NINETEENTH ANNUAL INTERNATIONAL MARITIME

LAW ARBITRATION MOOT COMPETITION 2018

OBAFEMI AWOLOWO UNIVERSITY

ILE-IFE, NIGERIA

IN THE MATTER OF ARBITRATION HELD IN ENGLANDIA

Claimant

Cerulean Beans and Aroma Ltd.

Respondent

Dynamic Shipping LLC.

The Ship ‘Madam Dragonfly’

MEMORANDUM FOR THE RESPONDENT TEAM NO. 29

Akinteye Ifeoluwa Akinola

Disu Damilare

Otuyiga Olasunkanmi Azees

Oyarinde Isreal Oluwapelumi

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TABLE OF CONTENTS

LIST OF AUTHORITIES................................................................................................................3

LIST OF ABBREVIATIONS..........................................................................................................6

STATEMENT OF FACTS .............................................................................................................7

PART ONE: JURISDICTION.....................................................................................................8

A. THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION…….....8 B. THE ENTIRETY OF THIS MATTER IS WITHIN THE TECHNICAL KNOWLEDGE OF

A MASTER MARINER...........................................................................................................8

C. THE AWARD OF THE EXPERT DETERMINATION IS LIKELY TO BE ENFORCED BY THE NYC.........................................................................................................................11

1. THE RESPONDENT DELIVERED THE CARGO TO THE CLAIMANT AT 8:42PM ON 29 JULY 2017 AND ITS LIABILITY FOR THE GOODS PASSED ON

DELIVERY............................................................................................................................12

2. THE RESPONDENT IS NOT LIABLE FOR ANY DELAY AS THE DELAY WAS CAUSED BY TWO EVENTS OF FORCE MAJEURE…………………………………....13

A. The Deviation to the Port of Spectre was Necessitated by an Act of God and was Made in Order to Save the Lives and Properties Aboard.....................................................................13

B. The Inability of Madame Dragonfly to Discharge its Cargo at the Agreed Time was Due to an Unforeseen Weather Event................................................................................................15

PART TWO: MERITS

I. BREACH OF CHARTER PARTY A. THE RESPONDENT IS NOT LIABLE FOR THE WATER DAMAGED

CARGO..................................................................................................................................15

B. ALTERNATIVELY, THE RESPONDENT’S LIABILITY IS LIMITED PURSUANT TO INTERNATIONAL CONVENTION.....................................................................................16

PART THREE: MARITIME LIEN...........................................................................................17

I. THE CLAIMANT HAS NO MARITIME LIEN OVER MADAME DRAGONFLY........................................................................................................................17

PART FOUR: DAMAGES AND REBUTTALS.......................................................................19

A. THERE WAS A BREACH OF CONTRACT........................................................................20 B. THE DAMAGE WAS FORSEEABLE..................................................................................21

C. BREAK IN CHAIN OF CAUSATION.................................................................................21

D. CLAIMANT IS LIABLE FOR ALL THE COUNTER CLAIMS.........................................23

PRAYER FOR RELIEFS...........................................................................................................25

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LIST OF AUTHORITIES: BOOKS

The Culture of American Arbitration and the Lessons of ADR, 40 TEX. INT'L L.J. 449, 487

(2005)

G. H. Treitel, The Law of Contract (2003), 11th edition, Thomson, Sweet & Maxwell, London.

Robert Force, A.N. Yiannopoulos & Martin Davies, 2 Admiralty and Maritime Law 2-1 (2012).

Prof. William Tetley, Q.C., Maritime Liens in the Conflict of Laws, Law and Justice in a

Multistate World: Essays in Honor of Arthur T. von Mehren, Transnational Publishers Inc.,

Ardsley, N. Y. 2002 at pp. 439-457).

Blacks’ Law Dictionary, 9th edition, pg. 1475

Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1, 853

Nigel Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University)

Press, 5th ed, 2009) 346-7.

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LIST OF AUTHORITIES: CASES

A.

Age Old Builders Pty Ltd v Swintons Limited [2003] VSC 307 (21 August 2003)

B.

Badgin Nominees Pty. Ltd. v Oneida Ltd. Anor [1998] VSC 188 – 18 Dec 1998 - unreported

Baulderstone Hornibrook Engineering Pty. Ltd. V Kayah Holdings Pty. Ltd. (1998) 14 BCL 277

C.

Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer

Holzwirtschaftsbetriebe RegistrierteGmbH [1954] 1 QB 8, 12-3

E.

Europcar Italia, S.p.A., v. Maiellano Tours, Inc., 156 F.3d 310 (2d Cir. 1998);

F.

