UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO … · 2020. 8. 17. · 20 April 2016 Loading of the cargo was completed. The vessel sailed from the Port of Wahanda. 07 May 2016 The Vessel

INTERNATIONAL MARITIME LAW

ARBITRATION MOOT

ROTTERDAM, 2019

UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO

MEMORANDUM FOR CLAIMANT

ON BEHALF OF: AGAINST:

Panther Shipping Inc. Omega Chartering Ltd.

Claimant Respondent

GEMMA NAVEJA • MARÍA JOSÉ GONZÁLEZ •

BRENDA VALTIERRA • FRIDA CRUZ

TEAM 27

TABLE OF CONTENTS

TABLE OF ABBREVIATIONS…………………………………………………………………..…

TABLE OF LITERATURE………………………………………………………………………….

TABLE OF CASES…………………………………………………………………………………..

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

ARGUMENT………………………………………………………………………………………….4

PART I: THE RESPONDENT BREACHED THE UNDERWATER HULL CLEANING

OBLIGATION……………………………………………………………………………………..…4

A. THE RESPONDENT WAS OBLIGED UNDER CLAUSE 83 OF THE RIDER CLAUSES TO

PERFORM UNDERWATER HULL CLEANING……………………………………...…….…4

B. THE ALTERNATIVES GIVEN BY THE RESPONDENT FOR THE AVOIDANCE OF THE

CLEANING OBLIGATION WERE INAPPROPRIATE..............................................................6

1. THE RESPONDENT’S OFFERS TO PAY A LUMP SUM WERE

INADEQUATE............................................................................................................................6

2. CLAIMANT’S DECISION OF UNDERWATER CLEANING PORT WAS

REASONABLE............................................................................................................................7

PART II: DELAY OF REDELIVERY……………………………………………………………...9

A. RESPONDENT FAILED TO REDELIVER THE VESSEL PRIOR TO THE EXPIRATION OF

THE MAXIMUM PERIOD OF THE CHARTERPARTY……………………………………………9

B. RESPONDENT IS LIABLE FOR CLAIMANT’S LOSS OF

PROFITS..............................................................................................................................................10

COUNTERCLAIMS DEFENSE.......................................................................................................12

PART I: THE CARGO IS INADMISSIBLE..................................................................................12

A. THE CARGO CLAIM IS TIME-BARRED..............................................................................12

B. EVEN IF CARGO CLAIM WAS WITHIN THE TIME LIMIT, THE CLAIMANT IS NOT

RESPONSIBLE FOR CARGO DAMAGE …………………………………………………………16

1. THE CLAIMANT IS NOT LIABLE FOR CARGO DAMAGE IN ACCORDANCE WITH

THE INTER-CLUB AGREEMENT…………………………………………………….16

2. THE CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE ARISING FROM

CREW NEGLIGENCE……………………………………………………………………18

3. CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE IN ACCORDANCE

WITH THE BILL OF LADING………………………………………………………….19

PART. II: THE VESSEL REMAINED ON-HIRE DURING THE ENTIRE TRIP..........20

A. THE DELAY WAS NOT DUE TO AN OFF-HIRE EVENT UNDER ARTICLE 17 OF

THE NYPE ..........................................................................................................................20

PRAYER FOR RELIEF…………………………………………………………………..…22

TABLE OF ABBREVIATIONS

Abbreviation Explanation

Art. Article

Arbitration

Act 1996

English Arbitration Act 1996

BOL Bill of Lading

Cargo 2,000 mt of cargo of loose-leaf English Breakfast Tea with a value of

US$50 per kg

Co. Company

Crew Crew of the Motor Vessel Thanos Quest

Ed. Edition

English Court of

Appeal

Court of Appeal of England and Wales

Hague Rules International Convention for the Unification of Certain Rules of

Law relating to Bills of Lading and Protocol of Signature (Brussels, 25

August 1924)

ICA Inter-Club New York Produce Exchange Agreement 1996 (As

Amended September 2011)

Inc. Incorporated

Ltd. Limited Company

Moot Scenario International Maritime Law Arbitration Moot 2019 ‘Moot Scenario’

No. 20, Version 3.

