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20th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT In the matter of an arbitration under the Arbitration Act 1996 Between PANTHER SHIPPING INC CLAIMANT / Owners - and - OMEGA CHARTERING LIMITED RESPONDENT / Charterers MEMORANDUM FOR RESPONDENT Counsel for RESPONDENT TEAM 02 UNIVERSITY OF VERSAILLES · PARIS SACLAY Houda NAJI · Nicoleta IFTODI · Eyram APETOGBOR · Leonte READ

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Page 1: ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT · 20th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT In the matter of an arbitration under the Arbitration Act 1996 Between

20th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

In the matter of an arbitration under the Arbitration Act 1996

Between

PANTHER SHIPPING INC

CLAIMANT / Owners

- and -

OMEGA CHARTERING LIMITED

RESPONDENT / Charterers

MEMORANDUM FOR RESPONDENT

Counsel for RESPONDENT

TEAM 02

UNIVERSITY OF VERSAILLES · PARIS SACLAY

Houda NAJI · Nicoleta IFTODI · Eyram APETOGBOR · Leonte READ

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MEMORANDUM FOR RESPONDENT

II

TABLE OF CONTENT

INDEX OF ABBREVIATIONS ........................................................................................................................ IV

INDEX OF AUTHORITIES ............................................................................................................................... V

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

I. THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION TO RULE OVER THE

CLAIMS ................................................................................................................................................................ 3

A. The Arbitration Act 1996 and the London Maritime Arbitration Association Terms 2017 gorvern

the arbitral proceedings according to the Charterparty ............................................................................... 3

B. The Arbitral Tribunal is competent to assess its own jurisdiction ....................................................... 4

C. The appointment of Madam Mary Walker as arbitrator by the CLAIMANT is not valid ............... 4

D. The Arbitral Tribunal has jurisdiction to rule over counterclaims ..................................................... 5

E. The Cargo Claim was notified within the time and in accordance with Clause 6 of the ICA ........... 6

II. RESPONDENT IS LIABLE FOR THE DAMAGE CAUSED TO THE CARGO ............................. 7

A. Cargo damage should be apportioned in accordance with Clause 8(a) of the ICA, RESPONDENT

is 100% responsible for the damages .............................................................................................................. 7

B. Alternatively, if Cargo Claim were not to be apportioned in accordance with Clause 8(a) of the

ICA, the Tribunal shall apportion them on a 50/50 basis ........................................................................... 10

III. RESPONDENT IS NOT LIABLE FOR ANY CLEANING COST UNDER CHARTERPARTY . 11

A. CLAIMANT is not entitled for damages upon Hull Cleaning ............................................................ 11

1. Bimco Clause is not applicable ........................................................................................................... 11

2. Hull Cleaning obligation remains with the CLAIMANT ................................................................... 12

B. CLAIMANT should bear in the course of trading .............................................................................. 13

1. CLAIMANT must arrange Hull Cleaning under Charterparty ......................................................... 14

2. The prolonged stay at Wahanda was due to operational considerations at Wahanda Port ............. 14

3. RESPONDENT is not liable for the cost of the Vessel’s consumption to South Island ................... 15

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MEMORANDUM FOR RESPONDENT

III

4. RESPONDENT is not entitled to the cleaning cost of the entire Vessel ........................................... 16

5. Tribunal shall declare voyage to North Titan not compliant with the (ism) code ............................. 16

IV. RESPONDENT IS NOT LIABLE FOR THE LATE RE-DELIVERY OF THE VESSEL ............. 17

A. CLAIMANT is solely liable for the late re-delivery of the Vessel ...................................................... 17

1. The Master’s negligence led to the presence of the Ebola virus on board the Vessel ....................... 18

2. The Vessel was off-hire during the quarantine period ....................................................................... 19

i. Inefficiency of the Vessel ...................................................................................................................... 19

ii. Off-hire event ........................................................................................................................................ 20

iii. Time deductible following an off-hire event ......................................................................................... 21

B. CLAIMANT is not entitled to claim loss of hire .................................................................................. 21

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

ANNEXE 1 .......................................................................................................................................................... 23

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MEMORANDUM FOR RESPONDENT

IV

INDEX OF ABBREVIATIONS

Arbitration Act Arbitration Act of England (1996)

BIMCO Baltic and International Maritime Council

Cargo A cargo of 1720 x 5mt of English breakfast tea in bags on board of

the Vessel

Charterparty The time Charterparty between CLAIMANT and RESPONDENT

CLAIMANT Panther Shipping Inc

Comm Commercial Court

EWHC England and Wales High Court (or, High Court of Justice in

England)

FHS Final Hire Settlement

Ibid. Ibidem

ICA Inter-Club NYPE Agreement (1996)

LMAA Terms London Maritime Arbitration Association Terms (2017)

Next Fixture Charterparty between Panther Shipping Inc and Champion

Chartering Corp

NYPE 2015 New York Produce Exchange (2015)

Parties CLAIMANT and RESPONDENT

p. / pp. Page / pages

RESPONDENT Omega Chartering Limited

Vessel M/V Thanos Quest

WOG Without guarantee

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MEMORANDUM FOR RESPONDENT

V

INDEX OF AUTHORITIES

CASE LAW

Case Law Quoted on page:

A.

Action Navigation Inc v Bottigliere di Navigazione SpA (the “Kitsa”), [2005] 1

Lloyd’s Rep. 432

12, 13

Actis Co Ltd v Sanko Steamship Co Ltd (the “Aquacharm”), [1982] 1 Lloyd’s

Rep. 7

14

Andre & Cie S.A. v Orient Shipping Rotterdam B.V. (the “Laconian Confidence”),

[1997] 1 Lloyd’s Rep. 139.

18

Armonia Shipping and Finance Corporation (the “Ira”), [1995] 1 Lloyd’s Rep. 103 17

Athanasia Comninos, [1990] 1 Lloyd’s Rep. 227 13

Attorney General of Belize v Belize Telecom Ltd, [2009] UKPC 10 10, 11

B.

Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (the “Pamphilos”), [2002] 2

Lloyd’s Rep. 681

11

BP Refinery (Westernport) Pty Ltd v Shire of Hastings, [1977] 180 CLR 266 10

C.

Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH, [1954] 1 QB 8

14

D.

Darlington Futures Ltd v Delco Australia Pty Ltd, [1986] 161 CLR 500 4

E.

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MEMORANDUM FOR RESPONDENT

VI

Eastern Mediterranean Maritime (Liechtenstein) Ltd v Unimarine S.A. (the “Marika

M”), [1981] 2 Lloyd’s Rep. 622

17

H.

Hogarth v Alexander Miller Brother & Co, [1891] A.C. 48 H.L. 19

Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (the “Doric

Pride”), [2006] EWCA Civ 599, [2007] 2 CLC 1042, [2006] 2 All ER (Comm) 188,

[2006] 2 Lloyd’s Rep. 175

16, 19

I.

Imperator I Maritime Co v Bunge SA (the “Coral Seas”), [2016] EWHC 1506 14

K.

Kuwait Petroleum Corporation V. I v D Oil Carriers Ltd (the “Houda”), [1994] 2

Lloyd’s Rep. 541

17

L.

