INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016 · international maritime law arbitration moot...

INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016

IN THE MATTER OF AN ARBITRATION HELD IN LONDON

_________________________________________________________________________

Claimant Respondent

Zeus Shipping and Trading Company Hestia Industries

_________________________________________________________________________

MEMORANDUM FOR THE RESPONDENT

TEAM NO. 4

Benjamin Adamson

Josh Kain

Kashmirra Thevar

Sienna Warne

i

TABLE OF CONTENTS

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS ...................................III

LIST OF AUTHORITIES: LEGISLATION ..................................................................... IX

LIST OF AUTHORITIES: BOOKS AND JOURNALS .................................................... X

LIST OF AUTHORITIES: RULES .................................................................................. XI

LIST OF DEFINED TERMS ........................................................................................... XII

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

PART ONE: JURISDICTION .............................................................................................3

THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION ...................................3 I.

THE ARBITRATION AGREEMENT IS GOVERNED BY ENGLISH LAW .......................................3 II.

FRUSTRATION IS OUTSIDE THE SCOPE OF THE ARBITRATION AGREEMENT ..........................4 III.

A.The parties did not intend for all disputes to be resolved by arbitration ........................4

B.Frustration falls outside the scope of the Arbitration Agreement ..................................5

THEREFORE, DEMURRAGE CANNOT BE DETERMINED AT THIS STAGE .................................6 IV.

PART TWO: MERITS .........................................................................................................6

THE CHARTERPARTY HAS BEEN FRUSTRATED ......................................................................6 I.

A.The commercial purpose of the Charterparty could not be performed ..........................7

The commercial purpose of the Charterparty was to transport the Cargo from Hades a.

to Poseidon within a reasonable time ........................................................................ 7

i. The Charterparty contains a term for delivery within a reasonable time .............. 8

ii. The Respondent stated a delivery time in pre-contractual negotiations ................ 8

iii.Time is of the essence in commercial contracts.................................................... 9

ii

The Cargo could not be transported from Hades to Poseidon within a reasonable timeb.

............................................................................................................................. 10

B.The delay was unforeseen by the parties ......................................................................11

Clause 10 of the Charterparty does not foresee an indefinite delay .................... 12 a.

The FM clause does not foresee government intervention ................................. 13 b.

C.The delay was unforeseeable ........................................................................................14

THE VESSEL LEFT THE LOADING PLACE PRIOR TO THE EXPIRY OF LAYTIME ......................15 II.

THE VESSEL’S RETURN TO PORT WAS AN UNJUSTIFIABLE DEVIATION ..............................15 III.

ALTERNATIVELY, IF THE TRIBUNAL FINDS THAT THE RESPONDENT IS LIABLE TO PAY IV.

DEMURRAGE, THE RESPONDENT CAN RELY ON THE FM CLAUSE. ..........................................16

A.There was a FM event ..................................................................................................16

B.The FM event meets the common law requirements ....................................................17

C.The Respondent met the requirements of the FM clause .............................................18

a. Notice was not required....................................................................................... 19

b. No reasonable steps could be taken to minimise the delay ................................. 20

PART THREE: SALVAGE ...............................................................................................21

THE VESSEL IS A RECOGNISED SUBJECT OF SALVAGE .........................................................21 I.

THE SERVICES RENDERED WERE SUCCESSFUL ...................................................................21 II.

THE VESSEL WAS IN DANGER...........................................................................................22 III.

A.There was a reasonable fear of danger .........................................................................22

B.In any event, the Vessel was automatically in danger once it was immobilised ..........23

THE RESPONDENT FALLS WITHIN THE CLASSIFICATION OF A SALVOR ..............................23 IV.

The Respondent does not have a propriety interest in the vessel .................................24 V.

THE CLAIMANT WAS IN POSSESSION AND CONTROL OF THE VESSEL ................................24 VI.

PRAYER FOR RELIEF .....................................................................................................25

iii

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS

A.

A/s Awilco of Oslo v Fulvia SpA di Navigazione of Cagliari (‘The Chikuma’) [1981] 1 WLR

314 ................................................................................................................................................ 9

Achille Lauro Fu Gioacchino and C v Total Societa Italiana Per Azioni [1968] 2 Lloyd’s Rep

247 .............................................................................................................................................. 15

Adelfamar SA v Silos E Mangini Martini SpA (‘The Adelfa’) [1988] 2 Lloyd’s Rep 466 ......... 11

AGL Sales (Qld) Pty Ltd v Dawson Sales Pty Ltd [2009] QSC 8 .............................................. 18

Amalgamate Investment and Property Co Ltd v John Walker and Sons Ltd [1977] 1 WLR 164 5

Ange v First East Auction Holdings Pty Ltd (2011) 284 ALR 638............................................ 11

Argonaut Navigation Co Ltd v Ministry of Food (‘The SS Argobec’) [1949] 1 KB 572 ........... 15

Astea (UK) Ltd v Time Group Ltd [2003] EWHC (TCC) 725 ................................................... 10

Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202 (21 June 2012) ..................... 9

Australia and New Zealand and Banking Group Ltd v Manasseh [2015] WASC 34 (2 February

2015)............................................................................................................................................. 8

B.

Bank Julius Baer and Co v Waxfield Ltd 424 F3d 278, 284 (2nd Cir 2005) ............................... 4

Bank Line Ltd v Arthur Capel and Co [1919] AC 435 ........................................................ 12, 14

Barclays Bank Plc v Nylon Capital LLP [2011] EWCA Civ 826 (18 July 2011) ....................... 4

Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143 .................. 5, 7, 8, 10, 12

British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co

of London Ltd [1912] AC 673 .................................................................................................... 20

Bunge Corp New York v Tradax Export SA Panama [1981] 1 WLR 711 ................................... 9

C.

Caltex Oil v Howard Smith Industries Pty Ltd [1973] 2 NSWLR 89 ........................................ 18

Cargo ex Port Victor [1901] P 243 ............................................................................................ 24

Cargo Ex Schiller (1877) 2 PD 145 ........................................................................................... 24

Cattanach v Melchior (2003) 215 CLR 1 .................................................................................. 14

Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 ..................... 17, 18, 20

Chapman v Hearse (1961) 106 CLR 112............................................................................. 12, 14

Christopher Brown Ltd v Genessenschaft Oesterreichisher Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8 ........................................................ 3

City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 ................................. 7, 10

Claude Neon Ltd v Hardie [1970] QB R 93 ................................................................................ 5

iv

Coastal (Bermuda) Petroleum Ltd v VTT Vulcan Petroleum SA (No 2) (‘The Marine Star’)

[1994] 2 Lloyd's Rep 629 ........................................................................................................... 16

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 .....................

.......................................................................................................................... 4, 5, 6, 7, 8, 10, 12

Cody v J H Nelson Pty Ltd (1947) 74 CLR 629 ......................................................................... 17

D.

Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd [2012]

4 SLR 837..................................................................................................................................... 3

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 .................................. 13

Davis v Garrett (1830) 6 Bing 716 ............................................................................................ 15

Davis v Pearce Parking Station Pty Ltd (1954) 91 CLR 642 .................................................... 13

Denny, Mott and Dickson Ltd v James B Fraser and Co Ltd [1944] AC 265 ........................... 12

Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd [2002] 1 SLR (R) 492 ............ 3

DGM Commodities Corp v Sea Metropolitan SA [2012] EWHC (QB) 1984 .............................. 6

Douglas v Cicirello [2006] WASCA 226 (8 August 2006) ......................................................... 9

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423......................................... 9

E.

E B AABY’S Rederi AIS v The Union of India [1974] 2 Lloyd’s Rep 57 ..................................... 5

Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage) Ltd

(‘The Sea Angel’) [2007] EWCA Civ 547 ................................................................................. 12

Eighty-Second Agenda Pty Ltd v Handberg [2015] FCA 1136 (26 October 2015) ............... 8, 12

Electrosteel Castings Ltd v Scan-Trans Shipping and Chartering Sdn Bhd [2003] 1 Lloyd’s

Rep 190 ...................................................................................................................................... 16

Embiricos v Sydney-Reid and Co [1914] 3 KB 45 ..................................................................... 10

Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (‘The Playa Larga’)

[1983] 2 Lloyd’s Rep 171 ...................................................................................................... 7, 11

Exploration (Libya) Ltd v Hunt [1979] 1 WLR 783 .................................................................. 11

F.

Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) ................ 4

Firth v Halloran (1926) 38 CLR 251 ................................................................................... 5, 6, 7

Freedom Maritime Corporation v International Bulk Carriers SA and Another (‘The Khian

Captain’) [1985] 2 Lloyd’s Rep 212 .......................................................................................... 15

Fyffes Group Ltd v Reefer Express Lines Pty Ltd (‘The Kriti Rex’) [1996] 2 Lloyd’s Rep 171 .. 8

G.

Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226 ........................................ 5

v

Gelling v Crespin (1917) 23 CLR 443 ....................................................................................... 12

H.

Harris v Best, Ryley and Co (1892) 68 LT 76 ........................................................................... 15

High Seas Venture Ltd Partnership v Sinom (Hong Kong) Ltd (‘The Newforest’) [2008] 1

Lloyd’s Rep 504 ......................................................................................................................... 15

Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd [2006] FCA 1324 (11

October 2006) ................................................................................................................. 17, 18, 20

I.

