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TEAM 1
Twentieth
INTERNATIONAL MARITIME LAW ARBITRATION MOOT
Rotterdam, 30th June – 5th July
AMITY LAW SCHOOL, DELHI
GGSIP UNIVERSITY
Memorandum For CLAIMANT
On behalf of Against
Panther Shipping Inc. Omega Chartering Limited
(CLAIMANT) (RESPONDENT)
COUNSEL FOR CLAIMANT
FATEH SINGH KHURANA ▪ SAOUMYA VASHISHT ▪ SIDDHARTH DHAWAN
VATSALA CHAUHAN ▪ VIDUSHI SINHA
TEAM 1
TABLE OF CONTENTS
LIST OF ABBREVIATIONS...........................................................................................................I
INDEX OF AUTHORITIES..........................................................................................................IV
INDEX OF CASES.................................................................................................................... VII
LEGAL SOURCES AND MATERIAL........................................................................................XVI
STATEMENT OF FACTS.............................................................................................................. 1
SUMMARY OF ARGUMENTS........................................................................................................4
ARGUMENTS ON JURISDICTION.................................................................................................5
I. THAT THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT MATTER....................5
A. The Arbitral Tribunal has the authority to decide upon its own jurisdiction..............5
1. The Tribunal has the power to rule upon its jurisdiction ............................. 5
2. The Arbitration Clause stipulates that the Seat of Arbitration will be in
London ......................................................................................................... 6
3. The Law applicable to the Arbitration Agreement is English Law ............. 6
B. The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and
sufficiency of the notification given by RESPONDENT with regards to the Cargo
Claim ........................................................................................................................ 7
1. The Arbitration Clause must be interpreted broadly .................................... 7
2. Alternatively, even if the claim is found to be non-contractual, the tribunal
has the jurisdiction to adjudicate upon the same...........................................8
CONCLUSION TO THE FIRST ISSUE ........................................................................................... 9
ARGUMENTS ON MERITS.......................................................................................................... 9
TEAM 1
II. THE RESPONDENT’S FAILURE TO PERFORM HULL CLEANING PRIOR TO RE-DELIVERY
HAS RESULTED IN BREACH OF THE CHARTERPARTY AND THEY ARE THUS LIABLE FOR
THE COSTS INCURRED.........................................................................................................9
A. RESPONDENT is not relieved of its obligation to perform hull cleaning...................10
1. RESPONDENT is liable under clause 83 of the Charterparty to provide for hull
cleaning. ..................................................................................................... 10
2. Even if RESPONDENT has discharged their liability under clause 83, the
principle of implied indemnity would be applicable in this situation..........12
B. RESPONDENT is liable for lump sum payment of the entire cost incurred by
CLAIMANT in lieu of hull cleaning...........................................................................12
C. RESPONDENT is liable for the cost of the voyage to South Island.............................14
CONCLUSION TO THE SECOND ISSUE ..................................................................................... 16
III. RESPONDENT IS LIABLE TO PAY THE DAMAGES AS PER THE SUBSEQUENT FIXTURE.....16
A. Vessel was on hire during its stay at Wahanda port.........................................16
B. The delay in redelivery was caused due to the personal gross negligence of
RESPONDENT...........................................................................................................17
C. RESPONDENT had the special knowledge of the next fixture....................................18
D. Loss of hire under the next fixture is for 4 years and not for 2 years as claimed by
RESPONDENT...........................................................................................................19
E. CLAIMANT is not liable to give credit for hire received under replacement
fixture.....................................................................................................................20
CONCLUSION TO THE THIRD ISSUE........................................................................................21
TEAM 1
IV. CLAIMANT IS NOT LIABLE FOR THE PAYMENT OF THE CARGO CLAIM MADE BY
RESPONDENT......................................................................................................................21
A. The cargo claim is time barred under clause 6 of the ICA.......................................21
B. The cargo claim does not fall to be apportioned under clause 8 (a) of the ICA........23
CONCLUSION TO THE FOURTH ISSUE.....................................................................................25
REQUEST FOR RELIEF............................................................................................................. 25
TEAM 1 MEMORANDUM FOR CLAIMANT | I
LIST OF ABBREVIATIONS
& And
A. OR ART. Article
AJSL Asian Journal on Shipping and
Logistics
ARB Arbitration
AUG. August
BIMCO The Baltic and International Maritime
Council
CL. Clause
CORP. Corporation
DEC December
DOC. Document
ED. Edition
GMBH Gesellschaft mit beschränkter Haftung
HFW Holman Fenwick Willan
ICA Inter-Club Agreement
ICC International Chamber of Commerce
TEAM 1 MEMORANDUM FOR CLAIMANT | II
ICSID International Centre for Settlement of
Investment Disputes
IMO International Maritime Organization
INC. Incorporated
INT. International
JUL. July
JUN. June
LMAA London Maritime Arbitrators Association
LTD. Limited
M metre
MAR. March
MEPC Marine Environment Protection Council
MV OR M/V Motor Vessel
NO. Number
NOV. November
NYPE New York Produce Exchange
OCT. October
P. Page/Pages
P&I Protection and Indemnity
TEAM 1 MEMORANDUM FOR CLAIMANT | III
PARA./§ Paragraph
PO Provisional Order
S. Section
UK United Kingdom
UN United Nations
UNCITRAL United Nations Commission on International
Trade Law
USD United States Dollar
VOL. Volume
TEAM 1 MEMORANDUM FOR CLAIMANT | IV
INDEX OF AUTHORITIES
BERLINGIERI,
Francesco
A Comparative Analysis of the Hague-Visby Rules,
Hamburg Rules and the Rotterdam Rules
(2009)
Cited as:
BERLINGIERI
in para: § 17.
BLACKABY, Nigel
PARTASIDES,
Constantine
REDFERN, Alan
HUNTER, Martin
Redfern and Hunter on International Arbitration,
6th Ed. (2015)
Published by: Oxford University Press
pp: 322-345
Cited as:
REDFERN/
HUNTER
in para: § 4.
BORN, Gary B. International Commercial Arbitration,
2nd Ed. (2001)
pp: 317-319
Cited as:
BORN, 2001
in para: § 9.
CHAFIK, Muhsen The Rules of the Carriage of Goods by Sea”
(The Hamburg Rules) (1984)
p.43
Cited as:
CHAFIK
in para: § 45.
COGHLIN, T.
BAKER, A.
KENNY, J.
Time Charters.
6TH Ed.. (2008)
Available at: Informa Law from Routledge, Lloyd’s
Shipping Law Library
Cited as:
COGHLIN/BAKER/
KENNY
in para: § 69.
TEAM 1 MEMORANDUM FOR CLAIMANT | V
GARD Gard Guidance to Seaworthiness
Available at:
http://www.gard.no/web/publications/document/ch
apter?p_subdoc_id=6224&p_document_id=6208
Cited as:
GARD GUIDANCE TO
SEAWORTHINESS
in para: § 64.
GIRVIN, S. Carriage of Goods by Sea
2ND Ed. (2011)
Published by: Oxford University Press.
Cited as:
GIRVIN
in para: § 71.
LEE, J.S. A Case Study on the Recovery Criteria of Reliance
Damage in Marine Transport Contract and
Charterparty Volume 33, Issue 4 (2017)
pp. 245-251
Cited as:
LEE
in para: § 52.
MANAADIAR,
Hariesh
The essential guide to cargo damage
(2017)
Available at:
https://shippingandfreightresource.com/the-
essential-guide-to-cargo-damage/
Cited as:
GUIDE TO CARGO
DAMAGE,
MANAADIAR
in para: § 60.
MCILWRATH,
Michael
SAVAGE, John
International Mediation and Arbitration: A Practical
Guide (2010)
Published by: Kluwer Law International
Cited as:
MCILWRATH/
SAVAGE
in para: § 5.