Liverpool City Council v Irwin, [1977] A.C. 239 11

N.

Navigas International v TransOffshore Inc (the “Bridgestone Maru” (No. 3), [1985]

2 Lloyd’s Rep. 62

18

New A Line v Erechthion Shipping Co S.A (the “Erechthion”), [1987] 2 Lloyd’s

Rep. 180

13

O.

Ocean Glory Compania Naviera S.A. v A/S P.V. Christensen (the “Ioanna”), [1985]

2 Lloyd’s Rep. 164

18

R.

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MEMORANDUM FOR RESPONDENT

VII

Rahcassi Shipping Co SA v Blue Star Line Ltd, [1969] 1QB 173 4

Royal Greek Government v Minister of Transport (the “Illissos”), [1948/49] 82

Lloyd’s Rep.196

19

S.

Sidermar Spa v Apollo Corporation (the “Apollo”), [1978] 1 Lloyd’s Rep. 200 18

Silver Dry Bulk Co Ltd v Homer Hulbert Maritime Co Ltd, [2017] EWHC 44

(Comm)

4

Sim Chay Koon v NTUC Income Insurance Cooperative Ltd, [2016] 2 SLR 4

T.

Transgrain Shipping (Singapore) PTE Ltd v Yangtze Navigation (Hong Kong) Ltd,

[2016] EWHC 3132 (Comm)

7, 9

Triad Shipping Co v Stellar Chartering and Brokerage Inc (the “Island Archon”),

[1994] 2 Lloyd’s Rep. 227

12,13

W.

Western Sealanes Corporation v Unimarine S.A. (the “Pythia”), [1982] 2 Lloyd’s

Rep. 160

17

Z.

Zodiac Maritime Agencies Limited v Fortescue Metals Group Limited (the

“Kildare”), [2011] 2 Lloyd’s Rep. 360

14

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MEMORANDUM FOR RESPONDENT

VIII

LEGISLATION

Legal Sources Full citation Quoted on page:

Arbitration Act 1996 Arbitration Act 1996 (of England), CHAPTER 23

[17th June 1996]

2, 3, 4

Hague-Visby Rules The Hague Rules as Amended by the Brussels

Protocol 1968

8

ICA Inter-Club Agreement (as amended 1 September

2011) - UK P&I

6, 7, 8, 9

LMAA Terms London Maritime Arbitration Association Terms

2017

3, 4

NYPE 2015 Form New York Produce Exchange Form

Time Charter

6th November 1913

Amended 20th October 1921; 6th August 1931; 3rd

October 1946;

Revised 12th June 1981; 14th September 1993; 3rd

June 2015

3, 6, 11, 12, 14,

18, 19

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MEMORANDUM FOR RESPONDENT

IX

DOCTRINE

Doctrine Cited as: Quoted on page:

BAUGHEN, SIMON

Shipping Law

6th Edition

Routledge, 2015

S. Baughen, Shipping Law 18

BORN, GARY

International Commercial Arbitration

Kluwer Law International, vol 1, 853, 2009

G. Born, International

Commercial Arbitration

4

CARTWRIGHT, JOHN

Contract Law: An Introduction to the English

Law of Contract for the Civil Lawyer

Hart Publishing,

3rd revised edition 2016.

J. Cartwright, Contract Law: An

Introduction to the English Law

of Contract for the Civil Lawyer

10

CARVER-RAOUL, THOMAS GILBERT

COLINVAUX, RAOUL P.

Carver’s carriage by sea

Stevens & Sons, 1971

T. G. Carver, R. P. Colinvaux,

Carver’s carriage by sea

9

DAVIES, MARTIN

The off-hire clause in the New York Produce

Exchange time charterparty

LMCLQ, 1990

M. Davies, The off-hire clause

in the New York Produce

Exchange time charterparty

18

LEMOS, GEORGES CHRISTOS

The third-party proceedings

Lloyd’s Rep 107, 1991

G. C. Lemos, The third-party

proceedings

13

TAYLOR, CHARLES

Standard Club: Cargo, The Inter-Club

Agreement Standard Club, June 2018

C. Taylor, Standard Club:

Cargo, The Inter-Club

Agreement

7

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MEMORANDUM FOR RESPONDENT

1

STATEMENT OF FACTS

A. The Parties and the Charterparty

1. Panther Shipping Inc (“CLAIMANT”), a Liberian company, is the owner of the M/V “THANOS

QUEST” (“Vessel”). The Vessel is registered under Antigua and Barbuda Flag. Omega Chartering

Limited (“RESPONDENT”) is a company based in Liechtenstein.

2. On 18 March 2016, CLAIMANT chartered the Vessel to RESPONDENT, for a period of about 50-55

days WOG, pursuant to a time charter trip (“Charterparty”). Accordingly, RESPONDENT had to

carry out the shipment of a cargo of 1720 x 5mt of English breakfast tea bags (“Cargo”), from West

Coast to Wahanda. On 29 March 2016, the Vessel was delivered to RESPONDENT.

B. The re-delivery of the Vessel

3. On 15 April 2016, the Challaland Times announced that the international tea market was impacted by

shortage. On 18 April 2016, West Coast Daily Echo raised serious concerns in relation to the fast

spread of the Ebola virus in West Coast area. In the meanwhile, West Coast municipal authorities

imposed a curfew on the movement of goods and ships as higher number of Ebola cases had been

reported exclusively amongst Ports and on lorry drivers.

4. On 20 April 2016, the Vessel departed West Coast and sailed to Wahanda, after completion of the

cargo’s loading. The Vessel arrived at Wahanda, on 7 May 2016, but was prevented from berthing

by Port Authority’s based on strong suspicions that crew members were carrying the deadly virus

Ebola. Consequently, on 11 May 2016, Port State Control quarantined the Vessel for at least 28 days

starting 11 May 2016 as crew members were affected by Ebola. On 30 June 2016, the Vessel was re-

delivered to CLAIMANT. However, the Vessel was off-hire from 7 May 2016 until 26 June 2016.

C. The Hull Cleaning

5. In parallel, on 8 June 2016, RESPONDENT was informed by disport agent that cleaning could not be

performed at disport Wahanda. Alternatively, RESPONDENT asked CLAIMANT for advice to solve

the cleaning problem and offered to pay USD 15,000, in lumpsum as a settlement. After several

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MEMORANDUM FOR RESPONDENT

2

exchanges, on 9 June 2016, the Parties agreed that CLAIMANT should organize Vessel’s bottom

cleaning and inspection at the next convenient port based on the Vessel itinerary which was yet set.

6. On 24 June 2016, RESPONDENT received from Titan Shipbuilders their best quotation offer

amounting USD33,000.00 for underwater cleaning cost. On 26 June 2016, CLAIMANT informed

RESPONDENT that the Vessel’s next Voyage was to be East Coast port and that cleaning could be

fulfilled there. In addition, CLAIMANT requested RESPONDENT to arrange Vessel’s bottom cleaning

at Wahanda.

7. On 27 June 2016, RESPONDENT reminded CLAIMANT that arranging Vessel’s bottom cleaning was

not possible, and suggested that cleaning be carried out at North Titan port, which is located half a

day sailing from Wahanda. RESPONDENT offered to pay a final settlement amounting USD20,000.

