CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012 QUEENSLAND UNIVERSITY OF TECHNOLOGY IN THE MATTER OF AN ARBITRATION HELD AT BRISBANE MEMORANDUM FOR THE CLAIMANT ON BEHALF OF: AGAINST: MARKKA TRADING COMPANY 10 CROW STREET SCHILLING LIRA STEAMSHIP COMPANY LEVEL 4, WEST CIRCLE PESETA CLAIMANT RESPONDENT TEAM NUMBER 14 TIM ALEXANDER, MICHELLE COWAN, EMMA HIGGINS AND LIANNA MARTINS
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CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
QUEENSLAND UNIVERSITY OF TECHNOLOGY
IN THE MATTER OF AN ARBITRATION HELD AT BRISBANE
MEMORANDUM FOR THE CLAIMANT
ON BEHALF OF: AGAINST: MARKKA TRADING COMPANY 10 CROW STREET SCHILLING
LIRA STEAMSHIP COMPANY LEVEL 4, WEST CIRCLE
PESETA
CLAIMANT RESPONDENT
TEAM NUMBER 14
TIM ALEXANDER, MICHELLE COWAN, EMMA HIGGINS AND LIANNA MARTINS
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
MEMORANDUM FOR THE CLAIMANT
TEAM NUMBER 14
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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TABLE OF CONTENTS
A. LIST OF ABBREVIATIONS ....................................................................................................... III
B. LIST OF AUTHORITIES ............................................................................................................ IV
C. STATEMENT OF FACTS .............................................................................................................. 1
D. QUESTIONS PRESENTED ........................................................................................................... 1
E. ARGUMENTS PRESENTED ......................................................................................................... 3
1. THE ARBITRATION PANEL HAS JURISDICTION TO HEAR THIS DISPUTE ................ 3
1.1. ANY CHALLENGE TO THE QUALIFICATIONS OF THE ARBITRATORS MUST BE HEARD IN THE
SUPREME COURT OF QUEENSLAND ...................................................................................................... 4
1.2. ALTERNATIVELY, THE RESPONDENT CANNOT CHALLENGE THE APPOINTMENT OF MR
PAPANDREOU ON THE GROUNDS THAT HE IS INCOMPETENT OR UNSUITABLE ...................................... 4
2. IN BREACH OF THE CHARTERPARTY, THE VESSEL DEVIATED TO THE PORT OF
Cooke, J H S and R R Cornah, Lowndes and Rudolf: The Law of General Average and the
York-Antwerp Rules (Sweet & Maxwell, 13th
ed, 2008)
Girvin, Stephen, Carriage of Goods by Sea (Oxford University Press, 2nd
ed, 2011)
Lambeth, R J, Templeman on Marine Insurance (Pitman Publishing, 6th
ed, 1986)
Redfern, A et al, Law and Practice of International Commercial Arbitration (Sweet &
Maxwell London, 4th ed, 2004)
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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C. STATEMENT OF FACTS
1. The Claimant is engaged in trade, and operates from Schilling and owns the Berth. The
Respondent operates from Peseta, is engaged in the business of shipping cargo, operates
from Peseta and owns the Vessel.
2. In November 2010, the Claimant and Respondent negotiated a contract of carriage from
Escudo to Schilling. On 16 November 2010, the Claimant agreed to the terms proposed by
the Respondent, save that all reference to 14 days in Clause 25(e)(ii) be changed to 30
days.
3. On 30 November 2010, the Claimant entered into the Charterparty with the Respondent to
ship 15,000mt of Ammonium Nitrate from Escudo to Schilling. Clause 36 of the
Charterparty provided ―any disputes arising out of or in connection with‖ the Charterparty
be resolved by arbitration in Brisbane according to the MLAANZ Arbitration Rules.
4. On 25 December 2010, the Vessel completed loading and proceeded to Schilling. On 3
January 2011, Schilling began to endure extreme weather conditions and at 9:00am on 11
January 2011, Schilling was closed until further notice due to inclement weather
conditions.
5. On 11 January 2011, the Respondent wrote to the Claimant giving notice of a Force
Majeure Event pursuant to Clause 25 of the Charterparty and of its intention to direct the
Master of the Vessel to proceed to the Berth. On 12 January 2011, the Claimant wrote to
the Respondent advising that its declaration of a Force Majeure Event was invalid and
expressly directed the Respondent to remain at Schilling for the port to re-open and not to
deviate to Guilder.
6. On 30 January 2011, the Vessel left anchorage at Schilling and proceeded to Guilder.
While proceeding to Guilder, the Vessel‘s propeller shaft was damaged, such that it could
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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not continue under its own power. The Vessel was drifting and the Respondent engaged the
services of Koruna Salvage and Tow Company to tow the Vessel to the Port of Koruna to
be repaired. On 31 January 2011, the Respondent sent a letter to the Claimant declaring
general average in relation to this event.
7. On 25 February 2011, the Vessel attempted to enter the Port of Guilder, which is a
compulsory pilotage area. Guilder Harbour Control ordered the Vessel to wait for a pilot.
