INTERNATIONAL MARITIME ARBITRATION MOOT · PDF fileCHARTER PARTY It is hereby ... delivery of...

INTERNATIONAL MARITIME ARBITRATION

MOOT COMPETITION 2018

IMAM Moot organized by National Law University of Odisha, Cuttack, India

MOOT PROPOSITION

* The IMAM 2018 Moot Proposition has been prepared by Professor (Dr.) Proshanto K.

Mukherjee (Professor Emeritus WMU / Dalian Law School / Lund Law Faculty, Canada) and

reviewed by Mr. Pallab Das (Research Associate cum Teaching Associate, NLUO).

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CHARTER PARTY

It is hereby mutually agreed by the parties to this Charter party that they shall perform their

obligations in accordance with its terms, which include Parts I and II as set out below. In the

event of a conflict, the provisions of Part I shall prevail over those of Part II to the extent of

such conflict.

PART I

1. Place and date

Liuville, HELGALAND, 11 August, 2016

11. Freight rate (also state whether freight

prepaid or payable on delivery) (Cl.4)

USD 35/mt prepaid

2. Owner’s Name and Place of business

(Cl.1)

Shangrila Shipping Corporation, Nirvana,

NAVIGONIA

12. Freight payment (state currency and

method of payment, beneficiary and bank

account) (Cl.4)

As per Owners’ invoice in USD

3. Charterer’s Name and Place of business

(Cl.1)

Continental Chemicals Limited, Liuville,

HELGALAND

13. State if Vessel’s cargo handling gear

shall not be used (Cl.1)

Ship’s gear available for use

4. Vessel’s name (Cl.1)

MV Sulphur Express

14. Laytime (Cl.6)

Total laytime for loading and discharging -

25 days

5. GT/NT (Cl.1)

25, 070/40, 450

15. Shipper’s/Place of business (Cl.6)

Liuville, Helgaland

6. DWT all told on summer load line in

metric tons (abt.) (Cl.1)

23,000 mt

16. Demurrage rate and manner payable

(loading and discharging) (Cl.7)

USD 8,000

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7. Expected ready to load (abt.) (Cl.1)

10 October, 2016

17. Cancellation date (Cl.9)

30 November, 2016

8. Loading port or place (Cl.1)

Deeptara, Indisha

18. General Average to be adjusted at

(Cl.12)

Liuville

9. Discharging port or place (Cl.1)

Liuville, Helgaland

19. Freight Tax (state if for the Owner’s

account) (Cl.13(c))

For Owner’s account

10. Cargo (state quantity and margin at

Owners’ option, if agreed; if full and

complete cargo not agreed state “part

cargo”) (Cl.1)

Dry Sulphur 21,000 mt, 10% more or less at

Charterers option

20. Law and Arbitration

Cl. 17 shall apply

Signatures

Shangrila Shipping Corporation

(Owners)

Continental Chemicals Limited

(Charterers)

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CHARTER PARTY

PART II

1. INTRODUCTION

It is agreed between the parties mentioned in Box 2 as the Owners of the Vessel

named in Box 4, of the GT/NT indicated in Box 5 and carrying out the number of

metric tons of deadweight capacity all told on summer loadline stated in Box 6, and

expected ready to load under this Charter party about the date indicated in Box 7, and

the party mentioned as the Charterers in Box 3, that:

The said Vessel shall, as soon as her prior commitments have been completed,

proceed to the loading port(s) or place(s) stated in Box 8 or so near there to as she

may safely get and lie always afloat, and there load a full and complete cargo (if

shipment of deck cargo agreed same to be at the Charterers’ risk and responsibility) as

stated in Box 10, which the Charterers bind themselves to ship, and being so loaded

the Vessel shall proceed to the discharging port(s) or place(s) stated in Box 9 as

ordered on signing Bills of Lading, or so near there to as she may safely get and lie

always afloat, and there deliver the cargo.

2. OWNERS’ RESPONSIBILITY CLAUSE

The Owners are to be responsible for loss of or damage to the goods or for delay in

delivery of the goods only in case the loss, damage or delay has been caused by

personal want of due diligence on the part of the Owners or their manager to make the

Vessel in all respects seaworthy and to secure that she is properly manned, quipped

and supplied, or by the personal act or default of the Owners or their manager.

And the Owners are not responsible for loss, damage or delay arising from any other

cause whatsoever, even from the neglect or default of the Master or crew or some

other person employed by the Owners on board or ashore for whose acts they would

but for this Clause, be responsible, or from unseaworthiness of the Vessel on loading

or commencement of the voyage or at any time whatsoever.

3. DEVIATION CLAUSE

The Vessel has liberty to call at any port or ports in any order, for any purpose, to sail

without pilots, to tow and/or assist Vessel in all situations, and also to deviate for the

purpose of saving life and/or property.

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CHARTER PARTY

4. PAYMENT OF FREIGHT

(a) The freight at the rate stated in Box 11 shall be paid in cash calculated on the

intaken quantity of cargo.

(b) Prepaid. If according to Box 11 freight is to be paid on shipment, it shall be

deemed earned and non-returnable, Vessel and/or cargo lost or not lost. Neither the

Owners nor their agents shall be required to sign or endorse bill of lading showing

freight prepaid unless the freight due to the Owners has actually been paid.

(c) On delivery. If according to Box 11 freight, or part thereof, is payable at

destination it shall not be deemed earned until the cargo is thus delivered.

Notwithstanding the provisions under (a), if freight or part thereof is payable on

delivery of the cargo the Charterers shall have the option of paying the freight on

delivered weight/quantity provided such option is declared before breaking bulk and

the weight/quantity can be ascertained by official weighing machine, joint draft

survey or tally.

Cash for Vessel’s ordinary disbursements at the port of loading to be advanced by the

Charterers, if required, at highest current rate of exchange, subject to two (2) percent

to cover insurance and other expenses.

5. LOADING/DISCHARGING

(a) Costs/Risks

The cargo shall be brought into the holds, loaded, stowed and/or trimmed, tallied,

lashed and/or secured and taken from the holds and discharged by the Charterers,

free of any risk, liability and expense whatsoever to the Owners. The Charterers

shall provide and lay all dunnage material as required for the proper stowage and

protection of the cargo on board, the Owners allowing the use removing their

dunnage after discharge of the cargo under this Charter party and time to count

until dunnage has been removed.

(b) Cargo Handling Gear

Unless the Vessel is gearless or unless it has been agreed between the parties that

the Vessel’s gear shall not be used and stated as such in Box 13, the Owners shall

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CHARTER PARTY

throughout the duration of loading/discharging give free use of the Vessel’s cargo

handling gear and of sufficient motive power to operate all such cargo handling

gear. All such equipment’s to be in good working order. Unless caused by

negligence of the stevedores, time lost by breakdown of the Vessel’s cargo

handling gear or motive power, shall not count as laytime, such time lost being

calculated pro rata in relation to the total number of winches/cranes on the Vessel.

On request the Owners shall provide free of charge cranemen/winchmen from the

crew to operate the Vessel’s cargo handling gear, unless local regulations prohibit

this, in which latter event shore labourers shall be for the account of the Charterers

cranemen/winchmen shall be under the charter’s risk and responsibility and as

stevedores to be deemed as their servants but shall always work under the

supervision of the Master.

(c) Stevedore Damage

The Charterers shall be responsible for damage (beyond ordinary wear and tear) to

any part of the Vessel caused by Stevedores. Such damage shall be notified as

soon as reasonably possible by the Master to the Charterers or their agents and to

their Stevedores failing which the Charterers shall not be held responsible. The

Master shall endeavour to obtain the Stevedores’ written acknowledgement of

liability.

The Charterers are obliged to repair any stevedore damage prior to completion of

the voyage, but must repair stevedore damage affecting the Vessel’s

seaworthiness or class before the Vessel sails from the port where such damage

was caused or found. All additional expenses incurred shall be for the account of

the Charterers and any time lost shall be for the account of and shall be paid to the

Owners by the Charterers at the demurrage rate.

6. LAYTIME

(a) Separate laytime for loading and discharging

The cargo shall be loaded within the number of running days/hours as indicated in

Box 14, weather permitting, Sundays and holidays excepted, unless used, in which

event the time used shall count.

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CHARTER PARTY

(b) Total laytime for loading and discharging

The cargo shall be loaded and discharged within the number of total running

days/hours as indicated in Box 14, weather permitting, Sundays and holidays

excepted, unless used, in which event time used shall count.

