STATEMENT OF RESPONDENT’S - Murdoch University · Team 19 Statement of Respondent’s Case ii b. The Claimant has not complied with its obligation under article 87 of the

International Maritime Law Arbitration Moot

2017

In the matter of arbitration under

the International Arbitration Act (CAP 143A, Rev Ed 2002)

and the Singapore Chamber of Maritime Arbitration Rules

MASTER PROGRAM IN ARBITRATION AND INTERNATIONAL BUSINESS LAW

UNIVERSITY OF VERSAILLES – PARIS SACLAY

STATEMENT OF RESPONDENT’S CASE

COUNSEL – TEAM NUMBER 19

Arleen Gonzalez Charlotte Hauchard Vérane Pasi

Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa

BETWEEN

INFERNO RESOURCES SDN BHD

Suite No. 2, Level 3

South Wing, Pasar Borong Pandan

81100 Johor Bahru

MALAYSIA

&

FURNACE TRADING PTE LTD

2 Marina Boulevard #19-05 Singapore 0189990

SINGAPORE

(RESPONDENT) (CLAIMANT)

&

IDONCARE BERJAYA UTAMA PTY. LTD.

30 Pacific Street #02-04

Newcastle 2300

NEW SOUTH WALES, AUSTRALIA

(RESPONDENT 2, OR SHIPPER)

Team 19 Statement of Respondent’s Case

i

TABLE OF CONTENTS

Table of Contents ........................................................................................................................ i

Index of Abbreviations ............................................................................................................ iii

Index of Scholars ....................................................................................................................... v

Index of Case Law ................................................................................................................. viii

Index of Legal Sources ............................................................................................................. xi

Introduction ................................................................................................................................ 1

I. Arguments on Jurisdiction ...................................................................................................... 4

A. The Arbitral Tribunal has jurisdiction over the present dispute ................................... 4

B. The Arbitral Tribunal is not empowered to order interim relief ................................... 5

C. Finally, the Arbitral Tribunal should not grant an interim order allowing Claimant to

sell the Cargo ..................................................................................................................... 7

1. The Claimant has no prima facie case on the merits .................................................. 7

2. There is no urgent need for interim relief .................................................................. 8

3. The Claimant will not suffer any irreparable harm if the interim relief is not granted

by this Tribunal ....................................................................................................... 10

II. Arguments on the Merits ..................................................................................................... 11

D. Preliminary Issue: The applicable Law to the Dispute ............................................... 11

E. The Respondent did not breach the Voyage Charterparty........................................... 11

1. The congestion at Chinese ports made it impossible to nominate them as valid

discharge port .......................................................................................................... 12

2. By refusing the two alternative valid discharge ports nominated by the Respondent,

the Claimant breached its obligation to respect a nomination that is irrevocable ... 14

a. The Respondent reasonably nominated a safe discharge port in South Korea that

was refused by the Claimant .................................................................................... 14

i. Busan is a valid discharge port ......................................................................... 15

ii. Busan was arbitrarily refused by the Claimant as a discharge port ................. 16

b. The Claimant wrongfully terminated the contract even though the Respondent has

just suggested a discharge port valid under the contract.......................................... 19

F. The Claimant is not entitled to the liens over the Cargo and the Sub-Freight............. 20

1. The Claimant’s lien over the Cargo is unlawful ...................................................... 20

a. The Respondent is not the owner of the Cargo .................................................... 21


ii

b. The Claimant has not complied with its obligation under article 87 of the

Chinese Maritime Law ......................................................................................... 22

2. Singaporean law does not acknowledge lien on the Sub-Freight ............................ 23

Request for Relief .................................................................................................................... 25


iii

INDEX OF ABBREVIATIONS

& And

§/§§ Paragraph/Paragraphs

Agreement Development and Sales Agreement of 1

August 2010

Arbitral Tribunal/Tribunal

Panel consisting of the arbitrators

nominated in accordance with the SCMA

Rules

Art. Article/Articles

CLAIMANT

Furnace Trading Pte Ltd, a company

organised and existing under the laws of

Singapore

E.g. Exempli gratia; for example

Ed. Editor/Editors/Edition

Etc. Et cetera, “and so on”

Fn. Footnote

Ibid. Ibidem, in the same place

ICC International Chamber of Commerce

Lex arbitri The procedural law of the seat of arbitration

Ltd. Limited liability company

Model Law

UNCITRAL Model Law on International

Commercial Arbitration of 1985 with the

2006 amendments

Mr Mister

Ms Miss


iv

No. / Ns. Number / Numbers

NY Convention

New York Convention of 1958 on the

Recognition and Enforcement of Foreign

Arbitral Awards

p./pp. page/pages

PO1 Procedural Order Number 1



RESPONDENT Inferno Resources Sdn Bhd

RESPONDENT 2 Idoncare Berjaya Utama PTY. LTD

SCMA Singapore Center of Maritime Arbitration

Shipper Idoncare Berjaya Utama PTY. LTD

Statement Statement of Respondent’s Claims

UNCITRAL United Nations Commission on

International Trade Law

UNCITRAL Rules Arbitration Rules of United Nations

Commission on International Trade Law

USD United States Dollars

v. Versus; against


v

INDEX OF SCHOLARS

BORN, Gary B.

International Arbitration: Law and

Practice

Kluwer Law International

2nd Ed., 2015

Referred to in: §20, fn.

25; §29, fn. 31; §31, fn.

33-34; §44, fn. 51, of

the Statement

[cited as: BORN]

FURMSTON, Olivia

MARHINGER, Silvia

Liens on cargo

The Standard

2015

Available at:

http://www.standard-

club.com/media/1665027/defence-

class-cover-liens-on-cargo.pdf


52, of the Statement

[cited as: FURMSTON &

MARHINGER CARGO]

FURMSTON, Olivia

MARHINGER, Silvia

Liens on Sub-Freight

The Standard

2015

Available at:

http://www.standard-

club.com/media/1774240/defence-

class-cover-liens-on-Sub-Freight.pdf



[cited as: FURMSTON &

MARHINGER SUB-

FREIGHT]

KNIGHT, Stevie Seeing through the fog

www.portstrategy.com

03 February 2017

Available at:

http://www.portstrategy.com/news10

1/world/asia/seeing-through-the-fog



[cited as: KNIGHT]

LEW, Julian M. Commentary on Interim and

Conservatory Measures in ICC

Arbitration Cases, 11(1)



[cited as: LEW]

http://www.standard-club.com/media/1665027/defence-class-cover-liens-on-cargo.pdf



http://www.standard-club.com/media/1774240/defence-class-cover-liens-on-sub-freight.pdf



http://www.portstrategy.com/

http://www.portstrategy.com/news101/world/asia/seeing-through-the-fog

http://www.portstrategy.com/news101/world/asia/seeing-through-the-fog


vi

ICC Ct. Bull. 23, 28

2000

RODRIGO, Ravindu

Liens on Cargo in a Nutshell,

2015

Available at : https://www.linkedin.com/pulse/liens

-cargo-nutshell-ravindu-rodrigo



[cited as: RODRIGO]

SAVOLA, Mika Interim Measures and Emergency

Arbitration proceedings.

