TEAM 1 - ALSD GGSIPU CLAIMANT - Murdoch University...Action Navigation Inc v. Bottigliere di Navigazione SpA (The Kista) 16 February 2005 Queen’s Bench Division (Commercial Court)

TEAM 1

Twentieth

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

Rotterdam, 30th June – 5th July

AMITY LAW SCHOOL, DELHI

GGSIP UNIVERSITY

Memorandum For CLAIMANT

On behalf of Against

Panther Shipping Inc. Omega Chartering Limited

(CLAIMANT) (RESPONDENT)

COUNSEL FOR CLAIMANT

FATEH SINGH KHURANA ▪ SAOUMYA VASHISHT ▪ SIDDHARTH DHAWAN

VATSALA CHAUHAN ▪ VIDUSHI SINHA

TEAM 1

TABLE OF CONTENTS

LIST OF ABBREVIATIONS...........................................................................................................I

INDEX OF AUTHORITIES..........................................................................................................IV

INDEX OF CASES.................................................................................................................... VII

LEGAL SOURCES AND MATERIAL........................................................................................XVI

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

SUMMARY OF ARGUMENTS........................................................................................................4

ARGUMENTS ON JURISDICTION.................................................................................................5

I. THAT THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT MATTER....................5

A. The Arbitral Tribunal has the authority to decide upon its own jurisdiction..............5

1. The Tribunal has the power to rule upon its jurisdiction ............................. 5

2. The Arbitration Clause stipulates that the Seat of Arbitration will be in

London ......................................................................................................... 6

3. The Law applicable to the Arbitration Agreement is English Law ............. 6

B. The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and

sufficiency of the notification given by RESPONDENT with regards to the Cargo

Claim ........................................................................................................................ 7

1. The Arbitration Clause must be interpreted broadly .................................... 7

2. Alternatively, even if the claim is found to be non-contractual, the tribunal

has the jurisdiction to adjudicate upon the same...........................................8

CONCLUSION TO THE FIRST ISSUE ........................................................................................... 9

ARGUMENTS ON MERITS.......................................................................................................... 9

TEAM 1

II. THE RESPONDENT’S FAILURE TO PERFORM HULL CLEANING PRIOR TO RE-DELIVERY

HAS RESULTED IN BREACH OF THE CHARTERPARTY AND THEY ARE THUS LIABLE FOR

THE COSTS INCURRED.........................................................................................................9

A. RESPONDENT is not relieved of its obligation to perform hull cleaning...................10

1. RESPONDENT is liable under clause 83 of the Charterparty to provide for hull

cleaning. ..................................................................................................... 10

2. Even if RESPONDENT has discharged their liability under clause 83, the

principle of implied indemnity would be applicable in this situation..........12

B. RESPONDENT is liable for lump sum payment of the entire cost incurred by

CLAIMANT in lieu of hull cleaning...........................................................................12

C. RESPONDENT is liable for the cost of the voyage to South Island.............................14

CONCLUSION TO THE SECOND ISSUE ..................................................................................... 16

III. RESPONDENT IS LIABLE TO PAY THE DAMAGES AS PER THE SUBSEQUENT FIXTURE.....16

A. Vessel was on hire during its stay at Wahanda port.........................................16

B. The delay in redelivery was caused due to the personal gross negligence of

RESPONDENT...........................................................................................................17

C. RESPONDENT had the special knowledge of the next fixture....................................18

D. Loss of hire under the next fixture is for 4 years and not for 2 years as claimed by

RESPONDENT...........................................................................................................19

E. CLAIMANT is not liable to give credit for hire received under replacement

fixture.....................................................................................................................20

CONCLUSION TO THE THIRD ISSUE........................................................................................21

TEAM 1

IV. CLAIMANT IS NOT LIABLE FOR THE PAYMENT OF THE CARGO CLAIM MADE BY

RESPONDENT......................................................................................................................21

A. The cargo claim is time barred under clause 6 of the ICA.......................................21

B. The cargo claim does not fall to be apportioned under clause 8 (a) of the ICA........23

CONCLUSION TO THE FOURTH ISSUE.....................................................................................25

REQUEST FOR RELIEF............................................................................................................. 25

TEAM 1 MEMORANDUM FOR CLAIMANT | I

LIST OF ABBREVIATIONS

& And

A. OR ART. Article

AJSL Asian Journal on Shipping and

Logistics

ARB Arbitration

AUG. August

BIMCO The Baltic and International Maritime

Council

CL. Clause

CORP. Corporation

DEC December

DOC. Document

ED. Edition

GMBH Gesellschaft mit beschränkter Haftung

HFW Holman Fenwick Willan

ICA Inter-Club Agreement

ICC International Chamber of Commerce

TEAM 1 MEMORANDUM FOR CLAIMANT | II

ICSID International Centre for Settlement of

Investment Disputes

IMO International Maritime Organization

INC. Incorporated

INT. International

JUL. July

JUN. June

LMAA London Maritime Arbitrators Association

LTD. Limited

M metre

MAR. March

MEPC Marine Environment Protection Council

MV OR M/V Motor Vessel

NO. Number

NOV. November

NYPE New York Produce Exchange

OCT. October

P. Page/Pages

P&I Protection and Indemnity

TEAM 1 MEMORANDUM FOR CLAIMANT | III

PARA./§ Paragraph

PO Provisional Order

S. Section

UK United Kingdom

UN United Nations

UNCITRAL United Nations Commission on International

Trade Law

USD United States Dollar

VOL. Volume

TEAM 1 MEMORANDUM FOR CLAIMANT | IV

INDEX OF AUTHORITIES

BERLINGIERI,

Francesco

A Comparative Analysis of the Hague-Visby Rules,

Hamburg Rules and the Rotterdam Rules

(2009)

Cited as:

BERLINGIERI

in para: § 17.

BLACKABY, Nigel

PARTASIDES,

Constantine

REDFERN, Alan

HUNTER, Martin

Redfern and Hunter on International Arbitration,

6th Ed. (2015)

Published by: Oxford University Press

pp: 322-345

Cited as:

REDFERN/

HUNTER

in para: § 4.

BORN, Gary B. International Commercial Arbitration,

2nd Ed. (2001)

pp: 317-319

Cited as:

BORN, 2001

in para: § 9.

CHAFIK, Muhsen The Rules of the Carriage of Goods by Sea”

(The Hamburg Rules) (1984)

p.43

Cited as:

CHAFIK

in para: § 45.

COGHLIN, T.

BAKER, A.

KENNY, J.

Time Charters.

6TH Ed.. (2008)

Available at: Informa Law from Routledge, Lloyd’s

Shipping Law Library

Cited as:

COGHLIN/BAKER/

KENNY

in para: § 69.

TEAM 1 MEMORANDUM FOR CLAIMANT | V

GARD Gard Guidance to Seaworthiness

Available at:

http://www.gard.no/web/publications/document/ch

apter?p_subdoc_id=6224&p_document_id=6208

Cited as:

GARD GUIDANCE TO

SEAWORTHINESS

in para: § 64.

GIRVIN, S. Carriage of Goods by Sea

2ND Ed. (2011)

Published by: Oxford University Press.

Cited as:

GIRVIN

in para: § 71.

LEE, J.S. A Case Study on the Recovery Criteria of Reliance

Damage in Marine Transport Contract and

Charterparty Volume 33, Issue 4 (2017)

pp. 245-251

Cited as:

LEE

in para: § 52.

MANAADIAR,

Hariesh

The essential guide to cargo damage

(2017)

Available at:

https://shippingandfreightresource.com/the-

essential-guide-to-cargo-damage/

Cited as:

GUIDE TO CARGO

DAMAGE,

MANAADIAR

in para: § 60.

