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1 8 T H I N T E R N A T I O N A L M A R I T I M E L A W A R B I T R A T I O N M O O T , 2 0 1 7

U N I V E R S I T A S G A D J A H M A D A

TEAM 12

MEMORANDUM FOR RESPONDENT

ON BEHALF OF AGAINST

Inferno Resources SDN BHD Furnace Trading PTE LTD

RESPONDENT/CHARTERERS CLAIMANT/OWNERS

Idoncare Berjaya Utama PTY. LTD.

RESPONDENT/SUB-CHARTERERS

COUNSEL

ALDIO PRIMADI

PRIDIERO ANUGERAH

INDIRA JAUHARA

JOHANNA DEVI

MICHELLE ALRIANI

NADYA AZKIA

TEAM 12 MEMORANDUM for RESPONDENT

i

TABLE OF CONTENTS

INDEX OF AUTHORITIES .......................................................................................................... III

LIST OF ABBREVIATIONS ......................................................................................................... XI

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

I. RESPONDENT DID NOT CONDUCT REPUDIATORY BREACH ........................................... 2

A. RESPONDENT’S CONDUCT DOES NOT CONSTITUTE AS A REPUDIATORY BREACH ......... 2

B. RESPONDENT’S CONSISTENT COOPERATION TO EXECUTE THEIR CHARTERPARTY DOES

NOT AMOUNT TO RENUNCIATION ........................................................................................ 3

C. CLAIMANT’S WRONGFUL TERMINATION AMOUNTED AS REPUDIATORY BREACH ....... 4

II. CLAIMANT DID NOT POSSESS THE RIGHT OF LIEN OVER THE CARGO ......................... 5

A. THE INCORPORATING CLAUSE OF B/L DID NOT SPECIFICALLY REFER TO VCP ............ 5

B. THE CONSTRUCTION OF THE B/L IS NOT IN ADHERENCE WITH THE TERMS OF VCP ..... 7

C. EVEN IF THE B/L REFERRED TO THE VCP, THE LIEN CLAUSE FAILED TO BE

INCORPORATED ................................................................................................................... 7

III. ALTERNATIVELY, CLAIMANT FAILED TO EXERCISE VALID LIEN OVER THE CARGO . 8

A. CLAIMANT FAILED TO INSERT SPECIFIC AMOUNT OF CLAIM IN ITS NOTICE OF LIEN ... 9

B. CLAIMANT’S NOTICE OF LIEN IS CONSTRUCTED WITH WRONGFUL BASIS ................... 9

1. Detention Charges are not Sums Due under VCP .............................................. 10

2. Incurring Damages for Detention does not Entitle Claimant to Exercise Lien .. 10

IV. CLAIMANT IS NOT ENTITLED TO EXERCISE LIEN OVER SUB-FREIGHT ..................... 11

A. CLAIMANT SHALL NOT BE ENTITLED TO EXERCISE THE LIEN AS THERE WAS NO

EXPRESS CONTRACTUAL PROVISION ................................................................................. 11

B. ALTERNATIVELY, THE NOTICE WAS INVALIDLY EXERCISED ...................................... 12

C. GRANTING CLAIMANT THE SUB-FREIGHT AMOUNTS TO UNJUST ENRICHMENT ......... 13

V. RESPONDENT IS NOT LIABLE FOR THE INDEMNIFICATION OVER THE ALLEGED COSTS

INCURRED BY CLAIMANT IN EXERCISING ITS LIEN ............................................................ 14

A. CLAIMANT’S SUPPOSED RIGHT TO INDEMNITY IS NOT VESTED WITHIN THE VCP. .... 14


ii

B. IN THE ALTERNATIVE, EVEN IF CLAIMANT SUFFERED LOSS AND EXPENSES, IT IS NOT

RECOVERABLE. .................................................................................................................. 15

VI. THE TRIBUNAL DOES NOT HAVE THE POWER TO GRANT CLAIMANT THE INTERIM

MEASURE TO SELL THE CARGO .......................................................................................... 15

A. THE CIRCUMSTANCE AT HAND REQUIRES THE HIGH COURT INSTEAD OF THE

TRIBUNAL TO ASSESS CLAIMANT’S URGENT APPLICATION .............................................. 16

1. The Presence of Third Party Renders the Tribunal an Inappropriate Forum ....... 16

2. The Nature of Claimant’s Urgent Application Renders the Tribunal Ineffective .. 17

3. The Tribunal is Incapable of Securing the Relief Sought ...................................... 18

B. ALTERNATIVELY, THE INTERIM MEASURE TO ORDER SALE OF CARGO DOES NOT FALL

WITHIN THE TRIBUNAL’S POWER UNDER .......................................................................... 18

VII. IT IS NEITHER NECESSARY NOR JUST FOR THE CARGO ON BOARD THE MV TARDY

TESSA TO BE SOLD PENDENTE LITE.................................................................................... 20

A. THE CONDITION OF THE CARGO DOES NOT CONSTITUTE A NECESSARY SITUATION TO

SELL THE CARGO PENDENTE LITE ..................................................................................... 20

B. LIBERTY TO SELL THE CARGO IS INCONSISTENT WITH THE RIGHTS OF LIEN .............. 22

C. CLAIMANT’S ASSERTION TO SELL THE CARGO PENDENTE LITE IS UNJUST ................ 23

PRAYER FOR RELIEF ............................................................................................................... 25


iii

INDEX OF AUTHORITIES

Cases Referred in Page:

Aegnoussiotis Shipping Corporation v. A/S Kristian Jobsens Rederi (The

“Aegnoussiotis”) [1977] 1 Lloyd’s Rep 268

4

American Cyanamid Co v Ethicon Ltd [1975] AC 396 5,23

Anglo-Polish Line v Vickers (1924) 19 Lloyd’s Rep 89,121 14,23

Alan Auld Associates Ltd v Rick Po Allard Associates [2008] EWCA Civ 655;

[2008] BLR 419

2

Albacruz (Cargo Owners) v Albazero (Owner) [1977] A.C. 774 841 13

Albemarle Supply Co. Ltd v. Hind & Co [1928] 1 K.B. 307 8

Bangladesh Chemical Industries Corp v. Hendry Stephens Shipping Co Ltd

(The “SLS Everest”) [1981] 2 Lloyd’s Rep. 389

6

Bank of Scotland plc v. Owners of MV “Union Gold” [2013] EWHC 1696 18,24

BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783 13

Brice v Bannister (1878) 3 QBD 569 11

British Westinghouse Electric and Manufacturing Co. Ltd v. Underground

Railways Co. of London Ltd [1912] A.C. 673

13

Care Shipping v. Itex Itagrani Export SA (The “Cebu” (No.1)) [1993] QB

1005

5

Care Shipping v. Itex Itagrani Export SA (The “Cebu” (No.2)) [1993] QB 1 4

Caresse Navigation Ltd v. Office National de l’Electricite [2014] 1 Lloyd’s

Rep 337

7

Cascade Shipping Inc v Eka Jaya Agencies (Pte) Ltd [1993] 1 SLR 980;

[1993] SGCA 7

11

Cetelem SA v Roust Holdings Ltd (“Cetelem”) [2005] 1 WLR 3555 19

Challenger Technologies Limited v Courts (Singapore) [2015] SGHC 218 23

Chembulk Trading LLC v. Chemex Ltd [2003] AMC 1441, 1444–1445 (E.D.

La. 2003)

10

China Pacific SA v Food Corporation of India (The “Winson”) [1982] AC

939

23

Comeau’s Sea Foods Limited v. Frank & Troy (The) [1971] F.C. 556 24


iv

Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 12

Dahl v Nelson (1881) 6 App Cas 38 2

Den Norske Bank ASA v Owners of the ship “Margo L” [1997] HKEC 767 23,24

Denney, Gasquet & Metcalfe v Conklin [1913] 3 KB 177 11

Dry Bulk Handy Handling Inc & Aor v Fayette International Holdings Ltd &

Aor (The “Bulk Chile”) [2012] 2 Lloyd’s Rep 594; [2013] EWCA Civ 184

11

Dunlop & Sons v. Balfour, Williamson & Co [1892] 1 QB 507 (CA) 10

Emilia Shipping Inc v State Enterprise for Pulp & Paper Industries [1991] 1

SLR(R) 411

20

Federal Commerce & Navigation Co Ltd v. Molena Alpha Inc (The “Nanfri”)

[1978] QB 927

4

Finmoon Ltd v. Baltic Reefers Management Ltd [2012] 2 Lloyd’s Rep. 388 4,5

Finora Co., Inc. v. Amitie Shipping Ltd., 54 F.3d 209, 1995 A.M.C. 2014 (4

Cir. 1995)

11

Five Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 19,20,22

Franklin Lumber v. Essington II (The) (The “Essington II”) 2005 FC 95,

[2005] F.C.J. No. 125

21

Freeth v Burr (1873-74) LR 9 CP 208 2

Garbis Maritime Corporation v. Philippine National Oil Co (The “Garbis”)

[1982] 2 Lloyd's Rep. 283

4

Garnac Grain Company Incorporated v HMF Faure & Fairclough Ltd and

Others [1968] AC 1130

14

General Billposting Co v. Atkinson [1909] AC 118 (HL) 1

Glencore Grain Ltd v Goldbeam Shipping Inc [2002] EWHC 27 13,15

Heyman v Darwins Ltd [1942] AC 356 1

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA

Civ

1

India Steamship Co. v. Louis Dreyfus Sugar Ltd (The “Indian Reliance”)

[1997] 1 Lloyd’s Rep. 52

10

Inman Steamship Co. Ltd v. Bishchoff [1882] 7 App.Cas. 670 5

International Marine Banking Co. v. Dora [No. 2] (The)

[1977] 1 F.C. 603

21


v

J. Gadsen Pty Ltd v Strider 1 Limited [1990] 20 NSWLR 57 12

Jaks (UK) Ltd v Cera Investment Bank SA [1988] 2 Llyod’s Rep 89, 93 2

K/S A/S Seateam Co. v. Iran National Oil Co. and others

(The “Sevonia Team”) [1983] 2 Lloyd's Rep 640

4

Kallang Shipping S.A. v. AXA Assurances Senegal (The “Kallang” (No.2))

[2009] 1 Lloyd’s Rep. 124

4

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA

61

1

London Arbitration No. 5/92 LMLN 321 9

London Arbitration No. 13/87 (1987) LMLN 205 14,23

London Arbitration No. 16/91 LMLN 307 8

Lyle Shipping v. Cardiff Corp [1900] 2 Q.B 638 13,14

Maldives Airports Co Ltd v. GMR Male International Airport Pte. Ltd [2013]

