Team 26 Memorandum for the Respondent
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19th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2018
IN THE MATTER BEFORE LONDON MARITIME ARBITRATORS ASSOCIATION
MEMORANDUM FOR RESPONDENT
APPLICANT
Cerulean Beans and Aromas Ltd.
945 Moccasin Road
Cerulean 9659
V
RESPONDENT
Dynamic Shipping LLC
23 Fuchsia Crescent
Cerulean 1268
Team No. 26
COUNSEL
Aditya Andrea Sunny Vasilia
Team 26 Memorandum for the Respondent
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TABLE OF CONTENTS
ABBREVIATIONS
A. LIST OF AUTHORITIES AND REFERENCES
B. ARTICLES AND BOOKS
C. CASE LAW
D. LEGISLATION
E. OTHER
STATEMENT OF FACTS
THE CHARTERPARTY CHART
PART I: ARGUMENTS ON GOVERNING LAW
A. LAWS OF NEW SOUTH WALES, AUSTRALIA GOVERNS THE CHARTER PARTY
B. LAWS OF LMAA IS THE APPLICABLE LEX ARBITRI
PART II: ARGUMENTS ON JURISDICTION
A. THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION
1. SCOPE OF REFERENCE- PRE-CONDITION OF EXPERT DETERMINATION IS NOT
FULFILLED
2. THE CLAIMS FALL UNDER THE CONTRACTUAL DEFINITION OF ‘TECHNICAL
MATTERS’
3. CHOICE OF ROUTE FALLS UNDER DEFINITION OF TECHNICAL MATTERS
B. TIME LIMITATION
PART III: ARGUMENTS ON MERITS
A. DEVIATION
1. NO BREACH OF THE DUTY NOT TO DEVIATE
(i) DEVIATION WAS REASONABLE AND JUSTIFIED: LIBERTY CLAUSE
Team 26 Memorandum for the Respondent
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(ii) DEVIATION UNDER HAGUE VISBY RULES
(iii) DEVIATION UNDER COMMON LAW
2. CAUSATION
3. DEVIATION IS WAIVED
B. FORCE MAJEURE
1. OCCURRENCE OF SOLAR FLARES AND THE STORM ARE ‘UNFORESEEN’
EVENTS
2. DUE DILIGENCE EXERCISED BY THE RESPONDENT
C. SEAWORTHINESS OF THE VESSEL: RESPONDENT DID NOT BREACH THE
CONTRACTUAL DUTY OF SEAWORTHINESS
1. RESPONDENT DID NOT BREACH THE CONTRACTUAL DUTY OF
SEAWORTHINESS
D. CARGO ON BOARD THE VESSEL: DAMAGE OF THE CARGO NOT CAUSED BY
“UNSEAWORTHINESS”
1. DAMAGE TO THE CARGO WAS NOT CAUSED BY ‘UNSEAWORTHINESS’
E. MARITIME LIEN
1. THE APPLICANT IS NOT ENTITLED TO A LIEN OVER THE VESSEL
2. THE APPLICANT CANNOT RECEIVE THE BENEFIT OF A MARITIME LIEN OVER
THE VESSEL EXERCISED BY THE CREW
3. THE APPLICANT DID NOT VALIDLY EXERCISE A MARITIME LIEN OVER THE
VESSEL
F. DELIVERY
1. BARCODE PASS CONSTITUTES DELIVERY
G. DEMURRAGE IS ACCRUED
1. DEVIATION AND DELAY WERE AS A RESULT OF FORCE MAJEURE
2. CALCULATION OF LAYTIME
Team 26 Memorandum for the Respondent
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(i) LAYTIME STARTS WHEN VESSEL ARRIVES AT PORT - CLAUSE 8(C)(II)
(ii) LAYTIME ENDS AFTER 0.5 WWD
3. DEMURRAGE IS CHARGED AS PER CHARTERPARTY
H. DAMAGES
1. THE APPLICANT IS NOT ENTITLED TO DAMAGES
2. THE RESPONDENT IS ENTITLED TO DAMAGES
(i) DAMAGE TO THE HULL: GENERAL AVERAGE INCIDENT
(ii) AGENCY FEES AT THE PORT OF SPECTRE
(iii) ELECTRONIC RELEASE SYSTEM (‘THE BARCODE PASS’) AT THE
DISCHARGE PORT
I. LIMITATION OF LIABILITY
1. UNDER THE HAGUE VISBY RULES
2. INVALID DECLARATION OF VALUE
PART IV: PRAYERS FOR RELIEF
Team 26 Memorandum for the Respondent
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LIST OF ABBREVIATIONS
Applicant Cerulean Beans and Aromas Ltd as Charterers who entered in the
Charterparty with the Respondent for shipping the Cargo from the
port of Cerulean to the port of Dillamond.
Barcode Pass The barcode access document given by Respondent to Applicant as
authority pass to take delivery of goods from Discharge port through
electronic access system at Discharge Port.
CANA 2012 Commonwealth of Australia Navigation Act 2012
Cargo The carriage of 70000 kilograms (kgs) of coffee beans shipped in 4
containers.
Charterparty Voyage charterparty dated 22 July 2017 entered between the
Applicant and the Respondent for carriage of Cargo from Cerulean
to Dillamond.
COGSA 1991 Carriage of Goods by Sea Act 1991, Act No. 160 of 1991 as
amended
Crew Crew members of the Madam Dragonfly vessel.
Discharge Port Port of Dillamond under clause 1 Box 9 the Charterparty
HVR Hague Visby Rules
LMAA London Maritime Arbitrators Association
Loading Port Port of Cerulean under clause 1 Box 5 of the Charterparty
NSWA New South Wales, Australia
Parties Applicant and Respondent collectively referred as Parties.
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Respondent Dynamic Shipping LCC as the Shipowners who carried the Cargo
from Discharge Port to Loading Port.
SOLAS The International Convention for the Safety of Life at Sea
Tribunal Arbitral Tribunal constituted under clause 27 of the Charterparty.
Voyage Journey of the vessel from Cerulean to Dillamond
Vessel The Madam Dragonfly chartered under the Charterparty
YAR 2004 The York-Antwerp Rules 2004
Team 26 Memorandum for the Respondent
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LIST OF AUTHORITIES AND REFERENCES
A. Articles and books
Cooke et al Voyage Charterers (Informa Law, 4th edition, 2014) [17.25].
Dicey and Morris, Conflict of Laws, 11th edition, at p.1163
J. F. Wilson, Carriage of Goods by Sea, 7th edt., p.16.
M. Tsimplis, ‘Maritime Law’ Textbook 4th Edition p.514
Scrutton on Charterparties and Bill of lading, Sweet & Maxwell
Y. Baatz, Maritime Law, 4th edt., p. 144
B. Case Law
Albemarle Supply Co Ltd v Hind & Co [1928] 1 KB 307, 318 (Scrutton LJ)
Alfred C Toepfer Schiffahrtsgesellschaft GmbH v Tossa Marine Co Ltd (The Derby) [1985] 2
Lloyd’s Rep 325
Arnold v Britton & Others [2015] UKSC 36
Atlantic Paper Stock Ltd. v. St. Anne-Nackawic Pulp and Paper Company Limited, [1976] 1 S.C.R.
