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THE 20TH ANNUAL INTERNATIONAL
MARITIME LAW ARBITRATION MOOT 2019
Memorandum for the Respondents
NALSAR UNIVERSITY OF LAW, HYDERABAD
ON BEHALF OF: AGAINST
Omega Chartering Company Panther Shipping Inc.
P.O. Box 911, Vaduz, Liechtenstein 80 Broad Street, Monrovia, Liberia
RESPONDENT CLAIMANT
TEAM 25
Dhanishta Mittal | Prakshal Jain | Satyam Goyal | Roshni Mulchandani | Sagar Kumar
Team 25 Memorial for Respondent
TABLE OF CONTENTS
LIST OF ABBREVIATIONS .................................................................................................. i
INDEX OF AUTHORITIES .................................................................................................. iii
SUMMARY OF FACTS ......................................................................................................... 1
ARGUMENTS ADVANCED ................................................................................................. 3
I. The Tribunal has the Jurisdiction to Adjudicate The Matter and Provide Any Award
To The Parties ............................................................................................................................. 3
A. The Arbitration Agreement in the C/P is strictly enforceable ......................... 3
B. The Appointment of Capt. Eric Masterson is valid ......................................... 3
C. The CLAIMANT Has Waived off their Right to Object to Masterson’s Appointment
4
D. Mary Walker should not become the Sole Arbitrator in this dispute ............... 5
II. That the Vessel was off hire for the mentioned period ................................................ 6
A. That the full working of MV THANOS has been prevented ............................... 6
B. That such full working has been prevented because of one of the reasons mentioned
in the off-hire clause .................................................................................................... 8
C. Full Working of the Vessel has been prevented due to deficiency or default of the
officers or ratings ........................................................................................................ 9
D. That the Actual delay has been caused due to the Off-Hire Event ................ 10
E. Such a delay was not caused by RESPONDENT’S fault ....................................... 10
F. That the action of the PSC was a reasonable action .......................................... 11
III. Re-delivering the vessel without a cleaned bottom did not amount to a breach of
the charterparty ........................................................................................................................ 13
Team 25 Memorial for Respondent
3
A. The RESPONDENT was prevented from cleaning the Vessel at Wahanda ....... 13
B. The RESPONDENT Act of Providing a 1-Day Re-Delivery notice is protected by
Annexure 1 BIMCO Clause ...................................................................................... 14
C. That the CLAIMANT did not reach an agreement on the lumpsum amount as
specified in C/P Cl. 83 ............................................................................................... 14
D. The CLAIMANT is estopped by virtue of their mail dated 9th June 2016 ........ 16
E. The RESPONDENT is not under an obligation to pay the claimant the costs of hull
cleaning ..................................................................................................................... 16
F. That the re-delivery of the vessel was not late since it is protected by the ‘without
guarantee’ provision in the time charter trip ............................................................ 19
IV. The CLAIMANT is liable to indemnify the RESPONDENT for cargo damage .............. 19
A. The Bill of Lading has been incorporated ...................................................... 20
B. There was Insufficient information in the notification of the cargo claim .... 21
C. The CLAIMANT shall indemnify RESPONDENT according to Cl. 8(a) of ICA . 23
REQUEST FOR RELIEF ....................................................................................................... x
Team 25 Memorial for Respondent
i
LIST OF ABBREVIATIONS
& And
§ Section
A.I.R. All India Report
B/L Bill of Lading
BIMCO Baltic and International Maritime Council
C/P Charter party
Capt. Captain
Cargo The 2,000 metric tonnes of English breakfast tea bags
Cl. Clause
CLAIMANT Panther Shipping Inc.
Co. Company
CoC Contract of Carriage
CV Curriculum Vitae
Ed. Edition
EWHC High Court of England & Wales
Hon’ble Honourable
HVR Protocol to Amend the International Convention for the Unification of
Certain Rules of Law Relating to Bills of Lading (Hague-Visby Rules)
(Brussels 1968)
ICA Inter-Club Agreement
Lloyd’s Rep. Lloyd’s Law Report
Ltd. Limited
Moot Scenario International Maritime Law Arbitration Moot, 2019
Team 25 Memorial for Respondent
ii
MT Metric Tonnes
NYPE New York Produce Exchange Form
P. Page
Parties CLAIMANT & RESPONDENT
PSC Port State Control at Wahanda
Pvt. Private
Rep. Report
RESPONDENT Omega Chartering Company
S.C.R. Supreme Court Rules
TCT Time Charter Trip
UNCITRAL United Nations Commission on International Trade Law
US COGSA United States Carriage of Goods by Sea Act, 1936.
USD United States Dollars
Vessel MV Thanos Quest
Virus Ebola Virus
Team 25 Memorial for Respondent
iii
INDEX OF AUTHORITIES
CASES
A/S Iverans Rederei v. KG MS Holtencruiser Seeschiffahrtsgesellschaft m.b.H. & Co. and Others–
“The Holtencruiser” [1992] 2 Lloyd’s Rep. 378 .......................................................................... 32
A/S Rendal v Arcos Ltd [1937] 58 Lloyd’s Law Report 287 ......................................................... 33
Action Aviation Inc. v. Bottigliere di Navigazione S.p.A.- “The Kitsa” [2005] 1 Lloyd’s Rep. 43229
Alfred C Toepfer Schiffahrtsgesellschaft mbH v. Tossa Marine Co. Ltd. – “The Derby” [1985] 2
Lloyd’s Rep. 325, 333 ................................................................................................................... 35
Andre & Cie v. Orient Shipping Rotterdam- “The Laconian Confidence” [1997] 1 Lloyd’s Rep. 139
....................................................................................................................................................... 17
Arab Maritime Petroleum Transport Co. v. Luxor Trading Panama and Geogas Enterprise Geneva
– “The Al Bida” [1987] 1 Lloyd’s Rep. 142 .................................................................................. 27
Belcore Maritime Corporation v. F.LLI. Moretti Cereali S.p.A– “The Mastro Giorgis” [1983] 2
Lloyd’s Rep. 66 ............................................................................................................................. 17
Bremer HandelgesellschaftmbH v RaffeisenHauptgenossenschafteG [1982] 1 Lloyd’s Rep. 43433
CF Vigers Brothers Ltd. v. Montague L Meyer Ltd. [1938] 11 L1 Lloyd’s Rep. 35 ..................... 16
Cosco Bulk Carrier Co Ltd v. Team Up Owning Co Ltd.- “The Saldanha” [2011] 1 Lloyd’s Rep.
187 ................................................................................................................................................. 18
Cosmos Bulk Transport Inc. v. China National Foreign Trade Transportation Corporation- “The
Apollonius” [1978] 1 Lloyd’s Rep. 53 .......................................................................................... 27
Court line Ltd v AKT Gotaverken– “The Halcyon the Great” [1984] 1 Lloyd’s Rep .................. 33
Dahlen v. Gulf Crews, [2002] AMC 566 ....................................................................................... 37
Dunlop S.S. Co. v. Tweedie Trading Co., 162 F. 490,493 (S.D.N.Y. 1908) ................................. 20
Exercise Shipping Co. Ltd. v. Bay Maritime Lines Ltd. – “The Fantasy” [1991] 2 Lloyd’s Rep. 391
....................................................................................................................................................... 37
Forrest v. Glasser [2006] 2 Lloyd’s Rep. 392 ............................................................................... 33
Framlington Court [1934] AMC 272 ............................................................................................ 35
Team 25 Memorial for Respondent
iv
Gow v. Gans Steamship Line (C.C.A.) 174 Fed. 215 .................................................................... 20
Hadley v. Baxendale [1854] EWHC J70 ....................................................................................... 30
Homburg Houtimport B.V. v. Agrosin Private Ltd. and Others - “The Starsin” [2003] 1 Lloyd’s
Rep. 571 ................................................................................................................................... 32, 36
International Packers London Ltd. v. Ocean Steam Ship Company Ltd. – “The Hector” [1998] 2
Lloyd’s Rep. 287 ........................................................................................................................... 32
M.H. Progress Lines SA v. Orient Shipping Rotterdam BV and other-” The Genius Star” 1 [2012] 1
Lloyd’s Rep. 222 ........................................................................................................................... 33
Macieo Shipping Ltd. v. Clipper Shipping Lines Ltd. – “The Clipper Sao Luis” [2000] 1 Lloyd’s
Rep. 645 ......................................................................................................................................... 17
Maestro Bulk Ltd. v. Cosco Bulk Carrier Co. Ltd- “The Great Creation” [2015] Lloyd’s Rep. Plus
11 ................................................................................................................................................... 30
Minerva Navigation INC v. Oceania Shipping AG - The “Athena” [2013] EWCA Civ 1723 ..... 21
MSC Mediterranean Shipping Co. SA v. Alianca Bay Shipping Co. – “The Argonaut” [1985] 2
Lloyd’s Rep. 216 ........................................................................................................................... 37
National Shipping Co. of Saudi Arabia v. BP Oil Supply Company- “The Abqaiq” [2012] 1 Lloyd’s
Rep. 18 ........................................................................................................................................... 34
Newcastle Protection and Indemnity Association Ltd. v. Assurance Forningen Gard Gjensidig –
“The Labrador” [1998] 2 Lloyd’s Rep. 387 ................................................................................. 31
NYK Bulkship (Atlantic) NV v. Cargill International SA- The “Global Santosh” [2016] UKSC 2021
