Seventh Draft of Full Claimant Memo - Murdoch University · National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 9 ... Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’)

$Page 1: Seventh Draft of Full Claimant Memo - Murdoch University · National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 9 ... Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’)$
SIXTEENTH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2015

MEMORANDUM FOR CLAIMANT

THE UNIVERSITY OF SYDNEY

TEAM 13

ON BEHALF OF:

AGAINST:

WESTERN TANKERS INC LDT PTE

CLAIMANT/OWNERS DEFENDANT/CHARTERERS

COUNSEL

Henry Cooper

Winnie Liu

Timothy Smartt

Bradley Smith

MEMORANDUM FOR RESPONDENT

I

TWENTY FIRST ANNUAL

WILLEM C. VIS INTERNATIONAL COMMERCIAL ARBITRATION MOOT

12 TO 17 APRIL 2014

MEMORANDUM FOR RESPONDENT

THE UNIVERSITY OF SYDNEY

ON BEHALF OF:

Hope Hospital

1-3 Hospital Road

Oceanside

Equatoriana

RESPONDENT

AGAINST:

Innovative Cancer Treatment Ltd

46 Commerce Road

Capital City

Mediterraneo

CLAIMANT

COUNSEL:

James Argent

Matthew Barry

Heydon Wardell-Burrus

Dominique Yong

TEAM 13 MEMORANDUM FOR CLAIMANT

II

TABLE OF CONTENTS

ABBREVIATIONS ................................................................................................................................. V

LIST OF AUTHORITIES ....................................................................................................................... VI

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

ARGUMENTS ON JURISDICTION .......................................................................................................... 2

I. THE TRIBUNAL HAS JURISDICTION OVER THESE PROCEEDINGS ............................................. 2

A. The arbitration agreement was validly incorporated ........................................................... 2

B. The Parties clearly agreed to the seat and law stated in cl 46(b) ......................................... 2

II. THE TRIBUNAL HAS JURISDICTION TO HEAR A CLAIM FOR THE TORT OF FRAUD ................. 3

A. The tort of fraud is within the scope of the words ‘all disputes arising out of this charter’ 3

ARGUMENTS ON THE MERITS OF THE CLAIM .................................................................................... 5

III. DEFENDANT BREACHED ITS OBLIGATION TO PAY HIRE UNDER THE CHARTERPARTY ........ 5

A. Hire was due and owing on 3 July 2014 .............................................................................. 5

B. The Vessel was not off-hire at any material time ................................................................ 6

1. There was no breach of orders by the Master ................................................................... 7

2. The Charterparty did not provide that the Vessel would go off-hire in the event of a

pirate attack .............................................................................................................................. 8

3. The Master did not exhibit a neglect of duty pursuant to cl 21(a)(ii) ............................... 9

C. The Charterparty was not frustrated by the pirate attack ..................................................... 9

1. The pirate attack was within the contemplation of the Parties ......................................... 9

2. The delay caused by the pirate attack did not radically alter the Parties’ obligations .... 10

IV. ASA2 ACTED ON DEFENDANT'S BEHALF AT ALL RELEVANT TIMES ................................... 11

A. An agency agreement between DEFENDANT and ASA2 should be implied ...................... 11

B. In addition, ASA2 acted on DEFENDANT’s behalf pursuant to the doctrine of apparent

authority ..................................................................................................................................... 12


III

V. DEFENDANT COMMITTED THE TORT OF FRAUD ................................................................... 13

A. DEFENDANT and ASA2 on its behalf made false representations to CLAIMANT ................ 14

B. The representations were made dishonestly ....................................................................... 14

C. DEFENDANT and ASA2 on its behalf intended that CLAIMANT would rely on the

representations ........................................................................................................................... 15

D. CLAIMANT relied on the representations ............................................................................ 15

E. CLAIMANT suffered damage as a result of relying on the representations ......................... 16

ARGUMENTS ON THE MERITS OF THE COUNTER-CLAIM ................................................................ 16

VI. DEFENDANT CANNOT SUCCEED IN A CLAIM ARISING OUT OF ITS ILLEGAL CONDUCT ....... 16

A. DEFENDANT engaged in illegal conduct ............................................................................. 17

B. DEFENDANT’s damage arose out of its illegal conduct ...................................................... 17

VII. CLAIMANT PROVIDED A VESSEL THAT WAS FIT FOR SERVICE .......................................... 18

A. CLAIMANT’s provision of the Master fulfilled its Charterparty obligation ........................ 18

1. CLAIMANT provided a competent master ........................................................................ 18

2. In the alternative, the Master followed DEFENDANT’s instructions ................................ 19

3. In the further alternative, if ASA2 was not DEFENDANT’s agent, CLAIMANT’s provision

of the Master did not cause the loss of cargo ........................................................................ 19

4. CLAIMANT exercised the requisite due diligence in selecting the Master ....................... 20

B. The Master’s decision not to apply the pleaded anti-piracy measures did not breach the

Charterparty ............................................................................................................................... 20

1. The Master was not obliged to implement the pleaded anti-piracy measures ................ 21

2. The Master complied with BMP4 .................................................................................. 22

VIII. CLAIMANT IS NOT LIABLE FOR THE TORT OF CONVERSION ............................................ 22

A. The Master acted in a manner consistent with DEFENDANT’s right to immediate

possession .................................................................................................................................. 23


IV

B. Even if CLAIMANT converted the cargo, it is not liable for the loss of cargo pursuant to art

IV r 2(f) of the Hague-Visby Rules ........................................................................................... 23

IX. CLAIMANT DID NOT BREACH ITS DUTY AS BAILEE OF THE CARGO ..................................... 23

A. CLAIMANT took reasonable care to protect the cargo from piracy .................................... 23

1. CLAIMANT took reasonable care to protect the cargo from piracy by providing a

seaworthy vessel .................................................................................................................... 24

2. The Master took reasonable care by only following instructions from DEFENDANT’s

agent ....................................................................................................................................... 24

B. CLAIMANT is not liable for the loss of cargo as the loss was not caused by CLAIMANT’s

lack of reasonable care ............................................................................................................... 25

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


V

ABBREVIATIONS

ASA Atlantic Services Agency

ASA2 Atlantic STS Agency Ltd (ASA Angola Ltd)

BIMCO Piracy Clause BIMCO Piracy Clause for Time Charter Parties 2013

BMP4 Best Management Practices for Protection against Somalia

Based Piracy (Version 4 – August 2011)

Charterparty Agreement contained in recap including Shelltime 4 proforma

CLAIMANT Western Tankers Inc (Owners)

COB Close of Business

DEFENDANT LDT Pte (Charterers)

GMT Greenwich Mean Time

Hague-Visby Rules International Convention for the Unification of Certain Rules

of Law relating to Bills of Lading 1924 as Amended by the

Brussels Protocol 1968, First Protocol 1968

IMB International Maritime Bureau

Master Captain Stelios Smith

MT Metric Tonnes

Parties CLAIMANT/Owners and DEFENDANT/Charterers

Recap Fully fixed recap

Record 2015 International Maritime Law Arbitration Moot Scenario

Special Provisions Piracy Clause Special Provisions Piracy Clause added to the ST4 proforma

ST4 BIMCO Shelltime 4 proforma (December 2003)

STS Ship-to-ship

Vessel Western Dawn

WAF West Africa


VI

LIST OF AUTHORITIES

CASES AND ARBITRAL AWARDS

Referred to at page:

AIC Ltd v ITS Testing Services (UK Ltd) (‘The Kriti Palm’) [2007] 1 Lloyd’s Rep 555

14

Al Khudairi v Abbey Brokers Ltd [2010] EWHC 1486

14

Anglo-Scottish Beet Sugar Corp Ltd v Spalding Urban DC [1937] 2 KB 607

15

Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191

6

Armagas Ltd v Mundogas SA [1986] AC 717

13

Bangladesh Export Import Co Ltd v Sucden Kerry SA [1995] 2 Lloyd’s Rep 1

10

Bank Line Ltd v Arthur Capel & Co [1919] AC 435

10

Barings plc v Coopers & Lybrand [2002] Lloyd’s Rep PN 395

14

Barrett v Deere (1828) Mood & M 200

13

Barton v Armstrong [1976] AC 104

16

Biggs & Anor v Sotnicks (a firm) & Ors [2002] EWCA Civ 272

14

Black-Clawson v Papierwerke [1981] 2 Lloyd’s Rep 446

2

Bocking Garage v Mazurk, The Times, February 4, 1954

13

BP Exploration Operating Co Ltd v Kvaerner Oilfield Products Ltd [2005] 1 Lloyd’s Rep 307

4

Brook’s Wharf and Bull Wharf Ltd v Goodman Brothers [1937] 1 KB 534

25

Burrows v Rhodes [1899] 1 QB 816

17

C v D [2007] EWHC 1541 (Comm)

