INTERNATIONAL MARITIME LAW ARBITRATION MOOT

30 June- 05 July 2019 Rotterdam

MEMORANDUM FOR CLAIMANT

University of Hamburg

Team No. 19

Theresa Bardenhewer; Christin Sörnsen; Eliane Wolf; Laura Meyer

I MEMORANDUM FOR CLAIMANT

TABLE OF CONTENTS

Table of Abbreviations……………………………………………………………………….II

Table of Authorities…………………………………………………………………………III

Relief Sought …………………………………………………………………………………1

Submissions…………………………………………………………………………………...2

Statement of Facts (para. 1 - 3)……………………...………………………………………..2

Submissions on Jurisdiction (para. 4. - 8.)……………………...…………………………....3

Submissions on the Merits of the Claim ……………………...…………………………….4

9. Underwater Cleaning……………………...………………………………………………...4

10. Late Re-delivery……………………...…………………………………………………....8

Submissions of the Merits of the Counterclaim…………...………………………………11

11. Statement of Facts…………...…………………………………………………….…...…11

12. Cargo Claim………………….…………….…………….…………….……………....…11

13. Off Hire…………….…………….…………….…………….……….…….…………….16

Arbitration Costs and Fees (para. 14. -15.)...………….…………….…………………..…18

II MEMORANDUM FOR CLAIMANT

TABLE OF ABBREVIATIONS

cl. clause

Comm Commercial Court

DLOSP 1SP Dropping Off Last Sea Pilot

ed. editor

et seq. et sequens (and the following one or ones)

EWHC High Court of England and Wales

ICA Inter Club Agreement

INC Incorporated

J. Justice

Lloyd’s Rep. Lloyd’s Law Report

LMAA London Maritime Arbitrators Association

LMLN Lloyd's Maritime Law Newsletter

Ltd. Limited

M.R. Master of the Rolls

M/V Motor Vessel

NYPE New York Produce Exchange

OMS Organización Mundial de la Salud

P. & I. Protection and Indemnity

para. paragraph

QC Queen's Counsel

III MEMORANDUM FOR CLAIMANT

sec. section

TCC Technology and Construction Court

UK United Kingdom

USD US Dollar

WHO World Health Organisation

WOG Without Guarantee

TABLE OF AUTHORITIES

Statutes and Treaties

para.

Arbitration

Act 1996

An Act to restate and improve the law relating to

arbitration pursuant to an arbitration agreement; to make

other provision relating to arbitration and arbitration

awards; and for connected purposes dated 17th June 1996

2.; 6.

The Hague

Rules

International Convention for the Unification of Certain

Rules of Law relating to Bills of Lading dated 25th

August 1924, Brussels

12.4.1.; 12.4.2;

12.4.4.; 12.4.5.

General Terms and Conditions

NYPE 2015 New York Produce Exchange Form 2015 3.; 9.1.; 10.1.;

10.2.;

10.3.;10.4.;

12.1.;13.1.

ICA 2011 The Inter-Club New York Produce Exchange Agreement

1996 as amended on 1 September 2011

12.1.; 12.2.;

12.3.; 12.4.;

12.4.4.;

12.4.5.;

12.4.6.; 12.4.7.

IV MEMORANDUM FOR CLAIMANT

ICA 1984 The Inter-Club New York Produce Exchange Agreement

1984

12.3.

ICA 1970 The Inter-Club New York Produce Exchange Agreement

1970

12.2.

Rules

LMAA Terms London Maritime Arbitrators Association Terms 2017

4.; 5.

Scholarly Works and Articles

Terence Coghlin/ Andrew W. Baker/ Julian Kenny, John D. Kimball/ Thomas H.

Belknap

Time Charters,

7th Edition, London 2014

(cited: Coghlin, Time

Charters, at …, (nr.))

9.1.; 9.2.;

10.2.; 10.3.;

10.4.; 12.4.4.

Steven J. Hazelwood/ David Semark P. &. I. Clubs Law and

Practice, 4th Edition,

London 2010

(cited: P. & I. Clubs — Law

and Practice, para…)

12.4.5.

Howard N. Bennett/ Robert Bright Carver on Charterparties,

London 2017

(cited: Carver on

Charterparties at…)

12.4.4.

D. Rhidian Thomas Legal issues relating to time

charterparties, London 2008

(cited: Legal issues relating

to time charterparties, at…)

12.4.4.

Lloyd's Maritime Law Newsletter London Arbitration 16/02

NYPE Inter-Club

Agreement - Whether claim

time-barred (Appeared in

issue: 600 - 14 November

2002)

12.3.

