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XVIII International Maritime Law Arbitration Moot
2017
In the matter of an arbitration under
the International Arbitration Act (CAP 143A, Rev Ed 2002)
Singapore Chamber of Maritime Arbitration Rules
MASTER PROGRAM IN ARBITRATION AND INTERNATIONAL BUSINESS LAW
UNIVERSITY OF VERSAILLES – PARIS SACLAY
STATEMENT OF CLAIMANT’S CASE
COUNSEL – TEAM NUMBER 19
Arleen Gonzalez Charlotte Hauchard Vérane Pasi
Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa
BETWEEN
FURNACE TRADING PTE LTD
2 Marina Boulevard #19-05
Singapore 0189990
SINGAPORE
&
INFERNO RESOURCES SDN BHD
Suite No. 2, Level 3
South Wing, Pasar Borong Pandan
81100 Johor Bahru
MALAYSIA
(CLAIMANT) (RESPONDENT)
&
IDONCARE BERJAYA UTAMA PTY. LTD.
30 Pacific Street #02-04
Newcastle 2300
NEW SOUTH WALES, AUSTRALIA
(RESPONDENT 2)
Team 19 Statement of Claimant’s Case
i
TABLE OF CONTENTS
Table of Contents ........................................................................................................................ i
Index of Abbreviations ............................................................................................................ iii
Index of Scholars ....................................................................................................................... v
Index of Case Law ................................................................................................................... vii
Index of Legal Sources ............................................................................................................. xi
Introduction ................................................................................................................................ 1
I. Jurisdiction.............................................................................................................................. 5
A. The Arbitral Tribunal has jurisdiction over the present case ............................................. 5
B. The Arbitral Tribunal has the power to order interim relief .............................................. 6
II. Merits .................................................................................................................................... 6
A. Preliminary Issue: Laws of Singapore are applicable to the dispute ................................. 6
B. The Respondent has committed a repudiatory breach of the Voyage Charterparty .......... 7
1. The Respondent failed to nominate a valid discharge port ............................................. 7
a. The violation of the obligation to nominate a valid discharge port ............................. 7
b. The failure to nominate a discharge generated damaging delays ................................ 9
2. The Respondent failed to pay freights .......................................................................... 10
3. The repudiatory nature of the breaches of the Voyage Charterparty ............................ 11
a. The Respondent is liable for a repudiatory breach of the contract ............................ 11
b. The Claimant is entitled to discharge or affirm the Voyage Charterparty ................. 12
C. The Claimant is entitled to the lien over the Cargo and Sub-freight ............................... 13
1. The Claimant is in position to ask for payment to the Shipper ..................................... 13
a. The Shipper is bound by the Time Charterparty ........................................................ 14
Team 19 Statement of Claimant’s Case
ii
b. The Time Charterparty links the Claimant to the Shipper by the lien clause ............ 15
2. The lien on Cargo exercised by the Claimant is valid and shall be enforced ............... 15
a. The lien over the Cargo is valid under the Common Law ......................................... 15
b. The lien over the Cargo is incorporated in all contractual documents entered into
between the Parties and the Shipper .............................................................................. 16
3. The Claimant has also validly exercised a lien over the Shipper’s Sub-Freight ........... 18
a. The lien over the sub-freight is incorporated in all contractual documents entered
into between the Parties and the Shipper ....................................................................... 18
b. The Claimant has the right to intercept freight owed under the Bills of Lading ....... 19
c. The lien over the sub-freight can only be exercised while the freight is still owed ... 19
4. Subsequently, the Arbitral Tribunal shall render an order allowing the Claimant to sell
the Cargo ........................................................................................................................... 20
a. The urgency commands the granting of an interim measure ..................................... 21
b. The interim measure is necessary to preserve the value of the Cargo ....................... 22
Request for Relief .................................................................................................................... 25
Team 19 Statement of Claimant’s Case
iii
INDEX OF ABBREVIATIONS
& And
§/§§ Paragraph/Paragraphs
Agreement Development and Sales Agreement of 1
August 2010
Arbitral Tribunal / Tribunal
Panel consisting of the arbitrators
nominated in accordance with the SCMA
Rules
Art. Article/Articles
Claimant
Furnace Trading Pte Ltd, a company
organised and existing under the laws of
Singapore
E.g. Exempli gratia; “for example”
Ed. Editor/Editors/Edition
Etc. Et cetera; and so on
Fn. Footnote
Ibid. Ibidem, “in the same place”
ICC International Chamber of Commerce
Lex arbitri The procedural law of the seat of arbitration
Ltd. Limited liability company
Memorandum Statement of Claimant’s Case
Model Law
UNCITRAL Model Law on International
Commercial Arbitration of 1985 with the
2006 amendments
Mr Mister
Ms Miss
No./Ns. Number/Numbers
Team 19 Statement of Claimant’s Case
iv
NY Convention
New York Convention of 1958 on the
Recognition and Enforcement of Foreign
Arbitral Awards
p./pp. page/pages
PO1 Procedural Order Number 1
PO2 Procedural Order Number 2
PO3 Procedural Order Number 3
Respondent Inferno Resources Sdn Bhd
Respondent 2 Idoncare Berjaya Utama PTY. LTD
SCMA Singapore Center of Maritime Arbitration
Shipper Idoncare Berjaya Utama PTY. LTD
UNCITRAL United Nations Commission on
International Trade Law
UNCITRAL Rules Arbitration Rules of United Nations
Commission on International Trade Law
USD United States Dollars
v. Versus; against
Team 19 Statement of Claimant’s Case
v
INDEX OF SCHOLARS
BORN, Gary B.
International Arbitration: Law and
Practice
Kluwer Law International,
2nd Ed., 2015
Referred to in:
§21, fn. 28, of the
Statement
[cited as: BORN]
FURMSTON, Olivia
MARHINGER, Silvia
Liens on sub-freight
The Standard
2015
Available at:
http://www.standard-
club.com/media/1774240/defence-class-
cover-liens-on-sub-freight.pdf
Referred to in:
§72, fn. 77 of the
Memorandum
[cited as:
FURMSTON &
MARHINGER]
KAH WAH, Leong
TEO, Ian
A Shipowner’s Lien – Is it an illusory
right?
Rajah & Tann LLP Admiralty and
Shipping Client Update
June 2011
Available at:
http://eoasis.rajahtann.com/eOASIS/lu/pdf
/2011-06-Shipowner-Lien.pdf
Referred to in:
§69, fn. 76; &
§82, fn. 85, of the
Memorandum
[cited as: KAH WA
& TEO]
LIM, Steven Interim Relief in International Arbitration
SIAC Congress, 2014
Available at:
http://www.siac.org.sg/m/2013-09-18-01-
57-20/2013-09-22-00-27-02/articles/444-
interim-relief-in-international-arbitration
Referred to in:
§§82-83, fn. 83,
86 of the
Memorandum
[cited as: LIM]
SING, Toh Kian Commentary on Article 25 of the Shipping Referred to in:
Team 19 Statement of Claimant’s Case
vi
BALA, V. Law of Singapore
Available at:
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-25
§62, fn. 71, of the
Memorandum
[cited as: SING &
BALA]
TOUCHARD, Gabriel Le droit applicable au GNL
Gazette de la Chambre Arbitrale Maritime
de Paris, nº 31
Available at:
http://www.arbitrage-
maritime.org/cpt_download.php?file=gaze
tte31.pdf
Referred to in:
§58, fn. 65, of the
Memorandum
[cited as:
TOUCHARD]
WILSON, John F.