MCILWRATH,

Michael

SAVAGE, John

International Mediation and Arbitration: A Practical

Guide (2010)

Published by: Kluwer Law International

Cited as:

MCILWRATH/

SAVAGE

in para: § 5.

TEAM 1 MEMORANDUM FOR CLAIMANT | VI

PLOMARITOU, Evi A Review of Shipowner’s & Charterer’s

Obligations in Various Types of Charter.

Published by: Journal of Shipping and Ocean

Engineering. (2014)

available at:

http://www.davidpublisher.org/Public/uploads/Con

tribute/550a993f0831a.pdf

Cited as:

PLOMARITOU, IN:

JSOE.

in para: § 68.

VIRGO, Graham The Principles of the Law of Restitution

Published by: Oxford University Press

(2006)

Cited as:

VIRGO

in para: § 52.

TEAM 1 MEMORANDUM FOR CLAIMANT | VII

INDEX OF CASES

CANADA

Dell Computer Corp. v. Union des consommateurs

13 July 2007

Superior Court of Canada,

Citation: 2007 SCC 34

Cited as: CANADA 13 Jul. 2007

in para: § 2.

Kaverit Steel & Crane Ltd v. Kone Corp.

16 January 1992

Alberta Court of Appeal

Citation: 120 A.R. 346 (CA)

Cited as: CANADA 16 Jan. 1992

in para: § 13.

UNITED KINGDOM

Action Navigation Inc v. Bottigliere di Navigazione SpA (The Kista)

16 February 2005

Queen’s Bench Division (Commercial Court)

Citation: [2005] EWHC 177

Cited as: UK 16 Feb. 2005

in para: § 33, 37, 38.

TEAM 1 MEMORANDUM FOR CLAIMANT | VIII

Sig Bergesen D.Y. A/S & al. v. Mobil Shipping & Transportation Co. (The “BERGE

SUND”)

18 December 1991

Queen’s Division Bench (Commercial Court)

Citation: [1992] 1 Lloyd’s Rep.460

Cited as: UK 18 Dec. 1991

in para: § 43.

Czarnikow (C) Ltd v. Koufos ( The Heron II )

17 October 1967

House of Lords

Citation: [1969] 1 AC 350 (HL)

Cited as: UK 17 Oct. 1967

in para: § 49.

D/S A/S Idaho v. Peninsular and Oriental Steam Navigation Co. (The Strathnewton)

30 November 1982

Court of Appeal

Citation: [1983] 1 Lloyd’s Rep 296

Cited as: UK 30 Nov. 1982

in para: § 60.

ENE Kos 1 Ltd v. Petroleo Brasileiro SA (The Kos) (No 2) (SC)

2 May 2012

Supreme Court

TEAM 1 MEMORANDUM FOR CLAIMANT | IX

Citation: [2012] UKSC 17

Cited as: UK 2 May 2012

in para: § 31.

Federal Commerce and Navigation Ltd v. Molena Alpha Inc (The Nanfri)

13 April 1978

Court of Appeal

Citation: [1978] 1 Lloyd’s Rep. 581

Cited as: UK 13 Apr. 1978

in para: § 55.

Geldof Metaalconstructie NV v. Simon Carves Limited

11 June 2010

England and Wales Court of Appeal (Civil Division)

Citation: [2010] EWCA Civ 667

Cited as: UK 11 Jun. 2010

in para: § 55.

Golden Strait Corp v. Nippon Kubishika Kaisha (The Golden Victory)

28 March 2007

House of Lords

Citation: [2007] UKHL 12

Cited as: UK 28 Mar. 2007

in para: § 52.

TEAM 1 MEMORANDUM FOR CLAIMANT | X

Hadley v. Baxendale

23 February 1854

Court of Exchequer

Citation: [1854] EWHC J70

Cited as: UK 23 Feb. 1854

in para: § 50.

Imperator I Maritime Co v. Bunge Sa (The “Coral Seas”)

24 June 2016


Citation: [2016] EWHC 1506 (Comm)


in para: § 26, 37.

Ipsos S.A. v. Dentsu Aegis Network Limited (previously Aegis Group plc)

29 April 2015


Citation: [2015] EWCH 1171 (Comm)

Cited as: UK 29 Apr. 2015

in para: § 59, 60.

Jackson v. Royal bank of Scotland

27 January 2005

House of Lords

Citation: [2005] 1 WLR 377

TEAM 1 MEMORANDUM FOR CLAIMANT | XI

Cited as: UK 27 Jan. 2005

in para: § 48.

J. &J. Denholm Ltd. v. Shipping Controller (The “CARRONPARK”)

23 July 1920

King’s Bench Division

Citation: [1920] 4 Ll.L.Rep.426

Cited as: UK 23 Jul. 1920

in para: § 41.

Legola Compania de Navigacion, S.A. v. John Glynn & Son, Ltd. (The

“DODECANESE”)

15 May 1953

Queen’s Bench Division

Citation: [1953] 2 Lloyd's Rep.47


in para: § 41.

Louis Dreyfus Commodities Suisse SA v. MT Maritime Management BV

1 September 2015

England and Wales High Court (Commercial Court)


Cited as: UK 1 Sep. 2015

in para: § 52, 54.

TEAM 1 MEMORANDUM FOR CLAIMANT | XII

Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS);

25 October 1976

Queen’s Bench (Commercial Court)

Citation: [1977] 1 Lloyd's Rep 368

Cited as: UK 25 Oct. 1976

in para: § 41.

MMP GmbH (Formerly Antal International Network GmbH) v. Antal International

Network Ltd

6 May 2011

England and Wales High Court (Commercial Court)



in para: § 51.

Ratcliffe v Evans

1892

Queen’s Bench Division

Citation: [1892] 2 QB 524

Cited as: UK 1892

in para: § 51.

Santa Martha Baay Scheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The

Rijn)

27 March 1981

TEAM 1 MEMORANDUM FOR CLAIMANT | XIII


Citation: [1981] 2 Lloyd's Rep 267

Cited as: UK 27 Mar. 1981

in para: § 32.

Sulamerica Cia Nacional de Seguros S.A.v. Enesa Engenharia S.A.

16 May 2012,

England and Wales Court of Appeal (Civil Division)

Citation: [2012] EWCA Civ 638


in para: § 6.

Transfield Shipping Inc v. Mercator Shipping Inc

9 July 2008

House of Lords

Citation: [2008] UKHL 48

Cited as: UK 9 Jul. 2008

in para: § 48.

Triad Shipping Co v. Stellar Chartering & Brokerage Inc (The Island Archon)

15 June 1994

Court of Appeal

Citation: CA 8 JUL 1994


in para: § 26.

TEAM 1 MEMORANDUM FOR CLAIMANT | XIV

Volcafe Ltd and another v. Compania Sud Americana de Vapores SA

5 December 2018

The Supreme Court

Citation: [2018] UKSC 61

Cited as: UK 5 Dec. 2018

in para: § 69.

UNITED STATES OF AMERICA

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.

2 July 1985

U.S. Supreme Court

Citation: 473 U.S. 614 (1985)

Cited as: USA 2 Jul. 1985

in para: § 14.

Moses H. Cone Memorial Hospital v. Mercury Construction Corp.

23 February 1983

U.S. Supreme Court

Citation: 460 U.S. 1 (1983)

Cited as: USA 23 Feb. 1983

In para: § 9.

Texaco Inc v. Universal Marine, Inc.

1 August 1975

United States District Court, E. D. Louisiana

TEAM 1 MEMORANDUM FOR CLAIMANT | XV

Citation: 400 F. Supp. 311 (1975)

Cited as: USA 1 Aug. 1975

in para: § 65.

