16th international maritime l a m 2015

TEAM NUMBER 03

MEMORANDUM for THE CLAIMANT

16TH INTERNATIONAL MARITIME LAW ARBITRATION MOOT, 2015

WEST BENGAL NATIONAL UNIVERSITY OF JURIDICAL SCIENCES

MEMORANDUM FOR WESTERN TANKERS INC.

IN THE MATTER OF AN ARBITRATION HELD AT MELBOURNE, AUSTRALIA:

ON BEHALF OF:

WESTERN TANKERS INC.

CLAIMANT/OWNER

AGAINST

LDT PTE

RESPONDENT/CHARTERER

TEAM NO. 3

ANKITA PARASAR

SHAILJA AGARWAL

ADYA GARG

GUNCHA DHIMAN

MEMORANDUM for THE CLAIMANT

TEAM NUMBER 03 -Table of Contents-

MEMORANDUM for THE CLAIMANT |ii

TABLE OF CONTENTS

T A B L E O F C O N T E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i

L I S T O F A B B R E V I A T I O N S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

I N D E X O F A U T H O R I T I E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v i i

Q U E S T I O N S P R E S E N T E D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x i i i

S T A T E M E N T O F F A C T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x i v

A R G U M E N T S P R E S E N T E D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. THE ARBITRAL TRIBUNAL HAS THE JURISDICTION TO DETERMINE THE MATTER.

...............................................................................................................................1

A. THE PARTIES INTENDED LONDON TO BE THE ARBITRAL SEAT FOR THEIR PROCEEDINGS.

…………………………………………………………………………………….1

B. EVEN IF THE COURT ACCEPTS THE AMENDMENT, THE ARBITRAL PROCEEDINGS CANNOT

BE ENFORCED ................................................................................................................ 3

II. THE ARBITRAL TRIBUNAL CAN ARBITRATE THE CLAIM OF TORT OF FRAUD. .... 4

A. THE PHRASE “DISPUTES ARISING OUT OF THE CHARTER” CAN BE EXTENDED TO COVER

TORTIOUS CLAIMS. ........................................................................................................ 4

B. THERE IS A CLOSE CONNECTION BETWEEN THE TORT OF FRAUD AND THE C/P

AGREEMENT ................................................................................................................. 5

III. THE RESPONDENTS HAVE COMMITTED THE TORT OF FRAUD ........................... 6

A. RESPONDENTS AND THEIR AGENTS MADE UNTRUE AND DISHONEST REPRESENTATIONS 6

1. Respondents made untrue and dishonest representations .................................. 6

2. ASA2, on behalf of the Respondents, made untrue and dishonest representations 7

a. The representations made by ASA2 were untrue and dishonest ................. 8


MEMORANDUM for THE CLAIMANT |iii

b. ASA2’s representation was ratified by the Respondents so as to be liable for

them………………………… ............ …………………………………………………8

B. THE REPRESENTATIONS WERE MADE WITH THE INTENTION TO BE RELIED UPON .... 10

C. THE REPRESENTATIONS WERE RELIED UPON BY THE CLAIMANTS .......................... 11

D. THE CLAIMANTS SUFFERED DAMAGES DUE TO THE RELIANCE ............................... 11

IV RESPONDENTS HAVE COMMITTED BREACH OF CONTRACT BY FAILING TO PAY THE

HIRE AMOUNT WHICH BECAME DUE ON JULY 03, 2014. ............................................. 12

A. ON THE TERMS OF THE CHARTERPARTY, HIRE BECAME DUE AND OWING TO THE CLAIMANT

ON JULY 03, 2014. ...................................................................................................... 12

B. IN ANY EVENT, THE VESSEL WAS NOT OFF-HIRE FROM JULY 04, 2014. .................. 13

1. The Master did not commit any breach of orders and/or neglect of duty ........ 13

2. Alternatively, there was no loss of time caused to charterers. ......................... 14

3. In arguendo, the Claimants cannot rely on the Off-hire clause as the loss of time was a

result of the Charterers’ fault. ................................................................................. 15

C. THE CHARTERPARTY WAS NOT FRUSTRATED DUE TO ANY REASON WHATSOEVER. 17

V THE CLAIMANTS HAVE NOT BREACHED THE CHARTERPARTY AS THEY PROVIDED A

VESSEL THAT WAS FIT FOR SERVICE, AS IS REQUIRED BY THE CHARTERPARTY. ..... 18

A. THE MASTER WAS NOT INCOMPETENT AS HE FOLLOWED THE INSTRUCTIONS OF THE

RESPONDENTS. ........................................................................................................... 19

B. THE MASTER DID NOT FAIL TO FOLLOW ANTI-PIRACY PRECAUTIONS AS REQUIRED BY THE

CHARTERPARTY AND/OR INDUSTRY PRACTICE RELATING TO WEST AFRICA............... 20

VI. THE CLAIMANTS HAVE NOT BREACHED THEIR DUTY AS A BAILOR. ................. 21

A. PIRACY IS A FORCE MAJEUR EVENT ........................................................................ 21

B. IN ANY CASE, PIRACY IS EXCEPTED UNDER THE HVR .............................................. 21


MEMORANDUM for THE CLAIMANT |iv

1. Piracy was the result of an act, neglect, or default of the master, mariner, pilot, or the

servants of the carrier in the navigation or management of the ship ...................... 22

2. The act of piracy was without any fault of the carriers .................................... 22

P R A Y E R ..................................................................................................................... 23

TEAM NUMBER 03 -List of Abbreviations-

MEMORANDUM for THE CLAIMANT |v

LIST OF ABBREVIATIONS

All ER

Art

Bing NC

BIMCO

BMP4

Ch.

Charter

Charterers

Cl

Claimants

C/P

Edn

ETA

EWCA (Civ)

F.2d

F.3d

Factsheet

FCA

Hague- Visby Rules/ HVR

All England Law Reports

Article

Bingham New Cases

Baltic and International Maritime Council

Best Management Practices for Protection

Against Somali Based Piracy

Law Reports Chancery

Charterparty

LDT PTE

Clause

Western Tankers Inc

Charterparty

Edition

Estimated Time of Arrival

Court of Appeal (Civil Division)

Federal Reporter, 2nd Series

Federal Reporter, 3rd Series

IMLAM Moot Scenario 2015

Federal Court of Appeal

Protocols to the International Convention for

the Unification of Certain Rules of Law

relating to Bills of Lading (Brussels, 25

TEAM NUMBER 03 -List of Abbreviations-

MEMORANDUM for THE CLAIMANT |vi

i.e.

ICSID

KB

Lloyd's Rep

mt

NYPE

Owners

Para

P & I

QBD

Respondents

s

SGCA

SGHCR

ST4

Tul Mar LJ

UKHL

v/l

W.L.R

August 1924

That is

International Centre for Settlement of

Investment Disputes

Law Report King’s Bench Division

Lloyd's Law Reports

metric tonnes

The New York Produce Exchange 1946

Western Tankers Inc.

Paragraph

Protection and Indemnity insurance

Law Reports Queen's Bench Division

LDT Pte

Section

Singapore Court of Appeals

Singapore High Court

Shell Time 4

Tulane Maritime Law Journal

United Kingdom House of Lords

Vessel (“Western Dawn”)

Weekly Law Reports (UK)

TEAM NUMBER 03 -Index of Authorities -

MEMORANDUM for THE CLAIMANT |vii

INDEX OF AUTHORITIES

Treaties and Conventions

Protocols to the International Convention for the Unification of Certain Rules of Law relating

to Bills of Lading (Brussels, 25 August 1924).……………………….23, 24

International Arbitral Awards

In The Treana, SMA 2929 (Arb. at N.Y. 1992) ........................................................... 13

The Dagny Skou, SMA 2416 (Arb. at N.Y. 1987........................................................ 13

The Thekos, SMA 2253 (Arb. at N.Y. 1986). ............................................................. 13

Municipal Cases

Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1

Lloyd’s Rep 87 ........................................................................................................... 4

Aoetearoa International Ltd v Westpac Banking Corp. [1984] 2 N.Z.L.R. ................... 9

Armagas Ltd v Mudogas S.A. (The Ocean Frost) [1986] AC 717 .............................. 11

Bank Line v Arthur Capel, [1919] AC 435 ................................................................. 18

Bedford Insurance Co. Ltd v Institutio de Resseguros do Brasil [1985] Q.B. 966 ....... 9

Berge Sund, The—Sig Bergesen D.Y. A/S v Mobil Shipping and Transportation Co. [1993] 2

Lloyd’s Rep 453 (C.A.) ..................................................................................... 16, 17

Bird v Brown [1850] 4 Exch. 786 at 798 ....................................................................... 9

Blyth v Birmingham Waterworks [1856] 11 Ex R 781 ............................................... 21

Briess v Woolley [1954] 2 W.L.R. 832 ......................................................................... 9

Brown v Jenkinson; [1957] 2 QB 621 ......................................................................... 11

Burrows v Rhodes [1899] 1 QB 816............................................................................ 12

