SIXTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION 2015 International Shipping Law School East China University of Political Science and Law IN THE MATTER OF AN ARBITRATION HELD IN MELBOURNE ————————— Claimant/Owners Respondent/Charterers Western Tankers Inc LTD Ptd AND Claimant/Charterers Respondent/Owners LTD Ptd Western Tankers Inc ————————— MEMORANDUM FOR THE CHARTERERS TEAM NO. 22 Yuwei Yang Lin Fang Chao Qian Fuzhou Bai Sen Wang
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SIXTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION 2015
International Shipping Law School
East China University of Political Science and Law
IN THE MATTER OF AN ARBITRATION HELD IN MELBOURNE
————————— Claimant/Owners Respondent/Charterers Western Tankers Inc LTD Ptd
AND
Claimant/Charterers Respondent/Owners
LTD Ptd Western Tankers Inc
————————— MEMORANDUM FOR THE CHARTERERS
TEAM NO. 22
Yuwei Yang
Lin Fang
Chao Qian
Fuzhou Bai
Sen Wang
I
TABLE OF CONTENTS
TABLE OF AUTHORITIES: BOOKS ................................................................... III
TABLE OF AUTHORITIES: CASES AND ARBITRAL AWARDS ..................IV
TABLE OF AUTHORITIES: LEGISLATION ......................................................VI
LIST OF ABBREVIATIONS ................................................................................. VII
STATEMENT OF FACTS .......................................................................................... 1
PART ONE: JURISDICTION.................................................................................... 3
A. This Tribunal has the power to rule on its own jurisdiction .................................. 3
B. The Charterparty contains a valid arbitration clause, which specifies London as
the seat ........................................................................................................................ 3
C. Every dispute arising out of this Charterparty is admissible in this arbitration .... 4
PART TWO: BREACH OF THE CHARTERPARTY ............................................ 6
A. The Charterers failed to provide the Owners with bunkers ................................... 6
B. The Owners were entitled to hires due .................................................................. 6
I. Payment of hire is the absolute obligation of the Charterers .............................. 6
II. The Master strictly followed orders and the off-hire clauses shall not be
10. The Claimant argues that the Charterers breached the Charterparty because: (A)
The Charterers failed to provide the Owners with bunkers; (B) The Owners were
entitled to the hires due; (C) the Vessel involved was fit for service; (D) The
Charterers were in breach of the Charterparty; (E) The Owners ware not liable for
the loss of cargo.
A. The Charterers failed to provide the Owners with bunkers
11. Under Clause 7 of Shelltime 4, the Charterers shall provide and pay for all fuel
unless bunkers are consumed for Owners’ purposes or while the vessel is off-hire.11
The Charterers may contend that the Owners should pay for the bunkers themselves
from July 4 to July 17 because the Vessel was off-hire during that time. However,
the Owners constantly followed the instructions of the Charterers and their agents
and the loss of the cargo was not caused by the Owners. Thus, the Charterers have
the obligation to provide the Owners with bunkers all time.
B. The Owners were entitled to hires due
12. Under Clause 9 of the Shelltime 4, the Owners argue that the Charterers were liable
to pay hire because: (I) payment of hire is the absolute obligation of the Charterers;
(II) the Master strictly followed orders and thus the off-hire clauses shall not be
applied; (III) the Owners are entitled to the sums claimed as damages for breach.
I. Payment of hire is the absolute obligation of the Charterers
13. The Vessel was on hire from 4 June 2014,12 thus it was 3 July 2014 that was the
11 Shelltime 4, clause 7. 12 Moot Problem, 29.
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exact day of paying hire for the second month. On 3 July 2014, the Owners sent a
notice of second period hire payment to the Charterers. On 4 July 2014, the
Charterers sent an off-hire notice, stating that they refused to pay the same or any
part thereof,13 which breached the Charterparty. Hire-attaining is the Owners’
determinant purpose of letting the vessel. Payment of hire clause was a condition
based on its seriousness and importance of time-cost and certainty in commercial
transactions.14
14. On the one hand, the Charterers may argue that the Charterparty was frustrated by
no later than 4 July 2014. With reference to the case of the National Carriers v.