Owners of Cargo Lately Laden on Board the Makedonia v. Owners of the Makedonia – “The
Makedonia” [1962] 1 Lloyd’s Law Report 316 ............................................................................ 36
Pagnan S.p.A. v. Tradex Ocean Transportation S.A. [1987] 2 Lloyd’s Rep. 342 (CA) ............... 25
Pan Cargo Shipping Corp v. United States 234 F Supp. 623.629 (SDNY 1964) ......................... 18
Royal Greek Government v. Minister of Transport 1949 L.I.L. Rep. 228 .................................... 20
Seaboard Offshore Ltd. v. Secretary of State for Transport- “The Safe Carrier” [1994] 1 WLR 541
....................................................................................................................................................... 36
Team 25 Memorial for Respondent
v
Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34, [2008] 1 AC 561 ........ 37
Slyvia Shipping Co. Ltd. v. Progress Bulk Carriers Ltd- “The Slyvia” [2010] 2 Lloyd’s Rep. 8130
The A B Marintrans v. Comet Shipping Co. Ltd. – “The Shinjitsu Maru No. 5” [1985] 1 Lloyd’s
Rep. 568 ......................................................................................................................................... 36
The Island Territory v. Solitron Devices Inc. [1973] 356 F Supp 1(USDC, SDNY) .................... 15
The Lendoudis Evangelos II, 75 [1997] 1 Lloyd’s Rep. 404 ........................................................ 30
The Lipa [2001] 2 Lloyd’s Rep. 17 ............................................................................................... 30
The Orient Horizon, SMA 1709 (Arb. At NY 1982) .................................................................... 21
The Sidermar S.A. v. Apollo Corporation – “The Apollo” [1978] 1 Lloyd’s Rep. 200 .......... 18, 21
The Sig Bergesen D.Y. A/S v. Mobil Shipping and Transportation Co. – “The Berge Sund” [1993] 2
Lloyd’s Rep.453 (C.A.) ................................................................................................................. 17
The Transfield Shipping v. Mercator Shipping- “The Achilleas” [2007] 1 Lloyd’s Rep. 432 ..... 29
Transpacific Discovery S.A. v. Cargill International S.A. – “The Elpa” [2001] 2 Lloyd’s Rep. 596
................................................................................................................................................. 31, 34
TS Lines Ltd v Delphis NV Delphis NV v. Ulrike F Kai Freese GMBH & Co KG– “The TS
Singapore” [2009] 2 Lloyd’s Rep. 54 ........................................................................................... 17
Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL)
....................................................................................................................................................... 37
STATUTES
§ 10, LMAA (2017) ....................................................................................................................... 16
§ 16, UNCITRAL Model Law on International Commercial Arbitration 1985 ............................ 14
§ 17 Arbitration Act, 1996 ............................................................................................................. 16
§ 31(1), Arbitration Act, 1996 ....................................................................................................... 15
§ 73(1), Arbitration Act, 1996 ................................................................................................. 14, 15
§49(3)(a) of Arbitration Act, 1996 ................................................................................................ 38
Limitation Act 1980 ....................................................................................................................... 34
Team 25 Memorial for Respondent
vi
OTHER AUTHORITIES
Annexure 1, BIMCO Redelivery clause for Time Charter Parties, BIMCO ................................. 25
Appendix 2, Guidelines for the Detention of Ships, A 27/Res. 1052, IMO A. 1052(27) Procedures
for Port State Control ..................................................................................................................... 20
Article III, Rule 1(a), Hague-Visby Rules, 1968 ........................................................................... 35
Cl. 15, NYPE Form 2015 .............................................................................................................. 28
Cl. 17, NYPE Form 2015 .............................................................................................................. 19
Cl. 54 NYPE Form, 2015 ........................................................................................................ 13, 16
Cl. 6, ICA, NYPE Agreement, 1996 ............................................................................................. 33
BOOKS
CLARE AMBROSE, KAREN MAXWELL, MICHAEL COLLETT, LONDON MARITIME ARBITRATION 51
(Informa Publications, 4ed, 2018) ........................................................................................... 13, 37
KIM LEVISON, INTERPRETATION OF CONTRACTS 12 (Sweet & Maxwell, 5ed, 1989) .................... 22
MICHAEL J. MUSTIL AND STREWART C. BOYD, COMMERCIAL ARBITRATION (1999), 205 ............ 33
NIGEL BLACKABY, CONSTANTINE PARTASIDES, ALAN REDFERN, AND MARTIN HUNTER, REDFERN &
HUNTER ON INTERNATIONAL ARBITRATION 85 (Oxford University Press, 5ed, 2014) ............ 13, 15
PROFESSOR YVONNE BAATZ, MARITIME LAW 139 (3ed 2014) ...................................................... 27
ROBERT MERKIN, ARBITRATION LAW, 440 (Informa Professional, 2004) ..................................... 16
SIR GUENTER TREITEL, F.M.B. REYNOLDS, CARVER ON BILLS OF LADING 45 (Sweet & Maxwell,
2001) .............................................................................................................................................. 35
TERENCE COGHLIN, JOHN D. KIMBALL, ANDREW W. BAKER, THOMAS H. BEDLKNAP, JULIAN
KENNY, TIME CHARTERS 367 (Informa Law, 7th ed., 2014) .................................................... 32, 37
THE NYPE OFF-HIRE CLAUSE AND THIRD PARTYINTERVENTION: CAN AN EFFICIENT
VESSEL BE PLACED OFF-HIRE? Vol. 33, No.2, April 2002, Journal of Maritime Law &
Commerce, 137 .............................................................................................................................. 20
WOODS HOLE OCEANOGRAPHIC INSTITUTION, MARINE FOULING AND ITS PREVENTION 3-5 (Bureau
of Ships, Navy Department) (1952) ............................................................................................... 24
Team 25 Memorial for Respondent
vii
INTERNET SOURCES
Alberto Giubilini, Thomas Douglas, Hannah Maslen, Julian Savulescu, Quarantine, isolation and
the duty of easy rescue in public health, US National Library of Medicine National Institutes of
Health, (Apr. 28, 2019, 12:33AM), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6001516/ . 23
CDC, Emerging Infectious Diseases, Centre for Disease Prevention and Control, (Apr. 24, 2019,
10:25 PM) https://www.cdc.gov/vhf/ebola/about.html ................................................................. 20
CDC, Notes on the Interim U.S. Guidance for Monitoring and Movements of Persons with
Potential Ebola Virus Exposure, Centre for Disease Prevention and Control, (Apr. 28, 2019,
12:35AM), https://www.cdc.gov/vhf/ebola/exposure/monitoring-and-movement-of-persons-with-
exposure.html ................................................................................................................................. 23
Cl. 12 (2) (b) MERCHANT SHIPPING (SEAFARERS) (HEALTH AND SAFETY: GENERAL DUTIES)
REGULATIONS (Apr. 28, 2019, 12:26AM),
https://www.elegislation.gov.hk/hk/cap478C%21en.assist.pdf?FROMCAPINDEX=Y .............. 23
Stephen Grainger, Getting to the bottom of it, Maritime Risk International, June 2003, (Apr. 24,
2019, 02:252 AM), https://www.i-
law.com/ilaw/doc/view.htm?queryString=rijn&sort=date&sort=date&searchType=advancedsearch
&se=37&id=7660&searched=true ................................................................................................. 26
The Prevention of the Spread of Infectious Diseases Regulations (Cap. 141B) (the Regulations),
(Apr. 28, 2019, 12:26AM), https://www.elegislation.gov.hk/hk/cap141B!en .............................. 23
Trans-Lex Principle, (Apr. 28, 2019, 01:23AM), https://www.trans-lex.org/970012/_/waiver-of-
right-to-object/ ......................................................................................................................... 15, 16
WHO Updates Blueprint List of Priority Diseases, World Health Organization, (Apr. 28, 2019,
12:25AM), https://globalbiodefense.com/2018/02/12/who-updates-blueprint-list-of-priority-
diseases/ ......................................................................................................................................... 22
WHO, Emergencies preparedness, response, World Health Organization,
https://www.who.int/csr/sars/archive/2003_05_17/en/. ................................................................ 23
Team 25 Memorial for Respondent
viii
ARBITRAL AWARDS
London Arbitration 10/00 .............................................................................................................. 26
London Arbitration 18/14 .............................................................................................................. 29
London Arbitration 19/18 .............................................................................................................. 27
London Arbitration 32/04 .............................................................................................................. 34
ARTICLES
Yashar Nasirian, Revisions in the concept of commencement of laytime and demmurage- laytime
and demurrage clauses in international sale contracts, Free pratique and Quarantine, 31, Lund
University ...................................................................................................................................... 18
Team 25 Memorial for Respondent
1
SUMMARY OF FACTS
The CLAIMANT (“Shipowners”) is Panther Shipping Inc., a Liberian Company. The RESPONDENT
(“Charterers”) is Omega Chartering Limited, a European Company. HULK HULLS is the manager
of the CLAIMANT. CLARK KENT AND SONS is the broker of the parties. The communication
between the parties flow through the broker.
Through a TCT (the “Charterparty”) dated 18.03.2016, the CLAIMANT chartered MV THANOS
QUEST (the “Vessel”) to the RESPONDENT for a time charter trip of about 50-55 days from West
Coast to Wahanda for delivery of cargo comprising of English Breakfast Tea.