Canadian Pacific (Bermuda) Ltd v Canadian Transport Co Ltd (The HRMacmillan) [1974] 1

Lloyd’s Rep 31 ......................................................................................................... 16


MEMORANDUM for THE CLAIMANT |viii

Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] 157 FCR 45.......... 5

Czech v General Steam Co. [1867] L. R. 3 C. P. 14 .................................................... 23

Darlington Futures Ltd v Delco Australia Pty Ltd [1986] 161 CLR 500 ...................... 2

Davis Contractors Ltd. v Fareham U.D.C [1956] 2 All E.R.145 (H.L.). ..................... 18

Derry v Peek [1889] 14 App.Cas. 337 ........................................................................... 7

Deutsche Ost- Afrika- Linie v Legent Maritime (The Marie H) [1998] 2 Lloyd’s Rep 71 17

Dodds v Walker [1980] 1 W.L.R. 1061 ....................................................................... 13

Edgington v Fitzmaurice [1885] 29 Ch.D. 459........................................................ 7, 11

Empressa Exportadora De Azucar(CUBAZUCAR) v Industria Azucarera Nacional SA

(IANSA) (The Playa Larga and Marble Islands) [1983] 2 Lloyd’s Rep 171 ............ 4

Fiona Trust v Primalov [2007] UKHL 40...................................................................... 4

Firth v Staines [1897] 2 QB 70 ...................................................................................... 9

Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways(1996) 39 NSWLR 160 . 5

Freeman v Reed [1863] 4 B. & S. 174 ......................................................................... 13

Geipel v Smith [1872] L.R. 7 Q.B. .............................................................................. 18

Glynn v Margetson & Co. [1893] A. C. 351 ............................................................... 16

Instituto Cubano De Estabilizacion Del Azucar v The Ss Theotokos 155 F. Supp. 945 (1957).

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

International Packers London Ltd. V Ocean Steam Ship Co. Ltd. [1955] 2 Lloyd’s Rep 719,

QB. ........................................................................................................................... 21

J.E.B. Fasteners Ltd v Marks Bloom & Co [1983] 1 All E.R. 583 at 589................... 11

Jonathan Parish, Brian Ogden v The Danwood Group Limited, [2015] EWHC 940 .... 6

Kelner v Baxter [1866] LR 2 CP 174 ............................................................................ 9

Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19 ............ 22


MEMORANDUM for THE CLAIMANT |ix

Kuwait Petroleum Corporation v I & D Oil Carriers Ltd.—The Houda [1994] 2 Lloyd’s Rep

541 (C.A.). ............................................................................................................... 20

Langridge v Levy [1837] 2 M&W 519 ....................................................................... 12

Leolga Compania de Navigacion v John Glynn & Sons Ltd. [1953] 2 Lloyd’s Rep

47…………………………………………………………………………………..17

Lensen Shipping Ltd. v Anglo-Soviet Shipping Co. [1935] 52 Ll.L.Rep 141 ............ 17

Limerick v Coker [1916] 33 T.L.R 103 ....................................................................... 23

Marsh v Joseph [1877] M 123 ....................................................................................... 9

Mclean Bros & Rigg Ltd v Grice [1906] 4 C.L.R. 835 ................................................. 9

Minerva Navigation Inc v Oceana Shipping AG (The Athena) [2013] 2 Lloyd's Rep 673 16

National Carriers Ltd. v Panalpina (Northern) Ltd. [1981] A.C. 675 .......................... 18

Petroships Pte Ltd of Singapore v Petec Trading & Investment Corp of Vietnam (The Petro

Ranger) [2001] 2 Lloyd's Rep 348. .......................................................................... 18

Polhill v Water [1832] 3 B. & ad. 114 ......................................................................... 11

Portsmouth Steamship v Liverpool & Glasgow Salvage Association (1929) 34 Ll.L.Rep 459

.................................................................................................................................. 17

Premium Nafta Products Limited & Ors v Fili Shipping Company Limited & Ors [2007]

UKHL 40 ................................................................................................................... 4

Q.N.S. Paper Co. v Chartwell Shipping Ltd. [1989] 2 S.C.R. 683 .............................. 10

Reardon Smith Line v Australian Wheat Board (The Houston City) [1956] 1 Lloyd’s Rep 1

(P.C.). ....................................................................................................................... 16

Reardon Smith Line v Black Sea and Baltic General Insurance Company [1939] A.C. 562.

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

Rijn, The—Santa Martha Baay Scheepvaart & Handelsmaatschappij N.V v Scanbulk A/S

[1981] 2 Lloyd’s Rep 267 (Q.B.). ............................................................................ 17


MEMORANDUM for THE CLAIMANT |x

Royal Albert Hall Cop. v Winchilsea [1891] 7 T.L.R. 362…………………..………..9

Eastern Construction Co. Ltd v Natiojnal Trust Co. Ltd. [1914] A.C. 197 at 213 ........ 9

Sea Angel, The—Edwinton Commercial Corp. v Tsavliris Russ (Worldwide Salvage &

Towage) Ltd. [2007] 2 Lloyd’s Rep 517 (C.A.). ..................................................... 19

Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash and The

Oceanic Amity) [1984] 1 Lloyd's Rep 588 .............................................................. 23

Son & Co (Dublin) Ltd v Owners of the Motor Vessel Freshfield (The Lady Gwendolen)

[1965] 3 W.L.R. 91 .................................................................................................. 23

Standard Oil Co. of New York v Clan Line Steamers Ltd. [1924] AC 100 ................ 20

Steel v Slate Line Steamship Co. [1877] 3 App Cas 72 HL ........................................ 21

Suncorp Insurance and Finance v Milano Assecurazioni SpA [1983] 22 Llyod's Rep. 225 9

Super Servant Two, The Lauritzen v Wijsmuller B.V [1990] 1 Lloyd’s Rep 1 .......... 18

Tamplin Steamship Company v Anglo-Mexican Petroleum Products Company [1916] 1 K.B.

485............................................................................................................................ 19

Taylor v Smith [1926] 38 C.L.R. 48 .............................................................................. 9

The Daminanos [1971] 2 ALLER 1301…………………………………….……...….5

Re Polemis and Furness, Withy & Co. Ltd. [1921] 3 KB 560. .................................... 5

TTMI Sarl v Statoil ASA (‘The Sibohelle’) [2011] EWHC 1150 (Comm), ................. 1

Turner v Haji Goolam [1904] A.C. 826 ....................................................................... 23

Valkenburg v The S.S. Henry Denny 295 F.2d 330 .................................................... 10

Waivera Co-operative Dairy Co. Ltd. v Wright, Stephenson & Co. Ltd [1917] N.Z.L.R.

178……………………………………………………………………….………….9

Akel v Turner [1926] G.L.R. 574 (N.Z.) ...................................................................... 9

Wehner v Dene [1905] 2 K.B 92 ................................................................................. 23


MEMORANDUM for THE CLAIMANT |xi

Western Sealanes Corporation v Unimarine S.A.—The Pythia [1982] 2 Lloyd’s Rep 160

(Q.B.) ....................................................................................................................... 16

Wilson v Tunman and Fretson [1843] 6 M. & G. 236 at 242 ........................................ 9

Woolf v Collins [1948] 1 KB 11.................................................................................... 5

World Fuel Services Corporation v The Ship “Nordems” 2011 FCA 73 .................... 10

World Sport Group (Mauritius) Ltd v MSM Sattelite (Singapore) Pte. Ltd (Civ App. No. 895

of 2014). ..................................................................................................................... 4

Treatises and Commentaries

Adrian Briggs, Agreements on Jurisdiction and Choice of Law, (OUP 2008) pg 81; Michael

J. Mustill, and Stewart C. Boyd, Commercial Arbitration, (2nd edn, Butterworths 2001)

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

Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration

(5th edn, OUP 2009) .................................................................................................. 1

Claire Ambrose and Karen Mazwell, London Maritime Arbitration (2nd edn,Sweet &

Maxwell 2002) ........................................................................................................... 1

F M B Reynolds, Bowstead and Reynolds on agency ....................................... 9, 10, 15

Hugh Beale, Chitty on Contracts, vol 2 (13th edn., Sweet & Maxwell 2008) ............. 4

Julian M. Lew , Loukas A. Mistelis , et al., Comparative International Commercial

Arbitration, 414, ¶17-13, (2003)………………………………………………………2

Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa Publishing, 2013) ............ 18

Simon Baughen, Shipping Law (6th edn, Routledge 2015) ........................................ 20

Terence Coghlin, Andrew Baker, Julian Kenny, John Kimball and Tom Belknap, Time

Charters (6th edn, Informa Law 2008) ...................................................................... 2

Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian

Kenny, Time Charters (7th, Informa law, New York 2014) .................................... 23


MEMORANDUM for THE CLAIMANT |xii

Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian

Kenny., Time Charters (7th, Informa law, New York 2014) ................... 7, 13, 14, 16

W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell, London

2006)……… ................................................................................................ 10, 11, 12

Journals and Newspaper Articles

Ahmad Taleb, 'Piracy in West Africa Targets the Region’s Oil Industry' (International Policy