TEAM 1 MEMORANDUM FOR CLAIMANT | VI
PLOMARITOU, Evi A Review of Shipowner’s & Charterer’s
Obligations in Various Types of Charter.
Published by: Journal of Shipping and Ocean
Engineering. (2014)
available at:
http://www.davidpublisher.org/Public/uploads/Con
tribute/550a993f0831a.pdf
Cited as:
PLOMARITOU, IN:
JSOE.
in para: § 68.
VIRGO, Graham The Principles of the Law of Restitution
Published by: Oxford University Press
(2006)
Cited as:
VIRGO
in para: § 52.
TEAM 1 MEMORANDUM FOR CLAIMANT | VII
INDEX OF CASES
CANADA
Dell Computer Corp. v. Union des consommateurs
13 July 2007
Superior Court of Canada,
Citation: 2007 SCC 34
Cited as: CANADA 13 Jul. 2007
in para: § 2.
Kaverit Steel & Crane Ltd v. Kone Corp.
16 January 1992
Alberta Court of Appeal
Citation: 120 A.R. 346 (CA)
Cited as: CANADA 16 Jan. 1992
in para: § 13.
UNITED KINGDOM
Action Navigation Inc v. Bottigliere di Navigazione SpA (The Kista)
16 February 2005
Queen’s Bench Division (Commercial Court)
Citation: [2005] EWHC 177
Cited as: UK 16 Feb. 2005
in para: § 33, 37, 38.
TEAM 1 MEMORANDUM FOR CLAIMANT | VIII
Sig Bergesen D.Y. A/S & al. v. Mobil Shipping & Transportation Co. (The “BERGE
SUND”)
18 December 1991
Queen’s Division Bench (Commercial Court)
Citation: [1992] 1 Lloyd’s Rep.460
Cited as: UK 18 Dec. 1991
in para: § 43.
Czarnikow (C) Ltd v. Koufos ( The Heron II )
17 October 1967
House of Lords
Citation: [1969] 1 AC 350 (HL)
Cited as: UK 17 Oct. 1967
in para: § 49.
D/S A/S Idaho v. Peninsular and Oriental Steam Navigation Co. (The Strathnewton)
30 November 1982
Court of Appeal
Citation: [1983] 1 Lloyd’s Rep 296
Cited as: UK 30 Nov. 1982
in para: § 60.
ENE Kos 1 Ltd v. Petroleo Brasileiro SA (The Kos) (No 2) (SC)
2 May 2012
Supreme Court
TEAM 1 MEMORANDUM FOR CLAIMANT | IX
Citation: [2012] UKSC 17
Cited as: UK 2 May 2012
in para: § 31.
Federal Commerce and Navigation Ltd v. Molena Alpha Inc (The Nanfri)
13 April 1978
Court of Appeal
Citation: [1978] 1 Lloyd’s Rep. 581
Cited as: UK 13 Apr. 1978
in para: § 55.
Geldof Metaalconstructie NV v. Simon Carves Limited
11 June 2010
England and Wales Court of Appeal (Civil Division)
Citation: [2010] EWCA Civ 667
Cited as: UK 11 Jun. 2010
in para: § 55.
Golden Strait Corp v. Nippon Kubishika Kaisha (The Golden Victory)
28 March 2007
House of Lords
Citation: [2007] UKHL 12
Cited as: UK 28 Mar. 2007
in para: § 52.
TEAM 1 MEMORANDUM FOR CLAIMANT | X
Hadley v. Baxendale
23 February 1854
Court of Exchequer
Citation: [1854] EWHC J70
Cited as: UK 23 Feb. 1854
in para: § 50.
Imperator I Maritime Co v. Bunge Sa (The “Coral Seas”)
24 June 2016
Queen’s Bench Division (Commercial Court)
Citation: [2016] EWHC 1506 (Comm)
Cited as: UK 24 Jun. 2016
in para: § 26, 37.
Ipsos S.A. v. Dentsu Aegis Network Limited (previously Aegis Group plc)
29 April 2015
Queen’s Bench Division (Commercial Court)
Citation: [2015] EWCH 1171 (Comm)
Cited as: UK 29 Apr. 2015
in para: § 59, 60.
Jackson v. Royal bank of Scotland
27 January 2005
House of Lords
Citation: [2005] 1 WLR 377
TEAM 1 MEMORANDUM FOR CLAIMANT | XI
Cited as: UK 27 Jan. 2005
in para: § 48.
J. &J. Denholm Ltd. v. Shipping Controller (The “CARRONPARK”)
23 July 1920
King’s Bench Division
Citation: [1920] 4 Ll.L.Rep.426
Cited as: UK 23 Jul. 1920
in para: § 41.
Legola Compania de Navigacion, S.A. v. John Glynn & Son, Ltd. (The
“DODECANESE”)
15 May 1953
Queen’s Bench Division
Citation: [1953] 2 Lloyd's Rep.47
Cited as: UK 15 May 1953
in para: § 41.
Louis Dreyfus Commodities Suisse SA v. MT Maritime Management BV
1 September 2015
England and Wales High Court (Commercial Court)
Citation: [2015] EWHC 2505 (Comm)
Cited as: UK 1 Sep. 2015
in para: § 52, 54.
TEAM 1 MEMORANDUM FOR CLAIMANT | XII
Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS);
25 October 1976
Queen’s Bench (Commercial Court)
Citation: [1977] 1 Lloyd's Rep 368
Cited as: UK 25 Oct. 1976
in para: § 41.
MMP GmbH (Formerly Antal International Network GmbH) v. Antal International
Network Ltd
6 May 2011
England and Wales High Court (Commercial Court)
Citation: [2011] EWHC 1120 (Comm)
Cited as: UK 6 May 2011
in para: § 51.
Ratcliffe v Evans
1892
Queen’s Bench Division
Citation: [1892] 2 QB 524
Cited as: UK 1892
in para: § 51.
Santa Martha Baay Scheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The
Rijn)
27 March 1981
TEAM 1 MEMORANDUM FOR CLAIMANT | XIII
Queen’s Bench Division (Commercial Court)
Citation: [1981] 2 Lloyd's Rep 267
Cited as: UK 27 Mar. 1981
in para: § 32.
Sulamerica Cia Nacional de Seguros S.A.v. Enesa Engenharia S.A.
16 May 2012,
England and Wales Court of Appeal (Civil Division)
Citation: [2012] EWCA Civ 638
Cited as: UK 16 May 2012
in para: § 6.
Transfield Shipping Inc v. Mercator Shipping Inc
9 July 2008
House of Lords
Citation: [2008] UKHL 48
Cited as: UK 9 Jul. 2008
in para: § 48.
Triad Shipping Co v. Stellar Chartering & Brokerage Inc (The Island Archon)
15 June 1994
Court of Appeal
Citation: CA 8 JUL 1994
Cited as: UK 15 Jun. 1994
in para: § 26.
TEAM 1 MEMORANDUM FOR CLAIMANT | XIV
Volcafe Ltd and another v. Compania Sud Americana de Vapores SA
5 December 2018
The Supreme Court
Citation: [2018] UKSC 61
Cited as: UK 5 Dec. 2018
in para: § 69.
UNITED STATES OF AMERICA
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.
2 July 1985
U.S. Supreme Court
Citation: 473 U.S. 614 (1985)
Cited as: USA 2 Jul. 1985
in para: § 14.
Moses H. Cone Memorial Hospital v. Mercury Construction Corp.
23 February 1983
U.S. Supreme Court
Citation: 460 U.S. 1 (1983)
Cited as: USA 23 Feb. 1983
In para: § 9.
Texaco Inc v. Universal Marine, Inc.
1 August 1975
United States District Court, E. D. Louisiana
TEAM 1 MEMORANDUM FOR CLAIMANT | XV
Citation: 400 F. Supp. 311 (1975)
Cited as: USA 1 Aug. 1975
in para: § 65.
