queensland university of technology —team 14 international maritime law arbitration moot 2012...

CLAIMANT —TEAM 14 INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012

INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012

QUEENSLAND UNIVERSITY OF TECHNOLOGY

IN THE MATTER OF AN ARBITRATION HELD AT BRISBANE

MEMORANDUM FOR THE CLAIMANT

ON BEHALF OF: AGAINST: MARKKA TRADING COMPANY 10 CROW STREET SCHILLING

LIRA STEAMSHIP COMPANY LEVEL 4, WEST CIRCLE

PESETA

CLAIMANT RESPONDENT

TEAM NUMBER 14

TIM ALEXANDER, MICHELLE COWAN, EMMA HIGGINS AND LIANNA MARTINS


INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2012

MEMORANDUM FOR THE CLAIMANT

TEAM NUMBER 14


i

TABLE OF CONTENTS

A. LIST OF ABBREVIATIONS ....................................................................................................... III

B. LIST OF AUTHORITIES ............................................................................................................ IV

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

D. QUESTIONS PRESENTED ........................................................................................................... 1

E. ARGUMENTS PRESENTED ......................................................................................................... 3

1. THE ARBITRATION PANEL HAS JURISDICTION TO HEAR THIS DISPUTE ................ 3

1.1. ANY CHALLENGE TO THE QUALIFICATIONS OF THE ARBITRATORS MUST BE HEARD IN THE

SUPREME COURT OF QUEENSLAND ...................................................................................................... 4

1.2. ALTERNATIVELY, THE RESPONDENT CANNOT CHALLENGE THE APPOINTMENT OF MR

PAPANDREOU ON THE GROUNDS THAT HE IS INCOMPETENT OR UNSUITABLE ...................................... 4

2. IN BREACH OF THE CHARTERPARTY, THE VESSEL DEVIATED TO THE PORT OF

GUILDER ................................................................................................................................................ 5

2.1. ALTERNATIVELY, THE RESPONDENT CANNOT CHALLENGE THE APPOINTMENT OF MR

PAPANDREOU ON THE GROUNDS THAT HE IS INCOMPETENT OR UNSUITABLE ..... ERROR! BOOKMARK NOT

DEFINED.

2.2. THE DEVIATION BY THE RESPONDENT TO THE PORT OF GUILDER WAS NOT JUSTIFIED UNDER

CLAUSE 25 OF THE CHARTERPARTY AS A FORCE MAJEURE EVENT ..................................................... 6

(a) Clause 25 is not engaged ......................................................................................................... 6

(b) Alternatively, the Respondent did not follow the procedure required by Clause 25 where

there is a Force Majeure Event ........................................................................................................ 8

2.3. FURTHER, THE RESPONDENT CANNOT RELY UPON THE EXPRESS PROVISION UNDER CLAUSE 25,

EXCUSING LIABILITY FOR DEVIATIONS FOR THE PURPOSE OF SAVING LIFE OR PROPERTY ................. 10

2.4. THE CLAIMANT COULD TREAT THE CHARTERPARTY AS RESCINDED BECAUSE OF THE

RESPONDENT‘S DEVIATION ................................................................................................................. 11

(a) The Claimant was entitled to treat the contract as rescinded at the time of the deviation .... 11

(b) The Claimant has treated the Charterparty as rescinded ...................................................... 12

(c) The Claimant has not waived the Respondent‟s breach......................................................... 12

2.5. THE CLAIMANT IS ENTITLED TO DAMAGES AS A RESULT OF THE RESPONDENT‘S UNJUSTIFIED

DEVIATION TO THE PORT OF GUILDER ................................................................................................ 13

3. THE RESPONDENT IS LIABLE TO THE CLAIMANT FOR DAMAGES DONE TO THE

BERTH ................................................................................................................................................... 13


ii

3.1. THE RESPONDENT IS VICARIOUSLY LIABLE FOR MASTER‘S NEGLIGENT ACT OF CRASHING THE

VESSEL INTO THE CLAIMANT‘S BERTH AT THE PORT OF GUILDER..................................................... 13

(a) The master of the Vessel was negligent ................................................................................. 13

(b) The Respondent is liable as principal for the master‟s negligence ....................................... 17

4. THE RESPONDENT CANNOT RELY ON THE LLMC TO LIMIT THEIR LIABILITY

TO THE SUM OF $28M ...................................................................................................................... 17

4.1. THE RESPONDENT CANNOT LIMIT THEIR LIABILITY FOR THE COST OF ROAD TRANSPORTATION

18

4.2. THE CLAIMANT‘S CANNOT LIMIT THEIR LIABILITY FOR CLAIMS BY OTHER PORT USERS......... 18

4.3. ALTERNATIVELY, ALL CLAIMS RELATING TO THE BERTH AT THE PORT OF GUILDER ARE

EXCLUDED FROM LIMITATION UNDER ARTICLE 4 OF THE LLMC ....................................................... 19

5. THE RESPONDENT IS NOT ENTITLED TO A GENERAL AVERAGE CONTRIBUTION

FROM THE CLAIMANT IN RELATION TO THE DAMAGE TO THE PROPELLER SHAFT

OF THE VESSEL .................................................................................................................................. 20

5.1. THE RESPONDENT‘S CLAIM FOR GENERAL AVERAGE IS NEGATED UNDER RULE VII ............... 20

5.2. ALTERNATIVELY, THERE IS NO GENERAL AVERAGE ACT UNDER RULE A ................................ 21

(a) The Respondent has not suffered any extraordinary loss ...................................................... 22

(b) The expenditure was not incurred at a time of peril .............................................................. 22

5.3. IN THE FURTHER ALTERNATIVE, THE RESPONDENT IS NOT ENTITLED TO CLAIM $3.8M FROM

THE CLAIMANT .................................................................................................................................... 23

(a) The Respondent cannot claim a contribution for the lost revenue of the Vessel ................... 23

(b) The Respondent is only entitled to a contribution for general average, not the total amount23

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


iii

A. LIST OF ABBREVIATIONS

Berth Berth No.3 at the Port of Guilder

Charterparty Voyage Charter

Claimant Markka Trading Company

GMIS Guilder Maritime Inspection Services

LLMC Convention on the Limitation of Liability for

Maritime Claims 1976

LMAA London Maritime Arbitrators Association

MLAANZ Maritime Law Association of Australia and

New Zealand

Respondent Lira Steamship Company

Vessel The Drachma


iv

B. LIST OF AUTHORITIES

CASES

André & Cie SA v Orient Shipping (Rotterdam) BV (The Laconian Confidence) [1997] 1

Lloyd's Rep 139

Australian Coastal Shipping Commission v Green [1971] 1 QB 456

Balian & Sons v Joly, Victoria & Co Ltd (1890) 6 TLR 34.

Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529

Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45

Davis v Garratt (1830) 6 Bing 716

Duncan v Koster (The Teutonia) (1872) LR 4 PC 171

Enterra Pty Ltd v ADI Ltd (2002) 55 NSWLR 521

Fatur v IC Formwork Services Pty Ltd (2000) 155 FLR 70

Fiona Trust and Holding Corporation v Privalov [2007] Bus L R 1719

Fox v Hack [1984] 1 Qd R 391

Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235

Golden Strait Corp v Nippon Yusen Kubishija Kaisha (The Golden Victory) [2007] 2 Lloyd‘s

Rep 164

Hain Steamship Co Ltd v Tate & Lyle Ltd [1936] 2 All ER 597

Harrison v Bank of Australia (1872) LR 7 Ex 39

Holman v FT Everard & Sons Ltd (The Jack Wharton) [1986] 2 Lloyd‘s Rep 382

Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26

Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd (2006) 236 ALR 115

Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180

Korin v McInnes [1990] VR 723


v

Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181

Margolle & Anor v Delta Maritime Co Ltd & Ors (The Saint Jacques II and The Gudermes)

[2003] 1 Lloyd‘s Rep 203

Millar v Candy (1981) 38 ALR 299

McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579

McDermid v Nash Dredging & Reclamation Co Ltd [1987] 2 Lloyd‘s Rep 201

McDermid v Nash Dredging & Reclamation Co Ltd [1986] 2 Lloyd‘s Rep 24

Nippon Yusen Kubishiki Kaisha v Golden Strait Corp [2003] 2 Lloyd's Rep 592

Oakland Metal Co Ltd v Benaim & Co Ltd [1953] 2 QB 261

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451

Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (2004) 212 ALR 158

Qenos Pty Ltd v Ship „APL Sydney‟ (2009) 260 ALR 692

R v Owners of SS Argyllshire [1922] St R Qd 186

Reardon Smith Line Ltd v Black Sea & Baltic General Insurance Co Ltd [1939] AC 562

Rio Tinto Co v Seed Shipping Co (1926) 24 Ll.L.R 183

Roads and Traffic Authority of New South Wales v Dederer (2007) 238 ALR 761

Robinson v Price (1876) 2 QBD 91

Rockhampton Harbour Board v Ocean Steamship Co Ltd [1930] St R Qd 343

Romeo v Conservation Commission (NT) (1998) 192 CLR 431

Scott v Davis (2000) 204 CLR 333

Sea Success Maritime Inc v African Maritime Carriers Ltd [2005] 2 Lloyd's Rep 692

Segovia Compagnia Naviera SA v R Pagnan and Fratelli (The Aragon) [1975] 2 Lloyd's Rep

216.

Sharp v Batt (1930) 25 Tas LR 32


vi

Societe Nouvelle d‟ Armement v Spillers & Bakers [1917] 1 KB 865

Texada Mines Pty Ltd v The Ship “Afovos” [1974] 2 Lloyd‘s Rep 168

The “Breydon Merchant” [1992] 1 Lloyd‘s Rep 373

The Leitrem [1902] P 256

Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Total Transport Corp v Arcadia Petroleum Ltd (The Eurus) [1996] 2 Lloyd‘s Rep 408

Tronson v Dent (1853) 8 Moo PCC 419

University of Wollongong v Mitchell (2003) Aust Torts Reports 81-708

Wetherall v London Assurance [1931] 2 KB 448

Wilkie v Gordian Runnoff Ltd (2005) 221 CLR 522

Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 128

TREATIES

Convention on the International Regulations for Preventing Collisions, opened for signature 20

October 1972, 1050 UNTS 16 (entered into force 15 July 1977)

Convention on the Limitation of Liability for Maritime Claims, opened for signature

19 November 1976, 1456 UNTS 221 (entered into force 1 December 1986)

STATUTES

Civil Liability Act 2003 (Qld)

Commercial Arbitration Act 1990 (Qld)

International Regulations for Preventing Collisions at Sea 1977 (Cth)

Navigation (Collision) Regulations 1982 (Cth)


vii

RULES

The Maritime Association of Australia and New Zealand Arbitration Rules, 1 July 2007.

<http://www.mlaanz.org/Uploads/MLAANZ_Arbitration_Rules.pdf>

The York-Antwerp Rules 1994

SECONDARY MATERIALS

Baughen, Simon, Shipping Law (Cavendish Publishing Limited, 2nd

ed, 2001)

Butler, D A and W D Duncan, Maritime Law in Australia (Legal Books, 1992)

Carter, J W, Kate Cahill and Kate Draper, ‗Force majeure clauses – a timely topic‘ (2011) 26

Australian Environment Review 74

Colinvaux, Raoul, Carver: Carriage by Sea (London Stevens & Sons, 13th

ed, 1982)

Cooke, J H S and R R Cornah, Lowndes and Rudolf: The Law of General Average and the

York-Antwerp Rules (Sweet & Maxwell, 13th

ed, 2008)

Girvin, Stephen, Carriage of Goods by Sea (Oxford University Press, 2nd

ed, 2011)

Lambeth, R J, Templeman on Marine Insurance (Pitman Publishing, 6th

ed, 1986)

Redfern, A et al, Law and Practice of International Commercial Arbitration (Sweet &

Maxwell London, 4th ed, 2004)


1

C. STATEMENT OF FACTS

1. The Claimant is engaged in trade, and operates from Schilling and owns the Berth. The

Respondent operates from Peseta, is engaged in the business of shipping cargo, operates

from Peseta and owns the Vessel.

2. In November 2010, the Claimant and Respondent negotiated a contract of carriage from

Escudo to Schilling. On 16 November 2010, the Claimant agreed to the terms proposed by

the Respondent, save that all reference to 14 days in Clause 25(e)(ii) be changed to 30

days.

3. On 30 November 2010, the Claimant entered into the Charterparty with the Respondent to

ship 15,000mt of Ammonium Nitrate from Escudo to Schilling. Clause 36 of the

Charterparty provided ―any disputes arising out of or in connection with‖ the Charterparty

be resolved by arbitration in Brisbane according to the MLAANZ Arbitration Rules.

4. On 25 December 2010, the Vessel completed loading and proceeded to Schilling. On 3

January 2011, Schilling began to endure extreme weather conditions and at 9:00am on 11

January 2011, Schilling was closed until further notice due to inclement weather

conditions.

