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SIXTEENTH ANNUAL INTERNATIONAL MARITIME LAW
ARBITRATION MOOT COMPETITION 2015
IN THE MATTER OF ARBITRATION
___________________________________________________________________________
Claimant Respondent
Western Tankers Inc Ldt Pte
___________________________________________________________________________
MEMORANDUM FOR THE CLAIMANT
TEAM NO. 23
Karolina Aksamitowska
Dan Anghelache
Sabrina Fischer
ii
TABLE OF CONTENTS
LIST OF AUTHORITIES iv
LIST OF ABBREVIATIONS ix
STATEMENT OF FACTS 1
PART ONE: JURISDICTION 3
The Tribunal has jurisdiction 3
The claim relating to fraud is arbitrable 4
PART TWO: MERITS 6
I Breach of the charterparty 6
The obligation to stem sufficient bunkers was on the charterers and the charterers are in
breach 7
The breach of the condition of the charterparty regarding hire 8
Piracy as an offhire event 10
Frustration of the charterparty 11
The Claimant did not breach the piracy clause 12
The Respondent directed the vessel to an unsafe port 13
The Claimant did not breach its obligation to make the vessel seaworthy 13
The Master was not incompetent 14
The Claimant is under no duty to check the safety of the nominated port 14
II Tort of fraud 16
The establishment of ASA2 as an agent of the charterers has been done expressly 16
Apparent authority 18
Representations made by charterers or their agents were untrue 18
iii
The representations made by ASA2 were intended to be acted upon by the Claimant 20
The Claimant relied on the representations made by the Respondent 20
The Claimant suffered damage as a result of acting upon the representations 21
The damage caused by the Respondent is not too remote 21
III Bailment 22
Bailment cannot arise as a distinct course of action in English law 22
There was not consent to bailment on the part of the alleged bailee 23
There is not bailment due to lack of attornment 23
The Claimant is exempted from liability 24
The Claimant did not convert in respect of a part of the cargo on the vessel 24
IV Prayer 25
iv
LIST OF AUTHORITIES: INTERNATIONAL CONVENTIONS, RULES AND
STATUTES
Arbitration Act 1996 (UK).
Hague-Visby Rules, The Hague Rules as Amended by The Brussels Protocol 1968.
LIST OF AUTHORITIES: CASES
A
Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717
B
Briess v Woolley [1954] AC 333
Brown v Raphael [1958] Ch. 636
Bunge Corp v Tradax Export SA [1981] 1 W.L.R. 711
Bunge Corporation v Tradax Export SA (CA) (1980) 1 Lloyd’s Rep 294; (HL) (1981) 2
Lloyd’s Rep 1; (1981) 1 WLR 711
C
C v D [2007] EWHC 1541
Carslogie S.S. Co Ltd v Royal Norwegian Government [1952] AC 292
Cosco Bulk Carrier Co. Ltd. v Team-Up Owning Co. Ltd. (the “Saldanha”) [2010] EWHC
1340
D
Derry v Peek (1889) 14 App. Cas. 337
Downs v. Chappell [1997] 1 W.L.R. 426
Doyle v Olby [1969] 2 Q.B. 158
Dumford Trading v OAO Atlantrybflot [2005] 1 Lloyd’s Rep 289
E
East West Corp v. DKBS AF 1912 A/S [2003] EWCA Civ 83; [2003] QB 1509
Edwards v. West Herts Group Management Committee [1957] 1 W.L.R. 415
F
Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc (The Nanfri) [1979] A.C. 757
Fiona Trust & Holding Corporation v Yuri Privalov [2007] EWCA Civ 20
Fiona Trust v Privalov [2007] UKHL 40
Fiona Trust v Privalov [2008] 1LLR 254
Front Carriers Ltd v Atlantic And Orient Shipping Corporation (The "Double Happiness")
[2007] EWHC 421 (Comm)
G
Goldsmith v Baxter [1970] Ch. 85
v
H
Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29 (Comm).
Hamburg Houtimport B.V. v. Agrosin Pte Ltd (The Starsin) [2000] 1 Llooyd’s Rep. 85, 101-
102
K
Karberg’s Case [1892] 3 Ch. 1
Kodros Shipping Corp v Empresa Cubana de Fletes (The Evia) (No. 2) [1983] 1 AC 736
Kuwait Rocks Co v AMN Bulkcarriers Inc (The Astra) [2013] 2 Lloyd's Rep 69
L
Leeds Shipping Co ltd v Societe Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep
127
Lensen v Anglo-Soviet (1935) 52 L.I Rep. 141
M
Magripilis v Baird [1926] St.R.Qd. 89
Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia (The Laconia) [1975]
1 Lloyd's Rep 634; (CA) [1976] 1 Lloyd's Rep 395; (HL) [1977] 1 Lloyd's Rep 315; [1977]
AC 850
McGhee v National Coal Board [1973] 1 WLR 1
Motis Exports Ltd v. Dampskibsselskabet AF 1912 Aktieselskab, Aktieselskabet
Dampskibsselskabet Svenborg
Motor Oil Hellas (Corinth) Refineries S.A. v Shipping Corporation of India (The
Kanchenjunge”) [1990] 1 Lloyd’s Rep. 391
N
National Carriers Ltd. v Panalpina (Northern) Ltd [1981] AC 675
Nittan (U.K.) Ltd. V Solent Steel Fabrication Ltd. Trading As Sargrove Automation And
Cornhill Insurance Co. Ltd. [1981] 1 Lloyd's Rep. 634
P
Parbulk II A/S v Heritage Maritime Ltd SA (The Mahakam) [2011] EWHC 2917 (Comm);
[2012] 1 Lloyd's Rep 87
R
Royal Greek Govt. v Minister of Transport, The Ann Stathos (1948) 82 LIL Rep 196
S
Shinhan Bank Ltd v Sea Containers Ltd [2002] 2 Lloyd’s Rep. 406
Smith New Court Securities Ltd. V. Scrimgeourvickers (Asset Management) Ltd. [1997] A.C.
254
Smith v Chadwick (1883-84) 9 App. Cas. 187
Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others,
[2012] EWCA Civ 638
T
Tackey v McBain [1912] AC 186
vi
Tankexpress A/S v Compagnie Financiere Belge des Petroles S/A (The Petrofina) (HL) (1948)
82 Ll L Rep 43; [1949] AC 76
The “Eugenia” [1964] 2 QB 226
The “Rijn” [1981] 2 Lloyd’s Rep. 267
The Aliakmon [1986] AC 785; [1986] 2 Lloyd’s Rep 1
The Batis [1990] 1 Lloyd’s Rep 345
The Captain Gregos (No 1) [1989] 2 Lloyd’s Rep 63
The Glory Wealth [2013] 2 Lloyd’s Rep. 653
The Griparion [1994] 1 Lloyd’s Rep. 533
The Gudermes [1993] 1 Lloyd’s Rep 311 (CA)
The Hill Harmony [2001] 1 Lloyd’s Rep 147
The Houston City [1956] 1 Lloyd’s Rep 1 (P.C.)
The Kanchenjunga [1987] 2 Lloyd’s Rep 509
The Manhattan Prince [1985] 1 Lloyd’s Rep. 140
The Ocean Victory [2013] EWHC 2199 (Comm)
The Ocean Victory [2014] 1 Lloyd’s Rep 59
The Pamphilos [2002] 2 Lloyd’s Rep. 681
The Petro Ranger [2001] 2 Lloyd’s Rep 348
The Riza and The Sun [1997] 2 Lloyd’s Rep. 314
The Starsin [2000] 1 Lloyd’s Rep 85, 101
The Stork [1954] 2 Lloyd’s Rep 397
The Stork [1955] 1 Lloyd’s Rep 349 (C.A.)