Carriage of Goods by Sea
Pearson Ed.
7th Ed., 2010
Referred to in:
§56, fn. 63; &
§§72-73, fn. 77-
78, of the
Memorandum
[cited as: WILSON]
Team 19 Statement of Claimant’s Case
vii
INDEX OF CASE LAW
SINGAPORE Freight Connect (S) Pte Ltd v. Paragon
Shipping Pte Ltd [2015] SGCA 37
Available at: http://www.singaporelaw.sg/sglaw/laws
-of-singapore/case-law/free-law/court-
of-appeal-judgments/18051-freight-
connect-s-pte-ltd-v-paragon-shipping-
pte-ltd-2015-sgca-37
Referred to in: §38, fn.
42, of the Memorandum
[cited as: Freight
Connect v. Paragon]
Faith Maritime Co Ltd v Feoso
(Singapore) Pte Ltd and another action
[2002] SGHC 229
Available at:
http://www.singaporelaw.sg/sglaw/laws
-of-singapore/case-law/free-law/high-
court-judgments/22074-faith-maritime-
co-ltd-v-feoso-singapore-pte-ltd-and-
another-action
Referred to in: §82, fn.
85, of the Memorandum
[cited as: Faith
Maritime v. Feoso]
Five Ocean Corporation v. Cingler
Ship Pte Ltd (PT Commodities &
Energy Resources, intervener) [2015]
SGHC 311
Available at:
http://www.uncitral.org/docs/clout/SGP
/SGP_041215_FT.pdf
Referred to in: §87, fn.
90; & §§89-90, fn. 96,
of the Memorandum
[cited as: Five Ocean v.
Cingler]
Maldives Airports Co Ltd and another v
GMR Malé International Airport Pte
Ltd [2013] SGCA 16
Available at:
http://www.singaporelaw.sg/sglaw/laws
-of-singapore/case-law/free-law/court-
of-appeal-judgments/15130-maldives-
airports-co-ltd-and-another-v-gmr-mal-
eacute-international-airport-pte-ltd-
2013-sgca-16
Referred to in: §91, fn.
97, of the Memorandum
[cited as: Maldives
Airports v. GMR Malé]
Team 19 Statement of Claimant’s Case
viii
UNITED KINGDOM Kodros Shipping Corporation v.
Empresa Cubana de Fletes [1982] 1
Lloyd's Rep. 334
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=148728
Referred to in: §27, fn.
37, of the Memorandum
[cited as: The Evia (No.
2)]
Motor Oil Hellas (Corinth) Refineries
s.a. v. Shipping Corporation of India
[1990] 1 Lloyd's Rep. 391
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=150298
Referred to in: §27, fn.
37, of the Memorandum
[cited as: The
Kanchenjunga]
Leeds Shipping Company, Ltd. v.
Societe Francaise Bunge [1958] 2
Lloyd's Rep. 127
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=147006
Referred to in: §30, fn.
35, of the Memorandum
[cited as: The Eastern
City]
E. L. Oldendorff & Co. GmbH. v.
Tradax Export S.A. [1973] 2 Lloyd's
Rep. 285
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=147196
Referred to in: §38, fn.
42, of the Memorandum
[cited as: The Johanna
Oldendorff]
Hong Kong Fir Shipping Company,
Ltd. v. Kawasaki Kisen Kaisha, Ltd.
[1961] 2 Lloyd's Rep. 478
Available at:
http://www.bailii.org/ew/cases/EWCA/
Civ/1961/7.html
Referred to in: §45, fn.
49, of the Memorandum
[cited as: The Hong
Kong Fir]
Maredelanto Compania Naviera SA v.
Bergbau-Handel GmbH [1970] EWCA
Civ 4
Available at:
http://www.bailii.org/ew/cases/EWCA/
Civ/1970/4.html
Referred to in: §50, fn.
53, of the Memorandum
[cited as: The Mihalis
Angelos]
Team 19 Statement of Claimant’s Case
ix
Avery v. Bowden, 5 Ellis & Black (85
E.C.L.) 714 Available at:
http://www.commonlii.org/uk/cases/En
gR/1855/842.pdf
Referred to in: §50, fn.
54, of the Memorandum
[cited as: Avery v.
Bowden]
Fercometal S.A.R.L.v Mediterranean
Shipping Co AS [1989] 1 A.C. 788
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=13456
Referred to in: §50, fn.
54, of the Memorandum
[cited as: The Simona]
China National Foreign Trade
Transportation Corporation v. Evlogia
Shipping Co SA of Panama [1979] 2
Lloyd’s Rep. 303
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=148593
Referred to in: §63, fn.
72; §70, of the
Memorandum
[cited as: The Mihalios
Xilas]
Hain SS Co v Tate & Lyle (1936) 41
Com. Cas. 359
Available at: https://i-
law.com/ilaw/doc/view.htm?id=142321
Referred to in: §64, fn.
73, of the Memorandum
[cited as: Hain SS v.
Tate & Lyle]
Santiren Shipping Ltd. v. Unimarine
S.A. [1981] 1 Lloyd's Rep. 159
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=148559
Referred to in: §66, fn.
74, of the Memorandum
[cited as: The
Chrysovalandou Dyo]
Tate v Meek (1818) 8 Taunt 280, 129
ER 391
Available at:
Reports of cases argued and
determined in the courts of Common
pleas and Exchequer chamber, with
tables of the names of the cases and the
principal matters
Great Britain. Court of Common Pleas;
Great Britain. Court of Exchequer
Chamber;
Ed. MOORE, John Bayly
1818
Referred to in: §69, fn.
76, of the Memorandum
[cited as: Tate v. Meek]
Team 19 Statement of Claimant’s Case
x
Dry Bulk Handy Holding Inc. and
another v. Fayette International
Holdings and another [2013] EWCA
Civ 184
Available at:
http://www.bailii.org/ew/cases/EWCA/
Civ/2013/184.html
Referred to in: §75, fn.
81, of the Memorandum
[cited as: Bulk Chile
case]
Seele Middle East FZE v. Drake &
Scull international Co SA [2014]
EWHC 435
Available at: http://www.bailii.org/ew/cases/EWHC/
TCC/2014/435.html
Referred to in: §86, fn.
89, of the Memorandum
[cited as: Seele Middle
East v. Drake & Scull]
Cetelem SA v Roust Holdings Ltd
[2005] EWCA Civ 618
24 May 2005
Available at: https://www.i-
law.com/ilaw/doc/view.htm?id=153171
Referred to in: §§90-91,
fn. 95, 98, of the
Memorandum
[cited as: Cetelem v.
Roust Holdings]
Telenor East Holing II AS v. Altimo
Holdings & Invesments Ltd [2014]
EWHC B5
Available at:
http://cisarbitration.com/wp-
content/uploads/2013/07/Telenor-East-
Holding-II-AS-v-Altimo-ors.pdf
Referred to in: §91, fn.
