MEMORANDUM FOR THE RESPONDENT

Transcription

1 17 TH INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016 MEMORANDUM FOR THE RESPONDENT In the Matter of arbitration under the MLAA Rules TEAM 25 CENTRE DROIT MARITIME ET DES TRANSPORTS (FRANCE) Camille AUBERT Natalia GAUCHER Benoit GUILLOU Rosaline JACQUET Fanny LECADRE Evangeline MARCHAIS

2 MEMORANDUM FOR THE RESPONDENT ON BEHALF OF HESTIA INDUSTRIES The Respondent AGAINST ZEUS SHIPPING AND TRADING COMPANY The Claimant 2

3 TABLE OF CONTENTS TABLE OF CONTENTS... 3 TABLE OF ABBREVIATIONS... 4 INDEX OF AUTHORITIES... 5 I. BOOKS REFERRED TO... 5 II. CASES REFERRED TO... 6 III. LEGISLATIONS AND RULES REFERRED TO... 7 STATEMENT OF FACTS... 8 MERITS I. THE TRIBUNAL HAS NO JURISDICTION TO HEAR THE CLAIM A. The Arbitration Clause and Law of Arbitration The Arbitration Clause The Law of Arbitration B. This Tribunal has no jurisdiction to hear the case The Arbitration agreement is not valid The Respondent denies the scope of the Arbitration Clause Conclusion: the arbitration clause has no effect II. PERFORMANCE OF THE CONTRACT A. No demurrage is due by the Respondent under the Contract The laytime was not exceeded The Vessel had left the Port of Loading Alternatively, the laytime had been interrupted Conclusion B. The Claimant is liable to the Respondent Introduction The Claimant liability under the Contract a. Unjustified lack of notice by the Claimant b. The Claimant s negligence c. Failure of the obligation of transport by the Claimant The Claimant extra-contractual liability a. The Master committed a fault b. The vicarious liability of the Claimant III. alternatively, The respondent is discharged by force majeure A. Force Majeure B. A wrongful arrest of the ship as Force Majeure event A Vessel may be arrested only by a legitimate Government The interception of the Vessel was illegal C. Conclusion IV. ALTERNATIVELY, THE RESPONDENT IS DISCHARGED BY FRUSTRATION A. The conditions of application of the frustration doctrine B. The Frustration of the Contract discharges the Respondent of its contractual obligations V. RESPONDENT S COUNTERCLAIM: SALVAGE REWARDS A. THE NECESSARY APPLICATION OF THE 1989 SALVAGE CONVENTION B. THE ASSISTANCE OF THE VESSEL IS A SALVAGE OPERATION The qualification of the operation according to the Salvage Convention The port assistance towing contract was fulfilled The Respondent is entitled to salvage rewards Alternatively, the operation must be considered as an exceptional towing

4 REQUEST FOR RELIEF TABLE OF ABBREVIATIONS COGSA ETA ETD HLNG LNG MLAA NOR WWD SHINC Carriage of Goods by Sea Act, 1991 (Australia) Estimated Time of Arrival Estimated Time od Departure Hades Liquefied Natural Gas Liquefied Natural Gas Maritime Law Association of Australia & New Zealand Arbitration Rules, 2007 Notice Of Readiness Weather Working Days, Sundays and Holidays Included 4

5 INDEX OF AUTHORITIES I. BOOKS REFERRED TO AMBROSE (Clare) MAXWELL (Karen) PARRY (Angharad), London Maritime Arbitration, 3rd ed., London, Informa, 2009, XLIX-611 p. BONASSIES (Pierre) SCAPEL (Christian), Droit maritime, 2 nd ed, Paris, LGDJ-Lextenso, 2010, X-946 p. CHITTY (Joseph) BALE (H. G.), Chitty on Contracts, 28 th ed., 2 vol., London, Sweet & Maxwell, 1999, CCCXXVI-1659 p. GADBIN-GEORGE (Géraldine) et al., Glossaire de droit anglais, méthode, traduction et approche comparative, 2014, Paris, Dalloz, XVI-455 p. MCKENDRICK (Ewan), Contract Law, 8 th 278 p. ed., London, Palgrave-Basingstoke, 2009, XL- SCHOFIELD (John), Laytime and demurrage, 3 rd ed., London New York, LLP (Lloyd s Shipping law Library), 1996, XXXIII-414 p. TIBERG (Hugo), The law of demurrage, 3 rd ed., London, Stevens & Sons Ltd, 1979, XI-652 p. TETLEY (William), Marine Cargo Claims, 3 rd ed., London, Blais, CXL-1305 p. Laytime Definitions for Charter Parties, BIMCO. 5

