MEMORANDUM FOR CLAIMANT RESPONDENT TEAM AARYANA …€¦ · cleaning, the parties shall, prior to...

Team 34 Memorandum for the Claimant

20TH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

IN THE MATTER OF AN ARBITRATION UNDER THE ARBITRATION ACT, 1996

MEMORANDUM FOR CLAIMANT

CLAIMANT

PANTHER SHIPPING INC 80 BROAD STREET,MONROVIA

LIBERIA

V

RESPONDENT

OMEGA CHARTERING LTD 2/3 SW PASAR BORONG PANDAN

MALAYSIA

TEAM 34

COUNSEL

AARYANA ANAND |AKASH SINGHAL | DISHA SHAH | PRATEEK GUJJAR | SUBHAM

AGARWAL


1

TABLE OF CONTENTS

LIST OF ABBREVIATIONS ............................................................................................................ 3

INDEX OFAUTHORITIES……………………………………………………………………………5

STATEMENT OF FACTS ................................................................................................................. 7

STATEMENT OF ISSUES…………………………………………………………...………………10

SUMMARY OF ARGUMENTS…………………………………………………………….……….11

CHARTERPARTY CHAIN ............................................................................................................. 12

PRELIMINARY MATTERS ........................................................................................................... 13

SUBMISSIONS ON THE HULL CLEANING ISSUE ..................................................................... 14

I.THE CHARTERERS HAVE BREACHED THE CHARTERPARTY BY NOT PERFORMING HULL CLEANING PRIOR

TO REDELIVERY ................................................................................................................................ 14

A. The charterers failed to perform hull cleaning prior to

redelivery………………………………...14

B. The charterers cannot settle with lump sum costs ……………………………......……………….15

SUBMISSIONS ON REDELIVERY ISSUE .................................................................................... 18

II. THERE WAS A FAILURE TO RE-DELIVER THE VESSEL PRIOR TO THE EXPIRY OF THE MAXIMUM PERIOD

OF THE CHARTERPARTY. ................................................................................................................... 18

A. The vessel is to be considered on hire for the delay period .......................................................... 18

B. Quarantine does not fall within the ambit of “any other cause” as per Clause .............................. 19

SUBMISSIONS ON LOSS OF SUBSEQUENT FIXURE ............................................................... 21

III. The Respondent had an implied knowledge of the subsequent

fixture……………………………21


2

IV.The Respondent must be held liable for the loss of subsequent fixture ......................................... 22

SUBMISSIONS ON CARGO CLAIM ............................................................................................. 24

A. Charterers failed to give the written notification of the Cargo Claim required by clause 6 of the

ICA………………………………………………………………………………………………….24

B. The Cargo Claim fails to be apportioned under clause 8 (a). ........................................................ 25

SUBMISSIONS ON DAMAGES .................................................................................................... 27

PRAYER FOR RELIEF ................................................................................................................... 29

ANNEXURE A: MAP OF PORTS……………………………………………………………….......30


3

LIST OF ABBREVIATIONS

ABBREVIATION TERM

& And

% Percentage

BIMCO Baltic and International Maritime Council

BoL Bill of lading

c/p Charterparty

Charterers Omega Chartering Limited

CHOPT Charterparty Option

Chrtr Charter

CL. Clause

Claimant Panther Shipping Inc.

DLOSP Dropping last outward sea pilot

DLY Delivery

Ed. Edition

ETA Estimated time of arrival

EWHC England and Wales High Court

HC High Court

i.e. That is

Id. Ibid

LAYCAN Lay Days Cancelling

Lloyd’s Rep Lloyd’s Law Reports

Ltd. Limited

Moot Proposition International Maritime Law Arbitration Moot 2019 ‘Moot Proposition’

No. Number


4

NYPE 2015 New York Produce Exchange Charterparty 2015

Ors. Others

Owners Panther Shipping Inc.

PMT Per metric tone

Pvt. Private

REDEL Re-delivery

Respondent Omega Chartering Limited

TCP Time charterparty

USD US Dollar

v. Versus

VSL Vessel


6

INDEX OF AUTHORITIES

ARTICLES

1. Julien Rabeux, ‘Off-Hire in a nutshell’ (Westpandi.com, 2016)

<https://www.westpandi.com/globalassets/about-us/claims/claims-guides/west-of-england-defence-

guide---off-hire.pdf > accessed 28 April 2019

2. (Westpandi.com, 2019) <https://www.westpandi.com/globalassets/news/130716-bimco-hull-

fouling-clause-for-time-charter-parties.pdf> accessed 28 April 2019

BOOKS

1. CARVER, CARRIAGE OF GOODS BY SEA, 6 ED. 82;

2. COGHLIN ET AL TIME CHARTERS, INFORMA LAW,

7ED

3. COGHLIN ET AL TIME CHARTERS, INFORMA LAW,

6ED

4. D KIMBALL, ‘REDELIVERY UNDER TIME CHARTERS’ (HEALY & BAILLIE

LLP, 2001)