99, of the Memorandum
[cited as: Telenor East
v. Altimo Holdings]
Team 19 Statement of Claimant’s Case
xi
INDEX OF LEGAL SOURCES
The New York Convention on
Recognition and Enforcement of
Foreign Arbitral Awards of 1958
- http://www.newyorkconvention.org/engli
sh
UNCITRAL Model Law - http://www.uncitral.org/pdf/english/texts/
arbitration/ml-arb/07-86998_Ebook.pdf
Singapore International Arbitration
Act (Chapter 143A) -
http://siac.org.sg/images/stories/articles/r
ules/IAA/IAA%20Aug2016.pdf
The Commercial Law of Singapore,
Chapter 8 on the Law of Contract -
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-8
The Commercial Law of Singapore,
Chapter 25 on Shipping Law -
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-25
Singapore Merchant Shipping Act
(Chapter 179) -
http://statutes.agc.gov.sg/aol/search/displ
ay/view.w3p;page=0;query=DocId%3A
%22977a0eb4-e902-420e-abbd-
6b95a7d270b1%22%20Status%3Ainforc
e%20Depth%3A0;rec=0
Team 19 Statement of Claimant’s Case
1
Introduction
1. This memorandum is submitted on behalf of Furnace Trading Pte Ltd (hereinafter the
“CLAIMANT”), a company organised and existing under the laws of Singapore, and in
accordance with Rules 8.1 and 9 of the Singapore Chamber of Maritime Arbitration Rules of
2015 (hereinafter the “SCMA RULES”).
2. On 15 February 2016, the CLAIMANT entered into a time Charterparty (hereinafter the “TIME
CHARTERPARTY”) with Imlam Consignorist G.m.b.H (hereinafter the “LEGAL OWNER”) of the
M. V. Tardy Tessa (hereinafter the “VESSEL”).1
3. On 1 September 2016, during an exchange of e-mails, the contents of a voyage charterparty
based on a proforma BIMCO Orevoy Charterparty (hereinafter the “VOYAGE
CHARTERPARTY”) were confirmed between the CLAIMANT (now disponent owner of the
VESSEL) and Inferno Resources Sdn Bhd (hereinafter the “RESPONDENT”).2.
4. On 1 October 2016, a notice of readiness (hereinafter the “NOTICE OF READINESS”) was
tendered by Mr. Tan Xiao Ming (hereinafter the “MASTER” of the VESSEL) to Idoncare
Berjaya Utama PTY. LTD. (hereinafter the “RESPONDENT 2”, or, simply, the “SHIPPER”),
informing that the VESSEL arrived at Kooragang Precint, Australia, and that it was ready to
load 84,000.052 metric tons of Australian Steam Coal in Bulk (hereinafter the “CARGO”).3
5. Following this event, the MASTER issued and signed a bill of lading on 4 October 2016,
making express nomination of the SHIPPER, as well as an express reference to an undated
Charterparty (hereinafter the “Bill of Lading”).4
1 Time Charterparty – Case Scenario, pp. 1-19
2 Voyage Charterparty – Case Scenario, pp. 20-33
3 Notice of Readiness – Case Scenario, p. 39
4 Bill of Lading – Case Scenario, p. 41
Team 19 Statement of Claimant’s Case
2
6. On 10 October 2016, the CLAIMANT informed the RESPONDENT had not received the freight
due on 9 October 2016, inviting the latter to comply with the payment under the VOYAGE
CHARTERPARTY.5 The CLAIMANT also requested the RESPONDENT to nominate a discharging
port before the VESSEL would pass Singapore, in accordance with rider Clause 16 of the
VOYAGE CHARTERPARTY.6
7. On 15 October 2016, the RESPONDENT informed the CLAIMANT that it was unable to indicate
the discharging port as their sub-charterer had yet to pay freight. 7 The CLAIMANT
immediately refused this reasoning and stated that it would consider the failure to nominate
the discharge port to be a breach of the VOYAGE CHARTERPARTY.8
8. On 16 October 2016, the MASTER informed the RESPONDENT that the VESSEL was being kept
adrift without being given any precise instructions or directions.9 The RESPONDENT therefore
nominated the port of Busan, South Korea, in view of the heavy congestion at Chinese ports.
Nonetheless, the CLAIMANT refused to accept the nomination of Busan, in the absence of
explicit authorisation to discharge in any port other than those listed in the TIME
CHARTERPARTY or the VOYAGE CHARTERPARTY.10
9. On the same date, the RESPONDENT repeated its request for disport at Busan, and the
CLAIMANT refused such nomination on the following day, 17 October 2016. The CLAIMANT
expressly opposed to Busan as the discharging port, since the region was under zombie
attacks at that time.11 The RESPONDENT insisted that the port was safe, claiming that the
5 E-mail sent on the 10 of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 50
6 Voyage Charterparty – Case Scenario, p. 21
7 E-mail sent on 15 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 55
8 E-mail sent on 15 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 56
9 E-mail sent on 16 October 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 34
10 E-mail sent on 16 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 57
11 E-mail sent on 17 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58
Team 19 Statement of Claimant’s Case
3
Korean military forces had secured the area.12 The CLAIMANT kept asking for the indication
of a legitimate and safe port in the range of those enumerated in rider clause 16 of the
VOYAGE CHARTERPARTY.13
10. On 19 October 2016, the RESPONDENT once again alleged that it could not nominate the
discharge port as it pretended having yet to receive nomination from its sub-charter, the
SHIPPER.14 Unsatisfied, the CLAIMANT gave the RESPONDENT an urgent notice establishing a
deadline to nominate disport by 12:00 Local Time on 20 October 2016.
11. On 20 October 2016, 12:00 Local Time, no answer was received by the CLAIMANT regarding
its notice of the previous day. At 15:21 and 15:24 Local Time, respectively, the CLAIMANT
notified the RESPONDENT and the SHIPPER that it was exercising its rights of lien over the
CARGO and over the Sub-freights owed.15
12. The RESPONDENT sent a late e-mail on 21 October 2016, 13:22 Local Time, nominating the
port of Ningbo, Zhejiang Province in China, for discharge, as well as indicating it was
impossible to provide the payment before the discharge of the Cargo.16
13. On 22 October 2016, the CLAIMANT sent a Notice of Termination 17 of the VOYAGE
CHARTERPARTY to the RESPONDENT, characterizing the latter’s renunciation and repudiatory
breach of the VOYAGE CHARTERPARTY in view of the default over payment of freight. The
RESPONDENT sent an answer 18 considering the Notice of Termination wrongful, and the
CLAIMANT to be in repudiatory breach of the VOYAGE CHARTERPARTY.
12 E-mail sent on 17 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 60
13 Voyage Charterparty – Case Scenario, p. 21
14 E-mail sent on 19 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62
15 E-mails sent on 20 October from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66
16 E-mail sent on 22 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67
17 Notice of Termination – Case Scenario, p. 68
18 E-mail sent on 22 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 69
Team 19 Statement of Claimant’s Case
4
14. The CLAIMANT was therefore entitled to submit its claims in arbitration for recognition of the
enacted liens, as well as damages and any other remedies under the VOYAGE CHARTERPARTY,
according to its Clause 29.
15. On 25 November 2016, two Notices of Arbitration were filed with the SCMA by the
CLAIMANT, against the SHIPPER and the RESPONDENT, pursuant to Clause 29 of the VOYAGE
CHARTERPARTY.19 The Responses to the Notices of Arbitration were filed on the very next
day, denying all claims made by the CLAIMANT. The SHIPPER brought a defence reasoning
that freight, if any, would be due only to the RESPONDENT. The SHIPPER and the RESPONDENT
accepted the jurisdiction of the SCMA arbitration with no objections.20
16. On 1 December 2016, the CLAIMANT filed an urgent application for consolidation and liberty
to sell the CARGO, this application requested the Arbitral Tribunal to consolidate the
proceedings initiated against the SHIPPER and the RESPONDENT, and to issue an interim order
with respect to the liberty to sell the CARGO.
