Team 20 The University of Queensland Claimant · The University of Queensland Memorandum for the Claimant iv LIST OF AUTHORITIES A. ARTICLES/BOOKS John Schofield, Laytime and Demurrage

19th Annual International Maritime Law Arbitration Moot

_____________________________________________________________

In the matter of an arbitration under the LMAA Arbitration Rules

UNIVERSITY OF QUEENSLAND A U S T R A L I A

MEMORANDUM FOR CLAIMANT

Team 20 CLAIMANT

Cerulean Beans and Aromas Ltd 945 Moccasin Road

Cerulean

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RESPONDENT Dynamic Shipping LLC 23 Fuchsia Crescent Cerulean

COUNSEL _______________________________________________________________________ SANGEETHA BADYA | LAURA HEIT | JOSHUA MCKERSEY | PRIAM RANGIAH

The University of Queensland Memorandum for the Claimant

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS III

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

TIMELINE OF KEY EVENTS .......................................................................................................................................................... 3

SUBMISSIONS ON THE TRIBUNAL’S JURISDICTION ............................................................................................................ 3

I. THE TRIBUNAL HAS JURISDICTION TO DETERMINE THIS DISPUTE ................................................................................ 3

A. The Tribunal has jurisdiction to determine the dispute unless it involves ‘technical matters’ ............................... 3

B. The present dispute should be characterised holistically, as a single dispute ............................................................... 4

C. The dispute is not as to ‘technical matters’ ................................................................................................................................... 4

SUBMISSIONS ON THE INCORPORATION OF THE AUSTRALIAN HAGUE-‐VISBY RULES ........................................... 5

I. CHARTERPARTY INCORPORATES THE AUSTRALIAN HAGUE-‐VISBY RULES ................................................................ 5

A. Clause 28 incorporates a variant of the Hague Rules ............................................................................................................... 5

B. The parties intended to incorporate the Australian Hague-‐Visby rules ........................................................................... 6

SUBMISSIONS ON DELAY .............................................................................................................................................................. 7

I. THE DELAY WAS NOT CAUSED BY EVENTS BEYOND THE RESPONDENT'S REASONABLE CONTROL ............... 8

II. THE DELAY WAS NOT CAUSED BY A DEVIATION AUTHORISED BY THE CHARTERPARTY .................................... 8

A. The solar flares were not a Force Majeure Event ....................................................................................................................... 9

B. The deviation was not reasonable ..................................................................................................................................................... 9

C. The deviation was not to save life or property .......................................................................................................................... 10

SUBMISSIONS ON DAMAGE TO COFFEE BEANS ................................................................................................................. 11

I. THE COFFEE BEANS WERE DAMAGED ON DELIVERY .......................................................................................................... 11

II. THE DAMAGE TO THE COFFEE BEANS WAS CAUSED BY THE RESPONDENT’S BREACH OF ART 3(2) OF THE

AUSTRALIAN HAGUE VISBY RULES .............................................................................................................................................. 13

A. The RESPONDENT failed to properly and carefully care for the Coffee Beans until delivery .................................... 14


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B. Alternatively, even if the RESPONDENT’s obligation ended on discharge, the RESPONDENT failed to properly

and carefully discharge the Coffee Beans .................................................................................................................................... 15

C. The RESPONDENT is not exempted from liability under art 4(2) ......................................................................................... 16

III. ALTERNATIVELY, THE DAMAGE TO THE COFFEE BEANS WAS CAUSED BY THE RESPONDENT’S BREACH

OF CL 34 OF THE CHARTERPARTY ................................................................................................................................................ 16

SUBMISSIONS ON DAMAGES .................................................................................................................................................... 17

I. THE RESPONDENT’S LIABILITY FOR CARGO DAMAGE IS LIMITED PURSUANT TO ART 4(5) WITH

REFERENCE TO THE NUMBER OF PACKAGES .......................................................................................................................... 18

II. THE RESPONDENT’S LIABILITY FOR LOSSES CAUSED BY DELAY IS LIMITED PURSUANT TO ART 4A .......... 19

SUBMISSIONS ON THE MARITIME EQUITABLE LIEN ....................................................................................................... 19

I. THE CLAIMANT HOLDS A ‘MARITIME EQUITABLE LIEN’ OVER THE VESSEL FOR USD100,000 ADVANCED

FOR THE PAYMENT OF THE CREW’S WAGES ........................................................................................................................... 19

A. The crew has an outstanding lien over the Vessel ................................................................................................................... 20

SUBMISSIONS ON COUNTERCLAIM ........................................................................................................................................ 21

I. THE CLAIMANT IS NOT LIABLE TO PAY THE RESPONDENT THE USD1,610,000 IN RESPECT OF THE

COUNTERCLAIM .................................................................................................................................................................................... 21

A. The CLAIMANT is not liable for the USD500,000 claimed for freight ................................................................................. 22

B. The CLAIMANT is not liable for the USD100,000 claimed for demurrage ........................................................................ 22

C. The CLAIMANT is not liable for the USD875,000 claimed for the cost of repairing the damage to the hull ..... 23

D. The CLAIMANT is not liable for the USD50,000 claimed for agency fees and USD10,000 for the use of the

electronic access systems at Dillamond ....................................................................................................................................... 24

E. The CLAIMANT is not liable for the USD75,000 claimed for agency fees at Spectre .................................................... 24

PRAYER FOR RELIEF .................................................................................................................................................................. 25


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LIST OF ABBREVIATIONS

ABBREVIATION TERM

Access Authority Pass Electronic Access Authority Pass issued at the Port of Dillamond

Australian Hague-Visby

Rules

Carriage of Goods by Sea Act 1991 (Cth) Schedules 1 and 1A

Charterparty The Voyage Charterparty

Coffee Beans 1000 x 70kg bags of Native Cerulean Coffee Beans

Claimant Cerulean Beans and Aromas Ltd

Dillamond The Port of Dillamond

Expert Report Statement of Expert Opinion of Simon Webster

Record International Maritime Law Arbitration Moot 2018 Moot Scenario’

Purchaser Coffees of the World Ltd

Respondent Dynamic Shipping LLC

Spectre The Port of Spectre

Storm Storm at Dillamond which commenced on 28 July 2017

Vessel The Ship ‘Madam Dragonfly’


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LIST OF AUTHORITIES

A. ARTICLES/BOOKS

John Schofield, Laytime and Demurrage (Informa, 6th ed, 2011)

Julian Cooke et al, Voyage Charters (Informa Law, 4th ed, 2014)

Justice Steven Rares, ‘The Onus of Proof in a Cargo Claim - Articles III and IV of the Hague-Visby Rules and the Uncitral Draft Convention’ (2008) 31 Australian Bar Review 159

Kate Lewins, ‘Are the 1998 Amendments to COGSA Holding Water?’ (2000) 28 Australian Business Law Review 422

Martin Davies and Anthony Dickey, Shipping Law (Thomson Reuters, 4th ed, 2016)

Marel Katsivela, ‘The Treatment of the Perils of the Sea Exception of the Hague-Visby Rules in Common Law and Civil Law Jurisdictions’ (2016) 16(1) WMU Journal of Maritime Affairs 19

B. CASES

Adamastos Shipping Co Ltd v Anglo-Saxon Petroleum Co Ltd; The Saxon Star [1959] AC 133

Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53

Asfar v Blundell [1896] 1 QB 123

Athel Line Ltd v Liverpool & London War Risks Insurance Association Ltd [1944] KB 87

Board of Trade v Baxter; The Scarsdale [1907] AC 373

British Shipowners v Grimond (1876) 3 Rett 968

C/V Scheepvaartonderneming Ankergracht v Stemcor (A/Asia) Pty Ltd (2007) 160 FCR 342