Panalpina, an event which so significantly changes the nature of the outstanding
contractual rights and/or obligations from what the parties could reasonably have
contemplated at the time of execution, that it would be unjust to hold them to the
literal sense of its stipulations in the new circumstances and the burden of proving
frustration will fall on the party alleging it.15 Accordingly, lack of contact was for
such a short period that would not change the nature of the contractual rights and
obligations.
15. On the other hand, the Vessel was released on 17 July 2014, much less than ninety-
first days, thus under Clause(f) of the BIMCO Piracy Clause for time Charter
Parties 2013,16 the hire payment shall not be affected. Besides, the Owners argue
that the Charterers shall pay the hire in full whatever would happen after the
13 Ibid, 41. 14 Kuwait Rocks Co v AMN Bulk Carriers Inc (The Astra) [2013] EWHC 865 (Comm). 15 John F Wilson, Carriage of Goods by Sea (Pearson Education Limited, 7th ed, 2010), 41. 16 Moot Problem, 11.
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payment. There are numerous cases can demonstrate the Charterers were liable to
pay a full month’s hire at the beginning of each month.17 Furthermore, even if the
vessel had been requisitioned after an installment of advance hire had become due,
leading to the frustration of the charterparty, the charterers were still liable to pay
the hire in full.18 Even if after the happening of that event charterers would have a
right of set-off as against a future installment of hire of a right of repayment, the
right to receive the payment of the hire installment was separate.19
16. This case shared the same situation thus the above cases can be applied. Moreover,
the off-hire periods claimed by the Charterers were disputed and not experienced
until 3 July 2014, thus no reduction would be allowed.
II. The Master strictly followed orders and the off-hire clauses shall not be
applied
17. In terms of the Charterers’ counterclaim,20 the Owners contend that the Master
was completely competent when he followed instructions from the Charterers and
their agents, thus the off-hire clauses21 were not activated.
18. At the later stages, the Master contacted with the Charterers’ agent, but the
Charterers argue that ASA2 is not, and has never been the agent of Charterers, thus
here comes to the issue of agency and Charterers’ fraud, which will be discussed
in the part of tort of fraud hereafter. In any event, Mr. Anya was the agent of the
Charterers and the Master has always strictly followed instructions from the
17 Tonnelier and Bolckow, Vanghan and Co v. Smith & Weatherill & Co (1897) 2 Com.Cas.258. 18 French Marine v. Compagnie Napolitaind’Eclairage et de Chauffage par le Gaz [1921] 2 AC 494. 19 Pan Ocean Shipping v. Creditcorp [1994]1 WLR 161,168-9(HL). 20 Moot problem, 68. 21 Shelltime 4, clause 21.
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Charterers. In terms of the Charterers’ untrue and dishonest orders during the whole
process, it is worth mentioning that there is some authority for suggesting that the
off-hire clause will not operate where the specified event results from a breach of
contract by the Charterer22. Even if the vessel did go off-hire in such an event,
presumably the owner could include the loss of hire in his claim for damages for
breach.23
19. Furthermore, the operation of the off-hire clause is triggered merely by the
occurrence of one of the specified events irrespective of any fault on the part of the
shipowner. Being a “no fault” clause, its provisions are strictly construed, and the
burden of proof rests firmly with the charterer.24 In addition, those clauses must
be read in favor of the owners because the charterer is attempting to cut down the
owners’ right to hire.25 In conclusion, the off-hire clause shall not be applied.
III. The Owners are entitled to the sums claimed as damages for breach
20. The payment of hire clause is a condition in a charterparty. A condition is an
essential contract term, breach of which entitles the innocent party to treat himself
as discharged from further performance of the contract, even if he has suffered no
prejudice. The innocent party can also claim damages for any loss suffered.