V MEMORANDUM FOR CLAIMANT

(cited: London Arbitration

16/02 (2002) 600 LMLN)

Gunter Rochow/ Agnes Czimbalmos/ Fidel

Arevalo/ Mary Cole/ Anand Dhavle/ Enid

Kaabunga/ David Lees/ Mart Leesti/ John

Miner/ Zakariaou Njoumemi/ Youssef

Ouadi/ Axel Rex/ Waldo Rochow/

Goberdhan Singh

Evaluacion completa de la

aplicacion de la Estrategia

mundial y plan de accion

sobre salud publica,

innovacion y propiedad

intelectual, Evaluation

institucional realizada a

peticion de la Oficina de

Evaluacion de la OMS,

20.12.2016:

(cited: Evaluacion completa

de la aplicacion de la

Estrategia mundial y plan

de accion sobre salud

publica, innovacion y

propiedad intelectual,

Evaluation institucional

realizada a peticion de la

Oficina de Evaluacion de la

OMS, 2016, at 35, 43, 52,

112

9.3.

ed. World Health Organization Review Report June 2017:

Independent review of the

implementation of the

WHO evaluation policy and

the framework for

strengthening evaluation

and organizational learning,

2016, p.32

(cited: Independent review

of the implementation of the

WHO evaluation policy and

the framework for

strengthening evaluation

and organizational

learning, WHO, 2016)

9.3.

VI MEMORANDUM FOR CLAIMANT

Judicial Decisions

Action Navigation Inc v Bottiglieri

Navigation SpA (The “Kitsa”) [2005] EWHC

177 (Comm)

Queen’s Bench

Division

9.5.

Ben Line Steamers Ltd v Pacific Steam

Navigation Co (The “Benlawers”) [1989] 2

Lloyd’s Rep. 51

Queen’s Bench

Division

12.4.4.

Donald Insall Associates Limited v Kew

Holdings Limited [2019] EWHC 384 (TCC)

High Court of Justice

Business and Property

Courts of England and

Wales (Queen’s Bench

Division)

8.

D/S A/S Idaho v Peninsular and Oriental

Steam Navigation Co (The “Strathnewton”)

[1983] 1 Lloyd’s Rep. 219

Court of Appeal 12.2.

IMT Shipping and Chartering GmbH v

Chansung Shipping Company Limited,

Owners of the “Zenovia” [2009] EWHC 739

(Comm)

Queen's Bench Division 10.3.

Imperator I Maritime Company v Bunge SA

Bunge SA v C Transport Panamax Ltd (The

“Coral Seas”) [2016] EWHC 1506 (Comm)

Queen’s Bench

Division

9.1.

Maestro Bulk Ltd v Cosco Bulk Carrier Co

Ltd [2014] EWHC 3978 (Comm)

Queen's Bench Division 10.3.

Medenta Finance Limited v Hitachi Capital

(UK) Plc [2019] EWHC 516 (Comm)

High Court of Justice

Business and Property

Courts of England and

Wales (Queen's Bench

Division)

8.

Skibsaktieselskapet Snefonn v Kawasaki

Kisen Kaisha Ltd (The “Berge Tasta”)

[1974] 1 Lloyd´s Rep. 422

Queen’s Bench

Division

10.2.

1 MEMORANDUM FOR CLAIMANT

IN THE MATTER OF THE ARBITRATION ACT 1996

AND IN THE MATTER OF AN ARBITRATION

B E T W E E N :

PANTHER SHIPPING INC

CLAIMANT/OWNER

- and -

OMEGA CHARTERING LIMITED

RESPONDENT/CHARTERER

M/V “Thanos Quest”

Charterparty dated 18 March 2016

MEMORANDUM FOR THE CLAIMANT

Represented by Thor & Loki Brothers

RELIEF SOUGHT

CLAIMANT requests the Tribunal to:

1. Declare that it has jurisdiction to hear CLAIMANT’s claim for damages caused by

RESPONDENT’s breach of contractual obligations and RESPONDENT’s defence of frustration;

2. Award CLAIMANT damages in the sum of USD15,426,567.42 or further or other relief as

the Tribunal considers meeting the justice of the case plus compound interest pursuant to

sec. 49 of the Arbitration Act 1996 in accordance with the decision of the Tribunal on this

2 MEMORANDUM FOR CLAIMANT

matter and award CLAIMANT further and other relief as the Tribunal considers meeting the

justice of the case;

3. Make the following findings: that the CLAIMANT may recover its costs associated with the

(1) underwater cleaning amounting to USD41,000.00 and (2) voyage to South Island in

order to perform underwater cleaning in the sum of USD55,567.42 and (3) damages for re-

delivery amounting to USD15,330,000.00 (loss of hire under the Next Fixture, calculated

as 4 years at USD10,500.00 per day);

4. Dismiss the RESPONDENT’s Defence and Counterclaim;

5. Impose all costs of Arbitration on the RESPONDENT.

SUBMISSIONS

STATEMENT OF FACTS

1. This dispute arises from a Charterparty dated 18 March 2016 (“the Charterparty”) according

to which Omega Chartering Ltd. (“Respondent” / “Charterer”) and Panther Shipping Inc.

(“Claimant” / “Owner”) agreed on a Time Charter of the M/V “Thanos Quest” (the

“Vessel”) at a daily hire rate of USD7,500.00 for about 50-55 days WOG.

2. Last port of discharge was DLOSP 1SP Wahanda; thus, the re-delivery should have taken

place in Wahanda range.

