CLAIMANT did not elevate the time for payment of freight to be a condition of the Voyage
Charterparty in its email to RESPONDENT on 18 October 2016.113 Given the nature and application of
clause 19 itself, the request that freight be paid ‘no later than 20 October 2016’ was not justified given the
circumstances of the case. As such, RESPONDENT submits that there was no legal basis for sending an
email on 18 October 2016 requesting that freight be paid no later than 20 October 2016 or the contract
would be terminated.114
97. Accordingly, RESPONDENT’S alleged failure to pay freight cannot be construed as a breach of a condition
of the Voyage Charterparty.
C. RESPONDENT’S conduct did not amount to a repudiation of the Voyage Charterparty
98. A party seeking TO perform the contract in a manner that is ‘directly inconsistent with the terms of the
contract’ may be found to have repudiated the contract. 115 In such a case the issue is whether the
inconsistent performance goes to the root of the contract and amounts to a substantial breach.116
110 Bentson v Taylor, Sons & Co (No 2) [1893] 2 QB 274, 281 (Bowen LJ); Man Financial v Wong Bark Chuan David [2008] 1
SLR (R) 663, 721 (Phang J); Tan Wee Fong v Denieru Tatsu F&B Holdings Pte Ltd [2010] 2 SLR (R) 298, 318, 319 (Ang J). 111 RDC Concrete, 448 (Phang JA). 112 Moot problem, 22. 113 Ibid, 64. 114 Ibid, 115 RDC Concrete, 459 (Phang J). 116 Ibid.
19
99. A breach of a non-essential term of a contract (or a warranty) may not be treated as a repudiatory breach
if non-fulfilment of that term does not result in the denial of substantial benefit to which the CLAIMANT
intended that it would derive.117 This principle is exemplified in situation 3 (B) of RDC Concrete and
embodies what is commonly referred to as the ‘Hong Kong fir approach’.118
100. In Hong Kong Fir Shipping119, Diplock LJ observed that ‘... non-compliance with a contractual term will
lead to a fundamental breach of the contract if it denies the innocent party of the substantial benefit of the
contract, which depends on the events which occurred as a result of the breach’.120 RESPONDENT submits
that its alleged non-compliance with its obligations under the contract is not capable of being rendered so
serious that it went to the root of the contract and deprived CLAIMANT of substantially the whole of the
benefit under the Voyage Charterparty. This is for three reasons:
101. First, the main purpose of the Voyage Charterparty was to have the Cargo delivered from Newcastle to a
nominated discharge port in China.121 That purpose remained achievable. RESPONDENT nominated a
discharge port on 21 October 2016.122 However Claimant refused to comply with these requests. Had the
Voyage Charterparty not been terminated the cargo would have been delivered and Claimant would have
received the payment of freight, including the adjusted amount based on Port Ningbo as the discharge
port.123
102. Secondly, although RESPONDENT may not have been in a position to pay freight, it was still willing to do
so and promised that payment would be made.124 Furthermore, CLAIMANT had not fallen into arrears with
hire to the shipowner under the Time Charterparty. This is based on the fact that CLAIMANT had no need
to rely on the grace period under Clause 11 of the Time Charterparty.125
103. Thirdly, as per Clause 1 of the Time Charterparty, the Vessel was hired from THE SHIPOWNER for a period
117 Glaholm v Hays (1841) 2 Man & G 257; Bradford v Williams (1872) LR 7 Ex 259, 261 (Martin B); Hong Kong Fir Shipping
Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] 2 Lloyds Rep 478, 494 (Diplock LJ); RDC Concrete, 448 (Andrew Phang JA);
Sports Connection, 916 (Phang JA). 118 RDC Concrete, 450 (Andrew Phang JA); see also, Hong Kong Fir, 70 (Diplock LJ). 119 [1962] 2 QB 26. 120 Hong Kong Fir, 66 (Diplock LJ). 121 Moot problem, 21, 22. 122 Ibid 67. 123 Ibid. 124 Ibid 68. 125 Ibid 8.
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of two (2) years.126 CLAIMANT was therefore still able to re-charter the vessel under another Charterparty
upon the completion of the voyage and make a profit. As a result, notwithstanding that freight would be
paid after the delivery of the cargo at the discharge port, RESPONDENT submits that CLAIMANT would not
have been denied the substantial benefit of the Voyage Charterparty.
104. In the Singapore decision of Chua Chay Lee v Premier Properties Pte Ltd127, the Court found that a delay
of one (1) year was not sufficient to amount to a repudiation of the contract at the time the Appellant
terminated the contract.128 There, Tan Lee Meng J, in dismissing the Appellants appeal, said that ‘...