Fletcher Construction Australia Limited v MPN Group Pty. Ltd. 2 NSW Sup Ct, 14 July 1997,

unreported

G.

Garage A. et fils v. Z. AG, BGer Dec. 14, 2006, 4P.299/2006, 29 ASA Bulletin 391 (2011).

Gaetano Butera c. Pietro e Romano Pagnan, Cass., sez. un., 18 settembre 1978, n. 4167, IV Y.B.

Com. Arb. 296

I. 1 i.S. Nachmann gegen German und Mitb. Bundesgericht [BGer] [Federal Supreme Court] Dec.

9, 2003, 130 Entscheidungen des schweizerischen Bundesgerichts [BGE] III 125

L.

Laws and others v Smith (Ship Rio Tinto) (Gibraltar) [1884] UKPC 3 (9 February 1884)

M.

Mutuelle Fraternelle d'Assurances v Chetouane, Cour d'Appel [CA] [regional court of appeal]

Paris, 1e ch., Dec. 21, 2000, 2001 Revue de l'Arbitrage 178

McDonnell Douglas Fin. Corp. v. Pennsylvania Power & Light Co., 858 F.2d 825, 830-31 (2d

Cir. 1988

S.

Spier v. Calzaturificio Tecnica S.p.A., 663 F. Supp. 871 (S.D.N.Y. 1987).

T.

Thouzery v AXA Assurances CA Paris, Mar. 14, 2002, 2002 Revue de l'Arbitrage 772.

Z.

Zanetta & Moretti c. Comune di Vacallo, BGer May 13, 1981, 107 BGE Ia 318

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LIST OF AUTHORITIES: INTERNATIONAL CONVENTIONS, RULES AND

STATUTES

International

THE BRUSSELS PROTOCOL 1968

The Hague Rules

York – Antwerp Rules 2016

Domestic

New York Convention

Carriage of Goods by Sea Act 1971

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LIST OF ABBREVIATIONS

AA- ARBITRATION ACT 1996

CB- CERULEAN BEANS AT AROMA

DS- DYNAMIC SHIPPING LLC

IMO- INTERNATIONAL MARITIME ORGANISATION

MD- MADAMDRAGONFLY

NYC- NEW YORK CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF

FOREIGN ARBITRAL AWARDS

SOLAS - THE INTERNATIONAL CONVENTION FOR THE SAFETY OF LIFE

AT SEA

KG-KILOGRAM

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STATEMENT OF FACTS

1. On July 22, 2017, Cerulean Beans and Aroma (Claimant) entered into a voyage charter party

agreement with Dynamic Shipping LLC (Respondent) to ship 4 containers totalling 70,000kg of

exceptionally rare, high quality, speciality grade green coffee to Dillamond before 7pm on the

28th of July, 2017. Also, the Claimant advanced the Respondent USD 100,000 to be used as

security for wages of the crews of the Ship Madam Dragonfly (Vessel).

2. On 25th of July, the vessel deviated to the Port of Spectre after its communications and

navigations systems were knocked out by solar flares. This deviation was necessitated by the

need to save the lives and cargoes onboard.

3. On 28th of July, 2017 at 7pm, the Respondent could not deliver the cargo because of a “once in a

lifetime storm’ which closed down the port. However, the cargo was promptly delivered the next

day at 8:42pm. However, while the vessel was stuck as a result of the storm, it’s hull was

damaged as a result of its anchor getting tangled on a coral bed.

4. On 1 August 2017, the Claimant claimed it was able to deliver only 250 bags of the coffee and

had to procure replacement coffee for USD 9,450,000 and settlement payment for USD

5,000,000 to its client.

5. On 7 August 2017, the Respondent requested for the due payment of the freight, agency fees,

repairs to hull, demurrage and use of electronic access systems at Port of Dillamond to which the

Claimant denied responsibility on 8 August 2017.

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PART ONE: JURISDICTION

6. The Claimant argues that this tribunal (Tribunal) does not have jurisdiction to hear the merits of

this dispute because: (A) this Tribunal has the power to rule on its own jurisdiction; (B) the

entirety of this matter is within the technical knowledge of a master mariner; and (C)the award of

the Expert Determination is likely to be enforced by the NYC.

A. THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION

7. It is a well-established principle of international arbitration that an arbitral tribunal has an

inherent power to rule on its own jurisdiction, including questions as to the validity of the

arbitration agreement.1The Claimant, therefore, argues that this Tribunal has the power to rule

on its own jurisdiction.