3. The Charterparty provides specific rules through Omega Chartering Rider Clauses and

incorporates the NYPE 2015 for matters not covered by specific clauses in the contract.

3 MEMORANDUM FOR CLAIMANT

SUBMISSIONS ON JURISDICTION

4. According to cl. 80 of the Charterparty, the law of the United Kingdom governs the

arbitration agreement. Further, the arbitration is to be held in London. As the parties agreed

in the Charterparty on the application of English law and the Tribunal to be located in

London, the LMAA Terms 2017 are applicable (Rule 6 of the LMAA Terms 2017).

5. The Arbitral Tribunal is to be constituted according to the Arbitration Agreement as

provided in cl. 80 of the Charterparty (Omega Chartering Rider Clauses). Accordingly, the

Tribunal consists of Ms. Mary Walker appointed by the Claimant and Captain Eric

Masterson appointed by the Respondent. The third arbitrator will be appointed by the two

Arbitrators before the first hearing according to Rule 8 of the LMAA Terms 2017 and cl.

80 of the Charterparty (Omega Chartering Rider Clauses). Alternatively, the parties are

willing to agree otherwise.

6. Further, sec. 30 of the Arbitration Act 1996 the Arbitral Tribunal may rule on its own

substantive jurisdiction.

7. If the Tribunal considers the claim to be substantially established, the Arbitration

Agreement grants the Arbitral Tribunal the competence to enter into final decisions on any

dispute arising between Owner and Charterer.

8. The Tribunal’s jurisdiction does not depend on prior negotiations between Claimant and

Respondent based on the Parol Evidence Rule exercised in common law.1

1Medenta Finance Limited v Hitachi Capital (UK) Plc [2019] EWHC 516 (Comm) at 8 (J Lord Hofmeyr QC);

Donald Insall Associates Limited v Kew Holdings Limited [2019] EWHC 384 (TCC) at 7 (J Lord O´Farrell).

4 MEMORANDUM FOR CLAIMANT

SUBMISSIONS ON THE MERITS OF THE CLAIM

9. The Respondent is liable for the full costs of the Underwater Cleaning.

9.1. Referring to cl. 4 (a) of the NYPE 2015 the Claimant is aware that ordinary wear and tear

of the Vessel is at its own risk. The parties contractually agreed on the re-delivery of the

Vessel in good order and condition except ordinary wear and tear of the ship. However, hull

fouling is not included in ordinary wear and tear.2 Adoption of a specific clause which

divides the responsibility for underwater cleaning between the parties in case of hull fouling

clearly shows the understanding and intention of the parties on this point. This issue is

specifically regulated in cl. 83 of the Charterparty (Omega Chartering Rider Clauses).

9.2. The Respondent was in breach of its obligation to perform underwater cleaning according

to cl. 83 of the Charterparty (Omega Chartering Rider Clauses). According to the terms of

the Charterparty the place of re-delivery of the Vessel is the Wahanda Range. Hence, in

case of hull fouling it was possible to easily arrange the cleaning at the re-delivery port to

be accordingly chosen in the Wahanda Range. The Respondent was obliged to perform

underwater cleaning prior to re-delivery if necessary, according to cl. 83 (d) of the

Charterparty (Omega Chartering Rider Clauses). The Vessel was severely fouled during her

extended stay at Wahanda port due to a detention by the Port Authorities because of which

she lay idle for almost a month. The Respondent was informed by the Wahanda Port

Services on the extraordinarily dirty water at Wahanda port. Due to this fact, it was

impossible to carry out underwater cleaning. According to the Charterparty, it is Charterer’s

duty to make sure that the cleaning is possible at the port where the Charterer plans to re-

deliver the Vessel. In their e-mail of 25 May 2016 to the Respondent, the Wahanda Port

services pointed out that they recommend cleaning at another port. This does not contradict

2Imperator I Maritime Co v Bunge SA (The “Coral Seas”) [2016] EWHC 1506 (Comm) at 6 (J Lord Phillips);

Coghlin, Time Charters at 271, 15.19.

5 MEMORANDUM FOR CLAIMANT

the contractual framework as the re-delivery was possible at any port in Wahanda Range.

For this reason, underwater cleaning and re-delivery should have been arranged at another

port in Wahanda Range. Since the Respondent failed to satisfy its contractual obligation the

Claimant was forced to undertake the cleaning arrangements. Due to time pressure for

honouring the following Time Charter the Claimant had no other choice than to make sure

that it could fulfil its duty to deliver the Vessel in a state of reasonable performance to the

next Charterer.3 Therefore, the Claimant organized the cleaning at South Island which

evidently is another port in Wahanda Range. According to cl. 83 (c) of the Charterparty

(Omega Chartering Rider Clauses) underwater cleaning is at Charterers risk and expense;

therefore, the Respondent is required to pay the cleaning costs as already claimed in the

sum of USD41,000.00.