6 II. CASES REFERRED TO C. Christopher Brown Ltd. V. Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8. D. Dampskibsselskabet Norden A/S v Gladstone Civil Pty Ltd, Federal Court of Australia, [2012] FCA 696. H. Horne Coupar v. Velletta & Company, Supreme Court of British Columbia, 21 April 2010, [2010] BCSC 483. L. London Arbitration 4/92, LMLN 349, 20 March T. Tamplin SS Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC 397. W. Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274 (CA) 6

7 III. LEGISLATIONS AND RULES REFERRED TO International Conventions International Convention on Salvage, London, 28 April International Convention on the High Seas, Geneva, 29 April International Convention on the Law of the Sea, Montego Bay, 10 December Hague-Visby Rules (The Hague Rules as Amended by the Brussels Protocol 1968). Australia Carriage of Goods by Sea Act, Maritime Law Association of Australia & New Zealand Arbitration Rules, Western Australia Port Authorities Act, United Kingdom Arbitration Act, BIMCO Special Circular No. 8 of 10 September 2013: Laytime Definitions for Charter Parties. 7

8 STATEMENT OF FACTS 1. On Tuesday, 1st July 2014, HESTIA INDUSTRIES (hereafter the Respondent ), a producer of Liquefied Natural Gas (LNG) based in Hades, required the ship-owner ZEUS SHIPPING AND TRADING COMPANY (hereafter the Claimant ) to submit the terms of a Voyage Charter Party to hire a Vessel suitable for the transport of 260,000 m3 of LNG produced from Hades Shale Gas (hereafter HLNG) from Hades to Poseidon with an approximate loading date set for Wednesday 1 st October 2014 and approximate discharge date on Thursday 30 th October On Monday 14 th July, the Claimant informed the Respondent of its recent purchase of the MV Athena, a vessel suitable for the proposed transport and informed the Respondent that the Vessel had been flagged with the Hades flag. The Claimant submitted a Charter Party for the proposed voyage to the Respondent. 3. By way of an dated Wednesday 16 th July 2014, the Respondent accepted the main commercial terms proposed by the Claimant in the Charter Party. The Respondent merely requested that the ARBITRATION clause (clause 30) be amended to exclude disputes, that relate to but do not arise out the terms of the charterparty, from the scope of arbitration. 4. On Tuesday 22 nd July 2014, the Respondent addressed an executed version of the proposed Voyage Charter Party to the Captain of the MV Athena. 5. On Saturday 20 th September 2014, the Claimant informed the respondent that the MV Athena s excepted time of arrival (ETA) in Hades was set for 9:00 on Friday 3 rd October

9 6. On Friday 3 rd October 2014, a notice of readiness (NOR) was tendered at 09: The loading operations of HLNG commenced on Friday 3 rd October at 14:30 and were completed on Monday 6 th October at 23:50. It is necessary to mention that the Port of Hades was closed during two hours as a result of significant protests against HLNG export from Hades. In spite of these important protests, the Claimant ordered the MV Athena s Master to proceed with loading the cargo. 8. During the night of 6/7 th October 2014, against all expectations, the leader of the Opposition Party in Hades took control of the Parliament. 9. On 7 th October 2014, the new President publically affirmed her intention to instruct the Hades Coast Guard to intercept the MV Athena and to have it return to port. 10. On Tuesday 7 th October 2014, The MV Athena left Hades at 09:00 following customs clearance and port clearance. 11. On Wednesday 8 th October 2014, the Hades Coast Guard intercepted the MV Athena while it was sailing towards Poseidon. The Hades Coast Guards requested the Master of the Vessel to return to the Port of Hades, arguing that the Vessel was within the inner limits of Hade s territorial waters and the Hades Flag. The Vessel s Master followed the Coast Guard s instructions. 12. On Friday 10 th October 2014, the Claimant informed the Respondent that because the delay was caused by the nature of the cargo and as the Coast Guard considers the vessel had not left the port of Hades, demurrage will accrue at the sum of USD 50,000/day, in accordance with Charter Party. Subsequently, the Claimant criticised the Master s behaviour and asserted that the Vessel was outside the Hades territorial limits. However, the Respondent had not been informed of the situation. 9

10 13. On Tuesday 22 th October 2014, the Respondent informed the Claimant that its company would suffer significant losses as a result of the failure to deliver the cargo in Poseidon. 14. On Wednesday 15 th April (after 6 months), the Claimant addressed an invoice to the Respondent for the payment of 184 days of demurrage at the rate 50,0000 USD / day which amounts to the sum of USD 9.2 million. 15. On Monday, 5 th October 2015, following the President s resignation, the Coast Guards released the MV Athena. 16. Towing operation began under the control of HESTUG services. Shortly after the end of the towing operation, it had become clear that, while at the Port of Hades, the propellers of the Vessel had been tampered with. As a result, the propeller shafts broke. The Vessel needed assistance was successfully rescued by HESTUG 17. On Tuesday 6 th October 2015, the Claimant addressed an invoice to the Respondent for the payment of 358 days of demurrage, amounting to the sum of USD 17.9 million. 18. On Monday, 16 th November, the Claimant informed the Respondent of its intention to refer the dispute to arbitration. The Respondent made clear that it does not recognise its liability for the alleged demurrage and denied the jurisdiction of the arbitral tribunal. 10