B THE ENTIRETY OF THIS MATTER IS WITHIN THE TECHNICAL KNOWLEDGE OF

A MASTER MARINER

8. In the NSW decision of Fletcher Construction Australia Limited v MPN Group Pty. Ltd.2, the

Court held as regard expert determination that:

“There is nothing unusual about such a provision and parties are held to their

bargain if they agree to such a clause…The effect of the clause is to make the

decision of the expert final and binding provided the matters referred to him are ones

which the agreement contemplates.”

1Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer

Holzwirtschaftsbetriebe RegistrierteGmbH [1954] 1 QB 8, 12-3; Gary B Born, International

Commercial Arbitration (Kluwer Law International 2009) vol 1, 853; Nigel Blackaby et al,

Redfern and Hunter on International Arbitration (Oxford University) Press, 5th ed, 2009) 346-7. 22 NSW Sup Ct, 14 July 1997, unreported

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9. Likewise, in Baulderstone Hornibrook Engineering Pty. Ltd. V Kayah Holdings Pty. Ltd.3, Mr

Justice Heenan held that

“The court usually will not intervene when the parties have referred a matter for the

determination of an expert if such determination is within the referee's particular

field of expertise”

10. Based on the above-cited authorities, the Respondent vehemently contend that the combination

of Clause 27 (d) and (e) is of the effect that any legal proceeding, including arbitral proceedings,

should not commence unless the matters referred to in Clause 27(g) have been determined by a

Master Mariner. These serve as a condition precedent before any legal proceedings can be

embarked on.

11. Furthermore, based on a superficial reading of the moot fact, it is visible to the blind and loud to

the deaf that all the grounds upon which the Claimant based its action are solidly grounded in

technical matters as they relate to alleged breach of contract as relating to vessel’s route,

unloading of cargo, storage conditions and trade practices. The effect of all this clearly evinced

the intention of the parties to oust the jurisdiction of the arbitral panel on such matters and make

the findings of the Master Mariner binding and conclusive as stated in Clause 27(e).

12. Moreover, the respondent may argue that the breach is a matter of law or that their claim for

maritime lien is a matter of law. The Respondent counter-argue that it is irrelevant as it has been

held in a plethora of cases that it is immaterial that a dispute involves a matter of law where the

parties, negotiating at arm’s length, willingly agreed to submit to the binding determination of an

expert.

3(1998) 14 BCL 277

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13. In the Supreme Court of Victoria in BadginNominees Pty. Ltd. v Oneida Ltd. anor4, Mr Justice

Gillard, after reviewing the earlier authorities and the relevant principles, stated categorically

that:

“It was their common intention that the dispute resolution procedure be

applied in the event of a dispute. It is their contract: and it should be enforced”

14. In his judgment in the same case in relation to the determination of issues of law by a non-legally

qualified person, Mr Justice Gillard held that:

"The parties to a contract agree that the value is to be determined by an expert

acting as such using his own skill, judgment and experience. He is not a lawyer. His

authority derives from the contract. The terms of the contract are to be considered by

him. It would be contrary to the parties’ common intention to expect the valuer to

construe the contract and apply it as a court would. The parties have entrusted the

task to an expert valuer, not a lawyer. They must be taken to accept the

determination 'warts and all' and subject to such deficiencies as one would expect in

the circumstances. The parties put in place a procedure, they must accept the result

unless it would be contrary to their common intention." In my opinion, the matters

raised by Mr Loewenstein are matters which the parties contemplated. They put in

place the procedure and if it involves a question of law as to construction of the

agreement, the gathering of evidence without regard to rules or procedures, a

determination in which the expert may rely upon his own experience and

knowledge and without hearing the parties or any valuation experts on their

4[1998] VSC 188 – 18 Dec 1998 - unreported

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behalf, the parties are bound by it. They put it in place, it binds them’.5(emphasis

added)

C. THE AWARD OF THE EXPERT DETERMINATION IS LIKELY TO BE ENFORCED

BY THE NYC

15. The majority of jurisdictions which are significant in international arbitration take an approach

which assimilates to arbitration expert determination. Those jurisdictions include France6,

Switzerland7, Italy8 (in relation to international, but not domestic awards) and the USA9 (under

the Federal Arbitration Act). The UK obviously will not deviate from this trend even though no

case in point has come before the courts for decision.

16. Firstly, the Respondent contends that the language of a multilateral treaty such as the New York

Convention is intended to operate in a variety of different legal systems, and so cannot be read

5Similar views were expressed in the Victorian decision of Age Old Builders Pty Ltd v Swintons

Limited[2003] VSC 307 (21 August 2003) and Fletcher Construction Australia Limited v MPN

Group Pty. Ltd NSW Sup Ct, 14 July 1997, unreported where it was held that “the effect of the

clause is to make the decision of the expert final and binding provided the matters referred to

him are ones which the agreement contemplates.”