5. GARY BORN, INTERNATIONAL COMMERCIAL ARBITRATION (KLUWER LAW

INTERNATIONAL, 2ND EDITION, 2009)

6. HG BEALE, CHITTY ON CONTRACTS (COMMON LAW LIBRARY, 30TH EDN, SWEET

AND MAXWELL 2008)

7. MACLACHLAN, MERCHANT SHIPPING, 5 ED., 60

8. MCGREGOR ON DAMAGES, 18TH EDN (SWEET & MAXWELL, LONDON, 2011)

9. MIKA SAVOLA, ‘INTERIM MEASURES AND EMERGENCY ARBITRATOR

PROCEEDINGS’ (2016) 23

10. STEPHENS, CHARTERPARTIES, I45. I5 HARV. L. REV. 63; I8 IBID., 384.


7

CASES

1. Royal Greek Government v. Ministry of transport

2. Andre & Cie v. Orient Shipping Rotterdam BV (The “LACONIAN CONFIDENCE”)

3. Actis Co. Ltd. v The Sanko Steamship Co. Ltd. (The “AQUACHARM”)

4. Court Line Ltd. v. Dant & Russel Inc.

5. Parkin v. Thorold

6. Torvald Klaveness A/S v. Arni Maritime Corporation (The “GREGOS”)

7. Brown v. Dean.

LEGISLATION AND CONVENTION

1. International Arbitration Act,1996

2. The Hague Visby Rules, 1968

OTHER

1. Chartered Institute of Arbitrators, International Arbitration Practice Guideline: Applications

for Interim Measures (2016)

2. New York Produce Exchange Charterparty 2015

3. Lloyd’s Law Reports


7

STATEMENT OF FACTS

18 March – Charter Party between Omega Chartering (Charterers) and Panther Shipping

(Owners)

25-30 March – Laycan [50-55 days’ duration]

18 April - Ebola virus outbreak

20 April 2016 – Vessel sailed from West Coast to Wahanda

07 May 2016 – Charterers to owners - At the Anchorage for 2 days at least, by order of port

authorities due to fear of Ebola.

11 May 2016 –Charterers to Owners – Port authorities stated that a number of people high fever,

and therefore quarantined vessel for 28 days or more.

24 May 2016 – Charterers to Wahanda - Asked for cleaning details at Wahanda Port

25 May 2016 – Wahanda to Charterers – Not possible at Wahanda

08 June –Owners to Charterers – Vessel arrived on 7th may, not expected to complete discharge

before 12 June. (One month for quarantine)

08 June – Charterers to Owners – Underwater cleaning cannot be performed at Wahanda. Advise

us or accept 15k Lump sum

09 June – Owners to Charterers– No inspection hence no lump sum and cost of inspection also

varies. Owners to get it inspected/cleaned at next convenient port as per Clause 83 and revert with

quotations.

09 June – Charterers to Owners – Wahanda Port authorities do not allow hull fouling. So owners

can clean the hull and Charterers will pay for it.

CHAMPION CHARTERING – Time Charter – 2 Years [Wahanda to East Coast] (Laycan – 22

to 28 June)

18 June 2016 – From owners – Owners understand that Charterers will redeliver dirty and Owners

reserve right to revert back for costs.

22 June 2016 – Charterers to Titan – provide us quotations (North Titan Port)


8

23 June 2016 – Titan to Charterers –$33,000/- (cost differs port to port)

26 June 2016 –Owners to Charterers – The Vessel is heavily fouled; Vessel fixed for next voyage

(charterers are aware); Vessel can’t proceed without cleaning plus no cleaning in east coast port.

26 June 2016 - Vessel Cleared to berth after quarantine

27 June 2016 – Charterers to Owners – Not possible to arrange cleaning before redelivery. If

Owners are sailing north, then the Charterers will arrange for cleaning at North Titan Port (1/2 day

from Wahanda). In alternative, $20,000 lump sum settlement.

27 June 2016 - Charterers to Owners - Cargo Damage – During discharge found damage, appears

substantial.

27 June 2016 – Owners to Charterers – Acknowledged damage, notified P&I club for joint survey.

27 June 2016 - Owners to Champions Chartering - Delay in delivery is because of bad weather, so

please grant extension of laycan to 30th June

27 June 2016 – Champions to owners – Extension not granted

28.06.2016 - Champion Chartering to Owners - Cancelled Charterparty as per Clause 3.

28-29-30 - Preliminary survey of the cargo - Mekon Surveyors.

29 June 2016 - Charterers to Owners - Joint survey going on and joint inspection will happen after

cargo is fully discharged. One day redelivery notice is given.

29 June 2016 – Owners to Charterers - Inspection needs to happen as per Clause 83, but not

possible at Wahanda. Owners will get it cleaned at South Island subject to Charterers bearing costs.