11 MERITS I. THE TRIBUNAL HAS NO JURISDICTION TO HEAR THE CLAIM A. THE ARBITRATION CLAUSE AND LAW OF ARBITRATION 1. The Arbitration Clause 19. Clause 30 of the Charter Party provides: 30. ARBITRATION (a) Any dispute arising under this contract shall be referred to arbitration in London by a sole arbitrator/a tribunal of 3 arbitrators (strike out whichever is inapplicable) in accordance with the Arbitration Rules of the Maritime Law Association of Australia and New Zealand. [ ] (d) The parties hereby agree that:- (i) the Arbitrators may determine any questions by reference to consideration of general justice and fairness; (ii) a party may be represented by duly qualified legal practitioners or other representative; (iii) the Arbitrators shall include in the arbitration award their findings on the material questions of law and fact, including references to the matters. 2. The Law of Arbitration 20. The Clause does not define a legislation governing the Arbitration. The MLAA Rules provide: 2. In these Rules, unless the contrary intention appears: Arbitration means an arbitration conducted a) in Australia which concerns a dispute to which: [ ] ii) the International Arbitration Act 1974 (Cth) applies. 21. The Arbitration Clause shall be construed under the Law of the Seat, that is to say under the United Kingdom Arbitration Act,

12 22. Alternatively, Australian International Arbitration Act, 1974 may also apply. B. THIS TRIBUNAL HAS NO JURISDICTION TO HEAR THE CASE 23. Under the principle of Kompetenz-Kompetenz, this Tribunal is entitled to rule on its own jurisdiction 1. Arbitrators jurisdiction is the power conferred on them by the Parties to determine the dispute and make a final decision, which is binding on the Parties Under Clause 30(1) of the Arbitration Act, 1996, the principle is appreciated as follows: (1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to (a) whether there is a valid arbitration agreement, (b) whether the tribunal is properly constituted, and (c) what matters have been submitted to arbitration in accordance with the arbitration agreement. 1. The Arbitration agreement is not valid 25. ARBITRATION Clause (Clause 30) provides: a) Any dispute arising under this contract shall be referred to arbitration in London. 26. This provision is void, as it purports to preclude or limit the jurisdiction of Australian Courts. Or pursuant to Sect. 11 of Australian COGSA, 1991, such a foreign arbitration clause in Charter Party has no effect: (1) All parties to: (a) a sea carriage document relating to the carriage of goods from any place in Australia to any place outside Australia; or (b) a non negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii), relating to such a carriage of goods; are taken to have intended to contract according to the laws in force at the place of shipment. (2) An agreement (whether made in Australia or elsewhere) has no effect so far as it purports to: 1 Christopher Brown Ltd. V. Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 2 C. AMBROSE K. MAXWELL A. PARRY, London Maritime Arbitration, 3 rd ed., London, 2009, p

13 [ ] (c) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of: (i) a sea carriage document relating to the carriage of goods from any place outside Australia to any place in Australia; or (ii) a non negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii) relating to such a carriage of goods. 27. Pursuant to s 7 and s 9 of COGSA 1991, sea carriage document is defined by reference to the Hague Rules as A non-negotiable document (including a consignment note and a document of the kind known as a sea waybill or the kind known as a ship s delivery order) that either contains or evidences a contract of carriage of goods by sea. 28. A voyage charter party is such a sea carriage document. This point still raises tensions amongst Australian jurisdictions, as there has no longer been a Supreme Court decision to settle this question. In Dampskibsselskabet Norden A/S v Gladstone Civil Pty Ltd 3, a Federal Court considered voyage charter parties as sea carriage documents under Sect. 11 of the COGSA. 29. As there is no consensus, this interpretation according to which a foreign arbitration clause in a charter party is void, must be followed by this Tribunal, otherwise its award may not be not be enforced in Australia. 2. The Respondent denies the scope of the Arbitration Clause 30. The Respondent intended ab initio to limit the arbitrable matter: There is one amendment ( ). We are not prepared to arbitrate disputes that relate to but do not arise out of the terms of the charterparty (Letter to Zeus dated 16 July ). 3 Dampskibsselskabet Norden A/S v Gladstone Civil Pty Ltd, Federal Court of Australia, [2012] FCA Moot scenario, p