The Vessel was delivered at West Coast Port on 29th March 2016. The loading of 8,600 metric tonnes
of English Breakfast Tea in 1kg jute bags packed in 1,720 5mt big bags of cargo was completed by
20th April 2016. The Vessel sailed from West Coast Port. Meanwhile on 18th April 2016 there was a
notification issued in the newspapers of West Coast, USA stating that there has been an Ebola
outbreak in the region due to which restrictions were to be imposed on the international trade and
travel in and from the place.
The Vessel sailed to Wahanda (Bao Kingdom) where it reached on 7th of May 2016. On this day, the
Vessel was detained by the Port authorities at Wahanda, for suspicion of crew members being
potential carriers of the Ebola virus. On 11th of May 2016, when the Port authorities boarded the
Vessel and undertook health inspection of the crewmen, they found multiple crew members
exhibiting symptoms of Ebola such as ‘high fever’. Accordingly, the Vessel was issued a quarantine
order for a minimum of 28 days. This detention led to the Vessel being held at anchorage and unable
to proceed to berth.
The Vessel stayed idle around the Port of Wahanda until it was issued a free pratique on 26th of June
2016. As the Vessel stayed idle for a period exceeding 30 days, its bottom got fouled and required
cleaning. However, such cleaning services were unavailable at the Wahanda port due to the muddy
water, charges and restrictions imposed by the government of Wahanda which disallowed such
underwater cleaning services. It was alternatively suggested by the RESPONDENT that they would
Team 25 Memorial for Respondent
2
arrange for cleaning at North Titan Port, if the CLAIMANT decided to subsequently travel there, else
offered to pay a final lump sum amount of USD 30,000.
Around the time of discharge, it was discovered that CLAIMANT had entered into another fixture
whose delivery was due on 28th June 2016 which could not be completed as the Vessel was re-
delivered to CLAIMANT only on 30th June 2016. The CLAIMANT undertook a voyage to South Island
Port where they got the Vessel’s Hull cleaned at a total cost of USD 41,000. Thereafter they claim
from the RESPONDENT a sum of USD 41,000 for cleaning, USD 55,567.42 for the journey to South
Island and USD 15,330,000 for losing the 2nd charter party contract.
The Vessel was issued free pratique on the 26th June 2016. Upon discharge, It was found that the
cargo was severely damaged due to the crew member opening the wrong valve, during the loading
operations at West Coast Port, Challaland. Having discovered that a substantial damage had been
caused to the cargo, the RESPONDENT informed the same to the CLAIMANT through an email i.e. a
notice of claim on the 7th July 2016 along with an attached Preliminary Survey Report. As the cargo
damage had not been quantified and was in the process of ascertainment by the Receivers, the
RESPONDENT asked for extension twice from the CLAIMANT through the mail dated 23rd May and 23rd
August 2017 which was duly accepted.
To resolve the dispute at hand through arbitration, the CLAIMANT appointed Ms. Mary Walker as
their arbitrator and served a notice of the same to the RESPONDENTS who thereafter appointed Capt.
Eric Masterson. Subsequent to this appointment, Ms. Mary along with Capt. Eric constituted a
Tribunal before which this matter is to be adjudicated. Claims and Counterclaims were brought forth
by both the parties and the the liabilities are to be determined.
Team 25 Memorial for Respondent
3
ARGUMENTS ADVANCED
Argument on Jurisdiction
I. THE TRIBUNAL HAS THE JURISDICTION TO ADJUDICATE THE MATTER
AND PROVIDE ANY AWARD TO THE PARTIES
A. THE ARBITRATION AGREEMENT IN THE C/P IS STRICTLY ENFORCEABLE
1. The agreement to arbitrate is a foundational stone of international arbitration.1 Cl. 80 of the
C/P which is the Arbitration clause, states that any dispute arising between the Owners and the
Charterers ‘shall be referred to three persons in London’ and the governing law for the same is to be
the English law.2 Intention of the parties can be reflected through the terms of the C/P itself since it
is a specifically negotiated agreement.3 The inclusion of ‘shall’ in the clause makes the composition
of a tribunal of three persons a mandatory requirement. In addition, the NYPE form, which is a set
of norms governing time charter parties, also incorporates reference being to three arbitrators.4 Thus,
upon strict construction, the tribunal ought to comprise of three arbitrators.
B. THE APPOINTMENT OF CAPT. ERIC MASTERSON IS VALID
2. Capt. Eric Masterson’s appointment should not be questioned because there was a valid notice
of his appointment sent to the parties concerned. The First Directions mail dated 30th October 2018
by Mary Walker confirmed the constitution of the tribunal through the words, ‘My co-arbitrator and
I have been appointed.’5 Mary Walker was given a copy of the C/P in her appointment email dated
15th October 2018.6 Thus, she was aware of the details of both the parties to the dispute. On 30th
October, when Ms. Walker sent the First Directions mail, she carbon copied Capt. Eric.7 This can be
1 NIGEL BLACKABY, CONSTANTINE PARTASIDES, ALAN REDFERN, AND MARTIN HUNTER, REDFERN & HUNTER ON INTERNATIONAL ARBITRATION 85 (Oxford University Press, 5ed, 2014). 2 Moot Scenario, 15. 3 CLARE AMBROSE, KAREN MAXWELL, MICHAEL COLLETT, LONDON MARITIME ARBITRATION 51 (Informa Publications, 4ed, 2018). 4 Cl. 54 NYPE Form, 2015. 5 Moot Scenario, 63. 6 Moot Scenario, 59. 7 Moot Scenario, 63.
Team 25 Memorial for Respondent
4
possible only when the RESPONDENT itself sent the notice of appointment of their arbitrator to Ms.
Walker herself. She could not have under any circumstances, known about Capt. Eric’s appointment
unless she was so informed by them. Capt. Eric was never given any details about either the C/P or
Ms. Walker’s appointment as an arbitrator. Thus, the only possible communication of Capt. Eric’s
appointment as the 2nd arbitrator and his details, was known through a valid notice from the
RESPONDENT to Ms. Walker and/or the CLAIMANT.
3. Capt. Eric’s appointment was done within the specified period of 14 days from the notification
of appointment of Mary Walker, as per Cl. 54 of the NYPE Form.8 The Tribunal was validly
constituted within this stipulated time period of 14 days. The information regarding Mrs. Walker’s
appointment was conveyed to the RESPONDENT on the 16th of October 2018.9 Capt. Eric’s
appointment was confirmed on the 26th of October 2018.10 As has been proved above, the notice of
Capt. Eric’s appointment had been given to the parties before the First Directions mail. The Tribunal
was constituted on the 30th of October 2018 as per the First Directions mail.11 Thus, the RESPONDENT
having duly followed the procedure, the tribunal has been validly constituted and should not be
questioned.
C. THE CLAIMANT HAS WAIVED OFF THEIR RIGHT TO OBJECT TO MASTERSON’S
APPOINTMENT
4. The RESPONDENT contends that CLAIMANT is deemed to have waived off their right to object
to the appointment of Capt. Eric.12 An objection to an appointment must be notified as soon as
possible after it is known to the party, otherwise it risks losing their right to object.13 When a party
either does not do so, or does not do so within the time allowed by the arbitration agreement, it may
not object later to the Tribunal’s substantive jurisdiction.14 In common law jurisdictions, the concept
of waiver is established, and it intends that the parties to the arbitration should not “lie in ambush”
8 Id. 9 Moot Scenario, 61. 10 Moot Scenario, 62. 11 Moot Scenario, 63. 12 § 73(1), Arbitration Act, 1996; § 16, UNCITRAL Model Law on International Commercial Arbitration 1985. 13 Id. 14 § 73(1), Arbitration Act, 1996.
Team 25 Memorial for Respondent
5
with an objection to await the decision of the tribunal.15 A party who has knowledge that any non-
mandatory provision of the applicable arbitration law or any requirement under the arbitration
agreement has not been complied with, must raise an objection without undue delay before it
proceeds with the arbitration. When an objection is raised at a later stage, the procedure is regarded
as inconsistent with previous behaviour. In such a situation, the party’s knowledge of non-compliance
can thus be regarded as a waiver of their right to object.16 In the present case, On 30th October 2018,
the notice of constitution of the Tribunal was given to both the parties.17 In addition, there were
exchange of claims and counterclaims on 9th November18 and 17th December19 respectively.
Moreover, the solicitors of both the parties met with both the arbitrators on 7th March 2019.20 In none
of the above three meetings, was there any question about Capt. Eric’s invalid appointment. They are
thus deemed to have waived off their right to object to the substantive jurisdiction of the tribunal
under § 31(1) of the Arbitration Act.21
5. Therefore, it is submitted that the CLAIMANT should have objected to the appointment of Capt.
Eric as soon as the Tribunal was formed on the 30th of October 2018 or even on multiple other
occasions when they had the opportunity to raise such an objection.22 This delayed action on part of
the CLAIMANT eventually led to their right to object being waived off.
D. MARY WALKER SHOULD NOT BECOME THE SOLE ARBITRATOR IN THIS DISPUTE
6. The language used in the C/P clause is a mandatory language, therefore three persons shall
be appointed as arbitrators. If Mary Walker is allowed to be appointed as the sole arbitrator in this
15 NIGEL BLACKABY, CONSTANTINE PARTASIDES, ALAN REDFERN, AND MARTIN HUNTER, REDFERN & HUNTER ON INTERNATIONAL ARBITRATION 285 (Oxford University Press, 5ed, 2014); The Island Territory v. Solitron Devices Inc. [1973] 356 F Supp 1(USDC, SDNY). 16 Trans-Lex Principle, (Apr. 28, 2019, 01:23AM), https://www.trans-lex.org/970012/_/waiver-of-right-to-object/. 17 Moot Scenario, 63. 18 Moot Scenario, 69. 19 Moot Scenario, 74. 20 Moot Scenario, 78. 21 § 31(1), Arbitration Act, 1996. 22 Moot Scenario, 62.