9.3. The Respondent is liable for problems arising from virus infections. This is set out in cl.

122 of the Charterparty (Omega Chartering Rider Clauses). The detention of the Vessel at

the outer anchorage of Wahanda Port was based on a possible threat of infected crew

members by the Ebola Virus. The Ebola Virus, like the ZIKA Virus,4 is a highly contagious

disease. These health emergencies are particularly dreaded on board a Vessel because all

workers are in a confined space. This increases the viral infection rate among seafarers. In

cases of such infections the whole Vessel is affected as a matter of fact, because the

treatment and handling of infections on a ship are not available as they are on shore, where

only the infected persons can be treated in a hospital. If there is a possible threat of a virus

outbreak on board the whole Vessel must be put in quarantine. This is why M/V “Thanos

Quest” was detained by the Wahanda Port Authority. Therefore, cl. 122 of the Charterparty

3 Coghlin, Time Charters at 74, 3.72 and 242, 11.21. 4 Evaluacion completa de la aplicacion de la Estrategia mundial y plan de accion sobre salud publica, innovacion

y propiedad intelectual, Evaluation institucional realizada a peticion de la Oficina de Evaluacion de la OMS, 2016,

at 35, 43, 52, 112; Independent review of the implementation of the WHO evaluation policy and the framework for

strengthening evaluation and organizational learning, WHO, 2016, at 32.

6 MEMORANDUM FOR CLAIMANT

(Omega Chartering Rider Clauses) is applicable in this case. Accordingly, the Charterer had

to take all relevant measures. As a matter of fact, the Ebola outbreak occurred at the delivery

port in West Coast, Challaland. Since the Respondent agreed to this delivery port it is

unconditionally liable for all consequences arising from the virus outbreak. Even if the

Claimant could be liable for the detention period, cl. 122 of the Charterparty (Omega

Chartering Rider Clauses) shifts the responsibility in consequence of a virus outbreak upon

the Respondent. Hull fouling is to be considered a consequence of the virus outbreak within

the meaning of cl. 122 of the Charter Party (Omega Chartering Rider Clauses). As such, the

Respondent was under a duty to take measures to resolve this matter.

9.4. Pursuant to cl. 83 (d) of the Charterparty (Omega Chartering Rider Clauses) the Claimant

was not obliged to accept any lump sum payment. Under this clause, unless the Respondent

is prevented from carrying out underwater cleaning, the parties can agree on a lump sum

payment prior to but at the latest on re-delivery. This proposition as a final settlement was

not possible, because the Respondent was not prevented from fulfilling its cleaning duty.

However, to the Claimant’s regret the Respondent tried to escape from its obligation to pay

the full costs arising from the underwater cleaning process by offering a lump sum payment

in advance several times. Moreover, the Claimant was not able to agree on a lump sum

payment since the extent of the hull fouling had not been ascertained by an inspection. The

report by Captain Rodgers which was forwarded to the Charterer on 26 June 2016 on the

severe hull fouling is not an official inspection by a professional surveyor. Although the

Respondent increased the amount of the offered lump sum payment with each further e-

mail, the costs had still not been fully covered. The Charterer started with a presumptuous

offer of USD15,000.00 which covered half of the average costs of underwater cleaning

procedures. The last offer of USD30,000.00 almost corresponds to the average costs of an

underwater cleaning operation. The additional costs of agency fees in the amount of

7 MEMORANDUM FOR CLAIMANT

USD11,000.00 are common costs relating to such operations. The Respondent has to reckon

with the foreseeable expenses. Hence, the Respondent is obliged to pay the Claimant’s

incurred expenses. The Respondent had already assured the Claimant on 9 June 2016 to pay

the costs against the original invoice if the Owner arranged the underwater cleaning.

Moreover, the Respondent was not prevented from carrying out the underwater cleaning

only until the Claimant agreed, in an e-mail dated 18 June 2016, to the re-delivery of the

Vessel in a dirty condition. In this e-mail, the Claimant reserved its “rights in due course

with their claim for costs/ time/ expenses for the vessels’ cleaning”. In its e-mail of 27 June

2016, the Respondent proposed that the underwater cleaning could be arranged at North

Titan Port. Since this offer was made after the Claimant had already agreed to the re-

delivery of the Vessel without prior underwater cleaning, the Claimant did not consider the

cleaning option at North Titan Port. At this point, as stated in its e-mail of 18 June 2016,

the Claimant had already arranged the underwater cleaning at South Island all rights

reserved. Thus, the repeated lump sum offers by the Respondent were irrelevant.

9.5. Furthermore, cl. 83 (d) of the Charterparty (Omega Chartering Rider Clauses) also states

that the Charterer is fully responsible to make all arrangements to undertake the underwater

cleaning. Consequently, the Respondent is required to cover all costs “arising as a result of

or in connection with the need for cleaning”5 – meaning also the costs of performing the

operation, including the costs for the voyage to any port where the cleaning can be

undertaken. As long as the Vessel is under the Charterer’s commercial control all costs for

carrying out the underwater cleaning process including voyage costs, especially trivial

bunker costs, are at the Charterer’s expense.6 It is clear that the Vessel was under Charterer’s

order until the de-fouling process was completed at South Island. Even if the Charterer had

5 Cl. 83 (d) Charterparty (Omega Chartering Rider Clauses). 6 Action Navigation Inc v Bottiglieri di Navigatione SpA (The “Kitsa”) [2005] EWHC 177 (Comm) at 4 et seq. (J

Lord Aikens).

