INTERNATIONAL MARITIME LAW ARBITRATION MOOT

ROTTERDAM, 2019

MEMORANDUM FOR RESPONDENT

UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO

ON BEHALF OF: AGAINST:

Omega Chartering Ltd. Panther Shipping Inc.

Respondent Claimant

GEMMA NAVEJA • MARÍA JOSÉ GONZÁLEZ •

BRENDA VALTIERRA • FRIDA CRUZ

TEAM 27

TABLE OF CONTENTS

TABLE OF ABBREVIATIONS……………………………………………...………………………..…I

TABLE OF LITERATURE…………………………………………………………………………….III

TABLE OF CASES……………………………………………………………...………………………IV

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

ARGUMENT………………………………………………………………...…………………………….4

PART I: THE RESPONDENT IS RELIEVED OF THE OBLIGATION TO PERFORM

UNDERWATER CLEANING……………………………………………………………………………4

A. RESPONDENT WAS PREVENTED FROM CARRYING OUT UNDERWATER CLEANING….4

1. THE CLAIMANT WAS UNWILLING TO AGREE A LUMP SUM…………………………......…...4

2. THE CLAIMANT UNREASONABLY REJECTED THE UNDERWATER CLEANING AT PORT

NORTH …………………………………………………………………………………………………….5

3. RESPONDENT SHALL NOT PAY THE COST OF THE VOYAGE TO SOUTH ISLAND……….......6

PART II: THE CLAIMANT IS NOT ENTITLED TO LOSS OF PROFITS…………….…………….6

A. THE RESPONDENT IS NOT LIABLE FOR THE CLAIMANT’S LOSS OF FIXTURE…………...6

i) APPLICABLE TEST FOR RECOVERABILITY OF DAMAGES………………………………………...7

COUNTERCLAIMS DEFENSE……………………………………………………………………..…..9

PART I: THE RESPONDENT SUBMITTED THE CARGO CLAIM WITHIN THE TIME

LIMIT…………………………………………………………………………………………...……….9

A. THE RESPONDENT NOTICE OF CARGO DAMAGE CONSTITUTES A CARGO

CLAIM……………………………………………………………………….…………………………..9

i) IN THE ALTERNATIVE, RESPONDENT'S SUBMISSION WAS MADE WITHIN THE SIX

YEARS PROVIDED BY THE ICA………………………………………………...……………………..10

B. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE……………..………………….11

1. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE ARISING FROM CREW

NEGLIGENCE…………………………………………………………………………..………………11

2. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE IN ACCORDANCE WITH THE

ICA………………………………………………………………………………………………………..12

i) THE CLAIMANT IS 100% LIABLE FOR THE CARGO DAMAGE……...............................................12

ii) ALTERNATIVELY, THE CLAIMANT IS 50% RESPONSIBLE FOR THE CARGO

CLAIM……………………………………………………………………………………………………13

PART II: THE VESSEL WAS OFF-HIRE……………………………………………………………..14

A. THE OFF-HIRE WAS CAUSED BY THE CLAIMANT’S LACK OF DUE DILIGENCE……….14

1. THE MASTER’S DECISION TO SAIL FROM WEST COAST WAS CONTRARY TO THE

NAVIGATION OBLIGATION………………...……………………………………………………….14

B. THE PORT STATE DETENTION IS ENVISAGED IN THE CLAUSE 17 OF THE

CHARTERPARTY…………………………..…………………………………………………………..15

i) THE DETENTION WAS DERIVED FROM THE MASTER’S LACK OF DUE

DILIGENCE……………………………………………………………………………………..………..16

ii) THE RESPONDENT IS ENTITLED TO THE RESTITUTION OF THE OVERPAID HIRE…………18

PRAYER FOR RELIEF……………………………………………………………….………19

I

TABLE OF ABBREVIATIONS

Abbreviation Explanation

Art. Article

Arbitration

Act 1996

English Arbitration Act 1996

Cargo 2,000 mt of cargo of loose-leaf English Breakfast Tea with a value of

US$50 per kg

Corp. Corporation

Crew Crew of the Motor Vessel Thanos Quest

English Court of

Appeal

Court of Appeal of England and Wales

ICA Inter-Club New York Produce Exchange Agreement 1996 (As

Amended September 2011)

Inc. Incorporated

Limitation Act Limitation Act 1980

Ltd. Limited Company

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

No. 20, Version 3.