Tractebel Energy Marketing, Inc. v. AEP Power Marketing
22 May 2007
United States Court of Appeals, Second Circuit,
Citation: Inc 487 F.3d 89, (2007)
Cited as: USA 22 May 2007
in para: § 49.
TEAM 1 MEMORANDUM FOR CLAIMANT | XVI
LEGAL SOURCES AND MATERIAL
Arbitration Act The English Arbitration Act, 1996
BIMCO Explanatory Notes BIMCO Hull Fouling Clause for Time Charter
parties Explanatory Notes.
BIMCO Remarks Hull Fouling Clause for Time Charter Parties
REMARKS (2013).
Geneva Protocol The Geneva Protocol on Arbitration Clauses,
1923.
ICA Inter Club New York Produce Exchange
Agreement.
IMLAM Rules The Rules for 20th Annual International
Maritime Law Arbitration Moot.
LMAA Rules London Maritime Arbitrators Association
Rules.
TEAM 1 MEMORANDUM FOR CLAIMANT | XVII
MEPC Resolutions Anti-fouling Systems, International Maritime
Organization (2003).
New York Convention United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards,
1958.
Rotterdam Rules United Nations Convention on Contracts for
the International Carriage of Goods Wholly or
Partly by Sea.
The Hague – Visby Rules The Hague Rules as Amended by the Brussels
Protocol (1968).
The Hamburg Rules
United Nations Convention on Carriage of
Goods by Sea.
UNCITRAL Model Law UNCITRAL Model Law on International
Commercial Arbitration, 1985.
TEAM 1 MEMORANDUM FOR CLAIMANT | 1
STATEMENT OF FACTS
1. The parties to this arbitration are Panther Shipping Inc. [hereinafter, CLAIMANT] and
Omega Chartering Limited, [hereinafter, RESPONDENT].
2. The CLAIMANT, Panther Shipping Inc. is a Shipping Company based in Liberia.
3. The RESPONDENT, Omega Chartering Ltd. is a Chartering Company based in
Liechtenstein.
18 Mar 16 CLAIMANT and RESPONDENT entered into a time Charterparty for a period
of 50-55 days from West Coast to Wahanda carrying a cargo of harmless
bulk products.
P. 2.
29 Mar 16 M/V Thanos Quest, hereinafter referred to as the vessel, delivered into
the Charterparty.
P. 66.
07 May 16
-
08 May 16
Vessel arrived at Wahanda but was not allowed to berth. Held at
anchorage until Port State Control cleared the crew on board, who was
suspected of carrying the Ebola virus. RESPONDENT intimated CLAIMANT
about ship being off hire from her arrival at Wahanda. CLAIMANT iterated
that this is a situation beyond their control. Communicated to
RESPONDENT that vessel remains on hire.
P. 66.
11 May 16 Port State Control inspected ship and found a number of crew members
with high fever. Ship placed in quarantine for a minimum of 28 days.
RESPONDENT again communicated to CLAIMANT that ship is off hire.
CLAIMANTS in their reply repeated that this is not an off hire event and
the ship remains on hire.
P. 24.
TEAM 1 MEMORANDUM FOR CLAIMANT | 2
25 May 16
Wahanda port services communicated to RESPONDENT that Wahanda port
is not suitable for cleaning due to current, change and other issues.
Advised that ship owner should choose other port to do the cleaning.
P. 26.
08 Jun 16
CLAIMANT contacted RESPONDENT requesting to confirm the
arrangements regarding the vessels bottom, propeller underwater
inspection and cleaning if necessary, in accordance with Cl. 83.
RESPONDENT asked for advice to solve the problem or offered a lump sum
payment of USD 15,000 in its stead due to non-availability of underwater
cleaning services.
P. 29.
09 Jun 16 CLAIMANT acknowledged non-availability of underwater cleaning
services at Wahanda. Refused the lump sum payment as no inspection
had been carried out. RESPONDENT agreed to pay cost of underwater
cleaning against original invoice.
P. 28.
15 Jun 16 CLAIMANT entered into a Charterparty dated 15.06.2016 with Champion
Chartering Corp for MV Thanos Quest. Delivery of Vessel to Champion
Chartering Corp was before the cancelling date, i.e., 28 June 2016.
P. 30.
18 Jun 16 CLAIMANT communicated to RESPONDENT that they reserve their rights
to revert in due course with their claim for costs/time/expenses for the
vessel’s cleaning from fouling due to the prolonged stay at Wahanda.
P. 35.
22 Jun 16
23 Jun 16
RESPONDENT contacted Titan Shipbuilders and received a quote for USD
33,000 for underwater hull cleaning.
P. 35.
26 Jun 16 RESPONDENT intimated about heavy fouling of the vessel and details of
next fixture by CLAIMANT. CLAIMANT then requested RESPONDENT to
P. 34.
TEAM 1 MEMORANDUM FOR CLAIMANT | 3
advise their intention regarding arrangement for Vessel’s hull, flat
bottom, rudder, propeller inspection and cleaning.
28 Jun 16 Champion Chartering Corp. cancelled the Charterparty with the
CLAIMANT due to non-delivery of Vessel before cancelling date.
P. 40.
29 Jun 16 RESPONDENT delivered one day delivery notice to CLAIMANT and
informed them that they are in talks with the receiver about the potential
cargo claim. CLAIMANT again called upon RESPONDENT to carry out the
inspection and cleaning of the vessel at South Island.
P. 43, 44.
30 Jun 16 RESPONDENT repeated their offer of lump sum payment of USD 30,000
and reiterated that any voyage to South Island would not be contractual,
and hence, RESPONDENT’S responsibility. CLAIMANT gave RESPONDENT
final opportunity to comply with contractual terms and complete the
cleaning of the vessel under Cl. 83 of the charterparty.
P. 42, 43.
04 Jul 16 CLAIMANT delivered Vessel to Fairwind International, the next fixture for
MV Thanos Quest.
P. 53.
05 Nov 17
RESPONDENT requested CLAIMANT to extend time in relation to Cargo
Claim.
P. 58.
Oct 18 CLAIMANT began arbitration process. Both CLAIMANT and RESPONDENT
appointed their arbitrators.
P. 61.
09 Nov 18 CLAIMANT served its claim on RESPONDENT. P. 65.
17 Nov 18 RESPONDENT served its counterclaim on the CLAIMANT. P. 70.
Dec 18 CLAIMANT gave its reply to RESPONDENTS counterclaim. P. 75.
TEAM 1 MEMORANDUM FOR CLAIMANT | 4
SUMMARY OF ARGUMENTS
This Tribunal is kindly requested to order that this Tribunal has jurisdiction over the present
matter. [I, see below §§1- 15]. First, the Tribunal has the authority to decide upon its own
jurisdiction. Second, the Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding
nature and sufficiency of the notification given by RESPONDENT with regards to the Cargo
Claim.
Further, the Tribunal is kindly requested to declare that the RESPONDENT’S failure to perform
Hull Cleaning prior to re-delivery has resulted in breach of the Charterparty and they are, thus,
liable for the costs incurred by CLAIMANT [II, see below §§16 - 38]. First, RESPONDENT is not
relieved of its obligation to perform hull cleaning. Second, RESPONDENT is liable for lump sum
payment of the entire cost incurred by CLAIMANT in lieu of hull cleaning. Third, RESPONDENT
is liable for the cost of the voyage to South Island.
This Tribunal is also kindly requested to hold the RESPONDENT liable to pay the damages as
per the subsequent fixture [III, see below §§38 - 56]. First, Vessel was on hire during its stay
at Wahanda Port. Second, the delay in re-delivery was caused due to the personal gross
negligence of RESPONDENT. Third, RESPONDENT had the special knowledge of the next fixture.
Fourth, loss of hire under the next fixture is for 4 years and not for 2 years as claimed by
RESPONDENT. Last, CLAIMANT is not liable to give credit for hire received under replacement
fixture.