Tractebel Energy Marketing, Inc. v. AEP Power Marketing

22 May 2007

United States Court of Appeals, Second Circuit,

Citation: Inc 487 F.3d 89, (2007)

Cited as: USA 22 May 2007

in para: § 49.

TEAM 1 MEMORANDUM FOR CLAIMANT | XVI

LEGAL SOURCES AND MATERIAL

Arbitration Act The English Arbitration Act, 1996

BIMCO Explanatory Notes BIMCO Hull Fouling Clause for Time Charter

parties Explanatory Notes.

BIMCO Remarks Hull Fouling Clause for Time Charter Parties

REMARKS (2013).

Geneva Protocol The Geneva Protocol on Arbitration Clauses,

1923.

ICA Inter Club New York Produce Exchange

Agreement.

IMLAM Rules The Rules for 20th Annual International

Maritime Law Arbitration Moot.

LMAA Rules London Maritime Arbitrators Association

Rules.

TEAM 1 MEMORANDUM FOR CLAIMANT | XVII

MEPC Resolutions Anti-fouling Systems, International Maritime

Organization (2003).

New York Convention United Nations Convention on the Recognition

and Enforcement of Foreign Arbitral Awards,

1958.

Rotterdam Rules United Nations Convention on Contracts for

the International Carriage of Goods Wholly or

Partly by Sea.

The Hague – Visby Rules The Hague Rules as Amended by the Brussels

Protocol (1968).

The Hamburg Rules

United Nations Convention on Carriage of

Goods by Sea.

UNCITRAL Model Law UNCITRAL Model Law on International

Commercial Arbitration, 1985.

TEAM 1 MEMORANDUM FOR CLAIMANT | 1

STATEMENT OF FACTS

1. The parties to this arbitration are Panther Shipping Inc. [hereinafter, CLAIMANT] and

Omega Chartering Limited, [hereinafter, RESPONDENT].

2. The CLAIMANT, Panther Shipping Inc. is a Shipping Company based in Liberia.

3. The RESPONDENT, Omega Chartering Ltd. is a Chartering Company based in

Liechtenstein.

18 Mar 16 CLAIMANT and RESPONDENT entered into a time Charterparty for a period

of 50-55 days from West Coast to Wahanda carrying a cargo of harmless

bulk products.

P. 2.

29 Mar 16 M/V Thanos Quest, hereinafter referred to as the vessel, delivered into

the Charterparty.

P. 66.

07 May 16

-

08 May 16

Vessel arrived at Wahanda but was not allowed to berth. Held at

anchorage until Port State Control cleared the crew on board, who was

suspected of carrying the Ebola virus. RESPONDENT intimated CLAIMANT

about ship being off hire from her arrival at Wahanda. CLAIMANT iterated

that this is a situation beyond their control. Communicated to

RESPONDENT that vessel remains on hire.

P. 66.

11 May 16 Port State Control inspected ship and found a number of crew members

with high fever. Ship placed in quarantine for a minimum of 28 days.

RESPONDENT again communicated to CLAIMANT that ship is off hire.

CLAIMANTS in their reply repeated that this is not an off hire event and

the ship remains on hire.

P. 24.


25 May 16

Wahanda port services communicated to RESPONDENT that Wahanda port

is not suitable for cleaning due to current, change and other issues.

Advised that ship owner should choose other port to do the cleaning.

P. 26.

08 Jun 16

CLAIMANT contacted RESPONDENT requesting to confirm the

arrangements regarding the vessels bottom, propeller underwater

inspection and cleaning if necessary, in accordance with Cl. 83.

RESPONDENT asked for advice to solve the problem or offered a lump sum

payment of USD 15,000 in its stead due to non-availability of underwater

cleaning services.

P. 29.

09 Jun 16 CLAIMANT acknowledged non-availability of underwater cleaning

services at Wahanda. Refused the lump sum payment as no inspection

had been carried out. RESPONDENT agreed to pay cost of underwater

cleaning against original invoice.

P. 28.

15 Jun 16 CLAIMANT entered into a Charterparty dated 15.06.2016 with Champion

Chartering Corp for MV Thanos Quest. Delivery of Vessel to Champion

Chartering Corp was before the cancelling date, i.e., 28 June 2016.

P. 30.

18 Jun 16 CLAIMANT communicated to RESPONDENT that they reserve their rights

to revert in due course with their claim for costs/time/expenses for the

vessel’s cleaning from fouling due to the prolonged stay at Wahanda.

P. 35.

22 Jun 16

23 Jun 16

RESPONDENT contacted Titan Shipbuilders and received a quote for USD

33,000 for underwater hull cleaning.

P. 35.

26 Jun 16 RESPONDENT intimated about heavy fouling of the vessel and details of

next fixture by CLAIMANT. CLAIMANT then requested RESPONDENT to

P. 34.


advise their intention regarding arrangement for Vessel’s hull, flat

bottom, rudder, propeller inspection and cleaning.

28 Jun 16 Champion Chartering Corp. cancelled the Charterparty with the

CLAIMANT due to non-delivery of Vessel before cancelling date.

P. 40.

29 Jun 16 RESPONDENT delivered one day delivery notice to CLAIMANT and

informed them that they are in talks with the receiver about the potential

cargo claim. CLAIMANT again called upon RESPONDENT to carry out the

inspection and cleaning of the vessel at South Island.

P. 43, 44.

30 Jun 16 RESPONDENT repeated their offer of lump sum payment of USD 30,000

and reiterated that any voyage to South Island would not be contractual,

and hence, RESPONDENT’S responsibility. CLAIMANT gave RESPONDENT

final opportunity to comply with contractual terms and complete the

cleaning of the vessel under Cl. 83 of the charterparty.

P. 42, 43.

04 Jul 16 CLAIMANT delivered Vessel to Fairwind International, the next fixture for

MV Thanos Quest.

P. 53.

05 Nov 17

RESPONDENT requested CLAIMANT to extend time in relation to Cargo

Claim.

P. 58.

Oct 18 CLAIMANT began arbitration process. Both CLAIMANT and RESPONDENT

appointed their arbitrators.

P. 61.

09 Nov 18 CLAIMANT served its claim on RESPONDENT. P. 65.

17 Nov 18 RESPONDENT served its counterclaim on the CLAIMANT. P. 70.

Dec 18 CLAIMANT gave its reply to RESPONDENTS counterclaim. P. 75.


SUMMARY OF ARGUMENTS

This Tribunal is kindly requested to order that this Tribunal has jurisdiction over the present

matter. [I, see below §§1- 15]. First, the Tribunal has the authority to decide upon its own

jurisdiction. Second, the Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding

nature and sufficiency of the notification given by RESPONDENT with regards to the Cargo

Claim.

Further, the Tribunal is kindly requested to declare that the RESPONDENT’S failure to perform

Hull Cleaning prior to re-delivery has resulted in breach of the Charterparty and they are, thus,

liable for the costs incurred by CLAIMANT [II, see below §§16 - 38]. First, RESPONDENT is not

relieved of its obligation to perform hull cleaning. Second, RESPONDENT is liable for lump sum

payment of the entire cost incurred by CLAIMANT in lieu of hull cleaning. Third, RESPONDENT

is liable for the cost of the voyage to South Island.

This Tribunal is also kindly requested to hold the RESPONDENT liable to pay the damages as

per the subsequent fixture [III, see below §§38 - 56]. First, Vessel was on hire during its stay

at Wahanda Port. Second, the delay in re-delivery was caused due to the personal gross

negligence of RESPONDENT. Third, RESPONDENT had the special knowledge of the next fixture.

Fourth, loss of hire under the next fixture is for 4 years and not for 2 years as claimed by

RESPONDENT. Last, CLAIMANT is not liable to give credit for hire received under replacement

fixture.