14 31. A new clause was written by the Claimant. Parties now disagree on the scope of this clause, which stands ambiguous. The Tribunal shall therefore construe this clause contra proferetem: 10. Contra proferentem is a rule of contractual interpretation which provides that an ambiguous term will be construed against the party responsible for its inclusion in the contract. This interpretation will therefore favour the party who did not draft the term presumably because that party is not responsible for the ambiguity therein and should not be made to suffer for it. [ ], once ambiguity is established, the rule is fairly straightforward in application Therefore, the Respondent s interpretation that restrain the scope of the Arbitration clause shall be followed by this Tribunal. In particular, the frustration issue does not appear as a dispute arising under the Contract. Contra proferentem interpretation automatically requires to reject this question from the jurisdiction of this Tribunal. 3. Conclusion: the arbitration clause has no effect 33. As a result of the matters stated hereinabove, the ARBITRATION Clause has no effect, and this Arbitral Tribunal shall deny its jurisdiction. II. PERFORMANCE OF THE CONTRACT A. NO DEMURRAGE IS DUE BY THE RESPONDENT UNDER THE CONTRACT 1. The laytime was not exceeded 34. Laytime is a period allowed by the shipowner to the charterer to proceed with the loading and the discharging of the cargo, carried by sea onboard a vessel. Where the allowed laytime is 5 Horne Coupar v. Velletta & Company, Supreme Court of British Columbia, 21 April 2010, [2010] BCSC

15 exceeded, the charterer is liable to pay demurrage to the shipowner 6. According to the DEMURRAGE AND DISPATCH MONEY Clause 7, demurrage is a rate per day. 35. The laytime in principle begins to run when the Master of the Vessel gives the Notice of Readiness (NOR) 8, for advising the charterer the vessel has arrived at the port and is ready to load (or discharge). NOR is a prerequisite to the commencement of laytime at common law. In this case, the NOR was emitted by the Master on 3 rd October 2014 at 09:15. 9 And the laytime stops to run when the Vessel leaves the loading Place. In this case, the Statement of facts established by the Master mentions that the MV ATHENA sailed from Hades on 7 th October 2014 at 09: The Vessel was loaded in accordance with the Charter Party, on 3rd October 2014 at 14:30. The loading was completed on 6th October. The MV ATHENA left the port of Hades for Poseidon on 7th October at 9:00. According to the LOADING AND DISCHARGING Clause of the Charter Party 10, time permitted for loading is 10 WWD SHINC. Loading operations took place during three and a half days. The ten days of laytime allowed as per Clause 9 of the Charter Party were not exceeded. 37. Hence, demurrage has not accrued. 6 BIMCO, Laytime Definitions for Charter Parties, Clause 10 of the Charter Party. 8 P. BONASSIES C. SCAPEL, Droit maritime, 2 nd ed., Paris, NOR page 51 of the Moot Scenario. 10 Clause 9 c i of the Charter Party. 15

16 2. The Vessel had left the Port of Loading 38. In order to assert that the laytime continued to run after the loading operations had ended, and that the Respondent is liable for demurrage, the Claimant argues that the Vessel did not leave the Port of Hades. 11 This argument cannot retain the attention of this Tribunal. 39. Undoubtedly, the Vessel had left the Port of Loading. 40. If there is no delay for the load of the cargo and if the vessel has left the harbour waters, the laytime stops running. As evoked previously, there was no delay in the loading of HLNG. 41. The Claimant sent an to the Master of the Vessel in order to assert the Vessel was outside the territorial waters of Hades to justify there was no obligation to return to port and to ask his resignation The Claimant s bad faith is evident when asserting that the Vessel had never left the Port of Hades. MV ATHENA did in fact leave the Port of Loading. 3. Alternatively, the laytime had been interrupted 43. The LOADING AND DISCHARGING Clause of the Charter party 13 settles laytime interruption causes. 44. If the tribunal does not find the Vessel had left the Port of Loading, it would consider there was a cause of interruption of the laytime. 45. In particular, Clause 9 refers to arrests. The Master had been required by a Coast Guard to return to port and compelled to stay docked. This requisition will be considered as an arrest under Clause 9. Therefore, it represents a cause of interruption of the laytime. 11 from The Claimant to the Respondent, page 63 of the Moot Scenario. 12 Page 58 of the Moot Scenario. 13 Clause 9 (e) of the Charter Party. 16