8 MEMORANDUM FOR CLAIMANT

fulfilled its obligation to perform underwater cleaning at another port it would have been

obliged to cover all these expenses either way. As already mentioned, the Respondent left

the Claimant no choice but to organize the underwater cleaning on its terms. Thus, the

Claimant requires from the Respondent the sum of USD24,574.20 for the voyage from

Wahanda Port to South Island, where the cleaning was performed.

10. The Respondent is liable for all losses caused by the late re-delivery of the Vessel.

10.1. Although the Claimant has accepted the re-delivery on 30 June 2016 the acceptance of the

re-delivery does not, according to cl. 4 (c) of the NYPE 2015, “prejudice its rights against

the Charterers under th[e] Charter Party”.

10.2. The Respondent is liable for the late re-delivery according to the Charterparty. The Parties

contractually specified the duration. The Respondent did not adhere to this time period. Cl.

4 of the NYPE 2015 stipulates the conditions of the re-delivery of a Vessel under a Time

Charter. The Vessel must be re-delivered at the end of the agreed duration in the

Charterparty.7 In the present case the duration of the Charterparty was 50-55 days. On

scheduled development of events regarding the Charterparty the latest date of re-delivery

would have been 23 May 2016. The Claimant does not hold the Respondent to this date

anymore because of the detention of the Vessel by the Port Authority from 11 May 2016

until 8 June 2016 at Wahanda Port. With the detention period exempted from the calculation

the Respondent should have re-delivered the Vessel on 20 June 2016 to secure timely re-

delivery. The discharge of the cargo was not completed until the afternoon of 30 June 2016.

The Owner can accept re-delivery of the Vessel only if the cargo is completely discharged.8

For this reason, the Claimant was not able to accept the re-delivery before 30 June 2016.

Even if 20 June 2016 is taken as the newly estimated re-delivery date due to the

7 Coghlin, Time Charters at 9, I.37 8 Skibsaktieselskapet Snefonn v Kawasaki Kisen Kaisha Ltd (The “Berge Tasta”) [1974] 1 Lloyd´s Rep. 422 at

424 (J Lord Donaldson); Coghlin, Time Charters at 9, I.37

9 MEMORANDUM FOR CLAIMANT

governmental detention, the re-delivery of the Vessel was delayed nine days. Hence, the

Respondent is in clear breach of its contractual obligation for timely re-delivery.

10.3. Moreover, the Respondent did not fulfil its obligation to send to the Claimant a re-delivery

notice. Cl. 4 (b) of the NYPE 2015 presumes that the Respondent should have notified the

Claimant on the estimated re-delivery date prior to the arrival at the re-delivery port or place

in Wahanda Range. The re-delivery notice fulfils this requirement. If the re-delivery notice

is delayed it can have a detrimental impact upon the Owner’s following contracts.9 As soon

as the discharge process has started the Respondent should have notified the Claimant about

the expected time of re-delivery. The only notification given by the Respondent to re-deliver

the Vessel was the “1-Day Redelivery-Notice”10 in the e-mail of 29 June 2016. Furthermore,

the Claimant received an e-mail on 8 June 2016 regarding the discharge process lasting at

least until approximately 12 June 2016. Relying upon this statement the Claimant was

allowed to estimate the re-delivery of the Vessel around that date.11 The Claimant had a

follow-on fixture with Champion Chartering Corp. which was closed on 15 June 2016.

However, the Vessel was actually returned on 30 June 2016. Due to this late re-delivery the

Claimant suffered the cancellation of the Charterparty with Champion Chartering Corp with

a daily charter rate of USD10,500.00 for a duration of at least two years and in Champion

Chartering’s option up to four years. With this Charterparty the Claimant would have been

able to earn USD15,330,000.00. However, due to the late re-delivery of the Vessel by the

Respondent, the LAYCAN deadline between 22-28 June 2016 was missed. Hence, the

Claimant was forced to agree to another Charterparty with Fairwind International on less

favourable terms. Although the daily hire in the amount of USD11,000.00 is higher than the

9 IMT Shipping and Chartering GmbH v Chansung Shipping Company Limited, Owners of the “Zenovia” [2009]

EWHC 739 (Comm) at 7 (J Lord Tomlinson); Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2014] EWHC 3978

(Comm) at 5 et seq. (J Lord Cooke). 10 Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2014] EWHC 3978 (Comm) at 7 (J Lord Cooke). 11 Coghlin, Time Charters at 9, I.37.

10 MEMORANDUM FOR CLAIMANT

previous one, the Charterparty with Fairwind International was agreed only for a duration

of 50-55 days. As a matter of fact, this is a clear detriment for the Claimant as it had lost a

reliable source of income for at least the next two years.

