TWENTIETH ANNUAL INT 2019 MEMORANDUM FOR RESPONDENT · Actis Co Ltd v The Sanko Steamship Co Ltd...

TWENTIETH ANNUAL

INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2019

MEMORANDUM FOR RESPONDENT

THE UNIVERSITY OF SYDNEY

TEAM 22

ON BEHALF OF:

OMEGA CHARTERING LIMITED

RESPONDENT

AGAINST:

PANTHER SHIPPING INC

CLAIMANT

COUNSEL

Joy Chen Kaitlyn Crowe Alex Kiefer Georgia Reid May Yang

TEAM 22 MEMORANDUM FOR RESPONDENT

I

TABLE OF CONTENTS

ABBREVIATIONS IV

LIST OF AUTHORITIES VI

STATEMENT OF FACTS 1

ARGUMENTS ON THE MERITS OF THE CLAIM 2

I. RESPONDENT IS NOT LIABLE TO CLAIMANT WITH RESPECT TO THE COSTS OF HULL

CLEANING OR THE VOYAGE TO SOUTH ISLAND 2

A. RESPONDENT DID NOT BREACH CLAUSE 83 OF THE OMEGA RIDER CLAUSES 2

(i) The Vessel did not remain in Wahanda in accordance with RESPONDENT’s orders

2

(ii) There was no joint inspection of the Vessel 4

(iii) In any event, RESPONDENT was relieved of the hull cleaning obligation because CLAIMANT refused to permit cleaning

4

(iv) CLAIMANT’s unreasonable refusal of RESPONDENT’s lump sum offers disentitles it from any award of damages for breach of Clause 83

5

B. IN THE ALTERNATIVE, CLAIMANT IS ENTITLED TO NO MORE THAN USD33,000 IN DAMAGES

6

(i) The voyage to South Island was non-contractual 6

(ii) The cost of the voyage to South Island was too remote 7

(iii) In any event, CLAIMANT failed to mitigate its loss 7

II. RESPONDENT IS NOT LIABLE TO CLAIMANT WITH RESPECT TO THE DAMAGES CLAIMED FOR THE LATE RE-DELIVERY OF THE VESSEL

8

A. RESPONDENT DID NOT BREACH THE CHARTERPARTY BY RE-DELIVERING THE VESSEL LATE

8

(i) The express period of the Charterparty was qualified by ‘about’ and ‘without guarantee’

9

(ii) RESPONDENT is not prevented from asserting that late re-delivery was not a breach

9


II

B. IN ANY EVENT, RESPONDENT IS LIABLE FOR LOSS OF HIRE UNDER THE NEXT FIXTURE

10

(i) RESPONDENT’s late re-delivery did not cause the loss of hire under the Next Fixture

10

(ii) In the alternative, the loss of hire under the Next Fixture is too remote 11

a. Loss of hire under the Next Fixture does not fall within either limb of Hadley v Baxendale

11

b. In any event, RESPONDENT is not liable for the loss hire under the Next Fixture as it has not assumed responsibility for that loss

12

C. IN THE ALTERNATIVE, EVEN IF RESPONDENT IS LIABLE, CLAIMANT IS NOT ENTITLED TO RECOVER THE ENTIRETY OF THE USD15,330,000 CLAIMED

13

(i) CLAIMANT failed to mitigate its loss 13

(iii) CLAIMANT must account for all amounts received in the course of mitigating its loss

14

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM 14

III. CLAIMANT IS LIABLE TO INDEMNIFY RESPONDENT FOR THE CARGO CLAIM 14

A. CLAIMANT IS LIABLE TO INDEMNIFY RESPONDENT FOR THE CARGO CLAIM UNDER THE ICA

14

(i) The preconditions under Clause 4 of the ICA are satisfied 14

(ii) Recovery is not time-barred under Clause 6 of the ICA 16

(iii) CLAIMANT is liable for 100% of the Cargo Claim 16

(iv) In any event, CLAIMANT is only liable for 50% of the Cargo Claim 17

B. CLAIMANT IS LIABLE TO ACCOUNT FOR THE CARGO CLAIM UNDER THE HAGUE RULES

17

(i) The Hague Rules apply to determine CLAIMANT’s liability 17

a. The Hague Rules apply to CLAIMANT as the carrier under the relevant Bill of Lading

18

b. In any event, the Hague Rules have been incorporated into the Charterparty 19

(ii) CLAIMANT breached its obligation under Article 3(2) of the Hague Rules 19


III

(iii) CLAIMANT cannot rely on any exceptions to liability under Article 4(2) of the Hague Rules

19

a. CLAIMANT cannot rely on the exception in Article 4(2)(a) 20

b. CLAIMANT cannot rely on the exception in Article 4(2)(n) 20

IV. RESPONDENT IS ENTITLED TO RESTITUTION OF OVERPAID HIRE, OR ALTERNATIVELY, DAMAGES

20

A. THE VESSEL WAS OFF-HIRE PURSUANT TO CLAUSE 17 OF THE NYPE 2015 21

(i) The full working of the Vessel was prevented due to her detention for inspection and quarantine

21

(ii) The detention of the Vessel amounted to a cause or event within the scope of Clause 17

21

a. The detention of the Vessel constituted ‘detention pf the Port State control […] for Vessel deficiencies’

21

b. In the alternative, the detention of the Vessel by Port State Control constituted ‘similar cause preventing the full working of the Vessel’

23

(iii) The detention resulted in a loss of time 23

B. THE VESSEL OFF-HIRE PURSUANT TO CLAUSE 44 OF THE OMEGA RIDER CLAUSES

24

C. RESTITUTION OF THE HIRE PAID, OR ALTERNATIVELY DAMAGES, IS THE

APPROPRIATE REMEDY 24

D. RESPONDENT IS ENTITLED TO SET OFF AGAINST ANY DAMAGES AWARDED TO CLAIMANT

25

REQUEST FOR RELIEF 25


IV

ABBREVIATIONS

Cargo Claim Claim for damage to the cargo of tea brought by the Receivers against RESPONDENT

Charterparty The time charter between CLAIMANT and RESPONDENT, including the Omega Recap, the Omega Rider and NYPE 2015

Champion Champion Chartering Corp

Champion Recap Pages 30–33 of the Record

CHOPT Charterers’ option

Claim Submissions Pages 65–69 of the Record

CLAIMANT Panther Shipping Inc

Defence Submissions Defence and Counterclaim Submissions at pages 70–74 of the Record

Ebola The Ebola virus disease

Fairwind Fairwind International

Fairwind Recap Pages 53–56 of the Record

Hague Rules International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, opened for signature on 25 August 1924

ICA The Inter-Club New York Produce Exchange Agreement (as amended 1 September 2011)

Laycan Laydays cancelling

Next Fixture The time charter between CLAIMANT and Champion

NYPE 2015 New York Produce Exchange Form (as amended 3 June 2015)

Omega Recap Pages 2–6 of the Record

Omega Rider Clauses Pages 7–20 of the Record

Parties CLAIMANT and RESPONDENT

Receivers Hawkeye Import & Export Pty

Record 2019 International Maritime Law Arbitration Moot Scenario

Replacement Fixture The time charter between CLAIMANT and Fairwind


V

Reply Submissions Reply and Defence to Counterclaim Submissions at pages 75–77 of the Record

RESPONDENT Omega Chartering Limited

Vessel M/V Thanos Quest

WOG Without guarantee


VI

LIST OF AUTHORITIES

CASES AND ARBITRAL AWARDS REFERRED TO AT:

Action Navigation Inc v Bottigliere di Navigazione SpA [2005] 1 Lloyd’s Rep 432 (‘The Kitsa’)

3 [12]

Actis Co Ltd v The Sanko Steamship Co Ltd [1982] 1 Lloyd’s Rep 7 (‘The Aquacharm’)

3 [11], 21 [71], 22 [72]

Admiralty Comrs v SS Valeria [1922] 2 AC 242 10 [32]

AerCap Partners 1 Ltd v Avia Asset Management AB [2011] Bus LR D85 10 [33]

Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd [1983] 1 Lloyd’s Rep 183

15 [49]

Aldgate Construction Co Ltd v Unibar Plumbing & Heating Ltd [2010] EWHC 1063 (TCC)

12 [36]

Alghussein Establishment v Eton College [1988] 1 WLR 587 5 [17]

Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602 10 [33]

Alma Shipping Co of Monrovia v Mantovani [1975] 1 Lloyd’s Rep 115 (‘The Dione’)

11 [35]

Anchor Line Ltd v Keith Rowell Ltd [1980] 2 Lloyd’s Rep 351 6 [19]

Andre & Cie SA v Orient Shipping (Rotterdam) BV [1997] 1 Lloyd's Rep 139 (‘The Laconian Confidence’)

21 [69], 21 [71], 22 [72], 23 [76]

Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 (‘The Antaios’)

5 [16]

Arnold v Britton and others [2015] AC 1619 3 [10], 4 [14]

Arta Shipping Co Ltd v Thai Europe Tapioca Services Ltd [1977] 2 Lloyd’s Rep 1 (‘The Johnny’)

11 [35]

ASM Shipping Ltd of India v TTMI Ltd of England [2009] 1 Lloyd’s Rep 293 (‘The Amer Energy’)

12 [37]

Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GMBH [1976] 1 Lloyd's Rep 250 (‘The Puerto Buitrago’)

6 [21]


VII

Belcore Maritime Corporation v FLLI Moretti Cereali SpA [1983] 2 Lloyd’s Rep 66 (‘The Mastro Giorgis’)

22 [71]

Bernuth Lines Ltd v High Seas Shipping Ltd [2006] 1 Lloyd's Rep 537 (‘The Eastern Navigator’)

10 [30]

Bibby Factors Northwest Ltd v HFD Ltd [2016] 1 Lloyd’s Rep 517 25 [83]

Blackburn v Flavelle (1881) 6 App Cas 628 4 [14]

Brace v Calder [1895] 2 QB 253 8 [24]

Brazil Oiticica Inc v SS Bill (1942) 47 F Supp 969 20 [65]

Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft mbH [1980] 2 Lloyd’s Rep 556

6 [19]

British Transport Commission v Gourley [1956] AC 185 10 [32]

British Westinghouse Electric and Manufacturing Company Limited v Underground Electric Railways Company of London Limited [1912] AC 673

8 [24]

Bunge SA v Nidera BV [2015] 3 All ER 1082 8 [24]

C A Stewart & Co v Phs Van Ommeren (London) Ltd [1918] 2 KB 560 25 [82]

C Czarnikow Ltd v Koufos [1969] 1 AC 350 (‘The Heron II’) 7 [23], 10 [32], 11 [35], 12 [36], 12 [37], 13 [38]

CA Venezolana De Navegacion v Bank Line [1987] 2 Lloyd’s Rep 498 (‘The Roachbank’)

22 [71]

Canastrand Industries Ltd v The Lara S (1994) 176 NR 31 18 [61]

Canastrand Industries Ltd v The Lara S [1993] 2 FC 553 18 [61]

Chaplin v Hicks [1911] 2 KB 786 10 [33]

Christopher Hill Ltd v Ashington Piggeries Ltd [1971] 1 Lloyd's Rep 245 12 [36]


VIII

Compania Portorafti Commerciale SA v Ultramar Panama Inc [1990] 1 Lloyd’s Rep 310 (‘The Captain Gregos’)

16 [52]

Continental Pacific Shipping Ltd v Deemand Shipping Co Ltd [1997] Lloyds Rep 404 (‘The Lendoudis Evangelos II’)

9 [28]

Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd [2011] 1 Lloyd’s Rep 187 (‘The Saldanha’).