30 June 2016 –Charterers to Owners - Already given redelivery notice, any further trip is non-

contractual. The Charterers claim to have been prevented cleaning, and are therefore entitled to make

lump sum payment. Offer $30,000/- as lump sum settlement.

30 June 2016 – Owners to Charterers – Vessel to be cleaned before re-delivery. Last opportunity to

respect contractual obligations

01 July 2016 - Arrived at South Island Ports

01 July 2016 to 03 July 2016 – Cleaning at South Island Port

04 July 2016 - Owners chartered the Vessel to Fairwind International (“Replacement Fixture”).


9

01 August 2016 - Final Hire Statement

23 May 2017 to 23 November 2017 – Charterers to Owners - Request for time extension to bring

Cargo Claim

16 October 2018 – Appointment of Mary Walker as Claimant’s arbitrator.

26 October 2018 – Appointment of Eric Masterson as Respondent’s arbitrator.


10

STATEMENT OF ISSUES

-I-

THE CHARTERERS HAVE BREACHED THE CHARTERPARTY BY NOT

PERFORMING HULL CLEANING PRIOR TO RE-DELIVERY.

-II-

THERE NO FAILURE TO RE-DELIVER THE VESSEL PRIOR TO THE EXPIRY OF

THE MAXIMUM PERIOD OF THE CHARTERPARTY.

-III-

THE OWNERS ARE NOT LIABLE FOR CLAIMS ARISING OUT OF CARGO DAMAGE

-IV-

QUANTUM OF DAMAGES AND INTEREST


11

SUMMARY OF ARGUMENTS

I. THE CHARTERERS HAVE BREACHED THE CHARTERPARTY BY NOT PERFORMING HULL CLEANING

PRIOR TO REDELIVERY

A. THANOS QUEST has not breached the charterparty for the following reasons: (A) The charterers

failed to perform hull cleaning prior to redelivery; (B) The charterers cannot settle with lump sum

costs

B. CHARTERERS WOULD NOT BE RELIEVED OF THEIR OBLIGATION TO PERFORM HULL CLEANING EVEN IF

OWNERS ACTED UNREASONABLY

II. THERE WAS A FAILURE TO RE-DELIVER THE VESSEL PRIOR TO THE EXPIRY OF THE MAXIMUM

PERIOD OF THE CHARTERPARTY.

The vessel is to be considered on hire for the delay period:

(i) Quarantine does not fall within the ambit of “any other cause” as per Clause 17

(ii) The full working of the vessel was not prevented due to the quarantine

III. LOSS OF SUBSEQUENT FIXTURE

(i) The Respondent had an implied knowledge of the subsequent fixture.

(ii) The Respondents must be held liable for the loss of the subsequent fixture

IV. OWNERS ARE NOT LIABLE FOR THE LOSS CAUSED BY CARGO DAMAGE

The owners are not to be held liable for the losses caused by cargo damages for the following

reasons; (A) Charterers failed to give the written notification of the Cargo Claim required by clause

6 of the ICA; (B) The Cargo Claim fails to be apportioned under clause 8 (a).


12

CHARTERPARTY CHAIN

This diagram depicts the contractual relationships between the parties for the purpose of the following

submissions.


13

PRELIMINARY MATTERS

A. The laws of London govern this arbitration 2 Pursuant to Cl 80 of the Time Charterparty, this arbitration is governed by the laws of London and

is to be conducted per the London Court of International Arbitration (3rd edition) (LCIA rules).

Therefore, the Arbitration Act, 1996 governs this arbitration.


14

SUBMISSIONS FOR HULL CLEANING ISSUE

I. THE CHARTERERS HAVE BREACHED THE CHARTERPARTY BY NOT PERFORMING HULL CLEANING

PRIOR TO REDELIVERY

THANOS QUEST has not breached the charterparty for the following reasons: (A) The charterers failed

to perform hull cleaning prior to redelivery; (B) The charterers cannot settle with lump sum costs

(A) The charterers failed to perform hull cleaning prior to redelivery

2. Clause 83 of the Charterparty (BIMCO Hull Fouling Clause 2013) states that cleaning shall always

be carried out prior to redelivery. If, nevertheless, charterers are prevented from carrying out such

cleaning, the parties shall, prior to but latest on redelivery, agree a lump sum payment in full and

final settlement of Owners’ costs and expenses arising as a result of or in connection with the need

for cleaning pursuant to this clause.1 Clause 83 imposes the liability of cleaning upon the

Charterers. It requires them to clean the Vessel before redelivery. The term ‘always’ should be

given its natural meaning – that is to say, ‘at all times’, which includes hull fouling even when

resulting from ‘ordinary normal wear and tear’. If prevented from cleaning, then to reach an

agreement with the Owners regarding the lump sum payment in full and final settlement of hull

cleaning costs.