Team 25 Memorial for Respondent
6
dispute, then this would be a clear violation of consent of parties which is an essential feature of
arbitration.23
7. In the mail dated 16th October 2018, the claimants gave the notice of appointment of Mary
Walker and stated, “in order to limit the cost of arbitration we invite you to accept Mary Walker as
the sole Arbitrator.”24 This mail cannot be construed as a notice because the CLAIMANT merely made
an offer to the RESPONDENT saying that in order to decrease the cost of arbitration they should allow
Ms. Walker to be the sole arbitrator. Accordingly, upon the strict interpretation of Cl. 80 of the C/P
and due to the invitation based nature of the mail, Ms. Walker cannot be the sole arbitrator in this
case.
ARGUMENTS ON MERITS OF THE CLAIM
II. THAT THE VESSEL WAS OFF HIRE FOR THE MENTIONED PERIOD
8. MV THANOS was detained at the anchorage after the arrival at the port of Wahanda on the 7th
of May 2016.25 The PSC suspected the crew of carrying Ebola Virus.26 Such detention unduly
delayed the performance of the charter service. The RESPONDENT contended the whole period of
detention from 7th May 2016 to 26th June 2016 to be off-hire.27
9. The Vessel is said to go off-hire on the conditions: That there was prevention of full working
of the Vessel [a], full working of the Vessel has been prevented due to one of the reasons mentioned
in the off-hire clause [b] The delay has been actually caused due to prevention of full working of the
Vessel [c]. In the current case, all the three conditions have been fulfilled to give rise to an off-hire
event.
A. THAT THE FULL WORKING OF MV THANOS HAS BEEN PREVENTED
23 NIGEL BLACKABY, CONSTANTINE PARTASIDES, ALAN REDFERN, AND MARTIN HUNTER, REDFERN & HUNTER ON INTERNATIONAL ARBITRATION 86 (Oxford University Press, 5ed, 2014). 24 Moot Scenario, 61. 25 Moot Scenario, 25. 26 Moot Scenario, 24. 27 Moot Scenario, 74.
Team 25 Memorial for Respondent
7
10. MV THANOS was unable to perform the next operation required of her by the RESPONDENT,
which was to proceed to berth. Instead she was held at anchorage due to a quarantine order by the
PSC.28 Such a detention was not in the ordinary course of action. Full working of the Vessel is
prevented if it is unable to perform the next operation that the Charter service required of her.29 If the
next operation required of the Vessel is to sail at the discharge port and she is unable to do so, then
the Vessel is prevented from ‘full working’.30 Thus, this resulted in hindrance to the Vessel to proceed
to berth.31
11. The working of a Vessel may also be prevented because of third party interference.32 In
Laconian Confidence,33 it was held that, “the qualifying phrase ‘preventing the full working of the
Vessel’ does not require the Vessel to be inefficient in herself. A Vessel’s working may be prevented
by legal as well as physical means, and by outside as well as internal causes.”34 Here, the Vessel
was not granted free pratique by the PSC to proceed to berth. Pratique is a license for the master of a
Vessel to traffic in the ports of a given country, upon the lifting of quarantine or production of a clean
bill of health.35 Thus, the free pratique which was quintessential for the Vessel to proceed to berth at
the port of Wahanda was denied by the PSC.36 Therefore, the inability of the Vessel and its crewmen
to avail free pratique at the port of call, which is Wahanda, prevented the full working of the Vessel.37
12. The detention of the Vessel by the PSC is an external cause which was directed at MV
THANOS. Where the cause although ‘external’, is directed at or relates to a specific Vessel, it has to
be distinguished from cases of ‘external obstructions or impediments’ affecting shipping generally.38
In the former, the full working of the Vessel is prevented but it is not the same in the latter. In the
28 Moot Scenario, 24. 29 The Sig Bergesen D.Y. A/S v. Mobil Shipping and Transportation Co. – “The Berge Sund” [1993] 2 Lloyd’s Rep.453 (C.A.). 30 TS Lines Ltd v Delphis NV Delphis NV v. Ulrike F Kai Freese GMBH & Co KG– “The TS Singapore” [2009] 2 Lloyd’s Rep. 54; The Sig Bergesen D.Y. A/S v. Mobil Shipping and Transportation Co.- “The Berge Sund” [1993] 2 Lloyd’s Rep. 453. 31 Macieo Shipping Ltd. v. Clipper Shipping Lines Ltd. – “The Clipper Sao Luis” [2000] 1 Lloyd’s Rep. 645. 32 Belcore Maritime Corporation v. F.LLI. Moretti Cereali S.p.A– “The Mastro Giorgis” [1983] 2 Lloyd’s Rep. 66. 33 Andre & Cie v. Orient Shipping Rotterdam- “The Laconian Confidence” [1997] 1 Lloyd’s Rep. 139. 34 Id. 35Yashar Nasirian, Revisions in the concept of commencement of laytime and demmurage- laytime and demurrage clauses in international sale contracts, Free pratique and Quarantine, 31, Lund University; Pan Cargo Shipping Corp v. United States 234 F Supp. 623.629 (SDNY 1964). 36 Moot Scenario, 24, 81. 37 Moot Scenario, 9, Cl. 46. 38 Cosco Bulk Carrier Co Ltd v. Team Up Owning Co Ltd.- “The Saldanha” [2011] 1 Lloyd’s Rep. 187.
Team 25 Memorial for Respondent
8
present case, the Vessel was carrying sick crewmen suspected of being carriers of Ebola virus that
resulted in a specific action of quarantine by the PSC. The crew members are considered to be a part
of that Vessel.39 Therefore, the external cause that prevented the full working of the Vessel was
related to the particular Vessel in question which was carrying the ill crewmen suspected of Ebola
virus. Hence, the full working of the Vessel has been prevented.
13. Further, the CLAIMANT has a duty to provide the Vessel with an able crew to work her and to
perform the next operation required by the RESPONDENT. In the present scenario, the obtaining of
free pratique was no mere formality owing to the illness of the crew members who were reasonably
suspected of Ebola virus because of symptoms like ‘high fever’.40 There was a reasonable cause for
the PSC to conduct a careful inspection on board and subsequently declare quarantine of the Vessel
before the free pratique was issued.41 This led to a delay of the Charter service of around 50 days.
The Vessel had to comply with all safety and health regulations as mandated by Cl. 46 of the C/P.42
Since MV THANOS failed to comply with such a mandate, it was detained by the PSC which denied
issuance of free pratique to the Vessel. Therefore, the action of the PSC prevented the full working
of the Vessel.43
B. THAT SUCH FULL WORKING HAS BEEN PREVENTED BECAUSE OF ONE OF THE REASONS
MENTIONED IN THE OFF-HIRE CLAUSE
14. The Vessel was detained because many crewmen had high fever. High fever, being one of the
symptoms of Ebola, the Vessel was suspected of carrying the virus. As a result, the PSC suspected
the Vessel of spreading Ebola because of which it was quarantined.
15. Clause 17 of the NYPE 2015 states that, ‘In the event of loss of time from deficiency and/or
default and/or strike of officers or ratings…or detention by PSC or their competent authority for
Vessel deficiencies… or by any other similar clause preventing the full working of the Vessel, the
39 The Sidermar S.A. v. Apollo Corporation – “The Apollo” [1978] 1 Lloyd’s Rep. 200. 40 Moot Scenario, 24. 41 Id. 42 Moot Scenario, 9, Cl. 46. 43 Moot Scenario, 9, Cl. 44.
Team 25 Memorial for Respondent
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payment of hire and overtime, if any, shall cease for the time thereby lost.’44 The RESPONDENT
submits that there was a deficiency of ‘officers or ratings’ (i) The detention by the PSC for Vessel
deficiencies (ii) Thus, the payment of hire should cease for the time thus lost.
C. FULL WORKING OF THE VESSEL HAS BEEN PREVENTED DUE TO DEFICIENCY OR DEFAULT
OF THE OFFICERS OR RATINGS
16. The whole crew had become disqualified from participating in the further prosecution of the
voyage. It is because they were suspected of being exposed to Ebola virus at the West Coast Port.
Subsequently, the entire crew was disqualified from working the Vessel at Wahanda port. Ebola
being a contagious disease, mere exposure to the virus or contact with an ill person is enough to make
someone a potential carrier of the disease.45 These crew members who were exposed to the virus
cease to be part of the Vessel’s ‘company beyond detention’ because they were no longer able to
provide their services as part of the Vessel to the RESPONDENT.46
17. The C/P requires the CLAIMANT to provide ‘the full complement of crew’. If the cause of loss
of time is deficiency of men, then the amount of hire shall not be payable, during the detention
period.47 If some crew members are ill, with some contagious disease, on board the Vessel, then it
exposes other crewmen also to the same disease. This disqualifies the whole crew onboard the Vessel.
It can be thus inferred that there is a constructive deficiency of “officers or ratings” in the Vessel.