10.4. Further, the Claimant is sure that the delay in the re-delivery of the Vessel is also caused by

the prolonged discharge process. The Claimant is aware of the Master’s responsibility to

supervise all operations on the ship including cargo operations. However, there is a

difference between the ordinary responsibility to supervise the process and the legal

responsibility for the duration of the cargo operations and their legal implications.12

Master’s liability is only initiated if he had provoked a specific failure during cargo

operations. There is no evidence that the Master failed his duty to supervise which might

have caused the delay. The Claimant denies any negligent behaviour of the Master. The

Respondent is not in the position to blame the Claimant for the prolonged discharge process

caused by the Respondent as stated above. In any case the behaviour of the Master during

the cargo operations is not the reason for the extended discharge of the cargo and the

consequential late re-delivery. In addition, the Respondent is not “prevented having

primary responsibility under NYPE 2015 for discharge”.13 Since there is no specific

agreement regarding the distribution of liability and considering all circumstances and facts

of the present case, the Respondent remains liable for the matters relating to and any delay

caused by the discharge operations.

10.5. Finally, the Claimant demands the sum of USD15,330,000.00 for loss of profit.

12 Coghlin, Time Charters at 356, 20.13. 13 Coghlin, Time Charters at 359, 20.23.

11 MEMORANDUM FOR CLAIMANT

SUBMISSIONS ON THE MERITS OF THE COUNTERCLAIM

11. Statement of Facts

11.1. On 27 June 2016 the Owner received an e-mail from the Charterer notifying them of the

cargo damage for the first time. Since discharging operations were not completed by then,

the Charterer could not give further information on the extent of the damage.

11.2. On 29 June 2016 the Charterer sent another e-mail stating that there was a joint survey

taking place on board. Furthermore, their Receivers informed them that the cargo was likely

to be severely damaged due to a ballasting error and that it was not yet clear if the cargo

would be reconditioned or be sold in damaged condition.

11.3. On 07 July 2016 the Charterer sent an e-mail attaching a preliminary damage report of their

surveyors dated 30 June 2016. The e-mail also stated that the Charterer would revert once

the details of the cargo claim against them became clear and that the e-mail to be treated as

formal notice of claim against the Owner.

12. The Cargo Claim is not for Claimant’s account.

12.1. According to cl. 27 of the NYPE 2015, cargo claims between the Owner and the Charterer

should be settled according to the Inter-Club NYPE Agreement 1996 as amended on 1

September 2011 (ICA). The Respondent relies for its counterclaim arising from the cargo

damage on cl. 8 (a) of the ICA.

12.2. There is no evidence provided by the Respondent that the cargo claim between the

Respondent and the Receivers of the cargo has been properly settled or compromised and

paid as required by cl. 4 (c) of the ICA for the application of the apportionment under the

Agreement. In The Strathnewton14 the Court of Appeal handled a cargo claim between the

14 D/S A/S Idaho v Peninsular and Oriental Steam Navigation Co (The “Strathnewton”) [1983] 1 Lloyd’s Rep.

219.

12 MEMORANDUM FOR CLAIMANT

shipowners and time charterers. The 1970 version of the Inter-Club Agreement was

applicable to the Charterparty. In that case the court refers to cl. 1 (i) of the ICA 1970 which

also requires a properly settled or compromised claim. Hence, as Justice Kerr stated,

charterers ‘shall have “properly settled or compromised” the claims of the bill of lading

holders’15 before they can claim it from the Owners. As a result, pursuant to cl. 4 (c) of the

ICA the cargo claim of the Receivers should have been properly settled or compromised

and paid before it can be apportioned under the ICA. On the basis of the given facts it is

inferred that the Receivers’ claim has neither been settled nor been compromised (let alone

paid); therefore, the Respondent cannot claim the cargo damage under cl. 8 (a) of the ICA.

12.3. Furthermore, the cargo claim is time-barred since the Respondent failed to give a written

notification according to cl. 6 of the ICA. Pursuant to this provision the notification must

be given within 24 months of the date of delivery of the cargo or the date the cargo should

have been delivered. According to the preliminary survey report of 30 June 2016 the

Receivers agreed to take delivery of the damaged cargo. Although far more than two years

have passed since the discharge of the cargo the Respondent failed to give a written

notification which complies with the terms of cl. 6 of the ICA. As stated in an article in

Lloyd’s Maritime Law Newsletter 200216 reporting on a similar case where the 1984 version

of the Inter-Club Agreement was applicable, the charterers sought to recover a paid cargo

claim from the shipowners referring to the ICA 1984. They sent a message to the shipowners

stating “Please receive this message as our first notice of damage and be advised we hold

you responsible […]”. The Arbitral Tribunal discussed whether the claim was time-barred

pursuant to cl. (1)(iv) of the ICA 1984 (which is the equivalent of cl. 6 of the ICA 2011)

and held that the message from the charterers did not satisfy the requirements of a written

15 D/S A/S Idaho v Peninsular and Oriental Steam Navigation Co (The “Strathnewton”) [1983] 1 Lloyd’s Rep.

219 at (224). 16 London Arbitration 16/02 (2002) 600 LMLN.