Finally, the Tribunal is requested to hold that CLAIMANT is not liable for the payment of the

Cargo Claim made by RESPONDENT [IV, see below §§57 - 72]. First, the Cargo Claim is time

barred under clause 6 of the ICA. Second, the Cargo Claim does not fall to be apportioned

under Clause 8(a) of the ICA.


ARGUMENTS ON JURISDICTION

I. THAT THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT MATTER.

1 This Tribunal is requested to kindly order that the tribunal has the jurisdiction to decide

the present matter as the LMAA Terms are applicable in the present case, with English Law

being the governing law. The Tribunal has the power to determine issues relating to its own

jurisdiction (A) and that the Tribunal has the jurisdiction to hear CLAIMANT’S pleading

regarding nature and sufficiency of the notification given by RESPONDENT with regards to

the Cargo Claim (B)

A. That the Tribunal has the power to determine issues relating to its own jurisdiction.

2 The Arbitral Tribunal has the power to determine issues relating to its own jurisdiction.

There is a valid and binding arbitration clause between the parties [Cl. 80, P. 15, MOOT

PROPOSITION]. Arbitration is “a creature that owes its existence to the will of the parties

alone.” [CANADA 13 Jul. 2007]. In the present case, since it has been explicitly agreed to

by the parties, the arbitration clause constitutes the primary source of the Tribunal’s

authority to decide all disputes arising out of or in connection to the Charterparty.

1. The Tribunal has the power to rule upon its jurisdiction.

3 The London Maritime Arbitration Association Rules are the procedural rules governing

the arbitration [RULE 2.2, IMLAM RULES]. The seat of arbitration for the present matter

is in England, pursuant to Rule 6(a) of the London Maritime Arbitrators Association Rules

[RULE 6(a), LMAA RULES]. CLAIMANT and RESPONDENT, in the Arbitration Clause [Cl.

80, P. 15, MOOT PROPOSITION] have agreed that the governing the contract is English

Law. Accordingly, the English Arbitration Act [ARBITRATION ACT] will be applicable as

well.


4 The Kompetenz-Kompetenz Principle is recognized under S. 30(1) of the Arb. Act

[ARBITRATION ACT]. Under this Principle, the Tribunal has the power to determine its

own jurisdiction [REDFERN/HUNTER, P. 322, 345] by construing the arbitration

agreement according to its governing law [BORN, P. 1405-6]. Hence, the Tribunal may

rule on its own substantive jurisdiction as to matters that have been submitted to arbitration

in accordance with the Arbitration Clause [Cl. 80, P. 15, MOOT PROPOSITION].

2. The Arbitration Clause stipulates that the seat of arbitration is London.

5 The Arbitration Clause has expressly stipulated that the seat of arbitration is London.

Experts in drafting international arbitration clauses advise that express language ensures

that the parties’ intentions are followed [MCILWRATH/SAVAGE]. The parties, through

Clause 80, have stipulated that any dispute arising between CLAIMANT and RESPONDENT,

will be referred to arbitration in London, and the Contract will be construed in accordance

with English Law. The intention of the parties was to have the seat of the arbitration in

London, and to have the contract governed by English Law. Therefore, it is clear from the

language of the arbitration clause that the seat of Arbitration is London.

3. The Law applicable to the Arbitration Agreement is English Law.

6 The Law applicable to the Arbitration Agreement is English Law. In SULAMERICA,

MOORE-BICK LJ, gave the three-stage test to determine the law of the arbitration agreement,

which is as follows: (1) whether the parties had made an express choice as to what law

should govern the arbitration agreement; (2) whether the parties had made an implied

choice as to what law should govern the arbitration agreement; (3) what jurisdiction the

arbitration agreement has its closest and most real connection to [UK 16 May 2012]. In the

present matter, the parties had made an express choice that the contract is to be construed

in accordance with English Law. Hence, the arbitration will be governed by English Law.


7 The law governing the arbitration, that is, the Lex Arbitri is English Law in the present

case, pursuant to Rule 6(a) of LMAA [RULE 6(a), LMAA RULES]. This includes the

English Arbitration Act of 1996 [ARBITRATION ACT]. Alternatively, even if the law

governing the substantive contract to the arbitration agreement is found to be not

applicable, the law of the seat of the arbitration will govern the proceedings. Since the seat

of the arbitration is London in this case, the agreement will be governed by English Law.

B. The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and

sufficiency of the notification given by RESPONDENT with regards to the Cargo Claim.

8 The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and

sufficiency of the notification given by RESPONDENT with regards to the Cargo Claim. The

Arbitration Clause must be interpreted broadly (1) and even if the claim is found to be non-

contractual, the tribunal has the jurisdiction to adjudicate upon the same. (2)

1. The Arbitration Clause must be interpreted broadly.

9 As a general practice, in resolving disputes over the scope of arbitration agreements, a

number of national courts apply rules of interpretation which are avowedly “pro-

arbitration,” resolving doubts about the scope of a clause in favour of encompassing

borderline claims.[BORN, 2001, P.317-319] In interpreting international arbitration

agreements, for example, U.S. courts have generally applied a federal common law rule of

contract interpretation that is expressly and vigorously “pro-arbitration.” Questions of

arbitrability must be addressed with a healthy regard for the federal policy favouring

arbitration [and] any doubts concerning the scope of arbitrable issues should be resolved in

favour of arbitration.” [USA 23 Feb. 1983]

10 The arbitration clause [Cl. 80, P. 15, MOOT PROPOSITION] states that any dispute

between CLAIMANT and RESPONDENT would be referred to arbitration. CLAIMANT’S

pleading with regards to the nature and sufficiency of the Cargo Claim notification given


to it by RESPONDENT is one such dispute. The dispute arises directly from the Charterparty,

in as much as, it deals directly with the Cargo Claim made by RESPONDENT to CLAIMANT.

In order to determine the outcome of the Cargo Claim, the Tribunal must be able to

determine whether the Notification itself, was given in a proper and sufficient manner.

Further, the nature and sufficiency of the notification which is disputed arises from the Inter

- Club Agreement, an agreement which CLAIMANT and RESPONDENT have expressly agreed

to be bound by [Cl. 53, P. 10, MOOT PROPOSITION].

2. Alternatively, even if the claim is found to be non-contractual, the tribunal has the

jurisdiction to adjudicate upon the same.

11 Even if CLAIMANT’S pleading with regards to the nature and sufficiency of notification

is found to be non-contractual, the arbitral tribunal will still have the jurisdiction to

adjudicate upon the same.

12 There is no prohibition in most jurisdictions – either common law or civil law– against

the arbitration of non-contractual claims. Article II (1) of the New York Convention defines

an arbitration agreement as including differences arising from a relationship “whether

contractual or not,” and imposes international obligations to recognize the presumptive

validity of such agreements [NEW YORK CONVENTION, ART. II(I); GENEVA

PROTOCOL, ART. I]. This formulation is paralleled in many national arbitration statutes,

which also make clear that non-contractual claims may be the subject of valid arbitration

agreements [S. 6(1), ARBTIRATION ACT; ART. 7(1), UNCITRAL MODEL LAW].

13 “The Convention and Act…cover both contractual and non-contractual commercial

relationships. They thus extend their scope to liability in tort so long as the relationship that

creates liability is one that can fairly be described as ‘commercial.’ In my view, a claim

that a corporation conspired with its subsidiaries to cause harm to a person with whom it


has a commercial relationship raises a dispute ‘arising out of a commercial legal

relationship, whether contractual or not’ [CANADA 16 Jan. 1992].

