NINETEENTH INTERNATIONAL MARITIME LAW …

NINETEENTH INTERNATIONAL MARITIME LAW ARBITRATION MOOT

BRISBANE, AUSTRALIA

29 JUNE, 2018 – 3 JULY, 2018

THE WEST BENGAL NATIONAL UNIVERSITY OF JURIDICAL SCIENCES,

KOLKATA, INDIA

TEAM NO. 05

MEMORANDUM FOR CLAIMANT

CLAIMANT RESPONDENT

CERULEAN BEANS AND

AROMAS LTD

DYNAMIC SHIPPING

LLC

TEAM

ABHINAV SANKARANARAYANAN | KABIR WALIA

PRUTHVI JASANI | UNNATI JHUNJHUNWALA

TEAM 05| MEMORANDUM FOR CLAIMANT

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TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................ I

ABBREVIATIONS ............................................................................................................... IV

INDEX OF AUTHORITIES .................................................................................................. V

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

ISSUES IN CONTENTION .................................................................................................... 2

ARGUMENTS ADVANCED .................................................................................................. 3

MERITS OF JURISDICTION ............................................................................................... 3

I. THIS TRIBUNAL HAS THE JURISDICTION TO ADJUDICATE UPON THE CLAIMS PUT

FORTH BY CLAIMANT. ........................................................................................................... 3

A. This tribunal possesses the power to decide upon the extent of its jurisdiction. 3

B. The dispute resolution process contemplated by the Parties is unenforceable .. 4

MERITS OF CLAIMS ............................................................................................................ 5

II. RESPONDENT IS LIABLE TO CLAIMANT FOR DAMAGES AMOUNTING TO USD

30,200,000.............................................................................................................................. 5

A. RESPONDENT cannot claim the benefits of force majeure clause in light of the

CP’s repudiation at the instance of CLAIMANT. ............................................................ 5

1. The deviation to the port of Spectre was unjustified and constituted

fundamental breach of CP. ........................................................................................... 6

2. The Claimant elected to repudiate the Contract. ............................................... 7

B. Alternatively, even if the CP was held to be valid, reliance could not be placed

upon the force majeure clause to exclude liability. ........................................................ 7


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C. RESPONDENT is liable for damages amounting to USD 30,200,000. ..................... 9

1. RESPONDENT is liable for the damaged cargo worth USD 15,750,000.............. 9

2. RESPONDENT is liable for the Replacement Coffee worth USD 9,450,000. .... 11

3. RESPONDENT is liable for the Settlement Payment worth USD 5,000,000. ..... 12

D. RESPONDENT should not be entitled to limit its liability under International

Convention. ..................................................................................................................... 13

III. CLAIMANT IS ENTITLED TO A MARITIME EQUITABLE LIEN OVER THE MADAM

DRAGONFLY......................................................................................................................... 15

A. The Non-Payment of Wages Entitles the Crew of the Madam Dragonfly to

Exercise a Maritime Lien over the Vessel.................................................................... 15

B. Claimant is subrogated to the position of the crew members for this purpose.

……………………………………………………………………………………..16

MERITS OF COUNTERCLAIM ........................................................................................ 17

IV. CLAIMANT IS NOT LIABLE TO PAY RESPONDENT ANY AMOUNT MENTIONED IN THE

INVOICE DATED AUGUST 1, 2017. ........................................................................................ 17

A. The right to make a claim for these amounts ceases with the repudiation of the

CP. ……………………………………………………………………………………..17

B. In any case, the liability to pay these amounts has not accrued even separately.

……………………………………………………………………………………..18

1. CLAIMANT is not liable for payment of freight. ................................................ 18

2. CLAIMANT is not liable for payment of cost of repairs for damage to the vessel.

…………………………………………………………………………………19


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3. CLAIMANT is not liable to pay RESPONDENT for agency fees at the Port of

Spectre and at the Port of Dillamond. ........................................................................ 20

4. CLAIMANT is not liable to pay for the use of electronic access systems at the

Port of Dillamond........................................................................................................ 21

5. CLAIMANT is not liable to pay Demurrage........................................................ 23

PRAYER ................................................................................................................................. 24


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ABBREVIATIONS

§ Section

AMSA Australian Maritime Safety Authority

Art. Article

Cl Clause

CLAIMANT Cerulean Beans and Aromas Limited.

COW Coffees of the World

CP Charterparty

FIO Free in and out

ISM Code International Safety Management Code

LLC Limited Liability Company

LLMC Convention on Limitation of Liability for Maritime Claims

LMAA Rules London Maritime Arbitrators Association Rules

Ltd. Limited

P Page

Parties Cerulean Beans and Aromas Limited & Dynamic Shipping

LLC

RESPONDENT Dynamic Shipping LLC

Sch. Schedule

SOLAS International Convention for the Safety of Life at Sea

UK United Kingdom

USD United States Dollar

WWD Weather Working Day


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INDEX OF AUTHORITIES

Cases

American Hoesch Inc. v Steamship "Aubade" (The Aubade) [1971] 2 Lloyd’s Rep. 423 (HL)

.............................................................................................................................................. 10

Asfar v Blundell [1896] 1 Q.B. 123 ......................................................................................... 18

Automatic Tube Co v Adelaide SS (The Beltana) [1967] 1 Lloyd’s Rep. 531 ......................... 22

B.F. McKernin & Co v United States Lines Inc 416 F. Supp. 1068 (S.D.N.Y. 1976) ............. 13

Bacon v Cooper (Metals) Ltd [1982] 1 All E.R. 397 ............................................................... 11

Banabelle Electrical Pty Ltd [2002] NSWSC 178 .................................................................... 4

BGHZ 25, 300 .......................................................................................................................... 21

China Pacific S. A. v Food Corporation of India (The Winson) [1982] 1 Lloyd's Rep 117 p 118

.............................................................................................................................................. 11

Cia Sud Americana de Vapores v Sinochem Tianjin Import & Export Co (The Aconcagua)

[2010] 1 Lloyds ...................................................................................................................... 8

Compañía Anónima Venezolana de Nav. v A.J. Pérez Exp. Co. 303 F.2d 692 (5th Cir.1962) 16

Compania Maritima San Basilio S.A.S. v The Oceanus Mutual Underwriting Associations

(Bermuda) Ltd [1976] 2 Lloyd’s Rep. 171 .......................................................................... 14

Compania Naviera Termar SA v Tradax Export SA (The Ante Tropic) [1966] 1 Lloyd’s Rep

566 (HL)............................................................................................................................... 23

Court of Appeal, Hamburg, May 9, 1947, Versicherungsrecht, 1974 ..................................... 21

Dakin v Oxley (1864) 15 C.B. (N.S.) 646 ................................................................................ 18

Davis v Garrett (1830) 6 Bing. 716 ........................................................................................... 6

Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd [1995] 35 NSWLR 709

................................................................................................................................................ 4

Eriksen v Barkworth (1858) 3 H. & N. 601,606 ...................................................................... 22


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Fyffes v Reefer Express (The Kriti Rex) [1996] 2 Lloyds Rep. 171 .......................................... 8

Goldman v Thai Airways International Ltd [1983] 1 W.L.R. 1194 ........................................ 14

Grand Champion Tankers Ltd v Norpipe A/S (The Marion) [1984] A.C. 563 .......................... 8

Hadley v Baxendale (1854) 9 Exch. 341 ................................................................................. 12

Hain v Tate & Lyle (1936) 41 Com. Cas. 350 ......................................................................... 18

Hooper Bailie Associated Ltd v Natcon Group Pty Ltd [1992] 28 NSWLR 194 ...................... 4

K.M.P. Coastal Oil Pte Ltd v Owners of M.V. Iran Amanat [1997] 144 A.L.R. 720 (F.C.F.C.A.)