This can be counted as an off-hire event. Therefore, the RESPONDENT submits that they are entitled
to a deduction of hire during the period the Vessel was detained at quarantine as a result of the illness
and infection of the crew.
a. Full working of the Vessel has been prevented due to ‘detention by PSC for Vessel
deficiencies’
44 Cl. 17, NYPE Form 2015. 45CDC, Emerging Infectious Diseases, Centre for Disease Prevention and Control, (Apr. 24, 2019, 10:25 PM) https://www.cdc.gov/vhf/ebola/about.html. 46Gow v. Gans Steamship Line (C.C.A.) 174 Fed. 215; John Weale, THE NYPE OFF-HIRE CLAUSE AND THIRD PARTYINTERVENTION: CAN AN EFFICIENT VESSEL BE PLACED OFF-HIRE? Vol. 33, No.2, April 2002, Journal of Maritime Law & Commerce, 137. 47Royal Greek Government v. Minister of Transport 1949 L.I.L. Rep. 228; Dunlop S.S. Co. v. Tweedie Trading Co., 162 F. 490,493 (S.D.N.Y. 1908).
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18. The CLAIMANT failed to maintain health and safety standards on the Vessel which is evident
from the fact that one or more crewman had high fever. As a result, the PSC quarantined the Vessel
to safeguard Wahanda port from the threat of Ebola virus. Cl. 1.2.11 of the Appendix 2 of IMO
Procedures for PSC,48 stipulates that ‘the inability to provide safe and healthy conditions on board
by ship or crew will come under detainable deficiencies.’ Detainable deficiencies are those
deficiencies in the Vessel which are sufficiently serious to justify detention by the PSC. Under Cl.
17 of NYPE 2015, ‘detention by PSC for Vessel deficiencies’ gives rise to an off-hire event.
Therefore, the quarantine of Vessel because of presence of Ebola threat on board will be an off-hire
event under the above-mentioned clause.
D. THAT THE ACTUAL DELAY HAS BEEN CAUSED DUE TO THE OFF-HIRE EVENT
19. The Vessel is off-hire when there is a loss of time for service required by the RESPONDENT
[1] that loss of time was due to the prevention of full working of the Vessel by an event mentioned
in the clause [2].49 “Loss of time” means interruption or delay in the performance of the service
immediately required.50 The RESPONDENT immediately required the Vessel to proceed to berth to
discharge the cargo. The PSC detained the Vessel from 7th May 2016 to 11th May 2016 to arrange for
the inspection of crewmen. Subsequently, the PSC quarantined the Vessel as it found some crewmen
with high fever. Overall, this resulted in the delay of 50 days to the Vessel to proceed to berth. The
Vessel was unable to start the next operation required by the RESPONDENT until free pratique was
issued. This delay wouldn’t have taken place in the first place, had the Vessel been able to show a
valid clean bill of health and procured free pratique from the PSC.51 The Vessel was not granted free
pratique due to ill crewmen on board. Therefore, there is an actual delay of 50 days to the Vessel due
to an off-hire event.
E. SUCH A DELAY WAS NOT CAUSED BY RESPONDENT’S FAULT
48Appendix 2, Guidelines for the Detention of Ships, A 27/Res. 1052, IMO A. 1052(27) Procedures for Port State Control. 49 Minerva Navigation INC v. Oceania Shipping AG - The “Athena” [2013] EWCA Civ 1723. 50 NYK Bulkship (Atlantic) NV v. Cargill International SA- The “Global Santosh” [2016] UKSC 20. 51The Sidermar S.A. v. Apollo Corporation – “The Apollo” [1978] 1 Lloyd’s Rep. 200.
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20. If the RESPONDENT was not at fault in the given circumstances, then it will be unreasonable
to expect them to pay hire for the period of detention during which they were deprived of the use of
the Vessel.52 Cl.44 of the Omega Rider Clauses53 stipulates that, ‘it is necessary for the Master,
Officers or crewmen to take the written consent of the RESPONDENT before having communication
with any shore or infected area.’ If any delay is caused by quarantine because the Vessel/crew came
in contact with an infected area, then the Vessel will be off-hire.
21. Intention can be gauged from the written provisions of the contract itself and unless there is
an ambiguity, the Courts will interpret only the literal meaning of the terminology used.54 The clauses
of the C/P ought to be construed in its literal sense, since it is a contract which is drafted by the
express consent of both the parties involved.55 The scope for interpretation of the term ‘written
consent’ should not be expanded since it is clear and unambiguous.
22. In the present case, Master, officers or crewmen of the Vessel had never taken the written
consent of the RESPONDENT before coming in contact with the West Coast Port which had an outbreak
of Ebola. They had not even taken the written consent of the RESPONDENT before boarding the Vessel.
This would be a fault on the CLAIMANT’S side.
F. THAT THE ACTION OF THE PSC WAS A REASONABLE ACTION
23. Given the graveness of the disease and the security reasons associated with it, the Vessel was
detained at anchorage for a long duration of time. The action of the PSC to detain the Vessel due to
the illness of crewmen was a reasonable action.
a. The Health Authorities at Wahanda were statutorily authorized to give quarantine
orders
52 The Orient Horizon, SMA 1709 (Arb. At NY 1982). 53 Moot Scenario, 9, Cl. 47. 54 KIM LEVISON, INTERPRETATION OF CONTRACTS 12 (Sweet & Maxwell, 5ed, 1989). 55 KIM LEVISON, INTERPRETATION OF CONTRACTS 12 (Sweet & Maxwell, 5ed, 1989).
Team 25 Memorial for Respondent
12
24. The purpose and aim of a quarantine order are to ensure that proper measures are taken to
investigate, eliminate or minimise the spread ashore of an infectious disease,56 on board the Vessel.
A quarantine order was issued because the authorities had a suspicion that an infectious disease
(Ebola) was present on board.57 It can be reasonably assumed that the whole ship including all its
crewmen were potential carriers, since many of them exhibited symptoms like ‘high fever’.58
25. “…conditions on board the ship are clearly hazardous to the health or safety of persons on
board the ship, the Authority…, may detain the ship until measures are taken to rectify those
conditions…”59 The detection of illness of the crewmembers was prima facie hazardous to the health
and safety of the persons on board the Vessel. Thus, the PSC’s indefinite detention of the Vessel until
rectification of such conditions stands justified and reasonable.
b. Quarantine orders are justified for contagious diseases which have the potential of
becoming a GLOBAL threat
26. Quarantine might be mandated for people who have been exposed to a disease and when
treatment for such a disease is not available.60 One reason in favor of quarantine and isolation is that
they can be very effective in protecting or restoring public health.61
27. When infectious diseases threaten public health, national and human security, quarantine or
isolation may be justified if it can be expected that they would be effective in preventing or containing
the contagions. This was a reasonable expectation of the Port Authorities when they issued the
detention order.62 Hence, quarantine and isolation are not only effective and justified in protecting or
restoring public health, but also, they can contribute to protecting human and national security.
56 WHO Updates Blueprint List of Priority Diseases, World Health Organization, (Apr. 28, 2019, 12:25AM), https://globalbiodefense.com/2018/02/12/who-updates-blueprint-list-of-priority-diseases/. 57 The Prevention of the Spread of Infectious Diseases Regulations (Cap. 141B) (the Regulations), (Apr. 28, 2019, 12:26AM), https://www.elegislation.gov.hk/hk/cap141B!en. 58 Moot Scenario, 24. 59 Cl. 12 (2) (b) MERCHANT SHIPPING (SEAFARERS) (HEALTH AND SAFETY: GENERAL DUTIES) REGULATIONS (Apr. 28, 2019, 12:26AM), https://www.elegislation.gov.hk/hk/cap478C%21en.assist.pdf?FROMCAPINDEX=Y. 60 CDC, Notes on the Interim U.S. Guidance for Monitoring and Movements of Persons with Potential Ebola Virus Exposure, Centre for Disease Prevention and Control, (Apr. 28, 2019, 12:35AM), https://www.cdc.gov/vhf/ebola/exposure/monitoring-and-movement-of-persons-with-exposure.html. 61 WHO, Emergencies preparedness, response, World Health Organization, https://www.who.int/csr/sars/archive/2003_05_17/en/. 62 Alberto Giubilini, Thomas Douglas, Hannah Maslen, Julian Savulescu, Quarantine, isolation and the duty of easy rescue in public health, US National Library of Medicine National Institutes of Health, (Apr. 28, 2019, 12:33AM), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6001516/.
Team 25 Memorial for Respondent
13
28. The action of the PSC of indefinite detention is reasonable not only because it aids in
protection of public health but also because it is a preventive measure from the disease spreading in
Bao Kingdom.
III. RE-DELIVERING THE VESSEL WITHOUT A CLEANED BOTTOM DID NOT
AMOUNT TO A BREACH OF THE CHARTERPARTY
29. The RESPONDENT’S act of re-delivering the Vessel without cleaning its bottom did not amount
to a breach of the Charterparty because: The RESPONDENT was ‘prevented’ from cleaning the Vessel
at Wahanda [A] Their act of re-delivering the Vessel with a 1-day re-delivery notice is protected by
Annexure 1 BIMCO Clause [B] The CLAIMANT failed to reach an agreement on the lumpsum amount
prior or latest on re-delivery [C] The CLAIMANT is estopped by virtue of the mail dated 9th June 2016
[D].