Digest 2014) ............................................................................................................. 19

Arthur L. Corbin, 'Ratification in Agency without Knowledge of Material Facts' [1906] The

Yale Law Journal Company, Inc. 331 ....................................................................... 9

H. Edwin Anderson, ‘"Subject to Details" and C/P Negotiations’ (2001) 26 Tul Mar LJ 61

.................................................................................................................................... 1

Kuwait Petroleum Corporation v I & D Oil Carriers Ltd.—The Houda [1994] 2 Lloyd’s Rep

541 (C.A.) .......................................................................................................... 14, 15

Other International Documents

ICC International Maritime Bureau, ‘Piracy and Armed Robbery against Ships – Report for

the period of 1 January – 30 June 2014 ................................................................... 21

IMO, Best Management Practices for Protection Against Somali Based Piracy, Version 4,

August 2011 .................................................................................................. iv, 21, 22

Restatement of the Law Third, Foreign Relations Law of the United States, (1965).... 9

Shell Time 4 ................................................................................................................... 1

TEAM NUMBER 03 -Questions Presented-

MEMORANDUM for THE CLAIMANT |xiii

QUESTIONS PRESENTED

I. Does the Arbitral Tribunal have the jurisdiction to hear the present dispute?

II. Whether the Tribunal can arbitrate the Tort of Fraud?

III. Whether the Respondents are liable for the Tort of fraud?

IV. Whether the Respondents are liable for the breach of Charterparty due to non-

payment of second instalment of hire?

V. Whether the Claimants are liable for breach of Charterparty as they provided a vessel

not fit for service?

VI. Are the Claimants liable to the Respondents in bailment?

TEAM NUMBER 03 -Statement of Facts -

MEMORANDUM for THE CLAIMANT |xiv

STATEMENT OF FACTS

PARTIES AND CHARTER-PARTY NEGOTIATIONS

The parties Western Tankers Inc (the “Claimants”) agreed to let ‘Western Dawn’ (the

“Vessel”) to LDT Pte (the ‘Charterers’). The negotiations for the same took place. During

those negotiations the Charterers expressed their unwillingness of having London as the seat

of arbitration due to past bad experience.

THE CHARTERPARTY

The Time-Charterparty was an amended Shelltime 4 Pro forma. Piracy clauses were added.

Voyage orders were sent and Bills of lading were also issued.

PERFORMANCE OF THE CHARTERPARTY

Cargo was loaded at the Singapore Port, the starting point of the journey. Bunkers less than

the quantity asked for were provided by the Charterers. On discontent being expressed,

reassurance for alternative bunker supply at Durban or Cape Town was made. However no

bunkers were supplied at either place. On numerous occasions, Claimants had sought

information regarding coordinates of the STS Area as well as the bunker supply. However

adequate response was not received from the Charterers. On June 28, 2014, the v/l was

instructed by the Charterers to proceed to an alternative discharge ‘STS Area 1’ where

discharge of Cargo and bunker supply was promised. On the same day, ASA2 communicated

the Claimants that it had been passed local instruction by the Charterers. The v/l was

instructed to proceed to an alternative discharge area for discharge of cargo and provision of

bunkers through STS with v/l ANTELOPE. The same was informed to the Charterers who

consented to communication with the STS Coordinates. On communication that the second

installment of hire was due, the Charterers sent an off-hire notice due no contact.

TEAM NUMBER 03 -Statement of Facts -

MEMORANDUM for THE CLAIMANT |xv

PIRACY ATTACK

On arrival at the instructed location, the v/l was subjected to a Piracy Attack which lasted for

thirteen days, during which cargo theft and loss took place.

CLAIMS

The claimants commenced arbitration proceedings against the Respondents contending

breach of Charterparty due to refusal to pay second hire. Tort of fraud has been alleged

against the Respondents for fraudulent representations made by them and ASA2 on their

behalf.

TEAM NUMBER 03 -Arguments Presented -

MEMORANDUM for THE CLAIMANT -1-

ARGUMENTS PRESENTED

I. THE ARBITRAL TRIBUNAL HAS THE JURISDICTION TO DETERMINE THE

MATTER.

1. The Claimants submit that the arbitral tribunal has the jurisdiction to settle the disputes

arising under the Charter because: Contrary to the Respondent’s submission, London is the

proper seat and forum for deciding the arbitral proceedings in light of the true intention of the

parties [A] and since the amendment proposed by the Respondent does not specify any seat

of arbitration, it becomes a pathological arbitration clause which cannot be enforced [B].

A. THE PARTIES INTENDED LONDON TO BE THE ARBITRAL SEAT FOR THEIR PROCEEDINGS.

2. It is submitted that an arbitration proceeding is based upon the will and consent of the

parties.1 This means that an arbitral tribunal can initiate an arbitration process only if the

parties intended to give those powers to the tribunal.2 In the present case, this power is

derived from the C/P agreement.3 This agreement was based on the ST4 pro forma which

contained the arbitration clause specifying London as the seat of arbitration.4

3. It is common with respect to Charterparties, that they are concluded by exchanging emails or

faxes, fixing the terms of the subject.5 The Parties often negotiate the terms of the Charter

before finalizing the contract.6 In the present case as well, there were negotiations between

the parties through a broker. It is seen that the parties did bring about certain changes to the

1 Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration (5th, OUP,

Oxford 2009) 19. 2 Claire Ambrose and Karen Mazwell, London Maritime Arbitration (2nd, Sweet & Maxwell, London 2002) 25. 3 Factsheet, pg 5, Fully Fixed Recap. 4 ST4 cl 46. 5 TTMI Sarl v Statoil ASA (‘The Sibohelle’) [2011] EWHC 1150 (Comm), para 27. 6 H. Edwin Anderson, ‘"Subject to Details" and C/P Negotiations’ [2001] 26 Tul Mar LJ 61.



ST4.7 Even the Respondents proposed an amendment for not having London Arbitration

during the stage of communications between parties.8

4. The arbitration clause is a contractual clause which has to be construed according to the

natural and ordinary meaning so as to give effect to the intention of the parties. 9 This

intention can be determined by referring to the contract or the circumstances of the case.10 In

the present matter, even though the Respondents communicated their intention to amend the

ST4 provision on arbitration, this was never accepted by the other side. The facts clearly

show that there was no express acceptance. The only thing which could be implied from the

reply to this proposal for amendment is that the parties would send out the final recap very

soon.11 Hence the intention of the parties could have been reflected from the final fixture.

5. The final recap was sent after the Respondents lifted the management subjects.12 In shipping

industry, the term “lifting of subjects” refers to being fixed on the main terms of the

contract.13 This recap brought certain changes to the C/P. However it mentioned nothing

about the arbitration provision. The fact that it was left blank means that the negotiated term

was never accepted and the parties had to abide by the provisions of the ST4.14 Moreover if

the Parties had accepted the Respondent’s correspondence of not having “London

Arbitration”, then they would have made specific changes to the arbitral clause under ST4

like they did with the other clauses.15 Thus there was no acceptance of the amendment.

6. Also mere incorporation of the heading “Law and Litigation” in the fixed recap does not

indicate anything. ST4 specifically provides that headings cannot be used for the purpose of

7 Factsheet, pg 6, Fully Fixed Recap. 8 Factsheet, pg 2: Correspondence on May 23, 2014. 9, Darlington Futures Ltd v Delco Australia Pty Ltd [1986] 161 CLR 500, 510. 10 Julian M. Lew and Loukas A. Mistelis, Comparative International Commercial Arbitration, (Kluwer Law

International, New Delhi 2003) para 13-17. 11 Factsheet, pg 2: Correspondence on May 23, 2014. 12 Factsheet, pg 5: Fully Fixed Recap. 13 Terence Coghlin, Andrew Baker, Julian Kenny, John Kimball and Tom Belknap, Time Charters (6th, Informa

Law, London 2008) 29. 14 ST4 cl 46. 15 Factsheet, pg 6: Fully Fixed Recap.



construction but are there only for convenience.16 Thus the heading of “Law and Litigation”

does not reflect anything. Hence it is clear from the facts that there was no valid amendment

of the arbitration provision.

B. EVEN IF THE COURT ACCEPTS THE AMENDMENT, THE ARBITRAL PROCEEDINGS CANNOT

BE ENFORCED

7. It is submitted that if the Tribunal accepts the amendment as valid, it would lead to a

“pathological arbitration” 17 clause which cannot be enforced. It has been widely held that

defective arbitration clauses which do not specify the details of the arbitration process are

mostly void. 18 However the decision of the court on these cases depends upon the extent of

pathology which is created by an arbitration clause. 19 In the present case, the

correspondence 20 which is being relied upon by the Respondents did not specify any

alternative seat of arbitration. There were no specific terms communicated regarding other

terms of the arbitration provision. This leads to a situation of ambiguity where the

interpretation of the clause becomes difficult.

