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TWENTIETH ANNUAL
INTERNATIONAL MARITIME LAW ARBITRATION MOOT
2019
UNIVERSITAS DIPONEGORO
TEAM 18
MEMORANDUM FOR CLAIMANT’S
IN THE MATTER OF THE ARBITRATION HELD IN ROTTERDAM
ON BEHALF OF AGAINST
PHANTER SHIPPING INC OMEGA CHARTERING LTD
CLAIMANT / OWNERS RESPONDENT / CHARTERERS
COUNSEL
NATANAEL DAUD VENDRA WAHID RAKA PERMANA
RESTY SUTRAINY RUTH ARTHASYA DANIEL KANDOU
Team 18 Memorandum For Claimant
ii
TABLE OF CONTENTS
LIST OF ABBREVIATION ..................................................................................................... iv
STATEMENT OF FACTS ........................................................................................................ 1
TIMELINE OF KEY EVENTS ................................................................................................. 4
SUBMISSIONS ON THE TRIBUNAL’S JURISDICTION ..................................................... 4
I. THE CHARTERPARTY ............................................................................................. 4
A. The Fixture Recap Dated 18 March 2016 And The Rider Clause Are
Charterparty ..................................................................................................................... 4
B. NYPE 2015 Standard Form complemented The Charterparty ............................ 5
II. THE TRIBUNAL HAS JURISDICTION TO DETERMINE THE CLAIM OF
DAMAGES ........................................................................................................................... 5
A. The Tribunal has power to rule on its own jurisdiction ........................................ 5
B. The Small Claim Procedure Does Not apply in the Present Dispute ................... 6
SUBMISSIONS ON HULL CLEANING AND EXPENSES ............................................... 7
I. THE FINAL HIRE SETTLEMENT PRESENTED BY OWNER WAS FINAL
AND FULL SETTLEMENT ............................................................................................... 7
II. CHARTERER SHALL PAY OWNER FOR THE COSTS AND EXPENSES IN
CONNECTION WITH HULL CLEANING, INCLUDING THE VOYAGE. ............... 8
SUBMISSIONS ON LATE REDELIVERY .......................................................................... 9
Team 18 Memorandum For Claimant
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I. CHARTERER SHALL INDEMNIFY OWNER LOSS FROM THE NEXT
FIXTURE ............................................................................................................................ 10
II. THE RESPONDENT SHALL INDEMNIFY THE CLAIMANT DAMAGES
FOR THE LOSS OF POSSIBLE FIXTURE ................................................................... 12
ARGUMENTS ON THE MERITS OF THE COUNTER CLAIM ......................................... 14
SUBMISSION ON THE OVERPAID HIRE .......................................................................... 14
I. The Vessel was not off-hire from period of 07.05.2016 until 26.06.2016 ............... 15
II. The Vessel Is Not Off Hire From The Prevention Of Full Working Of The
Vessel Causes Under Clause 17 of the Charterparty ...................................................... 15
SUBMISSIONS ON CARGO CLAIM ................................................................................... 17
I. The Respondent failed to give proper details of the written notification of the
Cargo Claim to the Claimant required by clause 6 of the ICA...................................... 18
II. Cargo Claim shall not fall to be apportioned under clause 8(a) of the ICA. ..... 20
PRAYER FOR RELIEF .......................................................................................................... 22
Team 18 Memorandum For Claimant
iv
LIST OF ABBREVIATION
Abbreviation Term
Charterparty The Time Charterparty
Claimant / Owners Panther Shipping Inc.
ICA Inter-Club Agreement
NYPE New York Produce Exhange Form 2015
Respondent / Charterers Omega Chartering Limited
Vessel M/V “THANOS QUEST”
Wahanda The port of Wahanda
South Island The port of South Island
North Titan The port of North Titan
Receivers Hawkeye Import & Export Pty
LMAA London Maritime Arbitrators Association
Procedural Order No. 2
IMLAM 2019 Clarification for Procedural
Order No. 2
UKHL United Kingdom House of Lords
P. Page
Arbitration Act United Kingdom Arbitration Act 1996 c 23
Cargo 8,600 mt of loose leaf English Breakfast Tea
KB Law Reports King’s Bench
Lloyd’s Rep Lloyd’s Law Reports
REDEL Re-delivery
CHOPT Charterers Option
YR Years
Team 18 Memorandum For Claimant
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Master Captain Rogers of M/V “THANOS QUEST”
Champion Champion Chartering Corp
Next Fixture The first two years of Champion Fixture
Possible Fixture
Additional two years extension of Champion
Fixture in Champion option
i.e. Namely
EWCA Civ
Court of Appeal of England and Wales
Decisions (Civil Division)
para. Paragraph
Laycan Lay days/cancelling
FHS Final Hire Settlement
LIST OF AUTHORITIES
ARTICLES / BOOKS
Clare Amberose et al, London Maritime Arbitration (Informa Law, 4th ed, 2017)
Dicey, Morris and Collins on The Conflict of Laws (15th ed., 2012)
Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009)
Rhidian Thomas, Legal Issues Relating to Time Charterparties (Informa Law, 1st ed, 2008)
Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014)
CASES
Actis Co. Ltd. v. The Sanko Steamship Co. Ltd. (The "Aquacharm") [1980] 2 Lloyd's Rep.