The Teutonia (1871-73) LR 4 PC 171
The Trident Beauty [1994] 1 Lloyd’s Rep. 365
W
Whittam v. W. J. Daniel & Co. Ltd. [1962] 1 Q.B. 271
World Sport Group (Mauritius) Ltd v. MSM Sattelite (Singapore) Pte. Ltd Civ. App. No. 895
(2014)
X
XL Insurance Ltd v Owens Corning [2001] 1 All E.R. (Comm) 530
LIST OF AUTHORITIES: BOOKS
Born G, International Commercial Arbitration, 2nd
edn (Kluwer, 2014)
Bridge M, Personal Property Law, 3rd
edn (Clarendon, 2002)
Coghlin T, Baker T, Kenny A, Kimball J, D John, Time Charters 6th
end (2008)
Coghlin T, Baker A, Kenny J, Kimball JD, Belknap T, Time Charters, 7th edn (Informa Law
6th Ed, 2014)
Cooke J, Timothy Y, Taylor A, Voyage Charters (Informa 3rd 2007)
Dockray M, Cases and Materials on the Carriage of Goods by Sea (Routledge, 2004)
vii
Jones M, Dugdale A, Simpson M, Clerk & Lindsell on Torts 21st edn (Sweet & Maxwell,
2014)
Merkin R, Flannery L, Arbitration Act 1996, 5th
edn (Informa, 2014)
Palmer N E, Palmer on Bailment, 2nd
edn (Sweet and Maxwell, 1991)
Todd P, Maritime Fraud and Piracy, 2nd
edn (Informa Law, 2010)
Tweeddale A, Tweeddale K, Arbitration of Commercial Disputes (OUP, reprinted 2010)
Watts P (ed.), Bowstead & Reynolds on Agency, 20th
edn (Sweet & Maxwell, 20th ed. 2014)
Wilson J, Carriage of Goods by Sea, 6th
edn (Pearson, 2008)
LIST OF AUTHORITIES: JOURNAL ARTICLES
Arzandeh A, ‘The Law Governing Arbitration Agreements in England’ (2013) LMCLQ 31-35
Bell A, “The Place of Bailment in the Modern Law of Obligations” in N Palmer and E
McKendrick (eds), Interest in Goods, 2nd edn (1998)
Baughen S, ‘Misdelivery and the boundaries of contract and tort’ (2010) Lloyd’s Maritime
and Commercial Law Quarterly 411-430
Dempster H, ‘Clearing the Confusion Surrounding Bailment’ (2004) 33 CLWR 295
Hill, Jonathan ‘Determining the seat of an international arbitration: party autonomy and the
interpretation of arbitration agreements’ (2014) IMCLQ 63 (3), 517-534
McBain G, ‘Modernising and Codifying the Law of Bailment’ (2008) JBL 1
McMeel G, ‘Bailment: fertility and the forms of actions (Yearworth v. North Bristol NHS
Trust)’ (2010) Lloyd’s Maritime and Commercial Law Quarterly 22-27
McMeel G, “The Redundancy of Bailment’” (2003) Lloyd’s Maritime and Commercial Law
Quarterly 169-200
Tweeddale A, Tweeddale K, ‘Incorporation of arbitration clauses revisited’ (2010)
Arbitration 76(4), 656-660
viii
LIST OF AUTHORITIES: OTHER
Shelltime 4 Charter Party
United Nations Security Council , 19 January 2012, Letter Dated 18 January 2012 from the
Secretary-General addressed to the President of the Security Council S/2012/45
Keith Johnson, ‘Oil Pirates and the Mystery Ship’ Foreign Policy, January 29, 2014; James
Burgess, ‘Oil Piracy Moves to Angolan Coast with $8M Heist’
< http://oilprice.com/Energy/Energy-General/Oil-Piracy-Moves-to-Angolan-Coast-with-8M-
Heist.html> accessed 10 April 2015
Reuters ‘UPDATE 1-Pirates hijacked tanker off Angola, stole cargo - owners’
<http://uk.reuters.com/article/2014/01/26/angola-piracy-idUKL5N0L00NM20140126>.
David Kashi, ‘Nigerian Pirates Likely Hijacked Oil Tanker Off Angola's Coast, Expert Says’,
International Business Times (27 January 2014) <http://www.ibtimes.com/nigerian-pirates-
likely-hijacked-oil-tanker-angolas-coast-expert-says-1548738>
ix
LIST OF ABBREVIATIONS
ASA Atlantic Services Agency
ASA2 Atlantic STS Agency Ltd (ASA Angola Ltd)
Cl. Clause
OPL Off port limit
WTI Western Tankers Inc
STS Ship to ship transfer
WD Western Dawn
1
STATEMENT OF FACTS
THE CHARTERPARTY
1 The Claimant is Western Tankers Inc, a long established company incorporated in the
British Virgin Islands. The Claimant owns, among other vessels, the Western Dawn.
The Respondent is LDT Pte, a company incorporated in Singapore.
2 On 26 May 2014, Western Tankers Inc, the Claimant, and LDT Pte, the Respondent,
agreed on a time charter of Western Dawn (the Vessel) on an amended Shelltime 4
charterparty. The charterparty included rider clauses and was for a period of three
months, plus or minus 30 days. The first voyage under this time charter trip was from
Singapore to OPL (Off Port Limit) Luanda, Angola, with re-delivery in the
Mediterranean area (Gibraltar-Trieste range).
THE VOYAGE
3 On 8 June 2014 the Vessel completed the loading of the cargo, bills of lading were
issued and the vessel was ordered to proceed to OPL Luanda for discharge. The ship
did not take additional bunkers at Durban contrary to the initial plan. It was agreed
that the next bunker supply would be on arrival of “STS Area 1”.
4 The charterers advised the Western Dawn to refer to their local discharge coordinator
on arrival, the Atlantic Services Agency, which never replied to any of the vessels
messages. After having received an email from the Atlantic STS Agency Ltd on 28
June 2014., in which the addresser identified himself as the Charterers local discharge
agency, the Master of the Western Dawn followed the instructions given in this
message and proceeded to an alternative discharge area, in international waters off the
Angolan Coast, close to the original discharge area. The Master informed the
charterers of this alternative discharge place at which the vessel would take new
2
bunkers via a ship to ship transfer with a vessel called The Antelope on 3 July 2014.
The Charterers replied on 4 July 2014 with an instruction to continue to liaise with the
vessels ship to ship coordinator. On arrival at the designated position on 4 July 2014
the Master of the vessel tendered a notice of readiness to the Charterers. Later that
day, the Western Dawn was hijacked by the pirates. The Master was able to regain
control over the vessel only on 17 July 2014. As a result of the pirate attack, several
crewmembers were injured and the vessel was damaged. Additionally, about 28,500mt
of Gasoil were stolen from the cargo and could not be recovered. Due to this incident
the Western Dawn was unable to meet the discharge target date at Luanda. The vessel
did not continue to the originally designated discharge area, but instead, went to Cape
Town to await further instructions from the charterers.
Hire
5 The charterers failed to pay the July hire in advance. The owners sent a notice of
default of payment on 3 July 2014 to which the charterers never replied. Instead, they
sent a redelivery notice to the owners on 4 July 2014 and a few hours later an off-hire
notice. Due to no contact with the vessel, hire was not paid.