(c) Commencement of laytime (loading and discharging)

Laytime for loading and discharging shall commence at 13.00 hours, if notice of

readiness is given up to and including 12.00 hours. Notice of readiness at loading port

to be given to the Shippers named in Box 15. Notice of readiness at the discharging

port to be given to the receivers or if not known to the Charterers.

If the loading/discharging berth is not available on the Vessel’s arrival at or off the

port of loading/discharging, the Vessel shall be entitled to give notice of readiness

within ordinary office hours on arrival there, whether in free pratique or not, whether

customs cleared or not. Laytime or time on demurrage shall then count as if she were

in berth and in all respects ready for loading/discharging provided that the Master

warrants that she is in fact ready in all respects. Time used in moving from the place

of waiting to the loading/discharging berth shall not count as laytime.

If, after inspection, the Vessel is found not to be ready in all respects to load/discharge

time lost after the discovery thereof until the Vessel is again ready to load/discharge

shall not count as laytime. Time used before commencement of laytime shall count.

7. DEMURRAGE

Demurrage at the loading and discharging port is payable by the Charterers at the rate

stated in Box 16 in the manner stated in Box 16 per day or pro rata for any part of a

day. Demurrage shall fall due day by day and shall be payable upon receipt of the

Owners’ invoice

In the event the demurrage is not paid in accordance with the above, the Owners shall

give the charterers 96 running hours written notice to rectify the failure. If the

demurrage is not paid at the expiration of this time limit and if he Vessel is in or at the

loading port, the Owners are entitled at any time to terminate the Charter party and

claim damages for any losses caused thereby.

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CHARTER PARTY

8. LIEN CLAUSE

The Owners shall have a lien on the cargo and on all sub-freights payable in respect of

the cargo, for freight, dead freight, demurrage, claims for damages and for all other

amounts due under this Charter party including costs of recovering same.

9. CANCELLATION CLAUSE

(a) Should the Vessel not be ready to load (whether in berth or not) on the

cancellation date indicated in Box 17, the Charterers shall have the option of

cancelling this Charter party.

(b) Should the Owners anticipate that, despite the exercise of due diligence, the

Vessel will not be ready to load by the cancellation date, they shall notify the

Charterers thereof without delay stating the expected date of the Vessel’s readiness to

load and asking whether the Charterers will exercise their option of cancelling the

Charter party, or agree to a new cancellation date. Such option must be declared by

the Charterers within 48 running hours after the receipt of the Owners’ notice. If the

Charterers do not exercise their option to cancel, then this Charter party shall be

deemed to be amended such that the seventh day after the new readiness date stated in

the Owners’ notification to the Charterers shall be the new cancellation date. The

provision of sub-clause (b) of this clause shall operate only once, and in case of the

Vessel’s further delay, the Charterers shall have the option of cancelling the Charter

party as per sub-clause (a) of this clause.

10. BILL OF LOADING

Bill of lading to be signed as and when presented in any number of sets required by

Charterers for any portion of the cargo on board, such bills of lading being deemed to

incorporate and remain subject to all terms, conditions, clauses and exceptions as per

this Charter party. The cargo actually shipped, whether correctly estimated in bill of

lading or not, shall be deemed a full and complete cargo under this Charter. All bills

of lading issued under this Charter party are to incorporate the Carriage of Goods by

Sea Act 1971 of the United Kingdom incorporating the Hague-Visby Rules. Any

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CHARTER PARTY

dispute concerning the bills of lading and their issue shall be resolved pursuant to the

dispute resolution mechanism contained in this Charter party.

11. BOTH-TO-BLAME COLLISION CLAUSE

If the Vessel comes into collision with another Vessel as a result of the negligence of

the other Vessel any act, neglect or default of the Master, Mariner, Pilot or the

servants of the Owners in the navigation or in the management of the Vessel, the

Owners of the cargo carried hereunder will indemnify the Owners against all loss or

liability to the other or non-carrying Vessel or her Owners in so far as such loss or

liability represents loss of, or damage to, or any claim whatsoever of the Owners of

said cargo, paid or payable by the other or non-carrying Vessel or her Owners to the

Owners of said cargo and set-off, recouped or recovered by the other non-carrying

Vessel or her Owners as part of their claim against the carrying Vessel or the Owners.

The foregoing provisions shall also apply where the Owners; operators or those in

charge of any Vessel or Vessels or objects other than, or in addition to, the colliding

Vessels or objects other than, or in addition to, the colliding Vessels or objects are at

fault in respect of a collision or contact.

12. GENERAL AVERAGE AND NEW JASON CLAUSE

General average shall be adjusted in Liuville according to York Antwerp Rules 2016.

Proprietors of cargo to pay the cargos share in the general expenses even if the same

have been necessitated through neglect or default of the Owners’ servants.

13. TAXES AND DUES CLAUSE

(a) On Vessel - The Owners shall pay all dues, charges arid taxes customarily levied

on the Vessel, howsoever the amount thereof may be assessed.

(b) On cargo - The Charterers shall pay all dues, charges, duties and taxes customarily

levied on the cargo, howsoever the amount thereof may be assessed.

(c) On freight - Unless otherwise agreed in Box 19, taxes levied on the freight shall be

for the Charterers’ account.

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CHARTER PARTY

14. AGENCY

In every case the Owners shall appoint their own agent both at the port of loading and

the port discharge.

15. GENERAL STRIKE CLAUSE

(a) If there is a strike or lock-out affecting or preventing the actual loading of the

cargo, or any part of it, when the Vessel is ready to proceed from her last port or

(b) at any time during the voyage to the port or ports of loading or after her arrival

there, the Master or the Owners may ask the Charterers to declare, that they agree to

reckon the laydays as if there were no strike or lock-out. Unless the Charterers have

given such declaration in writing (by electronic telecommunication, if necessary) with

24 hours, the Owners shall have the option of cancelling this Charter party. If part

cargo has already been loaded, the Owners must proceed with same, (freight payable

on loaded quantity only) having liberty to complete with other cargo on the way for

their own account.

(c) If there is a strike or lock-out affecting or preventing the actual discharging of the

cargo on or after the Vessel’s arrival at or off port of discharge and same has not been

settled within 48 hours, the Charterers shall have the option of keeping the Vessel

waiting until such strike or lock-out is at an end against paying half demurrage after

expiration of the time provided for discharging until the strike or lock-out terminates

and thereafter full demurrage shall be payable until the completion of discharging, or

of ordering the Vessel to a safe port where she can safely discharge without risk of

being detained by strike or lock-out. Such orders to be given within 48 hours after the

Master or the Owners have given notice to the Charterers of the strike or lock-out

affecting the discharge. On delivery of the cargo at such port, all conditions of this

Charter party and of the bill of lading shall apply and the Vessel shall receive the

same freight as if she had discharged at the original port of destination, except that if

the distance to the substituted port exceeds 100 nautical miles, the freight on the cargo

delivered at the substitute port to be increased in proportion.

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CHARTER PARTY

(d) Except for the obligations described above, neither the Charterers nor the Owners

shall be responsible for the consequences of any strikes or lock-outs preventing or

affecting the actual loading or discharging of the cargo.

16. WAR RISKS

(1) For the purpose of the clause, the words:

(a) The “Owners” shall include the ship-owners, bareboat Charterers, disponent

Owners, managers or other operators who are charged with the management of the

Vessel, and the Master; and

(b) ”War Risks” shall include any war (whether actual or threatened), act of war, civil

war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying

of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility

or malicious damage, blockades (whether imposed against all Vessels or imposed

selectively against Vessels of certain flags or Ownership, or against certain cargoes or

crews or otherwise howsoever), by any person, body, terrorist or political group, or

the Government of any state whatsoever, which, in the reasonable judgment of the

Master and/or the Owners, may be dangerous or are likely to be or to become

dangerous to the Vessel, her cargo, crew or other person on board the Vessel.

(2) If at any time before the Vessel commences loading, it appears that, in the

reasonable judgment 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, the Owners may give notice to the

Charterers cancelling this Charter party, or may refuse to perform such part of it as

may expose, or may be likely to expose, the Vessel, her cargo, crew or other persons

on board the Vessel to War Risks; provided always that if this Charter party provides

that loading or discharging is to take place within a range of ports, and at the port or

ports nominated by the Charterers, the Vessel, her cargo, crew, or other persons on

board the Vessel may be exposed, or may be likely to be exposed, to War Risks, the

Owners shall first require the Charterers to nominate any other safe port which lies

within the range for loading or discharging, and may only cancel this Charter party if

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CHARTER PARTY

the Charterers shall not have nominated such safe port or ports within 48 hours of

receipt of notice of such requirement.

