NINETEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT MEMORANDUM FOR RESPONDENT

Transcription

1 NINETEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2018 SYMBIOSIS LAW SCHOOL, PUNE ON BEHALF OF DYNAMIC SHIPPING LLC THE SHIP MADAM DRAGONFLY RESPONDENT AGAINST CERULEAN BEANS AND AROMAS LTD. CLAIMANT COUNSEL Joseph Thodukayil Aravind Vishnubhotla Kenneth Martin

2 TABLE OF CONTENTS TABLE OF CONTENTS... ii LIST OF ABBREVIATIONS... iv LIST OF AUTHORITIES... v STATEMENT OF FACTS... 1 ARGUMENTS ON BEHALF OF THE RESPONDENT... 3 I. Whether this Arbitral panel has the Jurisdiction to determine the claim for damages made by the Claimant... 3 A. The Charterparty has excluded this Tribunals jurisdiction to adjudicate upon matters which arise out of technical matters :... 3 B. The Claim for damages arises out of matters to be determined by a Master Mariner... 4 II. Whether the RESPONDENT is liable to pay damages to the CLAIMANT?... 5 A. RESPONDENT is not liable for damages arising out of deviation B. RESPONDENT is not liable for damages arising out of late delivery of the cargo C. CLAIMANT s loss is not caused by the RESPONDENT s breach D. CLAIMANT s loss is a remote consequence of RESPONDENT s breach E. RESPONDENT is not liable for the damages arising out of water-damage to the cargo F. Any Liability towards the damaged cargo, if any, is limited pursuant to International Convention ii

3 III. Whether the Claimant holds a Maritime Equitable Lien Over The Madam Dragonfly?.. 12 A. The Wages Lien cannot transfer B. THE PROTECTION OF SEAFARERS IS OF UTMOST PRIORITY IV. Whether the CLAIMANT is liable to pay damages to the RESPONDENT? A. CLAIMANT is liable to pay freight B. The CLAIMANT is liable to pay demurrage to the RESPONDENT C. Agency fees as well as the cost for E-Access pass is payable by the CLAIMANT D. CLAIMANT is liable for the cost of repair to hull REQUEST FOR RELIEF iii

4 LIST OF ABBREVIATIONS ABBREVIATION SROAIR MEANING Statutory Right of Action in Rem CHARTERPARTY Voyage Charterparty between Cerulean Beans and Aromas Ltd. And Dynamic Shipping LLC ARBITRATION CLAUSE Clause 27 of the Charterparty VESSEL CARGO ELR KB QB WWD USD SC ER HKLRD LTD ED Madam Dragonfly 1,000 70Kg Bags of Coffee English Law Reporter King s Bench Queen s Bench Weather Working Day United States Dollars Supreme Court England Reporter Hong Kong Law Reporter and Digest Limited Edition iv

5 LIST OF AUTHORITIES A. CASES 1. Centerchem Products v. A/S Rederiet Odfjell 1972 AMC CV Sheepvaartonderneming Ankergracht v. Stemcor (Australasia) [2007] 1 Lloyd s Law Rep Dakin v. Oxley (1864) 15 C.B.(N.S.) Davis v. Garrett (1830) 6 Bing Falcke v Scottish Imperial Insurance Company, (1886) 34 Ch D Galoo Ltd v. Bright Grahame Murray [1994] 1 W.L.R Great Eastern Shipping Co Ltd v Far East Chartering Ltd., [2012] 2 All ER (Comm) Hain SS Co v Tate & Lyle [1936] 2 All ER Hain SS Co v Tate & Lyle [1936] 2 All ER 597, pg Harris v Best, Ryley and Co (1892) 68 LT 76, Hobbs, Savill & Co Ltd v The Vasilia (Owners) Albaran Bay Corporation [1972] 1 Lloyd's Rep Leonis Steamship Company, Ltd v Rank, Ltd [1908] 1 K.B Lond. Arb. 22/91 (L.M.L.N. 316) Madonna D ldra, Dodsons Admiralty Reports (1811) Marifortuna Naviera Government of Ceylon (The Mariasmi) [1970] 1 Lloyd s Rep Medina v. Marvirazon Compañía Naviera S.A., 709 F.2d 124, 125 (1st Cir. 1983) Morrison v. Shaw Savill [1916] 2 K.B Navalmar Uk Ltd v. Kale Maden Hammaddeler Sanayi Ve Ticart AS [2017] EWHC 116 (Comm) Nea Agrex S.A. v. Baltic Shipping Co. Ltd (The Agios Lazarus) [1976] Q.B v

