TEAM NO. 12 · A. Respondent is exempted from liability arising out of late redelivery as the charter period is set ... Blue Sky One Ltd v Mahan Air [2009] EWHC 3314 (Comm). ... Hayes

THE TWENTIETH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

Memorandum for Respondent

On Behalf of:

Omega Chartering Limited

P.O. Box 911, Vaduz, Liechtenstein

(RESPONDENT)

Against:

Panther Shipping, Inc.

80 Broad Street, Monrovia, Liberia

(CLAIMANT)

RIZKY BAYUPUTRA – RAFI YUSZAR – ANGGARDHA ANINDITO

TEAM NO. 12

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Team 12 Memorandum for Respondent

MEMORANDUM FOR RESPONDENT

TEAM NO. 12

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Team 12 Memorandum for Respondent

TABLE OF CONTENTS

LIST OF AUTHORITIES ....................................................................................................................................... v

LIST OF ABBREVIATIONS ................................................................................................................................... x

SUMMARY OF FACTS ......................................................................................................................................... 1

ARGUMENTS FOR RESPONDENT ....................................................................................................................... 2

SUBMISSIONS ON CLAIMS .................................................................................................................................. 2

ARGUMENTS ON THE MERITS OF THE CLAIM .................................................................................................. 2

I. RESPONDENT IS NOT LIABLE FOR DAMAGES ARISING FROM THE LOSS OF NEXT

FIXTURE.......................................................................................................................................................... 2

A. Respondent is exempted from liability arising out of late redelivery as the charter period is set

‘without guarantee’ ....................................................................................................................................... 3

B. Respondent had not assumed responsibility for losses in connection with missing the Next

Fixture ........................................................................................................................................................... 5

(i) Respondent could not have contemplated the extent of the loss ..................................................... 5

(ii) Respondent could not contemplate that late redelivery would put Claimant into poor market

conditions .................................................................................................................................................. 6

C. Claimant’s losses were caused by their own unreasonable actions .................................................... 7

D. There was no substantial chance for the Next Fixture to be extended .............................................. 8

II. RESPONDENT IS NOT LIABLE FOR ALL COSTS IN RELATION TO HCO ............................... 9

A. Respondent’s HCO Obligations have not arisen as overdue stay at Wahanda was not caused by

Respondent’s orders .................................................................................................................................... 9

B. Clause 83(d) of the Rider Clauses is Unenforceable .......................................................................... 10

C. Claimant had aggravated Respondent’s loss while performing HCO ............................................. 11

D. Claimant had no legitimate interest in forcing the Charterparty into an extended run ................ 12

(i) Claimant had perverse intentions .................................................................................................... 12

SUBMISSIONS ON THE COUNTERCLAIM .......................................................................................................... 13

ARGUMENTS ON THE ADMISSIBILITY OF THE COUNTERCLAIM .................................................................... 13

III. RESPONDENT IS ENTITLED TO SUBMIT CARGO CLAIMS ................................................. 13

IV. RESPONDENT’S CARGO CLAIMS ARE NOT TIME-BARRED .............................................. 14

A. Respondent had given proper notification.......................................................................................... 14

B. Alternatively, Claimant had waived the requirement of a proper notification ............................... 16

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM ................................................................................ 17

V. CLAIMANT IS LIABLE FOR THE DAMAGE TO THE CARGO ................................................... 17

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Team 12 Memorandum for Respondent

A. Claimant is fully responsible for the losses under the ICA ............................................................... 17

(i) The damage was caused by error in management of the Vessel pursuant to Clause 8(a) of the

ICA .......................................................................................................................................................... 18

(ii) The neglectful action of Claimant’s servants had caused damage to the Cargo pursuant to

Clause 8(d) of the ICA ........................................................................................................................... 18

B. Alternatively, the apportionment of liability is shared between the Parties ................................... 19

VI. RESPONDENT IS NOT REQUIRED TO PAY FOR HIRE DURING THE DETENTION

BECAUSE THE VESSEL SHALL BE CONSIDERED OFF-HIRE ........................................................ 19

A. The delay for 51 days amounts to off-hire pursuant to Clause 17 of NYPE15 ............................... 20

(i) The Vessel was prevented from full working .................................................................................... 20

(ii) The cause preventing the full working of the Vessel falls under Clause 17 of NYPE15 ........... 21

(a) The detention falls under ‘detention by Port State control for Vessel deficiencies’ .................. 21

(b) Alternatively, the detention falls under ‘any other similar cause preventing the full working of

the Vessel’ ............................................................................................................................................... 22

B. In any event, Claimant had assented the risks of detention .............................................................. 23

VII. CLAIMANT IS LIABLE FOR COMPOUND INTEREST ............................................................... 24

PRAYER FOR RELIEF................................................................................................................................ 25

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Team 12 Memorandum for Respondent

LIST OF AUTHORITIES

A. Articles and Books

Jie Liu "Chartering policies in the dry bulk market" (2001). World Maritime University Dissertations. 202.

Rathore KS, Keshari R, Rathore A, Chauhan D. A Review on Ebola Virus Disease.

PharmaTutor.2014;2(10):17–22.

Rothstein, Mark A. At Law: Ebola, Quarantine, and the Law. The Hastings Center Report 45, no. 1 (2015):

5-6.

B. Cases

Actis Co. Ltd. v The Sanko Steamship Co. Ltd. (“The Aquacharm”) [1982] 1 Lloyd’s Rep 7.

Albion Water Ltd v Dwr Cymru Cyfyngedid [2013] 3 WLUK 785.

Allied Maples Group Ltd v Simmons & Simmons [1996] C.L.C. 153.

Anderson v Anderson [1895] 1 QB 749.

Andre & Cie S.A. v Orient Shipping (Rotterdam) B.V. (“The Laconian Confidence”) [1997] 1 Lloyd’s Rep

139.

Associated British Ports v Tata Steel UK Limited [2017] EWHC 694 (Ch).

Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei G.m.b.H. (“The Puerto Buitrago”)

(C.A.) [1976] 1 Lloyd's Rep. 250.

Baird v Hastings [2015] 5 WLUK 107.

Belcore Maritime Corporation v F.Lli. Moretti Cereali S.P.A. (“The Mastro Giorgis”) [1983] 2 Lloyd’s

Rep 66.

Blue Sky One Ltd v Mahan Air [2009] EWHC 3314 (Comm).

Bremer Handelsgessellschaft mbH v Continental Grain [1983] 1 Lloyd’s Rep 269.

Bright v Barnsley District General Hospital NHS Trust [2004] 11 WLUK 781.

British Movietonenews Ltd v London and District Cinemas [1952] AC 166.

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Bulfracht (Cyprus) Ltd v Boneset Shipping Co. Ltd (“The Pamphilos”) [2002] 2 Lloyd’s Rep 681.

Patience (George) v Mackenzie, [1912] S.C. (J.) 7.

Bulfracht (Cyprus) Ltd. v Boneset Shipping Co. Ltd. (“The Pamphilos”) [2002] 2 Lloyd's Rep. 681.

C. Czarnikow, Ltd. v Koufos (“The Heron II”) [1967] 2 Lloyd's Rep. 457.

C.A. Venezolana De Navegacion v Bank Line (“The Roachbank) [1987] 2 Lloyd’s Rep 498.

Cable & Wireless plc v IBM United Kingdom Ltd [2002] 1 All E.R. (Comm) 1041.

Ceylon v Chandris [1965] 2 Lloyd's Rep. 204.

Chandris v Isbrandtsen-Moller Co Inc [1949/50] 83 Lloyd’s Rep 385.

Clea Shipping Corporation v Bulk Oil International Ltd. (“The Alaskan Trader”) (No. 2) [1983] 2 Lloyd’s

Rep 645.

Cobelfret Bulk Carriers NV v Swissmarine Services SA [2010] 1 Lloyd's Rep. 317.

Compagnie Noga D’importation Et D’exportation SA v Abacha & Ors [2003] EWCA Civ 1100.

Continental Pacific Shipping Ltd. v Deemand Shipping Co. Ltd. (“The Lendoudis Evangelos II”) [1997] 1

Lloyd’s Rep 404.

Davies v Taylor [1974] AC 207.

Electrical Wholesalers Ltd v Alcatel Submarine Networks Ltd [1999] 2 Lloyd’s Rep 423.

Emirates Trading Agency v Prime Mineral Exports Private Ltd [2014] 2 Lloyd’s Law Reports 457.

Exportadora Valle de Colina SA v AP Moller-Maersk A/S [2010] EWHC 3224 (Comm).

Five Oceans Salvage Consultants Ltd v Perla Navigation Ltd [2013] EWHC 4055 (Comm).

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

Gator Shipping Corporation v Trans-Asiatic Oil Ltd. S.A. And Occidental Shipping Establishment (“The

Odenfeld)” [1978] 2 Lloyd's Rep. 357.