237
Team 18 Memorandum For Claimant
vi
Andre & Cie S.A. v. Orient Shipping (Rotterdam) B.V. (The “Laconian Confidence”) [1997]
1 Lloyd's Rep. 139
Bernuth Lines Limited v. High Seas Shipping Limited, [2005] EWHC 3020 (Comm) Case No:
2005 FOLIO 684
C Czarnikow Ltd v Koufos (The Heron II) [1967] UKHL 4 (17 October 1967)
Ca Venezolana De Navegacion v. Bank Line (The "Roachbank") [1987] 2 Lloyd's Rep 498,
United Kingdom: High Court (England and Wales), 27 July 1987
F.C. Bradley & Sons v. Federal Steam Navigation (1926) 24 Ll.L.Rep. 446
Golden Ocean v. Salgaocar Mining [2012] 1 Lloyd’s Rep. (C.A.) 542
Hadley & Anor v Baxendale & Ors [1854] EWHC Exch J70 (23 February 1854)
H Parsons (Livestock) Ltd v Uttley Ingham & Company Ltd [1977] EWCA Civ 13 (18 May
1977)
IPSOS SA v Dentsu Aegis Network Ltd [2015] EWHC 1171 (Comm) (29 April 2015)
Jackson & Anor v. Royal Bank of Scotland [2005] UKHL 3 (27 January 2005)
John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37 (05 February 2013)
Laminates Acquisitions v. BTR Australia Limited [2004] 1 All ER (Comm) 737
Monarch Steamship v Karlshamns Oljefabricker [1948] UKHL 1 (09 December 1948)
M. (L.) v. Devally [1997] IEHC 50; [1997] 2 ILRM 369 (13th March, 1997)
Papera Traders Co. Ltd. & Ors v Hyundai Merchant Marine Co. Ltd. [2002] EWHC
118 (Commercial) (7th February, 2002)
Rok plc v S Harrison Group Ltd [2011] EWHC 270 (Comm)
RWE Nukem Ltd v AEA Technology Plc [2005] EWHC 78 (Comm) (28 January 2005)
Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] Lloyd's
Rep 175, 183
Team 18 Memorandum For Claimant
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Senate Electrical Wholesalers Ltd. v Alcatel Submarine Networks Ltd [1998] EWCA Civ
3534 (22 June 1998)
Shagang South -Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics [2015] EWHC 194
(Comm)
The Star Sea [1997] 1 Lloyd’s Rep. 360 P. 373-374 (per Leggatt LJ)
Torvald Klaveness A/S v. Arni Maritime Corporation (The “Gregos”) [1993]
Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48 (9 July 2008)
Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia [2006] EWHC
3030 (Comm) (01 December 2006)
Triad Shipping Co v Stellar Chartering and Brokerage Inc (The “Island Archon”) [1994] 2
Lloyd’s Rep 227
TTMI Sarl v. Statoil ASA, Queen’s Bench Division (Commercial Court): Beatson J: [2011]
EWHC 1150 (Comm): 9 May 2011
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528
Welex A.G. v. Rosa Maritime [2002] 2 Lloyd’s Rep. 81, [2003] 2 Lloyd’s Rep. 509 (C.A.)
LEGISLATIONS
Arbitration Act 1996 (UK)
Inter-Club New York Produce Exchange Agreement 1996 (As Amended September 2011)
Team 18 Memorandum For Claimant
1
STATEMENT OF FACTS
1. On 18 March 2016, Panther Shipping Inc (Claimant) chartered the M/V “THANOS
QUEST” (Vessel) to Omega Chartering Limited (Respondent) by a time charterparty
(Charterparty) for a trip of about 50-55 days from West Coast to Wahanda carrying a
cargo of harmless bulk products. On 29 March 2016, the Vessel was delivered into the
Charterparty. Loading of the cargo was completed and the vessel sailed for Wahanda on
20 April.
2. On 7 May, the Vessel arrived at the discharge port of Wahanda. The Vessel was unable
to proceed to berth and instead waited at the anchorage.1
3. On 8 June, the Claimant sent an e-mail to Respondent (via the Vessel’s managers and
brokers, respectively Hulk Hulls (Managers) and Clark Kent & Sons (Brokers)) noting
that the Vessel was expected to spend more than thirty days at the port of Wahanda.
Claimant requested that Respondent confirm arrangements for hull cleaning of the
Vessel in accordance with clause 83 of the Charterparty.2 Respondent replied stating that
hull cleaning could not be performed at Wahanda, and offered to pay Claimant USD
15,000 in lieu of cleaning.3
4. The Claimant could not agree a lump sum for cleaning since there had been no
inspection and it was not possible to know the extent of fouling. The Claimant stated
they would arrange an inspection and cleaning at the next convenient port.4 The
Respondent responded that they would pay the cost of underwater cleaning against an
original invoice.5
1 Moot Scenario, Email date 7 May 2016, P.25 2 Moot Scenario, First Email of 8 June 2016, P.29 3 Moot Scenario, Second Email of 8 June 2016, P.29 4 Moot Scenario, First Email of 9 June 2016, P.29 5 Moot Scenario, Second Email of 9 June 2016, P.28
Team 18 Memorandum For Claimant
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5. On 15 June, the Claimant chartered the Vessel to Champion Chartering Corp
(Champion) for a period of two years, plus a further two years in charterers’ option
(Next Fixture).6
6. On 18 June, the Claimant sent an email reserving their right to claim against Respondent
for the losses incurred resulting from the Vessel being delivered without hull cleaning
having been performed.7
7. The Claimant further stated that the Vessel had been fouled during the extended stay in
Wahanda and that cleaning could not take place in East Coast ports, questioning
Respondent’s intention regarding hull cleaning in accordance with clause 83 of the
Charterparty.8
8. On 27 June, the Respondent replied stating that they could arrange cleaning at North
Titan port if Owners were sailing north. Alternatively, a lump sum payment of USD
20,000 was offered in lieu of cleaning.9
9. On 28 June, Champion cancelled the Next Fixture, since the Vessel had missed the
laycan.10
10. On 29 June, The Claimant called the Respondent to arrange for the Vessel’s hull
cleaning at South Island following the discharge at Wahanda.11 The Respondent stated
that voyage to South Island would be non-contractual and cleaning could not be
performed at Wahanda, offering USD 30,000 in lieu of cleaning.12
11. The Claimant gave Respondent a final opportunity to comply with their contractual
obligations under clause 83 of the charterparty by arranging for underwater cleaning
prior to re-delivery.
