TEAM 4 NINETEENTH ANNUAL INTERNATIONAL MARITIME …

MEMORANDUM ON BEHALF OF THE CLAIMANT

COUNSELS

Sanya Kapoor

Riya Gupta

Arushi Sethi

Rupal Gupta

NINETEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2018

Guru Gobind Singh Indraprastha University, New Delhi, India

IN THE MATTER OF:

CERULEAN BEANS AND AROMAS LTD .… CLAIMANT

v.

DYNAMIC SHIPPING LLC. … RESPONDENT

TEAM 4

TEAM 4 MEMORANDUM FOR CLAIMANT

II

TABLE OF CONTENTS

ABBREVIATIONS IV

LIST OF AUTHORITIES V

STATEMENT OF FACTS 1

ARGUMENTS ON JURISDICTION 2

I. THAT THE TRIBUNAL HAS JURISDICTION TO DETERMINE THE CLAIMS

MADE BY THE CLAIMANT 2

A.The English law governs the arbitration agreement. 2

(i) The English law has the closest and most real connection to the

arbitration agreement. 2

(ii) The choice of London as the arbitral seat is testimony to this conclusion. 3

B. Pursuant to Clause 27 of the Charterparty, the dispute between the parties

had to be referred to arbitration 3

(i) Any dispute arising regarding existence or termination of the contract

to be referred to arbitration 3

(ii)The Respondents seek to delay the proceedings of the Hon’ble Tribunal 4

C. The Respondents seeks to delay the proceedings of the Hon’ble Tribunal 5

ARGUMENTS ON THE MERITS OF THE CLAIM 5

II. THAT THE RESPONDENTS ARE LIABLE FOR THE BREACH OF THE

CONTRACT 5

A. That deviation from the most direct route resulted in breach of the charterparty 5

B.That the Respondents breached the customary duty of seaworthiness 7

(i) The Respondents breached the duty of seaworthiness and due diligence. 8

(ii) The Vessel did not conform to the recent technological developments 9

C.That a bailor- bailee relationship exists between the Claimant and the Respondents 10

D. That the commercial purpose of the charterparty was frustrated by the Respondents 11


III

III. THAT THE CLAIMANT IS ENTILTED TO HOLD MARITIME EQUITABLE

LIEN OVER MADAM DRAGONFLY 11

A. Claimant holds maritime lien over the vessel 11

(i) Breach of charter party 12

(ii)Supply of necessaries 12

B. Claimant holds equitable lien over the vessel 13

IV. THAT THE RESPONDENTSARE LIABLE TOPAY THE CLAIMED

DAMAGES 15

A. The delivery took place on 31st July, 2017 15

B.That the Respondents are liable to pay on account of the damaged cargo 16

(i)Breach of contract of carriage 16

(ii) Claimant suffered loss of profit 17

(iii) Breach of duty as Bailee of goods 17

(iv) Respondents are not entitled to limit its liability 18

C. That the Respondents are liable to pay the replacement coffee payment. 18

D. That the Respondents are liable to pay the settlement payment. 19

(i) The Respondents are liable as per the Biggin Principles 20

(ii)The Respondents are liable under the Civil Liability (Contribution) Act 1978. 21

ARGUMENTS ON THE MERITS OF COUNTER CLAIM 21

V. THAT THE CLAIMANT IS NOT LIABLE TO PAY THE DAMAGES

CLAIMED BY THE RESPONDENTS 21

A. That the Claimant is not liable to pay freight 22

B. That the Claimant is not liable to pay the repairs to hull 22

C. That the Claimant is not liable to pay for demurrage 22

D. That the Claimant is not liable to pay for electronic access systems used 23

E. That the Claimant is not liable to pay the agency fee 24

REQUEST FOR RELIEF 25


IV

ABBREVIATIONS

Claimant Cerulean Beans and Aromas Ltd.

Respondents Dynamic Shipping LLC

WWD Weather Working Days

S. Section

p. Page

Para. Paragraph

LMAA London Maritime Arbitration Association

USD US Dollars

NSW New South Wales

HVR Hague Visby Rules by Brussels Protocol, 1968

UNCTAD United Nations Conference on Trade and

Development

ICC International Chamber of Commerce

Charterparty The Voyage Charterparty between Claimant and

Respondents.

Hon’ble Honourable


V

LIST OF AUTHORITIES

A/S D/S Heimdal v Questier Co. Ltd. (1949) 82 Ll.L.Rep 452

Akts. De Danske Sukkerfabrikker v. Bajamar Cia. (The Torenia), [1983] 2 Lloyd’s Rep. 210, at p. 216.

Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50, 61

Antclizo Shipping Corp. v. Food Corporation of India (The Antclizo) (No. 2) [1992] 1 Lloyd’s Rep. 558,

564.

Antwerp United Diamond BVBA v Air Europe [1996] Q.B. 317

Asfar v Blundell [1896] 1 QB 123.

Attorney General of the Republic of Ghana v Texaco Overseas Tankships Ltd – “Texaco Melbourne”

(1993) 1 Lloyd‟s Rep 471 (CA)

Balian& Sons v Joly Victoria Co. (1890) 6 TLR 345.

Banco de Portugal v. Waterlow, [1932] AC 452.

Bank Line Ltd v Arthur Capel & Co [1919] AC 435, 455

Barge B.A. 1401. (Hampton Roads Carriers, Inc. v. Allied Chemical Corp.), 329 F2d. 387, 1964

A.M.C. 2458 (4th. Cir. 1964)

Behn v Burness (1862) 1 B & S 877.

Bergerco v Vegoil [1984] 1 Lloyd's Rep. 440.

Bibb Broom Corn Co. v. Atchinson

Biggin & Co v Permanite [1951] 2 K.B. 314.

Black Clawson International Ltd v PapierwerkeWaldhof-Aschaffenburg [1981] 2 Lloyd’s Rep 446.

Bonython v Commonwealth (1950) 81 CLR 486, 498

Boudoin v. J. Ray McDermott & Co. 176 F.Supp. 900 (1959)

British Shipowners v. Grimond (1876) 3 Rett. 968, 972.

British Westinghouse Electric and Manufacturing Company, Limited v Underground Electric Railways

Company of London, Limited [1912] AC 673 (“British Westinghouse Electric”) at 689.

British Westinghouse Electric Co Ltd v Underground Electric Rlys [1912] AC 673, 689.

Budgett& Co. v Binnington& Co. [1891] 1 QB 35, 38


VI

Bulkhaul v. RhodiaOrganique Fine Ltd [2009] 1 Lloyd’s Rep. 353.

Bunge SA v Nidera BV (formerly NideraHandelscompagnie BV), [2015] UKSC 43

C. Tennant Sons & Co. v. Norddeutscher Lloyd, 220 F. Supp. 448 (E.D. La. 1963)

Canada (the Farrandoc [1967] 1 Lloyd's Rep 232

CfContigroup Companies, Inc. v Glencore A.G. [2005] 1 Lloyd's Rep. 241.

Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd. (HL) [1993] 1 Lloyd’s Rep 291.

Chartered Bank v. British India S.N. Co. [1909] A.C. 369, 375.

Cia Portorafti Commerciale SA v Ultramar Panama Inc (1990) 1 Lloyd’s Rep 310, 316 (CA)

Circle Finance Company v. Jessie L. Peacock and Sara A. Peacock 399 So. 2d 81 (1981).

Clayton v Simmonds (1741) 1 Burr 343.

Coast Lines Ltd v Hudig&Veder Chartering NV [1972] 2 WLR 280 (‘Coast Lines’), 286 ,289.

Coldman v Hill [1919] 1 KB 443 (CA) at 454.

Compania de Navegacion Porto Ronco, S.A. v. S.S. Am. Oriole, 474 F. Supp. 22 (E.D. La. 1976).

CompaniaNaviera Aeolus SA v Union of India [1964] AC 868 at 899 (Lord Guest), cited by Lord

Diplock in Dias CompaniaNaviera SA v Louis Dreyfus Corporation [1978] 1 WLR 261 at 263.

Compania Sud Americana de Vapores S.A. v. Sinochem Tianjin Import and Export Corp (The

Aconcagua) [2010] 1 Lloyd’s Rep. 1, paras 376–379.

Comyn Ching & Co (London) v Oriental Tube Co Ltd (1981) 17 BLR 47

Cott UK Ltd v FE Barber Ltd(1997) 3 All ER 540.

Dakin v Oxley (1864) 143 ER 938 p 946.

Dallah Real Estate and Tourism Co v Ministry of Religious Affairs of the Government of Pakistan

[2011] 1 AC 763, 830

Davis v Garrett (1830) 6 Bing 716.

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

DGM Commodities Corp v Sea Metropolitan S.A. (The Andra) [2012] EWHC 1984 (Comm); [2012] 2

Lloyd’s Rep 587

Dominion Mosaics v. Trafalgar Trucking [1990] 2 All E.R. 246 at 248.

Duthie v Hilton (1868) LR 4 CP 138; Asfar v Blundell [1896] 1 QB 123


VII

East Ham Corp v Bernard Sunley& Sons Ltd [1966] AC 406

East West Corp v DKBS 1912 and AKTS Svendborg[2003] EWCA Civ 83, [2003] QB 1509 at [24].

Encyclopedia Britannica v. S.S. Hong Kong Producer, 422 F.2d 7, 16-17 (2nd Cir. 1969).

Fibrosa v Fairbairn [1943] AC 32.

Fisher v. Val de Travers (1876) 45 L. J. (C. P.) 479; 35 L. T. 366

Gatliffe v. Bourne(1838) 4 Bing. N.C. 314, (1841) 3 M. & G. 643, (1844) 7 M. & G. 850, 11 Cl. & F.

45.

General Feeds Inc. Panama V. SlobodnaPlovidba Yugoslavia [1999] 1 Lloyd's Rep. 688.

General Foods Corp. v. The Troubador, 98 F. Supp. 207, 210 (S.D.N.Y. 1951).

Gibaud v Great Eastern Railway Co. [1921] 2 KB 426.

Gilroy, Sons & Co v W R Price & Co [1893] AC 56, 63

Glencore International AG v MSC Mediterranean Shipping Co SA[2017] EWCA Civ 365.

Glory Wealth Shipping Pte. v. Korea Line Corp. (The Wren) [2011] 2 Lloyd’s Rep. 370

Glynn and Others v Margetson& Co and Others [1893] A.C. 351 (H.L.).

Glynn v Margetson [1893] AC 351, HL.

Golden v. Woodward 15 So.3d 664, 669

Grain Growers Export Co. v. Canada Steamship Lines Ltd. (1918) 43 O.L.R.(Ont. S.C.App. Div.),

upheld (1919) 59 S.C.R. 643 (Supr. C. of Can.)

Great China Metal Industries Co. Ltd. v Malaysian International Shipping Corp. Bhd (The

BungaSeroja) [1999] 1 Lloyd's Rep. 512.

Grebert-Borgnis v. Nugent (1885) 15 Q. B. D. 85

Hadley v Baxendale (1854) 9 Exch. 341.

Hain SS Co –v- Tate & Lyle [1936] 2 All ER 597.

Hammond & Co. v. Bussey (1887) 20 Q. B. D. 79

Hardesty v. Larchmont Yacht Club, 1983 AMC 1059, 1064 (S.D.N.Y. 1982)

Hart v. Allen, 2 Watts (Pa.) 114.

Herrington v British Railways Board (1971) 2 QB 107 (CA)

Heskell v Continental Express [1950] 1 All ER 1033.