17. Regarding the consolidation, no particular objections were made, where with respect to the
liberty to sell the CARGO, the SHIPPER declined to make any submissions either written or
oral.21 However, the RESPONDENT challenged the interim order sought by the Claimant.
18. On 3 December 2016, the PARTIES filed a Joint Expert Report (hereinafter the “Expert
Report”) signed by a Mr. Caleb Coleman (hereinafter the “Expert”).22
19 Voyage Charterparty – Case Scenario, p. 23
20 Response to Notice of Arbitration – Case Scenario, p. 84
21 Response to Claimant’s urgent application for consolidation and liberty to sell the cargo pendent lite – Case
Scenario, pp. 93; 108, §2(3)
22 Parties’ Joint Expert Report – Case Scenario, pp. 97-102
Team 19 Statement of Claimant’s Case
5
I. Jurisdiction
A. The Arbitral Tribunal has jurisdiction over the present case
19. The PARTIES have agreed on an arbitration agreement, which is incorporated under Clause 29
of the VOYAGE CHARTERPARTY.23 This clause provides that all disputes, arising out of or,
most importantly, in connection with the VOYAGE CHARTERPARTY, shall be resolved through
arbitration. Furthermore, the PARTIES made an express choice of the Singapore Law as the
applicable law, without defining if such choice was to be regarded as the lex contractus or the
lex arbitri. The PARTIES also chose the arbitration to be conducted under the SCMA Rules by
three arbitrators.24 No objections neither to the validity of the arbitration agreement, nor the
jurisdiction of the Arbitral Tribunal, or to the consolidation of the disputes were made.25
20. Under Article 22.1. of the SCMA Rules, the seat of arbitration shall be Singapore whenever
the parties fail to expressly choose a different seat. The Clause 29 of the VOYAGE
CHARTERPARTY is silent regarding such location, reason why the seat of the present
arbitration must be Singapore.26 However, the Clause 29 indicates a choice of law that could
be regarded as a choice of the contractual law applicable to the substance of the dispute, as
recognized by Rule 21 of the SCMA Rules, or as a choice of the arbitration law.27 It is worth
noting that Article 22.1 of the SCMA Rules, establish that if the seat of arbitration is
Singapore, as in the present case, then Singapore Law and the International Arbitration Act
(Cap 143A) (hereinafter “SIAA”) shall apply as the lex arbitri.
23 Voyage Charterparty – Case Scenario, p. 23
24 Coal Orevoy Charterparty, Art. 29 – Case Scenario, p. 24
25 Response to Notice of Arbitration – Case Scenario, pp. 84-89
26 Voyage Charterparty – Case Scenario, p. 23
27 Ibid., fn. 26
Team 19 Statement of Claimant’s Case
6
B. The Arbitral Tribunal has the power to order interim relief
21. In international arbitration, the availability of provisional measures is dealt with principally
by national arbitration legislation and the parties’ arbitration agreement.28 In the present case,
the PARTIES did not make any references in the arbitration agreement regarding the Arbitral
Tribunal’s power to order interim relief, but the lex arbitri expressly confers this power to the
latter. Indeed, paragraph 12(1)(d) of the SIAA provides that an arbitral tribunal have the
powers to make orders for the preservation, interim custody, or sale of any property which
forms part of the subject matter of the dispute.
22. Accordingly, this Arbitral Tribunal shall acknowledge its power to order interim relief and
therefore, as it will be further addressed,29 shall order the sale of the CARGO on board the
VESSEL pendente lite, as requested by the CLAIMANT.30
II. Merits
23. First and foremost, (A) the laws of Singapore are applicable to the dispute. The CLAIMANT
also contends that (B) the RESPONDENT has committed a repudiatory breach of the contract,
and that is why (C) the CLAIMANT is entitled on liens over both the Cargo and the sub-freight.
A. Preliminary Issue: Laws of Singapore are applicable to the dispute
24. The applicable law of the dispute shall be the law expressly chosen by the PARTIES in their
contracts. The VOYAGE CHARTERPARTY, under Clause 29, contains a choice of law provision,
which makes an express reference to the application of the Laws of Singapore as lex
28 BORN, p. 209
29 See hereunder, §§81-96
30 Urgent application for consolidation and liberty to sell the cargo pendent lite – Case Scenario, p. 90
Team 19 Statement of Claimant’s Case
7
contractus. Therefore, the Arbitral Tribunal will find that the Laws of Singapore are
applicable to the merits of the present dispute.
B. The Respondent has committed a repudiatory breach of the Voyage Charterparty
25. Throughout the VOYAGE CHARTERPARTY performance, the RESPONDENT has committed a
series of faulty acts that directly led to the declaration of discharge of all obligations by the
CLAIMANT, once there was a breach of the PARTIES’ agreement. By (1) failing to make a valid
and timely declaration of the discharge port, as well as (2) paying for the freight, (3) the
RESPONDENT has committed a repudiatory breach and must be held liable for all the
consequences of such actions.
1. THE RESPONDENT FAILED TO NOMINATE A VALID DISCHARGE PORT
a. The violation of the obligation to nominate a valid discharge port
26. In order to proceed with the discharge of the CARGO, a discharge port had to be selected and
nominated, according to rider clause 16 of the VOYAGE CHARTERPARTY.31 The selection and
declaration were contractually imparted to the RESPONDENT who did not comply with these
obligations and therefore committed a breach of the contract.32
27. According to the provisions of the VOYAGE CHARTERPARTY, as described the rider Clause 16,
the term “Charterers” refers to the RESPONDENT, which was contractually bound to nominate
a discharge port, all options from Chinese ports, when the VESSEL was to leave Singapore.
28. Numerous e-mails exchanged between the PARTIES demonstrate that the RESPONDENT
31 Urgent application for consolidation and liberty to sell the cargo pendente lite – Case Scenario, p. 90
32 E-mail sent on 1 September 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 21
Team 19 Statement of Claimant’s Case
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consistently failed to nominate a valid discharge port.33 After several days, the CLAIMANT
finally obtained a nomination. The RESPONDENT designated the port of Busan, South Korea, a
location that, firstly, was not included in the list agreed upon by the PARTIES, and; secondly,
was under an imminent zombie attack at the time of the nomination. The CLAIMANT could
not accept a discharge port likely to put the VESSEL, its crew and the CARGO at high risk.
29. Clause 18 of the VOYAGE CHARTERPARTY enumerates the situations where “war risks” could
have been incurred or foreseen by the PARTIES. It further provides that in case of facing a war
risk, the owners shall first require the charterers to nominate any other safe port within the
range of the discharge port.34
30. The common definition of safety requires a safe port to be one that, in the relevant period of
time, can be reached, used and left by vessels without being exposed to danger that cannot be
avoided by good navigation and seamanship.35 This obligation of safety concerns the crew as
well as the VESSEL and the CARGO themselves: if the crew is exposed to a contagious disease
or other serious health risks or security risks, the port is unsafe.