(3) The Owners shall not be required to continue to load cargo for any voyage, or to

sign bills of lading for any port or place, or to proceed or continue on any voyage, or

on any part thereof, or to proceed through any canal or waterway, or to proceed to or

remain at any port or place whatsoever, where it appears, either after the loading of

the cargo commences, or at any stage of the voyage thereafter before the discharge of

the cargo is completed, that, in the reasonable judgment of the Master and/or the

Owners, the Vessel, her cargo (or any part thereof), crew or other persons on board

the Vessel (or any one or more of them) may be, or are likely to be, exposed to War

Risks. If it should so appear, the Owners may by notice request the Charterers to

nominate a safe port for the discharge of the cargo or any part thereof, and if within

48 hours of the receipt of such notice, the Charterers shall not have nominated such a

port, the Owners may discharge the cargo at any safe port of their choice (including

the port of loading) in complete fulfillment of the Charter party. The Owners shall be

entitled to recover from the Charterers the extra expenses of such discharge and, if the

discharge takes place at any port other than the loading port, to receive the full freight

as though the cargo had been carried to the discharging port and if the extra distance

exceeds 100 nautical miles, to additional freight which shall be the same percentage

of the freight contracted for as the percentage which the extra distance represents to

the distance of the normal and customary route, the Owners having a lien on the cargo

for such expenses and freight.

(4) If at any stage of the voyage after the loading of the cargo commences, it appears

that, in the reasonable judgment of the master and/or the Owners, the Vessel, her

cargo, crew or other persons on board the Vessel may be, or are likely to be, exposed

to War Risks on any part of route (including any canal or waterway) which is

normally and customarily used in a voyage of the nature contracted for, and there is

another longer route to the discharging port, the Owners shall give notice to the

Charterers that this route will be taken. In this event the Owners shall be entitled, if

the total extra distance exceeds 100 nautical miles, to additional freight which shall be

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CHARTER PARTY

the same percentage of the freight contracted for as the percentage which the extra

distance represents to the distance of the normal and customary route.

(5) The Vessel shall have liberty-

(a) to comply with all orders, directions, recommendations or advice as to departure,

arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of

cargo, delivery or in any way whatsoever which are given by the Government of the

state under whose flag the Vessel sails, or other Government to whose laws the

Owners are subject, or any other Government which so requires, or any body or group

acting with the power to compel compliance with their orders or directions;

(b) to comply with the orders, directions or recommendations of any war risks

underwriters who have the authority to give the same under the terms of the war risks

insurance;

(c) to comply with the terms of any resolution of the Security Council of the United

Nations, the effective orders of any supranational body which has the right to issue

and give the same, and with national laws aimed at enforcing the same to which the

Owners are subject, and to obey the orders and directions of those who are charged

with their enforcement;

(d) to discharge at any other port any cargo or part thereof which may render the

Vessel liable to confiscation as a contraband carrier;

(e) to call at any other port to change the crew or any part thereof or other persons on

board the Vessel when there is reason to believe that they may be subject to

internment, imprisonment or other sanctions;

(f) where cargo has not been loaded or has been discharged by the Owners under any

provisions of this Clause, to load other cargo for the Owner’s own benefit and carry it

to any other port or ports whatsoever, whether backwards or forwards or in a contrary

direction to the ordinary or customary route.

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CHARTER PARTY

(6) If in compliance with any of the provisions of sub clause (2) to (5) of this Clause

anything is done or not done, such shall not be deemed to be a deviation, but shall be

considered as due fulfillment of the Charter party.

17. LAW AND ARBITRATION

This Charter party shall be governed by and construed in accordance with English law

and any dispute arising out of this Charter party shall be referred to arbitration in

London, in accordance with the Arbitration Act 1996 of the United Kingdom or any

statutory modification or re-enactment thereof for the time being in force. Unless the

parties agree upon a sole arbitrator, one arbitrator shall be appointed by each party

and the arbitrators appointed shall appoint a third arbitrator, the decision of the three-

man tribunal thus constituted or any two of them, shall be final. On the receipt by one

party of the nomination in writing of the other party’s arbitrator, that party shall

appoint their arbitrator within fourteen days, failing which the decision of the single

arbitrator appointed shall be final. For disputes where the total amount claimed by

either party does not exceed USD 250,000, the arbitration shall be conducted in

accordance with the Free and Low Cost Arbitration (FALCA) Rules or Small Claims

Procedure of the London Maritime Arbitrators Association (LMAA).

18. HOLD CLEANLINESS

Vessel’s holds and hatches are to be clean of any previous cargo remnants or residues

and Owner acknowledges the Helgaland Quarantine Inspection Services (HQIS)

requirements that on arrival at Liuville, there is zero tolerance for any foreign organic

matter. Owners must ensure the Vessel’s compliance with, HQIS zero tolerance

policy. If any remnants or residues of previous cargo carried on board the performing

Vessel are found in the holds of the Vessel, Owners agree to indemnify Charterers

with respect to any loss Charterers suffer as a result whatsoever, including, but not

limited to, loss of profits and consequential loss.

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CHARTER PARTY

Loose paint and rust scale are to be removed from all internal structures and any

painted surfaces must be properly applied and cured. Holds are to be washed and

dried prior to inspection.

Charterer may, as soon as reasonably practicable after receipt of Notice of Readiness

at the loading port, cause the holds to be inspected by a surveyor appointed by the

Charterer to determine whether it appears that the Vessel’s holds are sufficiently clean

as required by the Charter party. Owners shall provide all necessary access and

assistance to enable the inspection to be carried out.

Charterer’s designated representative and/or surveyor shall have the authority to act to

ensure Charterer’s interests are protected. This representative/surveyor will only be

certifying that the holds were inspected and found to have been presented clean, dry

and apparently free of remnants or residues of previous cargo in accordance with the

terms and conditions of this Charter party as stated by the Master.

Vessel to be inspected alongside by Charterer’s appointed surveyor alongside load

berth, or at a layby berth in case load berth is unavailable, or at Vessel’s previous port

as Charterer may require, subject to the Owner’s approval.

Berth and shifting costs are for Owner’s account in case a layby berth is required for

survey. Any time lost waiting for inspection to be performed shall count in

accordance with NOR/Laytime provisions, regardless of survey outcome.

Inspection to be performed in daylight hours only. Time taken for inspection after

laytime has commenced, (or after discharge at prior port has been completed), shall

count towards laytime, otherwise inspection time shall not count. Should Vessel fail

inspection then time from failing to passing inspection shall not count as or be added

to laytime.

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CHARTER PARTY

In the event the inspection reveals that the Vessel does not meet the requirements of

this Charter party, the parties agree that the Vessel is not ready in all respects to load

and laytime or time on demurrage, even if already on demurrage, will not count from

the time of discovery until the Vessel is at the loading berth.

Vessels’ holds to be cleaned and dried in accordance with the requirements of this

Charter party and without limitation to the satisfaction of Charterer.

Any approval or rejection by the Charterer following such inspection or any failure by

the Charterer to appoint a surveyor or arrange an inspection, will not relieve Owner of

its obligations under this Charter party.

……………………………… ………………………………

OWNER CHARTERER

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CONTINENTAL CHEMICALS LIMITED

17 October 2016

Owners of MV Sulphur Express


Eton Place, Unit 1501

26 Linghai Avenue, New District

Nirvana, NAVIGONIA

Dear Sirs,

Re: Dry Sulphur Bags Loaded on board MV Sulphur Express

We are the manufacturers of the dry sulphur cargo loaded on board the MV Sulphur Express

The Sulphur Express was loaded with 21,214.775 mt of dry sulphur (the cargo) at the Port of

Deeptara, Indisha.

As to the cargo, during an inspection after the loading was completed, Owner’s surveyor

apparently discovered, on the surface of the Cargo loaded in hold 1:

(a) lumps of solidified tar

(b) torn plastic

(c) two pieces of dunnage wood

Notwithstanding the foregoing, and having caused the cargo loaded on board the vessel to be

surveyed, we are satisfied and we warrant that the cargo meets the product specifications in

relation to moisture and absence of foreign objects, of the type discovered, neither of which

would affect the handling, storage or use of the cargo.

The applicable law of NAVIGONIA governs this warranty. Each party irrevocably and

unconditionally submits to the exclusive jurisdiction of the courts of NAVIGONIA in this

regard.

Yours truly,

CONTINENTAL CHEMICALS LIMITED.