.............................................................................................................................................. 16

Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311 .......................... 7

London Transport Co v Trechmann (1904) 90 L.T. 132 ......................................................... 18

Machitis and Thassitis SMA 1178 (1997) ............................................................................... 21

MDC Ltd v NV Zeevaart Maatschappij "Beuersstraat" [1962] 1 Lloyd’s Rep 180 .................. 8

Medina v Marvirazon Compañía Naviera S.A. 709 F.2d 124, 125 (1st Cir. 1983) ................. 16

Metall Market OOO v Vitorio Shipping Co. Ltd. (The Lehmann Timber) [2013] EWCA Civ

650........................................................................................................................................ 10

Montedison S.p.A. v Icroma S.p.A. [1980] 1 Lloyd’s Rep. 91 ................................................. 18

MSC Mediterranean Shipping Co SA v Delumar BVBA (The "MSC ROSA M") [2000] 2 Lloyd’s

Rep 399 ................................................................................................................................ 13

Nott Turner v Bristol Corporation (1928) 31 Ll. L. Rep. 359 ................................................. 22

Phelps v Hill [1891] 1 Q.B. 605 ................................................................................................ 6

R v G (HL) [2003] UKHL 50 ................................................................................................... 14

Rederij Erven H. Groen v England (Owners) [1973] 1 Lloyds Rep. 373 ................................. 8

Richard Holden v Bostock & Co Ltd (1902) 18 T.L.R. 317 .................................................... 12

Santiago v Sea-Land Service Inc 366 F. Supp. 1309 (D.P.R. 1973) ....................................... 11

Sasportes v M/V Sol de Copacabana, 581 F.2d 1204 (5th Cir. 1978) ..................................... 16


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Schiffahrtsgesellschaft MS Merkur Sky mbH. & Co K.G. v Ms Leerort Nth Schiffahrts G.m.b.H.

& Co K.G. (The Leerort) [2001] 2 Lloyd’s Rep 291 ........................................................... 13

Shell International Petroleum Co v Seabridge Shipping (The Metulla) [1978] 2 Lloyd’s Rep. 5

.............................................................................................................................................. 18

Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 149 ........................... 7

Tele2 International Card Company SA and others v Post Office Limited [2009] EWCA Civ 9

................................................................................................................................................ 7

Terman Foods Inc. v Omega Lines 707 F.2d 1225 (11th Cir. 1983) ....................................... 11

The Asia Star [2010] 2 Lloyd’s Rep. 121 (Singapore Court of Appeal) ................................. 12

The Europa [1908] P. 84 ............................................................................................................ 6

The Heart Research Institute Ltd v Psiron Ltd [2002] NSWSC 646 ......................................... 4

The Isla Fernandina [2000] 2 Lloyds Rep. 15 .......................................................................... 8

The Southwark 191 U.S. 1 (1903) ............................................................................................ 19

The Torepo [2002] 2 Lloyds Rep. 235 ....................................................................................... 8

Tramp Oil and Marine Ltd. v M/V Mermaid 630, F. Supp. 630 (DPR 1986) ......................... 16

Triarno Pty Ltd v Triden Contractors Ltd [1992] 10 BCL 405 ................................................. 4

United States Trust Co of New York v Master and Crew of the Ship Ionian Mariner [1997] 149

A.L.R. 200 (F.C.F.C.A.) ...................................................................................................... 16

US Shipping Board v Bunge (1926) 42 T.L.R. 174 ................................................................. 18

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 K.B. 528 ....................... 12

Vinmar International v Theresa Navigation (The Atrice) [2001] 2 Lloyd’s Rep. 1 ................ 12

Legislative Enactments

Arbitration Act 1996 .................................................................................................................. 4

Carriage of Goods by Sea Act 1991 (Australia) ...................................................................... 14

Merchant Shipping Act 1995 ................................................................................................... 14


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Navigation Act 2012 .................................................................................................................. 9

Books

Aleka Mandaraka-Sheppard, Modern Maritime Law: Managing Risks and Liabilities vol 2 (3rd

edn, Routledge 2013) ........................................................................................................... 14

H.G. Beale, Chitty on Contracts, vol 1 (32nd edn, Sweet and Maxwell 2015) ....................... 12

John Schofield, Laytime and Demurrage (7th edn, Routledge 2016) ..................................... 23

Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) ............................... 6, 10

Julian D.M. Lew and others (eds), Chapter 8: Maritime Arbitration, Arbitration in England

with chapters on Scotland and Ireland (Wolters Kluwer 2013) ............................................ 4

Michael Bundock, Shipping Law Handbook (5th edn, Informa 2011) .................................... 14

Articles

Johannes Trappe, The Duties, Obligations and Liabilities of the Ship's Agent to His Principal,

Lloyd's Maritime and Commercial Law Quarterly, 1978 .................................................... 21

Leslie J. Buglass, Ground for Refusal to Contribute in General Average, Lloyd’s Maritime and

Commercial Law Quarterly, 1974 ....................................................................................... 20

Other Authorities

AMSA, Marine Notice 2014/17, available at https://www.amsa.gov.au/vessels-

operators/regulations-and-standards-vessels/marine-notices ................................................. 9

Association of Average Adjusters Report of General Meeting, 1973 ..................................... 20

Convention on Limitation of Liability for Maritime Claims 1976 .......................................... 14

GENCON Charter 1994 ........................................................................................................... 21

International Convention for the Safety of Life at Sea 1974, Chapter V, Regulation 19, 2.1.5,

available at http://solasv.mcga.gov.uk/regulations/regulation19.htm.................................... 9

International Safety Management (ISM) Code 1994 ................................................................. 9


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LMAA Terms............................................................................................................................. 4

London Award July 10, 1974, Schutzverein Deutscher Rheder, Annual Report 1973 ........... 21


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STATEMENT OF FACTS

1. On July 22, 2017, Cerulean Beans and Aromas (CLAIMANT) entered into a voyage charter

with Dynamic Shipping LLC (RESPONDENT), owners of the Madam Dragonfly for the

carriage of 4 containers of specialty grade green coffee from Cerulean to Dillamond.

Throughout the negotiations undertaken in this regard, CLAIMANT placed particular

emphasis on the need to deliver the goods by July 28, 2017.

2. The Madam Dragonfly set sail for Dillamond on July 24, 2017 and RESPONDENT dispatched

the cargo receipt.

3. Enroute, the communications and satellite systems of the Madam Dragonfly were rendered

inoperative by solar flares.

4. Despite the predictions made regarding the possibility of solar flares in that region, the crew

failed to update their hardcopy maps and the flare caused the Madam Dragonfly to lose

contact.

5. Owing to the loss of contact, the crew were compelled to rely upon their old maps and make

a deviation towards Spectre, which is situated to the west of Dillamond.

6. On July 28, 2017, the day the delivery was to be made, CLAIMANT was intimated that a

storm was about to hit Dillamond.

7. Owing to the storm, the Madam Dragonfly was forced to drop anchor approximately 100

nm from Dillamond and the vessel reached Dillamond port only on July 29, 2017.