6 Moot Scenario, Email date 15 June 2016, P.30 7 Moot Scenario, Email date 18 June 2016. P.34 8 Moot Scenario, Email date 25 June 2016, P.34 9 Moot Scenario, Email date 27 June 2016. P.38 10 Moot Scenario, Email date 28 June 2016, P.40 11 Moot Scenario, Email date 29 June 2016, P.43 12 Moot Scenario, Email date 30 June 2016, P.42
Team 18 Memorandum For Claimant
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12. In completion of discharge of the cargo, the Vessel was re-delivered on 30 June.13 Hull
cleaning was performed at South Island between 1 July and 3 July at a total cost of USD
41,000.
13. On 4 July, Claimant chartered the Vessel to Fairwind International for a time charter trip
of about 50-55 days (Replacement Fixture).14
14. On 1 August, the Claimant presented the Final Hire Statement (FHS) to the
Respondent.15 It includes costs of USD 97,766.64 in relation to the Vessel’s hull cleaning
at South Island after re-delivery of the Vessel.
15. The Respondent have paid sums under the FHS, but have failed to pay the amount of
USD 96,567.42 for hull cleaning and voyage in South Island.
16. The Claimant seeks to recover loss and damage:
1) USD 41,000.00 for hull cleaning costs
2) USD 55,567.42 for voyage to South Island to perform hull cleaning
3) USD 15,330,000.00 for late re-delivery (loss of hire under the Net Fixture,
calculated as 4 years at USD 10,500 per day).
On 16 October 2018, the Claimant referred the dispute to arbitration.16
13 Moot Scenario, Email date 29 June 2016, P.44. 14 Moot Scenario, Email date 4 July 2016, P.53. 15 Moot Scenario, Final Hire Statement dated 1 August 2016, P.52. 16 Moot Scenario, Notice of Arbitration dated 16 October 2018, P.61.
Team 18 Memorandum For Claimant
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TIMELINE OF KEY EVENTS
17. The following diagram depicts the key events for the purposes of the following
submissions.
SUBMISSIONS ON THE TRIBUNAL’S JURISDICTION
I. THE CHARTERPARTY
A. The Fixture Recap Dated 18 March 2016 And The Rider Clause Are Charterparty
18. The Charterparty for the Vessel referred to in the Fixture Recap dated 18 March 2016,
along with the Rider Clause. A charterparty is a written charter agreement which
includes any means by which an agreement may be recorded.17 Such a wide definition
would seem to include all forms of electronic transmission and communication18 with the
17 TTMI Sarl v. Statoil ASA, Queen’s Bench Division (Commercial Court): Beatson J: [2011] EWHC 1150
(Comm): 9 May 2011 18 Golden Ocean v. Salgaocar Mining [2012] 1 Lloyd’s Rep. (C.A.) 542 at [22]
Team 18 Memorandum For Claimant
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terms being recapitulated in a fixture recap.19 In the present case, parties have agreed the
Fixture Recap and the Rider Clause assimilate as the Charterparty.
B. NYPE 2015 Standard Form complemented The Charterparty
19. NYPE Form 2015 remains the most important standard form for dry cargo charters.20 In
common, the standard form wording is often supplemented and it may be specially
provided.21 Rather than ignoring the Charterparty, The Tribunal should interpret the
standard form as complementing the lack of the Charterparty.
II. THE TRIBUNAL HAS JURISDICTION TO DETERMINE THE CLAIM OF
DAMAGES
A. The Tribunal has power to rule on its own jurisdiction
20. Under clause 80 of the Charterparty, any dispute that arises shall be construed in
accordance with the English law and the seat of Arbitration chosen in London.22 English
law recognize the Lex Arbitri in establishing of tribunal substantive jurisdiction. As there
is no “agreement to the contrary”, appoint to rule 6 of the LMAA terms, the rule applied
to determine the power of tribunal to rule on its own jurisdiction.
21. Lex Arbitri is expressed in the choice of a seat for arbitration. This "seat" is in most cases
sufficiently indicated by the country chosen as the place of the arbitration23 and the law
governing the contact.24 The lex arbitri governs the procedure of an arbitration and
amongst other things, sets out the parties’ rights with respect to setting aside an arbitral
award.25 In this case, the Lex Arbitri is English Law.
19 Welex A.G. v. Rosa Maritime [2002] 2 Lloyd’s Rep. 81, [2003] 2 Lloyd’s Rep. 509 (C.A.). 20 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014), P.1 21 Ibid, P.11 22 Moot Scenario, Rider Clause, Clause 80 23 Shagang South -Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics [2015] EWHC 194 (Comm) cl. 30 24 Lord Collins of Mapesbury, Adrian Briggs, Andrew Dickson, Jonathan Harris, et al, Dicey, Morris and
Collins on The Conflict of Laws (Sweet & Maxwell Ltd, 15th ed. 2015) para. 16 25 Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol 1, P. 1004
Team 18 Memorandum For Claimant
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22. Dispute arising in the matter of a time charter under this form is in accordance with
clause 54 of NYPE Form 2015. The LMAA Tribunal should be chosen as the forum of
dispute settlement. Furthermore, The Tribunal may rule on its own substantive
jurisdiction on the principle of ”Competence - Competence” as to the matter that has
been submitted to arbitration. In the present case, both parties refer to Charterparty
arbitration clause supplemented with NYPE form 2015, this tribunal prima facie fit and
have jurisdiction to this case.