[t]here is no doubt that the respondents had been rather tardy in performing their contractual obligations...
and The Appellants have certainly good reason to be unhappy with the delay. However, whatever grouses
the appellants may have had in the past, things had finally begun to move along by 11 May 1999, the day
they purported to terminate the agreement’.129
105. Accordingly, in the absence of any further hindrance to the performance of the contract, RESPONDENT’S
non-compliance cannot be termed a fundamental breach going to the root of the contract, and as a result
cannot be considered repudiatory.130
106. At the heart of the doctrine of repudiation is the notion that there must be a clear absence of readiness or
willingness on the part of the defendant to perform its obligations under the contract.131 RESPONDENT
submits that the requests to divert to Busan due to congestion at the Chinese ports;132 the subsequent
nomination of port Ningbo on 21 October 2016;133 and the promise to pay freight, individually or
collectively cannot be construed as a clear manifestation of an absence of readiness or willingness to
perform the Voyage Charterparty. 134 In other words, RESPONDENT had, by its words and conduct,
126 Ibid 1. 127 [2000] 2 SLR 464. 128 Chua Chay Lee v Premier Properties Pte Ltd [2000] 2 SLR 464. 129 Ibid. 130 RDC Concrete, 449 ( Phang J). 131 J W Carter, Carters Breach of Contract (Heart Publishing, 2012) 371; see also eg The STX Mumbai [2015] 5 SLR 1, 33 (Phang
JA). 132 Moot problem 57. 133 Ibid 67. 134 Carter, above n 132, 371.
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dispelled any inference that it did not intend to fulfil its obligations under the Voyage Charterparty.135
Therefore, the Tribunal should reject any submission put forward by CLAIMANT alleging that
RESPONDENT was not ready and willing to perform the Voyage Charterparty.
107. Therefore, as RESPONDENT had not committed a renunciation and/or repudiatory breach of the contract at
this time, CLAIMANT was not entitled to treat the contract as discharged. As no common law right of
termination arose, it follows that CLAIMANT’S notice of termination on 22 October 2016 was in itself a
repudiation of the voyage Charterparty, which was duly accepted by RESPONDENT on 22 October 2016.136
D. Claimants notice of termination was without legal justification
108. RESPONDENT submits that it did not commit a repudiatory breach of the contract, and therefore, the
CLAIMANT terminated the Voyage Charterparty without justification. It has been established in
Singaporean law that if a party terminates a contract without legal justification, it will itself be in breach
of contract and liable to pay damages.137 RESPONDENT submits that CLAIMANT should therefore be liable
in this manner.
PART FOUR: LIENS
109. A lien is a right granted to a party at common law or contractually, to detain another party’s goods as
security until they are paid the amount that party owes them.138
110. RESPONDENT argues that: (I) CLAIMANT has no right to exercise a common law lien over the Cargo; and
(II) CLAIMANT has no right to exercise a contractual lien over the Cargo.
I. CLAIMANT CANNOT EXERCISE A LIEN ON CARGO AT COMMON LAW
111. A common law lien on cargo extends to sub-freights owed under sub-charters, provided that notice of the
135 Ibid. 136 Moot Problem, 69. 137 Alliance Concrete Singapore Pte LTD v Comfort Resources Pte Ltd [2009] 4 SLR (R) 602, 613 (Phang JA). 138 Santiren Shipping Ltd v. Unimarine S.A. (‘The Chrysovalandou Dyo’) [1981] 1 Lloyd’s Rep. 159, 162 (Mocatta J); Dry Bulk
Handy Holding Inc and Another v Fayetter International Holdings Ltd and Another (’The Bulk Chile’) [2013] EWCA Civ 184,
190 (Tomlinson LJ).
22
lien is served to the sub-charterers.139 Only the carrier in possession of cargo can exercise a common law
lien on that cargo.140
112. A party will have a right to exercise a common law lien against the Shipper through an implied contract
with the Shipper on the B/L, if that party is the owner of the B/L.141
113. RESPONDENT submits that CLAIMANT cannot exercise a common law lien because: (A) CLAIMANT is not
the carrier under the terms of the Time Charterparty; and (B) CLAIMANT does not own the B/L.
A. Claimant Is Not the Carrier Under the Terms of the Time Charterparty
114. Time charterparties typically divide responsibilities between parties on the basis that the time charterer is
responsible for the commercial use of the vessel, whilst the carrier is responsible for the navigational
aspects of the vessel, and employs the crew and master as their agents.142 The identity of the carrier may
be determined by reference to the employment clause of the relevant charterparty, 143 or any other
evidence showing the intentions of the parties.144
115. Clause 6 of the Time Charterparty, which concerns employment, states that the Shipowner is the
company employing the Master and the crew of the Vessel.145 CLAIMANT is not listed anywhere within
Clause 6. This strongly suggests that the Shipowner, and not CLAIMANT, is the carrier.