Finally, the Tribunal is requested to hold that CLAIMANT is not liable for the payment of the
Cargo Claim made by RESPONDENT [IV, see below §§57 - 72]. First, the Cargo Claim is time
barred under clause 6 of the ICA. Second, the Cargo Claim does not fall to be apportioned
under Clause 8(a) of the ICA.
TEAM 1 MEMORANDUM FOR CLAIMANT | 5
ARGUMENTS ON JURISDICTION
I. THAT THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT MATTER.
1 This Tribunal is requested to kindly order that the tribunal has the jurisdiction to decide
the present matter as the LMAA Terms are applicable in the present case, with English Law
being the governing law. The Tribunal has the power to determine issues relating to its own
jurisdiction (A) and that the Tribunal has the jurisdiction to hear CLAIMANT’S pleading
regarding nature and sufficiency of the notification given by RESPONDENT with regards to
the Cargo Claim (B)
A. That the Tribunal has the power to determine issues relating to its own jurisdiction.
2 The Arbitral Tribunal has the power to determine issues relating to its own jurisdiction.
There is a valid and binding arbitration clause between the parties [Cl. 80, P. 15, MOOT
PROPOSITION]. Arbitration is “a creature that owes its existence to the will of the parties
alone.” [CANADA 13 Jul. 2007]. In the present case, since it has been explicitly agreed to
by the parties, the arbitration clause constitutes the primary source of the Tribunal’s
authority to decide all disputes arising out of or in connection to the Charterparty.
1. The Tribunal has the power to rule upon its jurisdiction.
3 The London Maritime Arbitration Association Rules are the procedural rules governing
the arbitration [RULE 2.2, IMLAM RULES]. The seat of arbitration for the present matter
is in England, pursuant to Rule 6(a) of the London Maritime Arbitrators Association Rules
[RULE 6(a), LMAA RULES]. CLAIMANT and RESPONDENT, in the Arbitration Clause [Cl.
80, P. 15, MOOT PROPOSITION] have agreed that the governing the contract is English
Law. Accordingly, the English Arbitration Act [ARBITRATION ACT] will be applicable as
well.
TEAM 1 MEMORANDUM FOR CLAIMANT | 6
4 The Kompetenz-Kompetenz Principle is recognized under S. 30(1) of the Arb. Act
[ARBITRATION ACT]. Under this Principle, the Tribunal has the power to determine its
own jurisdiction [REDFERN/HUNTER, P. 322, 345] by construing the arbitration
agreement according to its governing law [BORN, P. 1405-6]. Hence, the Tribunal may
rule on its own substantive jurisdiction as to matters that have been submitted to arbitration
in accordance with the Arbitration Clause [Cl. 80, P. 15, MOOT PROPOSITION].
2. The Arbitration Clause stipulates that the seat of arbitration is London.
5 The Arbitration Clause has expressly stipulated that the seat of arbitration is London.
Experts in drafting international arbitration clauses advise that express language ensures
that the parties’ intentions are followed [MCILWRATH/SAVAGE]. The parties, through
Clause 80, have stipulated that any dispute arising between CLAIMANT and RESPONDENT,
will be referred to arbitration in London, and the Contract will be construed in accordance
with English Law. The intention of the parties was to have the seat of the arbitration in
London, and to have the contract governed by English Law. Therefore, it is clear from the
language of the arbitration clause that the seat of Arbitration is London.
3. The Law applicable to the Arbitration Agreement is English Law.
6 The Law applicable to the Arbitration Agreement is English Law. In SULAMERICA,
MOORE-BICK LJ, gave the three-stage test to determine the law of the arbitration agreement,
which is as follows: (1) whether the parties had made an express choice as to what law
should govern the arbitration agreement; (2) whether the parties had made an implied
choice as to what law should govern the arbitration agreement; (3) what jurisdiction the
arbitration agreement has its closest and most real connection to [UK 16 May 2012]. In the
present matter, the parties had made an express choice that the contract is to be construed
in accordance with English Law. Hence, the arbitration will be governed by English Law.
TEAM 1 MEMORANDUM FOR CLAIMANT | 7
7 The law governing the arbitration, that is, the Lex Arbitri is English Law in the present
case, pursuant to Rule 6(a) of LMAA [RULE 6(a), LMAA RULES]. This includes the
English Arbitration Act of 1996 [ARBITRATION ACT]. Alternatively, even if the law
governing the substantive contract to the arbitration agreement is found to be not
applicable, the law of the seat of the arbitration will govern the proceedings. Since the seat
of the arbitration is London in this case, the agreement will be governed by English Law.
B. The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and
sufficiency of the notification given by RESPONDENT with regards to the Cargo Claim.
8 The Tribunal has the jurisdiction to hear CLAIMANT’S pleading regarding nature and
sufficiency of the notification given by RESPONDENT with regards to the Cargo Claim. The
Arbitration Clause must be interpreted broadly (1) and even if the claim is found to be non-
contractual, the tribunal has the jurisdiction to adjudicate upon the same. (2)
1. The Arbitration Clause must be interpreted broadly.
9 As a general practice, in resolving disputes over the scope of arbitration agreements, a
number of national courts apply rules of interpretation which are avowedly “pro-
arbitration,” resolving doubts about the scope of a clause in favour of encompassing
borderline claims.[BORN, 2001, P.317-319] In interpreting international arbitration
agreements, for example, U.S. courts have generally applied a federal common law rule of
contract interpretation that is expressly and vigorously “pro-arbitration.” Questions of
arbitrability must be addressed with a healthy regard for the federal policy favouring
arbitration [and] any doubts concerning the scope of arbitrable issues should be resolved in
favour of arbitration.” [USA 23 Feb. 1983]
10 The arbitration clause [Cl. 80, P. 15, MOOT PROPOSITION] states that any dispute
between CLAIMANT and RESPONDENT would be referred to arbitration. CLAIMANT’S
pleading with regards to the nature and sufficiency of the Cargo Claim notification given
TEAM 1 MEMORANDUM FOR CLAIMANT | 8
to it by RESPONDENT is one such dispute. The dispute arises directly from the Charterparty,
in as much as, it deals directly with the Cargo Claim made by RESPONDENT to CLAIMANT.
In order to determine the outcome of the Cargo Claim, the Tribunal must be able to
determine whether the Notification itself, was given in a proper and sufficient manner.
Further, the nature and sufficiency of the notification which is disputed arises from the Inter
- Club Agreement, an agreement which CLAIMANT and RESPONDENT have expressly agreed
to be bound by [Cl. 53, P. 10, MOOT PROPOSITION].
2. Alternatively, even if the claim is found to be non-contractual, the tribunal has the
jurisdiction to adjudicate upon the same.
11 Even if CLAIMANT’S pleading with regards to the nature and sufficiency of notification
is found to be non-contractual, the arbitral tribunal will still have the jurisdiction to
adjudicate upon the same.
12 There is no prohibition in most jurisdictions – either common law or civil law– against
the arbitration of non-contractual claims. Article II (1) of the New York Convention defines
an arbitration agreement as including differences arising from a relationship “whether
contractual or not,” and imposes international obligations to recognize the presumptive
validity of such agreements [NEW YORK CONVENTION, ART. II(I); GENEVA
PROTOCOL, ART. I]. This formulation is paralleled in many national arbitration statutes,
which also make clear that non-contractual claims may be the subject of valid arbitration
agreements [S. 6(1), ARBTIRATION ACT; ART. 7(1), UNCITRAL MODEL LAW].
13 “The Convention and Act…cover both contractual and non-contractual commercial
relationships. They thus extend their scope to liability in tort so long as the relationship that
creates liability is one that can fairly be described as ‘commercial.’ In my view, a claim
that a corporation conspired with its subsidiaries to cause harm to a person with whom it
TEAM 1 MEMORANDUM FOR CLAIMANT | 9
has a commercial relationship raises a dispute ‘arising out of a commercial legal
relationship, whether contractual or not’ [CANADA 16 Jan. 1992].