Mt. Metric Tonne

New Fixture Fixture between Panther Shipping Inc. and Fairwind International, BVI

Next Fixture Fixture between Panther Shipping Inc. and Champion Chartering Corp.

for a period of two years, plus a further two years in charters’ option

North Port Titan Shipbuilders, North Titan Port

NYPE 2015 New York Produce Exchange Charterparty 2015

Preliminary

Survey Report

Preliminary Survey Report of Mekon Surveyors Inc., dated 30 June

2016

South Island South Island Port Agency Co. Ltd

TCP Time charterparty (between Panther Shipping Inc. and Omega

Chartering Ltd.) including the Rider Clauses

Underwater

Cleaning

Underwater Hull Cleaning Obligation pursuant clause 83 of the TCP.

II

USD United States Dollar

V. Versus

Vessel Motor Vessel Thanos Quest

III

TABLE OF LITERATURE

Cited as Citation ALIZADEH, Amir/

NOMIKOS, Nikos

ALIZADEH, Amir/ NOMIKOS, Nikos

Shipping derivatives and risk management,

Springer, [2009] ATHERTON, Laura ATHERTON, Laura

Protecting time under the ICA [2015]

BACHXEVANIS,

Konstantinos

BACHXEVANIS, Konstantinos

The distinction between ‘crew negligence’ and ‘crew

incompetence’ and the consequence thereof

Journal of International Maritime Law [2010] COGHLIN, Terence, et al.

COGHLIN, Terence, et al.

Time charters

Informa Law from Routledge [2014]

https://www.i-

law.com/ilaw/doc/view.htm?queryString=%22cleaning%22+%22

prior%22+%22redeliver*%22&sort=date&querySector=Maritime

+and+Commercial&practiceArea=Maritime+and+Commercial&s

ort=date&searchType=advanced-

search&se=27&id=173284&searched=true

MCINNES David/

CHISHOLM Alex

MCINNES David/ CHISHOLM Alex

UK: Protecting Time In Claims Under The NYPE Inter-

Club Agreement [2012] NYPE Inter-Club

Agreement

NYPE Inter-Club Agreement

English court decision on time bar issue Gard News 206

[2012] Steamship Mutual

Steamship Mutual, Comprehensive Cover

Time Charter – Charterers' Orders to Proceed by a

Specified Route – Whether Navigation or Employment?

[2000] TETLEY, William

TETLEY, William

Marine cargo claims, 4th edition, Thomson Carswell

[2008]

The Inter- Club Agreement The Inter- Club Agreement

Standard Club, Limited Cargo [2018]

IV

TABLE OF CASES

Cited as

Citation

Agile Holdings

Corporation v Essar

Shipping Ltd

Agile Holdings Corporation v Essar Shipping Ltd

Queen's Bench División

[2018] EWHC 1055

Blyth v Birmingham

Waterworks Co

Blyth v Birmingham Waterworks Co

Court of Exchequer

[1856] WLUK 25

CC Award No. 2291 CC Award No. 2291, Clunet 1976, at 990

Hardely v. Baxender Hardley v Baxendale

Court of Exchequer

[1854] WLUK 132;

The Maestro Bulk Ltd v

Cosco Bulk Carrier Co Ltd

Great Creation

The Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd Great

Creation

Queen's Bench Division

[2014] EWHC 3978

https://www.bailii.org/cgi-

bin/format.cgi?doc=%2Few%2Fcases%2FEWHC%2FComm%2F201

4%2F3978.html&query=(delay)%20AND%20(redelivery)&fbclid=I

wAR0B4pn3FozjV6tLl6gyb1ceNHTxRk-

pobsSa7oJYT7GF0ckEXfIQG7dwLc;

Metall Market 000 v

Vitorio Shipping Company

Limited, The Lehmann

Timber

Metall Market 000 v Vitorio Shipping Company Limited,

The Lehmann Timber

Court of Appeal

[2013] WLUK 133

P v Q, Q v R, R v S P v Q, Q v R, R v S,

Court of Justice Business and Property Courts of England

and Wales

[2018] EWHC 1399

Scheepvaartonderneming

Flintermar v Sea Malta Co

Ltd (The Flintermar)