SGCA 16

15,17,22,23

Maritime Corp. v. Holborn Oil Ltd (The “Miramar”) [1984] AC 676 4,7

Metall Market v Vitorio Shipping LTd (The “Lehmann Timber”) [2013]

EWCA Civ 650

14

Moller v Jecks (1865)19 CBNS 332 14,15

Molthes Rederi Aktieselskabet v Ellerman’s Wilson Line Limited [1927] 1 K.B

710 at 716 - 717

10

NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] SGCA

5

15

Ocean Cargo Lines, Ltd. v North Atlantic Marine Co., 227 F. Supp. 872

(S.D.N.Y. 1964)

13

Omak Maritime Ltd v Mamola Challenger Shipping Co (The “Mamola

Challenger”) [2010] EWHC 2026

12

Paragon Shipping Pte Ltd v Freight Connect (S) Pte Ltd [2014] SGHC 165 13

Partenreederei M/S 'Heidberg' v Grosvenor Grain and Feed Co. Ltd [1994] 2

Lloyd's Rep 287

4

PT First Media TBK v. Astro Nusantara International BV and Others [2013]

SGCA 57

16

Quark Ltd v. Chiquitta Unifruti Japan Ltd and Others (The “Vinson”) [2005] 4,6


vi

QBD 677 (Com Ct)

Rashtriya Chemicals v Huddart Parker (The “Boral Gas”) [1988] 1 Lloyd’s

Rep 192

13,14

Re Brumark Investments Ltd [2001] UKPC 28 10,11

Ross T Smyth & Co Ltd v TD Bailey Son & Co [1940] 3 All ER 60 1

Siboti K/S v. BP France SA (The “Siboti”) [2003] 2 Lloyd’s Rep 364 7

Sirius International Insurance Co. v. FAI General Insurance Ltd., [2004] 1

W.L.R. 325

6

SK B&T Pte. Ltd. v. The Owners of the Ship or Vessel “SILVER MOON”

WA-27NCC-14-12/2016

24

SK Shipping PTE Ltd v Petroexport Limited [2009] EWHC 2974 3

Somes v. British Empire Shipping Co (1858) El.Bl. & El.353(QB) 13

Sotrade Denizcilik v. Amadou Lo (The “Duden”) [2009] 1 Lloyd’s Rep. 145 5

Steedwood Carriers Inc of Monrovia v. Evimeria Compania Naviera SA of

Panama (The “Agios Giorgis”) [1976] 2 Lloyd's Rep 192

4

Thomas and Co Ltd v. Portsea Steamship Co Ltd. [1912] A.C 1 6 7

The "Annefield" [1971] 1 Lloyd's Rep. 1 7

The “Asia Star” [2010] SGCA 12 14

The "Dwima 1" [1996] 2 SLR 670; [1996] SGHC 83 18,19

The”San Nicolas” [1976] 1 Lloyd’s Rep 8 (CA) 4

The “Sea Urchin” [2014] 2 SLR 646;[2014] SGHC 24 23

The "Titan Unity" No. 2 [2014] SGHCR 4 16

The “Turtle Bay” [2013] SGHC 165 20,22,24

Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 1

Vivergo Fuels Ltd v Redhall Engineering Solutions Ltd [2013] EWHC 4030

(TCC)

3

Wehner v Dene Steam Shipping Co. (“Wehner”) [1905] 2 K.B. 92 21 T.L.R

339

10

Western Bulk Shipowning III A/S v Carbofer Maritime Trading APS & Others

[2012] EWHC 1224

9,11

Zim Integrated Shipping Services Ltd v. European ContainerKS [2013]

EWHC 3581 (Comm)

19


vii

Books Referred in Page:

Andrew Grubb et al, The Law of Contract, (LexisNexis Butterworths, 3rd ed.,

2007)

1

D.Jackson, Enforcement of Maritime Claims, (LLP, 3rd ed., 2000) 10

Donal Nolan & Andrew Robertson, Rights and Private Law (Hart Publishing,

2012)

19

Eva Lomnicka, Hugh Beale, Louise Gullifer, Michael Bridge, The Law of

Security and Title-Based Financing (Oxford University Press, 2012)

22

Felix W.H. Chan, Jimmy J.M. Ng, Bobby K.Y. Wong , Shipping and

Logistics Law: Principles and Practice in Hong Kong (Hong Kong University

Press, 2002)

24

Gareth Jones and Lord Goff, The Law of Restitution (Sweet & Maxwell, 6th

ed., 2002)

12,13

Gary B. Born, International Commercial Arbitration: Commentary and

Materials (Kluwer Law International, 2nd ed., 2001)

16,23

Hardinge Stanley Giffard Halsbury, Halsbury's Laws of England: Fourth

Edition (Volume 28) (Butterworth, 1979)

10,14

Hugh Beale, Chitty in Contracts (Sweet & Maxwell Ltd, 29th ed., 2004) 2

James Edelman and Simone Degeling, Unjust Enrichment in Commercial

Law ((Thomson Reuters, 2008)

12

Jill Poole, Textbook on Contract Law (Oxford University Press, 13th ed.,

2016)

1

John Schofield, Laytime and Demurrage (CRC Press, 7th ed., 2015) 2

Judith Sihombing, Goods: Sales and Securities (Hong Kong University Press,

3rd ed.,1997)

19

Julian Cooke, Tim Young, Michael Ashcroft, Andrew Taylor, John Kimball,

David Martowski, LeRoy Lambert, Michael Sturley Voyage Charter,

(Informa Law, 4th ed., 2014)

10,14,23

Lowndes & Rudolf, The Law of General Average and the York-Antwerp Rules

(Sweet & Maxwell, 13th ed., 2008)

14

Melis Özdel, Bills of Lading Incorporating Charterparties (Hart Publishing,

2015)

4,5

Michael Pryles and Michael J. Moser, Asian Leading Arbitrators’ Guide to 16

https://philpapers.org/s/Donal%20Nolan

https://philpapers.org/s/Andrew%20Robertson

https://www.abebooks.com/servlet/SearchResults?an=Hardinge+Stanley+Giffard+Halsbury&cm_sp=det-_-bdp-_-author


viii

International Arbitration (JurisNet, 2007)

Michael Wilford. Time Charters, (Informa Law, 1st Ed, 1978) 6

Norman Palmer, Palmer on Bailment (Sweet & Maxwell, 3rd ed., 2009) 14

Peter Birks, An Introduction to the Law of Restitution (Oxford University

Press, 1989)

12,13

Simon Baughen, Shipping Law (Routledge,2012) 23

Yvonne Baatz, Maritime and Transport (Routledge, 3rd ed., 2014) 13

Journals Referred in Page:

Arthur Rosett, Partial, Qualified, and Equivocal Repudiation of Contract,

(1981) 81 Columbia Law Review 93

2

Marc D. Isaacs, Arrest of Maritime Property – Mechanics and Emergencies

(National Judicial Institute/Canadian Maritime Law Association Joint

Seminar in Maritime Law, April 15, 2011)

21

Paul Myburgh, Satisfactory for Its Own Purposes: Private Direct

Arrangements and Judicical Vessel Sales (NUS Centre for Maritime Law

Working Paper 17/03, March 2017)

21,22,23,24

Ronald Wong, Interim Relief in Aid of International Commercial Arbitration

(2012) 24 Singapore Academy of Law Journal

16,18

Legal Instruments Referred in Page:

Association for International Arbitration, Interim Measures in Commercial

Arbitration (Maklu, 2007)

16

English Arbitration Act 1996 16

Chartered Institute of Arbitrators, International Arbitration Practice

Guideline: Applications for Interim Measure

<http://www.ciarb.org/docs/default-source/ciarbdocuments/guidance-and-

ethics/practice-guidelines-protocols-and-rules/international-arbitration-

guidelines-2015/2015applicationinterimmeasures.pdf?sfvrsn=26>

17,23

Singapore Arbitration Act (Chapter 10) Revised Edition 2002 13

Singapore Banking and Finance Law (Chapter 22)

<http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-

law/chapter-22>

22

http://www.ciarb.org/docs/default-source/ciarbdocuments/guidance-and-ethics/practice-guidelines-protocols-and-rules/international-arbitration-guidelines-2015/2015applicationinterimmeasures.pdf?sfvrsn=26




ix

Singapore Chamber of Maritime Arbitration Rules 3rd Edition (October 2015) 16

Singapore Contract (Rights of Third Parties) Act (Chapter 53B) 16

Singapore International Arbitration Act (Chapter 143A) 17,18,19

Singapore Law of Credit and Security

<http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-

law/chapter-11>

12

Singapore Supreme Court Of Judicature Act (Chapter 322) Rules Of Court 18

United Nations Commission On International Trade Law (UNCITRAL)

Model Law on International Commercial Arbitration (1985)

15

Miscellanous Referred in Page:

Charles Lockwood, Financial obligations under contract and repudiatory

breach: In What Circumstances Do Grounds for Termination Arise?

<http://www.incelaw.com/en/knowledge-bank/publications/financial-

obligations-under-contract-and-repudiatory-breach-in-what-circumstances-

do-grounds-for-termination-arise>

3

Coal Cargoes – Know the Dangers

http://www.westpandi.com/globalassets/loss-prevention/loss-prevention-

safety-alerts/loss-prevention-safety-alert---coal-cargoes---know-the-

dangers.pdf;

23

Greg Rowan, Tom Leech QC, Robert Moore, Terminating Contract: When

Can You Call It Quits? (2017)

3

John Mackle, Up A Creek Without A Boat Saying "No" to Contractual

Obligations <http://www.clarionsolicitors.com/blog.up-a-creek-without-a-

boat->

3

Lawrence Teh, Rodyk & Davidson LLP, Judicial Sale of vessels in Asia-

Pacific Common Law Jurisdictions (Comite Maritime International

Conference, Beijing, 14 to 19 October 2012)