VIII

Hewett v Court (1983) 149 CLR 639

Hollins v. Fowler, (1872) L.R. 7 Q.B. 616, 632; The Houda, [1994] 2 Lloyd’s Rep. 541; The Rigoletto,

[2000] 2 Lloyd’s Rep.

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7.

Horabin v British Overseas Airways Corp (1952) 2 Ll LR 450, 459.

Horne v Midland Railway Company (1873) LR 8 CP 131.

In Re Ropner [1927] 1 KB 879

James Morrison & Co., Limited v Shaw, Savill, and Albion Company, Limited [1916] 2 K.B. 783.

Joseph Thorley Ltd v Orchris Steamship Co Ltd [1907] 1 KB 660.

Kopitoff v Wilson (1876) 1 QBD 377, 380

Kossian v. American National Ins. Co., 254Cal. App. 2d647, 62Cal. Rptr.225 (1967). Leigh and Sillavan Limited v Aliakmon Shipping Company Limited 1986 AC 785

Lilley v Doubleday (1881) 7 QBD 510.

Schofield, 198 [4.18], 200 [4.26]

Longley, 44; The Ciprya, 137 F.2d 326, 1946 A.M.C 947 (2nd Cir)

Monarch Steamship Co Ltd v KarlshamnsOljefabriker [1949] AC 196 at p 220.

Lyon v Mells (1804) 5 East 428

Martin v. Southwark (1903), 191 U.S. 1, 24 S.Ct. 1, 48 L.Ed. 65.

Maxine Footwear Co. Ltd. V. Can. Government Merchant Marine [1959] A.C. 589, [1959] 2 Lloyd’s

Rep. 105 (P.C.)

McFadden v Blue Star Line [1905] 1 KB 697 (KBD) at 700.

MDC Ltd. v. NV ZeevaartMaatschapijBeursstraat[1962] 1 Lloyd’s Rep. 180,at 186.

Mediterranean Freight Services Ltd. v BP Oil International Ltd (The Fiona) [1993] 1 Lloyd's Rep. 257,

[1994] 2 Lloyd's Rep. 506

Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] 1 NSWLR 366, 369.

Meredith Jones v. Vangemar Shipping (The Apostolis) (No. 2) [1999] 2 Lloyd’s Rep.

Millen v Brasch& Co. (1882-83) L.R. 10 Q.B.D. 142

Morris v CW Martin & Sons [1966] 1 QB 716, 726.


IX

Morrison v Peacock &Roslyndale Shipping Co Pty Ltd (2000) NSWCCA 452 (QL),[70]-[76]

Nabob Foods Ltd v Cape Corso [1954] 2 Lloyd's Rep 40)

Nissho v Livanos (1941) 69 Ll.L.Rep 125

Obestain Inc. v. National Mineral Development Corp. (The Sanix Ace) [1987] 1 Lloyd’s Rep. 465

Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 217.

Otis Mcallister& Co v Skibs-A/S Marie Bakke [1959] 2 Lloyd's Rep 210)

Pacific Interlink SdnBhd v Owner of the Asia Star [2009] 2 Lloyd's Rep 387

Packard v. Taylor, 35 Ark. 402, 37; New Brunswick Steamboat, etc., Transp. Co. v. Tiers, 24 N. J. L.

697

Paper Products Pty Limited v Tomlinsons (Rochdale) Ltd &Ors (1993) 43 FCR 439, 444.

Robinson v Harman (1848) 1 Ex 850 at p 855

QH Tours Ltd v Ship Design and Management (Aust) Pty Ltd (1991) 105 ALR 371, 384

R v International Trustee for the Protection of Bondholders Aktiengesellschaft [1937] AC 500, 529

Re United Railways of Havana and Regla Warehouses Ltd [1961] AC 1007, 1021

Reardon Smith Line v Black Sea and Baltic General Insurance (1939) AC 562 (HL).

Rodocanachi v Milburn (1886) 18 QBD 67, 78

Rothwells Ltd (in liq) v Connell (1993) 27 ATR 137, 143.

Royal Brompton Hospital NHS Trust v Hammond (No.1) [1999] B.L.R. 162.

Royal Brompton Hospital NHS Trust v Hammond [2002] 1 WLR 1397; Aer Lingus v. Gildacroft [2005]

EWHC 1556 (QB)

Sanborn, 7; Anderson, III, chap 6.

Saw-Mill Co Ltd v Nettleship 105 (1868) LR 3 CP 499

Scaramanga& Co v Stamp (1880) 5 C.P.D. 295.

Select Commodities Ltd v Valdo SA (The Florida) [2006] EWHC 1137 (Comm),[2007] 1 Lloyd’s Rep 1.

Sellers Fabrics Pty Ltd v Hapag- Lloyd AG [1998] NSWSC 646

Sevylor Shipping and Trading Corp v Altfadul Co for Foods, Fruits and Livestock [2018] EWHC 629

(Comm)

Shawinigan Ltd v Vokins& Co Ltd (1961) 3 All ER 396, 403 (QB)


X

Shearson Lehman Hutton Inc. v. Maclaine Watson & Co. Ltd (No. 2) [1990] 1 Lloyd’s Rep. 441

Shoe Co. v. Chicago [1905] 102 N. W. 709.

Simpson & Co. v. Thomson [1877] 3 Appeal Cases 279.

Smithers v Lokys (2001) 108 FCR 303 (WL), [15] (FCA);

St Vincent Shipping Co Ltd v Bock, Godeffroy& Co (The Helen Miller) [1980] 2 Lloyd’s Rep 95.

Steel v State Line Steamship Co (1877) 3 App Cas 72, 77, 84, 88

Stolt Tankers v Landmark Chemicals [2002] 1 Lloyd’s Rep 786

Sul America Cia Nacional De Seguros SA v EnesaEngenharia SA [2012] EWCA Civ 638.

Sze Hai Tong Bank v Rambler Cycle Co [1959] AC 576; The Houda [1994] 2 Lloyd's Rep 541.

T.A. Shipping v. Comet Shipping (The Agamemnon) [1998] 1 Lloyd’s Rep. 675.

T.J. Hooper Eastern Transp. Co. New England Coal & Coke Co. V. Northern Barge Corporation.

Hartwell & Son, Inc. 53 F.2d 107, 1931 A.M.C. 1764 (D.C.N.Y. 1931).

The Albazero [1977] Appeal Cases 774.

The Anastasia, 11 F. Supp. 314, 1935 A.M.C. 579(E.D.Va.).

The Aramis [1989] 1 Lloyd’s Rep 213

The Assunzione [1954] 2 WLR 234 (‘Assunzione’), 261

The Athenian Harmony [1998] 2 Lloyd’s Rep 410

R&W Paul Ltd v National Steamship Co Ltd (1937) 59 Ll L Rep 28.

The Baleares [1993] 1 Lloyd's Rep. 215 (C.A.)

The Bethulia , 200 F. 876 (D. Mass. 1912)

The British Columbia and Saw-Mill Co v Nettleship (1867-68) L.R. 3 C.P. 499.

The Caspian Sea [1980] 1 Lloyd’s Rep 91.

The Edwin I. Morrison, 153 U.S. 199, 215, 14 S. Ct. 823, 38 L.Ed. 688 (1894)

The Esso Providence, 112 F. Supp.631, 1953 A.M.C. 1317 (S.D.N.Y.).

The Eurasian Dream [2002] 1 Lloyd’s Rep. 719.

The Fontevivo [1975] 1 Lloyd’s Rep 339.

The Glenville, 1962 A.M.C. 2311 (S.D. Tex.)

The Gonzenheim, 36 F.2d 869, 1930 A.M.C. 122 (5th Cir)


XI

The John Michalos [1987] 2 Ll. Rep. 188

The Kapitan Sakharov [2000] 2 Lloyd’s Rep.255.

The Kriti Rex [1996] 2 Lloyd’s Rep 171, 194.

The LendoudisEvangelos[2001] 2 Lloyd’s Rep. 304.

The Maria, 15 F. Supp. 745, 1936 A.M.C. 1314(S.D.N.Y.)

The Maria, 91F.2d 819, 1937 A.M.C. 934 (4th. Cir.)

The Mary Lou [1981] 2 Lloyd’s Rep 272

The Mass Glory [2002] 2 Lloyd’s Rep 244.

The Nanfri [1979] AC 757.

The Oceano , 148 F. 131, 133 (S.D.N.Y. 1906).

The Pennsylvania (1873) 86 U.S. 125, 1998 A.M.C. 1506, 22 L.Ed. 148, 19 Wall. 125 (1873).

The Roseina, 1937 A.M.C. 359 (S.D.N.Y.)

The Schooner Freeman v. Buckingham, U.S. 182, 190 (1856).

The Silverway, 15 F.2d 648, 1926A.M.C. 1645 (5th Cir.)

The Silvia (1898) 19 S Ct 7, 8; Abbott (n 18) 180.

The Thomas Cook Group Ltd v Air Malta Co Ltd (1997) 2 Lloyd’s Rep 399, 408

The Union Amsterdam [1982] 2 Lloyd’s Rep 432

The W.W. Bruce, 94 F.2d 834, 1938 A.M.C. 232 (2d Cir.)

The Welsh Endeavour [1984] 1 Lloyd’s Rep 400.

The Winkfield (1900-3) All ER Rep 346

TheSouthwark 191 U.S. 1, 15, 24 S.Ct. 1, 48 L.Ed. 65 (1903)

Thyssen, Inc. v. S/S Eurounity, 21 F.3d 533, 1994 AMC 1638 (2d Cir. 1994)

Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia [2006] EWHC 3030 (Comm).

Transgrain Shipping v. Global TransporteOceanico (The Mexico I) [1990] 1 Lloyd’s Rep. 507

Trinidad Shipping Co. v. Frame Alston Co. 88 Fed. 528 (S.D.N.Y.1898)

U.S. v. Ultramar Shipping Co., Inc. 685 F. Supp. 887 (S.D.N.Y. 1988).

United States v. The Barge CBC 603, 233 F. Supp. p.85, 87-88.


XII

Virginia Carolina Chemical Co v Norfolk and North American Steam Shipping Co [1912] 1 KB 229,

243- 244.

Wehner v. Dene [1905] 2 K.B. 92, 99;

Williams Brothers v Agius Ltd [1914] A.C. 510, (H.L.)

Woodger v The Great Western Railway Company (1866-67) L.R. 2 C.P. 318

XL Insurance Ltd v Owens Corning [2000] 2 Lloyd’s Rep 500.

Zodiac Maritime Agencies v. Fortescue Metals Group Ltd (The Kildare) [2011] 2 Lloyd’s Rep. 360,

para. 56

BOOKS& JOURNALS REFERRED

A Treatise on the Jurisdiction and Practice of the English Courts in Admiralty Actions and Appeals ,

Gainsford Bruce, Esq, Q.C.

Arnaldez, Jean-Jacques et. Al (2003) Collection of ICC Arbitral Awards 1996-2000, Kluwer Law

International.

B. A. Garner and H. C. Black, Black's law dictionary, 9th edn.

Baughen, S (1991), Does Deviation Still Mater?Lloyd‟s Maritime and Commercial Law Quarterly.

Bernard Eder and others, (2015) Scrutton on Charterparties and Bills of Lading, 23rd edn, Sweet &

Maxwell.

Cooke on Voyage Charters, 4th ed (2014).