8. On 29 June 2016, CLAIMANT informed RESPONDENT that since it was not prevented from carrying

bottom cleaning at Wahanda, agreeing on lumpsum was not possible. Though CLAIMANT stated that

inspection of the fouling was not possible because of the water conditions at Wahanda, it threatened

RESPONDENT to arrange Hull Cleaning and inspection at South Island on RESPONDENT cost and

risk.

9. On 1st August 2016, CLAIMANT presented their Final Hire statement (“FHS”) to RESPONDENT who

paid all amounts under the FHS but questioned the total cost of cleaning namely USD96,567.42.

RESPONDENT only admitted its liability for reasonable costs of the Vessel’s Hull Cleaning which

exactly amounted to UDS33,000.

D. The Cargo Claim

10. In parallel, on 27 June 2016, RESPONDENT received from CLAIMANT a notification in relation to

cargo damages as a result of the crew’s negligence. On 7 July 2016, RESPONDENT sent the

preliminary damage survey report to the CLAIMANT based on which (“Cargo Claims”) were held.

E. The arbitral proceedings

11. On 16 October 2018, CLAIMANT filled a Request for Arbitration in accordance with Clause 80 of the

Charterparty. On 30 October 2018, the Tribunal was constituted pursuant to Arbitration Act 1996.

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MEMORANDUM FOR RESPONDENT

3

I. THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION TO RULE OVER

THE CLAIMS

12. Pursuant to the laws governing the arbitral proceedings under the Charterparty (A.), the Tribunal has

the authority to determine its own jurisdiction (B.). However, the appointment by CLAIMANT of the

arbitrator is not valid (C.). Nonetheless, the Arbitral Tribunal has jurisdiction to rule over

counterclaims (D.), as the Cargo Claim was notified within the time and in accordance with Clause 6

of the ICA (E.).

A. The Arbitration Act 1996 and the London Maritime Arbitration Association Terms 2017

gorvern the arbitral proceedings according to the Charterparty

13. Clause 80 of the Charterparty provides: “Should any dispute arise between Owners and the

Charterers, the matter in dispute shall be referred to three persons at London, one to be appointed by

each of the parties hereto, and the third person by the two so chosen; their decision, or that of any

two of them, shall be final and for the purpose of enforcing any award this agreement may be made a

rule of the court”1.

14. This Clause further provides for the application of English law as the lex arbitri: “English law to apply

(…) The Contact to be construed in accordance with English Law (…) Arbitration to be in London”2.

Parties can indeed determine by express reference within the arbitration agreement the applicable law.

Moreover, the Parties also referred to NYPE 2015 Form3. This regulation takes into consideration the

seat of arbitration in order to designate the applicable law to the arbitration. The Charterparty provides

for London as the seat of arbitration.

15. Clause 54 of the NYPE 2015 Form therefore triggers the application of two different texts4. The first

regulation, which is applicable to the proceedings, is the English Arbitration Act 1996 as the general

law applicable to arbitration in England. The second regulation is the London Maritime Arbitration

Association Terms 2017 (“LMAA Terms”) especially for Maritime Arbitration which apply when

1 IMLAM Problem Scenario V2, Charterparty, Article 80, p.15. 2 Ibid. 3 Ibid., p.5.

4 NYPE 2015 Form, Clause 54(a) & (b).

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MEMORANDUM FOR RESPONDENT

4

the seat of arbitration is London and when English law applies to the proceedings5. According to

LMAA Terms: “the arbitral proceedings and the rights and obligations of the parties in connection

therewith shall be in all respects governed by the [1996] Act save to the extent that the provisions of

the Act are varied, modified or supplemented by these Terms”6. The Rules of LMAA must also be

read in conjunction with the provisions of the 1996 Act since they make an express reference to the

later rules.

16. In this case, the Parties agreed on London as the seat of the arbitration and the application of English

law as the applicable to the merits. The procedure shall therefore be governed by the LMAA terms, as

well as the arbitration act 1996. Moreover, the dispute is a maritime case, which abides with the

specific application of the LMAA Terms.

B. The Arbitral Tribunal is competent to assess its own jurisdiction

17. Section 30 of the Arbitration Act 1996 provides that the arbitral tribunal may rule on its own

jurisdiction, unless otherwise agreed by the parties7. This authority known as the competence-

competence8 principle is well-established in international arbitration9.

18. In this case, the Tribunal therefore has to decide on the claims referred to arbitration in accordance

with the arbitration agreement10.

C. The appointment of Madam Mary Walker as arbitrator by the CLAIMANT is not valid

19. Clause 80 of the Charterparty provides: “(…) the arbitrators shall be commercial men conversant with

shipping matters (…)”11. The terms of the Clause shall be construed according to its nature and the

ordinary meaning of the terms applied in order to reflect the Parties real intent12.

5 LMAA Rules, Paragraph 7(a). 6 LMAA Terms 2017, Paragraph 7(a). 7 Arbitration Act 1996, Section 30. 8 Silver Dry Bulk Co Ltd v Homer Hulbert Maritime Co Ltd, [2017] EWHC 44 (Comm); Sim Chay Koon v NTUC Income

Insurance Cooperative Ltd, [2016] 2 SLR. 9 Arbitration Act 1996, Section 30; Christopher Brown Ltd v Genossenschaft Oesterreichische Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH, [1954] 1 QB 8; G. Born, International Commercial Arbitration. 10 Arbitration Act 1996, Section 30(c). 11 IMLAM Problem Scenario V2, Rider Clauses, p.15. 12 Darlington Futures Ltd v Delco Australia Pty Ltd, [1986] 161 CLR 500.

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MEMORANDUM FOR RESPONDENT

5

20. In the Rahcassi Shipping Co SA v Blue Star Line Ltd13 case, it was established that the terms used to

describe the arbitrators in the clause shall prevail during the appointment of the arbitrator. Therefore,

arbitrators must meet the criteria specified in the given contractual clause in order to be nominated. In

this case, the arbitrators shall meet two criteria. First, the arbitrator must be “commercial men” as

reflected by the important commercial, technical and complex features Maritime cases call for.

21. CLAIMANT appointed Madam Mary Walker, who is a full-time arbitrator as opposed to a commercial

woman as set by Clause 80 of the Charterparty. Hence, though she has experience in commercial

disputes involving charterparties14, Madam Walker is not appropriately qualified and does not meet

the criteria set by the clause to hear this dispute.

22. Therefore, CLAIMANT respectfully asks the Tribunal to hold that it is not regularly constituted to hear

the dispute.

D. The Arbitral Tribunal has jurisdiction to rule over counterclaims

23. The carrying of the goods in the contract is governed by the Bill of Lading, which also regulates the

settlement of disputes between the parties. The Parties defined in Clause 1 of the Bill of Lading are

Omega Chartering Ltd (RESPONDENT in this procedure) as Carrier, and the Merchant.

24. Pursuant to Clause 3 of the Bill of Lading, “any dispute arising under this Bill of Lading shall be

decided in the country where the carrier has his principal place of business, and the law of such

country shall apply (…)”. Disputes arising from the application of the Bill of Lading may, however,

be subject to the arbitration clause contained in the Charterparty.