6Mutuelle Fraternelle d'Assurances v Chetouane, Cour d'Appel [CA] [regional court of appeal]

Paris, 1e ch., Dec. 21, 2000, 2001 Revue de l'Arbitrage 178; Thouzery v AXA Assurances CA

Paris, Mar. 14, 2002, 2002 Revue de l'Arbitrage 772. 7 i.S. Nachmann gegen German und Mitb. Bundesgericht [BGer] [Federal Supreme Court] Dec.

9, 2003, 130 Entscheidungen des schweizerischen Bundesgerichts [BGE] III 125; Garage A. et

fils v. Z. AG, BGer Dec. 14, 2006, 4P.299/2006, 29 ASA Bulletin 391 (2011). 8Zanetta & Moretti c. Comune di Vacallo, BGer May 13, 1981, 107 BGE Ia 318; Gaetano

Butera c. Pietro e Romano Pagnan, Cass., sez. un., 18 settembre 1978, n. 4167, IV Y.B. Com.

Arb. 296. 9 In McDonnell Douglas Fin. Corp. v. Pennsylvania Power & Light Co., 858 F.2d 825, 830-31

(2d Cir. 1988), the Court held that what is important is that the parties clearly intended to submit

some disputes to their chosen instrument for the definitive settlement of [their] grievances."

Also, according to Alan Scott Rau, The Culture of American Arbitration and the Lessons of Adr,

40 TEX. INT'L L.J. 449, 487 (2005), “it should not be too surprising to find many American

courts simply unable to find any reason at all why the legal regime of arbitration should not now

extend equally to appraisals or expert determinations." This trend has also been followed in

Europcar Italia, S.p.A., v. Maiellano Tours, Inc., 156 F.3d 310 (2d Cir. 1998); Spier v.

Calzaturificio Tecnica S.p.A., 663 F. Supp. 871 (S.D.N.Y. 1987).

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restrictively. Secondly, a literal reading of the treaty does not disclose any requirement that the

award has the status of a judgment, only that the award be final and binding, and that the

agreement complies with the New York Convention Art. II (2) formality requirements, which

Clause 27 does in this case.

17. Consequently, the Respondent submits that the award by an Independent Master Mariner will in

all likelihood be enforceable under the NYC.

PART TWO: BREACH OF CHARTER PARTY

1. THE RESPONDENT DELIVERED THE CARGO TO THE CLAIMANT AT 8:42PM ON

29 JULY 2017 AND ITS LIABILITY FOR THE GOODS PASSED ON DELIVERY

18. Clause 8(c)(ii) of the voyage charter party in providing for discharge stated that:

“Time permitted for discharging (calculated from when vessel arrives at the

discharge port until all cargo has been discharged) is .5 WWD.”

19. Consequently, pursuant to DS’ letters on 29th of July which notified the Claimant of the arrival

and delivery of the cargo and urging CB to take charge of the shipment.10 Likewise, the access

authority pass given to CB clearly stated for them to take delivery of their cargo at 12:02 am

which they failed to do.

20. The Respondent thereby submits that that it delivered the cargo to the claimant at 8:42pm on 29

July 2017, at which point its control on the cargo was divested in line with paragraph 4 of Clause

22 of the voyage charter party which provides that all liability of Shipper shall cease on shipment

of cargo. Therefore, the liability of the respondent ended the moment the claimant could unload.

10Compromis, page 22.

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2.THE RESPONDENT IS NOT LIABLE FOR ANY DELAY AS THE DELAY WAS CAUSED

BY TWO EVENTS OF FORCE MAJEURE

21. Clause 17 of the Voyage Charter Party specifically provided that in cases of force majeure,

neither party shall be liable for any failure under the contract.

22. Likewise, Article IV (2) The Hague Rules11 provides thus:

“Neither the carrier nor the ship shall be responsible for loss or damage arising or

resulting from

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier

in the navigation or in the management of the ship.

(b) Fire, unless caused by the actual fault or privity of the carrier.

(c) Perils, dangers and accidents of the sea or other navigable waters.

(d) Act of God.”