3. In the present case, the vessel, Thanos Quest’s stayed at the port anchorage at Wahanda for more

than 30 days (07.05.2016 – 26.06.2016). Charterers stated that the underwater hull cleaning could

not be performed at Wahanda, and offered to pay Owners $15,000.00 as a lump sum in lieu of

cleaning. 2

4. Furthermore, Owners on 18.06.2016 sent email to Charterers reserving their right to claim against

charterers for losses incurred as a result of Vessel being redelivered without hull cleaning having

1 Refer to Moot Proposition, P.16, (BIMCO Hull Fouling Clause for Time Charter Parties) 2 Refer to Moot Proposition.


15

been performed and requested the Charterers to confirm the arrangement for cleaning the Vessel’s

hull in accordance with Clause 83 of the Charterparty. 3

5. The Charterers stated that joint inspection of the vessel is not possible at Wahanda.4 However, from

the evidence available, it was clear that the vessel had to be cleaned. No cleaning could take place

in East Coast Ports, and thus Charterers were asked to confirm their intention with regard to

cleaning.

6. On 27.06.2016, Charterers stated that they could arrange cleaning at North Titan Port if owners

were sailing north. Or, alternatively, Charterers offered to pay $20,000.00 in lieu of cleaning.

However, Owners had already communicated to the charterers on 26.06.2016 that they were

heading towards East Coast.

7. The Owners, on 29.06.2016, rejected the North Titan Port offer, calling upon the Charterers to

arrange for the Vessel’s hull to be cleaned at South Island following the completion of discharge at

Wahanda.5 However, the Charterers blatantly ignored the Owners’ requests and sought to redeliver

the Vessel through a one day redelivery notice dated 29.06.2016. They offered to pay $30,000.00 in

lieu of the cleaning costs. 6

8. The Owners protested against the attempted premature redelivery and called upon the Charterers to

arrange cleaning at the South Island Port, stating that the vessel remains on hire in the meantime.

Nonetheless, the Charterers redelivered the Vessel dirty on 30.06.2016, without reaching an

agreement regarding the lump sum cleaning costs. Thereafter, the Owners got the Vessel’s hull

cleaned at South Titan Port at a cost of $41,000.00. 7

3 Refer to Moot Proposition. 4 Refer to Moot Proposition. 5 Refer to Moot Proposition. 6 Refer to Moot Proposition. 7 Refer to Moot Proposition.


16

9. In the case at hand, the Charterers had the liability of cleaning the vessel’s bottom as per Clause 83

of the Charterparty. However, they redelivered the vessel without doing so. It is submitted that this

vitiates the first requirement of Clause 838 – to clean the vessel before redelivery.

(B) The charterers cannot settle with lump sum costs

(a) The charterers and the owners did not reach an agreement regarding the lump sum costs

before redelivery.

10. After the hull had been fouled, the Charterers were in no way prevented from getting the hull

cleaned. The offer by the Charterers to get the Vessel cleaned at North Titan Port was contingent

upon the owners’ acceptance. Even if the offer was accepted, it was further contingent upon the

Vessel travelling north.

11. After this offer was rejected, the Owners called upon the Charterers to get the Vessel cleaned, prior

to redelivery, following the completion of discharge at Wahanda. 9

12. For the Charterers to be prevented from cleaning the Vessel, as required under Clause 8310, they

must be left with no option to clean the vessel prior to the date of redelivery. However, in the

present case, the Charterers had the option of getting the vessel cleaned at South Island Port before

redelivery, and therefore cannot redeliver the Vessel dirty and cannot settle for lump sum costs.

13. It is further submitted that, after the completion of inspection (27.06.2016 – 29.06.2016), and

discharge (30.06.2016), the Owners provided the Charterers the opportunity to get the vessel

cleaned at South Island Port as the Laycan for the Next Fixture was 04.07.2016 - 06.07.2016.

11Therefore providing sufficient time for the Charterers to respect their liability as per Clause 83 of

the Charterparty. The Charterers failed to perform their obligations, and redelivered the vessel dirty,

in breach of Clause 83. Therefore, the Charterers were not prevented from getting the ship cleaned

prior to redelivery.

8 Refer to Moot Proposition. 9 Refer to Moot Proposition. 10 Refer to Moot Proposition. 11 Refer to Moot Proposition.


17

14. Clause 83 states “…the parties shall, prior to but latest on redelivery, agree a lump sum payment in

full and final settlement of Owners’ costs and expenses…”.12 This clause required the parties to

reach an agreement before the redelivery of the Vessel.

15. The spirit of Clause 83 favors the owners as it shifts the liability of cleaning from the owners to the

Charterers, differentiating it from common law. The intention behind the option of payment of lump

sum arises as a last resort, so that the Owners’ claims over the cleaning costs are secured post

redelivery.

16. On 30.06.2016, the Charterers enforced redelivery of the Vessel and offered to pay $30,000.00 in

full and final settlement of the cleaning costs, in strong protest from the Owners. The Owners did

not agree to the lump sum costs proposed to be paid by the Charterers. Thus, since no agreement

was reached, the Charterers cannot settle the claims with a lump sum payment.