Clatex Refining Co Pty Ltd v BHP Transport Ltd [1994] 1 Lloyd’s Rep 335

Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45

Compania Naviera Azuero SA v British Oil & Cake Mills Ltd [1957] 1 Lloyd’s Rep 312

Constable v National SS Co, 154 US 51 (1894)

Dakin v Oxley, 15 CBNS 646 (1864)


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Dolphin Maritime & Aviation Services v Sveriges Angfartygs Assurans Forening [2009] 2 Lloyd’s Rep 123

El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA (2004) 140 FCR 296

Federal Commerce & Navigation Co Ltd v Eisenerz GmbH; The Oak Hill [1975] 1 Lloyd’s Rep 105

Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254

Goulandris Brothers Ltd v B Goldman & Sons Ltd [1958] 1 QB 74

Grand Champion Tankers Ltd v Norpipe A/S; The Marion [1984] AC 563

Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad (1998) 196 CLR 161

Hancock Prospecting Pty Ltd v Rinehart (2017) 350 ALR 658

Hilditch Pty Ltd v Dorval Kaiun KK (No 2) (2007) 245 ALR 125

Joseph Watson & Son v Fireman’s Fund Insurance Co of San Francisco [1922] 2 KB 355

Keane v Australian Steamships Pty Ltd (1929) 41 CLR 484

Lauritzen Reefers v Ocean Reef Transport Ltd SA; The Bukhta Russkaya [1997] 2 Lloyd’s Rep 744

Lebeaupin v Richard Crispin & Co [1920] 2 KB 714

Lyric Shipping Inc v Intermetals Ltd; The Al Taha [1990] 2 Lloyd's Rep 117

Matsoukis v Priestman & Co [1915] 1 KB 681

Monarch Steamship Co Ltd v Karlshamns Oljefabriker (A/B) [1949] AC 196

Nea Agrex SA v Baltic Shipping Co Ltd; The Agios Lazaros [1976] 2 Lloyd’s Rep 47

Nesbitt v Lushington (1792) 4 TR 783

Nickolay Malakhov Shipping v Seas Sapfor (1998) 44 NSWLR 371

Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries & Food [1963] 1 Lloyd’s Rep 12

SA Sucre Export v Northern River Shipping Ltd; The Sormovskiy 3068 [1994] 2 Lloyd’s Rep 266

Sanko Steamship Co Ltd v Sumitomo Australia Ltd (No 2) (1995) 63 FCR 227


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Seafood Imports Pty Ltd v ANL Singapore Pte Ltd (2010) 272 ALR 149

Ship Hako Endeavour v Programmed Total Marine Services Pty Ltd (2013) 211 FCR 369

Shipping Corp of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142

Société Nouvelle d’Armement v Spillers & Bakers Ltd [1917] 1 KB 865

Stag Line Ltd v Foscolo, Mango v Co Ltd [1932] AC 328

The Halcyon Skies [1977] QB 14

The Petone [1917] P 198

The River Guara [1998] 1 Lloyds Rep 225

The Tagus [1903] P 44

The Tasman Discoverer [2002] 2 Lloyd’s Rep 528

The William Safford (1860) Lush 69

The Zita [1924] NZLR 369

Volcafe Ltd v Compania de Sud America Vapores SA [2017] QB 915

Yemgas FZCO v Superior Pescadores SA Panama; The Superior Pescadores [2016] 1 Lloyd’s Rep 561

C. LEGISLATION

Arbitration Act 1996 (UK) c 23

Carriage of Goods by Sea Act 1991 (Cth)

Marine Order 27 (Safety of Navigation and Radio Equipment) 2016 (Cth)

Senior Courts Act 1981 (UK) c 54


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STATEMENT OF FACTS

1. On 22 July 2017, Cerulean Beans and Aromas Ltd (CLAIMANT) entered into a voyage

charterparty (Charterparty) with Dynamic Shipping LLC (RESPONDENT) for the shipment of

native Cerulean coffee beans (Coffee Beans) on the Madam Dragonfly (Vessel).1 The

Charterparty required delivery of the Coffee Beans from Cerulean to the Port of Dillamond

(Dillamond) by 7.00pm on 28 July,2 for use at a festival organised by the purchaser of the

Coffee Beans, Coffees of the World Ltd (Purchaser).3

2. On 24 July, at approximately 9.00am, the Vessel departed Cerulean.4 The Vessel deviated from

the agreed route to the Port of Spectre (Spectre) at approximately 9.30pm on 25 July, after its

communication and navigation systems were disrupted by solar flares.5 The solar flares had been

occurring daily for the week previous and had been predicted to continue for the duration of the

voyage.6 The Vessel’s systems would not have been disrupted had they had complied with

regulations.7 The Vessel left Spectre and sailed to Dillamond shortly after 7.17am on 27 July.8

3. At around 5.15pm on 28 July, the Vessel encountered a storm (Storm) while more than 100nm

out from Dillamond.9 The crew dropped anchor on a coral bed in an attempt to avoid the Storm

and, as a result, the Vessel’s hull was damaged when lifting anchor.10

4. The Coffee Beans were delivered after 7.00pm on 28 July, preventing the CLAIMANT from

fulfilling its contractual obligations to the Purchaser.11 At 12.02am 30 July, the RESPONDENT left

1 Record, 14: Letter from Respondent to Claimant of 22 July 2017. 2 Record, 3: Charterparty, Box 9. 3 Record, 2: Letter from Claimant to Respondent of 22 July 2017. 4 Record, 15: Letter from Respondent to Claimant of 24 July 2017. 5 Record 17: Email from Respondent to Claimant of 26 July at 2.32pm; Procedural Order 2, [10]. 6 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 7 Ibid. 8 Record, 18: Email from Respondent to Claimant of 27 July 2017 at 7.17am. 9 Record, 19: Email from Respondent to Claimant of 28 July 2017 at 4.58pm; Record, 20: Email from Respondent to Claimant of 29 July 2017 at 8.58am. 10 Record, 20: Email from Respondent to Claimant of 29 July 2017 at 8.58am.


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the Coffee Beans at Dillamond and issued the CLAIMANT with an electronic barcode (Access

Authority Pass).12 At this time, Dillamond was experiencing extreme rain, flooding and power

outages following the Storm.13 The CLAIMANT took delivery of the Coffee Beans at 1.17pm on

31 July and subsequently discovered that three containers of Coffee Beans had been water

damaged.14 According to maritime engineer Simon Webster (Expert Report) this damage was

caused by the prolonged use of a short term sealant and rainfall in the 24 hours from 4.30am on

30 July.15

5. The CLAIMANT seeks to recover the value of the damaged Coffee Beans (USD15,750,000). It

also seeks to recover the costs of sourcing alternative coffee beans to satisfy its obligations to the

Purchaser (USD9,450,000) and settlement payment with the Purchaser (USD5,000,000). The

CLAIMANT denies liability for payment of freight, agency fees, hull repairs, demurrage, and use

of the Access Authority Pass (USD1,610,000).

6. Further, the CLAIMANT seeks to recover the USD100,000 advanced on account of crew’s wages

at the request of the RESPONDENT.16 The funds have since dissipated but the RESPONDENT has

not paid the crew’s wages.17

7. On 11 August, the CLAIMANT referred the dispute to arbitration.18

11 Record, 24: Email from Respondent to Claimant of 29 July 2017 at 8.42pm. 12 Record, 23: Access Authority Pass. 13 Record, 36: ‘Flooding After Storm’ Article in the Dillamond Times of 1 August 2017. 14 Record, 25: Email from Claimant to Respondent of 1 August 2017 at 9.17am. 15 Record, 43: Maritime Engineer Simon Webster’s Expert Report. 16 Record, 1: Claimant’s Internal Memo of 19 July 2017. 17 Procedural Order 2, [20]. 18 Record, 34: Letter from Claimant’s lawyer to Respondent’s lawyer of 11 August 2017.