Accordingly, a breach of that condition, namely failure to pay hire, entitles the
owner to terminate the contract and claim damages for losses suffered.26
C. The Vessel involved was fit for service
22 Nourse v Elder, Dempster (1922) 13 LlLR 197; Lensen v Anglo-Soviet Shipping Co (1935) 52 LlLR 141. 23 John F Wilson, Carriage of Goods by Sea (Pearson Education Limited, 7th ed, 2010), 97. 24 John F Wilson, Carriage of Goods by Sea (Pearson Education Limited, 7th ed, 2010), 96-97. 25 Royal Greek Government v Minister of Transport (No 1) (1948) 82 LlLR 196 at p 199. 26 Kuwait Rocks Co v AMN Bulk Carriers Inc (The Astra) [2013] EWHC 865 (Comm).
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21. The Charterers argue that the Vessel was not fit for service on the ground that the
Master was incompetent and failed to take anti-piracy precautions. On the one hand,
the Owners do not admit this allegation totally and contends that the Vessel was
absolutely fit for service as required by the Charterparty. On the other hand, the
actions throughout the charter service which a prudent Master must be based on
the type of vessel and the voyage to be undertaken and further, the requirement to
exercise due diligence does not extend to protect against all conceivable
hazard.27Therefore, (I) the Vessel was fit for service and; (II) the Master was
competent and had followed anti-precautions;
I. The Vessel was fit for service
22. The Vessel was fit for service based on three main reasons. Firstly, the stipulations
in Clause 1 of this Shelltime 4 contain undertakings applicable at the date of
delivery, which impose absolute obligations. However, in regard to claims arising
out of “any loss of or damage to or in connection with cargo”, if they are subject to
the Hague or Hague-Visby Rules pursuant to Clause 27(c)(ii), the effect of Article
IV, rule 1 of the Rules will be to reduce the obligation of seaworthiness from an
absolute obligation to an obligation to exercise due diligence to make the ship
seaworthy.28 In this case, the Vessel is classed BV. To be classed BV a vessel must
meet stringent requirements as to safety equipment and electronic systems and the
Owners ensured that the Vessel possessed all the necessary documents such as the
Safety Equipment Certificate, Safety Radio Certificate, Safety Construction
27 The Portland Trader [1963] 2 Lloyd’s Rep 278, 281 28 Andrew W. Baker&Hatty Sumption,Time Charters (Lloyd’s Shipping Law Library,7th ed 2014), 660.
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Certificate and Safety Management Certificate.29
23. Secondly, the general requirement in Clause 1(c) of the amended Shelltime 4
constitutes an express undertaking of seaworthiness.30 Considering the words “in
every way fit for the service”, if the fitness must be fairly generally construed, one
may be laying the owners open to having to fulfill conflicting and inconsistent
obligations depending on which contingency is taken into account and the owners
are required, at the time of delivery, to anticipate and provide in advance for every
contingency.31 In other words, at the date of delivery, the Owners are not required
to take everything into consideration, which is not possible as well.
24. The third reason is concerned with the words “throughout the charter service.”
Whether they not only constitute absolute undertakings applicable at the date of
delivery, but absolute and continuing undertakings that the ship will always possess
all of those attributes in full, which are thought to be incorrect readings. It would
involve the owners in an extravagant promise and is contradicted by Clause 3(a) in
which the owners undertake only an obligation to exercise due diligence to
maintain or restore the ship.32 Owners therefore argue they exercised the requisite
degree of due diligence to the make Vessel seaworthy.
II. The Master was competent and had followed anti-precautions
25. The Respondent counterclaim that the Master was incompetent33 and failed to
29 Moot Problem,49 30 Andrew W. Baker&Hatty Sumption, Time Charters (Lloyd’s Shipping Law Library, 7th ed 2014), 661. 31 The Derby [1984] 1 Lloyd’s Rep.635, at page 641, upheld by the Court of Appeal at [1985] 2 Lloyd’s Rep.325. 32 Andrew W. Baker&Hatty Sumption, Time Charters (Lloyd’s Shipping Law Library, 7th ed 2014), 662. 33 It is the issue about whether the Master has strictly followed instructions, which has been discussed elsewhere,
thus there is no specific and duplicated statement here.