23. . Consequently, in view of the foregoing, the Respondent contends that it is not liable for any

delay.

a. The Deviation to the Port of Spectre was Necessitated by an Act of God and was Made in

Order to Save the Lives and Properties Aboard

24. Paragraph 5 of Clause 17 of the voyage charter party provided expressly that:

“The Shipper and/or Charterer and/or Receiver shall not be liable on any basis

whatsoever, without limitation, whether it be in contract, tort or otherwise, in

11AS AMENDED BY THE BRUSSELS PROTOCOL 1968, Carriage of Goods by Sea Act 1971

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damages or otherwise responsible for failure or delay in delivery for loading or in

discharging if prevented, delayed or obstructed by any Force Majeure Event.”

25. In this case, the solar flare as evident by DS’ mail to CB12 was caused by solar flares which

knocked out MD’s navigation and communication systems. Consequently, the Ship was left

without support and no hope of one for an indefinite amount of time. Consequently, the vessel

had no other option than to head for the port of Spectre in other to save life and property.

26. In any case, the Respondent will not be liable for any delay that arose out of any deviation to

protect lives and property as paragraph 3 of Clause 17 of the Charter Party explicitly provided

that:

“Vessel has the liberty to deviate for the purpose of saving life or property (including

the vessel), with leave to sail without Pilots, and tow or to be towed and assist

vessels or to be assisted in all situations whatsoever.”

27. Consequently, Article 4 of the Carriage of Goods by Sea Act 1971 provides 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.”

28. The Respondent, therefore, submits that the deviation to the Port of Spectre was necessitated by

an act of God and was made in order to save the lives and properties aboard.

12Compromis, Page 17.

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b. The Inability of Madame Dragonfly to Discharge its Cargo at the Agreed Time was Due to

an Unforeseen Weather Event

29. Paragraph 2(b) of Clause 17 of the voyage charter party excluded liability for any failure to

perform as a result of unforeseen weather events. In this instance, Madame Dragonfly,

notwithstanding the deviation to the Port of Spectre would have met its obligation under the

charter party but for the “once in a lifetime storm” which closed the port which is the agreed port

of discharge for 12 hours.13

30. The Respondent, therefore, submits that notwithstanding the deviation to the Port of Spectre, the

cargo would have been discharged but for the storm which was an unforeseen weather event.

Consequently, the Respondent is not liable for any delay in delivering the cargo as the delay was

caused by two events of force majeure.

3. THE RESPONDENT IS NOT LIABLE FOR THE WATER DAMAGED CARGO

31. It is a trite principle of law that a party is only liable for its breach of contract. A party who

performs a contract in accordance with its terms is thereby discharged from his obligations under

it and a breach of contract is committed when a party without lawful excuse fails or refuses to

perform what is due from him under the contract or performs defectively or incapacitates himself

from performing.14

32. In this instance, DS fulfilled the spirit and letters of the Charter Party by shipping the cargo to

Dillamond while CB breached the charter party by failing to take delivery of the Cargo.

Therefore, in line with paragraph 4 of Clause 22 of the voyage charter party which provides that

13Compromis, Pages 20 & 21. 14G. H. Treitel, The Law of Contract (2003), 11th edition, Thomson, Sweet & Maxwell, London.

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all liability of Shipper shall cease on shipment of cargo, the liability of the respondent ended the

moment the claimant could unload the cargo which they failed to do. The Respondent had no

added obligation under the Charter Party or any law to keep charge of the cargo.

33. The Respondent, therefore, submits that the damage to the cargo and all other ancillary damages

were as a result of the Claimant’s tardiness in fulfilling its own part of the Charter party.

4.ALTERNATIVELY, THE RESPONDENT’S LIABILITY IS LIMITED PURSUANT TO

INTERNATIONAL CONVENTION

34. If this tribunal should find that the Respondent is liable for the damaged coffee and the

settlement payments, the Respondent contends that its liability will in any instance be limited to

pursuant to the York-Antwerp Rules on General Average.

35. Rule XII the York – Antwerp Rules 2016 which relates to Damage to Cargo in Discharging etc

provides that:

“Damage to or loss of cargo, fuel or stores sustained in consequence of their

handling, discharging, storing, reloading and stowing shall be allowed as general

average, when and only when the cost of those measures respectively is allowed as

general average.”

36. In the same vein, UK’s Carriage of Goods by Sea Act 1971 provided in S.5 that

“5 (a) Unless the nature and value of such goods have been declared by the shipper

before shipment and inserted in the bill of lading, neither the carrier nor the ship

shall in any event be or become liable for any loss or damage to or in connection

with the goods in an amount exceeding [666.67 units of account] per package or unit

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or [units of account per kilogramme] of gross weight of the goods lost or damaged,

whichever is the higher.