25. In this case, the designated carrier on the Bill of Lading is RESPONDENT, which had the commercial

management of the Vessel. It made a counterclaim against CLAIMANT. The counterclaim is part of

the relationship between CLAIMANT and RESPONDENT. This request falls within the scope of article

80 of the Charterparty.

26. Therefore, any dispute arising between CLAIMANT and RESPONDANT shall be settled in accordance

with the arbitration clause in the Charterparty. The exception is the express choice of the parties to

13 Rahcassi Shipping Co SA v Blue Star Line Ltd, [1969] 1QB 173. 14 IMLAM Problem Scenario V2, Email 16 October 2018, from Mary Walker to CLAIMANT, p.60.

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MEMORANDUM FOR RESPONDENT

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have the Bill of Lading supersede the Charterparty in case a dispute arises. The jurisdiction clause

does not apply since it is under the exception.

27. In this case, the Parties did not expressly agree on the application of the Bill of Lading to their dispute.

Clause 80 of the Charterparty is the applicable clause to regulate the arbitration.

28. Furthermore, the Charterparty and the Bill of Lading are two distinct documents which bind different

parties. Indeed, the NYPE 2015 Form organizes the relationship between the Bill of Lading and the

Charterparty. Article 31(b) of the NYPE 2015 Form provides: “all bills of lading (…) shall be without

prejudice to this Charter Party” 15. Thus, the arbitration clause contained in the Charterparty prevails

over the jurisdiction clause contained in the Bill of Lading.

29. The jurisdiction clause in the Bill of Lading is only applicable in the reports to the Merchant of

“English breakfast Tea in bags”. For the jurisdiction clause to apply, it is required that the Bill of

Lading refers to the arbitration clause or incorporates it.

30. Thereby, RESPONDENT respectfully asks the Arbitral Tribunal to declare it has jurisdiction to rule

over the claims as well as the counterclaims in this case.

E. The Cargo Claim was notified within the time and in accordance with Clause 6 of the ICA

31. Both parties agreed that the Cargo Claim shall be settled in accordance with the Inter-Club NYPE

Agreement 1996 (“ICA”), as amended on1 September 201116. Clause 6 of ICA provides that:

“Recovery…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 (…)”.

32. On 7 July 2016 CLAIMANT gave formal written notification, via email, of the Cargo Claim to the

RESPONDENT. This notice included the damage report of the Surveyor, where it was clearly indicated

the underlying facts, events, circumstances, nature of the claim and damage claimed17.

15 NYPE 2015 Form, Clause 31(b). 16 IMLAM Problem Scenario V2, Rider Clauses, Clause 53, p.71. 17 Ibid., Preliminary Survey Report, p.46.

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MEMORANDUM FOR RESPONDENT

7

33. RESPONDENT alleges that the notice sent by email is just a simple notice of information of Cargo

damage, yet two emails were sent the 27 June 201618, those emails account for a notice of information

about the damage of the Cargo and the arrangements for a survey, not the email of 7 July 2016 where

it is indicated that it was the “formal notice of claim”19. Besides, there is no prescribed form that the

notice under the ICA should take20.

34. It is true that CLAIMANT asked for several extensions, but as indicated in the emails21, they were “in

relation to the bringing of a Claim for Cargo damage”22, thus not related to the notification required

by Clause 6 of the ICA.

35. Shall the Tribunal consider that the formal notification of 7 July 2016 was not in accordance with

Clause 6 of the ICA it should be noted that delivery was completed on 30 June 201623; counting 24

months from this date, this Party had until 29 June 2018 to bring the Cargo Claim.

36. Moreover, as two extensions of 3 months were given (first one the 29 May 201724 and the second one

the 28 August 201725) CLAIMANT had until the 29 December 2017 to notify the Claim. The Cargo

Claim was also notified in the Counterclaim Submissions of 17 December 2017, thus within the time.

II. RESPONDENT IS LIABLE FOR THE DAMAGE CAUSED TO THE CARGO

37. Cargo damage should be apportioned in accordance with Clause 8(a) of the ICA, RESPONDENT is

100% responsible for the damages (A.) Alternatively, if Cargo Claim were not to be apportioned in

accordance with Clause 8(a) of the ICA, the Tribunal shall apportion them on a 50/50 basis (B.)

A. Cargo damage should be apportioned in accordance with Clause 8(a) of the ICA,

RESPONDENT is 100% responsible for the damages

18 Ibid., p.44. 19 IMLAM Problem Scenario V2, p.45. 20 C. Taylor, Standard Club: Cargo, The Inter-Club Agreement. 21 IMLAM Problem Scenario V2, p.57. 22 IMLAM Problem Scenario V2, p.38. 23 Ibid, p.46. 24 Ibid, p.58. 25 Ibid, p.57.

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MEMORANDUM FOR RESPONDENT

8

38. Clause 8(a) provides that claims arising out of unseaworthiness and/or error or fault in the navigation

or management of the vessel shall be apportioned 100% to the Owners. In the ICA no question of due

diligence to make the Vessel seaworthy arises or of whether errors or faults in the navigation or

management of the vessel are excepted perils26.

39. The Cargo damage originated when a crew member opened the wrong valves. As a result of this sea

water was pumped into the hold rather than into the ballast tanks damaging the Cargo.

40. It should be noted that Rider Clause 70 establishes that “4. a) Opening and closing of hatches in

preparation for, during and after loading and discharging” its RESPONDENT’s responsibility and it

is included in the services of the hire.

41. As long as the claim arises out of unseaworthiness, navigation or management of the vessel it falls

under the owner’s “sphere of responsibility and risk” under the ICA; consequently, the RESPONDENT

must bear 100% of the Cargo Claim27.

42. Additionally, a shipowner’s duty is to provide a seaworthy vessel before it sets sail to its destination28.

The seaworthiness obligation extends to the physical characteristics of the ship, but as well as the

competence and adequacy of the crew29.

43. In order for a shipowner to comply with the requirement of seaworthiness a competent crew must be

employed, as the management of the vessel is their responsibility. Hence, a competent crew means

that the staff are familiar with the vessel and its equipment30.

44. Furthermore, the Hague-Visby Rules (“HVR”) provides in its article III that “The carrier shall be

bound before and at the beginning of the voyage to exercise due diligence to: b) properly man, equip

and supply the ship”. As well, in Article IV, HVR indicates that “Neither the carrier nor the ship shall

be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due

26 Transgrain Shipping (Singapore) PTE Ltd v Yangtze Navigation (Hong Kong) Ltd, [2016] EWHC 3132 (Comm). 27 Teacher, Law. (November 2013). Extent of the Implied Obligation of Seaworthiness. Retrieved from

https://www.lawteacher.net/free-law-essays/contract-law/extent-of-the-implied-obligation-of-seaworthiness-contract-law-

essay.php?vref=1 28 Ibid. 29 Ibid. 30 Marine Directorate of the Department of Transport. The Human Element in Shipping Casualties. ISBN 0 11 551004 4.

1991, p. 3.

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diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly

manned, equipped and supplied (…)”.

45. If the shipowner did not fulfil this obligation by employing a competent crew and a loss or damage

occurs he will not be able to use the exceptions mentioned in Article IV. Indeed, the purpose of the

ICA and the HVR is holding the party in custody and possession of the goods responsible for the

safety of the cargo.