David Chong Gek Sian, ‘Revisiting the Safe Port’, (1992) Singapore Journal of Legal Studies.

Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd ed (2004), Cavendish.

Dyala Jimenez-Figueres, Multi-Tiered Dispute Resolution Clauses in ICC Arbitration, 14 ICC Bull. 71

(No. 1, 2003).

Fan Wei, Measurement of Damages in Carriage of Goods by Sea, 2008.

Fouchard, Gaillard, Goldman (1999) On International Commercial Arbitration, Kluwer Law

International.

Gary Born (2014) International Commercial Arbitration, Kluwer Law International, 2nd ed.

Harvey McGregor, McGregor on Damages (Thomson Reuters (Legal) Limited, 18th Ed, 2009).

John F.Wilson, Carriage of Goods by Sea.


XIII

Kent's Com. (13th ed.).

Lindey D. Clark, Law of Employment of Labour.

Longley, H.N (1967), Common Carriage of Cargo.

Paul S. Edelman & James E. Mercante, Of Hurricanes, Acts of God and Admiralty Jurisdiction, N. Y.

L. J., Oct. 28, 2005.

Redfern and Hunter (2015) International Arbitration, Oxford University Press, 6th ed.

Robert Force & A.N. Yiannopoulos, 2 Admiralty and Maritime Law 2-1 (2001).

Shipbroking and Chartering Practice (2004; LLP) p. 243.

Tetley, Interpretation and Construction.

Tetley, Marine Cargo Claims, Vol. 1.

Tulane Maritime Law Journal, 12 Tul. Mar. L.J. (1987).

Varady, Tibor, et.al (2012): International Commercial Arbitration, a Transnational Perspective, Fifth

Edition, American Casebooks.

STATUTES AND COVENTIONS

Arbitration Act, 1996 (UK)

Civil Liability (Contribution) Act 1978.

Hague-Visby Rules by the Brussels Protocol, 1968.

International Convention for the Safety of Life at Sea, 1974.

International Safety Management Code

United Nations Conference on Trade and Development, 1964.

UNCITRAL Model Law on International Commercial Arbitration, 1985


1

SUMMARY OF THE FACTS

I. AGREEMENT BETWEEN PARTIES

Cerulean Beans, serving as the Charterers and Dynamic Shipping, owner of the vessel named Madam

Dragonfly had entered into a voyage charterparty, dated 22 July, 2017 for the shipment of cargo entailing

high quality coffee beans. The shipment had to be delivered by 7 pm on 28 July, 2017 at Port Dillamond by

the most direct route, as there was a parallel contract running between the Charterer and a third party,

Coffees of the World.

II. PERFORMANCE OF THE CONTRACT

Madam Dragonfly deviated to Port Spectre during the voyage due to the hampering of the communication

and navigational systems for a period of 17 hours owing to the solar flares which the vessel was struck with.

Once the communication system was back on track, they started the journey towards Dillamond, however a

storm rolled in which led to the closure of the Ports for 12 hours.Before the arrival of the vessel at the port,

the Owners had mandated that they would deliver the goods via a barcode access if the Charterer is unable

to collect the same. After the arrival of the ship at the port on 29 July 2017, the goods were ready for

delivery by 8:42 pm the same day. Due to congestion on the port, agents of the Charterers were unable to

collect the goods until 31 July 2017, 3/4th of which were found to be damaged.

III. MARITIME EQUITABLE LIEN ON THE VESSEL

On 22 July 2017, the Charterer paid the amount of USD100,000 on account of wages which would become

payable to the crew of the Madam Dragonfly following the voyage into a special Bank account of the

Respondents established for that purpose. The Respondents did not pay the crew of the Madam Dragonfly

wages due for the voyage and has not repaid the US$100,000 to the Charterer, pursuant to which the

Charterer kept a maritime equitable lien on the vessel.

IV. DAMAGES CLAIMED BY BOTH THE PARTIES

Owing to such circumstances the Charterers referred the case to arbitration and both sides submit their

points of claim. The Charterer claims damages in the amount of USD30,200,000 while owner claims

damages in amount of USD 1,160,000.


2

ARGUMENTS ON JURISDICTION

I. THAT THE TRIBUNAL HAS JURISDICTION TO DETERMINE THE CLAIMS MADE BY THE

CLAIMANT

1. It is submitted that under the doctrine of competence-competence,1 the Tribunal has power to determine its

own jurisdiction2 by construing the arbitration agreement according to its governing law.3 The English law

governs the arbitration agreement (A). Pursuant to Clause 27 of the Charterparty, the dispute between the

parties had to be referred to arbitration (B). The Respondents seeks to delay the proceedings of the Hon’ble

Tribunal (C).

A. The English law governs the arbitration agreement.

2. The Parties have not expressly chosen a governing law for the arbitration agreement. In the absence of such

a choice, the system of law with the “closest and most real connection” to the arbitration agreement governs

that agreement.4

(i) The English law has the closest and most real connection to the arbitration agreement.

3. Both the Claimant and the Respondents, are based in Cerulean5which has adopted the laws of the United

Kingdom.6 Therefore, four additional factors indicate that the English law has the closest and most real

connection to the arbitration agreement. First, both Parties are located in states that apply the English law.7

Second, both Parties executed their counterparts of the Charterparty in states that apply English law.8 Third,

the subject matter9 of the arbitration agreement is “disputes arising under the Charterparty”, which is an

agreement for the voyage of a ship bound by English law. Fourth, the arbitration is regulated by LMAA,

1Fouchard, Gaillard, Goldman (1999) On International Commercial Arbitration, Kluwer Law International, p. 213. 2Redfern and Hunter (2015) International Arbitration, Oxford University Press, 6th ed., p.322, 345; QH Tours Ltd v Ship Design and Management (Aust) Pty Ltd (1991) 105 ALR 371, 384; Dallah Real Estate and Tourism Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763, 830; UNCITRAL Model Law on International Commercial Arbitration, Article 16(1). 3Gary Born (2014) International Commercial Arbitration, Kluwer Law International, 2nd ed., p.1405-6; Paper Products Pty Limited v Tomlinsons (Rochdale) Ltd &Ors (1993) 43 FCR 439, 444. 4Bonython v Commonwealth (1950) 81 CLR 486, 498; Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50, 61; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 217. 5Procedural Order No. 2, Clause 1. 6Moot Scenario, 45. 7Rothwells Ltd (in liq) v Connell (1993) 27 ATR 137, 143. 8R v International Trustee for the Protection of Bondholders Aktiengesellschaft [1937] AC 500, 529; Re United Railways of Havana and Regla Warehouses Ltd [1961] AC 1007, 1021; Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] 1 NSWLR 366, 369. 9R v International Trustee for the Protection of Bondholders Aktiengesellschaft [1937] AC 500, 529; The Assunzione [1954] 2 WLR 234 (‘Assunzione’), 261; Coast Lines Ltd v Hudig&Veder Chartering NV [1972] 2 WLR 280 (‘Coast Lines’), 286 ,289.


3

which is an English set of institutional rules10 and involved preliminary activities such as appointing

arbitrators and exchanging points of claim, which took place in states that apply English law.

(ii) The choice of London as the arbitral seat is testimony to this conclusion.

4. Following the doctrine of separability established under S.7 of the Arbitration Act,11 it does not necessarily

follow that the law governing the main Charterparty should also govern the arbitration clause. The Court of

Appeal held in Sul America v EnesaEngenharia12 that “in principle the proper law of an arbitration

agreement which itself formed part of a substantive contract13 might differ from that of the contract as a

whole”.14 Indeed, the Court of Appeal held that the place chosen for the arbitration proceedings, and the

consequential lexarbitri, was an “important factor” which (where London was the ‘seat’) “tended to suggest

that the parties intended English law15 to govern all aspects of the arbitration agreement.”

5. It would be rare for the law of the arbitration agreement to be different from the law of the seat of the

arbitration.16 The reason is that an agreement to arbitrate will normally have a closer and more real

connection with the place where the parties have chosen to arbitrate17 than with the place of the law of the

underlying contract in cases where the parties have deliberately chosen to arbitrate in one place, disputes

which have arisen under a contract governed by the law of another place.18 Thus it is submitted that the

arbitration agreement is to be governed by the English law.

B. Pursuant to Clause 27 of the Charterparty, the dispute between the parties had to be referred to

arbitration

6. A perusal of Clause 27 of the Charterparty, as a whole makes it abundantly clear that the dispute between

the parties had to be referred to the jurisdiction of this Hon’ble Tribunal.

(i) Any dispute arising regarding existence or termination of the contract to be referred to arbitration

10Moot Scenario, 12. 11Section 7, Arbitration Act, 1996 (UK). 12Sul America Cia Nacional De Seguros SA v EnesaEngenharia SA [2012] EWCA Civ 638. 13Ibid, p. 679. 14Supra 11,p. 672. 15XL Insurance Ltd v Owens Corning [2000] 2 Lloyd’s Rep 500. 16Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd. (HL) [1993] 1 Lloyd’s Rep 291. 17Black Clawson International Ltd v PapierwerkeWaldhof-Aschaffenburg [1981] 2 Lloyd’s Rep 446. 18Ibid.


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7. A perusal of Clause 27(a) of the Record makes it evidently clear that the dispute between the parties

involved a question regarding the existence, validity or termination of the contract, therefore has to be

referred to the jurisdiction of this Hon’ble Tribunal.

8. Four additional factors indicate that there was an evident question pertaining to the breach of the contract by

the Respondents. First, the vessel’s route being the commercial purpose of a voyage charterparty,19Madam

Dragonfly had deviated from the prescribed route in the instant case.20 Second, the Respondents had the duty

to deliver a seaworthy ship,21 however the Respondents were negligent in not securing up-to date

technological communication and radio systems22 leading to humongous loss for the Claimant. Third, the

Respondents also had the duty of due diligence in using the most recent technological developments,23 yet

that too was breached. Fourth, ultimately, the Respondents delivered the goods at 1:55 pm on 31 July,

2017,24 two days after the agreed date.

9. These factors prove that the dispute between the parties had necessarily raised the question pertaining to the

existence, breach of the charterparty and in no way can the dispute be referred to as arising out of a technical

matter to be referred to the jurisdiction of a Master Mariner, as the claim is inapt for determination by an

expert; and thus, mandatorily needs to be referred to arbitration before the Hon’ble Tribunal.25

(ii) Pursuant to Clause 27(e) of the Record, the dispute could have been referred to arbitration

10.Even if the Respondents’ claim is to be considered pursuant to Clause 27(d) of the Record, Clause 27(e) has

to be read alongside it.

11.The word “may” indicates that the pre-arbitration mechanisms in the multi-tiered clause leading to

arbitration are non-mandatory26 so the Claimant has the right to submit the dispute directly to arbitration

19Baughen, S (1991), “Does Deviation Still Mater?”, Lloyd‟s Maritime and Commercial Law Quarterly, pt 1, 70-96; Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7. 20Moot Scenario, 18. 21Kopitoff v Wilson (1876) 1 QBD 377, 380; Steel v State Line Steamship Co (1877) 3 App Cas 72; Gilroy, Sons & Co v W R Price & Co [1893] AC 56, 63; Virginia Carolina Chemical Co v Norfolk and North American Steam Shipping Co [1912] 1 KB 229, 243- 244. 22Moot Scenario, 35. 23T.J. Hooper Eastern Transp. Co. New England Coal & Coke Co. V. Northern Barge Corporation. Hartwell & Son, Inc. 53 F.2d 107, 1931 A.M.C. 1764 (D.C.N.Y. 1931). 24Moot Scenario, 37. 25Cott UK Ltd v FE Barber Ltd(1997) 3 All ER 540. 26Dyala Jimenez-Figueres, Multi-Tiered Dispute Resolution Clauses in ICC Arbitration, 14 ICC Bull. 71 (No. 1, 2003), pp. 87-88.