CV Scheepvaartonderneming Flintermar v Sea Malta Co

Ltd (The Flintermar) Flintermar

[2005] WLUK 396

V

Transfield Shipping Inc v

Mercator Shipping Inc (The

Achilleas)

Transfield Shipping Inc v Mercator Shipping Inc (The

Achilleas)

House of Lords

[2008] Lloyd's Rep 275

1

STATEMENT OF FACTS

18 March 2016 The Claimant time chartered the Vessel to Respondent for about 50-

55 days from West Coast to Wahanda pursuant to a time charterparty

(hereafter the “Charterparty”).

The Charterparty comprised a fixture recap incorporating the

NYPE 2015 form and additional rider clauses.

29 March 2016 The Vessel was delivered into the Charterparty.

18 April 2016 It was published that it was a serious concern in relation to an

outbreak of Ebola virus in West Coast.

20 April 2016 The vessel sailed from the loading port

21 April 2016 West Coast authorities confirmed the outbreak of Ebola and

quarantine surrounding areas.

07 May 2016 The Vessel arrived at the discharge port of Wahanda. She waited at

the anchorage due to the impossibility to berth immediately due to

the fact that the Port Authority feared that the crew had Ebola,

charterers informed that the Vessel is off hire.

2

08 May 2016 Owners noted the decision to detain the vessel due to Port

Authorities orders.

11 May 2016 Charterers informed that the vessel have quarantine for a minimum

period of 28 days affirming that the vessel was off-hire

8 June 2016 Charterers offered USD 15,000 due to the impossibilities to

perform underwater cleaning.

9 June 2016 Owners rejected the Charterer’s proposal.

23 June 2016 Port North Titan sent the invoice of underwater cleaning

performance to Charterers.

27 June 2016 Discharge began

Charterers noted that it was a clear substantial damage in the cargo

for possible negligence of the crew and found the owners fully

liable for it.

Charterers offered to perform the cleaning in North Port or a lump

sum in lieu.

29 June 2016 Charterers notified to the Owners that receivers told them that the

cargo is severely damage.

3

30 June 2016 Charterers informed to Owners that the voyage of South Island will

not be contractual. Charterers offered a lump sum of USD 30,000.

30 June 2016 It is submitted the Preliminary Survey Report.

4 July 2016 Owners chartered the vessel to Fairwind International for 50-55

days.

7 July 2016 Charterers sent to Owners the Preliminary damage report.

23 May 2017 Charterers requested to Owners a 3 months’ time extension in

relation to claim for cargo damage.

29 May 2017 Owners approved the extension.

23 August 2017 Charterers asked for another 3 months’ time extension regarding

cargo claim.

28 August 2017 Owners approved the extension.

4

ARGUMENT

PART I: THE RESPONDENT IS RELIEVED OF THE OBLIGATION TO PERFORM

UNDERWATER CLEANING

A. RESPONDENT WAS PREVENTED FROM CARRYING OUT UNDERWATER

CLEANING

1. On 24 May 2016, the Respondent sent an email to Wahanda Port requesting relevant

information regarding cleaning of the Vessel, in order to comply with the clause 83 of the

TCP.1 However, Wahanda Port Authority held that the underwater cleaning was not

suitable due to the fact that the visibility was below the standard.2

1. THE CLAIMANT WAS UNWILLING TO AGREE A LUMP SUM

2. The impossibility to perform the underwater cleaning was beyond Respondent’s control.

The clause 83 (d) of the TCP contemplates this scenario by establishing that in such cases

in which the Charterer is prevented for cleaning before redelivery, the parties shall agree on

a lump sum payment.3

3. There is an implied duty to cooperate in the performance of the contract4[3] by acting

in a way non prejudicial for the other party, therefore, reasonable renegotiations are usual

in international economic contracts.5 And as was established in the clause 83 (d), the

parties had the contractual obligation to cooperate for agree on a lump sum payment.