Arbitral Proceedings
6 A statement of claim was served to the defendant by the claimant on the 1 November
2014; a responding statement of defense with a counterclaim was served on 29
November 2014.
3
JURISDICTION OF THE TRIBUNAL
7 The Claimant refutes the Respondent’s contention that this Tribunal has no
jurisdiction to determine the dispute before us. International Commercial Arbitration
proceedings arise out of arbitration agreements. The tribunal has merely the authority
that is transferred to it by the parties to the agreement. The Claimant contends that all
the correspondence between the parties is a proof of a written agreement as under
Clause 5(2)(b) of the Arbitration Act 1996.
8 In common law countries the wording of the arbitration agreement is analysed in detail
in order to determine the jurisdiction.1 The wording of the Shelltime 4 clause (para.46
“Law and Litigation”) is very clear in this regard. According to the clause, the charter
shall be construed according to English law and all disputes arising out of this charter
shall be referred to arbitration in London in accordance with the Arbitration Act 1996.
According to the Arbitration Act 1996, the tribunal has furthermore the power to rule
on its own competency.2
9 In the recap of the charterparty dated 26 May 2014 the parties evidenced their
intention for the dispute under this charter to be arbitrable in London and governed by
the English law. When it comes to the seat determination party autonomy is the
guiding principle.3
10 The parties agreed to the wording of the Shelltime 4 arbitration clause. Before the
agreement was made, the Respondent merely expressed a reluctance to London
arbitration and never expressly refused the original Shelltime 4 clause. Furthermore
the defendants did not seek rectification of the full recap of the charterparty, sent 26
1 Tweeddale A, Tweeddale K, Arbitration of Commercial Disputes (OUP, reprinted 2010) 166.
2 Arbitration Act 1996 (UK) c 23, s 30; Gary B Born, International Commercial Arbitration
(Kluwer Law International, 2009) vol I, 856. 3 Jonathan Hill, ‘Determining the seat of an international arbitration: party autonomy and the interpretation of
arbitration agreements’ (2014) IMCLQ 63 (3), 517-534, 521.
4
May 2014. Since the last reference to the arbitration clause was the reference to the
original Shelltime 4 clause.
11 Alternatively, should the Tribunal decide that there is no agreement between the
parties as to the original Shelltime 4 arbitration clause, it is submitted that London is
seat of the Arbitration nonetheless and English law applies as proper law governing
the proceedings.
12 The only law concerning this matter that the parties definitely did agree on, is the law
governing the charterparty, namely English law according to cl.46 (a) of Shelltime 4.4
This is the law that the parties expressly agreed to govern the charterparty. The
Claimant argues that this is a justified reason to infer that English law is the governing
law in the present case.5
13 The Claimant therefore submits that the Tribunal has jurisdiction to rule on this
matter. The seat of the arbitration proceedings is London and the proper law of the
forum is English law.
THE CLAIM RELATING TO FRAUD IS ARBITRABLE
14 The Respondent argues that the phrase ‘disputes arising out of this charter’ (‘the
phrase’) should not extend to the tort of fraud. However, in response, the Claimant
submits that this cannot be the correct interpretation of the charterparty contract.
Authorities on this point have made it clear that the phrase can encompass, inter alia,
fraud claims.
15 In Fiona Trust, Lord Hoffmann stated that the term aforementioned, or any arbitration
clause for this reason, should be interpreted widely.6 This has the effect of shifting a
heavy burden onto the Respondent to prove that the general position, according to
4 Shelltime 4, cl.46 (a), line 775.
5 Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others, [2012] EWCA Civ
638. 6 Fiona Trust v Privalov [2007] UKHL 40, [26].
5
which all disputes, including the fraud allegations, fall within the arbitration clause,
has been displaced. The tribunal must also be aware that this is the position in many
common law countries, including India7 and the United States.
8 Any decision to the
contrary will upset a well-established practice with regards to submitting fraud
allegations for determination to arbitration tribunals. The Claimant submits that there
are five reasons for which the tribunal should find that the claim relating to fraud must
be considered by this tribunal.
16 In his judgment, which was approved by the House of Lords, Longmore LJ pointed
out that the arbitration clause covered “every dispute except a dispute as to whether
there was a contract at all”.9 This refers both to the claims of fraud and to the validity
of the contract. However, the Claimant contends, that the present dispute is a claim
regarding the currency of the contract, as opposed to one as to the existence of the
contract. Hence, it falls within the ambit of Longmore LJ’s statement of law. Although
there are minor disputes regarding the arbitrability of the latter, claims under the
former category can be submitted for determination to an arbitration tribunal.10
The
Claimant submits, that the claim relating to fraud falls under the former category.
17 The Claimant contends that the words ‘out of the charter’ do not have a narrower
meaning than the phrase ‘under the charter’. Ascribing different meanings to the two
phrases was criticised and rejected by Longmore LJ in Fiona Trust.11
Therefore, the
difference in wording does not add anything to the Respondent’s case.
18 Furthermore, it is true that the case of Fiona Trust concerned an act of bribery tainting
the main contract and not one of fraud. However, the Claimant argues that any
contention to the effect that that Fiona Trust only applies to bribery cases is
7 World Sport Group (Mauritius) Ltd v. MSM Sattelite (Singapore) Pte. Ltd Civ. App. No. 895 of 2014.
8 Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967).
9 Ibid, [18].
10 Merkin R, Flannery L, Arbitration Act 1996 5
th edn (Informa, 2014) 30(2).
11 Fiona Trust & Holding Corporation v Yuri Privalov [2007] EWCA Civ 20, [18].
6
unsubstantiated. Lord Hoffmann made it clear in his judgment that the ratio applies
mutatis mutandis to fraud.12
19 The Claimant argues that it is also immaterial whether it is seeking to recover damages
through a claim relating to the tort of fraud, rather than contract. It is general practice
that a party will not circumvent an arbitration agreement by basing its claims on tort
rather than contract.13
20 Finally, if the Tribunal finds that the fraud claim is untriable in this arbitration, the
Claimant will be forced to bring two sets of proceedings in order to achieve justice.
This was exactly what Longmore LJ was looking to avoid, when he said that an
interpretation of the contract resulting in parallel litigation was commercially unsound
and one-stop arbitration is to be favoured.14
Thus the Claimant submits that, finding to
the contrary would go against the purpose of Longmore LJ’s decision.
21 Alternatively, it is true that the generic position according to which all disputes may
fall within the ambit of the phrase may be displaced by express words to the
contrary.15
However, the court has gone to great lengths to point out that the situations
in which this exception applies are narrow.16
Neither the Claimant nor the Respondent
have evinced a contrary intention through correspondence or otherwise.
22 Further, as in the case of Fiona Trust, the relevant paragraph of the charterparty is not
subject to any amendment.17
The Claimant argues that this means that neither party
purported to alter the default position under the contract, that is, for claims relating to
fraud to be included within the ambit of the phrase.
12
Fiona Trust & Holding Corporation v Yuri Privalov [2007] EWCA Civ 20 [15]. 13
Born G, International Commercial Arbitration 2nd
edn (Kluwer, 2014) 1104. 14
Fiona Trust & Holding Corporation & Ors v Yuri Privalov & Ors [2007] EWCA Civ 20, [19]. 15
Fiona Trust & Holding Corporation v Yuri Privalov [2007] UKHL 40, [13]. 16
Ibid. 17
“Shelltime 4” Charterparty, 46 (b).
7
23 For these reasons, the Claimant would urge the tribunal to declare that the claim
relating to fraud is admissible.