In Marriage of Cawthorn (1998) 144 FLR 255 ................................................................. 7, 8, 10

Insight Vacations Pty Ltd v Young [2011] HCA 16 (11 May 2011) .......................................... 16

J.

Joseph Thorley Limited v Orchis Steamship Company Limited [1907] 1 KB 660 .................... 15

K.

Kopitoff v Wilson (1876) 1 QBD 377 ......................................................................................... 15

L.

Lindsay-Owen v Associated Dairies Pty Ltd [2000] NSWSC 1095 (10 November 2000) ........ 14

Lockhart v Falk (1875) LR 10 Ex 132 ....................................................................................... 15

Lyle v Soc (2009) 38 WAR 418 ........................................................................................... 12, 14

M.

M’Andrew v Adams (1834) 131 ER 1028 .................................................................................... 8

March v Stramare (1991) 171 CLR 506 .............................................................................. 12, 14

Meredelanto Compania Naviera SA v Bergbau-Handel Gmbh (‘The Mihalis Angelos’) [1970]

EWCA Civ 4 ................................................................................................................................ 6

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990...... 4, 8, 12, 13

N.

National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 .......................................... 10

Navico AG v Vrontados Naftiki Etairia PE [1968] 1 Lloyd’s Rep 379 ..................................... 15

Naviera Amazonia Peruana SA v Compania Internacional de Seguros de Peru [1988] 1

Lloyd’s Rep 116 ........................................................................................................................... 3

O.

Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226 ................. 5, 11

Otrava Pty Ltd v Mail Boxes Etc (Australia) Pty Ltd [2004] NSWSC 1066 (10 December

2004)........................................................................................................................................... 10

vi

Overseas Union Insurance Ltd v AA Mutual Insurance Co Ltd [1988] 2 Lloyd’s Rep 63 .......... 5

Owners of the Hamtun v Owners of the St John [1999] 1 Lloyd’s Rep 883 .............................. 22

P.

Paal Wilson and Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 ............... 5, 14

Page v Admiralty Commissioners [1921] 1 AC 137 .................................................................. 24

Paul Smith Ltd v H and S Intl Holding Inc [1991] Lloyd’s Rep 127 ........................................... 4

Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239 ...................................................... 10

Perks v Clark [2001] 2 Lloyd’s Rep 431 ................................................................................... 21

Personal Sec and Safety Systems v Motorola 297 F3d 388, 395-6 (5th Cir 2002) ...................... 4

Peterson Farms Inc v C and M Farming Ltd [2004] 1 Lloyd’s Rep 603 .................................... 3

Petrotrade Inc v Stinnes Handel GmbH [1995] 1 Lloyd’s Rep 142 ............................................ 9

Phelan v Minges (1959) AMC 975 ...................................................................................... 21, 23

Pioneer Shipping Ltd v BTP Tioxide Ltd (‘The Nema’) [1982] AC 734...................................... 6

Plainmar Ltd v Waters Trading Co Ltd (1945) 72 CLR 304 ..................................................... 16

Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Aust) Pty Ltd (1978) 139 CLR

231 .............................................................................................................................................. 13

President of India v Hariana Overseas Corp (‘The Takafa’) [1990] 1 Lloyd’s Rep 536 ............ 8

R.

Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194 ........................................ 5, 6, 7

Reardon Smith Line Ltd v Black Sea and Baltic General Insurance Co Ltd [1939] AC 562 .... 16

Reid v Hoskins (1855) 119 ER 365 ............................................................................................ 15

Ringstad v Gollin and Co Pty Ltd (1924) 35 CLR 303 .......................................................... 5, 10

S.

Samuel Sunday and Co v Cox, McEuen and Co (1922) 10 LI L Rep 459 ................................. 18

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 ................................... 5, 6, 7, 10, 12

Scottish Navigation Co Ltd v WA Souter and Co [1917] 1 KB 222........................................... 18

Select Commodities Ltd v Valdo SA (‘The Florida’) [2006] 1 Lloyd’s Rep 1 ........................... 12

Shevill v Builders Licensing Board (1982) 149 CLR 620 ............................................................ 9

Simmons Ltd v Hay [1964] 1 NSWR 416 .................................................................................. 14

Sobonis v Steam Tanker National Defender (1969) 298 F Supp 631 ........................................ 22

SS Magnhild (Owners of) v McIntyre Brothers and Co [1921] 25 KB 97 ................................. 17

Stoker v Picken 209 FCR 132 ...................................................................................................... 9

Strong Wise Limited v Esso Australia Resources Pty Ltd (2010) 185 FCR 149 .................. 12, 14

vii

Sulmerica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638 (16

May 2012) .................................................................................................................................... 4

Sydney City Council v West (1965) 114 CLR 481 ............................................................... 13, 16

T.

The Brillante Virtuoso [2015] EWHC 42 (Comm) .................................................................... 23

The Caroline (1861) 167 ER 149 ............................................................................................... 24

The Cartela v The Inverness Shire (1916) 21 CLR 387 ............................................................. 23

The Charlotte (1848) 166 ER 888 .............................................................................................. 22

The Cheerful (1855) 11 PD 3 ..................................................................................................... 21

The Collier (1865) LR 1 A and E 83 .......................................................................................... 24

The Council of the City of Gold Coast v Thi Hoa Dam [2015] (22 October 2015) QPEC 51 .......

.............................................................................................................................................. 16, 17

The Ella Constance (1864) 33 LJ Adm 189 ............................................................................... 22

The Five Steel Barges (1890) 15 PD 142 ............................................................................. 21, 24

The Hamtun and The St John [1991] 1 Lloyd’s Rep 883........................................................... 22

The Industry (1835) 3 Hagg 203 ................................................................................................ 21

The Key Singapore [2005] 1 Lloyd’s Rep 91 ............................................................................. 21

The Minnehaha (1861) 167 E R 149 .......................................................................................... 23

The Mozart [1985] 1 Lloyd’s Rep 239 ....................................................................................... 19

The Neptune (1824) 166 ER 81 .................................................................................................. 23

The Owners and/or Demise Charterers of the Tug ‘Sea Tractor’, Her Master, Officers and

Crew (Claimants) v The Owners of the Ship ‘Tramp’ (Defendants) [2007] 2 Lloyd’s Rep 36322

The Owners of the Vessel ‘Voutakos’, her Bunkers, Stores and Cargo v Tsaliris Salvage

(International) [2008] 2 Ll L Rep 516 ....................................................................................... 23

The Phantom (1866) LR 1 A and E 58 ................................................................................ 21, 22

The Queen Elizabeth (1949) 82 Ll L Rep 803 ..................................................................... 22, 23

The Sava Star [1995] Ll L Rep 134 ........................................................................................... 24

The Tojo Maru [1972] AC 242 .................................................................................................. 21

The Troilus and The Glenogle [1951] AC 820 .................................................................... 22, 23

The Waterloo 2 Dods 433........................................................................................................... 24

The Zephyrus (1842) 1 W Rob 329 ...................................................................................... 21, 24

Thorman v Dowgate Steamship Co Ltd (1909) 1 KB 410 ................................................... 16, 17

Thors v Weekes (1989) 92 ALR 131 .......................................................................................... 11

TNT (Melbourne) Pty Ltd v May (1970) ALR 751 .................................................................... 13

Tozer Kemsley and Millbourn (A’asia) Pty Ltd v Collier’s Interstate Transport Services Ltd

(1956) 94 CLR 384 .................................................................................................................... 13

viii

U.

UBS AG v HSH Nordbank AG [2009] 1 CLC 934 ....................................................................... 4

US Shipping Board v Bunge y Born (1924) 18 Ll L Rep 422 .................................................... 16

W.

Wells v The Gas Float Whitton No 2 (The Owners) [1897] AC 337 ......................................... 21

X.

XL Insurance v Owens Corning [2002] 2 Lloyd’s Rep 500 ......................................................... 3

ix

LIST OF AUTHORITIES: LEGISLATION

Arbitration Act 1996 (UK) ....................................................................................................... 3, 6

International Convention on Salvage 1989 .......................................................................... 21, 23

Navigation Act 2012 (Cth) ......................................................................................................... 21

UNCITRAL Model Law on International Commercial Arbitration (2006) ................................ 6

x

LIST OF AUTHORITIES: BOOKS AND JOURNALS

Blackaby et. al, Redfern and Hunter on International Arbitration (Oxford University Press, 5th

ed, 2009) ....................................................................................................................................... 6

Clifford G. Hall, ‘Frustration and the question of foresight’ (1984) Legal Studies 4(3), 300 ... 11

G H Treitel, Frustration and Force Majeure (Sweet and Maxwell, 2nd

ed, 2004) ........ 13, 14, 18

G Treitel, Frustration and Force Majeure (Sweet and Maxwell, London, 1994) ..................... 18

Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol I .....