22

Morgan Lewis Stanford, An Introductory Guide to Arbitration in Singapore

<https://www.morganlewis.com/~/media/files/publication/marketing%20ma

terial/supplemental%20info/mlstamford_arbitrationsingapore_june15.ashx>

18

Price Rate of Australian Thermal Coal

<http://www.indexmundi.com/commodities/?commodity=coal-

21

http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-11

http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-11

http://www.incelaw.com/en/knowledge-bank/publications/financial-obligations-under-contract-and-repudiatory-breach-in-what-circumstances-do-grounds-for-termination-arise



http://www.westpandi.com/globalassets/loss-prevention/loss-prevention-safety-alerts/loss-prevention-safety-alert---coal-cargoes---know-the-dangers.pdf



https://www.morganlewis.com/~/media/files/publication/marketing%20material/supplemental%20info/mlstamford_arbitrationsingapore_june15.ashx

https://www.morganlewis.com/~/media/files/publication/marketing%20material/supplemental%20info/mlstamford_arbitrationsingapore_june15.ashx


x

australian&months=60&commodity=coal-australian>

Steven Lim, Interim Relief in International Arbitration

<http://www.siac.org.sg/2013-09-18-01-57-20/2013-09-22-00-27-

02/articles/444-interim-relief-in-international-arbitration>

17, 23

http://www.siac.org.sg/2013-09-18-01-57-20/2013-09-22-00-27-02/articles/444-interim-relief-in-international-arbitration

http://www.siac.org.sg/2013-09-18-01-57-20/2013-09-22-00-27-02/articles/444-interim-relief-in-international-arbitration


xi

LIST OF ABBREVIATIONS

¶ / ¶¶ Paragraph/ Paragraphs

§ Section

AC Appeal Cases

All ER All England Law Reports

AMC American Maritime Cases

Art. Article

B/L Bill of Lading

Cargo 84,000.052 mt of Australian Steam Coal

Case File IMLAM Moot Scenario 2016

Ch. Chapter

Claimant Furnace Trading Pte Ltd

CP Charterparty

ELR European Law Review

EWCA Civ Court of Appeal of England and Wales Decisions

(Civil Division)

EWHC England and Wales High Court

EWHC (Comm) High Court (Commercial Decision)

EWHC (TCC) High Court (Technology & Construction)

FCAFC Federal Court of Australia Full Court

IAA Singapore International Arbitration Act

(Chapter 143A)

i.e. Namely

KB Law Reports King’s Bench

Lloyd’s Rep Lloyd’s Law Reports


xii

LMLN Lloyd’s Maritime Law Newsletter

Master Captain Tan Xiao Ming of the M.V. Tardy Tessa

mt Metric Tonnes

NSWLR New South Wales Law Review

O. Order

p. / pp. Page/Pages

r. Rule

QBD Law Reports Queen’s Bench Division

Respondent Inferno Resources Sdn Bhd

SCMA Rules Singapore Chamber of Maritime Arbitration Rules 3rd

edition (October 2015)

SDNY United States District Court for the Southern District

of New York

SGCA Singapore Court of Appeal

SGHC Singapore High Court

SGHCR Singapore High Court Registrar

Shipowner Imlam Consignorist GmbH

SIAC Singapore International Arbitration Center

SLR Singapore Law Reports

Sub-charterer Idoncare Berjaya Utama Pty. Ltd

TCP Time Charterparty

UNCITRAL Model Law UNCITRAL Model Law on International

Commercial Arbitration (1985)

USD United States Dollars

VCP Voyage Charterparty

Vessel M.V. Tardy Tessa

STATEMENT OF FACTS

1 The M.V. Tardy Tessa (“Vessel”) is initially time chartered (“TCP”) by Imlam Consignorist

GmbH (“CMI”) to Furnace Trading Pte Ltd (“Claimant”), which was then voyage chartered

(“VCP”) by Claimant to Inferno Resource Sdn Bhd (“Respondent”) for the carriage of

84,000.052 mt Australian Steam Coal (the “Cargo”) that belongs to Idoncare Berjaya Utama

Pty. Ltd (“Sub-Charterer”).

2 During the course of voyage, Claimant repeatedly sent reminders to Respondent in respect of

the payment of freight and the nomination of the discharge port. Respondent has informed

Claimant that a delay in performing such obligation is inevitable since the Sub-Charterer had

yet to remit the sub-freight and nominate the discharge port. Irrespectively, Respondent

managed to nominate Busan as the discharging port, since the Chinese ports were under

congestion. Respondent also promised that freight would be paid after the discharge of Cargo

in Busan.

3 However, Claimant countered Respondent’s willingness to perform its obligations with an

ambiguous exercise of lien on Cargo, spurious exercise of lien on sub-freight, and unlawful

termination of the VCP. Claimant then brings such matter to the attention of SCMA Tribunal

(“Tribunal”) in its attempt to enforce its untenable legal remedies.

4 Further exacerbating the issue, Claimant then filed an urgent application to the Tribunal to

obtain the liberty to sell the Cargo pendent lite.


2

I. RESPONDENT DID NOT CONDUCT REPUDIATORY BREACH

5 Claimant deemed that Respondent’s inability to punctually remit freight and nominate

discharge port amounts to renunciation and thus entitled Claimant to terminate the VCP based

on repudiatory breach.1 Respondent asserts otherwise because Respondent’s cooperation to

execute the Charterparty does not amount to renunciation [A] and repudiatory breach [B]. This

means, Claimant has conducted wrongful termination, which shall be held as a repudiatory

breach [C].

A. Respondent’s Conduct does not Constitute as a Repudiatory Breach

6 A repudiatory breach exists where there is a total and complete inability to perform the

obligation,2 and it should not “be lightly inferred.”3 Such breach shall be so fundamental that it

deprives the innocent party from its “substantial benefit of the contract.”4

7 Respondent’s delay in remitting the freight does not deprive Claimant’s substantial benefit.

Claimant’s substantial benefit under the VCP lies in Respondent’s payment of freight. Despite

Respondent’s inability to punctually remit the freight, Respondent still ensured its ability to

remit the freight to Claimant and guarantee that “payment will be made at disport after cargo

discharge.”5 This means, the delay will not deprive Claimant toward its benefit in receiving the

freight, as Claimant will obtain the freight after the completion of voyage. Further, the fact that

Claimant is still able to pay its monthly hire to CMI6 affirms that Respondent’s delay in

remitting the freight is trivial to Claimant.

8 A delay in nominating the discharge port did not deny Claimant’s benefit under the VCP. As

the owners in the VCP, Claimant’s primary concern is the completion of voyage in a

1 Case File, p. 65 2 Universal Cargo Carriers Corp v. Citati [1957] 2 QB 401 (Devlin J), ¶ 436; Heyman v. Darwins Ltd [1942]

AC 356 (Lord Porter), ¶ 397; Koompahtoo Local Aboriginal Land Council v. Sanpine Pty Ltd [2007] HCA 61

(Gleeson CJ); Jill Poole, Textbook on Contract Law (Oxford University Press, 13th ed., 2016) p. 314; Andrew

Grubb et al., The Law of Contract (LexisNexis Butterworths, 3rd ed., 2007) p. 1493 3 Ross T Smyth & Co Ltd v. TD Bailey Son & Co [1940] 3 All ER 60 (Lord Wright); General Billposting Co v.

Atkinson [1909] AC 118 4 Hong Kong Fir Shipping Co Ltd v. Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ (Diplock LJ) 5 Case File, p. 68 6 Ibid., p. 36


3

reasonable period of time.7 This served as Respondent’s basis in nominating Busan because it

knew that nominating one of the listed Chinese ports would have delayed the voyage, “at least

a month and possibly many months,”8 due to congestion.9 Further, had it continued its voyage,

demurrage may have accrued. However, seeing Claimant’s refusal of Busan as the discharge

port, Respondent then nominated Ningbo,10 but this was unfortunately followed by the sudden

termination of the VCP.11 Irrespective of Respondent’s delay in performance, it did not fail to

avoid deprivation of Claimant’s benefit.

B. Respondent’s Consistent Cooperation to Execute their Charterparty does not Amount

to Renunciation

9 Renunciation must be total, absolute, and unequivocal that the party expresses its total inability

to perform its obligation.12 The expression of a reasonable impression shall be clear when it can

be drawn that the breaching party “has the intention to abandon the contract”.13

10 Here, Respondent’s mere delay in remitting the freight and nominating the discharge port shall

not amount as a total and absolute failure in carrying out its duty under the VCP.14 It is

submitted that Respondent always remained ready and willing to fulfill its obligations under the

VCP. Its cooperation was depicted through its continuous correspondence with Claimant,

which denied the existence of the renunciation as follows:15

7 Steward Boyd et al., Scrutton on Charterparties and Bills of Lading (Sweet and Maxwell, 21st ed., 2008) ¶ 127 8 John Schofield, Laytime and Demurrage (CRC Press, 7th ed., 2015) p. 186; Dahl v. Nelson (1881) 6 App Cas

38 (Lord Watson) 9 Case File, p. 57 10 Ibid., p. 67 11 Ibid., p. 68 12 Arthur Rosett, Partial, Qualified, and Equivocal Repudiation of Contract (1981) 81 Columbia Law Review

93; Hugh Beale, Chitty on Contracts (Sweet & Maxwell Ltd, 29th ed., 2004), ¶¶ 24-018; Alan Auld Associates

Ltd v. Rick Po llard Associates [2008] EWCA Civ 655; [2008] BLR 419 (Lord Justice Tuckey); Freeth v. Burr

(1873-74) LR 9 CP 208 (Lord Coleridge); Jaks (UK) Ltd v. Cera Investment Bank SA [1988] 2 Llyod’s Rep 89,

93 (Justice Moore-Bick) 13 Freeth v. Burr (1873-74) LR 9 CP 208, 213 (Lord Coleridge) 14 Alan Auld Associates Ltd v. Rick Po llard Associates [2008] EWCA Civ 655; [2008] BLR 419 (Lord Justice

Tuckey) 15 SK Shipping PTE Ltd v. Petroexport Limited [2009] EWHC 2974 (Justice Flaux); John Mackle, Up A Creek

Without A Boat? Saying No to Contractual Obligations, (Clarion, 2010).


4

a) Respondent was responsive and proactive in researching and gathering information

regarding congestion in China;16

b) As an alternative to avoid congestion in China, Respondent requested Busan as the

discharge port, ensured its safety,17 and was even willing to bear the extra costs;18

c) Respondent is under the impression that Busan served as a legitimate port due to its safety

and the fact that Busan is the location for the re-delivery of the Vessel;19

d) Following Claimant’s refusal to have Busan as the discharge port, Respondent nominated

Ningbo as the discharge port.20

11 Accodingly, Respondent’s efforts evince that it was willing to fight ardently to fulfill its

obligations under the VCP. Thus, the Tribunal should find that Respondent’s alleged breaches

shall not be amounted as renunciation due to its exhibited cooperation.

C. Claimant’s Wrongful Termination Amounted as Repudiatory Breach

12 A termination based on a wrongful allegation of being in repudiatory breach, is in itself a

repudiatory breach. Claimant shall be held liable toward the losses and damages since its

wrongful termination to VCP amounts as a repudiatory breach.21 Claimant purported that it

has lawfully terminated the VCP. However, as indicated above, Respondent's conduct is

neither to be regarded as renunciation nor repudiatory breach. This means, Claimant has

conducted wrongful termination, which in itself amounted as repudiatory breach.