(b) Charterers would not be relieved of their obligation to perform hull cleaning even if owners

acted unreasonably.

17. Clause 83 imposes the liability of cleaning upon the Charterers. It requires them to clean the Vessel

always before redelivery. The term ‘always’ should be given its natural meaning – that is to say, ‘at

all times’13.

18. The Charterers redelivered the Vessel without cleaning the hull. The Charterers are not relieved of

their obligation of cleaning the hull prior to redelivery, as an offer to clean the Hull at a different

port does not amount to actually cleaning the vessel, as required by Clause 83 of the Charterparty.

19. It is furthermore submitted that even if the Owners’ rejection of the claim is held to be

unreasonable, Clause 83 imposes a duty upon the Charterers to clean the vessel prior to redelivery,

and not to merely make an offer to do the same.

12 Refer to Moot Proposition, P.16, (BIMCO Hull Fouling Clause for Time Charter Parties) 13 (Westpandi.com, 2019) <https://www.westpandi.com/globalassets/news/130716-bimco-hull-fouling-clause-for-time-charter-parties.pdf> accessed 28 April 2019


18

20. The Charterers sought to reposition the Vessel to their own commercial advantage at the cost of the

owners by offering to pay for cleaning only if the Owners travelled north, and thereby avoid their

duty to clean the vessel under Clause 83 of the Charterparty.


19

SUBMISSIONS ON REDELIVERY ISSUE

II. THERE WAS A FAILURE TO RE-DELIVER THE VESSEL PRIOR TO THE EXPIRY OF THE MAXIMUM

PERIOD OF THE CHARTERPARTY.

There was a failure to redeliver the vessel prior to the expiry of the maximum period of the

charterparty as: (A) The vessel is to be considered on hire for the period of delay, (B) Quarantine

does not fall within the ambit of “any other cause” as per Clause 17

A. The vessel is to be considered on hire for the delay period

(a)The burden is on the charterers to show that they fall within off hire exemptions

21. The Vessel was delivered into the Charterparty on 29.03.2016 for a total time of 50 - 55 days.14

On 18.04.2016, a newspaper report was published that stated that there was a serious outbreak of

Ebola along the West Coast, which was where the Vessel was delivered into the Charterparty.15

The Vessel departed to Wahanda on 20.04.2016. It thereupon reached Wahanda on 07.05.2016,

but was unable to proceed immediately to berth, as the Vessel was put under Quarantine for fear

of spread of Ebola. 16

22. Later, on 20.06.2016, the Vessel was granted leave to enter Wahanda port. It finished discharge of

cargo and was redelivered on 30.06.2016. This was past the time limit of 50-55 days. However,

the vessel is considered to be on hire for the period of delay as well. 17

23. It is the submission of the Claimants that the Charterers do not fall within the exceptions to Clause

17, and are thus to be considered as on hire for the entire delay, until redelivery.

24. In order for an event to be considered as off hire, it must fall within the ambit of Cl. 17 of NYPE

14 Refer to Moot Proposition 15 Refer to Moot Proposition 16 Refer to Moot Proposition 17 Refer to Moot Proposition


20

2015, which stipulates: In the event of loss of time from deficiency and/or default and/or strike of

officers or ratings….or detention by Port State control or other competent authority for Vessel

deficiencies.... All bunkers used by the Vessel while off-hire shall be for the Owners’ account”

25. The general burden that has to be discharged to this effect is that it is the onus of the charterers to

show that the off hire clause operates in the relevant circumstances18 In Royal Greek government

v. Ministry of transport it was held “The cardinal rule in interpreting such a charter party is that

the charterer will pay hire for use of the ship unless he can bring himself within the exceptions. If

there is a doubt as to what this means, it must be construed in favor of the owners as the charterer

is attempting to cut down the downers right of hire”19

26. In the present case, the owners submit that the respondents have been unable to discharge this

burden of both of its fundamental elements, primarily that: (i) Quarantine does not fall within the

ambit of “any other cause” as per CL. 17; (ii) The full working of the vessel was not prevented as

a result of the quarantine.

(B) Quarantine does not fall within the ambit of “any other cause” as per Clause 17

27. The Vessel, upon reaching Wahanda, was Quarantined at the Anchorage due to the port state

authority’s determination.

28. It is seen that the phrase ‘any other cause’ is to be interpreted to mean ‘any other cause of the same

type as those previously mentioned’, showing an application of the ejusdem generis rule. Speaking

to the same, in the ‘Lanconian Conference’20 case it was held that the phrase ‘any other clause’ in

absence of the word ‘whatsoever’ should be interpreted in a limited manner, and that interference

by authorities unjustified by the condition (or reasonably suspected condition) is not covered by this

clause.