.................................................................................................................................................. 3, 4

J W Carter, E Peden and G J Tolhurt, Contract Law in Australia (LexisNexis Butterworths, 5th

ed, 2007) ..................................................................................................................................... 14

Jason Chuah Law of International Trade: Cross-Border Commercial Transactions (Sweet and

Maxwell, 5th

ed, 2013) ............................................................................................................... 16

Jill Poole, Textbook on Contract Law (Oxford University Press, 11th

ed, 2012) ......................... 7

Lindy Willmot, Sharon Christensen, Des Butler and Bill Dixon, Contract Law, (Oxford

University Press, 4th

ed, 2013) ................................................................................................... 14

W R Kennedy, ‘Law of Salvage’ (5th

ed, 1985) ................................................................... 22, 23

xi

LIST OF AUTHORITIES: RULES

The Maritime Law Association of Australia and New Zealand Arbitration Rules (1 July 2007) ..

...................................................................................................................................................... 4

xii

LIST OF DEFINED TERMS

AA : Arbitration Act 1996 (UK)

Arbitration Agreement : Clause 30 of the Charterparty

Cargo : 260 000m3 Hades Liquefied Natural Gas

Charterparty : The charterparty executed on 22 July 2014

Claimant : Zeus Shipping and Trading Company

FM : Force majeure

HLNG : Hades Liquefied Natural Gas

LNG : Liquefied Natural Gas

MLAANZ Rules : The Maritime Law Association of Australia and

New Zealand Arbitration Rules

Respondent : Hestia Industries

SOF : The statement of facts issued on 7 October 2015

Tribunal : The arbitral tribunal

Vessel : The Athena

1

STATEMENT OF FACTS

THE CHARTERPARTY

1. On 1 July 2014, Hestia Industries (Respondent) contacted Zeus Shipping and Trading

Company (Claimant) requesting a vessel capable of transporting 260 000m3 of Hades

Liquefied Natural Gas (HLNG) (Cargo).

2. On 14 July 2014, the Respondent stated that the Athena (Vessel) would be able to

complete the voyage. The Claimant attached a proposed charterparty. On 16 July

2014, the Claimant rejected the proposed Charterparty and requested a narrower

arbitration clause, so that only disputes arising ‘under’ the Charterparty were arbitrable.

The Claimant sent an amended charterparty on 21 July 2015, which the Respondent

executed on 22 July 2014 (Charterparty).

THE VOYAGE

3. On 20 September 2014, The Vessel left Poseidon to sail to Hades. It arrived at Hades

on 3 October 2014. It was met with violent protests at the port objecting to the export

of HLNG. The Claimant instructed the Master to proceed with loading without

consulting the Respondent.

4. The Vessel completed loading on 6 October 2014. The Vessel departed the Loading

Place on 7 October.

THE DELAY

5. On 7 October 2014 the Hades government was overthrown by a military coup d’état.

The first act of the new government was to prohibit the export of HLNG.

6. On 7 October, the Vessel was intercepted by the Hades Coast Guard and ordered to

return to port. The Master was unsure of the Vessel’s geographical position, but still

returned to the Port of Hades. The Vessel’s return was not communicated to the

Respondent.

2

7. Laytime expired on 13 October 2014. On 15 October 2014, the Claimant informed the

Respondent that demurrage had begun to accrue. On 30 April 2015, The Claimant

issued an invoice for 184 days of demurrage equal to US$9.2 million. On 30April, the

Respondent informed the Claimant that it thought the contract had been frustrated by

the delay. The Respondent treated the Charterparty as at an end and sought alternative

transport.

8. On 30 September 2015, President Simmonds resigned. On 5 October 2015, the Hades

Coast Guard released the Vessel. On 6 October 2015, the Claimant issued the final

invoice for US$17.9 million in demurrage.

SALVAGE

9. On 7 October 2015, the Vessel attempted to leave Hades. However, the Vessel had

suffered damage to its propeller shafts which immobilised the Vessel. The Vessel was

drifting uncontrollably. Hestug intervened and provided assistance to the Vessel.

ARBITRATION

10. On 16 November 2015, the Claimant referred its claim for demurrage to arbitration

under Clause 30 of the Charterparty (Arbitration Agreement). On 23 November 2015,

the Respondent claimed demurrage and frustration should be determined by the

national courts of Poseidon. The Respondent also counterclaimed for a salvage award.

3

PART ONE: JURISDICTION

1. The Respondent argues that this Tribunal does not have jurisdiction to hear the

Claimant’s frustration and demurrage claims because: (I) the Tribunal has the power to

rule on its own jurisdiction; (II) the Arbitration Agreement is governed by English law;

(III) frustration is outside the scope of the Arbitration Agreement; and therefore (IV)

demurrage cannot be determined at this stage.

THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION I.

2. An arbitral tribunal has the power to decide on its own jurisdiction.1 The Respondent

argues that this Tribunal has the power to rule on its own jurisdiction.

THE ARBITRATION AGREEMENT IS GOVERNED BY ENGLISH LAW II.

3. Parties can select the law which governs their proceedings.2 Any issues not provided

for in the chosen procedural rules will be governed by the law of the seat.3 Where

England is chosen as the place of arbitration, it is also the seat. 4

The legislation that

governs international arbitration agreements in England is the Arbitration Act 1996

(UK) (AA).5

4. The Claimant argues that English law governs the arbitral procedure. England is the

seat of the arbitration.6 Therefore the AA applies. The parties have chosen the

Arbitration Rules of the Maritime Law Association of Australia and New Zealand

(MLAANZ Rules) as the procedural rules.7 The MLAANZ Rules provide that a

1 Arbitration Act 1996 (UK) ch 23, s 30; Christopher Brown Ltd v Genessenschaft Oesterreichisher Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8, 12-3 (Devlin J). 2 Arbitration Act 1996 (UK) ch 23, s 4; Peterson Farms Inc v C and M Farming Ltd [2004] 1 Lloyd’s Rep 603,

609 (Langley J); XL Insurance v Owens Corning [2002] 2 Lloyd’s Rep 500, 506 (Toulson J); Gary B Born,

International Commercial Arbitration (Kluwer Law International, 2009) vol I, 436. 3 Naviera Amazonia Peruana SA v Compania Internacional de Seguros de Peru [1988] 1 Lloyd’s Rep 116, 120

(Kerr LJ). See Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd [2012] 4

SLR 837 (Woo Bih Li J); Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd [2002] 1 SLR (R) 492

(Woo Bih Li JC). 4 Arbitration Act 1996 (UK) ch 23, s 4.

5 See Arbitration Act 1996 (UK).

6 The Charterparty cl 30, 45.

7 Ibid.

4

tribunal’s jurisdiction is derived from the relevant legislation governing the arbitration.8

Therefore the AA governs the jurisdiction of the Tribunal.

FRUSTRATION IS OUTSIDE THE SCOPE OF THE ARBITRATION AGREEMENT III.

5. The Respondent argues that frustration is outside the scope of the arbitration agreement

because: (A) the parties did not intend for all disputes to be resolved by arbitration; and

(B) frustration falls outside the scope of the Arbitration Agreement.

A. The parties did not intend for all disputes to be resolved by arbitration

6. Parties are presumed to intend for all disputes to be decided in a single arbitration.9

However, parties can decide to resolve different types of disputes in different forums.10

The presumption should not be applied where there is clear intention to the contrary.11

Evidence of events which occurred before the contract is executed are admissible to

determine the parties’ intention.12

This includes pre-contractual negotiations.13

7. On 14 July 2014, the Claimant sent the Respondent a draft charterparty.14

This

contained a broad arbitration agreement.15

On 16 July 2014, the Respondent rejected

the proposed charterparty.16

It stated that it did not want to submit all disputes to

arbitration.17

The Respondent said that this was ‘not negotiable’.18

On 21 July 2014,

8 The Maritime Law Association of Australia and New Zealand Arbitration Rules (1 July 2007) s 15.

9 Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) [19] (Longmore LJ);

Sulmerica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638 (16 May 2012) [40]

(Moore-Bick LJ); Barclays Bank Plc v Nylon Capital LLP [2011] EWCA Civ 826 (18 July 2011) [28] (Thomas

LJ); Born, above n 2, 1333-4. 10

Personal Sec and Safety Systems v Motorola 297 F3d 388, 395-6 (5th Cir 2002) (Jolly, Jones and Barksdale JJ);

Bank Julius Baer and Co v Waxfield Ltd 424 F3d 278, 284 (2nd Cir 2005) (Meskill, Sack and Parker JJ). See Paul

Smith Ltd v H and S Intl Holding Inc [1991] Lloyd’s Rep 127 (Steyn J). 11

UBS AG v HSH Nordbank AG [2009] 1 CLC 934, 951 [83] (Lord Collins, Ward and Toulson LJJ); Fiona Trust

and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) [13] (Hoffman J). 12

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1000 [48] (French CJ, Nettle

and Gordon JJ); Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 352 (Mason J). 13

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1000 [48] (French CJ, Nettle

and Gordon JJ); Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 352 (Mason J). 14

Moot Problem, 3. 15

Ibid, 20. 16

Ibid, 25. 17

Ibid, 25. 18

Ibid, 25.

5

the Claimant sent the Respondent the amended Charterparty.19

This contained a more

restrictive arbitration clause.20

The parties executed the Charterparty on 22 July 2014.21

Therefore the parties clearly indicated that they intended to exclude some disputes from

arbitration.