16 Case File, p. 57 17 Ibid., pp. 57, 60 18 Ibid., p. 58 19 Ibid., p. 2 20 Ibid., p. 67 21 Vivergo Fuels Ltd v. Redhall Engineering Solutions Ltd [2013] EWHC 4030 (TCC) (Justice Ramsey); Charles

Lockwood, Financial Obligations under Contract and Repudiatory Breach: In What Circumstances Do

Grounds for Termination Arise?, (Ince & Co, 2014); Greg Rowan, Leech Tom QC, Robert Moore, Terminating

Contract: When Can You Call It Quits? (2017)


5

II. CLAIMANT DID NOT POSSESS THE RIGHT OF LIEN OVER THE CARGO

13 Claimant purported that it has validly executed its right of lien over the Cargo based on the

VCP,22 and futher seeks to acquire benefit from Sub-Charterer based on the B/L. Respondent

submits the contrary.

14 Imposition of the VCP Lien Clause is only extendable to the Sub-Charterer if the terms under

VCP is incorporated into the B/L.23 Here, Claimant’s right to exercise lien over the Cargo is

lacking because the Parties had no intention to incorporate the terms of VCP to the B/L.

15 Intention of the parties is paramount in determining which charterparty shall be incorporated to

the B/L,24 as it projects what the parties have agreed beforehand.25 Intention of the parties can

be reflected through the incorporating clause in the B/L.26

16 In this case, the Parties did not intend to incorporate the terms of the VCP to the B/L since the

incorporating clause of the B/L did not specifically refer to the VCP [A], and the construction

of the B/L is not in adherence with the terms of the VCP [B]. Even if the B/L refers to the VCP,

the Lien Clause failed to be incorporated [C].

A. The Incorporating Clause of B/L did not Specifically Refer to VCP

17 Clear reference of a bill of lading to a charterparty is required if the vessel is being chartered

under two or more charterparties.27 Here, the Vessel is subject to two charterparties – TCP and

VCP with each distinctive terms. Respondent submits that the B/L failed to provide specific

reference to the VCP, thus its terms shall not be incorporated to the B/L.

22 Case File, pp. 63, 75 23 Steedwood Carriers Inc of Monrovia v. Evimeria Compania Naviera SA of Panama (The “Agios Giorgis”)

[1976] 2 Lloyd's Rep 192; Aegnoussiotis Shipping Corporation v. A/S Kristian Jobsens Rederi (The

“Aegnoussiotis”) [1977] 1 Lloyd’s Rep 268 24 Meliz Ozdel, Bills of Lading Incorporating Charterparties (Hart Publishing, 2015) p. 59; Miramar Maritime

Corpn v. Holborn Oil Ltd (The “Miramar”) [1984] AC 676 (Diplock LJ); K/S A/S Seateam Co. v. Iran National

Oil Co. and others (The “Sevonia Team”) [1983] 2 Lloyd’s Rep 640, ¶ 644; Garbis Maritime Corporation v.

Philippine National Oil Co. (The “Garbis”) [1982] 2 Lloyd’s Rep 283, ¶ 288; The Heidberg [1994] 2 Lloyd’s

Rep 287, ¶ 309-11; Quark Ltd v. Chiquitta Unifruti Japan Ltd and Ors [2005] QBD 677 (Com Ct) (The

“Vinson”) (Andrew Smith J) 25 Meliz Ozdel, above n. 24, p. 59; Miramar Maritime Corpn v. Holborn Oil Ltd (The “Miramar”) [1984] AC

676 (Diplock LJ); Care Shipping v. Itex Itagrani Export SA (The “Cebu” (No. 2) [1993] QB 1 (Steyn J); The

San Nicholas [1976] 1 Lloyd’s Rep 8 (CA) 26 Federal Commerce & Navigation Co Ltd v. Molena Alpha Inc (The” Nanfri”) [1978] QB 927 27 Finmoon Ltd v. Baltic ReefersManagement Ltd [2012] 2 Lloyd’s Rep. 388; Kallang Shipping S.A. v. AXA

Assurances Senegal (The “Kallang” (No.2) [2009] 1 Lloyd’s Rep. 124; Sotrade Denizcilik v. Amadou Lo (The

“Duden”) [2009] 1 Lloyd’s Rep. 145


6

18 Inserting the date of the conclusion of the charterparty,28 or serial code of the charterparty29

have been deemed sufficient to provide a specific reference to charterparty in the case of chain

charterparties. Applying that basis in our case, the B/L will be required to refer to a charterparty

dated 1st September 201630 and/or charterparty coded COAL-OREVOY31 to provide a specific

reference to VCP.

19 However, the B/L only stipulates “all terms and conditions, liberties, and exceptions, of the

Charterparty dated as overleaf […] are herewith incorporated.”32 It is clear that the mere

wording of “Charterparty dated as overleaf” is insufficient for specific reference from the B/L

to the VCP dated 1st September 2016 and coded as COAL-OREVOY charterparty.33 The

absence of specific dates or serial code in the B/L shall evince the parties’ intention to not

incorporate the VCP terms.

20 Moreover, Claimant cannot rely on the wording of “freight payable as per charterparty” to

provide a reference to the VCP. ‘Freight’ shall not be associated with a voyage charterparty

since the word ‘freight’ was “frequently used in the wider sense to include what was called

‘time freight or ‘time chartered freight.”34 This means it covers the form of remuneration from

the employment of vessel under a time charter and not necessarily under a voyage charter.35

Thus, the VCP terms shall not be incorporated to the B/L due to the absence of a specific

reference to the VCP and Claimant’s inability to rely on the mere wording of ‘freight’ as

reference to the VCP.

28 Finmoon Ltd v. Baltic Reefers Management Ltd [2012] 2 Lloyd’s Rep. 388 29 Sotrade Denizcilik v. Amadou Lo (The “Duden”) [2009] 1 Lloyd’s Rep. 145 30 Case File, p. 20 31 Ibid., p. 24 32 Ibid., p. 43 33 Meliz Ozdel, above n. 24 34 Care Shipping Corporation v. Latin American Shipping Corporation (The “Cebu” (No.1) [1983] 1 Lloyd’s

Rep. 302 (Lloyd J), pp. 1010 – 1111 35 Inman Steamship Co. Ltd v. Bishchoff [1882] 7 App.Cas. 670 (Lord Blackburn), p. 678; Michael Wilford.

Time Charters, (Informa Law, 1st Ed, 1978) p. 222


7

B. The Construction of the B/L is not in Adherence with the Terms of VCP

21 VCP shall not be incorporated to the B/L since the form of the B/L is inconsistent with the

terms of the VCP. Incorporation of the charterparty to the bill of lading depends on its

comformity to the specifiied form within the charterparty.36

22 This was the position in The Vinson,37 where Andrew Smith J refused the incorporation of the

contract of affreightment’s terms because the bill of lading was in the ‘Congenbill’ form,

instead of the ‘Refeer Bill of Lading’ form that the contract of affreightment called for.

23 Likewise, VCP terms shall not be incorporated since the B/L is not in the form of ‘COAL-

OREVOYBILL’ as required by the VCP. Clause 25 of the VCP Part II states that “B/L shall be

presented and signed by the Master as per the “COAL-OREVOYBILL” B/L form.”. Here, the

issued B/L was not in the COAL-OREVOYBILL form. It has distinguished format, as well as

distinctive conditions of carriage as follows:

a) COAL-OREVOYBILL provides specific reference to COAL-OREVOY charterparty;

b) COAL-OREVOYBILL requires the insertion of the date of charterparty;

c) Both bills of lading have different General Paramount Clause; and

d) Both bills of lading have different General Average Clause.

24 If it is the true intention of the Parties to incorporate VCP terms, then the Master shall be

presented with COAL-OREVOYBILL form or the Master shall refuse to sign any bill of lading

that is not in form a quo. However, the Master signed the B/L and neither Parties nor the

Master raised any objections. This evinces that the Parties did not intend to have the VCP

referred in the B/L.

C. Even if the B/L Referred to the VCP, the Lien Clause Failed to be Incorporated

25 Assuming but not conceding that the Tribunal finds that the B/L provided reference to the VCP,

Respondent nevertheless submits that the Lien Clause shall not be incorporated. Claimant

36 Bangladesh Chemical Industries Corp v. Hendry Stephens Shipping Co Ltd (The “SLS Everest”) [1981] 2

Lloyd’s Rep. 389; Adamastos Shipping Co. Ltd. v. Anglo-Saxon Petroleum Co [1959] AC 133, 158; Sirius

International Insurance Co. v. FAI General Insurance Ltd. [2004] 1 WLR 325 37 Quark Ltd v. Chiquitta Unifruti Japan Ltd and Ors (The “Vinson”) [2005] QBD 677 (Com Ct) (Andrew

Smith J).


8

cannot rely that such a broad wording of “all terms and conditions, liberties and exceptions of

the [VCP] are herewith incorporated” in the B/L suffice to incorporate the VCP Lien Clause to

the B/L.38

26 Courts have found that general words of incorporation such as “all terms, conditions, and

exception of charterparty” will incorporate only those provisions of the charterparty that are

directly germane to the shipment. 39 Provisions that will be classified as directly germane to the

shipment are those provisions that without its existence, the voyage is unable to be executed.

This includes the conditions of shipment, delivery of the goods, or the payment of freight.40

27 In this vein, Respondent submits that the Lien Clause is not directly germane to the shipment.

This is because even with the absence of a lien clause, a master can still bring its vessel into

voyage. Provisions that are not directly germane to the shipment require specific reference for

incorporation.41 This is the reason why the Arbitration Clause was specifically mentioned in the

B/L, since the Arbitration Clause is not germane to the shipment and without specific

reference; such clause was unable to be incorporated.42 Likewise, if the Parties intended to

incorporate the VCP Lien Clause, then the B/L should contain specific reference to the Lien

Clause.

III. ALTERNATIVELY, CLAIMANT FAILED TO EXERCISE VALID LIEN OVER THE CARGO

28 Even if the VCP is incorporated to the B/L, Claimant is still not entitled to retain possession

over the Cargo. This is because its execution of lien upon the Cargo is not in conformity with

the VCP as Claimant failed to specify the amount in its notice of lien [A]. Further, Claimant’s

exercise of lien over the cargo is invalid due to a wrongful basis [B].