Omar Qureshi

Managing Director

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CONGENBILL 2007

BILL OF LADING

To be used with charter parties

Page 1

Shipper

Continental

Chemicals Limited

Bill of Lading No.

BL1108

Reference No.

DS1991

Consignee

TO ORDER

Vessel

MV Sulphur Express

Notify address

Continental

Chemicals Limited

18 Cartiera Circle

Liuville

HELGALAND

Port of loading

Deeptara, INDISHA

Port of discharge

Liuville, HELGALAND

Shipper’s description of goods

Gross weight

21,214.775mt Dry Sulphur

21,214.775mt

(of which on deck at shipper’s risk; the Carrier not

being responsible for loss or damage howsoever arising)

Freight payable as per

CHARTER

PARTY dated:

11 August 2016

SHIPPED at the Port of Lading in apparent good

order and condition on the Vessel for carriage to the

Port of discharge or so near thereto as the Vessel may

safely get the goods specified above.

Weight, measure, quality, quantity, condition,

contents and value unknown.

IN WITNESS whereof the Master or Agent of the

said vessel has signed the number of Bills of Lading

FREIGHT ADVANCE

Received on account of

freight:

5th NLUO IMAM, 2017

19

indicated below any one of which being

accomplished the others shall be void.

FOR CONDITIONS OF CARRIAGE SEE

OVERLEAF

Date shipped on

board

10 October 2016

Place and

date of issue

Deeptara,

INDISHA

10 October

2016

Number of

original Bills

of Lading

3

Signature:

(i).....................................................................Master

Master’s name and signature

5th NLUO IMAM, 2017

20

CONGENBILL 2016

BILL OF LADING

(to be used with charter parties)

Page 2

Conditions of Carriage

(1) All terms and conditions, liberties and exceptions of the Charter party, dated as

overleaf, including the Law and Arbitration Clause/Dispute Resolution Clause, are

herewith incorporated.

(2) General Paramount Clause

The International Convention for the Unification of Certain Rules of Law relating to

Bills of Lading signed at Brussels on 25 August 1924 (“the Hague Rules”) as

amended by the Protocol signed at Brussels on 23 February 1968 (“the Hague-Visby

Rules”) and as enacted in the country of shipment shall apply to this Contract. When

the Hague-Visby Rules are not enacted in the country of shipment, the corresponding

legislation of the country of destination shall apply, irrespective of whether such

legislation may only regulate outbound shipments.

When there is no enactment of the Hague-Visby Rules in either the country of

shipment or in the country of destination, the Hague-Visby Rules shall apply to this

Contract save where the Hague Rules as enacted in the country of shipment or if no

such enactment is in place, the Hague Rules as enacted in the country of destination

apply compulsorily to this Contract.

The Protocol signed at Brussels on 21 December 1979 (“the SDR Protocol 1979”)

shall apply where the Hague-Visby Rules apply, whether mandatorily or by this

Contract.

The Carrier shall in no case be responsible for loss of or damage to cargo arising prior

to loading, after discharging, or while the cargo is in the charge of another carrier, or

with respect to deck cargo and live animals.

5th NLUO IMAM, 2017

21

(3) General Average

General Average shall be adjusted, stated and settled according to York-Antwerp

Rules 2016 in Liuville, HELGALAND unless another place is agreed in the Charter

party.

Cargo’s contribution to General Average shall be paid to the Carrier even when such

average is the result of a fault, neglect or error of the Master, Pilot or Crew.

(4) New Jason Clause

In the event of accident, danger, damage or disaster before or after the

commencement of the voyage, resulting from any cause whatsoever, whether due to

negligence or not, for which, or for the consequence of which, the Carrier is not

responsible, by statute, contract or otherwise, the cargo, shippers, consignees or the

owners of the cargo shall contribute with the Carrier in General Average to the

payment of any sacrifices, losses or expenses of a General Average nature that may be

made or incurred and shall pay salvage and special charges incurred in respect of the

cargo. If a salving vessel is owned or operated by the Carrier, salvage shall be paid for

as fully as if the salving vessel or vessels belonged to strangers. Such deposit as the

Carrier, or his agents may deem sufficient to cover the estimated contribution of the

goods and any salvage and special charges thereon shall, if required, be made by the

cargo shippers, consignees, or owners of the goods to the Carrier before delivery.

(5) Both-to Blame Collision Clause

If the Vessel comes into collision with another vessel as a result of the negligence of

the other vessel and any act, neglect or default of the Master, Mariner, Pilot or the

servants of the Carrier in the navigation or in the management of the Vessel, the

owners of the cargo carried hereunder will indemnify the Carrier against all loss or

liability to the other or non-carrying vessels or her owners in so far as such loss or

liability represents loss of, or damage to, or any claim whatsoever of the owners of

said cargo, paid or payable by the other or non-carrying vessel of her owners to the

owners of said cargo and set-off, recouped or recovered by the other or non-carrying

vessel or her owners as part of their claim against the carrying Vessel or the Carrier.

5th NLUO IMAM, 2017

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The foregoing provisions shall also apply where the owners, operators or those in

charge of any vessel or vessels or objects other than, or in addition to, the colliding

vessels or objects are at fault in respect of a collision or contact.

For particulars of cargo, freight,

Destination, etc., see overleaf.

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23

HELGALAND QUARANTINE INSPECTION SERVICES

10 Downton Drive, Liuville, Helgaland

14 November 2016

To: The Master, Sulphur Express

Dear Captain Elliot,

Re: MV Sulphur Express Order into Quarantine

I refer to the attendance of our quarantine inspectors on your vessel on 10 November 2016.

Pursuant to section 35 of the Public Health and Quarantine Act, 2010, I order the vessel MV

Sulphur Express (“the vessel”) into quarantine. Set out below are my reasons.

Reasons

1. On 10 November 2016, the Vessel arrived at the Port of Liuville from the Port of Deeptara,

Indisha.

2. On board the Vessel is a cargo of 21,214.775 mt of dry sulphur.

3. Upon inspection by quarantine officers, solidified lumps of tar, dunnage wood and torn

plastic pieces were found in hold No. 1 which were remnants of a previous cargo. Upon

further inspection, certain residues were discovered stuck to the torn plastic, which were

determined to be NAVIGONIA wheat germ (NWG), a prohibited import into Helgaland.

4. It is impossible to determine the extent of the infestation of the cargo on board the Vessel

with NWG residues.

5. Pratique is refused and the Vessel must not discharge any cargo at the port of Liuville

unless and until I am satisfied that steps have been taken to remove any and all residues of

NWG in the cargo.

Yours truly,

HELGALAND QUARANTINE INSPECTION SERVICES.

Riju George

Chief Quarantine Officer

5th NLUO IMAM, 2017

24

SHANGRILA SHIPPING CORPORATION

14 November 2016

Omar Qureshi

Continental Chemicals Limited,

18 Cartiera Circle,

Liuville, HELGALAND

Dear Mr Qureshi,

MV Sulphur Express

We refer to the Voyage Charter party between us and you in respect of the Sulphur Express

dated 11 August, 2016 and to the Bill of Lading numbered BL1108 issued on 10 October,

2016.

The cargo which is the subject of the bill of Lading has been ordered into quarantine by the

Helgaland Quarantine Inspection Services due to the discovery of lumps of solidified tar,

pieces of dunnage and torn plastic in Hold No. 1.

These materials were the subject of a Letter of Indemnity from you to us dated 17 October,

2016. In that LOI, you warranted that the cargo meets the product specifications in relation to

moisture and absence of foreign objects, of the type discovered neither of which would affect

the handling, storage or use of the cargo.

On the basis of receipt of that LOI, the Master of the Sulphur Express issued a clean bill of

lading. We put you on notice that we will claim indemnity from you in respect of any claim

made against the Vessel by the holder of the bill of lading.

Yours truly,


Kevin Jones

Managing Director

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25


15 November 2016

Kevin Jones




Nirvana, NAVIGONIA

Dear Mr Jones,

Re: MV Sulphur Express

We refer to your letter of 14 November 2016.

Regarding your claim for indemnity pursuant to our letter of 17 October, 2016 we reject any

liability or obligation to indemnify you in respect of any claim made against the Sulphur

Express by the endorsee of the Bill of Lading.

The LOI relevantly provides-

“As to the cargo, during an inspection after the loading was completed, Owner’s surveyor

apparently discovered, on the surface of the Cargo loaded in hold 1:

(d) solidified lumps of tar

(e) torn plastic

(f) two pieces of dunnage wood

Notwithstanding the foregoing, and having caused the cargo loaded on board the vessel to be

surveyed, we are satisfied and we warrant that the cargo meets the product specifications in

relation to moisture and absence of foreign objects, of the type discovered, neither of which

would affect the handling, storage or use of the cargo”.