B. Frustration falls outside the scope of the Arbitration Agreement

8. Clause 30 of the Charterparty provides that only disputes ‘arising under’ the

Charterparty shall be referred to arbitration.22

‘Arising under’ has been interpreted to

refer to disputes about the interpretation and enforcement of contractual obligations.23

Frustration is caused by an outside event24

that occurs after the formation of the

contract.25

Frustration arises by operation of law and cannot be provided for in the

contract.26

9. The Respondent argues that the frustration claim is not a claim to enforce any rights

under the Charterparty. It is a claim to discharge the Charterparty as a result of delay.27

It is not a claim that arises under the Charterparty. Therefore it falls outside the scope

of the Arbitration Agreement.

19 Ibid, 27.

20 The Charterparty, cl 30, 45.

21 Moot Problem, 28.

22 The Charterparty, cl 30, 45.

23 E B AABY’S Rederi AIS v The Union of India [1974] 2 Lloyd’s Rep 57, 69 (Lord Salmon); Overseas Union

Insurance Ltd v AA Mutual Insurance Co Ltd [1988] 2 Lloyd’s Rep 63, 68 (Evans J). 24

Paal Wilson and Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854, 909 (Diplock L); Codelfa

Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 357 (Mason J); Brisbane City Council v

Group Projects Pty Ltd (1979) 145 CLR 143, 160 (Stephen J). 25

See Amalgamate Investment and Property Co Ltd v John Walker and Sons Ltd [1977] 1 WLR 164

(Sir John Pennycuick, Buckley and Lawton LJJ); Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR

1226 (Garland J). 26

Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226, 239 (Lord Denning). See

Claude Neon Ltd v Hardie [1970] QB R 93 (Wanstall, Lucas and Campbell JJ); Ringstad v Gollin and Co Pty Ltd

(1924) 35 CLR 303 (Knox CJ, Isaacs and Starke JJ). 27

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 407 (Mason J); Scanlan's

New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 203 (McTiernan J); Firth v Halloran (1926) 38 CLR 251, 266

(Higgens J); Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194, 201 (Knox CJ and Barton J).

6

THEREFORE, DEMURRAGE CANNOT BE DETERMINED AT THIS STAGE IV.

10. When an issue is beyond a tribunal’s jurisdiction, that issue must be remitted to the

national courts.28

Frustration is beyond the scope of the Arbitration Agreement.29

The

dispute must be remitted to the courts of Poseidon.30

The Claimant is only entitled to

demurrage if the Charterparty was not frustrated.31

Therefore, this Tribunal cannot

determine the demurrage claim until frustration has been decided.

PART TWO: MERITS

11. The Respondent is not liable to pay demurrage because: (I) the Charterparty has been

frustrated; (II) the Vessel left the Loading Place prior to the expiry of laytime; and (III)

the Vessel’s return to port was an unjustifiable deviation. Alternatively, if the Tribunal

finds that the Respondent is liable for demurrage: (IV) the Respondent can rely on the

force majeure (FM) clause. Further, the Respondent argues that it is not liable for

damages for the detention of the Vessel because: (V) the Claimant accepted the risk of

delay.

THE CHARTERPARTY HAS BEEN FRUSTRATED I.

12. The doctrine of frustration applies to voyage charterparties.32

A contract is frustrated

when a supervening event renders performance radically different from what the parties

28 Arbitration Act 1996 (UK) ch 23, s 9; UNCITRAL Model Law on International Commercial Arbitration (2006)

ch 7, art 34(2)(a)(iii); Blackaby et. al, Redfern and Hunter on International Arbitration (Oxford University Press,

5th ed, 2009) 444 [7.12]. 29

See above, Part III. 30

Moot Problem, 73. 31



(Higgens J); Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194, 201 (Knox CJ and Barton J). 32

See DGM Commodities Corp v Sea Metropolitan SA [2012] EWHC (QB) 1984 (Hurley J); Pioneer Shipping

Ltd v BTP Tioxide Ltd (‘The Nema’) [1982] AC 734 (Lord Diplock, Lord Tullybelton, Lord Russell, Lord Kinkell

and Lord Roskill); Meredelanto Compania Naviera SA v Bergbau-Handel Gmbh (‘The Mihalis Angelos’) [1970]

EWCA Civ 4 (Lord Denning MR, Edmund Davies and Megaw LJJ).

7

originally contemplated.33

A frustrating event cannot be induced by either party.34

Frustration automatically discharges the parties of their future contractual obligations.35

13. The Respondent argues that performance of the Charterparty was rendered radically

different because: (A) the commercial purpose of the Charterparty could not be

performed. Further, the Respondent argues that: (B) the delay was unforeseen; and (C)

the delay was unforeseeable.

A. The commercial purpose of the Charterparty could not be performed

14. A contract will be frustrated if the commercial purpose of the contract cannot be

performed.36

The commercial purpose is the common reason that the parties entered

into the contract.37

15. The Respondent argues that: (a) the commercial purpose of the Charterparty was to

transport the Cargo from Hades to Poseidon within a reasonable time; and (b) the Cargo

could not be transported from Hades to Poseidon within a reasonable time.

The commercial purpose of the Charterparty was to transport the Cargo from a.

Hades to Poseidon within a reasonable time

16. The Respondent argues that the commercial purpose of the Charterparty was to

transport the Cargo from Hades to Poseidon within a reasonable time because: (i) the

Charterparty contains a term for delivery within a reasonable time; (ii) the Respondent

33 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 357 (Mason J); Brisbane City

Council v Group Projects Pty Ltd (1979) 145 CLR 143, 160 (Stephen J); Qantas Airways Ltd v Christie (1998)

193 CLR 280, 394 (Gaudron J). 34

Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 186 (Latham CJ); Codelfa Construction Pty Ltd v

State Rail Authority of NSW (1982) 149 CLR 337, 357 (Mason J); City of Subiaco v Heytesbury Properties Pty

Ltd (2001) 24 WAR 146, 164 [67] (Ipp J). 35



(Higgens J); Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194, 201 (Knox CJ and Barton J). 36

Brisbane City Council v Group Projects Ltd (1979) 145 CLR 143, 158 (Stephen J); Scanlan’s New Neon Ltd v

Toooheys (1943) 67 CLR 169, 176 (Latham CJ, McTiernan and Williams JJ); In Marriage of Cawthorn (1998)

144 FLR 255, 262 (Ellis, Lindenmayer and Joske JJ). 37

Scanlan’s New Neon Ltd v Toooheys (1943) 67 CLR 169, 179 (Stephen J); Empresa Exportadora de Azucar v

Industria Azucarera Nacional SA (‘The Playa Larga’) [1983] 2 Lloyd’s Rep 171, 189 (Ackner LJ); Jill Poole,

Textbook on Contract Law (Oxford University Press, 11th

ed, 2012) 298.

8

stated a delivery time in pre-contractual negotiations; and (iii) time is of the essence in

commercial contracts.

i. The Charterparty contains a term for delivery within a reasonable time

17. Clause 1 of the Charterparty provides that the Vessel must proceed to the discharge port

with ‘reasonable speed’.38

‘Reasonable speed’ means that the voyage must be

completed within a reasonable time.39

Therefore the parties have agreed that the Cargo

must be delivered within a reasonable time.

ii. The Respondent stated a delivery time in pre-contractual negotiations

18. Identifying the commercial purpose of a contract is a matter of construction.40

To

assess whether the commercial purpose has been frustrated, a tribunal will focus on the

purpose of the party alleging frustration.41

A tribunal may have regard to pre-

contractual negotiations when assessing the commercial purpose of a contract.42

19. On 1 July 2014, the Respondent contacted the Claimant requesting a vessel to carry the

Cargo from Hades to Poseidon.43

The Respondent stated that the discharge time would

be 30 October 2014 +/- 3 days.44

Therefore, time for delivery was important.


39 M’Andrew v Adams (1834) 131 ER 1028, 1031 (Tindal CJ); Fyffes Group Ltd v Reefer Express Lines Pty Ltd

(‘The Kriti Rex’) [1996] 2 Lloyd’s Rep 171, 191 (Moore-Bick J); President of India v Hariana Overseas Corp

(‘The Takafa’) [1990] 1 Lloyd’s Rep 536, 539 (Hirst J). 40

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 351 (Mason J); Mount Bruce

Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1006-7 [108] (Kiefel and Keane JJ); Eighty-

Second Agenda Pty Ltd v Handberg [2015] FCA 1136 (26 October 2015) [40] (Middleton J). 41

See In Marriage of Cawthorn (1998) 144 FLR 255 (Ellis, Lindenmayer and Joske JJ); Brisbane City Council v

Group Projects Pty Ltd (1979) 145 CLR 143 (Gibbs, Stephen, Mason, Murphy and Wilson JJ). 42

Australia and New Zealand and Banking Group Ltd v Manasseh [2015] WASC 34 (2 February 2015) [158]

(McKechnie J); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 998 [48] (French

CJ, Nettle and Gordon J); Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 352

(Mason J). 43

Moot Problem, 2. 44

Ibid.