31. The “relevant period of time”36 implies that the port does not have to be immediately safe as
the Charterer nominates it, though it has to be prospectively safe: the vessel shall be able to
use the port when it arrives.37
32. The CLAIMANT was informed that hordes of zombies were arriving from Seoul to Busan on a
train when the RESPONDENT nominated it as a discharge port. A zombie attack falls must be
considered as encompassed by the definition of War Risks pursuant to Clause 18 of the
33 E-mail exchanges between Gordon Grill and Eric Yan from 10 October 2016 to 19 October 2016 – Case
Scenario, pp. 51; 56; 58; 60 & 62
34 Voyage Charterparty, Art. 18 – Case Scenario, p. 30
35 The Eastern City
36 Ibid., fn. 35
37 The Evia (No 2), §§314; 756; The Kanchenjunga
Team 19 Statement of Claimant’s Case
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VOYAGE CHARTERPARTY, in view of the discretion of the Master and/or the Owners to define
such situation as endangering to the VESSEL, its crew and the CARGO.
33. If Busan were a safe port when the RESPONDENT nominated it, the information received by
the RESPONDENT was still implying that zombies were on their way to Busan, making the port
prospectively unsafe by the time the VESSEL would have arrived there, especially considering
that there was not enough time to take necessary security measures.38
34. If the VESSEL, the CARGO and the crew were likely to be exposed to such war risks, the
process of an alternative discharge port and further cancellation of the CHARTERPARTY could
have been set in motion by the shipowners, the disponent owners, the charterers or any
person in charge of the management of the VESSEL.
35. In the case at hand, the CLAIMANT rightfully declared that Busan was an unsafe port to
discharge the CARGO and asked for the RESPONDENT to nominate another port on 17 October
2016.39 The RESPONDENT did not comply with this contractual obligation until 21 October
2016, despite the forty-eight hours deadline imposed by the VOYAGE CHARTERPARTY.40
36. As a result of the violation of its contractual obligation by the RESPONDENT, the VESSEL was
left adrift in open seas and under harsh climatic conditions for days on end, unable to
discharge, causing damages to the crew, to the CARGO and to the VESSEL itself.
b. The failure to nominate a discharge generated damaging delays
37. Consequently, from 10 October 2016 until the issuance of the Notice of Termination on 22
October 2016,41 the VESSEL was kept adrift. The CARGO was supposed to be discharged on
38 E-mail sent on the 17 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58
39 E-mail sent on the 17 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58
40 E-mail sent on 21 October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67
41 E-mail sent on 22 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 68
Team 19 Statement of Claimant’s Case
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10 October 2016. The delays generated had an important and negative impact on the CARGO,
the crew and the VESSEL.
38. Pursuant to Article 25.3.8 of the Singapore Shipping Law, if the risks of delay lie with the
ship-owner for the voyage, the charterer is held responsible for loading and discharge
operations. To proceed to these operations, the vessel must be an “arrived vessel”, meaning
that it has reached the “contractual destination and is in all respects ready to receive or
discharge the cargo and has tendered a notice of readiness”.42
39. In the case at hand, the VESSEL was unable to reach its contractual destination because of
RESPONDENT’s failure to nominate a discharge port,43 which led to a second breach of
contract: the noncompliance with the dates settled by CLAIMANT to pay the freight due and to
nominate a Chinese port. Preventing the smooth running of the discharging operation for
which it is solely responsible, RESPONDENT is liable for the delays and ought to repair them.
2. THE RESPONDENT FAILED TO PAY FREIGHTS
40. As evidenced by the numerous requests of the CLAIMANT in its several e-mails sent to Eric
Yan; and the RESPONDENT’s response to that particular matter, the latter failed to comply
with his obligation to pay freights.44
41. Clause 19 of the Voyage Charterparty45 provides that 100% of the freight must be paid within
five banking days after the completion of loading, the signing of the Bill of Lading marked
“freight payable as per charterparty”, and the reception of the Invoice by the Owners.
42 Freight Connect v. Paragon; The Johanna Oldendorff
43 See above, §§23-24
44 E-mail sent on 10 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 51; E-mails sent on 20
October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66; E-mail sent on 21 October 2016 from
Eric Yan to Gordon Grill – Case Scenario, pp. 67-68
45 Voyage Charterparty, Art. 19 – Case Scenario, p. 22
Team 19 Statement of Claimant’s Case
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42. In the present case, the Bill of Lading was released on 4 October 201646 and the Invoice
received by Gordon Grill, sitting in for the CLAIMANT, on 9 October 2016. The RESPONDENT
had consequently until 14 October 2016 to remit the freight which he did not do and never
did,47 violating yet another contractual obligation.
3. THE REPUDIATORY NATURE OF THE BREACHES OF THE VOYAGE CHARTERPARTY
43. The RESPONDENT failed to nominate a valid discharge port and to pay freight, breaching
severely the VOYAGE CHARTERPARTY. It is therefore (a) liable for a breach of contract that
can be qualified as repudiatory and (b) is entitled to terminate the VOYAGE CHARTERPARTY.
a. The Respondent is liable for a repudiatory breach of the contract
44. The RESPONDENT is responsible for several breaches of the VOYAGE CHARTERPARTY. A
breach, under the commercial law of Singapore, can be of a general or repudiatory nature and
must therefore be distinguished.48
45. On the one hand, the law states that the aggrieved party has the power to discharge the
contract for breach if the contractual term, which has been breached, is a condition or if the
breach of the said-obligation substantially deprives it of the benefit of the contract. It is then
considered as a repudiatory breach of the contract.49
46. On the other hand, said party has no such power of election if the contractual term, which has
actually been breached, is a warranty or if the breach does not substantially deprive it of the
aforementioned benefit. In such a case, the contract will persist despite the breach.
47. In the case at hand, the absence of nomination of a discharge port led to precarious delays
46 Bill of Lading – Case Scenario, p. 41
47 E-mail sent on 14 October 2016 – Case Scenario, p. 54
48 Commercial Law of Singapore, Art. 8.8.11 & 8.8.1
49 The Hong Kong Fir
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that induced a massive increase of additional costs, up to USD 101.666,67,50 and damages
both moral and material for the crew, the CARGO and the VESSEL.51
48. The simple fact that the VESSEL was not able to call at port in one of the locations laid down
by the VOYAGE CHARTERPARTY to proceed to the discharging of its CARGO compromises the
entire operation consisting in carrying coal from Australia to China. The CARGO has not been
discharged yet and the costs are increasing every passing day. It is thus indisputable that this
contractual term that has been breached is a condition that deprives the CLAIMANT of its
substantial expectations under the contractual terms agreed upon by the PARTIES.
49. Therefore, the breach of the contract was of a repudiatory nature, and the RESPONDENT shall
answer for all the damages resulting from such breach.
b. The Claimant is entitled to discharge or affirm the Voyage Charterparty
50. In accordance with the Singaporean contractual law,52 the party which suffered damage as a
result of a contractual breach, in line with its own best interest, can either terminate the
contract,53 which then ceases to bind the PARTIES from the time the election is effectively
communicated to the other contracting party. Following an effective discharge, the parties are
released from all outstanding contractual obligations, or the aggrieved party can affirm the
contract, giving the party-in-breach another opportunity to rectify the situation, and the entire
contract is kept alive but the aggrieved party loses the right to have the contract terminated.54
51. The CLAIMANT was entitled to decide between these two options, having requested the
termination of the contract considering the extent of damages triggered by RESPONDENT's
50 E-mail sent on 21 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 67
51 E-mail sent on 30 November 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 37
52 Commercial Law of Singapore, Art. 8.8.14 & 8.8.15
53 The Mihalis Angelos
54 Avery v. Bowden; The Simona
Team 19 Statement of Claimant’s Case
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failure to perform its contractual obligations, in line with its repudiatory nature.55
C. The Claimant is entitled to the lien over the Cargo and Sub-freight
52. The RESPONDENT has continuously avoided its obligations under the VOYAGE
CHARTERPARTY leading to its repudiatory breach. These breaches centre around
RESPONDENT’s obligation to pay the full price of the freight due on 21 October 2016 in the
amounts of USD 101.666,67.56
1. THE CLAIMANT IS IN POSITION TO ASK FOR PAYMENT TO THE SHIPPER
53. The RESPONDENT failed to timely nominate a valid discharge port, constituting a first breach
of the contract.57 This breach was followed by a second one, namely the noncompliance with
the dates agreed upon, and the consequential damaging delays that occurred. The CLAIMANT
seeks compensation for these two breaches, but insofar as the RESPONDENT incapacity to
repair these breaches, the CLAIMANT may as well call upon payment from the SHIPPER.