2, 3

C v D [2008] 1 Lloyd’s Rep 239

2

China Pacific SA v Food Corp India (‘The Winston’) [1982] AC 939

24

Clark v Urquhart [1930] AC 28

16

Clunis v Camden and Islington HA [1998] QB 978 17


VII

Clydesdale Bank Ltd v Paton [1896] AC 381

14

Dadourian v Simms [2009] 1 Lloyd’s Rep 601

15, 16

Davis Contractors Ltd v Fareham UDC [1956] AC 696

9, 10

Derry v Peek (1889) 14 App Cas 337

14, 15

Dhanani v Crasnianski [2011] 2 All ER (Comm) 799

6

Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158

16

Edgington v Fitzmaurice (1885) 29 Ch D 459

14

Edwinton Commercial Corp v Tsavliris Russ (Worldwide Salvage & Towage) Ltd (‘The Sea Angel’) [2007] EWCA Civ 547

9, 10

Fibrosa Spolka Ackcynjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32

10

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

3, 4

Ford v Beech (1848) 118 ER 1029

4

Forrest v Glasser [2006] 2 Lloyd’s Rep 392

4

Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603

6

Freeman & Lockyer v Brockhurst Park Properties (Mangal) Ltd [1964] 2 QB 480

13

Galbraith & Grant v Block [1922] 2 KB 155

13

Garnac Grain Co Inc v HMF Faure and Fairclough Ltd [1968] AC 1130

11

Glyn Mills Currie & Co v East and West India Dock Co (1882) 7 App Cas 591

23

Glynn v Margetson & Co [1893] AC 351

6

Gray v Thames Trains Ltd [2009] 1 AC 1339

17

Joseph Constantine S.S. Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154

10

Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29 (Comm)

2

Hamilton v Mendes (1761) 97 ER 787 6


VIII

Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549

11

Hewison v Meridian Shipping Services PTE Ltd [2003] ICR 766

17

Hillas & Co Ltd v Arcos Ltd [1932] All ER 494

6

Hoddesdon v Koos Bros 135 A.2d 702 (NJ, 1957)

13

Holman v Johnson (1775) 1 Cowp 341

17, 18

Homburg Houtimport BV v Agrosin Private Ltd (‘The Starsin’) [2004] 1 AC 715

6

Hongkong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26

18

Hyundai Merchant Marine Co Ltd v Gesuri Chartering Co Ltd [1991] 1 Lloyd’s Rep 100

8

ING Re (UK) Ltd v R & V Versicherung [2006] 2 All ER (Comm) 870

13

International Fina Services AG v Katrina Shipping Ltd [1995] 2 Lloyd’s Rep 344

8

Intertradex SA v Lesieur-Torteaux SARL [1978] 2 Lloyd’s Rep 509

10

Kopitoff v Wilson (1876) 1 QBD 377

21

Kuwait Airways Corp. v Iraqi Airways Co [2002] 2 AC 883

23

Kuwait Petroleum Corp v I&D Oil Carriers Ltd (‘The Houda’) [1994] 2 Lloyd's Rep 541

9

Kuwait Supply Co v Oyster Marine Management (‘The Safeer’) [1994] 1 Lloyd’s Rep 637

10

Lake v Simmons [1927] AC 487

6

Les Laboratoires Servier v Apotex Inc [2015] AC 430

17, 18

Maclaine Watson & Co v Dept of Trade [1988] 3 WLR 1033

11

Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd (‘The Star Sea’) [1995] 1 Lloyd’s Rep 651

18

Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749

4


IX

McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579

6

Mid West Shipping Co v DI Henry [1971] 1 Lloyd’s Rep 375

7

Minister of Food v Reardon Line (1951) 2 Lloyd’s Rep 265

20

Miramar Maritime Corp v Holborn Oil Trading Ltd [1984] AC 676

4, 6

Monde Petroleum SA v Western Zagros Ltd [2015] EWHC 67 (Comm)

4

Moore v Peachey (1891) 7 TLR 748

11

National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675

9

New Falmouth Resorts Ltd v International Hotels Jamaica Ltd (Jamaica) [2013] UKPC 11

13

Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226

10

Pioneer Shipping Ltd v BTP Tioxide Ltd (‘The Nema’) [1982] AC 724

9

Port Swettenham Authority v TW Wu & Co (M) Sdn Bhd [1979] AC 580

24

Pratt v Aigaion Insurance Co SA [2009] 1 Lloyd’s Rep 225

4

President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278

19, 21

Ravennavi SpA v New Century Shipbuilding Ltd [2007] 2 Lloyd’s Rep 24

4

Roberts v Ogilby (1821) 9 Price 269

11

Sea Trade Maritime Corporation v Hellenic Mutual War Risk Association (Bermuda) Limited (‘The Athena’) (No 2) [2007] 1 Lloyd’s Rep 280

2

Select Commodities Ltd v Valdo SA (‘The Florida’) [2007] 1 Lloyd’s Rep 1

10

Sig Bergesen DY & Co v Mobil Shipping & Transportation Co (‘The Berge Sund’) [1993] 2 Lloyd’s Rep 453

6

Sir Lindsay Parkinson & Co Ltd v Commissioners of Works [1949] 2 KB 632

10

Smith v New Court Securities Ltd v Scrimgeour Vickers (Asset 16


X

Management) Ltd [1997] AC 254 Snarski v Barbarich [1969] WAR 46

14

Standard Oil Co of New York v Clan Line Steamers Ltd [1924] AC 100

18

Stargas SPA v Petredec Limited (‘The Sargasso’) [1994] 1 Lloyd's Rep 412

9

Sulamerica v Enesa Engenharia [2012] 1 Lloyd’s Rep 671

3

Tamplin (F A) Steamship Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC 397

10

Tatem (W J) Ltd v Gamboa [1939] 1 KB 132

10

The Captain George K [1970] 2 Lloyd’s Rep 21

10

The Europa [1908] P 84

20

Tinsley v Milligan [1994] 1 AC 340

17

Trade and Transport Inc v Iino Kaiun Kaisha Ltd [1973] 1 WLR 210

10

TTMI Sarl v Statoil ASA [2011] 2 Lloyd’s Rep 220

2

UBC Chartering Ltd v Liepaya Shipping Co Ltd (‘The Liepaya’) [1999] 1 Lloyd's Rep 649

9

Walter Rau Neusser Oel und Fett AG v Cross Pac. Trading Ltd, XXXI Y.B. Comm. Arb. 559

3

Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd [1995] QB 174

11

BOOKS


Baatz, Yvonne, Maritime Law (Informa Law, 3rd ed, 2004)

20

Born, Gary G, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014)

3, 4, 5

Carty, Hazel, An Analysis of the Economic Torts (Oxford University Press, 2nd ed, 2010)

14, 15, 16

Chitty, Joseph, Chitty on Contracts (Sweet and Maxwell, 25th ed, 1983) vol 2

11

Eder, Bernard et al, Scrutton on Charterparties and Bills of Lading 10, 23


XI

(Sweet & Maxwell, 21st ed, 2010) Fleming, John, Fleming’s The Law of Torts (Thomson Reuters, 10th ed, 2011)

14

Munday, Roderick, Agency: Law and Principles (Oxford University Press, 2010)

11

Palmer, Norman Palmer on Bailment (Sweet & Maxwell, 3rd ed, 2009)

24, 25

Redfern, Alan and Martin Hunter, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed, 2009)

2

Steele, Jenny, Tort Law: Text, Cases and Materials (Oxford University Press, 2014)

17

Tan, Cheng-Han, ‘Unauthorised Agency in English Law’ in Danny Busch and Laura J. Macgregor (eds), The Unauthorised Agent: Perspectives from European and Comparative Law (Cambridge University Press, 2009)

13

Todd, Paul, Maritime Fraud and Piracy (Lloyd’s List, 2nd ed, 2010)

5

Watts, Peter and Reynolds F. M. B., Bowstead & Reynolds on Agency (Sweet & Maxwell, 20th ed, 2014)

11, 13

Wilson, John F, Carriage of Goods by Sea (Pearson, 5th ed, 2004)

6, 18, 19, 21

Waincymer, Jeffrey, Procedure and Evidence in International Arbitration (Kluwer Law International, 2012)

22

JOURNAL ARTICLES


Kamal-Deen, Ali, ‘The Anatomy of Gulf of Guinea Piracy’ (2015) 68 Naval War College Review 93

21

NEWSPAPER ARTICLES


James Bridger, ‘The World’s Most Violent Pirates’, USNI News (Baltimore) 12 May 2014

25

STATUTE


Arbitration Act 1996 (UK)

2


XII

MISCELLANEOUS


Best Management Practices for Protection against Somalia Based Piracy (Version 4, August 2011)

22

International Chamber of Commerce Maritime Bureau, Piracy and Armed Robbery Against Ships: Report for the Period 1 January – 31 March 2014 (2014)

21


1

STATEMENT OF FACTS

1. On 26 May 2014, Western Tankers (CLAIMANT) and LDT Pte (DEFENDANT) entered into an

amended ST4 charterparty for a term of three months, plus or minus thirty days. The following

day, DEFENDANT issued the Voyage Orders instructing CLAIMANT to transport approximately

30,000.MT of aviation fuel and 72,000.MT of gasoil from Singapore to Luanda, discharge the

cargo by way of STS transfer and redeliver the Vessel at Gibraltar.

2. Before departing, CLAIMANT requested a sufficient supply of bunkers to complete the voyage.

DEFENDANT only provided enough bunkers for part of the journey, but assured CLAIMANT that

more bunkers would be available in South Africa. The Vessel left Singapore on 8 June.