22 [71]

de Rosa v John Barrie (Contractor) Ltd [1974] 1 WLR 946 4 [14]

Deutsche Bank AG v Total Global Steel Ltd [2012] EWHC 1201 (Comm) 8 [25]

Diamond v Campbell-Jones [1961] Ch 22 12 [36]

Dodd Properties (Kent) Ltd v Canterbury City Council [1980] 1 All ER 928 10 [32]

Doe d Bryan v Bancks (1821) 106 ER 984 5 [17]

Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1978] 2 Lloyd’s Rep 132 (‘The Nanfri’)

25 [83]

Fetim BV v Oceanspeed Shipping Ltd [1999] 1 Lloyd’s Rep 612 (‘The Flecha’) 18 [60]

Fibrosa Spolka Ackina v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 25 [82]

Fiona Trust and Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254 15 [49]

Freeth v Burr (1874) LR 6 CP 208 6 [19]

Fulton Shipping Inc of Panama v Globalia Business Travel SAU of Spain [2014] 2 Lloyd’s Rep 230 (‘The New Flamenco’)

8 [24]

Fyffes Group Ltd v Templeman [2000] 2 Lloyd’s Rep 643 10 [33]

Galoo v Bright Grahame Murray [1993] 1 WLR 1360 10 [32]

Geldof Metaalconstructie NV v Simon Carves Ltd [2011] 1 Lloyd’s Rep 517 25 [83]

Glencore Grain Ltd v Goldbeam Shipping Inc [2002] 2 Lloyd’s Rep 244 (‘The Mass Glory’)

7 [23]


IX

Gosse Millard v Canadian Government Merchant Marine Ltd [1928] 1 KB 717 17 [54]

Gosse Millerd v Canadian Government Merchant Marine Ltd [1929] AC 223 17 [53]–[54]

Gul Bottlers (PVT) Ltd v Nichols plc [2014] EWHC 2173 (Comm) 8 [24]

H Parsons (Livestock) Ltd v Uttley, Ingham & Co Ltd [1978] QB 791 7 [23], 12 [36]

Hadley v Baxendale (1854) 9 Ex 341 7 [22]–[23], 11 [34], 12 [37]

Hamsard 3147 Ltd (t/a Mini Mode Childrenswear) v Boots UK Ltd [2013] EWHC 3251 (Pat)

5 [16]

Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442 15 [49]

Heifer International Inc v Christiansen [2008] 2 All ER (Comm) 83 15 [49]

Homburg Houtimport BV v Agrosin Private Ltd [2001] 1 Lloyd’s Rep 437 18 [61]

Homburg Houtimport BV v Agrosin Private Ltd [2003] 1 Lloyd’s Rep 571 (‘The Starsin’)

18 [60], 19 [64]

Hyundai Merchant Maritime Co Ltd v Gesuri Chartering Co Ltd [1991] 1 Lloyd’s Rep 100 (‘The Peonia’)

11 [35]

IMT Shipping and Chartering GmbH v Chansung Shipping Co Ltd [2009] 2 Lloyd’s Rep 139 (‘The Zenovia’)

6 [21], 8 [27], 9 [28]

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896

3 [10], 4 [14], 5 [16], 16 [51],

24 [79]

Jackson v Bank of Scotland [2005] 1 WLR 377 7 [23]

John Grimes v Gubbins [2013] EWCA Civ 37 12 [37]

Kaleej International Pty Ltd v Gulf Shipping Lines (1986) 6 NSWLR 569 (‘The Sun Diamond’)

18 [60]

Koryar v Perry (No 2) [1997] FCA 1468 4 [14]


X

Leon Corporation v Atlantic Lines & Navigation Co Inc [1985] 2 Lloyd’s Rep 470 (‘The Leon’)

25 [83]

Liesbosch Dredger v SS Edison [1933] AC 449 10 [32]

Linea Naviera Paramaconi SA v Abnormal Load Engineering Ltd [2001] 1 Lloyd’s Rep 763

16 [52]

London Arbitration 16/02 (2002) 600 Lloyd’s Maritime Law Newsletter 2 16 [51]

Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd [2001] 2 Lloyd’s Rep 17 (‘The Lipa’)

9 [28]

LSREF III Wight Ltd v Gateley LLP [2016] EWCA Civ 359 8 [25]

Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd [2018] 1 Lloyd’s Rep 654 (‘The Ocean Neptune’)

5 [16]

Macrae v H G Swindells [1954] 1 WLR 597 8 [24]

Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2015] 1 Lloyd’s Rep 315 (‘The Great Creation’)

6 [21], 11 [35]

Martin v Stout [1925] AC 359 6 [19]

MB Pyramid Sound MV v Briese Schiffahrts GmbH [1995] 2 Lloyd’s Rep 144 (‘The Innes’)

18 [60]

Miller v Borner [1900] 1 QB 691 15 [49]

Minnesota Mining & Manufacturing (Australia) Pty Ltd v The Ship ‘Novoaltaisk’ [1972] 2 NSWLR 476

17 [53]

New A Line v Erechtion Shipping Co SA [1987] 2 Lloyd’s Rep 180 (‘The Erecthion’)

3 [10]

New Zealand Shipping Co Ltd v Société des Ateliers et Chantiers de France [1917] 2 KB 717

5 [17], 6 [19]

North Sea Energy Holdings NV v Petroleum Authority of Thailand [1999] 1 Lloyd’s Rep 483

10 [33]

North Stafford Steel, Iron and Coal Co (Burslem) Ltd v Ward (1868) LR 3 Exch 172

4 [14]


XI

Oceanfocus Shipping Ltd v Hyandai Merchant Marine Co [1999] 1 Lloyd’s Rep 176 (‘The Hawk’)

15 [49]

Omak Maritime Ltd v Mamola Challenger Shipping Co [2011] 1 Lloyd's Rep 47 (‘The Mamola Challenger’)

8 [24]

Pan Ocean Shipping Ltd v Creditcorp Ltd [1994] [1994] 1 Lloyd’s Rep 365 (‘The Trident Beauty’)

25 [82]

Parke, Lacey, Hardie Ltd v The Ship Clan MacFayden (1930) 30 SR (NSW) 438

20 [66]

Payzu Ltd v Saunders [1919] 2 KB 581 8 [24]

Petroleum Shipping Ltd v Vatis [1997] 2 Lloyd’s Rep 314 (‘The Riza and The Sun’)

8 [24], 14 [42]

PM Law Ltd v Motorplus Ltd [2018] EWCA Civ 1730 15 [49]

Rainy Sky SA v Kookmin Bank [2012] 1 Lloyd’s Rep 34 3 [10], 5 [16]

Rede v Farr (1817) 105 ER 1188 5 [17], 6 [19]

Ross T Smyth & Co v Bailey, Son & Co [1940] 3 All ER 60 6 [19]

Santa Martha Baay Scheepvaart and Handelsmaatschappij NV v Scanbulk A/S [1981] 2 Lloyd’s Rep 267 (‘The Rijn’)

6 [21]

Seven Seas Properties Ltd v Al-Essa (No 2) [1993] 3 All ER 577 12 [36]

Sidermar SpA v Apollo Corporation [1978] 1 Lloyd’s Rep 200 (‘The Apollo’) 22 [72], 23 [76]

Sig Bergesen DY & Co v Mobil Shipping and Transportation Co [1993] 2 Lloyd's Rep 453 (‘The Berge Sund’)

21 [69]

Sino Channel Asia Ltd v Dana Shipping and Trading Pte Singapore [2016] 2 Lloyd's Rep 97

10 [30]

Society of Lloyd’s v Robinson [1999] 1 WLR 756 3 [10]

Sotiros Shipping Inc v Samiet Solholt [1983] 1 Lloyd's Rep 605 (‘The Solholt’) 8 [24]

South Australia Asset Management v York Montague [1997] AC 191 12 [36]


XII

Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] 2 Lloyd’s Rep 447 (‘The Spar Capella’)

6 [19]

SS Knutsford Ltd v E Tillmans & Co [1908] AC 406 18 [60]

Staniforth v Lyall (1830) 131 ER 65 14 [42]

Starlight Shipping Co v Allianz Marin & Aviation Versicherungs AG [2012] 1 Lloyd’s Rep 162 (‘The Alexandros T’)

15 [48]

Stinnes Interoil GmbH v A Halcoussis & Co (No 2) [1984] 1 Lloyd’s Rep 676 (‘The Yanxilas’)

12 [36]

Supershield Ltd v Siemens Building Technologies [2010] I Lloyd’s Rep 349 11 [35], 12 [37]

Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] 2 Lloyd’s Rep 81 (‘The Sylvia’)

11 [35], 12 [37], 13 [38]

Thai Airways International Public Co Ltd v KI Holdings Co Ltd [2015] EWHC 1250 (Comm)

8 [24]

The Argonaftis [1989] 2 Lloyd’s Rep 487 10 [32]

The Berkshire [1974] 1 Lloyd’s Rep 185 18 [60]

The Glendarroch [1894] P 226 19 [64]

The Glenochil [1896] P 10 17 [53]

The London Steam Ship Owners Mutual Insurance Association Ltd v The Kingdom of Spain [2014] 1 Lloyd's Rep 137 (‘The Prestige’)

10 [30]

The Ullises Shipping Corporation v Fal Shipping Co Ltd [2006] 1 Lloyd’s Rep Plus 99 (‘The Greek Fighter’)

3 [11]

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

3 [11]

Transfield Shipping Inc v Mercator Shipping Inc [2007] 2 Lloyd’s Rep 555 13 [38]

Transfield Shipping Inc v Mercator Shipping Inc [2009] 1 AC 61 (‘The Achilleas’)

7 [23], 11 [35], 12 [36]–[37],

12–3 [38]


XIII

Transpetrol Maritime Service v SJB (Marine Energy) BV [2012] 1 Lloyd’s Rep 564 (‘The Rowan’)

9 [28]

Triad Shipping Co v Stellar Chartering and Brokerage Inc [1993] 2 Lloyd's Rep 388 (‘The Island Archon No 1’).

3 [10]

Triad Shipping Co v Stellar Chartering and Brokerage Inc [1994] 2 Lloyd’s Rep 227 (‘The Island Archon No 2’)

3 [12]

TS Lines Ltd v Delphis NV [2009] 2 Lloyd’s Rep 54 (‘The TS Singapore’) 21 [69]

Vardinoyannis v The Egyptian General Petroleum Co [1971] 2 Lloyd’s Rep 200 (‘The Evaggelos’).

3 [10]

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 7 [23]

Volcafe Ltd v Compania Sud Americana de Vapores SA [2019] 1 Lloyd’s Rep 21

19 [64]

Wellesley Partners LLP v Withers LLP [2016] Ch 529 12 [36]–[37]

Wickman Machine Tool Sales Ltd v Schuler AG [1974] AC 235 5 [16]

Wood v Capita Insurance Services Ltd [2017] AC 1173 3 [10], 15 [49]

Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277

6 [19]

Wye Shipping Co Ltd v Compagnie du Chemin de Fer Paris-Orleans (1922) 10 Lloyd’s Rep 85

6 [21]

LEGISLATION REFERRED TO AT:

Arbitration Act 1996 (UK) 9 [30]

Civil Procedure Rules 1998 (UK) 10 [30]

Practice Direction 14 (UK) 10 [30]


XIV

BOOKS REFERRED TO AT:

Beale, H G, A S Burrows, Mindy Chen-Wishart, M R Freeland, A G Guest, R J A Hooley, Eva Lomnicka, David McClean, Peter MacDonald Eggers and E G McKendrick (eds), Chitty on Contracts: Volume 1 (Sweet & Maxwell, 32nd ed, 2015)

10 [32]

• Bennett, Howard, Peter MacDonald Eggers, Siobán Healy, Stephen Girvin, Stephen Hofmeyr, Julia Dias, Robert Bright, Alexander MacDonald, Richard Sarll and Simon Kerr (eds), Carver on Charterparties (Sweet & Maxwell, 2017)

6 [21], 7 [23], 8 [24], 10 [33],

12 [36], 12 [37], 14 [42], 15 [58], 15 [49], 16 [51], 17 [53], 19 [64], 23 [75], 23 [77]

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

15 [49]

Coghlin, Terence, Andrew Baker, Julian Kenny, John Kimball and Thomas Belknap, Time Charters (Taylor & Francis, 7th ed, 2014)

3 [11], 6 [21], 9 [28], 11 [35], 25

[82]

Eder, Bernard, David Foxton, Andrew Burrows, Steven Berry and Stewart Boyd, Scrutton on Charterparties and Bills of Ladings (Sweet & Maxwell, 23rd ed, 2017)

3 [10], 11 [35], 15 [49]

Harris, Jack W, Maritime Law: Issues, Challenges and Implications (Nova Science, 2009)

17 [53]

Hazelwood, Stephen J, and David Senmark, P&I Clubs Law and Practice (Informa Law, 4th ed, 2010)

16 [51]

Lopez, Norman, Bes’ Chartering and Shipping Terms (Barker & Howard, 11th ed, 1992)

10 [32]

Matej, David, and Stephan Gollasch (eds), Global Maritime Transport and Ballast Water Management: Issues and Solutions (Springer, 2014)

17 [53]

Stroud's Judicial Dictionary (5th ed, 1991) 4 [14]

Tetley, William, Marine Cargo Claims (Thomas Carswell, 4th ed, 2008) 18–9 [61], 20 [65], 20 [66]

Thomas, Rhidian D, Legal Issues Relating to Time Charterparties (Informa London, 2008)

3 [10], 15 [49]


XV

Treitel, Guenter, and Francis Reynolds, Carver on Bills of Lading (Sweet & Maxwell, 3rd ed, 2011)

20 [65]

JOURNAL ARTICLES REFERRED TO AT:

Baughan, Simon and Natalie Campbell, ‘Case and Comment: Hull Fouling – Charterparty Issues’ (2006) Lloyd’s Maritime and Commercial Law Quarterly 129

3 [12]

Liu, Edward Yang, ‘Disputes arising out of Hull Bottom Fouling under Time Charterparties’ (2018) 18(2) Lloyd’s Shipping and Trade Law 1

5 [16]

Tetley, William, ‘Bills of Lading Case Note’ (2004) 35(1) Journal of Maritime Law & Commerce 121

18 [61]

OTHER REFERRED TO AT:

BIMCO, Singapore Maritime Foundation (SMF) and Association of Shipbrokers and Agents (ASBA), ‘NYPE 2016 Explanatory Note’ (2018)

19 [62]

Gard P&I Member Circular, ‘Inter-Club New York Produce Exchange Agreement 1996 (as amended September 2011)’, (August 2011) No 7-11

15 [49]

Oxford English Dictionary (online at 17 April 2019) ‘accordance’ 3 [10]


1

STATEMENT OF FACTS

1. On 18 March 2016, Panther Shipping Inc (CLAIMANT) and Omega Chartering Limited

(RESPONDENT) entered into a time charter (Charterparty), pursuant to which the M/V Thanos Quest

(Vessel) carried a cargo of English Breakfast Tea (Cargo) on behalf of Hawkeye Import & Export

(Receivers) from West Coast, Challaland to Wahanda, Bao Kingdom.