5

without using all the pre-arbitration mechanisms stipulated in the multi-tiered clause leading to arbitration,27

as it is only the Claimant’s right but notobligation.28

12.In the instant case, Clause 27(e) of the Record also uses the word “may” which indicates that the Claimant

was under no obligation of submitting the dispute to the Master Mariner and the Claimant had the right to

directly approach the jurisdiction of the Arbitral Tribunal, hence the claim.

C. The Respondents seeks to delay the proceedings of the Hon’ble Tribunal

13. Even if the plea of the Respondents, in reference with referring the matter to the Master Mariner, is

considered, the Tribunal had already appointed an expert specializing in maritime engineering29, the report

of whom has already been admitted by the Tribunal.30 Once the expert has been appointed and the report of

whom has been accepted by the Tribunal, it becomes evidently clear that the motive of the Respondents is to

delay the proceedings of the Tribunal and to protract the adjudication of the dispute.31 Such behaviour is

unbecoming of the Respondents, of which a strict view ought to be taken against the Respondents by this

Tribunal.

14.Thus, it is pleaded by the Claimant that this dispute falls within the jurisdiction of the Arbitral Tribunal and

it remains obligatory for the Tribunal to pass such an award.

ARGUMENTS ON THE MERITS OF THE CLAIM

II. THAT THE RESPONDENTS ARE LIABLE FOR THE BREACH OF THE CONTRACT

15.The Claimant submits that, Respondents are liable for the breach of charterparty due to deviation (A),

unseaworthiness (B), breach of duty of bailee (C), frustration of commercial purpose (D).

(A) That deviation from the most direct route resulted in breach of the charterparty

16.It is submitted that there is an implied undertaking on the part of a carrier or ship owner that there will be no

voluntary32 or unjustified departure by a vessel33 from its “proper course.”34The carrier had a legal

27Varady, Tibor, et.al: International Commercial Arbitration, a Transnational Perspective, Fifth Edition, 2012, American Casebooks, p. 14. 28Supra 25. 29Moot Scenario, 43. 30Moot Scenario, 45. 31Arnaldez, Jean-Jacques et. Al Collection of ICC Arbitral Awards 1996-2000, Kluwer Law International 2003, p. 331. 32Scaramanga& Co v Stamp(1880) 5 C.P.D. 295. 33Clayton v Simmonds (1741) 1 Burr 343.


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obligation to carry the goods by the usual and customary route35 or to take the safe and direct geographical

route to the destination.36

17.Once there has been a deviation the ship owner is reduced to the status of a common carrier37 and thus the

only defences that remain are Act of God, Act of the King’s enemies, inherent vice and of course fault of the

consignor. Nevertheless, even these common law defences will be lost if the damage or loss occurred during

an unjustified deviation.38

18.Thus, in the instant case, it had been expressly mandated by the Claimant via mail propositions,39 to take the

“most direct geographical route possible” as the delivery was an urgent one and could not be subject to any

kind of delays.

19.Pursuant to the email confirmations, the goods had to be delivered latest by Friday, 28.07.2017 by 7:00 pm

which was in-turn confirmed by the Respondents. However, despite repeated instructions, the Respondents

deviated to the Port Spectre, claiming hampering of the communication and navigational systems, owing to

the usual and the foreseeable solar flares leading to delay in delivery.

20.Lord Atkin has expressly stated that “The true view is that the departure from the voyage contracted to be

made is a breach by the ship owner of the contract, a breach of such a serious character that, however slight

the deviation40, the other party to the contract is entitled to treat it as going to the root of the contract,41 and

to declare himself as no longer bound42 by any of the contract terms." 43

21.It is further submitted that “if you undertake to do a thing in a certain way, or to keep a thing in a certain

place, with certain conditions protecting it, and have broken the contract by not doing the thing contracted

for in the way contracted for44, you cannot rely on the conditions which were only intended to protect you if

you carried out the contract45 in the way which you had contracted to do it”.46

34Bergerco v Vegoil[1984] 1 Lloyd's Rep. 440. 35Davis v Garrett(1830) 6 Bing 716. 36Reardon Smith Line v Black Sea and Baltic General Insurance (1939) AC 562 (HL). 37Balian& Sons v Joly Victoria Co. (1890) 6 TLR 345. 38James Morrison & Co., Limited v Shaw, Savill, and Albion Company, Limited [1916] 2 K.B. 783. 39Moot Scenario, 2. 40John F.Wilson, Carriage of Goods by Sea p. 20-21. 41Longley H.N (1967), Common Carriage of Cargo at p.118; Tetley, Marine Cargo Claims, Vol. 1, 1839; Encyclopedia Britannica v. S.S. Hong Kong Producer, 422 F.2d 7, 16-17 (2nd Cir. 1969). 42Joseph Thorley Ltd v Orchris Steamship Co Ltd [1907] 1 KB 660. 43Hain SS Co –v- Tate & Lyle [1936] 2 All ER 597. 44Gibaud v Great Eastern Railway Co.[1921] 2 KB 426. 45Bernard Eder and others, (2015) Scrutton on Charterparties and Bills of Lading ; 23rd edn, Sweet & Maxwell; Lilley v Doubleday (1881) 7 QBD 510.


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22.In voyage charterparties the stipulated route forms part of the subject matter of the contract of carriage.47 For

this reason any unlawful deviation will render the contract of carriage a fundamentally different thing from

what the parties had either agreed or contemplated.

23.It is further submitted that if a cargo is injured by a storm at sea, during a deviation, it has been maintained

that the deviation is a sufficiently proximate cause of the loss48 to enable the freighter to recover.49That a

carrier by water is not excused from liability50 from loss by an act of God51 operating upon an unseaworthy

vessel, nor would it avail him to show that the same loss might have occurred had the vessel been staunch

and sound.52

24.Owing to the above contentions and well settled law, it is evident that the Respondents have wrongly

claimed the defence of Force Majeure clauses as neither the storm, owing to the presence of the states in an

area with similar weather conditions to the Mediterranean area53, and solar flares were unforeseeable54 and

not preventable by reasonable, upgraded and back up technological measures.55 That thus the Respondents’

defence of Force Majeure stands negated.

25.Without prejudice to the above submissions, the Respondents deviation and stay at the Port Spectre was a

prolonged stay56, as even after the communication systems had restarted, the vessel remained at the Port for

an excessively long period of time. That the devious behaviour of the Respondents corresponds to a

repudiatory breach57 or an intentional breach of the charterparty.

26.That pursuant to the above-mentioned rulings, the Respondents are and should be held liable for a breach of

the voyage charterparty.

(B)That the Respondents breached the customary duty of seaworthiness

46Ibid. p. 435. 47Baughen, S (1991), “Does Deviation Still Mater?”, Lloyd‟s Maritime and Commercial Law Quarterly, part 1, 70-96; Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7. 48Thyssen, Inc. v. S/S Eurounity, 21 F.3d 533, 1994 AMC 1638 (2d Cir. 1994); United States v. The Barge CBC 603, 233 F. Supp. p.85, 87-88. 49Davis -v. Garrett, (1830) 6 Bing 716; Kent's Com. (13th ed.) p. 210. 50Bibb Broom Corn Co. v. Atchinson and Shoe Co. v. Chicago [1905] 102 N. W. 709. 51Hardesty v. Larchmont Yacht Club, 1983 AMC 1059, 1064 (S.D.N.Y. 1982); Compania de Navegacion Porto Ronco, S.A. v. S.S. Am. Oriole, 474 F. Supp. 22 (E.D. La. 1976). 52Packard v. Taylor, 35 Ark. 402, 37; New Brunswick Steamboat, etc., Transp. Co. v. Tiers, 24 N. J. L. 697; Hart v. Allen, 2 Watts (Pa.) 114. 53Procedural Order No. 2, Clause 2. 54Moot Scenario, 35. 55Moot Scenario, 35. 56Moot Scenario, 18,19. 57The Nanfri [1979] AC 757.


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27.It is submitted that the Respondents have evidently breached the customary duty of a shipowners. (i)The

Respondents breached the duty of seaworthiness and due diligence. (ii)The Vessel did not conform to the

recent technological development.

(i) The Respondents breached the duty of seaworthiness and due diligence

28.The accepted definition of seaworthiness is that the shipowner’s vessel should be ‘strong and staunch’58or

‘tight and fit’59 and must be ‘fit to meet and undergo the perils of sea and other incidental risks to which of

necessity she must be exposed in the course of a voyage’.60 This, thus corresponds to a situation of absolute

warranty61 which the Respondents breached by using old/faulty equipment.

29.The shipowner or carrier when preparing the vessel for voyage must consider the normal perils and

vicissitudes he may encounter62 during the sea adventure.63In the present case, the solar flares were very

much predictable, pursuant to the news headline “The Solar Flares Continue” which was published on

18.07.2017.64The voyage was undertaken on 24.07.2017, proposing to the fact that the Respondentsshould

have considered the warnings and rectified the faulty navigational equipment and upgraded it.

30.Article III, rule 1 of the HVR65 is an overriding obligation. In event of its non-fulfilment the immunities of

Articles IV cannot be relied on. This is the natural construction apart from the opening words of Article III,

Rule 2. The fact that that rule is made subject to the provisions of Article IV (1) makes the Claimant’s point

clear beyond argument.66

31.In the instant case, the Respondents have breached their duty of providing a seaworthy ship which was

incumbent upon them. This can be evidenced by the fact that the navigational equipment installed were

58Behn v Burness (1862) 1 B & S 877. 59Lyon v Mells (1804) 5 East 428; The Silvia (1898) 19 S Ct 7, 8; Abbott (n 18) 180. 60Kopitoff v Wilson (1876) 1 QBD 377, 380; Steel v State Line Steamship Co (1877) 3 App Cas 72, 77, 84, 88; Gilroy, Sons & Co v W R Price & Co [1893] AC 56, 63; Virginia Carolina Chemical Co v Norfolk and North American Steam Shipping Co [1912] 1 KB 229, 243- 244. 61McFadden v Blue Star Line [1905] 1 KB 697 (KBD) at 700. 62Boudoin v. J. Ray McDermott & Co. 176 F.Supp. 900 (1959); Paul S. Edelman & James E. Mercante, Of Hurricanes, Acts of God and Admiralty Jurisdiction, N. Y. L. J., Oct. 28, 2005, at p. 3. 63Longley, 44; The Ciprya, 137 F.2d 326, 1946 A.M.C 947 (2nd Cir); The Gonzenheim, 36 F.2d 869, 1930 A.M.C. 122 (5th Cir); Barge B.A. 1401. (Hampton Roads Carriers, Inc. v. Allied Chemical Corp.), 329 F2d. 387, 1964 A.M.C. 2458 (4th. Cir. 1964); The Roseina, 1937 A.M.C. 359 (S.D.N.Y.); The Anastasia, 11 F. Supp. 314, 1935 A.M.C. 579(E.D.Va.). 64Moot Scenario, 35. 65Hague Visby Rules by Brussels Protocol, 1968. 66Maxine Footwear Co. Ltd. V. Can. Government Merchant Marine [1959] A.C. 589, [1959] 2 Lloyd’s Rep. 105 (P.C.).; Mediterranean Freight Services Ltd. v BP Oil International Ltd (The Fiona) [1993] 1 Lloyd's Rep. 257, [1994] 2 Lloyd's Rep. 506; Great China Metal Industries Co. Ltd. v Malaysian International Shipping Corp. Bhd (The BungaSeroja) [1999] 1 Lloyd's Rep. 512.