3. CLAIMANT’s Master navigated the Vessel to East Africa without incident. On 20 June, the

Master asked DEFENDANT to supply bunkers at Durban. DEFENDANT failed to do so. The Master

asked DEFENDANT again on 25 June to provide information about the supply of bunkers.

CLAIMANT answered by stating that bunkers would be available ‘on arrival STS Area 1’.

4. The next day, the Master was contacted by William Anya from ASA2, who identified himself as

DEFENDANT’s STS coordinator. Anya instructed the Master to proceed to a newly-provided STS

location and assured the Master that bunkers would be available upon arrival.

5. On 4 July, the Master arrived at the STS location. Soon after notifying DEFENDANT and Anya of

the Vessel’s location, the Vessel was seized by unknown assailants and held for thirteen days

during which approximately 28,000 MT of the gasoil was stolen. The Vessel was severely

damaged and five crew members were injured.

6. CLAIMANT initiated arbitral proceedings on 1 November 2014.


2

ARGUMENTS ON JURISDICTION

I. THE TRIBUNAL HAS JURISDICTION OVER THESE PROCEEDINGS

1. This Tribunal has the power to determine its own jurisdiction in accordance with the doctrine of

competence-competence. 1 The Parties have a valid arbitration agreement. The standard

arbitration clause contained within cl 46(b) of ST4 was validly incorporated into the

Charterparty, as evidenced by the Recap (A). In accordance with cl 46(b), the Parties agreed to

London arbitration governed by English law (B).

A. The arbitration agreement was validly incorporated

2. The arbitration agreement contained in cl 46(b) was validly incorporated into the Charterparty.2

The use of general words is sufficient to incorporate an arbitration agreement where the parties

have evinced a clear intention to incorporate standard terms.3 The Parties clearly intended to

incorporate all of the terms of ST4 because it formed the basis of the Charterparty, as evidenced

by the Recap.4

B. The Parties clearly agreed to the seat and law stated in cl 46(b)

3. The proper seat and forum of the arbitration is London, as provided by cl 46(b) of ST4.

Reference to the Arbitration Act 1996 in cl 46(b) is an express reference to the law governing

the procedure of the arbitration.5 The law of the arbitral seat being English law is consistent

with the law governing the substantive contract pursuant to cl 46(a). In the great majority of

cases, these laws are the same.6 The recognition of the autonomy of the parties to select the

1 Alan Redfern and Martin Hunter, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed, 2009) 347. 2 Record 5. 3 Sea Trade Maritime Corporation v Hellenic Mutual War Risk Association (Bermuda) Limited (‘The Athena’) (No 2) [2007] 1 Lloyd’s Rep 280, 291 [74] (Langley J); Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29 (Comm) [51] (Clarke J); TTMI Sarl v Statoil ASA [2011] 2 Lloyd’s Rep 220, 230 [50]–[51] (Beatson J). 4 Record 5. 5 C v D [2007] EWHC 1541 (Comm) [27] (Cooke J), upheld in C v D [2008] 1 Lloyd’s Rep 239, 239–40 (Longmore LJ). 6 Black-Clawson v Papierwerke [1981] 2 Lloyd’s Rep 446, 483 (Mustill J).


3

arbitral seat is central to international arbitration.7 The Tribunal should give effect to the Parties’

express agreement over any supposed implied agreement.8

4. DEFENDANT cannot rely on the email dated 23 May 2014 to argue that the Parties rejected

London as the arbitral seat.9 The Parties reviewed ST4 and made line by line amendments

between 23 and 26 May.10 DEFENDANT never expressed an intention to arbitrate in Singapore,

nor did it nominate an alternative arbitral seat to London. DEFENDANT approved the

Charterparty and lifted the subject to management clause on 26 May.11 The ‘Law and

Litigation’ provision within the Recap was left deliberately blank as the Parties had already

agreed to the arbitration agreement within cl 46(b). DEFENDANT therefore agreed to London as

the seat and forum of the arbitration.

II. THE TRIBUNAL HAS JURISDICTION TO HEAR A CLAIM FOR THE TORT OF FRAUD

5. The Parties intended that a claim for the tort of fraud be within the Tribunal’s jurisdiction.

Clause 46(b) of ST4 provides that ‘all disputes arising out of this charter shall be referred to

arbitration in London’. These words evince a clear intention that arbitration was to be the sole

method for resolving disputes stemming from the Parties’ commercial relationship. CLAIMANT

submits that the tort of fraud is within the scope of cl 46(b) (A).

A. The tort of fraud is within the scope of the words ‘all disputes arising out of this charter’

6. The words of cl 46(b) manifest an intention that all disputes arising out of performance of the

Charterparty were to be adjudicated conclusively by one tribunal. These words govern the scope

of the Tribunal’s jurisdiction as that jurisdiction arises from the Parties’ consent.12 In construing

7 Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 2081. 8 C v D [2007] EWHC 1541 (Comm) [27] (Cooke J); Sulamerica v Enesa Engenharia [2012] 1 Lloyd’s Rep 671, 678 [25] (Moore-Bick LJ). 9 Record 2. 10 Record 5–12. 11 Procedural Order No 2 [20]. 12 Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 1405–6; Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 256 [5] (Lord Hoffman); Walter Rau Neusser Oel und Fett AG v Cross Pac. Trading Ltd, XXXI Y.B. Comm. Arb. 559, 564 (Allsop J) (Australian Federal Court, 2005).


4

the terms of a commercial contract, the Tribunal should consider the agreement as a whole,13

and adopt a commercially sensible interpretation.14 There is a strong presumption in favour of

one-stop arbitration in the interpretation of arbitration clauses,15 which was conclusively

established in Fiona Trust,16 and recently endorsed.17 In Fiona Trust it was held that the overly

technical approaches to construing arbitration agreements should be abandoned.18 Instead, there

is a presumption that rational businesspeople ‘are likely to have intended that any dispute

arising out of the relationship … be decided by the same tribunal.’19 This presumption should

prevail except where clear language excludes certain matters.20

7. The tort of fraud arises out of the Charterparty because the fraud arose in connection with

DEFENDANT's failure to perform a specific contractual obligation. Providing bunkers pursuant to

cl 7 was a key obligation of DEFENDANT under the Charterparty. DEFENDANT’s fraudulent

conduct was committed at critical points during the voyage and went to the very heart of the

bargain between the Parties. CLAIMANT’s action for fraud concerns the conventional obligation

of a charterer to provide bunkers and is intimately connected to the substance of the

Charterparty. Giving the words of cl 46(b) their natural and ordinary meaning in a commercial

context,21 the clause evinces a clear intention for exactly this type of dispute to be covered.

8. In Fiona Trust, the fraud was in the form of pre-contractual bribes that induced parties to enter

unprofitable charterparties. It was held that the ST4 arbitration clause did not exclude questions

of the validity of the contract from the jurisdiction of the tribunal. CLAIMANT submits that if

fraud committed when there was no contract is sufficiently connected to the contract to confer

13 Ford v Beech (1848) 118 ER 1029, 1034 (Coleridge J); Ravennavi SpA v New Century Shipbuilding Ltd [2007] 2 Lloyd’s Rep 24, 27 [12] (Moore-Bick LJ). 14 Miramar Maritime Corp v Holborn Oil Trading Ltd [1984] AC 676, 682 (Lord Diplock). 15 Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 1432–3. 16 Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254. 17 Monde Petroleum SA v WesternZagros Ltd [2015] EWHC 67 (Comm) [33] (Popplewell J). 18 Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 257 [12] (Lord Hoffman). 19 Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 257 [13] (Lord Hoffman). 20 Fiona Trust & Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 256 [6] (Lord Hoffman). 21 BP Exploration Operating Co Ltd v Kvaerner Oilfield Products Ltd [2005] 1 Lloyd’s Rep 307, 321–2 [93] (Colman J); Forrest v Glasser [2006] 2 Lloyd’s Rep 392, 397 [21] (Ward LJ); Pratt v Aigaion Insurance Co SA [2009] 1 Lloyd’s Rep 225, 229 [12] (Sir Anthony Clarke MR); Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, 768 (Lord Steyn).


5

jurisdiction on an arbitral tribunal, then the present case must fall within this Tribunal’s

jurisdiction. The relevant conduct, though pleaded in tort, is conceptually inseparable from the

substantive obligations created by the Charterparty. The advantages of arbitration, such as

efficiency, flexibility and finality, support an inclusive construction that brings the tort of fraud

within the Tribunal’s jurisdiction.22 In a case where the fraud occurred during the performance

of one of DEFENDANT’s most important contractual obligations, only erroneous construction and

disregard of high authority could lead to the exclusion of fraud from the Tribunal’s jurisdiction.

ARGUMENTS ON THE MERITS OF THE CLAIM

III. DEFENDANT BREACHED ITS OBLIGATION TO PAY HIRE UNDER THE CHARTERPARTY

9. DEFENDANT has not paid hire due and owing to CLAIMANT under the terms of the Charterparty.

Hire was due and owing on 3 July 2014 (A). The Vessel was not off-hire at any point during the

voyage (B), and DEFENDANT cannot rely on frustration to justify its failure to pay hire (C).