Mt. Metric Tonne

Next Fixture Fixture between Panther Shipping Inc. and Champion Chartering Corp.

for a period of two years, plus a further two years in charters’ option

NYPE 2015 New York Produce Exchange Charterparty 2015

NYPE 2015

Explanatory

Notes

New York Produce Exchange Charterparty 2015 Explanatory

Notes

Preliminary

Survey Report

Preliminary Survey Report of Mekon Surveyors Inc., dated 30 June

2016

TCP Time charterparty (between Panther Shipping Inc. and Omega

Chartering Ltd.) including the Rider Clauses

Underwater

Cleaning

Underwater Hull Cleaning Obligation pursuant clause 83 of the TCP.

USD United States Dollar

V. Versus

Vessel Motor Vessel Thanos Quest

TABLE OF AUTHORITIES

Cited as

Citation Cited in

para.

BIMCO BIMCO

BIMCO and industry partners to launch hull

underwater cleaning standard, amid environment

concerns; Maritime Risk International

5

HENDRIKSE, M.L./

MARGETSON,

N.H./

MARGETSON, N.J.

HENDRIKSE, M.L./ MARGETSON, N.H./

MARGETSON, N.J.

Aspects of Maritime Law, Claims Under Bills of

Lading, Kluwer Law International [2008]

52, 53

KONARSKI, Hubert KONARSKI, Hubert

International Business Law Journal, Force majeure and

hardship clauses in international contractual practice

[2003]

24

London Arbitration

25/17

LLOYD'S MARITIME LAW NEWSLETTER

London Arbitration 25/17

7

NIKAKI Theodora /

SOYER, Barış

NIKAKI, Theodora / SOYER, Barış

Enhancing standardization and legal certainty through

standard charterparty contracts: The NYPE 2015

experience 1, 3, 6

NYPE 2015.

EXPLANATORY

NOTES

NYPE 2015

Time Charter Party Explanatory Notes 29

SOYER, Bariş /

TETTENBORN,

Andrew

SOYER, Bariş / TETTENBORN, Andrew Charterparties: Law, Practice and Emerging Legal

Issues. Informa Law from Routledge [2017] 31, 66

TETLEY, William TETLEY, William Marine cargo claims, 4th edition, Thomson Carswell

[2008]

44, 56

YANG LIU, Edward YANG LIU, Edward

Disputes arising out of hull bottom fouling under time

charterparties, Lloyd's Shipping & Trade Law [2018]

4, 16

TABLE OF CASES

Cited as Citation Cited in

United Kingdom

Alize 1954 & Anor v

Allianz Elementar

Versicherungs AG &

Ors

Alize 1954 & Anor v Allianz Elementar

Versicherungs AG & Ors

Queen's Bench Division

[2019] EWHC 481

63

CARISBROOKE Shipping

v Bird Port Limited CARISBROOKE Shipping v Bird Port Limited

Queen's Bench Division

[2005] EWHC 1974

33

Channel Island Ferries

v. Cenargo Navigation

Channel Island Ferries Ltd. V. Cenargo Navigation

Ltd. (The “Rozel”)

Queen’s Bench Division

[1994] 2 Lloyd’s Rep 161

15

Deep Sea Maritime Ltd v

Monjasa A/S (The

¨Alhani¨)

Deep Sea Maritime Ltd v Monjasa A/S (The ¨Alhani¨)

Queen's Bench Division

[2018] EWHC 1495

47

Hawk Shipping Ltd v

Cron Navigation Ltd

Hawk Shipping Ltd v Cron Navigation Ltd

Queen's Bench Division

[2003] EWHC 1828

33

Lansat Shipping v.

Glencore Grain BV

Lansat Shipping Co Ltd v Glencore Grain BV.

England and Wales High Court

[2009] 551, 1 Lloyd's Rep 658

25

Pyrene Company v.

Scindia Steam

Navigation Company

Pyrene Company, Ltd. V. Scindia Steam Navigation

Company, Ltd.

Queen's Bench Division

[1954] 1 Lloyd's Rep. 321

64

Transfield Shipping Inc

v Mercator Shipping Inc

(The Achilleas)

Transfield Shipping Inc v Mercator Shipping Inc (The

Achilleas)

House of Lords

[2008] 2 Lloyd's Rep 275

32

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STATEMENT OF FACTS

The parties to this arbitration are Panther Shipping Inc. (hereafter “Claimant”) which is

the registered shipowner of the Antigua and Barbuda-flagged M/V “Thanos Quest”

(hereafter the “Vessel”) and Omega Chartering Ltd (hereafter “Respondent”).

CLAIMANT is a company based in Liberia.

RESPONDENT is a company based in Liechtenstein.