8. A Pathological arbitration clause does not indicate the true intention of the parties regarding

arbitration. 21 This is because even if the Court tries to interpret these clauses with a view to

ensure its effectiveness, it is difficult to determine which arbitral tribunal had the jurisdiction

to determine matters. 22 Thus according to the principle of effective interpretation, arbitration

clauses which are ambiguous should be construed in a reasonable manner. 23 In this case, the

16 ST4 cl 48. 17Frederic Eisemann, ‘La Clause d’arbitragepathologique, Arbitrage Commervial: Essais in Memoriam Eugenio

Minoli’ (1974) 129 in Graig Park and Paulson, International Chamber of Commerce Arbitration, 3rd edn (2000)

12. 18 Palencia Court of Appeal (Audiencia Provincial) on 10 April 2000 (Spain); Madrid Court of Appeal (10th

panel) of 31 May 2005; X. v Y. [2010] 4A_620/2009. 19HKL Group Co. Ltd. v Rizq International Holdings Pte Ltd. [2013] SGHCR 5. 20 Factsheet, pg 2: Correspondence on May 23, 2014. 21X. v Y. [2010] 4A_620/2009. 22X. v Y. [2010] 4A_620/2009 23Star Shipping AS v China National Foreign Trade Transp. Corp. (1993] 2 Lloyd's Rep 445.



amendment proposed by the Respondents was vague and thus could not be enforced. Hence

this Tribunal should not accept this amendment.

II. THE ARBITRAL TRIBUNAL CAN ARBITRATE THE CLAIM OF TORT OF FRAUD.

9. It is submitted that the tribunal has the jurisdiction to arbitrate upon the claim of fraud

because: The phrase “disputes arising out of the charter” can be extended to cover tortious

claims. [A] The tortious claim of fraud is closely connected with the C/P agreement. [B]

A. THE PHRASE “DISPUTES ARISING OUT OF THE CHARTER” CAN BE EXTENDED TO COVER

TORTIOUS CLAIMS.

10. The language of an arbitration agreement helps in determining the scope of reference to

arbitration.24 The usage of the phrase “arising out of the charter” reflects the intention of the

parties to give it a wider meaning. This is because of the liberal construction of this phrase is

to include every dispute except the one relating to the existence of the contract.25 The most

important reason behind such interpretation is based on the presumption that a prudent

commercial man would always favour an adjudication mechanism where all his disputes

could be settled. This principle was discussed in the famous Fiona Trust26 case.

11. It reaffirmed the approach of giving a wider interpretation to the arbitral clause which used

the same phrase as “disputes arising under the charter”. Further it clarified how the

distinction between the scope of clauses “arising out of” and arising in connection with” are

redundant. 27 This is because an agreement should always be interpreted with a rational

commercial purpose favouring the presumption stated above.

24 Hugh Beale, Chitty on Contracts, vol 2 (13th , Sweet & Maxwell, London 2008) 25 Adrian Briggs, Agreements on Jurisdiction and Choice of Law, (OUP 2008) pg 81; Michael J. Mustill, and

Stewart C. Boyd, Commercial Arbitration, (2nd, Butterworths, London 2001) 120. 26 Fiona Trust v Primalov [2007] UKHL 40; Premium Nafta Products Limited & Ors v Fili Shipping Company

Limited & Ors [2007] UKHL 40. 27 Premium Nafta Products Limited & Ors v Fili Shipping Company Limited & Ors [2007] UKHL 40; World

Sport Group (Mauritius) Ltd v MSM Sattelite (Singapore) Pte. Ltd (Civ App. No. 895 of 2014).

http://judis.nic.in/supremecourt/imgs1.aspx?filename=41175

http://judis.nic.in/supremecourt/imgs1.aspx?filename=41175



12. Further this phrase has been held wide enough to cover tortious claims. 28 It has been

discussed to be as broad as the term “in connection with” thereby including not only

contractual issues but anything which has any connection with the dispute.29 Hence unless

the parties express their clear intention to have different issues adjudicated upon under

different mechanisms, they should not be bifurcated.30 Thus the usage of this phrase reflects

the intention of the parties to submit all disputes to arbitration.

B. THERE IS A CLOSE CONNECTION BETWEEN THE TORT OF FRAUD AND C/P AGREEMENT

13. It is submitted that an arbitral tribunal can arbitrate tortious claims if the arbitration

agreement provides for such a reference and also when the dispute is connected to the

contract. 31 In order to decide upon the claims of tort, it is essential to see whether the claim is

linked to the main contract.32 A tortious claim would be seen as linked to the contract if while

deciding upon the contractual issue, the courts would also have to consider the other.33

14. In the present case, the claim of tort of fraud is closely connected with the contract and can be

said to have arisen out of the agreement. The issue of fraud revolves around the set of

representations made by the Respondent and ASA2 to the Claimant regarding the supply of

bunkers which were never fulfilled. As per the C/P, the Respondents had an obligation to

provide for all the bunkers.34 Hence the representations made by them in this regard were

connected to the Charter Party and were arising out of it.

15. The representation made by ASA2 acting on behalf of the Respondents, regarding bunker

supply was also linked to the contract. This is because the voyage orders did provide for the

28 Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87;

Empressa Exportadora De Azucar(CUBAZUCAR) v Industria Azucarera Nacional SA (IANSA) (The Playa

Larga and Marble Islands) [1983] 2 Lloyd’s Rep 171. 29 Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] 157 FCR 45. 30 Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160. 31 Woolf v Collins [1948] 1 KB 11. 32 The Daminanos [1971] 2 ALLER 1301; Re Polemis and Furness, Withy & Co. Ltd. [1921] 3 KB 560. 33 The Paolo de’Alesio [1994] 2 Lloyd’s Rep 366 (QB), Aggeliki Charis Compania Maritima S.A. v Pagnan

S.p.A. (The Angelic Grace) [1994] 1 Lloyds Rep 168; Comandate Marine Corp v Pan Australia Shipping Pty

Ltd [2006] 157 FCR 45; Ethiopian Ouilseeds and Pulses Export Corp v Rio del Mar Foods [1990]1 Lloyd’s

Rep 86. 34 ST4 cl 7; Factsheet, pg 5: Fully Fixed Recap.



provision of agency nominated by the Respondent at the load port and the discharge port.35

Thus the representations made to the Claimant by the agents of the Respondent regarding the

availability of bunker supply is connected to the agreement. This is because the

representations were made in light of the fulfilment of an obligation of the Respondent. Thus

there is a nexus between the tort of fraud and the Contract. Hence fraud can be arbitrated by

the Tribunal.

III. THE RESPONDENTS HAVE COMMITTED THE TORT OF FRAUD

16. It is submitted that the Respondents are liable for the tort of fraud as all essentials of fraud

have been fulfilled. First, the Respondents as well as the persons acting on their behalf made

untrue and dishonest representations [A]. Second, they were made with the intention to be

relied upon [B]. Third, the Claimants did rely [C]. Fourth, due to this damage was caused

[D].

A. RESPONDENTS AND THEIR AGENTS MADE UNTRUE AND DISHONEST REPRESENTATIONS

17. It is submitted that the Respondents and ASA2 on their behalf made representations that were

dishonest and untrue on their proper construction.

1. Respondents made untrue and dishonest representations

18. It is submitted that the Respondents made representations that were untrue ‘on their proper

construction’36. A representation made with the knowledge of its falsity or recklessly without

caring about it37 and with a dishonest intention38 is an essential to fraud. Even promises

comprise of a statement in the manifestation of a person’s mind39, so as to make them

fraudulent.

35 Factsheet, pg 13, 25: Voyage Orders. 36 Jonathan Parish, Brian Ogden v The Danwood Group Limited, [2015] EWHC 940. 37 Derry v Peek [1889] 14 App.Cas. 337; Edgington v Fitzmaurice [1885] 29 Ch.D. 459 38 Edgington v Fitzmaurice [1885] 29 Ch.D. 459. 39 Edgington v Fitzmaurice [1885] 29 Ch.D. 459 at 483 per Bowen L.J.; Clydesdale Bank Ltd v Paton [1896]

A.C. 381 at 394 per Lord Herschell.



19. Here, in lieu of discontent expressed by the Claimants against the short supply of bunkers at

Singapore 40 , the Respondents had assured existence of an ‘alternative bunker supply

available passing Durban or Cape Town’41 and that ‘everything is under control’42. In-spite

of requests43 from the Master, and protest against, ‘not supplying fuel at Durban’44 , no

communication was made by the Respondents till June 28, 2014. Even then instead of

explaining non-supply, the v/l was instructed to proceed to ‘STS Area 1’ for discharge of

cargo and Bunker supply.45

20. The fact that the Respondents did not communicate for twenty-five days and no bunker was

supplied at either places, indicates that everything was not under control. Had the supply

been available, even if the Respondents were not being able to provide bunkers at Durban to

Cape Town, they could have communicated their inability.

21. Further, Charterers are under an absolute obligation46 to provide bunkers under the C/P47, and

for supply of the correct quantity, information provided by the Master is followed.48 Here,

despite requirement of 1500 mt bunkers being explicitly communicated by the Master49, the

Respondents approached the supplier only for 950mt bunkers50. This indicates that they had a

casual and dishonest attitude, right from the beginning towards providing bunkers.