2. While the Cargo was being loaded at West Coast in mid-April 2016, there were media reports of an

Ebola outbreak in the City of West Coast and surrounding areas. Upon arriving at Wahanda on 7 May

2016, Port State Control prevented the Vessel from berthing because they feared that members of her

crew were carrying Ebola. The Vessel was held at anchorage until an onboard inspection occurred.

The Vessel was then quarantined until she obtained free pratique on 26 June 2016. RESPONDENT

informed CLAIMANT that the Vessel was off-hire on 7 May 2016, and again on 11 May 2016.

3. During the Vessel’s detention at Wahanda, her hull became fouled. Wahanda Port Services advised

on 25 May 2016 that hull cleaning could not occur at Wahanda. RESPONDENT offered on three

occasions to pay a lump sum, the amount of which increased each time, in lieu of cleaning.

RESPONDENT also offered to arrange cleaning at its expense at North Titan. CLAIMANT refused all of

these offers and arranged for the Vessel to be cleaned at South Island after the Vessel had been re-

delivered. After cleaning was performed at South Island, the Vessel was delivered into a fixture

(Replacement Fixture) with Fairwind International (Fairwind).

4. After berthing at Wahanda, the Cargo was discovered to have sustained severe damage caused by

water ingress. A joint survey revealed that, during loading at West Coast, the Vessel’s crew, in error,

pumped sea water into the hold in which the Cargo was stowed. Following delivery of the damaged

Cargo, the Receivers made a cargo claim against RESPONDENT (Cargo Claim).

5. CLAIMANT commenced proceedings on 9 November 2018, claiming damages for the costs of hull

cleaning, the voyage to South Island and for the late re-delivery of the Vessel. RESPONDENT

counterclaimed for an indemnity with respect to the Cargo Claim and restitution, or damages, for

overpaid hire. The seat of the arbitration is London. The Charterparty is governed by English law.


2

ARGUMENTS ON THE MERITS OF THE CLAIM

I. RESPONDENT IS NOT LIABLE TO CLAIMANT WITH RESPECT TO THE COSTS OF HULL CLEANING OR

THE VOYAGE TO SOUTH ISLAND

6. Clause 83 of the Omega Rider Clauses, which governs the commercial agreement between the Parties

with respect to hull fouling, is structured as follows: sub-Clause 83(a) sets out the circumstances in

which either party may call for a joint inspection under sub-Clause 83(b); sub-Clause 83(c) provides

for cleaning arrangements that may be made, if called for after the joint inspection, yet contemplates

that cleaning may be impermissible or impossible; in those circumstances, sub-Clause 83(d) specifies

that the Parties shall agree a lump sum payment prior to, or on, re-delivery, if RESPONDENT is

prevented from carrying out cleaning in accordance with the Clause.

7. RESPONDENT is not liable to account for the hull cleaning or South Island voyage costs because its

inability to perform hull cleaning prior to re-delivery of the Vessel did not breach Clause 83 (A). In

the alternative, CLAIMANT is entitled to no more than USD33,000 in damages (B).

A. RESPONDENT DID NOT BREACH CLAUSE 83 OF THE OMEGA RIDER CLAUSES

8. RESPONDENT’s inability to clean the Vessel’s hull prior to re-delivery did not amount to a breach of

Clause 83 because either RESPONDENT was relieved of the obligation to perform hull cleaning as the

preconditions of the cleaning obligation in sub-Clause 83(c) were not satisfied,1 or RESPONDENT

otherwise acted consistently with its obligations under Clause 83 at all material times.

9. This is for four reasons: first, the Vessel did not remain in Wahanda in accordance with

RESPONDENT’s orders, as contemplated by sub-Clause 83(a) (i); second, there was no joint inspection

of the Vessel, as required by sub-Clause 83(b) (ii); third, CLAIMANT refused to permit cleaning (iii);

and fourth, CLAIMANT’s unreasonable refusal of RESPONDENT’s lump sum offers, made pursuant to

sub-Clause 83(d), disentitles it from any award of damages (iv).

(i) The Vessel did not remain in Wahanda in accordance with RESPONDENT’s orders

10. Sub-Clause 83(a) provides that, where a vessel remains idle for a period exceeding 30 days in

1 Record 16.


3

accordance with Charterers’ orders, speed and consumption warranties shall be suspended pending

inspection of the Vessel’s underwater parts.2 A reasonable commercial party would construe ‘in

accordance with’ to mean ‘in obedience to’, rather than ‘as a result of’, 3 because the former coheres

with the ordinary meaning4 of sub-Clause 83(a) and promotes a commercial outcome reflecting the

Parties’ agreed allocation of risk:5 the consequences of an order should fall on the party that made it.6

RESPONDENT should not be held liable for fouling that did not occur as a direct result of its order. 7

11. Further, CLAIMANT bears the burden of establishing that the cause of its loss can properly be

characterised as an order of RESPONDENT, as charterer.8 CLAIMANT cannot discharge that burden

because the Vessel was detained by Port State Control.9 That detention, which caused the delay and

CLAIMANT’s loss, broke the chain of causation between RESPONDENT’s initial order that the Vessel

set sail to Wahanda and the Vessel remaining idle there for a period exceeding 30 days.10

12. As sub-Clause 83(a) is not enlivened, the remainder of Clause 83 necessarily does not apply. As such,

CLAIMANT’s entitlement to damages falls to be determined under the common law. Applying that

law, RESPONDENT is not liable to account for the hull cleaning damages that CLAIMANT seeks.11

2 Record 16. 3 Oxford English Dictionary (online at 17 April 2019) ‘accordance’. 4 Bernard Eder et al, Scrutton on Charterparties and Bills of Lading (Thomson Reuters, 23rd ed, 2017) 30–34 [2-047]–[2-065] (‘Scrutton’); Rhidian Thomas, Legal Issues Relating to Time Charterparties (Informa, 2008) 17 (‘Thomas’); Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912–3 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing) (‘ICS’); Arnold v Britton and others [2015] AC 1619, 1627 [15] (Lord Neuberger) (‘Arnold’). 5 ICS, 913 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing); Society of Lloyd’s v Robinson [1999] 1 WLR 756, 763 (Lord Steyn); Rainy Sky SA v Kookmin Bank [2012] 1 Lloyd’s Rep 34, 40 [21] (Lord Clarke) (‘Rainy Sky’); Wood v Capita Insurance Services Ltd [2017] AC 1173, 1179 [11] (Lord Hodge, Lords Neuberger, Mance, Christopher Clarke and Sumption agreeing) (‘Capita’); SEA2011 Inc v ICT Ltd [2018] 1 Lloyd’s Rep 463, 470 [43] (Sir Cranston). 6 Triad Shipping Co v Stellar Chartering and Brokerage Inc [1993] 2 Lloyd's Rep 388, 407 (Cresswell J) (‘The Island Archon No 1’). 7 New A Line v Erechthion Shipping Co SA [1987] 2 Lloyd’s Rep 180, 187 (Staughton J) (‘The Erechthion’); see also, Vardinoyannis v The Egyptian General Petroleum Co [1971] 2 Lloyd’s Rep 200, 206 (Donaldson J) (‘The Evaggelos’). 8 Actis Co Ltd v The Sanko Steamship Co Ltd [1982] 1 Lloyd’s Rep 7, 12 (Griffith LJ) (‘The Aquacharm’). 9 Record 24–5. 10 Terence Coghlin et al, Time Charters (Routledge, 7th ed, 2014) 340 [19.18] (‘Coghlin’); Total Transport Corporation v Arcadia Petroleum Ltd [1996] 2 Lloyd’s Rep 408, 426, 430, 434 (Rix J) (‘The Eurus’); The Ullises Shipping Corporation v Fal Shipping Co Ltd [2006] 1 Lloyd’s Rep Plus 99 [14], [17] (Colman J) (‘The Greek Fighter’). 11 Triad Shipping Co v Stellar Chartering and Brokerage Inc [1994] 2 Lloyd’s Rep 227, 236 (Evans LJ), 238 (Nicholls VC) (‘The Island Archon No 2’); Action Navigation Inc v Bottigliere di Navigazione SpA [2005] 1 Lloyd’s Rep 432, 437–9 (Aickens J) (‘The Kitsa’); see also, Simon Baughan and Natalie Campbell, ‘Case and Comment: Hull Fouling – Charterparty Issues’ (2006) Lloyd’s Maritime and Commercial Law Quarterly 129, 134.


4

(ii) There was no joint inspection of the Vessel

13. Where speed and consumption warranties have been suspended pending inspection pursuant to sub-

Clause 83(a), sub-Clause 83(b) provides that any inspection called for shall be ‘arranged jointly’.12

In turn, sub-Clause 83(c) expressly states that cleaning shall be undertaken by RESPONDENT only if

either party calls for it as a result of a joint inspection.

14. At no point did CLAIMANT fulfil this obligation. It follows from the natural and ordinary meaning13

of the word ‘jointly’ that the obligation to arrange inspection should not be exercised severally.14 By

expressly stipulating the process by which this obligation is to be performed, the agreement should

not be construed to allow performance by other means. 15 Here, CLAIMANT’s demands that

RESPONDENT arrange for inspection and cleaning at South Island constituted an attempt to exercise

that obligation severally,16 particularly as CLAIMANT failed to engage with RESPONDENT’s earlier

offer to arrange for cleaning at North Titan, which had been made in good faith.17

(iii) In any event, RESPONDENT was relieved of the hull cleaning obligation because

CLAIMANT refused to permit cleaning

15. Even if the requirements in both sub-Clauses 83(a) and 83(b) were satisfied, RESPONDENT was

nevertheless relieved of its obligation under sub-Clause 83(c) to arrange hull cleaning because

CLAIMANT refused to permit cleaning, as a result of which speed and consumption warranties were

reinstated. Therefore, RESPONDENT was relieved of any obligation to perform cleaning.

16. RESPONDENT complied with its obligation under sub-Clause 83(c) by offering to arrange for the

Vessel to be cleaned at North Titan.18 That offer was unreasonably rejected by CLAIMANT in favour

of inspection and cleaning at South Island. The port charges associated with cleaning at South Island

12 Record 16 (emphasis added). 13 ICS, 913 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing); Arnold, 1627 [15] (Lord Neuberger). 14 Koryar v Perry (No 2) [1997] FCA 1468, 3 (Beaumont J); Stroud's Judicial Dictionary (5th ed, 1991), 1367 ‘jointly’. 15 North Stafford Steel, Iron and Coal Co (Burslem) Ltd v Ward (1868) LR 3 Exch 172, 177 (Willes J); Blackburn v Flavelle (1881) 6 App Cas 628, 634–5 (Sir Barnes Peacock); de Rosa v John Barrie (Contractor) Ltd [1974] 1 WLR 946, 957 (Lord Hailsham). 16 Record 42–3. 17 Record 39. 18 Ibid.