14 Although the language of Art. II(I) of the New York Convention and equivalent

provisions of national arbitration legislation acknowledges that non-contractual claims may

be the subject of valid arbitration agreements [USA 2 Jul. 1985]. Non-contractual claims

should be treated no less favourably with regard to interpretation than contractual claims.

15 This dispute arises from the commercial legal relationship between CLAIMANT and

RESPONDENT with regards to the Charterparty, MV Thanos Quest. In order to determine

the validity of the Cargo Claim of RESPONDENT, it is necessary to decide whether the

notification itself was given properly and sufficiently in the first place. Therefore, even if

CLAIMANT’S pleading with regards to the nature and sufficiency of notification is found to

be non-contractual, the arbitral tribunal still has the jurisdiction to adjudicate upon the

same.

CONCLUSION TO THE FIRST ISSUE

The Tribunal has the authority to decide upon the present dispute. Further, the Tribunal also

has the jurisdiction to decide upon CLAIMANTS pleading with regards to the nature and

sufficiency of the information about the Cargo Claim given by RESPONDENT to CLAIMANT.

ARGUMENTS ON MERITS

II. RESPONDENT’S FAILURE TO PERFORM HULL CLEANING PRIOR TO RE-DELIVERY HAS

RESULTED IN BREACH OF THE CHARTERPARTY AND THEY ARE THUS LIABLE FOR THE

COSTS INCURRED.

16 The RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in

breach of the Charterparty, and they are liable for the costs incurred. RESPONDENT is not


relieved of its obligation to perform hull cleaning (A), RESPONDENT is liable for lump sum

payment of the entire cost incurred by CLAIMANT in lieu of hull fouling (B) and that

RESPONDENT is liable for costs, other than hull cleaning, specifically voyage costs. (C)

A. RESPONDENT is not relieved of its obligation to perform hull cleaning.

17 RESPONDENT is not relieved of its obligation to perform hull cleaning. RESPONDENT is

liable under clause 83 of the Charterparty to provide for hull cleaning. Even if RESPONDENT

has discharged their liability under clause 83, the principle of implied indemnity would be

applicable in this situation.

1. RESPONDENT is liable under clause 83 of the Charterparty to provide for hull

cleaning.

18 RESPONDENT is liable under clause 83 of the Charterparty to provide for hull cleaning.

The obligations of parties are determined as per Omega Rider clause 83 of Charterparty

which has been adopted from NYPE 2015 clause 30 [P. 18, MOOT PROPOSITION].

19 It explicitly states that if the vessel sits idle in tropical waters or outside them for a

period exceeding the agreed or default period, such cleaning is to be ‘undertaken by the

Charterers at their risk, cost, expense’ but ‘in consultation with the Owners’ [NYPE 2015,

Cl. 30(C)]. The vessel had arrived at the Wahanda discharge port on 7.05.2016 [P. 31,

MOOT PROPOSITION] and had remained at the anchorage for aggregate period exceeding

30 days [MOOT PROPOSITION, P.31], which was the agreed time as per the Charterparty

for non- tropical zones [Cl. 83, P. 18, MOOT PROPOSITION], after which the risk, cost,

expense and time lost due to hull cleaning shifted from CLAIMANT to RESPONDENT

[BIMCO EXPLANATORY NOTES].

20 As a result, there was a Contractual obligation on RESPONDENT to provide for inspection

and cleaning at their risk, cost, expense, and during their on-hire period [P. 18, MOOT

PROPOSITION] which it failed to do and have thus; breached the Charterparty.


21 RESPONDENT in its defence and counterclaim submissions’ [P. 74, MOOT

PROPOSITION] has relied on the fact that their offer to conduct the cleaning at North Titan

Port or accept a USD 20,000 as lump-sum payment in regard of the hull cleaning had

relieved them of their obligations towards the same [P. 41, MOOT PROPOSITION].

However, their obligation as per rider clause 83(c) is that the cleaning has to take place ‘in

consultation with the owners’ [P. 18, MOOT PROPOSITION]. ‘In consultation with the

owners’ should be construed to include the CLAIMANT’S say with regards to the port of

cleaning.

22 It is evident from the photos that the hull had been severely fouled [P.86, 87, 88, MOOT

PROPOSITION] and there was a need for de-fouling that RESPONDENT had an obligation

to fulfil. As can be seen from the ‘Quotation’ by Titan Shipbuilders, North Titan Port,

RESPONDENT only planned to arrange for underwater hull cleaning and not for above the

water level fouling.

23 Clause 83(c)(iii) of the Charterparty reads: “If, despite the availability of suitable

facilities and equipment, Owners nevertheless refuse to permit cleaning, the speed and

consumption warranties shall be reinstated from the time of such refusal.” [P. 18, MOOT

PROPOSITION] There is no indication to suggest that refusal to permit cleaning would

result in discharge of the liability imposed by clause 83. It merely refers to reinstatement

of speed and consumption warranties.

24 In addition, the hull fouling clause provides that the vessel’s hull should always be

cleaned by the Charterers before she is returned to her Owners [NYPE 2015, Cl. 30(d)].

The RESPONDENT, failed to get the vessel cleaned prior to its redelivery. RESPONDENT was

aware and had been informed and that clause 83 of Charterparty would become operative

08.06.2016 onwards and had ample time to arrange for inspection and cleaning, and was

thus not prevented from carrying out such cleaning.


2. Even if RESPONDENT has discharged their liability under clause 83, the principle

of implied indemnity would be applicable in this situation.

25 Even if RESPONDENT has discharged their liability under clause 83, the principle of

implied indemnity would be applicable in this situation. The fouling was not an ordinary

incident of trading and was a result of a prolonged stay at the Wahanda anchorage which

could not have been foreseen at the time Charterparty was concluded.

26 It is well established that as a general rule a ship-owner has an implied right of

indemnity against a time charterer in respect of the consequences of complying with the

charterer's orders as to the employment of the ship, even if the orders were ones the

charterer was contractually entitled to give [UK 15 Jun. 1994]. The fouling is a direct

consequence of the vessel’s unforeseeable extended stay, and the implied indemnity is not

covered by ‘such indemnity did not extend to the usual perils of the voyage in respect of

which the owner must be taken to have accepted the risk’ [UK 24 Jun. 2016] because

expectation of CLAIMANT for this level of fouling was that it would be the responsibility of

the RESPONDENT, and the CLAIMANT has not accepted such risk at the time conclusion of

Charterparty.

B. RESPONDENT is liable for lump sum payment of the entire cost incurred by CLAIMANT

in lieu of hull cleaning.

27 As has been established above; RESPONDENT is liable for costs of de-fouling the

vessel’s hull. The decision of CLAIMANT opting to go South Island port for cleaning of the

hull is justified and RESPONDENT is liable for lump sum payment of the entire cost incurred

by CLAIMANT in lieu of hull cleaning.

28 CLAIMANT incurred a cost of USD 41,000 [P.52, 53, MOOT PROPOSITION] towards

hull cleaning and has the right to recover those costs. RESPONDENT, in its defence and

counterclaim submissions, has submitted that it is not liable beyond USD 33,000 [P.75,


MOOT PROPOSITION]; which is what the cleaning charges would have amounted to, had

de-fouling been performed at North Titan Port [P. 37, MOOT PROPOSITION].

29 Cleaning costs will vary from port to port as the quality of service rendered by each

agency is different. On comparison of the ‘Statement of Vessel Disbursement’[P. 53,

MOOT PROPOSITION], ‘Invoice’ [P. 52, MOOT PROPOSITION] by South Island Port

Agency Co. Ltd. And the ‘Quotation’ [P. 39, MOOT PROPOSITION] by Titan

Shipbuilders, North Titan Port the differentiating item is ‘BOOTOPING ABOVE WATER

LEVEL 4m CLEANING BY MAN POWER HAND TOOLS’, that is, the charges for hull

cleaning above water level which amounted to a total of USD 13,000 [MOOT

PROPOSITION, P.52]. It is evident from the photograph that the hull has been fouled even

above the water level [P. 86, MOOT PROPOSITION].