8. Thereafter, due to congestion at Dillamond, CLAIMANT could only take delivery on July 31,

2017.

9. However, it was discovered on August 1, 2017 that three out of the four containers shipped

were water damaged and had been rendered completely unusable.


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10. On August 1, 2017, RESPONDENT was intimated regarding its breach of the voyage charter.

Inter alia, CLAIMANT sought damages for the replacement coffee that had to be sourced,

the water damage caused to the coffee transported, and the compensation amount that had

to be paid to the third-party client.

11. Subsequently, RESPONDENT denied all liability and sent an invoice for payment under the

voyage charter on August 7, 2017.

12. CLAIMANT refused to pay this amount on the basis that these additional costs had arisen

because of RESPONDENT’s breach of the CP.

13. CLAIMANT issued RESPONDENT with a notice of arbitration on August 11, 2017 and

proceeded to nominate its arbitrator. The matters were consolidated on February 16, 2018.

ISSUES IN CONTENTION

1. Whether the Tribunal has the power to adjudicate upon the claims put forth by

CLAIMANT.

2. Whether CLAIMANT should be allowed to claim USD 30,200,000 as damages for the

following: (a) Damage to Cargo; (b) Replacement Coffee; (c) Settlement Payment.

3. Whether CLAIMANT is liable to pay RESPONDENT in lieu of the counterclaims raised.

4. Whether CLAIMANT exercises an equitable maritime lien over the Madam Dragonfly.


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ARGUMENTS ADVANCED

MERITS OF JURISDICTION

I. THIS TRIBUNAL HAS THE JURISDICTION TO ADJUDICATE UPON THE CLAIMS PUT

FORTH BY CLAIMANT.

1. The Parties agreed under the CP to refer “any and all disputes” concerning the CP to arbitration

under the LMAA Rules.1 However, Clause 27(d) of the CP suggests that disputes concerning

“technical matters” are to be determined by an expert and not an arbitrator.2

2. RESPONDENT contends that the tribunal lacks the requisite jurisdiction to adjudicate upon the

claims made because they arise from matters that are to be determined by an expert. CLAIMANT

submits that this tribunal possesses the power to decide upon the extent of its jurisdiction[A].

Further, the reference to expert determination made in the CP is unenforceable on account of

uncertainty and contractual ambiguity [B]. Accordingly, it is submitted that this Tribunal

possesses the requisite jurisdiction to adjudicate upon the claims put forth by CLAIMANT.

A. This tribunal possesses the power to decide upon the extent of its

jurisdiction.

3. Here, The Parties explicitly stipulated that the law of New South Wales shall govern the CP.3

However, they consciously omitted the incorporation of a clause specifying the lex arbitri, that

is, the law governing the arbitration. Hence, because the Parties have not agreed upon a

particular lex arbitri, §7 of the LMAA Rules will take effect and the arbitration agreement will

be governed by English Law.4 Under both English Law and the LMAA Rules, the tribunal is

1 Moot Scenario, p 12. 2 Moot Scenario, p 12, Clause 27(d). 3 Moot Scenario, p 12, Clause 28 4 LMAA Terms, §7.


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empowered to decide upon the extent of its own jurisdiction.5 Therefore, this Tribunal

possesses the power to decide upon the extent of its jurisdiction.

B. The dispute resolution process contemplated by the Parties is

unenforceable

4. CLAIMANT admits that clauses conferring jurisdiction upon an expert to determine a particular

class of disputes have been upheld by Courts, where the intention of the parties has been clear

and unambiguous.6 However, when the dispute resolution mechanism outlined by the parties

is uncertain, Courts have deemed such agreements as unenforceable.7 Moreover, when the

agreement in question is contradictory or ambiguous, Courts have refused to intervene and

modify the procedure contemplated by the parties and have confined themselves to

examination of the enforceability of the agreement in question.8

5. Here, the Parties defined the phrase technical matters and provided that the determination made

by the expert would be “conclusive and binding”.9 However, Clause 27(f), which provides that

the determination will be “conclusive and binding” is incompatible with Clause 27(e), which

provides that arbitral proceedings can be initiated once the reference to expert determination is

complied with.10 A mutually conjunctive reading of these two clauses leads to a contradictory

inference, wherein disputes concerning technical matters are to be resolved by means of a two-

step process. It is submitted that the creation of such a prolonged dispute resolution mechanism

is contrary to the intention to the Parties. Further, this would render the reference to expert

determination, which is renowned for being a speedy form of dispute resolution, ineffectual.

5 Arbitration Act 1996, §30; Julian D.M. Lew and others (eds), Chapter 8: Maritime Arbitration, Arbitration in

England with chapters on Scotland and Ireland (Wolters Kluwer 2013) [8-23]. 6 The Heart Research Institute Ltd v Psiron Ltd [2002] NSWSC 646 7 Hooper Bailie Associated Ltd v Natcon Group Pty Ltd [1992] 28 NSWLR 194; Elizabeth Bay Developments Pty

Ltd v Boral Building Services Pty Ltd [1995] 35 NSWLR 709; Banabelle Electrical Pty Ltd [2002] NSWSC 178. 8 Triarno Pty Ltd v Triden Contractors Ltd [1992] 10 BCL 405; The Heart Research Institute Ltd v Psiron Ltd

[2002] NSWSC 646. 9 Moot Scenario, p 12. 10Moot Scenario, p 12, Clause 27(e); Moot Scenario, p 12, Clause 27(f).


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Hence, CLAIMANT submits that this Tribunal must recognize the unambiguous intention of the

Parties to generally arbitrate their disputes under the LMAA Rules.11 Accordingly, it is

submitted that the reference to expert determination contained in the CP is unenforceable on

account of uncertainty and contractual ambiguity. Further, this Tribunal possesses the requisite

jurisdiction to adjudicate upon the instant dispute in its entirety.

MERITS OF CLAIMS

II. RESPONDENT IS LIABLE TO CLAIMANT FOR DAMAGES AMOUNTING TO USD

30,200,000.

6. The Madam Dragonfly was directed to take the most direct route from Cerulean to Dillamond.

However, the Madam Dragonfly deviated to Spectre and was later embroiled in a storm. This

caused a delay in delivery of the cargo. While RESPONDENT admits that delivery of the cargo

was delayed, it denies liability for the same on the count that such delay was caused due to two

events of force majeure.

7. In light of the voyage CP entered into by the Parties, a defence of force majeure can be raised

only in accordance with the provisions of the CP. Here, CLAIMANT contends that RESPONDENT

cannot rely upon the force majeure clause in the CP because of the repudiation of the CP at the

instance of CLAIMANT [A]. Alternatively, even if the CP is deemed to be valid, the force

majeure clause cannot be relied upon to exclude liability [B]. Consequently, RESPONDENT is

liable to pay an amount of USD 30,200,000 as damages [C]. Further, RESPONDENT should not

be entitled to limit its liability under International Convention [D].

A. RESPONDENT cannot claim the benefits of force majeure clause in light of

the CP’s repudiation at the instance of CLAIMANT.

11 Moot Scenario, p 12, Clause 27(a).


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8. CLAIMANT submits that Madam Dragonfly’s deviation to the port of Spectre was unjustified

and hence caused a fundamental breach of the CP [1]. Hence, the CLAIMANT elected to

repudiate the Contract [2].