Presentation at the 23rd Croatian

Arbitration Days : Access to Arbitral

Justice (Part IV)

2015

Available at:

http://arbitration.fi/wp-

content/uploads/sites/22/2016/04/23-

cad-savola-interim-measures-and-

emergency-arbitrator-

proceedings.pdf



[cited as: SAVOLA]

SCHWARTZ, Eric A. The Practices and Experience of the

ICC Court in Conservatory and

Provisional Measures in

International Arbitration

45, 60 publication No.°519, 1993



[cited as: SCHWARTZ]

TEO, Paul

LEACH, Jonathan

The International Comparative Legal

Guide to International arbitration

2016

Available at:

https://iclg.com/practice-

areas/international-arbitration-

/international-arbitration-2016



cited as: TEO &

LEACH]

https://www.linkedin.com/pulse/liens-cargo-nutshell-ravindu-rodrigo

https://www.linkedin.com/pulse/liens-cargo-nutshell-ravindu-rodrigo

http://arbitration.fi/wp-content/uploads/sites/22/2016/04/23-cad-savola-interim-measures-and-emergency-arbitrator-proceedings.pdf





https://iclg.com/practice-areas/international-arbitration-/international-arbitration-2016




vii

WALLIS, Keith

GLOYSTEIN, Henning

As the smog lifts, China's ports

grapple with huge traffic jam of

ships

Thomson Reuters

Singapore

12 January 2017

Available at:

http://www.reuters.com/article/us-

shipping-china-congestion-

idUSKBN14W36R


55; §64, fn. 77, of the

Statement

[cited as: WALLIS &

GLOYSTEIN]

WILSON, John F.

Carriage of Goods by Sea

Pearson Ed.

7th Ed., 2010



[cited as: WILSON]

http://www.reuters.com/article/us-shipping-china-congestion-idUSKBN14W36R




viii

INDEX OF CASE LAW

AWARDS ICSID Tokios Tokeles v. Ukraine, [2004]

Available at:

http://www.italaw.com/sites/default/files/

case-documents/ita0669.pdf



[cited as: Tokios Tokeles

v. Ukraine]

Plama Consortium Ltd v. Repub. of

Bulgaria, [2005]

Available at:

http://www.italaw.com/sites/default/files/

case-documents/ita0669.pdf



[cited as: Plama

Consortium Ltd v.

Repub. of Bulgaria]

AWARDS ICC Partial Award in ICC Case No. 8113,

11(1)

ICC Ct. Bull. 65 [2000]



[cited as: Partial Award

in ICC Case No. 8113]

Interim Award in ICC Case No. 8894,

11(1)

ICC Ct. Bull. 94 [2000]



[cited as: ICC Case No.

8894]

Interim Award in ICC Case No. 8786,

11(1)

ICC Ct.Bull.81, 83- 84 [2000]



[cited as: Interim

Award in ICC Case No.

8786]

IRAN Islamic Repub. of Iran v. U.S.A.,

Decision No. DEC 116-A 15(IV) & A24-

FT of 18 May 1993, 29 Iran-US C.T.R.

214 [1993]



[cited as: Iran v. USA]

http://www.italaw.com/sites/default/files/case-documents/ita0669.pdf





ix

SINGAPORE Five Ocean Corporation v. Cingler Ship

Pte Ltd (PT Commodities & Energy

Resources, intervener) [2015] SGHC 311

Available at:

http://www.uncitral.org/docs/clout/SGP/S

GP_041215_FT.pdf



[cited as: Five Ocean v.

Cingler]

CAA Technologies Pte Ltd v Newcon

Builders Pte Ltd [2016] SGHC 246

Available at:

http://www.singaporelaw.sg/sglaw/laws-

of-singapore/case-law/free-law/high-

court-judgments/22615-caa-technologies-

pte-ltd-v-newcon-builders-pte-ltd



[cited as: CAA

Technologies]

UNITED KINGDOM Anglo-Danubian Transport Co. v.

Ministry of Food, [1949] 83

Available at:

https://www.i-

law.com/ilaw/doc/view.htm?id=143726



[cited as: Anglo-

Danubian Transport

Co. v. Ministry of

Food]

The Mihalios Xilas [1978] 2 Lloyd’s Rep

186, 191-192

Available at:

https://www.i-




[cited as: The Mihalios

Xilas]

Bulk Shipping A.G. v. Ipco Trading S.A.

[1992] 1 Lloyd's Rep. 39

Queen’s Bench Division

Available at:

https://www.i-




[cited as: The Jasmine

B]

http://www.uncitral.org/docs/clout/SGP/SGP_041215_FT.pdf

http://www.uncitral.org/docs/clout/SGP/SGP_041215_FT.pdf

http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/high-court-judgments/22615-caa-technologies-pte-ltd-v-newcon-builders-pte-ltd




https://www.i-law.com/ilaw/doc/view.htm?id=143726







x

SABIC UK Petrochemicals Ltd v Punj

Lloyd Ltd [2013]

Available at:

https://uk.practicallaw.thomsonreuters.com/D

-023-

2911?__lrTS=20170418232316527&transitio

nType=Default&contextData=(sc.Default)&f

irstPage=true&bhcp=1



[cited as: SABIC]

Venizelos A.N.E of Athens v Societe

Commerciale De Cereales Et Financiere S.A

of Zurich [1974] 1 Lloyd’s Rep

Available at:

https://www.i-




[cited as: The

Prometheus]

https://uk.practicallaw.thomsonreuters.com/D-023-2911?__lrTS=20170418232316527&transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1








xi

INDEX OF LEGAL SOURCES

The New York Convention on

Recognition and Enforcement of

Foreign Arbitral Awards of 1958

- http://www.newyorkconvention.org/engli

sh

UNCITRAL Model Law - http://www.uncitral.org/pdf/english/texts/

arbitration/ml-arb/07-86998_Ebook.pdf

Singapore International Arbitration

Act (Chapter 143A) -

http://siac.org.sg/images/stories/articles/r

ules/IAA/IAA%20Aug2016.pdf

The Commercial Law of Singapore,

Chapter 8 on the Law of Contract -


of-singapore/commercial-law/chapter-8

The Commercial Law of Singapore,

Chapter 25 on Shipping Law -


of-singapore/commercial-law/chapter-25

Singapore Merchant Shipping Act

(Chapter 179) -

http://statutes.agc.gov.sg/aol/search/displ

ay/view.w3p;page=0;query=DocId%3A

%22977a0eb4-e902-420e-abbd-

6b95a7d270b1%22%20Status%3Ainforc

e%20Depth%3A0;rec=0

http://www.newyorkconvention.org/english

http://www.newyorkconvention.org/english

http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf

http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf

http://siac.org.sg/images/stories/articles/rules/IAA/IAA%20Aug2016.pdf

http://siac.org.sg/images/stories/articles/rules/IAA/IAA%20Aug2016.pdf

http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-8




http://statutes.agc.gov.sg/aol/search/display/view.w3p;page=0;query=DocId%3A%22977a0eb4-e902-420e-abbd-6b95a7d270b1%22%20Status%3Ainforce%20Depth%3A0;rec=0