6 20. Potter v. Burrell [1897] 1 Q.B Racing Drivers Club v. Hextall Erskine & Co. [1996] 3 All E.R Stinnes v. Halcoussis (The Yanxilas) [1982] 2 Lloyd s Rep Stuart v. British & African Nav. Co (1875) 32 L.T The Aditya Vaibhav [1993] 1 Lloyd s Rep The Berostar [1970] 2 Lloyd's Rep The David Pratts, 7 F. Cas. 22, 25 (D. Me. 1839) The Flowergate [1967] 1 Lloyd s Rep The King Coal, [2013] 2 HKLRD The Leoborg (No 2), [1964] 1 Lloyd's Rep The Louisa, (1848) 3 W. Rob. 99, 166 E.R The Lyons, (1887) 6 Asp. M.L.C The Neptune, (1834) 3 Hagg. Adm. 129, 166 E.R The New Eagle, (1846) 4 Notes of Cases The Nour [1999] 1 Lloyd s Rep The Petone [1917] P The Petone, (1917) P The Sparti, [2000] 2 Lloyd s Rep The SS Aragon [1943] 3 DLR 178, The Sydney Cove, 1815 (2 Dods.11) The World Star [1987] 1 Lloyd's Rep Versloot Dredging BV v. HDI-Gerling Industrie Versicherung AG (The DC Merwestone) [2013] 2 Lloyd s Rep vi

7 42. Victoria Laundry v. Newman Industries [1949] 2 K.B. 528, 539) B. RULES 1. Australian Carriage of Goods by Sea Act Hague-Visby Rules, C. BOOKS 1. Aleka Mandaraka-Sheppard, Modern Maritime Law (Volume 1): Jurisdiction and Risks, Gaskell, Asariotis, Baatz, Bills of Lading: Law and Contracts, LLP: John F. Wilson, Carriage of Goods, pg 24, 7 th Edn, John Schofield, Laytime and Demurrage, Page 71, Informa Law, 6 th Ed., Judah P. Benjamin, Benjamin s Sale of Goods, 9th ed (2014) Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed., , 15, 21, Simon Baughen, Shipping Law, Routledge, 6 th ed Tetley William, Marine Cargo Claims, third edition, International Shipping Publications BLAIS: William Tetley Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege? (1984) 15 Journal of Maritime Law and Commerce William Tetley Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege? (1984) 15 Journal of Maritime Law and Commerce 393, William Tetley, Marine Cargo Claims, Page 311, vii

8 STATEMENT OF FACTS A. THE PARTIES 1. The Claimant is Cerulean Beans and Aromas Ltd., a Cerulean company. The Respondent is Dynamic Shipping LLC, a Cerulean company. The registered ship-owner of the Cerulean-flagged vessel, the MADAM DRAGONFLY (the Vessel ) is the Respondent. Coffees of the World Ltd., is a Dillamond Company, who is the client of the Claimant (the Client ). B. THE PAYMENT OF CREW S WAGES 1. On 22 nd July, on request of the Respondent, the Claimant paid $100,000 (the Amount ) to the Respondent, considering the urgency of the shipment. The amount was to be used as security by the crew. 2. The $100,000 paid by the Claimant, paid into a separate account, did not constitute freight. Subsequently, the funds were spent for purposes other than the crews wages and the Claimant is yet to be repaid. C. THE CHARTERPARTY CHAIN 1. The Voyage Charterparty (the Charterparty ) between the Claimant and Respondent arose for a for a shipment of rare coffee (the Shipment ) from Cerulean to Dillamond. It was reiterated that the shipment of the said coffee was of utmost priority and that the ship must discharge the rare coffee at the port of Dillamond by 7:00 p.m. on the 28 th of July, requiring it to take the most direct route to Dillamond informing the Claimant of any change in route beforehand. 2. Due to the nature of the coffee, the shipment was to be entirely waterproof. Considering the commercial sensitivities, the Respondent used a sealant guaranteeing 5 days of waterproofing. D. THE PERFORMANCE OF THE CHARTERPARTY 1