38 Case File, pp. 42, 44, 46 39 Thomas v. Portsea SS. Co. [1912] AC 1,6; Miramar Shipping v. Holborn Oil (The “Miramar”) [1984] AC

676; The Dolphina [2012] Lloyd’s Rep. 304 40 Caresse Navigation Ltd v. Office National de l’Electricite [2014] 1 Lloyd’s Rep 337 (Males J); Siboti K/S v.

BP France SA (The “Siboti”) [2003] 2 Lloyd’s Rep 364 (Gross J); Thomas v. Portsea SS. Co. [1912] A.C 1,6;

Miramar Shipping v. Holborn Oil (The “Miramar”) [1984] A.C 676; The "Annefield" [1971] 1 Lloyd's Rep. 1

(Lord Denning) 41 Ibid. 42 Caresse Navigation Ltd v. Office National de l’Electricite [2014] 1 Lloyd’s Rep 337 (Males J)


9

A. Claimant Failed to Insert Specific Amount of Claim in its Notice of Lien

29 A person claiming a lien must claim it for a definite amount.43 This allows the lienee to be

aware of the exact amount of payment that is sufficient to discharge the lien.44 Failure to send a

valid notice means no answer to a claim of lien.45 In London Arbitration No. 16/91,46 the

tribunal held that although the owners had the right to exercise a lien, they had not validly

exercised that right until they had given notice of lien to the charterers together with sufficient

information to allow them to ascertain the amount of their indebtedness to the owners.47

30 In its notice of lien, Claimant merely stated “[Claimant] incurred and is continuing to incur

substantial losses, cost, expenses and damages” without claiming any sum that Respondent

need to pay. Claimant also failed to provide information to enable Respondent to self-calculate

the sum for which the lien is due. Respondent is well-aware of its outstanding freight in the

amount of USD 771,120,48. However, Respondent did not possess any knowledge as to how to

calculate Claimant’s “losses, cost, expenses and damages” that it purported to incur. Thus,

Respondent is relieved from making a tender to Claimant’s lien due to Claimant’s vagueness in

delivering its notice of lien.

B. Claimant’s Notice of Lien is Constructed with Wrongful Basis

31 To exercise its lien right of lien over the Cargo under VCP, Claimant is obliged to establish the

existence of “freight, deadfreight, demurrage and general average contribution due to

[Claimant] under this [Voyage Charterparty].48 In its notice of lien,49 Claimant purported that it

incurs “substantial losses, cost, expenses and damages”. However, the explanation as to what

types of “losses, cost, expenses, and damages” that it seeks to claim is omitted.

43 Albemarle Supply Co. Ltd v. Hind & Co [1928] 1 K.B. 307, at p. 318 (Scrutton L.J) 44 Ibid. 45 Ibid. 46 London Arbitration No. 16/91 LMLN 307, p. 3 47 Ibid. 48 Case File, p. 31 49 Ibid., p. 65


10

32 Despite Claimant’s vagueness in notifying its exercise of lien, there were indications that

Claimant had the intention to exercise lien over the Cargo for the daily drifting charges as

damages for detention.50 However, Claimant is deprived from its right to exercise lien over the

Cargo since detention charges are not sums due under VCP [1] and incurring damages for

detention does not entitle Claimant to exercise lien under VCP [2].

1. Detention Charges are not Sums Due under VCP

33 The right to exercise a lien is limited only to certain sums that are due under a charterparty that

contains the invoked lien clause.51 Claimant heavily relied on the daily detention charges of

USD 10,000 per day52 or USD 91,666.67 per 20th October 2016 to justify its action to exercise

the lien over the Cargo.53 However, this argument shall not stand.

34 Owner cannot exercise their lien under VCP to secure sums due under the TCP.54 Since

Claimant is relying upon Lien Clause under VCP, this means the sums shall be due under the

VCP. However, the detention charges amounted to USD 10,000 per day demanded by

Claimant is not a sum due under the VCP, but instead under the TCP, in particular Clause 10(a)

of TCP.

35 The said clause states that “The Charterer shall pay for the use and hire of the said Vessel at

the rate of USD 10,000 per day”.55 This is the duty of Claimant – as the Charterer of TCP – to

pay hire to CMI, not the Respondent’s under the VCP. Hence, relying on sums due under TCP

will render Claimant unable to invoke the Lien Clause under the VCP.

2. Incurring Damages for Detention does not Entitle Claimant to Exercise Lien

36 Even if the Tribunal finds that damages for detentions are sums due under VCP, Respondent

nevertheless submits that incurring detention charges does not give right to Claimant to

exercise lien under VCP. This is because the scope of VCP Lien Clause only covers “freight,

50 Case File, p. 35 51 Western Bulk Shipowning III A/S v. Carbofer Maritime Trading APS & Ors [2012] EWHC 1224, ¶ 26 - 29 52 Case File, pp. 53 - 66 53 Case File, p. 66 54 London Arbitration No. 5/92 LMLN 321, p. 4 55 Case File, p. 5


11

deadfreight, demurrage, and general average contribution due under [VCP]”.56 Constituting

detention charges as a ground to exercise lien shall extinguish Claimant’s exercise toward the

lien since it relies on wrongful basis.57

37 Further, Claimant cannot consider that the word ‘demurrage’ under VCP Lien Clause extended

to ‘damages for detention’. The two are not the same “if a charter contains a provision giving a

lien for demurrage […] this does not usually entitle the shipowner to exercise a lien over the

cargo [for] detention”58 Thus, since damages for detention is not within the coverage of the

VCP Lien Clause, Claimant is not entitled to exercise lien over the Cargo by relying on

damages for detention.

IV. CLAIMANT IS NOT ENTITLED TO EXERCISE LIEN OVER SUB-FREIGHT

38 In addition to Claimant’s unlawful exercise of lien over the Cargo, Claimant also attempted to

execute a lien over the sub-freights. However, Claimant shall not be entitled to exercise the lien

as there was no express contractual provision [A]. Furhter and alternatively, the notice was

invalidly exercised [B], and granting the Sub-Freight would amount to unjust enrichment [C].

A. Claimant shall not be Entitled to Exercise the Lien as there was no Express Contractual

Provision

39 The entitlement of lien on sub-freights is strictly contractual-based.59 Unlike a lien on cargo,60 a

lien on sub-freight is a right given solely by contract from the charterer to the owner, in which

the owner would not otherwise have.61

56 Case File, p. 31 57 Julian Cooke et al., above n.59, ¶ 8-75 58 Ibid.; Gray v. Carr [1891] 1 QB 625 (CA); Dunlop & Sons v. Balfour, Williamson & Co [1892] 1 QB 507

(CA) 59 Wehner v. Dene Steam Shipping Co. (Wehner) [1905] 2 K.B. 92, 21 T.L.R 339 (Channell LJ) ¶ 340; Chembulk

Trading LLC v. Chemex Ltd., [2003] AMC 1441, 1444–1445 (E.D. La. 2003); India Steamship Co. v. Louis

Dreyfus Sugar Ltd (The “Indian Reliance”) [1997] 1 Lloyd’s Rep. 52 (Rix J); Care Shipping Corporation v. Itex

Itagrani Export S.A. [1993] QB 1; Re Brumark Investments Ltd [2001] UKPC 28 (Lord Millett); Molthes Rederi

Aktieselskabet v. Ellermans Wilson Line Ltd [1927] 1 K.B. 710, 717 (Greer, J.); Hardinge Stanley Giffard

Halsbury, Halsbury's Laws of England (Butterworth, 4th ed., Vol. 28, 1979); D. Jackson, Enforcement of

Maritime Claims, (LLP, 3rd ed., 2000), Chp. 18; Julian Cooke et al., Voyage Charter (Lloyd’s Shipping Law

Library, 4th ed., 2014), ¶ 479 60 Halsbury, above n. 59; D. Jackson, above, n. 59 61 Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS & Others (The Western Moscow) [2012]

EWHC 1224 (Christopher Clarke J); Dry Bulk Handy Handling Inc & Aor v. Fayette International Holdings Ltd




12

40 As laid down in Western Moscow,62 involving a long charterparty chain, the specifications of

an explicit lien clause greatly determined the owner’s rights. Pursuant to the lien clause in the

voyage charterparty, the owners were entitled to lien over any sub-hire or sub-freight due under

any sub-charterparties. Juxtaposed, unlike the voyage charterparty between the other parties,

the sub-sub-charterparty provided ‘no lien’, disabling owner’s rights owed from said

charterparty.63

41 On 20th October, 2016, Claimant purported to invoke the Lien Clause under the VCP.64 In the

assumption that Claimant has the right to rely on such clause, VCP did not empower Claimant

to invoke the Lien Clause for sub-freights. The Lien Clause stipulates, “The Owner shall have a

lien on the cargo for freight, deadfreight, demurrage, and general average contribution due to

them under this Charter Party.”65 Indeed, the Lien Clause conferred Claimant the right to lien

over the Cargo for freight, however, not to the extent of Sub-Freights. Therefore, Claimant is

barred to receive sub-freights from the sub-charterer.

B. Alternatively, the Notice was Invalidly Exercised

42 A valid notice of lien requires accuracy and sufficiency in the details provided.66 Accurate and

sufficient details include, but not limited to specifications of legal basis; amount(s) due; and

registration of sub-freight. In the case at hand, Claimant failed to fulfill all above requirements

in sending a valid notice of lien over the sub-freight.

43 Firstly, Claimant failed to provide thorough details of the legal basis for their right to lien over

the sub-freight. In the notice of lien,67 Claimant simply mentioned their “exercise [of] rights

& Aor (The “Bulk Chile”) [2012] 2 Lloyd’s Rep 594 (Andrew Smith J), [2013] EWCA Civ 184; Re Brumark

Investments Ltd [2001] UKPC 28 (Lord Millett); Finora Co., Inc. v. Amitie Shipping Ltd., 54 F.3d 209, 1995

A.M.C. 2014 (4 Cir. 1995) (Chief Judge Ervin) 62 Cascade Shipping Inc v. Eka Jaya Agencies (Pte) Ltd [1993] 1 SLR 980, [1993] SGCA 7 (Lord Denning MR) 63 Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS & Others (The Western Moscow) [2012]

EWHC 1224 (Justice Christopher Clarke) 64 Case File, p. 69 65 Case File p. 31 66 Care Shipping Corporation v. Itex Export S.A (The “Cebu” No.2) [1993] QB (Lord Millett) p. 4; Brice v.

Bannister (1878) 3 QBD 569; Denney, Gasquet & Metcalfe v. Conklin [1913] 3 K.B. 177 67 Case File, p. 66


13

under the CP.” However, Claimant did not provide any specifications of the associated

provision, nor even specifications as to which charterparty it referred to.