PART II MERITS
THE OBLIGATION TO STEM SUFFICIENT BUNKERS AT SINGAPORE WAS ON
THE CHARTERERS AND THE CHARTERERS ARE IN BREACH
24 The Claimant argues that the obligation to stem sufficient bunkers at Singapore was on
charterers18
for two reasons. Firstly, the Claimant contends that according to Clause 29
of Shelltime 4 “the Charterers shall supply fuel oil with a maximum viscosity of
380 ….”.19
This is an express obligation and has not been amended in any way in the
present charter. The Claimant further argues that the obligation cast upon the
charterers by Clause 7 and Clause 15 of Shelltime 4 is absolute, thus they must
provide the bunkers and not merely exercise due diligence towards that end. Secondly,
the Claimant contends that the charterers’ obligation to stem sufficient bunkers could
be inferred on a proper construction of correspondence exchanged with Charterers
between 27 May 2014 and 3 June 2014.20
In this correspondence the charterers
evinced an intention to stem the bunkers, which implies that it is indeed their
obligation. In the correspondence between the parties, there cannot be found a single
reference to the Claimant being aware that he is the one responsible for the bunkers.
To the contrary, it is the charterers providing all the details and coordinates. The
Claimant merely follows the charterers instructions and indicates the particular needs
for the voyage.
25 The Claimant argues that he is relieved from the duty of rendering the ship seaworthy
in respect of bunkers. The obligations of the owner in respect of the vessel are
extensive enough. It would be disproportionate to hold the Claimant responsible for
18
Time Charters, [13.10]; The Hill Harmony [2001] 1 Lloyd’s Rep 147, 157 per Lord Hobhouse. 19
Shelltime 4 Charter Party. 20
Moot Problem pages 20-25.
8
the supply of bunkers. Furthermore, the owners had fulfilled their general duty of co-
operation by reasonably providing the charterers with information about the needs and
characteristics of their ship that may reasonably be required to enable the charterers to
perform their duty.21
The Claimant argues that this obligation was fulfilled on
numerous occasions, when the master informed the charterers about the supply of
bunkers being insufficient.22
The Claimant, thus, argues that the Respondent is
responsible for any losses or extra expenses which the owners incurred.23
BREACH OF THE CONDITION OF THE CHARTERPARTY REGARDING HIRE
HIRE DUE AND OWED BY CHARTERERS ON 3 JULY
26 The claimant argues that the hire was due and owed to the owners under the terms of
the Charterparty on 3 July.
HIRE DUE AND OWED
27 According to Shelltime 4 cl.9, hire must principally be paid monthly in advance.24
In
default of such a payment, the owners shall notify the charterers and the charterers
then have three banking days25
after receiving the notice to make the payment
including interest, otherwise the owners obtain the right to withdraw the vessel.
28 The notice was sent by the owners on 3 July. The Respondent did not reply to the
notice and did not pay the hire. Instead, the charterers sent a redelivery notice and an
off-hire notice on 4 July 2014.
29 Under Clause 9(i) of Shelltime 4 as amended, a deduction from hire cannot be made in
regard to a future off-hire event.26
The clause reads as follows “payment of hire shall
be made in immediately available funds (…) less pro rata hire for undisputed and
21
Time Charters [12.5]. 22
Moot Problem, 25. 23
Time Charters, [12.6]. 24
Shelltime 4 cl.9, line 185. 25
Shelltime 4 cl.9 (a), line 196, amended version. 26
Terence Coghlin Time Charters [37.62].
9
experienced off hire periods”.27
Equally, if the vessel is off-hire when the monthly
payment is due, Clause 9(i)28
is still of no use, since it refers to “undisputed and
experienced off hire periods”.29
The off-hire notice sent by the Respondent on 4 July
does therefore not affect the hire owed on the 3 July 2014, even under the assumption
that the vessel was off-hire at that time, which is denied.
30 There is no information to support a right to reduce hire regarding cl. 9 (ii). A right to
reduce hire according to clause 9 (iii) can exist regarding an amount not due yet,30
if
the amount is due to the Charterers according to two optional clauses. Since the
reference to clause 3(c) is interpreted as a typographical error for 3(b), and 3(b) is not
relevant in this matter, only cl.24 of Shelltime 4 could found a right to reduce hire.31
Cl. 24 refers to the guaranteed speed of the chartered vessel, but a right to reduce the
hire can only be founded regarding undisputed amounts.32 In this matter the speed of
the vessel was reduced from the 25 June 2014 to 17
July. On 25
June, the charterers
received a notice from the Master of the vessel/Owners that responsibility for this
change in speed or any delays was denied.
31 Since the amount is disputed, the Claimant submits that the hire was due and owed to
the claimant on the 3 July.
32 The Claimant refutes the Respondent’s contention that no hire is due at any point after
6 July. The Claimant submits that the hire is still due and that the Claimant is under
no obligation to pay an adjustment of hire.
27
Shelltime 4 cl.9, line 186 amended version. 28
Shelltime 4 cl.9, line 186 amended version. 29
Ibid. 30
Terence Coghlin, Time Charters [37.63]. 31
Ibid. 32
Shelltime 4 cl.9 (iii), line 189, amended version.
10
OFF-HIRE EVENT
33 Since the original charterparty does not contain an express obligation to pay an
adjustment of hire for overpaid hire, such an obligation is implied by the courts.33 The
Claimant argues that there has been no off-hire event which would have put the
claimant under the obligation to repay hire which has not been “earned”.34 Such an
obligation would arise if an off-hire event, as defined in the charterparty actually
occurred and if there was a loss of time to the charterer as a consequence of this event.
In principle, an off-hire event must be fortuitous and not a natural result of the
charterers orders35 and not a result of a breach of contract on the part of the
charterers.36
34 Cl. 21 of Shelltime 4 as amended defines off-hire events. Since the clause contains an
exception, the burden of proof is on the charterers.37 Equally, any uncertainties as to it
the meaning of the clause are to be construed to the disadvantage of the charterers.38
The amended version of cl.21 (a) refers to an undisputed loss of time, in this matter
the Master of the vessel notified the charterers on 3 June that neither him nor the
owners will be responsible for time, deviation or cost relating to future bunkering on
the laden passage.
35 The Respondent alleges that the vessel was off-hire for breach of orders and/or neglect
of duty on the part of the Master from 4 July 2014 according to Shelltime 4 cl.21 (a)
(ii) until the vessel was ready to resume service of its voyage from a position not less
favourable to charterers than that at which such loss of time commenced.39
33
Terence Coghlin Time Charters [16.10]; The Trident Beauty [1994] 1 Lloyd’s Rep. 365, p.368.; The Riza and
The Sun [1997] 2 Lloyd’s Rep. 314, 320. 34
Ibid. 35
The “Rijn” [1981] 2 Lloyd’s Rep. 267. 36
Lensen v Anglo-Soviet (1935) 52 L.I Rep. 141. 37
Martin Dockray Cases and Materials on the Carriage of Goods by Sea 318. 38
Ibid; Royal Greek Govt. v Minister of Transport, The Ann Stathos (1948) 82 LIL Rep 196, 199. 39
Moot problem, 68.
11
36 The Claimant contends that the Master did not neglect any of his duties and was not in
breach. The Respondent’s allegation that the vessel was off-hire due to no contact with
the receiver/charterer40 is denied. The Master contacted the defendants two minutes
before the off-hire notice was sent.41 The Claimant concedes the breach of orders
under Shelltime 4 cl. 21 (a) (ii).