17 46. An additional element supports the hereinabove plea: if there is a fixed laytime in a charter party, the interruptions and exceptions will normally be in favour of the charter according to the contra proferentem rule 14. Hence, it is clear that the clause inserted in the Charter Party rules in favour of the Respondent. 4. Conclusion 47. The Claimant is not grounded to ask the Respondent for demurrage. B. THE CLAIMANT IS LIABLE TO THE RESPONDENT 1. Introduction 48. The Master of the MV Athena had reported to the Claimant the unsafe situation at the Port of Hades on account of huge protest against the HLNG export from Hades. He wanted to know wether or not he had to proceed to the loading notwithstanding the conjecture. The Claimant commanded to him to proceed to the loading of the cargo However, the Claimant had to secure the release of the Vessel from Hades. Hence, the Claimant would have waived the operation regarding the troubles at the Port. It clearly appears that the Claimant would have challenged the transport, or at least postponed it for the security of the Vessel and its cargo. 50. There were significant protests at the Port of Hades when the Vessel arrived. As a result, the Port had to close during two hours. 51. The Claimant could have prevented the loading by referring a state of Force Majeure as provided by the FORCE MAJEURE clause 16 of the Charter Party such as stoppage, 14 J. SCHOFIELD, Laytime and demurrage, 3 rd ed., London New York, 1996, p In an from Zeus to the MV Athena dated 4 th October 2014, page 53 of the Moot Scenario. 16 Clause 19 of the Charter Party. 17

18 mobilisation, hostilities or riots. In addition, the Claimant had the possibility to minimize the risk. However, it decided to proceed to the loading of the cargo, arbitrarily and without notifying or consulting the Respondent. 52. The Claimant clearly committed a fault by ordering the loading of the cargo on board, without consulting the Respondent, in spite of the exceptional circumstances. 53. Also, the Claimant did not act in good faith. When the Claimant issued the Charter Party, they took the risk to export HLNG knowing that if the vessel could not leave the port of Hades due to protests, the delivery of the cargo would be delayed. The Claimant can be aware that this incident could give rise to important demurrage requested to the Respondent. 54. Moreover, the Claimant registered the MV Athena in Hades from its own initiative when the Respondent requested to it for the transport of HLNG from Hades to Poseidon. It is potential that the Claimant foresaw the protests against the export of HLNG. Hence, the power of Hades authorities would have been stronger regarding the flag of the MV Athena rather a foreign flag. It is clear that the Claimant facilitated the interception of the Vessel. 2. The Claimant liability under the Contract 55. According to the Charter Party, the Claimant must take all steps necessary to secure the release of the Athena from the port of Hades and sail to Poseidon with all due despatch. 17 (our emphasis) 56. The Claimant failed to perform its contractual obligations. 17 Page 61 of the Moot Scenario and INTRODUCTION of the Charter Party and implicitly in all different clauses. 18

19 57. Under common law, the duty of a carrier refers to that of a common carrier. A carrier has to perform a contract in a reasonable way. In this case, it appears that the Claimant did not take all reasonable steps to fulfill the Charter Party. a. Unjustified lack of notice by the Claimant 58. The Claimant failed to notify the interception of the MV Athena and its return to Port. The Claimant did not send any in order to inform the Respondent. The Respondent discovered the arrest by checking the Vessel tracking. 59. However, the Claimant had to inform the Respondent about the progress of loading, transport and unloading of the cargo. This obligation had to be maintained during all the execution of the contract. 60. This obligation can be deduced especially in view of some clauses in the Charter Party: - The LOADING PORT NOTICE Clause 18 states that: If the vessel is already at the port of loading discharging cargo or for other reason, the Master or Owners shall give corresponding notice when the vessel is excepted to load under this charter party - The DISCHARGING PORT NOTICE clause 19 states that: on completion of loading, the Master or Owners shall notify Charterers in Poseidon stating the date and time of departure from the loading place ( ), the excepted time of arrival. 61. These clauses on the Charter Party must be interpreted as an obligation for the shipowner to notice the Charterer of many events, of the well process of the transport. 18 Clause 3 iv of the Charter Party. 19 Clause 14 a of the Charter Party 19

20 62. Such important incident has to be notified to the charterer. It was essential for the Respondent to know the unexceeded situation. b. The Claimant s negligence 63. The Claimant has a duty of care pursuant to the Charter Party. The Claimant is a professional. The Claimant had a duty to give advice to its clients. As a leader in the maritime transport and a professional shipper, the Claimant must advice the Respondent as the risk creating by such transport. Surely, The Respondent is a professional however it had not the same profession. The Respondent is in HLNG business (liquefaction and export). It had no expertise in shipping. 64. The Claimant should have alerted the Respondent of the risk in order to export HLNG from Hades, not necessary in the Charter Party but at least in an . They exchanged many s. Hence, the Claimant should have informed the Respondent of the risks generated by the transport of HLNG. c. Failure of the obligation of transport by the Claimant 65. The Voyage Charter Party represents the contract signed the shipowner the Claimant and the charterer the Respondent. In this kind of Charter Party, the owner keeps the nautical and commercial management. Indeed, the owner has a fundamental contractual obligation: transport a determined cargo from one port to another. In case of failure, this obligation is not fulfilled and the responsible owner can be found liable. Hence, the Claimant had to transport HNLG with the MV Athena, from Hades to Poseidon pursuant to the Charter Party. Nevertheless, the Master of the vessel returned to the port of loading and as a result the transport had not been made until Poseidon. The fact that the transport had not be completed correctly due to a wrong option made by the Master is imputable to the Claimant. The 20