1. The deviation to the port of Spectre was unjustified and constituted

fundamental breach of CP.

9. A vessel is required to continue on its voyage without unnecessary deviation.12 An unjustified

deviation from the course of the voyage is dealt with as a breach of a fundamental term

conferring upon the charterer a right to elect so as to affirm or repudiate the contract.13 A

deviation is justified only when it is absolutely necessary to deviate in order to ensure the safety

of human lives, the cargo or the ship. 14 Even if a deviation is necessary, Courts have held that

the ship cannot deviate beyond what is reasonable to achieve the justifiable object. 15

10. Here, the Madam Dragonfly deviated to Spectre during the solar flare due to RESPONDENT’s

failure to update the maps.16 Moreover, whilst systems that were compliant with industry

regulations were down for merely four hours, it took seventeen hours to resuscitate the

navigation systems of the Madam Dragonfly.17 Even after the navigation systems came back

online at 2:32 pm, the Madam Dragonfly continued to sail towards Spectre for an additional

period of fifteen hours. In accordance with the CP, the Madam Dragonfly was to deviate only

if it was to “save life or property”. The additional fifteen hours’ journey towards the Port of

Spectre, was completely unjustified considering that there was no immediate threat to the

vessel once the navigation systems had come on. Therefore, this unjustified deviation led to a

fundamental breach of the contractual agreement between the parties, entitling CLAIMANT to

12 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [12.1-3]; Davis v Garrett (1830) 6 Bing.

716. 13 Ibid [12.28]. 14 The Europa [1908] P. 84. 15 Phelps v Hill [1891] 1 Q.B. 605. 16 Moot Scenario, p 19. 17 Moot Scenario, pp 19, 35.


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repudiate the contract.

2. The Claimant elected to repudiate the Contract.

11. Normally, an election of affirmation of the contract or its repudiation is required to be done

immediately after the deviation which led to fundamental breach of the contract. However, the

incorporation of a non-waiver clause in the contract removes this obligation to exercise the

right to elect immediately.18 Only an unequivocal decision affirming the contract would be

considered as a waiver of the right to elect.19

12. Here, the Parties incorporated a non-waiver clause.20 As a result of this, CLAIMANT was entitled

to reserve its right to repudiate the contract at any time after deviation in lieu of RESPONDENT’s

fundamental breach. Upon being intimated regarding the deviation, CLAIMANT sought to

confirm whether it would still be possible to deliver the goods within the contractually

stipulated time limit.21 This action cannot be regarded as conduct which unequivocally affirms

the contract. It was merely an exercise of the non-waiver rights wherein the election to

repudiate the Contract was made contingent upon the Respondent’s failure to complete the

delivery of the goods before 7 pm on July 28, 2017. CLAIMANT repudiated its contract with

RESPONDENT as soon as there was a delayed delivery as the condition on the basis of which the

right to elect was reserved, was not complied with by the Respondent. Therefore, CLAIMANT

actually repudiated the contract between the parties.

B. Alternatively, even if the CP was held to be valid, reliance could not be

placed upon the force majeure clause to exclude liability.

13. The force majeure clause in the CP to exclude liability is conditional on the “exercise of due

18 Tele2 International Card Company SA and others v Post Office Limited [2009] EWCA Civ 9. 19 Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311; Summer Hill Business Estate Pty

Ltd v Equititrust Ltd [2011] NSWCA 149. 20 Moot Scenario, p 13, Clause 35. 21 Moot Scenario, p 19.


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diligence to ensure the ship is seaworthy”.22 For a vessel to be seaworthy, she, her equipment

and systems23 must be reasonably fit to withstand the foreseeable perils of the voyage.24 Fitness

of equipment includes the supply of updated charts,25 publications and other navigational aids

on the vessel for the purpose of the voyage.26 The obligation of seaworthiness also includes

possession of documents in compliance with laws and regulations to ensure that the vessel is

legally fit.27 The test applied is whether a prudent owner would have sent the ship to sea in that

condition in the case that he had knowledge of the defect.28

14. Here, RESPONDENT was required to ensure that its vessel could withstand the foreseeable perils

for the contractual voyage from July 24 to 28, 2017. Extensive news reports advised travellers

to take precautionary measures in light of the high probability of solar flares in that period.29

They specifically urged travellers to make back-up arrangements given the high probability of

a communications blackout due to the solar flares.30 Considering that RESPONDENT was an

established Shipowner in the Cerulean region and was responsible for the majority of the

shipping traffic in Dillamond,31 it ought to have known about the possibility of a solar flare and

the region. Hence, by undertaking simple due diligence measures and updating the hardcopy

maps, RESPONDENT could have avoided the unwarranted deviation to Spectre. Accordingly, the

Madam Dragonfly was unprepared to face foreseeable perils and was hence ‘unseaworthy’ for

22 Moot Scenario, p 9, Clause 17. 23 Cia Sud Americana de Vapores v Sinochem Tianjin Import & Export Co (The Aconcagua) [2010] 1 Lloyds

Rep. 1 [367]. 24 Fyffes v Reefer Express (The Kriti Rex) [1996] 2 Lloyds Rep. 171; Julian Cooke and others, Voyage Charters

(4th edn, Routledge 2014) [11.18]. 25 Grand Champion Tankers Ltd v Norpipe A/S (The Marion) [1984] A.C. 563; The Isla Fernandina [2000] 2

Lloyds Rep. 15. 26 Rederij Erven H. Groen v England (Owners) [1973] 1 Lloyds Rep. 373. See also The Torepo [2002] 2 Lloyds

Rep. 235. 27 The Madeleine [1967] 2 Lloyds Rep. 224; Golden Fleece Maritime Inc v ST Shipping & Transport Inc (The Elli

and The Frixos) [2008] 1 Lloyds Rep. 262. 28 MDC Ltd v NV Zeevaart Maatschappij "Beuersstraat" [1962] 1 Lloyd’s Rep 180. 29 Moot Scenario, p 35. 30 Moot Scenario, p 35. 31 Moot Scenario, p 36.


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the purposes of this voyage.

15. Further, RESPONDENT failed to ensure that the Madam Dragonfly was legally fit. In accordance

with Clause 15 of the CP, RESPONDENT had to comply with the ISM Code, which requires ships

to possess a safety management system that adheres to rules and regulations that are

mandatory.32 Clause 15 specifies that the ship must conform to the Commonwealth of Australia

Navigation Act 2012, which mandates that ships must carry nautical charts.33 Furthermore,

International Convention obligates RESPONDENT to provide for alternative means of navigation,

such as hardcopy maps, which can be used if the electronic modes fail.34 Evidently,

RESPONDENT did not fulfil its obligation under both, the provisions of the CP, and International

Convention by failing to ensure that the hardcopy maps were updated.

16. Accordingly, RESPONDENT has failed to exercise due diligence. Hence, RESPONDENT cannot

place reliance upon the force majeure clause of the CP. Therefore, CLAIMANT submits that

RESPONDENT is responsible for the delayed delivery of the cargo.

C. RESPONDENT is liable for damages amounting to USD 30,200,000.

17. RESPONDENT is liable to pay CLAIMANT the amount of the damaged cargo worth USD

15,750,000 [1] as the goods were damaged due to a breach of RESPONDENT’S delivery

obligation. RESPONDENT is also liable to pay for the Replacement Coffee worth USD 9,450,000

[2] since it is a loss directly arising out of their breach. Further, the Settlement Payment is a

consequential loss that RESPONDENT is liable for as the result of his breach [3].