4. On 8 June 2016 the Respondent offered to pay a lump sum of USD15,0006in order to

comply with the underwater cleaning obligation, however the Claimant denied this

1 Moot Scenario, 27 2 Moot Scenario, 26 3 Moot Scenario, 16-17 4 COGHLIN, Terence, et al. 5 ICC Award No. 2291 6 Moot Scenario, 29

5

proposal. Then, on 27 June 2016 the Respondent tried again to comply with said obligation

by offering USD20,000.7 Finally, the Respondent tried to reach a solution by offering

USD30,000 as a lump sum payment.8 Nevertheless the Claimant did not even try to

negotiate said offers, showing Claimant’s unwillingness to cooperate.

2. THE CLAIMANT UNREASONABLY REJECTED THE UNDERWATER

CLEANING AT NORTH PORT

5. Regardless Claimant’s unwillingness to reach an agreement on the lump sum payment,

the Respondent was still trying to comply with the underwater cleaning obligation and

looked for a Porth to perform the underwater cleaning.

6. On 26 June 2016, the Claimant requested to the Respondent for the details of the

arrangement for vessel’s cleaning.9 The day after that, it was notified to the Claimant that

Respondent could arrange the cleaning at North Port.10 However, the 29 June 2016, the

Claimant denied Respondent’s offer by calling upon Respondent to arrange inspection and

cleaning in South Island without giving any reasons for the denial of the proposal for

performing the cleaning at North Port.11

7. The Respondent tried in several occasions to reach an agreement for the performance of

the underwater cleaning obligation, but as was set out above, the Claimant unreasonable

denied every Respondent’s proposal breaching the cooperation duty, thus, the Respondent

was relieved of the cleaning obligation.

8. Alternatively, if it is consider that the Respondent is not relieved of the underwater

cleaning obligation, the Respondent is not liable for more than the payment of USD33,000,

7 Moot Scenario, 39 8 Moot Scenario, 42-43 9 Moot Scenario, 34 10 Moot Scenario, 39 11 Moot Scenario, 43

6

since the Respondent offered to perform the cleaning at North Port in which the cost of

said performance would be of said amount.12

9. It was Claimant’s fault to choose the most expensive Port, consequently, the Claimant

shall cover the over cost of it.

3. RESPONDENT SHALL NOT PAY THE COST OF THE VOYAGE TO SOUTH

ISLAND.

10. In the time charterparties the charterer hires the vessel for a period of time.13

Given the impossibility of perform the underwater cleaning at Wahanda, on 27 June 2016

the Respondent explicitly explained to the Claimant that it was not possible to arrange hull

cleaning before redelivery of the Vessel.14

11. On 30 June 2016, the Vessel was redelivered15 finishing the contractual relationship

between the Claimant and the Respondent, for that reason the Respondent stated on the

same day that any further voyage would not be contractual.

12. The voyage to South Island took place after the re-delivery day, thus, the Respondent

is not liable for said cost.

PART II: THE CLAIMANT IS NOT ENTITLED TO LOSS OF PROFITS

A. THE RESPONDENT IS NOT LIABLE FOR THE CLAIMANT’S LOSS OF

FIXTURE

13. On 15 June 2016 the Claimant did a fixture with Champion Chartering Corp.,16 even

when the Respondent notified to the Claimant since 7 May 2016 that the vessel had been

12 Moot Scenario, 35 13 ALIZADEH, Amir/ NOMIKOS, Nikos, 41 14 Moot Scenario, 39 15 Moot Scenario, 68 16 Moot Scenario, 30-33

7

detained by Port State Control due to the reasonable believe that the crew was infected

by Ebola,17 which was a circumstance beyond Respondent’s control and it was not

possible to know the time that would take to redeliver the vessel.