5

exceeded those that would have been charged at North Titan.19 By rejecting a reasonable offer, and

insisting on an unreasonable course of action, CLAIMANT refused to permit cleaning despite the

availability of suitable facilities and equipment, as contemplated by sub-Clause 83(c)(iii).20 As such,

speed and consumption warranties were reinstated,21 the effect of which reinstatement was that

RESPONDENT was relieved of any obligation to arrange cleaning, producing the most commercially

sensible outcome.22

(iv) CLAIMANT’s unreasonable refusal of Respondent’s lump sum offers disentitles it from

any award of damages for breach of Clause 83

17. CLAIMANT’s conduct disentitles it from any award of damages on this ground as CLAIMANT’s refusal

to accept or negotiate a lump sum payment was unreasonable, and amounted to renunciation of its

obligations under sub-Clause 83(d). CLAIMANT cannot take advantage of its own wrongdoing.23

18. Sub-Clause 83(d) stipulates that where RESPONDENT is ‘prevented from carrying out [hull] cleaning,

the parties shall […] agree a lump sum payment’. RESPONDENT was prevented from carrying out hull

cleaning at Wahanda due to the quarantining of the Vessel,24 and the poor visibility and complex

currents at that port.25 RESPONDENT thus accrued the right under the Charterparty to offer to make a

lump sum payment.

19. RESPONDENT made three such offers to CLAIMANT, each of which increased in value, in fulfilment of

its obligation under sub-Clause 83(d).26 CLAIMANT unreasonably rejected each offer, notwithstanding

that it was open to CLAIMANT to negotiate, provide reasons as to why RESPONDENT’s offers were not

19 Record 37, 50–1. 20 Hamsard 3147 Ltd (t/a Mini Mode Childrenswear) v Boots UK Ltd [2013] EWHC 3251 (Pat) [86]–[87] (Norris J). 21 Record 16. 22 Wickman Machine Tool Sales Ltd v Schuler AG [1974] AC 235, 251 (Lord Reid); Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, 201 (Lord Diplock) (‘The Antaios’); ICS, 912–13 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing); Rainy Sky, 39 (Lord Clarke); Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd [2018] 1 Lloyd’s Rep 654, 660 [8] (Popplewell J) (‘The Ocean Neptune’); see also, Edward Yang Liu, ‘Disputes arising out of Hull Bottom Fouling under Time Charterparties’ (2018) 18(2) Lloyd’s Shipping and Trade Law 1. 23 Rede v Farr (1817) 105 ER 1188, 1189–1190 (Lord Ellenborough CJ) (‘Rede’); Doe d Bryan v Bancks (1821) 106 ER 984, 986–7 (Bayley J) (‘Doe’); New Zealand Shipping Co Ltd v Société des Ateliers et Chantiers de France [1917] 2 KB 717, 723–4 (Viscount Reading CJ), 724 (Scrutton LJ) (‘New Zealand Shipping’); Alghussein Establishment v Eton College [1988] 1 WLR 587, 591–4 (Lord Jauncy) (‘Alghussein’). 24 Record 24. 25 Record 26. 26 Record 29, 39, 43.


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generous,27 and suggest a more appropriate lump sum amount in response. CLAIMANT’s conduct

amounted to renunciation of its obligations under sub-Clause 83(d),28 because the rejection of all

three lump sum offers objectively evinced an unwillingness to perform the Charterparty according to

its terms,29 and an intention to refuse unequivocally30 and absolutely to perform its side of Clause

83.31 As such, CLAIMANT is not entitled to take advantage of its own wrongdoing.32

B. IN THE ALTERNATIVE, CLAIMANT IS ENTITLED TO NO MORE THAN USD33,000 IN DAMAGES

20. Even if the Tribunal determines that CLAIMANT has established RESPONDENT’s breach of Clause 83,

RESPONDENT is nevertheless liable only for the reasonable costs of cleaning the Vessel’s hull. Here,

reasonable costs amounted to USD33,000, the price quoted for cleaning at North Titan,33 and not the

higher cost of cleaning at, or the voyage to, South Island.34 RESPONDENT’s liability should be so

capped for three reasons: the voyage to South Island was non-contractual (i); the costs of the voyage

to South Island are too remote (ii); and CLAIMANT failed to mitigate its loss (iii).

(i) The voyage to South Island was non-contractual

21. The voyage to South Island was non-contractual. RESPONDENT had tendered its re-delivery notice

prior to CLAIMANT’s request that the Vessel be cleaned at South Island.35 That 1-day re-delivery

notice was permissible because the Charterparty is silent on when a re-delivery notice may be validly

tendered.36 The state of the Vessel’s hull did not affect the validity of this re-delivery notice, as the

hull cleaning obligation pursuant to Clause 83 was not a condition precedent to re-delivery. 37

27 Record 42. 28 Martin v Stout [1925] AC 359, 364 (Lord Atkinson); Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft mbH [1980] 2 Lloyd’s Rep 556, 562 (Lord Stephenson); Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] 2 Lloyd’s Rep 447, 461–3 [66]–[78] (Lord Gross) (‘The Spar Capella’). 29 Ross T Smyth & Co v Bailey, Son & Co [1940] 3 All ER 60, 72 (Lord Wright); The Spar Capella, 463 (Lord Gross). 30 Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277, 287–8 (Lord Salmon), 292 (Lord Russell); Anchor Line Ltd v Keith Rowell Ltd [1980] 2 Lloyd’s Rep 351, 353 (Megaw LJ) (‘The Hazelmoor’). 31 Freeth v Burr (1874) LR 6 CP 208, 214 (Lord Coleridge CJ). 32 Rede, 1189–1190 (Lord Ellenborough CJ); Doe, 406–7 (Bayley J); New Zealand Shipping, 723–4 (Viscount Reading CJ), 724 (Scrutton LJ); Alghussein, 591–594 (Lord Jauncy). 33 Record 37. 34 Record 50–52. 35 Record 4, 43. 36 Cf Howard Bennett et al, Carver on Charterparties (Sweet and Maxwell, 2017) 665 [7-393] (‘Carver’); Coghlin, 268 [15.7]; IMT Shipping and Chartering GmbH v Chansung Shipping Co Ltd [2009] 2 Lloyd’s Rep 139, 141 (Tomlinson J) (‘The Zenovia’). 37 Carver, 646 [7-336]; Santa Martha Baay Scheepvaart and Handelsmaatschappij NV v Scanbulk A/S [1981] 2 Lloyd’s Rep 267, 269–70 (Mustill J) (‘The Rijn’); see also, Wye Shipping Co Ltd v Compagnie du Chemin de Fer Paris-Orleans


7

Consequently, as the voyage was non-contractual, RESPONDENT is not liable to account for the costs

of that voyage, which amounted to USD55,567.42.38

(ii) The costs of the voyage to South Island are too remote

22. The applicable test for remoteness from Hadley v Baxendale contains two limbs:39 where one party

breaches a contract, the damages that party is liable to pay should be fairly and reasonably considered

to be either that which arises naturally, or according to the usual course of things, from the breach

(the first limb), or that which may reasonably be supposed to have been in the contemplation of both

parties at the time they made the contract as the probable result of breach (the second limb).40

23. The costs of the voyage to South Island are too remote as they do not fall within either limb of the

test. First, such costs do not fall within the first limb as the voyage was made after the Vessel was re-

delivered, with the contractual obligations under the Charterparty having concluded, and thus did not

arise naturally.41 Moreover, there must be a geographical cut-off point to which losses resulting from

travel to an alternative port will arise naturally from breach.42 Second, such costs do not fall within

the second limb, as, at the time of formation,43 RESPONDENT lacked the requisite knowledge of the

special circumstances in which a costly additional journey would result from the inability to clean at

Wahanda prior to re-delivery,44 as the Parties were only informed that hull cleaning could not occur

at that port after the Vessel had arrived in Wahanda.45

(iii) In any event, CLAIMANT failed to mitigate its loss

(1922) 10 Lloyd’s Rep 85, 87 (McCardie J); Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GMBH [1976] 1 Lloyd's Rep 250, 253 (Lord Denning MR) (‘The Puerto Buitrago’); Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2015] 1 Lloyd’s Rep 315, 319 [18], 321 [31] (Cooke J) (‘The Great Creation’). 38 The Great Creation, 321 [31] (Cooke J). 39 (1854) 9 Ex 341, 354–5 (Alderson B) (‘Hadley v Baxendale’). 40 Hadley v Baxendale, 354–5 (Alderson B). 41 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528, 537, 540 (Asquith LJ) (‘Victoria Laundry’); C Czarnikow Ltd v Koufos [1969] 1 AC 350, 383–4 (Lord Reid), 405–6 (Lord Morris) (‘The Heron II’); H Parsons (Livestock) Ltd v Uttley, Ingham & Co Ltd [1978] QB 791, 802 (Lord Denning), 805 (Lord Orr), 807 (Lord Scarman) (‘H Parsons’). 42 Jackson v Bank of Scotland [2005] 1 WLR 377, 386 [30], 388–9 [35]–[43] (Lord Hope) (‘Jackson’). 43 Victoria Laundry, 539 (Asquith LJ). 44 Carver, 1121 [11-275], 1127 [11-285]; Hadley v Baxendale, 355 (Alderson B); Glencore Grain Ltd v Goldbeam Shipping Inc [2002] 2 Lloyd’s Rep 244, 259 [63] (Moore-Bick J) (‘The Mass Glory’); Transfield Shipping Inc v Mercator Shipping Inc [2009] 1 AC 61, 75 [36] (Lord Hope), 78 [52] (Lord Roger), 83 [68] (Lord Walker) (‘The Achilleas’). 45 Record 26.


8

24. CLAIMANT owed RESPONDENT a duty to take all reasonable steps to mitigate the losses that resulted

from any breach of Clause 83, and is debarred from claiming any damage due to its neglect to take

such steps.46 Courts have characterised the rejection of a reasonable offer made in good faith as a

failure to mitigate. 47 Therefore, CLAIMANT’s rejection of RESPONDENT’s offer to arrange hull

cleaning at North Titan, and of RESPONDENT’s three lump sum offers, constitutes a failure to mitigate.

25. Moreover, CLAIMANT acted unreasonably by pursuing the ulterior and extraneous purpose of

repositioning the Vessel to its commercial advantage, and accruing additional costs in arranging for

cleaning at South Island.48 The significantly higher costs of pilotage and tuggage at South Island, as

compared to North Titan, resulted in the incurring of an additional USD8,000 above the quote

provided at North Titan, and a further USD55,567.42 as the costs of travelling to South Island.49

II. RESPONDENT IS NOT LIABLE TO CLAIMANT WITH RESPECT TO THE DAMAGES CLAIMED FOR THE

LATE RE-DELIVERY OF THE VESSEL

26. CLAIMANT is not entitled to recover the damages claimed on this ground because RESPONDENT did

not breach the Charterparty by re-delivering the Vessel late (A). In any event, RESPONDENT is not

liable for the loss of hire under the Next Fixture (B). In any event, even if RESPONDENT is so liable,

CLAIMANT is not entitled to recover the entirety of the USD15,330,000 claimed (C).

A. RESPONDENT DID NOT BREACH THE CHARTERPARTY BY RE-DELIVERING THE VESSEL LATE

27. The Omega Recap relevantly provides: ‘DURATION ABT 50-55 DAYS WOG’.50 The Vessel was

46 Carver, 1058 [11-127], 1089 [11-194]; British Westinghouse Electric and Manufacturing Company Limited v Underground Electric Railways Company of London Limited [1912] AC 673, 689 (Viscount Haldane LC) (‘British Westinghouse’); see also, Payzu Ltd v Saunders [1919] 2 KB 581, 589 (Scrutton LJ); Macrae v H G Swindells [1954] 1 WLR 597, 598 (Barry J); Sotiros Shipping Inc v Samiet Solholt [1983] 1 Lloyd's Rep 605, 608–10 (Sir Donaldson MR) (‘The Solholt’); Petroleum Shipping Ltd v Vatis [1997] 2 Lloyd’s Rep 314, 321–3 (Walker J) (‘The Riza and The Sun’); Omak Maritime Ltd v Mamola Challenger Shipping Co [2011] 1 Lloyd's Rep 47, 50 [17]–[18] (Teare J) (‘The Mamola Challenger’); Thai Airways International Public Co Ltd v KI Holdings Co Ltd [2015] EWHC 1250 (Comm) [31]–[38] (Leggatt J); Bunge SA v Nidera BV [2015] 3 All ER 1082, 1107 [81] (Lord Toulson). 47 Brace v Calder [1895] 2 QB 253, 259 (Lord Esher MR), 263–4 (Lord Rigby); Fulton Shipping Inc of Panama v Globalia Business Travel SAU of Spain [2014] 2 Lloyd’s Rep 230, 241 (Popplewell J) (‘The New Flamenco’); Gul Bottlers (PVT) Ltd v Nichols plc [2014] EWHC 2173 (Comm) [26] (Cooke J). 48 Deutsche Bank AG v Total Global Steel Ltd [2012] EWHC 1201 (Comm) [159] (Smith J); LSREF III Wight Ltd v Gateley LLP [2016] EWCA Civ 359 [39] (Briggs LJ, MacFarlane LJ and Moore-Bick LJ agreeing). 49 Record 52. 50 Record 4, Omega Recap; The Zenovia, 144 [14] (Tomlinson J).