A. THE RESPONDENT WAS PREVENTED FROM CLEANING THE VESSEL AT WAHANDA
30. The RESPONDENT was willing to undertake the cleaning process. However, the then existing
events at the said Port ‘prevented’ them from undertaking the same at Wahanda,
31. Murky, low-visibility water or dirty, dark muddy water63 is a reason for not conducting the
cleaning operations of fouled hull bottoms.64 The water at Wahanda was muddy and the anchorage
was facing current complexities along with other issues.65 There were no cleaning services available
at the Wahanda Port particularly due to the ‘rare circumstances’ at the Port which did not exist in
the past. Wahanda Port Services denied availability of any services that offer hull cleaning operations.
They themselves suggested that such an activity be undertaken at another Port.66 In addition, such
cleaning services were also prohibited by the Government of Bao Kingdom.67
63 Moot Scenario, 26. 64 WOODS HOLE OCEANOGRAPHIC INSTITUTION, MARINE FOULING AND ITS PREVENTION 3-5 (Bureau of Ships, Navy Department) (1952). 65 Moot Scenario, 26. 66 Id. 67 Moot Scenario, 28.
Team 25 Memorial for Respondent
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32. Thus, the RESPONDENT was ‘prevented’ from cleaning the ship, not due to orders of the
Claimant but due to the circumstances at the Wahanda Port, which couldn’t have been reasonably
anticipated.
B. THE RESPONDENT ACT OF PROVIDING A 1-DAY RE-DELIVERY NOTICE IS PROTECTED BY
ANNEXURE 1 BIMCO CLAUSE
33. The RESPONDENT shall give the CLAIMANT the following notices of the Vessel’s redelivery,
unless otherwise agreed: Minimum 30 followed by 20, 15, 10, 7, 5 and 3-days’ approximate notice
and 2 days’ definite notice of redelivery. All notices shall be consistent with the above agreed spread
of notices ‘except for circumstances beyond the Charterer’s control’.68
34. The Vessel having been detained for an unspecified period by the PSC, the period of release
was thus uncertain and couldn’t have been anticipated. The RESPONDENT, accordingly cannot be
reasonably expected to have known the day of release from detention, or the day when the re-delivery
of the Vessel would become feasible. Thus, the RESPONDENT’S act of not issuing an approximate
days’ notice within the above agreed spread of notice periods, falls within the exception of
‘circumstances beyond Charterer’s control’, since they themselves could not have known the
estimated date of re-delivery post completion of discharge of the cargo.
C. THAT THE CLAIMANT DID NOT REACH AN AGREEMENT ON THE LUMPSUM AMOUNT AS
SPECIFIED IN C/P CL. 83
35. The Rider Cl. 83, sub-clause (d) provides that if cleaning is not possible before redelivery,
the parties will agree on a lump sum payment in full and final settlement of the ‘Owner’s costs and
expenses’ related to the cleaning of the Vessel, either prior or latest on re-delivery.69
36. It is evident from the facts of the present case, that the same requirement was not satisfied.
The CLAIMANT abstained from agreeing on any lumpsum amount without conducting an inspection
68 Annexure 1, BIMCO Redelivery clause for Time Charter Parties, BIMCO. 69 Pagnan S.p.A. v. Tradex Ocean Transportation S.A. [1987] 2 Lloyd’s Rep. 342 (CA), at 350 (Bingham LJ).
Team 25 Memorial for Respondent
15
of the fouled bottom.70 The CLAIMANT never acknowledged their proposal despite repeated
increments in the amount. Neither did they initiate any steps to negotiate on the requisite lumpsum
amount.71
37. The proposed lumpsum amount was not inadequate either since the final amount offered to
the CLAIMANT was 30,000USD. This amount was sufficient to cover the cleaning costs had the
cleaning taken place at the North Titan Port.
38. Moreover, the CLAIMANT undertook no steps to conduct any inspection and thus, neither
agreed on the lumpsum nor took any steps to agree on the same. Thus, they delayed the process of
determining the hull cleaning cost. Where the conduct of the CLAIMANT constitutes a willful failure
to investigate and remedy any hull fouling, this may in some circumstances amount to a separate
breach by the CLAIMANT.72
39. In the mail dated 9th June 2016, the CLAIMANT themselves proposed to arrange for inspection
and cleaning of the Vessel at the next convenient Port to which they subsequently retracted.73 This is
an evidence of an intentional delay on their part to determine the extent of hull damage and
subsequently the costs to be incurred in cleaning the bottom.
40. Despite there being no disagreement on the extent of hull fouling, the CLAIMANT alleged that
the ‘Charterer’s offer is not generous’. The intention of the RESPONDENT in proposing the lumpsum
was to reimburse only for the costs and expenses incurred by the CLAIMANT in cleaning the fouled
hull. Its purpose was not to unduly profit the CLAIMANT by proposing a ‘generous amount’.
41. In addition, the RESPONDENT in the usual course of business can only be liable for the normal
characteristics of the port whether they were known to them or not.74 The fouling of the hull, in the
present scenario was a ‘fortuitous’ event.75 This is because the fouling of the hull was on account of
70 Moot Scenario, 28. 71 Id at 29. 72 London Arbitration 10/00; Stephen Grainger, Getting to the bottom of it, Maritime Risk International, June 2003, (Apr. 24, 2019, 02:252 AM), https://www.i-law.com/ilaw/doc/view.htm?queryString=rijn&sort=date&sort=date&searchType=advancedsearch&se=37&id=7660&searched=true. 73 Moot Scenario, 28. 74 PROFESSOR YVONNE BAATZ, MARITIME LAW 139 (3ed 2014). 75 Cosmos Bulk Transport Inc. v. China National Foreign Trade Transportation Corporation- “The Apollonius” [1978] 1 Lloyd’s Rep. 53.
Team 25 Memorial for Respondent
16
both unexpected delay at the Port due to indefinite quarantine by the PSC,76 as well as due to
unexpected circumstances at the stated Port. These unexpected circumstances at the Port include
muddy water with current, charge and other complexities.77
42. Even if it is theoretically foreseeable as possibly occurring at a port, it is not sufficient to turn
“a rare event in the history of the port” into a normal characteristic of the port. Significant factors
such as the actual evidence relating to the past history of the port, the frequency (if any) of the event,
the degree of foreseeability of the critical combination should be considered.78 Accordingly, it cannot
be said that muddy water with other complexities at Wahanda was a normal characteristic of the Port.
There were cleaning services available at the Port in the past and they have closed only recently.79
This shows that such an occurrence at Wahanda was ‘a rare event in the history of the Port’. Thus,
the RESPONDENT could not have anticipated their liable for such rare occurrences which were
unexpected and not in the usual course of events.
D. THE CLAIMANT IS ESTOPPED BY VIRTUE OF THEIR MAIL DATED 9TH JUNE 2016
43. There should be an estoppel, either by convention or by promissory estoppel because both the
parties proceeded on the basis that the CLAIMANT,80 would undertake the inspection and cleaning
operation at the next convenient Port.81
44. The CLAIMANT’S subsequent conduct of retracting on those words would enforce the doctrine
of Estoppel. The RESPONDENT acted in accordance with the proposal and thus consented to pay
against the original invoice of the cleaning costs undertaken by the CLAIMANT.
E. THE RESPONDENT IS NOT UNDER AN OBLIGATION TO PAY THE CLAIMANT THE COSTS OF
HULL CLEANING
76 Moot Scenario, 24. 77 Id at 26, 28. 78 Arab Maritime Petroleum Transport Co. v. Luxor Trading Panama and Geogas Enterprise Geneva – “The Al Bida” [1987] 1 Lloyd’s Rep. 142. 79 Moot Scenario, 26. 80 London Arbitration 19/18. 81 Moot Scenario, 28.
Team 25 Memorial for Respondent
17
45. The RESPONDENT ought not to be held liable for the payment of the voyage amount of the
Vessel’s travel from Wahanda to South Island. Since the subsequent costs associated with cleaning
and undertaking the voyage to the South Island Port were a direct result of ‘detention by PSC’.82 The
indefinite detention order by the PSC resulted in idling of MV THANOS for over 30 days which led to
fouling of the hull’s bottom. Accordingly, the payment of hire for such an event, should cease to
operate. In addition, the bunkers used by the Vessel during this off-hire period and the cost of
replacing the same shall be for the CLAIMANT’S account and therefore deducted from hire. Moreover,
even for the time lost on account of underwater cleaning or repair, the payment of hire will cease for
the said time.83
46. In addition, the Vessel’s voyage to South Island port was contrary to the RESPONDENT’S
orders or directions, since such a journey was undertaken after completion of the C/P itself. For the
completion of such a non-contractual action, the hire ought to be suspended from the time of this
deviation until she’s repositioned from where another voyage can commence.
a. The Respondent will reimburse only the hull cleaning expenses as would’ve been
charged, had they undertaken the voyage to North Titan Port instead
47. Since there had been no agreement on the lumpsum amount and the RESPONDENT had also
been prevented from cleaning the Vessel at Wahanda, they were absolved of their liability to clean
the Vessel. Accordingly, even if the RESPONDENT is asked to pay, they cannot be charged higher than
the expenses they would’ve been charged for, had the cleaning taken place at the North Titan Port
itself.