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TIMELINE OF KEY EVENTS

8. The following diagram depicts the key events for the purposes of the following submissions.

SUBMISSIONS ON THE TRIBUNAL’S JURISDICTION

I. THE TRIBUNAL HAS JURISDICTION TO DETERMINE THIS DISPUTE

9. The Tribunal has the power to rule on its own jurisdiction.19 In this case: (A) the Tribunal has

jurisdiction to determine the dispute unless it involves ‘technical matters’; (B) the present dispute

should be characterised holistically, as a single dispute; and (C) the dispute is not as to ‘technical

matters’.

A. The Tribunal has jurisdiction to determine the dispute unless it involves ‘technical matters’

10. Under cl 27(a) of the Charterparty, the Tribunal has jurisdiction to determine disputes ‘arising out

of or in connection with the Charterparty.20 However, this jurisdiction is limited by cl 27(d),

19 Arbitration Act 1996 (UK) c 23, s 30. 20 Record, 12: Charterparty, cl 27(a).


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which provides that ‘any dispute as to technical matters’ must be referred to expert

determination.21 Clause 27(g) defines ‘technical matters’ as matters surrounding matters which

can reasonably be considered to be within the expert technical knowledge of a Master Mariner’,

and lists examples of such matters.22 The Tribunal should find that, as a matter of construction,

the present dispute is not a ‘dispute as to’ a ‘technical matter’.

B. The present dispute should be characterised holistically, as a single dispute

11. When determining whether a dispute is the subject of a contractual dispute resolution process, a

court or tribunal should characterise the dispute broadly, without drawing ‘overly fine’

distinctions between different aspects of the dispute.23 This is especially so where arbitration and

expert determination are provided as disjunctive forms of dispute resolution, meaning that the

dispute, construed as a whole, is referred to either form. This aligns with the commercial

presumption that the parties intend for disputes to be resolved in one forum.24 If the Tribunal

were to divide the present dispute into sub-disputes, some of which were ‘technical matters’ and

some of which were not, this would create parallel arbitral and expert determination proceedings.

In turn, this would cause delay and expense, fundamentally undermining the parties’ choice of

efficient and inexpensive methods of dispute resolution.

C. The dispute is not as to ‘technical matters’

12. On the approach outlined above, the present dispute can be characterised as a dispute concerning

the respective rights and liabilities of the parties under the Charterparty. In the present dispute,

the Tribunal will need to resolve competing constructions of the Charterparty and the operation

of international conventions, as well as assess the CLAIMANT’s damages according to legal

21 Record, 12: Charterparty, cl 27(d). 22 Record, 12: Charterparty, cl 27(g). 23 Hancock Prospecting Pty Ltd v Rinehart (2017) 350 ALR 658, 700[157], 710-11[157]. 24 Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45, 87 [165] (Allsop J); Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 257 (Lord Hoffman).


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principles.25 The present dispute plainly involves questions of law which fall outside the expert

technical knowledge of a Master Mariner as defined by cl 27(g). The dispute should therefore be

heard by the Tribunal.

SUBMISSIONS ON THE INCORPORATION OF THE AUSTRALIAN HAGUE-

VISBY RULES

I. CHARTERPARTY INCORPORATES THE AUSTRALIAN HAGUE-VISBY RULES

13. The Tribunal should find that the Charterparty incorporates the Australian Hague-Visby Rules

because (A) cl 28 incorporates a variant of the Hague Rules; and (B) the parties intended to

incorporate the Australian Hague-Visby Rules.

A. Clause 28 incorporates a variant of the Hague Rules

14. Clause 28 refers to the governing law of the Charterparty and includes the words ‘Incorporating

Clause Paramount’.26 Used in a Charterparty, the words ‘Clause Paramount’ have been

understood as a reference to the Hague Rules or their subsequent amendments.27 Which version

of the Rules is incorporated can greatly affect the allocation of risk. As such, cl 28 must be

interpreted to give effect to the commercial intent of the parties.28

15. The courts exercise a wide mandate to interpret and give effect to clauses paramount.29 Thus,

even where a clause paramount is unclear the Tribunal should make all ‘reasonable implications’

to give efficacy to the parties’ intent.30

25 Record, 37: Claimant’s Points of Claim; Record, 40: Respondent’s Points of Defence and Counterclaim. 26 Record, 12: Charterparty, cl 28. 27 Nea Agrex SA v Baltic Shipping Co Ltd; The Agios Lazaros [1976] 2 Lloyd’s Rep 47, 50 (Lord Denning MR) (‘The Agios Lazaros’); Yemgas FZCO v Superior Pescadores SA Panama; The Superior Pescadores [2016] 1 Lloyd’s Rep 561, 565 [22] (Longmore LJ) (‘The Superior Pescadores’). 28 Adamastos Shipping Co Ltd v Anglo-Saxon Petroleum Co Ltd; The Saxon Star [1959] AC 133, 154 (Viscount Simonds) (‘The Saxon Star’). 29 See eg, The Saxon Star [1959] AC 133, 154 (Viscount Simonds). 30 The Agios Lazaros [1976] 2 Lloyd’s Rep 47, 50.


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B. The parties intended to incorporate the Australian Hague-Visby rules

16. When determining which version of the Hague Rules is incorporated, the Tribunal should

consider what cl 28 would mean to ‘reasonable shipping men’.31 Here, reasonable shipping men

would understand that the Charterparty incorporates the Australian Hague-Visby Rules.

17. In The Superior Pescadores, the Court considered that a clause paramount which does not

specify which variant of the Rules is incorporated would be taken by reasonable shipping men as

incorporating the variant enacted in the governing law of the Charterparty.32 Applied to the

present case, where the parties chose the law of New South Wales as the governing law, the

parties should be taken to have intended to incorporate the Rules as enacted in Australia. That

the clause paramount appears in the governing law clause strengthens this conclusion.33

18. This conclusion applies notwithstanding the fact that the countries of shipment and destination

are subject to the laws of the United Kingdom.34 Clause 28 does not refer to any particular

version of the Rules, nor the Rules ‘as enacted’ in the countries of shipment or destination.35 As

such, the law governing the countries of shipment and destination is not probative,36 and the only

indication of the parties’ intention is their choice of governing law.

19. In the absence of plain evidence to the contrary, it must be presumed that the parties intended to

wholly incorporate the Australian Hague-Visby Rules.37 As the Australian Hague-Visby Rules

are incorporated in their entirety, the RESPONDENT is liable for delay under art 4A.

31 Ibid. 32 The Superior Pescadores [2016] 1 Lloyd’s Rep 561, 566 [30] (Longmore LJ). 33 Record, 12: Charterparty, cl 28. 34 Record, 45: Background Information and Assumptions [1]; Lauritzen Reefers v Ocean Reef Transport Ltd SA; The Bukhta Russkaya [1997] 2 Lloyd’s Rep 744, 746 (Thomas J) (‘The Bukhta Russkaya’). 35 Record, 12: Charterparty, cl 28. 36 The Bukhta Russkaya [1997] 2 Lloyd’s Rep 744, 746 (Thomas J). 37 The Agios Lazaros [1976] 2 Lloyd’s Rep 47, 50 (Lord Denning MR); The Tasman Discoverer [2002] 2 Lloyd’s Rep 528, 534 [30] (Keith J).


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SUBMISSIONS ON DELAY

20. The RESPONDENT is liable to pay USD14,450,000 in damages for the loss caused by the delay

pursuant to art 4A of the Australian Hague-Visby Rules. Under art 4A, ‘a carrier [ie, the

RESPONDENT] is liable to a shipper for loss...caused by the shipper’s goods being delayed’.