1

INTRODUCTION

1. This memorandum is submitted on behalf of Inferno Resources Sdn Bhd (hereinafter

the “Respondent”), a company organised and existing under the laws of Malaysia, and in

accordance with Rules 8.1 and 9 of the Singapore Chamber of Maritime Arbitration Rules of

2015 (the “SCMA Rules”).

2. Furnace Trading Pte Ltd (hereinafter the “CLAIMANT”) entered into a TIME CHARTERPARTY

with Imlam Consignorist G.m.b.H (hereinafter the “LEGAL OWNER”) of M. V. Tardy Tessa

(hereinafter the “VESSEL”), on 15 February 2016 (hereinafter the “TIME CHARTERPARTY”).1

3. On 1 September 2016, during an exchange of e-mails, the contents of a VOYAGE

CHARTERPARTY based on a proforma BIMCO Orevoy Charterparty (hereinafter the “VOYAGE

CHARTERPARTY”) were confirmed between the CLAIMANT, now disponent owner of the

VESSEL, and the RESPONDENT (together referred to as the “PARTIES”).2

4. One month later, on 1 October 2016, a Notice of Readiness was tendered by Mr. Tan Xiao

Ming (hereinafter the “MASTER” of the VESSEL) to Idoncare Berjaya Utama PTY. LTD.

(hereinafter the “RESPONDENT 2”, or, simply, the “SHIPPER”), informing that the VESSEL

arrived at Kooragang Precint, Australia, and that it was ready to load 84,000.052 metric tons

of Australian Steam Coal in Bulk (hereinafter the “CARGO”).3 Following this event, the

MASTER issued and signed the Bill of Lading on 4 October 2016, making express nomination

of the SHIPPER, as well as an express reference to an undated Charterparty.4

1 TIME CHARTERPARTY between the Legal Owner and the Claimant – Case Scenario, pp. 1-19.

2 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, pp. 20-33.

3 Notice of Readiness issued on the 1st of October 2016 – Case Scenario, p. 39.

4 Bill of Lading issued on the 4th of October 2016 – Case Scenario, p. 41.


2

5. As of 11 October 2016, the CLAIMANT informed it had not received the freight due and payable

on 9 October 2016, inviting the RESPONDENT to comply with its payment obligation under the

VOYAGE CHARTERPARTY. The CLAIMANT also requested the RESPONDENT to nominate a

discharging port before the VESSEL would pass Singapore.5

6. On 15 October 2016, the RESPONDENT informed the CLAIMANT that it was unable to nominate

the discharging port as their sub-charterer had yet to pay freight. The CLAIMANT failed to

consider this reasoning and unilaterally decided to possibly declare the failure to nominate the

discharge port to be a breach of the VOYAGE CHARTERPARTY.6

7. On 16 October 2016, the MASTER of the VESSEL informed the RESPONDENT that the VESSEL

was being kept adrift off the port of Singapore, without any precise instructions or directions.7

The RESPONDENT therefore nominated the port of Busan, South Korea, in view of the heavy

congestion at Chinese ports, and the inability of naming a Chinese port as the SHIPPER also

failed to give any instructions as regards to the discharging port. Nonetheless, the CLAIMANT

once again categorically refused to accept the nomination of Busan, against reasonability and

feasibility.8

8. On the same date, the RESPONDENT repeated its request for disport at Busan, and the CLAIMANT

refused such nomination on the following day, 17 October 2016.9 The CLAIMANT expressly

opposed to Busan as the discharging port, since the region was allegedly under zombie attacks

at that time.10 The RESPONDENT insisted that the area was safe, expressly informing the

5 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21.

6 E-mail sent on the 15th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 56.

7 E-mail sent on the 16th of October 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 34.


9 E-mail sent on the 17th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 60.



3

CLAIMANT that the Korean military forces had secured the area, as well as stating that other

vessels had been successfully redirected to Busan.11

9. On 19 October 2016, the RESPONDENT once again informed that it was unable to nominate the

discharge port as it had yet to receive nomination from its sub-charterer, the SHIPPER.12 The

CLAIMANT gave an unreasonable and unlawful notice, establishing a deadline to nominate

disport by 12:00 Local Time on 20 October 2016.13 Due to the short and unfeasible time gave

by the CLAIMANT, the RESPONDENT could only provide a port on 21 October 2016, 13:22 Local

Time, nominating the port of Ningbo, Zhejiang Province in China, for discharge, as well as

indicating it was impossible to provide for payment before the discharge at disport.14

Nonetheless, the previous day, the CLAIMANT decided to brutally terminate the VOYAGE

CHARTERPARTY and informed both the RESPONDENT and the SHIPPER it was exercising a lien

over CARGO and Sub-Freight.15

10. On 22 October 2016, the CLAIMANT sent a Notice of Termination16 of the VOYAGE

CHARTERPARTY to the RESPONDENT, alleging the latter’s renunciation and repudiatory breach

of the VOYAGE CHARTERPARTY in view of the default over payment of freight. The

RESPONDENT sent an answer17 considering the Notice of Termination wrongful, and the

CLAIMANT to be in repudiatory breach of the VOYAGE CHARTERPARTY.


