MARITIME LAW ASSOCIATION OF SINGAPORE 2020 MOOTING COMPETITION By a time charter on the NYPE form Head Pte Ltd (“Head Owners”) chartered their vessel “THREE CORNERS” ("the Vessel”) to Clew Pte Ltd (“Charterers”) for a period of 12 months from 1 January - 31 December 2017. The time charter incorporated the Inter Club Agreement 1996, as amended in 2011 (“the ICA)”. By a booking note dated 1 March 2017 on the Charterers’ house form between the Charterers as carrier and Tack Pte Ltd as merchant, the Charterers agreed to carry a cargo of wind turbine equipment from Singapore to Perth, Australia. Upon loading a bill of lading was issued by the Charterers as the carrier, also on their house form, at Singapore dated 5 March 2017. The bill of lading was signed by Charterers and is a Charterer’s bill - that is, a contract between the Charterers as contracting carrier and the shipper. Tack Pte Ltd (“the Shipper”) was named as the shipper and consign ee. Neither the booking note nor the bill of lading was at any time sent or copied to Head Owners, although pro-forma copies of both were at all times available on the Charterers’ web site. Both contracts contained a Singapore law and arbitration clause, to be conducted in accordance with the rules of the SCMA. On 25 March 2017 the Vessel’s crew accidentally pumped water into the No 2 cargo hold. The cargo stowed in that hold was partially submerged in water as a result. Head Owners promptly informed the Charterers of the incident, who replied the same day: “We hold the Head Owners fully responsible for all Charterers’ liabilities, costs and expenses resulting from the crew’s negligence. We will arrange for a surveyor to attend at the discharge port and invite you to do likewise. Please acknowledge receipt of this notification.” A survey was held upon discharge on 1 April 2017, attended by surveyors for the Shipper, for Charterers and for Head Owners. Although it was clear the cargo had suffered some damage, the extent of it and the cost of repairs were difficult to assess at that stage. The Shipper has not yet quantified its claim or formally commenced suit, nor clearly articulated how and under which contract it intends to bring its claim. In mid-March 2018, when the 12 month time bar under the Hague-Visby Rules was approaching, the Shipper requested a 3 month extension of time for commencement of suit from the Charterers, who in turn wrote to Head Owners saying “Cargo interests have asked us for a 3 month extension of time and therefore we ask you to provide us with the same extension”. Owners responded
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MARITIME LAW ASSOCIATION OF SINGAPORE
2020 MOOTING COMPETITION
By a time charter on the NYPE form Head Pte Ltd (“Head Owners”) chartered their
vessel “THREE CORNERS” ("the Vessel”) to Clew Pte Ltd (“Charterers”) for a period
of 12 months from 1 January - 31 December 2017. The time charter incorporated the
Inter Club Agreement 1996, as amended in 2011 (“the ICA)”.
By a booking note dated 1 March 2017 on the Charterers’ house form between the
Charterers as carrier and Tack Pte Ltd as merchant, the Charterers agreed to carry a cargo
of wind turbine equipment from Singapore to Perth, Australia.
Upon loading a bill of lading was issued by the Charterers as the carrier, also on their
house form, at Singapore dated 5 March 2017. The bill of lading was signed by Charterers
and is a Charterer’s bill - that is, a contract between the Charterers as contracting carrier
and the shipper. Tack Pte Ltd (“the Shipper”) was named as the shipper and consignee.
Neither the booking note nor the bill of lading was at any time sent or copied to Head
Owners, although pro-forma copies of both were at all times available on the Charterers’
web site. Both contracts contained a Singapore law and arbitration clause, to be
conducted in accordance with the rules of the SCMA.
On 25 March 2017 the Vessel’s crew accidentally pumped water into the No 2 cargo
hold. The cargo stowed in that hold was partially submerged in water as a result. Head
Owners promptly informed the Charterers of the incident, who replied the same day:
“We hold the Head Owners fully responsible for all Charterers’ liabilities, costs
and expenses resulting from the crew’s negligence. We will arrange for a surveyor
to attend at the discharge port and invite you to do likewise. Please acknowledge
receipt of this notification.”