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follow anti-piracy precautions, which was denied by the Claimant based on three
main reasons.
26. Firstly, on the one hand, Clause (b) of the BIMCO STS Clause has put the
obligation of providing necessary items for the conduct of ship to ship operations
on the shoulder of Charterers. On the other hand, in accordance with the Clause(c)
of BIMCO Piracy Clause for Time Charter Parties 2013, it is not a strict obligation
but is at the Owners’ disposal. Besides, there is no term that specifies the exact time
for taking protective measures.
27. Secondly, under sub-clause (6) of the Piracy Clause of Special Provisions to ST4
Proforma, it is for the Owners to determine the level of threat and the measures
considered appropriate to discharge that obligation.34 Even so, in order to protect
this Vessel, the Owners have contacted their Safety Department to attend the Vessel
assisting in the plan and upgrade of systems and equipment on 27th May in
consideration of the WAF area, a known piracy threat area.35 Thus the Owners did
everything possible to protect the Vessel.
28. Thirdly, due to some problems with freighting parts, the Owners decided to provide
items concerned in Durban, 36 which was in accordance with the Charterers’
guidance that “we have alternative bunker supply available passing Durban or Cape
Town reverting” and these items were all prepared in Durban. However, the
constant changing guidance was not only out of the Owners’ control and not within
34 Moot Problem, 9 35 Ibid, 22. 36 Ibid, 27
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the “reasonable range.”37
III. Alternatively, the causation between the Owners’ duty and the Charterers’
loss had been interrupted by the Charterers’ tort of fraud
29. The first task of the Court is to look to see whether one of the causes is plainly the
proximate cause of the loss.38 Causation is not a chain but a net and at the point
where these various influences meet. It is for the judgment as upon a matter of fact
to declare which of the causes thus joined at the point of effect was the proximate
and which was the remote cause. The cause which is truly proximate is that which
is proximate in efficiency.39
30. The real efficient cause in this section lies in the Charterers’ tort of fraud. In terms
of systems and equipment needed in piracy threat area. The Owners had planned
to provide those items at Durban based on the Charterers’ previous guidance and
Charterers demonstrated that “everything is under control” on 3 June 2014.
However, during this course of things, Charterers did not provide the bunkers, even
had no intention of passing Durban. Therefore, the Owners’ actions did not cause
any damage and it was the misrepresentations and fraud by the Charterers that
directed the Vessel to another discharge place, leading to the losses.
31. We are concerned to inquire how far in the law of tort, when causal connection
between a wrongful act and harm is an element in responsibility. The decisions of
the courts have been controlled by the principle that this connection is negative if
37 Ibid, 26 38 The “Aliza Glacial” (2002) 2 Lloyd’s Rep. 421. 39 Leyland Shipping v. Norwich Union (1918) AC 350 (HL).
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the factors required, in addition to the wrongful act, for the production of the harm
include a voluntary human action or an abnormal occurrence.40 The Charterers’
tort of fraud, a voluntary human action, was more serious and proximate than the
claimed incompetence of the Master.
D. The Charterers were in breach of the Charterparty
32. The Charterers were in breach of the Charterparty because: (I) The Charterers
directed the Vessel to proceed to Angola in breach of the Charterparty; (II) The
Charterers directed the Vessel to proceed to an alternative discharge place without
the authorization of the Owners and in breach of the Charterparty; (III) A quantity
of Cargo was discharged from the Vessel at an alternative discharge place without
the authorization of the Owners and in breach of the Charterparty.