580
Caspian Basin Specialised Emergency Salvage Administration v Bouygues [1977] 2 Lloyd’s Rep.
507
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, para 14
E. L. Oldendorff & Co. G.M.B.H. v. Tradax Export S.A. (The Johanna Oldendorff), [1974] A.C.
479 ; [1973] 2 Lloyd's Rep. 285
Glencore International AG v MSC Mediterranean Shipping Co SA [2017] EWCA Civ 365 para.57
Hain SS Co v Tate & Lyle [1936] 2 All ER 597
Team 26 Memorandum for the Respondent
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Kyokuyo Co Ltd v AP Moller-Maersk A/S (t/a Maersk Line) [2017] EWHC 654 (Comm)
Matsoukis v Priestman & Co. [1915] 1 K.B. 681
Maxine Footwear Co. v Canadian Government Merchant Marine [1959] A.C. 589
Navalmar UK Ltd v Kale Maden Hammaddeler Sanayi Ve Ticart As (The Arundel Castle) [2017]
EWHC 116 (Comm)
Photo Production v Securicor Transport [1980] AC 827
Rio Tinto v Seed Shipping (1926) 24 Lloyd's Rep 316
Robertson v French (1803) 4 East 135
Sadler v Dixon (1841) 151 E.R.1303
Shore v. Wilson (1842) 9 Cl. & F. 355, 555; Smith v. Doe (1821) 3 B. & B. 473, 550, 602
Suisse Atlantique Societe d'Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 A.C. 361
The Arundel Castle, Supra note…
The Happy Ranger [2002] 2 Lloyd’s Rep 364
The Kapitan Petko Voivoda [2003] 2 Lloyd’s Rep.
The Petone [1917] P 198; The Leoborg (No 2) (fn 112)
The Teutonia (1872) LR 4 PC 171
C. Legislation
1976 Convention on Limitation of Liability for Maritime Claims (LLMC)
Carriage of Goods by Sea Act, 1991
Hague Visby Rules
York Antwerp Rules 2004
Team 26 Memorandum for the Respondent
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D. Other
Arbitration Rules of the London Maritime Arbitrators Association (LMAA)
Team 26 Memorandum for the Respondent
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STATEMENT OF FACTS
1. On 22 July 2017, the Cerulean Beans and Aromas Ltd (“the Applicant”) entered into a voyage
Charterparty with Dynamic Shipping LLC (“the Respondent”) for the carriage of 1,000 70
kilograms (kgs) bags of coffee beans (the ‘Cargo’), packed in four containers (each containing 250
bags), from Cerulean to Dillamond (“the Charterparty”).1
2. The containers which the Cargo was transported were water proofed as instructed by the Applicant.
The Respondent guaranteed that the waterproofing of the containers was suitable for short voyages
up to five days.2
3. On 24 July 2017, the Vessel departed from the port of Cerulean (“the Loading Port”) towards the
port of Dillamond (“the Discharge Port”). The delivery of The Cargo was agreed to be completed
by 19:00 on 28 July 2017.3
4. The Respondent received the dock receipt of the Cargo, including the number of ‘4 containers’ and
specifying the state of the Cargo: ‘No damage observed on receipt’.4
5. On 26 July 2017, contact was re-established after the absence of any communication between
Respondent and the Vessel and Applicant for 17 hours. Accordingly, the Respondent informed the
Applicant via email about the non-communication with the Vessel.5
6. During the knock down of the navigational communication systems due to solar flares, the Vessel
had deviated to the port of Spectre because the crew had noted that The Vessel had passed the port
of Spectre approximately 1,000 nautical miles to the West. The Respondent reported the deviation
to Spectre via sending an email to the Applicant dated on 27 July 2017 at 7:17.6
7. On 27 July 2017, the Vessel had departed from Spectre towards the Discharge Port.7
1 Box 4, The Charterparty, p. 3 of the Moot Scenario.
2 Letter dated 22 July 2017 from the respondent to the Applicant, p.14 of the moot scenario.
3 Box 9, The Charterparty dated 22 July 2017, p. 3 of the Moot Scenario 4 The Dock receipt, p.16 of the Moot scenario. 5 Email from the Respondent to the Applicant dated 26 July 2017 at 2:32pm, p.17 of the moot scenario. 6 Email from the Respondent to the Applicant dated 27 July 2017 at 7:17am, p.18 of the moot scenario. 7 Ibid.,
Team 26 Memorandum for the Respondent
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8. In the evening of the 28 July 2017, a massive storm hit the Dillamond area where the Discharge
Port is located, consequently rendering the vessel unable to proceed past its location. The storm was
sudden and was not picked up on radars until approximately 45 minutes before it hit Dillamond with
rain, hail and severe winds which ripped out trees and upturned cars.
9. During the storm, the Vessel’s anchor was dropped to avoid the storm but when an attempt was
made to lift it, it tangled on a coral bed and there was a damage to the hull.8
10. On 29 July 2017, since 7:00, the Vessel was located -100 nautical miles out from Dillamond after
being instructed by the Discharge Port to wait for berthing due to port delays after the storm. The
Applicant was informed about the unavailability of berth at the Discharge Port.9
11. On 29 July 2017, the Vessel berthed at 17:00 as communicated to the the Applicant via email at
16:28. In this email, the Applicant was also informed that the expected delivery of the cargo would
take place approximately two hours after berthing.10
12. On 29 July 2017 at 20:42, the Cargo was delivered to the Applicant. Since the Applicant was not
available to collect delivery of the Cargo at the time of discharge at the Discharge Port, the
Respondent made use of electronic access systems and sent a non-negotiable document with the
barcode access (“The Barcode Pass”).11
13. The Respondent contends in the Points of Defence that it should not held liable for any delay of the
cargo supply as the delay was caused due to two events of force majeure namely solar flares and
storm.12
14. The Respondent states that there was no water damage at the time of the delivery at the Discharge
Port and any damage claimed would have occurred after delivery.13
8 Email from the Respondent to the Applicant dated 29 July 2017 at 8:58am, p.20 of the Moot scenario. 9 Ibid.
10 Email from the Respondent to the Applicant dated 29 July 2017 at 4:28pm, p.22 of the Moot scenario. 11 Authority access pass, p. 23 of the Moot scenario.
12 Point of Defence and counterclaim, p. 40 of the moot scenario
13 The points of Defence and Counterclaim on behalf of the Respondent, p. 41 of the Moot scenario.
Team 26 Memorandum for the Respondent
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15. On 1 August 2017 the Applicant served notice of breach of the Charterparty agreement and pressed
for the payment of USD30,200,000 from the Respondent by 7 August 2017 for the damage allegedly
caused during the Voyage from the Loading Port to the Discharge Port. 14
16. The Respondent denies all liability in relation to the delays and damages caused to the Applicant as
stated in the Statement of Claim.15
17. The Applicant is in breach of its obligations under the Charterparty as it had failed to pay the
following amounts due, based on the invoice sent by the Respondent to the Applicant through email
dated on 7 August 2017 at 3:40pm 16:
• Freight (USD125,000/container): (USD 500,000)
• Agency fee at Port of Spectre: (USD75,000)
• Agency fee at Discharge Port: (USD50,000)
• The cost of repairs to damage caused to the vessel due to adverse weather conditions:
(USD875,000)
• Demurrage: (at the rate of USD20,000/hour- Total: USD100,000) and
• The Use of electronic access system at the Discharge Port: (USD10,000).