1. RESPONDENT is liable for the damaged cargo worth USD 15,750,000.

32 International Safety Management (ISM) Code 1994, Provision 1.2.3. 33 Navigation Act 2012, Part 6, Division 5, §224; AMSA, Marine Notice 2014/17, available at

https://www.amsa.gov.au/vessels-operators/regulations-and-standards-vessels/marine-notices. 34 International Convention for the Safety of Life at Sea 1974, Chapter V, Regulation 19, 2.1.5, available at

http://solasv.mcga.gov.uk/regulations/regulation19.htm. 34 Moot Scenario, p 43.


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18. According to the Statement of Expert Opinion of Simon Webster, the coffee was damaged in

the 24 hours from 4:30 am on July 30, 2017.35 CLAIMANT submits that the coffee was not

delivered to CLAIMANT before 1:55 pm on July 31, 2017.

19. Delivery is described as a bilateral act that does not only involve relinquishing of possession

by the carrier but also receipt of goods by the consignee.36 It is different from mere discharge.

American Hoesch v Steamship ‘Aubade’, made a distinction between discharge and delivery.37

Delivery affords the charterer an opportunity to examine the goods for damage.38 If such an

opportunity is not available, it amounts to discharge, not delivery.39

20. Here, RESPONDENT created an electronic access and warehoused the goods at the port of

delivery.40 These goods were not received by the consignee till 1:55 pm on July 31st, 2018.41

This was when CLAIMANT examined the goods and discovered the water damage to the

coffee.42 Hence, RESPONDENT merely discharged the goods when he warehoused them and did

not deliver them. In the absence of completed delivery, RESPONDENT continued to be liable

under bailment for the goods.43

21. Further, delivery is not said to be affected when goods are handed over to a person who is not

the agent of the consignee.44 This is applicable even if delivering to port or customs authority

is a general practice at the port. Such delivery, without authorisation by a BoL, would be at the

risk of the carrier.45

35 Moot Scenario, p 43. 36 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [10.4]. 37 American Hoesch Inc. v Steamship "Aubade" (The Aubade) [1971] 2 Lloyd’s Rep. 423 (HL). (In this case, steel

was to be delivered which got damaged in the warehouse. It is on limitation and the argument revolves around

when limitation starts – is it on discharge or delivery. Hence, the distinction has been spoken about in detail). 38 Ibid p 423. 39 Ibid p 423. 40 Moot Scenario, pp 22-23. 41 Moot Scenario, p 24. 42 Moot Scenario, p 24. 43 See Metall Market OOO v Vitorio Shipping Co. Ltd. (The Lehmann Timber) [2013] EWCA Civ 650. 44 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [10.4]. 45 Ibid [10.4].


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22. Here, the warehouseman did not qualify as agent of CLAIMANT. In the absence of any provision

in the CP authorising RESPONDENT to warehouse the goods without completing laytime, the

goods are kept in the warehouse at the peril of RESPONDENT. Hence, any damage caused to the

goods while in the warehouse is attributable to RESPONDENT. Further, the amount of damages

is USD 15,750,000 in spite of CLAIMANT’S efforts to mitigate46 the damage by selling the

damaged coffee.47 As the cargo was completely water damaged,48 the entire market value of

the cargo on delivery becomes payable.49

23. The contract for carriage of goods is akin to a bailment contract where the carrier plays the role

of a bailee.50 When the goods are damaged in his possession, he is liable to indemnify the

charterer against the loss.51

24. Here, the water damage to the goods was caused in the 24 hours from 4:30 am on July 30,

2017.52 RESPONDENT was liable for the goods as a bailee when the damage occurred. Thus,

RESPONDENT is liable to pay USD 15,750,000 to indemnify CLAIMANT for the value of the

goods damaged in his possession.

2. RESPONDENT is liable for the Replacement Coffee worth USD

9,450,000.

25. An injured party can recover the reasonable cost of repairing or replacing property damaged

by the defendant’s breach of contract.53 The law does not relieve the defendant from the

unavoidable circumstances of his wrong.54 This includes the cost of substituted performance

46 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [21A.25]. 47 Moot Scenario, p 27. 48 Moot Scenario, pp 25, 27. 49 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [21A.66]; Terman Foods Inc. v Omega

Lines 707 F.2d 1225 (11th Cir. 1983); Santiago v Sea-Land Service Inc 366 F. Supp. 1309 (D.P.R. 1973). 50 China Pacific S. A. v Food Corporation of India (The Winson) [1982] 1 Lloyd's Rep 117 p 118. 51 Ibid p 124. 52 Moot Scenario, p 43, Statement of Expert Opinion of Simon Webster. 53 Bacon v Cooper (Metals) Ltd [1982] 1 All E.R. 397; H.G. Beale, Chitty on Contracts, vol 1 (32nd edn, Sweet

and Maxwell 2015) [26-032]. 54 Ibid [26-032].


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by CLAIMANT.55 However, these damages should be foreseeable and arise directly as a result

of the defendant’s breach.56 Foreseeability depends on the knowledge possessed by the

parties.57

26. Here, RESPONDENT was aware that the coffee beans being delivered were to be used for a coffee

festival.58 CLAIMANT had a contract with a third party, Coffees of the World for delivery of the

beans and RESPONDENT was aware of the contract.59 RESPONDENT ought to have foreseen that

if defective coffee was delivered, then CLAIMANT would be compelled to replace the defective

product. Since the coffee delivered was water damaged, CLAIMANT had to procure

Replacement Coffee in order to honour its agreement with COW.60 The amount spent by

CLAIMANT in procuring Replacement Coffee was a direct consequence of RESPONDENT’s

failure to provide watertight storage. Therefore, RESPONDENT is liable to pay for the amount of

the Replacement Coffee.

3. RESPONDENT is liable for the Settlement Payment worth USD

5,000,000.

27. CLAIMANT paid USD 5,000,000 as Settlement Payment to COW for the damages incurred by

them as a consequence of RESPONDENT’S breach of the contract.61 Richard Holden v Bostock

& Co Ltd allowed taking into account, for the purpose of damages, the losses incurred by the

claimant even though he was not legally obligated to incur them.62 This includes payment

voluntarily made to a third party which was injured as a result of the defendant’s breach of

55 Vinmar International v Theresa Navigation (The Atrice) [2001] 2 Lloyd’s Rep. 1; The Asia Star [2010] 2

Lloyd’s Rep. 121 (Singapore Court of Appeal). 56 Hadley v Baxendale (1854) 9 Exch. 341 57 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 K.B. 528. 58 Moot Scenario, p 2. 59 Moot Scenario, p 2. 60 Moot Scenario, p 27. 61 Hadley v Baxendale (1854) 9 Exch. 341 (consequential loss). 62 Richard Holden v Bostock & Co Ltd (1902) 18 T.L.R. 317.


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contract.63 However, the injury to CLAIMANT must be foreseeable by the respondent.64

28. Here, CLAIMANT made a payment of USD 5,000,000 to COW as it faced losses due to non-

delivery of the speciality grade green coffee and late delivery of the lower grade coffee. COW

had threatened legal action if the beans were not delivered on time.65 COW agreed to release

and discharge CLAIMANT from any claims related to the failure to deliver against the payment

of this amount.66 The situation CLAIMANT was put into was analogous to the case of Holden v

Bostock & Co Ltd. CLAIMANT had to make the Settlement Payment to save its business interests

that were endangered by RESPONDENT’S breach.

