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18th
INTERNATIONAL MARITIME LAW ARBITRATION MOOT, 2017
IN A MATTER OF ARBITRATION BEFORE THE CENTER FOR ARBITRATION AND
MEDIATION
SEATED AT: SINGAPORE
HIDAYATULLAH NATIONAL LAW UNIVERSITY
MEMORANDUM FOR CLAIMANT
PARTIES TO DISPUTE
Claimant: Respondents:
Furnace Trading Pte. Ltd. Inferno Resources Sdn. Bhd.
And
Idoncare Berjaya Utama Pty. Ltd
COUNSEL ON BEHALF OF CLAIMANT
TEAM 24
I
TABLE OF CONTENTS
LIST OF ABBREVIATIONS ............................................................................................... III
LIST OF AUTHORITIES ...................................................................................................... V
STATEMENT OF FACTS ..................................................................................................... X
ISSUES RAISED .................................................................................................................. XII
I. THE TRIBUNAL HAS DOMINION OVER THE MERITS OF THE DISPUTE .... 1
A. THE CHARTER PARTY GOVERNS THE PRESENT DISPUTE .......................... 1
1. PROVISIONS UNDER THE CHARTER PARTY PROVIDE FOR DISPUTE
RESOLUTION. ................................................................................................................ 2
2. THE TERMS OF THE PRESENT CP CAN BE CONSTRUED ACCORDING
TO BIMCO STANDARD CHARTER PARTY. ........................................................... 3
B. THE PROVISIONS OF THE INTERNATIONAL ARBITRATION ACT, 1974
ARE APPLICABLE TO THE PRESENT DISPUTE. ..................................................... 3
C. AGREEMENT BY PARTIES TO BE GOVERNED BY THE SINGAPORE
CHAMBER OF MARITIME ARBITRATION RULES. ................................................ 5
D. RESPONDENT NO. 2 FALLS WITHIN THE AMBIT OF THE PRESENT
CHARTER PARTY ............................................................................................................. 6
II. THE RESPONDENTS HAVE COMMITTED REPUDIATORY BREACH OF
CHARTER PARTY BY NON-PERFORMANCE OF AGREED TERMS........................ 8
A. THE RESPONDENTS HAVE FAILED TO PERFORM THE OBLIGATIONS
STIPULATED UNDER THE CHARTER PARTY ......................................................... 9
1. THE RESPONSIBILITY OF NOMINATION OF PORT .............................. 10
2. WHEN THE NOMINATION OF THE PORT MUST BE MADE ................ 10
B.THE RESPONDENT’S REQUEST TO INSTRUCT THE VESSEL TO SOUTH
KOREA WAS IMPERMISSIBLE ................................................................................... 11
C. FAILURE ON PART OF RESPONDENTS TO PAY FREIGHT AND SUB-
FREIGHT ........................................................................................................................... 12
II
III. THE CLAIMANT IS ENTITLED TO CLAIM FREIGHT AND SUB-FREIGHT
ALONG WITH ADDITIONAL COSTS ............................................................................. 12
IV. THE CLAIMANT HAS A RIGHT OF LIEN AGAINST THE RESPONDENTS
15
A. NON- PAYMENT OF FREIGHT CREATES A RIGHT OF LIEN ON THE
CARGO ............................................................................................................................... 16
B. THE CLAIMANT CAN ENFORCE RIGHT OF LIEN AGAINST THE SUB-
CHARTERERS .................................................................................................................. 16
V. THE CLAIMANT IS ENTITLED FOR DAMAGES AND INTERIM MEASURES
18
A. The Respondents have failed to perform obligations as stipulated under the
Charter party ..................................................................................................................... 19
B. The Respondents are liable to indemnify the Claimant for damages, costs
andexpenses incurred in exercise of lien and arbitration with justifiable interest ...... 21
C. The Tribunal is empowered to grant interim measures ...................................... 22
PRAYER FOR RELIEF........................................................................................................ 25
III
LIST OF ABBREVIATIONS
& And
§ Section
¶/ Para. Paragraph
AC Appeal Cases
All ER All England Law Reporter
App. Appeal
BIMCO Baltic and International Maritime Council
CA Court of Appeals
Cl. Clause
Claimant Furnace Pte. Ltd.
Corp. Corporation
CP Charterparty
ed. Edition
Etc. Et cetera
EWCA England and Wales Court of Appeal
EWHC High Court of Justice of England and Wales
Id. Id Est.
IAA International Arbitration Act, 1994
I.L.R. International Law Reports
Int‟l International
Inc. Incorporation
J. Justice
KB King‟s Bench
L.M.C.L.Q Lloyd's Maritime and Commercial Law Quarterly
Lloyd‟s Rep. Lloyd‟s List Reports
Ltd. Limited
IV
No. Number
NYPE New York Produce Exchange
p./pp. Page(s)
Pte. Private
Pty. Proprietary
QB Queen‟s Bench
Rev. Review
Respondent No. 1 Inferno Resources
Respondent No.2 Idoncare Pty. Ltd.
Respondents Inferno Resources and Idoncare Pty. Ltd.
RoC Rules of Court
RSC Rules of Supreme Court
S. Section
SCMA Singapore Chamber of Maritime Arbitartion
Time CP Time Charterparty
v. Versus
Vessel M.V Tardy Tessa
vol. Volume
WLR Weekly Law Reports
V
LIST OF AUTHORITIES
CASES AND ARBITRAL AWARDS
AIC Ltd v. Marine Pilot (The Archimidis) [2008] 1 Lloyd’s Rep. 597
Andreas Vergottis v. Robinson, David & Co. Ltd (1928) 31 Ll. L. Rep. 23
AktieselskabetOlivebank v. Danske SvovlsyreFabrik (The Springbank) [1919] 2 K.B. 162.
Alder v. Moore (1961) 2 Q.B 57
Alfred McAlpine v. Panatown[2001] 1 A.C. 518
Beechwood Birmingham v. Hoyer Group UK [2011] Q.B. 357
Britannia Distribution v. Factor Pace [1998] 2 Lloyd’s Rep. 420
British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railways Co.