9

iii. Time is of the essence in commercial contracts

20. A condition is a term that goes to the root of the contract.45

A term goes to the root of a

contract if a party would not have entered the contract unless they were assured of strict

compliance with the term.46

Time stipulations in commercial contracts are presumed to

be conditions.47

21. On 1 July 2014, the Respondent contacted the Claimant requesting a vessel to carry the

Cargo from Hades to Poseidon.48

The Respondent said that it needed the Cargo to

facilitate commissioning of its LNG plant.49

The LNG plant was expected to be ready

for commissioning on 15 September 2014.50

The Respondent requested that the Cargo

be discharged in Poseidon on 30 October 2014.51

Clause 1 of the Charterparty provides

that the Vessel was to proceed with all reasonable speed to deliver the Cargo to

Poseidon.52

The Respondent argues that it would not have entered into the Charterparty

if the Cargo could not be delivered within a reasonable time. Therefore, delivery of the

Cargo to Poseidon within a reasonable time was a condition. This condition was the

commercial purpose of the Charterparty.

45 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 431 (Stephen, Mason and Jacobs JJ);

Shevill v Builders Licensing Board (1982) 149 CLR 620, 636 (Wilson J); Austman Pty Ltd v Mount Gibson

Mining Ltd [2012] WASC 202 (21 June 2012) [546] (Kenneth Martim J); Douglas v Cicirello [2006] WASCA

226 (8 August 2006) [13] (Steytler P). 46

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 431 (Stephen, Mason and Jacobs JJ);

Shevill v Builders Licensing Board (1982) 149 CLR 620, 636 (Wilson J); Stoker v Picken 209 FCR 132, 141-2

[41] (Dowsett J); Douglas v Cicirello [2006] WASCA 226 (8 August 2006) [13] (Steytler P). 47

Petrotrade Inc v Stinnes Handel GmbH [1995] 1 Lloyd’s Rep 142, 144 (Colman J); A/s Awilco of Oslo v Fulvia

SpA di Navigazione of Cagliari (‘The Chikuma’) [1981] 1 WLR 314, 321-2 (Lord Bridge); Bunge Corp New York

v Tradax Export SA Panama [1981] 1 WLR 711, 725 (Lord Roskill). 48

Moot Problem, 2. 49

Ibid. 50

Ibid. 51

Ibid. 52

The Charterparty, cl 1, 30.

10

The Cargo could not be transported from Hades to Poseidon within a reasonable b.

time

22. A contract is frustrated when performance is rendered radically different from what the

parties contemplated.53

If the commercial purpose of the contract cannot be achieved

then performance has been rendered radically different.54

23. However, frustration can be decided before performance becomes radically different55

if a reasonable businessperson would consider the event likely to render performance

radically different.56

A contract can still be frustrated even if the event does not

actually render performance radically different.57

24. To determine what constitutes a reasonable time for delivery, a tribunal must consider

the type of event that caused delay and any estimated time for delivery.58

25. The export of HLNG from Hades was very controversial in Hades.59

The Vessel’s

arrival at the Port of Hades was met with violent protests against the export of the

Cargo.60

Jacqueline Simmons, then the Leader of the Opposition, declared that her

party would not rest until they had stopped the export of HLNG from Hades.61

On 6

53 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 357 (Mason J); Brisbane City

Council v Group Projects Pty Ltd (1979) 145 CLR 143, 160 (Stephen J); Qantas Airways Ltd v Christie (1998)

193 CLR 280, 394 (Gaudron J); Tongue v Council of the City of Tamworth [2004] FCA 209 (23 March 2004) [61]

(Jacobson J); City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146, 164 [67] (Ipp J). 54

Brisbane City Council v Group Projects Ltd (1979) 145 CLR 143, 158 (Stephen J); Scanlan’s New Neon Ltd v

Toooheys (1943) 67 CLR 169, 176 (Latham CJ, McTiernan and Williams JJ); In Marriage of Cawthorn (1998)

144 FLR 255, 262 (Ellis, Lindenmayer and Joske JJ). 55

Scanlan's New Neon Ltd v Tooheys (1943) 67 CLR 169, 184 (Latham CJ); Ringstad v Golling and Co Pty Ltd

(1924) 35 CLR 303, 316 (Isaacs J); National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, 706 (Lord

Simon). 56


(1924) 35 CLR 303, 316 (Isaacs J); National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, 706 (Lord

Simon). 57


(1924) 35 CLR 303, 316 (Isaacs J); Embiricos v Sydney-Reid and Co [1914] 3 KB 45, 54 (Scrutton J); Otrava Pty

Ltd v Mail Boxes Etc (Australia) Pty Ltd [2004] NSWSC 1066 (10 December 2004) [92] (Nicholas J). 58

Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239 [15] (Auld, Dyson and Maurice Kay LJJ); Astea

(UK) Ltd v Time Group Ltd [2003] EWHC (TCC) 725 [144] (Richard Seymour J). 59


Ibid, 52. 61

Ibid, 52.

11

October 2014, Jacqueline Simmons seized control of the Hades Parliament.62

The coup

was precipitated by the protests and public opposition to the export of the Cargo.63

Jacqueline Simmons’ first act as President was to ban the export of the Cargo.64

On 7

October 2014, the Vessel was intercepted by the Hades Coast Guard and ordered to

return to port.65

On 15 October 2014, the Claimant informed the Respondent that there

was no indication of when the Vessel would be allowed to leave Hades.66

26. On 30 April 2015, the Respondent told the Claimant that it believed the Charterparty

had been frustrated.67

By this time, the Vessel had been delayed for 208 days. The

voyage had been anticipated to take 30 days +/- 3 days.68

The Vessel was not released

until 5 October 2015, after the Simmons Government resigned.69

The Respondent

argues that, as of 30 April 2015, a reasonable businessperson would believe that the

Cargo could not be delivered within a reasonable time and therefore the Charterparty

was frustrated on that day.

B. The delay was unforeseen by the parties

27. The fact that a supervening event was foreseen will not exclude the doctrine of

frustration.70

However, if the parties foresaw a risk and provided for it in the contract,

then their rights will be determined by the express terms of the contract.71

62 Ibid, 55.

63 Ibid, 26, 52, 55.

64 Ibid, 55.

65 Ibid, 56-7.

66 Ibid, 60.

67 Ibid, 65.

68 Ibid, 2, 65.

69 Ibid, 2, 67.

70 Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226, 229 (Lord Denning); Adelfamar

SA v Silos E Mangini Martini SpA (‘The Adelfa’) [1988] 2 Lloyd’s Rep 466, 471 (Evans J); Exploration (Libya)

Ltd v Hunt [1979] 1 WLR 783, 830 (Richard Seymour J); Clifford G. Hall, ‘Frustration and the question of

foresight’ (1984) Legal Studies 4(3), 300, 304. 71

Ange v First East Auction Holdings Pty Ltd (2011) 284 ALR 638, 652 (Hargrave J); Thors v Weekes (1989) 92

ALR 131, 142 (Gummow J); Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (‘The Playa

Larga’) [1983] 2 Lloyd’s Rep 171, 188 (Ackner LJ).

12

28. The Respondent argues that the delay was not foreseen by the parties because: (a)

Clause 10 of the Charterparty does not foresee an indefinite delay; and (b) the FM

clause does not foresee government intervention.

Clause 10 of the Charterparty does not foresee an indefinite delay a.

29. To determine whether the parties foresaw a risk, a tribunal must examine the terms of

the contract.72

However, the inclusion of a term providing for an event does not mean

the event is foreseen.73

The contract must specifically identify the event,74

the full

extent of its consequences75

and the parties’ position if the event occurs.76

30. Clause 10 of the Charterparty is a demurrage clause.77

It contemplates that the Vessel

may experience delays during loading.78

This is a broad clause. It did not specifically

provide for delay caused by government intervention or for indefinite delay.79

Therefore, Clause 10 is not evidence that the parties foresaw the frustrating event and

its consequences.

72 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 357 (Mason J), 376 (Aickin

J), 408 (Brennan J); Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143, 160 (Stephen J);

Gelling v Crespin (1917) 23 CLR 443, 454 (Isaacs J). 73

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 351 (Mason J); Mount Bruce

Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1006-7 [108] (Kiefel and Keane JJ); Eighty-

Second Agenda Pty Ltd v Handberg [2015] FCA 1136 (26 October 2015) [40] (Middleton J); Scanlan’s New Neon

Ltd v Tooheys (1943) 67 CLR 169, 183-4 (Latham CJ). 74

Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (‘The Sea Angel’)

[2007] EWCA Civ 547 [127] (Rix LJ); Select Commodities Ltd v Valdo SA (‘The Florida’) [2006] 1 Lloyd’s Rep

1, 4 [6] (Tomlinson J); Denny, Mott and Dickson Ltd v James B Fraser and Co Ltd [1944] AC 265, 284 (Lord

Wright). 75

Chapman v Hearse (1961) 106 CLR 112, 122 (Dixon CJ, Kitto, Taylor, Menzies and Windeyer JJ); March v

Stramare (1991) 171 CLR 506, 510 (Mason CJ); Strong Wise Limited v Esso Australia Resources Pty Ltd (2010)

185 FCR 149, 170 [71] (Rares J); Lyle v Soc (2009) 38 WAR 418, 425-6 [33] (Steytler P). 76

Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (‘The Sea Angel’)

[2007] EWCA Civ 547 [127] (Rix LJ); Bank Line Ltd v Arthur Capel and Co [1919] AC 435, 455 (Lord Sumner);

Select Commodities Ltd v Valdo SA (‘The Florida’) [2006] 1 Lloyd’s Rep 1, 4 [6] (Tomlinson J). 77

The Charterparty, cl 30, 45-6. 78

Ibid. 79

Ibid, cl 10, 36.