B. The Small Claim Procedure does Not apply in the present dispute
23. Under clause 102 of the Charterparty, if claims or counterclaims of the dispute does not
exceed the sum of USD 100,000, the dispute shall be resolved in accordance with The
Small Claim Procedure of the LMAA.26 The Small Claim Procedure was intended as an
expeditious, low cost, usually documentary procedure, with a single arbitrator, no
discovery and reduced formality.27 This procedure would not fit with the claim and
interest in this proceeding.
24. A properly constituted tribunal was the heart on arbitration proceeding. Under small
claim procedure, parties shall appoint the sole arbitrator for the proceeding. On rule 2(b)
LMAA SCP, if the parties do not appoint a sole arbitrator in 14 days, either party may
apply in writing to the Honorary Secretary LMAA for the appointment of a sole
arbitrator by the President. In the present case, both parties have not appointed the sole
arbitrator.
26 Clare Ambrose, Karen Maxwell, Michael Collett, London Maritime Arbitration, (Informa Law, 4th ed, 2017)
para. 1.25 27 Bernuth Lines Limited v. High Seas Shipping Limited, [2005] EWHC 3020 (Comm) Case No: 2005 FOLIO
684, para. 46
Team 18 Memorandum For Claimant
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ARGUMENTS ON THE MERITS OF THE CLAIM
SUBMISSIONS ON HULL CLEANING AND EXPENSES
25. The Respondent is liable to pay Claimant the amount of USD95,567.42 in damages for
the loss caused by Respondent’s failure to perform hull cleaning prior re-delivery.
Pursuant to the clause 83 of Charterparty, Respondent has obligation to “clean any of
vessel underwater parts, including but not limited to, the hull, sea chests, rudder and
propeller” prior redelivery.
26. The Respondent redelivered the vessel without conduct inspection or cleaning the vessel.
Otherwise, the charterer offer to pay sum to suite their convenience. Due to the
Respondent failed to perform hull cleaning before re-delivery. The Claimant was loss
and beared the costs of the voyage to South Island (USD55,567.42) in order to perform
hull cleaning (USD41,000.00).28
27. Charterer is liable for Owner loss and damages cause by: (I) The Final Hire Statement
Presented by Owner was Final and Full Settlement (II) Charterer shall pay Owner for the
cost and expenses in connection with Hull Cleaning.
I. THE FINAL HIRE SETTLEMENT PRESENTED BY OWNER WAS FINAL AND
FULL SETTLEMENT
28. Under clause 83 (d) Charterparty, if Charterer failed perform cleaning prior redelivery,
parties shall agree a lump sum payment in full and final settlement of Owner cost and
expenses arising as a result of or in connection with the need for cleaning.29 The full and
final settlement arose as a result of the performance of the cleaning undertaken by the
Owner's account.
28 Moot Scenario, Claimant Claim Submissions, P.69 29 Moot Scenario, Rider Clause, Clause 83, P.16
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29. Owner consider the risk of the vessel suffering hull fouling by being inactive at a muddy
water for more than 30 days as a result of detention by port authority. The risk that the
vessel's performance would suffer as a result of hull fouling means that the Owners
would have to clean her hull as soon as they could.30 This type of risk was one that was
foreseeable and foreseen by both parties.31 When the charterparty concluded, this risk
flowing to the Owner from the order as to the employment of the vessel was
unforeseen.32 Then that will be a potent factor in deciding that the loss or expense will
fall within the scope of the implied indemnity.
30. The lump sum payment is a factor to be taken into account when the Tribunal considers
the merits.33 The Tribunal must consider that the Charterer had breached their contractual
obligation to perform inspection and hull cleaning before vessel redelivery, which
resulted in the cleaning of the vessel undertaken by Owner’s account.
31. The full and final settlement shall express the Owner's full satisfaction for loss and
damages. In the present case, the Final Hire Statement were the result of Owner's
performance in hull cleaning, including all the expenses in connection with hull cleaning.
Rather than a sum presented by Charterers, the sum cannot fulfil the Owner's
satisfaction. Therefore, in vein with clause 83 (d), the Final Hire Statement was the lump
sum that should be agreed to by both parties.
II. CHARTERER SHALL PAY OWNER FOR THE COSTS AND EXPENSES IN
CONNECTION WITH HULL CLEANING, INCLUDING THE VOYAGE.
32. Under Clause 83 (d), Charterer must consider Owner cost and expenses “in connection
with the need for cleaning” if Charterer fails to perform cleaning before redelivery. In the
30 Triad Shipping Co v Stellar Chartering and Brokerage Inc (The “Island Archon”) [1994] 2 Lloyd’s Rep 227 31 Moot Scenario, Rider Clause, Clause 83, P.16. 32 Triad Shipping Co v Stellar Chartering and Brokerage Inc (The “Island Archon”) [1994] 2 Lloyd’s Rep 227 33 M. (L.) v. Devally [1997] IEHC 50; [1997] 2 ILRM 369 (13th March, 1997), para 27
Team 18 Memorandum For Claimant
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present case, the cost of the voyage to cleaning port in South Island must be considered.
Charterer had known this type of risk when Wahanda Port Services notified the parties
that the port condition is not suitable for hull cleaning.
33. Charterer intended to redeliver the vessel prematurely to avoid the operation cost and
expenses for cleaning in South Island Port. The operation cost comprises of the bunker,
hire, and other expenses related to the daily operation of the vessel. A vessel needs a
master, officer and crew to be operated. For the purpose of cleaning, Owner suffered a
loss by reason of premature redelivery for the cost of hire and bunker.
34. Charterers denied liability for any costs other than the lump sum they offered.34 A lump
sum offered by Charterer does not include the bunker and the operational cost. It is not
generous, while the owner suffers from hull fouling due to charterer’s fault. Under clause
83 (d), “in connection” shall be interpreted not limited to hull cleaning process, but
includes bunker, hire and operational cost suffered by Owner.
35. The Tribunal must consider the voyage cost to South Island as Charterer’s liability.
Under FHS, Charterer liable to indemnify the Owner in full and final. Owner has the
right to enjoy full satisfaction for its loss and damages.