29. Therefore, the need to make the Settlement Payment flows directly from RESPONDENT’S breach

of its delivery obligation and RESPONDENT is liable to make good this loss.

D. RESPONDENT should not be entitled to limit its liability under International

Convention.

30. Limitation of liability is a shipowner’s right under the LLMC 197667 which has the force of

law in the UK.68 It allows the shipowners to limit their liability to amounts calculated as per

the amended Hague or Hague Visby Rules, whichever shall be specifically applicable as per

the provisions of the CP.69 However, limitation of liability is not permitted where it can be

proved that “damage resulted from an act or omission of the carrier done with intent to cause

damage, or recklessly and with knowledge that damage would probably result.”70 It has to be

shown that the defendant’s state of mind was culpable in that he acted recklessly in respect of

63 Ibid; H.G. Beale, Chitty on Contracts, vol 1 (32nd edn, Sweet and Maxwell 2015) [26-074]. 64 B.F. McKernin & Co v United States Lines Inc 416 F. Supp. 1068 (S.D.N.Y. 1976). 65 Moot Scenario, p 1. 66 Moot Scenario, p 29. 67 Convention on Limitation of Liability for Maritime Claims 1976, Article 4. 68 Merchant Shipping Act 1995, Part I, Schedule 7. 69 Michael Bundock, Shipping Law Handbook (5th edn, Informa 2011) p 209. 70 Convention on Limitation of Liability for Maritime Claims 1976, Article 4; Carriage of Goods by Sea Act 1991

(Aus), Article 4(5)(e); MSC Mediterranean Shipping Co SA v Delumar BVBA (The "MSC ROSA M") [2000] 2

Lloyd’s Rep 399; Schiffahrtsgesellschaft MS Merkur Sky mbH. & Co K.G. v Ms Leerort Nth Schiffahrts G.m.b.H.

& Co K.G. (The Leerort) [2001] 2 Lloyd’s Rep 291.


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a circumstance, if he was aware of a risk or the result of the risk and it was, in those

circumstances, unreasonable to take the risk.71 Recklessness may be indicated by an attitude of

indifference.72 Where a shipowner knows that the ship is unseaworthy and reasonably unfit to

encounter the ordinary perils of the sea, and he “turns a blind eye”; the shipowner shall be

considered to be reckless. 73

31. Here, CLAIMANT had made it known to RESPONDENT that the shipment was urgent and the date

of discharge and delivery must be complied with strictly, with no delays.74 Therefore,

CLAIMANT expected a certain standard of care and fulfilment of obligations to be undertaken

by RESPONDENT. The newspaper reports made it clear that solar flares, which disrupted satellite

communications, were rampant and expected during the voyage.75 RESPONDENT should have

been aware of these considering that it is based in Cerulean76, where the news was published.

Moreover, its shipping business would be heavily impacted by such events. RESPONDENT failed

to carry hardcopy maps of the voyage to Dillamond.77 Further, it did not update its electronic

navigation systems either.78 Both these acts showed an attitude of complete indifference

especially where RESPONDENT was aware that its actions meant that the ship would be left

without any means of navigation in a situation where solar flares were foreseeable. The

indifferent attitude is further made evident from RESPONDENT’S wilful omission to

communicate to CLAIMANT that the vessel was deviating to Spectre, although RESPONDENT

was aware of the same when she sent the email at 2:32 pm.79 RESPONDENT was aware of the

71R v G (HL) [2003] UKHL 50; Aleka Mandaraka-Sheppard, Modern Maritime Law: Managing Risks and

Liabilities vol 2 (3rd edn, Routledge 2013). 72 Goldman v Thai Airways International Ltd [1983] 1 W.L.R. 1194. 73Compania Maritima San Basilio S.A.S. v The Oceanus Mutual Underwriting Associations (Bermuda) Ltd [1976]

2 Lloyd’s Rep. 171. 74 Moot Scenario, p 2. 75 Moot Scenario, p 35. 76 Procedural Order 2, Clause 1. 77 Moot Scenario, p 19. 78 Moot Scenario, p 35 79 Moot Scenario, p 17.


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risk of its actions and its conduct clearly shows how it turned a ‘a blind eye’ to it. RESPONDENT

acted recklessly and was fully aware that delay in delivery and consequent damage to the goods

was a probable consequence of it omission in carrying maps and being stuck without any means

of navigation. Consequently, RESPONDENT should not be entitled to limit its liability under

International Convention.

III. CLAIMANT IS ENTITLED TO A MARITIME EQUITABLE LIEN OVER THE MADAM

DRAGONFLY.

32. On or around July 22, 2017, CLAIMANT paid USD 100,000 into a special Bank account which

had been set up by RESPONDENT.80 This amount was to account for the wages which would

become payable to the crew of the Madam Dragonfly following her voyage from Cerulean to

the Dillamond.81 However, despite the fact that the voyage has culminated, RESPONDENT is yet

to pay the crew of the Madam Dragonfly or repay CLAIMANT for the funds deposited.82 Hence,

on account of this amount, CLAIMANT seeks to exercise an equitable maritime lien upon the

Madam Dragonfly.

33. In this regard, CLAIMANT submits that non-payment of wages entitles the crew members to

exercise a maritime lien [A]. Further, CLAIMANT is subrogated to the position of the crew

members for the purposes of exercising this maritime lien [B].

A. The Non-Payment of Wages Entitles the Crew of the Madam Dragonfly to

Exercise a Maritime Lien over the Vessel.

34. The amount of USD 100,000 that was paid on or around July 22, 2017 was originally meant to

be utilised as security by the crew of the Madam Dragonfly so as to compel RESPONDENT to

80 Moot Scenario, p 41. 81 Moot Scenario, p 41. 82 Moot Scenario, p 41.


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pay them their wages.83 However, RESPONDENT is yet to pay the crew of the Madam Dragonfly

their wages and news articles indicate that the crew members have remained unpaid since the

first week of June.84 Under these circumstances, it is submitted that this non-payment of wages

would entitle the crew members of the Madam Dragonfly to exercise a maritime lien over the

vessel.

35. Under Australian Law, Section 15(2)(c) of the Admiralty Act, 1988 explicitly recognises that

unpaid wages of crew-members can give rise to the creation of a maritime lien.85 Accordingly,

under certain circumstances, when seafarers have not been paid for their efforts, Courts have

recognised their right to exercise a maritime lien upon the concerned vessel.86

36. Here, RESPONDENT failed to pay its crew’s wages for undertaking the voyage from Cerulean to

Dillamond on the Madam Dragonfly.87 Therefore, the crew will be entitled to exercise a

maritime lien upon the Madam Dragonfly.

B. Claimant is subrogated to the position of the crew members for this

purpose.