Pursuant to art 4A(2)(a) of the Australian Hague-Visby Rules, ‘goods have been delayed if they

are not delivered at the port of discharge...within the time allowed in the contract’.

21. The delivery of the Coffee Beans was delayed because they were delivered after 7.00pm on 28

July, in breach of the Charterparty.38 Due to this delay, the CLAIMANT was unable to meet its

contractual obligations to the Purchaser and incurred the cost of sourcing alternative coffee beans

(USD9,450,000) and agreeing to the settlement payment (USD5,000,000).

22. The RESPONDENT is liable for losses caused by delay,39 unless it can show that (a) the delay was

excused under Art 4A(3); and (b) the RESPONDENT took all measures reasonably required to

avoid the delay and its consequences. The RESPONDENT cannot prove its delay was excused

under art 4A(3) because: (I) the delay was not caused by events beyond the RESPONDENT’s

reasonable control;40 and (II) the delay was not caused by a deviation authorised by a term of the

Charterparty.41 There are no other excuses open to the RESPONDENT under art 4A.

38 Carriage of Goods by Sea Act 1991 (Cth) sch 1A art 4A(2)(a) (‘COGSA’). 39 COGSA sch 1A art 4A(1). 40 COGSA sch 1A art 4A(3)(b). 41 COGSA sch 1A art 4A(3)(a).


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I. THE DELAY WAS NOT CAUSED BY EVENTS BEYOND THE RESPONDENT'S

REASONABLE CONTROL

23. Whether the Storm was beyond the RESPONDENT’s reasonable control is irrelevant, as the Storm

was not the cause of the delay. The Storm hit Dillamond at 5.15pm on 28 July;42 therefore, had

the Vessel not deviated it would have arrived by at least 5.00pm on 28 July and avoided the

Storm. 43 Hence, the RESPONDENT’s deviation to Spectre was the true cause of the delay.

24. The Vessel deviated to Spectre at approximately 9.30pm on 25 July,44 and did not recommence

its voyage until ‘shortly after’ 7.17am 27 July.45 Although the Vessel’s precise time of departure

from Spectre is unknown, this means her deviation delayed the voyage by at least 34 hrs (1.5

days).46 On the balance of probabilities, but for the deviation, the Vessel would have arrived at

Dillamond well before the Storm occurred and delivery would not have been delayed. It follows

that, as the deviation caused the delay, it is irrelevant whether the Storm was beyond the

RESPONDENT’s reasonable control.

II. THE DELAY WAS NOT CAUSED BY A DEVIATION AUTHORISED BY THE

CHARTERPARTY

25. The RESPONDENT’s deviation was not authorised by a term of the Charterparty because: (A) the

solar flares were not a Force Majeure Event; (B) the deviation was not reasonable; and (C) the

deviation was not to save life or property.

42 Record, 19: Email from Respondent to Claimant of 28 July 2017 at 4.58pm; Record, 21: ‘“Once in a Lifetime” Storm Closes Airport, Port, Rivers’ Article in the Dillamond Times of 29 July 2017. 43 Procedural Order 2, [7]. 44 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 45 Record, 18: Email from Respondent to Claimant of 27 July at 7.17am. 46 See above [8], Timeline of Key Events.


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A. The solar flares were not a Force Majeure Event

26. Clause 17 of the Charterparty does not absolve the RESPONDENT of liability because the solar

flares were not an event of Force Majeure.47 Under cl 17(b), Force Majeure events include

‘unforeseen weather events’.48 Whether the solar flares were ‘unforeseen’ is a question of fact.49

27. The RESPONDENT knew that solar flares had been occurring daily,50 and were likely to continue

for the duration of the voyage. It must have foreseen the possibility that solar flares would

disrupt the voyage, meaning that the solar flares were not ‘unforeseen’ weather events.

B. The deviation was not reasonable

28. Article 4(4) of the Australian Hague-Visby Rules, which has been incorporated as a term of the

Charterparty, excuses any ‘reasonable deviation’. The RESPONDENT cannot rely on this excuse as

its deviation to Spectre would not have been made by a ‘prudent person controlling the Vessel’.51

Official reports found that systems ‘were only down for four hours’,52 and, in the most severe

cases, the Cerulean Mail found that some systems were affected for almost 20 hours.53 In either

case, the maximum time that it would have taken for the Vessel’s navigation systems to come

back online was significantly less than the time it would have taken to deviate to Spectre. At the

very least, a prudent person controlling the Vessel would have waited a reasonable period to see

if the Vessel’s navigation systems would begin working. The RESPONDENT, however, deviated

immediately when its communication systems stopped working,54 even though it knew the likely

47 Record, 9: Charterparty, cl 17. 48 Ibid. 49 Lebeaupin v Richard Crispin & Co [1920] 2 KB 714, 720-1 (McCardie J). 50 Procedural Order 2, [1]. 51 Stag Line Ltd v Foscolo, Mango v Co Ltd [1932] AC 328, 343-4 (Lord Atkin). 52 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 53 Ibid. 54 Procedural Order 2, [10].


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cause of the disruption was the solar flares.55

29. In any event, a deviation caused by the vessel’s unseaworthiness cannot be reasonable where the

carrier knew of the unseaworthiness.56 The Vessel was unseaworthy because the RESPONDENT

had not equipped the Vessel with up to date charts or communication systems, in breach of

regulations.57 This was despite its obligation under cl 15(a) of its own standard terms to comply

with regulations.58 As a sophisticated commercial entity,59 it would be surprising if the

RESPONDENT did not know whether its Vessel satisfied this obligation. Further, the

RESPONDENTs knew that the Vessel was likely to encounter solar flares which would disrupt

radio and satellite communications if its systems were old and faulty’.60 In these circumstances,

the Tribunal can infer that the RESPONDENT knew the Vessel was unseaworthy and thus its

deviation was not reasonable.

C. The deviation was not to save life or property

30. Clause 17 allows the RESPONDENT to deviate ‘for the purpose of saving life or property

(including the vessel)’.61 However, reliance on this exception is ‘conditional on the exercise of

‘due diligence to ensure the ship is seaworthy.’62 This obliged the RESPONDENT to ensure the

Vessel and its equipment was fit to meet anticipated conditions of the voyage.63

55 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 56 Monarch Steamship Co Ltd v Karlshamns Oljefabriker (A/B) [1949] AC 196, 211 (Lord Porter); Lyric Shipping Inc v Intermetals Ltd; The Al Taha [1990] 2 Lloyd's Rep 117, 128 (Phillips J). 57 Record, 18: Email from Respondent to Claimant of 27 July 2017 at 7.17am; Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017; Sanko Steamship Co Ltd v Sumitomo Australia Ltd (No 2) (1995) 63 FCR 227, 274 (Sheppard J); Grand Champion Tankers Ltd v Norpipe A/S; The Marion [1984] AC 563, 576-7 (Lord Brandon). 58 Record, 8: Charterparty, cl 15(a)(i); Marine Order 27 (Safety of Navigation and Radio Equipment) 2016 (Cth) r 23. 59 Procedural Order 2, [1]. 60 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 61 Record, 9: Charterparty, cl 17. 62 Ibid. 63 Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad (1998) 196 CLR 161, 175 [33] (Gaudron, Gummow and Hayne JJ).


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31. Here, the RESPONDENT knew that the Vessel was likely to encounter solar flares which would

disrupt radio and satellite communications if its systems were not up to date.64 The Vessel’s

navigation systems did not comply with regulations65 and the RESPONDENT had not supplied

current hard copy maps.66 Indeed, under cl 15(a) of the Charterparty, the RESPONDENT was

required to have hard copy maps for the voyage as a backup for its electronic systems.67 In any

event, a failure to have up to date charts has been held to render a vessel unseaworthy.68

32. It follows that the RESPONDENT did not exercise due diligence at the beginning of the voyage and

cannot rely on cl 17 to authorise its deviation.