5. On 11 January 2011, the Respondent wrote to the Claimant giving notice of a Force

Majeure Event pursuant to Clause 25 of the Charterparty and of its intention to direct the

Master of the Vessel to proceed to the Berth. On 12 January 2011, the Claimant wrote to

the Respondent advising that its declaration of a Force Majeure Event was invalid and

expressly directed the Respondent to remain at Schilling for the port to re-open and not to

deviate to Guilder.

6. On 30 January 2011, the Vessel left anchorage at Schilling and proceeded to Guilder.

While proceeding to Guilder, the Vessel‘s propeller shaft was damaged, such that it could


2

not continue under its own power. The Vessel was drifting and the Respondent engaged the

services of Koruna Salvage and Tow Company to tow the Vessel to the Port of Koruna to

be repaired. On 31 January 2011, the Respondent sent a letter to the Claimant declaring

general average in relation to this event.

7. On 25 February 2011, the Vessel attempted to enter the Port of Guilder, which is a

compulsory pilotage area. Guilder Harbour Control ordered the Vessel to wait for a pilot.

The Vessel advised that it had to proceed to berth immediately in readiness for a further

voyage beginning on 26 February 2011. Despite being ordered that pilotage was not

negotiable, the Vessel proceeded to enter the port without a pilot. The Vessel struck the

Berth and caused significant damage to the Berth and associated port infrastructure.

8. On 26 February 2011, the GMIS prepared a report stating the Vessel had approached the

Berth at too high a speed and was unable to slow and turn as necessary. Consequently the

Vessel had struck the Berth and caused damage to the Berth and associated port

infrastructure.

9. On 1 March 2011, the Claimant wrote to the Respondent denying liability in relation to the

Respondent‘s claim for general average, giving notice of the losses resulting from the

Vessel‘s deviation and damage to the Berth, and requesting payment of those losses. On 10

March 2011, the Respondent wrote to the Claimant denying liability for those losses and

requested payment in relation to the general average incident.

10. On 30 June 2011, the Claimant informed the Respondent that it was referring its claim to

arbitration and that it appointed Mr Silvio Papandreou, a former Prime Minister of a large

ship-owning nation, as an arbitrator. On 1 July 2011, the Respondent appointed Mr Jose

Mengel, LMAA arbitrator for the past 20 years and former Master on a Cape Size vessel,

as an arbitrator.


3

D. QUESTIONS PRESENTED

11. Whether the arbitral panel have jurisdiction to hear this dispute.

12. Whether the Respondent can rely upon Clause 25 to excuse its unjustified deviation.

13. Whether the Respondent is liable for the damage done to the Berth.

14. Whether the Respondent is entitled to limit its liability under the LLMC.

15. Whether the Claimant is liable to make a general average contribution.

E. ARGUMENTS PRESENTED

1. THE ARBITRATION PANEL HAS JURISDICTION TO HEAR THIS DISPUTE

[1] The Charterparty provides the arbitration panel with jurisdiction over ―any dispute arising out

of or in connection with‖ the Charterparty.1 Arbitration clauses are interpreted broadly, and

with the presumption that the parties agreeing the arbitration clause intended the dispute to be

heard before an arbitration tribunal.2 Broadly speaking, this dispute

3 concerns the performance

or non-performance of the Charterparty and the presumption of arbitral jurisdiction has not

been rebutted. Indeed, the Claimant and Respondent have each appointed arbitrators in

accordance with clause 36 of the Charterparty.4 Therefore, the panel has been properly

appointed and has jurisdiction to hear this dispute.

1 Charterparty Clause 36 (a) (Procedural Order No 2, 16).

2 Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45, 89-90 (Allsop J); Fiona Trust &

Holding Corporatioin v Privalov [2007] Bus L R 1719, 1725-1726 (Lord Hoffman). 3 Points of Claim delivered on behalf of Markka Trading Company LLC (Moot Problem 56-7); Points of Defence

and Counter-Claim delivered on behalf of Lira Steamship Company (Moot Problem 58-9). 4 Moot Problem 54-5.


4

1.1. Any challenge to the qualifications of the arbitrators must be heard in the Supreme

Court of Queensland

[2] In the absence of any agreed challenge procedure, a party who objects to the appointment of an

arbitrator must have the arbitrator removed on one of the grounds contained in the governing

legislation.5 Further, the arbitral panel is to ―exercise the jurisdiction and have all the powers

set out in the relevant legislation governing the Arbitration‖.6

[3] The Charterparty does not outline a procedure to be followed where a party wishes to challenge

the appointment of an arbitrator, but does indicate that the arbitration is to be governed by the

Commercial Arbitration Act 1990 (Qld).7 Further, the parties have agreed that any questions of

law arising in the course of the arbitration are to be decided by the Supreme Court of

Queensland.8

[4] Accordingly, the Claimant submits that should the Respondent want to remove an arbitrator, it

must bring the matter before the Supreme Court of Queensland.

1.2. Alternatively, the Respondent cannot challenge the appointment of Mr Papandreou

on the grounds that he is incompetent or unsuitable

[5] In determining the competence and suitability of an arbitrator the relevant question is whether

a satisfactory arbitration can be had.9 The Respondent must demonstrate that Mr Papandreou is

not able to properly perform the functions of an arbitrator.10

5 Commercial Arbitration Act 1990 (Qld) s 44; Oakland Metal Co Ltd v Benaim & Co Ltd [1953] 2 QB 261;

Enterra Pty Ltd v ADI Ltd (2002) 55 NSWLR 521; Korin v McInnes [1990] VR 723. 6 The Maritime Association of Australia and New Zealand Arbitration Rules, 1 July 2007, Rule 15,3.

<http://www.mlaanz.org/Uploads/MLAANZ_Arbitration_Rules.pdf>. 7 Charterparty Clause 36 (d) (Procedural Order No 2, 17).

8 Charterparty Clause 36 (d)(iv) (Procedural Order No 2, 17).

9 Korin v McInnes [1990] VR 723, 726 (Brooking J); Enterra Pty Ltd v ADI Ltd (2002) 55 NSWLR 521.

10 Korin v McInnes [1990] VR 723, 727 (Brooking J).


5

[6] An arbitrator to an international dispute should have an awareness of international trade

relations and the relationships and expectations of trading partners.11

As a former Prime

Minister of a large shipping nation, 12

Mr Papandreou would have acquired extensive

knowledge of international trade negotiations and an understanding of international shipping,

which render him competent and suitable to act as an arbitrator in this dispute.

[7] As a result, the Claimant asserts the Respondent has no ground upon which to challenge the

appointment of Mr Papandreou as an arbitrator.