21 Claimant has failed to fulfil its central obligation of transport. It is the reason of the delay. Therefore, the Respondent cannot be found liable for it. 66. On a second hand, Shipowner has to provide a Vessel in good condition, so called in seaworthiness condition, able to receive the cargo, preserve it and able to transport it between a place to another. After the release of the MV Athena, it was clear that the vessel was not seaworthy. The ship owner failed in providing a vessel able to carry out the sea passage. 3. The Claimant extra-contractual liability a. The Master committed a fault 67. The Master on a voyage takes on significant obligations: as agent of the shipowner, he has the duty of taking all necessary steps to carry out the contract and of taking reasonable care of the goods entrusted to him The Claimant himself asserted the Master should not return to Port because the Vessel was outside the Hades territorial waters via an 21. The Coast Guards did not have jurisdiction to give such orders. The Claimant reproached to the Master his conduct and asked for his resignation because he committed a fault submitting to the Coast Guard orders. 69. The Master should have continued the transport, despite the direction of the Coast Guard. The fact the Vessel returned to Port is the cause of the delay. If the Vessel would not has returned to Port, it is possible to think that transport would have been correctly realized, without delay. So no demurrage would have been existed. 20 J. COOKE T. YOUNG A. TAYLOR et al., Voyage Charters, London - New York - Hambourg - Hong Kong, LLP, 1993 (Lloyd's Shipping Law Library), p from the Respondent to the Master of the Vessel, page 58 of the Moot Scenario. 21

22 70. Pursuant the different breaches of the Contract by the Claimant, and resulting that the Respondent had suffer losses (economic and reputation injuries), the Respondent is entitled to damages. b. The vicarious liability of the Claimant 71. The Respondent is able to invoke the vicarious liability. 72. The vicarious liability makes the Respondent liable for the torts committed by another individual. It is the case in an employer-employee relationship. For the employer to be held vicariously liable, the worker must be an employee who has committed a tort in the course of his/her employment. 73. In this case, the Claimant the shipowner and the Respondent the charterer entered into a Voyage Charter Party. 74. In law, under a Voyage Charter Party, the shipowner retains the nautical and the commercial management of the vessel. Consequently the shipowner the Claimant is responsible for employing the crew included the Master and for accomplishing the necessary maintenance and repairs of the vessel. 75. The Claimant employed the shipmaster there was a subordinate relationship between the Claimant and the Master of the Vessel. The litigious act (the interception of the Vessel) has occurred in the course of this employment. The Master was on board to conduct the vessel until Poseidon, the determined port of discharge. 76. Whilst a charterer s obligation to complete loading or discharge within the prescribed lay days is unconditional, nevertheless laytime will not run whilst there is a delay caused by the 22

23 fault of the shipowner or those from whom they are responsible 22. The defence is an example of the more general principle that a plaintiff cannot claim damages if the claim is based on his own fault or default. 77. The vicarious liability of the Claimant has to be challenged. The delay is due to the Master who is under the control of the shipowner, the Claimant. As a result, the Claimant is not entitled to request the payment of demurrage because the Respondent is not liable for the delay. III. ALTERNATIVELY, THE RESPONDENT IS DISCHARGED BY FORCE MAJEURE A. FORCE MAJEURE 78. FORCE MAJEURE Clause of the Charter Party provides 23 : Neither party shall be liable for any failure to perform or delay in performing its obligations under this Contract, where the party is being delayed, interrupted or prevented from doing so by reasons of any Force Majeure Event. For the purposes of this Contract, Force Majeure Event means: [ ] (d) mobilization, war (declared or undeclared), hostilities [...], riots [ ], Court issued arrest proceedings, act of the Queen s enemies, [ ], enemies [ ] or other similar cause. 79. An in concreto interpretation of the facts, as it was engaged in Cobelfret (UK) Limited v Austen and Butta (Sales) PTY Limited, , requires the discharge of obligations under the FORCE MAEURE Clause. In this case, the chartered Vessel could not discharge its cargo properly, due to sudden quota restrictions in the designated Port of Discharge. The judge 22 J. SCHOFIELD, Laytime and demurrage, op. cit., p. 164; London Arbitration 4/92 LMLN March Clause 19 of the Charter Party. 24 Cobelfret (UK) Limited v Austen and Butta (Sales) PTY Limited, New South Wales Supreme Court, 24 February 1988 (unreported - jurisdata BC ). 23