A survey was held upon discharge on 1 April 2017, attended by surveyors for the Shipper,
for Charterers and for Head Owners. Although it was clear the cargo had suffered some
damage, the extent of it and the cost of repairs were difficult to assess at that stage. The
Shipper has not yet quantified its claim or formally commenced suit, nor clearly
articulated how and under which contract it intends to bring its claim.
In mid-March 2018, when the 12 month time bar under the Hague-Visby Rules was
approaching, the Shipper requested a 3 month extension of time for commencement of
suit from the Charterers, who in turn wrote to Head Owners saying
“Cargo interests have asked us for a 3 month extension of time and therefore we
ask you to provide us with the same extension”.
Owners responded
“We grant the extension requested provided the matter is not already time-
barred.”
As each 3 month period neared its end the Shipper asked the Charterers for another 3
month extension of time. Messages in materially similar terms to those set out above
were exchanged between Charterers and Head Owners in June, September and December
2018, and in March 2019 and June 2019. In June 2019 In September 2019, the Shipper
asked the Charterers for a yet further 3 months extension and Charterers made a request
to Head Owners in the same terms as their previous requests set out above.
But this time the Head Owners responded that Charterers’ claim against them could only
lie under the ICA and had become time barred under the terms of that agreement, on the
grounds that: (i) Charterers did not give written notification of the Cargo Claim within
24 months of the date of delivery of the Cargo, as required by clause 6 of the ICA, and
(ii) the extensions of time granted by them had only related to a prospective cargo claim
under the Hague-Visby Rules and did not extend Charterers’ time for giving notification
of a claim under the ICA. The Head Owners said the Charterers’ claim was therefore
waived and absolutely barred.
Clause 6 of the ICA provides as follows:
“Time Bar
(6) Recovery under this Agreement by an Owner or Charterer shall be deemed to
be waived and absolutely barred unless written notification of the Cargo Claim
has been given to the other party to the charterparty within 24 months of the date
of delivery of the cargo or the date the cargo should have been delivered, save
that, where the Hamburg Rules or any national legislation giving effect thereto
are compulsorily applicable by operation of law to the contract of carriage or to
that part of the transit that comprised carriage on the chartered vessel, the period
shall be 36 months. Such notification shall if possible include details of the
contract of carriage, the nature of the claim and the amount claimed.”
Charterers responded that (i) compliance with all the requirements of clause 6 is not a
requirement of an effective notification, and they had adequately notified their claim so
that it had not become barred; alternatively (ii) the several extensions of time granted by
the Owners should be understood as extending time for giving notification under clause 6
of the ICA.
Owners commenced an arbitration for a declaration that the Charterers’ claim is waived
and time barred. Both issues are now heard as preliminary questions of law.
Inter-Club New York Produce Exchange Agreement 1996 (as amended September 2011)
This Agreement, the Inter-Club New York Produce Exchange Agreement 1996 (as amended September 2011) (the Agreement), made on 1st September 2011 between the P&l Clubs being members of The International Group of P&l Associations listed below (hereafter referred to as "the Clubs") amends the Inter-Club New York Produce Exchange Agreement 1996 in respect of all charterparties specified in clause (1) hereof and shall continue in force until varied or terminated. Any variation to be effective must be approved in writing by all the Clubs but it is open to any Club to withdraw from the Agreement on giving to all the other Clubs not less than three months' written notice thereof, such withdrawal to take effect at the expiration of that period. After the expiry of such notice the Agreement shall nevertheless continue as between all the Clubs, other than the Club giving such notice who shall remain bound by and be entitled to the benefit of this Agreement in respect of all Cargo Claims arising out of charterparties commenced prior to the expiration of such notice.
The Clubs will recommend to their Members without qualification that their Members adopt this Agreement for the purpose of apportioning liability for claims in respect of cargo which arise under, out of or in connection with all charterparties on the New York Produce Exchange Form 1946 or 1993 or Asbatime Form 1981 (or any subsequent amendment of such Forms), whether or not this Agreement has been incorporated into such charterparties.
Scope of application This Agreement applies to any charterparty which is entered into after the date hereof on the New York Produce Exchange Form 1946 or 1993 or Asbatime Form 1981 (or any subsequent amendment of such Forms).
The terms of this Agreement shall apply notwithstanding anything to the contrary in any other provision of the charterparty; in particular the provisions of clause (6) (time bar) shall apply notwithstanding any provision of the charterparty or rule of law to the contrary.