THE CHARTERPARTY CHART
This diagram depicts the contractual relationships between the parties for the purpose of the following
submissions.
14 The demand Notice dated 1 August 2017, p. 27 of the Moot scenario
15 The points of Defence and Counterclaim on behalf of the Respondent, p. 41 of the Moot scenario
16 Email from the Respondent to the Applicant dated 7 August 2017 at 3:40pm, p.32 of the Moot scenario
Team 26 Memorandum for the Respondent
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PART I: ARGUMENTS ON APPLICABLE GOVERNING LAW
A. Laws of New South Wales, Australia governs the contract
a) Pursuant to Clause 28 of the Charterparty, the governing substantive law is stated to be that of New
South Wales, Australia (NSWA). Clause 28 of the Charterparty also contains a clause paramount
which states: “Owners to have benefit of Article 4(5).”17
b) It must be noted that the Carriage of Goods by Sea Act, 1991 (GOGSA 1991) under Part 2 seeks
the application of the amended Hague Rules. Under Section 8, GOGSA 1991 the amended Hague
Rules as amended by the Brussels Visby Protocol 1968 and notably known as Hague Visby Rules
(HVR) are to have the force of law in Australia subject to Section 10 of GOGSA 1991. 18
18. Applicable lex arbitri
The Parties agreed under Clause 27 of the Charterparty to apply the Arbitration Rules of the London
Maritime Arbitrators Association (LMAA). Accordingly, the lex arbitri will be that of the LMAA
Terms 2017 which is English law.
17 HVR, Art. IV (5)
18 Section 10, COGSA 1991, Including amendments up to: Act No. 126, 2015
Team 26 Memorandum for the Respondent
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PART II: ARGUMENTS ON JURISDICTION
19. The Arbitral Tribunal does not have Jurisdiction to hear the claims based on “Technical Matters”
for the reasons stated below. Further, as stated above the lex arbitri applicable is that of LMAA
Arbitration Rules and in view of the same procedural law of England and Wales namely the
Arbitration Act 1996 will apply. The ruling of the Tribunal on its jurisdiction is not binding on any
subsequent review of its determination by the court under Sections 32, 67 or 72 of the Arbitration
Act 1996.
A. Ousting clause is illegal
20. The Australian modified Hague Visby rules definition of “Sea carriage document” under article
1(1)(g)(iv) includes “a non-negotiable document (including a consignment note and a document of
the kind known as a sea waybill or the kind known as a ship's delivery order) that either contains or
evidences a contract of carriage of goods by sea.” The literal definition includes charterparties as
“sea carriage documents”; charterparties are not negotiable and certainly contain a carriage by sea
contract. This candid view appealed to court in The Blooming Orchard Case.
21. Pursuant to clause 11(2), any agreement which ousts or tries to preclude or limit the jurisdiction of
the Commonwealth court or of a State or Territory in respect of a bill of lading (or similar document)
relating to carriage of goods according to the Australian law is illegal. Although section 11(3)
provides exception to agreement clauses which precludes or limit court jurisdiction, it is conditional
upon arbitration being conducted in Australia. Thus clause 27(e) which restricts parties from
commencing legal proceedings is illegal and inoperative as per section 11(2) and 11(3) of the
GOGSA 1991. Therefore, Respondent humbly submits that accordingly, this Tribunal does not have
jurisdiction in respect of cargo claims made by Applicants.
B. Scope of Reference – The pre-condition of expert determination is not fulfilled
Team 26 Memorandum for the Respondent
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22. Assuming, the above contention is not recognized, and Tribunal still adjudicate in favor of
jurisdiction on above ground, the Respondent submits that Tribunal has limited scope as the
“technical matter” was agreed to be determined by expert determination before applying for
arbitration. The scope of reference stated in clause 27 (a)19 is to be read with an exception provided
under clause 27 (d)20 Further, clause 27 (e)21 provides for complying with clause 27(d) before going
to Tribunal.
23. Clause 27 (g)22 defines the term “Technical matter” as “matters surrounding the technical aspects
of the performance of the charterparty, such as the vessel’s route, …. which can reasonably be
considered to be within the expert technical knowledge of a Master Mariner.” Pursuant to above sub
clauses, it is comprehensible on plain reading that “technical matters” which is defined in clause
27(g) is not arbitrable23 or not subject to court’s jurisdiction24 without first referring dispute for
expert determination. Therefore, “technical matters” were outside the reference of an arbitral
tribunal until the condition precedent was complied with. The condition precedent under clause 27
(e) must therefore be fulfilled before approaching the Tribunal i.e. the expert determination must be
obtained in technical matters.
C. The Claim falls under the contractual definition of “Technical Matters”
24. In the present case, the term ‘technical’ does not only mean “Technical” in general parlance as the
meaning of the term “technical matters” is already defined under the Charterparty. When the term
has been defined in the contract the meaning is to be considered in reference to the meaning defined
in the contract25 and must take precedence over general ordinary meaning and must be to be
understood in their plain, ordinary and popular sense.26
19 Clause 27 (a), The Charterparty, p.12 of Moot scenario
20 Clause 27 (d) Ibid,
21 Clause 27 (e), Ibid,
22 Clause 27 (g), Ibid,
23 Clause 27(g), Ibid,
24 Clause 27 (e), Ibid,
25 Shore v. Wilson (1842) 9 Cl. & F. 355, 555; Smith v. Doe (1821) 3 B. & B. 473, 550, 602
26 Robertson v French (1803) 4 East 135
Team 26 Memorandum for the Respondent
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25. Therefore, it is submitted by the Respondents that the intention of the Parties must be inferred from
the contractual provisions which clearly define “technical matters”. Further, since the meaning
includes “vessel’s route” it must be interpreted in the light of its natural and ordinary meaning and
not in a commercial parlance as the “employment of vessel”. Therefore, the claims are held to fall
under “technical matters”.
D. Choice of route falls under definition of ‘Technical matters’
26. Pursuant to above submissions, the Respondent submits that the Vessel’s route and any disputes
arising from the deviation and later circumstances must be construed as a technical matter under
clause 27 (g) and be subject to expert determination. Accordingly, the formation of the Tribunal was
premature and without fulfillment of pre-conditions required to be performed before approaching
arbitration. Thus, the Tribunal does not have jurisdiction to adjudicate on the Claims falling under
Clauses 27 (d) and (e)27.
E. Time Limitation
27. The Counterclaim of the Respondent is brought within the time bar of 6 months under clause 22 of
the Charterparty28 for freight claims as the notice was sent on 1 August 201729 and hence not time
barred. The Tribunal was constituted on 7 September 201730.