5th NLUO IMAM, 2017

26

The LOI does not record that the pieces of dunnage wood were contaminated with any

residues of NAVIGONIA Wheat Germ. The torn plastic or pieces of dunnage was not the

cause of the cargo being ordered into quarantine. Furthermore, in your letter of 14 November,

2016, you say that the Master issued a clean bill of lading because of our letter of 17 October,

2016. Our letter of 17 October, 2016 does not request or direct the Master to issue a clean bill

of lading. The taking of that step by the Master was a matter for him and he should have

taken all reasonable steps to inform himself as to whether it was appropriate for a clean bill of

lading to be issued.

Yours truly,


Omar Qureshi

Managing Director

5th NLUO IMAM, 2017

27

CONSTANTINE COMMODITY TRADERS LTD.

18 November 2016




Nirvana, NAVIGONIA

(Through the Master, MV Sulphur Express)

Dear Sirs,

Re: MV Sulphur Express Bill of Lading No. BL1108

We purchased the sulphur cargo on board the above-named vessel from Continental

Chemicals Limited and are the endorsee of bill of lading (B/L) No. BL1108 in respect of that

cargo.

We are aware that the said cargo has been ordered into quarantine at the port of Liuville,

HELGALAND due to the presence of inter alia, NAVIGONIA wheat germ (NWG). In the

above-mentioned B/L which purports to be a clean bill of lading, there is no mention of the

cargo being contaminated by NWG or other foreign material including solidified lumps of tar

and torn plastic. The clean bill of lading issued at the port of Deeptara, INDISHA is evidence

of the fact that the cargo became contaminated while it was on board your vessel, the Sulphur

Express.

We have inquired into possibilities of de-contaminating the cargo and have made proposal to

the Helgaland Quarantine Inspection Services (HQIS) to that end. However, all our proposed

5th NLUO IMAM, 2017

28

options have been rejected and we have been ordered by the HQIS to re-export the cargo on

board the subject vessel.

We have, in the circumstances, looked into reselling the said cargo to buyers in a jurisdiction

where entry of NWG is not prohibited and have negotiated a resale with Heeru Sulphur

Products Ltd. in ANIKALAND which requires us to transport the cargo to the port of Ariela.

We have suffered a loss of USD 270,000 on the resale of the cargo which is payable by you

to us. Enclosed herewith are the relevant purchase and sale invoices. We request you to

confirm immediately that you will pay to us the amount of USD 2700,00 and transport the

cargo to the port of Ariela without any charge to us. The transportation costs relating to the

re-export of the cargo from Liuville to Ariela must be borne by you.

Yours truly,

Constantine Commodity Traders Ltd.

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29

INVOICE

SALE FROM: Continental Chemicals Limited

18 Cartiera Circle, Liuville, HELGALAND

SALE TO: Constantine Commodity Traders Ltd.

10 Chemlux Industrial Complex, Liuville, HELGALAND

DATE: 17 November, 2016

CARGO: 21,214.775 mt of dry Sulphur

@ USD 1,000/mt

USD 21,214,775

TERMS: LC against clean bill of lading

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30

INVOICE

Sale from: Constantine Commodity Traders Ltd.

10 Chemlux Industrial Complex, Liuville, HELGALAND

Sale to: Heeru Sulphur Products (Pvt) Ltd.

26 Boulevard des Armanis, Ariela, ANIKALAND

Date: 23 November, 2016

Cargo: 21,214.775 mt of dry sulphur

@ USD 850/mt

USD 18,032,558.75

Terms: LC against clean bill of lading

5th NLUO IMAM, 2017

31


25 November 2016

Omar Qureshi

Continental Chemicals Limited.

18 Cartiera Circle,

Liuville, HELGALAND

Dear Mr Qureshi,


We refer to our letter of 14 November 2016 and enclose a copy of the letter dated 18

November, 2016 which we received from Constantine Commodity Traders Ltd., holders of

the bill of lading in respect of the cargo of dry Sulphur shipped on board the Sulphur Express

at Deeptara, INDISHA.

Please note that Constantine Commodity Traders, holders of the bill of lading in question, are

demanding payment in the amount of USD 270,000 as their losses on the resale of the cargo

and, in addition, transportation of the cargo from the port of Liuville to the port of Ariela in

Anikaland, without charge.

We have examined the claim made by Constantine Commodity Traders and consider it to be

reasonable. We have thus today made the payment to them of USD 270,000, in respect of

which we now demand to be indemnified by you pursuant to the Letter of Indemnity (LOI)

dated 17 October, 2016 provided to us by you.

Regarding the voyage from Liuville, HELGALAND to Ariela, ANIKALAND, we propose

that we enter into an Addendum to the Charter party dated 11 August, 2016 to cover that

voyage to include costs incurred by us in respect of that transportation for your account as per

the terms of the LOI. We are pleased to enclose such an Addendum with a request for you to

sign and return to us a copy without delay.

5th NLUO IMAM, 2017

32

Yours truly,


Kevin Jones

Managing Director

5th NLUO IMAM, 2017

33

ADDENDUM No. 1 DATED 27 NOVEMBER 2016

TO

CHARTER PARTY DATED 11 AUGUST 2016

between

SHANGRILA SHIPPING CORPORATION (Owners)

and

CONTINENTAL CHEMICALS LIMITED (Charterers)

It is hereby mutually agreed between Owners and Charters that the MV Sulphur Express will

proceed from Liuville, HELGALAND to Ariela, ANIKALAND and there deliver the cargo

remaining on board upon the following terms:

Freight: USD 23.66 per tonne free out for discharge Ariela, ANIKALAND

Vessel to have highest class Lloyd’s 100A1 or equivalent designation of an IACS member

Classification Society, fully covered by P&I insurance including wreck removal cover, ISM

certificated and IOPP certificate covered.

ARIELA DISCHARGING TERMS

Cargo is to be discharged at 1-2 safe anchorages in Ariela, where Charterers warrant a

minimum of 10.50 m. SW draft at all times. Charterers warrant Vessel will remain safely

afloat at all times basis maximum draft 10.50 m. SW, however, Charterers do not warrant the

working anchorage to be accessible at all times.

All discharging expenses from Vessel’s cargo holds to be for Charterer’s account but any

lightering costs shall always be for Receiver’s account.

The opening and closing of hatches shall at all times in the loading port be for Owner’s time

and expense.

Charterers to have full use of Vessel’s grabs for discharging but any damage or expenses and

responsibility shall be for Charterer’s/Receiver’s account.

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Cargo beams, boards and battens which Charterers may deem necessary to be removed in

order not to impede discharging operations, shall be removed by Owners at Owner’s time and

expense before commencement or during discharging as may be required by Charterers. In

any event, Charterers are not to be responsible for damage to cargo beams, boards and

battens.

Discharging Rate

Cargo to be discharged at the rate of 9,200 metric tons per weather working day of 24

consecutive hours FHEX EIU provided vessel can deliver at this rate.

Time from 17:00 hours on Friday or a day preceding a local holiday until 08:00 hours

Monday or the day following a local holiday is not to count as used laytime even if used

(EIU).

Notice of Readiness

All notices at discharging port shall be tendered to Charterers/Receivers and their nominated

agents during office hours. Office hours are deemed to be 09:00 to 17:00 hours Monday to

Friday.

Commencement of Laytime

Laytime shall commence to count 24 hours after Notice of Readiness is tendered within

office hours. Time used prior to commencement of laytime not to count as used laytime.

If upon entering the port the vessel fails to obtain free pratique or customs clearance, or is for

any other reason found unfit to discharge the cargo, then time shall cease to count as used

laytime or time on demurrage until the Vessel is fully ready to proceed with the discharging

operation.

Time taken steaming from the waiting anchorage to the working anchorage not to count as

used laytime or time on demurrage. Time taken shifting between anchorages not to count as

laytime or time on demurrage.

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All time lost by the inability of the Vessel to discharge in accordance with this contract shall

not count as used laytime or time on demurrage.

Demurrage/dispatch rate

In case the Vessel is delayed at the discharging port longer than the laytime allowed then the

Charterers shall pay demurrage at the rate specified in the governing Charter party per day for

every running day so detained and proportionately for any part of day.

Despatch is to be paid at half the demurrage rate for all working time saved.

Laytime allowed for discharging to be based on the metric ton bill of lading weight.