37 The Claimant concedes that the piracy incident itself is an off-hire event according to
Shelltime 4 cl. 21 (a) (i). The Claimant argues that even if the Shelltime clause is to be
construed in a way that it would include pirate attacks as an off-hire event, which is
denied,42
the BIMCO piracy clause clearly states that the vessel shall remain on hire if
the vessel is attacked by pirates. The clause is confined to matters relating to the
physical condition of the ship only.43
FRUSTRATION OF THE CHARTERPARTY
38 The Claimant refutes the Respondent’s argument that the charterparty was frustrated
no later than 4 July 2014. The charterparty has not been frustrated. Whether a piracy
attack frustrated a contract or not depends on the length of the pirate attack.44 In the
present case, the pirate attack lasted 13 days, this length of time is not sufficient to
frustrate the contract, especially since frustration is not lightly inferred.45 There was no
supervening event.46 The Claimant argues that the nature of the cargo, being not
perishable, does not support an argument of frustration as well.47
DAMAGES
40
Moot problem, 41. 41
Moot problem, 40-41. 42
Cosco Bulk Carrier Co. Ltd. v Team-Up Owning Co. Ltd. (the “Saldanha”) [2010] EWHC 1340 43
The Manhattan Prince [1985] 1 Lloyd’s Rep. 140 44
Paul Todd Maritime Fraud and Piracy [1.138]. 45
Ibid., The Petro Ranger [2001] 2 Lloyd’s Rep 348. 46
National Carriers Ltd. v Panalpina (Northern) Ltd [1981] AC 675, 700. 47
Paul Todd Maritime Fraud and Piracy [1.139].
12
39 The Claimant submits that the failure to pay hire amounts to a breach of condition by
the charterers.48 Alternatively, should the Tribunal find that failure to pay hire is a
breach of an innominate term, it is submitted that the failure amounts to a repudiatory
breach in this case.
40 The anti-technicality clause in Shelltime 4 49 allows the charterers to withdraw the
vessel under certain circumstances if a failure to pay hire occurs. The clause is a
strong indication that in this charterparty “time is of the essence” 50 and very important
for the parties51 The anti-technicality clause makes the payment of hire a condition.52
The need for commercial certainty supports this point of view as well.53
41 Since the vessel was never off hire and the contract was not frustrated, it is submitted
that the claimant is entitled to damages for loss of future earnings.
IF TRIBUNAL FINDS THAT OBLIGATION TO PAY HIRE NOT A CONDITION
42 Should the Tribunal find, that the anti-technicality clause is not a condition, the
Claimant submits that the fact that the defendants have refused to pay hire until today
clearly shows that in this matter there is a repudiatory breach.54
THE CLAIMANT DID NOT BREACH THE PIRACY CLAUSE. THE CLAIMANT
ACTED IN ACCORDANCE WITH THE CHARTERPARTY AND THE INDUSTRY
PRACTICE
43 The Claimant contends that as under BIMCO Piracy Clause for Time Charter Parties
2013, the Claimant merely “has a liberty” to take measures to protect the Vessel from
48
Kuwait Rocks Co v AMN Bulkcarriers Inc (The Astra) [2013] 2 Lloyd's Rep 69. 49
Shelltime 4, cl. 9 (a), amended version. 50
Bunge Corporation v Tradax Export SA (CA) (1980) 1 Lloyd’s Rep 294; (HL) (1981) 2 Lloyd’s Rep 1; (1981)
1 WLR 711. 51
Tankexpress A/S v Compagnie Financiere Belge des Petroles S/A (The Petrofina) (HL) (1948) 82 Ll L Rep 43;
[1949] AC 76; Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia (The Laconia) [1975] 1
Lloyd's Rep 634; (CA) [1976] 1 Lloyd's Rep 395; (HL) [1977] 1 Lloyd's Rep 315; [1977] AC 850. 52
Kuwait Rocks Co v AMN Bulkcarriers Inc (The Astra) [2013] 2 Lloyd's Rep 69.; Parbulk II A/S v Heritage
Maritime Ltd SA (The Mahakam) [2011] EWHC 2917 (Comm); [2012] 1 Lloyd's Rep 87. 53
Ibid. 54
Bunge Corp v Tradax Export SA [1981] 1 W.L.R. 711; Federal Commerce & Navigation Co Ltd v Molena
Alpha Inc (The Nanfri) [1979] A.C. 757.
13
a risk under sub-clause (c).55
It is, according to the Claimant, under no express
obligation to take the aforementioned measures. The Claimant argues further that it is
for the owners to determine the level of threat and the measures considered
appropriate as according to the Piracy Clause in the Charterparty.56
The Claimant
contends that the Master proceeded on a reasonable judgment as in accordance with
BIMCO Piracy Clause for Time Charter Parties 2013 sub-clause (a).57
THE CHARTERERS DIRECTED THE VESSEL TO AN UNSAFE PORT58
44 The Claimant argues that the Respondent ordered the vessel to an unsafe port in
breach of the safe ports warranty.59
The Claimant contends that the port in Luanda was
not a port which in the relevant period of time, the particular ship can reach it, use it
and return from it without, in the absence of some abnormal occurrence, being
exposed to danger which cannot be avoided by good navigation and seamanship.60
The
risk of piracy was high at the time of the charterparty. The Claimant argues that
according to Shelltime 4 Clause 4 line 115, as amended, Angola is excluded from safe
navigation, as in this area the pirates primarily hijack ships to steal petroleum and sell
it on the local illegal market.61
THE CLAIMANT DID NOT BREACH ITS OBLIGATION OF EXERCISING DUE
DILIGENCE TO MAKE THE VESSEL SEAWORTHY
55
Moot Problem, 11. 56
Moot Problem, 9. 57
Moot Problem,11. 58
Kodros Shipping Corp v Empresa Cubana de Fletes (The Evia) (No. 2) [1983] 1 AC 736. 59
Wilson J, Carriage of Goods by Sea, 6th edn (Pearson, 2008), 25-32; Paul Todd, Maritime Fraud and Piracy
[1.160]. 60
Leeds Shipping Co ltd v Societe Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep 127, 131 per
Sellers LJ; The Ocean Victory [2014] 1 Lloyd’s Rep 59 at [99] per Teare J; The Evia (No. 2), The Stork [1955] 1
Lloyd’s Rep 349 (C.A.), The Batis [1990] 1 Lloyd’s Rep 345. 61
United Nations Security Council , 19 January 2012, Letter Dated 18 January 2012 from the Secretary-General
addressed to the President of the Security Council S/2012/45, p. 3; Keith Johnson, ‘Oil Pirates and the Mystery
Ship’ Foreign Policy, January 29, 2014; James Burgess, ‘Oil Piracy Moves to Angolan Coast with $8M Heist’
< http://oilprice.com/Energy/Energy-General/Oil-Piracy-Moves-to-Angolan-Coast-with-8M-Heist.html>
accessed 10 April 2015; Reuters ‘UPDATE 1-Pirates hijacked tanker off Angola, stole cargo - owners’
<http://uk.reuters.com/article/2014/01/26/angola-piracy-idUKL5N0L00NM20140126>; David Kashi, ‘Nigerian
Pirates Likely Hijacked Oil Tanker Off Angola's Coast, Expert Says’, International Business Times (27 January
2014) <http://www.ibtimes.com/nigerian-pirates-likely-hijacked-oil-tanker-angolas-coast-expert-says-1548738>.