30 As per Procedural Order No. 2, the extent of hull fouling is not disputed [P. 83, MOOT

PROPOSITION]. The fouling above the water level was a direct result of the Vessel’s

extended stay at the Wahanda anchorage.

31 Though above water fouling is not covered by Clause 83, which extends to inspection

and cleaning of only underwater parts of the vessel, it falls within the ambit of implied

indemnity. The purpose of the indemnity is to protect them against losses arising from risks

or costs which they have not expressly or implicitly agreed in the Charterparty to bear [UK

2 May 2012].

32 ‘In the great majority of cases the accretion of marine growth was simply a natural

consequence of the vessel remaining in service with nothing fortuitous about it’ [UK 27

Mar. 1981]. Additionally , in THE RIJN, it was held that the excessive growth stemmed

from the abnormally long period , three months, that the vessel spent at rest on charterers’

orders; awaiting cargo and was held to be fortuitous. CLAIMANT, in letting RESPONDENT


continue despite delayed re-delivery of the vessel, was not a natural consequence of

complying with RESPONDENT’S order and was unforeseeable.

33 ‘When a tribunal of fact had to decide whether particular expenses were within the

scope of an implied indemnity under an NYPE charter-party, it was entitled to ask the

question whether the relevant type of risk was one that the ship-owners agreed to bear at

the time the charter was concluded’[UK 16 Feb. 2005]. In the present case, the ‘relevant

type of risk’ was the risk of hull fouling. That the vessel would be inactive at Wahanda port

for {x days, x is more than 30} days and that vessel would be delayed for so long awaiting

discharge, and as a consequence; CLAIMANT would suffer the expense of hull-cleaning was

not the type of risk that was foreseeable and foreseen by both parties at the time the charter-

party was concluded. This relevant type of risk was one that CLAIMANT had not agreed to

accept at the time the charter-party was made. Therefore, RESPONDENT is liable for USD

41,000 towards cleaning under the principle of implied indemnity.

C. RESPONDENT is liable for the costs of the voyage to South Island.

34 RESPONDENT is liable for the cost of the voyage to South Island. RESPONDENT had failed

to fulfil its contractual obligation as a result of which CLAIMANT had to arrange for cleaning

at South Island [P. 45, MOOT PROPOSITION]. As per the Final Hire Statement the costs

beyond hull cleaning include the costs of bunker consumed during voyage to South Island,

and the daily hire charges for the period of cleaning [P. 54, MOOT PROPOSITION].

35 According to 83(c) cleaning had to be undertaken by RESPONDENT at their risk, cost,

expense and time in consultation with CLAIMANT [P. 18, MOOT PROPOSITION]].

Accordingly, if the hull is fouled then it is to be cleaned by the charterers at their cost and

in their time [BIMCO REMARKS]. The time spent on cleaning i.e. 4.2639 days, from

30.06.2016 to 03.07.2016, should have been done within the RESPONDENT’S hire period.


Therefore, the daily hire rate charged for the period of cleaning is justified and thus,

RESPONDENT is liable to bear the cost of the same.

36 Moreover, In the case, ‘THE RIJN’ loss of time of charterers because of hull cleaning

was not deducted from the amount of time for which hire is payable, that is, the Charterers

had to bear the costs of daily hire for time lost during cleaning. Similarly, in the present

case, there was a ‘loss of time’ of the CLAIMANTS for hull cleaning instead of the

RESPONDENTS. Assuming, notionally, the RESPONDENTS had the hull cleaned at their time

then as judgment of ‘THE RIJN’ the RESPONDENTS would not be entitled to deduct for loss

of time for hire. So we can infer from this that the daily hire charges for cleaning period

are justified.

37 Had the RESPONDENT fulfilled its liability, the bunkers consumed during the voyage to

South Island would not have been consumed. Hull fouling is a well-known problem in the

shipping industry, which can reduce speed and increase fuel consumption [UK 24 Jun.

2016] and also result in additional costs and time lost removing the ship-fouling organisms

[UK 16 Feb. 2005]. A fouled hull leads to increased frictional resistance which results in

loss of speed or increased fuel consumption. Fouling may cause the coating system to

deteriorate; leading to premature corrosion of the hull. This, together with an increased

frictional drag has both an economic and environmental impact on the ship’s operations.

According to MEPC assessment, even a small amount of fouling can lead to an increase of

fuel consumption of up to 40%, due to the increased resistance to movement. A clean ship

can sail faster and with less energy [IMO FOULING].

38 The Costs of voyage also fall within the ambit of implied indemnity. Whether a

particular risk of loss or expense is unforeseen or unforeseeable, at the time the

Charterparty is concluded, is a potent factor to determine whether that loss or expense is

within the scope of an implied indemnity [UK 16 Feb. 2005]. The costs of voyage to South


Island were unforeseen as this was the contractual obligation of RESPONDENT. CLAIMANT

did not agree to bear this risk in any manner and therefore, RESPONDENT is liable for costs

of voyage.

CONCLUSION TO THE SECOND ISSUE

RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in breach of

the Charterparty and they are thus liable for the costs incurred as RESPONDENT was not relieved

of its obligation to perform hull cleaning.

III. RESPONDENT IS LIABLE TO PAY THE DAMAGES AS PER THE SUBSEQUENT FIXTURE.

39 It is an undisputed fact that RESPONDENT failed to re-deliver the vessel M/V THANOS

QUEST prior to the expiry of the maximum period of the Charterparty. [P. 72, Para. 10(2),

MOOT PROPOSITION] This failure entitles CLAIMANT to receive damages for late re-

delivery: USD15,330,000.00 (loss of hire under the Next Fixture, calculated as 4 years at

USD10,500 per day) [P. 69, Para. 22(3), MOOT PROPOSITION].

40 The same shall be established by the following: Vessel was on hire during its stay at

Wahanda Port (A); Delay in redelivery was caused due to the personal gross negligence of

RESPONDENT (B); RESPONDENT had the special knowledge of the Next Fixture (C); Loss

of hire under the Next Fixture is for 4 years and not for 2 years as claimed by RESPONDENT

(D); CLAIMANT is not liable to give credit for hire received under Replacement Fixture (E).

A. Vessel was on hire during its stay at Wahanda port.

41 Vessel THANOSQUEST was on hire during its stay at Wahanda Port and RESPONDENT

cannot put the vessel off hire because of the decision of the port as it is beyond CLAIMANT’S

control [P. 25, MOOT PROPOSITION]. It is settled law that prima facie hire is payable

continuously and that it is for the charterers to bring themselves clearly within an off-hire

clause if they contend that hire ceases [UK 25 Oct. 1976]. RESPONDENT’S obligation to pay


hire is continuous. If a charterer withholds hire, purporting to do so under the off-hire

clause, it is for him to establish facts which entitle him to do so [UK 15 May 1953]. The

off-hire clause sets out the events which lead to a cessation of hire. If the Charterers fail to

prove a loss of time due to a cause specifically mentioned in the clause hire will not cease.

If a Charterer desires to escape this liability he must take care to make the requisite

provision clear and unmistakeable [UK 23 Jul. 1920].

42 Time charterers are usually under an express obligation to order the vessel to “safe”

ports. Masters may be reluctant to call at ports in Ebola-affected regions. Under a time

charter, Owners must comply with Charterers’ employment orders but can refuse to do so

where compliance may expose the vessel or crew to danger [SHIPPING BULLETIN,

HFW].