9 1. En route to Dillamond the communications and satellite systems of the vessel were knocked out by solar flares causing it to deviate to Spectre as it did not have the hard copy maps to the port of Dillamond. Claimant was only informed after the deviation as the communication systems were knocked out. On 28 th July, 2017, the vessel could not sail past its current location due to a sudden storm rolling in. The crew noticed it on its radar only 30 minutes ago. Furthermore, the Claimant s agents have been at the port since 4:30 p.m. to take delivery of the cargo, since the shipment was due by 7 p.m. 2. Subsequently, was stuck 100 nautical miles outside the port of Dillamond due to a storm. During the storm the anchor and hull of the ship were damaged. 3. After arrival, the vessel the shipment was offloaded at the port of Dillamond. Due to congestion in the port Claimant took delivery only on 31 st July. 4. It was then discovered that 3 of the Containers of coffee were water damaged. As a result of which Claimant had to procure replacement coffee. Under the circumstances, the Claimant have demanded the Respondents pay for damaged coffee, replacement coffee and settlement amount paid by the Claimant to the Client 5. The Respondents rejected the Claims and raised their own claim for damages. As on 11 th August, 2017 the dispute was referred to arbitration pursuant to clause 27(a) of the Charterparty by the Claimant. 2

10 ARGUMENTS ON BEHALF OF THE RESPONDENT I. WHETHER THIS ARBITRAL PANEL HAS THE JURISDICTION TO DETERMINE THE CLAIM FOR DAMAGES MADE BY THE CLAIMANT 1. It is submitted that this Arbitral Tribunal does not have the jurisdiction to determine the claim for damages made by the Claimant as the claim for damages made by the Claimant arise out of matters that have been contractually excluded from the jurisdiction of this Tribunal. This submission is substantiated by establishing that [a.] firstly the Charterparty has excluded this Tribunals jurisdiction to adjudicate upon matters which arise out of technical matters and secondly, without prejudice to the objection to the jurisdiction of this Tribunal, [b.] the claim for damages made by the Claimant arise out of technical matters which are to be determined according to expert determination provisions of the Charterparty. A. The Charterparty has excluded this Tribunals jurisdiction to adjudicate upon matters which arise out of technical matters : 2. Article 12 and Article 14(a) of the LMAA Terms, 2017 provides that the Jurisdiction of this Tribunal to determine all disputes, shall be subject to the agreement of the parties. Clause 27 or the Arbitration Clause, clearly lays down the procedure for resolution of any dispute arising out of the said Charterparty. Clause 27(d) specifically prescribes that in the event of any dispute as to technical matters arising out of or in connection to the Charterparty must be referred to an expert determination and Clause 27(e) further provides that no legal proceedings in respect of any such dispute may commence prior, including arbitral proceedings. Clause 27(f) further establishes that any such expert written determination will be conclusive and binding on the parties. It is submitted that Clause 27(d) constitutes a valid agreement by the parties to exclude the Tribunals jurisdiction 3