2. ASA2, on behalf of the Respondents, made untrue and dishonest representations

22. It is submitted that, first the representations made by ASA2 were untrue and dishonest (a)

Secondly, these would bind the Respondents as they ratified the representation (b).

40 Factsheet, pg 25: Correspondence on June 3, 2014. 41 Factsheet, pg 26: Correspondence on June 3, 2014. 42 Factsheet, pg 28: Correspondence on June 3, 2014. 43 Factsheet, pg 29: Correspondence on June 08, 2014, 31: Correspondence on June 20, 2014. 44 Factsheet, pg 32: Correspondence on June 25, 2014. 45 Factsheet, pg 33: Correspondence on June 28, 2014. 46 Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny., Time

Charters (7th, Informa law, New York 2014) 247. 47 ST4 cl 7; Factsheet, pg 5: Fully Fixed Recap. 48 Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny., Time

Charters (7th, Informa law, New York 2014) 248. 49 Factsheet, pg 21: Correspondence on May 27, 2014. 50 Factsheet, pg 24: Correspondence on May 30, 2014.



a. The representations made by ASA2 were untrue and dishonest

23. On June 28, 2014, ASA2, on behalf of the Respondents, instructed the v/l to proceed to an

alternative discharge location for discharge of some cargo and supply of 300mt bunkers

through STS with v/l ‘ANTELOPE’.51 On arrival here, the STS v/l had still not arrived.52 In

its absence, neither were any bunkers provided, nor did any discharge of cargo take place.

24. Dishonest intention to conduct any STS at the area can be inferred from the fact that despite

two communications regarding non arrival of ‘ANTELOPE’, and issuing a NOR, ASA2 did

not revert back to the Claimants. On the other hand, an off-hire notice had been sent by the

Respondents ‘due no contact’53, despite the fact that they themselves had instructed the v/l to

proceed to ‘STS Area 1’. This indicates double standards of the Respondents and that they

made dishonest representations.

b. Respondents ratified ASA2’s representation so as to be liable for them

25. It is submitted that the Respondents ratified the representations made by ASA2. An act done

by a party on behalf of another by whom it had no authority to act may be made valid by

ratification. 54 This is applicable for all ‘lawful or unlawful’ 55 acts, including tortious

actions.56

26. Here, the Master had informed the Respondents57, that the v/l was to receive 300mt bunkers

from v/l ANTELOPE before cargo transfer for new OPL discharge. They consented to

‘continue liaise’ with the ‘STS coordinators’.58 Since ratification has a retrospective effect59

51 Factsheet, pg 35: Correspondence on June 28, 2014. 52 Factsheet, pg 40-41: Correspondence on July 04, 2014. 53 Factsheet, pg 41: Correspondence on July 04, 2014. 54 Wilson v Tunman and Fretson [1843] 6 M. & G. 236 at 242; Bird v Brown [1850] 4 Exch. 786 at 798; Firth v

Staines [1897] 2 Q.B. 70; Restatement of the Law Third, The Foreign Relations Law of the United States,

(1965)Chap 4. 55 F M B Reynolds, Bowstead and Reynolds on agency (18th, Sweet & Maxwell, London 2006) 64, 65. 56 F M B Reynolds, Bowstead and Reynolds on agency (18th, Sweet & Maxwell, London 2006) 64, 65. 57 Factsheet, pg 38: Correspondence on July 03, 2014. 58 Factsheet, pg 40: Correspondence on July 04, 2014. 59 F M B Reynolds, Bowstead and Reynolds on agency (18th, Sweet & Maxwell, London 2006) 65.



and can be implied60, it can be inferred by from these words that the Respondents adopted the

representations as their own. Further, this ratification is valid legally as all the essentials of

Ratification have been met with.

All the essentials of ratification including knowledge of material circumstances have been

met

27. Essentials of ratification include existence61 and competence62 of the person on whose behalf

the act has been done and ‘knowledge of all material circumstances’ in which the act has

been done 63 . While the first one has clearly been satisfied, for the second one, such

knowledge can be considered to have been imputed to the person ratifying, if he chooses to

ratify without ‘further investigation’ despite possessing ‘knowledge of such facts that would

lead a reasonable person to investigate’, 64 and he need not know the collateral

circumstances65.

28. Here, the Respondents, having been told the STS v/l’s name, should have investigated about

the complete facts. While the extent of inquiry differs in each case, such has been made

easier and possible in a timely manner due to the modern technology. 66 For people in

maritime commerce67, disclosure of the name of a v/l is equivalent to disclosure of the

60 Waivera Co-operative Dairy Co. Ltd. v Wright, Stephenson & Co. Ltd [1917] N.Z.L.R. 178; Akel v Turner

[1926] G.L.R. 574 (N.Z.) 61 Kelner v Baxter [1866] LR 2 CP 174. 62 Firth v Staines [1897] 2 QB 70 at 75. 63 Suncorp Insurance and Finance v Milano Assecurazioni SpA [1983] 22 Llyod's Rep. 225; see Arthur L.

Corbin, 'Ratification in Agency without Knowledge of Material Facts' [1906] The Yale Law Journal Company,

Inc. 331. See also Royal Albert Hall Cop. v Winchilsea [1891] 7 T.L.R. 362; Eastern Construction Co. Ltd v

National Trust Co. Ltd. [1914] A.C. 197 at 213; Mclean Bros & Rigg Ltd v Grice [1906] 4 C.L.R. 835; Taylor v

Smith [1926] 38 C.L.R. 48; Bedford Insurance Co. Ltd v Institutio de Resseguros do Brasil [1985] Q.B. 966 at

987; Aoetearoa International Ltd v Westpac Banking Corp. [1984] 2 N.Z.L.R. 34; Restatement, Third, s 4.06. 64 Restatement, Third § 4.06; Briess v Woolley [1954] 2 W.L.R. 832; Marsh v Joseph [1877] M 123;See Arthur

L. Corbin, 'Ratification in Agency without Knowledge of Material Facts' [1906] The Yale Law Journal

Company, Inc. 331. 65 F M B Reynolds, Bowstead and Reynolds on agency (18th, Sweet & Maxwell, London 2006) 75. 66 World Fuel Services Corporation v The Ship “Nordems” 2011 FCA 73 [65]. 67 Valkenburg v The S.S. Henry Denny 295 F.2d 330.



identity of its owner68 as the party is put into a position of finding out the identity of the

owner by referring to the ‘registers of shipping’.69

29. Further, considering the provisions in the ST4 against discharging cargo at an alternative

location, other than the one specified in the B/L70, a reasonable Charterer on being informed

of deviation of the v/l to an alternative discharge area, would investigate its specific

coordinates, before consenting to it. Such could have been easily ascertained on inquiry from

the Masters.

30. However, in absence of such inquiries by the Respondents, they would be considered to have

been imputed with the knowledge of all material circumstances. And thus, all essentials of

ratification having been met, the representations made by ASA2 would bind the Respondents.

B. THE REPRESENTATIONS WERE MADE WITH THE INTENTION TO BE RELIED UPON

31. Intention that the other party relies upon the statement made is an essential requirement of the

fraud71, irrespective of whether the actual damages were intended to be ensued or not72.

32. The representation that “everything is under control”73 by the Respondents indicates that

they intended reliance upon the previous representation, and hence the same was reassured

again.

33. Bunkers, being an important commodity in shipping 74 , its repeated demand made the

Respondents aware of the fact that the v/l was in urgent need of bunker. This meant that the

Master would comply with the instructions to go to an alternative discharge area if they were

to be provided with bunkers there. Hence, this frequently raised issue was included in the

representations as an allurement with an intention that the Claimants would rely upon it.

68 Q.N.S. Paper Co. v Chartwell Shipping Ltd. [1989] 2 S.C.R. 683. 69 Instituto Cubano De Estabilizacion Del Azucar v The Ss Theotokos [1957] 155 F. SUPP. 945. 70 ST4 cl 13(b). 71 W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell, London 2006) 531. 72 Polhill v Water [1832] 3 B. & ad. 114; Edgington v Fitzmaurice [1885] 29 Ch.D. 459 at 482; Brown v

Jenkinson; [1957] 2 QB 621 as on W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell,

London 2006) 532 73 Factsheet, pg 73: Correspondence on June 03, 2014. 74 Reardon Smith Line v Black Sea and Baltic General Insurance Company [1939] A.C. 562.



C. THE REPRESENTATIONS WERE RELIED UPON BY THE CLAIMANTS

34. In fraud, while reliance upon the representations is essential,75 reasonability is not expected.76

Hence, neither does it matter if the party acts incautiously and could have verified the truth of

the representations77, nor are the representation required to be the decisive factor78

35. Relying upon the first representation, the v/l was to receive stores from its safety department

at the Durban call for bunkers79. Protest against no supply was made when nearing Durban.80

The respondents were intimated that the v/l was proceeding towards the coordinates

instructed, and would be taking bunkers on arrival, for which ETA was intimated and

confirmation of hose connections and fender supply was sought on multiple days.81 The v/l

did arrive at the instructed co-ordinates and even issued a NOR.82 Thus, it can be concluded

that the representations were relied upon by the Claimants.