46. As previously indicated, during ballast of the Vessel the crew negligently pumped water into the cargo

hold prior to leaving the berth at West Coast, damaging the Cargo. Water ingressed into hold No.2.

Clause 64 of the Charterparty indicates the following:

64. Ballasting/Deballasting: Vessel to ballast/deballast clean water ballast tanks only

including floodable hold(s), (…) All ballasting/deballasting shall be at the discretion of Master

having due regard to stability and seaworthiness of the Vessel. (…) Owners guarantee that the

Vessel will always be maintained in safe condition during ballast operations. (…) The Vessel

is capable of ballasting No. 4 hold. In such instances Owners, Master and crew will do their

utmost to deballast and dry such hold as quickly as possible.

47. As indicated in Clause 64, ballast shall only include floodable holds, ballasting is at the discretion of

Master and Owners have an obligation of maintaining Vessel in safe condition during ballast

operation. The Clause includes a “seaworthiness of the Vessel” obligation that is clearly determined

by the Clause. Consequently, if the crew pumped water into a hold that was not floodable, at the

discretion of the Master the Owner is liable for the consequences of such actions, and such neglect

rendered the Vessel unseaworthy.

48. Additionally, Surveyor Dan Dare indicated in its report that Cargo damage was “severe” as the Cargo

stowed in lower hold no. 2 was completed flooded. Stating as well that damage originated when “that

the crew were taking steps to ballast the vessel, ready for her departure once the cargo had been

discharged31.

31 IMLAM Problem Scenario V2, Preliminary Survey Report, p.46.

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49. RESPONDENT on the Cargo Claim accepts that the findings of the Preliminary Report were confirmed

by an investigation undertook by them32. Thus, the information contained in the Preliminary Report

cannot be denied as in was verified by RESPONDENT. The cause of the Cargo Damage was indeed

the error and negligence of a crew member that was under the responsibility of the RESPONDENT.

50. All things considered, the principle under common law is that the party in custody and possession of

the goods it is the one responsible and liable, since it exercises control over the cargo during the period

of transportation33. RESPONDENT was in control of the Cargo when the crew member, under his

supervision, pumped water into the hatches damaging the cargo. Clause 8(a) is applicable,

consequently RESPONDENT is 100% liable for the damages.

B. Alternatively, if Cargo Claim were not to be apportioned in accordance with Clause 8(a)

of the ICA, the Tribunal shall apportion them on a 50/50 basis

51. In the further alternative, if the Tribunal were to consider that Clause 8(a) is not applicable then as

stated in Clause 8(b) the damages should be apportioned on a 50/50 basis.

52. Clause 8(a) of the ICA states that “(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”.

53. Clause 8 of the NYPE Form 2015 indicates that in relation to the Performance of Voyage “[T]he

Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming,

lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the

supervision and responsibility of the Master…”.

54. The inclusion of the word “and responsibility” is a material amendment that should, alternatively,

divide cargo liability 50% for RESPONDENT and 50% for CLAIMANT. In conclusion, Cargo damage

aroused out of an act of the RESPONDENT, so as it was noted in the Yangtze Xing Hua34 case: “The

32 Procedural Order No.2, Contemporaneous Events, No.9. 33 T. G. Carver, R. P. Colinvaux, Carver’s carriage by sea, p.1. 34 Transgrain Shipping (Singapore) PTE Ltd v Yangtze Navigation (Hong Kong) Ltd, [2016] EWHC 3132 (Comm).

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critical factual question under clause 8 is that of causation. Does the claim “in fact” arise out of the

act, operation or state of affairs described? It does not depend upon legal or moral culpability...”.

III. RESPONDENT IS NOT LIABLE FOR ANY CLEANING COST UNDER

CHARTERPARTY

55. In accordance with the Charterparty, CLAIMANT is not entitled to damages on the ground of BIMCO

Clause (A.). Instead, CLAIMANT should bear the course of trading and comply with its contractual

obligation (B.).

A. CLAIMANT is not entitled for damages upon Hull Cleaning

56. The BIMCO Hull Fouling Clause is not applicable since the circumstances it set did not occur shall

only be used by CLAIMANT to avoid litigation of bottom fouling disputes if the Vessel was idling

under the circumstances agreed on. Since the clause do not apply, the legal relationship upon Hull

Cleaning between the Parties fall under English law.

1. Bimco Clause is not applicable

57. Under English law, the general legal rule is that the last set of terms to be provided prior to the

acceptance or performance of the contract will govern the contract. The parties to a contract are bound

by its terms and subject to the obligations imposed by it. However, if the obligations are subject to a

condition, and the condition is not fulfilled, the obligations are not enforceable35.

58. The aim of the BIMCO Hull Fouling Clause, incorporated into the Charterparty, is to expressly state

in what circumstances and at what point the responsibility for bottom cleaning and liability for losses

arising there from will shift from owner to charterer.

59. In Charterparty terms, it is precisely indicated that “BIMCO Hull Fouling Clause for Time-Charter

Parties to Apply with Sub-Clause (a) top read as follows”36. Clause 83(a) of Charterparty establishes

a Hull Cleaning arrangement to apply when the Vessel remains within a place anchorage and/or berth

35 J. Cartwright, Contract Law: An Introduction to the English Law of Contract for the Civil Lawyer. 36 IMLAM Problem Scenario V2, Charterparty, Clause 83(a), p.16.

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for an aggregated period exceeding “(i) 25 days in a tropical zone or seasonal tropical zone. (ii) 30

days outside such zones”37.

60. In Belize Telecom Ltd38 case, the Privy Council, a judgment delivered by Lord Hoffmann, states that

implication is part of the process of determining the objective meaning of the contract. The meaning

that the document would convey to a reasonable person who has knowledge of all the relevant

background to the contract.

61. Indeed, the court has no power to add to or “improve upon the instrument which it is called upon to

construe”39. In that case, Lord Simon of Glaisdale listed five conditions (“which may overlap”) that

must be satisfied before a term can be implied: importantly it must be capable of clear expression and

it must not contradict any express term of the contract. The contract should be concerned with

ascertaining the meaning of words contained in the written agreement.

62. It was further stated that: “it is not enough for the court to say that the suggested term is a reasonable

one the presence of which would make the contract a better or fairer one”40.

63. In this case, the BIMCO clause strictly apply to cases involving tropical waters. However, Wahanda

water cannot be deemed tropical and may therefore not trigger the application of the BIMCO clause41.

In this context, CLAIMANT cannot refer to Clause 83 in settlement of Hull Cleaning issue.

2. Hull Cleaning obligation remains with the CLAIMANT

64. Clause 6 of the NYPE 2015 indicates that the de-fouling costs are treated as ordinary expenses of

trading the ship under a time charter, to be paid by the Owners in fulfilment of their maintenance

obligation. The Hull Cleaning belongs, then, to normal expenses in the course if the vessel’s

employment. In addition, Clause 4(a) of the same text, excuse RESPONDENT for “ordinary wear and

tear” when re-delivering the vessel.