CLAIMANT does not dispute that the seizure was a ‘pirate attack’, notwithstanding that there is

no settled definition of piracy in private law.23

A. Hire was due and owing on 3 July 2014

10. Under the terms of the Charterparty, payment for the second hire period was due and owing by

COB GMT on 3 July. The Vessel went on-hire on 4 June.24 Accordingly, the second hire period

commenced on 4 July. Clause 9 of ST4 relevantly provides that ‘payment of hire shall be made

in immediately available funds … per calendar month in advance’. In construing cl 9, the proper

approach is to give the clause a businesslike interpretation, with regard to the circumstances of

22 Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 82. 23 Paul Todd, Maritime Fraud and Piracy (Lloyd’s List, 2nd ed, 2010) 3–4. 24 Record 28–9.


6

commerce with which it deals, and the objects that it is intended to secure.25 The words should

be read fairly and broadly, without being too astute or subtle in finding defects.26

11. Adopting this approach, the words ‘immediately available funds’ should be read as importing a

requirement for CLAIMANT to have access to the funds at the moment when the hire period

commences. Because the hire period commenced at 0001 hours on 4 July,27 the only way that

this could be done is for DEFENDANT to tender payment by COB on 3 July. This is the most

commercially sensible interpretation, as the interpretation suggested by DEFENDANT would lead

to an unreasonably narrow interpretation of the words ‘immediately available funds’. The words

‘in advance’ indicate that payment was due by the time the hire period commenced. This

interpretation is commercially reasonable as any other construction would lead to a situation

where the Vessel was on-hire without DEFENDANT having tendered any payment. It is unlikely

that any reasonable commercial party in CLAIMANT’s position would intend for such a situation

to arise, and the precise words in cl 9 militate against such an interpretation. Accordingly,

DEFENDANT breached the Charterparty by not paying hire on 3 July.

B. The Vessel was not off-hire at any material time

12. CLAIMANT submits that there is no basis on which DEFENDANT can claim that it did not owe hire

on 3 July. DEFENDANT claims that ‘the Vessel was off-hire for breach of orders and/or neglect

of duty on the part of the Master’.28 The burden of proving that an off-hire clause is activated

lies with DEFENDANT, which must bring itself ‘clearly within the exceptions’ to hire provided by

cl.21.29 First, CLAIMANT submits that there was no breach of orders by the Master (1). Secondly,

25 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603, 618 [19] (Allsop P); Homburg Houtimport BV v Agrosin Private Ltd (‘The Starsin’) [2004] 1 AC 715, 737–8 (Lord Bingham); McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579, 589 [22] (Gleeson CJ); Lake v Simmons [1927] AC 487, 509 (Viscount Sumner); Glynn v Margetson & Co [1893] AC 351, 359 (Lord Halsbury LC); Hamilton v Mendes (1761) 97 ER 787, 795 (Lord Mansfield). 26 Hillas & Co Ltd v Arcos Ltd [1932] All ER 494, 503 (Lord Wright), quoted in Dhanani v Crasnianski [2011] 2 All ER (Comm) 799, 813 [66] (Teare J); Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] AC 676, 682 (Lord Diplock); Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, 201 (Lord Diplock). 27 Record 28–9. 28 Record 68. 29 John F Wilson, Carriage of Goods by Sea (Pearson, 5th ed, 2004) 191, citing Royal Greek Government v Minister of Transport (1948) 82 Ll LR 196 and The Berge Sund [1993] 2 Lloyd’s Rep 453.


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the piracy clauses added to the Charterparty did not provide for the Vessel to go off-hire in the

event of a pirate attack (2). Thirdly, the Master did not neglect his duty at any point in a way

that enlivened the off-hire clause (3).

1. There was no breach of orders by the Master

13. The Master did not breach any order that could cause the Vessel to go off-hire pursuant to cl 21

of ST4. DEFENDANT, in its email to the Master on 4 July, purported to declare the Vessel off-

hire due to ‘no contact with receiver/charterer’. 30 However, the Master had contacted

DEFENDANT approximately 15 hours prior to the off-hire notice and referred specifically to the

‘new OPL discharge’.31 The Master then contacted DEFENDANT again, two minutes prior to the

off-hire notice, advising DEFENDANT and its agent, ASA2,32 of the Vessel’s readiness to

discharge its cargo. The Master advised DEFENDANT of the new discharge location,33 and sent

the Notice of Readiness to both DEFENDANT and ASA2.34 Having been informed at all times of

the Vessel’s movements and the Master’s plans, DEFENDANT sent an unfounded off-hire notice

two minutes after the Notice of Readiness,35 which cannot render the Vessel off-hire.

14. Further, the Master did not breach the order stipulating that ‘Master shall disregard any voyage-

related instructions received from third parties’.36 This is because ASA2 was DEFENDANT’s

agent, not a third party. Even if this is not the case, it was reasonable for the Master to conclude

that ASA2’s instructions were not third party instructions. Whether instructions are from a third

party, within the meaning of this order, should be determined by an assessment of whether a

master acting reasonably would conclude that they were in fact from a third party,37 irrespective

of whether this Tribunal concludes that they were in law from a third party.

30 Record 41. 31 Record 38. 32 Below [23]. 33 Record 38. 34 Record 41. 35 Record 41. 36 Record 13. 37 Mid West Shipping Co. v D.I. Henry [1971] 1 Lloyd’s Rep 375, 379 (Donaldson J).


8

15. It was reasonable for the Master to act upon the new orders received from ASA2. This is

because ASA2 provided specific information with respect to the cargo to be discharged.38 ASA2

provided its instructions immediately following DEFENDANT’s instruction to await voyage

orders from a third party. In these circumstances, a reasonable person in the Master’s position

would not at any time have concluded that ASA2’s instructions were from a third party,

especially given DEFENDANT’s subsequent encouragement to ‘continue to liaise with your STS

coordinator’.39 Accordingly, the Tribunal should find that the Master did not breach this order.

2. The Charterparty did not provide that the Vessel would go off-hire in the event of a pirate

attack

16. The two piracy clauses added to ST4 in the Recap do not provide for the Vessel to be off-hire in

the circumstances of this case. Sub-clause (4) of the Special Provisions Piracy Clause

provides:40

where … not caused by a lack of due diligence on owner’s part … the vessel is captured by pirates,

hire shall be payable at 100% of the hire rate for the duration of any such capture.

17. Paragraphs (e) and (g) of the BIMCO Piracy Clause provide respectively:41

[i]f the vessel is attacked by pirates any time lost shall be for the account of the charterers and the

vessel shall remain on hire.

…

In the event of a conflict between the provisions of this clause and any implied or express provision

of the charterparty, this clause shall prevail.

18. The two piracy clauses must be taken on their face and the Tribunal should give effect to both

clauses.42 CLAIMANT submits that the Charterparty imposes no obligation of due diligence on

38 Record 35. 39 Record 40. 40 Record 8. 41 Record 12. 42 Hyundai Merchant Marine Co Ltd v Gesuri Chartering Co Ltd [1991] 1 Lloyd’s Rep 100, 116 (Bingham LJ); International Fina Services AG v Katrina Shipping Ltd [1995] 2 Lloyd’s Rep 344, 352 (Neill LJ).


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CLAIMANT as paragraph (g) of the BIMCO Piracy Clause causes paragraph (e) of the BIMCO

Piracy Clause, which does not impose a due diligence requirement, to prevail over sub-clause

(4) of the Special Provisions Clause, which does impose such a requirement. There is no

ambiguity in the words used, and the Tribunal should give effect to these words. There was no

lack of due diligence on the part of the Master, but even if that were the case, the Vessel

remained on-hire throughout the period of its seizure.

3. The Master did not exhibit a neglect of duty pursuant to cl 21(a)(ii)

19. There was no neglect of duty that could enliven cl 21(a)(ii) and make the Vessel off-hire.

Neglect of duty will ordinarily arise from the negligent performance of a duty required by the

Charterparty that directly delays the voyage or otherwise prevents it from proceeding as

planned. 43 The Master did not neglect his duty as he was competent at all times and

implemented sufficient anti-piracy measures.44 That being so, it cannot be said that the Master’s

neglect of duty caused the pirate attack that gave rise to an undisputed loss of time.

C. The Charterparty was not frustrated by the pirate attack

20. There is no basis for the Charterparty to be discharged by frustration. First, the pirate attack was

within the contemplation of the Parties (1). Secondly, the delay caused by the pirate attack did

not radically alter the obligations of the Parties (2).

1. The pirate attack was within the contemplation of the Parties

21. CLAIMANT submits that the Charterparty was not frustrated as the Parties provided for the kind

of pirate attack that occurred. The relevant test is whether the event renders the contractual

obligations of the parties radically different from what the contract provided for.45 The inclusion

43 See, eg, The Aditya Vaibhav [1993] 1 Lloyd’s Rep 63; The Sargasso [1994] 1 Lloyd’s Rep 412; The Liepaya [1999] 1 Lloyd’s Rep 649; The Houda [1994] 2 Lloyd’s Rep 541. 44 See submissions on seaworthiness and competence of the Master below [44]–[55]. 45 Davis Contractors Ltd v Fareham UDC [1956] AC 696, 728–9 (Lord Radcliffe); National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, 700–1 (Lord Simon); Pioneer Shipping Ltd v B.T.P. Tioxide Ltd (‘The Nema’) [1982] AC 724, 738 (Lord Diplock); Edwinton Commercial Corp v Tsavliris Russ (Worldwide Salvage & Towage) Ltd (‘The Sea Angel’) [2007] EWCA Civ 547 [84] (Rix LJ).