9

delivered on 29 March 2016,51 and the Vessel was re-delivered on 30 June 2016.52 While the date of

re-delivery was more than 55 days after delivery, RESPONDENT did not breach the Charterparty

because the express period of 50–55 days is qualified by ‘about’ and ‘without guarantee’ (i). Further,

RESPONDENT is not precluded from asserting that late re-delivery was not a breach (ii).

(i) The express period of the Charterparty was qualified by ‘about’ and ‘without guarantee’

28. ‘WOG’, which does not appear in the Champion Recap or the Fairwind Recap, was deliberately

inserted into the Charterparty.53 Where the period of a charterparty is qualified by the words ‘without

guarantee’, there can be no liability for late re-delivery unless fraud or mala fides is established,54

which can only occur if, at the time of fixing, a charterer did not hold a genuine belief that the trip

would be completed within the timeframe contemplated by the fixture.55 This was not the case here,56

and CLAIMANT has therefore failed to discharge the burden of proving such mala fides.

(ii) RESPONDENT is not precluded from asserting that late re-delivery was not a breach

29. Paragraph 10(2) of the Defence Submissions does not preclude RESPONDENT from denying that the

late re-delivery of the Vessel did not amount to a breach of the Charterparty.57 Properly construed,

Paragraph 10(2) only constituted an admission that RESPONDENT did not re-deliver the Vessel prior

to the expiry of the 50–55 day period on 23 May 2016.58

30. In the alternative, even if Paragraph 10(2) is construed as an admission of breach, the Tribunal has

the power to grant RESPONDENT leave to depart from its Defence Submissions absent agreement

otherwise between the Parties.59 The Tribunal’s discretion should be guided by English procedural

51 Record 66, Claim Submissions [3]. 52 Record 44; Record 68, Claim Submissions [17]. 53 Cf Record 31, Champion Recap; Record 55, Fairwind Recap. 54 Coghlin, 96 [4.28]; Continental Pacific Shipping Ltd v Deemand Shipping Co Ltd [1997] 1 Lloyd’s Rep 404, 406 (Longmore J) (‘The Lendoudis Evangelos II’); Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd [2001] 2 Lloyd’s Rep 17, 19 [11] (Smith J) (‘The Lipa’); The Zenovia, 151 [48] (Tomlinson J); Transpetrol Maritime Services v SJB (Marine Energy) BV [2012] 1 Lloyd’s Rep 564, 568 [16] (Longmore LJ) (‘The Rowan’). 55 The Lendoudis Evangelos II, 406 (Longmore J); The Lipa, 19 [14] (Smith J). 56 Record 66, Claim Submissions [3]–[4]; Record 72, Defence Submissions [8]. 57 Record 72, Defence Submissions [10]. 58 Record 68, Claim Submissions [21(2)]; Record 72, Defence Submissions [10]. 59 Arbitration Act 1996 (UK) s 34.


10

principles60 regarding withdrawal of pre-trial admissions.61 Accordingly, leave should be granted

because any admission was clearly made in error and RESPONDENT would suffer significant prejudice

should the Tribunal refuse to grant leave.62 Further, RESPONDENT has strong prospects of success on

the merits of the Claim if leave were granted, for the reasons submitted in [23].

B. IN ANY EVENT, RESPONDENT IS NOT LIABLE FOR THE LOSS OF HIRE UNDER THE NEXT FIXTURE

31. RESPONDENT is not liable for the damages claimed because any breach, if established, did not cause

the loss of the Next Fixture (i) and, in the alternative, the loss of the Next Fixture is too remote (ii).

(i) RESPONDENT’s late re-delivery did not cause the loss of hire under the Next Fixture

32. On 15 June 2016, CLAIMANT and Champion entered into the Next Fixture for a 2-year period.63 The

Next Fixture also provided for a 2-year option, exercisable at Champion’s discretion.64 RESPONDENT

accepts that the late re-delivery of the Vessel caused the loss of the 2-year period.65 However, it was

not the effective cause of CLAIMANT’s loss of hire under the 2-year option.66 At the purported date of

breach, 30 June 2016, the 2-year option had not crystallised into an enforceable contract because

Champion had not yet exercised the option.

33. Moreover, CLAIMANT has not demonstrated that there was a ‘real’ or ‘substantial’ chance that

Champion would have exercised the option.67 Further, three factors militate against that conclusion.

First, Champion’s cancellation of the Next Fixture involved refusal to grant a 2-day extension to keep

60 Record 15–6, Omega Rider Clauses cl 80. 61 Ibid; see Civil Procedure Rules 1998 (UK) pt 14, r 14.1(5); Practice Direction 14 (UK) [7.1]–[7.2]. 62 Bernuth Lines Ltd v High Seas Shipping Ltd [2006] 1 Lloyd's Rep 537, 546–7 [56]–[63] (Clarke J) (‘The Eastern Navigator’); The London Steam Ship Owners Mutual Insurance Association Ltd v The Kingdom of Spain [2014] 1 Lloyd's Rep 137, 150–9 [59]–[78], 160 [82]–[84] (Walker J) (‘The Prestige’); Sino Channel Asia Ltd v Dana Shipping And Trading Pte Singapore [2016] 2 Lloyd's Rep 97, 99 [4]–[6] (Sir Elder). 63 Record 30. 64 Record 31; Norman Lopez, Bes’ Chartering and Shipping Terms (Barker & Howard, 11th ed, 1992) 38. 65 Record 72, Defence Submissions [10]. 66 H G Beale, Chitty on Contracts: Volume I (Sweet & Maxwell, 32nd ed, 2015) 1838 (‘Chitty’); Admiralty Comrs v SS Valeria [1922] 2 AC 242, 248 (Lord Dunedin); Liesbosch Dredger v SS Edison [1933] AC 449, 463 (Lord Wright); British Transport Commission v Gourley [1956] AC 185, 197 (Earl Jowitt); The Heron II, 414 (Lord Pearce), 420 (Lord Upjohn); Dodd Properties (Kent) Ltd v Canterbury City Council [1980] 1 All ER 928, 934 (Megaw LJ); The Argonaftis [1989] 2 Lloyd’s Rep 487, 491–2 (Sheen J); Galoo v Bright Grahame Murray [1993] 1 WLR 1360, 1374–5 (Lord Glidewell) (‘Galoo’). 67 Carver, 1110–1 [11-250]–[11-251]; Chaplin v Hicks [1911] 2 KB 786, 795 (Moulton LJ), 800 (Farell LJ); Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602, 1611–14 (Stuart-Smith LJ) (‘Allied’); North Sea Energy Holdings NV v Petroleum Authority of Thailand [1999] 1 Lloyd’s Rep 483, 493–4 (Waller LJ); Fyffes Group Ltd v Templeman [2000] 2 Lloyd’s Rep 643, 667–8 (Toulson J); AerCap Partners 1 Ltd v Avia Asset Management AB [2011] Bus LR D85, D87–8 [76] (Gross LJ).


11

a 2-year, and potentially 4-year charterparty on foot.68 That conduct evinces at best a non-committal

attitude that does not support any inference that Champion would have exercised the option out of

convenience or inertia.69 Second, the market rate of hire could be lower at the conclusion of the initial

2-year period than when the Next Fixture was originally concluded. In those circumstances, it would

likely not make commercial sense for Champion to exercise the option. Third, due to ever-changing

business needs, Champion may consider that it would be in its commercial interests not to exercise

the 2-year option. In light of Champion’s conduct and the significant commercial uncertainty,

CLAIMANT has failed to establish that RESPONDENT caused the loss of hire under the 2-year option.

(ii) In the alternative, the loss of hire under the Next Fixture is too remote

34. The loss of hire under the Next Fixture also does not fall within either limb of Hadley v Baxendale

(a). In any event, RESPONDENT is not liable because it has not assumed responsibility for that loss (b).

a. Loss of hire under the Next Fixture does not fall within either limb of Hadley v Baxendale

35. The loss claimed by CLAIMANT does not fall within the first limb as it does not arise naturally from

RESPONDENT’s breach.70 It is common knowledge in the shipping industry that damages for late re-

delivery are confined to the ‘normal measure’, that is, the difference between hire received during the

overrun period and market price for hire in that same period.71 ‘Businessmen who are entering into a

commercial contract’ are assumed to ‘have a shared understanding’ of the industry and

‘expect[ations] from the contract’. 72 It is reasonable to expect that the Parties, as sophisticated

shipping entities, with the assistance of brokers or managers,73 would possess such knowledge.74

68 Record 31, 40–1. 69 Allied, 1614 (Stuart-Smith LJ). 70 Above n 41. 71 Coghlin, 94 [4.20]; Scrutton, 348–9; The Achilleas, 67 [10] (Lord Hoffmann), 74 [34] (Lord Hope), 88 [84]–[87] (Lord Walker); see also, Alma Shipping Co of Monrovia v Mantovani [1975] 1 Lloyd’s Rep 115, 117–8 (Lord Denning MR) (‘The Dione’); Arta Shipping Co Ltd v Thai Europe Tapioca Services Ltd [1977] 2 Lloyd’s Rep 1, 2 (Lord Denning MR) (‘The Johnny’); Hyundai Merchant Marine Co Ltd v Gesuri Chartering Co Ltd [1991] 1 Lloyd’s Rep 100, 108–10 (Bingham LJ), 117 (Slade LJ) (‘The Peonia’); Supershield Ltd v Siemens Building Technologies [2010] I Lloyd’s Rep 349, 356 [43] (Toulson LJ) (‘Supershield’); The Great Creation, 318 [16] (Cooke J). 72 The Achilleas, 83 [69] (Lord Walker). 73 Record 66–8, Claim Submissions [5]–[16]. 74 The Heron II, 399 (Lord Morris), 416 (Lord Pearce); Transfield Shipping Inc v Mercator Shipping Inc [2007] 2 Lloyd’s Rep 555, 573 [96] (Rix LJ); The Achilleas, 72 [23] (Lord Hoffmann), 74 [34] (Lord Hope), 82–3 [67] (Lord Walker); Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] 2 Lloyd’s Rep 81, 88 [61]–[63] (Hamblen J) (‘The Sylvia’).


12

36. Further, the loss claimed was not incurred in special circumstances of which RESPONDENT had actual

knowledge.75 Here, there was at best only an abstract possibility76 that CLAIMANT might lose a future

charter of 3–5 years’ duration,77 which is insufficient to satisfy the second limb.78 In particular,

RESPONDENT could not have had actual knowledge of this type of loss at the time it entered into the

Charterparty because the Champion Recap was confidential and only finalised some 3 months later.79

b. In any event, RESPONDENT is not liable for the loss of hire under the Next Fixture as it has

not assumed responsibility for that loss

37. Even if the Tribunal is satisfied that CLAIMANT’s loss falls within either limb of Hadley v Baxendale,

that alone is insufficient to establish liability. Following the majority of the House of Lords in The

Achilleas, RESPONDENT is only liable for loss for which it has assumed responsibility.80 Subsequent

Court of Appeal decisions have accepted that the principle in The Achilleas forms part of the law of

remoteness, although it should only be applied in exceptional cases.81 By analogy with the facts in

The Achilleas, the present matter is such an exceptional case. Therefore, it would be commercially

unjust for RESPONDENT to be liable for the loss of hire under the Next Fixture, for three reasons.