37. The doctrine of subrogation is derived from the principles of equity and good conscience and

has been recognised in common law jurisdictions.88 This doctrine has been applied and

maritime liens have been subrogated when it would be equitable to do so, on a case to case

basis.89

38. Here, CLAIMANT paid the amount of USD 100,000 into the special Bank account because the

83 Moot Scenario, p 1. 84 Moot Scenario, p 36. 85 Admiralty Act, 1988, § 15(2) (c). 86 K.M.P. Coastal Oil Pte Ltd v Owners of M.V. Iran Amanat [1997] 144 A.L.R. 720 (F.C.F.C.A.); United States

Trust Co of New York v Master and Crew of the Ship Ionian Mariner [1997] 149 A.L.R. 200 (F.C.F.C.A.). 87 Moot Scenario, p 41. 88 Tramp Oil and Marine Ltd. v M/V Mermaid 630, F. Supp. 630 (DPR 1986); Medina v Marvirazon Compañía

Naviera S.A. 709 F.2d 124, 125 (1st Cir. 1983) 89 Sasportes v M/V Sol de Copacabana, 581 F.2d 1204 (5th Cir. 1978); Compañía Anónima Venezolana de Nav.

v A.J. Pérez Exp. Co. 303 F.2d 692 (5th Cir.1962)


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crew members refused to set sail unless this amount was secured as security.90 Moreover, this

amount was paid on or around July 22, 2017 and CLAIMANT is yet to be repaid for this payment

by RESPONDENT. Further, RESPONDENT’s precarious financial position following revelations of

corruption and fraud which caused the entire executive to resign makes it probable that

RESPONDENT will be incapable of repaying CLAIMANT if a claim is put forth in this regard.91

Hence, in the interests of equity and good conscience, it is necessary for CLAIMANT to exercise

a maritime lien over the Madam Dragonfly if it is to realise the amount of USD 100,000 paid

to RESPONDENT. Therefore, it is submitted that it would be equitable to subrogate CLAIMANT

to the position of the crew-members and allow it to exercise a maritime equitable lien over the

Madam Dragonfly.

MERITS OF COUNTERCLAIM

IV. CLAIMANT IS NOT LIABLE TO PAY RESPONDENT ANY AMOUNT MENTIONED IN THE

INVOICE DATED AUGUST 1, 2017.

39. CLAIMANT submits that it is not liable to pay RESPONDENT any amount raised upon it on the

basis of a counterclaim. These include: (1) freight, (2) agency fees at Port of Spectre, (3) Cost

of repairs because of damage caused to the vessel, (4) agency fees at Port of Dillamond, (5)

demurrage and (6) use of electronic access systems at Dillamond.

40. In this regard, CLAIMANT submits that the right to make a claim for these amounts ceases with

the repudiation of the CP on grounds of an unjustified deviation [A]. In any case, the liability

to pay these amounts has not accrued even separately [B].

A. The right to make a claim for these amounts ceases with the repudiation of

the CP.

90 Moot Scenario, p 1. 91 Moot Scenario, p 36.


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41. An unjustified deviation permits a repudiation of the contract. Such repudiation puts an end to

the contractual obligations of payment of freight,92 demurrage,93 and general average

contributions which occurs post such deviation.94

42. Here, all the claims from (1) to (6) arose post the deviation of the ship towards the Port of

Spectre. As established above, such deviation was completely unjustified leading to

repudiation of the CP by CLAIMANT.95 Consequently, RESPONDENT’s right to seek the payments

for (1) to (6) is also put to an end and CLAIMANT is not liable for any payment under the invoice

of August 1, 2017.

B. In any case, the liability to pay these amounts has not accrued even

separately.

1. CLAIMANT is not liable for payment of freight.

43. The true test of determining whether freight is payable is to determine whether the contract has

been substantially performed.96 Where freight is payable on delivery and the commercial

identity of the cargo itself is completely lost, no freight is payable.97 Where the contract

provides for a clause to calculate freight on the loaded quantity, there may be an implied

undertaking that the freight is deemed to have accrued and is hence payable even if a part of

the cargo was not delivered.98 However, where the damage to the cargo can be ascertained in

terms of bags or containers lost, then the freight is not payable on the bags so lost.99

44. The CP between the Parties obligates payment of freight, calculated on the loaded quantity,

92 Hain v Tate & Lyle (1936) 41 Com. Cas. 350. 93 US Shipping Board v Bunge (1926) 42 T.L.R. 174. 94 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [12.33]. 95 Refer above [9-12]. 96 Dakin v Oxley (1864) 15 C.B. (N.S.) 646. 97 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [13.81-82]; Asfar v Blundell [1896] 1

Q.B. 123; Montedison S.p.A. v Icroma S.p.A. [1980] 1 Lloyd’s Rep. 91; Dakin v Oxley (1864) 15 C.B. (N.S.) 646. 98 Shell International Petroleum Co v Seabridge Shipping (The Metulla) [1978] 2 Lloyd’s Rep. 5. 99 London Transport Co v Trechmann (1904) 90 L.T. 132.


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within two banking days of delivery. Hence, the freight is deemed to be accrued when it was

loaded. However, the final damage to the cargo was ascertainable. Here, the cargo was

delivered in four containers and the damage caused on delivery was clearly ascertainable as

has been evidenced by the Final Inspection Report.100 Moreover, the ascertainment of the cargo

in terms of containers was also done at the instance of RESPONDENT itself when it amended the

details page of the CP.101 This clearly implied that freight must not be payable for the damages

as it was ascertainable in nature.

2. CLAIMANT is not liable for payment of cost of repairs for damage to

the vessel.

45. A shipowner is entitled to general average contributions from the charterer for a general

average act, wherein a sacrifice is made or expenditure is incurred for the safety of the ship and

cargo.102 Expenditure incurred in repair of the damaged ship can be claimed by the shipowner,

only where he has a defence against an actionable claim by the charterer.103 While damage to

the cargo caused by negligence of the crew is protected under the New Jason Clause, the

shipowner is not protected for his failure in exercising due diligence to ensure seaworthiness.104

In the latter case, the shipowner cannot claim any contributions from CLAIMANT. Hence if it is

shown that (1) the vessel was unseaworthy; (2) there existed a causal connection between the

unseaworthiness and general average act and; (3) the shipowner was not duly diligent in

ensuring seaworthiness,105 then automatically the charterer has an actionable claim to which

the shipowner has no defence. Consequently, the charterer is not liable to pay general average

costs in the presence of such an actionable claim.

100 Moot Scenario, p 44. 101 Moot Scenario, p 14. 102 Ibid p 395. 103 Leslie J. Buglass, Ground for Refusal to Contribute in General Average, Lloyd’s Maritime and Commercial

Law Quarterly, 1974, pp 392, 397. 104 The Southwark 191 U.S. 1 (1903). 105 Association of Average Adjusters Report of General Meeting, 1973, p 16.


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46. Here, the anchor was dropped during the storm but had to be cut off for the safety of the ship.

Since the anchor was tangled on a coral bed, cutting it off caused damage to the Hull.106

Therefore, the damage was caused to the hull in the midst of this act of ensuring safety of the

ship and cargo in the storm. Consequently, the act leading to the damage is a general average

act and the cost of repairs can be recovered by making general average claims.

47. However, RESPONDENT also failed to replace the hardcopy maps of the previous journey with

those to the Port of Dillamond.107 This evidenced the Respondent’s failure in exercising due

diligence in ensuring that her ship was seaworthy as established above.108 Further, this

unseaworthiness necessitated the ship’s deviation to Spectre. In the course of this devious

voyage from Spectre to Dillamond, the storm struck and general average act had to be carried

out at the instance of the Respondent. The ship deviated towards the port of Spectre for 32

hours, from 9:30 pm on July 25, 2017 to 7:17 am on July 27, 2017.109 In light of such a major

deviation, it is highly improbable that the ship would have been in the same situation where

such a general average act was necessitated, unless she had deviated. Such deviation was

caused purely out of the vessel’s unseaworthiness. Hence, there is a clear connection between

the general average act and unseaworthiness of the vessel. Consequently, CLAIMANT has an

actionable claim against the Respondent, for which RESPONDENT has no defence. Hence,

CLAIMANT is not liable to pay any general average costs of repair for damage to the vessel.