I. The Charterers directed the Vessel to proceed to unsafe places in breach
of the Charterparty
33. Under clause 4(a) of the Shelltime 4, it stipulates issues about period, trading limits
and safe places, providing that in any part of the world always to exclude Angola
and other places.41 Under Article 4(c) of Shelltime 4, the Charterers shall use due
diligence to ensure that the vessel is only employed between and at safe places
where she can safely lie always afloat.42 Additionally, the Charterers shall direct
the Vessel to a safe area for the conduct of such ship to ship operations but always
subject to the Master’s approval.43 The Charterers shall obtain any and all relevant
40 H. L. A. Hart & Tony Honore.Causation in the Law (Oxford University Press; 2nd revised edition). 41 Shelltime 4, clause 4(b). 42 Ibid, clause 4(c) 43 BIMCO STS Clause of the LDTP Rider Clauses, clause (b); Moot problem, 10.
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permission from proper authorities.44
34. The Owners argue that the Charterparty includes a safe port warranty by reason of
the express terms and the terms expressly exclude the areas of high pirate risks,
which is an implicit reference to avoiding the risk of piracy and indicates the
Owners’ unwillingness to bear that risk. The Charterparty is no warrant for
construing clause 4 as an agreement by the Owners that the Vessel can be instructed
by the Charterers to proceed to any port or place other than the excluded areas.45
The alternative discharge place known as Area 1 is near Angola and of high pirate
risk. Both the OPL Luanda and Area 1 are not safe places which are excluded by
Charterparty. Therefore, the Charterers have breached the contract.
35. The Charterers directed the Vessel to proceed to Area 1 without the authorization
of the Owners and in breach of the Charterparty. Although the Master agreed to go
there and, to some extent, the Master could act on behalf of the Owners. However,
the Charterers should still obtain the Owners’ authorities.
II. A quantity of Cargo was discharged without the authorization of the
Owners and in breach of the Charterparty
36. Under BIMCO (c), the Charterers shall obtain any and all relevant permissions
from proper authorities to perform ship to ship operations.46
37. On 4 July, the Master informed the Charterers and their agent that the Vessel was
ready for discharge of cargo and tendered notice of readiness. However,
44 BIMCO STS Clause of the LDTP Rider Clauses, clause (c); Moot problem, 10, 11. 45 Taokas Navigation SA v Komrowski Bulk Shipping KG (GmbH & Co), Kent Line International Ltd., Solym
accordance with a sound system, having regard to the nature of the cargo55 while
“carefully” means that care must have been taken when the Owners maintain a
sound system throughout the voyage56. The requirement “properly and carefully
carry and discharge the goods carried” means that the Owners must perform the
duties of carriage and discharge imposed upon them by the contract in a proper and
careful manner.57
44. On the present facts, the Vessel loaded the cargo of 30 mt Jet A1 and 72mt Gasoil
at Singapore on June 8.58 After that, the cargo was kept in a proper and careful
management. And there was no loss of the cargo until the vessel was attacked by
the pirates.59
b. The Owners may rely on the excepted perils under Article IV, Rule2
45. Under Article III, Rule 2, the carrier’s obligations of proper and careful carriage of
goods are subject to the Article IV, rule 2 of the Hague-Visby Rules.60 The Owners
remain under an obligation to “properly and carefully load, handle, stow, carry,
keep, care for and discharge the goods carried”. But the Owners is not liable if the
“loss or damage” to the goods arises or results from one of the matters identified
in paragraph (a)-(q) of Article IV, Rule 2. Where the Charterers allege a breach of
Article III, Rule 2 and the Owners rely on one of the identified matters in paragraph
(a)-(q) as a defense, the liability of the Owners will turn on whether the loss or
55 Albacora v Westcott and Laurance Line [1966] 2 Lloyd’s Rep 53, 64; CV Sheepvartondereneming Ankergracht
v. Stemcor (Australasia) Ptd Ltd [2007] FCAFC 77, 29. 56 Atlantic Consolidated Foods Ltd. v. The Doroty, 1978 CarswellNat 78 57 Falconbridge Nickel Mines Ltd. v. Chimo Shipping Ltd.1969 CarswellNat 362; G.H. Renton & Co. v. Palmyra
Trading Corp. of Panama [1957] A.C. 149 58 Moot Problem, 29. 59 Ibid, 42. 60 Hague-Visby Rules a (IV)(2).