12 E-mail sent on the 19th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62


14 E-mail sent on the 21st of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67

15 E-mails sent on the 20th of October from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66.

16 Notice of Termination issued on the 22nd of October 2016 – Case Scenario, p. 68.

17 E-mail sent on the 22nd of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 69.


4

11. Over one month later, on 25 November 2016, two Notices of Arbitration were filed with the

SCMA by the CLAIMANT, against the SHIPPER and the RESPONDENT, according to clause 29 of

the VOYAGE CHARTERPARTY.18 The Responses to the Notices of Arbitration were filed on the

very next day, denying all claims made by the CLAIMANT.19 The SHIPPER brought a defence

reasoning that freight, if any, would be due only to the RESPONDENT. The SHIPPER and the

RESPONDENT admitted the jurisdiction of the SCMA arbitration with no objections.20

12. On 1 December 2016, the CLAIMANT filed an Urgent Application for Consolidation and Liberty

to sell the CARGO, requesting the Arbitral Tribunal to consolidate the proceedings initiated

against the SHIPPER and the RESPONDENT, and to issue an interim order with respect to the

liberty to sell the CARGO on board pendente lite.21

13. Regarding the consolidation, no particular objections were made, where with respect to the

liberty to sell the CARGO, the SHIPPER declined to make any submissions at the written and oral

hearings22, and the RESPONDENT challenged the interim order sought. On 3 December 2016,

the PARTIES filed a Joint Expert Report signed by a Mr. Caleb Coleman (hereinafter the

“Expert”) .23

I. ARGUMENTS ON JURISDICTION

A. THE ARBITRAL TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE

18 Notices of Arbitration – Case Scenario, pp. 70; 76.

19 Responses to Notices of Arbitration – Case Scenario, pp. 84; 86.

20 Responses to Notices of Arbitration – Case Scenario, pp. 84, 87.

21 Urgent application for consolidation and liberty to sell the cargo – Case Scenario, p. 89.

22 Response CLAIMANT’s urgent application for consolidation and liberty to sell the cargo pendent lite – Case

Scenario, pp. 93; 108, §2(3).

23 Parties’ Joint Expert Report – Case Scenario, pp. 97-102.


5

14. The PARTIES have agreed on an arbitration agreement concluded in clause 29 of the VOYAGE

CHARTERPARTY. Said agreement established that all of their disputes, arising out of or in

connection with the VOYAGE CHARTERPARTY must be solved through arbitration. The PARTIES

made an express choice of the Singapore Law as the applicable law, without defining if such

choice was to be regarded as the lex contractus or the lex arbitri. The PARTIES also chose the

arbitration to be conducted under the SCMA Rules with 3 arbitrators. No objection neither to

the validity of the arbitration agreement, nor the jurisdiction of the Arbitral Tribunal or to the

consolidation of the disputes was made.

15. Under Rule 22.1. of the SCMA Rules, the seat of the Arbitration shall be Singapore whenever

the parties fail to expressly choose a different seat. Clause 29 of the VOYAGE CHARTERPARTY

is silent regarding such location, reason why the seat of this arbitration shall be Singapore.

16. Furthermore, Clause 29 indicates a choice of law that could be regarded as a choice of the

contractual law applicable to the substance of the dispute, as recognized by Rule 21 of the

SCMA Rules, or as a choice of the arbitration law. It must be noted that if not the latter, the

result would be the same, since the SCMA Rules, also under their Rule 22.1, establish that if

the seat of arbitration is Singapore, as it is the case explained above, then Singapore Law and

the International Arbitration Act (Cap 143A), hereinafter “SIAA”, shall apply as the lex arbitri.

B. THE ARBITRAL TRIBUNAL IS NOT EMPOWERED TO ORDER INTERIM RELIEF

17. It is the RESPONDENT’s contention that, in the present case, the Arbitral Tribunal does not have

the power to grant the interim relief requested by the CLAIMANT.24

24 Response to Claimant’s Urgent application for consolidation and liberty to sell the cargo – Case Scenario, p.

95, §2.1.


6

18. In international arbitration, the availability of provisional measures is dealt with by national

arbitration legislation and the parties’ arbitration agreement.25 In the present case, according to

the analysis of the arbitration agreement, the Singapore Law is the lex arbitri.

19. Therefore, it is necessary to apply the SIAA to determine the possibility of granting interim

measures. By virtue of Section 12A of the SIAA, the Arbitral Tribunal has the power to award

interim relief. But the limit it is that an Arbitral Tribunal cannot order interim measures of

protection before it has been properly constituted.26

20. In the present case, on 1 December 2016, at the time of the application for liberty to sell

pendente lite the cargo, the Arbitral Tribunal could not effectively act because the SCMA had

not yet appointed the arbitrators.

21. The SIAA establishes in Section 12A that the Singapore Court can order interim relief in

support of any international arbitration if, and only if, the arbitral tribunal has no power or is

unable for the time being to act effectively.27

22. It is generally understood that arbitral tribunals do not have authority to make orders against

third parties28, and, as it will be further demonstrated in section E, the CLAIMANT is not entitled

to exercise any lien over the CARGO.29 Consequently, the Arbitral Tribunal does not have the

power to order the sale of the CARGO on board because the CARGO is in the hands of a third

party.

25 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 209.

26 SAVOLA, Interim Measures and Emergency Arbitration proceedings. Presentation at the 23rd Croatian

Arbitration Days : Access to Arbitral Justice (Part IV). [2015].

27 TEO & LEACH, The International Comparative Legal Guide to International arbitration [2016].

28 Interim relief in aid of international commercial arbitration. A Critique on the International Arbitration Act.

29 See hereunder, ¶¶48-72


7

23. The CLAIMANT’s urgent application for interim relief should therefore be declared inadmissible

by the Arbitral Tribunal and rejected on such ground.

24. Alternatively, should the Arbitral Tribunal consider it is empowered to grant interim relief, it

will be further contended by the RESPONDENT that the Arbitral Tribunal should not grant

interim relief allowing the CLAIMANT to sell the CARGO.

C. FINALLY, THE ARBITRAL TRIBUNAL SHOULD NOT GRANT AN INTERIM ORDER ALLOWING

CLAIMANT TO SELL THE CARGO

25. If the Arbitral Tribunal were to consider that it has powers to grant interim measures,30 the one

sought by the CLAIMANT shall be dismissed since the claim fails to comply with the legal

requirements needed for such an order.

26. It is necessary to determine what standards the arbitral Tribunal should apply in order to grant

such measures. Three choices are possible for the law governing provisional measures: the law

of the seat of arbitration, the law governing the parties’ underlying agreement or international

standards.

27. The test that arbitral tribunals have to consider when deciding on provisional measures is

defined by sui generis sources of law.31

28. It is widely accepted that the test, as to whether request for provisional measures should be

granted, has three conditions: (1) whether the CLAIMANT has a prima facie case on the merits,

(2) whether there is an urgent need for interim relief; and (3) whether the CLAIMANT will suffer

serious or irreparable harm if the emergency relief is not granted.32

1. The CLAIMANT has no prima facie case on the merits

30 See above, §§17-24.


32 ICC Case No. 8113.


8

29. In order to make rational and business-sensible decision regarding provisional measures, an

arbitral tribunal shall first and foremost determine whether the party requesting the relief has a

prima facie case33. At the stage of a request for provisional measures, the inquiry into the merits

of the PARTIES’ claims and defences should be made without any detailed or binding

assessments of the evidence or the merits of parties’ legal arguments.34

30. In the present case, the CLAIMANT breached the contract by arbitrarily refusing the two

alternative discharge ports nominated by the RESPONDENT in compliance with the VOYAGE

CHARTERPARTY.35 In addition, the CLAIMANT also wrongfully terminated the contract.36

31. Moreover, the CLAIMANT has unlawfully exercised a lien over the CARGO as its Notice of Lien

has failed to meet all the necessary criteria to be considered a valid exercise of rights, and as it

has failed to consider the validity of such measure under Chinese law.37 Also, the CLAIMANT

claimed to exercise a lien over the Sub-freight but Singaporean law does not acknowledge such

a lien.38

32. For all the reasons stated above, it is clear that the CLAIMANT has no prima facie case on the

merits and thus, the Arbitral Tribunal should not grant any interim measures ordering the sale

of the CARGO.