116. Where a vessel is demise chartered to the charterer, the charterer will maintain control over both
commercial and navigational operation of the vessel, and the charterer will be considered the legal carrier
of the vessel.146 Clause 26 of the Time Charterparty expressly state that no part of the Time Charterparty
is to be considered a demise of the Vessel.147
117. Thus, the terms of the Time Charterparty suggest that the Shipowner is the legal carrier in this case,
139 ‘The Western Moscow’ [2012] 2 Lloyd’s Rep. 163, 166 (Clarke J) ; The Bulk Chile [2013] EWCA Civ 184, 190 (Tomlinson
LJ); applying dicta of Rix LJ in Tradigrain S.A v King Diamond Shipping S.A (‘The Spiros C’) [2000] 2 Lloyd’s Rep 319. 140 The Mathew [1990] 2 Lloyd’s Rep 323 (QB). 141 Samuel v West Hartlepool SN Co (1906) 11 Com Cas 115. 142 Sir Bernard Eder, Howard Bennett et al, Scrutton on Charterparties and Bills of Lading ( 23rd Ed, Sweet and Maxwell, 2015),
425. 143 Bridges & Salmon Ltd v The Marine Diesel Service (Grimsby) ltd v Same (‘The Swan’) [1968] 1 Lloyd’s Rep. 5, 9 (Brandon J);
Brandt & Co v H.N. Morris & Co Ltd [1917] 2 K.B 784 (Scrutton LJ). 144 Ibid. 145 Moot problem, 1. 146 Sir Bernard Eder, Howard Bennett et al., Scrutton on Charterparties and Bills of Lading ( 23rd Ed, Sweet and Maxwell, 2015),
462. 147 Moot problem, 10.
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rather than CLAIMANT.
B. The B/L belongs to the Shipowner
118. In determining which party ‘owns’ the B/L, priority should be given to the terms on the front of the B/L,
rather than on the reverse.148 Since a time charter does not amount to a demise of the ship, the contract
evidence by a B/L signed by the master himself is prima facie a contract made with the Shipowner, not
with CLAIMANT.149
119. The B/L is a standard form B/L distributed by the Shipowner as evidenced by the ‘IMLAM Consignorist’
logo in the top left hand corner of the B/L,150 and the Master signed off on the B/L as ‘Master of the M.V
Tardy Tessa’, without qualification.151 Further, there are no terms on the reverse of the B/L that would
suggest that the Master signed the B/L as an agent on behalf of CLAIMANT.
120. Thus, the evidence suggests IMLAM is the carrier in this case, and are in possession of the Cargo as per
the B/L, and CLAIMANT has no right to exercise a common law lien on the cargo, as IMLAM is the legal
carrier and owners of the B/L.
II. CLAIMANT CANNOT EXERCISE A CONTRACTUAL LIEN ON CARGO.
121. Clause 19 of the Coal Orevoy grants CLAIMANT power to exercise a lien on cargo for freight, deadfreight
demurrage and general average contribution under the Voyage Charterparty.152
122. However, a contractual lien is limited to parties to the contract.153 Entities cannot be bound to contractual
terms to which they did not agree.154
123. A shipped negotiable B/L will perform the function of a document of title for the holder.155 Here, the
148 Homburg Houtimport BV v Agrosin Private Ltd (‘The Starsin’) [2003] UKHL 12, 578 (Lord Bingham); The “Star Quest” and
other matters [2016] 3 SLR 1280 (Chong J). 149 Wehner v Dene [1905] 2 K.B. 92, 95 (Channell J); Cascade Shipping Inc v Eka Jaya Agencies (S) Pte ltd [1993] SLR(R) 187,
194 [17] (M Karthigesu J). 150 Moot problem, 42. 151 Ibid. 152 Moot problem, 31. 153 Ibid 31. 154 Jiang Halying v Tan Lim Hui and Another Suit [2009] 3 SLR(R) 13 [19] and [22] (Ang J); The Engedi [2010] 3 SLR 409, 419
(Ang J); Go Go Delicacy Pte Ltd v Corona Holdings Pte Ltd [2008] 1 SLR(R) 116, 168 [26] (Lai Siu Chiu J). 155 Lickbarrow v Mason (1787) 2 Term Rep. 63 (Buller J); Chan Cheng Kum v Wah Tat Bank Ltd [1971] SGPC 1 32 [11] (Lord
Devlin); Bandung Shipping Pte Ltd v Keppel Tat Lee Bank Ltd [2002] SGCA 46, 303 [30] (Chao Hick Tan JA) ;The “Dolphina”
[2011] SGHC 273, 335 (Ang J).