2. IN BREACH OF THE CHARTERPARTY, THE VESSEL DEVIATED TO THE

PORT OF GUILDER

2.1. The deviation to the Port of Guilder constituted a breach of the Charterparty

[8] The deviation to Guilder amounted to a breach of the Charterparty, which entitled the Claimant

to exercise its right to rescind the Charterparty.

[9] A Charterparty agreement is, by nature, entered into for a specified voyage13

and the shipowner

is obliged to follow the lawful voyage instructions.14

The Charterparty specified the discharge

port15

and the parties agreed, by Clause 1 of the Charterparty, to proceed to the discharge port

specified ―with all reasonable speed‖.16

Therefore, the Charterparty imposed upon the

11

A Redfern et al, Law and Practice of International Commercial Arbitration (Sweet & Maxwell London, 4th

ed,

2004) 233; 4-46. 12

Moot Problem 54. 13

Simon Baughen, Shipping Law (Cavendish Publishing Limited, 2nd

ed, 2001) 9. 14

Total Transport Corp v Arcadia Petroleum Ltd (The Eurus) [1996] 2 Lloyd‘s Rep 408. 15

Charterparty (Procedural Order No 2, 2). 16

Charterparty (Procedural Order No 2, 1).


6

Respondent an obligation not to deviate.17

A vessel deviates if it does not proceed to the

discharge port by the usual and customary course.18

[10] In proceeding to a port other than the discharge port specified by the Charterparty,19

the

Claimant submits the Respondent breached its obligation not to deviate. As a consequence, the

Respondent is in breach of the Charterparty.20

2.2. The deviation by the Respondent to the Port of Guilder was not justified under

Clause 25 of the Charterparty as a Force Majeure Event

[11] The Respondent can avoid liability for its deviation if it is shown that Clause 25 is engaged and

the Respondent followed the procedure required where there is a Force Majeure Event.21

The

Claimant submits that neither requirement has been satisfied.

(a) Clause 25 is not engaged

[12] Clause 25 is only engaged where:

there was a Force Majeure Event; and

the Force Majeure Event delayed, interrupted or prevented the Respondent from

performing its obligations.22

17

Reardon Smith Line Ltd v Black Sea & Baltic General Insurance Co Ltd [1939] AC 562, 584-5; Stephen Girvin,

Carriage of Goods by Sea (Oxford University Press, 2nd

ed, 2011) 401. 18

Balian & Sons v Joly, Victoria & Co Ltd (1890) 6 TLR 34; Davis v Garratt (1830) 6 Bing 716, 725; Stephen

Girvin, Carriage of Goods by Sea (Oxford University Press, 2nd

ed, 2011) 401. 19

Charterparty (Procedural Order No 2, 3); Moot Problem 46. 20

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 601 (Lord Atkin); Rio Tinto Co v Seed

Shipping Co (1926) 24 Ll.L.R 183. 21

Charterparty Clause 25 (Procedural Order No 2, 11-13); J W Carter, Kate Cahill and Kate Draper, ‗Force

majeure clauses – a timely topic‘ (2011) 26 Australian Environment Review 74, 74. 22

Charterparty Clause 25 (Procedural Order No 2, 11).


7

(i) There was no Force Majeure Event

[13] In declaring an event of Force Majeure, the Respondent pointed to ―inclement weather

conditions‖ and ―flooding‖, which resulted in the Port of Schilling being closed.23

[14] The Claimant accepts that such flooding satisfied the definition of ―flood‖ in Clause 25 (b) of

the Charterparty.24

[15] However, the clause must be read as a whole.25

Clause 25 ends with the words ―at the mines or

Shipper‘s or Receiver‘s works or berths‖.26

The terms ―inclement weather conditions‖ and

―flooding‖ must be read as being limited by these final words.27

As such, it is only where such

events occur at the localities specified by Clause 25 that they will constitute a Force Majeure

Event. In circumstances where there was no confirmation or evidence of flooding or bad

weather at the Receiver‘s berth, Clause 25 does not operate.28

(ii) Alternatively, the Force Majeure Event did not delay, interrupt or prevent the

Respondent from performing its obligations

[16] Even where there is a Force Majeure Event, it must have ―delayed, interrupted or prevented‖

the Respondent from performing its obligations,29

specifically to deliver the cargo to the Port

of Schilling.30

It is not sufficient for the event to have made the voyage more onerous or

difficult.31

23

Moot Problem, 45. 24

Charterparty Clause 25 (Procedural Order No 2, 12). 25

Sea Success Maritime Inc v African Maritime Carriers Ltd [2005] 2 Lloyd's Rep 692 (Aikens J). 26

Charterparty Clause 25 (b) (Procedural Order No 2, 12). 27

Segovia Compagnia Naviera SA v R Pagnan and Fratelli (The Aragon) [1975] 2 Lloyd's Rep 216, 221

(Donaldson J); André & Cie SA v Orient Shipping (Rotterdam) BV (The Laconian Confidence) [1997] 1 Lloyd's

Rep 139, 150-1 (Rix J). 28

Charterparty Clause 25 (b) (Procedural Order No 2, 12). 29

Charterparty Clause 25 (i) (Procedural Order No 2, 12). 30


Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd (2006) 236 ALR 115, 130 (Kiefel J).


8

[17] The Force Majeure Event claimed by the Respondent is the inclement weather conditions at the

Port of Schilling.32

The Respondent was aware that other ships were awaiting the reopening of

the port.33

At the time of nearing the Port of Schilling, the contract became more difficult and

onerous because of the bad weather conditions.

(b) Alternatively, the Respondent did not follow the procedure required by

Clause 25 where there is a Force Majeure Event

[18] Even if Clause 25 is engaged, the Respondent cannot rely upon it to escape liability for failure

to perform their contractual obligations because the Respondent did not follow the process

provided by Clause 25. Under Clause 25, the Respondent was required to:

give notice of the Force Majeure Event and take reasonable steps to avoid the event or

mitigate its consequences; and

wait a reasonable period before taking steps contrary to the contract.34

(i) The Respondent did not take reasonable steps to avoid the event or to mitigate

its consequences

[19] The Charterparty provides that the party declaring a Force Majeure Event, ―shall give the other

party prompt written notice of such cause or causes and shall take all reasonable steps to

minimise any delay.‖35

The Claimant accepts the Respondent gave prompt written notice.

[20] The Claimant submits the Respondent did not take all reasonable steps to minimise the delay

associated with the Force Majeure Event.36

The Respondent could have discharged this

32

Moot Problem 45. 33

Moot Problem 48. 34


Charterparty Clause 25 (i) (Procedural Order No 2, 12-13).