Glenochil, The [1896] P 10.

Gosse Millerd, Ltd., And Another v Canadian Government Merchant Marine, Ltd. (“The Canadian

Highlander”) [1927] 28 Ll. L Rep 88.

Hadley v Baxendale (1854) EWHC J 70.

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Hall v Wright [1859] 11 WLUK 133.

Hans Peter Moller and Others v Jecks [1865] 144 E.R. 815.

Hayden v Maidstone and Turnbridge Wells NHS Trust [2016] EWHC 3276.

Hayes v South East Coast Ambulance Service [2015] EWHC 18.

Hyundai Merchant Marine Co Ltd v Furness Withy Pty (The Doric Pride) [2005] EWHC 945 (Comm).

Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506.

ING Bank NV v Ros Roca SA [2011] EWCA Civ 353.

Intense Investments Ltd v Development Ventures Ltd [2006] EWHC 1586 (TCC).

IPSOS S.A. v Dentsu Aegis Network Limited (formerly Aegis Group plc) [2015] EWHC 1171 (Comm).

Isabella Shipowner Sa v Shagang Shipping Co Ltd (“The Aquafaith”) [2012] 2 Lloyd’s Rep 61.

Japy Freres and Co. v Sutherland & Co. (C.A.) [1921] 6 Lloyd's Rep. 381.

Johnson v Agnew [1980] AC 367.

Kuwait Oil Tanker Co SAK & Anor. v Qabazard [2002] EWCA Civ 34.

Laminates Acquisitions v BTR Australia Limited [2004] 1 All ER (Comm) 737.

Losinjska Plovidba Brodarstovo Dd v Valfracht Maritime Co. Ltd. And Another (“The Lipa”) [2009] 2

Lloyd's Rep 17.

Lyle Shipping Co. v Cardiff Corporation [1899] 5 Com. Cas. 87.

Man Nutzfahrzeuge AG v Freightliner Ltd [2005] EWHC 2347 (Comm).

Mareva Navigation Co. Ltd. v Canaria Armadora S.A. (“The Mareva A.S.”) [1977] 1 Lloyd's Rep. 368.

McDonald v Dennys Lascelles Ltd [1933] 48 CLR 457.

Metal Market OOO v Vitorio Shipping Co Ltd [2013] 2 Lloyd’s Rep 541.

Minerva Navigation Inc v Oceana Shipping Ag (“The Athena”) [2013] 2 Lloyd’s Rep 673.

MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] 2 Lloyd’s Rep 494.

Nippon Yusen Kaisha Ltd. v Scindia Steam Navigation Co. Ltd. (“The Jalagouri”) [2000] 1 Lloyd's Rep.

515.

Ocean Marine Navigation Limited v Koch Carbon Inc. (“The Dynamic”) [2003] 2 Lloyd’s Rep 693.

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Petroleum Oil and Gas Corporation Of South Africa (Pty) Ltd v Fr8 Singapore Pte Ltd, The [2008] EWHC

2480 (Comm).

Rijn, The [1981] 2 Lloyd’s Rep 267 (Q.B.).

Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] UKSC 24.

ROK Plc (in administration) v S Harrison Group Ltd [2011] EWHC (Comm).

Royal Greek Government v Minister of Transport (“The Ann Stathatos”) [1949] 83 Ll L Rep 228.

Royal Greek Government v Minister of Transport (“The Illissos”) [1949] 1 KB 7 (Court of Appeal).

Scott v United States [2018] EWHC 2021 (Admin).

Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners and another [2008]

Bus. L.R. 49.

Sidermar S.p.A. v Apollo Corporation (“The Apollo”) [1978] 1 Lloyd’s Rep 200.

Slack v Cumbria CC [2009] EWCA Civ 293.

Spiro v Lintern [1973] 1 WLR 1002.

Summit Navigation Ltd v Generali Romania Asiguarare Reasiguarare SA [2014] EWHC 398 (Comm).

Supershield Ltd v Siemens Building Technologies FE Ltd [2010] 1 Lloyd’s Rep 349.

Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd (“The Sylvia”) 2 Lloyd’s Rep 81.

TCB Ltd v Gray [1986] Ch 621.

Transfield Shipping Inc v Mercator Shipping Inc (“The Achilleas”) [2008] 2 Lloyd’s Rep 275.

Transgrain Shipping (Singapore) Pte Ltd v Yangtze Navigation (Hong Kong) Co Ltd (“Mv Yangtze Xing

Hua”) 1 Lloyd's Rep. 330.

Transgrain Shipping (Singapore) Pte Ltd v Yangtze Navigation (Hong Kong) Ltd [2017] EWCA Civ 2107.

Transpetrol Maritime Services Ltd v SJB (Marine Energy) BV [2012] 1 Lloyd's Rep 564.

Triad Shipping Co. v Stellar Chartering & Brokerage Inc. (“The Island Archon”) [1994] 2 Lloyd's Rep.

227.

Victoria Laundry v Newman Industries, Ltd. [1949] 2 K.B. 528.

Washington, The [1976] 2 Lloyd's Rep 453.

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C. Statutes and Regulations

Arbitration Act 1996 (United Kingdom).

IMO Resolution A.1052(27) on Procedures for Port State Control, 2011.

Carriage of Goods by Sea Act 1992 (United Kingdom).

Maritime and Port Authority of Singapore – Port Marine Circular No. 11 of 2014.

Panama Canal Advisory to Shipping No. A-22-2014 dated September 23, 2014 regarding Measures for the

Prevention and Protection against Ebola Virus Disease (EVD).

United States Coast Guard Sector New Orleans – Marine Safety Information Bulletin No. 1317 ‘Vessel

Reporting Requirements from Countries Posing a Serious Ebola Threat’ dated 10 October 2014.

Prevention and Control of Disease Regulation Cap. 599, section 7, L.N. 203 of 2008 (Hong Kong).

D. Other

New York Produce Exchange 2015 Time Charterparty Form.

Inter-Club New York Produce Exchange Agreement/Inter-Club Agreement per September 2011.

Re: South American P&I Club Circular 01/14 – Ebola – South American Countries.

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LIST OF ABBREVIATIONS

Abbreviation Term

A.C. Law Reports Appeal Cases

Admin Administrative Court

All E.R. All England Law Reports

C.A. English Court of Appeals

Cargo 8,600mt of loose-leaf English tea carried by the

Vessel

Charterparty The time charterparty between Claimant and

Respondent

Claimant Panther Shipping Inc., Panther Shipping, Inc., 80

Broad Street, Monrovia, Liberia

Comm Commercial Court

EWCA England and Wales Court of Appeals

EWHC England and Wales High Court

Fixture Recap End of negotiations between Claimant and

Respondent which signifies the conclusion of the

Charterparty

HCO Hull cleaning operations

ICA Inter-Club Agreement as amended September 2011

IMO International Maritime Organisation

KB King’s Bench

Ll. L. Rep. Lloyd’s Law Report

Lloyd’s Rep Lloyd’s Law Report

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Master Captain Rogers, Master of the M/V Thanos Quest

Moot Problem International Maritime Law Arbitration Moot 2019

Moot Scenario (V3) Released 25 March 2019

NYPE15 New York Produce Exchange 2015 Time

Charterparty Form

Preliminary Report Report by Mekon Surveyors published on 7 July

2016

QB Queen’s Bench Division

Receivers Hawkeye Import & Export Pty, Wahanda, Bao

Kingdom

Respondent Omega Chartering Limited, P.O. Box 911, Vaduz,

Liechtenstein

Rider Clauses Omega Rider Clauses as negotiated between

Claimant and Respondent in the Fixture Recap

S.C. Scottish Council

UKHL United Kingdom House of Lords

UKSC United Kingdom Supreme Court

Vessel M/V Thanos Quest

W.L.R. Western Law Reports

WPS Wahanda Port Services

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Team 12 Memorandum for Respondent

SUMMARY OF FACTS

1. On 18 March 2016, Panther Shipping, Inc. (“Claimant”), owners of the M/V THANOS QUEST

(“Vessel”) entered into a charterparty with Omega Chartering Ltd. (“Respondent”) (collectively, the

“Parties”) for the delivery of 8,600mt of tea (“Cargo”) from West Coast, Challaland (“West Coast”)

to Wahanda, Bao Kingdom (“Wahanda”) for a period of ‘about 50-55 days without guarantee’ on

an amended NYPE15 with Rider Clauses (“Charterparty”). The Vessel was delivered on 29 March

2016 at West Coast.