37 Ibid. 38 General of Belize v Belize Telecom Ltd, [2009] UKPC 10; See also, BP Refinery (Westernport) Pty Ltd v Shire of Hastings,

[1977] 180 CLR 266. 39 General of Belize v Belize Telecom Ltd, [2009] UKPC 10. 40 Liverpool City Council v Irwin, [1977] AC 239, 258, per Lord Cross of Chelsea. 41 IMLAM Problem Scenario V2, Answers on clarification questions, p.1.

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65. In Pamphilos42 case, bottom fouling was viewed by the Court as “fair wear and tear” and the cause

of such fouling was one of the owner’s operational risks. In the same case, it was decided that the

characters are not obliged to bear the cleaning costs for bottom fouling caused in the ordinary course

of complying with the charterers legitimate orders as to the employment of the vessel43.

66. In Island Archon44 decision, it was set that the risk of bottom fouling was considered to be foreseeable

by both parties when entering into the charterparty. Furthermore, “the costs of bottom cleaning belong

to normal expenses in the course of a vessel’s employment”. A similar judgement was set by London

arbitration, and then by the English High Court in the Kitsa45 case upon a time-chartered vessel.

67. Therefore, the cost of de-fouling is not considered to be part of the implied indemnity under a

charterparty.

68. In this case, the voyage to Wahanda port was done in compliance with the Charterparty46. Under the

present circumstances, RESPONDENT is excused for ordinary wear and tear upon

redelivery. CLAIMANT is not entitled to recover such costs from RESPONDENT under an implied

indemnity.

B. CLAIMANT should bear in the course of trading

69. CLAIMANT must arrange Hull Cleaning under Charterparty (1.). Tribunal shall take into consideration

all the circumstances of this case (2.). It should be noted that RESPONDENT agreed to pay reasonable

cost for cleaning. However, CLAIMANT is not only attempting to recover the cost of the Vessel’s

consumption to South Island performed in violation of the NYPE (3.), but also the cost of the cleaning

the entire Vessel, as opposed to the sole Hull (4.). Additionally, CLAIMANT decision to arrange Hull

Cleaning at South Island constitutes a violation of Charterparty (5.).

42 Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (The Pamphilos), [2002] 2 Lloyd’s Rep. 681. 43 Ibid. 44 Triad Shipping Co v Stellar Chartering and Brokerage Inc (the “Island Archon”), [1994] 2 Lloyd’s Rep. 227. 45 Action Navigation Inc v Bottigliere di Navigazione SpA (the “Kitsa”), [2005] 1 Lloyd’s Rep. 432. 46 IMLAM Problem Scenario V2, Recap fixture, p.2.

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1. CLAIMANT must arrange Hull Cleaning under Charterparty

70. Clause 1 of the NYPE 2015 Form provides “that the Owners shall … keep the vessel in a thoroughly

efficient state in Hull, machinery and equipment … for and during the service”. The shipowners will

be in breach of this obligation if defouling operations are unreasonably delayed, notwithstanding that

the accumulation of growth is the result of a breach of contract by the charterers.

71. RESPONDENT didn’t violate the Charterparty, the Vessel’s performance remained within the limits

of the Charterparty until redelivery. Consequently, it is CLAIMANT duty to arrange Hull Cleaning.

2. The prolonged stay at Wahanda was due to operational considerations at Wahanda

Port

72. In the Erechthion47 case, the arbitrators distinguished two situations which triggered the damage.

Whether it was sustained by the vessel as a matter of navigation based on the pilot’s instructions or

whether it was sustained as a matter of employment on the ground of the Port Authority orders.

Accordingly, Staughton J. remitted this issue to the arbitrators. However, even if a loss can be shown

to flow directly from an order of the charterers as to the employment of the vessel, it does not

necessarily follow that such loss will fall within the scope of the indemnity.

73. In the Island Archon48 case, the Court of Appeal held that shipowners would not be entitled to claim

from charterers under an implied indemnity where foreseeable losses and expenses are incurred as a

consequence of complying with charterers’s legitimate and ordinary employment orders.

74. Therefore, where lawful orders have been provided by charterers and the vessel incurs Hull fouling in

the course of ordinary trading, the costs of cleaning the fouling from the Hull, fall to the shipowners

as a risk which they consented to bear on fixing the Charterparty.

75. Such fouling is considered foreseeable at the time of fixing the vessel, especially where the vessel is

permitted to trade in the area where the fouling was caused49. The shipowners’ have the obligation to

maintain the vessel.

47 New A Line v Erechthion Shipping Co S.A (the “Erechthion”), [1987] 2 Lloyd’s Rep. 180. 48 Triad Shipping Co v Stellar Chartering and Brokerage Inc (the “Island Archon”), [1994] 2 Lloyd’s Rep. 227. 49 G. C. Lemos, The third-party proceedings; Athanasia Comninos, [1990] 1 Lloyd’s Rep. 227.

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76. In the Kitsa50 case, the arbitrators found that there had been no breach by the charterers, as the vessel

was trading within the geographical limits and was not within the ports excluded under the

charterparty. The arbitrators found that the risk did not go beyond the shipowners expectation. The

Hull fouling was a risk accepted by entering the charterparty. Consequently, Hull Cleaning falls

outside the scope of the implied indemnity.

77. Michael Crane QC, sitting as a Deputy High Court Judge, in the Doric Pride, held that the allocation

of risk expressly adopted by the parties was not to be reversed by the operation of an implied

indemnity. In the Aquacharm51, it was highlighted that it is legitimate to ask what type of risks the

shipowners had agreed to bear.

78. If CLAIMANT cannot recover indemnity for losses sustained as a result of complying with

RESPONDENT legitimate orders as to the employment of the vessel. RESPONDENT is not responsible

of losses due to operational matters.

3. RESPONDENT is not liable for the cost of the Vessel’s consumption to South

Island

79. Clause 12(e) of the NYPE 2015 indicates that if Owners comes to contest the consumption rate due

to reduced performance, the matter shall be referred to an independent expert or alternative weather

service selected by mutual agreement.

80. In a similar vein, if the Owners had assumed the risk of a drop in performance as a result of Hull

fouling, it is not a defence to a claim on speed underperformance for the Owners to prove that the

speed reduction by Hull fouling resulted from compliance with the time Charterers’ orders52.

81. However, shall the Tribunal decide to hear claims on the ground of the cost of consumption of South

Island voyage. There is a mechanism dealing with the situation, that CLAIMANT ignored. In these

circumstances, RESPONDENT respectfully addresses the Tribunal with a request to appoint a single

joint expert according to Clause 12(e) of NYPE 2015 Form.

50 Action Navigation Inc v Bottigliere di Navigazione SpA (the “Kitsa”), [2005] 1 Lloyd’s Rep. 432. 51 Actis Co Ltd v Sanko Steamship Co Ltd (the “Aquacharm”), [1982] 1 Lloyd’s Rep. 7. 52 Imperator I Maritime Co v Bunge SA (the “Coral Seas”), [2016] EWHC 1506; [2016] 2 Lloyd’s Rep 293 (QB).

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4. RESPONDENT is not entitled to the cleaning cost of the entire Vessel

82. In the Kildare53 case it was held that shipowner is entitled to recover for damages the actual loss

measured by taking into account the difference between the contract price and the actual position

resulting from the breach.