2. There is no urgent need for interim relief



35 See below, §54.

36 See below, §§67-70.

37 See below, §§73-75.

38 See below, §§84-88.


9

33. In order to grant an interim order, the Tribunal has to make sure the case is one of urgency,

which has been formulated as follows: “ urgency is necessary…in order to make a provisional

decision as quickly as possible without awaiting a final decision”. 39

34. The main issue is then to determine whether the order to sell de CARGO sought by the

CLAIMANT could not wait the final award of the Arbitral Tribunal.

35. The SIAA provides that the arbitral tribunal shall have the power to order any interim

measure.40 Besides, it also gives the power to national courts to order interim reliefs for the

purpose of preserving the assets if the case is one of urgency.41

36. In the case at hand, the CLAIMANT applied for liberty to sell the CARGO pendent lite on 1

December 2016.42 The Arbitral Tribunal fixed the oral hearing during which it will hear party’s

arguments and rule on this issue, eight months after the application, namely in early July43. It

clearly appears that by fixing the hearing with eight months’ delay, the Arbitral Tribunal did

not consider the case was one of urgency.

37. In addition, to our knowledge, no other proceedings have been commenced in Singapore or

elsewhere.44 This means that the CLAIMANT itself does not consider it to be a case of urgency,

as it did not use its right to apply for interim measure before the national courts, as foreseen by

the SIAA,45 but would rather wait eight months for the hearings before the Arbitral Tribunal.

39 SCHWARTZ, The Practices and Experience of the ICC Court in Conservatory and Provisional Measures in

International Arbitration 45, 60 publication N°519, [1993].

40 SIAA, §12(1)(i).

41 SIAA, §12A(4).

42 Urgent application for consolidation and liberty to sell the Cargo on board pendente lite – Case Scenario, p. 89.

43 PO1 – Case Scenario, p. 104.

44 PO3 – Case Scenario, p. 110.

45 SIAA, §12A(4).


10

38. In a recent case, a Court of Singapore found that there “was a clear case of urgency” when the

crew lacked fresh food, water and medical supplies and the overheating of the Cargo generated

a risk of self-ignition and explosion.46 But such case is significantly different from the one at

hand. Indeed, in Five Ocean v. Cingler, the ship was drifting in high seas for more than 70

days, while in the case at hand, the VESSEL is drifting only 10 nautical miles outside

Singapore’s port limits, making it easier to supply the VESSEL and the Crew.

39. Moreover, there is no connection between the order to sell the CARGO and the lack of water,

fresh food and medicines on board, which can be resolved by taking on different supplies in

Singapore, merely 10 nautical miles away from the VESSEL’s location. The CARGO itself is in

no way in danger, in view of the Export Report showings that it remains intact, without

depreciation of its value, which nonetheless would have been avoidable if CLAIMANT

cooperated with the alternative nominations of the discharge ports made by the RESPONDENT.

3. The Claimant will not suffer any irreparable harm if the interim relief is not granted by this

Tribunal

40. Julian Lew considers that “it is not appropriate to grant a measure where no irreparable or

substantial harm comes to the movant in the event the measure is not granted”. 47

41. Considering the above, the Arbitral Tribunal may only order provisional measures if requesting

party has substantiated the thread of a no easily reparable prejudice.48

42. The interpretation of the word “irreparable” can either be narrow, suggesting that “irreparable”

harm is required for a grant of provisional measures49, or wide. Most decisions, which state

46 Five Ocean Corporation v. Cingler Ship §59.

47 LEW, Commentary on Interim and Conservatory Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23,

28 [2000].

48 ICC Case No.8786; ICC Case No. 8894; Iran v. USA.

49 Tokios Tokelés v. Ukraine.


11

that damage must be irreparable, require that there be a material risk of serious damage to the

plaintiff.50 This implies for the tribunal to consider the extent to which such injury appears

compensable in a final award and the extent to which it is just that the burden of loss during

the arbitral proceeding fall on one party or another.51

43. In this case, the only harm the CLAIMANT could suffer during the arbitral proceeding is the non-

payment of the freight, which can easily be compensate by a final award rendered by the

Tribunal. Furthermore, considering that the CLAIMANT breached the contract on many

occasions, putting all the burden of loss on the RESPONDENT is unfair and unjust. Therefore,

the Arbitral Tribunal shall dismiss the CLAIMANT’s request to obtain an interim measure

allowing it to sell the CARGO.

II. ARGUMENTS ON THE MERITS

D. PRELIMINARY ISSUE: THE APPLICABLE LAW TO THE DISPUTE

44. The RESPONDENT does not contest the application of Singaporean law to the contract. However,

the CLAIMANT avoids the discussion regarding the applicable laws to the lien. In common law,

the lien shall be valid at the place where it is supposed to be enforced.52

45. In the case at hand, the interim measure sought by the CLAIMANT involving a lien over the

CARGO would be enforced in a Chinese territory. Therefore, the Arbitral Tribunal shall apply

Singapore law over the contractual matters, and subsequently Chinese law with respect to the

CARGO.

E. THE RESPONDENT DID NOT BREACH THE VOYAGE CHARTERPARTY

50 Plama Consortium Ltd v. Repub. of Bulgaria.


52 FURMSTON & MARHINGER, Liens on Cargo/Liens on Sub-Freight, The Standard, [2015].


12

46. Despite CLAIMANT’s best efforts to prove it in its statement of claims, the RESPONDENT did not

breach the VOYAGE CHARTERPARTY. On the contrary, the RESPONDENT showed great

determination to complete its contractual obligation considering the circumstances: a

congestion made it impossible for the VESSEL to discharge the CARGO in the ports listed in the

VOYAGE CHARTERPARTY (1). Also, it is the CLAIMANT that did not respect its contractual

obligations in refusing two valid ports suggested by the RESPONDENT (2).