For the purposes of this Agreement, Cargo Claim(s) mean claims for loss, damage, shortage (including slackage, ullage or pilferage), overcarriage of or delay to cargo including customs dues or fines in respect of such loss, damage, shortage, overcarriage or delay and include:
any legal costs claimed by the original person making any such claim;
any interest claimed by the original person making any such claim;
all legal, Club correspondents' and experts' costs reasonably incurred in the defence of or in the settlement of the claim made by the original person, but shall not include any costs of whatsoever nature incurred in making a claim under this Agreement or in seeking an indemnity under the charterparty.
(4) Apportionment under this Agreement shall only be applied to Cargo Claims where:
(a) the claim was made under a contract of carriage, whatever its form, (i) which was authorised under the charterparty; or
(ii) which would have been authorised under the charterparty but for the inclusion in that contract of carriage of Through Transport or Combined Transport provisions, provided that
(iii) in the case of contracts of carriage containing Through Transport or Combined Transport provisions (whether falling within (i) or (ii) above) the loss, damage, shortage, overcarriage or delay occurred after commencement of the loading of the cargo on to the chartered vessel and prior to completion of its discharge from that vessel (the burden of proof being on the Charterer to establish that the loss, damage, shortage, overcarriage or delay did or did not so occur); and
(iv) the contract of carriage (or that part of the transit that comprised carriage on the chartered vessel) incorporated terms no less favourable to the carrier than the Hague or Hague Visby Rules, or, when compulsorily applicable by operation of law to the contract of carriage, the Hamburg Rules or any national law giving effect thereto; and
(b) the cargo responsibility clauses in the charterparty have not been materially amended. A material amendment is one which makes the liability, as between Owners and Charterers, for Cargo Claims clear. In particular, it is agreed solely for the purposes of this Agreement:
(i) that the addition of the words "and responsibility" in clause 8 of the New York Produce Exchange Form 1946 or 1993 or clause 8 of the Asbatime Form 1981, or any similar amendment of the charterparty making the Master responsible for cargo handling, is not a material amendment; and
(ii) that if the words "cargo claims" are added to the second sentence of clause 26 of the New York Produce Exchange Form 1946 or 1993 or clause 25 of the Asbatime Form 1981, apportionment under this Agreement shall not be applied under any circumstances even if the charterparty is made subject to the terms of this Agreement; and
(c) the claim has been properly settled or compromised and paid.
(5) This Agreement applies regardless of legal forum or place of arbitration specified in the charterparty
and regardless of any incorporation of the Hague, Hague Visby Rules or Hamburg Rules therein.
Time Bar
(6) Recovery under this Agreement by an Owner or Charterer shall be deemed to be waived and absolutely barred unless written notification of the Cargo Claim has been given to the other party to the charter- party within 24 months of the date of delivery of the cargo or the date the cargo should have been delivered, save that, where the Hamburg Rules or any national legislation giving effect thereto are compulsorily applicable by operation of law to the contract of carriage or to that part of the transit that comprised carriage on the chartered vessel, the period shall be 36 months. Such notification shall if possible include details of the contract of carriage, the nature of the claim and the amount claimed.
The apportionment
The amount of any Cargo Claim to be apportioned under this Agreement shall be the amount in fact borne by the party to the charterparty seeking apportionment, regardless of whether that claim may be or has been apportioned by application of this Agreement to another charterparty.
Cargo Claims shall be apportioned as follows:
(a) Claims in fact arising out of unseaworthiness and/or error or fault in navigation or management of the vessel: 100% Owners
save where the Owner proves that the unseaworthiness was caused by the loading, stowage, lashing, discharge or other handling of the cargo, in which case the claim shall be apportioned under sub- clause (b).
(b) Claims in fact arising out of the loading, stowage, lashing, discharge, storage or other handling of cargo: 100% Charterers unless the words "and responsibility" are added in clause 8 or there is a similar amendment making the Master responsible for cargo handling in which case: 50% Charterers 50% Owners
save where the Charterer proves that the failure properly to load, stow, lash, discharge or handle the cargo was caused by the unseaworthiness of the vessel in which case: 100% Owners
(c) Subject to (a) and (b) above, claims for shortage or overcarriage: 50% Charterers 50% Owners unless there is clear and irrefutable evidence that the claim arose out of pilferage or act or neglect by one or the other (including their servants or sub-contractors) in which case that party shall then bear 100% of the claim.
