memorandum for claimant p d - murdoch university€¦ · to bimco standard charter party. ... iv....

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


International Arbitration Act, section 2A, Revised edition (2002). 25



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


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


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


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







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


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


Id. 79


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. 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


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





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.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


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


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


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


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, 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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memorandum for claimant p d - murdoch university€¦ · to bimco standard charter party. ... iv....

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