PART III: ARGUMENTS ON MERITS
A. DEVIATION
1. No breach of Duty not to deviate
28. The Applicant’s arguments regarding breach of duty not to deviate must be dismissed. Deviation
has been identified as an ‘intentional and unreasonable change in the geographic route of the
voyage’.31 In accordance with this definition, deviation must both be intentional and unreasonable.
27 Clause 27 (d) and (e), The Charterparty, p.12 of Moot scenario
28 Clause 22, The Charterparty, p.11 of Moot scenario
29 The demand Notice dated 1 August 2017, p. 27 of the moot scenario.
30 Procedural order No. 2, para 23,
31 Tetley p. 1812.
Team 26 Memorandum for the Respondent
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However, in this case it is apparent that the duty not to deviate has not been breached by the
Respondent for a number of reasons:
(i) Deviation was reasonable and justified: Liberty Clause
29. Under the current circumstances The Vessel lost connection due to solar flares which knocked out
the communication and satellite systems for 17 hours.32 It is completely illogical for the Applicant
to argue that there was no danger to the Vessel or to the Cargo. The lack of communication and
satellite systems caused the Vessel to lose all contact. In order to prevent any damage to the Cargo
and The Vessel, the Respondent had to change its route from The Discharge port to the port of
Spectre. This decision taken by the Respondent is justified by the Charterparty itself as it contains
a Liberty Clause [Clause 17].
30. In reference to Clause 17 of the Charterparty, as agreed between the Applicant and the Respondent
on 22 July 2017, the Respondent had liberty to deviate for the purpose of saving life or property,
including The Vessel itself. Clearly, this decision to make a stop at Spectre in order to secure the
Cargo and The Vessel has been taken in the interest of the Applicant in accordance with the Liberty
Clause. Thus, it is obvious that no unreasonable deviation has taken place.
31. By adding a liberty clause into the Charterparty, the Parties’ intention was to give the Respondent
room to make decisions in case of arising dangers.
(ii) Deviation under The Hague-Visby Rules
32. Article IV, Rule 4, of The Hague-Visby Rules (“HVR”) states that “Any deviation in saving or
attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an
infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable
for any loss or damage resulting therefrom.”
33. In accordance with the HVR, which are incorporated into the Charterparty by the Clause Paramount
under Clause 28, as long as deviation is reasonable, it shall not be deemed to be a breach of the
contract. As mentioned in detail above, the change of route was the only choice the Respondent had
32 Email from the Respondent to the Applicant dated 27 July 2017 at 7:17am, p.18 of the moot scenario ,
Team 26 Memorandum for the Respondent
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for the purposes of protecting the Cargo and the Vessel. Because the Respondent had no knowledge
when solar flares would stop and systems come back on. As to knowledge of the Respondent,
systems would be gone for days even weeks.
(iii) Deviation under Common Law
34. Even in situations where the HVR were not applicable, the Respondent could have relied on the
justification for deviation at common law namely that deviation was made in order to avoid danger
to the ship or to her cargo.
35. Further, the Respondent argues that the deviation is justified although the risk to be avoided affects
only the ship and not the cargo.33 However, the Respondent, by changing the route aimed to keep
both the Vessel and Cargo safe.
36. There will be no breach of contract when the ship strays off track due to other intervening factors
such as a storm. 34 Therefore, even if the Charterparty had not expressly stated the liberty clause,
this precedent would have still been sufficient to advocate that the Respondent was not in breach of
the Charterparty.
2. Causation
37. Without prejudice to the above argument of deviation; in spite of the Applicant’s arguments
regarding the damages for the breach of the Charterparty, causing them a USD 5,000,000
claim(“Settlement Payment”) in respect of the Applicant’s liability to Coffees of the World Ltd
(“The Third Party”) and the USD 9,450,000 (“Replacement Coffee Payment”) claim in respect of
the replacement coffee, there is no link of causation evidenced by the Applicant that the deviation
caused them the said damage. All of the damage was caused by events which cannot be attributable
to the Respondent.
3. Deviation is waived
33 The Teutonia (1872) LR 4 PC 171.
34 Rio Tinto v Seed Shipping (1926) 24 Lloyd's Rep 316.
Team 26 Memorandum for the Respondent
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38. Without prejudice to the above arguments, even if the deviation was not justified, the Applicant had
ignored the deviation and treated the Charterparty as still subsisting. Instead of terminating the
Charterparty, the Applicant chose to keep it alive. Therefore, the Charterer is deemed to have waived
its rights and remedies and is restricted to a remedy of damages for any loss attributable to the
deviation.35
B. FORCE MAJEURE
1. Occurrence of Solar Flares and the Storm are ‘Unforeseen Events’
39. According to Clause 17 of the Charterparty Parties are exempted for any Force Majeure Event.
40. Further, Clause 17 (b) includes this events ‘unforeseen weather events, acts of God, accidents, fire,
explosions, flood, landslips, ice, frost or snow’ as Force Majeure. Therefore, the Respondent is not
responsible for the loss caused to the Applicant because the delay was caused due to the occurrence
of two (2) unforeseen events, which were beyond the control of the Respondent and thus fall under
the ‘force majeure clause’.
41. The first event of force majeure was the emission of solar flares by the sun, which knocked out the
communication systems of the the Vessel for 17 hours.36 It would be rational to say that the solar
flares were an unforeseen event and beyond the control of the Respondent.
42. In addition, the Respondent took all reasonable steps to overcome the situation and in order to do
so the Respondent deviated to Spectre because the Vessel only had a hard copy of the maps to
Spectre on board.37
43. The Vessel was stuck hundred (100) nautical miles out of the Discharge Port since 7:00 on 29 July
2017 but due to the storm the discharge port was closed for around twelve(12) hours and there was
nowhere for the Vessel to berth.38 The storm was described as “once in a lifetime” at the Dillamond
35 Suisse Atlantique Societe d'Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 A.C. 361; Hain SS Co v Tate &
Lyle [1936] 2 All ER 597.
36 Email from the Respondent to the Applicant dated 27 July 2017 at 7:17am, p.18 of the Moot scenario ,
37 Ibid.,
38 Email from the Respondent to the Applicant dated 29 July 2017 at 8:58am, p.20 of the Moot scenario.
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Times which had caused a complete shut down for the airports for three (3) hours and ports for
around twelve (12) hours, and thus it cannot be described as a foreseen event.39
44. In order to attract the force majeure Clause40 the event must clearly be beyond the control of the
contracting parties (here the event was unforeseeable and thus beyond the control of the Respondent)
and the event must render performance of the contractual obligations impossible.41 The occurrence
of solar flares and the storm made the performance of the contractual obligation to take the most
direct route to the Discharge Port42 impossible and it was only after the discontinuance of these
events that the contractual obligation could have been performed in the best possible way. As soon
as the flares effect disappeared, the Vessel was en route to the Discharge Port.43
2. Due diligence exercised by the Respondent as required by Clause 17
45. The Vessel was properly manned and maintained and the Respondent was diligent on his part. The
Vessel had to deviate due to the failure of the communication systems, which was damaged by the
solar flares. This failure is only attributable to the occurrence of an unforeseen event since the Vessel
left the Loading Port in a perfectly seaworthy state and if there had not been any intervention of the
solar flares the communication system would not have failed. Where the Respondent is diligent on
his part in maintaining the vessel, the breakdown of a machinery is deemed to come within the force
majeure clause.44
46. The solar flares emitted by the sun did not only adversely affect the communication system of The
Vessel, but they also knocked out the global communication system and that was completely
unforeseen.45 The seaworthiness of the Vessel and the effect of the solar flares can be supported by
the fact that the Vessel’s communication system did not require any repair and came back online