D. THE CLAIMANTS SUFFERED DAMAGES DUE TO THE RELIANCE

36. It is submitted that the Claimants were subjected to both financial loss as well as personal

injury due to the reliance. While test of reasonable foreseeability of remoteness is not applied

in fraud,83 some financial loss is necessary84 and may also include ‘personal injury’85.

37. On arrival at the instructed STS Area, the v/l was subjected to a piracy attack.86 Under the

pirate control, the cargo theft, loss, damage to various equipments of the v/l took place, while

some crew members were personally injured.87 Hence it is concluded that damage arose from

75 Armagas Ltd v Mudogas S.A. (The Ocean Frost) [1986] AC 717. 76 Armagas Ltd v Mudogas S.A. (The Ocean Frost) [1986] AC 717 77 W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell, London 2006) 533. 78 J.E.B. Fasteners Ltd v Marks Bloom & Co [1983] 1 All E.R. 583 at 589 per Stephenson. 79 Factsheet, pg 27: Correspondence on June 03, 2014. 80 Factsheet, pg 32: Correspondence on June 25, 2014. 81 Factsheet, pg 35-38: Correspondence on June 28, 2014, June 29, 2014, July 01, 2014, July 02, 2014, July 03,

2014. 82 Factsheet, pg 41: Correspondence on July 04, 2014. 83 W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell, London 2006) 536. 84 W V H Rogers, Winfield and Jolowicz on tort (17th, Sweet & Maxwell, London 2006) 535. 85 Langridge v Levy [1837] 2 M&W 519; Burrows v Rhodes [1899] 1 QB 816 as on W V H Rogers, Winfield

and Jolowicz on tort (17th, Sweet & Maxwell, London 2006) 537. 86 Factsheet, pg 42: Correspondence on July 17, 2014. 87 Factsheet, pg 42: Correspondence on July 17, 2014.



the reliance as the v/l suffered financial, and personal injury because of the attack, which

occurred at that exact location it had been instructed to proceed to. As all the required

essentials of the tort of fraud have been met with in this case, the Respondents are liable for

the tort of fraud.

IV. RESPONDENTS HAVE COMMITTED BREACH OF CONTRACT BY FAILING TO PAY THE

HIRE AMOUNT WHICH BECAME DUE ON JULY 03, 2014.

38. It is submitted that, the second instalment of hire was due and owing from the Respondents

on July 03, 2014. The Respondents, contending that the Vessel was off-hire, did not pay the

due amount on July 03, 2014 (close of business). This and the continued refusal to pay the

due amount of hire, amount to breach of the Charterparty. It is submitted that when the

Claimants gave notice of hire to the Respondent, hire was due and owing to them [A];

secondly, that the Respondents cannot claim that the vessel was off-hire [B]; and thirdly, that

there was no such event which frustrated the Charterparty [C].

A. ON THE TERMS OF THE CHARTERPARTY, HIRE BECAME DUE AND OWING TO THE CLAIMANT

ON JULY 03, 2014.

39. As per the Charterparty, the Respondents were to make monthly payment of hire in advance,

per calendar month, to the Claimants.88 On starting from the given date of the first month,

when the corresponding date is reached in the next month, a calendar month is said to be

complete.89 It is submitted that as per the “corresponding day rule”, the second installment of

hire became due on July 03, 2014.

40. Further, the Charterparty allows the Charterers to make deductions for, inter alia, any

amount accruing to an “undisputed and experienced” off-hire period.90 Even without these

amendments made to the provisions of ST4, it is amply clear that reductions cannot be made

88 ST4 cl 9. 89 Freeman v Reed [1863] 4 B. & S. 174; Dodds v Walker [1980] 1 W.L.R. 1061. 90 ST4 cl 21; Factsheet, pg 6: Fully Fixed Recap.



from the hire payment for an anticipated off-hire period.91 The sanctity of the owner’s right

of hire has been emphasized on umpteen occasions.92 Therefore, the entire hire amount will

be due to the Claimants except for deductions which relate to a period for which hire has

already been paid.

41. Under the Charterparty, the obligation to pay hire in advance for the next month does not

cease even if the Vessel is off-hire on the date that payment becomes due. The payment of

hire clause in the instant matter can easily be distinguished from the one that was discussed

by the courts in The Lutetian.93 The C/P in The Lutetian provided that the “payment of hire

shall cease for the time thereby lost”.94 Firstly, the interpretation given in the case has not

entirely been accepted, and is a debatable reading.95 Secondly, such a reading is not possible

under the Charterparty in this case, since there is no similar suggestion of suspension of

Charterers’ obligation to pay hire under ST4. It is therefore submitted that, hire was due and

owing to the Claimants under the Charterparty, and such an obligation did not cease even if

the Vessel was off-hire on the due date.

B. IN ANY EVENT, THE VESSEL WAS NOT OFF-HIRE FROM JULY 04, 2014.

42. In any event, the Vessel was not off-hire in the given period due to any reason whatsoever. It

is the claim of the Respondents that the Vessel was off-hire from July 04, 2014 due to the

breach of orders and/or neglect of duty on the part of the Master. It is submitted on behalf of

the Claimants that, the requirements for the Vessel to go off-hire under Clause 21 of ST4

have not been met. The Vessel continued to be on hire, on and after July 04, 2014.

1. The Master did not commit any breach of orders and/or neglect of duty

91 Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny., Time

Charters (7th, Informa law, New York 2014) 677. 92 The Dagny Skou SMA 2416 (Arb. at N.Y. 1987), In The Treana SMA 2929 (Arb. at N.Y. 1992), The Thekos

SMA 2253 (Arb. at N.Y. 1986). 93 Tradax Export S.A. v Dorada Compania Naviera S.A. [1982] 2 Lloyd’s Rep 140 (Q.B.). 94 Tradax Export S.A. v Dorada Compania Naviera S.A. [1982] 2 Lloyd’s Rep 140 (Q.B.). 95 Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny., Time

Charters (7th, Informa law, New York 2014) 282.



43. When loss of time is caused due to the neglect of the duty by the Master or the crew, the

Vessel goes off-hire from the time that such loss commences.96 It is submitted that, there was

no such neglect or breach by the Master in the instant case.

44. It is an undisputed and established law that in a time Charterparty, the Charterers have the

right to give orders to the Master, and there is a corresponding duty on the Master to act as

per the Charterer’s instructions with regard to the employment of the ship.97 It is submitted

that the Master, at all times, fulfilled this duty. It is admitted that in the voyage instructions,

the Master was instructed to send daily ETA reports to the Respondent and his agents.98

45. The Master, at all times, sent daily ETA reports to the Respondents and/or ASA2, who were

the agents of the Respondents.99 There is no denying that either the Respondents or the agents

had complete information of the location of the ship and the route being taken. It is an

established principle of law that information acquired by the agent within the authority of the

agency100, and which it is his duty to pass on to the principal101, are deemed to be within the

knowledge of the principal.102 The Respondents, therefore, cannot claim lack of contact with

him. In fact, on receiving the co-ordinates of the STS area and the name of the new Receiving

Vessel- ANTELOPE, the Master even contacted the Respondent directly.103 In response to

his e-mail, the Master was asked to continue liaising with the STS coordinator.104 Thus, the

Master acted in accordance with the instructions of the Respondents, and there was no breach

of duty on his part.

2. Alternatively, there was no loss of time caused to charterers.

96 ST4 cl 21(a)(ii); Stargas SpA v Petredec (The Sargasso) [1994] 1 Lloyd's Rep 412, Kuwait Petroleum

Corporation v I & D Oil Carriers Ltd.—The Houda [1994] 2 Lloyd’s Rep 541 (C.A.). 97 ST4 cl 13; Kuwait Petroleum Corporation v I & D Oil Carriers Ltd.—The Houda [1994] 2 Lloyd’s Rep 541

(C.A.); Hill Harmony, The—Whistler International v Kawasaki Kisen Kaisha [2001] 1 Lloyd’s Rep 147 98 Factsheet, pg 13: Voyage Orders. 99 Factsheet, pg 36: Correspondence on June 28, 2014. 100 Taylor v Yorkshire Insurance Co. Ltd. [1913] 2 Ir.R. 1 101 Boursot v Savage [1866] L.R. 2 Eq. 134, Rolland v Hart [1871] L.R. 6 Ch. App. 678. 102 F M B Reynolds, Bowstead and Reynolds on agency (18th, Sweet & Maxwell, London 2006) pg 480. 103 Factsheet, pg 38: Correspondence on July 03, 2014. 104 Factsheet, pg 40: Correspondence on July 04, 2014.