(d) All other cargo claims whatsoever (including claims for delay to cargo): 50% Charterers 50% Owners unless there is clear and irrefutable evidence that the claim arose out of the act or neglect of the one or the other (including their servants or sub-contractors) in which case that party shall then bear 100% of the claim.
Security
(9) If a party to the charterparty provides security to a person making a Cargo Claim, that party shall be entitled upon demand to acceptable security for an equivalent amount in respect of that Cargo Claim from the other party to the charterparty, regardless of whether a right to apportionment between the parties to the charterparty has arisen under this Agreement provided that:
(a) written notification of the Cargo Claim has been given by the party demanding security to the other party to the charterparty within the relevant period specified in clause (6); and
(b) the party demanding such security reciprocates by providing acceptable security for an equivalent amount to the other party to the charterparty in respect of the Cargo Claim if requested to do so.
Governing Law
(10) This Agreement shall be subject to English Law and the exclusive Jurisdiction of the English Courts, unless it is incorporated into the charterparty (or the settlement of claims in respect of cargo under the charterparty is made subject to this Agreement), in which case it shall be subject to the law and jurisdiction provisions governing the charterparty.
American Steamship Owners Mutual Protection & Indemnity Association, Inc. Assuranceforeningen Gard
Gard P&I (Bermuda) Ltd Assuranceforeningen Skuld
The Britannia Steam Ship Insurance Association Ltd.
The Japan Ship Owners' Mutual Protection and Indemnity Association The London Steam-Ship Owners' Mutual Insurance Association Ltd. The North of England Protecting and Indemnity Association Ltd.
The Shipowners' Mutual Protection and indemnity Association (Luxembourg) Skuld Mutual Protection and Indemnity Association (Bermuda) Ltd.
The Standard Steamship Owners’ Protection and Indemnity Association (Asia) Ltd The Standard Steamship Owners' Protection & Indemnity Association (Bermuda) Ltd. The Standard Steamship Owners’ Protection and Indemnity Association (Europe) Ltd The Standard Steamship Owners’ Protection and Indemnity Association (London) Ltd The Steamship Mutual Underwriting Association Ltd
The Steamship Mutual Underwriting Association (Bermuda) Ltd. Sveriges Angfartygs Assurans Forening (The Swedish Club)
The United Kingdom Mutua! Steam Ship Assurance Association (Bermuda) Ltd. United Kingdom Mutual Steam Ship Assurance Association (Europe) Ltd
The West of England Ship Owners Mutual Insurance Association (Luxembourg)
SCMA RULES 3RD EDITION (OCTOBER 2015)
MODEL CLAUSES
A) SCMA BIMCO Arbitration Clause (2013) (Introduced in Nov 2012 for use with BIMCO Documents, Agreements and Forms)
This Contract shall be governed by and construed in accordance with Singapore */ English* law.
Any dispute arising out of or in connection with this Contract, including any question regarding
its existence, validity or termination shall be referred to and finally resolved by arbitration in
Singapore in accordance with the Singapore International Arbitration Act (Chapter 143A) and any
statutory modification or re-enactment thereof save to the extent necessary to give effect to the
provisions of this Clause.
The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore
Chamber of Maritime Arbitration (SCMA) current at the time when the arbitration proceedings are
commenced.
The reference to arbitration of disputes under this clause shall be to three arbitrators. A party
wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such
appointment in writing to the other party requiring the other party to appoint its own arbitrator and
give notice that it has done so within fourteen (14) calendar days of that notice and stating that it
will appoint its own arbitrator as sole arbitrator unless the other party appoints its own arbitrator
and gives notice that it has done so within the fourteen (14) days specified. If the other party does
not give notice that it has done so within the fourteen (14) days specified, the party referring a
dispute to arbitration may, without the requirement of any further prior notice to the other party,
appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of
a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for
the appointment of a sole arbitrator.
In cases where neither the claim nor any counterclaim exceeds the sum of USD 150,000 (or such
other sum as the parties may agree) the arbitration shall be conducted before a single arbitrator
in accordance with the SCMA Small Claims Procedure current at the time when the arbitration
proceedings are commenced.