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of a contractual provision that was intended to deal with the supervening event that has occurred

will usually prevent the operation of the doctrine.46 The Tribunal must determine whether the

relevant provisions provide completely or only partially for the supervening event.47 CLAIMANT

submits that the two detailed piracy clauses are a complete provision such that the seizure does

not lie outside the ambit of the Charterparty.48 They provide a comprehensive framework that

determines how the Parties are to bear the financial risks of a pirate attack and clearly articulate

each Party’s obligations in the event of an attack.49 The seizure lasted only 13 days and was not

an instance of piracy so extreme or unusual that it went beyond the breadth of these provisions.

2. The delay caused by the pirate attack did not radically alter the Parties’ obligations

22. Where the general risk of delay is assumed by the contract, the supervening event must disrupt

the fundamental nature of the venture, and not merely cause adverse financial consequences.50

Frustration cannot succeed where the delay is within the commercial risks assumed by the

parties.51 There is a high threshold for delay, such that delay that merely prolongs the voyage

and results in extra expense will not frustrate the contract.52 The delay in this case, 13 days

during a three month Charterparty, 53 merely added to the cost of the Charterparty for

DEFENDANT and is therefore insufficient to constitute frustration. Both the actual length of the

delay and the prospective likely delay at the time of frustration are relevant to the inquiry.54

46 Joseph Constantine S.S. Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154, 163 (Viscount Simon LC); Kuwait Supply Co v Oyster Marine Management (‘The Safeer’) [1994] 1 Lloyd’s Rep 637, 643 (Rix LJ); Bangladesh Export Import Co Ltd v Sucden Kerry SA [1995] 2 Lloyd’s Rep 1, 5 (Neill LJ). 47 Bank Line Ltd v Arthur Capel & Co [1919] AC 435, 456 (Lord Sumner); Sir Lindsay Parkinson & Co Ltd v Commissioners of Works [1949] 2 KB 632, 667 (Asquith LJ); Fibrosa Spolka Ackcynjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32, 40 (Viscount Simon LC); Tamplin (F A) Steamship Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC 397, 406–7 (Viscount Haldane); Select Commodities Ltd v Valdo SA (‘The Florida’) [2007] 1 Lloyd’s Rep 1, 5 (Tomlinson J). 48 Record 8–12. 49 Record 8–12. 50 Davis Contractors v Fareham UDC [1956] AC 696, 729 (Lord Radcliffe); The Captain George K [1970] 2 Lloyd’s Rep 21, 27 (Mocatta J). 51 Trade and Transport Inc v Iino Kaiun Kaisha Ltd [1973] 1 WLR 210, 226 (Kerr J); Intertradex SA v Lesieur-Torteaux SARL [1978] 2 Lloyd’s Rep 509, 514 (Lord Denning MR). 52 The Eugenia [1964] 2 QB 226, 239 (Lord Denning MR); Edwinton Commercial Corp v Tsavliris Russ (Worldwide Salvage & Towage) Ltd (‘The Sea Angel’) [2007] 2 All ER (Comm) 634, 666 [118] (Rix LJ). 53 Record 5, 41. 54 Bernard Eder et al, Scrutton on Charterparties and Bills of Lading (Sweet & Maxwell, 21st ed, 2010) 32, citing Tatem (W J) Ltd v Gamboa [1939] 1 KB 132.


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Given its brevity, the delay was not so extreme that the fundamental nature of the voyage was

altered. The attack merely caused adverse financial consequences for the Parties.

IV. ASA2 ACTED ON DEFENDANT'S BEHALF AT ALL RELEVANT TIMES

23. An agency agreement between DEFENDANT and ASA2 should be implied (A). In addition,

ASA2 acted on DEFENDANT’s behalf pursuant to the doctrine of apparent authority (B).

A. An agency agreement between DEFENDANT and ASA2 should be implied

24. There is no record of an express agency agreement between DEFENDANT and ASA2. CLAIMANT

submits that an agency agreement between these parties should be implied. To imply the

existence of an agency agreement, it is sufficient for the Tribunal to find that DEFENDANT

consented to ASA2 exercising authority on its behalf, and that ASA2 consented to exercise such

authority.55 ASA2 explicitly purported to act on DEFENDANT's behalf.56 DEFENDANT is thus

unable to argue that ASA2 did not consent to act on its behalf.57 It follows that the only finding

that the Tribunal needs to make in order to imply an agency agreement between DEFENDANT

and ASA2 is that DEFENDANT consented to ASA2 acting on its behalf.

25. The consent of the parties may be inferred from their conduct or from their positions with

regard to each other.58 The best and most reasonable view is that DEFENDANT consented to

ASA2 acting on its behalf. The key facts that CLAIMANT relies upon are:

a. ASA2 knew details about the performance of the Charterparty that a stranger to it

could not know. This included that DEFENDANT had just expressed an understanding

55 Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd [1995] QB 174, 185 (Colman J), citing Garnac Grain Co Inc v HMF Faure and Fairclough Ltd [1968] AC 1130, 1137 (Lord Pearson). 56 Record 35. 57 Peter Watts and F. M. B Reynolds, Bowstead & Reynolds on Agency (Sweet & Maxwell, 20th ed, 2014) 64 [2–033], citing Roberts v Ogilby (1821) 9 Price 269; Moore v Peachey (1891) 7 TLR 748. 58 Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549, 583 (Lord Denning MR); Maclaine Watson & Co v Dept of Trade [1988] 3 WLR 1033, 1156 (Ralph Gibson LJ), citing Joseph Chitty, Chitty on Contracts (Sweet and Maxwell, 25th ed, 1983) vol 2, 4; see also Roderick Munday, Agency: Law and Principles (Oxford University Press, 2010) 48.


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that control of the Vessel would pass to disport agents for an STS transfer, and the

specific nature and amount of the cargo on board: 72,000 MT of gasoil.59

b. The disport agents named in the Voyage Orders, Atlantic Services Agency (ASA),

never came forward to act as DEFENDANT's agent, despite being prompted to do so in

emails from DEFENDANT.60 DEFENDANT is unable to satisfactorily account for this

fact, which suggests that DEFENDANT's true agency agreement was with ASA2.

c. The Master informed DEFENDANT that the agent had nominated a vessel, ‘the

Antelope’, which has no known relationship to ASA.61 DEFENDANT did not question

this.

d. DEFENDANT was silent while the Master liaised with ASA2 for a period of six days,

and instructed the Master to continue to liaise on the sixth day.62

26. These facts, taken as a whole, lead to the conclusion that the most reasonable inference

available on the facts is that DEFENDANT gave ASA2 the information regarding the performance

of the Charterparty and consented for ASA2 to act as its agent. It follows that an agency

agreement between DEFENDANT and ASA2 should be implied.

B. In addition, ASA2 acted on DEFENDANT’s behalf pursuant to the doctrine of apparent

authority

27. Even if the Tribunal does not find that an agency relationship existed between DEFENDANT and

ASA2, DEFENDANT created the circumstances in which a reasonable person in CLAIMANT’s

position would have believed that ASA2 was DEFENDANT’s agent. This is because DEFENDANT

represented to CLAIMANT that ASA2 had authority to act on DEFENDANT’s behalf, and

CLAIMANT dealt with ASA2 as DEFENDANT’s agent on the faith of that representation. It follows

that DEFENDANT is bound by ASA2’s acts to the same extent as if ASA2 had the authority that it 59 Record 35. 60 Record 34. 61 Record 61; Procedural Order No 2 [13]. 62 Record 40.


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was represented as having by DEFENDANT.63 DEFENDANT’s conduct, taken as a whole, is

sufficient to constitute a representation as to ASA2’s authority.64

28. The case of Barrett v Deere is instructive.65 In that case, a third party sought to settle a debt by

paying at a merchant’s counting house. The third party paid a person who appeared to be

authorised to receive payment, mainly because he was sitting near account books and gave a

receipt. The person who received payment in fact had no authority to do so. It was held that the

debt was discharged, as the debtor had a right to suppose that the tradesman controlled his own

premises, and that he would not negligently allow persons to interfere with his business without

his authority. This reasoning, which has been used in a number of subsequent cases,66 supports

the proposition that DEFENDANT should bear the consequences of failing to exercise sufficient

control over its agency arrangement to ensure that the correct entity acted as its agent.

29. The most reasonable and principled approach for the Tribunal to take is to place the

responsibility on DEFENDANT for the actions of the third party that were caused by

DEFENDANT’s negligent lack of supervision of the transaction. It was reasonable for CLAIMANT

to conclude that ASA2 was entitled to act on DEFENDANT’s behalf. This is supported by the

weight of evidence.67 In these circumstances, it would be commercially unreasonable to make

CLAIMANT bear the consequences of DEFENDANT’s failed agency arrangement.