14. The Claimant’s assertion that the Respondent had special knowledge of the Next

Fixture at the moment of entering into the TCP18 was not possible due to the fact that the

TCP was celebrated on 18 March 201619 and the Claimant entered into the Next Fixture

on 15 June 2016, notifying that situation to the Claimant until 26 June 2016.20

15. Even if it is considered that the loss of fixture could have been foresee by the

Respondent, the Claimant is not entitled to loss of profits, because it has been established

in sophisticated areas of commerce, like shipping, the foreseeability test alone is too

simplistic.21

i) APPLICABLE TEST FOR RECOVERABILITY OF DAMAGES

16. The remoteness rule is used in the shipping industry for determine the extent of

recoverability of damages. Said rule states that the contract-breaker is liable for: “the

damages which … may fairly and reasonably be considered either arising naturally, ie,

according to the usual course of things, from such breach of contract itself, or such as

may reasonably be supposed to have been in the contemplation of both parties, at the time

they made the contract, as the probable result of the breach of it”.22

17 Moot Scenario, 25 18 Moot Scenario, 77 19 Moot Scenario, 2 20 Moot Scenario, 34 21 Much ado about nothing?. Mike Burns, of Weightmans LLP, considers a case of contractual damages. Maritime

Risk International , 19 may 2010

Hardely v. Baxender 22 Lloyd's Maritime and Commercial Law Quarterly. Contractual remoteness, “scope of duty” and intention. Mark

Stiggelbout (2012).

Hardely v. Baxender

8

17. In this sense, on Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas)

award, the Tribunal found that the damages claimed were too remote to be recoverable

as there was no evidence establishing the contemplation of the parties at the time they

entered into the charterparty regarding said damages.23

18. The loss of a particularly lucrative fixture in a volatile market is too remote since it is

unlikely that it was contemplated for the parties as a loss arising from a breach,24 therefore

it cannot be recoverable.

19. In any case, the Claimant is not entitled to loss of profits, because it is a recognized

standard in the shipping industry that the only damages that could be asked regarding the

delay in re-delivery are those consisting in the difference between the charter rate and the

market rate.25However, as the Claimant did not provide the applicable market rate and

not did any claim in this regard, the Tribunal shall found that the Claimant is not entitled

to that.

20. In the alternative, the damages should not constitute further than 2 years period,

because to consider the optional extension of the New Fixture of other 2 years it is way

too remote.

21. On 4 July 2016 the Claimant chartered the vessel to Fairwind International for 50-55

days.26 As the Claimant is not losing any profit in that period, even if it is considered that

the Claimant is entitled to loss of profits, the amount earned for the new fixture, shall be

discounted of the period of 2 years.

23 URL: http://www.bailii.org/ew/cases/EWCA/Civ/2007/901.html

[2007] EWCA Civ 901, [2007] 2 Lloyd's Rep 555, [2007] 2 CLC 400, [2008] 1 All ER (Comm) 685 24 Much ado about nothing?. Mike Burns, of Weightmans LLP, considers a case of contractual damages. Maritime

Risk International , 19 may 2010 25 The Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd Great Creation 26 Moot Scenario, 53-54

9

COUNTERCLAIMS

PART I: THE RESPONDENT SUBMITTED THE CARGO CLAIM WITHIN THE

TIME LIMIT.

A. THE RESPONDENT NOTICE OF CARGO DAMAGE CONSTITUTES A

CARGO CLAIM.

22. On 27 June 2016, the Respondent notified to the Claimant that the cargo had been

severely damaged and found that Claimant was fully liable of that.

The clause 53 of the TCP states:

“Owners agree that liability for cargo claims, as between Owners and

Charterers, shall be apportioned as specified by the Inter-Club New York

Produce Exchange Agreement (...)”

23. The clause 6 of the ICA concerning the Time Bar establishes:

“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.”

24. The term if possible shall be interpreted as its ordinary meaning. In this sense, the

Cambridge dictionary define possible as “able to be done or achieved, or able to exist”.

10

25. In the case at bar, the Respondent was not able to provide the amount of the damages,

given that as it was showed by the preliminary survey report, the real extent of the

damages was unknown.

26. The purpose of the 24 months of the time bar at clause (6) ICA is for notifying owners’

or charterers’ intention to seek apportionment of the cargo claim.27 In the case at hand the

Respondent notified the intention for seeking said apportionment of the cargo claim even

before the delivery of the cargo.

27. In light of the London Arbitration 32/04, commencement of the proceeding regarding

indemnity arising from the ICA, is calculated from the date when the liability for the

cargo claim has been established.28

28. Therefore, the Respondent’s notification of the cargo shall be considered a cargo

claim in accordance with the clause 6 of the ICA

(i) IN THE ALTERNATIVE, RESPONDENT'S SUBMISSION WAS MADE

WITHIN THE SIX YEARS PROVIDED BY THE ICA.