38. First, RESPONDENT had no knowledge of, or control over, the terms of the Next Fixture, 82 as

submitted above at [31].83 Second, the extent of that type of loss was unpredictable and unquantifiable

75 Above n 44. 76 Diamond v Campbell-Jones [1961] Ch 22, 36 (Buckley J); Seven Seas Properties Ltd v Al-Essa (No 2) [1993] 3 All ER 577, 583 (Lightman DJ); Aldgate Construction Co Ltd v Unibar Plumbing & Heating Ltd [2010] EWHC 1063 (TCC) [22] (Akenhead J). 77 Record 1. 78 The Achilleas, 75 [36] (Lord Hope), 78 [52] (Lord Roger), 83 [68] (Lord Walker). 79 Carver, 1135 [11-301]; The Heron II, 388 (Lord Reid), 404 (Lord Morris); Christopher Hill Ltd v Ashington Piggeries Ltd [1971] 1 Lloyd's Rep 245, 284 (Lord Diplock); H Parsons, 804 (Lord Denning MR), 813 (Scarman LJ); Stinnes Interoil GmbH v A Halcoussis & Co (No 2) [1984] 1 Lloyd’s Rep 676, 682 (Bingham J) (‘The Yanxilas’); The Achilleas, 70 [21] (Lord Hoffmann); South Australia Asset Management v York Montague [1997] AC 191, 211 (Lord Hoffman); Wellesley Partners LLP v Withers LLP [2016] Ch 529, 555 [86] (Floyd LJ) (‘Wellesley’). 80 The Achilleas, 68 [12] (Lord Hoffmann), 73 [31]–[33] (Lord Hope), 83 [69] (Lord Walker); see also, The Heron II, 385–6 (Lord Reid); The Sylvia, 85 [39] (Hamblen J); Supershield, 354 [37] (Toulson LJ); John Grimes v Gubbins [2013] EWCA Civ 37 [14], [17], [20] (Sir Keene) (‘John Grimes’). 81 Carver, 1124–6 [11-283]; The Achilleas, 67 [11] (Lord Hoffmann), 74 [36] (Lord Hope); ASM Shipping Ltd of India v TTMI Ltd of England [2009] 1 Lloyd’s Rep 293, 295 [17]–[18] (Flaux J) (‘The Amer Energy’); The Sylvia, 85–6 [40]–[41], 86 [48]–[50] (Hamblen J); Supershield, 355–6 [43] (Toulston LJ); John Grimes [20]–[24] (Sir Keene); Wellesley, 580 [178] (Roth J). 82 The Achilleas, 70 [23] (Lord Hoffmann), 74 [34]–[36] (Lord Hope). 83 Above n 79.


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at the time of entry into the Charterparty.84 Third, the imposition of liability on RESPONDENT in these

circumstances would be contrary to market expectations in the shipping industry.85

39. CLAIMANT’s representations on its Chatter account86 do not change this conclusion, even if the

Tribunal concludes that RESPONDENT was aware of them, for three reasons. First, CLAIMANT’s

statement on 1 March 2016 that it was ‘looking to fix for 3–5 years’ employed purely aspirational

language. Second, a reasonable commercial party would not have considered a statement made on a

social media platform to be completely accurate, entirely reliable or indicative of a defined

unchanging commercial strategy. Third, CLAIMANT’s own conduct in entering a 50–55 day fixture

with RESPONDENT was inconsistent with its purported desire to fix for 3–5 years.

C. IN THE ALTERNATIVE, EVEN IF RESPONDENT IS LIABLE, CLAIMANT IS NOT ENTITLED TO RECOVER

THE ENTIRETY OF THE USD15,330,000 CLAIMED

40. In any event, CLAIMANT is not entitled to recover the entirety of the USD15,330,000 claimed because

CLAIMANT failed to take reasonable commercial steps to mitigate its loss (i). Further, CLAIMANT must

account for all amounts received in the course of mitigating its loss (ii).

(i) CLAIMANT failed to mitigate its loss

41. The relevant mitigation principles were set out above at [19].87 Here, CLAIMANT failed to mitigate its

loss in two respects. First, CLAIMANT failed to take all reasonable steps to prevent cancellation of the

Next Fixture. CLAIMANT only contacted Champion for an extension of the laycan on 27 June 2016,88

with the laycan period set to expire the next day,89 in circumstances where it had been aware of the

quarantine and the risk of resultant delay since 7 May 2016.90 Second, CLAIMANT’S failure to secure

additional fixtures after the cancellation of the Next Fixture was unreasonable. On the available

evidence, CLAIMANT secured only the Replacement Fixture in mitigation of its loss.

84 The Achilleas, 70 [23] (Lord Hoffman), 74 [36] (Lord Hope), 88 [86] (Lord Walker). 85 The Heron II, 399–400 (Lord Morris), 416 (Lord Pearce); The Achilleas [2007] 2 Lloyd’s Rep 555, 573 [96] (Rix LJ); The Achilleas, 74 [34] (Lord Hope), 82–3 [67] (Lord Walker); The Sylvia, 88 [61]–[63] (Hamblen J). 86 Record 1; Record 81, Procedural Order No. 2 [3]. 87 Above n 46. 88 Record 41. 89 Record 31. 90 Record 25.


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(ii) CLAIMANT must account for all amounts received in the course of mitigating its loss

42. The hire received by CLAIMANT under the Replacement Fixture must be deducted from any award of

damages to avoid double recovery.91 Further, if CLAIMANT has secured, or will secure, additional

fixtures within the period of 30 June 2016 to 30 June 2020 in further mitigation of its loss, CLAIMANT

must also give credit for hire received under those additional fixtures.

ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM

III. CLAIMANT IS LIABLE TO INDEMNIFY RESPONDENT FOR THE CARGO CLAIM

43. CLAIMANT is liable to indemnify RESPONDENT for the Cargo Claim under the ICA (A) or, in the

alternative, under the Hague Rules (B).

A. CLAIMANT IS LIABLE TO INDEMNIFY RESPONDENT FOR THE CARGO CLAIM UNDER THE ICA

44. The Parties agreed that liability for cargo claims, as between CLAIMANT as owner and RESPONDENT

as charterer, shall be apportioned as specified by the ICA.92 Here, the ICA applies to apportion

liability for the Cargo Claim because the preconditions in Clause 4 of the ICA are satisfied (i) and

recovery is not time-barred under Clause 6 of the ICA (ii). Therefore, CLAIMANT is liable for 100%

of the Cargo Claim (iii). In any event, CLAIMANT is only liable for 50% of the Cargo Claim (iv).

(i) The preconditions under Clause 4 of the ICA are satisfied

45. Sub-Clauses 4(a), 4(b) and 4(c) set out three preconditions to the application of the apportionment

regime in Clause 8 of the ICA, each of which is satisfied here.

46. Sub-Clause 4(a) is satisfied where a cargo claim was made under a contract of carriage ‘incorporating

terms no less favourable to the carrier than the Hague [Rules]’. Here, the Bill of Lading under which

the Receivers’ Cargo Claim is being brought incorporates, at a minimum, the Hague Rules.93

47. Sub-Clause 4(b) requires that the Charterparty does not ‘materially amend’ the cargo responsibility

clause in the standard NYPE 2015 form. 94 While the Omega Recap inserts the words ‘and

91 Carver, 1089 [11-194]; Staniforth v Lyall (1830) 131 ER 65, 68 (Tindal CJ), 68–9 (Gaselee, Bosanquet and Alderson JJ agreeing); The Riza and the Sun, 321–3 (Walker J). 92 Record 10, Omega Rider Clauses cl 53. 93 Record 46; Record 48, Bill of Lading cl 2; ICA cl 4(a)(iv). 94 NYPE 2015 cl 8.


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responsibility’ before the words ‘of the Master’ in Clause 8 of the NYPE 2015,95 sub-Clause 4(b)(i)

of the ICA itself recognises that this does not amount to a material amendment.

48. Sub-Clause 4(c) requires that the Cargo Claim has been ‘properly settled or compromised and paid’.

There has been a proper compromise96 because the Receivers have commenced a claim.97 While no

payment has yet been made to the Receivers, the phrase ‘and paid’ should not be construed narrowly.

Rather, sub-Clause 4(c) is nevertheless satisfied if any determination by the Tribunal that

RESPONDENT has a right to be indemnified by CLAIMANT is simply understood as being contingent

upon RESPONDENT paying the Receivers the agreed amount98 in satisfaction of the Cargo Claim,99

for three reasons.

49. First, reading the ICA as a whole,100 sub-Clause 4(c) should be interpreted harmoniously with Clause

9 of the ICA, which expressly contemplates the provision of security as between the relevant parties

before any payment has been made with respect to a cargo claim. Indeed, Clause 9 was inserted in

2011 to address this very problem: unnecessary, wasteful and costly disputes arising from construing

‘and paid’ strictly.101 Second, this flexible approach is consistent with, and gives effect to, the ICA’s

commercial purpose: the efficient apportionment of cargo claims as between owners and

charterers.102 Third, consistently with the presumption of one-stop arbitration,103 it is most expedient

and cost-efficient that this Tribunal deal with the apportionment of CLAIMANT’s liability for the Cargo

95 Record 5; ICA cl 4(b). 96 Carver, 490 [5-257]. 97 Record 72, Defence Submissions [9]. 98 Record 82, Procedural Order No. 2 [11]. 99 Starlight Shipping Co v Allianz Marin & Aviation Versicherungs AG [2012] 1 Lloyd’s Rep 162, 174–5 [37]–[38] (Burton J) (‘The Alexandros T’). 100 Scrutton, 30–5 [2-047]–[2-065]; Thomas, 25 [2.24]; Miller v Borner [1900] 1 QB 691, 693 (Channell J) (‘Borner’); Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd and Securicor [1983] 1 Lloyd’s Rep 183, 184 (Lord Wilberforce), 185 (Lord Elwyn-Jones), 185 (Lord Salmon), 188 (Lord Lowry) (‘The Strathallan’); Capita, 1179 [10] (Lord Hodge, Lords Neuberger, Mance, Christopher Clarke and Sumption agreeing); PM Law Ltd v Motorplus Ltd [2018] EWCA Civ 1730 [12] (Lady Asplin) (‘Motorplus’). 101 Carver, 490 [5-257], 495 [5-271]; Gard P&I Member Circular, ‘Inter-Club New York Produce Exchange Agreement 1996 (as amended September 2011)’, (August 2011) No 7-11. 102 Thomas, 243 [13.60]; Oceanfocus Shipping Ltd v Hyundai Merchant Marine Co [1999] 1 Lloyd’s Rep 176, 184, 186 (Diamond J) (‘The Hawk’). 103 Gary Born et al, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014) 73; Fiona Trust and Holding Corporation v Privalov [2008] 1 Lloyd’s Rep 254, 257 [13] (Lord Hoffmann); see also, Heifer International Inc v Christiansen [2008] 2 All ER (Comm) 831, 859 [219] (Toulmin J); Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, 494 [186] (Allsop CJ, Besanko and O’Callaghan JJ).


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Claim, in circumstances where the present proceedings were initiated by CLAIMANT and RESPONDENT

raised this issue only by way of counterclaim.

(ii) Recovery is not time-barred under Clause 6 of the ICA

50. Clause 6 of the ICA provides that ‘[r]ecovery under [the ICA] […] shall be deemed to be waived and

absolutely barred unless written notification of the Cargo Claim has been given to the other party to

the charterparty within 24 months of the date of delivery of the cargo […]. Such notification shall if

possible include details of the contract of carriage, the nature of the claim and the amount claimed.’104

51. By reference to its natural and ordinary meaning,105 ‘written notification’ of the Receivers’ Cargo

Claim was given to CLAIMANT on 7 July 2016,106 a week after the Cargo was delivered. For the

following three reasons, the details provided in this notification meet the commercial purpose of the

ICA time bar, and time bars generally: to put a shipowner on notice of a claim it must meet.107

52. First, the notification provided CLAIMANT with the Preliminary Survey Report, which outlined the

nature of the Cargo Claim and the cause and the extent of the cargo damage. 108 Although

‘preliminary’, the findings were the product of a 3-day inspection on board the Vessel and those

details were later corroborated by CLAIMANT’s own investigations. 109 Second, CLAIMANT’s

subsequent conduct confirmed that it was put on notice about the Cargo Claim. CLAIMANT not only

conducted its own investigations, but also granted two extensions with respect to a ‘claim for cargo

damage under the Charter’.110 Third, the Report also outlined the maximum quantum of the Cargo

Claim, which would enable CLAIMANT to plan and clear its books after a period of 24 months.111

(iii) CLAIMANT is liable for 100% of the Cargo Claim

53. Pursuant to sub-Clause 8(a), CLAIMANT is liable to account for 100% of the Cargo Claim because the

104 Emphasis added. 105 ICS, 912–3 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing). 106 Record 45–6. 107 Carver, 490–1 [5-259]; Steven Hazelwood et al, P&I Clubs Law and Practice (Informa, 4th ed, 2010), 280 [15.66]; London Arbitration 16/02 (2002) 600 Lloyd’s Maritime Law Newsletter 2. 108 Record 46. 109 Record 81, Procedural Order No. 2 [9]. 110 Record 57–8. 111 Compania Portorafti Commerciale SA v Ultramar Panama Inc [1990] 1 Lloyd’s Rep 310, 315 (Bingham LJ) (‘The Captain Gregos’); Linea Naviera Paramaconi SA v Abnormal Load Engineering Ltd [2001] 1 Lloyd’s Rep 763, 769 [19] (Tomlinson J).