9

old/faulty, which in turn led to them being affected by the predictable solar flares which thereto resulted in

deviation of the ship. Thus, the Respondents have breached their duty of seaworthiness.

32.The objective conditions of every ship to navigate properly and safely, and its capability to confront the

navigational risks and perils of the sea67 have been set by the statutory regulations in order to assure a

minimum of ship’s safety:

A) SOLAS 1974:68 That as per Regulation 19.2.1 of the Convention the mandatory shipborne navigational

equipment entails nautical charts and nautical publications to plan and display the ship’s route and their

specific back-up arrangements.

B) ISM Code: That as per Rule 10.3 of the said Code, specific measures aimed at promoting the reliability of

technical systems, doubled with regular testing of stand-by arrangements, should be undertaken.69

33.It is submitted that the Respondents were in absolute breach of the said statutory regulations70as, in spite of

being aware of the usual solar flares approaching, the Respondents did not attempt to upgrade the

communication and the navigational systems. Further, the Respondents lacked physical navigational charts

to the Port of Dillamond, which is a basic requirement while travelling on a voyage. That owing to the above

circumstances, the Respondents are liable for providing an unseaworthy ship for the voyage.

(ii)That the Vessel did not conform to the recent technological developments

34.Courts have raised the standard of care by installation of modern navigation equipment on board the vessel,

such as radio communications, as part of the obligation of practicing due diligence71 in making the ship

seaworthy.72 That proper equipment allowing the ship to navigate safely is doubtlessly a very important part

of its seaworthiness.73 That “charts, light lists, pilot books, list of radio beacons74and similar navigation data

are essential equipment for the safe navigation of a ship, that she is unseaworthy without them, and it is the

duty of her owner to supply them.”75

67Sanborn, 7; Anderson, III, chap 6. 68International Convention for the Safety of Life at Sea, 1974, Regulation 19.2. 69 International Safety Management Code, Rule 10.3. 70The Pennsylvania (1873) 86 U.S. 125, 1998 A.M.C. 1506, 22 L.Ed. 148, 19 Wall. 125 (1873). 71The LendoudisEvangelos[2001] 2 Lloyd’s Rep. 304. 72Tetley, Interpretation and Construction, p. 63-64. 73Longley, H.N (1967), Common Carriage of Cargo at p.50. 74Longley, H.N (1967), Common Carriage of Cargo at p.50, The W.W. Bruce, 94 F.2d 834, 1938 A.M.C. 232 (2d Cir.); The Maria, 91F.2d 819, 1937 A.M.C. 934 (4th. Cir.); The Maria, 15 F. Supp. 745, 1936 A.M.C. 1314(S.D.N.Y.); Trinidad Shipping Co. v. Frame Alston Co. 88 Fed. 528 (S.D.N.Y.1898); The Glenville, 1962 A.M.C. 2311 (S.D. Tex.); The Silverway, 15 F.2d 648, 1926A.M.C. 1645 (5th Cir.); U.S. v. Ultramar Shipping Co., Inc. 685 F. Supp. 887 (S.D.N.Y. 1988). 75MDC Ltd. v. NV ZeevaartMaatschapijBeursstraat[1962] 1 Lloyd’s Rep. 180,at 186.


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35.That ‘it can never be settled by positive rules of law how far this obligation of seaworthiness extends in any

particular case, for the reason that improvement and changes in the means and modes of navigation

frequently require new improvements, or new forms of old ones;76 and these though not necessary at first,

become so when there is an established usage that all ships of a certain quality, shall have them.’77

36.It is submitted that the Respondents used a ship for the voyage which lacked the recent technological

developments and was functioning with old and faulty equipment. Thus the Respondents are liable for

delivering an unseaworthy ship for the voyage.

37.That due diligence has been defined as “the diligence reasonably expected,78 from and ordinarily exercised

by a prudent shipowner79 or person who seeks to satisfy a legal requirement or to discharge an obligation.”80

That it has further been defined as to whether the carrier, its servants, agents and independent contractors

have exercised all reasonable skill and care81 to ensure that the vessel was seaworthy82 at the commencement

of its voyage, namely, reasonably fit to encounter the ordinary incidents of the voyage.83

38.That in the instant case the Respondents have further breached their duty of exercising reasonable care and

due diligence while handling the goods of the Claimant by avoiding to properly equip the ship with the

necessary charts and upgraded navigational equipment.

(C)That a bailor- bailee relationship exists between the Claimant and the Respondents

39.Like anybody else who voluntarily takes care of the property of someone else, a sea carrier becomes bailee

of that property.84 As such, he is under a duty to take reasonable care to keep the goods safe, to deliver them

in the condition in which he took them, or to show that any damage was not caused by his neglect or default.

It is further mandated that “If the goods are lost or damaged, whilst they are in [the bailee’s] possession, he

is liable unless he can show – and the burden is on him to show – that the loss or damage occurred without

76T.J. Hooper Eastern Transp. Co. New England Coal & Coke Co. V. Northern Barge Corporation. Hartwell & Son, Inc. 53 F.2d 107, 1931 A.M.C. 1764 (D.C.N.Y. 1931). 77Martin v. Southwark (1903), 191 U.S. 1, 24 S.Ct. 1, 48 L.Ed. 65. 78Grain Growers Export Co. v.Canada Steamship Lines Ltd. 43 O.L.R. 330, (Ont. S.C. App. Div.), (1919) 59 S.C.R. 643 (Supr. C. ofCan.). 79MDC Ltd. v. NV ZeevaartMaatschapijBeursstraat [1962] 1 Lloyd’s Rep. 180; M/V Tuxpan Lim. Procs. 765 F. Supp. 1150, 1179, (S.D.N.Y. 1991). General Foods Corp. v. The Troubador, 98 F. Supp. 207, 210 (S.D.N.Y. 1951). 80B. A. Garner and H. C. Black, Black's law dictionary, 9th edn. 81The Eurasian Dream [2002] 1 Lloyd’s Rep. 719. 82Tetley, Marine Cargo Claims, Vol. 1, 876. Grain GrowersExport Co. v. Canada Steamship Lines Ltd. (1918) 43 O.L.R.(Ont. S.C.App. Div.), upheld (1919) 59 S.C.R. 643 (Supr. C. of Can.); TheSouthwark191 U.S. 1, 15, 24 S.Ct. 1, 48 L.Ed. 65 (1903); The Edwin I. Morrison, 153U.S. 199, 215, 14 S. Ct. 823, 38 L.Ed. 688 (1894); The Esso Providence, 112 F. Supp.631, 1953 A.M.C. 1317 (S.D.N.Y.). 83Tetley, Marine Cargo Claims, Vol. 1, 876. The Kapitan Sakharov [2000] 2 Lloyd’s Rep.255. 84Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd ed (2004), Cavendish, ch. 2.


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any neglect or default or misconduct of himself.” He will also be liable for breach of bailment if he fails to

deliver the goods, or misdelivers them.85

40.There was a bailment of the Claimant’s Cargo to the Respondents when it was loaded onto the Claimant’s

Vessel. This constituted a voluntary assumption of possession by the Respondents of the Claimant’s

Cargo.86 That the Respondents as bailee of the Cargo had a duty to take reasonable care of the Cargo. 87 This

duty includes taking all proper measures for the protection of the Cargo, taking into account imminent risks

to the Cargo. 88 Further, in the instant case it is evident that the 3/4th Cargo was damaged while it was in the

custody of the Respondents and thus the Respondents breached its duty to take reasonable care of the goods

as the bailee of the goods.

(D) That the commercial purpose of the charterparty was frustrated by the Respondents

41.It is submitted that the doctrine of frustration is where the essential object does indeed exist, but its

condition has by some casualty been so changed as to be not available for the purposes of the contract.89

42.Although a contract would normally not be frustrated if there is an express provision dealing with the

alleged frustrating event, such provision should be construed narrowly.90The Claimant submits that the

parties were aware of the solar flares owing to the news reports91 however the fact that the solar flares would

result in deviation of the Vessel and thus lead to delays in delivery of the cargo which also essentially was

damaged, was not anticipated.

43.In a voyage charterparty the commercial purpose remains the route which is undertaken by the shipper.92

That in the instant case, there was unjustified deviation leading to delay in delivery of goods resulting in

severe monetary repercussions for the Claimant, thereby making the Respondents liable for frustrating the

commercial purpose of the voyage charterparty93

85Morris v CW Martin & Sons [1966] 1 QB 716, 726. 86East West Corp v DKBS 1912 and AKTS Svendborg [2003] EWCA Civ 83, [2003] QB 1509 at [24]. 87Coldman v Hill [1919] 1 KB 443 (CA) at 454. 88Ibid. 89Fibrosa v Fairbairn [1943] AC 32. 90Bank Line Ltd v Arthur Capel & Co [1919] AC 435, 455; Select Commodities Ltd v Valdo SA (The Florida) [2006] EWHC 1137 (Comm), [2007] 1 Lloyd’s Rep 1. 91Moot Scenario, 35. 92Baughen, S (1991), “Does Deviation Still Mater?”, Lloyd‟s Maritime and Commercial Law Quarterly, part 1, 70-96; Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7. 93Glynn v Margetson [1893] AC 351, HL.


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III. THAT THE CLAIMANT IS ENTILTED TO HOLD MARITIME EQUITABLE LIEN OVER

MADAM DRAGONFLY

44.It is advanced that the Claimant is entitled to hold lien over the vessel. Claimant holds maritime lien over

the vessel (A). Claimant holds equitable lien over the vessel (B).

(A) Claimant holds maritime lien over the vessel

45.It is submitted that the Claimant holds Maritime Lien over Madam Dragonfly. A maritime lien is said to be

a non-possessory security device that is created by operation of law.94

46.Claimant is entitled to hold maritime lien due to (i) Breach of Charterparty and (ii) Supply of Necessaries.

(i) Breach of charter party

47.It is submitted that there was a breach of charter party by the Respondents which leads to creation of a right

of Claimant to hold Maritime Lien over Madam Dragonfly.

48.The Hon’ble Court in the case The Schooner Freeman v. Buckingham95, held that law confers a lien on the

vessel for the performance of the charterparty. Furthermore, under the general maritime law, the charterer

has a lien on the vessel for any breach by the owner once performance of the charter has begun96. Since,

there were breached qua performance of the charterparty, the Claimant is entitled to hold maritime lien on

the vessel.

49.The Hon’ble Court in the case The Oceano97, stated that: “As soon as the performance of a charter party is

commenced a lien exists on the vessel in favour of the shipper or charterer, and a suit in rem may be

maintained for any liability of the master or owner arising therefore . . . Damages sustained by a Charterer

through breach of a charter contract constitute a lien on the vessel.”

50.Thus a lien on the vessel arises in the charterer’s favour for virtually any breach of charter committed by an

owner.98Hence, it is submitted that due to the breach of charter party by the Respondents, the Claimant

holds a maritime lien over Madam Dragonfly.