54. A contractual link connects the CLAIMANT and the SHIPPER, as evidenced by (a) the Notice of
Readiness58 and the Bill of Lading59, signed by the LEGAL OWNER through the MASTER,
binding the SHIPPER to the TIME CHARTERPARTY;60 and (b) the SHIPPER is also linked to the
CLAIMANT through the lien clause 61 contained in the VOYAGE CHARTERPARTY and
incorporated by the Bill of Lading.
55 See above, §§44-49
56 E-mail sent on 21 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 67
57 See above, §§26-36
58 Notice of Readiness – Case Scenario, p. 39
59 Bill of Lading – Case Scenario, p. 41
60 Voyage Charterparty – Case Scenario, p. 20
61 Coal Orevoy Charterparty, Part II, Art. 19 – Case Scenario, p. 31
Team 19 Statement of Claimant’s Case
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a. The SHIPPER is bound by the TIME CHARTERPARTY
55. With respect to the Bill of Lading,62 which has been released on 4 October 2016 by the
CLAIMANT and signed by the SHIPPER and the MASTER of the VESSEL, it was stipulated in its
first clause: that all terms and conditions, liberties and exceptions of an undated charterparty,
were to be incorporated to the Bill of Lading.
56. The Bill of Lading refers to a charterparty, but there is no precision about which charterparty
it alludes to. The purpose of a bill of lading is to formalize the contract of transport, and
therefore display all the rights and obligations on the freight transport. When the shipper is
not the charterer, the bill of lading either evidences or contains the contract of carriage.63 As
it was determined in The San Nicholas, a reference to a charterparty is construed as a
reference to the head charterparty, which in the present case is the TIME CHARTERPARTY.
57. In the case at hand, the NOTICE OF READINESS was released by the LEGAL OWNER, on 1
October 2016, and was signed by the MASTER of the VESSEL and addressed to the SHIPPER. It
also refers to an undated charterparty.64
58. The Notice of Readiness matches the end of the transport and has a contractual value since it
transmits the shipment costs and risks from the owner to the charterer and to the shipper.65
Here, the charterparty that it is referred to is the transport contract, namely the TIME
CHARTERPARTY signed by the CLAIMANT and the LEGAL OWNER. The SHIPPER is, hence, also
bound to the TIME CHARTERPARTY by reference to this NOTICE OF READINESS.
59. Considering that the SHIPPER is bound by the Bill of Lading and the NOTICE OF READINESS,
which refer to the TIME CHARTERPARTY, the SHIPPER is also linked to this latter contract.
62 Bill of Lading – Case Scenario, p. 41
63 Singapore Shipping Law – Chapter 25, §4(a)(2); WILSON, p. 129
64 Notice of Readiness – Case Scenario, p. 39
65 TOUCHARD, p. 5, §2
Team 19 Statement of Claimant’s Case
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b. The TIME CHARTERPARTY links the CLAIMANT to the SHIPPER by the lien clause
60. The TIME CHARTERPARTY entrusts the CLAIMANT with the ability to sublet the VESSEL. In
accordance with clause 1(e),66 the CLAIMANT sublet the VESSEL to the RESPONDENT by means
of the VOYAGE CHARTERPARTY.67 This agreement does not prohibit the possibility for the
sub-charterer to sublet the VESSEL.
61. It is alleged that the VESSEL was subsequently sub-voyage chartered by the RESPONDENT to
the SHIPPER. To frame this sub-voyage chartering, the VOYAGE CHARTERPARTY stipulates a
lien clause,68 which allows the Owners to have a lien on the cargo for freight amongst other
things. This clause makes the CLAIMANT eligible to require the payment of the sub-freights
from the SHIPPER by using this clause, in relation to the TIME CHARTERPARTY.
2. THE LIEN ON CARGO EXERCISED BY THE CLAIMANT IS VALID AND SHALL BE ENFORCED
62. The CLAIMANT informed the RESPONDENT of its intention to exercise a lien over the CARGO
on 20 October 2016.69 As previously mentioned, the PARTIES have expressly decided to apply
Singaporean Law to their VOYAGE CHARTERPARTY. 70 Accordingly, such choice of law
encompasses the Common Law, the Carriage of Goods by Sea Act and the Bills of Lading
Act.71 The lien over the CARGO is acknowledged both under (a) the common law and (b) the
contractual rights established by the PARTIES.
a. The lien over the Cargo is valid under the Common Law
66 Time Charterparty, Art. 1(e) – Case Scenario, p. 2
67 Coal Orevoy Charterparty – Case Scenario, p. 24
68 Coal Orevoy Charterparty, §19 (a) & (b) – Case Scenario, p. 24
69 Notice of Lien on Sub-freight – Case Scenario, pp. 65-66
70 See above, §20
71 SING & BALA
Team 19 Statement of Claimant’s Case
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63. The CLAIMANT’s right to exercise a lien at common law arises independently of contract and
is based exclusively on the ability of the ship-owner to retain possession of the goods
concerned. The essence of the exercise of a lien is to deny possession of the CARGO to
someone who is entitled to it,72 thus forcing the interested party in paying the freight to the
lien possessor.
64. The right is restricted and is available at common law in three cases only: (i) for the recovery
of a general average contribution due from cargo; (ii) for expenses incurred by the ship-
owner in protecting the cargo; and (iii) to recover the freight due on delivery of the CARGO
under either the charter or bill of lading contract of carriage.73.
65. This last case is the one where the CLAIMANT grounds its request for the lien over the CARGO,
in view of the presence of a default in payment on the RESPONDENT’s end of the contractual
obligations.
b. The lien over the Cargo is incorporated in all contractual documents entered into
between the Parties and the Shipper
66. The lien is also a contractual creation of the PARTIES, being, thus, only enforceable against a
party to the contract of carriage. Usually, a lien incorporated in a charterparty to provide
security for unpaid hire is not enforceable against cargo of third parties shipped under a bill
of lading even where such third parties have notice of the existence of the charterparty at the
time their cargo was shipped.74 Such a lien would be enforceable if the charterparty clause
was incorporated by a specific term in the bill of lading issued to the third-party shipper.75
72 The Mihalios Xilas, p. 191
73 Hain SS v Tate & Lyle
74 The Chrysovalandou Dyo
75 Ibid., fn. 74
Team 19 Statement of Claimant’s Case
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67. The Bill of Lading, however, made express reference, in its first clause, to the incorporation
of all terms set out by the TIME CHARTERPARTY. Therefore, the SHIPPER, by means of
contractual connection between the Bill of Lading and the TIME CHARTERPARTY, is also
bound to the lien clause and, thus, to the CLAIMANT’s demand of a lien over the CARGO.