when the effect of the solar flares died down.46
39 The Dillamond Times dated 29 July 2017, p.21 of the Moot scenario.
40 Clause 17, The Charterparty,
41 Atlantic Paper Stock Ltd. v. St. Anne-Nackawic Pulp and Paper Company Limited, [1976] 1 S.C.R. 580
42 Email from the Respondent to the Applicant dated 27 July 2017 at 7:17am, p.18 of the moot scenario ,
43 Email from the Respondent to the Applicant dated 28 July 2017 at 4:58pm , p. 19 of the moot scenario,
44 Matsoukis v Priestman & Co. [1915] 1 K.B. 681
45 The Cerulean Mail dated 25 July 2017, p.35 of the moot scenario,
46 Email from the Respondent to the Applicant dated 28 July 2017 at 4:58pm , p. 19 of the moot scenario
Team 26 Memorandum for the Respondent
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C. SEAWORTHINESS OF THE VESSEL
1. Respondent did not breach the contractual duty of Seaworthiness
47. The Respondent obliged to provide the ship “warranted tight, staunch and strong and in every way
fitted for the Voyage”47. This Clause actually express the term of seaworthiness, in which the
Respondent has a duty to provide the ship in a seaworthy state. The wording also emphasizes that
the Vessel must be in every way fitted for the service and this was elaborated The Derby by stating
that the owners were bound to provide a vessel which was physically fit to encounter all such perils
as would be reasonably foreseeable. 48
48. Furthermore, a seaworthy vessel is defined in Sadler v. Dixon49 as one which is in a ‘fit state as to
repairs, equipment, crew and in all other respects, to encounter the ordinary perils of the sea’. Under
article III (1) of HRV also places the obligation of seaworthiness on the Respondent “(a) make the
ship seaworthy…fit and safe for their reception, carriage and preservation”. In this case, the
Respondent exercised due diligence to make the ship seaworthy. It could be seen from looking the
fact of the case, solar flares could be considered as force majeure because the emission of the solar
flares were unforeseen and beyond the control of the parties. In the Newspaper of the Cerulean Mail
on 25th of July 2017, it is said that the solar flares is regarded unprecedented international
emergency and thereby it may be said this event is not considered as ordinary peril of the sea
anymore.
49. As per Sadler v. Dixon, the Respondent has contractual duty to make the Vessel seaworthy by
making it able to encounter merely ordinary peril of the sea, not the events which are considered as
unordinary perils of the sea. The Respondent does not have duty to make the Vessel confront with
everything that happens at sea, especially something unexpected and unforeseeable therefore the
communication system of the Vessel is knocked out by solar flares which does not render the Vessel
unseaworthiness.
47 Clause 1, The Charterparty, p.4 of Moot scenario
48 Alfred C Toepfer Schiffahrtsgesellschaft GmbH v Tossa Marine Co Ltd (The Derby) [1985] 2 Lloyd’s Rep 325 49 Sadler v Dixon (1841) 151 E.R.1303
Team 26 Memorandum for the Respondent
22
50. Regarding equipment of the Vessel, it could be said that the Respondent also exercised due diligence
to make the equipment properly because after being knocking out by the solar flares, the Vessel still
did not require any repair and still be fit to continue the Voyage as confirmed in the email on 28th
of July 2017 at 4:58pm. As could be seen that the Vessel is still considered seaworthiness state and
do not affect the Voyage. Also, the Respondent exercised due diligence to keep and care properly
the Cargo by waterproofing the container up to five (5) days in order that the Cargo could be in a
good condition and order during the transit and could not be affected by ordinary danger of the sea.50
D. CARGO ON BOARD THE VESSEL: DAMAGE OF THE CARGO NOT CAUSED BY
“UNSEAWORTHINESS”
1. Damage to the Cargo was not caused by ‘Unseaworthiness’
51. Although the Respondent notified the Applicant of the estimated time of arrival of the Vessel and
the Cargo was available for collection on 29 of July 2017 at 20:42, however at this time but the
Applicant’s agent still not show up to collect the Cargo.51
52. Article 1.(e) of the HVR also requires that “the carriage of Cargo covers the period from the time
when the Cargo is loaded onto the Vessel until the time it is discharged from the Vessel”. It means
the obligation of the carrier’s is finished after the Respondent discharges the Cargo. As a result, the
Respondent unloaded the Cargo and fulfilled his contractual delivery obligation under the
Charterparty when discharging the Cargo at the Discharge Port and then passing the Barcode Pass
(“BAC”) to the Applicant on 30 of July 2017 at 24:02.
53. In addition, pursuant to the statement of expert opinion of Simon Webster stated the cargo was
damaged sometime in the 24 hours from 4:30 am on 30 July 2017. The Cargo was damaged because
the sealant used to seal the containers whilst exceptionally strong, is designed for short-term (up to
5 days) use only.52
50 Letter dated 22 July 2017 from the Applicant to the Respondent , p. 2 of the Moot scenario. 51 Email from the Respondent to the Applicant dated 29 July 2017 at 4:28pm , p. 22 of the Moot scenario. 52 Statement of expert opinion of Simon Webster, p.43 of the moot scenario.
Team 26 Memorandum for the Respondent
23
54. As can be seen from the statement of expert opinion of Simon Webster, ingress of water to the Cargo
happened after the Respondent discharged the Cargo.53 At the time of arrival of the Vessel at
Discharge Port, no water could have possibly get into the Cargo. Hence, if the Cargo was damaged
after the Respondent delivers the goods, the Respondent would not be held liable for such damages.
Because the Respondent has no any duties in respect of the Cargo after discharging according to
Article 1(e) of HRV.
55. Also, regarding the cause of loss, the Cargo was lost due to prolonged use of the sealant and also
unprecedented rainfall, and not caused by the lack of seaworthiness of the Vessel. If the Applicant
had taken delivery of the Cargo on the date the Cargo was discharged and available for collection,
the damage would not have occurred.
56. In any event, if the Respondent’s vessel is unseaworthy, the Respondent is only liable for such loss
if there is a want of due diligence to make Vessel seaworthy and its consequences as per HVR article
IV(1).
57. In conclusion, where there is no causal link between the loss and the Respondent’s obligation under
the contract of carriage and HVR obligation of want of due diligence, the Respondent is not liable.
E. MARITIME LIEN
58. The Applicant is not entitled to a maritime lien and specifically: (A) The Applicant is not entitled
to a lien over the Vessel for the crew’s wages; and (B) the Applicant cannot receive the benefit of a
maritime lien over the Vessel on behalf of the crew; and (C) in any event the Applicant did not
validly exercise a maritime lien over the Vessel.