29. The amount of the cargo claim was notified before the 15 March 2019.29

30. The time bar under English law for proceedings commencement in relation to their

claim is the same as that for breach of contract under the Limitation Act, which is six

years, as was held in the English Court decision in the Genius Star 1,30 and for that reason

in said decision was held that the charterers' claim was not time barred.31

31. Consequently, even if it is considered that the cargo claim was submitted until 15

March 2019, the Respondent has still more than 3 years for the submission of the cargo.

27 MCINNES David/ CHISHOLM Alex 28 The Inter- Club Agreement 29 Moot Scenario, 82 30 ATHERTON, Laura 31 NYPE Inter-Club Agreement

11

B. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE

1. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE ARISING

FROM CREW NEGLIGENCE

32. On 27 June 2016, the Respondent notified to the Claimant that the cargo was severely

damaged.32 It appears that the crew have pumped sea water into the cargo hold instead of

pumping it out. On 30 June 2016 a preliminary survey report was presented indicating

that cargo damage was caused when a crew member opened the wrong valves33. Later,

the Claimant, undertook its own investigations in that matter, which confirmed the cause

of the cargo was the one established in the preliminary survey report.34

33. In the same sense, the clause 64 of the TCP establishes that all ballasting/deballasting

shall be at the discretion of the Master having due regard to stability and seaworthiness

of the Vessel.35

34. Negligence can be defined as in Blyth v Birmingham Waterworks Co as “the omission

to do something which a reasonable man, guided upon those considerations which

ordinarily regulate the conduct of human affairs, would do, or doing something which a

prudent and reasonable man would not do”.36

35. The clause 26 of the TCP establishes that the Owner shall remain responsible for the

crew.

36. In the case Scheepvaartonderneming Flintermar v Sea Malta Co Ltd (The Flintermar)

2005, the Charterer had the responsibility for the cargo damage arising by loading of the

cargo by stevedores negligence because under its charterparty the Charterer was

32 Moot Scenario, 38 33 Moot Scenario, 46 34 Moot Scenario, 81 35 Moot Scenario, 12 36 BACHXEVANIS, Konstantinos, P.2.

12

responsible for them.37 In the Present case, the Arbitral Tribunal shall follow the same

line of reasoning by establishing that the Claimant is responsible for the cargo damage

arising from negligence of the crew.

2. THE CLAIMANT IS RESPONSIBLE FOR CARGO DAMAGE IN

ACCORDANCE WITH THE ICA

37. The clause 27 of the TCP sets out:

“Cargo claims as between the Owners and the Charterers shall be settled

in accordance with the Inter-Club NYPE Agreement 1996 (...)”

38. The present claim in within the definition of the ICA concerning cargo claims, since

they are defined as claims for loss, damage, shortage (including slackage, ullage or

pilferage), overcarriage of or delay to cargo including customs dues or fines in respect

of such loss, damage, shortage, overcarriage or delay.

i) THE CLAIMANT IS 100% LIABLE FOR THE CARGO DAMAGE.

39. The clause 53 of TCP lays down that liability for cargo claims, as between Owners

and Charterers, shall be apportioned as specified by the clause 8 of the ICA.38

Herein is established that (a) the claims arising out of unseaworthiness and/or error or

fault in navigation or management of the vessel shall be apportioned as 100% Owners.

40. Error of navigation could be defined as some mistake or negligence as to a matter of

seamanship which comprises the safety of the vessel and/ or its crew, resulting in cargo

loss or damage.

41. Error in management of the ship could be understand as some failure in the day to day

operation of the vessel, for example transferring bunkers and vessels fresh water to one

37 Scheepvaartonderneming Flintermar v Sea Malta Co Ltd (The Flintermar) 38 Moot Scenario, 10

13

bank the other with an error in valve sets causing damage to cargo(...) thereby causing

damage to cargo stowed therein (...)39

ii) ALTERNATIVELY, THE CLAIMANT IS 50% RESPONSIBLE FOR THE

CARGO CLAIM

42. According to clause 8 (a) of the ICA the Charterers are entitled to be indemnified by

Owners for the cargo claim,

“save the Owner proves that the unseaworthiness was caused by loading,

discharge or other handling of the cargo, in which case the claim shall be

apportioned under sub clause (b).