(b) The total amount recoverable shall be calculated by reference to the value of

such goods at the place and time at which the goods are discharged from the ship in

accordance with the contract or should have been so discharged. The value of the

goods shall be fixed according to the commodity exchange price, or, if there be no

such price, according to the current market price, or, if there be no commodity

exchange price or current market price, by reference to the normal value of goods of

the same kind and quality.

(c) Where a container, pallet or similar article of transport is used to consolidate

goods, the number of packages or units enumerated in the bill of lading as packed in

such article of transport shall be deemed the number of packages or units for the

purpose of this paragraph as far as these packages or units are concerned. Except as

aforesaid such article of transport shall be considered the package or unit.”

37. Consequently, in view of the above laws, in conjunction with Clause 19 of the Charter Party, the

Respondent contends that since the value of the goods have been declared by the shipper before

shipment and inserted in the bill of lading, therefore, its liability is limited. The Respondent,

therefore, submits that both parties to the Charter party bear the loss according to the York-

Antwerp Rules.

PART THREE: MARITIME LIEN

1. THE CLAIMANT HAS NO MARITIME LIEN ON MADAME DRAGONFLY

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38. According to Robert Force15

“A maritime lien is a special property right in a vessel given to a creditor by law as

security for a debt or claim arising from some service rendered to the ship to

facilitate her use in navigation or from an injury caused by the vessel in navigable

waters.”

39. It is thus a trite principle of English law that a maritime lien can only arise in three situations viz:

salvage, damage (e.g. collision) and wages (masters' and seamen's and master's disbursements).16

Likewise, Article 4 of the International Convention on Maritime Liens and Mortgages provides

that:

“1. the following claims shall be secured by maritime liens on the vessel:

(i) wages and other sums due to the master, officers and other members of the

vessel's complement in respect of their employment on the vessel;

(ii) Port, canal and other waterway dues and pilotage dues;

(iii) Claims against the owner in respect of loss of life or personal injury occurring,

whether on land or on water, in direct connection with the operation of the vessel;

15Robert Force, A.N. Yiannopoulos & Martin Davies, 2 Admiralty and Maritime Law 2-1

(2012). 16International Convention on Maritime Liens and Mortgages (Geneva, 6 May 1993); Laws and

others v Smith (Ship Rio Tinto) (Gibraltar) [1884] UKPC 3 (9 February 1884); Prof. William

Tetley, Q.C., Maritime Liens in the Conflict of Laws, Law and Justice in a Multistate World:

Essays in Honor of Arthur T. von Mehren, Transnational Publishers Inc., Ardsley, N. Y. 2002 at

pp. 439-457).

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(iv) claims against the owner, based on tort and not capable of being based on

contract, in respect of loss of or damage to property occurring, whether on land or

on water, in direct connection with the operation of the vessel;

(v) Claims for salvage, wreck removal and contribution in general average.”

40. In this case, the Claimant who do not fail into any of the above categories merely borrowed the

Respondent the money which, based on CB’s internal memo,17 was to be used as a security and

was intended to be recouped. Therefore, a security which as defined in the Blacks’ Law

Dictionary18 is a “collateral given or pledged to guarantee the fulfilment of an obligation” does

not fall into any of the categories prescribed as giving rise to maritime lien19. It is evident the

memo that CB never intended the money to be paid as wages and envisioned to recover its

money after the Respondent has paid the wages.

41. The Respondent, therefore, submits that Claimant does not own a maritime lien over Madame

Dragonfly as it $100,000 advance to the Respondent was never intended to be paid, neither was

it paid as wages. Also, the Claimant does not have standing as it is neither employed in respect of

the vessel, a salvager nor a tortfeasor.

PART FOUR: DAMAGES AND REBUTTALS

1. THE RESPONDENT IS NOT LIABLE TO THE CLAIMANT FOR DAMAGES

42. According to Black’s Law Dictionary, Damages are money claimed by or ordered to be paid to, a

person as compensation for loss or injury.20 In any claim for damages, certain conditions must be

17Compromis, Page 1. 18 9TH edition, pg. 1475 19Laws and others v Smith (Ship Rio Tinto) (Gibraltar), Ibid. 20Black’s Law Dictionary, ninth edition, page 445

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fulfilled. First, one must prove the existence of a ‘wrong’21 – that is, a breach of contract.