Any demurrage or dispatch incurred at the discharging port to be settled within 30 days of

presentation of Charterer’s dispatch calculation or Owner’s demurrage calculation.

Exceptions to Laytime

Any of the following causes are excepted, regardless of where they occur: strikes or lockouts

at the Charterer’s or Receiver’s factory, or at the ports of discharging; war or effects of war,

revolution, civil commotion, interruptions, stoppage or breakdowns at the factory of the

Charterers or Receivers now or hereafter under contract; stoppage or destruction of goods in

transit; epidemic, frost, fire, cyclones, storms, floods, earthquakes, unavoidable accidents to

machinery or equipment, or other unavoidable hindrances or delays in manufacturing,

transporting, discharging or receiving the material or goods; restraints of established

authorities; any delay caused by the Vessel, Master or crew; and any other causes whatsoever

and howsoever arising or happening without the fault of the Charterers or Receiver

preventing or delaying the discharging or receiving of the cargo. Charterers or Receiver shall

not be liable for any loss or damage resulting through any such excepted causes and time lost

by reason thereof shall not count as used laytime or time on demurrage.

Discharge Port Agents

Vessel to be consigned to port agents nominated by Charterers as identified below;

Zachariah Port & Shipping Agency Ltd.

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1704 Daliana Court,

Ariela, ANIKALAND

Tel: +88 152 4119 2804

E-mail: [email protected]

Claims Clause

Any claim of the Owners upon the Charterers and/or Receiver arising at the discharging port

shall be notified by the Owners to Charterers or Receiver before sailing from the discharging

port. No claim will be entertained unless proper notice has been given to and acknowledged

by Charterers or Receiver prior to completion of discharge.

Load and Discharge Port Notice

The Master or Owners shall give Charterers, Receiver and their agents notice on sailing from

Liuville 48 and 24 hours’ notice of the expected date on which the Vessel will arrive at the

discharging port.

Owners/Vessel must keep all parties closely advised of any changes of ETA. Owners to be

held responsible for any consequences and/or additional expenses arising from their failure to

keep Charterers and their agents so informed.

Except as otherwise specified herein, all notice required or permitted hereunder shall be sent

by e-mail to [email protected]

Draft Survey

Should Charterers or Receiver wish to conduct a draft survey at the discharging port to verify

the quantity of cargo on board, then the Vessel is not to take on or pump ballast, oil or water

at discharging port without first obtaining permission of the Charterers/Receiver or their

agents/inspectors, nor to switch oil or water from one tank to another in order to enable a

proper draft survey.

Vessel is to be presented for discharging in such trim and condition as to permit calculation

of the Vessel’s light displacement. Vessel is to furnish calibration scales for all tanks

including fore and aft peak, double bottom tanks and deep tanks. Vessel is to furnish capacity

mailto:[email protected]

mailto:[email protected]

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plans, displacement scales, deadweight scales and hydrostatic information, all certified by the

Master as to correctness at the time of loading and discharging. Plimsoll marks amidships and

draught marks at port and starboard sides, bow and stern, to be clearly cut and marked on

shell plating. Additional costs and time lost by Vessel’s failure to comply shall be for

Owner’s account.

General Terms

The Vessel to release cargo to Receiver after receiving a letter of indemnity (LOI) in Owner’s

standard P&I Club wording. LOI to be issued by cargo Receiver solely and without bank’s

counter-signature.

The Vessel shall provide free use of power, cargo gear and electric lights as on board and as

required in holds or on deck.

The port shall have the right to perform loading operations day and night 7 days per week,

holidays included, on a 24-hour basis.

All dues/taxes/wharfages/charges levied on the vessel and/or freight calculated on same to be

for Owner’s account.

Overtime to be for the account of the party ordering same except that crew overtime always

to be for Owner’s/Vessel’s account.

The Vessel chartered by the Owner to pay all usual disbursements, agency fees and port

expenses as customary for the port/place of discharging.

DATED: 27 November 2016

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27 November 2016

Kevin Jones




Nirvana, NAVIGONIA

Dear Mr Jones,


We refer to your letter of 25 November 2016 and our letter to you dated 15 November 2016.

For reasons set out in our letter of 15 November 2016, we deny any liability to indemnify you

against the claim made by Constantine Commodity Traders Ltd.

However, on a “without prejudice” basis, and to assist in the resolution of this matter, we

have signed the Addendum to the Charter party dated 11 August 2016 as proposed by you.

We reserve all rights to claim any amount of freight paid in respect of the voyage, which is

the subject of the Addendum, on the basis that the need for the extended voyage was

necessitated by the Vessel’s breach of the Charter party dated 11 August, 2016.

Yours truly,


Omar Qureshi

Managing Director

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STATEMENT OF FACTS IN RESPECT OF

MV SULPHUR EXPRESS AT ARIELA

1. NAME OF VESSEL: MV Sulphur Express

2. NAME OF MASTER: Captain Sam Elliot

3. FLAG: Indisha

4. PORT OF REGISTERY: Deeptara

5. GT/DWT: 25, 070/41, 220

6. NAME OF CONSIGNEE/RECEIVER: Continental Chemicals Limited

7. PORT OF LOADING: Liuville, HELGALAND

8. PORT OF DISCHARGE: Ariela, ANIKALAND

9. TOTAL B/L QUANTITY: 21,214.775 mt

10. RETENTION CARGO: Nil

11. TIME & DATE ARRIVED: 9 December, 2016, 12:00 hours

12. TIME & DATE DEPARTURE: 25 December, 2017,11:00 hours

DATE TIME FROM-TO REMARKS 9 Dec, 2016 12:00 – 24:00 VESSEL ARRIVED ARIELA; CUSTOMS BOARDED

FOR INSPECTIONS

10 Dec, 2016 00:00 – 24:00 CUSTOMS CLEARANCE GRANTED; CARGO

DISCHARGE PERMITTED

11 Dec, 2016 00:00 – 24:00 SUNDAY

12 Dec, 2016 12:00 GOVERNMENT EMBARGO IMPOSED ON CARGO

DISCHARGE

18 Dec, 2017 00:00 – 24:00 EMBARGO LIFTED, CARGO DISCHARGE

COMMENCED

19 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS





24 Dec, 2017 00:00 – 24:00 SUNDAY


08:00 – 11:00

11:00

CUSTOMS AND PORT CLEARANCE; VESSEL

PAPERS RETURNED TO MASTER;

VESSEL DEPARTED ARIELA

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12 December 2016

Omar Qureshi


18 Cartiera Circle,

Liuville, HELGALAND

Dear Mr Qureshi,


We refer to Addendum No 1 to the Charter party.

Under that Addendum, you are the charterers of the MV Sulphur Express and you directed

the vessel to sail the Port of Ariela.

The vessel arrived at the Port of Ariela on 9 December 2016 and received customs clearance

to unload on 10 December 2016. However, today, the Government of Anikaland imposed an

embargo on the discharging of cargo from the vessel.

As the voyage charterer you were under an obligation to nominate a safe port at which the

vessel could discharge the cargo on board in a timely manner.

It is not presently known how long this embargo is going to last.

We would request you provide lawful orders with which the vessel can comply so as to have

the cargo on board discharged without further delay.

Yours truly,


Kevin Jones

Managing Director

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41


20 December 2016

Kevin Jones




Nirvana, NAVIGONIA

Dear Mr Jones,


We refer to your letter of 12 December 2016.

As you know, we are no longer the owners of the cargo on board the Sulphur Express. That

cargo was sold by us to Constantine Commodity Traders Ltd. which has in turn (as we

understand it) on-sold the cargo to a buyer in Hunaville, HARBINARA.

Whilst we are the voyage charterers of the Sulphur Express, we are not in a position to give

any orders which might infringe the rights of the cargo owner.

You should seek directions from the holders of Bill of Lading.

Meanwhile, we reserve all our rights against you in respect of your breach of the Charter

party dated 11 August 2016.

Yours truly,


Omar Qureshi

Managing Director

5th NLUO IMAM, 2017

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CONGENBILL 2007

BILL OF LADING

To be used with charter parties

Page 1

Shipper

Continental

Chemicals Limited

Bill of Lading No.

BL1108

Reference No.

DS1992

Consignee

TO ORDER

Vessel

MV Sulphur Express

Notify address:

Zachariah Port &

Shipping Agency Ltd.