29. In the present case, quarantine cannot be interpreted to fall within the ambit of ‘any other cause’.

18 Terence Coghlin and others, Time Charters (5th edn, Informa Maritime & Transport 2003) 19 Royal Greek Government v. Ministry of transport (1949) 83 Ll.L. Rep.228 20 Andre & Cie v. Orient Shipping Rotterdam BV (The “LACONIAN CONFIDENCE”) [1997] 1 Ll.L.Rep.2


21

Clause 17 includes the following conditions to put a Vessel off hire – inherent vice, quality or

defect of the cargo, dry docking for the purpose of examination, cleaning and/or painting of

underwater parts and/or repair. By applying the rule of Ejusdem Generesis, it is observed that

Quarantine cannot be interpreted in consonance with the stated conditions. Thus, the vessel must be

held as on hire for this event.

The full working of the vessel was not prevented due to the quarantine

30. If an off-hire event is held to have occurred, it must then be established that the event prevented the

full working of the vessel.21 The charterer’s primary obligation is to pay hire continuously

throughout the charter period.

31. It has been held as per established case law, that quarantine does not prevent the full working of a

vessel as per law. In the case of Actis Co. LTD v The Sanko Steamship Co. LTD (The

“Aquacharm”)22,the ship was held up by port authorities because two of the crew had been taken to

hospital with suspected typhus. It was held that as the vessel was still “fit in itself” to perform her

duties, the vessel was not to be considered as off hire. Furthermore, in the case of Court line LTD.

v. Dant and Russel INC.23, it was held that a vessel fully sound and ready for service does not fall

within the ambit of this clause.

32. In the case at hand, the full working of the vessel was not prevented. As was admitted by the

owners, only 2 members of the crew might have fallen ill. This is not sufficient to prevent the full

working of the vessel. Therefore, it cannot be considered as an off hire event.

21 Julien Rabeux, ‘Off-Hire in a nutshell’ (Westpandi.com, 2016) <https://www.westpandi.com/globalassets/about-us/claims/claims-guides/west-of-england-defence-guide---off-hire.pdf > accessed 28 April 2019 22 Actis Co. Ltd. v The Sanko Steamship Co. Ltd. (The “AQUACHARM”) [1980] 2 Ll.L Rep.237 23 Court Line Ltd. v. Dant & Russel Inc. (1939) 64 Ll.L.Rep.212


22

SUBMISSIONS ON LOSS OF SUBSEQUENT FIXTURE

III. The Respondent had an implied knowledge of the subsequent fixture.

33. On 15.06.2016, the Owners of the Vessel entered into another time charter with Champion

Chartering, with a laycan of 22.06.2016 – 28.06.2016, for a 2 year duration, an option of a further 2

year extension at the option of the Charterers. 24

34. However, Redelivery of the Vessel was not done by the Charterers until 30.06.2016, therefore

causing the Owners to miss the laycan of the Subsequent Fixture.25 It is the submission of the

Owners that the respondent had an implied knowledge of the Subsequent Fixture, and should have

redelivered the Vessel on time, where time is of the essence in a contract.

35. Claimant submits that it can be implied from the nature of the contract or the surrounding

circumstances that the parties intended that time for redelivery should be considered to be of the

essence and that the Respondent, not adhering to the fixed timeline has caused a breach of

charterparty and has caused huge loss to the Claimant.

36. Time is “of the essence of contract”.26 At Common Law a strict approach was taken with respect to

time as was once stated by Sir John Romilly M.R.: “at law time is always of the essence of the

contract. When any time is fixed for the completion of it, the contract must be completed on the day

specified, or an action will lie for breach of it”.27 Time may be made expressly or implicitly “of the

essence” where the circumstances of the contract or the nature of the subject- matter indicate that

the fixed date must be exactly complied with.28

37. Scrutton observes of late delivery under a time charterparty, “where these are not too remote,

further damages (such as the loss of a substitute fixture) can be claimed”29; and comments in the

24 Refer to Moot Proposition 25 Refer to Moot Proposition 26 John E Stannard, Delay In The Performance Of Contractual Obligations (1st edn, Oxford University Press 2007). 27 Parkin v. Thorold (1852) 51 ER 698. 28 HG Beale, Chitty on Contracts (Common Law Library, 30th edn, Sweet and Maxwell 2008). 29 Scrutton, Scrutton on Charterparties, (20th edn, Oxford University Press 2007)


23

Court of Appeal in The Gregos30 similarly suggest the possibility of recovering such damages.

38. In a contract, where a particular date is decided for the redelivery of the vessel, it is implied that the

owner of the vessel has a future contract with another charterparty. No request or demand for

performance is necessary31 and the promisor is bound to perform his contractual obligation without

being requested to do so. The Respondent should have redelivered the vessel as per the required

dates mentioned within the contract.

39. It was reasonably foreseeable that the subsequent fixture will be affected if the vessel is redelivered

late because they were given a particular date to redeliver which itself implies that there exists a

subsequent fixture. Thereby, The Respondents are to be held liable for late redelivery of the vessel

which has led to cancellation of subsequent fixture and the owners are entitled to damages

calculated as the loss of hire under the next fixture.