Second, one must establish that the damage is not too remote and that the losses were reasonably

foreseeable at the time the parties entered into the contract.22 , any damages awarded are also

subject to any breaks in the chain of causation.23 Irrespective of factual causation, English law

can treat some losses as not having been legally caused by the breach, on the basis that it is not

fair to hold the defendant responsible for them due to a ‘break in the chain’ or novus actus

interveniens.24 If the breach of contract was the ‘effective’ or ‘dominant’ cause of the loss,

damages may be recoverable even if the cause was not the sole cause of the loss.25

43. The Respondent strongly contends, in the subsequent paragraphs, that none of the conditions set

out has been fulfilled by the claimant.

a. There was no Breach of Contract.

44. The Respondent already established that there was indeed no breach of the charter party as the

respondent delivered the cargo to the claimant at 8:42 pm on 29 July 2017 and its liability for the

goods passed on delivery, the delay was caused by two events of force majeure, and the

destroyed coffee beans was due to the elongated journey which was not in the contemplation of

the parties.

21H. McGregor, McGregor on Damages (19th ed. Sweet & Maxwell, London 2016), Section 1-

001.

22Wagon Mound (No. 1) [1961] AC 388; J. Chitty, H. Beale, Chitty on Contracts, 6th ed., 2008,

Ch. 26, paragraph 111. 23C. T. Salomon and P D. Sharp, ‘Chap 10: Damages in International Arbitration’, in J. Fellas

and J. H. Carter (eds), International Commercial Arbitration in New York (OUP New York

2010) 295.

24Corr v. IBC Vehicles Ltd [2008] 1 AC 884, per Lord Bingham: ‘The rationale of the principle

that a novus actus interveniens breaks the chain of causation is fairness.’ 25Galoo v. Bright Grahame Murray [1994] 1 W.L.R. 1360, 1374-1375.

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b. The damage was foreseeable and not too remote

45. The Respondent contests strongly that the damage was not foreseeable. The damage done to the

coffee bean could not have been in the contemplation of both parties as the correspondence

between the parties has shown. The respondent clearly stated in the correspondence between it

and the claimant that the waterproof sealants could guarantee the waterproofing of the cargo for

5 days and the claimant did not object to it. This is evident in the correspondence dated 22 July

201726 which reads verbatim:

We have recently contracted with a new supplier of waterproof sealant which we

can use on short voyages such as this. Guaranteed waterproofing of containers for

up to 5 days and we haven’t had any problems yet!

46. Assuming without conceding that this tribunal finds that the respondent indeed should have

foreseen the damage to the cargo, the doctrine of acquiescence avails the respondent.

Acquiescence occurs when a person knowingly stands by without raising any objection to the

infringement of his or her rights, while someone else unknowingly and without malice

aforethought acts in a manner inconsistent with their rights.27

47. This principle was given judicial flavour in Georgia v. South Carolina28, in which case

the Supreme Court of the United States held that Georgia could no longer make any claim to

an island in the Savannah River, despite the 1787 Treaty of Beaufort's assignment to the

contrary.29 The court said that Georgia had knowingly allowed South Carolina to join the island

as a peninsula to its own coast by dumping sand from dredging and to then levy property

26Page 14 of the statement of claim 27"Acquiescence". The Free Dictionary. Farlex. Retrieved 28 September 2017 28497 US 376, 110 S. Ct. 2903, 111 L. Ed. 2d 309 (1990)

29Ibid

https://en.wikipedia.org/wiki/Malice_aforethoughthttps://en.wikipedia.org/wiki/Malice_aforethoughthttps://en.wikipedia.org/wiki/Supreme_Court_of_the_United_Stateshttps://en.wikipedia.org/wiki/Islandhttps://en.wikipedia.org/wiki/Savannah_Riverhttps://en.wikipedia.org/wiki/Treaty_of_Beauforthttps://en.wikipedia.org/wiki/Peninsulahttps://en.wikipedia.org/wiki/Property_taxhttp://legal-dictionary.thefreedictionary.com/acquiescence

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taxes on it for decades. Georgia thereby lost the island-turned-peninsula by its own

acquiescence, even though the treaty had given it all of the islands in the river.

c. There was indeed a break in the chain of causation

48. The Respondent contends that there was a break in the chain of causation and this was caused by

an act of God. The principle of a break in the chain of causation as represented by the Latin

phrase novus actus interveniens has been explained by the courts in Gano S.S Line v,

Wilhelmsen30 where the court held that a slide of earth which made the Panama Canal

impassable was an Act of God and a novus actus interveniens.

49. Likewise, Article IV (2) The Hague Rules31 provides thus:

“Neither the carrier nor the ship shall be responsible for loss or damage arising or

resulting from

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier

in the navigation or in the management of the ship.

(b) Fire, unless caused by the actual fault or privity of the carrier.