SUBMISSIONS ON LATE REDELIVERY
36. Charterer is liable to pay USD15,330,000.00 in damages arising from the late redelivery.
Charterer are under a duty to redeliver the ship at the end of the charter period, where
that obligation has as its corollary that the Charterer must not redeliver the ship any
earlier than the end of the charter period, nor any later.35
34 Moot Scenario, Email date 30 June 2016, P.43. 35 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014) P.91
Team 18 Memorandum For Claimant
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37. The vessel was chartered to the Charterers in 29.03.2016, for a period provided in the
fixture recap for about 50 – 55 days.36 This has the effect that the period stated is to be
construed as an approximate period only, as the word “about” imports a reasonable
margin either side of the agreed period.37 The vessel is redelivered at 30.06.2016, far
beyond the expire date of supposed redelivery date based on the charterparty.38 Charterer
breaches of the charterparty by failure to redeliver the Vessel prior to the expiry of the
maximum period of the Charterparty which is already admitted by the Charterer.39
38. Due to this late redelivery, the Next Fixture are cancelled since the Vessel had missed the
laycan where the Vessel at the time still in the Charterer hand,40 and thereby unable to
gain the hire from the Next Fixture and the Possible Fixture calculated as 4 years at
USD10,500 per day for a total of USD15,330,000.00.41
39. Charterer are liable for damages by such late redelivery, as such the Charterer shall : (I)
Indemnify the Claimant damages from the loss of the next fixture, and (II) Indemnify the
Owner’s the damages from the loss of possible fixture.
I. CHARTERER SHALL INDEMNIFY OWNER LOSS FROM THE NEXT
FIXTURE
40. The Charterer argued the Owners would only be entitled to damages calculated as the
difference between the Charterparty rate of hire and the market rate of hire for the period
of overrun.42 The normal measure for the damages of late redelivery is the difference
between what the Owners earned in hire under the charter during the period of the
overrun and what the market would have paid for the use of the ship during the same
36 Moot Scenario, Fixture Recap, P.4 37Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014) P.94 38 Moot Scenario, Claimant Claim’s Submission, para 17, P.68 39 Moot Scenario, Respondent Defence and Counter Claim Submission, para. 10, P.72 40 Moot Scenario, Email date 28.06.2016, P.40 41 Moot Scenario, Claimant Claim’s Submission , para. 22, P.69 42 Moot Scenario, Respondent Defence and Counter Claim Submission, para. 11, P.73
Team 18 Memorandum For Claimant
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period.43 Normal measure does not apply in this case of losses arising from cancellation
of Next Fixture, as the Owners has Next Fixture terminated because of late re-delivery.44
In certain circumstances, the Owners may also be entitled to recover in respect of
additional losses.
41. In addition to losing the opportunity to take advantage of an increased rate of hire, the
Owners is suffering other losses from the result of late redelivery. Such losses may arise
either during the period of the overrun or after it. One additional loss that the Owners
may suffer is the loss of the next charter which the ship was due to perform.45
42. Where two parties have made a contract which one of them has broken, the damages
which the other party ought to receive in respect of such breach of contract should be
such as may fairly and reasonably be considered either arising naturally, i.e., from such
breach of contract itself.46 The damages recoverable for breach of contract are such as
flow naturally in most cases from the breach, whether under ordinary circumstances or
from special circumstances due to the knowledge either in the possession of or
communicated to the Charterer.47
43. English law distinct the types of damages between general and special damages; the
latter are such that, if they are not communicated, it would not be fair or reasonable to
hold the Charterer responsible for losses which he could not be taken to contemplate as
likely to result from his breach of Charterparty.48 If it is already communicated, then the
Charterer can be responsible for any losses arising from the breach of Charterparty.
43 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014) P.102 44 Moot Scenario, Email date 28.06.2016, P.40 45 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014) , P.103 46 Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48 (9 July 2008) 47 C Czarnikow Ltd v Koufos (The Heron II) [1967] UKHL 4 (17 October 1967), para 18 48 Monarch Steamship v Karlshamns Oljefabricker [1948] UKHL 1 (09 December 1948)
Team 18 Memorandum For Claimant
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44. In this case, the Owners already communicate and informed the Charterer about the
existence of the next fixture,49 which makes the Charterer already had knowledge about
such Next Fixture.50 Therefore, the Charterer is liable and shall indemnify the Owners
damages from the loss of next fixture as could reasonably have been foreseen at the time
of the breaching the Charterparty with late redelivery for the cancellation of the Next
Fixture as it’s possible consequences.51
II. THE CHARTERER SHALL INDEMNIFY THE OWNERS’ DAMAGES FOR
THE LOSS OF POSSIBLE FIXTURE
45. Next Fixture charterparty provides “FOR 2 YR CHARTER WITH 2 YR EXTENSION IN
CHOPT”, where there is an extension option for 2 years further (Possible Fixture).52 For
the loss of the possible fixture suffered by the Owners to be indemnified by the the
Charterer, there must be a causal connection between a party’s loss and the breach by the
other party before the tribunal will award damages, and the damage suffered by those
party must not be too “remote” from the breach of contract.