1704 Markham Court,

Ariela, ANIKALAND

Tel: +88 152 4119

2804

E-mail:

[email protected]

Port of loading

Liuville, HELGALAND

Port of discharge

Ariela, ANIKALAND

Shipper’s description of goods

Gross weight

21,214.775mt Dry Sulphur

21,214.775mt

(of which on deck at shipper’s risk; the Carrier not

being responsible for loss or damage howsoever arising)

Freight payable as per

CHARTER

PARTY dated:

11 August 2016

and Addendum dated 27

November, 2016

SHIPPED at the Port of Lading in apparent good

order and condition on the Vessel for carriage to the

Port of discharge or so near thereto as the Vessel may

safely get the goods specified above.

Weight, measure, quality, quantity, condition,

contents and value unknown. FREIGHT ADVANCE

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Received on account of

freight:

IN WITNESS whereof the Master or Agent of the

said vessel has signed the number of Bills of Lading

indicated below any one of which being

accomplished the others shall be void.

FOR CONDITIONS OF CARRIAGE SEE

OVERLEAF

Date shipped on

board

28 November 2016

Place and

date of issue

Liuville,

HELGALAN

D

28

November,

2016

Number of

original Bills

of Lading

3

Signature:

(i).....................................................................Master

Master’s name and signature

CONDITIONS OF CARRIAGE

(1) All terms and conditions, liberties and exceptions of the Charter party, dated as overleaf,

including the Law and Arbitration Clause/Dispute Resolution Clause, are herewith

incorporated.

(2) General Paramount Clause

The international Convention for the Unification of Certain Rules of Law relating to Bill of

Lading signed at Brussels on 25August 1924 ("the Hague Rules") as amended by the Protocol

signed at Brussels on 2 February 1968 ('"the Hague-Visby Rules") and as enacted in the

country of shipment shall apply to this Contract. When The Hague-Visby Rules are not

5th NLUO IMAM, 2017

44

enacted in the country of shipment, the corresponding legislation of the country of destination

shall apply, irrespective of whether such legislation may only regulate outbound shipments.

When there is no enactment of The Hague-Visby Rules in either the country of shipment or

in the country of destination, The Hague-Visby Rules shall apply to this Contract save where

the Hague Rules as enacted in the country of shipment or if no such enactment is in place,

The Hague Rules as enacted in the country of destination apply compulsorily to this Contract.

The Protocol signed at Brussels on 21 December 1979 ("the SDR Protocol 1979") shall apply

where The Hague-Visby Rules apply, whether mandatorily or by this Contract.

The Carrier shall in no case be responsible for loss of or damage to cargo arising prior to

loading, after discharging, or while the cargo is in the charge of another carrier, or with

respect to deck cargo and live animals.

(3) General Average

General Average shall be adjusted, stated and settled and settled according to York-Antwerp

Rules 2016 in London unless another place is agreed in the Charter party.

Cargo's contribution to General Average shall be paid to the Carrier even when such average

is the result of a fault, neglect or error of the Master, Pilot or Crew.

(4) New Jason Clause

In the event of accident, danger, damage or disaster before or after the commencement of the

voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or

for the consequence of which, the Carrier is not responsible, by statute, contract or otherwise,

the cargo, shippers, consignees or the owners of the cargo shall contribute with the Carrier in

General Average nature that may be made or incurred and shall pay salvage and special

charges incurred in respect of the cargo. If a salving vessel is owned or operated by the

Carrier, salvage shall be paid for as fully as if the said salving vessel or vessels belonged to

strangers. Such deposit as the Carrier, or his agents, may deem sufficient to cover the

estimated contribution of the goods and any salvage and special charges theron shall, if

required, be made by the cargo shippers, consignees or owners of the goods to the Carrier

before delivery.

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(5) Both-to-Blame Collision Clause

If the Vessel comes into collision with another vessel as a result of the negligence of the other

vessel and any act, neglect or default of the Master Mariner, Pilot or the servants of the

Carrier in the navigation or in the management of the Vessel, the owners of the cargo carried

here under will indemnify the Carrier against all loss or liability to the other or non-carrying

vessel or her owners in so far as such loss or liability represents loss of,or damage to, or any

claim whatsoever of the owners of said cargo, paid or payable by the other or non-carrying

vessel or her owners as part of their claim against the carrying Vessel or the Carrier. The

forgoing provisions shall also apply where the owners, operators or those in charge of any

vessel or vessels or objects other than, or in addition to, thee colliding vessels or objects are

at fault in respect of a collision or contract.

For particulars of cargo, freight, destination, etc., see overleaf.

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ONLINE EDITION

10 December 2016

-------- BREAKING NEWS ---------

A ship loaded with a cargo of contaminated fertilizer has arrived at the Port of Ariela.

Authorities say they have taken appropriate steps to prevent the unloading of the highly toxic

cargo until full investigations can be carried out to ensure the safety of the people of Ariela.

The vessel, which has allegedly already been rejected from the Port of Liuville, arrived at

Ariela on 9 December 2016 under cover of darkness.

The cargo is consigned to Heeru Sulphur Products Ltd., a recently established trader in

distressed cargos. Local Ariela importers have been urging the Government to not allow

Heeru to use Ariela as a dumping ground for cargos rejected by other countries.

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8 June 2017

Omar Qureshi


18 Cartiera Circle,

Liuville, HELGALAND

Dear Mr Qureshi,


We refer to our previous correspondence.

The Sulphur Express has now been stranded at the Port of Ariela for about six months.

During this time, demurrage has obviously been accruing pursuant to the Charter party dated

11 August, 2016.

Our view is that demurrage is no longer an adequate remedy for the losses we are suffering.

Our reasons for this view include, but are not limited to:

1. The freight market has moved significantly since the execution of the Charter party. A

vessel of similar size and description to the Sulphur Express could presently attract hire of

approximately USD 45,000 per day.

2. Demurrage is liquidated damages for delay occurring in the cargo loading or discharging

of a vessel. The delay currently being experienced at the Port of Ariela is much more

significant than a delay during the loading or discharging of the vessel. It is a delay, which

the demurrage provisions of the Charter party were not designed to contemplate.

3. There is no indication at present as to when the Sulphur Express may be permitted to

discharge its cargo or to sail from the Port of Ariela. As you are aware, despite your failure to

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48

give directions for discharging at an alternative port, when the vessel recently attempted to

leave the Port of Ariela, it was prohibited from doing so by the ANIKALAND authorities.

In light of the above, we will be seeking damages for detention, calculated at market rates,

rather than the demurrage rate specified in the Charter party.

Yours truly,


Kevin Jones

Managing Director

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50


27 December 2017

Omar Qureshi


18 Cartiera Circle,

Liuville, HELGALAND

Dear Mr Qureshi,


We refer to our previous correspondence.

As you are aware, the Sulphur Express has discharged its cargo and has sailed from the Port

of Ariela.

We have received no response from you to our letter of 8 June 2017; nor has any payment of

freight been made by you in respect of the voyage from Liuville to Ariela.

In these circumstances, clearly there is a dispute between us in respect of which we are

hereby invoking Clause 17 (at Box 20) of the Charter party referring to arbitration. Pursuant

to said Clause 17, we hereby appoint Mr. Santos Basu as arbitrator, a person well versed and

experienced in maritime and shipping matters. We would request you to nominate an

arbitrator as contemplated by the LMAA Arbitration Rules within 14 days of the date of this

letter.

Further, since our last correspondence, we have now received a claim from the end user/

buyer of the cargo in Ariela, ANIKALAND, Heeru Sulphur Products (Pvt) Ltd. Heeru’s

claim arises from its contention that its production system machinery suffered damage as a

result of the presence of solidified lumps of tar in the cargo. Of course, the solidified lumps

of tar were the subject of your letter dated 17 October 2016. Therefore, you are liable to

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51

indemnify us against any claim made by Heeru Sulphur Products (Pvt) Ltd. against the

vessel. We will provide details of the amounts involved as soon as they are received by us.

Yours truly,


Kevin Jones

Managing Director

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7 January 2018

Kevin Jones




Nirvana, NAVIGONIA

Dear Mr Jones,

MV Sulphur Express

We refer to your letter of 27 December 2017.

We appoint Ms Minna Shao as an arbitrator for the purposes of Clause 17 (Box 20) of the

Charter party dated 11 August 2016 and the LMAA Arbitration Rules but in so doing, we

reserve all our rights regarding the arbitral tribunal’s competency and jurisdiction to hear the

dispute as it is currently framed in your previous correspondence.

We have investigated the basis of the claim of Heeru Sulphur Products (Pvt) Ltd., which

indicates that when the cargo was being loaded from the dock with the ship's cranes, the

cranes picked up, together with the cargo, some remains of solidified tar in lumps situated on

the newly paved dock.