48. It is evident from the photographs, the bootop area of the Vessel had not been damaged.84
The South Island Port cleaning authorities charged an additional 13,000USD for cleaning the bootop
of the Vessel.85 In the present case, it was an unreasonable expense since there was no evident damage
82 Cl. 15, NYPE Form 2015. 83 Id. 84 Moot Scenario, 84. 85 Moot Scenario, 50.
Team 25 Memorial for Respondent
18
to that portion of the Vessel. Accordingly, the RESPONDENT cannot be held liable for extraordinary
expenses merely because the CLAIMANT undertook a voyage to the South Island Port.
b. The CLAIMANT’S claim for compensation on account of non-performance of the
subsequent fixture does not hold valid
49. The CLAIMANT despite being aware of the occurrence of hull fouling due to the prolonged
stay of the Vessel at Wahanda, entered into a subsequent C/P without informing the RESPONDENT
about the same in advance.86 In such circumstances, the CLAIMANT bears the direct responsibility
arising from a breach or non-fulfillment of mandate of subsequently contracted C/P.87
50. The RESPONDENT could not have reasonably assumed that the CLAIMANT would enter into a
subsequent Chartering Party Contract while the Vessel was still quarantined at Wahanda. In light of
the situation prevalent at the Wahanda Port, it was not foreseeable that the CLAIMANT, without surety
of a free pratique being issued on a particular date, enter into a subsequent C/P.
51. It is customary that the CLAIMANT enters in subsequent C/P contracts only when an
approximate notice of redelivery has previously been issued.88 In the present case, the CLAIMANT
proceeded with signing another C/P contract despite not being previously notified by the
RESPONDENT of an approximate date of redelivery. The RESPONDENT was informed about this
contract only at a subsequent date.89 Thus, the CLAIMANT acted against the generally accepted norms
and principles of C/P contracts.
52. Even if the type of loss through the loss of the subsequent fixture is foreseeable, the
RESPONDENT could not have reasonably understood that they were assuming responsibility for the
risk of loss on the follow-on fixture. They had no control or knowledge as to its terms, duration or
rate.90
86 Action Aviation Inc. v. Bottigliere di Navigazione S.p.A.- “The Kitsa” [2005] 1 Lloyd’s Rep. 432. 87 London Arbitration 18/14. 88 The Transfield Shipping v. Mercator Shipping- “The Achilleas” [2007] 1 Lloyd’s Rep. 432. 89 Moot Scenario, 34. 90 Slyvia Shipping Co. Ltd. v. Progress Bulk Carriers Ltd- “The Slyvia” [2010] 2 Lloyd’s Rep. 81.
Team 25 Memorial for Respondent
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53. Effect has to be given to the parties’ intentions as to their risk exposure.91Anticipated profits
from a lost fixture will not generally be recoverable unless at the time of contracting a Respondent
had detailed knowledge of an Claimant’ next fixture and in this case, losses could be recoverable as
special knowledge and/or be considered an assumed contractual risk.92 The RESPONDENT cannot be
expected to repay the anticipated profits from the lost fixture because they did not possess any
detailed knowledge of the subsequent fixture or any special knowledge of the assumed contractual
risk.
F. THAT THE RE-DELIVERY OF THE VESSEL WAS NOT LATE SINCE IT IS PROTECTED BY THE
‘WITHOUT GUARANTEE’ PROVISION IN THE TIME CHARTER TRIP
54. Where a TCT stipulated a “duration about 70-80 days without guarantee”, the CHARTERER
was only under an obligation to make the estimate of the duration of the trip in good faith and not on
a reasonable basis. The trip took over 103 days.93 The Tribunal found that, as the OWNER had alleged,
the CHARTERER made the estimate negligently, but it was never alleged that the CHARTERER did not
have a genuine belief in the estimate and therefore they were not liable.94
55. Likewise, in the present fact scenario, the extension of the stipulated time period of 50-55
days ‘without guarantee’ would not make the RESPONDENT liable for the delay in re-delivery of the
Vessel thus caused. This is primarily because they estimated the completion of the trip within the
stated time in good faith and that fact has not been disputed.
Arguments on Merits of the Counterclaim
IV. THE CLAIMANT IS LIABLE TO INDEMNIFY THE RESPONDENT FOR CARGO
DAMAGE
91 Hadley v. Baxendale [1854] EWHC J70. 92 Maestro Bulk Ltd. v. Cosco Bulk Carrier Co. Ltd- “The Great Creation” [2015] Lloyd’s Rep. Plus 11. 93 The Lipa [2001] 2 Lloyd’s Rep. 17, Andrew Smith J., 21. 94 The Lendoudis Evangelos II, 75 [1997] 1 Lloyd’s Rep. 404.
Team 25 Memorial for Respondent
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56. The CLAIMANT is liable to indemnify the RESPONDENT to the tune of USD 1,00,000 for the
damaged English Breakfast Tea because: (A) The B/L has been incorporated in the C/P therefore
ICA will be applicable (B) The nature and effect of the information provided in the notice to the
claimant is sufficient to be constituted as a valid cargo claim for the purposes of Cl. 6 of the ICA (C)
CLAIMANT did not exercise due diligence to make Vessel seaworthy.
A. THE B/L HAS BEEN INCORPORATED
57. B/L explicitly mentioned details that included the name of the carrier, Merchant, Vessel’s
name, place and date of fixture of C/P, loading and discharging port.95 In the Elpa,96 it was held that
B/L that fails to confirm with the mate’s receipts is not unauthorized and should not be regarded as
unauthorized for the purposes of the agreement.
58. The only requirement is that (a) the cargo claim must be under the bill and (b) it must contain
HVR or the equivalent.97 Both of these requirements have been fulfilled and hence the B/L is
authorized. Irrespective of the manner in which the claim is brought by the Receivers; ICA is
applicable only when there is a true cause of evidence of cargo damage.98
59. In the instant case, the RESPONDENT being the contractual carriers paid the Receivers
damages which amounted to 2000 metric tonnes of cargo at US$ 50 per kg.99 The terms of the identity
of the carrier clause were overridden by the clear identification of Omega Chartering Ltd. as the
contracting party on the front portion of the bill.100 Since the identity of the carrier is mentioned on
the front of the B/L clearly and unambiguously, it will override the contrary pre-printed terms and
conditions written on the reverse side of B/L.101 It was held in The Hector,102 “The front of the B/L
mentioned that the time CHARTERERS were the contractual carriers. This was unambiguous and thus,
overrode the prima facie rule that bills signed by or on behalf of the Master are Owner’s bills.”
95 Moot Scenario, 47. 96 Transpacific Discovery S.A. v. Cargill International S.A. – “The Elpa” [2001] 2 Lloyd’s Rep. 596. 97 Id. 98Newcastle Protection and Indemnity Association Ltd. v. Assurance Forningen Gard Gjensidig – “The Labrador” [1998] 2 Lloyd’s Rep. 387. 99 Moot Scenario, 82. 100Homburg Houtimport B.V. v. Agrosin Private Ltd. and Others - “The Starsin” [2003] 1 Lloyd’s Rep. 571. 101 Id. 102International Packers London Ltd. v. Ocean Steam Ship Company Ltd. – “The Hector” [1998] 2 Lloyd’s Rep. 287.
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However, in the present case, CLAIMANT being the actual carrier is contractually obliged to
indemnify the RESPONDENT under the C/P as the B/L has been duly authorized in accordance with
Clause 4(a)(1) of ICA.103
a. That the HVR are applicable for cargo claim
60. The C/P mentions that the loading operations are to be carried out strictly in accordance with
the local laws104 and Challaland resembles the laws of USA.105 It is known from the Clause
paramount that the US COGSA Rules incorporates the HVR. As US COGSA rules are applicable in
this case, hence HVR will also be applicable.106
B. THERE WAS INSUFFICIENT INFORMATION IN THE NOTIFICATION OF THE CARGO CLAIM
61. Since HVR are applicable in the particular case, there must be a valid cargo claim made within
24 months of the date of delivery of the cargo or the date the cargo should have been delivered, in
order to invoke Cl. 6 of the ICA.107 The claim so made under this clause must be a sufficient written
notification to constitute a valid cargo claim.108
62. The notice of claim as required by Cl. 6 of ICA should give the recipient sufficient
information as to the claim which he has to face.109 Even though the notice itself may not identify the
claim, it will continue to be a good notice if it is clear from the context in which it is given that it
intended to refer to a particular dispute.110 In the particular instance, the RESPONDENT on the 7th of
July 2016, through their mail had provided the CLAIMANT ‘sufficient’ information in the Mekon
Survey Report. They had provided the cause of cargo damage, the possible extent of damage to the
cargo and the anticipated amount for which the CLAIMANT would be liable. Such a liability as per
103A/S Iverans Rederei v. KG MS Holtencruiser Seeschiffahrtsgesellschaft m.b.H. & Co. and Others– “The Holtencruiser” [1992] 2 Lloyd’s Rep. 378. 104 Moot Scenario, 4. 105 Moot Scenario, 81. 106 TERENCE COGHLIN, JOHN D. KIMBALL, ANDREW W. BAKER, THOMAS H. BEDLKNAP, JULIAN KENNY, TIME CHARTERS 367 (Informa Law, 7th ed., 2014). 107 M.H. Progress Lines SA v. Orient Shipping Rotterdam BV and other-” The Genius Star” 1 [2012] 1 Lloyd’s Rep. 222. 108 Cl. 6, ICA, NYPE Agreement, 1996 (as amended 1 September 2011). 109 MICHAEL J. MUSTIL AND STREWART C. BOYD, COMMERCIAL ARBITRATION (1999), 205. 110Court line Ltd v AKT Gotaverken– “The Halcyon the Great” [1984] 1 Lloyd’s Rep. 283; Bremer HandelgesellschaftmbH v RaffeisenHauptgenossenschafteG [1982] 1 Lloyd’s Rep. 434.