11 to adjudicate upon technical matters 1. In the present matter the dispute has been resolved by the Maritime Engineer appointed by this Tribunal, in accordance with the terms of Clause 27. The Statement of Expert Opinion of Simon Webster 2 clearly establishes that the Cargo was damaged in the 24 hours after 4:30AM on 30 th July, as a result of the unprecedented rainfall. The expert opinion, which is binding on both parties 3 clearly establishes that the damage to the cargo much after delivery was made by the Respondent and only after it left the Respondents duty of care. The provisions of Clause 27 make the determination by the appointed expert binding on the parties and excludes this courts jurisdiction from adjudicating on any other claims of a technical nature. Therefore, in light of the expert opinion, it is clear that there exists no dispute and the Tribunal does not have the jurisdiction to determine the other claim for damages made by the Claimant as, the damages claimed by the Claimant arise from matters which are to be determined as according to the expert determination provisions of the Charterparty. This will be further established in Claim I[b.] B. The Claim for damages arises out of matters to be determined by a Master Mariner 3. Clause 27(g) defines the term technical matters to mean matters surrounding the technical aspects of the performance of the charterparty, such as the vessel's route, loading and unloading of cargo, storage conditions and other matters which can reasonably be considered to be within the expert technical knowledge of a Master Mariner. The claim for damages by the Claimant find their basis in claims of Seaworthiness, Route of the vessel, loading and unloading of cargo, storage conditions and other matters which can only be considered within the expert technical knowledge of a Master Mariner. The questions fixed by this Tribunal under the Statement of the Maritime Engineer 4 conclusively resolves the dispute revolving around the damaged cargo but does not conclusively 1 Clause 27(g), Voyage Charterparty 2 Page 43, Moot Proposition 3 Clause 27(f), Voyage Charterparty 4 Page 43, Moot Proposition 4

12 answer questions regarding the Vessels route, or time of delivery or any other matters which the Claimants claim for damages are said to arise from. Before any legal proceedings may commence in relation to the same. such Technical matters must be submitted to expert determination in order to satisfy Clause 27(d). Therefore, it is not within the jurisdiction of this Tribunal to adjudicate upon technical matters that have been validly excluded from its jurisdiction by this charterparty. Further, arbitral proceedings, under Clause 27, relating to any such matters may not commence without satisfying Clause 27(d). 5 II. WHETHER THE RESPONDENT IS LIABLE TO PAY DAMAGES TO THE CLAIMANT? 4. The RESPONDENT denies it is liable for damages claimed in Paragraph 13 of the Points of Claim or at all and further says that: A. RESPONDENT is not liable for damages arising out of deviation. i. Deviation was justified 5. A deviation may be justified by the terms of a specific clause in the bill of lading or charterparty giving the shipowner a liberty to call at additional ports during the voyage. 6 In the present case also the deviation of the RESPONDENT vessel was justified because the charterparty had granted express liberty to deviate. 6. Under clause 17 of the charter-party, it is provided that the vessel has liberty to deviate for the purpose of saving life or property, including the ship and assist or be assisted in all situations whatsoever. 7. In Stuart v. British & African Nav. Co., 7 while interpreting the phrase, to tow and vessels in all situations, it was held that the vessel was permitted to leave her berth in port in order to assist a 5 Clause 27(e), Charterparty. 6 Simon Baughen, Shipping Law, Routledge, 6 th ed Stuart v. British & African Nav. Co (1875) 32 L.T

13 vessel stranded about three miles away. It was argued that the phrase dealt only with vessels in distress, which the ship happened upon in the course of the voyage, but this construction was rejected as too narrow. The words have been held to protect the carrier where the ship fell in with a disabled vessel and took her in tow, thereby delaying arrival at the loading port by three weeks. 8 ii. Even if deviation was not justified, RESPONDENTS shall not be liable 8. In terms of clause 17 neither party shall be liable for failure to perform any obligation, where failure to perform that obligation is a result of a Force Majeure Event. In the present case, the vessel had to deviate because of solar flares, which constitute an act of god, which, under clause 17, is a Force Majeure Event. Therefore, the RESPONDENT shall not be held liable for any damages arising out of such deviation. 9. In any case where the contract has been affirmed after deviation, any loss, which occurs while the ship is actually upon the devious course, will be treated as having been caused by the deviation, unless the carrier can prove that the loss would have occurred if there had been no deviation Where the effect of the unlawful deviation is to increase the length of the voyage it has been held that the carrier is not responsible for damage resulting from the prolongation if he could, without committing a breach of the contract, have taken equally long to perform the voyage by making lawful use of a contractual liberty to deviate In the present case, the loss to the CLAIMANT was caused as a result of a force majeure event and would have been occasioned in spite of the deviation. B. RESPONDENT is not liable for damages arising out of late delivery of the cargo. 8 Potter v. Burrell [1897] 1 Q.B Davis v. Garrett (1830) 6 Bing. 716; Morrison v. Shaw Savill [1916] 2 K.B The Nour [1999] 1 Lloyd s Rep. 1. 6