V. DEFENDANT COMMITTED THE TORT OF FRAUD

63 Freeman & Lockyer v Brockhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 503 (Diplock LJ); ING Re (UK) Ltd v R & V Versicherung [2006] 2 All ER (Comm) 870, 888 [99] (Toulson J); Cheng-Han Tan, ‘Unauthorised Agency in English Law’ in Danny Busch and Laura J. Macgregor (eds), The Unauthorised Agent: Perspectives from European and Comparative Law (Cambridge University Press, 2009) 185, 188. 64 Freeman & Lockyer v Brockhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 503–4 (Diplock LJ); Armagas Ltd v Mundogas SA [1986] AC 717, 731 (Robert Goff LJ); New Falmouth Resorts Ltd v International Hotels Jamaica Ltd (Jamaica) [2013] UKPC 11 [23] (Sir Alan Ward). 65 (1828) Mood & M 200. 66 See, eg, Galbraith & Grant v Block [1922] 2 KB 155; Bocking Garage v Mazurk, The Times, February 4, 1954 (though apparent authority could not be established on the particular facts); Hoddesdon v Koos Bros 135 A.2d 702 (NJ, 1957). See also Peter Watts and F. M. B Reynolds, Bowstead & Reynolds on Agency (Sweet & Maxwell, 20th ed, 2014) 405 [8–042], where the reasoning in Barrett v Deere is approved. 67 The party who contacted the Master shared the initials ‘ASA’ with the agent nominated in the voyage orders; this party had intimate knowledge of the charter arrangement; this party contacted the Master when prompted to do so in a private email from DEFENDANT; DEFENDANT never indicated to the Master that he might not be liaising with the true agent, and no other STS coordinator ever contacted CLAIMANT. DEFENDANT went so far as to explicitly instruct the Master to continue to liaise with the party with whom he was liaising, six days after the initial contact.


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30. DEFENDANT and ASA2 on its behalf made false representations (A),68 knowing them to be

untrue, or being reckless as to their truth (B), and intended that CLAIMANT would rely on them

(C). DEFENDANT is therefore liable insofar as CLAIMANT relied upon these representations (D)

and suffered loss (E).69

A. DEFENDANT and ASA2 on its behalf made false representations to CLAIMANT

31. DEFENDANT, and ASA2 on its behalf, falsely represented to CLAIMANT that a sufficient supply

of bunkers would be available at various points on the journey.70 For example, DEFENDANT told

the Master that it had an ‘alternative bunker supply available passing Durban or Cape Town’.71

This supply of bunkers was never made available,72 and DEFENDANT never acted in a way

consistent with an intention to supply bunkers.

32. These representations were statements as to present intention, which are sufficient to satisfy this

element.73 These statements were made without the actual intention to supply bunkers at the

nominated locations. This is supported by the absence of any action exhibited by DEFENDANT in

its correspondence with its bunker supplier, or any other bunker supplier, consistent with its

promises to supply bunkers.74 It is manifestly unlikely that DEFENDANT ever had an intention to

supply bunkers in accordance with its representations, when it is unable to point to any

correspondence with a bunker supplier consistent with such an intention. The best view on the

evidence is that the representations were untrue at the time they were made.75

B. The representations were made dishonestly

68 Particularised at [17] of the Statement of Claim. 69 Derry v Peek (1889) 14 App Cas 337, 374 (Lord Herschell); AIC Ltd v ITS Testing Services (UK Ltd) (‘The Kriti Palm’) [2007] 1 Lloyd’s Rep 555, 594 [251] (Rix LJ); Biggs v Sotnicks (a firm) [2002] EWCA Civ 272 [33] (Arden LJ); Hazel Carty, An Analysis of the Economic Torts (Oxford University Press, 2nd ed, 2010) 188. 70 See Statement of Claim [17(a)–(c)]. 71 Record 25. 72 Record 42. 73 Edgington v Fitzmaurice (1885) 29 Ch D 459, 483 (Bowen LJ); Barings Plc v Coopers & Lybrand [2002] Lloyd’s Rep PN 395 [61] (Evans J); Al Khudairi v Abbey Brokers Ltd [2010] EWHC 1486 (Ch) [124]–[126] (Newey J). 74 See Record 25–35. 75 See Clydesdale Bank Ltd v Paton [1896] AC 381, 394 (Lord Herschell); Edgington v Fitzmaurice (1885) 29 Ch D 459, 483 (Bowen LJ); John Fleming, Fleming’s The Law of Torts (Thomson Reuters, 10th ed, 2011) 719 [28.30], citing Snarski v Barbarich [1969] WAR 46.


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33. It follows that DEFENDANT and ASA2 on its behalf made representations with the knowledge

that they were untrue, thus satisfying the element of dishonesty.76 Moreover, DEFENDANT is

liable for the false representations of its agent, ASA2, even if DEFENDANT was innocent and

without knowledge of those representations.77

C. DEFENDANT and ASA2 on its behalf intended that CLAIMANT would rely on the

representations

34. DEFENDANT knew that the Master sought a supply of bunkers78 and that he would act so as to

obtain that supply if instructed to do so. Accordingly, the instructions given by DEFENDANT and

ASA2 on its behalf were made with the intention that CLAIMANT would rely upon them.

D. CLAIMANT relied on the representations

35. The Master tendered a Notice of Readiness to DEFENDANT and ASA2, confirming arrival at STS

Area 1, the location nominated in the instructions from ASA2.79 This was done in reliance upon

ASA2’s instructions, as well as the representations by DEFENDANT that bunkering and cargo

transfer were to take place at STS Area 1.80 It was repeatedly made clear in correspondence that

the Vessel was at this location for the purposes of bunkering and cargo transfer.81

36. Even if the Tribunal holds that ASA2 did not act on DEFENDANT’s behalf, the representations of

DEFENDANT itself are sufficient to satisfy this element, and every element, of the tort of fraud.

This is because DEFENDANT’s representations played a real and substantial part in the Master’s

decision to go to the location where the damage occurred.82 The Master would not have

76 Derry v Peek (1889) 14 App Cas 337, 374 (Lord Herschell). 77 Anglo-Scottish Beet Sugar Corp Ltd v Spalding Urban DC [1937] 2 KB 607, 621 (Atkinson J). 78 Record 28, 31–2, 35–8. 79 Record 41. 80 Record 33–5. 81 Record 33–5. 82 Dadourian v Simms [2009] 1 Lloyd’s Rep 601, 618 [99] (Arden LJ), cited in Hazel Carty, An Analysis of the Economic Torts (Oxford University Press, 2nd ed, 2010) 195.


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accepted ASA2’s instructions if DEFENDANT’s representations had come to fruition. In these

circumstances, it would be erroneous to examine the competing causes of the Master’s actions.83

E. CLAIMANT suffered damage as a result of relying on the representations

37. As a result of relying on the representations of DEFENDANT and ASA2 on its behalf, CLAIMANT

suffered damage comprised of,84 at least, the physical damage to the Vessel particularised at line

GG of the incident report lodged by the Master.85 The test for remoteness of damage in fraud is

one of directness, and reasonable foreseeability is not a requirement.86 Accordingly, even if the

Tribunal does not accept CLAIMANT’s submission that ASA2 acted on DEFENDANT’s behalf, the

representations regarding bunkering made by DEFENDANT itself are sufficient to found liability

in this claim. The Master’s decision to follow ASA2’s instructions and proceed to STS Area 1

was induced by DEFENDANT’s dishonest representation that bunkers would be available at that

location. It follows that the test of directness is met, and the tort is complete, regardless of

whether ASA2’s representations were made on DEFENDANT’s behalf.

ARGUMENTS ON THE MERITS OF THE COUNTER-CLAIM

VI. DEFENDANT CANNOT SUCCEED IN A CLAIM ARISING OUT OF ITS ILLEGAL CONDUCT

38. DEFENDANT deceived CLAIMANT into navigating the Vessel to receive non-existent bunkers at

coordinates in close proximity to the location of the pirate attack. DEFENDANT’s counterclaim

consequently arises from a situation that directly stemmed from DEFENDANT’s commission of

the tort of fraud. Accordingly, DEFENDANT’s actions trigger the operation of the illegality

defence (ex turpi causa), a doctrine of wide application which precludes claimants from

83 Barton v Armstrong [1976] AC 104, 118 (Lord Cross). 84 Without prejudice to the phase of this arbitration relating to quantification of damages. 85 Record 42. 86 Dadourian v Simms [2009] 1 Lloyd’s Rep 601, 621 [112] (Arden LJ); Smith v New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254, 279 (Lord Steyn); Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158, 167 (Lord Denning MR), 171 (Sachs LJ); Clark v Urquhart [1930] AC 28, 68 (Lord Atkin); Hazel Carty, An Analysis of the Economic Torts (Oxford University Press, 2nd ed, 2010) 195.


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recovering damages in tort or contract for loss arising from their own illegal conduct.87 On this

basis, CLAIMANT submits that the Tribunal should preclude DEFENDANT’s counter-claim

because DEFENDANT’s own illegal conduct (A) caused its loss of cargo (B).

A. DEFENDANT engaged in illegal conduct

39. Tortious conduct may constitute the illegality that precludes recovery pursuant to authority that

defines the relevant conduct as criminal or unlawful.88 Specifically, the United Kingdom

Supreme Court in 2014 held that the tort of fraud is sufficient to constitute the illegality required

to engage this doctrine.89 Following this authority, DEFENDANT’s tort of fraud constituted illegal

conduct in the relevant sense.