14 Although the language of Art. II(I) of the New York Convention and equivalent
provisions of national arbitration legislation acknowledges that non-contractual claims may
be the subject of valid arbitration agreements [USA 2 Jul. 1985]. Non-contractual claims
should be treated no less favourably with regard to interpretation than contractual claims.
15 This dispute arises from the commercial legal relationship between CLAIMANT and
RESPONDENT with regards to the Charterparty, MV Thanos Quest. In order to determine
the validity of the Cargo Claim of RESPONDENT, it is necessary to decide whether the
notification itself was given properly and sufficiently in the first place. Therefore, even if
CLAIMANT’S pleading with regards to the nature and sufficiency of notification is found to
be non-contractual, the arbitral tribunal still has the jurisdiction to adjudicate upon the
same.
CONCLUSION TO THE FIRST ISSUE
The Tribunal has the authority to decide upon the present dispute. Further, the Tribunal also
has the jurisdiction to decide upon CLAIMANTS pleading with regards to the nature and
sufficiency of the information about the Cargo Claim given by RESPONDENT to CLAIMANT.
ARGUMENTS ON MERITS
II. RESPONDENT’S FAILURE TO PERFORM HULL CLEANING PRIOR TO RE-DELIVERY HAS
RESULTED IN BREACH OF THE CHARTERPARTY AND THEY ARE THUS LIABLE FOR THE
COSTS INCURRED.
16 The RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in
breach of the Charterparty, and they are liable for the costs incurred. RESPONDENT is not
TEAM 1 MEMORANDUM FOR CLAIMANT | 10
relieved of its obligation to perform hull cleaning (A), RESPONDENT is liable for lump sum
payment of the entire cost incurred by CLAIMANT in lieu of hull fouling (B) and that
RESPONDENT is liable for costs, other than hull cleaning, specifically voyage costs. (C)
A. RESPONDENT is not relieved of its obligation to perform hull cleaning.
17 RESPONDENT is not relieved of its obligation to perform hull cleaning. RESPONDENT is
liable under clause 83 of the Charterparty to provide for hull cleaning. Even if RESPONDENT
has discharged their liability under clause 83, the principle of implied indemnity would be
applicable in this situation.
1. RESPONDENT is liable under clause 83 of the Charterparty to provide for hull
cleaning.
18 RESPONDENT is liable under clause 83 of the Charterparty to provide for hull cleaning.
The obligations of parties are determined as per Omega Rider clause 83 of Charterparty
which has been adopted from NYPE 2015 clause 30 [P. 18, MOOT PROPOSITION].
19 It explicitly states that if the vessel sits idle in tropical waters or outside them for a
period exceeding the agreed or default period, such cleaning is to be ‘undertaken by the
Charterers at their risk, cost, expense’ but ‘in consultation with the Owners’ [NYPE 2015,
Cl. 30(C)]. The vessel had arrived at the Wahanda discharge port on 7.05.2016 [P. 31,
MOOT PROPOSITION] and had remained at the anchorage for aggregate period exceeding
30 days [MOOT PROPOSITION, P.31], which was the agreed time as per the Charterparty
for non- tropical zones [Cl. 83, P. 18, MOOT PROPOSITION], after which the risk, cost,
expense and time lost due to hull cleaning shifted from CLAIMANT to RESPONDENT
[BIMCO EXPLANATORY NOTES].
20 As a result, there was a Contractual obligation on RESPONDENT to provide for inspection
and cleaning at their risk, cost, expense, and during their on-hire period [P. 18, MOOT
PROPOSITION] which it failed to do and have thus; breached the Charterparty.
TEAM 1 MEMORANDUM FOR CLAIMANT | 11
21 RESPONDENT in its defence and counterclaim submissions’ [P. 74, MOOT
PROPOSITION] has relied on the fact that their offer to conduct the cleaning at North Titan
Port or accept a USD 20,000 as lump-sum payment in regard of the hull cleaning had
relieved them of their obligations towards the same [P. 41, MOOT PROPOSITION].
However, their obligation as per rider clause 83(c) is that the cleaning has to take place ‘in
consultation with the owners’ [P. 18, MOOT PROPOSITION]. ‘In consultation with the
owners’ should be construed to include the CLAIMANT’S say with regards to the port of
cleaning.
22 It is evident from the photos that the hull had been severely fouled [P.86, 87, 88, MOOT
PROPOSITION] and there was a need for de-fouling that RESPONDENT had an obligation
to fulfil. As can be seen from the ‘Quotation’ by Titan Shipbuilders, North Titan Port,
RESPONDENT only planned to arrange for underwater hull cleaning and not for above the
water level fouling.
23 Clause 83(c)(iii) of the Charterparty reads: “If, despite the availability of suitable
facilities and equipment, Owners nevertheless refuse to permit cleaning, the speed and
consumption warranties shall be reinstated from the time of such refusal.” [P. 18, MOOT
PROPOSITION] There is no indication to suggest that refusal to permit cleaning would
result in discharge of the liability imposed by clause 83. It merely refers to reinstatement
of speed and consumption warranties.
24 In addition, the hull fouling clause provides that the vessel’s hull should always be
cleaned by the Charterers before she is returned to her Owners [NYPE 2015, Cl. 30(d)].
The RESPONDENT, failed to get the vessel cleaned prior to its redelivery. RESPONDENT was
aware and had been informed and that clause 83 of Charterparty would become operative
08.06.2016 onwards and had ample time to arrange for inspection and cleaning, and was
thus not prevented from carrying out such cleaning.
TEAM 1 MEMORANDUM FOR CLAIMANT | 12
2. Even if RESPONDENT has discharged their liability under clause 83, the principle
of implied indemnity would be applicable in this situation.
25 Even if RESPONDENT has discharged their liability under clause 83, the principle of
implied indemnity would be applicable in this situation. The fouling was not an ordinary
incident of trading and was a result of a prolonged stay at the Wahanda anchorage which
could not have been foreseen at the time Charterparty was concluded.
26 It is well established that as a general rule a ship-owner has an implied right of
indemnity against a time charterer in respect of the consequences of complying with the
charterer's orders as to the employment of the ship, even if the orders were ones the
charterer was contractually entitled to give [UK 15 Jun. 1994]. The fouling is a direct
consequence of the vessel’s unforeseeable extended stay, and the implied indemnity is not
covered by ‘such indemnity did not extend to the usual perils of the voyage in respect of
which the owner must be taken to have accepted the risk’ [UK 24 Jun. 2016] because
expectation of CLAIMANT for this level of fouling was that it would be the responsibility of
the RESPONDENT, and the CLAIMANT has not accepted such risk at the time conclusion of
Charterparty.
B. RESPONDENT is liable for lump sum payment of the entire cost incurred by CLAIMANT
in lieu of hull cleaning.
27 As has been established above; RESPONDENT is liable for costs of de-fouling the
vessel’s hull. The decision of CLAIMANT opting to go South Island port for cleaning of the
hull is justified and RESPONDENT is liable for lump sum payment of the entire cost incurred
by CLAIMANT in lieu of hull cleaning.
28 CLAIMANT incurred a cost of USD 41,000 [P.52, 53, MOOT PROPOSITION] towards
hull cleaning and has the right to recover those costs. RESPONDENT, in its defence and
counterclaim submissions, has submitted that it is not liable beyond USD 33,000 [P.75,
TEAM 1 MEMORANDUM FOR CLAIMANT | 13
MOOT PROPOSITION]; which is what the cleaning charges would have amounted to, had
de-fouling been performed at North Titan Port [P. 37, MOOT PROPOSITION].