2. On 18 April 2016, 100 cases of Ebola virus disease (“Ebola”) were discovered in West Coast.

However, the Vessel continued loading operations in West Coast and departed on 20 April 2016. The

Vessel arrived at Wahanda on 7 May 2016 where she was detained by Wahanda Port Services

(“WPS”) and prevented from discharge. During the detention, the Vessel’s hull began to foul with

marine growth. On 15 June 2016, whilst still in detention and not knowing when the detention will

end, Claimant entered into a time charter with Champion Chartering Corp. (“Champion”) for a

period of two years with an additional two years on Champion’s option with a delivery window of

22 - 28 June 2016 (“Next Fixture”).

3. The Vessel was released from detention on 26 June 2016, where the Vessel proceeded to discharge

the Cargo. On 27 June 2016, it was revealed that Cargo Hold No. 2 had been flooded due to a

crewman opening the wrong valve during ballasting thus water-damaging the Cargo. The Vessel took

some time to discharge, resulting the Next Fixture to be missed.

4. Respondent redelivered the Vessel on 30 June 2016 after concluding discharge. Prior to redelivery,

Respondent’s numerous lump sum offers and a final offer to clean the Vessel at North Island at

USD33,000, were blatantly disregarded. Under no reasonable grounds, Claimant refused the

redelivery and opted to clean the hull at South Island at a substantially higher price of USD96,567.42

including bunkers. On 4 July 2016, Claimant entered into another charter with Fairwind International

BVI with a delivery window of 4-6 July 2016 for a period of ‘about 50-55 days’ (“Replacement

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Fixture”). Claimant initiated arbitration proceedings on 16 October 2018 for missing the Next

Fixture and hull cleaning. In response, Respondent submitted counterclaims in regards to Cargo

damage and withdrawing hire pursuant to the detention.

ARGUMENTS FOR RESPONDENT

SUBMISSIONS ON CLAIMS

ARGUMENTS ON THE MERITS OF THE CLAIM

I. RESPONDENT IS NOT LIABLE FOR DAMAGES ARISING FROM THE LOSS OF

NEXT FIXTURE

5. During the course of the Charterparty, on 15 June 2016, Claimant entered into the Next Fixture

with Champion Chartering for two years with an option to extend for another two years and a

scheduled delivery window set at 22-28 June 2016.1 However, the Vessel was not redelivered to

Claimant during that period as the Vessel was still in discharge by 28 June 2016, thus causing

Claimant to miss the delivery window for the Next Fixture and Champion Chartering’s subsequent

cancellation.2

6. Although Respondent had conceded the occurrence of late redelivery,3 Respondent is not liable for

the losses of the Next Fixture based on four alternative reasons, that being (A) Respondent is

exempted from liability arising out of late redelivery as the charter period is set ‘without

guarantee,’ (B) Respondent had not assumed responsibility for the loss, (C) Claimant’s losses were

caused by their own unreasonable actions, and (D) there was no substantial chance for the Next

Fixture to be extended.

1 Moot Problem, p. 30. 2 Moot Problem, pp. 40-41. 3 Moot Problem, p. 72.

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A. Respondent is exempted from liability arising out of late redelivery as the charter

period is set ‘without guarantee’

7. Claimant asserts that because of Respondent’s late redelivery, Respondent is liable for the loss

arising out of missing the Next Fixture. However, Claimant had overlooked the fact that the charter

period was set at ‘about 50-55 days without guarantee’4 thus exempting Respondent from any

liability arising out of late redelivery.5

8. If a charter period was given ‘without guarantee’ charterers’ obligations are reduced to merely

giving the charter period in good faith, meaning that that charterers had genuinely believed, at the

time of conclusion of a charterparty, the trip would last a certain period of time in normal

circumstances.6 As long as the estimate was made in good faith, charterers cannot be held liable

for any loss arising from late redelivery.7

9. In the present dispute, Respondent genuinely believed at the time of conclusion on 18 March 2016,

the voyage would last for about 50-55 days. The only reason why the Charterparty exceeded this

estimate was the detention by WPS in response to a sudden outbreak of Ebola in West Coast, the

Vessel’s port of loading.8 Had the detention not happen, the Charterparty would only last a total of

46 days, well within Respondent’s estimate.9 As a consequence, Respondent cannot be held liable

for the loss of the Next Fixture as Respondent had provided the charter period’s estimation in good

faith.

10. Claimant might argue that the Charterparty had been varied as a result of an Ebola outbreak on 18

April 2016, and that, pursuant to the variation, the charter period of ‘about 50-55 days without

4 Moot Problem, p. 4. 5 Japy Freres and Co. v Sutherland & Co. (C.A.) [1921] 6 Lloyd's Rep. 381; The Lendoudis Evangelos II [1997] 1 Lloyd’s

Rep 404; The Lipa [2001] 2 Lloyd's Rep 17; Transpetrol Maritime Services Ltd v SJB (Marine Energy) BV [2012] 1 Lloyd's

Rep 564. 6 Ibid. 7 Ibid. 8 Moot Problem, pp. 24, 72. 9 It took 23 days to load and depart from West Coast (28 March 2016 to 20 April 2016), then 17 days for the voyage to

West Coast (20 April 2016 to 7 May 2016), and finally another 5 days (26 to 30 June 2016) from the start of discharge

operations to redelivery.

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Team 12 Memorandum for Respondent

guarantee’ was not given in good faith. However, arguments as such cannot stand for three reasons.

Firstly, Contractual variations by operation of law caused by an extreme change of circumstances

may only apply to clear quantities in standard forms and not to mere representations10 such as

‘without guarantee’ in charter periods.11

11. Secondly, variations by operation of law can only apply to amendments that would lead to the

subject matter of the contract, such as the reduced amount of produce able to be sold to vendors

after a flood ruined a whole farming area in a sales contract.12 Presently, giving a new estimate in

the face of Ebola would be impossible and much more uncertain as the length of quarantine might

differ from vessel to vessel and port to port.

12. Thirdly, with the variation inapplicable, the given meaning of ‘without guarantee’ itself

indemnifies Respondent from liability out of late redelivery especially if unforeseeable events

intervened the Charterparty.13 During the conclusion of the Charterparty on 18 March 2016,

Respondent couldn’t have foreseen an Ebola outbreak taking place in West Coast and accordingly

the ‘without guarantee’ protects Respondent indefinitely from liability arising out of late

redelivery.

13. Conclusively, Claimant cannot argue that the charter period was varied after Ebola intervened

during the course of the Charterparty.

10 Bremer Handelsgessellschaft mbH v Continental Grain [1983] 1 Lloyd’s Rep 269. 11 Hall v Wright [1859] 11 WLUK 133; British Movietonenews Ltd v London and District Cinemas [1952] AC 166; Bremer

Handelsgessellschaft mbH v Continental Grain [1983] 1 Lloyd’s Rep 269. 12 Bremer Handelsgessellschaft mbH v Continental Grain [1983] 1 Lloyd’s Rep 269. 13 The Lendoudis Evangelos II [1991] 1 Lloyd’s Rep. 404; A. Mandarka-Sheppard, What Obligation Does Without

Guarantee Exclude? [1997] L.M.C.L.Q. 359.

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B. Respondent had not assumed responsibility for losses in connection with missing the

Next Fixture

14. A party could not assume responsibility for losses that are too remote to be recovered.14 In The

Achilleas,15 a charterer may only assume responsibility for the entirety of a missed fixture if they

could contemplate the extent of the loss or if they understood late redelivery would expose

shipowners to poor market conditions. In the present dispute, Respondent had not assumed

responsibility of the loss arising out of missing the Next Fixture for two alternative reasons: (i)

Respondent did not have the necessary knowledge to assume responsibility and (ii) Respondent

could not have understood that late redelivery would put Claimant into poor market conditions.

(i) Respondent could not have contemplated the extent of the loss

15. Claimant may argue that there is sufficient information for Respondent to have contemplated the

extent of the loss. However, Respondent submits that Respondent was not exposed to information

that would have led them being able to contemplate the extent of the loss.

16. In the Achilleas,16 the assessment of whether a charterer is liable for a missed fixture is determined

based on the knowledge of the charterer at the time of conclusion so long as the charterer could

contemplate the extent of the loss.

17. In the present dispute, Respondent was not in possession of knowledge to contemplate the extent

of the loss. The only information Respondent had received from Claimant was a Chatter post

stating that Claimant is ‘looking to fix 3-5 years.’17 The statement ‘looking to fix 3-5 years’ only

prescribes Claimant’s intent to look for a three to five-year charter, not the certainty of its existence.

By reading the Chatter post, Respondent as a reasonable person would only be able to comprehend

14 Hadley v Baxendale (1854) 9 Exch 341; Victoria Laundry Ltd v Newman Industries Ltd [1949] 2 KB 528; Heron II (HL)

[1967] 2 Lloyd's Rep. 457; The Achilleas 2 Lloyd's Rep 275; Supershield Ltd V Siemens Building Technologies Fe Ltd

[2010] 1 Lloyd's Rep. 349. 15 The Achilleas [2008] 2 Lloyd's Rep 275. 16 The Achilleas [2008] 2 Lloyd's Rep 275; see also Victoria Laundry Ltd v Newman Industries Ltd [1949] 2 KB 528; The

Heron II (HL) [1967] 2 Lloyd's Rep. 457. 17 Moot Problem, p. 1.