B. DEFENDANT’s damage arose out of its illegal conduct

40. DEFENDANT’s tort of fraud caused its loss of cargo. In order to preclude the recovery of damage,

unlawful conduct must cause the damage complained of, rather than providing the occasion for

damage to be caused.90 The present case is one in which DEFENDANT’s tort of fraud brought

about its loss of cargo.

41. But for DEFENDANT’s deceitful instruction to travel to the updated STS location, CLAIMANT had

no occasion to travel anywhere near the location at which the Vessel was robbed. It was

DEFENDANT that endangered the Vessel, its crew and its cargo by inducing the Master to stop

the Vessel at a location that was over two hundred nautical miles from shore and wait for a

supply of fuel that would never come. On that basis, DEFENDANT created the circumstances that

culminated in the loss of its cargo. Accordingly, CLAIMANT submits that the Tribunal should

87 Holman v Johnson (1775) 1 Cowp 341, 343 (Lord Mansfield CJ); Tinsley v Milligan [1994] 1 AC 340, 354–5 (Lord Goff); Clunis v Camden and Islington H.A. [1998] QB 978, 987 (Beldam and Potter LJJ, Bracewell J); Hewison v Meridian Shipping Services PTE Ltd [2003] ICR 766, 777 (Clarke LJ, Tuckey LJ agreeing); Gray v Thames Trains Ltd [2009] 1 AC 1339, 1377 (Lord Hoffmann, Lord Scott agreeing). 88 Holman v Johnson (1775) 1 Cowp 341, 343 (Lord Mansfield CJ); Burrows v Rhodes [1899] 1 QB 816, 828 (Kennedy J); Hewison v Meridian Shipping Services PTE Ltd [2003] ICR 766, 778 (Clarke LJ, Tuckey LJ agreeing); Jenny Steele, Tort Law: Text, Cases and Materials (Oxford University Press, 2014) 287. 89 Les Laboratoires Servier v Apotex Inc [2015] AC 430, 446 (Lords Sumption, Neuberger and Clarke). 90 Gray v Thames Trains Ltd [2009] 1 AC 1339, 1377 (Lord Hoffmann, Lord Scott agreeing).


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apply over 200 years of authority barring recovery to those damaged by their own illegal

conduct91 and preclude DEFENDANT’s recovery of loss caused by its tort of fraud.

VII. CLAIMANT PROVIDED A VESSEL THAT WAS FIT FOR SERVICE

42. In further response to DEFENDANT’s counter-claim, CLAIMANT submits that the provision of the

Master fulfilled CLAIMANT’s obligation under the Charterparty (A) and that the Master’s

decision not to apply the pleaded BMP4 measures did not breach the Charterparty (B).

A. CLAIMANT’s provision of the Master fulfilled its Charterparty obligation

43. CLAIMANT discharged its obligation under the Charterparty to provide a competent master by

appointing the Master (1). In the alternative, the Master simply followed the instructions of

DEFENDANT since ASA2 was DEFENDANT’s agent (2). In the further alternative, a competent

master would have followed the instructions of ASA2 (3). Lastly, CLAIMANT exercised due

diligence in providing the Master (4).

1. CLAIMANT provided a competent master

44. CLAIMANT accepts that its obligation to provide a vessel that was ‘in every way fit for the

service’92 extended to the provision of a competent crew and master.93 Although the Hague-

Visby Rules impose a due diligence standard for this obligation,94 the question of due diligence

cannot arise unless it is shown that the Vessel was unseaworthy by reason of the Master’s

incompetence. CLAIMANT submits that the Master did have the requisite competence for the

agreed voyage. The Master demonstrated this competence on many occasions during the

voyage, relevantly:

91 Holman v Johnson (1775) 1 Cowp 341, 343 (Lord Mansfield CJ); Les Laboratoires Servier v Apotex Inc [2015] AC 430, 439–40 (Lords Sumption, Neuberger, and Clarke). 92 ST4 cl 1(c). 93 Standard Oil Co of New York v Clan Line Steamers Ltd [1924] AC 100, 121 (Lord Atkinson); Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 56 (Sellers LJ); Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd (‘The Star Sea’) [1995] 1 Lloyd’s Rep 651, 658 (Tuckey J); John F Wilson, Carriage of Goods by Sea (Pearson Longman, 5th ed, 2004) 11. 94 See Below [48].


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a. the Master emailed DEFENDANT with a detailed description of the bunkering and

departure process engaged in at Singapore;95

b. the Master safely and expeditiously navigated the Vessel to East Africa;96

c. the Master vigilantly monitored the Vessel’s supply of bunkers and actively sought

more bunkers from DEFENDANT;97 and

d. the Master provided DEFENDANT with an extensive report of the damage caused to

the Vessel by pirates and promptly executed a plan to seek help in Cape Town.98

45. As evidenced by the above, the Master had the requisite skill for his position. CLAIMANT

submits that the competence of the Master is not to be confused with the quality of a single

decision to follow ASA2’s instructions. No seaworthiness obligation in the Charterparty

required CLAIMANT to supply a master who would unfailingly make optimal decisions. Clauses

1 and 3 of ST4, as well as any implied seaworthiness obligation, only required the provision of a

ship and master that were fit for purpose, as opposed to the provision of an invincible ship or an

infallible master.99 CLAIMANT fulfilled that obligation.

2. In the alternative, the Master followed DEFENDANT’s instructions

46. ASA2 was the agent of DEFENDANT. 100 Accordingly, the Master’s decision to follow

DEFENDANT’s instructions fulfilled the Master’s obligation under the Charterparty to follow

orders from the DEFENDANT. 101 Consequently, the Master’s decision to follow ASA2’s

instructions did not constitute a breach of the Charterparty.

3. In the further alternative, if ASA2 was not DEFENDANT’s agent, CLAIMANT’s provision of

the Master did not cause the loss of cargo

95 Record 29-30. 96 Procedural Order No 2 [6]. 97 Record 25, 26, 28, 31, 32. 98 Record 42. 99 President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278, 281 (Kilkenny DJ); John F Wilson, Carriage of Goods by Sea (Pearson, 5th ed, 2004) 11. 100 Above [28]. 101 ST4 cl 4(a).


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47. DEFENDANT must prove that CLAIMANT’s provision of an incompetent master caused the loss of

cargo.102 CLAIMANT submits that if the Master were incompetent, his incompetence did not

cause the loss of cargo since a competent master would have made the same decision to follow

ASA2’s instructions, for the reasons stated above.103 The Vessel would have thus travelled to

the location at which it was seized. The provision of an incompetent master therefore could not

have caused CLAIMANT’s loss.

4. CLAIMANT exercised the requisite due diligence in selecting the Master

48. If the Tribunal finds that the Master was incompetent, CLAIMANT submits that it is not liable for

DEFENDANT’s loss of cargo, since it satisfied the standard imposed by art IV of the Hague-

Visby Rules, 104 which is one of due diligence, rather than an absolute standard of

seaworthiness.105 The Parties incorporated the Hague-Visby Rules pursuant to cl 27(c)(ii) of

ST4 subject to cl 38, which stipulates that the Hague-Visby Rules will apply if there is no

legislation that mandatorily applies the Hague Rules or the Hamburg Rules. Given that there is

no such legislation, the Parties chose the Hague-Visby Rules to apply to loss of cargo claims.

49. CLAIMANT submits that it exercised due diligence in appointing the Master. Before the voyage

began, CLAIMANT dispatched a representative of its Operations and Safety Department to

personally inspect the Vessel for any security liabilities and to brief the Master on anti-piracy

equipment and protocol.106 CLAIMANT’s efforts to ensure that the Master was sufficiently

knowledgeable of anti-piracy precautions constituted due diligence in selecting the Master.

B. The Master’s decision not to apply the pleaded anti-piracy measures did not breach the

Charterparty

102 The Europa [1908] P 84, 97–8 (Bucknill and Bargrave Deane JJ); Minister of Food v Reardon Line [1951] 2 Lloyd’s Rep 265, 271–2 (McNair J). 103 Above [15]. 104 Hague-Visby Rules, Article IV r 1; Yvonne Baatz, Maritime Law (Informa Law, 3rd ed, 2004) 126. 105 Ibid. 106 Record 22.


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50. Because the risk of piracy off the coast of Angola was low, the piracy clauses107 did not require

the Master to apply the pleaded anti-piracy measures (1). In any event, CLAIMANT submits that

the Master complied with BMP4 (2).

1. The Master was not obliged to implement the pleaded anti-piracy measures

51. Based on the Master’s last reported location before disappearance of the Vessel, the Vessel was

attacked approximately 230 nautical miles from Angola, the country with the closest coast to

this location. The risk of piracy was low for two reasons. First, the Vessel was too far from

shore to be considered to be at a location with a current risk of piracy. This conclusion is

supported by the fact that the furthest reported distance from the coast of any attack in the

contemporaneously most current IMB report of 2014 was 115 nautical miles.108 Secondly, the

Vessel was positioned in an area that, even had the Vessel been significantly closer to shore,

would not have posed a risk of piracy.109 From 2009–2014, the IMB recorded only a single

incident of piracy off the coast of Angola.110 As a result, there was no risk of piracy that

activated the obligation to implement BMP4.