29 Cleaning costs will vary from port to port as the quality of service rendered by each
agency is different. On comparison of the ‘Statement of Vessel Disbursement’[P. 53,
MOOT PROPOSITION], ‘Invoice’ [P. 52, MOOT PROPOSITION] by South Island Port
Agency Co. Ltd. And the ‘Quotation’ [P. 39, MOOT PROPOSITION] by Titan
Shipbuilders, North Titan Port the differentiating item is ‘BOOTOPING ABOVE WATER
LEVEL 4m CLEANING BY MAN POWER HAND TOOLS’, that is, the charges for hull
cleaning above water level which amounted to a total of USD 13,000 [MOOT
PROPOSITION, P.52]. It is evident from the photograph that the hull has been fouled even
above the water level [P. 86, MOOT PROPOSITION].
30 As per Procedural Order No. 2, the extent of hull fouling is not disputed [P. 83, MOOT
PROPOSITION]. The fouling above the water level was a direct result of the Vessel’s
extended stay at the Wahanda anchorage.
31 Though above water fouling is not covered by Clause 83, which extends to inspection
and cleaning of only underwater parts of the vessel, it falls within the ambit of implied
indemnity. The purpose of the indemnity is to protect them against losses arising from risks
or costs which they have not expressly or implicitly agreed in the Charterparty to bear [UK
2 May 2012].
32 ‘In the great majority of cases the accretion of marine growth was simply a natural
consequence of the vessel remaining in service with nothing fortuitous about it’ [UK 27
Mar. 1981]. Additionally , in THE RIJN, it was held that the excessive growth stemmed
from the abnormally long period , three months, that the vessel spent at rest on charterers’
orders; awaiting cargo and was held to be fortuitous. CLAIMANT, in letting RESPONDENT
TEAM 1 MEMORANDUM FOR CLAIMANT | 14
continue despite delayed re-delivery of the vessel, was not a natural consequence of
complying with RESPONDENT’S order and was unforeseeable.
33 ‘When a tribunal of fact had to decide whether particular expenses were within the
scope of an implied indemnity under an NYPE charter-party, it was entitled to ask the
question whether the relevant type of risk was one that the ship-owners agreed to bear at
the time the charter was concluded’[UK 16 Feb. 2005]. In the present case, the ‘relevant
type of risk’ was the risk of hull fouling. That the vessel would be inactive at Wahanda port
for {x days, x is more than 30} days and that vessel would be delayed for so long awaiting
discharge, and as a consequence; CLAIMANT would suffer the expense of hull-cleaning was
not the type of risk that was foreseeable and foreseen by both parties at the time the charter-
party was concluded. This relevant type of risk was one that CLAIMANT had not agreed to
accept at the time the charter-party was made. Therefore, RESPONDENT is liable for USD
41,000 towards cleaning under the principle of implied indemnity.
C. RESPONDENT is liable for the costs of the voyage to South Island.
34 RESPONDENT is liable for the cost of the voyage to South Island. RESPONDENT had failed
to fulfil its contractual obligation as a result of which CLAIMANT had to arrange for cleaning
at South Island [P. 45, MOOT PROPOSITION]. As per the Final Hire Statement the costs
beyond hull cleaning include the costs of bunker consumed during voyage to South Island,
and the daily hire charges for the period of cleaning [P. 54, MOOT PROPOSITION].
35 According to 83(c) cleaning had to be undertaken by RESPONDENT at their risk, cost,
expense and time in consultation with CLAIMANT [P. 18, MOOT PROPOSITION]].
Accordingly, if the hull is fouled then it is to be cleaned by the charterers at their cost and
in their time [BIMCO REMARKS]. The time spent on cleaning i.e. 4.2639 days, from
30.06.2016 to 03.07.2016, should have been done within the RESPONDENT’S hire period.
TEAM 1 MEMORANDUM FOR CLAIMANT | 15
Therefore, the daily hire rate charged for the period of cleaning is justified and thus,
RESPONDENT is liable to bear the cost of the same.
36 Moreover, In the case, ‘THE RIJN’ loss of time of charterers because of hull cleaning
was not deducted from the amount of time for which hire is payable, that is, the Charterers
had to bear the costs of daily hire for time lost during cleaning. Similarly, in the present
case, there was a ‘loss of time’ of the CLAIMANTS for hull cleaning instead of the
RESPONDENTS. Assuming, notionally, the RESPONDENTS had the hull cleaned at their time
then as judgment of ‘THE RIJN’ the RESPONDENTS would not be entitled to deduct for loss
of time for hire. So we can infer from this that the daily hire charges for cleaning period
are justified.
37 Had the RESPONDENT fulfilled its liability, the bunkers consumed during the voyage to
South Island would not have been consumed. Hull fouling is a well-known problem in the
shipping industry, which can reduce speed and increase fuel consumption [UK 24 Jun.
2016] and also result in additional costs and time lost removing the ship-fouling organisms
[UK 16 Feb. 2005]. A fouled hull leads to increased frictional resistance which results in
loss of speed or increased fuel consumption. Fouling may cause the coating system to
deteriorate; leading to premature corrosion of the hull. This, together with an increased
frictional drag has both an economic and environmental impact on the ship’s operations.
According to MEPC assessment, even a small amount of fouling can lead to an increase of
fuel consumption of up to 40%, due to the increased resistance to movement. A clean ship
can sail faster and with less energy [IMO FOULING].
38 The Costs of voyage also fall within the ambit of implied indemnity. Whether a
particular risk of loss or expense is unforeseen or unforeseeable, at the time the
Charterparty is concluded, is a potent factor to determine whether that loss or expense is
within the scope of an implied indemnity [UK 16 Feb. 2005]. The costs of voyage to South
TEAM 1 MEMORANDUM FOR CLAIMANT | 16
Island were unforeseen as this was the contractual obligation of RESPONDENT. CLAIMANT
did not agree to bear this risk in any manner and therefore, RESPONDENT is liable for costs
of voyage.
CONCLUSION TO THE SECOND ISSUE
RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in breach of
the Charterparty and they are thus liable for the costs incurred as RESPONDENT was not relieved
of its obligation to perform hull cleaning.
III. RESPONDENT IS LIABLE TO PAY THE DAMAGES AS PER THE SUBSEQUENT FIXTURE.
39 It is an undisputed fact that RESPONDENT failed to re-deliver the vessel M/V THANOS
QUEST prior to the expiry of the maximum period of the Charterparty. [P. 72, Para. 10(2),
MOOT PROPOSITION] This failure entitles CLAIMANT to receive damages for late re-
delivery: USD15,330,000.00 (loss of hire under the Next Fixture, calculated as 4 years at
USD10,500 per day) [P. 69, Para. 22(3), MOOT PROPOSITION].
40 The same shall be established by the following: Vessel was on hire during its stay at
Wahanda Port (A); Delay in redelivery was caused due to the personal gross negligence of
RESPONDENT (B); RESPONDENT had the special knowledge of the Next Fixture (C); Loss
of hire under the Next Fixture is for 4 years and not for 2 years as claimed by RESPONDENT
(D); CLAIMANT is not liable to give credit for hire received under Replacement Fixture (E).
A. Vessel was on hire during its stay at Wahanda port.
41 Vessel THANOSQUEST was on hire during its stay at Wahanda Port and RESPONDENT
cannot put the vessel off hire because of the decision of the port as it is beyond CLAIMANT’S
control [P. 25, MOOT PROPOSITION]. It is settled law that prima facie hire is payable
continuously and that it is for the charterers to bring themselves clearly within an off-hire
clause if they contend that hire ceases [UK 25 Oct. 1976]. RESPONDENT’S obligation to pay
TEAM 1 MEMORANDUM FOR CLAIMANT | 17
hire is continuous. If a charterer withholds hire, purporting to do so under the off-hire
clause, it is for him to establish facts which entitle him to do so [UK 15 May 1953]. The
off-hire clause sets out the events which lead to a cessation of hire. If the Charterers fail to
prove a loss of time due to a cause specifically mentioned in the clause hire will not cease.
If a Charterer desires to escape this liability he must take care to make the requisite
provision clear and unmistakeable [UK 23 Jul. 1920].