[1912] A.C. 673
Castleton Commodities Shipping Company Pte Ltd v Silver Rock Investments [2015] EWHC
2584 (Comm) (“Castleton Commodities”)
Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 3555 (“Cetelem”)
CompaniaNaviera General SA v. Kerametal Ltd. (1983) 1 Lloyds Rep.373 CA, 374
Dakin v. Oxley (1864) 15 CB (NS) 646, 665
Emilia Shipping Inc v State Enterprise for Pulp and Paper Industries [1991] 1 SLR(R) 411
(“Emilia Shipping”)
VI
Re Cosslett (Contractors) Ltd. [1988] 1 Ch 495 at 508)
Dalwood Marine v. Nordana Line A/S (The Elbrus) [2010] 2 Lloyd’s Rep. 315
Durham Tees Valley Airport Ltd v. bmiBaby Ltd.[2011] 1 Lloyd’s Rep. 68
Flame S.A. v. Glory Wealth Shipping Pte Ltd. [2013] EWHC 3153 (Comm)
Five Ocean Corporation v. Cingler Ship Pte. Ltd. [2015] SGHC 311
Fidelitas Shipping Co. Ltd v. V/O Exportchleb [1965] 1 Lloyd‟s Rep. 13
Gatoil International v. Tradax Petroleum (The Rio Sun) [1985] 1 Lloyd’s Rep. 350
Golden Strait Corp. v. Nippon Yusen Kaisha (The Golden Victory) [2007] 2 A.C. 353
Hyundai Heavy Industries Co. Ltd. v. Papadopoulos (1980) 1 W.L.R 1129 HL
ItexItagrani Export SA v. Care Shipping Corpn and Ors. (1990) 2 Llyod 316
Kirchner v. Venus (1859) 12 Moore PC 361, 390
Knott [2013] L.M.C.L.Q. 496
Livingstone v. Rawyards Coal Co. (1880) 5 App. Cas. 25
Lock v. Furz(1866) L.R 1 CP 441
MSC Mediterranean Shipping Company SA v. CottonnexAnstalt[2016] EWCA Civ. 789
Metal Box Co. Ltd. v. Curry‟s Ltd. (1988) W.L.R 175
Miramar Maritime Corporation v. Holborn Oil Trading Ltd. [1983] 2 Lloyd’s Rep. 319
VII
PortolanaCia. Naviera v. Vitol S.A (The Afrapearl) [2003] 2 Lloyd’s Rep. 671
Robinson v. Harman, (1848) 1 Ex. 850, 855
Ruxley Electronics and Construction Ltd v. Forsyth [1996] A.C. 344
The Al Battani [1993] 2 Lloyd’s Rep. 219
The Argentino(1889) 14 App. Cas. 519
The Greta Holme [1897] A.C. 596
The Griparion (No. 2) [1994] 1 Lloyd’s Rep 533, QB
The Jalamohan[1988] 1 Lloyd’s Rep 443
The Miramar [1983] 2 Lloyd’s Rep 319, 324
The Okehampton[1913]
The Rewia[1991] 2 Lloyd’s Rep. 325
The SLS Everest [1981] 2 Lloyd’s Rep. 389
The SevoniaTeam [1983] 2 Lloyd’s Rep. 640
Telfair Shipping Corp. v. Inersea Carriers SA [1985] I W.L.R 553
Thode v. Gimeno (The Steendiek) [1961] 2 Lloyd’s Rep. 138
Tillmanns v. Knutsford [1908] 1 K.B 185
Transfield Shipping Inc. v. Mercator Shipping Inc. (The Achilleas) [2009] A.C. 61
VIII
United Carriers v. Heritage Food Group [1995] 2 Lloyd’s Rep. 269
Welex AG v. Rosa Maritime Ltd. [2003] EWCA Civ. 938
Wertheim v. Chicoutimi Pulp [1911] A.C. 301, 307 (P.C.)
BOOKS
Alfred H Silvertown, The Law of Lien (Butterworths, 1988)
Andrew Burrows, Remedies For Tort And Breach Of Contract,(3rd ed, 2004).
Beatson, J, Anson’s Law of Contract (Oxford University Press, 29th
ed.,2010)
Eder, Bernard, Howard Bennett, Stevn Berry, David Foxton and Girvin, Stephen, Carriage of
Goods by Sea (Oxford University Press, 2nd
ed.,2011)
Harvey McGregor, McGregor on Damages (19th edition, 2014)
Hill, Christopher, Maritime Law (Lloyd‟s Shipping Law Library, 6th ed, 2003)
Hugh Beale, Chitty on Contracts, (Sweet and Maxwell, 32nd
ed., 2015)
Julian Cook et al, Voyage Charterers, (Lloyd‟s Shipping Law Library, 4th
ed., 2014)
Professor Yvonne Baatz et al, Maritime Law (Lloyd‟s Shipping Law Library, 3rd
ed., 2014)
Simon Baughen, Shipping Law, (Routledge-Cavendish Publishers, 4th
ed., 2009)
STATUTES AND CONVENTIONS
Baltic and International Maritime Coucil (BIMCO, 1980; revised in 2003)
Hague/ Hague-Visby Rules
International Arbitration Act 1994 (Rev. Edn. 2002)
IX
New York Produce Exchange 1994
Rules of the Supreme Court 1971 (WA)
Rules of Court 1971 (WA)
SCMA Rules 2015
X
STATEMENT OF FACTS
1. Furnace Trading Pte Ltd. (“Claimant”), a company organized and existing under the
laws of Singapore, entered into a time charterparty for the purposes of chartering the
vessel MV “TARDY TESSA” (the “Vessel”) from its owners ImlamConsignorist
GmbH of Hamburg, Germany (the “Owner”).
2. Further, the Claimant, in its capacity as disponent owner, entered into a voyage
charterparty (“CP”) dated 1st September 2016 with Inferno Resources SdnBhd,
Malaysia (“Respondent No.1”) for the carriage of 80,000 mt 10% MOLOO
Australian Steam Coal in furtherance of the CP.
3. It is alleged, and the Claimant is incapable in verifying, that the Vessel was after
hereon, sub voyage chartered by Inferno Resources SdnBhd, Malaysia to
IdoncareBerjaaUtama Pty. Ltd. , New South Wales, Australia (“Respondent No.2”).
4. A bill of lading dated 4th
October 2016 (the “B/L”) was consigned “To order” and by
clause (1) of the conditions of carriage on the reverse of the B/L, the B/L incorporates
all “terms and conditions, liberties and exceptions of the CP. It also refers on its face
to “Freight payable as per Charterparty” dated.
5. An invoice was issued by the Claimant to Respondent No.1 on 9th
October 2016 for a
sum of USD$771,120.48 as total freight due under the CP on the grounds of Shanghai
being the discharge port, additional freight to be added after nomination of disport.
6. However, wrongfully and in breach and/or repudiatory breach of the CP, Respondent
No.1 failed to pay the freight despite copious demands, and also failed to nominate a
legitimate discharge port on time.
7. A notice of lien over sub freights was sent by the Claimant to Respondent No.2
pursuant to the CP, on 20th
October 2016. Despite repeated demands of the same,
XI
Respondent No.2 has failed to pay the sub-freight to date.
8. Consequently, the Claimant has suffered substantial loss and damages for detention of
the Vessel, occurring as a result of the failure to nominate a legitimate port on time
and more damages due to the continued detention of the Vessel on account of non-
payment of freight and other amounts due under the CP on Respondent No.1 and 2.
9. Pursuant to the abovementioned breach of the CP, separate notices of arbitration dated
25th
November 2016 were set out to the Respondents.
10. Response to the notices was received by the Claimant on 26th
November 2016.
11. An application for the consolidation of the abovementioned arbitral claims was filed
on 1st December 2016, to which the Respondents assented by their application dated
2nd
December 2016.
12. The Honorable Tribunal issued Procedural Order dated 11th
December 2016 directing
the oral hearing of the Claimant‟s application in Singapore in July 2017.
Hence, the present claim.
XII
ISSUES RAISED
1. Whether the Tribunal has dominion over the merits of the case?
2. Whether the Respondents have committed repudiatory breach of the charter party by non-
performance of agreed terms?
3. Whether the Claimant is entitled to claim freight and sub-freight along with additional costs?
4. Whether the Claimant has a right of lien against the Respondents?
5. Whether the Claimant is entitled for damages and interim measure?
1
ARGUMENTS ON JURISDICTION OF THE CASE
I. THE TRIBUNAL HAS DOMINION OVER THE MERITS OF THE DISPUTE
1. The CP and Time CP provide for an arbitration panel with jurisdiction over „any dispute
arising out of or in connection with the Charter Party‟1. Arbitration clause is interpreted
broadly and with the presumption that, the parties agreeing to the arbitration clause intended
the dispute to be heard before an arbitration tribunal.