43 Here, RESPONDENT completely relied upon Clause 17 of the NYPE 2015 Form which

states: “or by any similar cause preventing the full working of the Vessel”. The burden

rested squarely on the charterers to show that the case falls within these words [UK 18 Dec.

1991]. The clause does not require that ‘off hire events’ should be attributable to the fault

of the owners. Instead the emphasis is on a pragmatic allocation of risk [UK 18 Dec. 1991].

44 Hence, the Vessel cannot be considered off-hire from 7th May 2016 to 26th June 2016

and CLAIMANT is entitled to damages for the delay in redelivery for such period.

B. The delay in redelivery was caused due to the personal gross negligence of

RESPONDENT.

45 Delay in the redelivery of the vessel M/V THANOS QUEST is caused due to the

personal gross negligence of the Charterers. Hamburg Rules [HAMBURG RULES] and

Rotterdam Rules [ROTTERDAM RULES] cover the liability for delay by the Carrier

[BERLINGIERI]. Carrier is liable for loss resulting from delay in delivery, if the occurrence

of delay took place while the goods were in his charge [A.5, HAMBURG RULES]. The


causal connection between delay and damage should be shown in order to constitute the

carrier’s liability to pay compensation to aggrieved party [CHAFIK].

46 Clause 13 of Bill of Lading lays down responsibility of Carrier in case of delay caused

due to Carriers’ personal gross negligence [Cl. 13, P. 48, MOOT PROPOSITION].

Through Email dated 26th June 2016 CLAIMANT informed Carrier about their Next Fixture

and requested them to clean the vessel which was to be delivered to Champion Chartering

Corp [P. 34, MOOT PROPOSITION]. RESPONDENT in their communication dated 27th June

2018 denied to arrange hull cleaning before redelivery of the Vessel [P. 39, MOOT

PROPOSITION]. The delay in hull cleaning and re-delivery ultimately led to the

cancellation of Next Fixture of Shipper with Champion Chartering Corp [P. 40, MOOT

PROPOSITION].

C. RESPONDENT had the special knowledge of the next fixture.

47 CLAIMANT is entitled to recover all the damages claimed in paragraph 22(3) of the claim

submission because RESPONDENT had special knowledge of the Next Fixture [P. 77, MOOT

PROPOSITION]. As per Article 17(1) of the Rotterdam Rules [ROTTERDAM RULES] the

Carrier is liable for delay in delivery, if CLAIMANT proves that such delay is caused during

the period of Carrier’s responsibility.

48 In order for there to be an assumption of responsibility, the contract breaker would need

to have “some information that will enable him to assess the extent of any liability” [UK 9

Jul. 2008]. Complete knowledge of the terms of the third party contract from which the

loss flows has never been a requirement to determine the loss suffered by the innocent party

[UK 27 Jan. 2005].

49 CLAIMANT is entitled to recover the damages in respect of foreseeable result when the

facts are known or available to the Defendant [UK 17 Oct. 1967]. Aggrieved party may

claim compensation for damages for additional future harm, including lost profits


("consequential loss"), which it may have sustained due to the non-performance of the other

party, provided that such harm was foreseeable and is established with a reasonable degree

of certainty. Such future harm may include any gain of which the aggrieved party has been

deprived by the non-performance of the other party [TRANS LEX PRINCIPLES]. Lost

profits are consequential damages when, as a result of the breach, the non-breaching party

suffers loss of profits on collateral business arrangements [USA 22 May 2007].

50 In the concerned matter the vessel had already been fixed for the next voyage (to load

East Coast range) [P. 34, MOOT PROPOSITION] and the same had been informed to

RESPONDENT through email dated 26th June 2016. RESPONDENT, therefore, had the special

knowledge of the next voyage and the loss was foreseeable and not too remote [UK 23 Feb.

1854].

D. Loss of hire under the next fixture is for 4 years and not for 2 years as claimed by

RESPONDENT.

51 CLAIMANT is entitled for loss of hire under the Next Fixture calculated for the period

of 4 years and not for 2 years amounting to USD15,330,000.00 (USD10,500 per day) [P.

32, MOOT PROPOSITION]. Where it is possible to assess the loss of profits in the normal

way, that should be the measure of damages [UK 6 May 2011]. The quantum of the

prospective loss must be transparent, broken down and substantiated [UK 1892].

52 The compensatory principle [UK 1 Sep. 2015, UK 28 Mar. 2007] mandates the

assessment of actual loss resulting from the breach of a Charterparty. An assessment of

compensation begins with identifying the economic losses suffered by the innocent party

by the breach of contract [LEE]. The purpose of such damages is to place the CLAIMANT

in the position he would have been in had the contract not been breached. This involves the

projection of the so-called ‘expectation damage’ and ‘reliance damage’, which are

compensatory damages [VIRGO]. Compensatory damage is the most common legal


remedy and is a monetary award to compensate the aggrieved party (non-breaching party)

for losses [LEE].

53 The Next Fixture between CLAIMANT and Champion Chartering Corp. agreed for hire

rate at USD 10,500 daily, for the period of two years with an extension of further two years

which makes the total duration of the hire four years [P.32, MOOT PROPOSITION].

54 It is an undisputed fact that loss of subsequent fixture [P. 40, MOOT PROPOSITION]

occurred due to late re-delivery of the vessel by RESPONDENT. While calculating damages

for late re-delivery, subsequent loss, if not too remote, could be taken into account [UK 1

Sep. 2015]. Therefore, RESPONDENT is liable to pay damages for late re-delivery to

CLAIMANT. [P. 69, MOOT PROPOSITION].

E. CLAIMANT is not liable to give credit for hire received under replacement fixture.

55 For the calculation of damages with respect to late re-delivery of vessel by

RESPONDENT, CLAIMANT is not liable to give credit for hire received under replacement

fixture as claimed by RESPONDENT [P. 73, Para. 11(3)(b), MOOT PROPOSITION]. The

right to equitable set-off is a well- established principle under English law. There are three

criteria for equitable set-off against charter hire [THE NANFRI]:

1. Both the claim and counterclaim must arise from the same contract

(i.e. Charterparty) [UK 11 Jun. 2010];

2. The counterclaim must be ‘directly connected with the claim’;

3. There must be a ‘manifest injustice’ in allowing the claim to be

asserted without taking into account the counterclaim.

56 CLAIMANT on 04.07.2016 chartered the Vessel to Fairwind International (“Fairwind”)

for a time charter trip of about 50-55 days (the “Replacement Fixture”) [P. 68, Para. 20,

MOOT PROPOSITION]. However the counterclaim of RESPONDENT arose from the

Charterparty dated 18.03.2016 between CLAIMANT and RESPONDENT [P. 2, MOOT


PROPOSITION]. Since the counter claim doesn’t arise from the same contract, that is the

Charterparty, RESPONDENT is not entitled to equitable set off.

CONCLUSION TO THE THIRD ISSUE

RESPONDENT is liable to pay the damages as per the subsequent fixture to CLAIMANT since the

vessel was on hire during its stay at Wahanda port. The delay in redelivery was caused due to

the personal gross negligence of RESPONDENT. Further, RESPONDENT had the special

knowledge of the next fixture. Finally, CLAIMANT is not liable to give credit for hire received

under replacement fixture.

IV. CLAIMANT IS NOT LIABLE FOR THE PAYMENT OF THE CARGO CLAIM MADE BY

RESPONDENT.