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the Report would be a substantial one.111 As the amount was still in the process of ascertainment, it
would have been impossible for the RESPONDENT to provide the exact amount of the cargo damage.
The Survey Report highlighted that they would have to incur a substantial amount, as the market
price of this particular grade of tea, was between US$60 and US$65 per kilo.112 At the time, the
notice was given it is not necessary for the claim to be fully quantified or particularized.113
63. The RESPONDENT submits that a contractual limitation clause does not mean a precisely
formulated claim with full details.114 It must be such a notice as will enable the party to whom it is
given to take steps to meet the claim by preparing and obtaining appropriate evidence for that
purpose.115 One therefore has to consider the nature of the claim in writing, addressed on behalf of
the RESPONDENT to the CLAIMANT so far as a claim for an indemnity is concerned. Therefore, relying
on the same principle of law, the RESPONDENT seems to have fulfilled their duty by notifying the
CLAIMANT as to the possible claim.
a. The Cargo Claim had not been settled under the B/L
64. Cl. 6 of ICA states that the written notification of the cargo claim shall if possible, include
details of the contract of carriage which includes the B/L. It is also contended that the RESPONDENT
shall be discharged from all liability in respect of any claim which CLAIMANT may have made under
the C/P unless a claim in writing has been presented by the Receivers to RESPONDENT, together with
all supporting documentation substantiating each and every constituent part of the claim, within the
completion of discharge of the cargo carried.116 It is only when the RESPONDENT got the entire details
that they furbished it to the CLAIMANT which was during the course of arbitration.117
65. The ICA sets out the relevant notice obligation and time bar for providing such notice. The
time bar for commencing such proceeding under the Limitation Act 1980 is the same as that
111 Moot Scenario, 46. 112 Id. 113Court line Ltd v AKT Gotaverken– “The Halcyon the Great” [1984] 1 Lloyd’s Rep. 283; Bremer HandelgesellschaftmbH v Raffeisen HauptgenossenschafteG [1982] 1 Lloyd’s Rep. 434. 114 Forrest v. Glasser [2006] 2 Lloyd’s Rep. 392. 115 A/S Rendal v Arcos Ltd [1937] 58 Lloyd’s Law Report 287. 116 National Shipping Co. of Saudi Arabia v. BP Oil Supply Company- “The Abqaiq” [2012] 1 Lloyd’s Rep. 18. 117 Moot Scenario, 81.
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mentioned under the English law.118 And this is calculated as when the underlying cargo claim is
properly settled and paid.119 It is therefore argued that as the claim had not been settled with the
Receivers in the first place, providing B/L would have not served any purpose.
C. THE CLAIMANT SHALL INDEMNIFY RESPONDENT IN ACCORDANCE WITH CL. 8(A) OF ICA
66. That the claim arising out of unseaworthiness will continue to be subjected to 1984 ICA even
if the B/L is antedated or not been caused in accordance with the mate’s receipt.120
a. The Ship was not seaworthy in accordance with the HVR
67. Article III, rule 1 of the HVR imposes a duty on a carrier to exercise due diligence before and
at the beginning of the voyage to make the Vessel seaworthy and to properly man, equip and supply
the Vessel.121 MV THANOS was delivered to the RESPONDENT on March 29, 2016.122 The RESPONDENT
contend that the CLAIMANT breached their obligation to exercise due diligence before and at the
commencement of the voyage. The HVR apply to a CoC from the time at which the cargo is loaded
onto a Vessel.123
68. The CLAIMANT failed to ensure that the Master and the crew were competent to deal with
ballasting operation which ensures the stability of MV THANOS. As for a ship to be seaworthy, its
crew and Master should be competent and sufficient for the purpose of any voyage.124 The
undertaking of seaworthiness is not only limited to the physical state of the Vessel, but it also extends
to the competency of her Master and crewmen, and the adequacy of her equipment and stores.125 In
Farrandoc, the plaintiff argued that the defendant did not exercise “due diligence” in order to make
ship seaworthy as the crew of the ship was incompetent and shipowner did not enquire in detail into
the incompetency of the crew. In the instant case, since the Vessel started its operation on 1st March
118 Limitation Act 1980, Chp. 58. 119 London Arbitration 32/04. 120 Transpacific Discovery S.A. v. Cargill International S.A. – “The Elpa” [2001] 2 Lloyd’s Rep. 596. 121 Article III, Rule 1(a), Hague-Visby Rules, 1968. 122 Moot Scenario, 66. 123SIR GUENTER TREITEL, F.M.B. REYNOLDS, CARVER ON BILLS OF LADING 45 (Sweet & Maxwell, 2001). 124Alfred C Toepfer Schiffahrtsgesellschaft mbH v. Tossa Marine Co. Ltd. – “The Derby” [1985] 2 Lloyd’s Rep. 325, 333. 125Framlington Court [1934] AMC 272.
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2016,126 it can be reasonably construed that CLAIMANT did not inquire into the competency of the
crew in such a short span of time. Moreover, according to Mekon Surveyor’s report, only the
ballasting system was in order. Even if the CLAIMANT would have made enquiry of the crew, a proper
enquiry would entail questioning the crew, interviewing him, asking why he left his previous job.127
In fact, a crew can be technically incompetent even if it has performed adequately for years.128
69. The Vessel was new which started its operation only from the 1st March 2016, the C/P in
question was in all possibility only the second C/P as the crew was discharging goods at West Coast
which was supposed to be completed on 18th March 2016. The crew did not have enough time to get
familiar with the Vessel which made them specifically incompetent even if they were not generally
incompetent.129 Cl. 64 of C/P explicitly mentions that MV THANOS is capable of ballasting number 4
hold.130 Such specification should have been made familiar to the crew and the Master. Since it was
not communicated as required, the damage to the cargo occurred due to improper usage of the
ballasting system.131 Hence, the Vessel was incompetent, and the CLAIMANT failed to exercise due
diligence to make the Vessel seaworthy. Therefore, they are liable to indemnify the RESPONDENT
100% cargo claim according to clause 8(a) of the C/P.
b. Alternatively, the CLAIMANT shall indemnify the RESPONDENT under Cl. 8(b) of the ICA
70. The addition of the word “and responsibility” prima facie transfers the liability for loading to
the CLAIMANT.132 Cl. 64 of the C/P explicitly casts a duty on the Master at his discretion to conduct
all ballasting/deballasting operations having due regard to stability and seaworthiness of the
Vessel.133 Moreover, CLAIMANT guarantees that the Vessel will always be maintained in safe
condition during ballasting operation.134 The Master being an agent of the CLAIMANT will hold them
126 Moot Scenario, 1. 127Owners of Cargo Lately Laden on Board the Makedonia v. Owners of the Makedonia – “The Makedonia” [1962] 1 Lloyd’s Law Report 316. 128Homburg Houtimport B.V. v. Agrosin Private Ltd. and Others - “The Starsin” [2003] 1 Lloyd’s Rep. 571. 129Roger White, The Human Factor in Unseaworthiness Claims, 225-226; Seaboard Offshore Ltd. v. Secretary of State for Transport- “The Safe Carrier” [1994] 1 WLR 541. 130 Moot Scenario, 13. 131 Moot Scenario, 46. 132The A B Marintrans v. Comet Shipping Co. Ltd. – “The Shinjitsu Maru No. 5” [1985] 1 Lloyd’s Rep. 568. 133 Moot Scenario, 12. 134 Id.
Team 25 Memorial for Respondent
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vicariously liable for all cargo operation whether or not falling “within the master’s province”.135
The Mekon Survey Report mentions that the cause of the damage was negligence of the crewman in
opening the wrong valve,136 and the phrase “at Charterer’s risk” will not normally be effective to
transfer responsibility away from the CLAIMANT in a case where they or their crew are negligent.137
The RESPONDENT’S obligation to load, stow and discharge is that of reasonable care, the RESPONDENT
does not need to supervise loading and unloading or to warn of open and obvious conditions.138
Hence, this shows the causative unseaworthiness which therefore entitles the RESPONDENT to 50%
contribution of the damage.139
135MSC Mediterranean Shipping Co. SA v. Alianca Bay Shipping Co. – “The Argonaut” [1985] 2 Lloyd’s Rep. 216. 136 Moot Scenario, 46. 137Exercise Shipping Co. Ltd. v. Bay Maritime Lines Ltd. – “The Fantasy” [1991] 2 Lloyd’s Rep. 391. 138Dahlen v. Gulf Crews, [2002] AMC 566. 139TERENCE COGHLIN, JOHN D. KIMBALL, ANDREW W. BAKER, THOMAS H. BEDLKNAP, JULIAN KENNY, TIME CHARTERS 377 (Informa Law, 7th ed., 2014).
Team 25 Memorial for Respondent
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REQUEST FOR RELIEF
For the reasons set out above, RESPONDENT seeks the following declarations:
a. declaration that the tribunal has the jurisdiction to adjudicate the matter at hand (I);
b. declaration that the Vessel was off-hire during the period of 7th May to 26th June (II);
c. declaration that RESPONDENT is not responsible for the breach of the charter party. Even if
found liable, then the liability would be limited to the extent of USD30,000 (III);
d. an award of 100% indemnification of cargo claim and if found liable then also 50%
indemnification (IV);
e. an award for interest @5% compounded on the sums decided pursuant to § 49(3) (b) of
Arbitration Award;
f. any other relief as the Tribunal deems fit.