24 stated after an in concreto analysis (relationship between the parties, legal and economical contexts ) that this situation belonged to the FORCE MAJEURE clause. 80. In the case submitted to this Arbitral Tribunal, Parties shall be considered as having contemplated Jacqueline Simmons coup d État and its consequences This action was supported by Hades armed forces (The Hades Advocate, 7 October ) and is a mobilisation or hostilities or other similar cause according to the FORCE MAJEURE Clause. B. A WRONGFUL ARREST OF THE SHIP AS FORCE MAJEURE EVENT 81. The Vessel was under the Hades flag. 82. The nationality of a vessel is very important in maritime law notably because it determines the powers of the flag State, and the rights of the Vessel. 1. A Vessel may be arrested only by a legitimate Government 83. Firstly, in the High Seas. Two conventions are applicable. Article one of Geneva Convention of 29 th April 1958 states that: the term high seas means all parts of the sea that are not included in the territorial sea or in the internal waters of a State 84. Article 87 of the United Nations Convention on the Law of the Seas (signed at Montego Bay Convention on 10th December 1982) recognizes freedom of the high sea. Article 92 states that the vessel flying a flag shall be subject to its exclusive jurisdiction, on the high seas. And Article 94 compels that the State shall effectively exercise its jurisdiction over ships flying its flag and its Master, officers and crew. 85. According to the aforesaid articles, the state of Hades had jurisdiction over the MV Athena. 25 Moot scenario, p

25 86. Secondly, in Hades Territorial Waters. Article 3 of the United Nations Convention on the Law of Seas defines the territorial waters as follows: «Every State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with this Convention» 87. Article 2 of the same convention provides the sovereignty of the coastal State in its territorial waters. 88. Although the position of the MV Athena during the interception cannot be well determined, as the Vessel was under the Hades Flag, the State of Hades had exclusive jurisdiction over it. Only the State of Hades had jurisdiction over the Vessel. The fact that the Vessel was in territorial waters or in the high seas is irrelevant. 89. Hence, it is impossible to deny the power of the Hades State over the MV Athena in order to enforce it the national and international law. 2. The interception of the Vessel was illegal 90. Regarding the Port Authorities Act, 1999, The new President should have taken a special decision respecting the legal system in order to render the Act legal and enforceable. 91. She asked to Coast Guard of Hades to intercept the Vessel and order to it to return to the port arbitrarily, without any Act and with the Hades military aids. 92. It is indisputable that the flag State has an important power over vessels flying its flags but this power is not, however, unlimited. The law has to be respected. The legal system even if an urgent case has to be followed. 93. The President of Hades, ordering to the Coast Guard to compel the Master of the vessel to return to the Port of Hades, committed a fault. There was no legal and justified act. 25

26 94. If there had been a Presidential Decree, the order given to the Vessel and its Master to return to the Port of Hades would be enforceable by an officer of the Hades government, even on board of the MV Athena due to its flag. In the absence of a Presidential Decree, there was a lack of legal basis in spite of the Hades flag of the MV Athena. 95. Furthermore, reading from The Hades Advocate 26 issued on 25 th October 2014, it is clear that the Coast Guard Commander, who intercepted the MV Athena, was absolutely not sure that he had the power to do so. The article shows that the Commander found an argument in order to try to convince the Master to return to port but without real legal basis. The Hades flag ground seams to be hazardous perceiving the shipmaster was hesitant to submit to its authority. 96. In addition to this, it must be that the President Simmons does not embody a democratic policy, regarding the coup d état with the military assistance on one hand and the alleged corruption on the other. Such arbitrary decision based on illegal behaviour is inacceptable. 97. The Respondent was not able to overthrow this decision. Only the Master of the Vessel could resist the decision and refuse to return to Port. The Master had to ensure the vessel navigation; he was only responsible of it. A shipmaster has to choose the appropriate seaway. C. CONCLUSION 98. Therefore, performance of the Contract was no longer required, and the Claimant is discharged of its obligations from 7 October 2014, that is to say from the moment the Coast Guard required the Master. 26 Article of the Hades Advocate dated on 25 October 2014, page 62 of the Moot scenario 26