*Delete whichever does not apply. If neither or both are deleted, then English law shall apply by default.
B) SCMA Arbitration Clause
“Any and all disputes arising out of or in connection with this contract, including any question
regarding its existence, validity or termination, shall be referred to and finally resolved by
arbitration in Singapore in accordance with the Arbitration Rules of the Singapore Chamber of
Maritime Arbitration (“SCMA Rules”) for the time being in force at the commencement of the
arbitration, which rules are deemed to be incorporated by reference in this clause”.
C) SCMA Bunker Arbitration Clause
Any disputes arising out of or in connection with this contract, including any question regarding its
existence, validity or termination, shall be referred to and finally resolved by arbitration at SCMA
in accordance with the Singapore Bunker Claims Procedure (“SBC Terms”) for the time being in
force at the commencement of the arbitration which terms are deemed to be incorporated by
reference into this clause
D) SCMA Arb-Med-Arb Clause
The parties further agree that following the commencement of arbitration, they will attempt in
good faith to resolve the disputes referred to arbitration through mediation at [one of the following:]
[Singapore Mediation Centre (“SMC”)]
[Singapore International Mediation Centre (“SIMC”)]
[any other recognised mediation institution to be identified], [delete as appropriate],
in accordance with the SCMA AMA Protocol for the time being in force [refer to Schedule C]. Any
settlement reached in the course of the mediation shall be referred to the Arbitral Tribunal
appointed in accordance with the SCMA Rules and may be made a consent Award on agreed
terms.
Comment
It is strongly recommended that an additional paragraph determining the governing law of the
contract be included into the SCMA Arbitration Clauses (B&C).
An example is provided below:
This Contract shall be governed by and construed in accordance with Singapore / English Law *
(Select one)
*In the event that no governing law is selected, the default governing law shall be Singapore Law.
INDEX
RULE 1
Definitions
Page
1
RULE 2 Scope of Application Page 1
RULE 3 Notice, Calculation of Periods of Time Page 1
RULE 4 Commencement of Arbitration Page 2
RULE 5 Response by Respondent Page 2
RULE 6 Appointment of Tribunal Page 3
RULE 7 Multi-party Appointment of the Tribunal Page 4
RULE 8 Service of Case Statements Page 4
RULE 9 Contents of Case Statements Page 4
RULE 10 Default in Serving of Case Statements Page 5
RULE 11 Further Written Statements Page 5
RULE 12 Tribunal’s Fees Page 5
RULE 13 Tribunal’s Security for Costs Page 5
RULE 14 Appointment of Substitute Arbitrator Page 6
RULE 15 Independence and Impartiality of the Tribunal Page 6
RULE 16 Challenge to the Arbitrators Page 6
RULE 17 Decision on Challenge Page 7
RULE 18 Removal of the Tribunal Page 7
RULE 19 Conduct of the Proceedings in the Event of the
Substitution of Arbitrator(s)
Page 8
RULE 20 Jurisdiction of the Tribunal Page 8
RULE 21 Applicable Law Page 8
RULE 22 Juridical Seat of Arbitration Page 8
RULE 23 Language of Arbitration Page 9
RULE 24 Interpreters Page 9
RULE 25 Conduct of the Proceedings Page 9
RULE 26 Communications between Parties and the Tribunal Page 9
RULE 27 Party Representatives Page 10
RULE 28 Hearings Page 10
RULE 29 Booking Fees Page 10
RULE 30 Witnesses Page 11
RULE 31 Experts Appointed by the Tribunal Page 12
RULE 32 Closure of Proceedings Page 12
RULE 33 Additional Powers of the Tribunal Page 12
RULE 34 Decision Making by the Tribunal Page 13
RULE 35 Preliminary Meetings Page 13
RULE 36 The Award Page 14
RULE 37 Currency and Interest Page 15
RULE 38 Additional Award Page 15
RULE 39 Correction of Awards and Additional Awards Page 15
RULE 40 Settlement Page 16
RULE 41 Costs Page 16
RULE 42 Fund Holding Terms and Charges Page 17
RULE 43 Waiver Page 17
RULE 44 Confidentiality Page 17
RULE 45 Exclusion of Liability Page 18
RULE 46 Small Claims Procedure Page 18
RULE 47 SCMA Expedited Arbitral Determination of Collision Claims