46. Thus, if the type or kind of loss was, at the time of contract, reasonably foreseeable by
the Charterer as a result from his breach (had he contemplated a breach), then such a type
or kind of loss is not too remote, where what was known to the Charterer at the time of
contract will clearly be relevant to what was reasonably foreseeable.53
47. The facts in question come to the Charterer knowledge in such circumstances that a
reasonable person in the shoes of the Charterer would have contemplated that, in the
49 Moot Scenario, Email date 26.06.2016, P.34 50 Moot Scenario, Claimant Claim’s Submission, para. 6, P.77 51 H Parsons (Livestock) Ltd v Uttley Ingham & Company Ltd [1977] EWCA Civ 13 (18 May 1977) 52 Moot Scenario, Champion Fixture Recap, P.32 53 John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37 (05 February 2013), para. 17
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event of a breach by him, such facts were to be taken into account when considering his
responsibility for losses suffered by the the Owners as a result of such breach.54
48. Furthermore, the damages should be fairly and reasonably be considered arising
naturally, where the damages by a breach is caused from a delay in delivering is seen as
natural consequences.55 When it comes to recoverability of damages, the Owners can
recover such damages if the losses suffered was not too remote, which such loss arose
naturally, and reasonably foreseeable, thus the guilty party will be liable for those
unexpected damages.56
49. Even if the losses suffered do not arise naturally and thus are not reasonably foreseeable
which make it an extraordinary losses, a party will be liable for such extraordinary losses
if it had particular or specific knowledge that such losses are likely to occur in the case of
a breach.57 Thus, such losses are based on the actual knowledge of the party who did the
breach.
50. In this case, there is a causal connection between the possible fixture and next fixture
where the Charterer already have knowledge about the existence of those next fixture.58
The loss from possible fixture is directly connected with the next fixture as it is a natural
consequences from the cancellation of the next fixture caused by breach with late
redelivery by the Charterer. Where these damages suffered are not too remote, further
damages that are suffered can be claimed by the Owners.59
54 Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] Lloyd's Rep 175, 183 55 Jackson & Anor v. Royal Bank of Scotland [2005] UKHL 3 (27 January 2005), para. 46. 56 Hadley & Anor v Baxendale & Ors [1854] EWHC Exch J70 (23 February 1854) 528 57 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 58 Moot Scenatio, Email date 26.06.2016, P.34 59 Torvald Klaveness A/S v. Arni Maritime Corporation (The “Gregos”) [1993] 2 Lloyd's Rep. 335 ; Transfield
Shipping Inc of Panama v Mercator Shipping Inc of Monrovia [2006] EWHC 3030 (Comm) (01 December
2006, para. 36
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51. In other words, there shall be no option for possible fixture to available if the next fixture
itself is not exist in the first place. Therefore, the Charterer shall indemnify the Owners
for damages from the loss of possible fixture.
ARGUMENTS ON THE MERITS OF THE COUNTER CLAIM
SUBMISSION ON THE OVERPAID HIRE
52. The Charterer are not entitled for the restitution or damages from overpaid hire as the
Vessel is not off-hire from 07.05.2016 until 26.06.2016, as this would not amount to an
off-hire event under clause 17 of the NYPE form and hire therefore shall continued to
accrue.60
53. It was the case in The London Explorer [1972] where the The Vessel was chartered on
terms that hire was to continue until the hour of the day of her redelivery.61 The
Charterers’ most basic obligation under a time charter is to make full and punctual
payment of hire. At any time, and for any period between delivery and redelivery, the
ship is ‘on hire’.62 The Charterers remain liable for hire until the ship is redelivered,
even in cases where the ship is redelivered after the end of the agreed charter period, the
Charterers remain liable for hire until redelivery takes place.63
54. The Charterer are not entitled for the restitution for the overpaid hire, because (I) the
Vessel was not off-hire from period of 07.05.2016 until 26.06.2016, and (II) The Vessel
Is Not Prevented From Full Working Pursuant To Clause 17 of the Charterparty.
60 Moot Scenario, Claimant Reply and Defence to Counter Claim Submission, para. 8, P.77 61 Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia [2006] EWHC 3030 (Comm) (01
December 2006), para. 21. 62 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014), P.10 63 Ibid, P.267
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I. THE VESSEL WAS NOT OFF-HIRE FROM PERIOD OF 07.05.2016 UNTIL
26.06.2016
55. The Charterer argued that quarantine in Wahanda would amount the off-hire event under
provision of Clause 17 of the NYPE form. Such quarantine in Wahanda shall not
deducted as off-hire under the provision of Clause 44 of the Charterparty. Clauses 44 of
tlhe Charterparty provides the 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 and Any time lost by such
causes may be deducted as off-hire.64
56. Under this clause, if Charterers or their Agents acknowledge such quarantine from the
Master, Officers, or crew of the Vessel then the quarantine shall not be deducted as off-
hire.
57. In this case, the Master, Officers, or crew are having communication with Wahanda port
with the consent of the Charterer or their Agents, as the Owners are notified by the
Charterer Agent via email about the detainment of the Vessel by Wahanda port
authorities since the Vessel arrival in Wahanda without the objection of such
communication is made without their consent.65 Therefore, The Owners shall not be
liable and any time lost by such causes shall not deducted as off-hire based from
provision of Clauses 44.
II. THE VESSEL IS NOT OFF HIRE FROM THE PREVENTION OF FULL
WORKING OF THE VESSEL CAUSES UNDER CLAUSE 17 OF THE
CHARTERPARTY
64 Moot Scenario, Rider Clauses, Clause 44, P.9 65 Moot Scenario, Email date 07.05.2016, P.25
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58. Clause 17 of the Charterparty, where it is construed from clause 17 of NYPE form,
provides referring in relevant part, “in the event of loss of time from deficiency and/or
default and/or strike of officers or ratings… or detention by Port State control or other
competent authority for Vessel deficiencies… or by any similar cause preventing the full
working of the Vessel, the payment of hire and overtime, if any, shall cease for the time
thereby lost”.66
59. The off- hire clause of the NYPE form makes clear that only ejusdem generis causes are
to be effective, by adding the word “similar” before the word “cause” in the clause.67
Ejusdem generis rule is a rule of construction to the effect that a sweep up provision at
the end of a list must be taken to refer to the same kind of things as those previously
specifically mentioned.68
60. In such case, it is narrowed down from general to specific from the wording of the clause
and the court does not have to construe the clause constrictively.69 Here, the use of the
word, “similar” makes it abundantly clear whatever the “other cause” is, it has to be
similar to the causes specifically listed in the off-hire clause.
61. Where the off-hire clause is unamended and does not contain the word 'whatsoever', then
the ejusdem generis rule shall aplly.70 It is well established that the words ‘any other
cause’, in the absence of ‘whatsoever’, should be construed either ejusdem generis or at
any rate in some limited way reflecting the general context of the charter and clause.71 In
the application of the ejusdem generis rule, identification of the general type of cause of
the named causes is crucial.
66 New York Produce Exchange Form 2015 Clause 17 67 Terence Coghlin et al, Time Charters (Informa Law, 7th ed, 2014), P.451 68 Ibid, P.450 69 Rhidian Thomas, Legal Issues Relating to Time Charterparties (Informa Law, 1st ed, 2008), P.142-143 70 Ca Venezolana De Navegacion v. Bank Line (The "Roachbank") [1987] 2 Lloyd's Rep 498, United Kingdom:
High Court (England and Wales), 27 July 1987 71 Andre & Cie S.A. v. Orient Shipping (Rotterdam) B.V. (The “Laconian Confidence”) [1997] 1 Lloyd's Rep.
139
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62. Therefore, in the terms of the off-hire causes provided in the clauses 17 of the NYPE
form must be limited only within the causes already mentioned in such clauses, namely
detention by port state control or other competent authority for Vessel deficiencies and
not to be construed for every other causes outside what already mentioned in those
clauses that prevented the full working of the Vessel.
63. As the Charterparty already excepted the off-hire causes of detention by port state
control with Clause 44 of the Charterparty regarding quarantine, where in this case such
detention is caused by the quarantine of the Vessel, therefore the Vessel shall not be off-
hire from such causes and the Charterer is not entitled for any restitution or damages
from overpaid hire as the Vessel is at all times in the period of the Charterparty shall
remain on hire.
SUBMISSIONS ON CARGO CLAIM
64. The Owners is not liable for any cargo claim that are claimed by the Charterer from the
Receivers of the damaged cargo pursuant to clause 6 of the Inter-Club Agreement (ICA).
Clause 6 of the ICA provides “recovery under this Agreement by an Owners or
Charterers 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 or the date the cargo should have been delivered ...
such notification shall if possible include details of the contract of carriage, the nature of
the claim and the amount claimed”.72
65. Clause 53 of the Charterparty provides the Owners agree that liability for cargo claims,
as between Owners and Charterers, shall be apportioned as specified by the Inter-Club
72 Inter-Club Agreement Clause 6
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Agreement (ICA).73 Furthermore, clause 2 of the ICA provides the terms of ICA shall
apply notwithstanding anything to the contrary in any other provision of the charterparty;
in particular the provisions of clause (6) (time bar) shall apply notwithstanding any
provision of the charterparty or rule of law to the contrary.74
66. The Charterer argued in their counter claim where the cargo was found to be severely
wet damaged upon discharge of the Cargo at Wahanda caused by the negligence on the
part of the crew, where the crew negligently pumped water into the cargo hold while
ballasting prior to leaving the berth at West Coast.75 Details of the written notification of
those cargo claim provided by the Charterer only include nature of the cargo claim and
the contract of carriage that provided to the Owners, lacking the details of amount
claimed, which already confirmed by the Charterer during the course of this reference.76
67. The Owners is not liable for the cargo claim that are claimed by the Charterer from the
Receivers of the damaged cargo, because: (I) The Charterer failed to give proper details
of the written notification of the Cargo Claim to the Owners required by clause 6 of the
ICA; or alternatively, (II) Cargo Claim would not fall to be apportioned under clause
8(a) of the ICA.
I. THE CHARTERER FAILED TO GIVE PROPER DETAILS OF THE WRITTEN
NOTIFICATION OF THE CARGO CLAIM TO THE CLAIMANT REQUIRED
BY CLAUSE 6 OF THE ICA
68. The commercial purpose of a claims notification clause include ensuring the defendant
knows in sufficiently formal terms that a claim for breach is to be made so that financial
provision can be made for it. Such a purpose is not served if the notice is uninformative
73 Moot Scenario, Rider Clauses, Clause 53, P.10 74 Inter-Club Agreement Clause 2 75 Moot Scenario, Respondent Counter Claim Submission, para. 9, P.72 76 Procedural Order No. 2, para. 15
Team 18 Memorandum For Claimant
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or unclear.77 The clause contemplates that the notice will be couched in terms which are
sufficiently clear and unambiguous as to leave no such doubt and to leave no room for
argument about the particulars of the complaint.78
69. There is a need to specify the matter which gives rise to the claim, the nature of the claim
and the amount claimed.79 The notice must specify the matter which gives rise to the
claim. This must mean the underlying facts, events and circumstances, which constitute
the factual basis on which the claim is posited, where one of things need to be specified
is that the notice must set out the 'amount claimed', specifically requires a calculation on
the part of of the loss which is allegedly suffered.80
70. There is an obligation in the Claim Notice to include a requirement of reasonable detail,
where the meaning is intended to add something to a requirement to specify, such as the
amount claimed, for what constitutes reasonable detail will depend the details to be
provided should be as extensive as those that would be required.81 When it is realistic to
put any monetary quantification on the amount claimed, then it is what has to be included
in the notification in relation to any particular claim.82
71. Clause 6 of the ICA provides that such notification shall if possible include details of the
contract of carriage, the nature of the claim and the amount claimed.83 Every notification
clause turns on its own individual wording, in particular due regard must be had to the
fact that where such notification clauses operate as a condition precedent to liability for
the party bringing a claim to demonstrate that it has complied with the notification
77 IPSOS SA v Dentsu Aegis Network Ltd [2015] EWHC 1171 (Comm) (29 April 2015), para. 19 78 Senate Electrical Wholesalers Ltd. v Alcatel Submarine Networks Ltd [1998] EWCA Civ 3534 (22 June
1998) 79 IPSOS SA v Dentsu Aegis Network Ltd [2015] EWHC 1171 (Comm) (29 April 2015) para. 24 80 Laminates Acquisitions v. BTR Australia Limited [2004] 1 All ER (Comm) 737 ; IPSOS SA v Dentsu Aegis
Network Ltd [2015] EWHC 1171 (Comm) (29 April 2015) 81 Rok plc v S Harrison Group Ltd [2011] EWHC 270 (Comm) 82 RWE Nukem Ltd v AEA Technology Plc [2005] EWHC 78 (Comm) (28 January 2005), para. 11 83 Inter-Club Agreement Clause 6
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requirement where it gave proper particulars of its claims and did give those specific
details as were available to it.84
72. It is established for there is no claim notification in respect of the present claim was
given when there is a lack of details that need to be specified in such notification.85 In
this case, the Charterer only given the details for nature of the claim and contract of
carriage to the Owners without the amount of the claim provided.86 The Charterer have
failed to give the proper written notification of the Cargo Claim required by clause 6 of
the ICA, as the nature and effect of the information given by the Charterer regarding
cargo claim is not sufficient enough for the purposes of those clause, even when it is
applicable in this case to provide such information to the Owners where the amount is
already agreed between Receivers and the Charterer.87 As there is no cargo claim
notification given to the Owners by the Charterer within the time limit provided by
clause 6 of the ICA due to the lack of details, the written notification of the cargo claim
is time-barred under clause 6 of the ICA.