The Vessel advised that it had to proceed to berth immediately in readiness for a further
voyage beginning on 26 February 2011. Despite being ordered that pilotage was not
negotiable, the Vessel proceeded to enter the port without a pilot. The Vessel struck the
Berth and caused significant damage to the Berth and associated port infrastructure.
8. On 26 February 2011, the GMIS prepared a report stating the Vessel had approached the
Berth at too high a speed and was unable to slow and turn as necessary. Consequently the
Vessel had struck the Berth and caused damage to the Berth and associated port
infrastructure.
9. On 1 March 2011, the Claimant wrote to the Respondent denying liability in relation to the
Respondent‘s claim for general average, giving notice of the losses resulting from the
Vessel‘s deviation and damage to the Berth, and requesting payment of those losses. On 10
March 2011, the Respondent wrote to the Claimant denying liability for those losses and
requested payment in relation to the general average incident.
10. On 30 June 2011, the Claimant informed the Respondent that it was referring its claim to
arbitration and that it appointed Mr Silvio Papandreou, a former Prime Minister of a large
ship-owning nation, as an arbitrator. On 1 July 2011, the Respondent appointed Mr Jose
Mengel, LMAA arbitrator for the past 20 years and former Master on a Cape Size vessel,
as an arbitrator.
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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D. QUESTIONS PRESENTED
11. Whether the arbitral panel have jurisdiction to hear this dispute.
12. Whether the Respondent can rely upon Clause 25 to excuse its unjustified deviation.
13. Whether the Respondent is liable for the damage done to the Berth.
14. Whether the Respondent is entitled to limit its liability under the LLMC.
15. Whether the Claimant is liable to make a general average contribution.
E. ARGUMENTS PRESENTED
1. THE ARBITRATION PANEL HAS JURISDICTION TO HEAR THIS DISPUTE
[1] The Charterparty provides the arbitration panel with jurisdiction over ―any dispute arising out
of or in connection with‖ the Charterparty.1 Arbitration clauses are interpreted broadly, and
with the presumption that the parties agreeing the arbitration clause intended the dispute to be
heard before an arbitration tribunal.2 Broadly speaking, this dispute
3 concerns the performance
or non-performance of the Charterparty and the presumption of arbitral jurisdiction has not
been rebutted. Indeed, the Claimant and Respondent have each appointed arbitrators in
accordance with clause 36 of the Charterparty.4 Therefore, the panel has been properly
appointed and has jurisdiction to hear this dispute.
1 Charterparty Clause 36 (a) (Procedural Order No 2, 16).
2 Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45, 89-90 (Allsop J); Fiona Trust &
Holding Corporatioin v Privalov [2007] Bus L R 1719, 1725-1726 (Lord Hoffman). 3 Points of Claim delivered on behalf of Markka Trading Company LLC (Moot Problem 56-7); Points of Defence
and Counter-Claim delivered on behalf of Lira Steamship Company (Moot Problem 58-9). 4 Moot Problem 54-5.
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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1.1. Any challenge to the qualifications of the arbitrators must be heard in the Supreme
Court of Queensland
[2] In the absence of any agreed challenge procedure, a party who objects to the appointment of an
arbitrator must have the arbitrator removed on one of the grounds contained in the governing
legislation.5 Further, the arbitral panel is to ―exercise the jurisdiction and have all the powers
set out in the relevant legislation governing the Arbitration‖.6
[3] The Charterparty does not outline a procedure to be followed where a party wishes to challenge
the appointment of an arbitrator, but does indicate that the arbitration is to be governed by the
Commercial Arbitration Act 1990 (Qld).7 Further, the parties have agreed that any questions of
law arising in the course of the arbitration are to be decided by the Supreme Court of
Queensland.8
[4] Accordingly, the Claimant submits that should the Respondent want to remove an arbitrator, it
must bring the matter before the Supreme Court of Queensland.
1.2. Alternatively, the Respondent cannot challenge the appointment of Mr Papandreou
on the grounds that he is incompetent or unsuitable
[5] In determining the competence and suitability of an arbitrator the relevant question is whether
a satisfactory arbitration can be had.9 The Respondent must demonstrate that Mr Papandreou is
not able to properly perform the functions of an arbitrator.10
5 Commercial Arbitration Act 1990 (Qld) s 44; Oakland Metal Co Ltd v Benaim & Co Ltd [1953] 2 QB 261;
Enterra Pty Ltd v ADI Ltd (2002) 55 NSWLR 521; Korin v McInnes [1990] VR 723. 6 The Maritime Association of Australia and New Zealand Arbitration Rules, 1 July 2007, Rule 15,3.
<http://www.mlaanz.org/Uploads/MLAANZ_Arbitration_Rules.pdf>. 7 Charterparty Clause 36 (d) (Procedural Order No 2, 17).