1. The Applicant is not entitled to a lien over the Vessel for the crew’s wages.
59. The Applicant is not entitled to maritime lien over the Vessel because: (a) the Applicant cannot
hold a maritime lien over the Vessel in the first place; (b) the Applicant is not entitled to a common
law or statutory lien; (c) the Applicant is not entitled to any form of contractual lien on the vessel
for the wages of the crew.
53 Statement of expert opinion of Simon Webster, p.43 of the moot scenario.
Team 26 Memorandum for the Respondent
24
60. A maritime lien can come to existence for unpaid crew wages.54 The Applicant cannot claim a
maritime lien for matters that involve third parties, i.e. the crew.
61. According to common law, maritime liens are not transferrable rights.55 Where an agent pays off
outstanding crew wages which arose before the arrest, he does not then become entitled to the
maritime lien which the crew wages normally attract.56 To add, in The Ships Hako Fortress57,
confirms that maritime liens are a personal right, not transferable nor able to be revived after they
are extinguished.
2. The Applicant did not receive the benefit of a maritime lien over the Vessel exercised by
the crew
62. The Applicant cannot receive the benefit of a maritime lien over the Vessel exercised by the crew,
as (a) the crew did not assign a contractual right of lien to the Applicant; (b) the crew did not exercise
a right of lien as a trustee for the Applicant; (c) in any event, the Charterparty does not include a
clause of a maritime lien over the Vessel for purposes of crew wages.
63. The Applicant cannot exercise any contractual right of lien purported to be held by the crew unless
the crew assigned this right to the Applicant by an express provision.
64. Any purported assignment was not valid at law. Section 8(3) of Supreme Court Act 1981, section
21(6) requires any assignment to be by way of express notice in writing to the Respondents. No
such notice was given to the Respondents.
65. On 19 July 2017, a memo internal was sent to the Applicant by Will Gardner (General Counsel)
asking for a payment to be made of the amount of USD 100,000 into a separate bank account for
the crews’ wages. This email did not evince any intention to assign the Crew’s contractual right of
lien to the Applicant.58
66. Furthermore, the Crew did not exercise a right of lien as a trustee for the Applicant since an intention
54 Section 20(2)(o), Supreme Curt Act 1981
55 The Petone [1917] P 198; The Leoborg (No 2) (fn 112)
56 M. Tsimplis, ‘Maritime Law’ Textbook 4th Edition p.514
57 Programmed Total Marine Services Pty Ltd v The Ships Hako Fortress (2013) FCAFC 21
58 Memo Internal, p.1 of the Moot Scenario,
Team 26 Memorandum for the Respondent
25
for the creation of a trust is absent, therefore an express trust in favour of the Applicant cannot be
inferred.
3. The Applicant did not validly exercise a lien over the Vessel as no notice was given to the
Respondents and the crew.
67. In order for a lien to be validly exercised, ‘a person claiming a lien must either claim it for a definite
amount or give the owner [of the Vessel] particulars from which he himself can calculate the amount
for which the lien is due’.59 The Applicant failed to give such notice to the Respondents and
consequently the Applicant cannot validly exercise the lien over the Vessel.
68. Further, a failure to make any demand at all invalidates the exercise of the lien.60
F. DELIVERY
1. Barcode Pass constitutes delivery
69. E-mails sent from Respondent to Applicant states that in case Applicant fails to take accept delivery
in the usual manner, the Cargo will be collected by using the Barcode Pass.61 When the Applicant
informed62 that Madam Dragonfly was due to berth and the Cargo should be collected, the Applicant
had shown no protest. In spite of Respondent’s efforts to ensure the Cargo is delivered in the usual
manner, the Applicant had failed to be delivered in person. Therefore, the Respondent had to provide
access by the Barcode Pass in order to keep the Cargo safe and sound.
70. The Barcode Pass amounts to the delivery of goods. This can be understood merely by reading the
document63 sent to the Applicant. Apart from the e-mail correspondence stated above, the Barcode
Pass clearly states that because the Applicant failed to take delivery of the Cargo, in spite of the fact
that the Respondent had waited at the discharge port, delivery of the Barcode Pass constitutes
delivery of the Cargo. Not only the Applicant raised any queries about the Barcode Pass, it also used
59 Albemarle Supply Co Ltd v Hind & Co [1928] 1 KB 307, 318 (Scrutton LJ).
60 Cooke et al Voyage Charterers (Informa Law, 4th edition, 2014) [17.25]. 61 Access authority pass, p. 23 of the Moot scenario, 62 Email from the Respondent to the Applicant dated 29 July 2017 at 4:28pm , p. 22 of the Moot scenario,
63 Access authority pass, p. 23 of the moot scenario,
Team 26 Memorandum for the Respondent
26
it to access the Cargo with no other questions. Therefore, it is clear that delivery of the Cargo was
valid and Applicant was bound by the Barcode Pass and its terms.
71. At last, by reference to Glenore case on the judge’s findings, the Applicant was unaware that any
electronic release system was in use. In present case, it distinguishes Glencore from its facts due to
that the Respondent sent an email on 29 of July 2017 informing the Applicant about the use of BAC.
Therefore, the Applicant was aware that in case of the Applicant failing to collect the Cargo at the
time of discharge then the Cargo was to be placed at the Discharge Port and would be accessed the
gate using the barcode given64. Also, when the Barcode Pass was granted to Applicant through email
on 29 of July 201, Applicant did not deny accepting such delivery and accepted document without
raising any issue on such system.
G. DEMURRAGE IS ACCRUED
1. Deviation and Delay are because of force majeure
72. In reply to Applicants submissions under clause 15(b) of the Charterparty65, as stated above, in
deviation66 and force majeure67 contentions, the deviation and delays were due to force majeure
events and hence Respondent cannot be made accountable for such delays. Therefore, the
Respondent is not liable for any breach of law namely, CANA, 2012 and the HVR.
2. Calculation of laytime
(i) Laytime starts when vessel arrives at Port - Clause 8(c)(ii)
73. The Clause 8(c)(ii)68 provides for time counting for laytime for Discharge is “(calculated form when
vessel arrives at the discharge port until all cargo has been discharged) is .5 WWD”. So, as per
clause 8(c)(ii), the time would start when the Vessel arrives at the Discharge Port.
74. The Respondent states that the Vessel entered the Discharge Port at 7:00. This is evidenced by the
fact that Vessel was made to wait 100 nautical miles away from the Discharge Port. The storm
64 Ibid para.59
65 Clause 15(b), The Charterparty, p.8 of Moot scenario
66 See para. 18
67 See para. 32
68 Clause 8(c) (ii), The Charterparty, p.6 of Moot scenario
Team 26 Memorandum for the Respondent
27
caused delays and there was nowhere to berth. The Discharge Port instructed the Vessel to wait at
that location since 7:00.69
75. The 100 nautical miles outside the Discharge Port is in essence considered to be within the port
limits. The test to determine when a vessel has arrived under a Charterparty was addressed in the
Johanna Olderndorff70. Although, it is worth mentioning that the Johanna case is distinguished
from this case, it is still relevant to discuss that the area where the port authority exercise its powers
to regulate the movement and conduct of the ships would indicate the limits of the port where no
particular law determines them.71
76. In the present case, it is evident that there was no express reference to the Charterparty as to the
nature of an arrived ship nor it was specified that the Vessel need to be within port limits to constitute
her arrival.