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claim arose out of an ‘error or fault in … [the] management of the vessel’. The cargo was damaged

when the crew negligently pumped ballast water into the cargo hold instead of the ballast tanks.112

This act of ballasting the Vessel was undertaken in the ‘management of the vessel’ because it directly

affected her essential functions of structural stability, trim and safe navigation.113

54. Further, sub-Clause 8(a) suggests that the relevant claim cannot arise out of an error or fault caused

by the ‘loading, stowage, lashing, discharge or other handling of the cargo’, which is the case here.

While the amount of cargo affects the extent of ballasting required, the act of ballasting cannot be

said to affect the care of the cargo alone.114

(iv) In any event, CLAIMANT is liable for 50% of the Cargo Claim

55. RESPONDENT accepts that, if CLAIMANT can establish that the Cargo Claim arose ‘out of loading,

stowage, lashing, storage or other handling of the cargo’, sub-Clause 8(b) would apply. Since the

words ‘and responsibility’ were inserted into Clause 8 of the NYPE 2015 by the Omega Recap,115

the appropriate apportionment would be that CLAIMANT is liable for 50% of the Cargo Claim.

56. If neither sub-Clause 8(a) nor sub-Clause 8(b) applies, the Cargo Claim would fall to be apportioned

under sub-Clause 8(d) of the ICA, which applies to ‘all other cargo claims whatsoever’. In that event,

CLAIMANT would still be liable for 50% of the Cargo Claim.

B. CLAIMANT IS LIABLE TO ACCOUNT FOR THE CARGO CLAIM UNDER THE HAGUE RULES

57. If the ICA does not apply to apportion liability, CLAIMANT’s liability for the Cargo Claim may be

determined by reference to the Hague Rules (i). Here, CLAIMANT breached its obligations under

Article 3(2) (ii) and cannot rely on any of the exceptions to liability under Article 4(2) (iii).

(i) The Hague Rules apply to determine CLAIMANT’s liability

112 Record 48; Record 81, Procedural Order No. 2 [9]. 113 Carver, 424 [5-093]; The Glenochil [1896] P 10, 16 (Sir Francis Jeune); Gosse Millerd v Canadian Government Merchant Marine Ltd [1929] AC 223, 232 (Lord Hailsham LC) (‘Gosse Millerd’); Minnesota Mining & Manufacturing (Australia) Pty Ltd v The Ship ‘Novoaltaisk’ [1972] 2 NSWLR 476, 480–1 (Macfarlan J); see also, J W Harris, Maritime Law: Issues, Challenges and Implications (Nova Science, 2009), 161; David Matej, ‘Vessels and Ballast Water’ in D Matej and S Gollasch (ed), Global Maritime Transport and Ballast Water Management: Issues and Solutions (Springer, 2014) 14–5; J W Harris, Maritime Law: Issues, Challenges and Implications (Nova Science, 2009), 161. 114 Gosse Millard v Canadian Government Merchant Marine Ltd [1928] 1 KB 717, 749 (Greer LJ, dissenting) upheld on appeal by the House of Lords in [1929] AC 223. 115 Record 5.


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58. CLAIMANT’s liability for the Cargo Claim may be determined under the Hague Rules because they

have been incorporated into the relevant Bill of Lading under which, properly construed, CLAIMANT

is the carrier (a). In any event, the Hague Rules have been incorporated into the Charterparty (b).

a. The Hague Rules apply to CLAIMANT as the carrier under the relevant Bill of Lading

59. Clause 2 of the Bill of Lading, the relevant contract of carriage from which the Cargo Claim arises,

provides that the Hague Rules ‘shall apply to this contract’.116 This Bill of Lading is evidence of a

contract between the Receivers and the ‘Carrier’. Properly construed, and notwithstanding the

specification of RESPONDENT in Box 3 of the Bill of Lading, CLAIMANT is the Carrier because Clause

17 of the Bill of Lading, relevantly titled ‘Identity of Carrier’, provides that ‘the Contract evidence[d]

by this Bill of Lading is between the Merchant and the Owner of the vessel named herein’.

60. Examining the Bill of Lading as a whole,117 courts have held that the clear words of such an Identity

of Carrier clause will override the specification on the face of the bill.118 While a different outcome

was reached in The Starsin,119 that result should be distinguished because the bill of lading in that

case was signed by the charterer and the form itself was the charterer‘s own shipping form. Here, the

Bill of Lading was a standard BIMCO form and it remained an unsigned draft. Therefore, the Bill of

Lading is, properly construed, an owner’s bill.120

61. In the alternative, CLAIMANT and RESPONDENT are jointly liable as carriers under the Bill of

Lading.121 The definition of ‘carrier’ in Article 1(a) of the Hague Rules, which is deliberately open-

ended and non-exhaustive, 122 permits that construction because the carriage of goods by sea is

116 Record 48. 117 Above n 100. 118 Fetim BV v Oceanspeed Shipping Ltd [1999] 1 Lloyd’s Rep 612, 618 (Moore-Bick J) (‘The Flecha’); see also, The Berkshire [1974] 1 Lloyd’s Rep 185, 188 (Brandon J); Kaleej International Pty Ltd v Gulf Shipping Lines (1986) 6 NSWLR 569, 574 (Samuels JA) (‘The Sun Diamond’); The Rewia [1991] 2 Lloyd’s Rep 325, 333 (Leggatt LJ), 336 (Dillon LJ) ('; MB Pyramid Sound MV v Briese Schiffahrts GmbH [1995] 2 Lloyd’s Rep 144, 150 (Clarke J) (‘The Innes’). 119 Homburg Houtimport BV v Agrosin Private Ltd [2003] 1 Lloyd’s Rep 571 (‘The Starsin’), 573 (Lord Bingham), 583–4 (Lord Steyn), 588–9 (Lord Hoffman), 597 (Lord Hobhouse), 615 (Lord Millett). 120 SS Knutsford Ltd v E Tillmans & Co [1908] AC 406, 407–8 (Lord Loreburn), 409–10 (Lord Dunedin); The Rewia, 333 (Leggatt LJ), 336 (Dillon LJ). 121 William Tetley, Marine Cargo Claims: Volume 1 (Thomson Carswell, 4th ed, 2008) Ch 10 (‘Tetley’); Homburg Houtimport BV v Agrosin Private Ltd [2001] 1 Lloyd’s Rep 437, 451–2 (Rix LJ, dissenting); Canastrand Industries Ltd v The Lara S [1993] 2 FC 553, 587 (Reed J, Canadian Federal Court) (affirmed by Court of Appeal in (1994) 176 NR 31); William Tetley, ‘Bills of Lading Case Note’ (2004) 35(1) Journal of Maritime Law & Commerce 121, 122–5. 122 Tetley, 565.


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essentially a joint venture between shipowners and charterers.123 Importantly, as the Receivers would

not know the exact allocation of responsibilities under the Charterparty, the most commercial

outcome is that they can rely on the Hague Rules to recover against either party.124

b. In any event, the Hague Rules have been incorporated into the Charterparty

62. In any event, CLAIMANT is subject to the Hague Rules because they have been incorporated into the

Charterparty. Clause 33 of the NYPE 2015 provides that sub-Clause 33(a) is ‘deemed to form part of

[the Charterparty]’. Sub-Clause 33(a) relevantly provides that bills of lading issued under the

Charterparty ‘shall have effect subject to […] the Hague Rules’.125 This incorporation is consistent

with the Parties’ subsequent conduct, when they assumed that their dispute was subject to a 1-year

time bar,126 which cannot be attributed to the time bars under other schemes such as the ICA.

(ii) CLAIMANT breached its obligations under Article 3(2) of the Hague Rules

63. Article 3(2) imposes on CLAIMANT the obligation to ‘care for […] the goods carried’. As the Cargo

was delivered in a damaged condition,127 there is a prima facie breach of this obligation. In any event,

CLAIMANT clearly breached this obligation because the damage arose from CLAIMANT’s crew

negligently pumping ballast water into the hold which the Cargo was stowed, as confirmed by

CLAIMANT’s own investigations.128

(iii) CLAIMANT cannot rely on any exception to liability under Article 4(2) of the Hague Rules

64. CLAIMANT bears the onus to establish a basis upon which to limit its liability under Article 4(2) and

to disprove that the damage was caused by its negligence, or the negligence of its servants.129

CLAIMANT cannot discharge that onus. In particular, CLAIMANT cannot rely on the exceptions in

Article 4(2)(a) (a) or Article 4(2)(n) (b).

123 Tetley, 582–3, 586. 124 Tetley, 633–41. 125 BIMCO, Singapore Maritime Foundation (SMF) and Association of Shipbrokers and Agents (ASBA), ‘NYPE 2015 Explanatory Note’ (2018) 20. 126 Record 57–8. 127 Record 38; Record 72, Defence Submissions [9]. 128 Record 81, Procedural Order No. 2 [9]. 129 Carver, 403–4 [5-053], 409–10 [5-65]; Volcafe Ltd v Compania Sud Americana de Vapores SA [2019] 1 Lloyd’s Rep 21, 27–33 [14]–[37] (Lord Sumption, Lords Reed, Wilson, Hodge and Kitchin agreeing) (‘Volcafe’); see also, The Glendarroch [1894] P 226, 231–2 (Lord Esher MR); 234–5 (Lopes LJ); The Starsin, 603 [138] (Lord Hobhouse).


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a. CLAIMANT cannot rely on the exception in Article 4(2)(a)

65. Under Article 4(2)(a), CLAIMANT is not liable if the damage to the cargo arose from an ‘[a]ct, neglect,

or default […] in the management of the ship’. However, a ballasting error does not fall within ‘the

management of the ship’ if it occurred before the voyage began, at which stage the water ingress into

the relevant cargo hold instead constitutes a failure to care for cargo.130 Further, the case where

CLAIMANT’s failure to check periodically whether the Cargo had become wet by the ballasting

operation was also not an error in the management of the ship.131

b. CLAIMANT cannot rely on the exception in Article 4(2)(n)

66. Article 4(2)(n) provides that CLAIMANT is not liable if damage to the cargo arises from an

‘insufficiency of packing’. CLAIMANT bears the onus to show that the Cargo was insufficiently packed

and that this was the cause of the damage.132 Here, the damage was caused by CLAIMANT’s negligence

and not by any insufficient packing because, to the extent there was any insufficiency, that

insufficiency only manifested in damage as a result of the negligent ballasting and could have been

countered by the crew taking reasonable care.133

IV. RESPONDENT IS ENTITLED TO RESTITUTION OF OVERPAID HIRE, OR ALTERNATIVELY, DAMAGES

67. CLAIMANT is liable to account for overpaid hire on two distinct bases. First, the Vessel was off-hire

from 7 May 2016 to 26 June 2016, by reason of an off-hire event within the scope of Clause 17 of

the NYPE 2015, during which period the obligation to pay hire ceased (A).134 Second, pursuant to

Clause 44 of the Omega Rider Clauses, any time lost from 7 May 2016 to 26 June 2016 due to the

quarantine, is to be deducted as off-hire (B).135 If hire is found to have been overpaid, RESPONDENT

is entitled to restitution, or, in the alternative, has a contractual right to damages (C). Further,

RESPONDENT is entitled to set off these damages against any liability established under the Claim (D).

130 Tetley, 969–71; Guenter Treitel and Francis Reynolds, Carver on Bills of Lading (Sweet & Maxwell, 3rd ed, 2011) 707–8 [9-214]; see also, Brazil Oiticica Inc v SS Bill (1942) 47 F Supp 969. 131 Tetley, 969–70. 132 Parke, Lacey, Hardie Ltd v The Ship Clan MacFayden (1930) 30 SR (NSW) 438, 440 (Street CJ). 133 Tetley, 1185; cf Volcafe, 32 [34] (Lord Sumption, Lords Reed, Wilson, Hodge and Kitchin agreeing). 134 NYPE 2015 cl 17 135 Record 9.