44 Secondly, the notice lacked confirmation of the exact amount of sums due. Claimant did not

provide for the dates for which sub-freight became owed, along with the specific nominal

quantity of the sums due.

45 Lastly, the sub-freight must be registered prior to exercising the lien and receiving the amounts

due. For perfection on the enforcement of the lien over sub-freight,68 registration in a public

register is required before Claimant can validly exercise and receive the amounts.69

46 Accordingly, even if the Tribunal were to find that Claimant has a right of lien over the sub-

freight, Claimant’s notice of lien was invalid for it has not provided accurate and sufficient

details of the sub-freight.

C. Granting Claimant the Sub-Freight Amounts to Unjust Enrichment

47 If the Tribunal finds that Claimant is entitled to the lien over the sub-freight as restitution,

Respondent asserts that it would amount to an unjust enrichmnet. Unjust enrichment occurs

when the owners have been enriched by a benefit at the loss of the charterer, and it was unjust

for owners to retain such benefit.70 As in the instant case, granting Claimant the sub-freight

would amount to unjust enrichment as it would enrich Claimant at Respondent’s loss.

48 A party is inevitably enriched whenever they receive money.71 Presently, Claimant not only

seeked indemnification from proceeds of the sale, however, it even extended its claims for sub-

freight. Conducting and being granted such would result to a redundancy as it would not

restitute Claimant, but rather grant it more than entitled.72 Considering that arbitral tribunals

68 Singapore Law of Credit and Security §1.12 69 Ibid. 70 J. Gadsen Pty Ltd v. Strider 1 Limited [1990] 20 NSWLR 57 (Carruthers J); Daebo Shipping Co Ltd v. The

Ship Go Star [2012] FCAFC 156; Omak Maritime Ltd v. Mamola Challenger Shipping Co (The “Mamola

Challenger”) [2010] EWHC 2026; James Edelman and Simone Degeling, Unjust Enrichment in Commercial

Law (Thomson Reuters, 2008); Lord Goff and Gareth Jones, The Law of Restitution (Sweet & Maxwell, 6th

Edition, 2002) p. 14, ¶ 1-012; Peter Birks, An Introduction to the Law of Restitution (OUP, 1989), ¶ 17 71 Lord Goff and Gareth Jones, The Law of Restitution (Sweet & Maxwell, 6th Edition, 2002) p. 18, ¶ 1-018;

Peter Birks, An Introduction to the Law of Restitution (OUP, 1989) p.109; BP Exploration Co (Libya) Ltd v.

Hunt (No 2) [1979] 1 WLR 783 (Goff J) 72 Ocean Cargo Lines, Ltd. v. North Atlantic Marine Co., 227 F. Supp. 872 (S.D.N.Y. 1964)


14

“may award any remedy or relief that could have been ordered by court,”73 including the

power to award restitution,74 Respondent submits that granting Claimant the sub-freight shall

be avoided as to prevent enriching Claimant unjustly.

V. RESPONDENT IS NOT LIABLE FOR THE INDEMNIFICATION OVER THE ALLEGED COSTS

INCURRED BY CLAIMANT IN EXERCISING ITS LIEN

49 Claimant contends that it has suffered losses and expenses as a result of Respondent’s alleged

breach of the VCP. Further, Claimant contends that the breach rendered Respondent liable to

indemnify Claimant. Respondent rejects these contentions because the supposed right to

indemnity is not vested within the VCP [A], and in the alternative, even if Claimant suffered

any losses, it is not recoverable [C].

A. Claimant’s Supposed Right to Indemnity is not Vested Within the VCP.

50 It is submitted that Claimant cannot recover the costs for their supposed loss and expenses

incurred. First and foremost, before claiming for indemnity, such right must be expressly

provided in the according contract between the parties.75

51 In Somes v. British Empire Shipping Co,76 no contractual provision was found in the

charterparty between the two parties, specifically regarding costs recoverable for the exercise

of a lien. Due to its absence, the owners were not recovered for their costs of exercising a

lien.77 Likewise, the VCP lacks such clause. Although indemnity is mentioned, it does not refer

73 Singapore Arbitration Act (Chapter 10) Revised Edition 2002 74 Albacruz (Cargo Owners) v. Albazero (Owner) [1977] A.C. 774 841 (Lord Diplock); British Westinghouse

Electric and Manufacturing Co. Ltd v. Underground Railways Co. of London Ltd [1912] A.C. 673 (Viscount

Haldane LC) 75 Somes v. British Empire Shipping Co (1858) El.Bl. & El.353 (QB) (Campbell J); Lyle Shipping v. Cardiff

Corp [1900] 2 Q.B 638; Rashtriya Chemicals v. Huddart Parker (The “Boral Gas”) [1988] 1 Lloyd’s Rep 192;

Paragon Shipping Pte Ltd v. Freight Connect (S) Pte Ltd [2014] SGHC 165 (Judith Prakash J) p. 25; Yvonne

Baatz, Maritime and Transport p. 172; Glencore Grain Ltd v. Goldbeam Shipping Inc [2002] EWHC 27

(Moore-Bick J) p. 55 76 Somes v. British Empire Shipping Co (1858) El.Bl. & El.353 (QB) (Campbell J) 77 Lowndes & Rudolf, The Law of General Average and the York-Antwerp Rules (Sweet & Maxwell, 13th ed.,

2008), ¶ 30.44, p.608; Norman Palmer, Palmer on Bailment (Sweet & Maxwell, 3rd ed., 2009), p. 745 ¶ 13-052,;

Halsbury, above n. 59, p. 271 ¶ 822; Lyle Shipping v. Cardiff Corp [1900] 2 Q.B 638; Rashtriya Chemicals v.

Huddart Parker (The “Boral Gas”) [1988] 1 Lloyd’s Rep 192


15

to the damages, losses, costs and expenses incurred from exercising a lien.78 Thus, in the

absence of an express contractual provision, Claimant must enforce the lien at its own expense.

B. In the Alternative, Even if Claimant Suffered Loss and Expenses, it is not Recoverable.

52 Not all losses and expenses incurred in exercising the lien as mitigation are recoverable,79

unless such expenses are reasonably incurred.80 Expenses refer to the costs of safeguarding

cargo, namely warehousing costs.81 However, Claimant’s purported expenses are not

recoverable because of the following reasons:

53 First, as outlined in the Asia Star,82 avoided and avoidable losses83 are not recoverable, while

expenses are. Presently, if the Tribunal were to find that Claimant did in fact suffer losses for

exercising lien over the cargo, Respondent submits that such losses constitute as avoided loss

and are hence non-recoverable.

54 Second, it was upheld in Moller v Jecks, “a person cannot recover damages, which have been

caused by their own acts.”84 At the fault of the owners, recovery from the charterers is not

possible as it extinguishes charterers’ liability.85 In the present case, Respondent is not held

liable for either of the alleged breaches because despite its tardiness, Respondent remained

fully ready to alleviate its duties.86 Concluding, Respondent should not indemnify Claimant

over the supposed cost incurred.

VI. THE TRIBUNAL DOES NOT HAVE THE POWER TO GRANT CLAIMANT THE INTERIM

MEASURE TO SELL THE CARGO

55 The Tribunal does not have the power to grant Claimant interim measure to sell the Cargo

because the circumstance at hand requires the jurisdiction of the High Court instead of the

78 Case File, p.31 79 The “Asia Star” [2010] SGCA 12 (Rajah JA), ¶ 24; Harvey McGregor, McGregor on Damages (Sweet &

Maxwell, 17th ed, 2003) p. 217, ¶¶ 7-004, 7-091; Garnac Grain Company Incorporated v. HMF Faure &

Fairclough Ltd and Others [1968] AC 1130 (Lord Pearson), ¶ 1140 80 Ibid. 81 Anglo-Polish Line v. Vickers (1924) 19 LI.L. Rep 89,121 (Bailhache J), ¶ 125; London Arbitration 13/87

(1987) LMLN 205; Moller v. Jecks (1865) 19 CBNS 332; Metall Market OOO v. Vitorio Shipping Ltd (The

“Lehmann Timber”) [2013] EWCA Civ 650 (Justice Popplewell); Julian Cooke et al., above n. 59, ¶ 479 82 The “Asia Star” [2010] SGCA 12 (Rajah JA), ¶ 24 83 Harvey McGregor, above n. 79, p. 217, ¶¶ 7-004, 7-091 84 Moller v. Jecks (1865)19 CBNS 332 85 Glencore Grain Ltd. v. Goldbeam Shipping Inc. [2002] EWHC 27 (Comm) (Mr Justice Moore-Brick, ¶ 56 86 Case File, pp. 58-68


16

Tribunal to assess Claimant’s urgent application [A]. Alternatively, the interim measure to

order sale of Cargo does not fall within the Tribunal’s power under §12(1)(d) of IAA [B].

A. The Circumstance at Hand Requires the High Court Instead of the Tribunal to Assess

Claimant’s Urgent Application

56 The High Court, instead of the Tribunal should possess jurisdiction to assess Claimant’s urgent

application for interim measure. Art. 9 of Model Law 1985 as incorporated by IAA states, “It is

not incompatible with an arbitration agreement for a party to request, before or during arbitral

proceedings, from a court an interim measure for protection and for a court to grant such

measure.”87 Under NCC International,88 in the presence of arbitration agreement, there are

three alternative conditions where court shall have the power to render the interim measure:

when arbitration was inappropriate; ineffective; or incapable of securing the relief sought.89

57 Here, the High Court should possess the power instead of the Tribunal because first, the

presence of third party renders the Tribunal an inappropriate forum [1]. Second, the nature of

Claimant’s urgent application renders the Tribunal ineffective [2]. Third, the Tribunal is

incapable of securing the relief sought [3].

1. The Presence of Third Party Renders the Tribunal an Inappropriate Forum

58 Arbitral tribunal does not have the power to impose and enforce its order to non-party to the

arbitration due to the consensual nature of arbitration.90 Respondent submits that Sub-Charterer

is not a party to the arbitration.

59 Claimant’s conduct of dragging Sub-Charterer as a respondent in the proceeding shall not

automatically render Sub-Charterer a party to the arbitration proceeding. The parties of arbitral

87 UNCITRAL Model Law 1985, Art. 9 88 NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] SGCA 5 (Andrew Phang Boon Leong

JA); Maldives Airports Co Ltd v. GMR Male International Airport Pte Ltd [2013] SGCA 16 (Sundareh Menon

CJ) 89 Ibid. 90 English Arbitration Act 1996, §38(4); Association for International Arbitration, Interim Measures in

Commercial Arbitration (Maklu, 2007), p. 44, ¶ 5.1; Gary B. Born, International Commercial Arbitration:

Commentary and Materials (Kluwer Law International, 2nd ed., 2001) pp. 673; Michael Pryles and Michael J.