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damage arose or resulted from the breach or from the identified matters.61
(1) Piracy is a kind of perils, dangers of the sea
46. Article IV Rule 2(c) of the HVR exempts carriers from liability for loss or damage
arising from ‘perils, dangers and accidents of the sea or other navigable waters’.62
There was no criterion which alone would identify whether what happened as
properly to be called a peril of the sea; all of the facts and circumstances concerning
the voyage must be examined.63 But a peril of the seas can only be unforeseeable
events that cannot be avoided by the reasonable person64, thus no peril is one
"which could be foreseen as one of the necessary incidents of the adventure65". To
some extent, piracy actions are unexpected and fortuitous. The Owner was unable
to foresee the attack of the pirates. And it is not a kind of ordinary perils. Not every
vessel will be attacked by the pirates. Thus, loss to the goods which have been held
to be caused by perils of the sea include piracy. Many cases were in support of this
conclusion.66
(2) Piracy is an act of war
47. Article IV Rule 2(e) of the HVR exempts carriers from liability for loss or damage
arising from acts of war.67 These is an academic view that if piracy becomes “more
localized” in certain “hot spots”, typical war clauses could apply to it.68 Also, in
61 Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad 196 CLR 161, 22 62 Paul Todd, Maritime Fraud and Piracy (Informa Publishing, 2nd ed, 2010) 1.119. 63 Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad 196 CLR 161, 2 64 Thames and Mersey Insurance Co Ltd v Hamilton Fraser & Co (1887) LR 12 App Cas 484(H L); The Tila
Gorthon, [1985] 1 Lloyd’s Rep. 552. 65 Thomas Wilson Sons & Co v Owners of Cargo of the Xantho (The Xantho) (1887) LR 12 App Cas 503 (HL);
per Lord Herschell at [509] 66 Pickering v Barkley (1648) Style 132 [82 ER 587]; Great China Metal Industries Co Ltd v Malaysian
International Shipping Corporation Berhad 196 CLR 161; Thomas Wilson Sons & Co v Owners of Cargo of the
Xantho (The Xantho) (1887) LR 12 App Cas 503 (HL); 67 Hague-Visby Rules, a (IV)(2e). 68 Paul Todd, Maritime Fraud and Piracy (Informa Publishing, 2nd ed, 2010) 1.166.
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some war risk clauses69, piracy is regarded as a kind of war risks.70 Area 1 was a
High Risk Area. Thus, the attack of the pirates can be identified as an ‘act of war’.
(3) Piracy is any other cause arising without the actual fault and privity of the
Owners
48. Acticle IV, Rule 2(q) of the HVR provides that carriers shall not be liable for
damages resulting from any other cause arising without the actual fault and privity
of the Owners.71
49. It is impossible to identify all exceptions. The phrase of any other cause is to be
interpreted to include all cases where these is no fault or privity.72 Privates acts
certain fall within the scope of the meaning. On the present facts, piracy was
unforeseeable and extraordinary. The Owners, including their servants, were
unable to foresee it and not contributed to the loss of cargo. Also, they discharged
their obligation of protecting the safety of the Vessel, crew and cargo, which also
in compliance with BMP4. The Owners had no fault or privity.
PART THREE: TORT OF FRAUD
50. If the Charterers intended the representations to be acted upon and that they knew
them to be untrue, the representations made by the Charterers can be regarded as
fraud.73 The rule in regard to allegations of fraud is that the Owners must allege
that (A) the representations were untrue; (B) the Charterers knew that they were
69 Institute Wars and Strikes Clauses 1/10/83; “BIMCO Standard War Risk Clause for Time Charters, 1993 Code
Name: ‘CONWARTIME 1993’ 70 Atlasnavios Navegacao Lda (formerly Bnavios Navegacao Lda) v Navigators Insurance Co Ltd 2014 WL
6862527; Pacific Basin IHX Ltd v Bulkhandling Handymax AS 2011 WL 5105123 71 Hague-Visby Rules, a (IV)(2q) 72 Potts v Union SS Co of New Zealand [1946] NZLR 276 73 Davy v. Garrett (1878), 7 Chancery Division 473, Thesiger, L.J., at 489; Wallingford v. Mutual Society (1880), 5
A.C. 697, per Lord Hatherley, at 701; Paterson et al. v. Livingstone, [1931] 1 D.L.R. 386, at 387.