SUBMISSIONS ON DAMAGE TO COFFEE BEANS

33. The RESPONDENT is liable to pay the CLAIMANT USD15,750,000 for the value of the damaged

Coffee Beans. At 12.02am on 30 July 2017, the RESPONDENT left the moisture-sensitive Coffee

Beans at Dillamond, despite the sealant having expired. This caused three containers of Coffee

Beans, worth USD15,750,000, to be water damaged and rendered unusable.69

34. The RESPONDENT is liable for this loss as: (I) the Coffee Beans were damaged on delivery; and

(II) the damage to the Coffee Beans was caused by the RESPONDENT’s breach of art 3(2) of the

Australian Hague Visby Rules; or (III) alternatively, the damage to the Coffee Beans was caused

by the RESPONDENT’s breach of cl 34 of the Charterparty.

I. THE COFFEE BEANS WERE DAMAGED ON DELIVERY

35. The CLAIMANT has a prima facie case against the RESPONDENT for breach of art 3(2) if the Coffee

64 Record, 35: ‘Solar Flares Knock out Global Communications’ Article in the Cerulean Mail of 25 July 2017. 65 Ibid. 66 Record, 18: Email from Respondent to Claimant of 27 July 2017 at 7.17am. 67 Record, 8: Charterparty, cl 15(a)(i); Marine Order 27 (Safety of Navigation and Radio Equipment) 2016 (Cth) r 23. 68 Sanko Steamship Co Ltd v Sumitomo Australia Ltd (No 2) (1995) 63 FCR 227, 274, 278 (Sheppard J); Grand Champion Tankers Ltd v Norpipe A/S; The Marion [1984] AC 563, 576-7 (Lord Brandon). 69 Record, 43: Maritime Engineer Simon Webster’s Expert Report.


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Beans were delivered in a damaged condition.70 The RESPONDENT contends that it delivered via

the Access Authority Pass at 12.02am on 30 July.

36. The issuing of the Access Authority Pass cannot constitute delivery as: (A) the RESPONDENT did

not wait a reasonable time before leaving the Coffee Beans at Dillamond; and (B) the Access

Authority Pass was not a custom of the Port;71 rather, (C) the Coffee Beans were delivered when

the CLAIMANT took possession of them at 1.17pm on 31 July.

A. The RESPONDENT did not wait a reasonable time before leaving the Coffee Beans at

Dillamond

37. For delivery to occur, the carrier must allow a ‘reasonable opportunity for the consignee to take

actual possession of the goods.’72 The RESPONDENT discharged the Coffee Beans at 8.42pm on a

Saturday night, and during ‘unprecedented’ rainfall.73 The weather was so severe that authorities

had cautioned residents to stay indoors.74 Despite this, the RESPONDENT allowed the CLAIMANT

just 3 hours from when it was notified of discharge to take possession of the Coffee Beans.75 In

the circumstances, the three hours allowed did not constitute a reasonable opportunity for the

CLAIMANT to collect the Coffee Beans. As such, the RESPONDENT leaving the goods at

Dillamond and issuing the Access Authority Pass did not constitute delivery.

B. The Access Authority Pass was not a custom of Dillamond

38. Goods may be delivered according to the ‘custom and usage of the port’.76 The ‘custom’ relied

upon by the shipper must be ‘universally acquiesced’ to.77 Here, there is no evidence that

delivery via Access Authority Pass was a recognised custom of Dillamond. In fact, an Access

70 Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad (1998) 196 CLR 161, 197 [98] (McHugh J); Justice Steven Rares, ‘The Onus of Proof in a Cargo Claim - Articles III and IV of the Hague-Visby Rules and the Uncitral Draft Convention’ (2008) 31 Australian Bar Review 159[56]. 71 Constable v National SS Co, 154 US 51, 63 (1894).


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Authority Pass may be issued before a vessel has even arrived at port,78 and the Access Authority

Pass itself states that it was issued because delivery could not occur ‘in the usual manner.’79

C. The Coffee Beans were delivered when the CLAIMANT took possession at 1.17pm on 31 July

39. The Coffee Beans were damaged sometime between 4.30am on 30 July and 4.30am on 31 July.80

Accepting that the Coffee Beans were not delivered via the Access Authority Pass, delivery

occurred when they were placed in the CLAIMANT’s complete control.81 The CLAIMANT did not

have control of the Coffee Beans until 1.17pm on 31 July, when it took possession of them, well

after the damage had occurred. It follows that the goods were delivered in an unusable state and

the CLAIMANT has a prima facie case that the RESPONDENT breached its obligation under art 3(2).

II. THE DAMAGE TO THE COFFEE BEANS WAS CAUSED BY THE RESPONDENT’S

BREACH OF ART 3(2) OF THE AUSTRALIAN HAGUE VISBY RULES

40. Article 3(2) of the Australian Hague Visby Rules provides that ‘the carrier shall properly and

carefully…care for and discharge the goods carried.’ The RESPONDENT breached art 3(2)

because: (A) the RESPONDENT failed to properly and carefully care for the Coffee Beans until

delivery; or (B) alternatively, even if the RESPONDENT’s obligations under art 3(2) ended on

discharge, the RESPONDENT failed to properly and carefully discharge the Coffee Beans; and (C)

the RESPONDENT is not exempted from liability for any breach under art 4(2).

72 Keane v Australian Steamships Pty Ltd (1929) 41 CLR 484, 491 (Knox CJ and Gavan Duffy JJ). 73 Record, 36: ‘Flooding After Storm’ Article in the Dillamond Times Article of 1 August 2017; Record, 43: Maritime Engineer Simon Webster’s Expert Report. 74 Record, 36: ‘Flooding After Storm’ Article in the Dillamond Times Article of 1 August 2017. 75 Record, 24: Email from Respondent to Claimant of 29 July 2017 at 8.42pm. 76 Constable v. National SS Co, 154 US 51, 63 (1894). 77 SA Sucre Export v Northern River Shipping Ltd; The Sormovskiy 3068 [1994] 2 Lloyd’s Rep 266, 275 (Clarke J). 78 Procedural Order 2, [16]. 79 Record, 23: Access Authority Pass. 80 Record, 43: Maritime Engineer Simon Webster’s Expert Report. 81 British Shipowners v Grimond (1876) 3 Rett 968, 972; Julian Cooke et al, Voyage Charters (Informa Law, 4th ed, 2014) 217.


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A. The RESPONDENT failed to properly and carefully care for the Coffee Beans until delivery

1. The RESPONDENT’s obligation under art 3(2) ended on delivery

41. A key object of the Australian Hague-Visby Rules is to extend the carrier’s period of liability

from ‘tackle-to-tackle’ to ‘port-to-port’.82 ‘Port-to-port’ liability begins when the carrier accepts

the goods and ends on delivery.83

42. Pursuant to art 2(1), the Rules apply to contracts of ‘carriage of goods by sea’. The phrase

‘carriage of goods by sea’ is defined as ‘the period during which a carrier is in charge of the

goods.’84 Critically, the carrier is in charge of the goods until they are ‘delivered to or placed at

the disposal of the consignee.’85 This extension is not incompatible with the words of art 3(2), as

the obligation to properly and carefully ‘care for’ the goods is not temporally limited.86

43. Applying the modified definition of ‘carriage of goods by sea’, the RESPONDENT was therefore

bound to properly and carefully care for the Coffee Beans until delivery at 1.17pm on 30 July.