3. CLAIMANT is not liable to pay RESPONDENT for agency fees at the Port

of Spectre and at the Port of Dillamond.

48. Agency fees is the customary fees that an agent appointed under the terms of the CP is entitled

106 Moot Scenario, p 20. 107 Moot Scenario, p 19. 108 Refer above [13-16]. 109 Moot Scenario, pp 19-20, 35.


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to as remuneration.110 In a voyage CP, an agent is usually appointed by the shipowners, as has

been prescribed in the GENCON 1994 form.111 However, there may be instances where the

agent is referred to as the “Charterer’s Agent”. This means that the agent shall be nominated

by the charterer and appointed by the shipper or nominated and appointed by the charterer.112

Even if this is the case, it has been held that it is “the practice and custom of the trade” that

agency fees is to be paid by the shipowner.113 Appointment by a charterer is deemed to be that

on behalf of the shipowner, thereby establishing a contractual relation between the agent and

the shipowner, based on which, the latter is liable to make the payment of the agency fees.114

49. Here, the Clause under the CP requires the ship to be consigned to the “Charterer’s Agents” at

the port of discharge with the agency fees payable at the port.115 Further, it requires the

Charterer to advise the Master as regards the name of her agent in case the vessel calls at any

port in distress.116 Further, the CP operates on f.i.o terms wherein the charterer i.e. CLAIMANT

is liable for loading and discharge of goods.117 However, keeping in mind the law governing

such agents, the use of the words “Charterer’s Agents” or the nomination of agents by

CLAIMANT shall not put the obligation of payment of agency fees upon CLAIMANT.

Consequently, CLAIMANT is not liable for agency fees at the port of Spectre or the port of

Dillamond.

4. CLAIMANT is not liable to pay for the use of electronic access systems

at the Port of Dillamond.

50. A consignee is entitled to a direct delivery from the ship where he is ready to receive his goods

110 London Award July 10, 1974, Schutzverein Deutscher Rheder, Annual Report 1973, p 32. 111 See, GENCON Charter 1994, Clause 14. 112 Johannes Trappe, The Duties, Obligations and Liabilities of the Ship's Agent to His Principal, Lloyd's Maritime

and Commercial Law Quarterly, 1978, p 595. 113 Machitis and Thassitis SMA 1178 (1997). 114 Court of Appeal, Hamburg, May 9, 1947, Versicherungsrecht, 1974, 1218; BGHZ 25, 300. 115 Moot Scenario, p 7, Clause 12(a). 116 Moot Scenario, p 7, Clause 12(b). 117 Moot Scenario, p 7, Clause 8.


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within a reasonable time.118 Goods may be directly warehoused without waiting for a

reasonable time, where such a method of delivery has been agreed to as between the parties119,

however, in other situations it is important to grant the consignee a reasonable opportunity to

collect the goods.120

51. Here, RESPONDENT was ready to deliver goods due for delivery by 7 pm on July 28, 2017, only

at 8:42 pm on July 29, 2017. CLAIMANT’s men had waited all night in the pouring rain for the

ship’s arrival.121 However, there was no communication from RESPONDENT’S side. The coffee

festival kick-started on July 29, 2017 and the coffee could not delivered by RESPONDENT in

time.122 In this situation, RESPONDENT notified CLAIMANT as to the expected time of delivery

and simultaneously sent across a barcode for access to electronic systems to enable CLAIMANT

to take delivery in case it failed to take it in the usual manner until 12:00 am.123 There was no

agreement to have the delivery of the goods in this manner. Moreover, such a decision was

taken unilaterally, before even reaching the destination port. RESPONDENT was ready with

delivery of the consignment only at 8:42 pm, affording CLAIMANT barely 3 hours to take

delivery directly from the ship.124 This was entirely unreasonable considering that RESPONDENT

was delivering the goods late by more than 24 hours and the Dillamond was ridden with heavy

rains and floods on July 29, 2017 itself.125 Hence, RESPONDENT did not wait for a reasonable

time before making use of the electronic access systems to deliver the goods. Consequently,

the charges for using the electronic access systems are to be borne by RESPONDENT and not

CLAIMANT.

118 Eriksen v Barkworth (1858) 3 H. & N. 601,606; Nott Turner v Bristol Corporation (1928) 31 Ll. L. Rep. 359. 119 Automatic Tube Co v Adelaide SS (The Beltana) [1967] 1 Lloyd’s Rep. 531. 120 Julian Cooke and others, Voyage Charters (4th edn, Routledge 2014) [10.19]. 121 Moot Scenario, p 20. 122 Moot Scenario, p 2. 123 Moot Scenario, pp 22-23. 124 Moot Scenario, p 24. 125 Moot Scenario, p 36.


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5. CLAIMANT is not liable to pay Demurrage.

52. Generally, in a port charter, the time spent at the anchorage counts as laytime.126 Any place

within the port, including one from where a vessel cannot tender a valid notice of readiness

will be included for the purpose of laytime.127 However, once the vessel leaves the anchorage

and starts shifting to the appointed berth, the time spent in reaching the berth will not count as

laytime.128 In the present CP, Clause 8(e) excludes from laytime calculation the time spent

shifting berths or changing positions.129 The Madam Dragonfly reached the port of Dillamond

at 7:00 am on July 29, 2017 and was told to wait ~100nm outside the port till a berth became

available.130 Thereafter, on the availability of the berth, at 9:00 am it proceeded towards the

available berth.131 It did not reach this berth till 5:00 pm on the same day.132 Subsequently, it

remained on the allotted berth from 5:00 pm on July 29, 2017 till 12:00 am on July 30, 2017.

This entire episode lasted 18 hours, out of which the 8 hours which were spent shifting positions

would be excluded. Thus, laytime ran for 10 hours which is less than the 12 hours (.5WWD)

allowed by the CP.133 Since laytime did not expire, demurrage will not accrue and CLAIMANT

is not liable to pay USD 100,000 to RESPONDENT in lieu of the same.

126 John Schofield, Laytime and Demurrage (7th edn, Routledge 2016) [3.52]. 127 Ibid [15.69]. 128 Ibid [15.69]; Compania Naviera Termar SA v Tradax Export SA (The Ante Tropic) [1966] 1 Lloyd’s Rep 566

(HL). 129 Moot Scenario, p 6, Clause 8(e). 130 Moot Scenario, p 20. 131 Moot Scenario, p 20. 132 Moot Scenario, p 21. 133 Moot Scenario, p 6, Clause 8(c)(ii).


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PRAYER

For the reasons set out above, CLAIMANT seeks the following reliefs:

a) An order stating that the reference to expert determination in the arbitration agreement

is unenforceable on account of uncertainty;

b) An award for damages for Damaged Cargo, Replacement Coffee and Settlement

Payment to the tune of USD 30,200,000;

c) A holding that CLAIMANT is not liable to pay any amount sought by the RESPONDENT

as a counter-claim via invoice dated 1st August, 2017;

d) An order recognising the CLAIMANT’s maritime lien over the Madam Dragonfly.

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