13

The FM clause does not foresee government intervention b.

31. A FM clause is an exemption clause.80

Exemption clauses exempt a party from liability

where specific events provided for in the clause occur.81

Exemption clauses should be

interpreted strictly.82

The words of a clause are read in light of the clause as a whole.83

32. Clause 19 of the Charterparty is a FM clause.84

It provides that neither party would be

liable if one of the listed FM events occurred.85

The Vessel was detained due to

government intervention.86

This was the FM event. Clause 19 did not list government

intervention as a FM event.

33. There only two FM events which may be relevant. These are riots87

and hindrances in

loading or shipping.88

The protests occurred at the port on 3 October 2014.89

Loading

continued despite the protests.90

Therefore the protests themselves did not affect the

performance of the Charterparty and cannot constitute a FM event.

34. Clause 19(c) contemplates hindrances to loading or shipping.91

This clause deals with

delays to transport like difficulty securing transport facilities, fuel shortages and

hindrances to mining and processing.92

It does not contemplate events similar to

government intervention. The Respondent argues that hindrances to loading or

80 G H Treitel, Frustration and Force Majeure (Sweet and Maxwell, 2

nd ed, 2004) 456.

81 Davis v Pearce Parking Station Pty Ltd (1954) 91 CLR 642, 649 (Dixon CJ, McTiernan, Webb, Fullager, Kitto

JJ); Sydney City Council v West (1965) 114 CLR 481, 493 (Kitto J). 82

Tozer Kemsley and Millbourn (A’asia) Pty Ltd v Collier’s Interstate Transport Services Ltd (1956) 94 CLR

384, 394 (Dixon CJ); Sydney City Council v West (1965) 114 CLR 481, 491 (Kitto J); TNT (Melbourne) Pty Ltd v

May (1970) ALR 751, 760 (Windeyer J); Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Aust) Pty

Ltd (1978) 139 CLR 231, 239 (Barwick CJ). 83

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500, 510 (Mason, Wilson, Brennan, Deane

and Dawson JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1006-7 [108]

(Kiefel and Keane JJ). 84


Ibid, 41. 86


The Charterparty, cl 19(d), 42. 88

Ibid, cl 19(c), 42. 89


Ibid, 53-4. 91

The Charterparty, cl 19(c), 42 92

Ibid.

14

shipping must be read in light of the rest of the clause. Therefore Clause 19(c) is not

broad enough to encompass government intervention.

35. The Respondent argues that government intervention was not expressly provided for in

the FM clause and is not encompassed by riots or hindrances. Therefore, the frustrating

event was not foreseen by the FM clause.

C. The delay was unforeseeable

36. A tribunal may draw the inference that the parties have assumed the risk if they fail to

provide for a foreseeable event. 93

This inference can only be drawn if the frustrating

event was more than reasonably foreseeable.94

An event will be more than reasonably

foreseeable if a reasonable person in the position of the parties could have foreseen the

full extent of the event95

and considered it a real or serious possibility.96

37. The Charterparty was signed on 22 July 2014.97

The only indication of unrest was an

article published by The Hades Advocate on 20 July 2014 stating that environmental

protesters were planning protests over the commissioning of the Respondent’s HLNG

plant.98

The Vessel was ultimately delayed because of intervention by the Simmons

Government.99

The Simmons Government seized power in a military coup on 6

October 2014.100

Therefore, a reasonable person in the position of the parties on 22

93 Bank Line Ltd v Arthur Capel and Co [1919] AC 435, 462 (Lord Sumner); Paal Wilson and Co A/S v

Partenreederei Hannah Blumenthal [1983] 1 AC 854, 909 (Lord Diplock); Simmons Ltd v Hay [1964] 1 NSWR

416, 420 (Sugarman, Wallace and Asprey JJ); Lindsay-Owen v Associated Dairies Pty Ltd [2000] NSWSC 1095

(10 November 2000) [17] (Hamilton J). 94

Treitel, above n 80, 456; J W Carter, E Peden and G J Tolhurt, Contract Law in Australia (LexisNexis

Butterworths, 5th

ed, 2007) 771-2;. See Simmons Ltd v Hay [1964] 1 NSWR 416 (Sugarman, Wallace and Asprey

JJ). 95

Chapman v Hearse (1961) 106 CLR 112, 122 (Dixon CJ, Kitto, Taylor, Menzies and Windeyer JJ); March v

Stramare (1991) 171 CLR 506, 510 (Mason CJ); Cattanach v Melchior (2003) 215 CLR 1, 33 [71] (McHugh and

Gummow JJ); Strong Wise Limited v Esso Australia Resources Pty Ltd (2010) 185 FCR 149, 170 [71] (Rares J);

Lyle v Soc (2009) 38 WAR 418, 425-6 [33] (Steytler P). 96

Treitel, above n 80, 456; Carter, Peden and Tolhurt, above n 94, 771-2; Lindy Willmot, Sharon Christensen,

Des Butler and Bill Dixon, Contract Law, (Oxford University Press, 4th

ed, 2013) 778. 97


Ibid, 26. 99

Ibid, 55-7. 100

Moot Problem, 3, 55.

15

July 2014 would not have foreseen the risk of government intervention and the

resulting delay.

THE VESSEL LEFT THE LOADING PLACE PRIOR TO THE EXPIRY OF LAYTIME II.

38. Laytime is the period allocated for loading.101

A charterer must ensure loading is

completed before laytime expires.102

Demurrage accrues if a charterer fails to load the

vessel before laytime expires.103

A Statement of Facts (SOF) is issued to signify that

loading has completed and the vessel has sailed from the berth.104

39. Clause 9 of the Charterparty provides that laytime finishes when the Vessel leaves the

Loading Place.105

The SOF was issued on 7 October 2014.106

It stated that ‘loading

[was] completed’ on 6 October 2014107

and the Vessel sailed from Hades on 7 October

2014.108

Laytime expired on 13 October 2014.109

The Respondent argues that the SOF

is proof that the Vessel had loaded and sailed from Hades before laytime expired.

Therefore demurrage did not accrue.

THE VESSEL’S RETURN TO PORT WAS AN UNJUSTIFIABLE DEVIATION III.

40. A shipowner must not deviate.110

Deviation is a departure from the agreed route that a

vessel is to follow from the loading port to the discharge port.111

If a shipowner

deviates without justification, then they are not entitled to rely on a clause that benefits

101 Reid v Hoskins (1855) 119 ER 365, 365 (Lord Campbell CJ); Harris v Best, Ryley and Co (1892) 68 LT 76, 77

(Lord Esher MR); Argonaut Navigation Co Ltd v Ministry of Food (‘The SS Argobec’) [1949] 1 KB 572, 580

(Bucknill LJ). 102

Reid v Hoskins (1855) 119 ER 365, 365 (Lord Campbell CJ); Argonaut Navigation Co Ltd v Ministry of Food

(‘The SS Argobec’) [1949] 1 KB 572, 580 (Bucknill LJ). 103

Lockhart v Falk (1875) LR 10 Ex 132, 135 (Cleasby B). See Navico AG v Vrontados Naftiki Etairia PE [1968]

1 Lloyd’s Rep 379 (Donaldson J). 104

High Seas Venture Ltd Partnership v Sinom (Hong Kong) Ltd (‘The Newforest’) [2008] 1 Lloyd’s Rep 504,

507 (Mackie HHJ); Freedom Maritime Corporation v International Bulk Carriers SA and Another (‘The Khian

Captain’) [1985] 2 Lloyd’s Rep 212, 214 (Saville J). 105

The Charterparty, cl 9(c)(i), 34. 106


Ibid, 54. 108

Ibid, 57. 109

The Charterparty, cl 9(c)(i), 34. 110

Kopitoff v Wilson (1876) 1 QBD 377, 380 (Field J); Davis v Garrett (1830) 6 Bing 716, 722 (Tindal CJ);

Joseph Thorley Limited v Orchis Steamship Company Limited [1907] 1 KB 660, 668 (Collins MR). 111

Achille Lauro Fu Gioacchino and C v Total Societa Italiana Per Azioni [1968] 2 Lloyd’s Rep 247, 251

(Donaldson J); Davis v Garrett (1830) 6 Bing 716, 722 (Tindal CJ).

16

them.112

A demurrage clause compensates the shipowner for any delay during

loading.113

41. The Vessel was chartered to sail from Hades to Poseidon.114

The Vessel sailed from

Hades on 7 October 2014.115

The Vessel was intercepted en route to Poseidon and

returned to Hades on the same day.116

The Vessel did not proceed directly to Poseidon.

The Vessel was delayed in Hades for 358 days.117

This delay was caused by the

Claimant’s unjustified deviation. Therefore the Claimant is not entitled to claim

demurrage after the Vessel deviated on 7 October 2014.

ALTERNATIVELY, IF THE TRIBUNAL FINDS THAT THE RESPONDENT IS LIABLE TO IV.

PAY DEMURRAGE, THE RESPONDENT CAN RELY ON THE FM CLAUSE

42. The Respondent argues that the FM clause exempts it from paying demurrage because:

(A) there was a FM event; (B) the FM event meets the common law requirements; and

(C) the Respondent met the requirements of the FM clause.