Moser, Asian Leading Arbitrators’ Guide to International Arbitration (JurisNet, 2007) p. 237; Ronald Wong,

Interim Relief in Aid of International Commercial Arbitration, (2012) 24 Singapore Academy of Law Journal, ¶¶

21, 27


17

proceeding are those who have consented to the arbitration agreement.91 A non-party to

arbitration agreement can become a joinder third party when such party and all parties to the

proceeding have expressly agreed as to the involvement of such joinder in the proceeding.92

60 In this case, Sub-Charterer is a non-party to the Arbitration Agreement. Albeit having

expressed its consent as to the SCMA Rules,93 Sub-Charterer may become joinder in the

proceeding following express consent from all the parties in the arbitration.94 Respondent,

however has not conveyed its agreement as to the involvement of Sub-Charterer as joinder,

barring Sub-Charterer from becoming a joinder in the proceeding.

61 Having submitted that Sub-Charterer is not a party to the present arbitration, thus, it is

inappropriate for the Tribunal to impose the order enforceable against Sub-Charterer.

2. The Nature of Claimant’s Urgent Application Renders the Tribunal Ineffective

62 Interim orders for urgent application shall be rendered by the High Court or alternatively,

emergency arbitrator,95 because they are more effective than regular arbitral tribunals. The

SCMA Rules have not introduced the emergency arbitrator mechanism, leaving Claimant no

choice but to submit its urgent application to the High Court pursuant to §12A(4) of IAA.96

63 Under Maldives Airport v. GMR,97 the parties agreed to refer their disputes to arbitration seated

in Singapore under UNCITRAL Rules. The UNCITRAL Rules do not provide for emergency

arbitrator provision. Consequently, the claimant applied for interim relief to Singapore court,

and the High Court granted the interim relief.98

91 Contract (Rights of Third Parties) Act (Chapter 53B), §2(1); Gary B. Born, above n. 90, pp. 653-654 92 SCMA Rules, r. 33.2; Contract (Rights of Third Parties) Act (Chapter 53B) § 2(1); The "Titan Unity" No. 2

[2014] SGHCR 4 (Shaun Leong Li Shiong AR); PT First Media TBK v. Astro Nusantara International BV and

others [2013] SGCA 57 (Sundaresh Menon CJ) 93 Case File, pp. 83, 84 94 SCMA Rules, r. 33.2; The "Titan Unity" No. 2 [2014] SGHCR 4 (Shaun Leong Li Shiong AR); PT First

Media TBK v. Astro Nusantara International BV and others [2013] SGCA 57 (Sundaresh Menon CJ) 95 Chartered Institute of Arbitrators, International Arbitration Practice Guideline: Applications for Interim

Measure, Art.8 ¶ 1 96 IAA, §12A(4) 97 Maldives Airports Co Ltd and another v. GMR Malé International Airport Pte Ltd [2013] SGCA 16

(Sundaresh Menon CJ) 98 Steven Lim, Interim Relief in International Arbitration (SIAC, 2013), ¶ 23


18

64 Nonetheless, Claimant submitted its urgent application to the Tribunal, despite its consistent

reiteration of the urgency for its interim measure application.99 Thus, unless Claimant considers

the case as not urgent enough, the High Court should have the competence to render the interim

measure for Claimant’s urgent application instead of the Tribunal.

3. The Tribunal is Incapable of Securing the Relief Sought

65 The Tribunal is incapable of securing the relief sought because it cannot enforce its own

order.100 An award issued by arbitral tribunal is enforceable under New York Convention 1985.

On the other hand, enforcement under New York Convention 1985 is not applicable when the

arbitral tribunal issues an order. The interim order issued by the Tribunal requires the Court to

enforce at the end of the day.101

66 Further, both IAA and Rules of Court102 do not specify the method of enforcing arbitral-

tribunal ordered interim measure by the Court remains unclear. However, §12A of IAA does

mention the possibility that the method of enforcement requires the High Court to issue its own

interim order, while taking into account the interim order made by the Tribunal.103 Such

method of enforcement may thus result in differing orders issued by the Tribunal and High

Court.104 Therefore, directly submitting its urgent application for interim measure to the High

Court would be more effective.

B. Alternatively, the Interim Measure to Order Sale of Cargo does not Fall Within the

Tribunal’s Power Under §12(1)(d) of IAA

99 Case File, pp. 90-91 100 Steven Lim, Interim Relief in International Arbitration (SIAC, 2013), ¶ 19 101 IAA, § 12(6); Singapore Supreme Court Of Judicature Act (Chapter 322, Section 80) Rules Of Court, O. 45,

r.5; Morgan Lewis Stamford, An Introductory Guide to Arbitration in Singapore, (2015), ¶ 19 102 Rules of Court, O.69 r.5 103 Ronald Wong, above n. 90, ¶¶ 33-37 104 Ibid., ¶¶ 36-37


19

67 §12(1)(d) of the IAA states that the Tribunal has the power to make orders or give directions to

any party for preservation or sale of any property.105 Respondent submits that the sale of

property and the act of preservation are inseparable unity. To obtain the sale of property, the

claimant shall prove that the sale is necessary to support the act of preservation.

68 Under Bank of Scotland v. Owners of MV “Union Gold”,106 order for sale of vessel was granted

in order to preserve the vessel’s long-term contract which provides business for her. Under The

Dwima 1,107 the sale of property were intended to preserve the claimant’s right of lien.

Similarly in Five Ocean v. Cingler,108 the court ordered sale of property in order to preserve the

applicant’s right to detain possession and the value of the cargo.

69 However, the Tribunal may only give order for sale in order to preserve property,109 whereas

Court may give order for sale for the preservation of asset.110 Cetelem v. Roust distinguishes

the term ‘asset’ and ‘property’. The term ‘asset’ has a broader scope that may include the

contractual rights of the party seeking for preservation.111 For instance, in Five Ocean v.

Cingler, ‘right of lien’ was constituted as an ‘asset’ which can be preserved by an order of sale

of cargo by the High Court.112 Meanwhile, the term ‘property’ has a narrower scope, 113 which

merely refers to the tangible form of the property.114

70 Here, the Tribunal merely has the power to give order for sale in order to preserve property.

Unfortunately, Claimant failed to clarify which ‘property’ it sought to preserve in its

application for the liberty to sell the Cargo before the Tribunal. Instead, it claims to possess the

right of lien over the Cargo,115 and applies for the liberty to appraise and sell the Cargo on full

105 The “Dwima 1” [1996] SGHC 83 (S. Rajendran J) 106 Bank of Scotland plc v. Owners of MV “Union Gold” [2013] EWHC 1696 (Mr. Justice Teare), ¶¶ 22-24 107 The “Dwima 1” [1996] SGHC 83 (S. Rajendran J) 108 Five Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 (Belinda Ang Saw Ean J) 109 IAA, § 12(1)(d) 110 Ibid., §12A(4) 111 Cetelem SA v. Roust Holdings Limited [2005] EWCA Civ 618, ¶57 (Clarke LJ) 112 Five Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 (Belinda Ang Saw Ean J) 113 Cetelem SA v. Roust Holdings Limited [2005] EWCA Civ 618, ¶57 (Clarke LJ) 114 Judith Sihombing, Goods: Sales and Securities (Hong Kong University Press, 3rd ed., 1997), p. 18, ¶ 1.15.3;

Donal Nolan and Andrew Robertson, Rights and Private Law (Hart, 2012), ¶ 132 115 Case File, pp. 74, 80, 81


20

indemnity basis.116 By doing so, Claimant only sought to preserve its contractual right of lien

and the monetary value of the Cargo to cover up the freight and subfreight allegedly due from

Respondent.

71 However, with their intangible form, ‘contractual right’ and ‘value of property’ shall not be

regarded as ‘property’ under s.12(1)(d) of IAA.117 Rather, they shall be considered as assets.118

Thus, Claimant’s application to preserve the value of Cargo and its contractual right is not

within the power of the Tribunal under s.12(1)(d) of IAA.

VII. IT IS NEITHER NECESSARY NOR JUST FOR THE CARGO ON BOARD THE MV TARDY TESSA

TO BE SOLD PENDENTE LITE

72 Even if the Tribunal finds that it has the power to grant interim measure over the sale of Cargo,

Respondent asserts that Claimant should not be entitled to liberty to sell the cargo pendente lite.

This is because it is not necessary to sell the Cargo pendente lite [A], and such liberty to sell the

Cargo desired by Claimant would deprive the rights of lien [B]. Further, granting the interim

measures is unjust [C].

A. The Condition of the Cargo does not Constitute a Necessary Situation to Sell the Cargo

Pendente Lite

73 Tribunals and courts have demonstrated that in departing from normal appraisement process,

namely to grant the liberty to sell the cargo pendente lite, the seeking party shall prove the

existence of “special circumstance” to obtain such measures.119 However, this condition is not

found in present case because of the following reasons:

116 Ibid., p. 90 117 Cetelem SA v. Roust Holdings Limited [2005] EWCA Civ 618, ¶57 (Clarke LJ) 118 Ibid.; Zim Integrated Shipping Services Ltd v. European ContainerKS [2013] EWHC 3581 (Comm); Five

Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 (Belinda Ang Saw Ean J) 119 The “Turtle Bay” [2013] SGHC 165 (Belinda Ang Saw Ean J), ¶ 29


21

74 First, in the provided joint expert report, the change of Cargo quality from bituminous to sub-

bituminous is still unknown. Among the five aspects of assesment to define the quality of coal,

the report was based solely on the mere speculation of the change of gross calorific value.120

75 Regardless of the deterioriating condition of cargo, it still does not amount as perished. In

Emilia Shipping Inc v State Enterprise for Pulp & Paper Industries, the Court allowed the sale

of the cargo as the market price of the cargo was falling.121 However, the cargo’s market price

depends on the global trend.122 Currently, the value of the Cargo is USD 2,527,561.56 in

minimum.123 Meanwhile, the latest price for Australian coal, as per March 2017 is USD 86,37

per metric ton,124 or equivalent to approximate value of cargo as USD 7,255,084,491.24.

76 Second, if the value of the Cargo exceeds the monetary claim, Claimant is in no position for the

liberty to sell the cargo. In The Essington II, Prothonotary Hargrave issued the decision to sell

the vessel pendente lite because the claim against the vessel exceeded “even the most optimistic

valuation of the vessel.”125 The losses purported by Claimant derived from non-payment of

freight in the amount of USD 771,120.48126 and additional 10 days of hire and total bunker

costs in the amount of USD 101,666.67.127 However, this monetary claim is undervalued

compared to the value of the Cargo.