(ii)Supply of necessaries

94Robert Force & A.N. Yiannopoulos, 2 Admiralty and Maritime Law 2-1 (2001). 95The Schooner Freeman v. Buckingham, U.S. 182, 190 (1856). 96Julian Cooke and others, Voyage Charterers (4th edn, informa 2014) 97The Oceano, 148 F. 131, 133 (S.D.N.Y. 1906). 98Julian Cooke and others, Voyage Charterers (4th edn, informa 2014)


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51.It is submitted thatsupply of necessaries to the Respondents by the Claimant led to creation of a right of

Claimant to hold Maritime Lien. On or around 22 July 2017, the Claimant paid the amount of US$100,000

on account of wages which would become payable to the crew of the Madam Dragonfly following her

voyage from the Port of Cerulean to the Port of Dillamond into a special Bank account of the Respondents

established for that purpose. It was stated by the Respondents that the ship will not sail without payment of

such wages.99 At this point, it becomes abundantly clear that the Respondents saw crew as an essential part,

without which, they could not sail the ship. Hence, payment of wages to such crew becomes a necessary.

52. The persons who repair a ship, commonly called material men or supply her with necessaries, have

independently of any express contract in the nature of hypothecation, a maritime lien upon the ship 100

53.The term necessaries strictly applies to anchors, cables, rigging and matters of that description, but it has

been extended to include all things actually needed for the service of the ship.101In the term “actually needed

for service of the ship”, wages form an essential part.

54.Further in The Bethulia102, as cited in Tulane Maritime Law Journal103, money advanced for payment of

seamen’s wages is considered a necessary.

55.From the above, it becomes clear that as the Claimant supplied necessaries in the form of wages to the

Respondents which led to the creation of their right to hold maritime lien over Madame Dragonfly.

(B) Claimant holds equitable lien over the vessel

56.It is humbly submitted that the Claimant holds an Equitable Lien over Madam Dragonfly. It is hereby

submitted that on or around 22 July 2017, the Claimant paid the amount of US$100,000 on account of

wages which would become payable to the crew of the Madam Dragonfly. The Respondents, however, has

neither paid the crew of the Madam Dragonfly wages due for the voyage nor has it repaid the US$100,000

to the Claimant.104 The Claimant for the amount US$100,000, holds an equitable lien over Madam

Dragonfly.

99Moot scenario, 1. 100A Treatise on the Jurisdiction and Practice of the English Courts in Admiralty Actions and Appeals , Gainsford Bruce, Esq, Q.C. 101Ibid. 102The Bethulia , 200 F. 876 (D. Mass. 1912). 103Tulane Maritime Law Journal , 12 Tul. Mar. L.J. (1987). 104Page 38, para 11 and 12 of the Moot Scenario.


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57.In the case, Hewett v Court105, the Hon’ble Court while addressing what equitable lien is, stated that “An

equitable lien exists independently of possession and arises by operation of equity from the relationship of

the parties, rather than being created by the act of the parties as in the case of an equitable charge.”

58.In the matter at hand, even though the Claimant might not have retained the possession of the ship, it still

holds equitable lien under the Doctrine of Unjust Enrichment.

59.In the case Circle Finance Company v. Jessie L. Peacock and Sara A. Peacock106, the court acknowledged

that “There are three generally recognized remedies at equity by which a person who has been unjustly

deprived of his property may seek restitution: (1) by impressing a constructive trust, (2) by imposing an

equitable lien, and (3) by subrogating him to the rights of the obligee or lien holder.” That in accordance

with the same, the Claimant holds an equitable lien over Madam Dragonfly.

60.Doctrine of unjust enrichment is applicable in the instant case in accordance with essentials laid down in the

case in the case Golden v. Woodward107, where it has been stated that: “A claim based on unjust enrichment

must only set forth the required elements of an unjust enrichment claim: 1) plaintiff conferred a benefit on

defendant; 2) defendant has knowledge of the benefit; 3) defendant accepted the benefit; and 4) it would be

inequitable for defendant to retain the benefit without paying for it.”

61.It is submitted that the Claimant, while, paying the Respondents funds for the crew’s wages created a

benefit in favour of the Respondents. The payee of the wages must in general be the person rendering the

service (in this case, the Respondents) or his legal representative.108 Hence, in the first place itself, the

Claimant was not under any obligation to create a fund for the crew’s wages but it still did for the benefit of

the Respondents. The Respondents was also evidently in knowledge of such benefit and has retained the

same. The Respondents must, however, pay for the same and it would be inequitable for it to retain such

benefit without paying for the same. Hence, in accordance to the aforementioned essentials, the Claimant is

justified in claiming lien under the doctrine of unjust enrichment.

105Hewett v Court (1983) 149 CLR 639. 106Circle Finance Company v. Jessie L. Peacock and Sara A. Peacock 399 So. 2d 81 (1981). 107Golden v. Woodward 15 So.3d 664, 669. 108Lindey D. ClarkLaw of Employment of Labour.


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62.Unjust enrichment, or restitution, acknowledges an obligation which is imposed by law regardless of the

intent of the parties.109 It is a broad based concept, and, since the doctrine is not dependent upon the

existence of wrongdoing, a showing of fraud is not a necessary precondition to its application. 110

63.Further, the doctrine in question has been explained by stating that “The doctrine of unjust enrichment is a

recognition that a person is accountable to another on the ground that if the former were not required to do

so, he would unjustly benefit, or the other would unjustly suffer loss”111

64.In the instant case, the Respondents had acquired US$100,000 to pay the crew's wages into a separate Bank

account prior to the voyage as the crew will not sail before this occurs and it would be repaid to the

Claimant once the crew are paid their wages.112 However, as stated earlier, it neither paid the crew nor have

they repaid us the amount. In fact, the Respondents used these funds elsewhere.113 Hence, the Respondents

stands to unjustly gain from the whole scenario and the Claimant, unjustly lose.

65.It is also humbly submitted, to recover the huge amount given for the purpose of wages, the only option

available with the Claimant was to keep a lien on Madam Dragonfly.

IV. THAT THE RESPONDENTS ARE LIABLE TOPAY THE CLAIMED DAMAGES

66.It is submitted that the Respondents are liable to the Claimant to the amount of USD 30,200,000 as the

delivery took place on 31stJuly, 2017 (A). That the Respondents are further liable to pay USD15,750,000 on

account of the damaged Cargo (B): USD9,450,000 for the Replacement Coffee Payment (C),

USD5,000,000 on account of the Settlement Payment(D).

(A) The delivery took place on 31st July, 2017

67.It is submitted that the cargo was delivered on 31st July 2017 at approximately 1:55pm.

68.It has been said that delivery occurs when “the goods are so completely under the control of the consignee

that he may do what he likes with them”,114or when they are “placed under the absolute dominion and

control of the consignees”.115 In the instant case, goods were placed under the control of the Claimant only

109Kossian v. American National Ins. Co., 254Cal. App. 2d647, 62Cal. Rptr.225 (1967). 110Restatement of the Law, Restitution 1 (1937) by American Law Institute. 111Circle Finance Company v. Jessie L. Peacock and Sara A. Peacock 399 So. 2d 81 (1981). 112Moot scenario, 1. 113Procedural order 2. 114British Shipownersv. Grimond (1876) 3 Rett. 968, 972. 115Chartered Bank v. British India S.N. Co. [1909] A.C. 369, 375.


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on 31st July 2017 and that is when the delivery was constituted. Since delivery is a bilateral act, involving

the receipt of the goods by the consignee or his agent as well as the relinquishing of possession by the

carrier, it cannot be effected merely by discharging the goods over the ship’s side at the port of delivery.116

In the instant case, goods were merely discharged at the port on 29th July 2017, hence the claim of

Respondents regarding delivery on 29th July 2017 cannot be sustained.

69.It is submitted that the term "delivery" is not synonymous with "discharge". The former term denotes a two-

party transaction in which the consignee or an agent would have the opportunity to observe defects and the

latter term need involve only the shipper and there might or might not be opportunity for the consignee to

discover the damage at that point. Discharge and delivery need not occur at the same time and only at

delivery must there be opportunity for potential plaintiffs to discover damage.117 Therefore, owing to these

differences, delivery was not constituted when the goods were discharged.

70.Delivery usually means actual delivery, not delivery of a means of access, and nothing is spelt out in the

contract to the contrary.118Ergo,delivery of the access authority passwould not constitute delivery of the

cargo.

71.Furthermore, delivery without production of the bill of lading constitutes a breach of contract even when

made to the person entitled to possession.119

(B)That the Respondents are liable to pay on account of the damaged cargo

72.It is submitted that 75% of cargo delivered was completely water damaged for which the Respondents are

liable to the amount of $15,750,000 for breach of contract of carriage (i), loss of profit (ii) breach of duty as

bailee of goods (iii) and Respondents are not entitled to limit its liability (iv).

(i)Breach of contract of carriage

73.As soon as the goods are damaged, there is a breach of contract of carriage. Formerly he was the owner of

goods of full value and subsequently he is the owner of goods with only a reduced value. He has suffered a

loss.120Hence the Respondents are liable to pay for the damaged goods.

116Cooke on Voyage Charters, 4th ed (2014), para 10.4; Gatliffev. Bourne(1838) 4 Bing. N.C. 314, (1841) 3 M. & G. 643, (1844) 7 M. & G. 850, 11 Cl. & F. 45. 117C. Tennant Sons & Co. v. Norddeutscher Lloyd, 220 F. Supp. 448 (E.D. La. 1963) 118Glencore International AG v MSC Mediterranean Shipping CoSA[2017] EWCA Civ 365. 119Sze Hai Tong Bank v Rambler Cycle Co [1959] AC 576; The Houda [1994] 2 Lloyd's Rep 541. 120Obestain Inc v National Mineral Development Corporation Ltd [987] I LLR 465; Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia [2006] EWHC 3030 (Comm).


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74.A person who is the owner, or who has a right to possession, of the goods has a right to substantial damages

for loss of or damage to the goods, even where the loss falls upon another person.121 Ergo, in the instant

case, owner of the goods being the Claimant is entitled to claim damages for the damaged goods.

75.In the instance of cargo damage, the measurement is usually the difference between the market value122 of

sound and damaged cargo at the destination.123 The value of the damaged goods should be calculated as per

the market price or the “normal value of goods of the same kind and quality”.124 It is based on the

presumption of a substitute contract: that is, the Claimants are presumed by law to go into the market and

purchase the replacement at the present price125 provided the concerned goods are for immediate resale.126

76.In the present case the value of the damaged goods was nil as they were damaged to such an extent that they

had become useless with no willing buyer127 whereas the market value of the sound goods was USD

15,750,000 as the market price of the coffee was $300/kg.128 Since the present value is zero due to no

availability of market129, therefore the net value payable by the Respondents is USD 15,750,000.