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that Firstly, the statement did not indicate the Next Fixture actually existed instead merely an intent

to look for one. Secondly, the statement did not display the daily rate of hire of the Next Fixture,

as rates of hire may differ dependent on individual negotiations. Thirdly, the statement did not

represent an accurate charter period so that the daily rate of hire might be calculated.

18. Conclusively, Respondent could not have assumed responsibility of missing the Next Fixture as

they could not contemplate the extent of the loss.

(ii) Respondent could not contemplate that late redelivery would put Claimant into poor

market conditions

19. In the event a charterer redelivers a vessel late, the market expectation is for charterers to pay the

difference between the rate of hire of the current charter and the market rate of hire.18 The market

expectations could be set aside if charterers understood, at the conclusion of the Charterparty, that

late redelivery would put shipowners in poor market conditions.19 Claimant may argue that

Respondent understood that late redelivery would expose Claimant to poor market conditions.

However, Respondent submits that Claimant was not exposed to poor market conditions by

Respondent’s late redelivery.

20. In the present dispute, the Vessel’s marketability was not affected by Respondent’s late redelivery

as potential charterers would not be hindered by the fact that the Vessel had come from an Ebola-

affected port.20 This is because most major world ports will only detain vessels who had called at

an Ebola-affected port in the last sixty days at most.21 In this regard, at the time the Vessel was

redelivered to Claimant, 72 days had elapsed since the last time the Vessel called at an Ebola-

18 Heron II (HL) [1967] 2 Lloyd's Rep. 457; The Achilleas 2 Lloyd's Rep 275; Supershield Ltd v Siemens Building

Technologies Fe Ltd [2010] 1 Lloyd's Rep. 349. 19 The Achilleas 2 Lloyd's Rep 275; The Sylvia [2010] 2 Lloyd’s Rep 81; Supershield Ltd v Siemens Building Technologies

Fe Ltd [2010] 1 Lloyd's Rep. 349. 20 The Achilleas [2008] 2 Lloyd's Rep 275. 21 Singapore: 60 days (Maritime And Port Authority Of Singapore – Port Marine Circular No. 11 of 2014); Argentina: 30

days, Brazil: 21 days, Uruguay: 21 days (Re: South American P&I Club Circular 01/14 – Ebola - South American

Countries).

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Team 12 Memorandum for Respondent

affected port.22 Accordingly, the Vessel’s trading limits are not impaired, as she would not be

detained for Ebola at major trading hubs. Further, the Vessel had also undergone quarantine and

subsequently granted free pratique, ensuring that the Vessel is completely free from Ebola.

21. For the reasons mentioned above, there is no reason for potential charterers to be less inclined to

charter the Vessel. Accordingly, Respondent did not expose Claimant to poor market conditions.

Consequently, assuming but not conceding that Respondent is liable, Respondent is only liable for

the difference between the rate of hire of this Charterparty and the market rate of hire.

C. Claimant’s losses were caused by their own unreasonable actions

22. A person cannot recover damages which have been caused by their own unreasonable actions.23

Respondent submits that Claimant’s actions in concluding the Next Fixture with Champion24

during the vessel’s detention was unreasonable. Accordingly, Claimant could not recover damages

as Claimant’s own actions had caused the loss.

23. A regular detention for Ebola-affected vessels would usually last 30 days at most.25 In the present

dispute, Claimant concluded the Next Fixture on 15 June 2016, the 35th day they were in

quarantine.26 Seeing that the quarantine had exceeded the regular duration of quarantine, Claimant

should have known that the detention would not have ended soon taking into account that the

duration of the quarantine was irregular. Claimant’s decision in having unreasonably agreed on a

delivery window on 22-28 June 201627 reflects the fact that that they were oblivious and did not

even consider when their release from quarantine would be.

22 Moot Problem, p. 81. 23 Moller v Jecks [1865] 14 E.R. 815; MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] 2 Lloyd's Rep 494. 24 Moot Problem, p. 32. 25 Rathore KS, Keshari R, Rathore A, Chauhan D. A Review on Ebola Virus Disease. PharmaTutor. 2014;2(10):17–22;

Rothstein, Mark A. At Law: Ebola, Quarantine, and the Law. The Hastings Center Report 45, no. 1 (2015): 5-6. 26 Moot Problem, p. 30. 27 Moot Problem, p. 33.

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Team 12 Memorandum for Respondent

24. Conclusively, Claimant’s unreasonable decision to agree on a delivery date so close to an irregular

detention had caused Claimant’s own loss. Accordingly, Claimant may not claim for losses arising

out of missing the Next Fixture.

D. There was no substantial chance for the Next Fixture to be extended

25. Claimant is pleading for the full contract price of four years arising out of the loss of Next Fixture28

even though the Next Fixture’s duration is only two years.29 Although the Next Fixture may be

extended for a further two years on Champion’s option,30 the chance for the extension to happen

is unsubstantial. In assessing whether or not Respondent is liable for a loss of chance that is

dependent on Champion agreeing on an extension, Claimant must prove that a substantial chance

exists for Champion to extend the Next Fixture.31 A substantial chance may exist if circumstances

of the transaction were favourable to Claimant.32

26. In the present dispute, a substantial chance was not present for the Next Fixture to be extended as

the circumstances of the Next Fixture’s conclusion were not favourable to Claimant. By the time

the Next Fixture was concluded, the market rate of hire was on a high note. This is evidenced by

the Charterparty’s hire rate at USD7,500 on 18 March 2016,33 while the rate in the Next Fixture at

USD 10,500 on 15 June 2016,34 and the rate of hire in the Replacement Fixture was at USD11,000

on 4 July 2016.35 The purpose of a medium-term charter is to charter a vessel when the hire rates

are conveniently low.36 It would not be profitable for Champion to extend the Next Fixture

especially that Champion would have to face a constantly expensive rate of hire for a further two

years.

28 Statements of Claim, ¶22. 29 Moot Problem, p. 31. 30 Moot Problem, p. 31. 31 Allied Maples Group Ltd v Simmons & Simmons [1996] C.L.C. 153; Albion Water Ltd v Dwr Cymru Cyfyngedid [2013]

3 WLUK 785; Baird v Hastings [2015] 5 WLUK 107. 32 Ibid. 33 Moot Problem, p. 4. 34 Moot Problem, p. 32. 35 Moot Problem, p. 55. 36 Jie Liu (2001) Chartering policies in the dry bulk market, World Maritime University, pp. 33-35 .

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Team 12 Memorandum for Respondent

27. Conclusively, as the Next Fixture would be unprofitable for Champion to extend, no substantial

chance exists for the extension to take place. Ultimately, Claimant cannot plead for the full four

years of the Next Fixture, and limited to the first two years’ of the Next Fixture’s charter period.

II. RESPONDENT IS NOT LIABLE FOR ALL COSTS IN RELATION TO HCO

28. Claimant may argue that Respondent is liable for any in relation to hull cleaning operations

(“HCO”). Although Clause 83 of the Rider Clauses obliges Respondent for HCO,37 Respondent is

not in any way liable for costs involved for four alternative reasons, that being (A) Respondent’s

HCO Obligations have not arisen as overdue stay at Wahanda was not caused by Respondent’s

orders, (B) Clause 83(d) of the Rider Clauses is unenforceable (C) Claimant had aggravated

Respondent’s loss in performing HCO, and (D) Claimant had perverse intentions in forcing the

Charterparty into an extended run.

A. Respondent’s HCO Obligations have not arisen as overdue stay at Wahanda was not

caused by Respondent’s orders

29. Clause 83(a) to (c) of the Rider Clauses stipulates that if, under Respondent’s orders, the Vessel

stays idle in port for at least 30 days or more, Respondent is obliged to perform HCO.38 The intent

behind Clause 83 of the Rider Clauses was to burden charterers to only be liable for marine hull

fouling if charterers had explicitly ordered a vessel to stay in port, as part of ordinary trading, long

enough for marine organisms to grow on the hull.39

30. In the present dispute, the Vessel was detained by WPS between 7 May 2016 and 26 June 2016,

for a total of 51 days.40 Without the occurrence of a detention, Respondent’s orders, which was to

berth and discharge cargo, would only last a mere five days41 and not result in any marine hull

37 Clause 83 of the Rider Clauses. 38 Moot Problem, p. 16; Clause 83 of the Rider Clauses. 39 The Pamphilos [2002] 2 Lloyd's Rep. 681; Ocean Marine Navigation Ltd v Koch Carbon Inc, (The Dynamic) [2003]

EWHC 1936; Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506. 40 Moot Problem, p. 72. 41 Moot Problem, p. 72.

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Team 12 Memorandum for Respondent

fouling whatsoever.42 Consequently, Respondent has no obligation to perform HCO prior to

redelivery, nor should be liable for all costs pertaining to HCO.

B. Clause 83(d) of the Rider Clauses is Unenforceable

31. Clause 83(d) of the Rider Clauses stipulates that if Respondent is prevented from performing HCO

before redelivery, the Parties are to agree on a lump sum pursuant to HCO purposes.43 Respondent

submits that Respondent is not liable for any costs in relation to HCO as Clause 83(d) of the Rider

Clauses is too uncertain to be enforced and consequently, in accordance with business practices,

HCO has already been paid under hire.

32. Clause 83(d) of the Rider Clauses has a purpose to settle disagreements for HCO.44 In Associated

British Ports v Tata Steel UK Limited,45 it was established that settlement agreements may only be

enforceable if there was a clear mechanism on how disagreements would be settled. If the clause

was unclear in mechanism, then clause or sub-clause would be rendered void and neither party

could assert claims under it.46

33. In the present dispute, Clause 83(d) of the Rider Clauses lacked a mechanism to settle HCO

disagreements. In response to this event, Clause 83(d) of the Rider Clauses had no clear

mechanism, such as how lump sums are to be offered, what the calculation on the lump sum should

be based on, and what will happen if the Parties could not agree.47 The insufficient mechanism of

Clause 83(d) resulted in an impasse,48 resulting in Claimant’s one-sided actions of performing

HCO at South Island.49

42 Moot Problem, p. 44, 72. 43 Moot Problem, p. 18; Clause 83 of the Rider Clauses. 44 Clause 83 of the Rider Clauses. 45 Associated British Ports v Tata Steel UK Limited [2017] 2 Lloyd's Rep. 11. 46 Cable & Wireless plc v IBM United Kingdom Ltd [2002] 1 All E.R. (Comm) 1041; Emirates Trading Agency v Prime

Mineral Exports Private Ltd [2014] 2 Lloyd’s Law Reports 457; Associated British Ports v Tata Steel UK Limited [2017]

EWHC 694 (Ch). 47 Clause 83 of the Rider Clauses. 48 Moot Problem, pp. 44-46. 49 Moot Problem, pp. 42-44.

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Team 12 Memorandum for Respondent

34. As Clause 83(d) of the Rider Clauses is unenforceable, then relevant common business practices

shall apply in its place.50 In The Pamphilos51 and The Coral Seas,52 it was held that it was

shipowners’ obligation for HCO as marine hull fouling is classified as ‘regular wear and tear’

under Clause 4(a) of NYPE15. In this regard, Respondent has already paid for HCO costs through

hire as all matters ‘regular wear and tear’ are supposed to be normally paid.53

35. Conclusively, as Clause 83(d) of the Rider Clauses is unenforceable, Respondent has already paid

for HCO under hire and therefore no longer liable for the costs arising out of HCO.

C. Claimant had aggravated Respondent’s loss while performing HCO

36. On 9 June 2016, Respondent agreed to Claimant's offer to perform HCO at the next convenient

port and pay against an original invoice.54 However, a party acting for the other’s obligations may

not aggravate the other’s expenses.55 Accordingly, Claimant cannot decide the next convenient

port without taking into account the amount Respondent has to pay for HCO actions.

37. Claimant's decision to head straight to South Island without considering Respondent's interests was

obviously not what the Parties had agreed on when they decided to clean outside Wahanda. The

voyage to South Island was both more indirect,56 thus would cost more bunkers, and also more

expensive, with the cleaning alone was at USD 30,000.57 On the other hand, Titan Port, North

Island was not only a more direct route but also a cheaper cleaning port, at USD 25,000. The Parties

then also understood that prices for HCO would vary. Accordingly, Claimant is not entitled to

50 Hillas v Arcos [1932] 43 Lloyd’s Law Rep 359; Technocrats International Inc v Fredic Ltd (No.1) [2004] EWHC 692

(QB); iSOFT Group Plc v Misys Holdings Ltd [2003] EWCA Civ 229. 51 Bulfracht (Cyprus) Ltd v Boneset Shipping Company Limited MV Pamphilos [2002] EWHC 2292 (Comm). 52 Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506 (Comm). 53 The Pamphilos [2002] 2 Lloyd's Rep. 681; Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506

(Comm). 54 Moot Problem, p. 28. 55 Moller v Jecks [1865] 14 E.R. 815; The Borag [1981] 1 Lloyd's Rep. 483; MSC Mediterranean Shipping v Cottonex

Ansalt S.A. [2016] EWCA Civ 789. 56 Moot Problem, p. 83. 57 Moot Problem, pp. 50, 52.

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Team 12 Memorandum for Respondent

recover the cost of HCO as cleaning at South Island was not convenient and simply augmenting

Respondent's dues.

D. Claimant had no legitimate interest in forcing the Charterparty into an extended run

38. Claimant refused Respondent’s redelivery of the Vessel on 30 June 2016 on the grounds that the

hull was not cleaned.58 If a vessel is prematurely redelivered by a charterer before all obligations

had been performed, a shipowner may refuse redelivery and force the contract into an extended

run.59 However, a shipowner could only refuse redelivery if they had legitimate interest in

continuing the charterparty.60 Legitimate interest could be demonstrated by shipowners if their

intentions in refusing redelivery were not perverse and that damages were not an adequate

remedy.61 In the present dispute, Claimant may not recover the costs of HCO for two alternative

reasons, that being (i) Claimant had perverse intentions and (ii) damages for Claimant were an

adequate remedy.

(i) Claimant had perverse intentions

39. In MSC v Cottonex,62 perverse intentions were demonstrated when a party augmented the amount

the other party is to pay when that party could have opted for a cheaper alternative. In the present

dispute, Claimant opted for a more expensive alternative for HCO at South Island instead of the

cheaper one at North Island. The price of HCO, port, and bunkers at South Island was at

USD96,567.42 with USD41,000 for HCO alone,63 a substantial difference in costs had Claimant

opted for Titan Port, North Island instead, where HCO would be at USD33,000.64

58 Moot Problem, p. 42. 59 The Puerto Buitrago [1976] 1 Lloyd’s Rep 250; The Odenfeld [1978] 2 Lloyd’s Rep 357; The Alaskan Trader (No 2)

[1983] 2 Lloyd’s Rep 645; The Dynamic [2003] 2 Lloyd’s Rep 693; The Aquafaith [2012] 2 Lloyd’s Rep 61; MSC

Mediterranean Shipping v Cottonex Ansalt S.A. [2016] EWCA Civ 789. 60 The Puerto Buitrago [1976] 1 Lloyd’s Rep 250; The Odenfeld [1978] 2 Lloyd’s Rep 357; The Alaskan Trader (No 2)

[1983] 2 Lloyd’s Rep 645; The Dynamic [2003] 2 Lloyd’s Rep 693; The Aquafaith [2012] 2 Lloyd’s Rep 61; MSC

Mediterranean Shipping v Cottonex Ansalt S.A. [2016] EWCA Civ 789. 61 Ibid. 62 MSC Mediterranean Shipping v Cottonex Ansalt S.A. [2016] EWCA Civ 789. 63 Moot Problem, p. 54. 64 Moot Problem, p. 37.

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Team 12 Memorandum for Respondent

40. Accordingly, as Claimant had added unnecessary expenses for Respondent by performing HCO at

a more expensive port, Claimant’s intentions in forcing the Charterparty into an extended run were

perverse.

(ii) Damages for Claimant were an adequate remedy

41. In The Aquafaith,65 damages were not an adequate remedy was demonstrated when a vessel was

prematurely redelivered with the remaining hire unpaid. The court held that the shipowners were

entitled all hire unpaid as claiming damages would involve too much uncertainty, the vessel at the

time being in an uncertain market.66 In the present dispute, Claimant’s redelivery refusal was on

grounds that damages would have been an adequate remedy. Unlike premature redelivery of a

vessel with hire unpaid, there is no such thing as an uncertain HCO market.

42. Conclusively, under (i) and (ii), Claimant did not have legitimate interest to force the Charterparty

on an extended run and therefore Claimant is not entitled to recover the cost of HCO at South

Island. Accordingly, if a party had refused redelivery without legitimate interest, then that party is

only entitled to the sum they would receive had they claimed in damages that being the cheapest

alternative provided.67 Hence, Claimant is only entitled to the cost of cleaning at North Island at

the price of USD33,000.

SUBMISSIONS ON THE COUNTERCLAIM

ARGUMENTS ON THE ADMISSIBILITY OF THE COUNTERCLAIM

III. RESPONDENT IS ENTITLED TO SUBMIT CARGO CLAIMS

43. Respondent has a title to sue for damages even if the damaged cargo was owned by Receivers.

Respondent may claim both as a holder of the bill of lading and for the benefit of Receivers. S.

65 The Aquafaith [2012] 2 Lloyd’s Rep 61. 66 Ibid. 67 The Puerto Buitrago [1976] 1 Lloyd’s Rep 250; The Odenfeld [1978] 2 Lloyd’s Rep 357; The Alaskan Trader (No 2)

[1983] 2 Lloyd’s Rep 645; The Dynamic [2003] 2 Lloyd’s Rep 693; The Aquafaith [2012] 2 Lloyd’s Rep 61; MSC

Mediterranean Shipping v Cottonex Ansalt S.A. [2016] EWCA Civ 789.

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Team 12 Memorandum for Respondent

2(1) Carriage of Goods Act 1992 stipulates that a lawful holder of a bill of lading holds a right to

claim as if he had been a party to a contract of carriage. Such title is further complimented by S.

2(4) of the Carriage of Goods Act 1992, which allows a bill of lading holder to claim for the benefit

of the ‘actually damaged’ party. Accordingly, if a person did not experience the loss, but is a holder

of a bill of lading, they shall be treated one and the same with the party who lost the cargo and is

entitled to claim on that party’s behalf.68 In the present dispute, although Respondent was not party

who experienced actual loss of the cargo, but they have title to assert cargo claims, as they are bill

of lading holders claiming on Receivers’ behalf.

IV. RESPONDENT’S CARGO CLAIMS ARE NOT TIME-BARRED

44. Respondent is entitled to pursue cargo claims as long as they had given a claims’ notification to

Claimant within 24 months of the date of delivery of the Cargo, otherwise such claims would be

time-barred.69 Under the Charterparty, the requirements for a valid claims’ notification is governed

by the Inter-Club Agreement (“ICA”), incorporated by virtue of Clause 53 of the Rider Clauses.

In the present dispute, Respondent’s cargo claims are not time-barred because (A) Respondent had

given proper notification and (B) Alternatively, Claimant had waived their right to receive a proper

notification.

A. Respondent had given proper notification

45. A claims’ notification is deemed sufficient if it complies with the requirements laid out in the

relevant clause.70 In the present dispute, the notification requirement ‘shall if possible include’

entails no strict requirement of what constitutes as a proper notification pursuant to Clause 6 of the

ICA71 Such construction is common under claims’ notification clauses, as it could not be expected

68 Pace Shipping Co. Ltd. v Churchgate Nigeria Ltd. (“The Pace”) (No. 2) [2011] 1 Lloyd’s Law Reports 537. 69 Clause 6 of the ICA “Recovery under this Agreement by an Owner or Charterer shall be deemed to be waived and

absolutely barred unless written notification of the Cargo Claim has been given to the other party to the charterparty

within 24 months of the date of delivery of the cargo or the date the cargo should have been delivered […]. Such notification

shall if possible include details of the contract of carriage, the nature of the claim and the amount claimed.” 70 Forrest v Glasser [2006] 2 Lloyd’s Law Rep 392. 71 Clause 6 of the ICA.

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Team 12 Memorandum for Respondent

that the party claiming would have full information prior to asserting the claims which require an

extensive investigation that could cause the cargo claims itself being time-barred.72 As there are

no strict requirement to define what a proper notification is, so long as the notification fulfils the

commercial purpose, then it would be deemed sufficient.73

46. Senate Electric v Alcatel,74 lays out two different requirements for a notification to be proper as to

its commercial purpose. Firstly, a claims’ notification must be informative enough so to allow the

receivers of the notification prepare relevant measures such as contacting insurance and preparing

a legal defence.75 Secondly, the notification must also be certain enough that a reasonable person

would understand that a claim that had been made and not merely a possibility of a claim that might

arise in the future.76 In the present dispute, Respondent’s emails dated 27 June and 7 July 2016

fulfils the commercial purpose of notification as it is sufficiently informative and certain for

Claimant to respond to the claim.77

47. Firstly, the notifications on 26 June and 7 July 2016 were sufficiently informative to allow

Claimant to respond to a claim accordingly. The contained information came to the effect that

Claimant could know that Cargo damage was caused by crew opening the wrong valve during

ballasting and the possibility of claims amounting to 8,600mt of tea with the price range of USD60

to USD65 per kilogram.78 Upon receiving the information, Claimant responded to the claim by

contacting their P&I club and arranging a survey.79 It also gave them a chance to prepare legal

defence, knowing that the cause of damage was a mistakes done by the crew. Additionally,

72 ROK Plc (in administration) v S Harrison Group Ltd [2011] EWHC (Comm). 73 Ipsos S.A. v Dentsu Aegis Network Limited [2015] EWHC 1171 (Comm). 74 Electrical Wholesalers Ltd v Alcatel Submarine Networks Ltd [1999] 2 Lloyd’s Rep 423; Laminates Acquisitions v BTR

Australia Limited [2004] 1 All ER (Comm) 737; RWE Nukem Ltd v AEA Technology Plc [2005] EWHC 78 (Comm);

Waterfront Shipping Co Ltd v Trafigura AG [2008] 1 Lloyd's Rep. 286 Heffernan v Hackney LBC [2009] EWCA Civ 665. 75 Electrical Wholesalers Ltd v Alcatel Submarine Networks Ltd [1999] 2 Lloyd’s Rep 423; Laminates Acquisitions v BTR

Australia Limited [2004] 1 All ER (Comm) 737; RWE Nukem Ltd v AEA Technology Plc [2005] EWHC 78 (Comm);

Waterfront Shipping Co Ltd v Trafigura AG [2008] 1 Lloyd's Rep. 286 Heffernan v Hackney LBC [2009] EWCA Civ 665. 76 Ibid. 77 Moot Problem, pp. 38, 45. 78 Moot Problem, pp. 38, 45. 79 Moot Problem, pp. 38.

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Team 12 Memorandum for Respondent

Claimant had conducted their own investigations after receiving the Preliminary Report80 thus

being able to obtain their own information regarding the Cargo damage. Since Claimant was

already in possession of the claim’s details even without the notification, then the notification

would only be a formality bearing no practical difference.81

48. Secondly, Claimant understood that a claim would certainly be made82 because Claimant had

confirmed the damages themselves by conducting a survey of their own particular to the Cargo

damage.83 Claimant may argue that there was no certainty in a claim being made because there was

a possibility of selling the Cargo in a damaged condition given the high demand of tea in Bao

Kingdom.84 However, selling the Cargo in a damaged condition would entail a cheaper price, and

the Receivers would still claim for damages. The information of a certainty of a claim is also

evident in the Preliminary Report which stated that Receivers would submit a claim under the

contract of carriage between Respondent and Receivers.85

49. Conclusively, Respondent had provided a proper notification as the notification was sufficiently

informative and certain for Claimant to take necessary steps in response.

B. Alternatively, Claimant had waived the requirement of a proper notification

50. Respondent submits that Claimant had waived their right to receive such proper notification. When

Claimant received the Preliminary Report, Claimant’s subsequent conduct had led Respondent to

believe that the notification was sufficient. In Plasticmoda SPA v Davidson,86 it was held that when

a party’s action has led another to believe that certain conditions of a contract have been met, then

that party has waived their right to assert that conditions have not been met.

80 Moot Problem, pp. 81. 81Barratt Bros (Taxis) Ltd v Davies [1966] 2 Lloyd’s Rep 1; The Mozart [1985] 1 Lloyd’s Rep 239. 82 Laminates Acquisitions v BTR Australia Limited [2004] 1 All ER (Comm) 737. 83 Moot Problem, p. 81. 84 Moot Problem, p. 46. 85 Moot Problem, p. 46. 86 Plasticmoda Societa P.A. v Davidsons (Manchester) Ltd., (C.A.) [1952] 1 Lloyd’s Rep. 527; Wake v Wylie [2001]

P.I.Q.R. P13; WJB Chiltern Plc v Olympia Securities Commercial Plc [2003] EWHC 3464 (Chi).

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Team 12 Memorandum for Respondent

51. In the present dispute, Respondent sent the notification on 27 June 2016, in which Claimant

responded with ‘your notification in relation to damage to cargo hereby acknowledged.’ Claimant

then contacted their P&I club and arranged a survey to discover the extent of damages.87 By

acknowledging Respondent’s claims’ notification, Claimant did not inform Respondent of the

notification’s insufficiency.88 Claimant’s conduct had led Respondent to believe that Respondent’s

claims’ notification is sufficient. Accordingly, Claimant has waived the right to receive further

notification on the damaged Cargo.