2. The Counsel would substantiate contention under four sub-heads: [A.] The Charter Party
governs the present dispute; [B.] The provisions of International Arbitration Act are applicable
to the present case; [C.] Agreement by the Parties to be governed by the Singapore Chamber of
Maritime Arbitration Rules; and [D] The provisions of the Charter Party would extend to
Respondent No. 2.
A. THE CHARTER PARTY GOVERNS THE PRESENT DISPUTE.
3. An arbitration is usually described as a maritime arbitration if in some way it involves a
ship.2 Most commonly, disputes will be referred under a charter party.
3 This may be for the
hire of a ship for a period of time (a time charter), or the contract may simply be one for a
voyage (a voyage charter).4
4. As indicated above maritime disputes cover a wide range of areas such as charter parties,
bills of lading, sale of ships, ship financing, shipbuilding contracts, contracts of marine
insurance, salvage contracts and collisions.5 Under the CP and Time CP, the parties have
1Refer to Moot Proposition, p. 19 and 23.
2Bruce Harris, Michael Summerskill and Sarah Cockerill “London Maritime Arbitration” International Arbitration
275 – 88, (1993),. See also Mario Ricco Magno “Maritime Arbitration” JCI Arb 267,(Vol. 70, No. 4, (Nov. 2004) ). 3 Id.
4Id.
5Michael Moon, “New Opportunities for Maritime Arbitration and Arbitrators”, Nov [2004] , 70 JCI Arb. 4 at p.
274.
2
specifically provided for dispute resolution clause.6 The Parties governed by CP and Time CP
have clearly submitted their disputes to be governed by the laws of Singapore.7
1. PROVISIONS UNDER THE CHARTER PARTY PROVIDE FOR DISPUTE
RESOLUTION.
5. A Charter Party or Charter is defined as a specific contract by which the owner of a ship
lets the whole or principal part of the ship to another person for the conveyance of goods on a
particular voyage to one or more places or until the expiration of a specified time.8
6. The International Arbitration Act defines an arbitration agreement by stating that it must
be in writing and can be in a separate agreement or a clause within the main contract and the
parties must be willing to submit all disputes to the said arbitral tribunal.9 The requirement that
the arbitration agreement shall be in writing can also be satisfied through electronic
communication provided that the information therein is available for subsequent use.10
7. In the present case, the Time CP between the Owner and the Claimant was signed in
Singapore on 15th February, 2016.11
Clause 50 of the Time CP provides for a Law and
Dispute Resolution Clause.12
This clause makes it necessary for the parties to resort to the
laws of Singapore for the purposes of dispute resolution.13
8. Along with the original Time CP the Voyage CP governing Claimant and Respondent
No. 1 was formed on 1st September, 2016 by an electronic acceptance from both parties.14
Clause 29 of the CP mentions „Law and Dispute Resolution Clause‟ which specifically states
6 Refer to Moot Proposition, p. 18 and 23.
7 Id.
8The New York, 93 Fed. 495, 497 (E.D.N.Y. 1899); Vandewater v. Mills, 19 U.S. (How.) 82, 91 (1856).
9International Arbitration Act, section 2A, Revised edition (2002).
10International Arbitration Act, section 2A(5), Revised edition (2002).
11 Refer to Moot Proposition, p.1.
12 Refer to Moot Proposition, p.18.
13 Id.
14Refer to Moot Proposition, p. 20.
3
that any dispute between the parties shall be governed by and construed in accordance with
Singapore law and arbitration would be governed as per SCMA Rules.15
Therefore, it is
humbly submitted that the present dispute shall be governed by the rules of Singapore.
2. THE TERMS OF THE PRESENT CP CAN BE CONSTRUED ACCORDING TO
BIMCO STANDARD CHARTER PARTY.
9. BIMCO is an international shipping association which provides for standard charter
parties for shipping purposes.16
When the parties contract upon a standard form of charter or
incorporate standard clauses into their charter, it may normally be presumed that they intend
these standard terms to receive the same interpretation as in any other case.17
10. The CP agreed upon by the Claimant and Respondent No.1 was made in conformity with
the Standard Coal and Ore Charter Party of BIMCO.18
Clause 26(c) of BIMCO states that, “
This Charter Party shall be governed by and construed in accordance with the laws of the
place mutually agreed by the parties and any dispute arising out of or in connection with this
Charter Party shall be referred to arbitration at a mutually agreed place, subject to the
procedures applicable there.”19
11. The CP under Clause 29 deals with Law and Dispute Resolution under which the
parties have specifically agreed to be governed in accordance with the Singapore laws and
arbitration as per SCMA Rules.20
B. THE PROVISIONS OF THE INTERNATIONAL ARBITRATION ACT, 1974 ARE
APPLICABLE TO THE PRESENT DISPUTE.
15
Refer to Moot Proposition, p. 23. 16
Bimco.org. (2017). [online] [Accessed 10 Jan. 2017], Available at: https://www.bimco.org/About-us-and-our-
members. 17
Julian Cooke, Tim Young, Voyage Charters, Pg.43, para 1.116 (Fourth edition, 2014). 18
Refer to Moot Proposition, p. 20 and 24. 19
Refer to Moot Proposition, p. 32, clause 26(c). 20
Refer to Moot Proposition, p. 23, clause 29.
4
12. Section 2 of the IAA defines “parties” as a party to an arbitration agreement.21
The
parties to the present dispute i.e., the Owner, the Claimant22
and the Respondent23
, by means of
the Time CP and CP have also acceded to the arbitration clause therein. Therefore, the parties
are very well within the ambit of this definition.
13. The IAA mandates an arbitration agreement to be in writing and could be provided in a
separate agreement or a clause within the main contract to which the parties must be willing to
submit all disputes to the said arbitral tribunal.24
14. As indicated above, both the Time CP and the CP have arbitration clauses mentioned in
Clauses 5025
and 2926
respectively. Therefore, it can be validly construed that there exists a
mutually agreed upon arbitration agreement amongst the parties.
15. Section 5 of IAA stipulates provisions regarding the applicability of the Act. It states that
the Act will be applicable only in case of international arbitration. For an arbitration to be
considered as an international arbitration, at least one of the parties must have their place of
business outside the State of Singapore.27
16. Owner and Respondents both have their places of business in Germany and Malaysia
respectively, which are outside the state of Singapore.28
Therefore, the present arbitral
proceeding is international in nature, by virtue of which IAA applies to the present dispute.
17. Section 12(1) of the Act gives the Tribunal the power to pronounce orders regarding costs
to be paid, preserve cargo, custody and sale of the property in dispute which is, or forms part of
21
International Arbitration Act, section 2, Revised edition (2002). 22
Refer to Moot Proposition, p.1. 23
Refer to Moot Proposition, p. 20. 24
International Arbitration Act, section 2A, Revised edition (2002). 25
Refer to Moot Proposition, p. 18. 26
Refer to Moot Proposition, p. 23. 27
International Arbitration Act, section 5, Revised edition (2002). 28
Refer to Moot Proposition, p. 20.
5
the subject matter of the dispute etc.29
Hence, this Tribunal has the power under IAA to pass
orders as it deems fit with regard to the sale of cargo in the present dispute.
18. Section 12A of the Act empowers the Tribunal to pass interim orders.30
In a leading
case,31
Belinda Ang Saw Ean J observed that the language of S. 12A is wide enough to confer
such a power on the Tribunal to pass interim orders even when the vessel is outside the
territorial jurisdiction of Singapore.32
19. The Tribunal, therefore, has the power to order action against the Respondents and also to
order the sale of cargo in the present case as the seat of arbitration is in Singapore, even though
the matter of dispute is outside Singapore,
C. AGREEMENT BY PARTIES TO BE GOVERNED BY THE SINGAPORE CHAMBER
OF MARITIME ARBITRATION RULES.