For these reasons and for the reasons given in our previous correspondence regarding our

letter of 17 October 2016, we deny any liability to indemnify you against claims by Heeru

Sulphur Products (Pvt) Ltd. in respect of the lumps of solidified tar.

Yours truly,


Omar Qureshi

Managing Director

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IN THE MATTER OF: SHANGRILA SHIPPING CORPORATION

(Claimant)

and CONTINENTAL CHEMICALS LIMITED

(Respondent)

and SHIP MV SULPHUR EXPRESS

and CHARTER PARTY DATED 11 AUGUST, 2016

STATEMENT OF CLAIM

Delivered on behalf of Shangrila Shipping Corporation (Claimant)

1. The Claimant is the Owner of the vessel MV Sulphur Express.

2. The Claimant chartered out the Sulphur Express to the respondent for a voyage from the

Port of Deeptara, INDISHA to the Port of Liuville, HELGALAND.

3. The Respondent loaded a cargo of dry sulphur in bags on board the Sulphur Express.

4. After the cargo was loaded, the following foreign objects were found in the cargo:

(a) lumps of solidified tar;

(b) two pieces of dunnage wood; and

(c) pieces of torn plastic.

5. The Master of the Sulphur Express intended to clause the bill of lading in respect of the

cargo to indicate that it contained foreign objects.

6. The Respondent provided a letter of indemnity dated 17 October, 2016 to the Claimant

Shangrila Shipping in exchange for the issue of a clean bill of lading.

7. The Master, being satisfied that:

(a) the Respondent had caused an independent survey to be carried out;

(b) the Respondent was in the best position to know whether the foreign objects

would affect the suitability of the cargo for on-sale or discharge into Liuville,

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HELGALAND issued a bill of lading which did not make any reference to the foreign

objects.

8. Upon reaching the Port of Liuville, the cargo was ordered into quarantine by the Helgaland

Quarantine Inspection Services due to residues of NAVIGONIA Wheat Germ, a prohibited

import into HELGALAND, being present on the pieces of dunnage wood found in the cargo.

9. This endorsee of the bill of lading, Constantine Commodity Traders Ltd. (CCTL), re-sold

the cargo for re-export to Ariela, ANIKALAND.

10. CCTL claimed loss of profits of USD 3182.22

11. Being satisfied that the claim was reasonable, the Claimant made payment to CCTL of

the amount.

12. The Claimant entered into an Addendum to the Charter party with the Respondent for the

voyage of the Sulphur Express from Liuville to Ariela.

13. To date, the Respondent has failed, refused or otherwise neglected to pay the freight

owing under that Addendum.

14. Upon reaching Ariela, the Government of ANIKALAND placed an embargo on the

discharge of the cargo.

15. That embargo remained in place until 18 December 2017 when the vessel was permitted

to discharge its cargo.

16. The ultimate receiver of the cargo in Ariela has made a claim for damage sustained to its

processing facilities attributable to the presence of lumps of solidified tar in the cargo.

17. Pursuant to the terms of the Respondent's letter dated 17 October 2016, the Respondent is

liable to indemnify the Claimant against any liability, which the Claimant has to Heeru

Sulphur Products (Pvt) Ltd., in respect of this claim.

18. In the circumstances, the Respondent is liable, pursuant to the terms of the Respondent’s

letter dated 17 October 2016, to indemnify the Claimant against all losses and damage

suffered by the Claimant.

19. Further and alternatively, the Respondent is liable to the Claimant for the losses and

damages the Claimant has suffered and the Claimant claims damages in the amount of at least

USD 10,375,952.00.

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55

PARTICULARS

Claim by Constantine Commodity Traders

Ltd.

USD 3182.00

Freight unpaid

USD 650, 270.00

Damages for detention

USD 9,722,500.00

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IN THE MATTER OF: SHANGRILA SHIPPING CORPORATION

(Claimant)

and CONTINENTAL CHEMICALS LIMITED

(Respondent)

and SHIP MV SULPHUR EXPRESS

and CHARTER PARTY DATED 11 AUGUST, 2016

STATEMENT OF DEFENCE AND COUNTER-CLAIM

Delivered on behalf of Continental Chemicals Limited (Respondent)

1. The Respondent admits paragraphs 1 to 4 of the Statement of Claim.

2. The Respondent does not admit paragraph 5 of the Statement of Claim stating that the

Master had intended to clause the bill of lading, and is uncertain as to the state of mind of the

Master at the relevant time.

3. Regarding paragraph 6 of the Statement of Claim, the Respondent-

(a) admits that it sent a letter dated 17 October, 2016 to the Claimant;

(b) denies that it sent that letter in exchange for the issue of a clean bill of lading; and

(c) otherwise denies the statement made by the Claimant in that paragraph.

4. The Respondent does not admit the statement made in paragraph 7 of the Statement of

Claim and remains uncertain as to the state of mind of the Master as pleaded.

5. The Respondent admits paragraphs 8 to 10 of the Statement of Claim.


(a) admits the Claimant made a payment to Constantine Commodity Traders Ltd.

(CCTL) in the amount of USD 3182.22;

(b) denies that the payment was made reasonably.


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57

(a) admits it entered into an Addendum to the Charter party for the voyage of the

Sulphur Express from Liuville to Ariela

(b) did so, however, “without prejudice” to its rights against the Claimant under the

Charter party dated 11 August, 2016.

8. Regarding paragraph 13 of the Statement of Claim, the Respondent admits that it has not

made any freight payments to the Claimant in respect of the voyage from Liuville,

HELGALAND to Ariela, ANIKALAND and claims an entitlement to set off such payments

against its Counter-Claim pleaded below.

9. The Respondent admits paragraphs 14 and 15 of the Statement of Claim.

10. The Respondent does not admit paragraph 16 of the Statement of Claim because having

made reasonable inquiries, it remains uncertain of the verity of the facts or allegations made,

as the only evidence of the claim pleaded is an assertion made in the Claimant’s

correspondence.

11. The Respondent denies paragraph 18 of the Statement of Claim and states that it is not

liable to indemnify the Claimant against any liability it may have towards Constantine

Commodity Traders Ltd. because the presence of lumps of solidified tar was attributable to

causes unrelated to the Respondent’s obligations under the Charter party, and probable fault

on the part of the Vessel’s lifting gear operator.

12. The Respondent denies paragraph 17 of the Statement of Claim and states that-

(a) its letter of 17 October, 2016 is not a letter of indemnity;

(b) the Claimant is not entitled to be indemnified pursuant to the terms of that letter;

and

(c) even if the letter of 17 October, 2016 is a letter of indemnity, this arbitral tribunal

has no jurisdiction to hear any matters related to it as the letter provides that disputes

arising in relation to it are to be referred to the Courts of NAVIGONIA, which have

exclusive jurisdiction to hear such matters.

13. The Respondent denies paragraph 19 of the Statement of Claim on the basis that the

Claimant is not entitled to any damages from the Respondent; and further states in the

alternative, that it is entitled to set-off its liability, if any, against its Counter-claim pleaded

below:

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COUNTER-CLAIM

14. The cargo on board the Sulphur Express was ordered into quarantine at the Port of

Liuville because of the discovery of NAVIGONIA Wheat Germ (NWG) residues in the holds

of the Vessel.

15. The foreign material referred to in the Respondent’s letter of 17 October 2016 did not

contain on it any residues of NWG.

16. Pursuant to Clause 18 in Part II of the Charter party dated 11 August, 2016, the Claimant

was required to ensure prior to loading that the holds of the Vessel were clean and free of

remnants or residues of any previous cargo.

17. The Claimant is in breach of the said Clause 18 in Part II of the Charter party dated 11

August 2016, because NWG had previously been carried on board the Vessel and remnants

and residues of it remained in the holds of the Vessel.

18. In the circumstances, the Respondent is entitled to be indemnified by the Claimant

against any losses, including consequential losses, pursuant to the said Clause 18 in Part II of

the Charter party dated 11 August 2016.

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MISCELLANEOUS RELEVANT INFORMATION

- The laws of NAVIGONIA, INDISHA and HELGALAND, statutory and otherwise, are

virtually the same as those of England and Wales in the United Kingdom.

- ANIKALAND has adopted in the same terms, all the laws of England and Wales in the

United Kingdom, statutory and otherwise, except that it has no legal regime, statutory or

otherwise, governing quarantine matters.

- It is assumed that the parties concerned have properly executed all documents mentioned.

- It is assumed that notices and demurrage calculations have been provided by the Owners

prior to the Vessel’s departure from discharging ports.

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