2. The RESPONDENT failed to care for the Coffee Beans until delivery

44. Article 3(2) imposes an obligation on the carrier to exercise reasonable care according to a ‘sound

system’, given the knowledge which the carrier has or ought to have about the nature of the

goods.87 The RESPONDENT knew that the Coffee Beans were extremely sensitive to moisture, but

82 Martin Davies and Anthony Dickey, Shipping Law (Thomson Reuters, 4th ed, 2016) 260; Explanatory Memorandum, Carriage of Goods by Sea Regulation 1998, art 1. 83 Martin Davies and Anthony Dickey, Shipping Law (Thomson Reuters, 4th ed, 2016) 260; Explanatory Memorandum, Carriage of Goods by Sea Regulation 1998, art 1. 84 COGSA sch 1A art 1(1)(e). 85 COGSA sch 1A art 1(3)(a)-(b). 86 Cf Kate Lewins, ‘Are the 1998 Amendments to COGSA Holding Water?’ (2000) 28 Australian Business Law Review 422. 87 Hilditch Pty Ltd v Dorval Kaiun KK (No 2) (2007) 245 ALR 125, 142 [78] (Rares J). See also Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53, 62 (Pearce LJ); Clatex Refining Co Pty Ltd v BHP Transport Ltd [1994] 1 Lloyd’s Rep 335, 357 (Carruthers J); Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad (1998) 196 CLR 161, 216-7 (Kirby J); C/V Scheepvaartonderneming Ankergracht v Stemcor (A/Asia) Pty Ltd (2007) 160 FCR 342, 370 [88] (Ryan & Dowsett JJ); Volcafe Ltd v Compania de Sud America Vapores SA [2017] QB 915, 945 (Flaux J).


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nonetheless left them unsealed in heavy rainfall.88 In doing so, it failed to care for the Coffee

Beans according to a ‘sound system’ and thus was in breach of art 3(2).

B. Alternatively, even if the RESPONDENT’s obligation ended on discharge, the RESPONDENT

failed to properly and carefully discharge the Coffee Beans

45. Even if the obligation under art 3(2) does not extend to delivery, the RESPONDENT was obliged to

properly and carefully ‘discharge’ the Coffee Beans.89 Critically, the extent of care with which

the carrier must discharge the goods depends on the nature of the cargo.’90

46. In Seafood Imports Pty Ltd v ANL Singapore Pte Ltd,91 a cargo of seafood carried in refrigerated

containers was damaged when the containers malfunctioned. Ryan J held that the carrier’s

obligation to properly and carefully discharge the goods extended to ensuring that the refrigerated

containers would not spoil while at port and ‘before the goods could reasonably be expected to be

removed from the container’.92 Thus, because of the nature of the goods and the fact that the

carrier had supplied the refrigerated containers, the parties had impliedly extended the carrier’s

liability past discharge.

47. Here, the RESPONDENT was aware the Coffee Beans were extremely sensitive to moisture,93 and

had provided the containers and applied the sealant.94 In doing so, it impliedly undertook to

ensure that the containers were waterproof while at Dillamond and until they could reasonably be

expected to be removed by the CLAIMANT.

48. By leaving the Coffee Beans at Dillamond, during heavy rain and without a functioning sealant,

the RESPONDENT failed to satisfy this obligation, in breach of art 3(2).

88 Record, 36: ‘Flooding After Storm’ Article in the Dillamond Times of 1 August 2017. 89 Nickolay Malakhov Shipping v Seas Sapfor (1998) 44 NSWLR 371, 380 (Handley JA). 90 Ibid. 91 (2010) 272 ALR 149. 92 Seafood Imports Pty Ltd v ANL Singapore Pte Ltd (2010) 272 ALR 149, 174-5 [76] (Ryan J). 93 Record, 2: Letter from Cerulean Beans to Dynamic Shipping of 22 July 2017. 94 Procedural Order 2, [13]; cf Nickolay Malakhov Shipping v Seas Sapfor (1998) 44 NSWLR 371.


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C. The RESPONDENT is not exempted from liability under art 4(2)

49. The RESPONDENT cannot rely on an excepted ‘peril of the sea’ under the Australian Hague-Visby

Rules where the relevant peril is merely a concurrent cause of the loss.95 It can only escape

liability if it can show that the loss or damage was caused by an excepted circumstance alone.96

According to the Expert Report, the prolonged use of the sealant and heavy rainfall were

concurrent causes of the loss.97 Accordingly, the RESPONDENT cannot argue that the rain was a

‘peril of the sea’ under art 4(2).

III. ALTERNATIVELY, THE DAMAGE TO THE COFFEE BEANS WAS CAUSED BY THE

RESPONDENT’S BREACH OF CL 34 OF THE CHARTERPARTY

50. Under cl 34 of the Charterparty, the RESPONDENT warranted that the Vessel would, ‘at

presentation for both loading and discharge, conform with the quality standards required to

transport the nominated coffee cargo for the duration of the scheduled voyage.’98 The key quality

standard was that the Coffee Beans were shipped in waterproof containers.99 Clause 34 therefore

obliged the RESPONDENT to exercise due diligence, at presentation for loading and discharge, to

ensure the containers were waterproofed for the duration of the scheduled voyage. The

RESPONDENT is liable for its failure to ensure the containers were waterproofed because: (A) the

duration of the scheduled voyage ended on delivery; and (B) the RESPONDENT failed to ensure, at

discharge, that the Containers would be waterproof until delivery.

95 C/V Scheepvaartonderneming Ankergracht v Stemcor (A/Asia) Pty Ltd (2007) 160 FCR 342, 404 [227] (Rares J); Marel Katsivela, ‘The Treatment of the Perils of the Sea Exception of the Hague-Visby Rules in Common Law and Civil Law Jurisdictions’ (2016) 16(1) WMU Journal of Maritime Affairs 19, 23. 96 Hilditch Pty Ltd v Dorval Kaiun KK (No 2) (2007) 245 ALR 125, 145 [93] (Rares J); Shipping Corp of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142, 151 (Stephen J); Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad (1998) 196 CLR 161, 194 (McHugh J); C/V Scheepvaartonderneming Ankergracht v Stemcor (A/Asia) Pty Ltd (2007) 160 FCR 342, 393-4 [182] (Rares J). 97 Record, 43: Maritime Engineer Simon Webster’s Expert Report. 98 Record, 13: Charterparty, cl 34. 99 Record, 2: Letter from Cerulean Beans to Dynamic Shipping of 22 July 2017.


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A. The duration of the scheduled voyage ended on delivery

51. The meaning of the word ‘voyage’ will depend on the facts of each case,100 but ordinarily it

means the period from loading to delivery.101 Under the Charterparty, the scheduled voyage was

from Cerulean to Dillamond. The duration of the scheduled voyage was the period from the time

of loading at Cerulean to delivery at Dillamond.102 The conclusion that the voyage ended on

delivery (as distinct from discharge) is consistent with cl 1 of the Charterparty, which provides a

chronology of the voyage, ending in delivery.103 Further, cl 14 obliges the RESPONDENT to

deliver always afloat,104 and cl 22 provides that freight becomes payable on delivery.105

B. The RESPONDENT failed to ensure, at discharge, that the containers would be waterproof

until delivery

52. The sealant expired between 5.00am and 9.00am on 29 July — over 12 hours before the Coffee

Beans were discharged.106 Delivery occurred at 1.17pm on 31 July,107 and according to the

Expert Report, the Coffee Beans were damaged prior to this.108 Accordingly, the RESPONDENT

failed to ensure the containers were waterproof and is liable for its breach of cl 34.