9

obligation by exercising reasonable skill.37

Instead the Respondent chose to deviate to the Port

of Guilder,38

resulting in a journey from Schilling to Guilder which took 26 days; damage to

the Vessel, which required it to make berth in the Port of Koruna; and a further journey by road

from Guilder to Schilling.

[21] This significantly increased the delay, rather than mitigating it, placing the Respondent in

breach of this obligation. The Respondent would have taken all reasonable steps to minimise

the delay by remaining at the Port of Schilling for it to be reopened.

(ii) The Respondent was required to wait a reasonable period of time before acting

inconsistently with its contractual obligations

[22] If there were a Force Majeure Event, it would also be required that ―the performance of those

obligations shall be resumed as soon as practicable after such disability is removed.‖39

The

general approach to the interpretation of commercial contracts applicable in the common law

of Australia40

, including force majeure clauses,41

is to determine what a reasonable person in

the position of the parties would have understood the words of the provision to mean, taking

into account the contract as a whole and giving proper weight to the context in which the

contract was made.42

36


Sharp v Batt (1930) 25 Tas LR 32. 38

Moot Problem 45, 47. 39


Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235, [7] (Spigelman CJ). 41

Yara Nipro Pty Ltd v Interfert Australia Pty Ltd [2010] QCA 128, [27] (Fraser JA). 42

Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179. See also: McCann v Switzerland

Insurance Australia Ltd (2000) 203 CLR 579, [22]; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR

181, [11]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 461–462; Wilkie v Gordian Runnoff

Ltd (2005) 221 CLR 522, [15].


10

[23] A reasonable person in the position of the parties would have understood the provision to mean

that the parties wanted the obligations under the contract to continue despite the Force Majeure

Event, hence the requirement to resume obligations.

[24] However, this is a commercial contract and as such, due weight must be given to the

commercial context in which the contract was made.43

The Claimant accepts that it would be

commercially impractical for the parties to wait for an indefinite period of time for the

disability to be removed. Rather the intention was for the parties to wait a period of time before

any actions could be taken inconsistent with those obligations delaying performance.44

Further,

the parties settled on this period of time as 30 days.45

[25] The Respondent acted inconsistently with its obligations under the Charterparty on 30 January

2011,46

only 19 days after it purported to declare a Force Majeure Event.47

Therefore, it has not

complied with its obligations under clause 25 (ii) of the Charterparty.48

2.3. Further, the Respondent cannot rely upon the express provision under clause 25,

excusing liability for deviations for the purpose of saving life or property

[26] The Charterer will not be held liable for deviation where it is for the purpose of saving life or

property.49

The Respondent asserts that the deviation to Guilder was permitted for the purpose

of saving property because of the serious weather conditions at Schilling.50

[27] It is accepted that the need to save property may arise from natural causes, such as serious

weather conditions.51

However, the danger complained of must be to the ship itself.52

The

43

McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579, [22] (Gleeson CJ). 44



Moot Problem 47. 47

Moot Problem 45. 48



Points of Defence and Counter-Claim delivered on behalf of Lira Steamship Company, [5] (Moot Problem, 58).


11

Claimant submits that the danger to the Vessel at the Port of Schilling was not to the ship itself.

The Vessel did not enter the Port at Schilling but was informed of the storm cycle on its

approach53

and was therefore not subject to the inclement weather conditions. There is no

indication that other ships, which were waiting for the Port to reopen,54

were subject to danger

in this situation. Further, the Vessel was able to remain at its anchorage from 11 January 2011

to 31 January 2011 without any danger to it.55

There is no indication of the weather conditions

becoming more serious at the time of the Vessel‘s departure on 31 January 2011.56

2.4. The Claimant could treat the Charterparty as rescinded because of the Respondent’s

deviation

(a) The Claimant was entitled to treat the contract as rescinded at the time of the

deviation

[28] A party will be entitled to treat a contract as rescinded if the other party breaches the contract

in a manner which goes to the root of the contract.57

Any deviation from the voyage constitutes

a breach of such a serious character that the innocent party is entitled to treat the breach as

going to the root of the Charterparty.58

The Respondent‘s deviation went to the root of the

contract,59

which entitled the Claimant to treat the Charterparty as rescinded.

51

Stephen Girvin, Carriage of Goods by Sea (Oxford University Press, 2nd

ed, 2011) 401. 52

Duncan v Koster (The Teutonia) (1872) LR 4 PC 171. 53

Moot Problem 45. 54

Moot Problem 48. 55


Moot Problem 47. 57

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 601-2 (Lord Atkin); Hongkong Fir

Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 64 (Upjohn LJ). 58

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597. 59

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597.


12

(b) The Claimant has treated the Charterparty as rescinded

[29] Whether a party has treated a contract as rescinded is determined by looking at the intention of

the party.60

Here, the Claimant demonstrated its intention to treat the contract as rescinded by

denying the Respondent any further claims in reliance on the Charterparty.61

[30] It is not necessary to expressly state this intention,62

and thus is irrelevant that the Claimant

never stated its intention to treat the contract as rescinded in its correspondence with the

Respondent.

(c) The Claimant has not waived the Respondent’s breach

[31] A party is entitled to waive a breach of contract and continue to perform its obligations.63

In

doing so, that party retains its right to claim damages.64

The obligation is to ―plainly show‖

that the breach has been waived.65

In continuing to deny that the Respondent‘s deviation was

justified under the Charterparty66

and not acceding to the Respondent‘s reason for deviation,

the Claimant has not demonstrated a waiver of the breach. On this basis, the Claimant submits

there has been no waiver of the Respondent‘s breach of the Charterparty.

60

Nippon Yusen Kubishiki Kaisha v Golden Strait Corp [2003] 2 Lloyd's Rep 592. 61


Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597 (Lord Atkin). 63

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 602 (Lord Atkin). 64

Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180; Hain Steamship

Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 602 (Lord Atkin). 65

Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 602 (Lord Atkin). 66

Moot Problem 45, 51.


13

2.5. The Claimant is entitled to damages as a result of the Respondent’s unjustified

deviation to the Port of Guilder

[32] The Claimant is entitled to damages as a result of the Respondent‘s unjustified deviation to the

Port of Guilder. The objective of damages for breach of contract is to place the innocent party

―in the same situation with respect to damages as if the contract had been performed‖.67

If the

contract had of been performed and the Respondent delivered the cargo to the Port of Schilling,

the Claimant would not have had to incur the costs of transporting the cargo from Guilder to

Schilling. Therefore, the Claimant is entitled to these transport costs, amounting to $250,000.68

3. THE RESPONDENT IS LIABLE TO THE CLAIMANT FOR DAMAGES DONE

TO THE BERTH

3.1. The Respondent is vicariously liable for master’s negligent act of crashing the

Vessel into the Claimant’s berth at the Port of Guilder

(a) The master of the Vessel was negligent

(i) The master owed a duty of care to the Claimant

[33] A duty of care may be established where the Claimant can demonstrate:

a relevant relationship of proximity between the Claimant and the master; and

that the master ought reasonably have foreseen that his acts were likely to have caused

the Claimant damage.69

67

Golden Strait Corp v Nippon Yusen Kubishija Kaisha (The Golden Victory) [2007] 2 Lloyd‘s Rep 164. 68

Moot Problem 52; Points of Claim delivered on behalf of Markka Trading Company LLC, Particulars (a) (Moot

Problem 56). 69

Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529; D A Butler and W D Duncan,

Maritime Law in Australia (Legal Books, 1992) 215.