18 March 2016

The Claimant time chartered the Vessel to Respondent for about 50-55

days from West Coast to Wahanda pursuant to a time charterparty

(hereafter the “Charterparty”)

The Charterparty comprised a fixture recap incorporating the NYPE

2015 form and additional rider clauses.

29 March 2016 The Vessel was delivered to the Charterparty.

18 April 2016 West Coast Daily reported an outbreak of Ebola virus in West Coast.

20 April 2016

Loading of the cargo was completed.

The vessel sailed from the Port of Wahanda.

07 May 2016

The Vessel arrived at the discharge port of Wahanda. She waited at the

anchorage because immediate berthing was not available.

8 May 2016 Claimant notified the Respondent that the Vessel remained on-hire

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25 May 2016

Wahanda Port recommended to the charterers that they choose another

port for the performance of the underwater cleaning.

08 June 2016

The Claimant notified to the Respondent that the Vessel was expected

to spend more than 30 days at the port of Wahanda and requested

confirmation regarding the arrangements for the underwater cleaning.

The Respondent offered to pay the Owners USD 15,000 in lieu of

cleaning.

09 June 2016

The Claimant responded that they could not agree to a lump sum

payment because there had been no hull inspection and it was not

possible to know the extent of any fouling.

The Respondent accepted to pay the cost in accordance with the original

invoice.

15 June 2016

The Claimant chartered the Vessel to Champion Chartering Corp. for a

period of two years, plus a further two years in charter’s option

(hereafter “Next Fixture”). The daily rate of hire was USD 10,500.

18 June 2016

23 June 2016

The Claimant sent an e-mail to the Respondent reserving their right to

make a claim against the Respondent for losses incurred as a result of

the Vessel being redelivered without hull cleaning having been

performed. The Claimant sent photos that clearly showed that the

vessel was heavily fouled and reminded the Respondent of their

obligation to arrange the cleaning.

The North Port submitted a quotation stating that the performance of

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the underwater cleaning would cost USD 33,000.00

26 June 2016

The Claimant reported that the vessel has already been scheduled for

her next voyage.

27 June 2016

The Respondent offered to arrange hull cleaning at North Port or pay a

lump sum of 20,000 USD.

28 June 2016

Champion gave notice to the Claimant that they were canceling the

Next Fixture because the Vessel had missed the laycan.

29 June 2016

The Claimant sent an e-mail to the Respondent to arrange for the

Vessel’s hull to be cleaned at South Island to maintain on-hire in

accordance with clause 83 of the rider clauses. The Claimant informed

the Respondent that if the underwater cleaning was not performed prior

to redelivery the Claimant would arrange the cleaning in South Island

and bill the Respondent for all related expenses.

30 June 2016

The Respondent replied to the Claimant that any voyage to South Island

would be no-contractual.

The Respodent offered to pay 30,000 USD

The Claimant gave a final opportunity to comply with their contractual

obligations under clause 83 of the Charterparty by arranging for

underwater cleaning prior to redelivery.

The discharge of the cargo was completed.

The Vessel was redelivered without underwater hull cleaning.

1 July - 3 July

2016

The vessel arrived at South Island to perform underwater hull cleaning

and propeller polishing services.

The total cost of the cleaning was 41,000 USD.

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ARGUMENT

PART I: THE RESPONDENT BREACHED THE UNDERWATER HULL

CLEANING OBLIGATIONS

A. THE RESPONDENT WAS OBLIGED UNDER CLAUSE 83 OF THE

RIDER CLAUSES TO PERFORM UNDERWATER HULL CLEANING

1. Hull fouling is the result of accumulation of marine growth at the bottom of vessels

sitting idle for lengthy periods in places located in warm waters.1

2. The article 83 of the rider clauses states:

(a) If, in accordance with Charterers’ orders, the Vessel remains

at or shifts/sails within a place, anchorage and/or berth and/or

port(s) for an aggregated period exceeding:

(…)

(ii) A period of 30 days outside such zones any warranties

concerning speed and consumption shall be suspended pending

inspection of the Vessel’s underwater parts including, but not

limited to, the hull, sea chests, rudder and propeller.2

3. In accordance with the above, the risk of the vessel suffering hull fouling was

foreseeable and foreseen by both sides at the time the TCP was concluded due to the

fact that the parties established that obligation in the TCP and agreed that the

Respondent would have to perform the cleaning.3

1 NIKAKI Theodora / SOYER, Barış, 83 2 Moot Scenario, 16 3 NIKAKI Theodora / SOYER, Barış, 84

5 | P a g e

4. Furthermore, the aim of the hull cleaning clause is to expressly state when the hull

conditions and the responsibility for bottom cleaning and liability for losses arising

therefrom will shift from owner to charterer4. Therefore, it was clear that the intention

was to establish that the burden of this obligation remains with the Respondent.