A. There was a FM event

43. Words in a FM clause are assigned their natural and ordinary meaning.118

A FM clause

relieves liability when a specified event occurs.119

An event that is not expressly

provided for can be covered by a catch-all phrase.120

Catch-all phrases should be

construed to include events of the same kind or nature as the events expressly provided

112 US Shipping Board v Bunge y Born (1924) 18 Ll L Rep 422, 423 (Bailhache J); Reardon Smith Line Ltd v

Black Sea and Baltic General Insurance Co Ltd [1939] AC 562, 575 (Lord Wright). 113

See Electrosteel Castings Ltd v Scan-Trans Shipping and Chartering Sdn Bhd [2003] 1 Lloyd’s Rep 190

(Gross J); Jason Chuah, Law of International Trade: Cross-Border Commercial Transactions (Sweet and

Maxwell, 5th

ed, 2013) 320. 114

The Charterparty, box 5, 9. 115


Ibid, 58. 117

Ibid, 70. 118

Insight Vacations Pty Ltd v Young [2011] HCA 16 (11 May 2011) [38] (French CJ, Gummow, Hayne, Keifel

and Bell JJ); Coastal (Bermuda) Petroleum Ltd v VTT Vulcan Petroleum SA (No 2) (‘The Marine Star’) [1994] 2

Lloyd's Rep 629, 631 (Mance J). 119

Sydney Corporation v West (1965) 114 CLR 481, 483 [9] (Kitto J); Plainmar Ltd v Waters Trading Co Ltd

(1945) 72 CLR 304, 315 (Rich, Dixon and McTiernan JJ). 120

Thorman v Dowgate Steamship Co Ltd (1909) 1 KB 410, 420 (Hamilton J). See The Council of the City of

Gold Coast v Thi Hoa Dam [2015] (22 October 2015) QPEC 51 (Dean P. Morzone DJ).

17

for in the clause.121

The events must share a common characteristic to be covered by a

catch-all phrase.122

44. Clause 19 of the Charterparty is a FM clause.123

It states that ‘neither party is liable for

any...delay in performing its obligations…by reasons of any FM event.’124

Clause

19(d) states that FM events include ‘war…hostilities…intervention of…custom

authorities…or other similar cause.’

45. On 7 October 2014, the Vessel was intercepted by the Hades Coast Guard and ordered

to return to port. This was a direct result of an order issued by the Hades Government.

The Vessel was delayed for 358 days.125

46. The Respondent argues that the phrase ‘or other similar cause’ in Clause 19(d) is a

catch all phrase. This should be interpreted to include other events with common

characteristics. The Respondent argues that the common characteristic in Clause 19(d)

is supervening political disturbances. The Vessel was detained due to government

intervention after the Simmons Government took power in a military coup.126

This was

a supervening political disturbance and falls within the scope of Clause 19(d).

B. The FM event meets the common law requirements

47. A FM event must meet four common law requirements.127

The FM event must be

unforeseeable, irresistible, outside the control of the party seeking to invoke FM, and

render performance of the contract impossible.128

121 Thorman v Dowgate Steamship Co Ltd (1909) 1 KB 410, 420 (Hamilton J). See The Council of the City of

Gold Coast v Thi Hoa Dam [2015] (22 October 2015) QPEC 51 (Dean P and Morzone DJ); Cody v J H Nelson

Pty Ltd (1947) 74 CLR 629 (Latham CJ, Rich, Starke, Dixon and McTiernan JJ). 122

SS Magnhild (Owners of) v McIntyre Brothers and Co [1921] 25 KB 97, 105 (Warrington LJ). 123




Ibid, 55. 127

Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd [2006] FCA 1324 (11 October 2006) [61]

(Kiefel J). 128


(Kiefel J); Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, 328 (Gibson LJ).

18

48. A FM event is unforeseeable if a reasonable person in the position of the parties would

not have contemplated the occurrence of the event.129

A FM event will be irresistible

and outside the control of the parties if it was unavoidable130

and no reasonable steps

could have been taken to prevent the FM event occurring.131

Performance is rendered

impossible when it is legally unworkable.132

The FM event may be temporary as long

as it prevents the delivery of cargo.133

49. On 7 October 2014, the Hades Government, led by President Simmons, ordered the

Vessel be returned to port.134

President Simmons had seized power overnight in a

military coup.135

There was no indication that the previous government of Hades

opposed the export of the Cargo. The Respondent could not prevent the Hades

Government from ordering the Vessel to return. After returning to Hades, the Vessel

was delayed for 358 days making it impossible to deliver the Cargo to Poseidon during

that period. Therefore the FM event satisfies the common law requirements.

C. The Respondent met the requirements of the FM clause

50. A party can only rely on a FM clause if they have complied with the requirements set

out in the clause.136

Clause 19(d)(i) provides that the affected party must provide

prompt notice of the occurrence of a FM event and take reasonable steps to minimise

the delay caused.137

The Respondent argues that it met the requirements of Clause

129 Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd [2006] FCA 1324 (11 October 2006) [61]

(Kiefel J); Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, 328 (Gibson LJ). 130


(Kiefel J); Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, 328 (Gibson LJ). 131

AGL Sales (Qld) Pty Ltd v Dawson Sales Pty Ltd [2009] QSC 8 (9 February 2009) [30] (McMurdo J). 132


(Kiefel J); Scottish Navigation Co Ltd v WA Souter and Co [1917] 1 KB 222, 237-8 (Swinfen Eady LJ); G Treitel,

Frustration and Force Majeure (Sweet and Maxwell, London, 1994) 257 [6-021]. 133

Treitel, above n 132, 436 [12-020]. See Samuel Sunday and Co v Cox, McEuen and Co (1922) 10 LI L Rep

459. 134


Ibid. 136

See Caltex Oil v Howard Smith Industries Pty Ltd [1973] 2 NSWLR 89 (Moffitt AP, Hardie JA, Reynolds JA);

Scottish Navigation Co Ltd v WA Souter and Co [1917] 1 KB 222 (Swinfen Eady, Bankes LJ, Lawrence J). 137

The Charterparty, cl 19(d)(i), 41.

19

19(d)(i) because: (a) notice was not required; and (b) no reasonable steps could have

been taken to minimise the delay.

a. Notice was not required

51. Clause 19(d)(i) provides that the affected party must provide prompt written notice of

the occurrence of a FM event. A FM clause is an exemption clause. The obligation to

give notice in order to rely on an exemption clause does not apply where the other party

knew of the event giving rise to the exemption.138

52. In The Mozart,139

the charterer was required to give notice of events that caused delays

to loading in order to exempt their liability for demurrage.140

The charterer failed to

give notice of a machinery breakdown.141

The Court held that there was no

requirement to give notice because the shipowner was aware of the breakdown.142

Notice served no purpose because the shipowner already had all the information that

would have been contained in the notice.143

53. On 7 October 2014, the Hades Government banned the export of HLNG.144

The Hades

Coast Guard intercepted the Vessel on the same day and ordered it to return to berth.145

On 8 October 2014, the Claimant emailed the Master asking for the ship’s location and

status.146

The Master replied the same day, advising that the Vessel had been

intercepted by the Hades Coast Guard and required to return to berth.147

The Master

said that the Vessel was required to comply because it was carrying the Hades flag.148

138 The Mozart [1985] 1 Lloyd’s Rep 239, 243 (Mustill J).

139 Ibid, 243.

140 Ibid, 243.

141 Ibid, 243.

142 Ibid, 243.

143 Ibid, 243.


145 Ibid, 55.

146 Ibid, 58.

147 Ibid, 58.

148 Ibid, 58.

20

Therefore the Claimant was aware that the FM event had occurred. There was nothing

the Respondent could have added to the Claimant’s knowledge of the event and

surrounding circumstances.

b. No reasonable steps could be taken to minimise the delay

54. Parties must take reasonable steps to minimise the consequence of a FM event.149

Reasonable steps include a duty to take actions150

to mitigate the effects of the FM

event.151

55. On 4 October 2014, the Leader of the Hades Opposition Party, Jacqueline Simmons,

declared that her party would not rest until they had stopped the export of HLNG from

Hades.152

On 6 October 2014, Simmons seized control of the Hades Parliament in a

military coup.153

This was caused by the protest and public opposition to the export of

the Cargo.154

Simmons’ first act as president was to instruct the Hades Coast Guard to

intercept the Vessel and return it to port.155

The Respondent argues that it could not

have prevented the Hades Government from ordering the Vessel to return to port. The

Respondent could not have secured the Vessel’s release with the Cargo while the Hades

Government was determined to prevent the export of the Cargo. The Vessel was

ultimately released after the Simmons Government resigned. Therefore, there were no

reasonable steps that the Respondent could have taken to minimise the delay.

149 British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd

[1912] AC 673, 689 (Viscount Haldane). 150


(Kiefel J). 151

Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, 327 (Parker LJ). 152




Moot Problem, 55.

21

PART THREE: SALVAGE

56. Salvage is awarded where a party saves property.156

The owner of the saved property

pays the reward.157

The Respondent argues that it is entitled to a salvage award

because: (I) the Vessel is a recognised subject of salvage; (II) the services rendered

were successful; (III) the Vessel was in danger; and (IV) the Respondent falls within

the classification of a salvor. Further, the Respondent is not disentitled to a salvage

award because: (V) the Respondent does not have a proprietary interest in the Vessel;

and (VI) the Claimant was in possession and control of the Vessel.