SUBMISSIONS ON DAMAGES

53. The Tribunal should find that the damages claimed in this dispute do not fall within one

limitation of liability under the Australian Hague-Visby Rules. Rather, two separate limitations

apply to the RESPONDENT’s liability, allowing the CLAIMANT to recover a greater sum of damages

100 Board of Trade v Baxter; The Scarsdale [1907] AC 373, 380 (Atkinson LJ). 101 Dolphin Maritime & Aviation Services v Sveriges Angfartygs Assurans Forening [2009] 2 Lloyd’s Rep 123, 132 [50] (Christopher Clarke J). 102 Record, 3: Charterparty, Boxes 5, 9. 103 Record, 4: Charterparty, cl 1. 104 Record, 8: Charterparty, cl 14. 105 Record, 11: Charterparty, cl 22. 106 Procedural Order 2, [13]; Record, 43: Maritime Engineer Simon Webster’s Expert Report. 107 Record, 24: Email from Claimant to Respondent of 31 July 2017 at 4.21pm. 108 Record, 43: Maritime Engineer Simon Webster’s Expert Report.


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in total. The CLAIMANT contends that: (I) the RESPONDENT’s liability for cargo damage is limited

pursuant to art 4(5) with reference to the number of packages and not containers; and (II) the

RESPONDENT’s liability for losses caused by delay is limited pursuant to art 4A.

I. THE RESPONDENT’S LIABILITY FOR CARGO DAMAGE IS LIMITED PURSUANT

TO ART 4(5) WITH REFERENCE TO THE NUMBER OF PACKAGES

54. Article 4(5) places a limitation on liability for damage to goods by reference to the number of

packages of goods transported. The RESPONDENT’s limitation of liability under art 4(5) of the

Australian Hague-Visby Rules should be calculated by reference to the number of bags of Coffee

Beans.109

55. The enumeration of the goods in the Charterparty is not determinative of the relevant ‘package’

for art 4(5).110 Rather, ‘package’ should be determined in accordance with how the goods were

actually packed.111 Both parties agree that the goods were actually packed in ‘1,000 70kg

bags’.112 Although the RESPONDENT amended the Charterparty after it was signed by the

CLAIMANT to change the description of the goods to as packed in 4 containers,113 this amended

description represents neither the intention of the parties nor how the goods were actually packed.

Indeed, the RESPONDENT’s amendment was solely ‘to allow [them] to enter the voyage data into

[their] database.114

109 COGSA sch 1A art 4(5). 110 El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA (2004) 140 FCR 296, 361 [265] (Allsop J). 111 El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA (2004) 140 FCR 296, 318 [93] (Allsop J); The River Guara [1998] 1 Lloyds Rep 225, 232 (Phillips LJ). 112 Record, 3: Charterparty, Box 4. 113 Record, 14: Letter from Respondent to Claimant of 22 July 2017. 114 Record, 14: Letter from Respondent to Claimant of 22 July 2017.


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56. The number of packages used to store the Coffee Beans is equivalent to the number of bags of

coffee as detailed in the Charterparty.115 Thus the RESPONDENT’s liability is limited to

$728,744.116

II. THE RESPONDENT’S LIABILITY FOR LOSSES CAUSED BY DELAY IS LIMITED

PURSUANT TO ART 4A

57. Pursuant to art 4A(6)(b) of the Australian Hague-Visby Rules the RESPONDENT’s liability for any

losses caused by delay is limited to USD1,250,000.117 This limitation applies to the

USD14,450,000 claimed for sourcing alternative coffee beans and the settlement payment made

to the Purchaser. This is separate to any limitation of liability concerned with the damage of the

Coffee Beans. It follows that, if the limitations under both art 4A and 4(5) apply, the CLAIMANT

can, in total, recover a greater sum of damages.

SUBMISSIONS ON THE MARITIME EQUITABLE LIEN

I. THE CLAIMANT HOLDS A ‘MARITIME EQUITABLE LIEN’ OVER THE VESSEL

FOR USD100,000 ADVANCED FOR THE PAYMENT OF THE CREW’S WAGES

58. The RESPONDENT requested that the CLAIMANT pay the crew’s wages (USD100,000) into a

separate bank account.118 The RESPONDENT has dissipated these funds and the crew’s wages

remain unpaid.119 It is uncontroversial that the crew has a lien over the Vessel for wages in these

circumstances. The Tribunal should recognise that the CLAIMANT enjoys a right of subrogation

to the crew’s lien over the Vessel because: (A) the crew has an outstanding lien over the Vessel;

and (B) the CLAIMANT is entitled to be subrogated to the lien of the crew.

115 Record, 3: Charterparty, Box 4. 116 750 × 666.67 = SDR 500,002.50 (1.45) = $728,743.644 (At USD rate for 1 SDR = 1.45 as at 18 April 2018). 117 2.5 × sea freight payable for goods delayed (500,000) = 1,250,000. 118 Record, 1: Claimant’s Internal Memo of 19 July 2017. 119 Procedural Order 2, [20].


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A. The crew has an outstanding lien over the Vessel

59. It is well established in the laws of admiralty that a crew can claim a lien over a vessel for unpaid

wages.120 Here, the RESPONDENT had an obligation to pay the wages of the crew. The crew of

the Vessel have not been paid and thus their lien over the Vessel remains outstanding.

B. The CLAIMANT is entitled to be subrogated to the lien of the crew

1. Subrogation is available to a third party who has made an involuntary payment of the

crew’s wages

60. In The William Safford, Dr Lushington recognised that a third party who has paid the wages of a

crew can stand in the crew’s position.121 In the subsequent case of The Petone, Hill J qualified

that doctrine but did not extinguish it.122 Instead, Hill J found that there was no basis for

subrogation where the claimant had voluntarily paid the crew’s wages.123 The Petone was

distinguished on this basis in The Zita. In that case, Adams J allowed a third party to the benefit

of the crew’s lien where he had advanced wages at the master’s request, which was ratified by the

shipowner.124 From this line of authorities, a principle emerges - that subrogation is available as

a remedy to a third party who has advanced money on account of the crew’s wages at the ship

owner’s request.

2. The CLAIMANT advanced USD 100,000 on account of the crew’s wages at the

RESPONDENT’s request

61. Here, the RESPONDENT required the CLAIMANT to advance USD100,000 on account of the crew’s

wages.125 Due to the RESPONDENT’s financial struggles, the crew refused to sail unless and until

120 Senior Courts Act 1981 (UK) c 54, s 20(2)(o); The Halcyon Skies [1977] QB 14. 121 (1860) Lush 69, 70, cited in The Tagus [1903] P 44, 54. 122 [1917] P 198. 123 The Petone [1917] P 198, 208. 124 [1924] NZLR 369. 125 Record, 1: Claimant’s Internal Memo of 19 July 2017.


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their wages were paid into a separate bank account.126 The CLAIMANT advanced the amount on

the RESPONDENT’s request and on the understanding that it would be repaid —127 the payment

was not voluntary. The CLAIMANT also intended to obtain some type of security for the advance.

This is clear from the words ‘we will of course take steps to ensure our interests are adequately

protected’.128

62. These facts are materially analogous to cases like The William Safford and Rhind v The Zita

where third parties had advanced the crew’s wages at the request of the master.129 The present

facts can also be distinguished from Hako Endeavour, a recent case in which the Full Court of the

Federal Court did not allow subrogation because the claimant had paid the crew’s wages as

required under its employment contracts with each crew member.130 Here, the primary liability

for the crew’s wages lay with the RESPONDENT.

63. It therefore follows that the CLAIMANT can be subrogated to the crew’s wages.

SUBMISSIONS ON COUNTERCLAIM

I. THE CLAIMANT IS NOT LIABLE TO PAY THE RESPONDENT THE USD1,610,000 IN

RESPECT OF THE COUNTERCLAIM

64. The CLAIMANT is not liable to pay the RESPONDENT: (A) freight; (B) demurrage; (C) the cost of

repairing the damage to the hull; (D) the cost of agency fees and the use of the electronic access

systems at Dillamond; or (E) the cost of agency fees at Spectre.