(c) Perils, dangers and accidents of the sea or other navigable waters.

(d) Act of God.”

50. In casu, Clause 17 of the Voyage Charter Party specifically provided that in cases of force

majeure, neither party shall be liable for any failure under the contract. Consequently, in view of

30275 F. 254 (2d Cir. [N.Y.] 99, 1966 A.M.C. 1175) 31AS AMENDED BY THE BRUSSELS PROTOCOL 1968 Carriage of Goods by Sea Act 1971

https://en.wikipedia.org/wiki/Property_taxhttps://en.wikipedia.org/wiki/Treatyhttps://en.wikipedia.org/wiki/River

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the foregoing, the Respondent contends that it is not liable for any damage as the link between its

breach of the contract and the damage to the cargo has been severed by the act of God.

2.THE CLAIMANT IS LIABLE FOR ALL OF THE COUNTERCLAIMS

a. The Claimant is Liable for the Freight

51. Clause 22 of the Voyage Chaterparty expressly provided for when freight is to be paid and it

admits no exception. It would, therefore, be a breach of contract on the part of the Claimant to

refuse to pay the freight. The Respondent therefore submit that the Claimant is liable for

payment of the freight of its Cargo.

b. The Claimant is liable for the agency fees at the Port of Spectre

52. It has already been established that the deviation was as a result of an act of God and necessitated

by the need to safeguard the lives and properties aboard the vessel. Consequently, based on the

express provision of Clause 12(b) of the Charterparty:

“If the ship calls at any port or ports on passage in distress, the Master is to advise

Charterers in Cerulean, who will advise the name of their Agents at such port, to

whom the ship is to be consigned for cargo purposes only.”

53. Furthermore, Rule X of the York-Antwerp Rule32 states that

“(a) (I) When a ship shall have entered a port or place of refuge or shall have

returned to her port or place of loading in consequence of accident, sacrifice or

other extraordinary circumstances which render that necessary for the common

safety, the expenses of entering such port or place shall be allowed as general

average, and when she shall have sailed thence with her original cargo, or a part of

32Ibid.

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it, the corresponding expenses of leaving such port or place consequent upon such

entry or return shall likewise be allowed as general average.”

54. In this instance, the Respondent complied with the above provision, paying the customary fees

provided for in Clause 12(a). The Respondent, therefore, submits that the Claimant is liable for

the agency fee and it will be inequitable and a breach of contract if this tribunal holds otherwise.

c. The Claimant is liable for the Cost of Repairs to Damaged Caused to the Madame Dragonfly

when Avoiding Dangerous Weather Conditions

55. It is an unassailable fact that the vessel was damaged while engaged in the service of the

Claimant. Consequently, pursuant to Rule B of the York-Antwerp Rule, the Respondent

contends that the Claimant is liable for the payment of Cost of Repairs to Damaged Caused to

the Madame Dragonfly when Avoiding Dangerous Weather Conditions.

d. The Claimant is Liable for Agency fees at the port of Dillamond, Demurrage, and the Use of

Electronic Access Systems at the Port of Dillamond

56. The Respondent contends that the Claimant is liable for all the expenses incurred in its favour at

the port of Dillamond. Clause 12(a) of the Voyage Charterparty expressly provided that:

“The ship shall be consigned to Charterers’ Agents at the port or ports of load and

discharge, paying all customary fees at each port, for attending to matters

concerning the cargo and the vessel”.

57. Furthermore, due to the fact that the Claimant did not take delivery of the cargo, the Respondent

had to wait over and above the lay-days, and per Clause 9 of the Voyage Charterparty,

demurrage accrued as per the agreement. Furthermore, in order to mitigate the cost accruing to

the Claimant, the Respondent made use of the Electronic Access System. Consequently, in line

with Clause 23 of the Chaterparty, the Respondent contends that the Claimant is liable for liable

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for agency fees at the port of Dillamond, demurrage, and the use of electronic access systems at

the port of Dillamond.

PRAYER FOR RELIEF

For the reasons set out above, the Claimant requests this Tribunal to:

DECLARE that this Tribunal has no jurisdiction to hear the merits of the Claimant’s claims;

FIND that the Respondent is not liable for the breaches of contract, the damage to the Cargo, the

Replacement Coffee Payment and the Settlement Payment as argued above; and

AWARD damages to the Claimant and interest on the amounts claimed for freight, agency fees

at the port of spectre, the cost of repairs to damage caused to the Madam Dragonfly, agency fees

at the Port of Dillamond, demurrage and use of electronic access systems at the Port of

Dillamond.