1. The congestion at Chinese ports made it impossible to nominate them as valid discharge port

47. In the VOYAGE CHARTERPARTY, under clause 16(b), the PARTIES settled a way to deal with a

possible hindrance affecting or preventing the discharging of the CARGO in case the said-

hindrance lasts over 48 hours:53

“If there is a hindrance affecting or preventing the actual discharging of the cargo

on or after (…) arrival at or off port of discharge and same has not been settled

within 48 hours, the Charterers shall have the option (…) of ordering the vessel to

a safe port where she can safely discharge without risk of being detained by a

hindrance. Such orders to be given within 48 hours after the Master or the Owners

have given notice to the Charterers of the hindrance affecting the discharge. On

delivery of the cargo at such port, all conditions of this Charterparty and of the

Bill of Lading shall apply and the vessel shall receive the same freight as if she had

discharged at the original port of destination, except that if the distance to the

substituted port exceeds 100 nautical miles, the freight on the cargo delivered at

the substituted port to be increased in proportion.”

53 VOYAGE CHARTERPARTY – Case Scenario, p. 29, §16(b).


13

48. As stated in an e-mail sent by the shipbroker to the CLAIMANT on 16 October 201654, the

MASTER and the crew found themselves unable to proceed with the discharging operations in

the ports mentioned in the VOYAGE CHARTERPARTY due to congestion at Chinese ports. The

congestion made it impossible for the VESSEL to reach any of the ports and complete its

mission.

49. Congestions are common in Chinese ports and ships can be forced to berth for days before

being able to discharge when the major northern ports do not simply suspend the loading or

discharging of ships.55 When a charterer encounters such impossibility, the nomination is not

a valid exercise to the right of election. The charterer has an obligation to solve such precarious

situation.56

50. Clause 16 of the VOYAGE CHARTERPARTY offers two options to charterers. The first one is to

keep the VESSEL waiting until the hindrance is over and paying half demurrage from when

expires the time provided to initially discharge until the actual completion of discharging. The

second is to order the VESSEL to a safe port where it can safely discharge without risk of being

detained by a hindrance. The condition is that orders have to be given within 48 hours after the

MASTER or the Owners have given notice to the charterers of the hindrance affecting the

discharge.

51. In this very case, the RESPONDENT has complied with its contractual obligation, bearing in mind

the damages that could be inflicted on the VESSEL, the CARGO and the crew if the VESSEL was

left adrift for days on end in the coming winter before the congestion blew over. Hence it chose

the second option that was offered to it in the VOYAGE CHARTERPARTY and decided to order

54 E-mail sent on the 16th of October 2016 from Gordon Grill to Eric Yan– Case Scenario, p. 57.

55 WALLIS & GLOYSTEIN, As the smog lifts, China's ports grapple with huge traffic jam of ships

[2017].

56 The Springbank.


14

the VESSEL to Busan, South Korea, which was a safe port where it was possible to safely

discharge the CARGO.

52. In terms of delay, the RESPONDENT immediately nominated an alternative discharge port

considering that it was informed by the shipbroker of congestion in Chinese ports.57 The

RESPONDENT diligently respected the 48 hours deadline. Several e-mails sent from the

CLAIMANT, between 11 October 2016 and 16 October 2016, were urging the RESPONDENT to

nominate a discharge port, and although the RESPONDENT did as soon as it was in capacity to

do so, the latter had to wait for its sub-charter, the SHIPPER, to complete its obligation to first

nominate a discharge port.58

53. Accordingly, the Arbitral Tribunal shall acknowledge that the RESPONDENT, facing an

impromptu situation, diligently performed the VOYAGE CHARTERPARTY.

2. By refusing the two alternative valid discharge ports nominated by the RESPONDENT, the

CLAIMANT breached its obligation to respect a nomination that is irrevocable

a. The Respondent reasonably nominated a safe discharge port in South Korea that was

refused by the Claimant

54. Considering the congestion of all the Chinese ports59 contained in the list of discharge ports in

the VOYAGE CHARTERPARTY60, the RESPONDENT was unable to nominate one of these ports to

57 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario p. 57.

58 E-mail sent on the 15th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, pp. 55-56; E-mail sent

on the 19th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62.


60 VOYAGE CHARTERPARTY, Status, 16. Discharge Port – Case Scenario, p. 21.


15

discharge the CARGO. The RESPONDENT, fulfilling its obligation to nominate a discharge port,

suggested a South Korean port to the CLAIMANT.61

i. Busan is a valid discharge port

55. The CLAIMANT persistently refused to validate Busan as discharge port despite all better

judgment and the RESPONDENT's repeated requests to do so.

56. As it has been demonstrated62, the RESPONDENT faced a significant congestion preventing the

VESSEL to dock at any Chinese ports and had a contractual right and obligation to solve the

predicament of the VESSEL, the crew and the CARGO were in. Considering that the entire list of

potential discharge ports settled between the Owners and Charterers in the VOYAGE

CHARTERPARTY was compromised by the congestion, the RESPONDENT scrupulously

nominated an alternative discharge port out of the mentioned list, as it was contractually bound

to. This alternative port was Busan and the RESPONDENT also offered to pay for all additional

costs generated by the deviation of course, according to its legal obligations.63

57. The CLAIMANT kept refusing to validate Busan alleging a rumoured arrival of zombies by train

from Seoul to Busan.64 These hearsays were supposed to be cleared up by an e-mail from the

RESPONDENT to the SHIPPER, transferred to the CLAIMANT, explaining that the Korean military

had secured the area of Busan and that several vessels under the RESPONDENT's supervision

safely called at port in Busan.


62 See above, §§49-55.




16

58. Without any further explanation as to why they were so determined not to validate Busan as a

discharge port when it was proved to be safe, the disponent Owners reiterated their position

and refused the nomination.

59. It has to be stressed that the RESPONDENT, as a voyage charterer, is contractually obliged to

warrant the safety of the nominated port of discharge that was not mentioned in the contract65.

The RESPONDENT would take responsibility for all the responsibility towards the VESSEL in

case of a breach of this obligation of safety. The RESPONDENT, in declaring Busan as the

discharging port, was aware of this responsibility and still estimated the situation secured

considering that ships under its supervision already had called at port in Busan and that it

confirmed its demand to validate Busan as discharge port. Mutual trust is essential to the good

functioning of a contractual relationship.

60. Once a valid nomination of a discharge port is made, the PARTIES’ contractual obligations are

fulfilled and, thus, irrevocable.66 Accordingly, it means that the valid nomination has to be

treated as if the port designated was originally written into the CHARTERPARTY.

ii. Busan was arbitrarily refused by the Claimant as a discharge port

61. By increasing pressure over the RESPONDENT, without considering the complexity of the

situation and disregarding the RESPONDENT’s will to nominate a valid discharge port, the

CLAIMANT failed to fulfil its own obligation of due diligence towards the VOYAGE

CHARTERPARTY. This violation is a breach of the contract by the CLAIMANT.