42 Time charterers are usually under an express obligation to order the vessel to “safe”
ports. Masters may be reluctant to call at ports in Ebola-affected regions. Under a time
charter, Owners must comply with Charterers’ employment orders but can refuse to do so
where compliance may expose the vessel or crew to danger [SHIPPING BULLETIN,
HFW].
43 Here, RESPONDENT completely relied upon Clause 17 of the NYPE 2015 Form which
states: “or by any similar cause preventing the full working of the Vessel”. The burden
rested squarely on the charterers to show that the case falls within these words [UK 18 Dec.
1991]. The clause does not require that ‘off hire events’ should be attributable to the fault
of the owners. Instead the emphasis is on a pragmatic allocation of risk [UK 18 Dec. 1991].
44 Hence, the Vessel cannot be considered off-hire from 7th May 2016 to 26th June 2016
and CLAIMANT is entitled to damages for the delay in redelivery for such period.
B. The delay in redelivery was caused due to the personal gross negligence of
RESPONDENT.
45 Delay in the redelivery of the vessel M/V THANOS QUEST is caused due to the
personal gross negligence of the Charterers. Hamburg Rules [HAMBURG RULES] and
Rotterdam Rules [ROTTERDAM RULES] cover the liability for delay by the Carrier
[BERLINGIERI]. Carrier is liable for loss resulting from delay in delivery, if the occurrence
of delay took place while the goods were in his charge [A.5, HAMBURG RULES]. The
TEAM 1 MEMORANDUM FOR CLAIMANT | 18
causal connection between delay and damage should be shown in order to constitute the
carrier’s liability to pay compensation to aggrieved party [CHAFIK].
46 Clause 13 of Bill of Lading lays down responsibility of Carrier in case of delay caused
due to Carriers’ personal gross negligence [Cl. 13, P. 48, MOOT PROPOSITION].
Through Email dated 26th June 2016 CLAIMANT informed Carrier about their Next Fixture
and requested them to clean the vessel which was to be delivered to Champion Chartering
Corp [P. 34, MOOT PROPOSITION]. RESPONDENT in their communication dated 27th June
2018 denied to arrange hull cleaning before redelivery of the Vessel [P. 39, MOOT
PROPOSITION]. The delay in hull cleaning and re-delivery ultimately led to the
cancellation of Next Fixture of Shipper with Champion Chartering Corp [P. 40, MOOT
PROPOSITION].
C. RESPONDENT had the special knowledge of the next fixture.
47 CLAIMANT is entitled to recover all the damages claimed in paragraph 22(3) of the claim
submission because RESPONDENT had special knowledge of the Next Fixture [P. 77, MOOT
PROPOSITION]. As per Article 17(1) of the Rotterdam Rules [ROTTERDAM RULES] the
Carrier is liable for delay in delivery, if CLAIMANT proves that such delay is caused during
the period of Carrier’s responsibility.
48 In order for there to be an assumption of responsibility, the contract breaker would need
to have “some information that will enable him to assess the extent of any liability” [UK 9
Jul. 2008]. Complete knowledge of the terms of the third party contract from which the
loss flows has never been a requirement to determine the loss suffered by the innocent party
[UK 27 Jan. 2005].
49 CLAIMANT is entitled to recover the damages in respect of foreseeable result when the
facts are known or available to the Defendant [UK 17 Oct. 1967]. Aggrieved party may
claim compensation for damages for additional future harm, including lost profits
TEAM 1 MEMORANDUM FOR CLAIMANT | 19
("consequential loss"), which it may have sustained due to the non-performance of the other
party, provided that such harm was foreseeable and is established with a reasonable degree
of certainty. Such future harm may include any gain of which the aggrieved party has been
deprived by the non-performance of the other party [TRANS LEX PRINCIPLES]. Lost
profits are consequential damages when, as a result of the breach, the non-breaching party
suffers loss of profits on collateral business arrangements [USA 22 May 2007].
50 In the concerned matter the vessel had already been fixed for the next voyage (to load
East Coast range) [P. 34, MOOT PROPOSITION] and the same had been informed to
RESPONDENT through email dated 26th June 2016. RESPONDENT, therefore, had the special
knowledge of the next voyage and the loss was foreseeable and not too remote [UK 23 Feb.
1854].
D. Loss of hire under the next fixture is for 4 years and not for 2 years as claimed by
RESPONDENT.
51 CLAIMANT is entitled for loss of hire under the Next Fixture calculated for the period
of 4 years and not for 2 years amounting to USD15,330,000.00 (USD10,500 per day) [P.
32, MOOT PROPOSITION]. Where it is possible to assess the loss of profits in the normal
way, that should be the measure of damages [UK 6 May 2011]. The quantum of the
prospective loss must be transparent, broken down and substantiated [UK 1892].
52 The compensatory principle [UK 1 Sep. 2015, UK 28 Mar. 2007] mandates the
assessment of actual loss resulting from the breach of a Charterparty. An assessment of
compensation begins with identifying the economic losses suffered by the innocent party
by the breach of contract [LEE]. The purpose of such damages is to place the CLAIMANT
in the position he would have been in had the contract not been breached. This involves the
projection of the so-called ‘expectation damage’ and ‘reliance damage’, which are
compensatory damages [VIRGO]. Compensatory damage is the most common legal
TEAM 1 MEMORANDUM FOR CLAIMANT | 20
remedy and is a monetary award to compensate the aggrieved party (non-breaching party)
for losses [LEE].
53 The Next Fixture between CLAIMANT and Champion Chartering Corp. agreed for hire
rate at USD 10,500 daily, for the period of two years with an extension of further two years
which makes the total duration of the hire four years [P.32, MOOT PROPOSITION].
54 It is an undisputed fact that loss of subsequent fixture [P. 40, MOOT PROPOSITION]
occurred due to late re-delivery of the vessel by RESPONDENT. While calculating damages
for late re-delivery, subsequent loss, if not too remote, could be taken into account [UK 1
Sep. 2015]. Therefore, RESPONDENT is liable to pay damages for late re-delivery to
CLAIMANT. [P. 69, MOOT PROPOSITION].
E. CLAIMANT is not liable to give credit for hire received under replacement fixture.
55 For the calculation of damages with respect to late re-delivery of vessel by
RESPONDENT, CLAIMANT is not liable to give credit for hire received under replacement
fixture as claimed by RESPONDENT [P. 73, Para. 11(3)(b), MOOT PROPOSITION]. The
right to equitable set-off is a well- established principle under English law. There are three
criteria for equitable set-off against charter hire [THE NANFRI]:
1. Both the claim and counterclaim must arise from the same contract
(i.e. Charterparty) [UK 11 Jun. 2010];
2. The counterclaim must be ‘directly connected with the claim’;
3. There must be a ‘manifest injustice’ in allowing the claim to be
asserted without taking into account the counterclaim.
56 CLAIMANT on 04.07.2016 chartered the Vessel to Fairwind International (“Fairwind”)
for a time charter trip of about 50-55 days (the “Replacement Fixture”) [P. 68, Para. 20,
MOOT PROPOSITION]. However the counterclaim of RESPONDENT arose from the
Charterparty dated 18.03.2016 between CLAIMANT and RESPONDENT [P. 2, MOOT
TEAM 1 MEMORANDUM FOR CLAIMANT | 21
PROPOSITION]. Since the counter claim doesn’t arise from the same contract, that is the
Charterparty, RESPONDENT is not entitled to equitable set off.
CONCLUSION TO THE THIRD ISSUE
RESPONDENT is liable to pay the damages as per the subsequent fixture to CLAIMANT since the
vessel was on hire during its stay at Wahanda port. The delay in redelivery was caused due to
the personal gross negligence of RESPONDENT. Further, RESPONDENT had the special
knowledge of the next fixture. Finally, CLAIMANT is not liable to give credit for hire received
under replacement fixture.
IV. CLAIMANT IS NOT LIABLE FOR THE PAYMENT OF THE CARGO CLAIM MADE BY
RESPONDENT.