46. Even if the Master breached his duty, the same cannot be said to validly lead to a loss of time

to the Respondents. The requirement under ST4 for invoking the off-hire clause is not merely

proving an incident that put the Vessel off-hire, but that the incident actually led to a net loss

of time.105 Despite the occurrence of some off-hire event, if the Vessel during the period

provides some service to the Charterers, there is no loss of time during such period.106

47. In the instant matter, the Vessel was in dire need of bunkers as the Vessel did not have

sufficient bunker supply to continue the voyage. The Claimants went to the alternate

discharge location given by ASA2 under the belief that they were to receive supply of

bunkers at the STS location given by the agents. It has been held that a deviation for

bunkering, even if it is for considerations such as convenience or cheapness, is a valid

deviation.107 The real question to be answered is whether or not the deviation was justified in

the business sense.108

48. Taking into account the circumstances of the instant matter, it seems reasonable for the

Master to have deviated from the original route. Even if there was breach of instructions

given by the Respondents, which led to the Vessel going to an alternate location, it was to get

bunkers for the Vessel. Hence, the deviation, and any corresponding delay, was for providing

some service to the Respondents. That being the only event which could have led to delay,

there was no net loss of time

3. In arguendo, the Claimants cannot rely on the Off-hire clause as the loss of time was a

result of the Charterers’ fault.

105 Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny., Time

Charters (7th, Informa law, New York 2014) 687; Berge Sund, The—Sig Bergesen D.Y. A/S v Mobil Shipping

and Transportation Co. [1993] 2 Lloyd’s Rep 453 (C.A.); Canadian Pacific (Bermuda) Ltd v Canadian

Transport Co Ltd (The HRMacmillan) [1974] 1 Lloyd’s Rep 31; Minerva Navigation Inc v Oceana Shipping AG

(The Athena) [2013] 2 Lloyd's Rep 673; Western Sealanes Corporation v Unimarine S.A.—The Pythia [1982] 2

Lloyd’s Rep 160 (Q.B.) 106 ST4 cl 21; Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian

Kenny., Time Charters (7th, Informa law, New York 2014) pg 687. 107 Reardon Smith Line v Australian Wheat Board (The Houston City) [1956] 1 Lloyd’s Rep 1 (P.C.). 108 Glynn v Margetson & Co. [1893] A. C. 351.

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49. It is finally submitted that, in any event, even if there was a loss of time occasioned to the

Respondents, the same was the result of the Respondents’ fault, and they can therefore not be

allowed to rely on the off-hire clause.

50. In certain cases, the Charterparty expressly provides for exclusion of the clause in instances

where the loss of time is caused due to the fault of the Charterers.109 The courts in such cases

have interpreted “charterer’s fault” to mean that there was some kind of a causal connection

between the time lost and an act or omission of the Charterers, irrespective of whether such

act or omission made the charterers morally blameworthy or liable for breach of the

contract.110 Moreover, it was inconsequential that the act or omission of the charterers was

unconscious or negligent.111 Even in cases where the C/P does not make an explicit exclusion

for charterer’s fault, the owners have been allowed an implied indemnity where they were

able to show that the loss of time was the direct cause of the owners following the

instructions of the charterers.112

51. The Master simply has the duty to follow the instructions given by the Charterers “within the

grave limits of obviously grave danger.” 113 There were explicit instructions from the

Respondents to the Master asking him to continue liaise with the STS coordinator. The

Master, accordingly, directed the Vessel to the location given by ASA2, the STS

coordinator.114 Any deviation and any corresponding loss of time, was undeniably a result of

acting as per the instructions of the Respondents.

52. The Respondents cannot take advantage of their own fault to invoke the off-hire clause. It is

thus submitted that, the Vessel was not off-hire.

109 Deutsche Ost- Afrika- Linie v Legent Maritime (The Marie H) [1998] 2 Lloyd’s Rep 71. 110 Berge Sund, The—Sig Bergesen D.Y. A/S v Mobil Shipping and Transportation Co. [1993] 2 Lloyd’s Rep

453 (C.A.). 111 Berge Sund, The—Sig Bergesen D.Y. A/S v Mobil Shipping and Transportation Co. [1993] 2 Lloyd’s Rep

453 (C.A.). 112 Leolga Compania de Navigacion v John Glynn & Sons Ltd. [1953] 2 Lloyd’s Rep 47, Lensen Shipping Ltd. v

Anglo-Soviet Shipping Co. [1935] 52 Ll.L.Rep 141; Rijn, The—Santa Martha Baay Scheepvaart &

Handelsmaatschappij N.V v Scanbulk A/S [1981] 2 Lloyd’s Rep 267 (Q.B.). 113 Portsmouth Steamship v Liverpool & Glasgow Salvage Association (1929) 34 Ll.L.Rep 459, 114 Memorandum for the Claimant, para 25.



C. THE CHARTERPARTY WAS NOT FRUSTRATED DUE TO ANY REASON WHATSOEVER.

53. It submitted on behalf of the Claimants that the Charterparty was not frustrated, and hence

the obligations of both the parties under the Charterparty continued. Frustration of any

contract takes place when there is a supervening event, which occurs without the default of

either parties, and which was not within the contemplation of the parties at the time the

contract was entered into, thereby changing the nature of the contract so significantly that it

would be unjust to hold that the parties are still bound by the terms of the contract.115 The

same principle of frustration has been accepted in maritime law as well. 116 Thus, a

Charterparty is frustrated only when it would indeed be “monstrous” to hold that the parties

are still to continue performing the Charterparty; for instance, where the goods are of a

perishable nature, or when the market value of the goods is entirely destroyed.117 It is not

sufficient that the performance of the Charterparty had merely become onerous, or more

expensive. Frustration time is longer in time charterparties than in voyage charterparties.118

54. In the instant matter, it is submitted that, as already aforementioned 119 , if there was a

deviation it was a valid one for the purpose of bunkering. 120 Further, even if it were to be

held that there has been a delay due to the Respondent’s fault, it is not sufficient to prove that

the delay was of a considerable period; it must also be proved that the delay caused was such

that there was a radical transformation of the contract.121 Since frustration discharges both

parties of all their obligations under the Charterparty, it is not a concept which can be

invoked lightly.122 Furthermore, the event of a delay being caused due to frustration, being

one which was within the contemplation of the parties, could not have frustrated the

115 National Carriers Ltd. v Panalpina (Northern) Ltd. [1981] A.C. 675; Davis Contractors Ltd. v Fareham

U.D.C [1956] 2 All E.R.145 (H.L.). 116 Petroships Pte Ltd of Singapore v Petec Trading & Investment Corp of Vietnam (The Petro Ranger) [2001] 2

Lloyd's Rep 348. 117 Geipel v Smith [1872] L.R. 7 Q.B. p 410. 118 Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa Publishing, 2013) pg 44. 119 Memorandum for the Claimant, para 47. 120 Memorandum for the Claimant, para 47. 121 Bank Line v Arthur Capel, [1919] AC 435. 122 Super Servant Two, The—Lauritzen (J.) A/S v Wijsmuller B.V [1990] 1 Lloyd’s Rep 1 (C.A.).



Charterparty.123 The Charterparty could easily have continued124 despite any possible delays

and there was no “radical transformation of the contract.”

55. Moreover, it is also contended that the incident of the piracy attack could not have frustrated

the contract, as that did not result in any “radical transformation of the Charterparty” either.

When the Vessel was found only ten days after the piracy attack, with substantial discharge

of cargo, there was no frustration of the Charterparty.125 The circumstances in the instant case

are very similar, and the Charterparty provided for piracy at length, implying that the event

was also foreseeable. Moreover, the nature of piracy in West Africa, as opposed to Somalia

where the ships are held for several months, is such that they hold the ship hostage only for a

few days.126 Therefore, there was no reason for the parties to have believed, even when the

event of piracy occurred, that the Charterparty was frustrated.127

V. THE CLAIMANT HAS NOT BREACHED THE CHARTERPARTY AS THEY PROVIDED A

VESSEL THAT WAS FIT FOR SERVICE, AS IS REQUIRED BY THE CHARTERPARTY.

56. The Claimants’ duty to provide a Vessel which is seaworthy is an absolute warranty under

ST4. However, when the claim of unseaworthiness pertains to loss of or damage to cargo,

then the incorporation of the HVR reduces the requirement to the exercise of “due diligence”.

It is submitted that the Claimants exercised due diligence to ensure that the Vessel was fit for

service, and that it was inter alia, manned by a competent crew. It is contended that the

Master was not incompetent as he followed the instructions of the Respondents and their

agents [A] and that the Master did not fail to follow anti-piracy precautions [B].

123 Sea Angel, The—Edwinton Commercial Corp. v Tsavliris Russ (Worldwide Salvage & Towage) Ltd. [2007] 2

Lloyd’s Rep 517 (C.A.). 124 Tamplin Steamship Company v Anglo-Mexican Petroleum Products Compan, [1916] 1 K.B. 485. 125 Petroships Pte Ltd of Singapore v Petec Trading & Investment Corp of Vietnam (The Petro Ranger) [2001] 2

Lloyd's Rep 348 126 Ahmad Taleb, 'Piracy in West Africa Targets the Region’s Oil Industry' (International Policy Digest 2014)

<http://www.internationalpolicydigest.org/2014/12/30/piracy-west-africa-targets-regions-oil-industry/>

accessed April 19, 2015. 127 Petroships Pte Ltd of Singapore v Petec Trading & Investment Corp of Vietnam (The Petro Ranger) [2001] 2

Lloyd's Rep 348



A. THE MASTER WAS NOT INCOMPETENT AS HE FOLLOWED THE INSTRUCTIONS OF THE

RESPONDENTS.