20. SCMA rules are the rules of arbitration which have been agreed upon by the parties in the
voyage charter party.33
Where any agreement, submission or reference provides for arbitration
under SCMA Rules, the parties are presumed to have agreed that the arbitration shall be
conducted in accordance with SCMA Rules.34
21. Rule 2 of the SCMA Rules asserts the Scope of Application, which mentions that the
parties will be governed by the Rules if they have agreed to be governed by them.35
As
mentioned earlier, the parties in CP have agreed to be governed by the said Rules and hence,
this Tribunal will have jurisdiction.36
29
International Arbitration Act, section 12(1), Revised edition (2002). 30
International Arbitration Act, section 12A, Revised edition (2002). 31
Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener). 32
[2015] SGHC 311, para 37. 33
Refer to Moot Proposition, p. 23. 34
Scma.org.sg. (2017). SCMA. [online][Accessed 10 Jan. 2017] Available at: http://www.scma.org.sg/rules.html. 35
SCMA Rules, Rule 2. 36
Refer to Moot Proposition, p. 23.
6
22. Rule 20 of the SCMA Rules provides for the Jurisdiction of the Tribunal.37
Rule 20(a)
states that the Tribunal has power to decide on its own Jurisdiction.38
This is commonly known
as Competence-competence principle, which confers on the tribunal jurisdiction to rule on its
jurisdiction when the validity or scope of the agreement to arbitrate is in doubt.39
23. Rule 20(b) of the SCMA Rules states about the power of the Tribunal to determine all
disputes arising from the charter party.40
In the present case, the parties have agreed to be
bound by the SCMA Rules.41
24. Therefore, this Tribunal has power to decide not only on the matter of dispute but also on
its own jurisdiction.
D. RESPONDENT NO. 2 FALLS WITHIN THE AMBIT OF THE PRESENT CHARTER
PARTY
25. A bill of lading, whether or not issued under a charter party, is customarily regarded as
having a threefold function, namely, as (A) a receipt, (B) a contract of carriage, and (C) a
document of title.42
26. Where in a charter party, bill of lading is issued and consigned to third party or an
endorsee, the bill of lading will constitute a contract of carriage and the shipowner would
ensure that his rights against the charterer are carried forward to the terms of bill of lading.43
27. When bill of lading is endorsed to third party, the bill of lading must be considered a
contract because the shipowner has given it so that the charterer can pass it on as the contract
37
SCMA Rules, Rule 20. 38
SCMA Rules, Rule 20(a). 39
AmokuraKawharu, Arbitral Jurisdiction, p. 240, Vol 23, New Zealand University Law Review (2008). 40
SCMA Rules, Rule 20(b). 41
Refer to Moot Proposition, p. 19. 42
Julian Cooke, et al, Voyage Charters, Pg.493, para 18.6 (Fourth edition,2014). 43
Stephen Girvin, Carriage of goods by sea, Pg. 44, para 3.14(Second edition,2011). See case Welex AG v. Rosa
Maritime Ltd, [2003] EWCA Civ 938.
7
of carriage in respects of the goods.44
Hence, where bill of lading has been given to the
charterer and has been passed to the third party, it will be a contract between the third party and
the owner.45
28. Even if the charter party contemplates or even expressly provides that the charterer will
be “the carrier” under any bill of lading issued under it, the identity of “the carrier” under such
a bill of lading should as a matter of principle be determined by reference to the terms of the
bill alone.46
29. The judgment in The Rewia47
emphasizes that the question of authority, whether the
shipowner or the charterer is the carrier under the bill of lading contract, it was held that this is
entirely a question of construction of the bill of lading and it is irrelevant that the shipper may
have made an antecedent booking arrangement with the charterer.48
30. In the present case, the bill of lading is issued by the Owner in the name of Respondent
No. 2 as shipper of the vessel.49
As has previously been established that the shipper mentioned
on the bill of lading will be liable to pay the freight amount. Therefore, it is important for
Respondent no. 2 to be a party to this claim.
31. It is also important to note that where the surety‟s liability does not arise from any request
by the debtor his right to an indemnity must, it seems, be placed on the law of restitution or
unjust enrichment.50
Such a right may arise exceptionally where the claimant has assumed (or
paid) the debtor‟s obligation under some practical necessity and it is in all the circumstances
44
Stephen Girvin, Carriage of goods by sea, Pg. 86, para 3.10(Second edition,2011). See The Al Battani [1993] 2
Lloyd‟s Rep, 219, 222 (Sheen J). 45
Id. 46
Julian Cooke et al, Voyage Charters, p.515, para 18.74(Fourth edition,2014). 47
The Rewia [1991] 2 Lloyd‟s Rep. 325; Tillmanns v. Knutsford [1908] 1 K.B. 185. 48
Julian Cooke et al, Voyage Charters, p.516, para 18.74(Fourth edition,2014). 49
Refer to Moot Proposition, p. 41. 50
Chitty on contracts, Sweet and Maxwell, Vol II, para. 45-126 p. 2246 (32nd edition,2015)
8
just and reasonable that he should be indemnified.51
This has also been applied to an implied
general indemnity, as where charterers are liable to indemnify ship-owners for liability on bills
of lading signed by the ship‟s master.52
32. In the present case, the Claimant under practical necessity paid the total hire amount to
the Owner and has stepped into his shoes.53
The Claimant was under an obligation to pay USD
10,000 per day.54
Further, the Respondent No. 1 was under the obligation to pay freight to the
Claimant.55
Since the Respondent No. 2 did not pay sub-freight which was due and payable to
the Respondent No. 156
and the same was not paid to the Claimant subsequently.57
The
Claimant, however, did not carry this chain of event and paid full hire due and payable to the
Owners.58
Due to this reason, the position of Claimant becomes that of the Owner and the
Claimant steps into the shoes of the owner.
33. Therefore it is humbly submitted that, Respondent No. 2 is liable to be tried by this
Tribunal as he has to settle the debt of the Claimant.
ARGUMENTS FOR REPUDIATORY BREACH OF CONTRACT
II. THE RESPONDENTS HAVE COMMITTED REPUDIATORY BREACH OF CHARTER
PARTY BY NON-PERFORMANCE OF AGREED TERMS
34. A Charter Party may be terminated because of the conduct of one of the principal parties
to it.59
The conduct must be of a sufficiently serious nature to entitle the other (innocent) party
51
Id. 52
Hugh Beale, Chitty on Contracts, Sweet and Maxwell, Vol II, para. 45-129 p.2247 (32nd edition,2015). See case
Telfair Shipping Corp. V. Inersea Carriers SA [1985] I W.L.R. 553 53
Refer to Moot Proposition, p. 34. 54
Refer to Moot Proposition, p. 5. 55
Refer to Moot Proposition, p. 22. 56
Refer to Moot Proposition, p. 62. 57
Refer to Moot Proposition, p. 51. 58
Refer to Moot Proposition, p. 38. 59
Christopher Hill, Maritime Law, p. 229-230 (6th edition,2003).