(b) claims in fact arising out of the loading, stowage, lashing, discharge,

storage or other handling of the cargo: 100% Charterers.

Unless the words “and responsibility” are added in clause 8 or there is a

similar amendments making the Master responsible for cargo handling in

which case: 50% Charterers 50 % Owners”.

43. In the case Agile Holdings Corp v Essar Shipping Ltd40, the Charterer brought a claim

against the Owner for cargo interests, the Owner argued that under the clause 8 (b) of the

ICA, he cannot be liable because under the clause 8 of the charterparty, the master was

responsible for cargo handling. The court held that as the word “and responsibility” was

not added into the TCP, the charterers were 100% liable.

39 TETLEY, William, 956

40 Agile Holdings Corporation v Essar Shipping Ltd

14

44. In the case at hand, the parties agreed to add the words “and responsibility” after

“under supervision” in clause 8 (a) of the TCP, making the Master responsible for cargo.41

PART II: THE VESSEL WAS OFF-HIRE

A. THE OFF-HIRE WAS CAUSED BY THE CLAIMANT’S LACK OF DUE

DILIGENCE.

1. THE MASTER’S DECISION TO SAIL FROM WEST COAST WAS

CONTRARY TO THE NAVIGATION OBLIGATION

45. On 18 April 2016 it was published in a widely known Newspaper that there were

several cases of Ebola at West Coast, and there was a serious concern of an outbreak of

said virus.42 Regardless that information, on 20 April 2016 the Master decided to sail

from West Coast to Wahanda.43

46. By doing a harmonic interpretation of the TCP, it is beyond cavil that the Master is

responsible for the navigation and for granting the seaworthiness of the vessel before, at

the beginning and during the voyage, and is the one that took the final decision to sail.44

47. In this sense, the clause (26) Navigation sets out:

Nothing herein stated is to be construed as a demise of the Vessel to the

Charterers. The Owners shall remain responsible for the navigation of the

Vessel, acts of pilots and tug boats, insurance, crew, and all other matters,

same as when trading for their own account.

41 Moot Scenario, 5 42 Moot Scenario, 22 43 Moot Scenario, 81 44P v Q, Q v R, R v S

15

48. On 8 May 2016 Contrary to Claimant assertion that the vessel could not be declared

off-hire by arguing that the Port State Control decision was beyond Claimant’s control.

The Port State Control declared the quarantine because of the reasonable believe that the

crew had Ebola. Since the Vessel sailed from an infected area, this situation was under

owners’ control,45 in accordance with the navigability obligation.

49. The master shall take his decisions to set and follow a course on the grounds that he

would thereby avoid the danger of bath weather and possible damage to the ship, in order

to comply with his navigability obligation. Said decisions might be made before or after

the Vessel had left the Port, or even while the Vessel was still on Port.46

50. Neither obligation displaced the responsibility of the Master in matters of

navigation.47

B. THE PORT STATE DETENTION IS ENVISAGED IN THE CLAUSE 17 OF

THE CHARTERPARTY.

51. On 11 May 2016 the Respondent informed to the Owners that the Port State Control

detained the vessel.48

52. The clause 17 of the TCP set out:

In the event of loss of time from (...) detention by the arrest of the Vessel,

or detention by Port State control or other competent authority for Vessel

deficiencies (...) or by any other similar cause preventing the full working

of the Vessel, the payment of hire and overtime, if any, shall cease for the

time thereby lost.

45 Metall Market 000 v Vitorio Shipping Company Limited, The Lehmann Timber 46 Steamship Mutual 47 Steamship Mutual 48 Moot Scenario, 24

16

53. The clause set out above, has two provisions of particular interest in the present case.

The first one is detention by Port State control or other competent authority for Vessel

deficiencies. In the present case, the Port State control detained the Vessel due to a health

issue of the crew.