57 It is an undisputed fact that RESPONDENT informed CLAIMANT of the Cargo Claim in
2016 [PO, P. 82, Para. 15, MOOT PROPOSITION]. However, the nature or effect of the
information is not according to Cl. 6 of ICA and the claim was not caused by
unseaworthiness and/or error or fault in the navigation or management of the vessel [P. 77,
Para. 8(1), MOOT PROPOSITION]. Therefore, CLAIMANT is not liable to pay the Cargo
Claim to RESPONDENT. The same shall be established as follows: The Cargo Claim is time
barred under clause 6 of the ICA (A); The Cargo Claim does not fall to be apportioned
under clause 8 of the ICA (B);
A. The cargo claim is time barred under clause 6 of the ICA.
58 RESPONDENT failed to give the written notification of the Cargo Claim required by
clause 6 of the ICA. As such, the Cargo Claim is time- barred [P. 77, Para. 8(1), MOOT
PROPOSITION]. Recovery under the Agreement by an Owner or Charterer shall be
deemed to be waived and absolutely barred unless written notification of the Cargo Claim
TEAM 1 MEMORANDUM FOR CLAIMANT | 22
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 [Cl. 6, ICA].
59 Such notification shall, if possible, include details of the contract of carriage, the nature
of the claim and the amount claimed [P. 76, Para. 3, MOOT PROPOSITION]. The idea of
the notification is to give the receiving part the possibility to investigate the claim in hand
and prepare his strategy of defence [UK 29 Apr. 2015].
60 There is a need to provide as much information as possible in relation to the underlying
cargo claim. It is important to ensure that contractual notices, such as those under the ICA,
are given in writing, and are clear and unambiguous as a matter of best practice [UK 29
Apr. 2015]. Notification of damage to the concerned parties must include the intention to
claim for the damage once the value of the damage claim has been ascertained [GUIDE
TO CARGO DAMAGE, MANAADIAR]. The Inter-Club Agreement had the effect of cutting
across the balance of claims and defences under the Hague Rules by means of a rough and
ready apportionment of financial liability as between owners and charterers [UK 30 Nov.
1982].
61 RESPONDENT informed CLAIMANT about the alleged damage to the cargo through an
email dated 27th June 2016 [P. 38, MOOT PROPOSITION]. Owners notified their P&I
Club and arranged a survey which could be done jointly [P. 38, MOOT PROPOSITION].
On 7th July 2016 Charterers attached a preliminary damage report [P. 46, MOOT
PROPOSITION] and asked the Owners to treat it as notice of claim [P. 45, MOOT
PROPOSITION].
62 The exact loss of cargo and quantum of damage had never been notified by the
Charterer to the Owners in spite of various time extension given by the Owners through
several emails (29th May 2017, 28th August 2017).
TEAM 1 MEMORANDUM FOR CLAIMANT | 23
B. The cargo claim does not fall to be apportioned under clause 8 (a) of the ICA.
63 The Cargo Claim would not fall to be apportioned under clause 8(a) of the ICA, since
the claim was not caused by unseaworthiness and/or error or fault in the navigation or
management of the vessel [P. 77, MOOT PROPOSITION].
64 As per the Hague Visby Rules [HAGUE-VISBY RULES] the carrier shall be bound
before and at the beginning of the voyage to exercise due diligence to make the ship
seaworthy, properly man, equip, and supply the ship, make the holds, refrigerating and cool
chambers, and all other parts of the ship in which goods are carried, fit and safe for their
reception, carriage and preservation [ART. 3, HAGUE-VISBY RULES].This obligation of
seaworthiness also extends to the fitness of the vessel to receive, carry and care for the
intended cargo [GARD GUIDANCE TO SEAWORTHINESS].
65 The term seaworthiness is a relative one, its meaning is dependent upon the vessel
involved and the service in which it is to be employed. In general, a ship must be
sufficiently strong and staunch and equipped with the appropriate appurtenances to allow
it to safely engage in the trade for which it was intended. Put in another way, the ship must
be fit for the use intended [USA 1 Aug. 1975].
66 CLAIMANT confirmed that the Vessel is fitted, and will be fitted throughout the duration
of this Charter, with hold ladders that conform to the regulations of the Waterside Workers
Federation of Australia [Cl. 47, P. 9, MOOT PROPOSITION]. As per the Preliminary
Survey Report dated 30th June 2016 [P. 46, MOOT PROPOSITION] the ballasting system
was standard, and has a system of non-return valves. Mr. Dare examined the ballasting
system and found it to be in order. [MOOT PROPOSITION, P. 46]
67 The shipper shall not be responsible for loss or damage sustained by the carrier or the
ship arising or resulting from any cause without the act, fault or neglect of the shipper, his
agents or his servants [HAGUE-VISBY RULES]. As per Clause 68 of the Charterparty, all
TEAM 1 MEMORANDUM FOR CLAIMANT | 24
shipboard personnel were holding valid certificates of competency in accordance with the
requirements of the law of the flag state and were trained in accordance with the relevant
provisions of the International Convention on Standards of Training, Certification and
Watchkeeping for Seafarers 1978, and/or other rules or regulations that may be
promulgated from time to time [P. 13, MOOT PROPOSITION].
68 Article III Rule 2 of the Hague Rules [HAGUE-VISBY RULES] puts a duty on the
carrier “properly and carefully to load, handle, stow, carry, keep, care for and discharge” the
cargo. Specifically, they cover not only the mechanical process of handling the ship’s gear
and cargo, but also matters of stevedores’ negligence in the strategic planning of loading
and discharge of the cargo [PLOMARITOU, IN: JSOE].
69 This duty is similar to the common law position, and the carrier has the burden of
proving they are not in causative breach of this provision [UK 5 Dec. 2018]. Clause 42 of
the Charterparty provides that RESPONDENT shall be responsible for stevedore and other
damages to vessel [P.8, MOOT PROPOSITION]. Time charterer has to indemnify owners
under the charter for cargo damage caused by bad stowage or defective lashing or securing
carried out by the charterer’s stevedores [COGHLIN/BAKER/KENNY].
70 Clause 64 of the Charterparty provides for Vessel to ballast/deballast clean water ballast
tanks only including floodable hold(s), if required by RESPONDENT or their Agents at any
time during loading and/or discharging of the cargo [P. 12, MOOT PROPOSITION].
71 The master is under the orders of the charterer as regards employment, agency or other
arrangements. The risk of damage to the vessel or cargo caused by the employment orders
(in contrast to the navigational orders) lies on the charterer [GIRVIN].
72 Hence, the damage to the cargo cannot be apportioned under Clause 8 (a) of the Inter
Club Agreement and CLAIMANT is not liable to pay any damages with respect to the Cargo
Claims.
TEAM 1 MEMORANDUM FOR CLAIMANT | 25
CONCLUSION TO THE FOURTH ISSUE
CLAIMANT is not liable for the payment of the cargo claim made by RESPONDENT since it is
time barred under clause 6 of the ICA. Further, the cargo claim does not fall to be apportioned
under clause 8 (a) of the ICA.
REQUEST FOR RELIEF
In response to the Tribunal’s Procedural Orders, Counsel makes the above submissions on
behalf of CLAIMANT. For the reasons stated in this Memorandum, Counsel respectfully requests
this Tribunal to declare that:
I. The arbitral tribunal is authorized to decide upon the nature and insufficiency pleading
of CLAIMANT.
II. RESPONDENT’S failure to perform hull cleaning prior to re-delivery has resulted in
breach of the Charterparty and they are thus liable for the costs incurred.
III. RESPONDENT is liable to pay damages as per the subsequent fixture.
IV. CLAIMANT is not liable for the payment of the cargo claim made by RESPONDENT.
Dated this 29th Day of April 2019
[SIGNATURES]
SOLICITORS FOR CLAIMANT
THOR & LOKI BROTHERS
DECK HOUSE, MOORING LANE, LONDON EC3
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