68. Thus, the freight under the VOYAGE CHARTERPARTY is due and payable and the
enforceability at the discharge port is impossible, leaving Singapore as the bunkering port.
69. The debt in question shall be ‘due’ and ‘payable’ at the time the lien is to be exercised.76 As
constantly evidenced by the case files, during the exchange of e-mails, the PARTIES have
continuously updated the amounts due as a result of the RESPONDENT’s failure to comply
with its obligation, and such sums were never contested. The RESPONDENT therefore cannot
avoid being held liable for the payment of the sums due for freight.
70. The lien should be exercised when the VESSEL is at, or anchored off, the discharge port.
However, exceptional circumstances may allow an owner to prove that a lien at the discharge
port would be impossible and the lien would be lost if the VESSEL proceeded to the port, as
evidenced in the Mihalios Xilas, where the owners halted the ship at a bunkering port mid-
voyage. In this instance, it was acceptable for the owner to halt the VESSEL outside the port,
as it was impossible and commercially impracticable to exercise the lien at the discharge port.
71. These exceptional circumstances must also be understood to be present in the present case.
The VESSEL is in no condition to discharge at the port nominated by the RESPONDENT.
Moreover, RESPONDENT has failed to comply with the nachfrist proposed by the CLAIMANT,
nominating the port of Ningbo too late. The VESSEL is still in a condition where it is anchored
in Singaporean shores, and the CARGO, as well as the crew, are facing imminent danger. The
CLAIMANT’s lien over the CARGO, requesting Singapore to be the relevant place to take place
76 Tate v. Meek; KAH WAH & TEO
Team 19 Statement of Claimant’s Case
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must be understood as an enabling condition to practice the lien at the present stage.
3. THE CLAIMANT HAS ALSO VALIDLY EXERCISED A LIEN OVER THE SHIPPER’S SUB-
FREIGHT
72. The CLAIMANT notified a lien over sub-freight to the SHIPPER on 20 October 2016, before any
sums were paid to the RESPONDENT. Many time charters provide that the lien for hire shall
extend not only to cargo but also to sub-freights belonging to the charterers. This term
presumably covers not only freight payable by the charterers under the terms of the Bill of
Lading, but also freight due by sub charterers.77 The term sub-freight (a) is also present in the
TIME CHARTERPARTY, making it (b) an incorporated term in all subsequent contracts, as well
as (c) leaving CLAIMANT with the right to exercise such kind of lien, which is still owing.
a. The lien over the sub-freight is incorporated in all contractual documents entered
into between the Parties and the Shipper
73. The lien shall be understood as being extended by the signing parties to cover “sub-hires”
from sub-time charters.78 Unlike a lien on cargo, the lien on freight is not a possessory lien: it
is not a right to retain possession of something already in the owner’s possession but rather a
right to intercept funds which are moving from a third party to the charterer. The lien on sub-
freight gives an owner a contractual right to claim the cost of freight.
74. In the case at hand, the Bill of Lading refers to an undated Charterparty.79 The Bill of Lading
was signed between the MASTER and the SHIPPER. The MASTER signed in the name of the
LEGAL OWNER, meaning that the MASTER was the agent of the LEGAL OWNER, as determined
77 WILSON, p. 303; FURMSTON & MARHINGER
78 Ibid. fn. 77
79 Bill of Lading – Case Scenario, p. 41
Team 19 Statement of Claimant’s Case
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by Clause 31 of the TIME CHARTERPARTY.80 Moreover, as the CLAIMANT is the Disponent
Owner, Clause 23 of the TIME CHARTERPARTY is also applicable to him and the CLAIMANT
can thus exercise a lien on freight.
b. The Claimant has the right to intercept freight owed under the Bills of Lading
75. When an owner’s Bill of Lading is marked “freight payable as per charter-party”, this
incorporates the provisions of the VOYAGE CHARTERPARTY regarding payment of the freight.
The charterer will usually collect freight. However, if the charterer defaults on the payment of
hire, the owner is entitled thereafter to direct the shipper to pay them the freight directly,
bypassing the charterer. The England and Wales Court of Appeal concluded that the third
party is to be regarded as the owner’s agent, who collects the freight on the owner’s behalf.81
76. English courts have held that this is the natural consequence of a Bill of Lading being a
contract between the owner and the shipper. A provision that freight is “payable as per
Charterparty” does not exclude that right. The freight is still due to the owner,
notwithstanding that it may be payable to someone else.
77. In the Bill of Lading, special instructions are held: “Freight payable as per Charterparty”.
Thus, the CLAIMANT can ask directly the SHIPPER to pay the freight in view of the
RESPONDENT’s noncompliance with its obligations. Moreover, the Bill of Lading created a
contractual link between the CLAIMANT and the SHIPPER and there is no possibility to exclude
the right to exercise a lien on freight.
c. The lien over the sub-freight can only be exercised while the freight is still owed
78. The CLAIMANT, as the disponent owner, has the right to intercept sub-freights before they are
80 Time Charterparty – Case Scenario, p. 12, §31
81 Bulk Chile case
Team 19 Statement of Claimant’s Case
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paid to the RESPONDENT. This is achieved by notifying the Bill of Lading holder, the SHIPPER
in the present case, that any freight due from him should be paid directly to the CLAIMANT.
There are no particular requirements regarding the notice as per the agreements.
79. However, the lien can only be exercised in respect of hire already accrued and due at the time
that it is exercised while the freight is still owing. Once the freight is paid, the lien is lost.
80. The present Bill of Lading was signed between the SHIPPER and the MASTER. Thus, the legal
right to freight is in the RESPONDENT’S hands but the CLAIMANT can exercise lien over cargo
and also lien over sub-freight because neither the RESPONDENT nor the SHIPPER have paid the
freights. Thus, the freight is still owing and the CLAIMANT has the right to intercept it.
4. SUBSEQUENTLY, THE ARBITRAL TRIBUNAL SHALL RENDER AN ORDER ALLOWING THE
CLAIMANT TO SELL THE CARGO
81. It has been established that according to the SIAA, this Arbitral Tribunal has the power to
order interim relief.82
82. However, the SIAA does not lay any test to order these measures.83 The SIAA provides for
the possibility to order the sale of any property, which is or forms part of the subject matter of
the dispute.84 This is also foreseen by the Singapore Merchant Shipping Act.85 The SIAA
provides this possibility without establishing a framework in which the reliefs shall be
granted. Therefore, the Arbitral Tribunal has the authority to determine this framework.
83. To establish which test an arbitral tribunal will use in order to assess needs to grant interim
relief, it may either apply the one used by the courts of the forum, or the one used by the
82 See above, §21
83 LIM, §4
84 SIAA, §12(1)(d)
85 Singapore Merchant Shipping Act, Art. 130; Faith Maritime v. Feoso; KAH WAH & TEO
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courts of the lex arbitri.86
84. Since both the forum and the lex arbitri refer to Singapore law, the present Arbitral Tribunal
shall use the test used by the courts of Singapore.