27 IV. ALTERNATIVELY, THE RESPONDENT IS DISCHARGED BY FRUSTRATION A. THE CONDITIONS OF APPLICATION OF THE FRUSTRATION DOCTRINE 99. There is no applicable piece of legislation, which excludes Voyage Charter Parties from the scope of the doctrine of frustration. The doctrine of frustration is therefore applicable to the Voyage Charter Party The doctrine of frustration operates where, after the contract was concluded, events occur which make performance of the contract impossible, illegal or something radically different from that which was in the contemplation of the parties at the time they entered into the contract The event has to be unforeseen or unforeseeable in order to invoke the frustration doctrine The Respondent will demonstrate that unforeseeable events have rendered the performance of the Charter Party impossible. Even if the parties were aware that environmental opponents, were against the export of HLNG from Hades, the decision to prohibit the export of HLNG and to arrest the MV Athena were absolutely not foreseen or foreseeable at the time the Charter Party was executed The arrest of the MV Athena and the prohibition of HLNG export occurred in a context of political instability, following a coup d Etat, backed by military forces. As a result of an order emanating from the newly appointed President, the MV Athena was requested to return to port and was ordered not to leave Hades. The transport of HLNG from Hades to 27 MCKENDRICK, Contract Law, 8th ed 2009, at [14.8]. 28 Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274 (CA) 27

28 Poseidon on board the MV Athena could not be completed. Hence, the performance of the Charter Party had become impossible Therefore, the contract should be deemed frustrated. B. THE FRUSTRATION OF THE CONTRACT DISCHARGES THE RESPONDENT OF ITS CONTRACTUAL OBLIGATIONS 105. At common law, where frustration is established the contract is terminated automatically for the future. 29 As a result of termination of contract, both parties are discharged from future performance The charter party does not provide any guidance in case of termination. In addition, the DEMURAGE AND DIPATCH MONEY clause 30 is not intended to survive to termination of the contract Hence, the Respondent is released from the contractual obligation to return the vessel at the expected time according to the charter party In conclusion, no demurrage is due by the Respondent. V. RESPONDENT S COUNTERCLAIM: SALVAGE REWARDS 109. The Respondent s counterclaim concerns the assistance of the MV Athena by HESTUG. The aim of the Respondent s counterclaim is to secure a reward on the following basis: a. The Salvage Convention, 1989 applies for the operation 29 Tamplin SS Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC Clause 10 of the Charter Party 28

29 b. The operation must be considered as salvage In a later section we will describe how the Respondent is entitled to a salvage reward. A. THE NECESSARY APPLICATION OF THE 1989 SALVAGE CONVENTION 110. The Convention entered into force in Australian law on 8 th January According to article 6, the Convention applies to any salvage operation except if the parties decide differently in the contract The parties did not exclude the application of the Convention in the Contract and they did not provide a contract to govern the operation. Thus, the Salvage convention of 1989 has to be applied. B. THE ASSISTANCE OF THE VESSEL IS A SALVAGE OPERATION 112. The operation must be considered as a salvage operation or alternatively as an exceptional towing operation 1. The qualification of the operation according to the Salvage Convention Article 1 identifies a salvage operation as «any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever». In this particular case, the MV Athena was removed while it was still in the open waters. Moreover, the Vessel was deprived of its capacity to manoeuvre. Thus, we can consider that, according to the 1989 Convention, the Vessel assistance is a salvage operation. 2. The port assistance towing contract was fulfilled 29

30 114. The port assistance towing contract was ended when the event occurred, Athena was sailing in open waters. Pursuant to article 17 of the Convention «no payment is due {...} unless the services rendered exceed what can be reasonably considered as due performance of a contract entered into before the danger arose». Indeed, in the case all towing lines were released, the tug boats were making their way to their berth, the tug boats were no more under Athena effects, i.e. free of their movements and not preventing the MV Athena from sailing. Port towing contract was clearly ended. 3. The Respondent is entitled to salvage rewards 115. The Respondent is claiming a salvage reward because of the intervention of Hestug (which is owing by him). The assistance had allowed the save of the Athena, its crew, its bunkers and the cargo. In addition, it avoided, for the port, a huge ecological disaster due to the nature of the cargo. In order to evaluate the reward, several elements have to be considered. At first the Athena is a recent vessel, equipped with the latest technology. Then the Hestug boats were able to assist the Athena with reduced delay. Because of the success of the operation, the Athena has been sailed back to a safe berth without making any damage. At least, m3 of LNG were loaded on board of the Athena. 4. Alternatively, the operation must be considered as an exceptional towing 116. Even if the Claimant does not accept the qualification of salvage of the operation, the action of the Hestug is still considered as an exceptional towing. The operation is in any case out of the towing contract and for this reason the Respondent deserved a compensation. 30

31 REQUEST FOR RELIEF For the reasons set out above, the Owners request this Tribunal to: (I) DECLARE that this Tribunal has no jurisdiction to settle the case; (II) FIND that the Claimant is liable for the breach of the Contract; (III) FIND that the Claimant is responsible for the delay; (IV) Alternatively, FIND that the Respondent is not liable due to a Force Majeure; (V) Alternatively, FIND that the Respondent is discharged by frustration; (VI) AWARD salvage rewards to the Respondent. 31