13 MEMORANDUM FOR CLAIMANT

notification pursuant to cl. (1)(iv) of the ICA 1984. It “simply advised as to certain

conditions found”. Furthermore, the Tribunal held that “[t]he point of notice requirements

such as clause (1)(iv) was, essentially, that the recipient of the notice had to be able to

investigate the potential claim and prepared himself to deal with it”. The e-mail dated 07

July 2016 from the Respondent declaring the message to be treated as a formal notice of

claim cannot be considered as a written notice in the context of cl. 6 of the ICA either. It

did not include any details of the contract of carriage, the nature of the claim and the amount

claimed as required by cl. 6 of the ICA. It is admitted that it was not possible for the

Respondent to include the amount of the cargo damage at that time but it indeed could have

included the details of the contract of carriage. Furthermore, in its e-mail of 23 August 2017,

the Respondent indicates that it was aware of the approximate amount of the cargo claim

by that time. In its email of 23 November 2017, the Respondent also stated that detailed

discussions were held with the Receivers in relation to the quantum of the claim as well as

to other issues with regard to the contract of carriage. The Respondent could have informed

the Claimant on these points within the requisite period of 24 months under cl. 6 of the ICA.

Since the Respondent did not provide such information the Claimant was not able to conduct

its own investigation of the potential claim in order to deal with it. Despite the possibility

of a written notification including detailed information on the extent of the cargo claim

within 24 months, the Claimant has been provided detailed information for the first time

during the course of reference from 15 March 2019. Cl. 6 of the ICA requires the details in

question to be included if possible. The above-mentioned facts prove that the Respondent

clearly had the possibility, but nevertheless chose not to inform the Claimant accordingly.

Thus, recovery by the Respondent is deemed to be waived and absolutely time-barred

pursuant to cl. 6 of the ICA.

14 MEMORANDUM FOR CLAIMANT

12.4. The Cargo Claim does not fall within the scope of cl. 8 (a) of the ICA, since the claim was

not caused by unseaworthiness and/or error or fault in the navigation or management of the

Vessel.

12.4.1. For the following it is important to mention that the International Convention for the

Unification of Certain Rules of Law relating to Bills of Lading dated 25 August 1924

(“Hague Rules”) are applicable to the cargo claim between the Respondent and the cargo

Receivers.

12.4.2. According to cl. 2 of the Full Terms of the Carrier‘s Bill of Lading Form the Hague Rules

as enacted in the country of shipment should be applicable. In the present case, the country

of shipment is Challaland whose laws closely resemble the laws of the United States

according to the Procedural Order No. 2. Since the Hague Rules are in force in the United

States the same applies to Challaland.

12.4.3. M/V “Thanos Quest” was not unseaworthy.

12.4.4. First, the term “unseaworthiness” must be considered in the context of the ICA. In The

Benlawers,17 Justice Hobhouse upheld that “unseaworthiness” in the ICA must be used in

the broader sense of the underlying rules that are incorporated by the bill of lading. As a

consequence, if the Hague or Hague-Visby Rules are incorporated the term

unseaworthiness includes uncargoworthiness18 just as in Art. 3 § 1 of the Hague and Hague-

Visby Rules meaning that the Vessel must be fit to carry the contract cargo. The cause for

damage to the cargo (onions) in The Benlawers was that the Vessel was not fitted with a

ventilation system. In the present case, since the contract of carriage between the

Respondent and the cargo Receivers incorporates the Hague Rules, unseaworthiness also

17 Ben Line Steamers Ltd v Pacific Steam Navigation Co (The “Benlawers”) [1989] 2 Lloyd’s Rep. 51 at 60. 18 Carver on Charterparties, 5-265; Legal Issues relating to Time Charterparties at 244; Coghlin, Time Charters at

375, 20.78.

15 MEMORANDUM FOR CLAIMANT

includes uncargoworthiness. The Vessel M/V “Thanos Quest” indeed was fit to carry the

contract cargo. It was fitted with all necessary equipment to keep the cargo safe and

undamaged. There was no leak or the like that could have caused the damage. An error in

the ballasting by a crew member does not change the fact that the Vessel was seaworthy as

well as cargoworthy.

12.4.5. Furthermore, the damage was not caused by an error or fault in navigation or management

of the Vessel either. Even if there was a navigation or management error the Respondent

could not claim the cargo damage under the ICA. According to Art. 4 § 2 (a) of the Hague

Rules neither the carrier nor the ship should be liable for loss or damage arising or resulting

from the act, neglect, or default of the master, mariner, pilot, or the servants of the carrier

in the navigation or in the management of the ship. Concerning cl. (8)(a) of ICA, P. & I.

Clubs —Law and Practice states: ‘[S]ub-clause (a) made the apportionment applicable to

claims arising out of error or fault in the navigation or management of the vessel; for

example, collisions. This is designed to deal with claims under the Hamburg Rules. Under

the Hague and Hague-Visby Rules there is already an “error of navigation” exemption in

respect of loss or damage caused by collision and so the carrier will not be liable for such

claims where the contract of carriage is subject to those rules.’19 The Respondent is the

carrier pursuant to Art. 1 (a) of the Hague Rules and therefore not liable for loss or damage

arising from navigation or management errors caused by the crew. Hence, even if the cargo

claim arose from an error or fault in the navigation or management of the Vessel it should

have been dismissed pursuant to Art. 4 § 2 (a) of the Hague Rules. The Claimant cannot be

liable for such an unfounded claim.