57 It is an undisputed fact that RESPONDENT informed CLAIMANT of the Cargo Claim in

2016 [PO, P. 82, Para. 15, MOOT PROPOSITION]. However, the nature or effect of the

information is not according to Cl. 6 of ICA and the claim was not caused by

unseaworthiness and/or error or fault in the navigation or management of the vessel [P. 77,

Para. 8(1), MOOT PROPOSITION]. Therefore, CLAIMANT is not liable to pay the Cargo

Claim to RESPONDENT. The same shall be established as follows: The Cargo Claim is time

barred under clause 6 of the ICA (A); The Cargo Claim does not fall to be apportioned

under clause 8 of the ICA (B);

A. The cargo claim is time barred under clause 6 of the ICA.

58 RESPONDENT failed to give the written notification of the Cargo Claim required by

clause 6 of the ICA. As such, the Cargo Claim is time- barred [P. 77, Para. 8(1), MOOT

PROPOSITION]. Recovery under the Agreement by an Owner or Charterer shall be

deemed to be waived and absolutely barred unless written notification of the Cargo Claim


has been given to the other party to the Charterparty within 24 months of the date of

delivery of the cargo or the date the cargo should have been delivered [Cl. 6, ICA].

59 Such notification shall, if possible, include details of the contract of carriage, the nature

of the claim and the amount claimed [P. 76, Para. 3, MOOT PROPOSITION]. The idea of

the notification is to give the receiving part the possibility to investigate the claim in hand

and prepare his strategy of defence [UK 29 Apr. 2015].

60 There is a need to provide as much information as possible in relation to the underlying

cargo claim. It is important to ensure that contractual notices, such as those under the ICA,

are given in writing, and are clear and unambiguous as a matter of best practice [UK 29

Apr. 2015]. Notification of damage to the concerned parties must include the intention to

claim for the damage once the value of the damage claim has been ascertained [GUIDE

TO CARGO DAMAGE, MANAADIAR]. The Inter-Club Agreement had the effect of cutting

across the balance of claims and defences under the Hague Rules by means of a rough and

ready apportionment of financial liability as between owners and charterers [UK 30 Nov.

1982].

61 RESPONDENT informed CLAIMANT about the alleged damage to the cargo through an

email dated 27th June 2016 [P. 38, MOOT PROPOSITION]. Owners notified their P&I

Club and arranged a survey which could be done jointly [P. 38, MOOT PROPOSITION].

On 7th July 2016 Charterers attached a preliminary damage report [P. 46, MOOT

PROPOSITION] and asked the Owners to treat it as notice of claim [P. 45, MOOT

PROPOSITION].

62 The exact loss of cargo and quantum of damage had never been notified by the

Charterer to the Owners in spite of various time extension given by the Owners through

several emails (29th May 2017, 28th August 2017).


B. The cargo claim does not fall to be apportioned under clause 8 (a) of the ICA.

63 The Cargo Claim would not fall to be apportioned under clause 8(a) of the ICA, since

the claim was not caused by unseaworthiness and/or error or fault in the navigation or

management of the vessel [P. 77, MOOT PROPOSITION].

64 As per the Hague Visby Rules [HAGUE-VISBY RULES] the carrier shall be bound

before and at the beginning of the voyage to exercise due diligence to make the ship

seaworthy, properly man, equip, and supply the ship, make the holds, refrigerating and cool

chambers, and all other parts of the ship in which goods are carried, fit and safe for their

reception, carriage and preservation [ART. 3, HAGUE-VISBY RULES].This obligation of

seaworthiness also extends to the fitness of the vessel to receive, carry and care for the

intended cargo [GARD GUIDANCE TO SEAWORTHINESS].

65 The term seaworthiness is a relative one, its meaning is dependent upon the vessel

involved and the service in which it is to be employed. In general, a ship must be

sufficiently strong and staunch and equipped with the appropriate appurtenances to allow

it to safely engage in the trade for which it was intended. Put in another way, the ship must

be fit for the use intended [USA 1 Aug. 1975].

66 CLAIMANT confirmed that the Vessel is fitted, and will be fitted throughout the duration

of this Charter, with hold ladders that conform to the regulations of the Waterside Workers

Federation of Australia [Cl. 47, P. 9, MOOT PROPOSITION]. As per the Preliminary

Survey Report dated 30th June 2016 [P. 46, MOOT PROPOSITION] the ballasting system

was standard, and has a system of non-return valves. Mr. Dare examined the ballasting

system and found it to be in order. [MOOT PROPOSITION, P. 46]

67 The shipper shall not be responsible for loss or damage sustained by the carrier or the

ship arising or resulting from any cause without the act, fault or neglect of the shipper, his

agents or his servants [HAGUE-VISBY RULES]. As per Clause 68 of the Charterparty, all


shipboard personnel were holding valid certificates of competency in accordance with the

requirements of the law of the flag state and were trained in accordance with the relevant

provisions of the International Convention on Standards of Training, Certification and

Watchkeeping for Seafarers 1978, and/or other rules or regulations that may be

promulgated from time to time [P. 13, MOOT PROPOSITION].

68 Article III Rule 2 of the Hague Rules [HAGUE-VISBY RULES] puts a duty on the

carrier “properly and carefully to load, handle, stow, carry, keep, care for and discharge” the

cargo. Specifically, they cover not only the mechanical process of handling the ship’s gear

and cargo, but also matters of stevedores’ negligence in the strategic planning of loading

and discharge of the cargo [PLOMARITOU, IN: JSOE].

69 This duty is similar to the common law position, and the carrier has the burden of

proving they are not in causative breach of this provision [UK 5 Dec. 2018]. Clause 42 of

the Charterparty provides that RESPONDENT shall be responsible for stevedore and other

damages to vessel [P.8, MOOT PROPOSITION]. Time charterer has to indemnify owners

under the charter for cargo damage caused by bad stowage or defective lashing or securing

carried out by the charterer’s stevedores [COGHLIN/BAKER/KENNY].

70 Clause 64 of the Charterparty provides for Vessel to ballast/deballast clean water ballast

tanks only including floodable hold(s), if required by RESPONDENT or their Agents at any

time during loading and/or discharging of the cargo [P. 12, MOOT PROPOSITION].

71 The master is under the orders of the charterer as regards employment, agency or other

arrangements. The risk of damage to the vessel or cargo caused by the employment orders

(in contrast to the navigational orders) lies on the charterer [GIRVIN].

72 Hence, the damage to the cargo cannot be apportioned under Clause 8 (a) of the Inter

Club Agreement and CLAIMANT is not liable to pay any damages with respect to the Cargo

Claims.


CONCLUSION TO THE FOURTH ISSUE

CLAIMANT is not liable for the payment of the cargo claim made by RESPONDENT since it is

time barred under clause 6 of the ICA. Further, the cargo claim does not fall to be apportioned

under clause 8 (a) of the ICA.

REQUEST FOR RELIEF

In response to the Tribunal’s Procedural Orders, Counsel makes the above submissions on

behalf of CLAIMANT. For the reasons stated in this Memorandum, Counsel respectfully requests

this Tribunal to declare that:

I. The arbitral tribunal is authorized to decide upon the nature and insufficiency pleading

of CLAIMANT.

II. RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in

breach of the Charterparty and they are thus liable for the costs incurred.

III. RESPONDENT is liable to pay damages as per the subsequent fixture.

IV. CLAIMANT is not liable for the payment of the cargo claim made by RESPONDENT.

Dated this 29th Day of April 2019

[SIGNATURES]

SOLICITORS FOR CLAIMANT

THOR & LOKI BROTHERS

DECK HOUSE, MOORING LANE, LONDON EC3

Documents

TEAM 1 - ALSD GGSIPU CLAIMANT - Murdoch University...Action Navigation Inc v. Bottigliere di Navigazione SpA (The Kista) 16 February 2005 Queen’s Bench Division (Commercial Court)