57. The Master directed the Vessel to the alternate discharge location in compliance with the

instructions given by ASA2128, the agents of the Respondents.129 There is a duty on the

Master to follow the instructions of the charterers.130 Sometimes the nature and circumstances

of the order are such that the Master, as a reasonable man, should not instantaneously comply

with them.131 He is instead required to enquire into the legality of the instructions. In the

instant matter, the Master fulfilled this duty. On receiving instructions from the Respondents’

agent that appeared contrary to the instructions given by the Respondents, the Master sent an

e-mail to the Respondents with all the material information. Thereafter, he continued to act in

accordance with the Respondent’s instructions.

58. Moreover, it is submitted that even if it were to be said that the Master acted according to the

instructions given by a third party, the same would amount to negligence and not

incompetence. The difference between the two has often been highlighted.132 Incompetence

of the crew has been defined as a “disabling want of skill” or a “disabling want of

knowledge.”133 The Master is said to be negligent when despite possessing the requisite skill

and knowledge, he is unable to carry out his duty properly.134

59. There is nothing in the facts to support that the Master lacked skill or knowledge required of

a person stationed in his post. He was merely, on an occasion, unable to discharge the

standard of care expected of a reasonable man. Thus, his act of following the instructions of a

128 Factsheet, pg 35 Correspondence on June 28, 2014. 129 Memorandum for the Claimants, para 25. 130 ST4 cl 13; Hill Harmony, The—Whistler International v Kawasaki Kisen Kaisha [2001] 1 Lloyd’s Rep 147. 131 Kuwait Petroleum Corporation v I & D Oil Carriers Ltd.—The Houda [1994] 2 Lloyd’s Rep 541 (C.A.). 132 Simon Baughen, Shipping Law (6th, Routledge, London 2015) 85. 133 Standard Oil Co. of New York v Clan Line Steamers Ltd. [1924] AC 100. 134 Blyth v Birmingham Waterworks [1856] 11 Ex R 781.



third party, would amount to negligence. Negligence in itself will not result in breach of the

warranty of seaworthiness.135

B. The Master did not fail to follow anti-piracy precautions as required by the

Charterparty and/or industry practice relating to West Africa.

60. While there have been increasing instances of piracy in West Africa, the region, that the

Vessel was in, is not a high risk area for piracy. There has only been one sole incidence of

piracy in the Angola region. 136 Therefore, directing the Vessel, through the alternate

discharge location, did not impose any special obligation on the Master to ensure the safety

of the Vessel, the crew, and the cargo.

61. Furthermore, the facts clearly show that despite not operating in an area that is internationally

recognized as a high piracy risk area, the Master was trying his best to take all precautions

under BMP4.137 One of the best ways to combat a piracy attack is to increase the speed of the

Vessel, as that makes it difficult for the pirates to get onboard the Vessel.138 However, in the

instant case, the Master did not have that option because he was forced to reduce the speed of

the Vessel because of the Respondents’ failure to supply sufficient bunkers. 139 BMP4

mandates that the Master should be vigilant, and must keep watch through radars.140 It is

evident that the Master at all times was keeping a close eye on the radar, and was watchful of

any suspicious movements.141 In light of the fact that not all measures given under BMP4 are

135 Steel v Slate Line Steamship Co. [1877] 3 App Cas 72 HL, International Packers London Ltd. V Ocean

Steam Ship Co. Ltd. [1955] 2 Lloyd’s Rep 719, QB. 136 ICC International Maritime Bureau, ‘Piracy and Armed Robbery against Ships – Report for the period of 1

January – 30 June 2014’ <http://www.allaboutshipping.co.uk/wp-content/uploads/2014/07/2014-Q2-IMB-

Piracy-Report-ABRIDGED.pdf> accessed on 20 April 2015. 137 Factsheet, pg 36: Correspondence on June 29, 2014. 138 IMO, Best Management Practices for Protection Against Somali Based Piracy, Version 4, August 2011, pg 7

(hereinafter ‘BMP 4’). 139 Factsheet, pg 32: Correspondence on June 25, 2014: Correspondence on July 17, 2014. 140 BMP4, pg 23. 141 Factsheet, pg 40: Correspondence on July 4, 2014.



applicable to all types of vessels 142 , the Master cannot be held incompetent for non-

compliance with one particular measure given under BMP4.

62. Therefore, the Claimants exercised due diligence to ensure that the Vessel was fit for service.

VI. THE CLAIMANTS HAVE NOT BREACHED THEIR DUTY AS A BAILOR.

The Claimants submit that the Claimants can exercise the force majeure defence [A] and

piracy is an exception under the Hague-Visby Rules [B].

A. PIRACY IS A FORCE MAJEURE EVENT

63. Events out of the control of the bailee are a universally accepted common law defence.143

Similarly, it is also an accepted principle that piracy is a force majeure event, out of the

control of either of the parties.144 The cause of the damage to the cargo, in this case, was the

hijacking of the vessel by pirates. Since the event causing damage is out of the control of the

Claimants, they cannot be held liable for the same.

64. Additionally, under common law, piracy is an absolute defence. Therefore, when a Ship-

owner can prove the loss to cargo is caused by pirates, he is absolved from the burden of

arguing his negligence.145 The loss to cargo is clearly a direct result of the piracy attack on the

ship, as is reported by the master146.

B. IN ANY CASE, PIRACY IS EXCEPTED UNDER THE HVR

65. Under English Law, where the bill of lading is signed by the master, the presumption is that it

takes effect as a contract with the employer of the master.147 Moreover, even when the bill of

lading is signed by the time charterer or his agent for and on behalf of the master, the carrier

142 BMP4 pg 1. 143 Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19 144 'Principle No. VI.3 - Force majeure' (Trans-Lex.org ) <http://www.trans-lex.org/944000> accessed April 19,

2015 145 Czech v General Steam Co. [1867] L. R. 3 C. P. 14. 146 Factsheet, pg 42: Correspondence on July 17, 2014. 147 Turner v Haji Goolam [1904] A.C. 826; Wehner v Dene [1905] 2 K.B 92; Limerick v Coker [1916] 33 T.L.R

103; Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H. Belknap, Jr. and Julian Kenny, Time

Charters (7th, Informa law, New York 2014) 333.



may still be the ship-owner because the time charterer generally has an authority to sign the

bill of lading so as to bind the ship-owner.148

1. Piracy was the result of an act, neglect, or default of the master, mariner, pilot, or the

servants of the carrier in the navigation or management of the ship

66. HVR provides that actions that are solely the fault of the master or any other servant of the

owners cannot be held to be the fault of the owner. 149 ‘Actions’ of the master include

navigation150, and other duties. It is submitted that the hijacking of the vessel by pirates was

solely the fault of the Master and the owners played no part in it and thus, cannot be held

liable.

67. The theory of this exception is that in olden times, it was very tough for the Owners to keep

in touch with and track of the master or the vessel.151 The Owners were kept similarly in the

dark about the proceedings off the coast of Luanda because even they weren’t aware of

whom the Master was contacting with. Further, they had no details about what decisions the

master was taking and shouldn’t be held liable for any loss arising from them.

2. The act of piracy was without any fault of the carriers

68. HVR provides the carrier with the exception to liability in cases where the cause of

the damage was without any fault of the carriers.152 The only burden on the carrier is to prove

that the event was not caused by any act of negligence of them, their agents or their servants.

148 Tillmans v Knutsford [1908] A.C 406; Terence Coghlin, John D. Kimball, Andrew W. Baker, Thomas H.

Belknap, Jr. and Julian Kenny, Time Charters (7th, Informa law, New York 2014) 149 Protocols to the International Convention for the Unification of Certain Rules of Law relating to Bills of

Lading (Brussels, 25 August 1924), Art IV 2(a) 150 Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash and The Oceanic Amity)

[1984] 1 Lloyd's Rep 588 151 Son & Co (Dublin) Ltd v Owners of the Motor Vessel Freshfield (The Lady Gwendolen) [1965] 3 W.L.R. 91 152 HVR, Art IV, Rule 2(q)



69. It is submitted and has been dealt with in prior submissions that the vessel was

employing ‘anti-piracy’ measures. The Claimants therefore submit that the cause of the loss

to cargo was removed from any attributable negligence of the Claimants.

PRAYER

For the reasons set out above, the Claimants request this Tribunal to: DECLARE that this

Tribunal has jurisdiction to hear the present matter; and ADJUDGE that the Respondents are

liable for the payment of hire, breach of Charterparty and for fraudulent representations; and

AWARD damages suffered by following these fraudulent representations.