8 Charterparty Clause 36 (d)(iv) (Procedural Order No 2, 17).
9 Korin v McInnes [1990] VR 723, 726 (Brooking J); Enterra Pty Ltd v ADI Ltd (2002) 55 NSWLR 521.
10 Korin v McInnes [1990] VR 723, 727 (Brooking J).
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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[6] An arbitrator to an international dispute should have an awareness of international trade
relations and the relationships and expectations of trading partners.11
As a former Prime
Minister of a large shipping nation, 12
Mr Papandreou would have acquired extensive
knowledge of international trade negotiations and an understanding of international shipping,
which render him competent and suitable to act as an arbitrator in this dispute.
[7] As a result, the Claimant asserts the Respondent has no ground upon which to challenge the
appointment of Mr Papandreou as an arbitrator.
2. IN BREACH OF THE CHARTERPARTY, THE VESSEL DEVIATED TO THE
PORT OF GUILDER
2.1. The deviation to the Port of Guilder constituted a breach of the Charterparty
[8] The deviation to Guilder amounted to a breach of the Charterparty, which entitled the Claimant
to exercise its right to rescind the Charterparty.
[9] A Charterparty agreement is, by nature, entered into for a specified voyage13
and the shipowner
is obliged to follow the lawful voyage instructions.14
The Charterparty specified the discharge
port15
and the parties agreed, by Clause 1 of the Charterparty, to proceed to the discharge port
specified ―with all reasonable speed‖.16
Therefore, the Charterparty imposed upon the
11
A Redfern et al, Law and Practice of International Commercial Arbitration (Sweet & Maxwell London, 4th
ed,
2004) 233; 4-46. 12
Moot Problem 54. 13
Simon Baughen, Shipping Law (Cavendish Publishing Limited, 2nd
ed, 2001) 9. 14
Total Transport Corp v Arcadia Petroleum Ltd (The Eurus) [1996] 2 Lloyd‘s Rep 408. 15
Charterparty (Procedural Order No 2, 2). 16
Charterparty (Procedural Order No 2, 1).
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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Respondent an obligation not to deviate.17
A vessel deviates if it does not proceed to the
discharge port by the usual and customary course.18
[10] In proceeding to a port other than the discharge port specified by the Charterparty,19
the
Claimant submits the Respondent breached its obligation not to deviate. As a consequence, the
Respondent is in breach of the Charterparty.20
2.2. The deviation by the Respondent to the Port of Guilder was not justified under
Clause 25 of the Charterparty as a Force Majeure Event
[11] The Respondent can avoid liability for its deviation if it is shown that Clause 25 is engaged and
the Respondent followed the procedure required where there is a Force Majeure Event.21
The
Claimant submits that neither requirement has been satisfied.
(a) Clause 25 is not engaged
[12] Clause 25 is only engaged where:
there was a Force Majeure Event; and
the Force Majeure Event delayed, interrupted or prevented the Respondent from
performing its obligations.22
17
Reardon Smith Line Ltd v Black Sea & Baltic General Insurance Co Ltd [1939] AC 562, 584-5; Stephen Girvin,
Carriage of Goods by Sea (Oxford University Press, 2nd
ed, 2011) 401. 18
Balian & Sons v Joly, Victoria & Co Ltd (1890) 6 TLR 34; Davis v Garratt (1830) 6 Bing 716, 725; Stephen
Girvin, Carriage of Goods by Sea (Oxford University Press, 2nd
ed, 2011) 401. 19
Charterparty (Procedural Order No 2, 3); Moot Problem 46. 20
Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 601 (Lord Atkin); Rio Tinto Co v Seed
Shipping Co (1926) 24 Ll.L.R 183. 21
Charterparty Clause 25 (Procedural Order No 2, 11-13); J W Carter, Kate Cahill and Kate Draper, ‗Force
majeure clauses – a timely topic‘ (2011) 26 Australian Environment Review 74, 74. 22
Charterparty Clause 25 (Procedural Order No 2, 11).
CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012
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(i) There was no Force Majeure Event
[13] In declaring an event of Force Majeure, the Respondent pointed to ―inclement weather
conditions‖ and ―flooding‖, which resulted in the Port of Schilling being closed.23
[14] The Claimant accepts that such flooding satisfied the definition of ―flood‖ in Clause 25 (b) of
the Charterparty.24
[15] However, the clause must be read as a whole.25
Clause 25 ends with the words ―at the mines or
Shipper‘s or Receiver‘s works or berths‖.26
The terms ―inclement weather conditions‖ and
―flooding‖ must be read as being limited by these final words.27
As such, it is only where such
events occur at the localities specified by Clause 25 that they will constitute a Force Majeure
Event. In circumstances where there was no confirmation or evidence of flooding or bad
weather at the Receiver‘s berth, Clause 25 does not operate.28
(ii) Alternatively, the Force Majeure Event did not delay, interrupt or prevent the
Respondent from performing its obligations
[16] Even where there is a Force Majeure Event, it must have ―delayed, interrupted or prevented‖
the Respondent from performing its obligations,29
specifically to deliver the cargo to the Port
of Schilling.30
It is not sufficient for the event to have made the voyage more onerous or
difficult.31
23
Moot Problem, 45. 24
Charterparty Clause 25 (Procedural Order No 2, 12). 25