II. CARGO CLAIM SHALL NOT FALL TO BE APPORTIONED UNDER CLAUSE
8(a) OF THE ICA
73. Alternatively, if the tribunal wish to asserts there is a written notification of this cargo
claim, the Owners denied that the Cargo Claim would fall to be apportioned under clause
8(a) of the Inter-Club Agreement (ICA), since the claim was not arising from
unseaworthiness and/or error or fault in the navigation or management of the vessel since
the cargo claim is caused by the negligence of the crew.
84 RWE Nukem Ltd v AEA Technology Plc [2005] EWHC 78 (Comm) (28 January 2005), para. 2 85 IPSOS SA v Dentsu Aegis Network Ltd [2015] EWHC 1171 (Comm) (29 April 2015), para. 11 86 Procedural Order No. 2, para. 15 87 Procedural Order No.2, para. 11
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74. The definition of seaworthiness is that the ship must have that degree of fitness which an
ordinary careful Owners would require his vessel to have at the commencement of her
voyage having regard to all the probable circumstances of it.88 There are two aspects of
seaworthiness, the first requires that the ship, her crew and her equipment shall be in all
respects sound and able to encounter and withstand the ordinary perils of the sea during
the contemplated voyage, and the second requires that the ship shall be suitable to carry
the contract cargo.89 This aspect of the duty relates to the physical condition of the vessel
and its equipment, the competence or efficiency of the Master and crew, and the
adequacy of stores and documentation.90 The Vessel at all times fulfilled the first and
second requirements of seaworthiness.
75. There is a distinction between negligence and incompetence of the crew, where only the
latter shall make the Vessel unseaworthy. Negligence is the omission to do something
which a reasonable man, guided upon those considerations which ordinarily regulate the
conduct of human affairs, would do, or doing something which a prudent and reasonable
man would not do,91 and incompetence may consist of a disabling want of skill or a
disabling want of knowledge.92
76. It is recognized that one mistake or even more than one mistake does not necessarily
render a crew member incompetent, as anyone can make a mistake without the
conclusion being drawn that he has either a disabling want of skill or a disabling lack of
knowledge.93
88 F.C. Bradley & Sons v. Federal Steam Navigation (1926) 24 Ll.L.Rep. 446 89 Actis Co. Ltd. v. The Sanko Steamship Co. Ltd. (The "Aquacharm") [1980] 2 Lloyd's Rep. 237 90 Papera Traders Co. Ltd. & Ors v Hyundai Merchant Marine Co. Ltd. [2002] EWHC 118 (Commercial)
(7th February, 2002) 91 Blyth v Birmingham Waterworks (1856) 11 Ex Ch 781 92 Papera Traders Co. Ltd. Ors v Hyundai Merchant Marine Co. Ltd. [2002] EWHC 118 (Commercial) (7th
February, 2002) 93 The Star Sea [1997] 1 Lloyd’s Rep. 360 P. 373-374 (per Leggatt LJ)
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77. In this case, the Charterer already acknowledge that error in ballasting management is
caused by negligence of the crew.94 The Owners also undertook its own investigations
into the incident and confirm the findings of the Charterer Preliminary Survey Report for
the cause of the damage suffered to the cargo.95 As negligence of the crew is not the
cause for the vessel to be unseaworthy, therefore the Cargo Claim shall not fall to be
apportioned under clause 8(a) of the ICA.
PRAYER FOR RELIEF
For the reasons set out above, the Owners seeks the following orders and declarations:
A. A declaration for this Tribunal has jurisdiction to hear the merits of the Owners’
claims;
B. An order that the Charterer pay the Owners damages in the amount of
USD15,426,567.42, comprising:
i. USD 41,000.00 for hull cleaning costs
ii. USD 55,567.42 for voyage to South Island to perform hull cleaning
iii. USD 15,330,000.00 for late re-delivery (loss of hire under the Net Fixture,
calculated as 4 years at USD 10,500 per day).
C. An award for interest under s 49 of the Arbitration Act 1996 (UK); and
D. An order for costs.
94 Moot Scenario, First Email of 27.06.2016, P.38 95 Procedural Order No. 2, para. 9
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