19 P. & I. Clubs — Law and Practice, para 15.69.

16 MEMORANDUM FOR CLAIMANT

12.4.6. The Respondent cannot claim damages for breach of clauses 27 and 53 of the Charterparty

since there has been no breach by the Claimant. Clauses 27 and 53 of the Charterparty are

simply references to the application of the ICA and they therefore cannot be breached.

12.4.7. The cargo claim cannot alternatively be apportioned under cl. 8 (b) of the ICA. According

to cl. 8 (b), the cargo damage must have been caused by the loading, stowage, lashing,

discharge, storage or other handling of the cargo. In the present case, the loading, stowage

and lashing operations were finished before the cargo was damaged by the water ingress

into hold No.2 and therefore cannot be the cause. Additionally, the cargo damage did not

derive from the storage. The storage in principle satisfied the usual conditions. The tea was

stored in a hold of a Multi Purpose Dry Cargo Ship without any deficiencies. The

discharging operations are not relevant in any way to the cargo damage either. When

discharging operations started the cargo had already been damaged. Generally, the handling

of the cargo should be distinguished from other operations, in particular the handling of the

ballasting system of the vessel. A crew member opened the wrong valve which caused the

water ingress causing the cargo damage. The handling of the ballast system by the crew

member is clearly not the handling of the cargo.

12.5. For the above-mentioned reasons, the Claimant is not liable for the cargo damage.

13. The Respondent is not entitled to an indemnification due to Off-Hire.

13.1. The Vessel was not off-hire from 07 May 2016 until 26 June 2016 since the period in

question does not represent an off-hire event under cl. 17 of the NYPE 2015. In the present

case M/V “Thanos Quest” was detained due to a required quarantine by Wahanda Port State

Authority. In marked contrast to cl. 21(a)(iv) of the Shelltime 4, quarantine is not

specifically mentioned as an off-hire event in cl. 17 of the NYPE 2015. In fact, detention

by Port State control in pursuance of this clause merely represents an off-hire event if the

detention is caused by the deficiencies of the Vessel. The Vessel was detained because of a

17 MEMORANDUM FOR CLAIMANT

reasonable doubt that certain crew members might be suffering from the Ebola virus. Hence,

the detention was not the result of a deficiency of the Vessel and does not fall within the

scope of cl. 17 of the NYPE 2015.

13.2. An off-hire event does not arise from cl. 44 of the Charterparty (Omega Chartering Rider

Clauses) either. This clause stipulates that the Owners should be liable for any delay in

quarantine arising from the Master, Officers, or crew having communication with the shore

or any infected area without the written consent of the Charterers or their Agents. It was

agreed by the Charterparty that the Vessel would be delivered at West Coast which indeed

constitutes a written consent of the Respondent.

13.3. Cl. 122 of the Charterparty (Omega Chartering Rider Clauses) on the ZIKA Virus

Protection could be applied in analogy for the present case since Ebola is a highly

contagious virus as well. It provides for Charterers’ liability for calling the Vessel to a port

considered as an area of ZIKA virus infection. It also stipulates that the Vessel should

remain on hire throughout. The West Coast Daily Echo of 18 April 2016 published an article

concerning the outbreak of Ebola virus in the City of West Coast and outlying areas. They

expected restrictions on the movement of ships. In the present case, loading of the cargo

was completed on 20 April 2016. This was two days after the newspaper published the

article. Thus, the Respondent should have known about the Ebola outbreak at West Coast.

Since the Claimant delivered the Vessel already on 29 March 2016 they could not have

estimated the future circumstances. Thus, the detention at Wahanda anchorage was at

Respondent’s risk. Therefore, the period of quarantine cannot be deducted as off-hire.

18 MEMORANDUM FOR CLAIMANT

ARBITRATON COSTS AND FEES

14. The Claimant respectfully requests the Arbitral Tribunal to decide that all the costs as well

as legal fees related to this arbitration should be borne by the Respondent, since its breaches

of the Charterparty gave rise to this arbitration.

15. According to sec. 59 of the Arbitration Act 1996 the costs of the arbitration are to the

arbitrators’ fees and expenses, the fees and expenses of any arbitral institution concerned,

and the legal or other costs of the parties including the costs of or incidental to any

proceedings to determine the amount of the recoverable costs of the arbitration.

In light of the above, the CLAIMANT respectfully requests the Arbitral Tribunal to:

16. Award damages in the sum of USD15,426,567.42 at such rate and compounded at such

interests;

17. Dismiss the RESPONDENT’s Defence and Counterclaim;

18. Impose all costs of Arbitration on the RESPONDENT.

Served this 29th day of April 2019 by Thor & Loki Brothers of Deck House, Mooring

Lane, London EC3, Solicitors for the Claimant.