(ii) Claimant suffered loss of profit

77.As the delivered cargo was damaged and hence it couldn’t be sold, the Claimant suffered loss of profit. The

goods owner has a right to recover substantial damages from the shipowner for the loss suffered by reason

of the damage to the goods. 130

78.If, by the negligence of a wrongdoer, goods are destroyed which the owner of them had bound himself by

contract to supply to a third person, this person as well as the owner has a right of action for any loss

inflicted on him by their destruction.131 In the instant case, goods were left by the Respondents at the port

121The Winkfield (1900-3) All ER Rep 346; Obestain Inc. v. National Mineral Development Corp. (The Sanix Ace) [1987] 1 Lloyd’s Rep. 465; Sevylor Shipping and Trading Corp v Altfadul Co for Foods, Fruits and Livestock [2018] EWHC 629 (Comm); The Aramis [1989] 1 Lloyd’s Rep 213, The Athenian Harmony [1998] 2 Lloyd’s Rep 410; R&W Paul Ltd v National Steamship Co Ltd (1937) 59 Ll L Rep 28. 122Bunge SA v Nidera BV (formerly NideraHandelscompagnie BV),[2015] UKSC 43 123Otis Mcallister& Co v Skibs-A/S Marie Bakke [1959] 2 Lloyd's Rep 210); Canada (the Farrandoc [1967] 1 Lloyd's Rep 232; Nabob Foods Ltd v Cape Corso [1954] 2 Lloyd's Rep 40); The Welsh Endeavour [1984] 1 Lloyd’s Rep 400. 124Fan Wei, Measurement of Damages in Carriage of Goods by Sea, 2008; Glynn and Others v Margetson& Co and Others [1893] A.C. 351 (H.L.). 125Williams Brothers v Agius Ltd [1914] A.C. 510, (H.L.) 126CfContigroup Companies, Inc. v Glencore A.G. [2005] 1 Lloyd's Rep. 241. 127Moot scenario, 27. 128Moot scenario, 2. 129Shearson Lehman Hutton Inc. v. Maclaine Watson & Co. Ltd (No. 2) [1990] 1 Lloyd’s Rep. 441; Zodiac Maritime Agencies v. Fortescue Metals Group Ltd (The Kildare) [2011] 2 Lloyd’s Rep. 360, para. 56; Glory Wealth Shipping Pte. v. Korea Line Corp. (The Wren) [2011] 2 Lloyd’s Rep. 370; Bulkhaul v. RhodiaOrganique Fine Ltd [2009] 1 Lloyd’s Rep. 353. 130The Baleares [1993] 1 Lloyd's Rep. 215 (C.A.); Leigh and Sillavan Limited v Aliakmon Shipping Company Limited 1986 AC 785; The Albazero [1977] Appeal Cases 774. 131Simpson & Co. v. Thomson [1877] 3 Appeal Cases 279.


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while it was raining and while they were aware that the sealant had expired as it was meant to last for 5days

only. 132Thus, the owner in equity is entitled to sue in tort for negligence anyone who by want of care

caused his property to be lost or damaged and as a result faces economic loss.133

(iii) Breach of duty as Bailee of goods

79.Where there is a delivery of possession of goods by a cargo owner to a carrier, there arises a bailment, and a

contract of carriage may and frequently will co-exist with the relationship of bailor and bailee.134

80.In principle, if a bailor proves delivery to the bailee of goods in a given condition, the mere failure by the

bailee to deliver them to the bailor or to his order either at all or in the same condition is a prima facie

breach of the bailment.135

81.Similarly in the present case there existed a relation of bailor and bailee between the charterer and owner

respectively, and failure on the part of the owner as bailee to deliver the goods in the same condition is

breach of duty to act as bailee for which the charterer i.e. the Claimant is entitled to receive damages.

(iv) Respondents are not entitled to limit its liability

82.The Respondents shall not be entitled to the benefit of the limitation of liabilityprovided in the Article IV of

Hague Visby Rules 136 for its acts or omission done in a reckless manner137 and with knowledge138 that

damage would probably result.139 This is confirmed by Sellers Fabrics Case, when Carrier has knowledge

about the risk that may be incurred and has been given information regarding its obligation, the Carrier will

lose its right to limit its liability. 140 In the present case, Respondents were well aware about the life of the

packaging materialas well as the cargo and their obligation to take the most direct route. Therefore, they do

not have a right to limit their liability.

(C) That the Respondents are liable to pay the replacement coffee payment.

132Moot scenario, 14. 133Leigh and Sillavan Limited v Aliakmon Shipping Company Limited1986 AC 785 134Akts. De Danske Sukkerfabrikker v. Bajamar Cia. (The Torenia), [1983] 2 Lloyd’s Rep. 210, at p. 216. 135Hollins Hollins v. Fowler, (1872) L.R. 7 Q.B. 616, 632; The Houda, [1994] 2 Lloyd’s Rep. 541; The Rigoletto, [2000] 2 Lloyd’s Rep. 136Hague-Visby Rules, Article 4(5)(e) 137Herrington v British Railways Board (1971) 2 QB 107 (CA); The Thomas Cook Group Ltd v Air Malta Co Ltd (1997) 2 Lloyd’s Rep 399, 408. 138Shawinigan Ltd v Vokins& Co Ltd (1961) 3 All ER 396, 403 (QB). 139Cia Portorafti Commerciale SA v Ultramar Panama Inc (1990) 1 Lloyd’s Rep 310, 316 (CA). Antwerp United Diamond BVBA v Air Europe [1996] Q.B. 317; Horabin v British Overseas Airways Corp (1952) 2 Ll LR 450, 459. 140Sellers Fabrics Pty Ltd v Hapag- Lloyd AG [1998] NSWSC 646; Morrison v Peacock &Roslyndale Shipping Co Pty Ltd (2000) NSWCCA 452 (QL),[70]-[76]; Smithers v Lokys (2001) 108 FCR 303 (WL), [15] (FCA).


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83.As the Cargo was required in order to satisfy the Claimant's contractual obligations with a third party, the

Claimant was required to urgently source alternative coffee at a cost of USD9,450,000. It is submitted that

such a replacement is justified and the Respondents are liable for the payment of replacement coffee.

84.The general underlying principle is that the party in breach is liable to pay such monetary compensation as

will place the injured party in the position it would have enjoyed had the contract been performed.141 In the

instant case, no need to purchase replacement coffee would have arisen had the contract been performed,

therefore, Respondents are liable to compensate the Claimant.

85.Indeed, the replacement cost of the goods in cases of damaged goods is an accepted measure of

damages.142Here, Respondents can reasonably assume that the cargo is used for further sales. Thus, sub-

transactions of the Claimant are not res inter alia actos. The replacement cost, i.e. USD 9,450,000 is

reasonable, and thus the Respondents is liable to that extent.

86.Where a breach of contract entails the inadequate performance of a contract, the damages recoverable will

usually, be the cost of putting the work right, by repair or replacement,143 this being normally treated as

representing the diminution in value in the case of a marketable chattel or right.144

87.In addition to the common claims for a loss of profits, the aggrieved party of a carriage contract may suffer

miscellaneous losses. Thus costs incurred in retrieving, searching for or replacing carried goods are

recoverable.145

88.Furthermore, the law is satisfied if the party placed in a difficult situation by reason of the breach of a duty

owed to him has acted reasonably in the adoption of remedial measures, he will not be held disentitled to

recover the cost of such measures merely because the party in breach can suggest that other measures less

burdensome to him might have been taken.146 In the present case, the Claimant has acted reasonably in

141Parke B in Robinson v Harman (1848) 1 Ex 850 at p 855; Lord Wright in Monarch Steamship Co Ltd v KarlshamnsOljefabriker [1949] AC 196 p 220. 142Attorney General of the Republic of Ghana v Texaco Overseas Tankships Ltd – “Texaco Melbourne” (1993) 1 Lloyd‟s Rep 471 (CA); Nissho v Livanos (1941) 69 Ll.L.Rep 125; A/S D/S Heimdal v Questier Co. Ltd. (1949) 82 Ll.L.Rep 452; Rodocanachi v Milburn (1886) 18 QBD 67, 78; The Kriti Rex [1996] 2 Lloyd’s Rep 171, 194. 143Meredith Jones v. Vangemar Shipping (The Apostolis) (No. 2) [1999] 2 Lloyd’s Rep. 144Dominion Mosaics v. Trafalgar Trucking [1990] 2 All E.R. 246 at 248. 145Heskell v Continental Express Ltd (1949-50) 83 Ll. L. Rep. 438; Woodger v The Great Western Railway Company (1866-67) L.R. 2 C.P. 318; Millen v Brasch& Co. (1882-83) L.R. 10 Q.B.D. 142; The British Columbia and Saw-Mill Co v Nettleship (1867-68) L.R. 3 C.P. 499. 146Banco de Portugal v. Waterlow, [1932] AC 452.


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expeditiously securing replacement coffee by discharging their duty to mitigate the loss consequent to the

breach without delay,147 he is thus entitled to recover the costs incurred.

(D) That the Respondents are liable to pay the settlement payment.

89.It is submitted that the third party with whom the Claimant had contracted for the supply of coffee suffered

loss and damage as a result of the Claimant's breach of contract. Thus, the third party and the Claimant

entered into a settlement agreement whereby the third party released the Claimant from all claims it may

have against it in relation to the Claimant's breach of contract in return for the Claimant paying the amount

of $5,000,000, due to which Claimant not only lost the profit that they should have made but were made to

pay this extra amount. Since the breach by Claimant was a direct result of breach by the Respondents, the

Respondents are liable to the amount of USD5,000,000 on account of the Settlement Payment.

90.Even if the Claimant is found on later analysis not to be liable to the third party, the settlement sum could

still be recoverable against the defendant whose breach caused the loss.148

(i) The Respondents are liable as per the Biggin Principles

91.The well-known legal principles formulated in the case of Biggin v Permanite149 ("Biggin Principles") are

applicable where a settlement concerns issues of liability as well as of quantum.150In essence, the Biggin

Principles provide that, in order for the Claimant to successfully recover sums reached in settlement with a

third party, the Claimant must show contemporaneous evidence to establish that both: (i) the Respondent's

breach caused the Claimant's liability to the third party ("Causation"); and (ii) that the settlement and the

settlement amount were reasonable in the circumstances ("Reasonableness").

(i.a) That the Respondent's breach caused the Claimant's liability to the third party

92.There was an effective causal link between the defendant's breach and the need for the Claimant to pay a

settlement sum to a third party. The Claimant entered into a contract with Coffees of The World to deliver

1,000 bags of rare, high - quality, specialty grade green coffee by 28 July 2017.151 In furtherance of this

contract, the Claimant entered into another contract with the Respondents under which Respondents were to

147East Ham Corp v Bernard Sunley& Sons Ltd [1966] AC 406; Pacific Interlink SdnBhd v Owner of the Asia Star [2009] 2 Lloyd's Rep 387; British Westinghouse Electric Co Ltd v Underground Electric Rlys [1912] AC 673, 689. 148Comyn Ching & Co (London) v Oriental Tube Co Ltd (1981) 17 BLR 47; General Feeds Inc. Panama V. SlobodnaPlovidba Yugoslavia [1999] 1 Lloyd's Rep. 688. 149Biggin& Co v Permanite [1951] 2 K.B. 314. 150Royal Brompton Hospital NHS Trust v Hammond (No.1) [1999] B.L.R. 162. 151Moot scenario, 29.


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discharge the cargo at the port of Dillamond by 7pm on 28 July 2017 and were made aware about the

imperativeness pertaining to the timely delivery.152 Not only did the Respondents fail to deliver the cargo by

28th July 2017 but 75% of cargo received later was completely water damaged and of no use. This breach of

contract by the Respondents caused Claimant to breach their contract of timely delivery with the third party

i.e. Coffees of The World which suffered losses.

(i.b) That the settlement and the quantum settlement amount were reasonable in the circumstances

93.it is submitted that Coffees of the World required 1,000 bags of rare, high - quality, speciality grade green

coffee for the opening of a coffee festival which was to be attended by over 350,000 people. 153 Considering

the large scale of this festival and their failure to uphold their commitments pertaining to such high quality

coffee, suffering losses was apparent. Ergo, the settlement was reasonable.