83. In fact, the quotation delivered from South Island port Agency, indicates the cost of USD41,000.00

for the realization of cleaning of the bottom part but also the raised portion of the Hull (which is 4

meters above the water level of the line of fouling along the entire length of the ship on both sides).

84. RESPONDENT is definitely not liable for the cleaning of the whole vessel under any circumstances54.

5. Tribunal shall declare voyage to North Titan not compliant with the (ism) code

85. Clause 95 of Charterparty indicates that CLAIMANT shall comply with the requirement of the ISM

code55. The International Safety Management Code (“ISM Code”) represents the International

Management Code for the Safe Operation of Ships and for Pollution Prevention.

86. The International Maritime Organization has identified that as a major threat to the world’s oceans

and to the conservation of biodiversity. In fact, the spread of invasive species is now recognized as

one of the greatest threats to the ecological and the economic well-being of the planet56. Aquatic

organisms may be transferred to new locations as biofouling and can be harmful and invasive in

locations where they do not naturally occur57. To comply with the requirements of the ISM Code,

CLAIMANT should maintain a safety management system to ensure that the safety and environmental

protection as defined by the ISM Code58.

87. Regulation 34 of the SOLAS convention, incorporated into the ISM code, dictates that “the owner,

the charterer, or the company, as defined in regulation IX/1,operating the ship or any other person

shall not prevent or restrict …. executing any decision for safe navigation and protection of the marine

53 Zodiac Maritime Agencies Limited v Fortescue Metals Group Limited (the “Kildare”), [2011] 2 Lloyd’s Rep. 360. 54 IMLAM Problem Scenario V2, Invoice by South Island port Agency, p.50; See also, Ibid., Statement of Vessel

Disbursement, p.51. 55 Ibid., Charterparty, Clause 95, p.17. 56 International Convention for the Safety of Life at Sea (SOLAS), 1974. 57 Guidance for minimizing the transfer of invasive aquatic species as biofoulling (Hull Fouling), Clause (2). 58 Guidelines on implementation of the International Safety Management (ISM) Code by Administrations, Resolution

A.1022(26), Clause (2.1.1).

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environment”59. In addition, the same text indicates “takes into account the marine environmental

protection measures that apply, and avoids, as far as possible, actions and activities which could cause

damage to the environment”.

88. When the hull vessel is fouled, there higher risk for marine species, carried either in the ship’s ballast

water or on ships’ hulls, may survive to establish a reproductive population in the host environment,

becoming invasive, outcompeting native species and multiplying into pest proportions.

89. Based on the map, it is clear that North Titan port water are and open to the ocean and that South

Island water are closed lakes sounded by land60. In fact, the voyage of the Vessel from an open water

port (Wahanda) to a closed water port (South Island) might have contributed to the introduction of

invasive aquatic species to new environments61.

90. CLAIMANT decision to reject cleaning at North Titan not only was unreasonable but importantly

harmful. The voyage to North Titan would have being the more enrimetale friendly choice as it

minimizes the bio invasions because both Wahanda and North Titan port water are open to the same

ocean.

IV. RESPONDENT IS NOT LIABLE FOR THE LATE RE-DELIVERY OF THE VESSEL

91. RESPONDENT is not liable for the delay incurred for the re-delivery since the Vessel was quarantined

by the Port State Control for 39 days. CLAIMANT is solely liable for this delay arising from the

Master’s negligence. CLAIMANT alleges that RESPONDENT cannot rely on any unforeseen events in

order to apply the off-hire clause. In fact, the late re-delivery is due to the Ebola virus carried at the

edge of the Vessel by the crew (A.). Thus, CLAIMANT is not entitled to claim loss of hire (B.).

A. CLAIMANT is solely liable for the late re-delivery of the Vessel

92. The late re-delivery was due to the quarantine of the Vessel following the reasonable grounds for

suspecting that crew members were carrying the Ebola Virus. This illness arrived on board the Vessel

as a result of the Master’s negligence, which was under the liability of the CLAIMANT.

59 International Convention for the Safety of Life at Sea (SOLAS), Regulation 34, p 287. 60Procedural Order No2, MAP. 61 See Annexe 1, Memorandum for Respondent, p.23.

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1. The Master’s negligence led to the presence of the Ebola virus on board the Vessel

93. The Doric Pride62 case highlighted a basic distinction of liability under a charterparty. On this wise,

the Court of Appeal suggested that the owner shall be liable for the management of the vessel and its

crew and charterer for the vessel’s trading arrangements.

94. Furthermore, Clause 44 of the Charterparty provides: “Owners shall be liable for any delay in

quarantine arising from the Master, Officers, or crew having communication with the shore or any

infected area without the written consent of Charterers or their Agents, also for any loss of time

through detention by customers or other authorities caused by smuggling or other infractions of local

law on the part of the Master, Officers or crew. Any time lost by such causes may be deducted as off-

hire”63.

95. In the case at hand, the Vessel was delivered into the Charterparty on 29 March 2016. However,

loading of the cargo was completed on 20 April 2016, whereupon the Vessel sailed for Wahanda.

Between these 2 dates, on 18 April 2016, the newspaper West Coast Daily Echo published an article

informing about “an outbreak of Ebola virus in the City of West Coast and surrounding areas”64.

96. More than that, this newspaper reported that there were over 100 cases and added: “The West Coast

municipal authorities are mobilising all resources available to them to restrict the spread of the virus.

This may include a curfew and restriction on the movement of lorries, goods and, possibly, ships”.

Despite this warning, the Master still decided to leave the port without any control of his crew who

could have been ill. This precipitous decision is a proof of negligence and a lack of professionalism.

97. Upon arrival at Wahanda, on 7 May 2016, the Vessel was not allowed to berth because of the

reasonable grounds for suspecting Ebola virus on board. The only source of infection was undoubtedly

West Coast. Through the negligence of the Master, the infected crew members were on the board. The

quarantine of the Vessel subsequently caused a delay in the re-delivery.

62 Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (the “Doric Pride”), [2006] EWCA Civ 599, [2007]

2 CLC 1042, [2006] 2 All ER (Comm) 188, [2006] 2 Lloyd’s Rep. 175. 63 IMLAM Problem Scenario V2, Charterparty, p.9. 64 Ibid., p.22.

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98. Thus, in accordance with clause 44 of the Charterparty, CLAIMANT shall be liable for any delay in

quarantine arising from the Master’s inactions.

2. The Vessel was off-hire during the quarantine period

99. Under a time charterparty, off-hire clauses are dealing with delay in re-delivery. Charterer remains

liable to pay hire in all circumstances unless the charterer can bring himself within the plain words of

an off-hire provision65. A charterer, to place the vessel off-hire, must establish three things. First, it

must show that the shipowner has been unable to perform the services required of it by the charterer.

Secondly, it must show that the inefficiency complained of was caused by an event listed in the off-

hire clause. Third, it must then show how much time was lost as a result of the inefficiency66.