14

[34] Proximity involves notions of nearness, such as casual proximity which means that the

Claimant‘s damage was directly caused by the master‘s act.70

The damage suffered was to the

Berth, which was directly caused by the master‘s act of crashing the ship into it.71

The

Claimant submits that this demonstrates a relevant relationship of proximity.

[35] If the master of the Vessel was going to proceed to the Berth without a pilot, as he did,72

then

he would have to personally navigate the vessel into Berth. He ought reasonably have foreseen

that if he did not exercise proper skill and judgment, then his act of navigation was likely to

cause the Claimant damage by physical damage to its Berth.73

Further, the master was aware

that the berth he was proceeding to was owned by the Claimant.74

Therefore, the master owed a

duty of care to the Claimant.

(ii) The master breached his duty of care

[36] A person is not in breach of a duty of care to take precautions against a risk of harm unless:

the risk was foreseeable;

the risk was not insignificant; and

in the circumstances, a reasonable person in the position of the person would have

taken the precautions.75

[37] The risk of harm is that the Claimant‘s berth would be damaged. The risk was foreseeable, as

indicated above.76

70

Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529; D A Butler and W D Duncan,

Maritime Law in Australia (Legal Books, 1992) 215. 71

Moot Problem 50. 72

Moot Problem 50. 73

Rockhampton Harbour Board v Ocean Steamship Co Ltd [1930] St R Qd 343; Texada Mines Pty Ltd v The Ship

“Afovos” [1974] 2 Lloyd‘s Rep 168; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (2004) 212 ALR

158, 217-18; D A Butler and W D Duncan, Maritime Law in Australia (Legal Books, 1992) 215-6. 74

Moot Problem 45. 75

Civil Liability Act 2003 (Qld) s 9 (1).


15

[38] As the master was proceeding to navigate the ship himself, with knowledge that he would have

to navigate into the Berth, the risk of harm to that Berth by collision was not insignificant,

neither in terms of the probability of its occurrence nor the likely damage to result.

[39] A reasonable person in the position of the master would have taken the precaution of

approaching the berth at a reduced speed. Whether a reasonable person would have taken such

precautions against the risk of harm requires a consideration of a number of factors:

The probability the harm would occur if care was not taken:77

The excessive speed

was the cause of the damage and thus increased the probability of harm.

Likely seriousness of the harm:78

The likely seriousness of the harm caused by

excessive speed was high, as evidenced by the damage that occurred in this case.79

Burden of taking precautions to avoid the risk of harm:80

The burden of

approaching the berth at a reduced speed was low given that the vessel would not have

added to its overall voyage time by much.

Statutory standards:81

the Convention on the International Regulations for Preventing

Collisions 1972, a statutory standard,82

provides that every vessel at all times must

proceed at a safe speed so as to take a proper and effective action to avoid collision.83

Further, a safe speed is determined by factors such as the stopping distance and turning

76

See: [35]. 77

Civil Liability Act 2003 (Qld) s 9 (2)(a); University of Wollongong v Mitchell (2003) Aust Torts Reports 981-

708, [34] (Giles JA); Roads and Traffic Authority of New South Wales v Dederer (2007) 238 ALR 761, [61]

(Gummow J). 78

Civil Liability Act 2003 (Qld) s 9 (2)(b); Roads and Traffic Authority of New South Wales v Dederer (2007) 238

ALR 761, [274] (Callinan J). 79

Moot Problem 50-1. 80

Civil Liability Act 2003 (Qld) s 9 (2)(c); Romeo v Conservation Commission (NT) (1998) 192 CLR 431, [128]

(Kirby J). 81

Civil Liability Act 2003 (Qld) s 9 (2)(d); Fatur v IC Formwork Services Pty Ltd (2000) 155 FLR 70, [19] (Miles

CJ); Fox v Hack [1984] 1 Qd R 391, 393-4 (Carter J). 82

Navigation (Collision) Regulations 1982 (Cth); International Regulations for Preventing Collisions at Sea 1977

(Qld). 83

Convention on the International Regulations for Preventing Collisions, opened for signature 20 October 1972,

1050 UNTS 16 (entered into force 15 July 1977), Rule 6.


16

ability.84

As excessive speed rendered the vessel unable to stop and turn, the master

failed to follow this standard, which evidences his breach of duty.

[40] The Claimant therefore submits the master breached his duty of care.

(iii)The Claimant suffered damage which was caused by the master‟s breach of duty

[41] The Claimant suffered physical damage to its Berth and consequential economic loss,85

which

are losses recoverable at law.86

The Claimant must demonstrate the master‘s breach of duty

caused this damage, which requires that:

the breach of duty was a necessary condition of the occurrence of harm;87

and

it is appropriate that the scope of the liability of the tortfeasor extend to the harm so

caused.88

[42] The GMIS report establishes that the damage to the Berth was caused by the master‘s

excessive speed.89

Therefore, without the master‘s breach of duty, the harm would not have

occurred.

[43] It is appropriate to extend the scope of liability to the master for this harm because of the close

physical proximity and directness between the conduct and damage.90

[44] The Claimant therefore submits that the master was negligent in crashing the Vessel into the

Claimant‘s berth.

84

Convention on the International Regulations for Preventing Collisions, opened for signature 20 October 1972,

1050 UNTS 16 (entered into force 15 July 1977), Rule 6 (a)(iii). 85

Moot Problem 50-2, 56. 86

Millar v Candy (1981) 38 ALR 299; R v Owners of SS Argyllshire [1922] St R Qd 186. 87

Civil Liability Act 2003 (Qld) s 11 (1)(a). 88

Civil Liability Act 2003 (Qld) s 11 (1)(b). 89

Moot Problem 50. 90

Rockhampton Harbour Board v Ocean Steamship Co Ltd [1930] St R Qd 343; Texada Mines Pty Ltd v The Ship

“Afovos” [1974] 2 Lloyd‘s Rep 168; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (2004) 212 ALR

158.