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A. The Vessel was off-hire pursuant to Clause 17 of the NYPE 2015

68. The Vessel was off-hire pursuant to Clause 17 of the NYPE 2015, as the three elements of that Clause

were satisfied: first, the full working of the Vessel was prevented due to her detention for inspection

and quarantine (i); second, the detention of the Vessel amounted to a cause or event within the scope

of Clause 17 (ii); and third, the detention of the Vessel resulted in a loss of time (iii).

(i) The full working of the Vessel was prevented due to her detention for inspection and

quarantine

69. The full working of a vessel is prevented when she is unable to perform the next operation that the

charter service requires of her, whether by an internal or external cause or event, or inter alia, the

condition of her crew.136 Here, the next operation required of the Vessel was to proceed to berth.137

While detained at Wahanda by Port State Control, the Vessel was unable to perform this operation.138

(ii) The detention of the Vessel amounted to a cause or event within the scope of Clause 17

70. Clause 17 of the NYPE 2015 expressly lists causes or events which result in a vessel being rendered

off-hire. It also provides that ‘any other similar cause preventing the full working of the Vessel’ will

result in the Vessel rendered off-hire. The detention of the Vessel constituted ‘detention by Port State

control […] for Vessel deficiencies’ (a). In the alternative, it constituted a ‘similar cause preventing

the full working of the Vessel’ (b).

a. The detention of the Vessel constituted ‘detention by Port State control […] for Vessel

deficiencies’

71. Clause 17 of the NYPE 2015 expressly provides that ‘detention by Port State control […] for Vessel

deficiencies’ is an off-hire event. In previous versions of the NYPE, whether detention by the relevant

authorities amounted to an off-hire event required consideration of whether the detention fell within

the scope of the phrase ‘any other cause’.139 This phrase was construed eiusdem generis; that is, its

136 Sig Bergesen DY & Co v Mobil Shipping and Transportation Co [1993] 2 Lloyd's Rep 453, 459 (Staughton LJ) (‘The Berge Sund’); Andre & Cie SA v Orient Shipping (Rotterdam) BV [1997] 1 Lloyd's Rep 139, 150 (Rix J) (‘The Laconian Confidence’); TS Lines Ltd v Delphis NV [2009] 2 Lloyd’s Rep 54, 57 (Burton J) (‘The TS Singapore’). 137 Record 25. 138 Record 24–5. 139 The Aquacharm, 10 (Griffiths LJ); The Laconian Confidence, 150–1 (Rix J).


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scope was limited to causes similar in nature to those expressly listed.140 However, where the parties

in a given case amended the NYPE clause to also include the word ‘whatsoever’, courts have held

that this prevented an eiusdem generis construction.141 In such cases, the scope of ‘any other cause’

was limited only by the general context of the charter,142 and the words ‘preventing the full working

of the Vessel’.143

72. Cases dealing with these prior versions of the NYPE, provide the background for, and therefore

should be drawn upon in the construction of, the new off-hire event included in the NYPE 2015. In

those cases, deficiencies of the crew were regarded as affecting the efficiency of the Vessel.144 For

example, it has been held that a vessel suspected of carrying a serious disease, such as typhus, ‘is

prevented from working fully until cleared, for no reasonable person would use it in such a

condition’. 145 Against this background, ‘Vessel deficiencies’ should be construed as including

deficiencies of the crew and, in particular, the suspected carriage of a serious disease like Ebola.

73. In this case, Port State Control detained the Vessel upon her arrival at Wahanda, due to a fear that the

crew were carrying Ebola,146 which was plausible based on reports of an Ebola outbreak in West

Coast, from which port the Vessel departed.147 Two days before the Vessel departed West Coast, 100

cases of Ebola, including among the stevedores working at the ports, were reported in a widely read

newspaper.148 Three days later, on the day the Vessel departed West Coast, a further 200 cases were

reported.149 Accordingly, Port State Control initially detained the Vessel due to vessel deficiencies,

until they could arrange an inspection onboard the Vessel.150

140 CA Venezolana De Navegacion v Bank Line [1987] 2 Lloyd’s Rep 498, 507 (Webster J) (‘The Roachbank’); The Laconian Confidence, 150–1 (Rix J); Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd [2011] 1 Lloyd’s Rep 187, 192–4 (Gross J) (‘The Saldanha’). 141 Sidermar SpA v Apollo Corporation [1978] 1 Lloyd’s Rep 200, 205 (Mocatta J) (‘The Apollo’); Belcore Maritime Corporation v FLLI Moretti Cereali SpA [1983] 2 Lloyd’s Rep 66, 68 (Lloyd J) (‘The Mastro Giorgis’); The Laconian Confidence 150–1 (Rix J). 142 The Apollo, 205 (Mocatta J); The Roachbank, 507 (Webster J). 143 The Apollo, 205 (Mocatta J); The Mastro Giorgis, 68–9 (Lloyd J). 144 The Apollo, 205 (Mocatta J); The Aquacharm, 10–1 (Griffiths LJ); The Laconian Confidence, 150–1 (Rix J). 145 The Aquacharm, 10–1 (Griffiths LJ). 146 Record 25. 147 Record 22–3. 148 Record 22; Record 66, Claim Submissions [3]; Record 81, Procedural Order No. 2 [3]. 149 Record 23. 150 Record 25.


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74. During the inspection, Port State Control found that a number of crew members had a high fever.151

Given these results, and the reported West Coast Ebola outbreak, Port State Control proceeded to

quarantine the Vessel until 26 June 2016.152 It follows that, throughout the entire period of detention,

from 7 May 2016 until 26 June 2016,153 Port State Control detained the Vessel due to ‘Vessel

deficiencies’.

b. In the alternative, the detention of the Vessel by Port State Control constituted a

‘similar cause preventing the full working of the Vessel’

75. Another amendment included in the NYPE 2015 is the replacement of the phrase ‘by any other cause

preventing the full working of the Vessel’ with ‘by a similar cause preventing the full working of the

Vessel’. This amendment amounts to an express adoption of the eiusdem generis construction

employed in construing ‘any other cause’.154 Accordingly, causes or events similar in nature to those

expressly listed in Clause 17 of the NYPE 2015 also fall within its scope.

76. In construing prior versions of the NYPE, courts have held that the conduct of authorities falls within

the scope of ‘any other cause’, construed eiusdem generis, if that conduct is justified by the actual, or

reasonably suspected, condition of the vessel or her crew.155 Such detention would also be similar to

‘detention by Port State Control or other competent authority for Vessel deficiencies’. At all times,

Port State Control acted in accordance with the reasonably suspected or actual condition of the Vessel.

Its conduct was justified by the reported Ebola outbreak in West Coast,156 and the condition of the

Vessel, as determined upon inspection.157

(iii) The detention resulted in a loss of time

77. Clause 17 of the NYPE 2015 also requires a causal connection between the off-hire event and the

loss of time.158 Here, the detention of the Vessel by Port State Control, for inspection and quarantine,

151 Record 24. 152 Record 24; Record 81, Procedural Order No. 2 [7]. 153 Record 81, Procedural Order No. 2 [7]. 154 Carver, 768–9 [7-706]. 155 The Apollo, 205 (Mocatta J); The Laconian Confidence, 151 (Rix J). 156 Record 22–3, 25; Record 81, Procedural Order No. 2 [3]. 157 Record 24. 158 Carver, 740 [7-609].


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directly caused a loss of time, specifically from 7 May 2016 to 26 June 2016.159

B. THE VESSEL WAS OFF-HIRE PURSUANT TO CLAUSE 44 OF THE OMEGA RIDER CLAUSES

78. Clause 44 of the Omega Rider Clauses provides that ‘Owners shall be liable for any delay in

quarantine arising from the Master, Officers, or crew having communication with the shore or any

infected area without the written consent of Charterers or their Agents…’, with any time lost by such

a delay to be deducted as off-hire.160 Therefore, for a vessel to be off-hire pursuant to Clause 44, three

elements must be satisfied: first, there must be an infected area; second, the Master, officers or crew

must have communication with that area or the shore; and third, such communication must occur

without the written consent of the charterers. Here, all three elements are satisfied.

79. First, according to its natural and ordinary meaning, West Coast was an ‘infected area’ due to the

extent to which Ebola had spread at West Coast,161 as submitted above at [68]. Two days before the

Vessel left West Coast, 100 cases of Ebola had been reported,162 a further 200 cases were reported

three days later, with access to the port by inbound or outbound vessels being entirely restricted.163

80. Second, it is highly likely that the Vessel was in communication with West Coast during the time it

was an ‘infected area’, throughout the loading operation and in preparing for departure.164 In any

event, the crew would have been in communication with the shore when preparing for departure.

81. Third, any communication the crew had with the infected area occurred without the written consent

of RESPONDENT, as charterers. As CLAIMANT has failed to adduce evidence of consent being sought

or obtained, it is reasonable to infer that no such consent was given.

C. RESTITUTION OF THE HIRE PAID, OR ALTERNATIVELY DAMAGES, IS THE APPROPRIATE REMEDY

82. RESPONDENT has already paid hire for the duration of the Charterparty, including the period during

which the Vessel was off-hire.165 RESPONDENT is entitled to restitution of that overpaid hire, because

159 Record 24–5; Record 81, Procedural Order No. 2 [7]. 160 Record 9. 161 ICS, 913 (Lord Hoffmann, Lords Goff, Hope and Clyde agreeing). 162 Record 22. 163 Record 23. 164 Record 81, Procedural Order No. 2 [4]. 165 Record 52; Record 68, Claim Submissions [19]; Record 74, Defence Submissions [15(2)].


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such hire was not earned and accordingly there was a failure of consideration.166 In the alternative,

RESPONDENT is entitled to recover the amount of overpaid hire as damages. Clause 23 of the NYPE

2015 provides that ‘any overpaid hire [is] to be returned at once’. It has been held that this ‘gives rise

to a contractual debt payable in the relevant circumstances by the shipowner to the charterer’.167

D. RESPONDENT IS ENTITLED TO SET OFF AGAINST ANY DAMAGES AWARDED TO CLAIMANT

83. Any entitlement established under the Counterclaim for overpaid hire should be set off against any

award of damages to CLAIMANT under the Claim because the two are closely connected. Any off-hire

event established by RESPONDENT impeaches CLAIMANT’s right to damages under the Claim168 as

both the hull fouling and late re-delivery are attributable to the delay arising therefrom. Therefore, it

would be manifestly unjust for the Tribunal to enforce the payment of damages under the Claim

without taking into account RESPONDENT’s entitlement to overpaid hire under the Counterclaim.169

REQUEST FOR RELIEF

84. For the reasons set out above, RESPONDENT requests that the Tribunal:

a. declare that CLAIMANT is not entitled to the amount of USD15,426,567.42 it seeks;

b. declare that CLAIMANT is liable to RESPONDENT in the amount comprising:

i. indemnify RESPONDENT for 100% of the agreed amount of the Cargo Claim;

ii. account to RESPONDENT for the USD375,000 for overpaid hire; and

c. declare that any entitlement to overpaid hire under RESPONDENT’s Counterclaim is to be set off

against any amount of damages awarded to CLAIMANT under the Claim.

166 C A Stewart & Co v Phs Van Ommeren (London) Ltd [1918] 2 KB 560, 564 (Scrutton LJ); Fibrosa Spolka Akcjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32, 45–7 (Viscount Simon LC); Pan Ocean Shipping Ltd v Creditcorp Ltd [1994] 1 Lloyd’s Rep 365, 372 (Lord Woolf) (‘The Trident Beauty’). 167 Coghlin, 281 [16.15]; The Trident Beauty, 367–8 (Lord Goff). 168 Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1978] 2 Lloyd’s Rep 132, 141 (Lord Denning MR), 144 (Lord Goff) (‘The Nanfri’); Leon Corporation v Atlantic Lines & Navigation Co Inc [1985] 2 Lloyd’s Rep 470, 474 (Hobhouse J) (‘The Leon’). 169 The Nanfri, 140–1 (Lord Denning MR); Geldof Metaalconstructie NV v Simon Carves Ltd [2011] 1 Lloyd’s Rep 517, 527–8 [43] (Rix LJ); Bibby Factors Northwest Ltd v HFD Ltd [2016] 1 Lloyd’s Rep 517, 522–3 [34]–[37] (Clarke LJ), 526 [61] (Kitchin LJ), 526 [62] (Laws LJ).

TWENTIETH ANNUAL INT 2019 MEMORANDUM FOR RESPONDENT · Actis Co Ltd v The Sanko Steamship Co Ltd...

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Transcript of TWENTIETH ANNUAL INT 2019 MEMORANDUM FOR RESPONDENT · Actis Co Ltd v The Sanko Steamship Co Ltd...