untrue and (C) the Charterers had the intention that the statement be relied upon.74
A. The Representations were untrue
51. On 27 May, the Owners required about 1500 mt FO for the voyage. 75 The
Charterers only gave 950mt IFO 380cst but promised that there were alternative
bunker supplies available passing Durban or Cape Town on 3 July.76 However, on
28 June, they changed bunker supply and discharge coordinated in Area 1 instead
of Durban or Cape Town. 77 In the end, there were no bunker supply neither in
Durban or Cape Town nor in Area 1. After leaving Singapore, the Vessel has never
been provided with bunkers.
B. The Charterers knew that those representations were untrue
52. The voyage route was regulated by the Charterers and they knew where the Vessel
would go before the Charterparty had been signed. Thus, the Charterers had a clear
conception on how much bunker would be required during the whole voyage. And
they also knew whether they had the financial ability of affording it. Otherwise,
they would not agree to sign the Charterparty. The Charterers have the obligation
to provide bunkers to the Owners under the Charterparty. Of necessity, the ability
of the Charterers to provide the ship with the correct quantity of bunkers requires
the co-operation of the owners and their offices.78 On 27 May, the Charterers did
not deny the quantity ordered by the Owners. Additionally, when the Charterers
gave these instructions to the Owners, they did not explain the reasons why they
74 Savage v. Greco Donair Francise Ltd. 1981 CarswellNB 299, 3. 75 Moot Problem, 20. 76 Ibid, 25, 26. 77 Moot Problem, 34. 78 Terence Coghlin, Andrew Baker, et al, Time Charters (7th ed, informa law, 2014), page 249.
22
had to change discharge coordinate and bunker supply. If there actually exists some
problems or factual information, they shall tell the Owners what happened.
53. Further, the Owners were a new comer in this field and they have had a tough time
with their tanker experiment.79 They did not have much relevant experience during
the whole voyage. And whether Area 1 is an area with high risk of piracy is still in
dispute. Thus, the Master was not aware that Area 1 may be dangerous and they
followed the Charterers’ instructions to go to the Area 1.
C. The Charterers had the intention that the representations be relied upon
54. Under Shelltime 4, the Charterers had the intention that the Owners would rely on
those representations because under Shelltime 4, the Charterers had the right to
instruct Owners and the Owners shall be subject to the instructions from the
Charterers.
55. Additionally, ASA2 is the Charterers’ agent. To establish that, some intricate
analysis should be attached to the facts and the nature of the relationship between
the parties. 80 It is the effect in law of the way the parties have conducted
themselves that must be investigated in order to determine whether the agency
relationship has come into existent.81
56. The Owners argue that William Edward Anya, the STS coordinator of Atlantic STS
Agency Ltd, is the agent of the Charterers. Atlantic Services Agency first appeared
on 8 June when the Master sent a copy of an email to it.82 On 28 June, the
79 Moot Problem, 44. 80 Chender v. Lewaskewicz, 2007 CarswellNS 497, 16. 81 G. E. Dal Pont, The law of Agency (Butterworth’s, 7th ed, 1996), 13. 82 Moot Problem, 29.
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Charterers sent a copy to Mr. Anya whose email address was
“[email protected]”. 83 This email was about discharge coordinate, next
bunker supply and information of next voyage. After few minutes, Mr. Anya sent
an email to the Master as an STS coordinator and he emphasized that the charterers
had passed control of the owner’s vessel to them for local instruction. Its address