14
45 The Claimant argues that under Article III(1) he did not breach the obligation to
exercise due diligence to make the vessel seaworthy and to properly man, equip and
supply the ship.62
There is no indication in the facts of the present case that the vessel
was not manned and equipped sufficiently. It is, however, for the charterer to prove
unseaworthiness first.
THE MASTER WAS NOT INCOMPETENT
46 The Claimant refutes the Respondent’s contention that the Master was incompetent.
The Claimant argues that the Master acted in a way which a prudent man would take
for the purpose of avoiding the danger.63
The fact that the vessel was hijacked has is in
no way the fault of the master. Quite to the contrary, the length of time, in which the
charterers lost the contact with the ship was 13 days, if the master did not co-operate
and did not take other reasonable measures to save the crew and the cargo, the
hijacking incident could have been longer. The fact that the damage sustained is not
higher is an indicator that the master took reasonable care and is not breach of his
duties.
47 Moreover, under Clause 27 of the Shelltime 4 Charterparty, the Master shall not be
liable for any loss or damage or delay or failure arising or resulting from any act,
neglect or default of the servants of the Claimant in the navigation or management of
the vessel, dangers and accidents of the sea.64
The Claimant thus argues that he is
exempt from liability.
THE CLAIMANT IS UNDER NO DUTY TO CHECK THE SAFETY OF THE
NOMINATED PORT
48 The Claimant contends that the owners and the master are entitled to assume that the
charterers in making their nomination of a port are doing so in accordance with their
62
Paul Todd, Maritime Fraud and Piracy [1.113]. 63
The Teutonia (1871-73) LR 4 PC 171, 179 per Mellish LJ. 64
Shelltime 4 Charter Party clause 27 ‘Exceptions’.
15
contractual obligation. The Claimant concedes that he is under no duty to check the
safety of the nominated port before proceeding to it.65
It would be unreasonable for the
Claimant to put the Respondent’s instruction under scrutiny. It is the charterers
obligation to nominate a safe port, and the owners have no reason to presume that the
charterers are negligent in the discharge of their duty.
49 With regards to the safe ports allegations, the Claimant refutes the Respondent’s claim
that his actions broke the chain of causation. The Claimant concedes that it is the
initial breach of contract by the charterers, i.e. the nomination of an unsafe port, that
caused the breach. The Claimant argues that the master acted reasonably in the
situation confronting him and thus his actions shall not be held to have been the
effective cause of damage.66
The Claimant concedes that the damage which the ship
sustained was the natural and probable result of the charterers’ order – and thus caused
by it.67
50 The Claimant contends that the duty to make the vessel seaworthy is only to act
“properly and carefully” however, so very high cost measures would not normally be
required.68
The fact that no further damage was sustained show that the Claimant
acted properly and carefully in the circumstances and made rational decisions.
DAMAGES
51 The Claimant argues that he is entitled to damages69
as the master reasonably obeyed
the charterers’ order and the ship was damaged as a result of the unsafety of the port.70
The Claimant argues that the obligation to redeliver the ship “in like good order and
condition, ordinary wear and tear excepted” should be construed as imposing on the
65
The Stork [1955] 1 Lloyd’s Rep 349, 372 per Morris L.J.;The Kanchenjunga [1987] 2 Lloyd’s Rep 509, 515
per Hobhouse J. 66
Time Charters, [10.69]; The Stork [1955] 1 Lloyd’s Rep 349, 363 per Sellers LJ; [1954] 2 Lloyd’s Rep 397. 67
Time Charters, [10.70]; The Ocean Victory [2013] EWHC 2199 (Comm); The “Eugenia” [1964] 2 QB 226. 68
Paul Todd, Maritime Fraud and Piracy [1.118]. 69
Motor Oil Hellas (Corinth) Refineries S.A. v Shipping Corporation of India (The Kanchenjunge”) [1990] 1
Lloyd’s Rep. 391. 70
Time Charters, [10.59]; The Houston City [1956] 1 Lloyd’s Rep 1 (P.C.).
16
charterers an obligation to indemnify the owners against the cost of restoring the ship
to the condition she was in at delivery, since firstly, the damage sustained has been
caused by compliance with the charterers’ orders, and secondly, the damage from the
pirate attack is not ordinary wear and tear.71
52 In the event that this tribunal rules that the contract is terminated by the charterers, the
assessment of what the owners’ position would have been if the charter had been
performed is generally a straightforward exercise of calculating what the owners
would have earned under the charter.72
The Claimant contends that they would have
performed their part of the contract so as to earn hire.73
The Claimant argues that the
owners are entitled to such sum as would put them in the same financial position as if
the charter had been performed.74
TORT OF FRAUD
53 The Claimant argues that ASA2 were agents of the Respondent. Whether or not ASA2
is an agent of the Charterers would depend on the establishment of an agency
relationship that can be created expressly, via contractual provision.75
Alternatively,
the Respondent may be liable for the acts of ASA2 under the doctrine of apparent
authority.76
THE ESTABLISHMENT OF ASA2 AS AN AGENT OF THE CHARTERERS HAS
BEEN DONE EXPRESSLY
54 The Claimant submits that Atlantic Services Agency (“ASA”) and Atlantic STS
Agency are one and the same entity and any differences result from a misnomer
71
The Pamphilos [2002] 2 Lloyd’s Rep. 681, 691 per Colman J. 72
Time Charters, [4.38]. 73
The Glory Wealth [2013] 2 Lloyd’s Rep. 653. 74
The Griparion [1994] 1 Lloyd’s Rep. 533, 537, per Rix, J. 75
Peter Watts (ed.), Bowstead & Reynolds on Agency (Sweet & Maxwell, 20th ed. 2014) [2-001]. 76
Ibid.
17
infiltrated into the voyage orders.77
In the case of The Double Happiness it was
accepted that the court was at liberty to construe a contract so as to reflect the true
intentions of the parties.78
Additionally, in Nittan v Solent Steel, upon reading the
correspondence, Lord Denning concluded that it would have been unjust for one party
to take advantage of a misnomer to avoid liability.79
55 In the present case, the voyage orders state that the agent at the discharge port is
Atlantic Services Agency,80
while the party contacting the Master on the 28th
of June
uses the name Atlantic STS Agency81
. The Claimants argue that these are obviously
referring to the same party. In the case of Goldsmith it was decided that if a party is
non-existent and the intended party is sufficiently identified by his characteristics, then
there is a binding contract between the claimant and the intended party.82
The contract
identifies the agent as being an operating a STS service near the Angolan coast and
ASA2 fits this description due to two reasons.
56 Firstly, the existence of proximity between the STS location stipulated in the voyage
orders and the STS location proposed by ASA2. Secondly, the fact that there is no
response on part of ASA, despite it being contacted several times either in carbon copy
or directly, shows that an entity going by the name of ASA is not willing to use this
email address for further communication. It is a logical and only conclusion of the
Claimant that if messages in response to an email sent by the Claimant come from a
different address than they were sent to, they are indeed from the very same person
they were sent to, even if the address is different. Therefore, the Claimant urges the
tribunal to find that ASA is a misnomer and the party intending to be nominated was
77
Moot Problem, 13. 78
Front Carriers Ltd v Atlantic And Orient Shipping Corporation (The "Double Happiness") [2007] EWHC 421
(Comm) [44]. 79
Nittan (U.K.) Ltd. V Solent Steel Fabrication Ltd. Trading As Sargrove Automation And Cornhill Insurance
Co. Ltd. [1981] 1 Lloyd's Rep. 634, 637, col. 2. 80
Moot Problem, 15. 81
Moot Problem, 35. 82
Goldsmith v Baxter [1970] Ch. 85.