5. Moreover, it is widely known that underwater cleaning is only allowed in a few

locations around the world,5 therefore the Respondent should have taken into account

where to perform the obligation in case it was necessary in order to comply with the

redelivery time established on the TCP.

6. Consequently, there can be no doubt that this is a clause which explicitly places the

risk, cost, and time of such cleaning on Charterers.6

7. In the London Arbitration case 25/17,7 the Arbitral Tribunal held a breach of the

hull cleaning clause due to the fact that the Vessel had to wait for berth staying idle at

the discharging port for 35 days and the Charterers redelivered the vessel with the hull

bottom fouled. Consequently Charterers were held responsible for damages realted to

the subsequent hull cleaning costs.

8. In the present case the circumstances in this matter were the same. For these reasons

this Arbitral Tribunal is requested to render its judgment on the same manner.

4 YANG LIU, Edward 5 BIMCO 6 NIKAKI Theodora / SOYER, Barış, 87 7 London Arbitration 25/17, 1

6 | P a g e

B. THE ALTERNATIVES GIVEN BY THE RESPONDENT FOR THE

AVOIDANCE OF THE CLEANING OBLIGATION WERE

INAPPROPRIATE

1.THE RESPONDENT‘S OFFERS TO PAY A LUMP SUM WERE

INADEQUATE.

9. In light of clause 83 (d) if the Respondent was prevented from carrying out

underwater cleaning, the parties shall, prior to but latest upon redelivery, agree to a

lump sum payment in full and final settlement of Claimant’s costs and expenses

arising as a result of or in connection with the need for cleaning.8

10. In the case at hand, the Respondent was not actually prevented from carrying out

underwater cleaning, since the Respondent could have arranged the performance in

another port, therefore, the Claimant was not obliged to agree on a lump sum.

11. In this sense, in the email sent on 8 June 2016,9 the Respondent offered a lump

sum of USD 15,000 to avoid the performance of its obligation without knowing the

extent of the fouling. In the same manner,on 23 June 201610 the Respondent received

the underwater cleaning quotation for an ammount of USD 33,000.00. On 27 June

2016, 11 the Respondent insisted on the avoidance of complying with the underwater

cleaning obligation by offering a lump sum of USD 20,000.

12. Finally, on 30 June 2016, the Respondent was persistent in requesting payment of

a lump sum, but the second request increased to USD 30,000 for the hull cleaning12

and the Claimant reiterated the importance of the Respondent’s compliance with their

8 Moot Scenario, 16-17 9 Moot Scenario, 29 10 Moot Scenario,35 11 Moot Scenario, 39 12 Moot Scenario, 42-43

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obligation , furthermorethe Respondent did not consider the quoatation of the

ammount of 23 June 2016 .

13. Every lump sum offer made by the Respondent was insufficient because their

offers did not include the cost of the voyage from Wahanda to the North Port.

14. Moreover, the Respondent did not consider additional overtime worker costs

depsite knowing that the Vessel was already in delay.13

15. As a result, Claimant’s refusals to Respondent’s offers were reasonable because

the lump sums offered did not cover all the costs and expenses related to underwater

cleaning, hence the lump sums were inadequate and consequently irrelevant.14

16. As the hull fouling clause explicitly places the risk, cost, and time of such cleaning

on the Charterers,15 it is logical that if the parties did not reach an agreement regarding

the lump sum payment, the Respondent was responisble for reimbursing the amount

ultimately paid for the underwater cleaning as agreed upon by the Respondent in their

email sent on 9 June 2016.16

2. CLAIMANT’S DECISION OF UNDERWATER CLEANING PORT WAS

REASONABLE

17. On 25 May 2016, Wahanda Port reported that it was not possible to perform the

underwater cleaning therein.17

18. On 5 June 2016 the Vessel had been berthed at the Port for more than 30 days and

the Respondent had not informed the Claimant of any intentions to perform the

13 Moot Scenario, 35 14 Channel Island Ferries v. Cenargo Navigation 15 YANG LIU, Edward

16 Moot Scenario, 28 17 Moot Scenario, 26

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cleaning even though the Respondent already knew that the performance would not

be possible at Wahanda Port; therefore, the Claimant had to remind the Respondent

of their underwater hull cleaning (the “underwater cleaning”) obligation on 8 June

2016,18 in order to make sure that necessary measures would be taken to perform said

obligation.