14 12. The RESPONDENT agrees that Madam Dragonfly was to depart the Port of Cerulean on 24 th July 2017, and discharge the cargo at the Port of Dillamond by 7 p.m. on 28 th July It is also conceded that the RESPONDENT failed to discharge this duty as the delivery was made later than the aforementioned time. However, the RESPONDENT submits that it is not liable for damages arising out of delay because in the present case, the RESPONDENT was prevented in performing its obligation of delivering the cargo by 7:00 p.m. on 28 th July 2017 because of the storm at the Port of Dillamond on about 5:00 p.m. on 28 th July 2017, which prevented the vessel from discharging the cargo on time. The RESPONDENT further submits that: i. Condition of ensuring ship is seaworthy is fulfilled 13. Although, clause 17 provides that the exceptions contained therein are conditional on the exercise of due diligence by the shipowner in ensuring that the ship is seaworthy and properly manned when she sails on voyage, such an obligation is not an absolute warranty of seaworthiness. 14. Due diligence is equivalent to the exercise of reasonable care and skill. 11 Due diligence does not require the taking of steps which are reasonably seen to have been necessary only with the benefit of hindsight, but once the lesson is learned with hindsight, it will be likely to govern subsequent voyages. 12 The duty on the carrier to exercise due diligence to make the vessel seaworthy is not, therefore, a guarantee of success in achieving seaworthiness Thus, the RESPONDENT need not show that the vessel was in perfect condition and fitted for every conceivable hazard; the RESPONDENT need only show that it had discharged the obligation of due diligence 11 The Eurasian Dream, 2002, 1 Lloyd s Rep 719, CV Sheepvaartonderneming Ankergracht v. Stemcor (Australasia) [2007] 1 Lloyd s Law Rep, Versloot Dredging BV v. HDI-Gerling Industrie Versicherung AG (The DC Merwestone) [2013] 2 Lloyd s Rep The Flowergate [1967] 1 Lloyd s Rep The Aditya Vaibhav [1993] 1 Lloyd s Rep

15 16. Therefore, merely because the RESPONDENT vessel s satellites got knocked out, the CLAIMANT cannot contend that the obligation of due diligence was not fulfilled. ii. Force Majeure applicable in spite of deviation 17. The effect of breach of obligation not to deviate is that the charterers are conferred with the right to elect whether to rescind or affirm the contract. Even if it is argued that deviation constituted a fundamental breach of contract, the cargo owner may elect to ignore it and treat the contract as still subsisting since however fundamental is the condition it may still be waived by the goods owner. 14 The charters election may be made by express words, or it may be inferred from conduct, the essential questions being (i) whether the charterer has demonstrated unambiguously an intention to affirm, or rescind, the contract and (ii) whether he did so with full knowledge of the deviation, since an election cannot be made without knowledge of the facts which gave rise to the right to elect. 18. In the present case, the charters were informed of the deviation within reasonable time and there after they, by express words as well as by conduct elected to affirm the contract. 19. In the event of such affirmation, all the terms of the contract continue to apply including the exceptions and the provisions relating to the limitation of liability In Hain SS Co v Tate & Lyle, 16 the court had little doubt that the deviation constituted a fundamental breach of contract entitling the cargo owners to treat the contract as repudiated. So far as the charterers were concerned, however, with full knowledge of the facts they had elected to waive the breach by ordering the vessel back to San Domingo. As the aggrieved party, the cargo owner can elect to treat the contract as subsisting; and if he does this with full knowledge of his rights he must in accordance with the general law of contract be held bound. 17 In these circumstances the ship- 14 Hain SS Co v Tate & Lyle [1936] 2 All ER 597, pg John F. Wilson, Carriage of Goods, pg 24, 7 th Edn, Hain SS Co v Tate & Lyle [1936] 2 All ER Hain SS Co v Tate & Lyle [1936] 2 All ER 597 8