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Shipper holds every B/L.156 Further, the B/L is consigned ‘to order’ and is thereby negotiable.157 As such,
the Shipper holds title to the cargo through the B/L, and any contractual lien must be exercised against
the Shipper, rather than RESPONDENT.
124. A third party B/L holder may be bound to the terms of a charterparty if there is a valid incorporation
clause on the reverse of the bill which effectively binds that party to the terms of the charterparty.158
Clause 1 on the reverse of the B/L attempts to incorporate the terms of a charterparty.159
125. RESPONDENT argues that CLAIMANT cannot exercise a contractual lien because (A) The Incorporation
Clause on the reverse of the B/L is invalid and thus does not bind the Shipper to the terms of the Voyage
Charterparty.
A. The Incorporation Clause is invalid.
126. RESPONDENT submits that the reference to the terms of the Charterparty in the B/L were not sufficiently
clear for the purposes of valid incorporation.
127. In Star-Trans Far East Pte Ltd v Norske-Tech (‘Norske-Tech’),160 the court held that an incorporation
clause would bind a third party where the incorporating words are specific and sufficiently clear.161
128. In The Epsilon Rosa, the English Court of Appeal held that to meet the requirements for clarity, the
reference to the terms of the charterparty in the bill of lading must make the terms reasonably
ascertainable,162 so that from reading the clause, the holder of the bill of lading would be aware of the
contractual obligations to which they are to be bound.163 Further, the Court suggested that where the
charterparty is concluded in a fixture recap, and thus not in a final written form, the reference in the bill
156 Procedural Order No.3, 2(1), 2. 157 Moot problem, 41. 158 Simon Baughen, Shipping Law (6th Edition, Routledge,2015) 219. 159 Moot problem, 42. 160 [1996] 2 SLR(R) 196 (Karthigesu JA) 161 Star-Trans Far East Pte ltd v Norske- Tech Ltd [1996] 2 SLR(R) 196, 206 (Karthigesu JA); Concordia Agritrading Pte Ltd v
Cornelder hoogewerft (Singapore) Pte Ltd [1999] 3 SLR(R) 618, 624 (Teong Qwee JC); L&M Concrete Specialist Pte Ltd v
United Eng Contractors Pte Ltd [2000] 2 SLR(R) 852, 856 [10] (Choo Han Teck JC); ‘The Federal Bulker’ [1989] 1 Lloyd’s Rep
103, 105 (Hobhouse J). 162 Welex AG v Rosa Maritime Ltd (‘The Epsilon Rosa’) [2002] 2 Lloyd’s Rep 202, 515 (Tuckey LJ); cited in The Channel Ranger
[2014] 1 Lloyd’s Rep 337, [41] (Beatson LJ); Thyssen Inc M/V/Markos N aff’d sub nom Thyssen Inc v Calypso Shipping Corp SA
310 F 3d 102 (2d Circ 2002). 163 The Epsilon Rosa [2002] 2 Lloyd’s Rep 202, 515 [27] (Tuckey LJ); Caresse Navigation Ltd v Zurich Assurances Maroc and
Others (‘The Channel Ranger’) [2014] 1 Lloyd’s Rep 337, 260 (Lord Dyson); The “Star Quest” and other matters [2016] SGHC,
1304 (Chong J).
25
of lading must direct the holder to a standard form contract for the terms of the contract to be reasonably
ascertainable.164
129. In the present case, on the reverse of the B/L, there is a purported incorporation clause that makes
reference to a charterparty specified on the front of the bill.165 On the front of the B/L, there is no date,
nor reference to the Coal Orevoy, nor reference to the terms of the Fixture Recap provided.166 As such,
there is no evidence to suggest that the Shipper was aware of the contractual obligations to which they
were to be bound under the terms of the Voyage Charterparty concluded between CLAIMANT and
RESPONDENT.
130. The terms of the Voyage Charterparty were not reasonably ascertainable from the reference provided on
the reverse of the B/L, and as such the Incorporation Clause is invalid.
131. RESPONDENT submits CLAIMANT is not entitled to exercise any lien over the Cargo.
PRAYER FOR RELIEF
For the reasons set out above, Respondent requests that the Tribunal:
a) DECLARE that it does not have jurisdiction to hear the claimants pleading for the sale of the cargo
pendente lite;
b) FIND that the charterers did not exercise a valid lien over the cargo;
c) DECLARE that the claimant is not entitled to demurrage; and
d) AWARD further or other relief as the Tribunal considers fit.
164 Welex AG v Rosa Maritime Ltd (‘The Epsilon Rosa’) [2002] 2 Lloyd’s Rep 202, 515 (Tuckey LJ). 165 Moot problem, 44. 166 Ibid 41.