85. According to the relevant provisions of the SIAA applicable in the matter at hand, arbitral
tribunals are entitled to order interim reliefs provided that (a) the case is one of urgency, and
(b) the judge determines that the relief is necessary for the purpose of preserving evidence or
assets.87
a. The urgency commands the granting of an interim measure
86. As previously seen, the SIAA allows for the interim relief for the sale of the subject matter of
the dispute.88 The relevant provisions of the SIAA do not lay out any guidance regarding the
interpretation of the urgency, which is therefore left to the judge or arbitrator’s discretion.89
87. In a recent case, a court of Singapore ruled that there “was a clear case of urgency” when the
crew lacked fresh food, water and medical supplies and the overheating of the cargo
generated a risk of self-ignition and explosion.90
88. In the matter at hand, the MASTER’S report91 evidences that the VESSEL, the CARGO and the
crew are in an identical situation, the Arbitral Tribunal shall therefore find that the present
case fulfils the same conditions, requiring that urgency measures shall be ordered. In the
absence of such measures, severe human and property damages will be inflicted to the
VESSEL, the CARGO and the Crew.
86 LIM, §§7-11
87 SIAA, §12A(4)
88 Ibid., fn. 84; See above, §21
89 Seele v. Drake & Scull
90 Five Ocean v. Cingler, §59
91 E-mail sent on 30 November 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 37
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89. In fact, the crew is in urgent need of basic supplies, as they are out of fresh food provisions,
water, and medicines, with even peril of human life.92 Moreover, the VESSEL and the CARGO
are compromised as they are incurring irreparable damages. Considering the extreme weather
conditions, the VESSEL is at high risk of being damaged and its CARGO lost. Indeed, the
MASTER noticed signs of overheating of the CARGO, which may lead to its self-ignition and
explosion.93 In the present case, the conditions being nearly identical to those in the Five
Ocean v. Cingler case, which granted urgent relief.
b. The interim measure is necessary to preserve the value of the Cargo
90. As established by the provisions of the SIAA, by which the interim measure sought should be
necessary for the purpose of preserving assets,94 the Singapore Court of Appeal considered in
Cetelem v. Roust Holdings95 that the “asset” in question was the value of the cargo and not
the cargo per se. The same interpretation was held in Five Ocean v. Cingler.96 Hence in the
case at hand, preserving the asset means preserving the value of the coal on board.
91. Moreover, the Singapore Court of Appeal has a very narrow construction of the term
“necessary”.97 In Cetelem v. Roust Holdings98, it held that in order to be necessary to preserve
the assets, no other remedies should be available; otherwise the court would have no
jurisdiction to order interim reliefs. Besides, in accordance with a High Court of Justice
Judgement in which an application for an interim injunction was made,99 the respondent
92 Ibid., fn. 91
93 E-mail sent on 30 November 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 37
94 SIAA, §. 12A(4)
95 Cetelem v. Roust Holdings
96 Five Ocean v. Cingler, §48
97 Maldives Airports v. GMR Malé
98 Ibid., fn. 95
99 Telenor v. Altimo Holdings
Team 19 Statement of Claimant’s Case
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should not have given suitable undertakings in respect of the assets. Presently, the
RESPONDENT did not give such undertakings and the only way to preserve the value of the
CARGO, still loaded on the VESSEL, is to allow the CLAIMANT to sell it.
92. In addition to the fact that the CARGO on board is at significant risk of being damaged or
lost,100 it is incurring a loss of its value, as the Chinese coal market has been structurally
falling in line as it is stated in the Expert Report.101 Moreover, the EXPERT put the Chinese
market in perspective with the benchmark Newcastle NSW according to which the prices
have risen 9,85% between 04 October 2016 and 30 November 2016.102
93. The EXPERT filed his report on December 2016, using the information publicly available at
that moment. By using the same sources of his report,103 one can observe that the prices have
substantially dropped from November 2016 to April 2017, losing a quarter of its value. Thus,
according to both China coal market and Australia prices, the current market conditions are
worsening. There is no doubt that the value of the CARGO will continuously depreciate.
94. Furthermore, the valuation of the CARGO is based on the water content of the coal, as stated
by the Expert:104 relying on the load port quality certificate105 that was provided, the EXPERT
added USD 0,50 per tonne to adjust from 37% total moisture of the Coalspot Benchmark to
30.10% being the total moisture of the coal in this case. But this consideration has been
overtaken by the fact that the VESSEL has been kept adrift in open seas during the monsoon
season 106 for a considerable period and the CARGO exposed to great seasonal humidity.
100 See above, §78
101 Expert report of Caleb Coalman – Case Scenario, p. 99
102 Ibid., fn. 101, p. 100
103 CoalSpot.com, Australian Coal Index - from October 2016 to April 2017
104 Expert report of Caleb Coalman –Case Scenario, p. 100
105 Carbon Investigators Certificate of Sampling and Analysis for the full specification – Case Scenario, p. 40
106 E-mail sent on 30 November 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 37
Team 19 Statement of Claimant’s Case
24
During that period, temperature can rise up to 30°C, while rainfall can reach 288mm in a
month, leading to more than 96,4% of relative humidity.107 This exposure has an impact on
the total moisture of the coal on board. Besides, a long exposure of the CARGO to such
climatic conditions will result in an increase of the water content of the coal rendering the
load port quality certificate out-dated and leading to Cargo’s inevitable devaluation.
95. The Expert Report states that the level of the discount of a distressed cargo depends on the
level of the buyers’ knowledge of the seller’s predicament.108 The EXPERT applied three
different discount rates to the value of the CARGO, stressing that the discount could be more
in this case.109 The longer the CARGO is delaying discharge, the more the information about
the CLAIMANT will spread, which will result in increasing the discount on the CARGO’S value,
leading to its increasing damaging depreciation.
96. Such depreciation needs to be assessed in the light of the increase in expenses in maintaining
the CARGO abroad the VESSEL, i.e. 10,000 USD per day.110 On 21 October 2016, the overall
costs on charterers account have already reached USD 101.666,67.111 In compliance with the
estimation112 made regarding the value of the CARGO, which is worth between 2,527,561.56
USD and 2,824,921.75 USD, the sum due to the CLAIMANT, at the time the Tribunal will
render its award, would eventually exceed the CARGO’s value. Therefore, the Arbitral
Tribunal ought to order the sale of the CARGO pendent lite in order the preserve the CARGO’S
value.
107 www.weather.gov.sg – Long Term Climate Averages
108 Expert report of Caleb Coalman - Case Scenario, p. 101
109 Ibid., fn. 108, p. 101
110 E-mail sent on 12 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 52
111 E-mail sent on 21 October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 67
112 Expert report of Caleb Coalman – Case Scenario, p. 102
Team 19 Statement of Claimant’s Case
25
Request for Relief
97. For the reasons described above, CLAIMANT respectfully requests the Arbitral Tribunal to:
I) Recognize it has jurisdiction over the present disputes, the PARTIES, and the SHIPPER, by
virtue of Clause 29 of the VOYAGE CHARTERPARTY;
II) Declare that RESPONDENT has committed a repudiatory breach of the VOYAGE
CHARTERPARTY, by failing to nominate the discharge port and pay freight due to CLAIMANT,
causing material and moral damages to the CLAIMANT, to be assessed in a further stage of
these proceedings;
III) Declare that CLAIMANT has validly exercised its rights of lien over the CARGO and over
Sub-Freight;
IV) Grant the CLAIMANT the requested interim order allowing the sale of the CARGO; and
V) Declare that all expenses incurred in this arbitration shall be borne by the RESPONDENT.
On behalf of Furnace Trading Pte Ltd.,
Versailles, 19 April 2017
Arleen Gonzalez Charlotte Hauchard Vérane Pasi
Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa