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EIGHTEENTH ANNUAL
INTERNATIONAL MARITIME LAW ARBITRATION MOOT
2017
MEMORANDUM FOR CLAIMANT
NATIONAL LAW UNIVERSITY ODISHA
TEAM 02
ON BEHALF OF: AGAINST:
FURNANCE RESOURCES TRADING PTE. LTD. INFERNO RESOURCES SDN BHD
&
IDONCARE BERJAYA UTAMA PTY. LTD.
COUNSEL
ANKITA ANKITA TANMAY VISHESH
DHABU SEN BHATNAGAR MEHROTRA
TEAM 02 -TABLE OF CONTENTS-
MEMORANDUM FOR CLAIMANT Page I
TABLE OF CONTENTS
INDEX OF AUTHORITIES ________________________________________________ V
LIST OF ABBREVIATIONS _____________________________________________ XVI
ISSUES RAISED ________________________________________________________ XIX
STATEMENT OF FACTS ___________________________________________________ 1
ARGUMENTS ADVANCED _________________________________________________ 3
[ISSUE I.] CL. 29 OF THE HEAD VOYAGE CHARTERPARTY BETWEEN CLAIMANT AND
RESPONDENT NO. 1 IS TO BE MADE APPLICABLE TO RESPONDENT NO.2 ______________ 3
A. THE TRIBUNAL HAS THE COMPETENCE TO DECIDE ON ITS OWN JURISDICTION. ______ 3
B. CL. 29 OF THE FIXTURE RECAP, READ TOGETHER WITH CL. 26(C) OF THE STANDARD
CHARTERPARTY CONSTITUTE THE ARBITRATION CLAUSE OF THE HEAD VOYAGE
CHARTERPARTY. ________________________________________________________ 4
C. THE BILL OF LADING INCORPORATES ARBITRATION CLAUSE OF THE HEAD VOYAGE
CHARTERPARTY. ________________________________________________________ 4
C.1 Absence of details required to identify a charter does not invalidate its
incorporation. ________________________________________________________ 5
C.2 The Charterparty incorporated in the bill of lading is the head voyage
Charterparty. ________________________________________________________ 5
C.3 The incorporation clause in the bill of lading expressly incorporates the
arbitration clause. ____________________________________________________ 7
TEAM 02 -TABLE OF CONTENTS-
MEMORANDUM FOR CLAIMANT Page II
D. THE DISPUTES IN THE PRESENT CASE ARISE OUT OF OR IN CONNECTION WITH THE HEAD
VOYAGE CHARTERPARTY. _________________________________________________ 8
[ISSUE II.] THE CLAIMANT’S EXERCISE OF LIEN ON SUB-FREIGHT IS VALID ______ 8
A. FURNACE, IS THE CARRIER OF THE GOODS IN THE PRESENT CASE. ________________ 8
A.1 Mere mention of the name of the headowner on the bill of lading is not
conclusive proof regarding the identity of the carrier. ________________________ 9
A.2 Due regard must be given to other factors like, the construction of the bill of
lading, functions carried on by the time charterer. ___________________________ 9
[I.] Importance must be given to the construction of the bill of lading. ________ 9
[II.] Importance must be given to the functions carried on by the time charterer
Furnace. __________________________________________________________ 10
B. FURNACE, BEING THE CARRIER CAN RIGHTFULLY CLAIM FREIGHT THAT IS UNPAID BY
THE IDONCARE. _________________________________________________________ 12
C. IN ARGUENDO, FURNACE HAS A LIEN ON SUB-FREIGHT BY WAY OF EQUITABLE
ASSIGNMENT. __________________________________________________________ 12
[ISSUE III.] THE CLAIMANT’S EXERCISE OF LIEN ON CARGO IS VALID __________ 13
A. FURNACE HAS A POSSESSORY LIEN ON THE CARGO ON BOARD MV TARDY TESSA. __ 13
A.1 Furnace has a valid right to exercise lien on cargo. ___________________ 13
A.2 Furnace has fulfilled the two basic requirements for exercise of lien on
cargo. ______________________________________________________________ 14
TEAM 02 -TABLE OF CONTENTS-
MEMORANDUM FOR CLAIMANT Page III
[I.] Furnace has a valid demand for the amount with regard to which the lien is
sought to be exercised. _______________________________________________ 14
[II.] Furnace can exercise such right by virtue of its constructive possession of the
cargo. ____________________________________________________________ 15
B. IN ARGUENDO, FURNACE HAS A RIGHT TO DETAIN THE POSSESSION OF CARGO. ____ 15
C. FURNACE IS ENTITLED TO RECOVER FROM INFERNO, THE COSTS OF EXERCISING THE
LIEN ON THE CARGO. _____________________________________________________ 16
[ISSUE IV.] THE CLAIMANT HAS VALIDLY TERMINATED THE HEAD VOYAGE
CHARTERPARTY DATED SEPTEMBER 1, 2016 __________________________________ 17
A. INFERNO HAS COMMITTED REPUDIATORY BREACH OF THE HEAD VOYAGE
CHARTERPARTY. _______________________________________________________ 17
A.1 Inferno has renounced the head voyage Charterparty. _________________ 17
A.2 The breach of the Charterparty by Inferno is of a nature that would deprive
Furnace of the substantial benefits agreed under the Charterparty. ____________ 18
B. FURNACE HAS ACCEPTED THE REPUDIATION AND HAS THEREFORE VALIDLY
TERMINATED THE HEAD VOYAGE CHARTERPARTY. _____________________________ 20
C. FURNACE CLAIMS DAMAGES FROM INFERNO, ON ACCOUNT OF THE REPUDIATORY
BREACH. ______________________________________________________________ 21
[ISSUE V.] THE APPLICATION MADE BY THE CLAIMANT FOR SALE OF CARGO IS TO
BE GRANTED __________________________________________________________ 22
A. THE TRIBUNAL HAS THE JURISDICTION TO ORDER FOR SALE OF CARGO PENDENTE
LITE. _________________________________________________________________ 22
TEAM 02 -TABLE OF CONTENTS-
MEMORANDUM FOR CLAIMANT Page IV
B. FURNACE CONTENDS THAT, IT IS JUST, NECESSARY AND URGENT FOR THE TRIBUNAL
TO ORDER FOR THE SALE OF THE CARGO ON BOARD. _____________________________ 23
B.1 In the present facts and circumstances the cargo demands for an urgent
sale. __________________________________________________________ 23
B.2 The sale of the cargo is just and necessary. _______________________ 23
C. THE RIGHT TO LIEN ON CARGO GETS TRANSFORMED INTO A RIGHT TO PROCEEDS OF
THE SALE OF CARGO. _____________________________________________________ 24
PRAYER _______________________________________________________________ XX
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page V
INDEX OF AUTHORITIES
CASES AND ARBITRAL AWARDS
“The Berkshire”, [1974]1 Lloyd’s Rep 185, 188 11
Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd
And Tex-Dilan Shipping Co Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389,
391
5,12
Bayoil SA v. Seawind Tankers Corp. (“The Leonidas”), [2001] 1 Lloyd’s Rep
533, 536
4
Beverly Hills National Bank Trust Co. v. Compania De Navegacione Almirante
S.A., Panama, (1971) 437 F. 2d 301, 302
15
Canficorp (Overseas projects) Ltd. v. Cormorant Bulk-Carriers Inc. (F.C.A),
[1984] F.C.J. No. 528, 8.
11
Castleton Commodities Shipping Company Pte Ltd. v. Silver Rock Investments,
[2016] 1 Lloyd’s Rep 1, 4
25
Cehave N.V. v. Bremer Handelsgesellschaft m.b.h (“The Hansa Nord”), [1976] 1
QB 44, 59
17
China Pacifiic v. Food Corporation Of India (“The Winson”), [1982] 1 Lloyd’s
Rep 117, 124
17
Cobelfret Bulk Carriers NV v. Swissmarine Services SA (“The Lowlands
Orchid”), [2010] 1 Lloyd’s Rep 317, 323.
4
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page VI
Coulter v. Chief Constable Of Dorset Police, [2004] EWCA Civ. 1259, 1263 13
Damayanti Kantilal Doshi v. Indian Bank, [1998] 3 SLR(R) 851 13
Decro-Wall International SA v. Practitioners In Marketing Ltd., [1971] 1 WLR
361, 380
19
Emilia Shipping Inc v. State Enterprise For Pulp And Paper Industries, [1991] 2
MLJ 379, 386
23
Engineering Company v. Engineering Company, Producer, Final Award, ICC
Case No. 6515 and 6516, Yearbook Commercial Arbitration, Vol. XXIV (1999).
3
Ethiopian Oilseeds & Pulses Export Corporation v. Rio Del Mar Foods Inc,
[1990] 1 Lloyd’s Rep 86, 97
8
Faith Maritime Co. Ltd. v. Feoso (Singapore)Pte Ltd, [2002] SGHC 229, 243 24
Federal Bulk Carriers Inc v. C. ITOH & Co. Ltd. And Others (The “Federal
Bulker”), [1989] 1 Lloyd’s Rep 103, 105
7
Federal Commerce And Navigation Co. Ltd. v. Molena Alpha (The” Nanfri”,
“Benfri” and “Lorfri”), [1978] 2 Lloyd’s Rep 132, 139
6
Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”,
“Benfri” and “Lorfri”), [1979] 1 Lloyd’s Rep 201, 207
19
Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”,
“Benfri” and “Lorfri”), [1979] 1 Lloyd’s Rep 201, 208
18
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page VII
Fetim B.V. v. Oceanspeed Shipping Ltd. (“The Flecha”), [1999] 1 Lloyd’s Rep
612, 618
10
Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities & Energy
Resources, Intervener), [2015] SGHC 311, 339
6,16
Golden Strait Corp v. Nippon Yusen Kubishika Kaisha (“The Golden Victory”),
[2007] 2 Lloyds Rep 164, 173
22
Government Of Gibraltar v. Kenney, [1956] LR 2 QB 410, 421 8
Gray v. Carr, [1871] L.R. 6 Q.B. 522, 555 14
H.E. Daniel Ltd. v. Carmel Exporters And Importers Ltd., [1953] 2 Lloyd’s Rep
103, 111
8
Harrison v. Huddersfield Steamship Company Ltd., [1903] 19 TLR 386 10
Heyman v. Darwins Ltd., [1942] 72 Lloyd’s Rep 65, 68 8,21
Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd.(“The Hongkong
Fir”), [1961] 2 Lloyd’s Rep 478, 494
19
IM Skaugen SE & Anr. v. MAN Diesel And Turbo SE & Anr, [2016] SGHCR 6,
29
13
International Bulk Carriers (Beirut) S.A.R.L. v Evlogia Shipping Co SA of
Panama (“The Mihalios Xilas”), [1978] 2 Lloyd’s Rep 186, 192
16
Itex Itagrani Export S.A. v. Care Shipping Corporation And Others (“The
Cebu”) (No. 2), [1990] 2 Lloyd's Rep 316, 321
6
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page VIII
K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia
Team"), [1983] 2 Lloyd’s Rep 640, 644
5, 12
Kallang Shipping S.A. Panama v. Axa Assurances Senegal, Comptoir
Commercial Mandiaye Ndiaya (“The Kallang No. 2”), [2009] 1 Lloyd’s Rep
124, 137
6
Kuwait Rocks Co. v. AMN Bulkcarriers Inc. (“The Astra”), [2013] 1 CLC 819,
830
19
Leeds Shipping Co. Ltd. v. Société Française Bunge (“The Easter City”), [1958]
2 Lloyd’s Rep. 127, 131
20
Logistics Management Inc v. One Pyramid Tent Arena, (1996) 86 F. 3d 908, 912 15
Louis Dreyfus Commodities Suisse SA v MT Maritime Management BV, (The
MTM Hong Kong), [2016] 1 Lloyd’s Rep 197, 207
22
Metall Market OOO v. Vitorio Shipping Company ltd. (“The Lehmann Timber”),
[2013] 2 Lloyd’s Rep 541, 557
17
National Navigation Co v. Endesa Generacion SA (“The Wadi Sudr”), [2009] 1
Lloyd’s Rep 666, 697
5
Pacific Molasses Co. & United Molasses Trading Co. v. Entre Rios Compania
Naviera SA (“The San Nicholas”), [1976] 1 Lloyd’s Rep 8, 11
5
Partenreederei M/S Heidberg v. Grosvenor Grain & Feed Co Ltd (“The
Heidberg”), [1994] 2 Lloyd's Rep. 287, 311
5
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page IX
Photo Production Ltd. v. Securicor Transport Ltd., [1980] 1 Lloyd’s Rep 545,
550
21
Rashtriya Chemicals and Fertilisers Ltd. v. Huddart Parker Industries Ltd. (“The
Boral Gas”), [1988] 1 Lloyd’s Rep 342, 349
16
Santiren Shipping Ltd. v. Unimarine SA (“The Chrysovalandou Dyo”), [1981] 1
Lloyd’s Rep 159, 165
14
Skips A/S Nordheim v Syrian Petroleum Co and Petrofina SA (“The Varenna”),
[1983] 2 Lloyd’s Rep 592, 597
7
Spar Shipping AS v. Grand China Logistics Holding (Group) Co. Ltd.(The “Spar
Capella”, “Spar Vega”and “Spar Draco”), [2016] 2 Lloyd’s Rep 447, 461
18
T.D. Bailey, Son & Co. v. Ross T. Smyth & Co. Ltd., [1940] 67 Lloyd’s Rep 147,
159
18
The “Dolphina”, [2012] 1 Lloyd’s Rep 304, 327 14
The “Trade Resolve”, [1999] 4 SLR 424, 439 24
The Rena K, [1978] 1 Lloyd’s Rep 545, 551 7
Uni-Ocean Lines Pte. Ltd. v. C. Trade S.A. (“The Lucille”), [1983] 1 Lloyd’s
Rep 387, 398
20
Vitol SA v. Norelf Ltd. (“The Santa Clara”), [1996] 2 Lloyd’s Rep 225, 229 21
Walter Rau Neusser Oel Fett AG v. Cross Pacific Trading Ltd., [2005] FCA
1102, 1119
8
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page X
Welex A.G v. Rosa Maritime Ltd. (“The Epsilon Rosa”), [2003] 2 Lloyd’s Rep
509, 514
5
Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS (“The
Western Moscow”), [2012] 2 Lloyd’s Rep 163, 168
12
Xiamen Xindaan Trade Co Ltd v. North China Shipping Co Ltd (“The
Mitchalakis”), [2009] EWHC 588
6
BOOKS AND DICTIONARIES
‘Constructive Possession’, Black’s Law Dictionary, Bryan A. Garner, West
Group, 9th Ed. (2009), Pg. 1282
15
Anthony Rogers, Jason Chuah, Martin Dockray, Cases And Materials On The
Carriage Of Goods By Sea, Routledge, 4th Ed. (2016), Pg. 150
18
Cyril Chern, The Law Of Construction Of Disputes, Informa Law Routledge, 2nd
Ed. (2016), Pg. 185
19
G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver
On Bills Of Lading, Sweet & Maxwell, 3rd Ed. (2011), Pg. 127
10
H.G. Beale, W.D. Bishop, M.P. Furmston, Contract: Cases & Materials, Oxford
University Press, 5th Ed. (2007), Pg. 572
19
John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed.
(2010), Pg. 249
7,13
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page XI
John Schofield, Laytime And Demurrage, Informa Law Routledge, 6th Ed. (2011),
Pg. 529
15
Joseph Chitty, H.G. Beale, Chitty On Contracts Vol. 1, Sweet & Maxwell, 31st
Ed. (2012), Pg. 1706
21
Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor,
John D. Kimball, David Martowski, LeRoy Lambert, Michael Sturley, Voyage
Charters, Informa Law From Routledge, 4th Ed. (2014), Pg. 316
6,12,
15,20
Lachmi Singh, The Law Of Carriage Of Goods By Sea, Bloomsbury Professional,
1st Ed. (2012), Pg. 224
12
Melis Ozdel, Bill Of Lading Incorporating Charterparties, Hart Publishing, 2nd
Ed. (2015), Pg. 89
14
Mindy Chen-Wishart, Contract Law, Oxford University Press, 1st Ed. (2007), Pg.
515
21
Peter Gillies, Concise Contract Law, The Federation Press, 1st Ed. (1988), Pg.
222
17
Richard Aikens, Richard Lord, Michael Bools, Bills of Lading, CRC Press, 2nd
Ed. (2015), Pg. 202
5
Stewart C. Boyd, Steven Berry, Andrew S. Burrows, Bernard Eder, David
Foxton, Christopher F. Smith, Scrutton On Charterparties And Bills Of Lading,
Sweet & Maxwell, 21st Ed. (2008), Pg. 72
5
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page XII
Terence Coghlin, Andrew W. Baker Q.C., Julian Kenny, John D. Kimball,
Thomas H. Belknap, Time Charters, Informa Law Routledge, 7th Ed. (2014), Pg.
24
10
Yvonne Baatz, Maritime Law, CRC Press, 3rd Ed. (2014), Pg. 174 13
JOURNAL ARTICLES
A Shipowner 's Lien on Sub-Sub-Freight in England and the United States: New
York Produce Exchange Time Charter Party Clause 18, Kenneth R. O’ Rourke,
Loyola Of Los Angeles International And Comparative Law Review, Vol.
7(1984), Pg. 73, 80
9
Incorporation Of Charterparty Arbitration Clauses Into Bills Of Lading: Recent
Developments, Miriam Goldby, The Denning Law Journal, Vol. 19 (2007), Pg.
171, 171
7
Maritime Liens, The American Law Register, The University Of Pennsylvania
Law Review, Vol. 5 (1857), Pg. 129, 131
15
Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time
Charter, MW Szczepanik, University Of Oslo, Pg. 28, available at
https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1,
last visited: April 6, 2017
18
Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time
Charter, MW Szczepanik, University Of Oslo, Pg. 7, available at
21
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page XIII
https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1,
last visited: April 10, 2017
Repudiation Of Contracts, Samuel Williston, Harvard Law Review, Vol. 14
(1901), Pg. 421, 439
18
The Ambiguous Incorporation Of Charterparties Into Bills Of Lading Under
English Law: A Case Of Too Many Cooks?, Lars Gerspacher, Journal Of
International Maritime Law, Vol. 12 (2006), Pg. 192, 197.
6
The Arbitrator’s Jurisdiction to Determine Jurisdiction, William W. Park, 13
ICCA Congress Series 55, Pg. 25, available at http://www.arbitration-
icca.org/media/4/1653246 3870041/media0124 09326410 520 jurisdiction _to
determine _jurisdiction_w_w_park.pdf, last visited: March 26, 2017.
3
The Concept Of Possession In The Common Law:Foundations For A New
Approach, A. E. S. Tay, Melbourne University Law Review, Vol. 4 (1964), Pg.
476, 489
15
The Embiricos Principle And The Law Of Anticipatory Breach, J.W. Carter, The
Modern Law Review, Vol. 47 (1984), Pg. 422, 422
17
The Identity Of Carrier Problem Under Time Charters: Diversity Despite
Unification Of Law, Caslav Pejovic, Journal Of Maritime Law And Commerce,
Vol. 31 (2000), Pg. 379, 398
9
The Identity Of Carrier Problem Under Time Charters: Diversity Despite
Unification Of Law, Caslav Pejovic, Journal Of Maritime Law And Commerce,
Vol. 31 (2000), Pg.379, 380
11
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page XIV
The Identity Of Carrier Problem Under Time Charters: Diversity Despite
Unification Of Law, Caslav Pejovic, Journal Of Maritime Law And Commerce,
Vol. 31 (2000), Pg.379, 399
9
The Identity Of The Carrier Under Bills Of Lading, J. Bassindale, Clifford
Chance Maritime Review, Vol. 11 (1992), Pg. 1, 4
10
The Incorporation Of A Charterparty Arbitration Clause In The Bill Of Lading :
Binding Effect Of Contract Without Consent, Sandra Lielbarde, Faculty Of Law
Lund University, Pg. 30, available at
http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1698465&file
OId=1698466, last visited: March 26, 2017
7
The Treatment, by the Federal Court of Canada, of Demise and Equivalent
Identity of Carrier Clauses in Liner Bills of Lading, David F.H. Marler, Tulane
Maritime Law Journal, Vol. 26 (2002), Pg. 597, 600
11
STATUTES AND CONVENTIONS
§ 10(2), International Arbitration Act (Ch. 143A), 1994 3
§12 (1)(d), International Arbitration Act (Ch. 143A), 1994 23
RULES
Art. III, R.2, Hague-Visby Rules, 1968 11
TEAM 02 -INDEX OF AUTHORITIES-
MEMORANDUM FOR CLAIMANT Page XV
R. 2, SCMA Rules, 3rd Ed. (2015) 22
R. 20, SCMA Rules, 3rd Ed. (2015). 3
OTHERS
Commentary On The 3rd Edition Of The Rules Of SCMA, Singapore Chamber
Of Maritime Arbitration, Pg. 1, available at
http://www.scma.org.sg/pdf/rules_201510_commentary.pdf, last visited: April
11, 2017
22
London Arbitration 16/91, LMLN (August 1991), Pg. 1 15
TEAM 02 -LIST OF ABBREVIATIONS-
MEMORANDUM FOR CLAIMANT Page XVI
LIST OF ABBREVIATIONS
§ Section
¶ Paragraph
Art. Article
Bundle IMLAM Moot Scenario December 9, 2016
Ch. Chapter
Cl. Clause
CLC Commercial Law Cases
Co. Company
Ed. Edition
EWCA England And Wales Court Of Appeal
EWCA Civ. England And Wales Court Of Appeal, Civil
Division
EWHC England And Wales High Court
FCA Federal Court Of Australia
F.C.J. Federal Court Judgment
ICC International Chamber of Commerce
Lloyd’s Rep Lloyd’s Reporter
TEAM 02 -LIST OF ABBREVIATIONS-
MEMORANDUM FOR CLAIMANT Page XVII
LMLN Lloyd’s Maritime Law Newsletter
LR Law Reports
Ltd. Limited
MLJ Malayan Law Journal
No. Number
Pg. Page
QB Queen’s Bench
R. Rule
SCMA Singapore Chamber Of Maritime
Arbitration
SGHC High Court Of Singapore
SGHCR High Court Of Singapore Reporter
SLR Singapore Law Reports
SLR(R) Singapore Law Reports Reissue
spsb Safe Port, Safe Berth
TLR Times Law Reports
v. Versus
Vol. Volume
TEAM 02 -LIST OF ABBREVIATIONS-
MEMORANDUM FOR CLAIMANT Page XVIII
WLR Weekly Law Reports
TEAM 02 -ISSUES RAISED-
MEMORANDUM FOR CLAIMANT Page XIX
ISSUES RAISED
ISSUE I
Whether or not Cl. 29 of the head voyage Charterparty between the Claimant and Respondent
No. 1 be made applicable to Respondent No.2?
ISSUE II
Whether or not the Claimant’s exercise of lien on sub-freight is valid?
ISSUE III
Whether or not the Claimant’s exercise of lien on cargo is valid?
ISSUE IV
Whether or not the Claimant has validly terminated the head voyage Charterparty dated
September 1, 2016?
ISSUE V
Whether or not the application made by the Claimant for sale of cargo be granted?
TEAM 02 -STATEMENT OF FACTS-
MEMORANDUM FOR CLAIMANT Page 1
STATEMENT OF FACTS
Formation of Charterparties and Issue of the Bill of Lading:
The Claimant, Furnace Trading Pte Ltd. (“Furnace”) entered into a ‘time Charterparty’ with
IMLAM Consignorist GmbH (“IMLAM”) on February 15, 2016 for the charter of the vessel,
MV Tardy Tessa. Furnace subsequently entered into a voyage charter (‘head voyage
Charterparty’) with Respondent No. 1, Inferno Resources Sdn Bhd (“Inferno”) on September
1, 2016 for carriage of Australian Anthracite coal from Newcastle, New South Wales, Australia
to one of eight Chinese ports at the charterer’s option. Inferno further sub-let the charter to
Respondent No. 2, Idoncare Berjaya Utama Pty. Ltd. (“Idoncare”). After loading of the coal, a
bill of lading dated 4th October 2016, incorporating the terms of voyage charter, was issued to
Idoncare.
Non-Fulfilment of the Head Voyage Charterparty Obligations by Inferno:
The bill of lading had been signed by the Master of MV Tardy Tessa on October 4, 2016. As
per the head voyage Charterparty, Inferno was under obligation to pay freight to Furnace within
5 days of signing of the bills of lading, but failed to do so. Further, the vessel arrived at
Singapore for bunkering on 10th October 2016, but Inferno failed to nominate the port of
discharge.
Repeated Reminders Given by Furnace:
Despite repeated reminders from Furnace, Inferno failed to pay freight or nominate the disport.
On October 16, 2016, Inferno nominated Busan, South Korea as the discharge port, which was
rejected by Furnace on account of it being unsafe and not within permitted range under the
head voyage Charterparty and the time Charterparty between Furnace and IMLAM. On
October 18, 2016, Furnace informed Inferno of the freight and other charges due and warned
that Furnace is preparing for a lien if Inferno continues its failure to perform. An urgent notice
TEAM 02 -STATEMENT OF FACTS-
MEMORANDUM FOR CLAIMANT Page 2
was mailed to Inferno on October 19, 2016 by Furnace requiring Inferno to nominate a
legitimate disport and to pay the freight due by 1200H LT on 20th October 2016, failing which
their conduct would be considered to be a renunciation of the head voyage Charterparty.
Notices of Lien Served by Furnace:
After getting no satisfactory response from Inferno, Furnace sent Notices of Lien on Cargo and
Sub-freight to Inferno and Idoncare, respectively, on October 20, 2016.
Notice of Termination by Furnace:
As a consequence of the inaction by Inferno, Furnace issued a Notice of Termination on
October 22, 2016 accepting the renunciation of the head voyage Charterparty by Inferno.
Notices of Arbitration:
Furnace sent Notices of arbitration to Inferno and Idoncare on November 25, 2016. Inferno and
Idoncare sent their own Responses to the Notices of arbitration sent to them on November 26,
2016. Furnace has also made an urgent application for the sale of coal on MV Tardy Tessa,
pendente lite, on December 1, 2016, considering the condition of the cargo as evident from the
Master’s Report dated November 30, 2016.
Inferno through its Response dated December 2, 2016, has denied all claims including that of
sale of cargo, while Idoncare has denied all claims, other than sale of cargo, and has objected
to the jurisdiction of the arbitral panel to determine the claim.
The arbitral tribunal has issued Procedural Order no. 1 dated December 11, 2016, Procedural
Order No. 2 and No. 3 dated February 17, 2017. Thereby, the oral arguments have been
scheduled for July 1-5, 2017.
TEAM 02 -ARGUMENTS ADVANCED-
MEMORANDUM FOR CLAIMANT Page 3
ARGUMENTS ADVANCED
[ISSUE I.] CL. 29 OF THE HEAD VOYAGE CHARTERPARTY BETWEEN CLAIMANT AND
RESPONDENT NO. 1 IS TO BE MADE APPLICABLE TO RESPONDENT NO.2
[¶1.] It is submitted before the Tribunal that the Claimant, that is, Furnace accepts the
competence of the Tribunal to decide on its own jurisdiction. [A] It thereby submits that Cl. 29
of the fixture recap, read with Cl. 26(c) of the standard Charterparty, that is, the “COAL-
OREVOY” Standard Coal and Ore Charterparty constitute the arbitration clause of the head
voyage Charterparty between Furnace and Respondent No. 1, that is, Inferno. [B] This
arbitration clause has been incorporated effectively in the bill of lading issued to Idoncare. [C]
Further, the disputes in the present case arise out of and in connection with the head voyage
Charterparty. [D]
A. THE TRIBUNAL HAS THE COMPETENCE TO DECIDE ON ITS OWN JURISDICTION.
[¶2.] It is submitted that according to the principle of ‘competence-competence’ an arbitral
tribunal has the authority to decide issues relating to its own jurisdiction.1 This principle is
considered as one of the basic principles in the area of International Commercial Arbitration.2
In the present case, the law in Singapore empowers the arbitration tribunal to rule on its own
jurisdiction.3 The procedural rules governing the arbitration also uphold the principle of
competence-competence.4 Hence, Furnace submits to the competence of the arbitral tribunal
to decide on its own jurisdiction.
1 The Arbitrator’s Jurisdiction to Determine Jurisdiction, William W. Park, 13 ICCA Congress Series 55, Pg.
25, available at http://www.arbitration-icca.org/media/4/1653246 3870041/media0124 09326410 520
jurisdiction _to determine _jurisdiction_w_w_park.pdf, last visited: March 26, 2017. 2 Engineering Company v. Engineering Company, Producer, Final Award, ICC Case No. 6515 and 6516,
Yearbook Commercial Arbitration, Vol. XXIV (1999). 3 § 10(2), International Arbitration Act (Ch. 143A), 1994. 4 R. 20, SCMA Rules, 3rd Ed. (2015).
TEAM 02 -ARGUMENTS ADVANCED-
MEMORANDUM FOR CLAIMANT Page 4
B. CL. 29 OF THE FIXTURE RECAP, READ TOGETHER WITH CL. 26(C) OF THE STANDARD
CHARTERPARTY CONSTITUTE THE ARBITRATION CLAUSE OF THE HEAD VOYAGE
CHARTERPARTY.
[¶3.] It is submitted that if the inconsistency between negotiated and incorporated standard
terms is reconcilable, they must be read together in a commercially suitable and sensible
manner.5 Thus, any potential conflict must be read in the aforementioned approach so that the
general clause applies, subject to the agreed terms between the parties.6
[¶4.] In the present case, Cl. 26(c) of the standard Charterparty says that the Charterparty
would be governed by the law of the place mutually agreed between the parties.7 Cl. 29 of the
fixture recap specifically mentions Singapore law and SCMA Rules as the governing law.
Hence, the general provision of the standard Charterparty must be qualified by the expressly
agreed ‘law and dispute resolution’ clause of the fixture recap. They must be read together
sensibly and thereby constitute the arbitration clause in the head voyage Charterparty.
C. THE BILL OF LADING INCORPORATES ARBITRATION CLAUSE OF THE HEAD VOYAGE
CHARTERPARTY.
[¶5.] It is respectfully submitted before the Tribunal that the absence of details required to
identify a Charterparty does not invalidate its incorporation in a bill of lading. [C.1] Here, the
Charterparty incorporated in the bill of lading is the head voyage Charterparty. [C.2] Further,
the incorporation clause in the bill of lading expressly incorporates the arbitration clause. [C.3]
5 Cobelfret Bulk Carriers NV v. Swissmarine Services SA (“The Lowlands Orchid”), [2010] 1 Lloyd’s Rep 317,
323. 6 Bayoil SA v. Seawind Tankers Corp. (“The Leonidas”), [2001] 1 Lloyd’s Rep 533, 536. 7 “COAL-OREVOY” Standard Coal and Ore Charterparty, Pg. 32 of Bundle.
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C.1 Absence of details required to identify a charter does not invalidate its
incorporation.
[¶6.] It is submitted that incorporation of a Charterparty in a bill of lading is not invalidated
due to absence of the date identifying the Charterparty.8 Unfilled blanks in the incorporation
clause with respect to the date of the Charterparty and name of the parties thereof, do not
invalidate the incorporation.9 This is because omission to fill up the blanks does not indicate
an intention to negative the incorporation of the Charterparty.10 Thus, non-identification of the
Charterparty sought to be incorporated in the bill of lading does not prove fatal to such
incorporation if the Charterparty can be otherwise identified properly.11
[¶7.] In the present case, the incorporation clause in the bill of lading mentions does not
specify the date or parties of any Charterparty. However, such failure to specify details for
identification of the Charterparty does not negative its incorporation into the bill of lading.
C.2 The Charterparty incorporated in the bill of lading is the head voyage
Charterparty.
[¶8.] It is respectfully submitted that where a series of charterparties exist, it is presumed that
the head Charterparty is incorporated in the bill of lading.12 This is based on the general rule
that the shipowner who issues the bill of lading is only a party to the head Charterparty.13
However, this general presumption does not extend to situations where there is a chain of
Charterparties containing a time Charterparty as the head Charterparty, followed by a voyage
8 Welex A.G v. Rosa Maritime Ltd. (“The Epsilon Rosa”), [2003] 2 Lloyd’s Rep 509, 514. 9 Pacific Molasses Co. & United Molasses Trading Co. v. Entre Rios Compania Naviera SA (“The San
Nicholas”), [1976] 1 Lloyd’s Rep 8, 11. 10 Stewart C. Boyd, Steven Berry, Andrew S. Burrows, Bernard Eder, David Foxton, Christopher F. Smith,
Scrutton On Charterparties And Bills Of Lading, Sweet & Maxwell, 21st Ed. (2008), Pg. 72. 11 National Navigation Co v. Endesa Generacion SA (“The Wadi Sudr”), [2009] 1 Lloyd’s Rep 666, 697. 12 K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia Team"), [1983] 2 Lloyd’s Rep
640, 644. 13 Richard Aikens, Richard Lord, Michael Bools, Bills of Lading, CRC Press, 2nd Ed. (2015), Pg. 202.
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Charterparty.14 In such cases the provisions of the relevant voyage Charterparty are
incorporated.15 General terms of a time Charterparty like period clause, clauses relating to off-
hire, withdrawal etc. are inconsistent with a voyage.16 Further, the use of the word ‘freight’
indicates that the Charterparty sought to be incorporated is a voyage Charterparty, the terms of
which are more relevant to a bill of lading.17 Moreover time charterparties do not generally use
the term ‘freight’,18 thereby nullifying the possibility of incorporation of a time Charterparty.
[¶9.] In the present case, the incorporation clause in the bill of lading fails to identify the
Charterparty. The head Charterparty between IMLAM and Furnace, being a time charter, is
unsuitable for a subsequent voyage. Further, the use of the term ‘freight’ in the bill of lading is
indicative of the incorporation of a voyage charter.19 Hence, it is clear that the Charterparty
incorporated is not the head time Charterparty but a relevant voyage Charterparty.
[¶10.] Further, if there are multiple voyage charterparties, the Charterparty that is incorporated
in the bill of lading is the head voyage Charterparty.20 Even though the head voyage charter
does not have the shipowner as the party or the shipper is a sub-sub-charterer, the time charterer
usually has a commercial incentive as well as the shipowner’s lawful authority to issue and
sign bills of lading.21
14 Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd And Tex-Dilan Shipping Co
Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389, 392. 15 Partenreederei M/S Heidberg v. Grosvenor Grain & Feed Co Ltd (“The Heidberg”), [1994] 2 Lloyd's Rep.
287, 311. 16 Federal Commerce And Navigation Co. Ltd. v. Molena Alpha (The” Nanfri”, “Benfri” and “Lorfri”), [1978]
2 Lloyd’s Rep 132, 139. 17 Kallang Shipping S.A. Panama v. Axa Assurances Senegal, Comptoir Commercial Mandiaye Ndiaya (“The
Kallang No. 2”), [2009] 1 Lloyd’s Rep 124, 137; Itex Itagrani Export S.A. v. Care Shipping Corporation And
Others (“The Cebu”) (No. 2), [1990] 2 Lloyd's Rep 316, 321. 18 The Ambiguous Incorporation Of Charterparties Into Bills Of Lading Under English Law: A Case Of Too
Many Cooks?, Lars Gerspacher, Journal Of International Maritime Law, Vol. 12 (2006), Pg. 192, 197. 19 Bill Of Lading, Pg. 41 of Bundle. 20 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities And Energy Resources, Intervener),
[2015] SGHC 311, 321; Xiamen Xindaan Trade Co Ltd v. North China Shipping Co Ltd (“The Mitchalakis”),
[2009] EWHC 588. 21 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David
Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law Routledge, 4th Ed. (2014), Pg.
511.
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[¶11.] In the present case, there exist two voyage charterparties, namely those between
Furnace and Inferno and between Inferno and Idoncare. The former is the head voyage
Charterparty and is therefore identified as the Charterparty incorporated in the bill of lading.
C.3 The incorporation clause in the bill of lading expressly incorporates the
arbitration clause.
[¶12.] It is submitted that in case of bills of lading, a strict rule has to be followed while
incorporating an arbitration clause,22 after proper reference to the operative words contained in
the bill of lading.23 The use of the expression ‘all conditions and exceptions’ does not
automatically incorporate an arbitration clause, which is considered to be collateral24 and
ancillary to the primary objective of the contract.25 An arbitration clause is however
incorporated in a bill of lading by the use of express terms,26 such as ‘including the arbitration
clause’.27
[¶13.] In the present case, the bill of lading uses the phrase ‘including the Law and Arbitration
Clause/Dispute Resolution Clause, are herewith incorporated’.28 Hence, through the use of
such express reference, the arbitration clause, that is, Cl. 29 of the head voyage Charterparty
has been validly incorporated in the bill of lading.
22 Federal Bulk Carriers Inc v. C. ITOH & Co. Ltd. And Others (The “Federal Bulker”), [1989] 1 Lloyd’s Rep
103, 105. 23 Incorporation Of Charterparty Arbitration Clauses Into Bills Of Lading: Recent Developments, Miriam
Goldby, The Denning Law Journal, Vol. 19 (2007), Pg. 171, 171. 24 Skips A/S Nordheim v Syrian Petroleum Co and Petrofina SA (“The Varenna”), [1983] 2 Lloyd’s Rep 592,
597. 25 John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed. (2010), Pg. 249.249. 26 The Incorporation Of A Charterparty Arbitration Clause In The Bill Of Lading : Binding Effect Of Contract
Without Consent, Sandra Lielbarde, Faculty Of Law Lund University, Pg. 30, available at
http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1698465&fileOId=1698466, last visited:
March 26, 2017.. 27 The Rena K, [1978] 1 Lloyd’s Rep 545, 551.. 28 Bill of Lading- Conditions of Carriage, Pg. 42 of Bundle.
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D. THE DISPUTES IN THE PRESENT CASE ARISE OUT OF OR IN CONNECTION WITH THE HEAD
VOYAGE CHARTERPARTY.
[¶14.] It is submitted that in a case where parties have contractually agreed to refer any dispute
that arises out of the contract to arbitration, such agreement between the parties must be
construed broadly.29 The expression ‘arising out of’ can be interpreted to include non-
contractual claims that are closely linked with the contract or are incidental to such contract.30
This expression reflects that disputes that arise not only out of contractual obligations and
rights, but also out of practical considerations in the performance of the contract, fall under the
ambit of ‘arising out of’ the contract.31 The use of words ‘arising out of’ covers all disputes
except a dispute as to the existence of the contract itself.32
[¶15.] In the present case, the head voyage Charterparty dated September 1, 2016 uses the
expression ‘arising out of or in connection with this Charter Party’.33 Hence, the use of this
expression demands a broad interpretation such that it covers all disputes in the present case.
[ISSUE II.] THE CLAIMANT’S EXERCISE OF LIEN ON SUB-FREIGHT IS VALID
[¶16.] It is submitted before the Hon’ble Tribunal that the Claimant, that is, Furnace is the
carrier of the goods with respect to the shipper, that is, Idoncare. [A] Thus, Furnace can rightly
claim the freight unpaid by Respondent No. 2, that is, Idoncare. [B] In arguendo, Furnace has
a lien on sub-freight by equitable assignment. [C]
A. FURNACE, IS THE CARRIER OF THE GOODS IN THE PRESENT CASE.
[¶17.] It is respectfully submitted before the Tribunal that the mere mention of the name of
29 Ethiopian Oilseeds & Pulses Export Corporation v. Rio Del Mar Foods Inc, [1990] 1 Lloyd’s Rep 86, 97.. 30 Government Of Gibraltar v. Kenney, [1956] LR 2 QB 410, 421;; Heyman v. Darwins Ltd., [1942] 72 Lloyd’s
Rep 65, 68.. 31 Walter Rau Neusser Oel Fett AG v. Cross Pacific Trading Ltd., [2005] FCA 1102, 1119.. 32 H.E. Daniel Ltd. v. Carmel Exporters And Importers Ltd., [1953] 2 Lloyd’s Rep 103, 111.. 33 “COAL-OREVOY” Standard Coal and Ore Charterparty: Cl. 26(c), Pg. 32 of Bundle.
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the headowner on the bill of lading is not conclusive proof regarding the identity of the carrier.
[A.1] Thus, in order to identify the carrier one must give due regard to other factors like, the
construction of the bill of lading and functions carried on by the time charterer. [A.2]
A.1. Mere mention of the name of the headowner on the bill of lading is not
conclusive proof regarding the identity of the carrier.
[¶18.] It is submitted that mention of an entity’s name as heading on the bill of lading is not
conclusive proof as to the identity of the carrier.34 Banner headings are considered of lesser
importance as compared to other potential indicators.35 This is because the heading on the bill
of lading may trace down to a person who might have no link with the contract itself.36
In the present case, the bill of lading mentions the headowner IMLAM’s name, as its heading.
However, mere mention of the headowner’s name does not designate to it the role of the carrier.
A.2. Due regard must be given to other factors like, the construction of the bill of
lading, functions carried on by the time charterer.
[¶19.] It is respectfully submitted before the Tribunal that due regard must be given to the
construction of the bill of lading, including the surrounding circumstances. [I] Also, importance
must be given to the functions carried on by the time charterer. [II]
[I.] Importance must be given to the construction of the bill of lading.
[¶20.] It is submitted that to determine whether a bill of lading is a charterer’s bill or a
34 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav
Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg. 379, 398.379, 398. 35 A Shipowner 's Lien on Sub-Sub-Freight in England and the United States: New York Produce Exchange
Time Charter Party Clause 18, Kenneth R. O’ Rourke, Loyola Of Los Angeles International And Comparative
Law Review, Vol. 7(1984), Pg. 73, 80.73, 80. 36 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav
Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg.379, 399..
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shipowner’s bill, importance must be given to the construction of the bill,37 for which, the it
must be examined as a whole, and not in isolation.38 If the construction is such that it
incorporates a Charterparty, recourse must be taken to the terms of such Charterparty for
identification of the carrier.39 Thus, importance must be accorded to ‘surrounding
circumstances’ like, provisions of the relevant Charterparty.40 If the incorporated provisions of
such Charterparty allow the Master to sign bills of lading on behalf of a charterer, such charterer
is to be considered as the carrier.41
[¶21.] In the present case, the head voyage Charterparty has been validly incorporated in the
bill of lading, as per which the Master would sign the bill of lading on behalf of Furnace.42
Hence, Furnace is the carrier of the goods as per the construction of all terms of the bill of
lading that incorporates the provisions of the head voyage Charterparty.
[II.] Importance must be given to the functions carried on by the time charterer Furnace.
[¶22.] It is submitted that in a time charter although the navigational control of the vessel rests
in the shipowner, it is the time charterer who controls the commercial functions of the vessel.43
He can freely utilize the vessel for transportation of cargo owned by him or by a third party,
thereby becoming the common carrier.44 The time charterer, being in charge of the commercial
functions of the vessel, is the party that enters into contract with the shipper.45 In the present
37 G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver On Bills Of Lading, Sweet &
Maxwell, 3rd Ed. (2011), Pg. 128.128. 38 Fetim B.V. v. Oceanspeed Shipping Ltd. (“The Flecha”), [1999] 1 Lloyd’s Rep 612, 618.. 39 The Identity Of The Carrier Under Bills Of Lading, J. Bassindale, Clifford Chance Maritime Review, Vol. 11
(1992), Pg. 1, 4.1, 4. 40 G.H Treitel,, Francis Martin, Baillie, Reynolds, Thomas Gilbert Carver, Carver On Bills Of Lading, Sweet &
Maxwell, 3rd Ed. (2011), Pg. 127.127. 41 Harrison v. Huddersfield Steamship Company Ltd., [1903] 19 TLR 386.. 42 Fixture Recap: Cl. 26, Pg. 22 of Bundle. 43 Terence Coghlin, Andrew W. Baker Q.C., Julian Kenny, John D. Kimball, Thomas H. Belknap, Time
Charters, Informa Law Routledge, 7th Ed. (2014), Pg. 24.24. 44 The Identity Of Carrier Problem Under Time Charters: Diversity Despite Unification Of Law, Caslav
Pejovic, Journal Of Maritime Law And Commerce, Vol. 31 (2000), Pg.379, 380.. 45 The Treatment, by the Federal Court of Canada, of Demise and Equivalent Identity of Carrier Clauses in
Liner Bills of Lading, David F.H. Marler, Tulane Maritime Law Journal, Vol. 26 (2002), Pg. 597, 600.597, 600.
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case, Furnace being the time charterer, entered into contracts with shippers.
[¶23.] Further, it is submitted that under the Hague-Visby Rules, the duties in relation loading,
stowing, handling, carrying, discharging and so on rest with the carrier.46 As a corollary, if a
time charterer carries on the aforementioned functions, it is a relevant factor to be considered
while identifying the carrier of the goods.47 Presence of terms such as, bringing the Master
under the control and directions of the charterers, charterer’s power to request removal of the
Master, to provide the Master with sailing directions, etc indicate the charterer’s control over
the vessel’s movement, thereby putting him in the position of the carrier with regard to the
obligations that he has assumed.48 It is important to note that the presence of the clause which
says that the Master would “sign bills of lading for cargo as presented, in conformity with
Mate's or Tally Clerk's receipts” indicates that the bill of lading was signed on behalf of the
shipowner unless something manifestly inconsistent is provided for in the bill.49
[¶24.] In the present case, crucial functions like that of loading, stowing and so on are being
carried on by the time charterer, Furnace.50 Thus, as per the time Charterparty between IMLAM
and Furnace, certain obligations have been assumed by Furnace that puts it in the position of
the carrier. Also, despite the presence of Cl. 31 in the time Charterparty providing for the master
to sign bills of lading as presented, IMLAM cannot be termed as the carrier. This is because
the bill of lading here incorporates the terms of the head voyage Charterparty that allows the
master to sign bills on behalf of Furnace, which is manifestly inconsistent with the
interpretation that allows the shipowner, that is, IMLAM to be the carrier.
46 Art. III, R.2, Hague-Visby Rules, 1968.. 47 Canficorp (Overseas projects) Ltd. v. Cormorant Bulk-Carriers Inc. (F.C.A), [1984] F.C.J. No. 528, 8.. 48 Ibid. 49 “The Berkshire”, [1974]1 Lloyd’s Rep 185, 188.. 50 Time Charterparty: Cl. 8, 14, Pg. 3, 8 of Bundle.
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B. FURNACE, BEING THE CARRIER CAN RIGHTFULLY CLAIM FREIGHT THAT IS UNPAID BY THE
IDONCARE.
[¶25.] It is submitted that the phrase ‘freight payable as per Charterparty’ enables the carrier
to have against the holder of the bill, a legal right to receive freight due under the bill.51 Thus,
the carrier can claim from the bill of lading holder, the freight that may be payable under a
charter to which the carrier is a party52, or a sub charter to which the carrier is not a party.53 If
the bill of lading is signed by the Master on behalf of the charterer, then the charterer being the
carrier, will be entitled to freight directly from the shipper.54
[¶26.] In the present case, Furnace is the carrier under the bill of lading issued to Idoncare.
The bill of lading contains on its face, the phrase “freight payable as per Charterparty”.55
Hence, Furnace is entitled to claim from Idoncare, the amount of freight that is unpaid by
Idoncare.
C. IN ARGUENDO, FURNACE HAS A LIEN ON SUB-FREIGHT BY WAY OF EQUITABLE ASSIGNMENT.
[¶27.] It is submitted that a lien on sub-freight can be exercised by assignment of the freight
that is due to a charterer, such lien being a security against such freight.56 Such lien on sub-
freight can be exercised in the form of equitable assignment, in the absence of an express
provision in writing.57 A claim of lien on sub-freight by equitable assignment must be
supported by an intention to assign the same58 that can be inferred from the conduct of the
51 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David
Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law From Routledge, 4th Ed. (2014),
Pg. 316.316. 52 K/S A/S Seateam & Co. v. Iraq National Oil Co. And Others (The "Sevonia Team"), [1983] 2 Lloyd’s Rep
640, 644.. 53 Bangladesh Chemical Industries Corporation v. Henry Stephens Shipping Co Ltd And Tex-Dilan Shipping Co
Ltd (“The SLS Everest”), [1981] 2 Lloyd's Rep 389, 391.. 54 Lachmi Singh, The Law Of Carriage Of Goods By Sea, Bloomsbury Professional, 1st Ed. (2012), Pg. 224.224. 55 Bill of Lading, Pg. 41 of Bundle. 56 Western Bulk Shipowning III A/S v. Carbofer Maritime Trading ApS (“The Western Moscow”), [2012] 2
Lloyd’s Rep 163, 168.. 57 IM Skaugen SE & Anr. v. MAN Diesel And Turbo SE & Anr, [2016] SGHCR 6, 29.. 58 Coulter v. Chief Constable Of Dorset Police, [2004] EWCA Civ. 1259, 1263..
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parties.59
[¶28.] In the present case, Inferno has not raised any objection against the notice of lien on
sub-freight that has been sent to Idoncare, by Furnace. This evinces an intention on part of
Inferno to assign to Furnace, the right to exercise lien on sub-freight. Hence, Furnace can
exercise a valid lien on sub-freight by way of equitable assignment, notwithstanding the
absence of a term in writing providing for such assignment.
[ISSUE III.] THE CLAIMANT’S EXERCISE OF LIEN ON CARGO IS VALID
[¶29.] It is submitted before the Tribunal that, the Claimant, that is, Furnace, can validly
exercise a possessory lien on cargo. [A] In arguendo, Furnace has a right to detain the
possession of cargo. [B] Also, Furnace is entitled to recover from Respondent No. 1, that is,
Inferno, the costs of exercising the lien on the cargo. [C]
A. FURNACE HAS A POSSESSORY LIEN ON THE CARGO ON BOARD MV TARDY TESSA.
[¶30.] It is submitted before the Tribunal that Furnace has a valid right to exercise lien on
cargo. [A.1] It has fulfilled the two basic requirements for exercise of lien on cargo. [A.2]
A.1. Furnace has a valid right to exercise lien on cargo.
[¶31.] It is submitted that lien on cargo is a possessory lien60 which can arise out of common
law or by an express contractual term.61 A contractual right of such lien can be exercised against
the cargo of third party shippers if the Charterparty lien clause has been stipulated expressly62
or validly incorporated in the bill of lading issued to the shipper.63 Words of incorporation like
‘all terms, conditions and exceptions of the Charterparty’ incorporate such provisions of the
59 Damayanti Kantilal Doshi v. Indian Bank, [1998] 3 SLR(R) 851.. 60 Yvonne Baatz, Maritime Law, CRC Press, 3rd Ed. (2014), Pg. 174.174. 61 John F. Wilson, Carriage Of Goods By Sea, Pearson Education Ltd., 7th Ed. (2010), Pg. 303.303 62 Melis Ozdel, Bill Of Lading Incorporating Charterparties, Hart Publishing, 2nd Ed. (2015), Pg. 89.89. 63 Santiren Shipping Ltd. v. Unimarine SA (“The Chrysovalandou Dyo”), [1981] 1 Lloyd’s Rep 159, 165..
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Charterparty that are germane to carriage, delivery of goods and freight payment.64 This
indicates that such a phrase validly incorporates the Charterparty lien clause into the bill of
lading. Even the narrowest forms of expressions are sufficient to incorporate a Charterparty
lien clause.65
[¶32.] In the present case, the head voyage Charterparty Furnace and Inferno, provides an
express right of lien on cargo to Furnace.66 This right of lien is exercisable over the goods
owned by Idoncare, by virtue of a valid incorporation of the lien clause contained in the voyage
Charterparty into the bill of lading issued to Idoncare. Hence, Furnace has a valid contractual
right to exercise lien on cargo for the freight unpaid to it by Inferno.
A.2. Furnace has fulfilled the two basic requirements for exercise of lien on
cargo.
[¶33.] It is submitted before the Tribunal that Furnace has a valid demand for the amount with
regard to which the lien is sought to be exercised. [I] Also, Furnace is in continuous
constructive possession of the cargo. [II]
[I.] Furnace has a valid demand for the amount with regard to which the lien is sought to be
exercised.
[¶34.] It is submitted that for a valid lien to be exercised, it is imperative that a demand is
made for the amount with respect to which lien is sought to be exercised.67 Further, a valid lien
can be exercised only when the lienee has served a notice of exercise of such lien.68
[¶35.] In the present case, Furnace has made numerous demands from Inferno for payment of
64 The “Dolphina”, [2012] 1 Lloyd’s Rep 304, 327.. 65 Gray v. Carr, [1871] L.R. 6 Q.B. 522, 555.. 66 “COAL-OREVOY” Standard Coal And Ore Charterparty: Cl. 19, Pg. 31 of Bundle. 67 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David
Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law Routledge, 4th Ed. (2014), Pg.
468.468. 68 London Arbitration 16/91, LMLN (August 1991), Pg. 1.1.
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freight69 and has also served upon Inferno a notice for exercise of lien on the cargo. Hence,
Furnace has made a valid demand for the amount with respect to which lien is sought.
[II.] Furnace can exercise such right by virtue of its constructive possession of the cargo.
[¶36.] It is submitted that in order to maintain a possessory lien, the person claiming the lien
must have actual or constructive possession of the cargo.70 Constructive possession of cargo
refers to an element of control on the cargo.71 This essentially entails some degree of power
that can be exercised over the object.72 A possessory lien on cargo can thus be claimed by one
who has control of the ship and thereby constructive possession of the goods.73 Such lien can
be exercised at any place other than the discharge port if there exist practical difficulties in
exercising the lien at the disport.74
[¶37.] In the present case, Furnace, by virtue of its employment instructions can instruct the
master to not unload the cargo.75 Moreover, Furnace has the assistance of IMLAM, in
exercising the lien.76 It is evident that Furnace has some form of control over the cargo, thereby
giving it constructive possession of the cargo. Hence, Furnace can validly exercise lien on
cargo.
B. IN ARGUENDO, FURNACE HAS A RIGHT TO DETAIN THE POSSESSION OF CARGO.
[¶38.] It is submitted that a disponent owner gets a beneficial or equitable right that is derived
69 E-mail Conversation Dated October 10, October 14, October 15, October 18, October 19, Pg. 51, 54, 56, 62,
64 of Bundle. 70 Logistics Management Inc v. One Pyramid Tent Arena, (1996) 86 F. 3d 908, 912;; Beverly Hills National Bank
Trust Co. v. Compania De Navegacione Almirante S.A., Panama, (1971) 437 F. 2d 301, 302.. 71 ‘Constructive Possession’, Black’s Law Dictionary, Bryan A. Garner, West Group, 9th Ed. (2009), Pg.
1282.1282. 72 The Concept Of Possession In The Common Law:Foundations For A New Approach, A. E. S. Tay, Melbourne
University Law Review, Vol. 4 (1964), Pg. 476, 489.476, 489. 73 Maritime Liens, The American Law Register, The University Of Pennsylvania Law Review, Vol. 5 (1857), Pg.
129, 131.129, 131. 74 John Schofield, Laytime And Demurrage, Informa Law Routledge, 6th Ed. (2011), Pg. 529.529. 75 Time Charterparty: Cl.8, Pg. 3 of Bundle. 76 E-mail Conversation Dated October 20, 2016, Pg. 36 of Bundle.
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from the exercise of lien by the headowner who is in actual possession of the cargo.77 This
gives the charterer as disponent owner, a right to detain possession of the cargo.78 A lien in
essence, is the denial of possession of goods to one who wants such goods.79 Further, as against
the voyage charterer, the disponent owner would have a right of lien under the voyage
Charterparty. As against the shippers it would act as beneficiary of a true lien in favor of the
carrier and it can direct the vessel to not unload the cargo.80
[¶39.] In the present case, Furnace is the beneficiary of the true lien that can be exercised by
the head owner IMLAM. IMLAM has assured its full assistance to the Claimant in order to
exercise lien on the cargo.81 Thus, although Furnace may not be able to exercise a lien in the
strict sense, it gets a right to detain the possession of the cargo.
C. FURNACE IS ENTITLED TO RECOVER FROM INFERNO, THE COSTS OF EXERCISING THE LIEN ON
THE CARGO.
[¶40.] It is submitted that a shipowner’s exercise of lien for non-payment of freight is not due
to any fault of his own.82 Such exercise of lien on cargo protects not only his own interest, but
also benefits the cargo interests through continuous care of the cargo.83 A cargo interest would
therefore, be liable to pay the storage costs incurred by the shipowner while exercising the
lien.84 Thus, in the present case, Inferno is liable to pay the costs of exercising the lien to the
Furnace.
77 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities And Energy Resources, Intervener), [2015]
SGHC 311, 327. . 78 Ibid at 328. 79 International Bulk Carriers (Beirut) S.A.R.L. v Evlogia Shipping Co SA of Panama (“The Mihalios Xilas”),
[1978] 2 Lloyd’s Rep 186, 192.. 80 Castleton Commodities Shipping Company Pte Ltd.v, Silver Rock Investments (“The Clipper Monarch”),
[2016] 1 Lloyd’s Rep 1,4. 81 E-mail Conversation Dated October 20, 2016, Pg.36 of Bundle. 82 Rashtriya Chemicals and Fertilisers Ltd. v. Huddart Parker Industries Ltd. (“The Boral Gas”), [1988] 1
Lloyd’s Rep 342, 349.. 83 China Pacifiic v. Food Corporation Of India (“The Winson”), [1982] 1 Lloyd’s Rep 117, 124.. 84 Metall Market OOO v. Vitorio Shipping Company ltd. (“The Lehmann Timber”), [2013] 2 Lloyd’s Rep 541,
557..
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MEMORANDUM FOR CLAIMANT Page 17
[ISSUE IV.] THE CLAIMANT HAS VALIDLY TERMINATED THE HEAD VOYAGE
CHARTERPARTY DATED SEPTEMBER 1, 2016
[¶41.] It is submitted before the Tribunal that there has been repudiatory breach of the head
voyage Charterparty on the part of Respondent No. 1, that is, Inferno. [A] The Claimant, that
is, Furnace has accepted such repudiation and has therefore validly terminated the head voyage
Charterparty. [B]
A. INFERNO HAS COMMITTED REPUDIATORY BREACH OF THE HEAD VOYAGE CHARTERPARTY.
[¶42.] It is submitted before the Tribunal that Inferno has renounced the head voyage
Charterparty. [A.1] Also, the breach of the Charterparty by Inferno is of a nature that would
deprive Furnace of the substantial benefits agreed under the Charterparty. [A.2]
A.1. Inferno has renounced the head voyage Charterparty.
[¶43.] It is respectfully submitted that when a party, before performance becomes due, evinces
an intention to not perform85, and be no longer bound by the contract86, it amounts to an
anticipatory breach of the contract. It is based on the idea that commercial men need not wait
for the actual non-performance, they are allowed to act on commercial probabilities.87 Such
anticipatory breach operates through a mode of renunciation of the terms of the contract by a
party.88 Renunciation refers to a conduct from which a party reasonably infers that the opposite
party does not intend to perform a future obligation, such that the non-performance would lead
to repudiation.89 Thus, it is important to determine the intention of the party alleged to have
85 Cehave N.V. v. Bremer Handelsgesellschaft m.b.h (“The Hansa Nord”), [1976] 1 QB 44, 59.. 86 Peter Gillies, Concise Contract Law, The Federation Press, 1st Ed. (1988), Pg. 222.222. 87 The Embiricos Principle And The Law Of Anticipatory Breach, J.W. Carter, The Modern Law Review, Vol.
47 (1984), Pg. 422, 422.422, 422. 88 Anthony Rogers, Jason Chuah, Martin Dockray, Cases And Materials On The Carriage Of Goods By Sea,
Routledge, 4th Ed. (2016), Pg. 150.150. 89 Spar Shipping AS v. Grand China Logistics Holding (Group) Co. Ltd.(The “Spar Capella”, “Spar Vega”and
“Spar Draco”), [2016] 2 Lloyd’s Rep 447, 461..
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MEMORANDUM FOR CLAIMANT Page 18
renounced the contract. Such intention may not expressly reveal its unwillingness to perform
the contract, but rather indicate the performance of the contract in a manner that is substantially
inconsistent with the contractual obligations.90 In such a circumstance, the innocent party may
make inferences from the actions of the other party and not from its subjective desires.91
Intention of a party must not be judged on the basis of individual words and actions but on the
basis of a sum total of such words or actions.92 If the intention of the party in breach is such as
to abandon the performance of the contract, a charge of repudiation would be justified against
such party.93 Thus, if a party reveals an intention to not be bound by the contract, the conduct
of the party is considered to be repudiatory.94
[¶44.] In the present case, Inferno has not paid the freight due to Furnace. It has also not
nominated a valid disport even after the vessel passed Singapore for bunkering. It has later
requested Furnace for payment of freight after discharge and has also nominated an unsafe
port. It is evident that Inferno’s intention has been to perform the Charterparty in a manner
substantially inconsistent with its obligations under the Charterparty.95 Hence, Inferno can be
said to have renounced the terms of the head voyage Charterparty, thereby constituting
repudiatory breach.
A.2. The breach of the Charterparty by Inferno is of a nature that would deprive
Furnace of the substantial benefits agreed under the Charterparty.
[¶45.] It is submitted that non-compliance of a term in a contract will amount to repudiation
if such breach is fundamental in nature, such that the innocent party is denied of ‘substantially
90 T.D. Bailey, Son & Co. v. Ross T. Smyth & Co. Ltd., [1940] 67 Lloyd’s Rep 147, 159.. 91 Federal Commerce And Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”, “Benfri” and “Lorfri”), [1979]
1 Lloyd’s Rep 201, 208.. 92 Sk Shipping (S) Pte Ltd v. Petroexport Ltd(“The Pro Victor”), [2010] 2 Lloyd’s Rep 158, 173. 93 Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time Charter, MW Szczepanik,
University Of Oslo, Pg. 28, available at
https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1, last visited: April 6, 2017.. 94 Repudiation Of Contracts, Samuel Williston, Harvard Law Review, Vol. 14 (1901), Pg. 421, 439.. 95 E-mail Conversation Dated October 16, 2016, October 21, 2016, Pg. 57, 58, 68 of Bundle.
TEAM 02 -ARGUMENTS ADVANCED-
MEMORANDUM FOR CLAIMANT Page 19
the whole benefit’ that it should have obtained as consideration for performing his undertakings
as agreed under the contract.96 An innocent party may also treat a breach by the other party to
be repudiatory, if the breach is such that it deprives the former of a ‘substantial part of benefit’
that it is entitled to under the contract.97 This brings out a common principle that if a breach
goes to the root of the contract, that is, it is a fundamental breach98, it entitles the innocent party
to treat the contract as repudiated.99 It is then immaterial whether the term belongs to specific
category of condition, warranty or innominate term.100
[¶46.] In the present case, Inferno, has failed to pay to Furnace the freight due under the
Charterparty within five banking days after completion of loading and signing the bills of
lading, as required by the head voyage Charterparty.101 Despite several reminders and a final
notice dated October 19, 2016, being given by Furnace, Inferno failed to make the payment.
The breach of the payment of freight clause of the head voyage Charterparty deprives Furnace
of freight that is the consideration it was to receive as per the agreed terms of the contract.
Hence, Furnace is being deprived of substantial benefit under the Charterparty and is thereby
entitled to treat the Charterparty as repudiated.
[¶47.] Further, where a delay in nominating a port is such that it goes to the root of the
Charterparty or is coupled with renunciation of the Charterparty, the innocent party is entitled
to terminate such Charterparty.102 Such nomination of port by the charterer must be in
accordance with the terms of the Charterparty. If a Charterparty provides for nomination of a
96 Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd.(“The Hongkong Fir”), [1961] 2 Lloyd’s Rep
478, 494.. 97 Decro-Wall International SA v. Practitioners In Marketing Ltd., [1971] 1 WLR 361, 380.. 98 Cyril Chern, The Law Of Construction Of Disputes, Informa Law Routledge, 2nd Ed. (2016), Pg. 185.185. 99 Kuwait Rocks Co. v. AMN Bulkcarriers Inc. (“The Astra”), [2013] 1 CLC 819, 830;; Federal Commerce And
Navigation Ltd. v. Molena Alpha Inc. (The”Nanfri”, “Benfri” and “Lorfri”), [1979] 1 Lloyd’s Rep 201, 207.. 100 H.G. Beale, W.D. Bishop, M.P. Furmston, Contract: Cases & Materials, Oxford University Press, 5th Ed.
(2007), Pg. 572.572. 101 Fixture Recap: Cl. 19, Pg. 22 of Bundle. 102 Julian Cooke, Timothy Young Q.C., Michael Ashcroft Q.C., Andrew Taylor, John D. Kimball, David
Martowski, LeRoy Lambert, Michael Sturley, Voyage Charters, Informa Law Routledge, 4th Ed. (2014), Pg.
653.653.
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MEMORANDUM FOR CLAIMANT Page 20
safe port, nomination of a port by the charterer that is politically unsafe will not amount to a
valid nomination under the Charterparty.103 This is because, safe port refers to a port that a ship
can reach to and also return from it, without facing any abnormal occurrence or such danger
that is not capable of being avoided by good seamanship.104
[¶48.] In the present case, Inferno was bound to nominate a discharge port from among the
eight ports named in the Charterparty, when the vessel passed Singapore for bunkering.105
However, Inferno failed to nominate the discharge port even though the vessel already sailed
past Singapore.106 The ports that were nominated by Inferno later, were politically unsafe107
and did not fulfill the ‘spsb’ requirement of the head voyage Charterparty. Thus, the failure to
nominate a valid discharge port by Inferno kept the vessel drifting outside Singapore OPL,
thereby obstructing a smooth voyage. The failure to nominate a valid disport by Inferno is
going to the root of the Charterparty dated September 1, 2016, it being a voyage Charterparty.
Hence, Furnace is justified in treating such failure by Respondent No. 1 as a repudiatory breach
of the voyage Charterparty.
B. FURNACE HAS ACCEPTED THE REPUDIATION AND HAS THEREFORE VALIDLY TERMINATED
THE HEAD VOYAGE CHARTERPARTY.
[¶49.] It is submitted that in order to terminate a Charterparty on the ground of breach of the
Charterparty, the other party must accept the repudiation by the defaulting party.108 Such
acceptance of repudiation by the innocent party need not be in any particular form.109 The
acceptance is usually done by communicating to the defaulting party, the decision to
103 Uni-Ocean Lines Pte. Ltd. v. C. Trade S.A. (“The Lucille”), [1983] 1 Lloyd’s Rep 387, 398.. 104 Leeds Shipping Co. Ltd. v. Société Française Bunge (“The Easter City”), [1958] 2 Lloyd’s Rep. 127, 131.
127, 131. 105 Fixture Recap: Cl.16, Pg. 21 of Bundle. 106 E-mail Conversation Dated October 11, 2016, Pg. 50 of Bundle. 107 E-mail Conversation Dated October 17, 2016, Pg. 58 of Bundle. 108 Heymans v. Darwins Ltd., [1942] 72 Lloyd’s Rep 65, 68.. 109 Vitol SA v. Norelf Ltd. (“The Santa Clara”), [1996] 2 Lloyd’s Rep 225, 229..
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MEMORANDUM FOR CLAIMANT Page 21
terminate.110
In the present case, Furnace has communicated to Inferno, its decision to terminate the head
voyage Charterparty through a Notice of Termination.111 Hence, Furnace has accepted
Inferno’s repudiation of the Charterparty and has thereby validly terminated the same.
C. FURNACE CLAIMS DAMAGES FROM INFERNO, ON ACCOUNT OF THE REPUDIATORY BREACH.
[¶50.] It is submitted that when a breach of contract occurs, it entitles the aggrieved party to
damages by the party in breach.112 Upon termination of a contract, both parties are discharged
from performance of their primary contractual obligation, but the breaching party is now under
a secondary obligation due to its non-performance.113 The aggrieved party’s right to claim
damages is co-related with this secondary obligation of the party at fault, to pay compensation
for loss suffered by the innocent party as a result of the breach.114 The object behind such
payment of damages is to put the innocent party in the position that he would have been, in
case the contract had been performed on agreed terms.115 Thus, when a repudiatory breach has
been committed by one party, the other party can claim damages for such repudiation.116
[¶51.] In the present case, Inferno has breached the head voyage Charterparty by non-payment
of freight and by not nominating the discharge port. Hence, Furnace is entitled to damages on
account of repudiatory breach of Charterparty by Inferno.
110 Joseph Chitty, H.G. Beale, Chitty On Contracts Vol. 1, Sweet & Maxwell, 31st Ed. (2012), Pg. 1706.1706. 111 E-mail Dated October 22, 2016– Notice Of Termination, Pg. 68 of Bundle. 112 Remedies For Charterer’s Breach Of The Obligation To Pay Hire In Time Charter, MW Szczepanik,
University Of Oslo, Pg. 7, available at
https://www.duo.uio.no/bitstream/handle/10852/50062/5074.pdf?sequence=1, last visited: April 10, 2017.. 113 Mindy Chen-Wishart, Contract Law, Oxford University Press, 1st Ed. (2007), Pg. 515.515. 114 Photo Production Ltd. v. Securicor Transport Ltd., [1980] 1 Lloyd’s Rep 545, 550.. 115 Louis Dreyfus Commodities Suisse SA v MT Maritime Management BV, (The MTM Hong Kong), [2016] 1
Lloyd’s Rep 197, 207.. 116 Golden Strait Corp v. Nippon Yusen Kubishika Kaisha (“The Golden Victory”), [2007] 2 Lloyds Rep 164,
173..
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MEMORANDUM FOR CLAIMANT Page 22
[ISSUE V.] THE APPLICATION MADE BY THE CLAIMANT FOR SALE OF CARGO IS TO BE
GRANTED
[¶52.] It is submitted before the Tribunal that it has the jurisdiction to order for sale of cargo
pendente lite. [A] The Claimant, that is, Furnace contends that, it is just, necessary and urgent
for the Tribunal to order for the sale of the cargo on board. [B] Also, the right to lien on cargo
gets transformed into a right to proceeds of the sale of cargo. [C]
A. THE TRIBUNAL HAS THE JURISDICTION TO ORDER FOR SALE OF CARGO PENDENTE LITE.
[¶53.] It is submitted that the applicability of the SCMA Rules extends to such arbitration
agreements where the parties have agreed on the same.117 According to these Rules, if the
juridical seat of arbitration is in Singapore, the International Arbitration Act (Chapter 143A)
of Singapore would apply to such arbitration, irrespective of the nationalities of the parties.118
Under the International Arbitration Act, the arbitral tribunal is empowered to issue interim
measures, including an order for interim custody, preservation or sale of a property which
forms a part of subject matter of the dispute that has been referred to arbitration.119
[¶54.] In the present case, the parties to the head voyage Charterparty have agreed upon the
application of SCMA Rules on a dispute that arises out of or is in connection with the head
voyage Charterparty.120 The International Arbitration Act is thus applicable to the present
dispute and empowers the arbitral tribunal to issue any interim measure ordering sale of the
cargo on board MV Tardy Tessa.
117 R. 2, SCMA Rules, 3rd Ed. (2015).). 118 Commentary On The 3rd Edition Of The Rules Of SCMA, Singapore Chamber Of Maritime Arbitration, Pg.
1, available at http://www.scma.org.sg/pdf/rules_201510_commentary.pdf, last visited: April 11, 2017.. 119 §12 (1)(d), International Arbitration Act (Ch. 143A), 1994.. 120 Fixture Recap: Cl. 29, Pg.23 of Bundle.
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MEMORANDUM FOR CLAIMANT Page 23
B. FURNACE CONTENDS THAT, IT IS JUST, NECESSARY AND URGENT FOR THE TRIBUNAL TO
ORDER FOR THE SALE OF THE CARGO ON BOARD.
[¶55.] It is submitted before the Tribunal that in the present facts and circumstances, the cargo
demands for an urgent sale. [B.1] Also, the sale of the cargo is necessary. [B.2]
B.1 In the present facts and circumstances the cargo demands for an urgent sale.
[¶56.] It is submitted that factors like master’s comments and opinion regarding condition of
the cargo on board, living conditions of crew on board, weather conditions, and safety of the
vessel indicate the urgency of the situation, thereby justifying an immediate sale.121 Also, a
shipowner incurring heavy storage costs along with other charges in protecting the cargo
becomes an important factor to be considered for allowing sale of cargo concerned.122
[¶57.] In the present case the cargo was at risk of self-ignition due to overheating, weather
conditions were unfavorable, the crew was running out of supplies with substantial
deterioration in their living conditions.123 These factors indicate the urgency of the situation,
thereby justifying the application made by the Claimant for an interim sale for the cargo on
board MV Tardy Tessa.
B.2 The sale of the cargo is just and necessary.
[¶58.] It is submitted that, if a cargo is found to be deteriorating and the situation is such that
certain sums that continue to accrue will reduce the value of the cargo, a sale of such cargo
must be favored.124 If the condition of the cargo is such that, if it is not allowed to be sold, the
value of the deteriorating cargo will be insufficient to act as security that the lien sought to
achieve, sale of such cargo is necessary. With respect to a cargo of coal, increased oxidation
121 Five Ocean Corporation v. Cingler Ship Pte Ltd. (PT Commodities & Energy Resources, Intervener), [2015]
SGHC 311, 339.. 122 Emilia Shipping Inc v. State Enterprise For Pulp And Paper Industries, [1991] 2 MLJ 379, 386.. 123 E-mail Conversation Dated November 30, 2016, Pg. 37 of Bundle. 124 Stelios B Maritime Ltd. v. Ibeto Cement Co. (“The Stelios B”), (2007) 711 LMLN 2, 2.
TEAM 02 -ARGUMENTS ADVANCED-
MEMORANDUM FOR CLAIMANT Page 24
and persistent weathering leads to a loss of calorific value of the coal, indicating deterioration
in its condition.125 In such circumstances, sale of the cargo becomes necessary.
[¶59.] In the present case, the vessel has been stranded at Singapore OPL126 due to delay in
nomination of the disport and payment of freight by Inferno. Due to this delay, the cargo
containing coal is becoming increasingly prone to oxidation, thereby resulting in the loss of its
calorific value. This, coupled with signs of overheating of the cargo is indicative of
deterioration of its condition. Such deterioration erodes the value of the cargo and thereby
makes the sale of such cargo necessary.
C. THE RIGHT TO LIEN ON CARGO GETS TRANSFORMED INTO A RIGHT TO PROCEEDS OF THE
SALE OF CARGO.
[¶60.] It is submitted that a lien on cargo can be equated with an entitlement to the cargo,
thereby giving the lienor a right over the proceeds of the sale of the cargo.127 Thus, a right to
exercise lien over a cargo that existed prior to the proposed sale, can be transformed to a right
over the sale proceeds of the cargo.128
[¶61.] In the present case, Furnace has a valid lien over the cargo. Hence, it can get
transformed to a right over the proceeds of the sale of the cargo.
125 Gimpex Ltd v Unity Holding Business Ltd and Others, [2013] SGHC 224, 236. 126 E-mail Conversation Dated October 12, 2016, Pg. 52 of Bundle. 127 The “Trade Resolve”, [1999] 4 SLR 424, 439;; Faith Maritime Co. Ltd. v. Feoso (Singapore)Pte Ltd, [2002]
SGHC 229, 243.. 128 Castleton Commodities Shipping Company Pte Ltd. v. Silver Rock Investments, [2016] 1 Lloyd’s Rep 1, 4..
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MEMORANDUM FOR CLAIMANT Page XX
PRAYER
In response to the Procedural Orders issued by the TRIBUNAL and in light of the above
submissions, CLAIMANT respectfully requests this TRIBUNAL to find and DECLARE that:
1. The TRIBUNAL has jurisdiction to try this dispute between the CLAIMANT and
RESPONDENT NO. 2.
2. The exercise of the lien over sub-freight is a valid and lawful one.
3. The exercise of the lien over cargo is a valid and lawful one.
4. The CLAIMANT is entitled to damages for detention, and costs and expenses incurred
while exercising lien to recover Freight.
5. The CLAIMANT is entitled to damages from RESPONDENT NO. 1 for breach of
Charterparty obligations.
6. The CLAIMANT be at liberty to appraise and sell the cargo presently lying on board the
M.V. Tardy Tessa.
7. Award any other interests & costs in favour of the CLAIMANT.
Dated this 19th day of April 2017 by the Counsel for CLAIMANT, Furnace Trading Pte Ltd.