9
to treat the contract as terminated.60
A breach of a condition (which in practice takes the form
of an undertaking by one party to perform or a guarantee that something will happen as
promised) should give rise to a right in the innocent party to terminate.61
It is thus, a
repudiatory breach.62
35. It has been submitted earlier by the counsel in his Submissions that a contractual
relationship between Owner and Respondent No. 2 exists.63
It has also been submitted that
there exists a commercial relationship between Claimant and Respondent No. 2 exists by way
of rule of indemnity.64
The Time CP between Owner and Claimant has already been
established.65
It has also been submitted that the CP exists between Claimant and Respondent
No. 1.66
36. The Counsel submits his contention further under four sub-heads: [A.] The Respondents
have failed to perform obligations as stipulated under the Charter party; [B.] The Respondent‟s
request to instruct Vessel to South Korea was impermissible; [C.] The Respondents have failed
to provide for freight and sub-freight; and [D] The Clauses of the present charter party will
extend to Respondent No. 2.
A. THE RESPONDENTS HAVE FAILED TO PERFORM THE OBLIGATIONS
STIPULATED UNDER THE CHARTER PARTY
37. The legal test for repudiatory breach is whether, looking at all the circumstances
objectively from the perspective of a reasonable person standing in the position of the innocent
party, the contract breaker has shown an intention to abandon and altogether refuse to perform
the contract or to deprive the innocent party of a substantial part of the benefit to which he/she
60
Christopher Hill, Maritime Law, p. 229-230 (6th edition,2003). 61
Id. 62
Id. 63
Refer to Moot Submission, contention [I.D.], p.8, para 32. 64
Refer to Moot Submission, contention [I.A.1], p.8, para 34. 65
Refer to Moot Submission, contention [I.A.1], p.2, para 8. 66
Refer to Moot Submission, contention [I.A.2], p.3, para 11.
10
is entitled under the contract.67
38. In the present claim, under the CP, the Respondents were under an obligation to declare a
discharge port when the Vessel passes Singapore.68
This obligation to nominate such port was
not fulfilled by the Respondents.69
1. THE RESPONSIBILITY OF NOMINATION OF PORT
39. The nomination of port will usually be made by the charterer or his agent. The charterer
may delegate the performance of (but not the responsibility for) the obligation to nominate the
port or place to others, such as the shipper, receiver70
or a port authority.71
40. In the present case, the nomination of the port was the responsibility of Respondent No.
1.72
It has been expressly provided for in the CP that Respondents were under an obligation to
nominate one out of eight designated ports when the Vessel passes Singapore.73
2. WHEN THE NOMINATION OF THE PORT MUST BE MADE
41. In the absence of any prescribed time limit, it is submitted that the nomination of a
loading or discharging port must be made within a reasonable time74
and that it should be made
early enough to ensure that the Vessel suffers no delay resulting from the absence of
nomination.75
In The Rio Sun,76
it was held that a buyer who had the right to name the
discharging port owed such a duty to his seller who had chartered the Vessel.
67
Eminence Property Developments Ltd v Kevin Christopher Heaney [2010] EWCA Civ. 1168. 68
Refer to Moot Proposition, p. 21, voyage charter party, clause 16. 69
Refer to Moot Proposition, p. 50-66. 70
Julian Cooke et al, Voyage Charters, p. 117, para 5.10 (Fourth edition, 2014). See casePortolanaCia. Naviera v.
Vitol S.A. (The Afrapearl) [2003] 2 Lloyd‟s Rep. 671. 71
Julian Cooke et al, Voyage Charters, p. 117, para 5.10 (Fourth edition,2014). 72
Refer to Moot Proposition, p. 21, voyage charter party, clause 16. 73
Id. 74
Julian Cooke et al, Voyage Charters, p. 119, para 5.14 (Fourth edition,2014). See case Thode v. Gimeno (The
Steendiek) [1961] 2 Lloyd‟s Rep. 138. 75
Id. See case AktieselskabetOlivebank v. Danske SvovlsyreFabrik (The Springbank) [1919] 2 K.B. 162. 76
Id. See case Gatoil International v. Tradax Petroleum (The Rio Sun) [1985] 1 Lloyd‟s Rep. 350.
11
42. In the present case, such time was specifically provided for77
in the CP. Respondents
were under an obligation to nominate the port before the Vessel passes Singapore78
, which they
clearly failed to perform.79
Therefore it is humbly submitted that the Respondents have failed
to nominate the discharge port on due date, which amounts to material breach of the CP.
B.THE RESPONDENT’S REQUEST TO INSTRUCT THE VESSEL TO SOUTH KOREA
WAS IMPERMISSIBLE
43. Where charterers nominate an unsafe port or berth, the normal80
consequences where the
order is obeyed are physical damage to the ship, sometimes accompanied by detention and by
loss of the profit under the charter and during the period of repair or the cost of replacement.81
Where the owners refuse to obey the order, the damage may consist of detention alone, while
waiting for a new order, and, if a new order is given, extra costs in reaching the loading port.82
44. In the present case, the Respondents made request to the Claimant seeking permission to
discharge the cargo at Busan, South Korea.83
This request was rejected in the first instance by
the Claimant as it was in violation of the Time CP as it was specifically agreed upon between
the Owners and the Claimant.84
On two subsequent occasions the said request was repeated and
denied,85
as it was beyond the permissible right granted to the Claimant by the Owners under
the Time CP. Further, Busan was an unsafe port at the time of request made by the
Respondents, rendering the Vessel and its crew vulnerable to an attack from zombies and
77
Refer to Moot Proposition, p. 21, voyage charter party, clause 16. 78
Id. 79
Refer to Moot Proposition, p. 64. 80
Julian Cooke et al, Voyage Charters, p. 654, para 21.95 (Fourth edition,2014). See case Cf. AIC Ltd v. Marine
Pilot (The Archimidis) [2008] 1 Lloyd‟s Rep. 597. 81
Id. See The Greta Holme [1897] A.C. 596. 82
Julian Cooke et al, Voyage Charters, p. 654, para 21.95. 83
Refer to Moot Proposition, p. 57. 84
Refer to Moot Proposition, p. 2, time charter party, Clause 4(a). 85
Refer to Moot Proposition, p. 58-60.
12
damage thereof.86
C. FAILURE ON PART OF RESPONDENTS TO PAY FREIGHT AND SUB-FREIGHT
45. The party who normally has responsibility for freight will be the voyage charterer, with
whom the voyage charter party is made.87
In the case of a charter party, it is the charterer who
has the primary responsibility for the payment of freight.88
At least this will be the case under a
voyage charter party.89
46. In the present case, it has earlier been submitted90
that there exists a valid CP between the
Claimant and Respondents.91
In the CP, the freight has to be paid by Respondents.92
The
payment of freight had to be made within 5 banking days93
after completion of loading and
signing and releasing of bill of lading which the Respondents failed to honor.94
47. Therefore, it is humbly submitted that the Respondents have committed a repudiatory
breach of the CP.
III. THE CLAIMANT IS ENTITLED TO CLAIM FREIGHT AND SUB-FREIGHT ALONG
WITH ADDITIONAL COSTS
48. The primary payment obligation under a voyage charter is freight.95
Freight is a fixed
price for a particular voyage carrying a particular cargo or cargoes.96
Under a voyage charter,
the shipowner is entitled to freight which will cover costs, including fuel and crew as well as
86
Refer to Moot Proposition, p. 58. 87
Stephen Girvin, Carriage of goods by sea, p. 359 para 22.33 (Second edition,2011). 88
Stephen Girvin, Carriage of goods by sea, p. 361 para 22.36 (Second edition,2011). 89
Id. 90
Refer to memo Submission, contention [II.A.2]. 91
Refer to Moot Proposition, p. 20. 92
Refer to Moot Proposition, p. 20, voyage charter party, clause 4. 93
Refer to Moot Proposition, p. 22, voyage charter party, clause 19. 94
Refer to Moot Proposition, p. 51. 95
Simon Baughen, Shipping Law, P. 225 (4th edition, 2009). 96
Id.
13
profit.97
Freight is the remuneration payable for the carriage of the cargo. The law on the
subject was developed in relation to the carriage of goods by sea, but many aspects of it have
since been applied in relation to all forms of carriage98
and to cases where a freight forwarder
organises carriage.99
49. Voyage Charters impose joint liability for freight on voyage charterer and the bill of
lading holder.100
This is achieved by providing for bills of lading in the voyage charter.101
The
bill of lading holder is liable for freight on Quantum Merit basis, even on payment of freight by
the Charterer to the shipowner. There is no direct authority covering the situation in which
freight is due under a charter and the shipowner wishes to recover from a third party who holds
the bill of lading. However, there does seem to be a tacit assumption that such a right does, in
fact, exist102, 103
50. The naming of a cargo owner as “shipper” in a bill of lading may, and perhaps normally
will, justify the inference that he has agreed to pay bill of lading freight.104
Bills of lading
issued under a charter arrangement frequently incorporate the terms of a charter party.105
In
such cases, it is common for such bills of lading to incorporate the freight provisions of a
charter party by a term “freight payable as per charter party” or, in its older form, “freight and
other conditions as per charter party . . .”.106
51. The purpose of such a term is to enable the shipowner to have the legal right as against
the bill of lading holder to receive freight which is due under the bill of lading, where he is
97
Id. at P. 220. 98
United Carriers v. Heritage Food Group, [1995] 2 Lloyd‟s Rep. 269. 99
Britannia Distribution v. Factor Pace [1998] 2 Lloyd‟s Rep. 420. 100
Simon Baughen, Shipping law, P. 229 (4th edition, 2009). 101
Id. 102
The Jalamohan [1988] 1 Lloyd‟s Rep 443. 103
Simon Baughen, Shipping law, Pg. 230 (4th edition, 2009). 104
Tim Young etal, Voyage Charter, ¶ 13.33, P. 314 (34th edition, 2014). 105
Id. at ¶ 13.38, P. 316. 106
Tim Young etal, Voyage Charter, ¶ 13.38, P. 316 (34th edition, 2014).
14
party to it. That freight may be under a charter to which he is a party107
or under a sub-charter
to which he is not a party,108
but between the shipowner and the bill of lading holder, it is
immaterial that the former is not party to the charter party thus incorporated.109
52. Where the claimant is a disponent owner, the charterers‟ breach may not only cause a loss
of profit under the sub-charter, but also render the disponent owner liable in damages to the
head owner.110
There is no reason in principle why such damages should not be recovered
entered into at the level of freight rates which the charterers ought to have contemplated.111
53. In the present case, the Claimant had an obligation to pay regular hire amount to Owner
for the chartered vessel at the rate of USD 10, 000/- day or pro-rata for any part of the day
commencing on and from the time of her delivery.112
The Claimant further voyage chartered
the vessel to Respondent no. 1 for a minimum freight amount of USD 771, 120.48, payable
within 5 banking days after completion of loading and signing/releasing B/L.113
54. The Vessel was furthered sub-chartered by the Respondent no. 1 to Respondent no. 2 for
carriage of coal from port of loading i.e.; Newcastle, Australia to any of the eight designated
ports. Pursuant to the CP, the B/L was issued on 4th October 2016 against the Respondent no.
2, which was payable on 11th October 2016.114
The Claimant made repeated requests for
payment from 10th October 2016 onwards to the Respondent no. 1 through the designated
broker.115
107
The Sevonia Team [1983] 2 Lloyd‟s Rep. 640. 108
The SLS Everest [1981] 2 Lloyd‟s Rep. 389. 109
Tim Young etal, Voyage Charter, para 13.39, P. 316 (34th edition, 2014). 110
Id. at ¶ 21.99, P. 656. 111
The Argentino (1889) 14 App. Cas. 519. 112
Refer to Moot Proposition, P. 5, Cl. 10 A of Time CP. 113
Refer to Moot Proposition, P. 22, Cl. 19 Freight CP. 114
Refer to Moot Proposition, P. 41. 115
Refer to Moot Proposition, PP. 50-69.
15
55. The Claimant owing to its obligation under the Time CP to the Owners made prompt and
regular payments irrespective of the receivable dues from the Respondents.116
But, the
Claimant is yet to receive its dues from the Respondents as per Clause 19 of the CP which
specifically mandates payment of freight to be made within five banking days on/from the
issue of B/L. Therefore, the Counsel humbly submits that the Claimant is entitled to freight and
sub-freights under the CP.
IV. THE CLAIMANT HAS A RIGHT OF LIEN AGAINST THE RESPONDENTS
56. A lien is a right by which a person can retain the possession of goods which do not
belong to him until such time as certain outstanding charges which are due to him have been
satisfied.117
There are generally two kinds of lien: Lien on sub-freight and Lien on cargo.118
The right of lien on sub-freights can be exercised by giving notice to the sub-charterer, or to
other charterers further down the chain.119
The notice will be effective only if the sub-charterer
has not paid the freight as at the date of the notice.120
57. Most charter parties provide for a lien on “the cargo”.121
Lien on cargo is possessory in
nature i.e.; a right to detain the cargo until the freight is paid.122
However, the lien will still be
effective against the bill of lading holder even if it incurs no personal liability in respect of the
charter party claims in respect of which the lien may be exercised.123
The owner has possession
of the cargo and the lien, whether at common law or contractual, gives the owner a right to
116
Refer to Moot Proposition, P.38. 117
Christopher Hill, Maritime Law, P. 189 (6th edition, 2003). 118
Simon Baughen, Shipping Law, P.232 (4th edition, 2009). 119
Id at P. 234. 120
Id. 121
Id at P. 201. 122
Id. 123
The Miramar [1983] 2 Lloyd‟s Rep 319, 324.
16
retain possession until it has been paid the sums which the lien covers.124
If the head voyage
charter party was incorporated, then, the Lien Clause would be a term of the Bill of Lading.125
58. The Counsel would substantiate her contention further under two sub-heads: [A.] Non-
payment of freight creates a right of lien on the Vessel‟s cargo; and [B.] Claimant can enforce
the right of lien against the Sub-Charters.
A. NON- PAYMENT OF FREIGHT CREATES A RIGHT OF LIEN ON THE CARGO
59. Freight is the consideration which is payable to the carrier for the carriage and arrival of
the goods in merchantable condition, ready to be delivered at the port of discharge.126
Freight is
payable under a voyage charter party or under a bill of lading issued by the shipowner, and in
some cases, also, by the charterer.127
60. In the present case, repeated notices for payment were made to the Respondents under the
CP by mails dated 11th October 2016 onwards128
. As already established in the previous
contention, the Claimant was entitled to freight under the CP. Non-payment of freight invokes
Clause 19 of the Bimco standard contract.129
Therefore, it is humbly submitted that the
Claimant had a right to lien on the Vessel‟s Cargo to recover the unpaid freight from the
Respondents.
B. THE CLAIMANT CAN ENFORCE RIGHT OF LIEN AGAINST THE SUB-
CHARTERERS
61. Most standard form charterparties, both time and voyage, contain an express contractual
right to lien the cargo which is much wider than that at common law.130
A lien can be created
in a bill of lading contract by express stipulation for a lien in terms set out in full in the bill of
124
Yvonne Baatz et al, Maritime Law, P. 174, (3rd
edition, 2014). 125
Five ocean Corpn v. Cingler ship Pte ltd. [2015] SGHC 311. 126
Dakin v. Oxley (1864) 15 CB (NS) 646, 665; Kirchner v. Venus (1859) 12 Moore PC 361, 390. 127
CompaniaNaviera General SA v. Kerametal Ltd. (1983) 1 Lloyds Rep.373 CA, 374. 128
Refer to Moot Proposition, P. 51. 129
Refer to Moot Proposition, P.31. 130
Yvonne Baatz, Maritime Law, P. 173 (3rd
edition, 2014).
17
lading, or it can be done by words of incorporation, principally by the incorporation of the
terms of the charter party, or by both means cumulatively as long as inconsistency is
avoided.131, 132
62. As between the shipowner and the bill of lading holder, it is enough that the former has
the legal right to freight whoever else may have equitable or beneficial right to it in the ship
owner‟s hands.133
However, where the shipowner does not actually receive payment of the
freight, the question arises whether he is under an obligation to the charterer to take steps to
recover it.134
63. Voyage Charters extend the Charterer‟s contractual obligation to the bill of lading as
well.135
Such bills link the shipowner contractually with the bills of lading holder on the terms
of Charter party.136
Voyage charters contain two special remedies for the shipowner in event of
non-payment of freight or demurrage.137
These are the lien on cargo, a right to detain the cargo
pending payment, and the lien on sub-freights, a right to intercept sub-freights due to charterers
from their sub-charters.138
64. Further, in The Indian Reliance, if the sub-charterer had not paid the freight at the time he
was put on notice of the owner‟s lien on sub-freights, Rix J. was of the view that the sub-
freights would then become payable to the order of the owner and not into the designated
account.139
131
Fidelitas v. V/O Exportchleb, [1965] 1 Lloyd‟s rep. 13. 132
Tim Young etal, Voyage Charter, ¶ 17.16, P. 466 (34th edition, 2014). 133
Id. at ¶13.39, P. 316 (34th edition, 2014). 134
Id. at ¶ 13.33, Pg. 316 (34th edition, 2014). 135
Simon Baughen, Shipping Law, P. 200 (4th edition, 2009). 136
Id at PP. 200 & 201 (4th edition, 2009). 137
Id. 138
Id. 139
Id. at P. 317.
18
65. Given that a lien is exercised on goods in the possession of the shipowner by depriving
the owner of the goods of that possession, the relationship between shipowner and cargo owner
is crucial.140
The ship owner‟s primary concern is the recovery of sums due to him under his
charter party.141
Where the bill of lading expressly incorporates the terms of the charter party
so that there is a substantial identity between the two, there is no problem in identifying the
sums for which the shipowner is entitled to exercise a lien as against the goods owner.142
66. In the instant case, the B/L dated 4th October 2015 was issued by the Owner in the name
of Respondent No. 2. 143
Hence, the right of lien on cargo of the Vessel extends against the
Respondent no. 2. As already established by my co-counsel and myself in the previous
contentions, the Respondent no. 2 had an obligation to pay freight and sub-freight to the
Claimant under the CP, which remains due and payable to date. Therefore, it is humbly
submitted that the Claimant has a right to lien on the vessel‟s cargo.
V. THE CLAIMANT IS ENTITLED FOR DAMAGES AND INTERIM MEASURES
67. Where a party performing a contract does not do so to the standard required by the
contract or within the set timeframe, the party will breach the contract144
. The traditional view
on damages for a breach of contract committed by the defendant is compensation to the
claimant which applies to all types of contracts for the damage, loss or injury he has suffered
through that breach. 145
68. Damages for breach of contract are normally designed to compensate for damages, loss
or injury the claimant has suffered through that breach. A claimant who has not, in fact,
140
Id. at ¶ 17.19, P. 467. 141
Id. 142
Id. 143
Refer to Moot Proposition. P. 41. 144
Beatson, J, Anson’s Law of Contract, P.533 (Oxford University Press, 29th
ed., 2010). 145
Robinson v. Harman, (1848) 1 Ex. 850, 855; Lock v. Furz (1866) L.R 1 CP 441.
19
suffered any loss by reason of breach, is nevertheless entitled to a verdict, but the damages
recoverable will be nominal.146
69. Commercial loss are the most frequent subject of actions for breach of contract.
However, as will be seen, damages for the breach of contract are necessarily limited to
compensation of financial loss alone.147
Damages may also be awarded in contract to
compensate for physical damage to the person or property, for the loss of an attribute of
property even where this has not affected its value, for inconvenience, and in certain
circumstances, for disappointment148
.
70. The Counsel would further substantiate her contention under following sub-heads:
(a.) Respondents have failed to perform obligations as stipulated under the CP;
(b.) Respondents are liable to indemnify the Claimant for damages, costs etc. And;
(c.) Tribunal is empowered to grant interim measures.
A. The Respondents have failed to perform obligations as stipulated under the Charter party
71. The remedy to which an injured innocent party most commonly resorts in the event of a
breach of charter is a claim for damages.149
The basic principle which lies behind an award of
damages for breach of contract is that of indemnity, it being “the general intention of the law
that, in giving damages for breach of contract, the party complaining should, as far as it can be
done by money, be placed in the same position as if the contract had been performed”.150, 151
This is often called the “compensatory principle”.152
146
Beatson, J, Anson’s Law of Contract, P.564 (Oxford University Press, 29th
ed., 2010). 147
Id. at P.552. 148
Burrows, Remedies for tort and breach of contract, P. 534 (3rd edition, 2004). 149
Tim Young etal, Voyage Charter, ¶ 21.1, P. 616 (34th edition, 2014). 150
Id. 151
Robinson v. Harman (1848) 1 Exch. 850; Livingstone v. Rawyards Coal Co. (1880) 5 App. Cas. 25; Wertheim v.
Chicoutimi Pulp [1911] A.C. 301, 307 (P.C.); British Westinghouse Electric and Manufacturing Co. v. Underground
Electric Railways Co. [1912] A.C. 673; Ruxley Electronics and Construction Ltd v. Forsyth [1996] A.C. 344; Cf.
20
72. The remedies for the breach of contract falls under three heads153
:
i. Every breach of contract entitles the injured party to damages. Damages are primarily
concerned to compensate the injured party for the loss he or she has suffered.
ii. In certain circumstances the injured party may obtain the enforcement of the promise by
an order for specific performance of the contract, an injunction to restrain its breach or for
the payment of the sum due under the contract.
iii. In certain circumstances the party to a contract that has been broken may be entitled to
the return of the money paid or the restitution of the value of the services rendered or good
transferred. This is a restitution remedy for the breach of a contract.
73. Once the claimant has established that its loss resulted from a breach of contract by the
defendant, the amount of damages that will be recoverable will be assessed by reference to the
general principles of causation and remoteness applicable to claims in tort and contract.154
The
same principles will apply, irrespective of whether the claim is made under a charter party or a
bill of lading.155
74. Here, it was commonly assumed in the shipping industry that late redelivery would
sound only in damages for the difference between hire and the market rate for the period of
overshoot.156
The claim will generally be based on the difference between the anticipated profit
under the repudiated charter and the actual profit under the replacement charter for the
prospective duration of the old charter.157
Alfred McAlpine v. Panatown [2001] 1 A.C. 518 Flame S.A. v. Glory Wealth Shipping Pte Ltd [2013] EWHC 3153
(Comm). 152
Golden Strait Corp. v. Nippon Yusen Kaisha (The Golden Victory) [2007] 2 A.C. 353; Dalwood Marine v.
Nordana Line A/S (The Elbrus) [2010] 2 Lloyd‟s Rep. 315. 153
Burrows, Remedies for tort and breach of contract, P.563 (3rd edition, 2004). 154
Id. at 53. 155
Simon Baughen, Shipping Law, P. 265 (4th
edition, 2009). 156
Id at P. 268. 157
The Griparion (No. 2) [1994] 1 Lloyd‟s Rep 533, QB.
21
75. A debt is definite sum of money fixed by the agreement of the parties as payable by one
party in return for the performance of a specified obligation by the other party or upon the
occurrence of some specified event or condition158
; damages may be claimed from the party
who has broken his contractual obligation in some way.159
It has always been open to parties to
make express provision in their contract for payment of interest, which the courts will
enforce.160
In principle, interest should run only from the date of accrual of the cause of action
when the claimant incurred the loss in question.161
76. In the present case, the Respondents have an obligation to pay freight to the Claimant,
failure of which creates a right of lien on the cargo of the vessel.162
The Respondents have also
breached the CP by not providing timely instruction to the vessel for discharging the cargo.163
These chain of events led to delay in discharge of cargo and redelivery of the Vessel.164
Therefore, the Counsel humbly submits that the Claimant is entitled to the freight due and
payable along with the interest rate as the Tribunal deems fit in the ends of justice and equity.
B. The Respondents are liable to indemnify the Claimant for damages, costs andexpenses
incurred in exercise of lien and arbitration with justifiable interest
77. The owner or charterer will be relieved of its obligation to perform and may sue for
damages if the other commits a repudiation of the charter.165
As a matter of ordinary contract
law, a party may, by conduct and expression, by abandonment of performance or by stating his
intention to abandon, repudiate the contract.166
The test for determining whether a repudiation
has occurred is an objective one and does not turn on the actual intent of the parties. Thus, if in
158
Alder v. Moore (1961) 2 Q.B 57; Hyundai Heavy Industries Co. Ltd. v. Papadopoulos (1980) 1 W.L.R 1129 HL. 159
Sweet and Maxwell, Chitty on Contracts, P. 1802 (32nd
edition, 2015). 160
Harvey McGregor, McGregor on Damages, P. 739 (19th edition, 2014). 161
Metal Box Co. Ltd. v. Curry‟s Ltd. (1988) W.L.R 175. 162
Refer Moot Proposition P.10, ¶ 23. 163
Refer Moot Proposition P.21, ¶ 16. 164
Refer Moot Proposition PP.50 onwards. 165
Tim Young etal, Voyage Charter, ¶ 21A, P. 76 (34th edition, 2014). 166
Restatement, Second, Contracts, PP. 250–257.
22
light of all the relevant circumstances, a reasonable person would conclude that his contract
partner will not perform, he is entitled to conclude that the charter has been repudiated.167
The
threatened or anticipated breach must involve a material term of the charter for there to be an
anticipatory repudiation.168
78. In the present case, the Respondents have breached material term of the CP by non-
payment of freight and by not designating the discharge port to the Vessel.169
The Respondents
are liable to indemnify the Claimant for the amount of hire paid to the Owners.170
Therefore,
the Counsel humbly submits that the Claimant is entitled to freight due and payable, damages
for breach of CP, costs for delay, costs of arbitration and interests on such amount at such rate
as the Tribunal deems fit.
C. The Tribunal is empowered to grant interim measures
79. The incorporation of the Lien Clause in the Bill of Lading gives owner a contractual lien
in respect of goods in its possession. A contractual lien is in the nature of security and may be
defined as a right to retain possession of goods or documents belonging to another until all
claims against that other are satisfied.171
A lien may exist at common law or, as in this case
under the Bill of Lading, as a term of an agreement172
. This interest is as an additional right
under a contract to obtain payment, is one which is capable of being preserved under S. 12 A
(4) of the IAA. S. 12 A (4) of IAA.173
167
Id. at 61. 168
Id. at 74. 169
Refer to Moot Proposition P.50 onwards. 170
Refer to Moot Proposition P.34 onwards. 171
Five ocean Corpn v. Cingler ship Pte ltd. [2015] SGHC 311. 172
Alfred H Silvertown, The Law of Lien (Butterworths, 1988); Re Cosslett (Contractors) Ltd [1988] 1 Ch 495 at
508. 173
Id. at 80.
23
80. In Cetelem174
, he discussed the type of orders a court could make under S. 44(3) of the
English Arbitration Act (which is in parimateria to S. 12 A (4) of the IAA).
81. Chan J in a case175
, although recognising that a lien over cargo did not confer a right of
sale, recognised that the court had the power to order the sale of the cargo under Order 29 Rule
4 of the Rules of Supreme Court 1970 (“1970 RSC”), which provided for the sale of moveable
property the subject-matter of an action “which is of a perishable nature or likely to deteriorate
if kept or which for any other good reason is desirable to sell forthwith”.
82. Order 29 Rule 4 of the 2014 ROC (which is the same as Order 29 Rule 4 of 1970 RSC)
is similar to S. 12A(4) of the IAA in that it gives the court the power to make orders of sale.
The rationale behind Order 29 Rule 4 is that where goods are perishable, or likely to deteriorate
if kept, the value of the movable property the subject-matter of the proceedings would be lost.
This rationale fits squarely into the intention behind S. 12 A (4) read with S. 12(1)(d) of the
IAA, which is to preserve the property which is or forms part of the subject-matter of the
dispute that is or will be referred to arbitration.176
83. In the present case, there is urgency and necessity for the order of sale of cargo on board
the vessel because of the following stated reasons:
(1) The increasing costs of holding the cargo on board
(2) Continual deterioration of cargo on board177
(3) Increasing administrative costs
84. To elaborate on the condition of the Cargo, there was a non-negligible risk that the value
of the Cargo would be steadily diminished over time.178
This coupled with the increase in
174
Id. at 60. 175
Emilia Shipping Inc v State Enterprise for Pulp and Paper Industries [1991] 1 SLR(R) 411 (“Emilia Shipping”). 176
Five ocean Corpn v. Cingler ship Pte ltd. [2015] SGHC 311. 177
Refer to Moot Proposition, P. 99.
24
expenses in maintaining the Cargo aboard the vessel, may result in a situation where
Respondents retained no residual financial interest in the Cargo and might even abandon the
same if the Cargo became commercially worthless.179
Therefore, the Counsel humbly submits
that it is in the interest of justice and equity that the Tribunal orders Interim measures in the
present case.
178
Refer to Moot Proposition, P. 97. 179
Refer to Moot Proposition, PP. 99- 100.
25
PRAYER FOR RELIEF
For the reasons set out above, CLAIMANT requests that the Tribunal:
Declare that the „claims‟ by the Claimant are admissible and that the Tribunal has jurisdiction to
determine the claim;
Adjudge that the Respondents have committed repudiatory breach of the charter party and are
liable to pay the outstanding freight and sub freight;
Declare that the Claimant has the right of exercising lien;
Adjudge that the Respondents are liable to pay damages and costs to the Claimant; and
Award further or other relief as the Tribunal thinks fit.
**********
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