100. Whether or not a vessel goes off-hire depends entirely upon the construction of the off-hire clause in

question and is not dependent on time being lost due to a breach of charter by the shipowner. It follows

that no account is to be taken of exceptions clauses in the shipowner’s favour when construing the off-

hire clause67.

i. Inefficiency of the Vessel

101. Clause 17 of the NYPE 2015 provides: “In the event of loss of time from deficiency and/or default

and/or strike of officers or ratings… or detention by Port State control or other competent authority

for Vessel deficiencies… or by any similar cause preventing the full working of the Vessel, the payment

of hire and overtime, if any, shall cease for the time thereby lost… All bunkers used by the Vessel

while off-hire shall be for the Owners’ account…”.

102. Therefore, the charterer must demonstrate that it actually lost time in that the ship was prevented from

performing a service.

103. In order to put a vessel off-hire, the vessel may be physically efficient, yet still incapable of performing

the task required by the charterers due to a legal prohibition imposed by the local port authorities. In

65 Eastern Mediterranean Maritime (Liechtenstein) Ltd v Unimarine S.A. (the “Marika M”), [1981] 2 Lloyd’s Rep. 622;

Western Sealanes Corporation v Unimarine S.A. (the “Pythia”), [1982] 2 Lloyd’s Rep. 160; Armonia Shipping and Finance

Corporation (the “Ira”), [1995] 1 Lloyd’s Rep. 103; Kuwait Petroleum Corporation V. I v D Oil Carriers Ltd (the

“Houda”), [1994] 2 Lloyd’s Rep. 541. 66 S. Baughen, Shipping Law, p.246. 67 Ocean Glory Compania Naviera S.A. v A/S P.V. Christensen (the “Ioanna”), [1985] 2 Lloyd’s Rep. 164.

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the Apollo68, the clause was held to cover a period of delay due to fumigation, which was caused by

suspected typhus on the vessel. In the Laconian Confidence69 case was stated that the NYPE off-hire

clause should not be limited to physical inefficiency, provided that the off-hire event is covered by

one of the causes listed in the clause70.

104. In the case at hand, upon arrival at Wahanda, the Vessel was not allowed to berth by the Port Authority

as the Port Authority had reasonable grounds for suspecting that one or more crew members were

carrying the Ebola virus. On 11 May 2016, the Port State Control attended on board and found a

number of crew members with a high fever. Thus, the Port Authority quarantined the Vessel for a

minimum of 28 days. During this period, the Vessel was inefficient to RESPONDENT.

ii. Off-hire event

105. Once established that the “full working of the vessel” was prevented, the fact that the delay is due to

one of the specific causes listed in the off-hire clause shall be proven. The burden of proving that a

cause listed in the clause has supervened is on the charterer71. The cause must be fortuitous and not

merely a natural consequence of the charterer’s use of the ship.

106. The NYPE off-hire clause lists the following events: “. . . deficiency of men or stores, fire, breakdown

or damages to Hull, machinery or equipment, grounding, detention by average accidents to ship or

cargo, dry docking for the purpose of examination or painting bottom, or by any other cause preventing

the full working of the vessel . . .”72.

107. In this case, the Port Authority had reasonable grounds for suspecting that one or more crew members

were carrying the Ebola virus. This reason shall be included since it relies on “any other cause

68 Sidermar Spa v Apollo Corporation (the “Apollo”), [1978] 1 Lloyd’s Rep 200; See also, Navigas International v

TransOffshore Inc (the “Bridgestone Maru” (No. 3), [1985] 2 Lloyd’s Rep. 62, where a vessel went off-hire when detained

by port authorities acting reasonably and properly pursuant to their suspicions as to the vessel’s physical inefficiency. 69 Andre & Cie S.A. v Orient Shipping Rotterdam B.V. (the “Laconian Confidence”), [1997] 1 Lloyd’s Rep. 139. 70 M. Davies, The off-hire clause in the New York Produce Exchange time charterparty, p.107. 71 Royal Greek Government v Minister of Transport (the “Illissos”), [1948/49] 82 Lloyd’s Rep.196; Hyundai Merchant

Marine Co Ltd v Furness Withy (Australia) Pty (the “Doric Pride”), [2006] EWCA Civ 599, [2007] 2 CLC 1042, [2006]

2 All ER (Comm) 188, [2006] 2 Lloyd’s Rep. 175. 72 NYPE 2015 Form, Clause 17.

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preventing the full working of the vessel”. Thus, the Ebola virus should be considered an off-hire

event.

iii. Time deductible following an off-hire event

108. The time deductible in consequence of an off-hire event will depend on the wording of the off-hire

clause. A period off-hire clause starts the interruption of hire with a specific event and end it with

another. In the Hogarth v Alexander Miller Bros & Co73 case, the vessel went off-hire due to an engine

breakdown, which required the vessel to be towed into the discharge port. Once there, she was once

again “in an efficient state to resume her service” and hire restarted. The engine breakdown had no

effect on the vessel’s ability to discharge once she had got to the discharge port.

109. Applied to the current case, the quarantine caused a delay to Vessel berthing from 7 May 2016 until

26 June 2016. On 28 June 2016, the Vessel was finally re-delivered, discharge of cargo having been

completed on the same day. Accordingly, the Vessel was off-hire from 7 May 2016 until 26 June 2016

pursuant to clause 17 of the Charterparty.

110. Therefore, RESPONDENT have overpaid USD375,000.00 of hire and shall be compensated.

B. CLAIMANT is not entitled to claim loss of hire

111. Clause 51 of the Charterparty states: “…The ship shall be off-hire for any time lost and any and all

expenses resulting directly to Charterers by reason of or in connection with these causes may be

deducted from hire…”74.

112. In the case, CLAIMANT alleges he lost his Next Fixture with Champion Chartering Group because of

the late re-delivery. However, as proven above, this delay was incurred as a result of the Master’s

inaction, whose responsibility lays under CLAIMANT. Hence, the loss of hire under the Next Fixture

cannot be attributed to RESPONDENT.

113. In the alternative, the relevant period of the Next Fixture for the calculation of damages would be the

minimum period of two years, not the maximum period of four years. Further, CLAIMANT must give

credit for hire received under the Replacement Fixture.

73 Hogarth v Alexander Miller Brother & Co, [1891] A.C. 48 H.L. 74 IMLAM Problem Scenario V2, p.10.

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PRAYER FOR RELIEF

For the reasons set out above, the RESPONDENT requests the Tribunal to:

(I) DECLARE the disqualification of Madam Mary Walker on account of a manifest lack of the

qualities required by the arbitration Clause (80);

(II) DECLINE jurisdiction of the Arbitral Tribunal to hear CLAIMANT defence;

(III) DECLARE jurisdiction of the arbitral Tribunal to rule over counterclaim;

(IV) ORDER RESPONDENT for 100% indemnity for Cargo damage;

(V) Alternatively, ORDER RESPONDENT for 50% indemnity for Cargo damage;

(VI) DECLARE RESPONDENT responsible for reasonable Hull Cleaning costs of the Vessel in

the amount of USD33,000;

(VII) DECLARE the Vessel off-hire from 7 May 2016 until 26 June 2016;

(VIII) ORDER CLAIMANT to refund overpaid hire in the amount of USD375,000.00;

(IX) ORDER CLAIMANT to pay arbitration costs and other expenses incurred due to these

arbitration proceedings.

Dated this 29th day of April 2019

Counsel for RESPONDENT

OMEGA CHARTERING LIMITED

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ANNEXE 1