17

(b) The Respondent is liable as principal for the master’s negligence

[45] A principal is liable for the wrongful acts of an agent where the agent is performing a task

which the principal has agreed to perform, and the principal has delegated that task to the

agent.91

The master of a vessel is the agent of the shipowner92

and therefore the master is the

agent of the Respondent.

[46] The Respondent, as principal, is obliged to deliver the Claimant‘s cargo by the Vessel,93

which

would necessarily involve navigation of the Vessel from its origin to destination. It is

reasonable in the circumstances to infer that the Respondent has delegated the task of

navigating the Vessel to the master because the master has been appointed for this task.

[47] Therefore, the Respondent is liable for the unlawful acts of the master committed during the

delegation of this task, including the master‘s negligence for the damage done to the Berth.

4. THE RESPONDENT CANNOT RELY ON THE LLMC TO LIMIT THEIR

LIABILITY TO THE SUM OF $28M

[48] As the Respondent seeks to rely on the LLMC, they bear the onus of demonstrating that their

claims falls within Article 2 of the LLMC. The Respondent submits that their loss is limited

under Article 2.1(a) and Article 2.1(c) of the LLMC.94

91

Scott v Davis (2000) 204 CLR 333, 346 (McHugh J). 92

Tronson v Dent (1853) 8 Moo PCC 419 at 449; (Sir John Patteson, PC); Holman v FT Everard & Sons Ltd (The

Jack Wharton) [1986] 2 Lloyd‘s Rep 382; McDermid v Nash Dredging & Reclamation Co Ltd [1986] 2 Lloyd‘s

Rep 24; affirmed in McDermid v Nash Dredging & Reclamation Co Ltd [1987] 2 Lloyd‘s Rep 201. 93


Moot Problem 58.


18

4.1. The Respondent cannot limit their liability for the cost of road transportation

[49] Article 2.1(a) will only entitle the Respondent to limit its liability if the transportation costs

were consequential loss upon some physical damage which occurred.95

The transportation

costs did not result from the damage to the Berth, they resulted from the Respondent‘s

unjustified deviation to the Port of Guilder. Therefore, this claim does not fall within the ambit

of Article 2.1(a).

[50] Article 2.1(c) relates to loss for infringement of rights other than contractual rights. The claim

for road transportation falls outside the meaning of this section as the Claimant was entitled to

delivery of the cargo to be delivered pursuant to Clause 1 of the Charterparty.96

Accordingly,

the Respondent is unable to limit their liability under the Convention for this claim.

4.2. The Claimant’s cannot limit their liability for claims by other port users

[51] The Respondent may only limit its liability under Article 2.1(a) of the LLMC if the loss is

consequential upon damage to property.97

Article 2.1(a) of the LLMC will not shield the

Respondent from liability, as the loss is too remote to be considered consequential upon the

Respondent‘s damage to the Berth.

[52] Further, the claim does not fall within Article 2.1(c). This article provides that a party may

limit their liability in respect of claims resulting from the infringement of rights, other than

contractual rights. The Claimant seeks damages in regards to infringement of contractual

rights, specifically those between the Claimant and the third parties with which it has contracts

for the use of its Berth at the Port of Guilder. Therefore, the LLMC does not apply.

95

The “Breydon Merchant” [1992] 1 Lloyd‘s Rep 373. 96


Qenos Pty Ltd v Ship „APL Sydney‟ (2009) 260 ALR 692.


19

4.3. Alternatively, all claims relating to the Berth at the Port of Guilder are excluded

from limitation under Article 4 of the LLMC

[53] A person is not entitled to limit his or her liability if the loss resulted from his personal act or

omission, committed recklessly and with knowledge that such loss would probably result.98

The damage to the Berth was caused by the master‘s reckless acts. The master decided to berth

the vessel in deliberate disobedience of the orders of the Harbour Control at the Port of Guilder

to wait for a pilot to take control of the vessel.99

[54] The master‘s reckless acts were (1) his decision to disobey the Harbour Master, and (2) his

negligent control of the vessel as he approached the Berth at too high a speed.100

[55] In The Saint Jacques II,101

the court denied an application for limitation. In that case, the

Vessel was involved in a collision due in part to the reckless navigation by the master in an

area subject to the Traffic Separation Scheme.102

The master‘s acts breached the Collision

Regulations.103

Accordingly, the right to limitation should be lost in this case as the master‘s

negligent navigation in a compulsory pilotage area caused the damage to the Berth.

Accordingly, the acts of the master are sufficient to show that the loss resulted from personal

acts attributable to the Respondent. Therefore, the Respondent is unable to limit their liability

pursuant to Article 4 of the LLMC.

98

Convention on the Limitation of Liability for Maritime Claims, opened for signature 19 November 1976, 1456

UNTS 221 (entered into force 1 December 1986), Article 4. 99

Moot Problem 49. 100


[2003] 1 Lloyd‘s Rep 203. 102

Margolle & Anor v Delta Maritime Co Ltd & Ors (The Saint Jacques II and The Gudermes) [2003] 1 Lloyd‘s

Rep 203. 103

Margolle & Anor v Delta Maritime Co Ltd & Ors (The Saint Jacques II and The Gudermes) [2003] 1 Lloyd‘s

Rep 203.


20

5. THE RESPONDENT IS NOT ENTITLED TO A GENERAL AVERAGE

CONTRIBUTION FROM THE CLAIMANT IN RELATION TO THE DAMAGE

TO THE PROPELLER SHAFT OF THE VESSEL

[56] The York-Antwerp Rules 1994 have agreed operation in accordance with the

Chaterparty.104

The Rule of Interpretation105

means that if a numbered rule negates a claim in

general average, then no claim can be made under the lettered rules, even though there may be

a general average act within the meaning of Rule A of the York-Antwerp Rules 1994.106

5.1. The Respondent’s claim for general average is negated under Rule VII

[57] Where a ship is afloat no loss or damage caused by working the propelling machinery shall in

any circumstances be allowed as general average.107

The object of this rule is to codify the

principle that a shipowner cannot claim from cargo owners any contribution towards loss

damage suffered by the ship in the ordinary course of its employment.108

Therefore, a

shipowner is able to seek contribution where there is damage to the propelling machinery

caused by efforts to refloat the ship.109

However, where the ship is afloat then the charterer

cannot be called upon to contribute for damage sustained to the propelling machinery.110

[58] The Respondent seeks a contribution in general average for its expenditure in repairing the

Vessel‘s propeller shaft. The Vessel was afloat when its propeller shaft was damaged.111

Further, the propeller shaft is part of the ―propelling machinery‖. Therefore, the damage

104


York-Antwerp Rules 1994. 106

J H S Cooke and R R Cornah, Lowndes and Rudolf: The Law of General Average and the York-Antwerp Rules

(Sweet & Maxwell, 13th

ed, 2008) 71-2. 107

York-Antwerp Rules, r VII. 108

R J Lambeth, Templeman on Marine Insurance (Pitman Publishing, 6th

ed, 1986) 350. 109

York Antwerp Rules 1994, r.VII. 110



ed, 2008) 303. 111

Moot Problem, 47.