94.Had the contract been performed, coffee amounting to $21,000,000 would have been delivered to them

($300/kg being the market price154 and total weight of cargo being 70,000 kg155), however, out of the coffee

delivered, the coffee that was of expected quality amounted to only $5,250,000 as only 250 bagswere not

damaged, while the rest being low quality replacement coffee amounting to $9,450,000156. Therefore,

considering the difference between $21,000,000 and $5,250,000 and, taking into account the quality of

coffee that was promised and the quality that was delivered to the third party, $5,000,000 as settlement

amount stands reasonable.Thatif the Claimant called evidence which showed that the settlement was a

reasonable one, though it might not strictly prove every item of damage claimed, that settlement should be

accepted by the court as the measure of damage.157

(ii)The Respondents are liable under the Civil Liability (Contribution) Act 1978.

95.Contribution is sought pursuant to section 1 of the Civil Liability (Contribution) Act 1978. Section 1 of the

1978 Act158 provides that (subject to the provisions of the section) "any person liable in respect of any

damage suffered by another person may recover contribution from any person liable in respect of the same

152Moot scenario, 2. 153Moot scenario, 2. 154Moot scenario, 2. 155Moot scenario, 16. 156Moot scenario, 27. 157Hammond & Co. v. Bussey (1887) 20 Q. B. D. 79; Grebert-Borgnis v. Nugent (1885) 15 Q. B. D. 85; Fisher v. Val de Travers (1876) 45 L. J. (C. P.) 479; 35 L. T. 366; CompaniaSud Americana de Vapores S.A. v. Sinochem Tianjin Import and Export Corp (The Aconcagua) [2010] 1 Lloyd’s Rep. 1, paras 376–379. 158Civil Liability (Contribution) Act 1978.


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damage (whether jointly with him or otherwise)…". Recovery can be claimed under the Act whatever the

legal basis of the other person's liability, provided it is in respect of "the same damage"159In the present

case, breach by Respondents caused the same damage as breach by Claimant i.e. loss and damage to

Coffees of The World and therefore, Claimant is entitled to recover the amount of settlement payment from

the Respondents.

ARGUMENTS ON THE MERITS OF COUNTER CLAIM

V. THAT THE CLAIMANT IS NOT LIABLE TO PAY THE DAMAGES CLAIMED BY THE

RESPONDENTS

(A) That the Claimant is not liable to pay the freight

96.The true test of the right to freight is the question whether the service in respect of which the freight was

contracted to be paid has been substantially performed.160 In the present case, contract has not been

performed by the Respondents as has been proved earlier, ergo they are not entitled to claim freight.

97.Freight is not payable where the goods are so badly damaged on their arrival that they are unmerchantable

in the sense that they no longer answer their commercial description.161 If the cargo is so changed in its

nature by the perils of the sea as to become an unmerchantable thing, which no buyer would buy and no

honest seller would sell, then there is a total loss.162In the present case, coffee beans were so badly water

damaged that they could no longer be used and had no willing buyer.163 Therefore, it is held that that

Claimant is not liable to pay the freight.

(B) That the Claimant is not liable to pay for repairs to hull

98.It is mandated that the charterer is not responsible for damage, delay or loss which occurs to the vessel as a

result of abnormal occurrence, i.e. an occurrence which was not, in all human probability, expected to

occur.164In the present case, since the charterer could not have contemplated that the anchor might get

159Royal Brompton Hospital NHS Trust v Hammond [2002] 1 WLR 1397; Aer Lingus v. Gildacroft [2005] EWHC 1556 (QB). 160Dakin v Oxley (1864) 143 ER 938 at p 946. 161Duthie v Hilton (1868) LR 4 CP 138; Asfar v Blundell [1896] 1 QB 123; The Caspian Sea [1980] 1 Lloyd’s Rep 91. 162Asfar v Blundell [1896] 1 QB 123. 163Moot scenario, 27. 164The Mary Lou [1981] 2 Lloyd’s Rep 272; David Chong Gek Sian, ‘Revisiting the Safe Port’, (1992) Singapore Journal of Legal Studies, 88.


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tangled with the coral bed while the crew tried to lift it in the ocean, charterer cannot be held liable for such

loss.

99.Failure to achieve the requisite standard of care and good seamanship renders the master responsible for the

resulting damage and loss; responsibility cannot be attributed to the charterer.165In the present case, damage

to hull was in fact caused, or at least contributed to, by negligence on the part of the master and the ship’s

crew by dropping the anchor where the storm was worse.166This damage could have been avoided had the

Captain made proper enquiries regarding the safety of theplace and the position of the storm before

anchoring the ship, therefore, the Claimant is not liable to pay for repairs to the hull.

(C)That the Claimant is not liable to pay demurrage

100. It is submitted that no laytime was given and even if the demurrage clock has started, the risk of delay

can be shifted back to the owners by the presence of an event covered in a sufficiently worded exception

clause.167

101. In the instant case, Claimant is not liable to pay demurrage because delay was caused due to congestion

listed in Clause 8(e)168 interrupting laytime and demurrage and by reason of a Force Majeure Event listed in

Clause 17 (A)169 which excludes liability where a failure or delay in performance is caused by a Force

Majeure Event.

102. Demurrage is liquidated damages for exceeding the laytime.170A notice which does not indicate that the

vessel is ready at the time when it is given, but merely that the vessel will be ready at some time in the

future, is not a valid notice of readiness.171According to the strict legal view, laytime will not commence in

the absence of a valid notice of readiness with the result that, not only will the owners have no claim for

demurrage but they may also be obliged to pay the charterers despatch money for the whole of the agreed

165St Vincent Shipping Co Ltd v Bock, Godeffroy& Co (The Helen Miller) [1980] 2 Lloyd’s Rep 95. 166Moot scenario, 20. 167The John Michalos [1987] 2 Ll. Rep. 188; Shipbroking and Chartering Practice (2004; LLP) p. 243. 168Cl 8 (e) of the Voyage Charterparty. 169Cl 17 A of the Voyage Charterparty. 170CompaniaNaviera Aeolus SA v Union of India [1964] AC 868 at 899 (Lord Guest), cited by Lord Diplock in Dias CompaniaNaviera SA v Louis Dreyfus Corporation [1978] 1 WLR 261 at 263. 171Transgrain Shipping v. Global TransporteOceanico (The Mexico I) [1990] 1 Lloyd’s Rep. 507; T.A. Shipping v. Comet Shipping (The Agamemnon) [1998] 1 Lloyd’s Rep. 675.; Antclizo Shipping Corp. v. Food Corporation of India (The Antclizo) (No. 2) [1992] 1 Lloyd’s Rep. 558, 564.


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laytime.172In the present case, since no valid notice of readiness was given, laytime did not commence and

hence, demurrage is not accrued.

103. It is submitted that time does not run during the periods where cargo operations have been delayed bythe

shipowner’s faultor resulted from action taken by him for his own convenience.173 This derives from the

principle that nobody can benefit fromtheir own wrong. Since the ship was delayed due to the unjustifiable

deviation by the Respondents and reached at a time when the Claimant couldn’t discharge the cargo due to

congestion at the port at that time, demurrage cannot be accrued for this period.

(D) That the Claimant is not liable to pay for electronic access systems used

104.It is submitted that the Claimant never agreed for the use of electronic access systems at the port of

Dillamond.

105.As regards vessels on voyage charter, all port dues and other charges in respect of the vessel — whatever the basis

of their calculation - are generally paid for by the owner and included in the freight rates.174

Respondents cannot recover damages for any loss which it could have avoided but failed to avoid due to its own

unreasonable action or inaction 175 Had they not deviated the ship unjustifiably, delivery wouldn’t have gotten

delayed and the need for using electronic access systems wouldn’t arise. Therefore, the Claimant is not liable to

pay for electronic access systems used.

(E) That the Claimant is not liable to pay the agency fee

106.That the Respondents have erred in claiming the payment of agency fee from the Claimant.

(i) Agency fee at the Port of Spectre

107.It is submitted that contravening the provisions of the agreement, the Respondents deviated to the Port of

Spectre. That thus it is evident that the Claimant cannot be held liable, for the non-payment of the agency

fee for the Port of Spectre, as it falls outside the scope of the obligations of the Claimant.

108.Further, even if this erroneous claim is to be considered it is mandated that losses which are the

consequence of special facts not known to the party in default at the time the agreement was made are not 172The Mass Glory [2002] 2 Lloyd’s Rep 244. 173DGM Commodities Corp v Sea Metropolitan S.A. (The Andra) [2012] EWHC 1984 (Comm); [2012] 2Lloyd’s Rep 587; Schofield, 198 [4.18], 200 [4.26]; Budgett& Co. v Binnington& Co. [1891] 1 QB 35, 38; In Re Ropner [1927] 1 KB 879; The Union Amsterdam [1982] 2 Lloyd’s Rep 432; Stolt Tankers v Landmark Chemicals [2002] 1 Lloyd’s Rep 786; The Fontevivo [1975] 1 Lloyd’s Rep 339. 174Report by the UNCTAD Secretariat. 175Harvey McGregor, McGregor on Damages (Thomson Reuters (Legal) Limited, 18th Ed, 2009) at para 7-004 and British Westinghouse Electric and Manufacturing Company, Limited v Underground Electric Railways Company of London, Limited [1912] AC 673 (“British Westinghouse Electric”) p. 689.


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covered176 and the party cannot be made liable for the same.177 It must be something which could have been

foreseen and reasonably expected,178 and to which they assented by entering into the contract.179

109.In the instant case, the deviation and hence the agency fee at the Port of Spectre, could not have been

contemplated while entering into the contract. That thus, even if the Tribunal considers the claim of the

Respondents, the Claimant cannot be made liable for the payment of the same.

(ii) Agency fee at the Port of Dillamond

110.It is mandated that the right and the duty of selecting and appointing agents to attend the ship at loading

and discharging ports is vested in the owners.180It is also submitted that notwithstanding the fact that the

charterers appoints the agent, it is nonetheless customary that the owners pays the agency fee.

111.In the instant case, it is clear that customarily, the Respondents are liable to pay the agency fees at the Port

of Dillamond and that even if it is considered, pursuant to Clause 12(a) of the Record, that the agents

appointed were infact of the Charterer’s, it is submitted that their services were not used by the Respondents

due to the delay caused in the delivery of goods by the Respondents,181 hence the submission.

REQUEST FOR RELIEF

For the reasons set out above, CLAIMANT requests that the Tribunal:

i. Declare that it has jurisdiction to determine the claims made by the Claimant

ii. Adjudge that the Respondents are liable for the breach of the charterparty

iii. Uphold that the Claimant is entitled to hold lien over Madam Dragonfly

iv. Uphold that the Claimant is entitled to claim damages equivalent to USD 30,200,000

Dated this 18th day of April 2018

Agents for the Claimant

Cerulean Beans and Aromas

176Hadley v Baxendale (1854) 9 Exch. 341. 177Horne v Midland Railway Company (1873) LR 8 CP 131. 178Heskell v Continental Express [1950] 1 All ER 1033. 179Saw-Mill Co Ltd v Nettleship105 (1868) LR 3 CP 499 180Wehnerv. Dene [1905] 2 K.B. 92, 99. 181Moot Scenario, 20.

TEAM 4 NINETEENTH ANNUAL INTERNATIONAL MARITIME …

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