18
in fact ASA2. Any other interpretation would allow the Respondents to escape liability
due to a technicality.
IN THE ALTERNATIVE, THE CLAIMANT SUBMITS THAT THE AGENCY
AGREEMENT BETWEEN ASA2 AND THE RESPONDENTS HAD BEEN CREATED
ON THE OPERATION OF THE DOCTRINE OF APPARENT AUTHORITY83
57 Judging from the Claimant’s position it would have been reasonable to believe that
ASA2 had authority to act, belief which can be traced to the Respondent’s
manifestations.84
The Claimant argues that there are three reasons in support of this
proposition.
58 Firstly, the relative proximity between the STS location proposed by ASA2 and the
STS location that the master was aware of point towards the conclusion that ASA2
had knowledge of the voyage orders.
59 Secondly, the repeated inclusion of the nominated agents’ e-mail address stipulated in
the voyage orders in messages sent to the Respondents,85
without them being put on
enquiry as to the email address’ validity, would have allowed the master, or any
reasonable person in his position, to make the assumption that he was dealing with
agents of the Respondent.
60 Thirdly, by confirming that the Claimants should continue to liaise with ASA2,86
the
Respondent has allowed the agent to act on their behalf as a ‘medium of
communication’.87
REPRESENTATIONS MADE BY CHARTERERS OR THEIR AGENTS WERE
UNTRUE. SUBJECT TO PRECEDING ARGUMENT, IT IS ARGUED THAT THE
RESPONDENTS ARE LIABLE IRRESPECTIVE OF WHETHER THE
83
Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717, 777. 84
Bowstead & Reynolds, [8-011]. 85
Moot Problem, 31-34. 86
Moot Problem, 40. 87
Magripilis v Baird [1926] St.R.Qd. 89, 96.
19
REPRESENTATIONS WERE MADE BY THEIR AGENT OR WHETHER THE
RESPONDENT IS ENTIRELY INNOCENT88
61 A statement of opinion by one who knows the facts best will carry an implication of
fact, namely that the representor by expressing that opinion impliedly states that he
believes that facts exist which reasonable justifies it.89
Because the Respondent or the
agent took it upon themselves to arrange the bunkering and because they provided no
further information outside the correspondence regarding the bunkering process, the
Respondent or the agents were the parties who were in the best position to express
whether bunkering at the specified locations was possible or not. It must be
remembered that the requirement is not for the Charterer to know all the facts, it
suffices for principle’s application that the Charterer was the one better equipped with
information.90
Therefore, this state of affairs carried an implication that the
Respondents represented that the facts were true.
THE CLAIMANT ARGUES THAT THE RESPONDENT DID NOT HONESTLY
BELIEVE THAT THE REPRESENTATIONS MADE BY HIM WERE TRUE
62 It is trite law that without the element of dishonesty the statement is not capable of
amounting to fraud.91
The Claimant argues that the Respondent was reckless when
making the representations, careless whether they were true or untrue, which is
sufficient to fulfil the dishonesty requirement of a claim in fraud.92
63 If a continuing representation is made recklessly by the Respondent’s knowledge at
the time when it is relied upon, there will be a deceit at the time.93
ASA2, on behalf of
the Charterers, represented that there would be bunkers available at STS Area 1,
88
Bowstead & Reynolds, [8-176]. 89
Professor Michael Jones; Professor Anthony Dugdale; Mark Simpson, QC, Clerk & Lindsell on Torts (Sweet
& Maxwell 21st ed. 2014) [18-14].
90 Brown v Raphael [1958] Ch. 636, 642.
91 Derry v Peek (1889) 14 App. Cas. 337, 376.
92 Clerk Lindsell, 1323.
93 Briess v Woolley [1954] AC 333, 353-354.
20
although the vessel Antelope was not even in range when the Western Dawn had
arrived at location, or even later, after the disruption in communications.94
ASA2
made no efforts to inform the Claimant that the Antelope would be late at any time,
therefore the initial representation stood as it was.
THE REPRESENTATIONS OF ASA2 WERE INTENDED TO BE ACTED ON BY
THE CLAIMANT
64 The Claimant argues that in order for this requirement to be fulfilled, it is sufficient
that ASA2 must have appreciated that in the absence of some unforeseen circumstance
the Claimant will actually follow the voyage instructions provided by ASA2.95
By
alluding to the potential resolution of the issue of fuel supply, ASA2 were looking to
ensure that the master would act upon the representation. It would have been
unreasonable, the Claimant argues, to presume that the expectation of ASA2 would
have been that the master would not have decided not to comply with the advice.
THE CLAIMANT ARGUES THAT IT HAD ACTUALLY RELIED ON THE
REPRESENTATIONS MADE BY THE RESPONDENT
65 In order to demonstrate this, a claimant must show that, but for the representation, he
would have acted differently than he had actually done.96
66 The master asked ASA2 to confirm that the initial discharge port location as per the
bills of lading and voyage orders was correct, with the intention of following the initial
coordinates. Upon ASA2 nominating the new discharge port location, the master
repeatedly confirms that it will ‘take bunkers on arrival’ at the new port location.97
But
for the representations made by ASA2, the master would have proceeded to discharge
the cargo and bunkered at the prior location.
94
Moot Problem, 40. 95
Shinhan Bank Ltd v Sea Containers Ltd [2002] 2 Lloyd’s Rep. 406. 96
Smith v Chadwick (1883-84) 9 App. Cas. 187; Clerk & Lindsell, [18-34]. 97
Moot Problem, 35-40.
21
THE CLAIMANTS SUBMIT THAT THEY HAVE SUFFERED DAMAGE AS A
RESULT OF RELYING ON THE RESPONDENT’S REPRESENTATIONS, OR
THAT OF THEIR AGENTS
67 The ordinary causation rules are usually construed in favour of the claimant in claims
relating to the tort of fraud.98
Therefore, if the tribunal finds that all the elements of
fraud have been met, finding causation is a much less onerous step to take. It is trite
law that a material contribution to the risk of damage is sufficient to find causation.99
The Claimants argue that, but for relying on the representations made by ASA2,
Western Dawn would have arrived at the initial location, which would have been
closer to the Angolan coast. It has been shown that the risk of being the victim of a
piracy attack increases significantly as one is closer to the Gulf of Guinea.100
Therefore, by relying on the representations of ASA2, the Claimants increased their
chance of being attacked by pirates and created a causative link between the damage
incurred and the Claimant’s reliance on the Respondent’s representations.
THE DAMAGE CAUSED BY THE RESPONDENTS IS NOT TOO REMOTE
68 When assessing damages in the context of claim relating to the tort of deceit the
Claimant may recover all damages directly flowing from the tort, regardless of
whether the damage was not foreseeable.101
69 In assessing the damages it is argued that the tribunal should seek to place the
Claimant in the position he would have been had the representations not taken
place.102
The Claimants urge the court to award damages in reparation for the damage
98
Smith New Court Securities Ltd. V. Scrimgeourvickers (Asset Management) Ltd. [1997] A.C. 254, 280. 99
Clerk & Lindsell, [2-41]; McGhee v National Coal Board [1973] 1 WLR 1, 4; Fairchild v Glenhaven Funeral
Services Ltd [2003] 1 AC 32. 100
United Nations Security Council, 19 January 2012, Letter Dated 18 January 2012 from the Secretary-General
addressed to the President of the Security Council S/2012/45, 3
<http://www.securitycouncilreport.org/atf/cf/%7B65BFCF9B-6D27-4E9C-8CD3-
CF6E4FF96FF9%7D/AUUN%20S%202012%2045.pdf>. 101
Doyle v Olby [1969] 2 Q.B. 158, 168. 102
Downs v. Chappell [1997] 1 W.L.R. 426, 438-439.