21

claimed by the Respondent falls within the ambit of the exception in Rule VII,112

regardless of

whether such contribution would otherwise be recoverable under the lettered rules.113

[59] Further, the exclusion is not limited to the direct loss or damage to the propelling machinery.114

It extends to any kind of loss or damage caused by operating the propelling machinery whilst

the ship is afloat.115

Thus, it is not only the loss directly suffered to the propelling machinery,

being the repairs, but also the other damages which were caused by this damage, specifically:

the salvage operation;

the port costs at Koruna; and

the loss of freight for the Vessel.

5.2. Alternatively, there is no general average act under Rule A

[60] If Rule VII is not applicable to these circumstances then the Respondent must establish there is

a general average act within the meaning of Rule A.116

The Claimant submits that the expenses

incurred by the Respondent do not constitute a general average act because:

there was no extraordinary loss; and

the expenditure was not incurred at a time of peril.

[61] The Claimant does not contest that the Respondent‘s act was intentionally and reasonably

incurred and for the common safety of the voyage.

112

The York-Antwerp Rules 1994. 113

The York-Antwerp Rules 1994, Rule Paramount; See: [56]. 114



ed, 2008), 311. 115



ed, 2008), 311. 116

The York-Antwerp Rules 1994.


22

(a) The Respondent has not suffered any extraordinary loss

[62] The Respondent is only entitled to claim a loss under general average which is extraordinary in

its nature.117

Any loss which arises out of ordinary measures taken in fulfillment of the

carrier‘s obligations under the contract of carriage does not amount to an extraordinary loss.118

This can be contrasted with losses which result from measures taken to re-float a grounded

vessel.119

When the propeller shaft was damaged the Respondent was simply carrying the

cargo as part of the ordinary measures to be taken in fulfillment of its obligation under the

Charterparty.120

As such, the losses suffered as a consequence of this propeller damage are not

extraordinary losses.

(b) The expenditure was not incurred at a time of peril

[63] The cost of towage, repair, and loss of revenue must be expenditures incurred at a time of

peril.121

The peril must be imminent and beyond the ordinary perils of the seas.122

Further,

―imminent‖ means a ―real‖ or ―substantial‖ peril.123

The Vessel lost the use of its propeller

shaft and was drifting.124

The only peril which the Vessel faced was the ordinary perils of the

sea. There is no evidence that it was placed in a position of substantial or real peril. Therefore,

the Respondent‘s expenditure was not incurred at a time of peril and should be rejected.

117

The York-Antwerp Rules 1994, r.A; J H S Cooke and R R Cornah, Lowndes and Rudolf: The Law of General

Average and the York-Antwerp Rules (Sweet & Maxwell, 13th

ed, 2008). 118

Robinson v Price (1876) 2 QBD 91; Harrison v Bank of Australia (1872) LR 7 Ex 39. 119

The York-Antwerp Rules 1994, r.VII. 120


The York-Antwerp Rules 1994, r.A. 122

Societe Nouvelle d‟ Armement v Spillers & Bakers [1917] 1 KB 865. 123



ed, 2008). 124

Moot Problem 47.


23

5.3. In the further alternative, the Respondent is not entitled to claim $3.8m from the

Claimant

[64] Even if the Respondent is entitled to a general average contribution from the Claimant, the

quantum of this contribution will not be $3.8m as is sought by the Respondent.125

(a) The Respondent cannot claim a contribution for the lost revenue of the Vessel

[65] Loss of the use of the ship during a delay caused by a general average act is not a matter for

which contribution is made.126

The Respondent seeks a contribution for lost revenue for the

Vessel.127

As no further particulars of this loss are provided, it should be inferred that this

arises from the inability to use the Vessel for other voyages as a result of the delays associated

with having the vessel repaired at Koruna. The Respondent is not entitled to seek a general

average contribution for this head of damage.

(b) The Respondent is only entitled to a contribution for general average, not the

total amount

[66] The Respondent has claimed a general average sum of $3.8m from the Claimant.128

Even if the

Claimant is liable in general average, the Respondent can only seek a contribution from the

Claimant.129

Here, the contributions of the Claimant and Respondent are the values of the

125


The York-Antwerp Rules 1994, r.C (3); The Leitrem [1902] P. 256, 268-9 (Gorell Barnes J); Wetherall v

London Assurance [1931] 2 KB 448, 458 (Rowlatt J); Raoul Colinvaux, Carver: Carriage by Sea (London

Stevens & Sons, 13th

ed, 1982) 1026. 127

Points of Defence and Counter-Claim delivered on behalf of Lira Steamship Company, para 9 (Moot Problem

59). 128

Points of Defence and Counter-Claim delivered on behalf of Lira Steamship Company, para 10 (Moot Problem

59). 129

The York-Antwerp Rules 1994, r.XVII.


24

cargo and the Vessel respectively.130

As these values are not presently disclosed, the exact

amount of general average contributions should be reserved until the information necessary for

these calculations can be confirmed.

130

The York-Antwerp Rules 1994, r.XVII.


25

F. PRAYER FOR RELIEF

For all the reasons submitted above, the Respondent respectfully requests this arbitral panel to:

DECLARE that this arbitral panel does have jurisdiction to hear these proceedings; and

further

ADJUDGE that the Respondent is liable to the Claimant for the following amounts claimed:

a) Cost of road transport from Guilder to Schilling of US$250,000

b) Damage to the Berth of US$35,000,000

c) Loss of use of the Berth of US$5,000,000

d) Claims by other port users with whom the Claimant has contracted for use of the Berth

of US$7,500,000; and

further

DECLARE that any liability of the Respondent is not limited to US$28,000,000

further

ADJUDGE that the Claimant is not liable to the Respondent for the following amounts

claimed:

a) Towage costs from Koruna Salvage & Tug Company of US$900,000

b) Repairs to the propeller shaft from Koruna Ship Repairs of US$2,000,000

c) Berth costs at Koruna of US$500,000

d) Lost revenue for the Vessel of US$400,000.

queensland university of technology —team 14 international maritime law arbitration moot 2012...

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