77. In the Arundel Castle72, the meaning of the ‘port’ in laytime definitions intend to reflect the wider
concept of the port area explained in the Johanna with reference now outside ‘the legal, fiscal or
administrative area’ of the port. Although, it was held that for a valid notice of readiness the vessel
needs to be within the legal limits of the port, given the factual matrix of the case, Knowles J may
have reached a different conclusion if the material had not been limited to an Admiralty chart.
78. In the present case, there is no reference to a geographical map of the Discharge port and
accordingly, laytime must start counting when the Vessel arrived at location where it was ordered
to wait from 7:00. This is well supported by a reference to the Laytime Definitions under
Charterparties 2013 where it states that ‘port limits’ include “any area within which vessels are
customarily asked to wait by the port authorities and over which the port authorities exercise
authority or control over the movement of shipping”73
(ii) Laytime ends after 0.5 WWD
69 Email from the Respondent to the Applicant dated 29 July 2017 at 8:58, p. 20 of the moot scenario.
70 Oldendorff (EL) & Co GmbH v Tradax Export S.A. [1973] 2 Lloyd's Rep 285
71 Ibid
72 Navalmar UK Ltd v Kalemaden Hammeddeler Sanayi ve Ticaret As [2017] EWHC 116 (Comm)
73 BIMCO’s Laytime Definitions for Charterparties 2013.
Team 26 Memorandum for the Respondent
28
79. Pursuant to Clause 8(c)(ii), laytime was permitted 0.5 WWD for discharging. WWD is defined by
lord Goddard as a working day is a length of time which, according to the port custom are usually
worked at the port and the presence of the word “weather” seems to qualify it so that from the
number of hours which would be the ordinary hours of the port to be deducted the length of time
during which the weather interferes with the work.74
80. The Respondent waited at the Discharge Port for the Applicant’s agents to come and collect the
Cargo. The Respondents informed the Applicant clearly by email dated 29 July 2017 at 16:28 that
Respondent will wait till 24:00 for delivery of cargo, if collection is not done then the attached BAC
will allow them access to gate where the goods were placed. Further, it was informed that demurrage
will accrue from the time of arrival.75 Accordingly, laytime started counting at 7:00 in the morning
and continued until 24:00 i.e. 12pm in midnight until which The Vessel waited at Discharge Port.
3. Demurrage is charged as per Charterparty
81. Pursuant to Clause 9 and box 24, demurrage was agreed to be charged at rate of USD 20,000/hour.
In view of above facts, Respondent provides the following timeline for claiming demurrage:
Date Day Time Remark
29/7/17 Saturday 7:00 The Vessel was ordered to wait 100 nm outside port –
laytime starts
29/7/17 Saturday 19:00 Laytime expires
29/7/17 Saturday 19:00 to
24:00
Vessel waited until midnight at Discharge Port.
Time Lost 5 hours USD 20,000/hour x 5 = USD 100,000
82. The Respondent states that, Applicant was informed about The Vessel being stuck 100 nautical
miles outside port vide email dated 29 July 2017 at 8:58. Respondent again emailed Applicant on
74 Clause 9, Box 24, The Charterparty, p.3 of Moot scenario
75 Email from the Respondent to the Applicant dated 29 July 2017 at 4:28pm, p.22 of the Moot scenario
Team 26 Memorandum for the Respondent
29
29 July 2017 at 16:28 stating that vessel will berth in thirty (30) minutes i.e. by 16:58 and can deliver
cargo in approximately two (2) hours i.e. by 7:58. In same email Respondent informed that they will
wait until 24:00 for the Applicant to come and collect the Cargo failing which the Applicant can
access goods through provided barcode access at Discharge Port. Finally, the Applicant did not
receive the goods until 24:00. Accordingly, the Respondent has appropriately charged five (5) hours
of demurrage at rate of USD 20,000/hour pursuant to Clause 9 and Box 24 for time starting from
19:00 until midnight i.e. 24:00.
H. DAMAGES
1. The Applicant is not entitled to Damages
83. The Applicant is (i) not entitled to damages for the damaged Cargo: (ii) costs and expenses for the
Replacement Coffee; and (iii) expenses on account of the Settlement Payment.
(i) The Applicant is not entitled to damages for the damaged Cargo
84. The Respondent denies the allegation in paragraph 6 of the Points of Claim. Further on, there was
no water damage to the Cargo at the time of its delivery pleaded in paragraph 43.
(ii) The Applicant is not entitled to damages for costs and expenses for the Replacement
Coffee
85. The Respondent admits that the Applicant has made the Replacement Coffee Payment but otherwise
does not admit paragraph 8 of the Points of Claim.
(iii) The Applicant is not entitled to expenses on account of the Settlement Payment
86. The Respondent admits that the Applicant has made the Settlement Payment but does not admit the
allegations in paragraphs 9 and 10 of the Points of Claim.
2. The Respondent is entitled to Damages
(i) Damage to the hull:
Team 26 Memorandum for the Respondent
30
87. The vessel was hit by the storm on 29 July 2017. In order to avoid the storm, the Crew had to drop
the anchor but when the crew tried to lift the anchor, it tangled on a coral bed and caused damage
to the hull.76
88. The damage was caused due to the occurrence of the storm, which is a force majeure event and was
beyond control of the owner. The crew had taken reasonable steps to minimize the damage by
cutting the anchor but tangled anchor had already caused substantial damage to the hull.77
89. Under Clause 19, the Applicant must contribute towards damages as General Average caused due
to unforeseen events or events not in control of Respondent. 78 Where temporary repairs are affected
to a ship at a Port of Loading, call or refuge, for the common safety, or of damage caused by general
average sacrifice, the cost of such repairs shall be allowed as general average.79
90. The amount to be allowed as general average for damage or loss to the ship, her machinery and/or
gear caused by a general average act shall be the actual reasonable cost of repairing or replacing
such damage or loss, subject to deductions in accordance with Rule XIII.80
91. Without prejudice to the above statements, the Applicant had breached the safe port warranty. The
Discharge Port was considered to be unsafe due to the occurrence of the storm and notwithstanding
the effort of the Crew to minimise the damage, the severe nature of the weather condition at the
Discharge caused the damage to the hull. Therefore, the Respondent states that the weather condition
at the port was a ‘characteristic of the port’ as discussed in The Ocean Victory81 and hence the
Applicant is in breach of the safe port undertaking.
(ii) Agency fees paid at the port of Spectre
76 Email from the Respondent to the Applicant dated 29 July 2017 at 8:58am, p. 20 of the Moot scenario.,
77 Ibid
78 Clause 19, The Charterparty, p.10 of Moot scenario
79 York Antwerp Rules 2004 RULE XIV (a)
80 York Antwerp Rules 2004 RULE XVIII
81 Gard Marine and Energy Limited v China National Chartering Company Limited and another (2017)
Team 26 Memorandum for the Respondent
31
92. The agency fees paid at the Spectre were due to the deviation and the deviation had taken place
because of the occurrence of the solar flares, which knocked out the communication system of the
vessel, and eventually the Vessel had to deviate to Spectre. 82
93. Since the agency fees at Spectre incurred additional expenses and were beyond control of the
Respondent, such expense is incurred an allowable general average. 83 Therefore, is allowable as
General Average under Rule F of YAR 2004.