19. Despite the above, the Respondent requested a quotation for underwater cleaning

at another Port until 22 June 2016,19 even when the Respondent was already in delay

since the Vessel should have been redelivered by 23 May 2016.20

20. On 27 June 2016 the Respondent announced their unwillingness to arrange the

underwater cleaning before redelivery of the Vessel21 which violated the following

contractual obligation established in Clause 83(d):

(...)

(d) Cleaning in accordance with this Clause shall always be

carried out prior to redelivery. If, nevertheless, Charterers are

prevented from carrying out such cleaning, the parties shall, prior

to but latest on redelivery, agree a lump sum payment in full and

final settlement of Owners’ costs and expenses arising as a result

of or in connection with the need for cleaning pursuant to this

Clause.22

21. In addition, the Respondent wrongfully attempted to establish the conditions in

which Claimant would have to perform the underwater cleaning by establishing that

18 Moot Scenario, 29 19 Moot Scenario, 36 20 Moot Scenario, 4 21 Moot Scenario, 39 22 Moot Scenario, 16- 17

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the voyage to South Port would be non-contractual23.

22. Having regard to these considerations, the Claimant's decision to perform the

underwater cleaning obligation in the South Port was reasonable due to the fact that

in accordance with the quotation given by South Port the Claimant knew that the

underwater cleaning working period would be one day. Contrary to the offer made by

the Respondent, which did not contemplate the time working period of the cleaning,

despite the email sent on 26 June 2016 where the Claimant informed them that the

Vessel was scheduled for a voyage to the East Coast.24

23. For the reasons stated above, this Arbitral Tribunal should hold that the

Respondent is liable for paying the amount established on Claimant’s final hire

statement of 1st August 2016 of USD 96,567.42.25

PART II: DELAY OF REDELIVERY

A. RESPONDENT FAILED TO REDELIVER THE VESSEL PRIOR TO

EXPIRATION OF THE MAXIMUM PERIOD OF THE CHARTERPARTY

24. The principle of pacta sunt servanda, binds a person to their promises in order to

safeguard the interest of the promisee. The importance of this rule must be underlined

since "effective economic activity is not possible without reliable promises". 26

25. In the case of a time charter, the charterer is contractually bound to redeliver the

vessel to the owner at the end of the agreed period27, as a result, the charterer is liable

23 Moot Scenario, 43 24 Moot Scenario, 34 25 Moot Scenario, 52 26 KONARSKI, Hubert, 1 27 Lansat Shipping v. Glencore Grain BV

10 | P a g e

for damages if the vessel is not redelivered within the contractual period.28

26. In accordance with the fixture, the Vessel had to be redelivered between 50-55

days after the delivery date. Nevertheless, it took 91 days for the Respondent to make

redelivery of the Vessel.29

27. For the reasons set out above the Respondent breached the contractual obligations

regarding the redelivery of the vessel within the time established by the parties.

B. RESPONDENT IS LIABLE FOR CLAIMANT’S LOSS OF PROFITS

28. Clause 4 (c) of the NYPE 2015 establishes the following:

(c) Acceptance of redelivery of the Vessel by the Owners shall not

prejudice their rights against the Charterers under this Charter

Party.30

29. In this regard in accordance with the Explanatory notes of such clause, whatever

the circumstances under which the owners accept redelivery of the ship, they do not

affect the owners’ rights to claim damages from the charterers for any loss suffered

by the owners due to the charterers’ breach of any of its obligations under the charter

party.31

30. In this sense “any loss” should be interpreted as the simple use of the words,

therefore, the loss of the fixture with Champion Chartering Corp (“Champion”) is

included therein, consequently, this Arbitral Tribunal may determine the Respondent

28 The Peonia [1991] 29 Moot Scenario, 72 30 NYPE 2015, 3 31 NYPE 2015. EXPLANATORY NOTES, 7

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liable for damages caused by late redelivery.

31. It is a persistent practice of owners to make plans for following fixtures based on

the expected date of redelivery, therefore any breach in this matter comes along with

detrimental consequences for them, since they risk losing their next fixture.32

32. In the case of Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas),

owners claimed damages that consisted of loss of profits for late redelivery of a time

charter vessel because the owners had a next future contract. The House of Lords held

that as a result of late redelivery, the Charterer would be liable for any loss, however

large, occasioned by a delay in the redelivery in circumstances where it had no

knowledge of, or control over, the new fixture.

33.Moreover, it is of course a general principle that the claimant must prove its loss33,

in the CARISBROOKE Shipping v Bird Port Ltd case the claimant failed to point out

evidence of the time expended in dealing with consequences caused by the incident,

and the profits which would have been earned.

34. In the case at bar the claimant proved the evidence of the profits which would

have been earned in the time period for the delay of the redelivery by the loss of hire

under the Next Fixture (15 June 2016).34

35. This Arbitral Tribunal should take into consideration the case law mentioned

above to determine that the respondent must pay for damages caused by late redelivery

in the amount of USD 15,330,000, which includes the loss of fixture for 4 years at

USD 10,500 per day.

32 SOYER, Bariş / TETTENBORN, Andrew, 79 33 Hawk Shipping Ltd v Cron Navigation Ltd; CARISBROOKE Shipping v Bird Port Limited 34 Moot Scenario, 30

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COUNTERCLAIMS DEFENSE

PART I: THE CARGO CLAIM IS INADMISSIBLE

A. THE CARGO CLAIM IS TIME-BARRED

36. By virtue of clause 27 of the NYPE35, the parties agreed to be settled their cargo

claims in accordance with the Inter-Club NYPE Agreement 1996 (as amended 1

September 2011) which establishes:

Time Bar

(6) Recovery under this Agreement by an Owner or Charterer

shall be deemed to be waived and absolutely barred unless written

notification of the Cargo Claim has been given to the other party

to the charterparty within 24 months of the date of delivery of the

cargo or the date the cargo should have been delivered, save that,

where the Hamburg Rules or any national legislation giving effect

thereto are compulsorily applicable by operation of law to the

contract of carriage or to that part of the transit that comprised

carriage on the chartered vessel, the period shall be 36 months.

Such notification shall if possible include details of the contract of

carriage, the nature of the claim and the amount claimed.

37. In order to define the applicable time period to make such a claim it is necessary

to refer to the applicable law regarding the contract of carriage.

35 NYPE 2015, 12

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38. In accordance with the Clause 19 of the bill of lading, the parties agreed to the

following:

(a) Goods may be stowed by the Carrier as received, or, at

Carrier's option, by means of containers, or similar articles of

transport used to consolidate goods.

(b) Containers, trailers and transportable tanks, whether stowed

by the Carrier or received by him in a stowed condition from the

Merchant, may be carried on or under deck without notice to the

Merchant.

(c) The Carrier's liability for cargo stowed as aforesaid shall be

governed by the Hague Rules as defined above notwithstanding

the fact that the goods are being carried on deck and the goods

shall contribute to general average and shall receive

compensation in general average.36

39. Hence, as the cargo was stowage the applicable Rules on this matter are the

Hague Rules.

40. Furthermore, the Hague Rules do apply to charterparties in two occasions:

a) When a bill of lading is issued under a charterparty and the bll of lading rather

than the charterparty regulates the relations between the carrier and the holder of the

bill of lading (i.e. when the bill of lading is in the hands of a person not a party to the

charterparty);

36 Moot Scenario, 48

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41. In this sense, the art. 5, second paragraph of the Hague Rules sets out:

(…)

“… but if bills of lading are issued in the case of a ship under a

Charterparty, they shall comply with the terms of this Convention

…”

42. In the same vein, it is important to mention that the BOL was issued at the same

moment of the TCP (18 March 2016),37 determining the relations between the carrier

and the merchant within the BOL.

43. Furthermore, the Clause 1 of the BOL establishes the following:

1. Definition.

Wherever the term “Merchant” is used in this Bill of Lading, it

shall be deemed to include the Shipper, the Receiver, the

Consignee, the Holder of the Bill of Lading and the Owner of the

Cargo38

44. In conclusion it is evident that the Hague Rules are applicable in this dispute

because the documents were finalized on the same day and the BOL does not regulate

the relation with the owner.

b) When the Charterparty specifically incorporates the Rules, usually by means of a

paramount clause.39

37 Moot Scenerio, 2, 47 38 Moot Scenerio, 48 39TETLEY, William, 76

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45. In the present case, the paramount clause is entitled in the clause 33 (a) of the

NYPE and establishes the following:

(…)

a) General Clause Paramount

This bill of lading shall have effect subject to the provisions of

the Carriage of Good by Sea Act of the United States, The Hague

Rules, or the Hague Visby Rules…40

46. In consequence, the Respondent had to give written notification of the cargo claim

adding the details of the contract of carriage, the nature of the claim, and the amount

claimed within 24 months of the date of delivery of the cargo (30 June 2016). The

Respondent did not fulfill said requirements since the Respondent did not mention the

amount claimed until this Arbitration, which exceeded the allowable time.

47. During a case involving Deep Sea Maritime Ltd v Monjasa A/S, the Claimant

incorrectly commenced a proceeding for damages within the time period and

subsequently submitted said claim in a correct form after the required time period. As

a result, the QBD held that the corrected claim was time-barred because it was

submitted after the time limit.

48. In the present case, even if the Respondent had submitted a cargo claim, he did it

incorrectly, and when the Respondent provided the details of the claim in order to

fulfill the requirements for doing so, it was not within the time established by the

Clause 6 of the ICA (p. 82)., therefore, the cargo claim is time-barred.

40 NYPE 2015, 14

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B. EVEN IF CARGO CLAIM WAS WITHIN THE TIME LIMIT, THE

CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE

1. THE CLAIMANT IS NOT LIABLE FOR CARGO DAMAGE IN

ACCORDANCE WITH THE INTER-CLUB AGREEMENT

49. The Respondent’s argument regarding the Claimant’s liability for cargo damage

in contrary to Clause 8 (a) of the ICA which provides the following:

(8) Cargo Claims shall be apportioned as follows:

(a) Claims in fact arising out of unseaworthiness and/or error or

fault in navigation or management of the vessel: 100% Owners

Save where the Owner proves that the unseaworthiness was

caused by the loading, stowage, lashing, discharge or other

handling of the cargo, in which case the claim shall be

apportioned under sub-clause (b).

(b) Claims in fact arising out of the loading, stowage, lashing,

discharge, storage or other handling of cargo: 100% Charterers

unless the words „and responsibility“ are added in clause 8 or

there is a similar amendment making the Master responsible for

cargo handling in which case: 50% Charterers 50% Owners

Save where the Charterer proves that the failure properly to

load, stow, lash, discharge or handle the cargo was caused by

the unseaworthiness of the vessel in which case: 100% Owners.

50. The requirements of the Clause mentioned above were not satisfied because one

of the elements is the existence of unseaworthiness.

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51. The Inter-Club Agreement does not provide any definition or content of the

obligation of seaworthiness, ergo, it is useful to analyze the content of said obligation

pursuant to the Hague Rules.

52. The article 3.1 of the Hague Rules establishes the following:

1. The carrier shall be bound before and at the beginning of the

voyage to exercise due diligence to:(a) Make the ship seaworthy.

(...)

Before and at the beginning of the voyage means the period from

at least the beginning of the loading until the vessel starts on her

voyage.41

53. The moment of departure is the beginning of the voyage. The voyage starts when

the ship breaks grounds for the purpose of departure. Thereafter, pursuant to the Hague

Rules the obligation to use due diligence for seaworthiness ends.42

54. The Article 3 makes it clear that the duty of due diligence is before and at the

beginning of the voyage, consequently there is no way that the acts of the crew after

this time are included under the responsibilities of the Article 3. Therefore the owner

is not liable for crew negligence during the voyage.

55. Due diligence to make the vessel seaworthy may be defined as a genuine,

competent and reasonable effort of the carrier to fulfill the obligations set out in

subparagraph (a), (b) and (c) of art. 3(1) of the Hague or Hague/Visby Rules.

41 HENDRIKSE, M.L./ MARGETSON, N.H./ MARGETSON, N.J.; 60-61 42 HENDRIKSE, M.L./ MARGETSON, N.H./ MARGETSON, N.J.; 62

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56. The English Court of Appeals has held that the test of due diligence is whether the

carrier, its servants, agents and independent contractors have exercised “all

reasonable skill and care to ensure that the vessel was seaworthy at the

commencement of its voyage, namely, reasonable fit to encounter the ordinary

incidents of the voyage….”43

57. Even though ballasting errors can be considered as an error or fault on the

navigation or management of the ship, there is an exception in this matter. This

exception states that the error must not have taken place before the voyage began.

58. In the case at bar the crew performed the ballasting of the vessel at the end of the

voyage; thus, the exception applies since the crew was taking steps to ballast the vessel

for her departure once the cargo had been discharged44.

59. Furthermore, the Preliminary Survey Report on 30 June 2016, established that the

ballasting system was found in order.45

60. Consequently, in the present case the Claimant fulfilled its responsibility of due

diligence to make the Vessel seaworthy before and at the beginning of the voyage.

2. THE CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE

ARISING FROM CREW NEGLIGENCE

61. The article 4 of the Hague Rules establishes:

43 William Tetley, Marine Cargo Claims, 4th edition, Thomson (2008), 969-970 44 Moot Scenario, 46 45 Ibid.

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2. Neither the carrier nor the ship shall be responsible for loss or

damage arising or resulting from:

(a) Act, neglect, or default of the master, mariner, pilot, or the

servants of the carrier in the navigation or in the management of

the ship.

62. In light of the above, the owner is exempt from all liability in this regard due to

acts, neglect, or default by the servants of the carrier in the navigation or in the

management of the ship performed after the beginning of the voyage.

63. Therefore, if the vessel is seaworthy and the cargo is lost by reason of negligent

navigation, the carrier is exempted from liability in accordance with the Hague

Rules.46

3. CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE IN

ACCORDANCE WITH THE BILL OF LADING

64. In the case Pyrene Company v. Scindia Steam Navigation Company, it was held

that the interpretation and applicability of the Hague Rules, establishes that rules must

be limited in accordance with the provided in the contract of carriage by sea.47 65.

Therefore, if the BOL does not stipulate any type of liability against the owner for

damages during the loading or discharging of the goods, the charterers are responsible

for those damages.

65. Consequently, under all of the possible scenarios in this case the Claimant is not

liable for and damages to the cargo.

46 Alize 1954 & Anor v Allianz Elementar Versicherungs AG & Ors 47 Pyrene Company v. Scindia Steam Navigation Company; 328,329

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PART. II: THE VESSEL REMAINED ON-HIRE DURING THE ENTIRE

TRIP

A. THE DELAY WAS NOT DUE TO AN OFF-HIRE EVENT UNDER

ARTICLE 17 OF THE NYPE

66. According with the principles of off-hire, the following is necessary to

consider an event as such:48

a)The off-hire regime is created by the terms of the contract.

67. The meaning of this principle is to consider the will of the parties to agree to

the most convenient terms for their contractual interests.

68. None of the circumstances contemplated under the clause 17 of the NYPE

provide the decisions of the Port State Authority to stop the vessel regarding fear

of crew infection; thus, the liability of the Claimant cannot go beyond the

responsibilities contemplated in the contract.

b)The burden is on the Charterer to show that the off-hire clause operates in the

relevant circumstances; furthermore, as a matter of interpretation the Charterer

must bring itself clearly within the clause.

69. The Respondent´s facts specified on emails are beyond the scope of the Clause

17 of the NYPE.

c) Off-hire clauses operate as an exception to the general rule. This means such

clauses are interpreted strictly as well as narrowly. They are construed contra

proferentem with the Charterer regarded as the proferens – in other words, any

ambiguity will usually be resolved in favour of the Owner and against the Charterer

48 SOYER, Bariş / TETTENBORN, Andrew, 33

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(i.e. the party seeking to rely on the clause).

70. In the case at hand it is clear that the event is not contemplated in the off-hire

clause of the NYPE, as a result, if the Respondent would like to interpret this clause,

the interpretation would be on behalf of the owner’s interests.

71. For the reasons set out above, the Arbitral Tribunal should find that the Vessel

remained on-hire at all times. As a result, the Respondent did not overpay for the hire

and the Respondent shall reimburse the Claimant’s loss of profits.

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PRAYER FOR RELIEF

Claimant respectfully requests the Arbitral Tribunal to:

1. ORDER the Respondent to pay the total amount of USD 15,426,567.42

consisting of:

a. USD 41,000 for hull cleaning;

b. USD 55,567.42 for the cost of the voyage to South Island in order to perform

hull cleaning;

c. USD 15,330,000 for late redelivery (loss of hire under the Next Fixture,

calculated as 4 years at USD10,500 per day)

2. FIND that the cargo claim asserted by the Respondent is time-barred;

3. Alternatively, FIND that the Claimant is not liable for the cargo damage

4. FIND that the Vessel remained on-hire at any time

5. AWARD interest and costs in favor of the Claimant as the Tribunal deems

appropriate pursuant to section 49 of the Arbitration Act 1996.

Dated this 29th day of April 2019

Solicitors for the Claimant

Panther Shipping Inc.