IV. The Respondents must be held liable for the loss of the subsequent fixture

40. The Next Fixture was for total time duration of 2 years, with a possible extension of 2 years, at

$10500 per day. Since the vessel was not redelivered early, it could not be redelivered into this

Charterparty, therefore causing the owners to bear losses amounting to 4 years. It is the submission

of the Owners that the Charterers are liable for the loss of subsequent fixture. 32

41. As established above, The Respondents are liable for the damages calculated as the loss of hire

under next fixture. Claimant would also like to draw attention toward the market conditions. The

market is easily available for short duration of Charterparties, such long duration charter parties

were hard to land upon.

42. The respondents have attempted to establish that the markets have favored the owners, in that they

have provided evidence for quick availability of a replacement fixture. However, Respondent

describing Fair Wind International as a replacement fixture for Champion Chartering Corp is

30 Torvald Klaveness A/S v. Arni Maritime Corporation (The “GREGOS”) [1993] 2 Ll.L. Rep.335. 31 Brown v. Dean (1833) 5B & Ad. 848. 32 Refer to Moot Proposition


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extremely unreasonable as it is clear that the duration and cost varies. Where the former (Fair Wind

International) is for 60 days and the cancelled subsequent fixture (Champion Chartering Corp) was

ranging from 2 years to 4 years,33 itself shows the vast difference and the quantum of loss suffered.

43. Landing upon such long duration charterparties is extremely difficult and respondents are

responsible for loss of such valuable long duration fixture. The quick availability of the subsequent

fixture is nothing but the last resort that the owners have sorted to avoid the vessel from being idle

despite being seaworthy and in a serviceable condition.

44. It was clearly mentioned within the Champion Chartering Charterparty itself that the Charterparty

would be for 2 years and at the option of the Charterparty the extension for 2 more years could

possibly be made. Thereby, considering maximum possibility of the extension the Claimants are

entitled to recover the damages as calculated to the maximum period of 4 years and not two years.

33 Refer to Moot Proposition


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OWNERS ARE NOT LIABLE FOR LOSS CAUSED BY CARGO DAMAGE

The owners are not to be held liable for the losses caused by cargo damages for the following

reasons; (A) Charterers failed to give the written notification of the Cargo Claim required by clause

6 of the ICA; (B) The Cargo Claim fails to be apportioned under clause 8 (a).

(A) Charterers failed to give the written notification of the Cargo Claim required by clause 6

of the ICA

45. Clause 6 of the Inter Club Agreement states: Recovery under this Agreement by an Owner or

Charterer shall be deemed to be waived and absolutely barred unless written notification of the

Cargo Claim has been given to the other party to the charterparty within 24 months of the date of

delivery of the cargo or the date the cargo should have been delivered, save that, where the

Hamburg Rules or any national legislation giving effect thereto are compulsorily applicable by

operation of law to the contract of carriage or to that part of the transit that comprised carriage on

the chartered vessel, the period shall be 36 months. Such notification shall if possible include

details of the contract of carriage, the nature of the claim and the amount claimed”

46. Clause 6 requires the claimant of the Cargo Claim to give a written notification to the other party to

the Charterparty within 24 months of the date of delivery of the cargo, or the date on which the

cargo should have been delivered. The only exception is if the Hamburg rules apply, in which case,

the time limit is 36 months. However, since the Hamburg rules do not apply, the exception cannot

be evoked. It further requires that the notification shall include details of cargo claim.

47. On 27.06.2016, it was discovered that substantial damage had been done to the Cargo, due to the

ingress of water. The Charterers conducted a unilateral preliminary survey, the report of which was

later confirmed by the Owners. The Charterers sent the Owners a notice for Cargo Claim. However,

the Charterers did not actually bring a Cargo Claim against the owners.34

34 Refer to Moot Proposition


26

48. On 23.05.2017, the Charterers asked for a time extension to bring a cargo claim against the Owners.

This was granted. However, the Charterers asked for multiple extensions until 23.11.2017, and yet

failed to bring a cargo claim. The cargo claim was brought along with the rest of the claims, on

09.11.2018. 35

49. It is the submission of the Owners that this Cargo Claim is not maintainable as the requirements of

Clause 6 of the ICA are not complied with. Clause 6 requires the Claimants to include details of

contract of carriage, nature of claim and amount claimed. It is admitted that the Charterers brought

to the notice of the Owners the existence of a Cargo Claim. However, the details of the Cargo

Claim were not produced. Thus, this amounts to an improper notice, which does not satisfy the

conditions of Clause 6 of the ICA. Therefore, notice cannot be held to be given.