16 owners, in the event of any claim being made by the charterers, would be entitled to rely for protection on the charter exception of perils of the sea. C. CLAIMANT s loss is not caused by the RESPONDENT s breach. 21. In No loss is recoverable as damages unless the claimant proves that it was caused by the breach of contract. The breach of contract must have been a dominant or effective cause There may be events which break the chain between breach and claimed loss and they may originate in the claimant himself or in the actions or omissions of third parties or even in the claimant s failure to avoid the consequences of such third party acts or omissions In the present case, the RESPONDENT did not cause the loss to the CLAIMANT with respect to the Settlement Payment and Replacement coffee. It is submitted that the loss to CLAIMANT was in fact caused by intervening events such as the storm at the Port of Dillamond as well as the CLAIMANT s failure to take delivery of the cargo at the earliest. D. CLAIMANT s loss is a remote consequence of RESPONDENT s breach. 24. No loss may be recovered by way of damages if it is too remote a consequence of the breach. 20 In contract, it is whether the loss in question was fairly and reasonably within the contemplation of the parties, as at the date of the contract, as a probable result of the breach, which has in fact occurred. 21 It is conceded that the RESPONDENT was made aware, that it was imperative for the cargo to be delivered by 7:00 p.m. on 28 th July However, the RESPONDENT had no knowledge of the CLAIMANT s contractual obligations to Coffees of the World. Thus, it cannot be said that the 18 Galoo Ltd v. Bright Grahame Murray [1994] 1 W.L.R. 1360; Racing Drivers Club v. Hextall Erskine & Co. [1996] 3 All E.R Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed., Victoria Laundry v. Newman Industries [1949] 2 K.B. 528, 539) 21 Stinnes v. Halcoussis (The Yanxilas) [1982] 2 Lloyd s Rep. 445 at p

17 RESPONDENT could contemplate that the deviation and delay have the consequence of the CLAIMANT having to bear costs of Settlement and Replacement Coffee. 25. In addition to an analysis of knowledge and contemplation, there may be a further issue of whether a party in breach can fairly, as a matter of construction of the contract in question, be said to have assumed the risk of the type of loss claimed. 22 Nowhere in the charter party has the RESPONDENT undertaken to indemnify the CLAIMANT in respect of the CLAIMANT s liability to its client and thus should not should not be held liable for the same. E. RESPONDENT is not liable for the damages arising out of water-damage to the cargo. 26. The respondents are not liable to pay damages arising out of the water-damaged cargo as there was no damage to the Cargo at the time of its delivery which took place at 8:42 PM on 29 th July 2017 and delivery marks the point of time at which the carrier s responsibility for safe custody of the goods comes to an end. 23 The delivery of goods may take place at the port of discharge, alongside the ship s rail, at a container yard or at an inland destination in case of a combined carriage. 24 At common law, the period of the carrier s responsibility extends from the time at which the goods cross the ship s rail on loading to the time at which they cross back over it on discharge The court decided in the case of Centerchem Products v. A/S Rederiet Odfjell to define the word delivery and established that a proper delivery of goods occur when the carrier discharges the goods from the ship, designates the goods, notify the consignee which is given a reasonable time to pick them up Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed., Julian Cooke et al, Voyage Charters, Informa Law, Pg 217, 4 th Ed., Gaskell, Asariotis, Baatz, Bills of Lading: Law and Contracts, LLP: 2000 at page Harris v Best, Ryley and Co (1892) 68 LT 76, Centerchem Products v. A/S Rederiet Odfjell 1972 AMC 373, (E.D. Va. 1971); Tetley William, Marine Cargo Claims, third edition, International Shipping Publications BLAIS: 1988, at page