65 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 26, §8.

66 Anglo-Danubian Transport Co. v. Ministry of Food; The Prometheus; The Jasmine B.


17

62. The obligation of due diligence is the care the contractor exercises to avoid its co-contractor

failure to fulfil its obligations.67 According to Common Law68, due diligence shall not require

the contractor to achieve the impossible. Moreover, the Singapore High Court considers the

lack of due diligence as a breach of contract.69

63. In the case at hand, the violation of the obligation of due diligence from the CLAIMANT arises

in three different ways. Firstly, the CLAIMANT puts pressure on the RESPONDENT in order to

obtain the nomination of a discharge port, even though it was unable to do so since the sub-

charterer had not yet designated a port in the first place70. Ignoring the delicate position the

RESPONDENT was in, torn between its obligation to the ship-owner and the incapacity to comply

because of its sub-charterer, the CLAIMANT persistently kept requesting the nomination of a

Chinese port71. Indeed, from 11 October 2016 until 14 October 2016, the CLAIMANT daily

requested such nomination of a discharge port from the RESPONDENT.72

64. Secondly, the CLAIMANT refused to cooperate with the RESPONDENT in order to find an

agreeable alternative solution. The RESPONDENT, having at last heard from its sub-charterer,

informed the CLAIMANT that the Chinese ports were congested and immediately suggested

another discharge port, Busan in South Korea.73 The CLAIMANT refused this alternative arguing

that Busan was not permitted by the contractual list of discharge ports pursuant to the VOYAGE

67 Merriam Webster Law Dictionary.

68 SABIC.

69 CAA Technologies.

70 E-mail sent on the 15th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, pp. 55-56.

71 E-mails sent on the 15th and 16th of October 2016 from Gordon Grill to Eric Yan – Case Scenario pp. 56-57.

72 E-mails sent from the 11th to 14th of October 2016 from Gordon Grill to Eric Yan - Case Scenario p. 50-56.



18

CHARTERPARTY74 even though it had been informed that the congestion made it impossible for

the VESSEL to use any of the Chinese ports.75 The RESPONDENT, running out of options, insisted

on Busan as a discharge port, assuring that it would pay for every additional cost. The

CLAIMANT then categorically refused the South Korean port.76 This refusal is unwelcome as

well as it is customary to turn away vessels sailing for Chinese ports to Korean ports for

congestion or meteorological reasons.77

65. It seems quite surprising that the CLAIMANT would refuse a valid solution in such a precarious

situation as the one at hand, solely based on rumours and an occurrence as peculiar as a zombie

attack. Whereas the RESPONDENT reaffirmed that the area around Busan had been secured and

that several ships under its command had been calling at port there78, the CLAIMANT kept

arbitrarily rejecting Busan.79

66. Third and lastly, the CLAIMANT used aggressive methods against the RESPONDENT. Despite the

best efforts of the RESPONDENT to fulfil its undertakings, the CLAIMANT threatened the

RESPONDENT to have a lien imposed on the CARGO80, in a persistent non-cooperative state of

minds. Further, when the RESPONDENT asked for patience while waiting for a nomination from

74 VOYAGE CHARTERPARTY, clause n°16 – Case Scenario, p. 21.

75 E-mail sent on the 16th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 57-58.

76 E-mail sent on the 17th of October 2016 from Gordon Grill to Eric Yan– Case Scenario, p. 58

77 KNIGHT, Seeing through the fog [2017]; WALLIS & GLOYSTEIN, As the smog lifts, China's ports grapple

with huge traffic jam of ships [2017].





19

the sub-charterer81, the CLAIMANT turned a deaf ear to this legitimate request, and set an

unreasonable ultimatum on 19 October 201682.

b. The Claimant wrongfully terminated the contract even though the Respondent has just

suggested a discharge port valid under the contract

67. Following the Notice of Lien83 from the CLAIMANT to the SHIPPER and a long-lasting silence

from the CLAIMANT on the second request of validation of Busan as discharge port, the

RESPONDENT nominated as a discharge port the Chinese port of Ningbo on 21 October 2016.84

68. At this point, the RESPONDENT was able to nominate this port since the congestion of the

Chinese ports was over. This port is one of the discharge ports listed in the VOYAGE

CHARTERPARTY.85 Therefore, this nomination shows the RESPONDENT’s initial will to nominate

a Chinese port as required in the VOYAGE CHARTERPARTY and that this will strongly persists

although the CLAIMANT has notified the Notice of Lien to the RESPONDENT. Consequently, the

RESPONDENT has respected its obligation to identify a discharge port consistent with the

VOYAGE CHARTERPARTY.

69. On the following day, the CLAIMANT sent a Notice of Termination to the RESPONDENT86 even

though it had just nominated a valid discharge port. This shows the CLAIMANT’s behaviour to

go against the proper performance of the VOYAGE CHARTERPARTY by the RESPONDENT.

70. Therefore, the RESPONDENT cannot be held accountable for the breach of the contract.



83 Notice of Lien issued on the 20th of October 2016 from Furnace to Idoncare – Case Scenario, p. 65.

84 E-mail sent on the 21st of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67.

85 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21, §16.

86 Notice of Termination issued on the 22nd of October 2016 from Furnace to Inferno – Case Scenario, p. 68.


20

F. THE CLAIMANT IS NOT ENTITLED TO THE LIENS OVER THE CARGO AND THE SUB-FREIGHT

71. It is undisputed that a ship-owner may have certain rights for remedies regarding its payments,

arising from the Common Law or from the contractual relationship established between the

contracting parties. However, such remedies must be recognized by both law and contract, and

abide to a set of requirements to be validly enforced.

72. Therefore, it is the RESPONDENT’s position that the CLAIMANT has enacted an unlawful lien

over the CARGO (1), and enacted an unlawful lien over the Sub-Freights (2).

1. The CLAIMANT’s lien over the CARGO is unlawful

73. The CLAIMANT’s notice of lien over the CARGO87 has failed to meet all the necessary criteria

to be considered a valid exercise of rights. In a very opportunistic approach, the CLAIMANT has

unlawfully exercised a lien over the CARGO, in contradiction to the laws of the discharge port

(a); and to the VOYAGE CHARTERPARTY terms (b).

74. As it will be further explained, the lien over the CARGO has to be recognized by the laws of the

discharging port, which in the present case, and in view of the CLAIMANT’s own demand, was

to be any out of six possible ports in China, and therefore, Chinese law must be regarded to

this subject. Also, the lien over the CARGO, as a contractual remedy, must be established

between the Parties, and the CLAIMANT has wrongfully communicated the RESPONDENT of such

lien, even though the RESPONDENT is not the owner of the CARGO.