126 Record, 1: Claimant’s Internal Memo of 19 July 2017. 127 Record, 1: Claimant’s Internal Memo of 19 July 2017. 128 Record, 1: Claimant’s Internal Memo of 19 July 2017. 129 The William Safford (1860) Lush 69, 70. 130 Ship Hako Endeavour v Programmed Total Marine Services Pty Ltd (2013) 211 FCR 369, 399 [108] (Rares J).


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A. The CLAIMANT is not liable for the USD500,000 claimed for freight

65. The RESPONDENT claims that freight in the amount of USD500,000 pursuant to cl 22 of the

Charterparty is earned and payable on delivery. However, a charterer is not liable to pay freight

where goods are damaged on the voyage such that they lose their ‘commercial identity’ and there

has not been a substantial performance of the Charterparty.131

66. Here, three containers of the Coffee Beans were damaged and unusable on delivery at 1.17pm on

31 July.132 Accordingly, the CLAIMANT is, at most, liable to pay USD125,000 for the single

container of coffee that was not deprived of its commercial identity.

B. The CLAIMANT is not liable for the USD100,000 claimed for demurrage

67. The CLAIMANT denies that it is liable for demurrage in any amount on the basis that the Coffee

Beans were discharged before laytime expired.

68. Clause 8(c)(ii) provides laytime of half a weather working day for discharging the Coffee

Beans.133 Discharge occurred on 29 July.134 Between 1.00am on 29 July and 1.00am on 30 July,

350mL of rain fell in Dillamond, in addition to severe flooding.135 The Tribunal should find that

29 July was not a day on which the weather permitted the discharge of the Coffee Beans from the

Vessel and, therefore, that 29 July was not a weather working day within the meaning of cl

8(c)(ii).136

69. Discharge was, at the latest, complete by 12.02am on 30 July, when the Access Authority Pass

became valid and the RESPONDENT left the Port.137 Therefore, laytime had not expired - and nor

131 Dakin v Oxley, 15 CBNS 646, (1864); Asfar v Blundell [1896] 1 QB 123. 132 Record, 25: Email from Claimant to Respondent of 1 August 2017 at 9.17am. 133 Record, 6: Charterparty, cl 8(c)(ii).. 134 Record, 22: Email from Respondent to Claimant of 28 July 2017 at 4.58pm; Record, 24: Email from Respondent to Claimant of 29 July 2017 at 8.42pm. 135 Record, 36: ‘Flooding After Storm’ Article in the Dillamond Times Article of 1 August 2017. 136 Compania Naviera Azuero SA v British Oil & Cake Mills Ltd [1957] 1 Lloyd’s Rep 312, 329 (Pearson J); Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries & Food [1963] 1 Lloyd’s Rep 12, 41 (Lord Devlin); see also John Schofield, Laytime and Demurrage (Informa Law, 6th ed, 2011) 18 [2.41].


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did demurrage accrue - when the Coffee Beans were discharged.

C. The CLAIMANT is not liable for the USD875,000 claimed for the cost of repairing the

damage to the hull

70. Due to the lack of detail in the RESPONDENT’s counterclaim, the CLAIMANT can only speculate

that the RESPONDENT is claiming general average for the damage to the Vessel’s hull under cl 19.

1. The RESPONDENT’s decision to drop anchor on a coral bed was not reasonable

71. The Rule Paramount of the York-Antwerp Rules provides that ‘in no case shall there be any

allowance for sacrifice or expenditure unless reasonably made or incurred’. Although the

RESPONDENT’s act of lowering the anchor may have been an act of sacrifice, the damage caused

to the hull by reason of the act was not reasonable, and thus is not general average loss.138 The

onus is on the RESPONDENT, as the party claiming general average, to show that its actions were

reasonable.139

72. Dropping anchor on the high sea during inclement weather is an inherently risky act, and, given it

was a commercial vessel, this Tribunal should infer that the Vessel had equipment to detect the

location of rocks and coral beds. There is nothing on the facts to indicate that the decision to

drop anchor on a coral bed was made with any ‘reasoning power or discretion’;140 rather, the

RESPONDENT admits it was made ‘inadvertently’.141 As the damage to the hull was not incurred

reasonably, the RESPONDENT has no claim for general average.

2. Alternatively, the RESPONDENT’s act was not made in response to a real peril

73. A general average act must be done in response to a real peril that is faced by the common

137 Record, 22: Email from Respondent to Claimant of 29 July 2017 at 4.28pm; Record, 23: Access Authority Pass. 138 Federal Commerce & Navigation Co Ltd v Eisenerz GmbH; The Oak Hill [1975] 1 Lloyd’s Rep 105, 110 (Ritchie J). 139 York-Antwerp Rules 2016 Rule E. 140 See Athel Line Ltd v Liverpool & London War Risks Insurance Association Ltd [1944] KB 87, 94 (Tucker J). 141 Record, 20: Email from Respondent to Claimant of 29 July 2017 at 8.58am.


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adventure.142 It is not enough that the Master held a reasonable belief that a peril was imminent.

143 Here, although the Master of the Vessel believed the Storm posed imminent peril,144 this

belief does not appear to have been reasonable. There are no reports of damage caused to ships

by reason of the Storm, and further, commercial ships like the Vessel are well equipped to handle

usual events such as storms.145 On these facts, it is impossible for the RESPONDENT to contend

that the Storm posed anything more than an ‘ordinary’ peril to ship and cargo.146

D. The CLAIMANT is not liable for the USD50,000 claimed for agency fees and USD10,000 for

the use of the electronic access systems at Dillamond

74. Pursuant to cl 12(a), the Vessel was to be consigned to the CLAIMANT’s agents at Dillamond,

‘paying all customary fees’.147 The Tribunal should find that the USD50,000 and the USD10,000

claimed by the RESPONDENT are customary fees under the cl 12(a) and, therefore, that the

CLAIMANT is not liable to the RESPONDENT in respect of these amounts.

E. The CLAIMANT is not liable for the USD75,000 claimed for agency fees at Spectre

75. The RESPONDENT cannot recover the fees at Spectre under general average,148 as they were only

incurred because of the RESPONDENT’s unjustified deviation.149

142 Nesbitt v Lushington (1792) 4 TR 783. 143 Joseph Watson & Son v Fireman’s Fund Insurance Co of San Francisco [1922] 2 KB 355, 358 (Rowlatt J). 144 Record, 20: Email from Respondent to Claimant of 29 July 2017 at 8:58am. 145 Matsoukis v Priestman & Co [1915] 1 KB 681, 687 (Bailhache J). 146 Société Nouvelle d’Armement v Spillers & Bakers Ltd [1917] 1 KB 865, 871 (Sankey J). 147 Record, 7: Charterparty, cl 12(a). 148 Goulandris Brothers Ltd v B Goldman & Sons Ltd [1958] 1 QB 74, 79 (Pearson J). 149 Goulandris Brothers Ltd v B Goldman & Sons Ltd [1958] 1 QB 74, 79 (Pearson J); See above [28]-[32].


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PRAYER FOR RELIEF

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

a. An order that the RESPONDENT pay the CLAIMANT damages in the amount of

USD30,200,000 comprising:

i. USD15,750,000 for damaged cargo;

ii. USD9,450,000 for the alternative Coffee Beans;

iii. USD5,000,000 for the Settlement Payment;

b. A declaration that the CLAIMANT is subrogated to the position of the crew for their lien

over the Vessel;

c. An award for interest under s 49 of the Arbitration Act 1996 (UK); and

d. An order for costs.

Documents

Team 20 The University of Queensland Claimant · The University of Queensland Memorandum for the Claimant iv LIST OF AUTHORITIES A. ARTICLES/BOOKS John Schofield, Laytime and Demurrage