18 28. Upon the Claimants receipt of the barcode for the electronic access system by which only the Claimant could then collect the goods, constructive delivery was met. 27 Delivery may be effected by handing to the buyer the key of a warehouse or other place where the goods are stored, provided that a licence to enter and take the goods can be implied. 28 In the present circumstances, the electronic access pass shall constitute delivery by way of providing a key to the shipment The Respondent physically surrendered possession of the cargo, thereby effecting delivery at the port and the ability to prevent discharge was an important criterion in determining whether delivery was constituted. 30 The offloading of cargo at the port of Dillamond results in surrender of possession and thereby constitutes delivery Even the Hague-Visby Rules does not impose a duty on the consignee to take delivery of the goods, but creates a duty for the carrier to properly and carefully load, handle, stow, carry, keep, care, for, and discharge the goods carried. 32 The Hague-Visby Rules merely states the obligation to properly discharge the goods at the port of discharge and not deliver the goods to the consignee. Article III(2) of the Hague-Visby Rules lays down the responsibilities that are stipulated for the carrier under the rules. 31. Further, the common law regime generally puts an obligation on the consignee to take delivery of cargo within a reasonable period of time or a fixed period Page 23, Moot Proposition 28 Judah P. Benjamin, Benjamin s Sale of Goods, 9th ed (2014), Para Page 23, Moot Proposition 30 Great Eastern Shipping Co Ltd v Far East Chartering Ltd., [2012] 2 All ER (Comm) Page 23, Moot Proposition 32 Article (III) 2, Hague-Visby Rules, William Tetley, Marine Cargo Claims, Page 311,

19 F. Any Liability towards the damaged cargo, if any, is limited pursuant to International Convention 32. Alternative to the Counter-Claim in II(f), it is submitted that any liability in respect of the Claim for damages arising out of the water-damaged cargo is limited pursuant to international convention. Clause 28 of the Voyage Charterparty establishes that the Charterparty shall be governed by the laws of New South Wales, Australia and further incorporates, by way of clause paramount, that that Respondents in the present matter shall have the benefit of Article 4(5) of the Hague-Visby Rules as amended by the Australian Carriage of Goods by Sea Act, The Clause Paramount refers to the Australian Carriage of Goods by Sea, which broadly enacts the Hague-Visby Rules. A clause paramount will have an overriding effect on any express exemption or condition that is inconsistent with it. 34 Article 4(5) states that unless the nature and value of the goods have been expressly declared by the Claimant before shipment and incorporated the same in the contract, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding Special Drawing Right per bags of water-damaged coffee bags. The SDR is to be converted into national currency on the basis of the value of that currency on a date to be determined by the law of the court seized of the case. 35 III. WHETHER THE CLAIMANT HOLDS A MARITIME EQUITABLE LIEN OVER THE MADAM DRAGONFLY? 34 Nea Agrex S.A. v. Baltic Shipping Co. Ltd (The Agios Lazarus) [1976] Q.B. 933, Marifortuna Naviera Government of Ceylon (The Mariasmi) [1970] 1 Lloyd s Rep Article 4(5)(d), Schedule 1A, Australian Carriage of Goods by Sea Act

20 33. It is humbly contended before the Arbitral Tribunal that the Claimants do not possess a maritime lien on the vessel. This shall be established by A. Long-standing view that the wages lien cannot transfer and B. The protection of seafarers is of utmost priority. A. The Wages Lien cannot transfer 34. Transferability can be used loosely to refer to two different situations. The first type of transfer is a contractual agreement by a seaman to assign his wages lien claim to a person in return for whatever contractual consideration that is stipulated. The second type of transfer is subrogation which occurs when a third party pays off the seaman s wages in full and that third party purports to be the holder of the lien. Tetley characterizes subrogation as a type of fictional or notional assignment Even when the crew is completely paid off the courts have staunchly maintained that the wages lien cannot be assigned or subrogated without prior leave from the court. The charterer who paid off the crew in The SS Aragon was held to have no lien, even though the crew had signed a document accepting the payment in return for appointment of the charterer to prosecute my claim against the Steamship Aragon for seamen's wages owing to me. 37 In the present facts and circumstances, the wages of the crew was not paid off by the Claimants Hill J.'s finding in The Petone 39 is held out to be the strongest English authority against the assignment of a maritime lien for wages by force of law. Upon close examination it can be seen that The Petone is really only authority for the proposition that a third party who pays seamen's wages is not subrogated by law to the maritime lien for wages of the seamen. It is therefore not permissible to subrogate the rights of the seafarers to the Claimants as rightly contended by the Respondents William Tetley Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege? (1984) 15 Journal of Maritime Law and Commerce 393, The SS Aragon [1943] 3 DLR 178, Page 36, Moot Proposition 39 The Petone, (1917) P Paragraph 10 of the Counterclaim. 13