54. And the second one is by any other similar cause preventing the full working of the

Vessel, which clearly is as a similar cause for detention by Port State Control for Vessel

deficiencies, due to the fact that the Port State Control detained the Vessel and that

circumstance prevented the full working of the vessel due to the impossibility of doing

anything, such as discharging, while this situation persisted, causing the unavoidable

delay of re-delivery.

(i) THE DETENTION WAS DERIVED FROM THE MASTER’S LACK OF

DUE DILIGENCE.

55. The clause 46 of the TCP establishes as following:

46. Safety and Health Regulations: Owners warrant that Vessel shall be in

possession of the necessary certificates to comply with all safety and health

regulations and all current requirements at all ports of call during the

currency of this Charter, without hindrance or delay.49

56. Wahanda Port50 is in Bao Kingdom, which laws closely resemble the laws of Hong

Kong.51

57. The International Health Regulations of the WHO are incorporated into Hong Kong

Law, in this sense, the regulations of the WHO shall be followed by the Claimant.

49 Moot Scenario, 9 50 Wahanda Port is the discharging port. 51 Moot Scenario, 81

17

58. In the art. 37 of the International Medical Guide for Ships of the World Health

Organization, it is established that the master of a ship, before arrival at its first port of

call in the territory of a State Party, shall ascertain the state of health on board.

59. The Master should have had special care in doing so due to its particular knowledge

of the outbreak of the Ebola virus in West Coast.

60. The failure of the Master to ascertain the state of health on board, had therefore the

detention of the Port State Control.

61. In the same sense, The Merchant Shipping (Seafarers) (Health and Safety: General

Duties) Regulation (Cap. 478 sub. leg. C), which is a Hong Kong regulation, establishes

as following:

12. Inspection and detention of ships which are not Hong Kong ships

(2) Where the Authority or a person referred to in subsection

(...)

(1) (b) where, in the opinion of the Authority or that person, as the case

may be, the ship does not comply with those requirements to such an extent

that conditions on board the ship are clearly hazardous to the health or

safety of persons on board the ship, the Authority or that person, as the

case may be, may detain the ship until measures are taken to rectify those

conditions, for which purpose the Authority or that person, as the case may

be, may take those measures.52

52 Emphasis added

18

62. The Wahanda Port Authority detained the Vessel because the Master did not follow

the applicable rules on the matter of health and by doing so the Claimant breached the

clause 46 of the TCP.

(ii) THE RESPONDENT IS ENTITLED TO THE RESTITUTION OF THE

OVERPAID HIRE.

63. On 07 May 2016, the Port State Control detained the vessel due to the reasonable fear

that the crew was carrying the Ebola virus.

64. Until 26 June 2016, the vessel obtained free pratique and was cleared to berth.53

65. The Respondent was obliged under the charterparty to pay hire for as long as the ship

was performing the charter service.54

66. In the case at hand, the vessel did not perform the charter service while it was detained

by the Port State Control, thus, the Vessel should have been considered off-hire from 07

May 2016 until 26 June 2016.Consequently, the Respondent payment for the overrun

period shall be reimbursed.

53 Moot Scenario, 81 54 COGHLIN, Terence, et al.

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PRAYER FOR RELIEF

Respondent respectfully requests the Arbitral Tribunal to:

1. ORDER that:

a. Costs due by the Respondent regarding Underwater Hull Cleaning are no more

than USD33,000

b. Owners are not entitled to damages for the Next Fixture of the Vessel with

Champion Chartering Corp.

(i) Alternatively, that only the 2 years period of the Next Fixture shall

be contemplated for the calculation of damages reimbursing the

credit received under the Replacement Fixture.

c. The cargo Claim is admissible

d. 100% of the Cargo Claim is for Claimants’ account

(i) Alternatively, 50% of the Cargo Claim is for Claimants’ account.

e. The Vessel was off hire from 7/05/2016 until 26/06/2016 pursuant to Clause 17

of the TCP.

f. Claimant shall restitute the overpaid hire in amount USD 375,000.

2. AWARD interest on all sums in favor of the Respondent as the Tribunal considers

fit pursuant to section 49 of the Arbitration Act 1996.

Dated this 29th day of April 2019

Solicitors for the Respondent

Omega Chartering Ltd.