75. Briefly, Chinese law has a very strict application of liens over cargoes. Article 87 of the Chinese

Maritime Code88 establishes that the lien over cargo must be exercised against the debtor for

87 Notice of Lien issued on the 20th of October 2016 from Furnace to Idoncare, Case Scenario, p. 65.

88 “Article 87 – If the freight, contribution in general average, demurrage to be paid to the carrier and other

necessary charges paid by the carrier on behalf of the owner of the goods as well as other charges to be paid to


21

freight, who must also be the owner of the goods involved. Moreover, the ship-owner can only

exercise such lien if it has previously requested the debtor for a security, and only in the

hypothesis where such security has not been voluntarily provided, the lien will be lawfully

exercised.

a. The Respondent is not the owner of the Cargo

76. As it is broadly accepted, bills of lading are a type of contract that serves mainly three purposes:

it functions as a receipt for goods shipped; as evidence of the contract of carriage; and as

document of title89. In the present case, the Bill of Lading are issued “to order”, meaning they

are a negotiable instrument. However, according to the sole information provided by this

Tribunal90, the SHIPPER is the one person in hold of the Bill of Lading, without any further

information as to their possible consignation, and must therefore be considered the rightfully

owner of the CARGO.

77. As previously seen, the laws of the discharge port must be used as a guidance to determine the

conditions on which a lien can be exercised.

78. Chinese law is the relevant law at the present case because the CLAIMANT has expressly

requested the discharge port to be in China, to the exclusion of any other.91 The CLAIMANT is

resorting to a contradictory position by requesting this Tribunal to make considerations to the

laws of the bunkering port, that is, Singapore. Not only contradictory, but also unacceptable,

the carrier have not been paid in full, nor has appropriate security been given, the carrier may have a lien, to a

reasonable extent, on the goods.”

89 WILSON, Carriage of Goods by Sea, Pearson Ed. 7th Ed., [2010], pp. 117-142.

90 PO3 – Case Scenario, p. 108. §2(1).

91 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21, §16; E-mail sent on the

19 October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 63-64.


22

since the CARGO is still considered to be in sail, and the lien of cargo can only be accepted at

the discharge port.92

79. Therefore, the Chinese law should be analysed and this will lead this Tribunal to the conclusion

that the RESPONDENT has failed to comply with such law.

b. The Claimant has not complied with its obligation under article 87 of the Chinese

Maritime Law

80. As previously mentioned, the rights of lien over cargo are regulated by article 87 of the Chinese

Maritime Code, as the relevant law to analyse the lien over the CARGO. Two important criteria

are set out by such article, mainly: the necessity that the debtor be also the owner of the goods

envisaged by the lien; and that the party against who the lien is opposed is presented with a

previous opportunity to provide for security before the ship-owner can exercise its remedy of

lien.

81. The first requirement is squashed with the fact that the CARGO is actually in property of the

SHIPPER, as established by the Bill of Lading.93 The CLAIMANT therefore cannot notify the

RESPONDENT about a lien over the CARGO that the RESPONDENT itself has no property over.

82. The second requirement was also not complied with by the CLAIMANT since, as seen on the

exchange of e-mails of the 22 October 201694, the CLAIMANT sent a direct notice of termination

and lien to the RESPONDENT, without demanding the necessary previous security from the

RESPONDENT.

92 The Mihalios Xilas.

93 Bill of Lading of 4 October 2016 – Case Scenario, p. 43.

94 Case Scenario, pp. 65-68.


23

83. This factual analysis of the present case leads the Tribunal to the single possible solution that

the CLAIMANT has made an unlawful exercise of the right to a lien over the CARGO under the

discharge port (Chinese) law.

2. Singaporean law does not acknowledge lien on the Sub-Freight

84. The lien must be recognized and enforceable under local law.95 If the owners exercise a lien

unlawfully under local law, then the owners can potentially be exposed to a claim in damages.

As the lien over Sub-Freight is a contractual right, the relevant law to be considered is the law

applicable to the contract. Clause 29 about Law and Dispute resolution of the VOYAGE

CHARTERPARTY between the CLAIMANT and the RESPONDENT is express in determining that

Singapore law is applicable.96

85. Article B(2) of the Section 3 of the Singaporean Shipping Law is express and so determines:

“The ship-owner is remunerated by the payment of the freight” and thus “under

the common law, a ship-owner is entitled to exercise a possessory lien for unpaid

freight”.

86. Moreover, article H(3) of the section 5 of the Singaporean Shipping Law gives the definition

of the possessory lien. The essence of the exercise of a lien is the denial of possession of the

cargo to someone who wants it, thus forcing the interested party in paying the freight to the

lien possessor. Singaporean Shipping Law only acknowledges lien over the cargo. Indeed,

Singaporean Shipping Law never mentions the possibility for the charterer to exercise a lien

over Sub-Freight. If the domestic law does not recognise this possibility, the charterer cannot

exercise a lien over the Sub-Freight.

95 RODRIGO, Liens on Cargo in a Nutshell, [2015].

96 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 23.


24

87. Therefore, the CLAIMANT is not admissible to exercise a lien over the Sub-Freight since the

domestic law does not expressly authorize it. Moreover, clause 19(a) of the VOYAGE

CHARTERPARTY97 provides that:

“The Owners shall have a lien on the cargo for freight, dead freight, demurrage

and general average contribution due to them under the Charterparty”.

88. Both Singaporean Law and the Charterparty signed between the PARTIES authorize the

CLAIMANT to exercise a lien over the CARGO but there is no acknowledgement regarding the

possibility to exercise a lien over the Sub-Freight.

97 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 31, §19(a).


25

REQUEST FOR RELIEF

For the above reasons, Counsel for RESPONDENT respectfully requests the Arbitral Tribunal to:

I) DECLARE that the RESPONDENT has not committed a repudiatory breach of the VOYAGE

CHARTERPARTY, since the CLAIMANT was in breach of its obligations and out of reasonability

regarding the discharge port matter;

II) DECLARE that the CLAIMANT is the party incurring in a repudiatory breach of the VOYAGE

CHARTERPARTY, by unilaterally and unlawfully terminating the contract, against its contractual

freight;

III) DECLARE that the CLAIMANT has unlawfully exercised its rights of lien over the CARGO

and over Sub-Freight;

IV) DECLARE inadmissible the requested interim order for the sale of the CARGO, as the legal

requirements to grant such request were not met by the CLAIMANT.

On behalf of Inferno Resources Sdn Bhd,

Versailles, 19 April 2017

Arleen Gonzalez Charlotte Hauchard Vérane Pasi

Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa

Documents

STATEMENT OF RESPONDENT’S - Murdoch University · Team 19 Statement of Respondent’s Case ii b. The Claimant has not complied with its obligation under article 87 of the