THE VESSEL IS A RECOGNISED SUBJECT OF SALVAGE I.

57. The salved vessel must be a recognised subject of salvage.158

A recognised subject of

salvage must be capable of navigation.159

58. The Vessel is a registered, ocean-going ship, built to navigate the sea under its own

power.160

Therefore the Vessel is a recognised subject of salvage.

THE SERVICES RENDERED WERE SUCCESSFUL II.

59. The salvage services provided must produce a successful result.161

A successful result

removes or greatly reduces the danger to a vessel.162

60. The Vessel’s propeller shafts broke after it was disconnected from the Respondent’s

tugs.163

The Vessel started drifting.164

The Respondent’s tugs reconnected the towlines

156 The Five Steel Barges (1890) 15 PD 142, 146 (The President); The Industry (1835) 3 Hagg 203, 204 (Sir John

Nicholl); The Zephyrus (1842) 1 W Rob 329, 320 (Dr Lushington); International Convention on Salvage 1989;

Navigation Act 2012 (Cth) div 2 reg 241. 157

International Convention on Salvage 1989 art 13.2. 158

International Convention on Salvage 1989 art 2. 159

International Convention on Salvage 1989 art 1. See Wells v The Gas Float Whitton No 2 (The Owners) [1897]

AC 337 (Lord Morris, Lord Macnaghten, Herschell, Watson); Perks v Clark [2001] 2 Lloyd’s Rep 431

(Longmore LJ); The Key Singapore [2005] 1 Lloyd’s Rep 91 (Robert Walker LJ, Longmore LJ, Carnwath J). 160


International Convention on Salvage 1989 (Salvage Convention) art 13; The Tojo Maru [1972] AC 242, 292

(Lord Diplock); The Cheerful (1855) 11 PD 3, 5 (Butt J). 162

The Phantom (1866) LR 1 A and E 58, 60 (Dr Lushington); Phelan v Minges (1959) AMC 975, 977 (Francis

JW and Ford DJ). 163


Ibid.

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and stopped the Vessel from drifting. The Vessel was then towed back to Hades.165

Therefore the Respondent successfully saved the Vessel.

THE VESSEL WAS IN DANGER III.

61. Danger is required for salvage to be awarded.166

A vessel is in danger if it is likely to

suffer loss or damage.167

Danger does not have to be immediate or likely.168

Danger

can be a remote risk.169

The Respondent argues the Vessel was in danger because: (A)

there was a reasonable fear of danger. In any event: (B) the Vessel was in danger once

it became immobilised.

A. There was a reasonable fear of danger

62. A master and crew do not need to have actual knowledge of the specific danger.170

It is

sufficient that a reasonable person in the position of the crew would have apprehended

the danger.171

63. The broken propeller shafts caused the Vessel to drift.172

With broken propellers, a

vessel cannot control its heading or propulsion. A vessel that has no control may run

aground or collide with another vessel. The Respondent argues that a seafarer would

recognise that a vessel without control over its heading or propulsion is in danger.

Therefore there was a reasonable fear of danger.

165 Ibid.

166 International Convention on Salvage 1989 art 1(a). See Owners of the Hamtun v Owners of the St John [1999]

1 Lloyd’s Rep 883 (Peter Gross DP); The Owners and/or Demise Charterers of the Tug ‘Sea Tractor’, Her

Master, Officers and Crew (Claimants) v The Owners of the Ship ‘Tramp’ (Defendants) [2007] 2 Lloyd’s Rep 363

(David Steel J). 167

The Charlotte (1848) 166 ER 888, 889 (Dr Lushington). 168

The Queen Elizabeth (1949) 82 Ll L Rep 803, 807 (Willmer J); The Phantom [1866] LR 1 A and E 58, 60 (Dr

Lushington); The Troilus and The Glenogle [1951] AC 820, 830 (Lord Potter). 169

The Queen Elizabeth (1949) 82 Ll L Rep 803, 820 (Dr Lushington); The Phantom (1866) LR 1 A and E 58, 60

(Dr Lushington); Sobonis v Steam Tanker National Defender (1969) 298 F Supp 631, 645 (Pollack DJ). 170

The Hamtun and The St John [1999] 1 Lloyd’s Rep 883, 889 (J P Gross QC). 171

W R Kennedy, ‘Law of Salvage’ (5th

ed, 1985) [303]. See generally The Hamtun and The St John [1991] 1

Lloyd’s Rep 883 (Peter Gross DP); The Ella Constance (1864) 33 LJ Adm 189. 172

Moot Problem, 71.

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B. In any event, the Vessel was automatically in danger once it was immobilised

64. An immobilised vessel poses a risk of loss or damage.173

A vessel is in danger as soon

as it is immobilised.174

65. The Vessel lost propulsive power and was immobilised.175

Therefore, it was in danger.

THE RESPONDENT FALLS WITHIN THE CLASSIFICATION OF A SALVOR IV.

66. A salvor must render salvage services voluntarily.176

Salvage will be voluntary if it is

performed without a pre-existing agreement or a statutory obligation.177

67. The parties agreed that the Respondent would tow the Vessel out to open waters.178

This was the extent of their agreement. The Vessel’s propeller shafts broke after this

towage was completed and the towlines were disconnected.179

Therefore the

Respondent did not have a contractual obligation to come to the aid of the Vessel.

There is no evidence that the Respondent had a statutory obligation to come to the aid

of the Vessel. Despite this, the Respondent towed the Vessel back to the Port of Hades.

This assistance was voluntary.

173 The Queen Elizabeth (1949) 82 Ll L Rep 803, 820 (Willmer J); W R Kennedy, ‘Law of Salvage’ (5

th ed, 1985)

[685]. 174

The Troilus and The Glenogle [1951] AC 820, 830 (Lord Potter); The Owners of the Vessel ‘Voutakos’, her

Bunkers, Stores and Cargo v Tsaliris Salvage (International) [2008] 2 Ll L Rep 516, 518 (Steel J); The Brillante

Virtuoso [2015] EWHC 42 (Comm) [296] (Flaux J). 175


The Cartela v The Inverness Shire (1916) 21 CLR 387, 404 (Issacs J); The Minnehaha (1861) 167 E R 149,

[335] (Lord Kingsdown). 177

International Convention on Salvage 1989 art 17; The Queen Elizabeth (1949) 82 Ll L Rep 803 820 (Dr

Lushington); Phelan v Minges (1959) AMC 975, 977 (Francis JW and Ford DJ); The Neptune (1824) 166 ER 81,

[231] (Lord Stowell). 178


Ibid.

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The Respondent does not have a propriety interest in the vessel V.

68. A salvage award is a right for anyone who saves property on the sea.180

An entitlement

in salvage is a right in rem.181

A cargo owner who salves a vessel and its cargo is not

barred from proceeding in rem against the shipowner for salvage.182

69. The Respondent is the owner of the Cargo and the salving tugs.183

The Claimant owns

the Vessel. The Respondent salved the Vessel and the Cargo.184

The Respondent is still

entitled to a salvage award from the Claimant for salving the Vessel.

THE CLAIMANT WAS IN POSSESSION AND CONTROL OF THE VESSEL VI.

70. A charterer can be entitled to a salvage award if it is not in possession or control of the

vessel.185

During the salvage operation, the owner of the vessel must remain in

possession or control of the vessel. 186

71. The Respondent was the charterer of the Vessel.187

The Vessel was en route to

Poseidon when its propeller shafts broke and the Respondent towed the Vessel back to

Hades.188

The Claimant had control over the navigation of the Vessel. Therefore at the

time salvage was provided the Claimant was in possession and control of the Vessel.

180 Five Steel Barges (1890) 15 PD 142, 146 (The President); The Waterloo 2 Dods 433, 435-63 (Sir W Scott);

Cargo ex Port Victor [1901] P 243, 256-8 (Lord Alverstone CJ). 181

Cargo Ex Schiller (1877) 2 PD 145, 149 (Brett LJ); The Zephyrus (1842) 1 W Rob 329, 330 (Dr Lushington);

The Caroline (1861) 167 ER 149 [334] (Dr Lushington). 182

The Sava Star [1995] Ll L Rep 134, 141 (Clarke J). 183


Ibid, 71. 185

The Collier (1865) LR 1 A and E 83, 85 (Dr Lushington); Page v Admiralty Commissioners [1921] 1 AC 137,

140 (Lord Birkenhead). 186

The Collier (1865) LR 1 A and E 83, 85 (Dr Lushington). 187

Moot Problem, 29-30. 188

Ibid, 71.

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PRAYER FOR RELIEF

For the reasons set out above, the Respondent requests this Tribunal to:

(I) DECLARE that this Tribunal does not have jurisdiction to hear the frustration dispute;

(II) DECLARE that this Tribunal cannot determine the demurrage dispute at this stage;

and

(III) DECLARE that the Respondent is eligible for a salvage award.

Alternatively:

(IV) FIND that the Charterparty has been frustrated;

(V) FIND that the Respondent is not liable to pay demurrage; and

(VI) DECLARE that the Respondent is entitled to a salvage award.

INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016 · international maritime law arbitration moot...

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