52. The Master’s obligation to implement BMP4, imposed by either a seaworthiness obligation or

the piracy clause, was not engaged because there was no relevant risk of piracy. First, the

Master’s decision not to implement BMP4 did not breach the seaworthiness provision of the

Charterparty. CLAIMANT was obliged to provide a vessel equipped to face ‘the perils of the sea

and the incidental risks to which of necessity she must be exposed in the course of a voyage’,111

as opposed to a vessel ‘which might withstand all conceivable hazards’.112 As the Vessel was

107 Record 8. 108 International Chamber of Commerce Maritime Bureau, Piracy and Armed Robbery Against Ships: Report for the Period 1 January – 31 March 2014 (2014) 21. 109 Ali Kamal-Deen, ‘The Anatomy of Gulf of Guinea Piracy’ (2015) 68 Naval War College Review 93, 95. 110 International Chamber of Commerce Maritime Bureau, Piracy and Armed Robbery Against Ships: Report for the Period 1 January – 31 March 2014 (2014) 22. 111 Kopitoff v Wilson (1876) 1 QBD 377, 380 (Field J); President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278, 281 (Kilkenny DJ); John F Wilson, Carriage of Goods by Sea (Pearson, 5th ed, 2004) 11. 112 President of India v West Coast Steamship Co [1963] 2 Lloyd’s Rep 278, 281 (Kilkenny DJ).


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travelling through a region with a low risk of piracy, the Vessel’s lack of anti-piracy defences

did not diminish the Vessel’s fitness for its journey.

53. Secondly, the Master did not breach the piracy clauses, which only obliged the Master to

implement BMP4 in circumstances where there was a current risk of piracy, verified by a

competent international authority.113 For the reasons stated above,114 there was no current risk of

piracy at the date of the incident. As a result, CLAIMANT had no obligation to apply BMP4.

2. The Master complied with BMP4

54. In response to DEFENDANT’s claim that the Master’s failure to install razor wire constituted

noncompliance, 115 CLAIMANT submits that BMP4 does not contain any positive

recommendation for the installation of razor wire but simply notes that ‘razor wire … creates an

effective barrier but only when carefully deployed’.116 This suggestion falls short of the many

recommendations that BMP4 includes such as ‘offer no resistance to the pirates once they reach

the bridge’117 or ‘monitor piracy related websites on specific threats’.118 On that basis, the

Master’s decision not to implement a particular practice discussed, but not recommended, in

BMP4 does not constitute a breach of BMP4 or the Charterparty.

55. With respect to other protective measures not particularised in the Statement of Defence, it is

DEFENDANT’s burden to demonstrate breach of contract and thus noncompliance with BMP4.119

In the absence of more information from the DEFENDANT and a lack of evidence concerning the

Master’s response to the pirate attack, the Tribunal should find that this allegation has not been

substantiated by DEFENDANT.

VIII. CLAIMANT IS NOT LIABLE FOR THE TORT OF CONVERSION

113 ST4 cl 1(c). 114 Above [61]. 115 Statement of Defence [20(b)(i)]. 116 Best Management Practices for Protection against Somalia Based Piracy (August 2011) 28. 117 Ibid 45. 118 Ibid 14. 119 Jeffrey Waincymer, Procedure and Evidence in International Arbitration (Kluwer Law International, 2012) 762.


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56. CLAIMANT is not liable for the tort of conversion because the Master at all times acted in a

manner consistent with DEFENDANT’s right to immediate possession (A). Moreover, CLAIMANT

is not liable for the loss of cargo pursuant to art IV r 2(f) of the Hague-Visby Rules (B).

A. The Master acted in a manner consistent with DEFENDANT’s right to immediate possession

57. CLAIMANT is not liable for conversion because the Master did not act inconsistently with

Defendant’s right to possession of the cargo.120 The Master did not deliberately deviate from the

disport location and did not act wrongfully because the Master, at all relevant times, was acting

under the instruction of DEFENDANT.121 DEFENDANT’s agent provided Master with the new

disport location.122 Since the Master did not evince any intention to exercise dominion or

authority over the cargo, CLAIMANT cannot be held liable in conversion.

B. Even if CLAIMANT converted the cargo, it is not liable for the loss of cargo pursuant to art

IV r 2(f) of the Hague-Visby Rules

58. Pursuant to art IV r 2(f) of the Hague-Visby Rules, CLAIMANT is not liable for the loss or

misdelivery of cargo because of piracy.123 CLAIMANT has exercised due diligence to provide a

seaworthy Vessel, including a competent master, pursuant to art III r 1 of the Rules.124 It follows

that CLAIMANT can rely on the exception provided by art IV(2)(f).

IX. CLAIMANT DID NOT BREACH ITS DUTY AS BAILEE OF THE CARGO

59. CLAIMANT did not breach its duty as bailee because the Master took reasonable care to protect

the cargo from piracy (A). Even if CLAIMANT did not take reasonable care of the cargo, the loss

of cargo was not caused by CLAIMANT’s lack of reasonable care (B).

A. CLAIMANT took reasonable care to protect the cargo from piracy

120 Kuwait Airways Corp. v Iraqi Airways Co [2002] 2 AC 883, 1084 [39] (Lord Nicholls). 121 Glyn Mills Currie & Co v East and West India Dock Co (1882) 7 App Cas 591, 609 (Lord Blackburn). 122 Above [13]–[15]. 123 Bernard Eder et al, Scrutton on Charterparties and Bills of Lading (Sweet & Maxwell, 22nd ed, 2011) 435. 124 Above [43]–[44].


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60. CLAIMANT fulfilled its duty to take reasonable care125 to protect the cargo from piracy by

providing a seaworthy Vessel including a competent master and crew (1). The Master adhered

to the terms of the bailment by following disport instructions from DEFENDANT’s agent (2).

1. CLAIMANT took reasonable care to protect the cargo from piracy by providing a

seaworthy vessel

61. CLAIMANT took reasonable care to protect the cargo by providing a seaworthy Vessel including

a competent Master and crew.126 For the reasons stated above,127 the Vessel was in compliance

with BMP4 and was adequately protected against piracy.128 The Master did his best to comply

with BMP4 at all other times.129 CLAIMANT thus took reasonable care as bailee.

2. The Master took reasonable care by only following instructions from DEFENDANT’s agent

62. The Master at all relevant times acted under instruction from DEFENDANT’s agent.130 He took

reasonable care to verify the coordinates for ‘OPL Area 1’ in an email to DEFENDANT on 28

June.131 DEFENDANT did not confirm the coordinates for the disport location.132 DEFENDANT’s

agent made contact with the Master to provide disport instructions and presented specific

knowledge of the quantity of cargo to be discharged.133 The Master advised DEFENDANT that he

had contacted DEFENDANT’s agent on 3 July.134 DEFENDANT responded on 4 July advising the

Master to ‘continue to liaise with your STS coordinator’.135 The Master, therefore, adhered to

the Voyage Orders and took reasonable care not to deliver the cargo to third parties.136

125 Norman Palmer, Palmer on Bailment (Sweet & Maxwell, 3rd ed, 2009) 573; Port Swettenham Authority v TW Wu & Co (M) Sdn Bhd [1979] AC 580, 589 (Lord Salmon); China Pacific SA v Food Corp India (‘The Winston’) [1982] AC 939, 960 (Lord Diplock). 126 Above [43]–[44]. 127 Above [51]–[54]. 128 Record 26. 129 Record 36. 130 Above [45]. 131 Record 34. 132 Record 34. 133 Record 34.. 134 Record 38. 135 Record 39. 136 Record 13.


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B. CLAIMANT is not liable for the loss of cargo as the loss was not caused by CLAIMANT’s lack

of reasonable care

63. CLAIMANT is not liable for the loss of cargo if the loss cannot be attributed to CLAIMANT’s lack

of reasonable care.137 CLAIMANT is not liable where the thieves have ‘shown ingenuity and

daring against which reasonable precautions could not avail’.138 WAF is a region known for

violent piracy attacks, notwithstanding their infrequent occurrence.139 No single defensive

measure would have been sufficient to overcome such an attack.140 The Vessel’s location was

only known to CLAIMANT, DEFENDANT and ASA2.141 The distance traversed by the pirates and

their ability to conduct STS operations so far from shore demonstrates a high degree of

sophistication that is not within the ordinary capabilities of pirates.142 The theft of cargo was

one of an exceptional nature. Accordingly, CLAIMANT is not liable for the loss of cargo as

reasonable preparation would not have prevented the pirate attack.

REQUEST FOR RELIEF

For the reasons set out above, CLAIMANT requests this Tribunal to:

a) declare that this Tribunal has jurisdiction to hear this claim;

b) award damages as particularised in the phase of this arbitration relating to quantification of

damages;

c) declare that CLAIMANT is not liable in relation to the counter-claim; and

d) award further or other relief as the Tribunal considers fit.

137 Norman Palmer, Palmer on Bailment (Sweet & Maxwell, 3rd ed, 2009) 1107–8. 138 Brook’s Wharf and Bull Wharf Ltd v Goodman Brothers [1937] 1 KB 534, 539 (Lord Wright). 139 James Bridger, ‘The World’s Most Violent Pirates’, USNI News (Baltimore) 12 May 2014. 140 Ibid. 141 Record 38, 41. 142 Above [36].

Seventh Draft of Full Claimant Memo - Murdoch University · National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 9 ... Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’)

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