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM

V. CLAIMANT IS LIABLE FOR THE DAMAGE TO THE CARGO

52. The Preliminary Report provided that, during ballasting, the Vessel’s crew had negligently opened

the wrong valve, causing seawater to flood into Cargo Hold No. 2, and severely damaging the

Cargo within.89 The crew’s neglectful action, as servants of Claimant, had caused immense damage

to the cargo, which is now being claimed by Receivers.90

53. Respondent asserts that Claimant is fully liable for cargo damages as (A) Claimant is fully

responsible for the losses under the ICA, and (B) alternatively, the apportionment of liability is

shared between the Parties.

A. Claimant is fully responsible for the losses under the ICA

54. Under the ICA, shipowners are fully liable for cargo damage arising out of unseaworthiness, error

of navigation, and/or mismanagement.91 In the present dispute, it is clear that Claimant, as

shipowner, is fully liable for Cargo damage, under two alternative reasons, that being (i) the

damage was caused by error in management of the Vessel pursuant to Clause 8(a) of the ICA and

87 Moot Problem, p. 38. 88 Panutsos v Raymon Hadley Corporation of New York, [1917] 2 K.B. 473; A/S Tankexpress v Campagnie Financiere

Belge Des Petroles S.A., [1984] 82 L1.L.Rep. 43. 89 Moot Problem, p. 46. 90 Moot Problem, p. 38. 91 Clause 8(a) of the ICA.

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Team 12 Memorandum for Respondent

(ii) the neglectful action of Claimant’s servants had caused damage to the Cargo pursuant to Clause

8(d) of the ICA.

(i) The damage was caused by error in management of the Vessel pursuant to Clause 8(a) of

the ICA

55. Clause 8(a) of the ICA provides that Claimant is fully liable for all cargo damages caused by error

in management of the Vessel.92 In Rowson v Atlantic Transport Co,93 error in management of the

vessel occurs when equipment, intended for ship operations not directly related to cargo but could

damage the cargo indirectly, is improperly handled by the crew.

56. In the present dispute, regardless of the Vessel’s crew competence, the crew had improperly

handled the ballasting system resulting in the damaged Cargo.94 Ballasting is not a part of direct

cargo handling as it has a main function to keep the vessel afloat and any improper handling may

indirectly damage the Cargo.95 As a consequence, Claimant is fully liable for Cargo damage arising

from error in management of the ballasting system.

(ii) The neglectful action of Claimant’s servants had caused damage to the Cargo pursuant to

Clause 8(d) of the ICA

57. Under the ICA, cargo damage by ‘the act or neglect’ of either party, including their servants or

sub-contractors, would lead to the wrongful party bearing 100% liability of the cargo lost.96 In the

London Explorer,97 it was held that under time charter, the crew is the servant of the shipowner. In

the present dispute, the crew’s neglectful actions that led to Cargo damage was done acting as

Claimant’s servants. Accordingly, Claimant is fully liable for the losses of the cargo.

92 Clause 8 of the ICA. 93 Rowson v Atlantic Transport Company [1903] 2 K.B. 666; The Canadian Highlander [1927] 28 Ll. L Rep 88; The

Washington [1976] 2 Lloyd's Rep 453; Compania Sud Americana de Vapores SA v Sinochem Tianjin Import & Export

Corp [2010] 1 Lloyd's Rep. 1 94 Moot Problem, p. 46 95 The Glenochil [1896] P 10. 96 Clause 8(d) of the ICA: “All other cargo claims whatsoever (including claims for delay to cargo): 50% Charterers 50%

Owners unless there is clear and irrefutable evidence that the claim arose out of the act or neglect of the one or the other

(including their servants or sub contractors) in which case that party shall then bear 100% of the claim.” 97 The London Explorer [1971] 1 Lloyd’s Rep. 523.

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Team 12 Memorandum for Respondent

B. Alternatively, the apportionment of liability is shared between the Parties

58. Under Clause 8(b) of the ICA, Cargo damage caused by errors in cargo handling are 100%

charterers’ responsibility, unless the phrase ‘and responsibility’ were added to Clause 8 of the

NYPE15, where liability is equally shared between charterers and shipowners.

59. In The Canadian Highlander,98 cargo handling is defined as all actions and/or equipment present

on a vessel for the care of cargo. In the present dispute, ballasting operations, being the cause of

Cargo damage, is inseparable from cargo handling as the Vessel is equipped with floodable holds.99

The crew must put in mind that the Cargo will be damaged if they mishandle the ballasting system.

60. Additionally, phrase ‘and responsibility’ had been added to Clause 8 of NYPE15, evident in the

Fixture Recap.100 The modification had effectively changed the Master’s duty not only to supervise

Cargo handling but to also be directly responsible for Cargo handling operations.101 Conclusively,

for the two reasons above, liability of Cargo damages shall be shared equally between Claimant

and Respondent pursuant to Clause 8(b) of the ICA.

VI. RESPONDENT IS NOT REQUIRED TO PAY FOR HIRE DURING THE DETENTION

BECAUSE THE VESSEL SHALL BE CONSIDERED OFF-HIRE

61. Upon the arrival of the Vessel at Wahanda on 7 May 2016, WPS had suspicions that the Vessel’s

crew was infected with Ebola. As a result, the Vessel was detained for five days pending inspection

by WPS. During this inspection, it was revealed that several crew members were with high fever,102

which resulted in the Vessel being quarantined for an additional 46 days.103 The Vessel was

detained for a total of 51 days and throughout that time could not continue operations required

under the Charterparty.104 On 26 June 2016, The Vessel was granted free pratique and thus released

98 The Canadian Highlander [1927] 28 Ll. L. Rep. 88; see also The Washington [1976] 2 Lloyd's Rep. 453; Compania Sud

Americana de Vapores SA v Sinochem Tianjin Import & Export Corp [2010] 1 Lloyd's Rep. 1. 99 Clause 64 of the Rider Clauses. 100 Moot Problem, p. 6. 101 The Maria [2018] Lloyd's Rep. Plus 79. 102 Moot Problem, p.24. 103 Moot Problem, p. 81. 104 Moot Problem, p.74.

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from quarantine, marking the end of the detention.105 Subsequently, the Vessel proceeded to

discharge the Cargo.106

62. Respondent submits that the Vessel shall be deduced off-hire during the 51 days of detention as

(A) the delay for 51 days amounts to an off-hire pursuant to Clause 17 of NYPE15 and (B) In any

event, Claimant had assented to the risks of detention.

A. The delay for 51 days amounts to off-hire pursuant to Clause 17 of NYPE15

63. In order to deduce the Vessel as off-hire, Respondent must first prove that the Vessel was prevented

from full working.107 Afterwards, the cause preventing the full working of the vessel must fall

under one named cause as provided within Clause 17 of NYPE15 or falls under ‘any other similar

causes’ in order to deduce the Vessel off-hire.108 Accordingly, the Vessel should be deduced as

off-hire because (i) the Vessel was prevented from full working and (ii) the cause of preventing

the full working of the Vessel falls under Clause 17 of NYPE15.

(i) The Vessel was prevented from full working

64. A vessel that is prevented from full working is a vessel that cannot perform the service immediately

required by charterers.109 Intervention by state authorities may be a cause that prevents a vessel

from doing so.110 This includes the detention of a vessel which would ultimately prevent them to

proceed to berth.111 In the present dispute, the Vessel was detained by WPS for 51 days.112 Since

WPS prevented the Vessel from proceeding to berth, the Vessel was prevented from full working

105 Moot Problem, p. 81. 106 Ibid. 107 Royal Greek Government v Minister of Transport (The Illissos) [1949] 1 KB 7 (Court of Appeal); The Aquacharm

[1982] 1 Lloyd’s Rep 7; The Apollo [1978] 1 Lloyd’s Rep 200; The Mastro Giorgis [1983] 2 Lloyd’s Rep 66; The Laconian

Confidence [1997] 1 Lloyd’s Rep 139; The Jalagouri [2000] 1 Lloyd’s Rep 515. 108 Ibid. 109 The Apollo [1978] 1 Lloyd’s Rep 200; The Aquacharm [1980] 2 Lloyd’s Rep 237; The Mastro Giorgis [1983] 2 Lloyd’s

Rep 66; The Jalagouri [2000] 1 Lloyd’s Rep 515. 110 The Laconian Confidence [1997] 1 Lloyd’s Rep 139. 111 The Jalagouri [2000] 1 Lloyd’s Rep 515; The Mareva AS [1977] 1 Lloyd’s Rep 368. 112 Moot Problem, p. 74.

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Team 12 Memorandum for Respondent

as the Vessel was unable to continue performing the service required of her immediately by

Respondent, that being to unload the Cargo.