22
to vessel, loss of cargo, loss of hire during the subsequent period in which the vessel
was unable to perform.
III BAILMENT
70 Were the tribunal to rule that frustration of the contract had taken place in the present
case, the Claimant refutes the Respondent’s contention that bailment is a course of
action in English law. Alternatively, were the court to rule that bailment is a course of
action in common law, the Claimant contends that no bailment obligation arises in the
present case, since there was not consent on the part of the alleged bailee. The
Claimant further argues that the claim of bailment could not arise due to lack of
attornment. Alternatively, were the court to rule that the relationship of bailment arose,
the claimant argues that he is exempted from liability by way of exceptions under
Article IV., r. 2 of the Hague-Visby Rules.103
The Claimant further argues that the
Owners did not convert part of the cargo on the Vessel.
BAILMENT CANNOT ARISE AS A DISTINCT CAUSE OF ACTION IN ENGLISH
LAW
71 The Claimant argues that bailment is inexistent in English law as a distinct cause of
action.104
There is no need for it, when there are the contractual and the tortious
obligations as in the present case. The Claimant further concedes that bailment cannot
be a separate course of action distinct from negligence and conversion.105
There is no
need for elevating the standard of care since the goods are insured anyway. There is no
need for the alleged bailee to be an additional insurer of the goods. Additionally, since
103
Hague-Visby Rules, The Hague Rules as Amended by The Brussels Protocol 1968. 104
Gerard McMeel “Bailment: fertility and the forms of actions (Yearworth v. North Bristol NHS Trust)” (2010)
Lloyd’s Maritime and Commercial Law Quarterly 22-27, 23. 105
A Bell, “The Place of Bailment in the Modern Law of Obligations” in N Palmer and E McKendrick (eds),
Interest in Goods, 2nd edn (1998) 461; G McMeel, “The Redundancy of Bailment’” [2003] Lloyd’s Maritime
and Commercial Law Quarterly 169; H Dempster, “Clearing the Confusion Surrounding Bailment” (2004) 33
CLWR 295; and G McBain, ‘‘Modernising and Codifying the Law of Bailment’’ [2008] JBL 1; Michael Bridge,
Personal Property Law, 3rd edn (2002) 34.
23
the Respondent argues that the tort of fraud is not arbitrable, the case should be the
same in bailment when it comes to damages awarded for the breach of duty of care.
ALTERNATIVELY, WERE THE COURT TO DECIDE THAT A CLAIM IN
BAILMENT IS ALLOWED, THERE WAS NO CONSENT ON THE PART OF THE
ALLEGED BAILEE
72 The Claimant argues that the consent on the part of the alleged bailee is crucial for the
establishment of the bailment relationship.106
The bailee must intend to possess and
actually possess the goods. It is, however, independent of the right to ownership. The
bailee is in fact prohibited from using the property whilst in his possession. The
Claimant thus refutes the argument of the Respondent as to the alleged obligations
arising out of the bailment relationship between the parties. The Claimant argues that
the duties of the bailee could not arise due to lack of the voluntary assumption of
possession of another’s goods.107
THERE IS NO BAILMENT DUE TO LACK OF ATTORNMENT
73 The Claimant concedes that the bailment claim is inadmissible due to lack of
attornment.108
The owners did not possess the goods on behalf of one part
acknowledging that they hold the goods on behalf of someone else. The obligation
between the parties in the present case was a contractual obligation for the carriage of
goods by sea. Since the contract is still in place, there could be no consent or
acknowledgement on the part of the owner for the bailment obligations to arise. The
Claimant further concedes that the delivery of the cargo against surrender of a bill of
lading, as under the contract of carriage, will not amount to an attornment.109
106
East West Corp v. DKBS AF 1912 A/S [2003] EWCA Civ 83; [2003] QB 1509 per Mance L.J. at [11]. 107
N E Palmer, Palmer on Bailment, 2nd
edn (1991), 64-77. 108
Hamburg Houtimport B.V. v. Agrosin Pte Ltd (The Starsin) [2000] 1 Llooyd’s Rep. 85, 101-102; The
Aliakmon [1986] AC 785, 818, per Lord Brandon of Oakbrook; The Gudermes [1993] 1 Lloyd’s Rep 311 (CA). 109
The Starsin [2000] 1 Lloyd’s Rep 85, 101 per Colman J.
24
IN THE ALTERNATIVE, THE CLAIMANT IS EXEMPTED FROM LIABILITY BY
WAY OF EXCEPTIONS UNDER ARTICLE IV., R. 2 OF THE HAGUE-VISBY
RULES
74 The Claimant argues that he owes no general duty of care to protect against the theft
of goods.110
A duty of that type would be too high of a standard. The Claimant further
contends that he should not be held responsible for any loss or damage arising or
resulting from perils, dangers and accidents of the sea or other navigable waters.111
The owners did not have any influence on the situation in the Gulf of Guinea. The
Claimant argues that piracy is regarded as a peril of seas.112
The Claimant argues that
he is exempted from liability by the action of Article III(2) of the Hague-Visby Rules,
which unlike Art. III(1), is subject to Art. IV, and Art. IV(2)(c) and exempts liability
for loss or damage arising prom perils, dangers and accidents of the sea.
THE OWNERS DID NOT CONVERT PART OF THE CARGO ON THE VESSEL
75 The Claimant refutes the Respondent’s conversion argument. The Claimant concedes
that the conversion claim is invalid due to lack of possession, both actual possession or
the immediate right to possession.113
The only duty that the Claimant was obliged to
fulfil was the contractual obligation. He did not consent to possess the goods on behalf
of the Respondent.
76 Nevertheless, if the Respondents (or their agents) were in possession of the bill of
lading, the Claimant submits that the physical possession of the bill does not mean that
the holder has the immediate right to possession of the goods referred to in the bill.114
The Claimant argues that it will not be possible for the Respondent to sue in
110
Edwards v. West Herts Group Management Committee [1957] 1 W.L.R. 415. 111
Article IV Rule 2(c) of the Hague-Visby Rules. 112
Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (The Bunga
Seroja) [1999] 1 Lloyd’s Rep 512 [81]; Pickering v Barkley (1648) Style 132; Morse v Slue (1671) 1 Vent 190; 113
Simon Baughen, “Misdelivery and the boundaries of contract and tort” (2010) Lloyd’s Maritime and
Commercial Law Quarterly 411-430, 413. 114
The Aliakmon [1986] AC 785; [1986] 2 Lloyd’s Rep 1.
25
conversion before it had obtained the immediate right to possession of the goods
covered by the bill of lading.115
The Claimant argues that at the time of the alleged
conversion, the Respondent was not in possession of the goods, hence the claim in
conversion is invalid.
IV PRAYER
For the reasons set out above, the Claimant requests the Tribunal to:
DECLARE that this Tribunal has jurisdiction to hear the merits of the dispute, including the
tort of fraud merits; and
FIND that the Respondent is liable for the breach of the Contract of Carriage and the tort of
fraud.
115
Motis Exports Ltd v. Dampskibsselskabet AF 1912 Aktieselskab, Aktieselskabet Dampskibsselskabet
Svenborg, per Moore-Bick J.