77 Third, Claimant cannot argue that the incurring charges for maintaining the arrest constitute a

circumstance for the Cargo to be sold pendente lite. In International Marine Banking Co. v. The

“Dora” (No.2), the Court was not satisfied that the expenses for maintaining the vessel under

120 Case File, pp. 99-100 121 Emilia Shipping Inc v. State Enterprise for Pulp & Paper Industries [1991] 1 SLR(R) 411 (Chan Sek Keong

J); Five Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 (Belinda Ang Saw Ean J), ¶ 53 122 Case File, p. 100 123 Ibid., p. 101 124 Index Mundi, Price Rate of Australian Thermal Coal 125 Franklin Lumber v. Essington II (The) (The “Essington II”) 2005 FC 95, [2005] F.C.J. No. 125, ¶ 55 126 Case File, pp. 50, 52, 55, 63, and 65 127 Ibid., p. 68


22

arrest were exceptional to grant order of sale.128 Meaning, the cost of maintaining the arrest is

not substantial and too general to be constituted as ‘special circumstances.’129

78 Accordingly, such conditions do not constitute perishable condition and ‘special circumstances’

for Claimant to be granted liberty to sell the cargo pendente lite.

B. Liberty to Sell the Cargo is Inconsistent with the Rights of Lien

79 Respondent contends that the liberty to sell the cargo for Claimant deprives its purported rights

of lien [1]. Further, warehousing the cargo is the most appropriate method of preserving the

cargo and maintaining the right of lien [2].

1. Liberty to Sell the Cargo pendente lite Deprives the Rights of Lien

80 The characteristic of lien is to confer the right to retain lawful possession of the property by

another until claim is met,130 which does not confer a power of sale, or recoupment out of the

proceeds of sale.131

81 However, the principle of transferring the rights in rem to proceeds of sale may be applicable if

the whole conduct of appraisement and sale is conducted by Sheriff,132 and if the proceeds of

sale are kept in the Court.133 Claimant’s application before the Tribunal for liberty to appraise

and sell the cargo, and to retain the balance of the said proceeds of sale, differs from judicial

sale.134 Therefore, the sale can be classified as conversion, in which the lien is destroyed, and

the lienholder is liable for the whole value of the property towards the cargo owner.135

128 International Marine Banking Co. v. Dora [No. 2] (The), [1977] 1 F.C. 603, at 10; Marc D. Isaacs, Arrest of

Maritime Property – Mechanics and Emergencies (National Judicial Institute/Canadian Maritime Law

Association Joint Seminar in Maritime Law, April 15, 2011) p. 8 129 Paul Myburgh, Satisfactory for Its Own Purposes: Private Direct Arrangements and Judicical Vessel Sales

(NUS Centre for Maritime Law Working Paper 17/03, March 2017) p.17 130 Singapore Banking and Finance Law (Chapter 22) 131 Eva Lomnicka, Hugh Beale, Louise Gullifer, Michael Bridge, The Law of Security and Title-Based Financing

(Oxford University Press, 2012) p. 2087 132 Supreme Court of Judicature Act (Chapter 322) § 64; The “Turtle Bay” [2013] 4 SLR 615, [2013] SGHC

165 (Belinda Ang J), ¶ 18 133 Rules of Court, O. 70 r. 20(7); Judicial sale of vessels in Asia-Pacific common law jurisdictions (Comite

Maritime International Conference, Beijing, 14 to 19 October 2012 by Lawrence Teh, Rodyk & Davidson LLP)

p. 8 134 Paul Myburgh, Satisfactory for Its Own Purposes: Private Direct Arrangements and Judicical Vessel Sales

(NUS Centre for Maritime Law Working Paper 17/03, March 2017), p.3 135 Ibid, p.2088


23

2. Claimant shall preserve the Cargo by Warehousing the Coal

82 As affirmed by past tribunals, it is justifiable to sell the cargo only in the case of urgency and

necessary to preserve the cargo as there is no “other reasonably available alternatives for

securing the evidence or asset existed”.136 By this notion, Respondent submits that

warehousing is the most appropriate form of preservation because it does not only maintain

Claimant’s possession over the rights of lien, 137 it is also efficient. 138

83 Furthermore, the cost of warehousing the cargo is recoverable.139 In China Pacific SA v Food

Corporation of India, it is possible to recover the sums due to warehousing the cargo as “ […]

loss and expenses incurred by him exclusively for his own benefit maintaining his security as

lienee and from which the lienor derives no benefit as owner of the goods.”140

C. Claimant’s Assertion to Sell the Cargo Pendente Lite is Unjust

84 The Tribunal needs to consider any harm that may inflict the opposing party if they grant the

interim measure.141 Respondent argues that by giving the liberty for Claimant to sell the cargo

pendente lite harms the interest of Respondent [1]. Should Claimant insist that the Cargo must

be sold, it shall be done in the form of judicial sale [2].

1. The Liberty for Claimant to Sell the Cargo Pendente Lite Harms the Interest of Respondent

85 To protect and give benefit to all parties’,142 the Tribunal shall ensure that ‘balance of

convenience test’ lies in favor of granting the interin measures.143 Maldives Airport

demonstrates which decision would carry the lower risk of injustice, in the sense of an

136 Five Ocean Corporation v. Cingler Ship Pte Ltd [2015] SGHC 311 (Judge Belinda Ang Saw Ean); Maldives

Airport Co Ltd v. GMR Male International Airport Pte Ltd (“Maldives Airport”) [2013] 2 SLR 449 (Sundaresh

Menon CJ), at 44. 137 Simon Baughen, Shipping Law (Routledge,2012), p.214; Julian Cooke et al., above n.59, p. 480 138 West England Insurance, Coal Cargoes – Know the Dangers (West of England Insurance Services) 139 Anglo-Polish Line v. Vickers. (1924) 19 Ll. L. Rep., at p. 125; Lond. Arb. 13/87 (1987) L.M.L.N. 205 140 China Pacific SA v. Food Corporation of India (The Winson) [1982] AC 939 141 Steven Lim, Interim Relief in International Arbitration, ¶ 17 142 The Sea Urchin [2014] 2 SLR 646, [2014] SGHC 24, at 8; Paul Myburgh, above n. 129, p.4; Den Norske

Bank ASA v. Owners of the ship “Margo L” [1997] HKEC 767 (William Waung J) 143 American Cyanamid Co v. Ethicon Ltd [1975] AC 396; Challenger Technologies Limited v. Courts

(Singapore) [2015] SGHC 218 (Goerge Wei J), ¶ 13


24

injunction having been granted when it should have been refused or vice versa.144 Here,

Claimant’s request of interim measure omitted the just circumstance for Respondent, as it has

failed to secure the sub-freight due to it.

86 Further, in a sale pendente lite, the result of such sale shall not only be distributed to one party

but also to others pursuant to the actual losses suffered by them.145 Claimant’s request for

liberty to sell will prevent Respondent to obtain proper damages for Sub-Charterer’s failure to

pay sub-freight upon it, as this method will put the right to proceeds of sale in Claimant’s

hands.

2. Judicial Sale should be the Appropriate Mechanism to Sell the Cargo

87 Past judgments depicted that tribunals shall ensure the sale by ‘all the well tried out method of

appraisement and sale by public tender,’146 which preserves the justice.147 If Claimant alone

conducts the sale, the purchaser acquires title cum onere, i.e. subject to any existing liens,

encumbrances and claims against the ship.148 Meanwhile the judicial sale extinguishes all

existing claims against the ship, including maritime liens, and confers clean title on the

purchaser.149

88 Further, as affirmed in Turtle Bay, when a court or tribunal grant private sale “ […] is advanced

for the applicant’s own purpose and benefit and is prima facie unfair,”150 and Judge Belinda

Ang Saw Ean subsequently suggested the ”[…] alternative prayer for the Vessels to be

appraised and sold by the Sheriff.”151

144Maldives Airport Co Ltd v. GMR Male International Airport Pte Ltd (“Maldives Airport”) [2013] 2 SLR 449

(Sundaresh Menon CJ), ¶ 53; Chartered Institute of Arbitrators, International Arbitration Practice Guideline:

Applications for Interim Measure, p.8; Gary B. Born, above n. 90, p.2507 145 Comeau’s Seafoods Limited v. Frank & Troy (The) [1971] F.C. 556, at 35; SK B&T Pte. Ltd. v. The Owners of

the Ship or Vessel “SILVER MOON” WA-27NCC-14-12/2016 (Judge Azizah Nawawi), ¶ 19 146 Den Norske Bank ASA v. Owners of the ship “Margo L” [1997] 1 HKEC 767 (William Waung J); Felix

W.H. Chan et al., Shipping and Logistics Law: Principles and Practice in Hong Kong (Hong Kong University

Press, 2002) p. 33 147 Bank of Scotland Plc v. The Owners of the M/V Union Gold [2013] EWHC 1696 (Mr. Justice Teare); The

“Turtle Bay” [2013] SGHC 165 (Judge Belinda Ang Saw Ean), ¶ 17 148 Paul Myburgh, above n. 129, p.4 149 The “Turtle Bay” [2013] SGHC 165 (Belinda Ang Saw Ean J), ¶¶ 10-17; Paul Myburgh, above n. 129, p. 4 150 The “Turtle Bay” [2013] SGHC 165 (Judge Belinda Ang Saw Ean), ¶ 23 151 Ibid., ¶ 38


25

89 Concluding, the failure to ensure the protection to Respondent has illustrated that interim

measures to order of sale for Claimant will be unjust and it most likely resulted in unjust

enrichment because of the exceeded value of the cargo compared to the actual losses claimed

by Claimant.

PRAYER FOR RELIEF

90 In light of the aforementioned submission, Respondent respectfully requests the Tribunal to

declare that:

a) Claimant is in repudiatory breach due to its unlawful termination of the VCP;

b) Claimant is not entitled to exercise lien over the Cargo and the Sub-freight;

c) Respondent is not liable for the indemnification toward the cost that Claimant

incurred from its exercise of lien;

d) The Tribunal does not have the power to grant Claimant the liberty to sell the Cargo

pendente lite; and

e) It is neither necessary nor just for the Tribunal to grant Claimant the liberty to sell the

Cargo pendente lite.

RESPECTFULLY SUBMITTED ON 19 APRIL 2017,

m for r - murdoch university€¦ · garnac grain company incorporated v hmf faure & fairclough...

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