(ii) The cause preventing the full working of the Vessel falls under Clause 17 of NYPE15

65. Clause 17 of NYPE15 mentions a number of causes which could give rise to off-hire.113 In the

present dispute, the detention administered by WPS for 51 days114 falls under the mentioned causes

under Clause 17 of NYPE15 as (a) the detention falls under ‘detention by Port State control for

Vessel deficiencies’ and (b) alternatively, the detention falls under ‘any other similar cause

preventing the full working of the Vessel’.

(a) The detention falls under ‘detention by Port State control for Vessel deficiencies’

66. A vessel is deficient if she does not meet the standards required by the port they are calling; this

should be interpreted widely as vessels may be detained for any reason and it is shipowners’

obligation to provide a seaworthy vessel so that they could fulfil charterers’ orders by going to

those destined ports.115 Since Wahanda applies Hong Kong law, then all Hong Kong disease

regulations apply.116 Under Section 51 of the Hong Kong Prevention and Control of Disease

Regulation Cap. 599117 (“Hong Kong Prevention and Control of Disease Regulation”) it is

stipulated that any international vessel is required to obtain free pratique before berthing at any

port in Bao Kingdom and lacking it would result in detention. In Schedule 2 of Hong Kong

Prevention and Control of Disease Regulation, if a vessel had been to an area infected by epidemic

disease in the last 30 days, then they are to be sent to quarantine anchorage to be inspected. A

113 These causes include but not limited to ‘grounding’, ‘detention by Port State control or other competent authority for

Vessel deficiencies’, ‘or by any similar cause preventing the full working of the Vessel’, and ‘detention by the arrest of the

Vessel’; Clause 17 of NYPE15. 114 Moot Problem, p. 74. 115 The Apollo [1978] 1 Lloyd’s Rep 200; The Aquacharm [1982] 1 Lloyd’s Rep 7; The Laconian Confidence [1997] 1

Lloyd’s Rep 139. 116 Moot Problem, p. 81. 117 Section 51 of Prevention and Control of Disease Regulation Cap. 599, section 7, L.N. 203 of 2008.

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Team 12 Memorandum for Respondent

vessel which lacks free pratique could not guarantee that the crewmembers are not carrying a

disease, therefore, upon arrival at Wahanda the vessel will be detained by WPS.118

67. In the present dispute, the Vessel was detained by WPS because they were not in possession of

free pratique and accordingly shall be deemed a deficient vessel. Conclusively, a vessel that is

detained by port authorities for vessel deficiencies shall be deduced off-hire for 51 days.

(b) Alternatively, the detention falls under ‘any other similar cause preventing the full

working of the Vessel’

68. Respondent submits that the cause preventing the full working of the Vessel falls under Clause 17

of NYPE15, as a result of the phrase ‘by any other similar cause preventing the full working of the

Vessel’. The phrase ‘by any other similar cause’ within an off-hire clause could include other

causes not mentioned in the off-hire clause as long as such causes of off-hire is of the same kind

(ejusdem generis) with the mentioned causes.119

69. One of the mentioned causes is ‘detention by Port State control or other competent authority for

Vessel deficiencies’ indicates that Clause 17 of NYPE15 recognizes that an intervention by port

authorities could prevent the full working of the Vessel, and subsequently gives rise to an off-hire

event. An intervention by port authorities is considered as an extraneous cause, or in other words

a cause not related to the vessel’s inner-workings such as a defect in hull, machinery, and

storage.120 As such, other types of extraneous causes such as detention by port authorities for

sickness, would be of the same kind with the mentioned causes in Clause 17 of NYPE15.

70. In the present dispute, the cause preventing the full working of the Vessel, for 51 days, was the

detention administered by WPS due to suspicions that the Vessel was carrying Ebola.121 Detention

118 Ibid. 119 Anderson v Anderson [1895] 1 QB 749; Chandris v Isbrandtsen-Moller Co Inc [1949/50] 83 Lloyd’s Rep 385; The

Roachbank [1987] 2 Lloyd’s Rep 498; The Laconian Confidence [1997] 1 Lloyd’s Rep 139. 120 The Laconian Confidence [1997] 1 Lloyd’s Rep 139. 121 Moot Problem pp. 24-25.

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Team 12 Memorandum for Respondent

by WPS for Ebola is an extraneous cause recognised under Clause 17 of NYPE15 as an off-hire

event. Accordingly, the Vessel shall be deduced off-hire.

B. In any event, Claimant had assented the risks of detention

71. The Charterparty in this dispute is a single-trip time charter. As evidenced in the Fixture Recap122

and bill of lading,123 Respondent intended to use the Vessel only from West Coast, as place of

delivery and port of loading, to Wahanda, as point of redelivery and port of discharge. In the Doric

Pride124 it was held that in single-trip time charters, shipowners are to have assented to any risk

arising out of visiting any ports specified within the Charterparty, including regulatory

detentions.125 In the present dispute, Claimant had assented to the risk of sailing from West Coast

to Wahanda, including any detention and quarantine, by concluding this Charterparty.

72. Claimant may argue that since the Ebola took place after the Charterparty had been concluded, the

risk of being detained for Ebola detention had not been accepted by Claimant. However, Clause

46(b) of NYPE15 stipulates that if a shipowner understood that charterers’ orders may lead to any

sanction imposed by states or other competent authorities to the vessel, shipowners may refuse

charterers’ orders.126 A state sanction is any ordnance with authority that may be imposed for the

public good,127 thus including detentions and quarantines as they are part of state regulations.

73. In the present dispute, Claimant, as a commercial man, must have known that a detention would

happen. However, Claimant did not ask Respondent to stop departing from West Coast despite

knowing just as much as Respondent that, as a result of an Ebola outbreak, a detention and/or

quarantine might happen at Wahanda. As such, Claimant did not exercise their right to refuse the

122 Moot Problem, p. 2. 123 Moot Problem, p. 47. 124 The Doric Pride [2005] EWHC 945 (Comm). 125 Ibid. 126 Clause 46 of NYPE15. 127 Kuwait Oil Tanker Co SAK & Anor v Qabazard [2002] EWCA Civ 34; Blue Sky One Ltd v Mahan Air [2009] EWHC

3314 (Comm); Five Oceans Salvage Consultants Ltd v Perla Navigation Ltd [2013] EWHC 4055 (Comm); Summit

Navigation Ltd v Generali Romania Asiguarare Reasiguarare SA [2014] EWHC 398 (Comm).

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Team 12 Memorandum for Respondent

voyage in the face of state sanctions pursuant to Clause 46(b) of NYPE15.128 Accordingly,

Claimant had accepted the voyage to Wahanda, including the risk of being detained by WPS, as

Claimant did not refuse the voyage to Wahanda.

74. Conclusively, AS Claimant did not exercise Claimant’s right of complaint to divert or stop the

voyage pursuant Clause 46(b) of NYPE15,129 the Vessel shall come to the regular effect as a result

of detention: off-hire.

VII. CLAIMANT IS LIABLE FOR COMPOUND INTEREST

75. Pursuant to Section 49(2) of the Arbitration Act 1996,130 the Tribunal has the authority to award

simple or compound interest in the absence of an agreement. With the non-existence of such

agreement, Respondent requests this Tribunal to readily grant compound interest on the whole part

of damages claimed above. In Man Nutzfahrzeuge AG v Freightliner Ltd, Moore Bick LJ131, stated

it has become routine for arbitrators to award compound interest in the exercise of their powers

under Section 49(3) of the Arbitration Act 1996, as simple interest does not fully compensate the

injured party for the loss it suffered. It is also noted that compound interest is not restricted to non-

payment of a debt, but also may be granted upon losses caused by late payment of debt.132 For the

reasons mentioned above, pursuant to Section 49(3) of Arbitration Act 1996 Claimant shall bear

compound interest to be paid in respect to the whole part of the claimed damages

128 Clause 46 of NYPE15. 129 Ibid. 130 Section 49 of Arbitration Act 1996 (c. 23). 131 Man Nutzfahrzeuge AG v Freightliner Ltd [2005] EWHC 2347 (Comm) 132 Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners and another [2008] Bus. L.R.

49.

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Team 12 Memorandum for Respondent

PRAYER FOR RELIEF

For reasons submitted above, Respondent respectfully requests this Tribunal to:

ADJUDGE that Respondent is not liable to Claimant for:

(1) All costs in connection with HCO at USD96,567.42 or alternatively, limited to USD33,000

(2) Damages for late re-delivery and missing the Next Fixture at USD15,330,000.00 (loss of hire under

the Next Fixture, calculated as 4 years at USD10,500 per day).

Further

DECLARE that Respondent has title to sue and not time-barred from asserting Cargo claims

Further

ADJUDGE that Claimant is liable to Respondent for:

(1) Funds that were paid in hire during time in detention between 7 May 2016 and 26 May 2016 at

USD350,000; and

(2) All Cargo lost as a result of the flooding of Cargo Hold No. 2 as awarded in a further award in

damages.