50. It is further submitted that the Charterers have brought the counterclaim without a proper notice, as

required under Clause 6. What is required by Clause 6 is not the initiation of legal proceedings, but

the production of a proper written notice, along with details, if available.36 The Charterer’s notice of

the cargo claim did not include such details. Having failed to produce such details within the

limited time, bars the Charterers from bringing the claim before this arbitral tribunal.

51. The Charterers have not only barred by limitation period, but have also failed to meet the

requirements of the Notice under Clause 6. It is thus submitted that this Cargo Claim is not

admissible as it is barred by Clause 6 of the ICA.

(B) The Cargo Claim fails to be apportioned under clause 8 (a).

52. Clause 8 (a) of the Inter Club Agreements states: “(8) Cargo Claims shall be apportioned as

follows: (a) Claims in fact arising out of unseaworthiness and/of error or fault in navigation or

management of the vessel: 100% Owners save where the Owner proves that the unseaworthiness

was caused by the loading, stowage, lashing, discharge or other handling of the cargo, in which

case the claim shall be apportioned under sub-clause (b).”

35 Refer to Moot Proposition 36 Terence Coghlin and others, Time Charters (5th edn, Informa Maritime & Transport 2003)


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53. The Cargo Claim has been attempted to be apportioned under Clause 8 (a) of the ICA. This clause

requires there to be unseaworthiness or error in navigation or management of the vessel. It is the

submission of the Owners that the vessel is not unseaworthy, by virtue of the fact that despite the

ingress of water, the Vessel was able to complete the journey to its disport Wahanda. Further, no

error has been committed in the navigation or the management of the Vessel, as the ingress

happened before the Vessel departed the port of Delivery into Charterparty.

54. The Claim at hand does not arise out of the unseaworthiness of the Vessel. The Claim is regarding

the damage of cargo. Had there not been any damage of cargo, such a claim would not have arisen.

Thus, the unseaworthiness of ship or the error in navigation/management was never in question.

The Claim is a result of the damage to the Cargo. This cannot be apportioned under Clause 8 (a) of

the ICA.

55. It is therefore submitted that since the Claim is not only barred by Clause 6, but also cannot be

apportioned under Clause 8 (a) of the ICA, the Claim itself is inadmissible, and the Owners cannot

be made liable for the costs arising out of Cargo Damage.


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SUBMISSIONS ON DAMAGES

The Claimants are entitled to damages. The Respondents are to be made liable for the following:

First, Hull Cleaning Costs amounting to USD41,000.00;37

Second, Costs of the voyage to South Island in order to perform Hull Cleaning amounting to

USD55,567.42;38

Third, Damages for late re-delivery amounting to USD15,330,000.00 (loss of hire under Next

Fixture, calculated as 4 years at USD10,500per day).39

INTEREST

Claimant claims interest on all sums found to be due to them pursuant to Section 49 of the Arbitration

Act, 1996, for such period, at such rate and compounded at such rates as the Tribunal thinks fit.40

And the Claimant claims:

(1). Damages in the amount of 15,426,567.42;41

(2). Interest as particularised above.

(3). Costs.

37 Refer to Moot Proposition, P.69. 38 Refer to Moot Proposition, P.69. 39 Refer to Moot Proposition, P.69. 40 Refer to Moot Proposition, P.69. 41 Refer to Moot Proposition, P.69.


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SUBMISSION ON COUNTERCLAIM OF DAMAGES

First, the Claimant are not liable for cargo claim.42

Second, even if delay is caused, it shall not amount to an off-hire event under clause 17 of the

Charterparty.

INTEREST

It is denied that Respondent is entitled to any interest, on the basis that Claimant have no liability to

Charterers upon which interest could accrue.43

42 Refer to Moot Proposition, P.77 43 Refer to Moot Proposition, P.77


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PRAYER FOR RELIEF

For the reasons set out above, Claimant seeks the following orders and declarations:

I. A declaration that Panther Shipping Inc. is entitled to the damages or interest claimed in the

claim submissions;

II. A declaration that Panther Shipping Inc. is entitled to Hull Cleaning Costs amounting to

USD41,000.00

III. A declaration that Panther Shipping Inc. is entitled to costs of the voyage to South Island in

order to perform Hull Cleaning amounting to USD55,567.42;

IV. A declaration that Panther Shipping Inc. is entitled to damages for late re-delivery amounting

to USD15,330,000.00

V. A declaration that Panther Shipping Inc. is not liable for cargo claim

VI. A declaration that Omega Chartering is not entitled to set off their counter claim against any

sum for which they are found to be liable to Panther Shipping Inc;

VII. A declaration that Omega Chartering is entitled to interest on all sums found to be due to

them pursuant to Section 49 of the Arbitration Act, 1996, for such period, at such rate and

compounded at such rates as the Tribunal thinks fit.

VIII. An order for costs.

Team 34

ANNEXURE A: MAP OF PORTS

1. Wahanda 2. North Titan 3. South Island

Memorandum for the Claimant

ANNEXURE A: MAP OF PORTS

Memorandum for the Claimant

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