(iii) Electronic release system (The Barcode Pass) at the Discharge Port
94. The Respondent informed the Applicant regarding the attached barcode required for collection of
the cargo. As the Applicant did not protested in this regard and collected the Cargo, therefore they
had consented to the electronic release of the Cargo.84
95. Since there were no agents of the Applicant to collect the Cargo the Respondent had to deliver it at
the Discharge Port and authority access authority pass was issued for collection of the cargo.85 Had
there been any agents of the charterer to collect the cargo the electronic release would not be
required, no expenses for the same could have incurred, and thus this expense shall be borne by the
Applicant.
I. LIMITATION OF LIABILITY
1. Under the Hague-Visby Rules
96. Without prejudice to defences and counter-claims submitted; in accordance with HVR Art. IV 5 (a),
unless the nature and value of such goods have been declared by the shipper (Applicant) before
shipment and inserted in the bill of lading, neither the carrier (Respondent) nor the ship (Madam
Dragonfly) shall in any event be or become liable for any loss or damage to or in connection with
the goods in an amount exceeding 2 units of account per kilogram of gross weight of the goods lost
82 Email from the Respondent to the Applicant dated 26 July 2017 at 2:32 pm, p.17 of the Moot scenario.
83 York Antwerp Rules 2004 RULE F
84 Email from the Respondent to the Applicant dated 29 July 2017 at 8:58am, p. 20 of the moot scenario.
85 Email from the Respondent to the Applicant dated 29 July 2017 at 4:28pm, p. 22 of the moot scenario.
Team 26 Memorandum for the Respondent
32
or damaged. In accordance with the current case, there can be no argument regarding valid
declaration of the goods (the Cargo).
97. First of all, it is important to underline that by invoking limitation, the Respondent is not deemed to
have admitted liability in respect of claims brought against it.86 In the present case, it is clear that
the parties (the Applicant and the Respondent) intended not to issue a bill of lading. In spite of the
fact that HVR Art. IV (5)(a) expressly stated that declaration of value must be under a bill of lading,
all arguments regarding valid declaration of value should be rejected due to absence of the bill of
lading.
98. Notwithstanding the defences and counter claims, Art. IV (5)(c) of HVR states that only where the
number of goods packed within the container are not enumerated would the container be capable of
constituting the package. The weight of the Cargo is 70,000 kilograms (kgs) of coffee beans87. This
is to be calculated from 2 units of account(SDR) per kg. Thus, in regards to HVR conclusion for
limitation of liability is $202,720 and claims exceeding this amount should be rejected.
99. In accordance with HVR in order to lose the right to limit liability is that the loss must have resulted
from personal act or omission of the party liable, and it must also be established that he (Respondent)
either intended such loss or was reckless as to the consequences of his act or omission in the sense
that he realized that such a loss would probably result. Unless these three conditions are fulfilled
there is no logical argument regarding the limitation. Because the Applicant could not evidence
there was an act or omission of the Respondent that was intended to cause such loss or reckless
behavior done by realizing such a loss would probably result. Therefore, lack of concrete evidence,
all claims regarding the Respondent not being able to minimize risks and limit liability, should be
rejected.
100. In addition to the package limitation given by HVR in relation to Cargo claims, the Respondent is
entitled to rely also on a global limitation figure based on the Vessel’s tonnage which in this case is
86 Caspian Basin Specialised Emergency Salvage Administration v Bouygues [1977] 2 Lloyd’s Rep. 507.
87 Box 4, The Charterparty, p.3 of Moot scenario
Team 26 Memorandum for the Respondent
33
2,000 GRT. 1976 Convention on Limitation of Liability88 for Maritime Claims (LLMC) Art. 4
provides that; “… a person liable shall not be entitled to limit his liability if it is proved that the loss
resulted from his personal act of omission, committed with the intent to cause such loss, or recklessly
and with knowledge that such loss would probably result.” Again in 1976 LLMC the limitation is a
right given to the ship-owner (Respondent) and cannot be overridden unless such conditions are
satisfied which, as explained above, have not been satisfied.
101. LLMC provides that the limitation figures under 1996 Protocol, which Australia is a contracting
state is that; for vessels not exceeding 2,000 GRT it is 1.510.000 SDRs which can be roughly
calculated as USD 2,115.00089. Since, the above limitation is legally applicable to Respondent, the
same must be maximum liability of Respondent if at all held liable, as adjudicated by Tribunal.
Therefore, Tribunal must reject Applicant’s package-based calculations.
102. The burden of proof lies with the Applicant 90. However, the Applicant has not presented any
evidence in order to override limitation of liability. Because there is no solid evidence of the
Respondent acting in a way that his liability cannot be limited, it should be decided that limitation
of liability should be applicable.
103. As explained previously, the Respondent is not in fundamental breach of the Charterparty. Even if
it were, limitation of liability would still be valid as it was held The Kapitan Petko Voivoda91,
seriousness of breach would no longer be considered as sole criteria for determining whether
limitation of liability would apply. Also, “in any event” means that limitation of liability would be
applicable to a breach irrespective of the seriousness of its nature92.
104. Consequently, all claims set out by the Applicant should be denied and if decided otherwise
limitation of liability should be applied to all claims.
88 1976 Convention on Limitation of Liability for Maritime Claims (LLMC).
89 See https://www.imf.org/external/np/fin/data/rms_sdrv.aspx, entered on 8 April 2018.
90 HVR, Art. IV (5) (a)
91 [2003] 2 Lloyd’s Rep. 1.
92 Photo Production v Securicor Transport [1980] AC 827, The Happy Ranger [2002] 2 Lloyd’s Rep 364.
Team 26 Memorandum for the Respondent
34
PART IV: PRAYER FOR RELIEF:
For the reasons set out above the Respondent request the tribunal to declare that:
1. The deviation and delay is caused due to the force majeure events.
2. The Applicant has waived the alleged breach of the Charterparty.
3. The Applicant is not entitled to maritime lien.
4. Respondent is not liable for any damages claimed for the damaged Cargo.
5. The Respondent is not liable to the Applicant for alleged damages in the amount of
USD30,200,000 comprising:
(a) USD15,750,000 on account of the damaged Cargo;
(b) USD9,450,000 for the Replacement Coffee Payment;
(c) USD5,000,000 on account of the Settlement Payment;
6. In addition, the Respondent requests the tribunal to allow the following counterclaim in favor of
Respondent:
(a) freight;
(b) agency fees at the Port of Spectre, to which the Vessel was required to deviate during the
voyage;
(c) the cost of repairs to damage caused to the Vessel when avoiding dangerous weather
conditions;
(d) agency fees at the Discharge Port;
(e) demurrage; and
(f) Use of electronic access systems at the Discharge Port.
7. Further, the Respondent also prays for any equitable remedy that the Tribunal deems fit.