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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
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
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
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
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.
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.
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
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
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
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
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.
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).
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.
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.
MEMORANDUM FOR RESPONDENT
6
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.
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.
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.
MEMORANDUM FOR RESPONDENT
9
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.
MEMORANDUM FOR RESPONDENT
10
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).
MEMORANDUM FOR RESPONDENT
11
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.
MEMORANDUM FOR RESPONDENT
12
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.
MEMORANDUM FOR RESPONDENT
13
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.
MEMORANDUM FOR RESPONDENT
14
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.
MEMORANDUM FOR RESPONDENT
15
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).
MEMORANDUM FOR RESPONDENT
16
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).
MEMORANDUM FOR RESPONDENT
17
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.
MEMORANDUM FOR RESPONDENT
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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.
MEMORANDUM FOR RESPONDENT
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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.
MEMORANDUM FOR RESPONDENT
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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.
MEMORANDUM FOR RESPONDENT
21
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.
MEMORANDUM FOR RESPONDENT
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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
MEMORANDUM FOR RESPONDENT
23
ANNEXE 1