21 The decision also relies on the judgments which support its view, i.e., The Lyons 41, The New Eagle, 42 The Neptune, 43 and The Louisa The Leoborg No held that the volunteer who paid without authority of the court had no lien and was only given the status of a necessaries man. Since in the present case no leave of the court was taken prior to paying an amount for the purpose of paying the crew, there shall be no lien on the Madam Dragonfly. 38. Under Common Law, when a person makes a payment with respect of property belonging to another, if he does so without request, is not entitled to any lien or charge on such property upon payment. 46 The claimants have made similar payments with regard to wages of the crew without their permission In the recent case of The King Coal, a similar conclusion was reached albeit via different reasoning. The arrest was set aside by reason of the wording of the SROAIR for wages under section 12A(2)(n) of the HCO. Au J held: 48 In my view, the legislature in enacting S.12A [of the HCO] had decided to expressly introduce these particular words: Any claim by a master or member of the crew in S.12A(2)(n) [of the HCO]. That is what the legislature had done by clear words. There may or may not be good reasons for that, but it is not for this Court to speculate those reasons. In light of the express words and the 41 The Lyons, (1887) 6 Asp. M.L.C The New Eagle, (1846) 4 Notes of Cases The Neptune, (1834) 3 Hagg. Adm. 129, 166 E.R The Louisa, (1848) 3 W. Rob. 99, 166 E.R The Leoborg (No 2), [1964] 1 Lloyd's Rep Falcke v Scottish Imperial Insurance Company, (1886) 34 Ch D 234 (at 241) 47 Page 1, Moot Proposition 48 The King Coal, [2013] 2 HKLRD

22 way S.12A(2)(n) [of the HCO] is drafted, the clear words of it mean that it is only limited to a claim for wages brought by the master or a member of the crew. 40. Subrogation and assignment of the wages lien have only been allowed where a party is directly ordered or permitted by the Court to pay the seamen. 49 B. THE PROTECTION OF SEAFARERS IS OF UTMOST PRIORITY 41. The state of affairs of the seafarers is crucial and to avoid being exploited by the shipowners, a wellprotected policy or law should be put into place. The rationale for such concern about seamen's wages was stated in The David Pratt s old primeval case: 50 Seamen are not a class of men who ordinarily make provision against the future. On their return from a voyage they are usually dependent on their wages for present support, and if they are withheld they ordinarily find themselves in a state of entire destitution, not only without present means to provide for their immediate and most pressing necessities, but without credit Sir William Scott in the MADONNA D ldra, 1 Dodson quoted in the above Argun case affirmed the same, where he said: 52 Now, it must be taken as the universal law of this court, that mariner s wages take precedence of bottomry bonds. 49 The World Star [1987] 1 Lloyd's Rep 452; The Berostar [1970] 2 Lloyd's Rep 403; Hobbs, Savill & Co Ltd v The Vasilia (Owners) Albaran Bay Corporation [1972] 1 Lloyd's Rep The David Pratts, 7 F. Cas. 22, 25 (D. Me. 1839) 51 The David Pratts, 7 F. Cas. 22, 25 (D. Me. 1839) 52 Madonna D ldra, Dodsons Admiralty Reports (1811) 15

23 43. The same Judge also referred to mariner s wages as a category of sacred lien, and in a later case, the Sydney Cove, he continued in the same vein, observing that: 53 A seaman s claim for his wages was sacred so long as a single plank of the ship remained. 44. In Medina v. Marvirazon Compañía Naviera, 54 the Court found that funds used to discharge seamen's wage liens allowed for subrogation to the lienors' rights provided the one making payment did not occupy "such a close relationship to the vessel and its owners and exercised sufficient control over the ship that it would be inequitable to grant him a lien". In the present scenario the seamen s wages have not been paid therefore it would be unfair to grant a lien to a third party A voluntary payment by a third party of claims to which a maritime lien has attached will not transfer the lien to that party, unless the payment is made with judicial consent or is ordered by the court In the case of The Sparti, it was held that a maritime lien as understood by the British and Hong Kong courts was regarded as a personal privilege that was for the sole benefit of maritime lienee and a personal right of maritime lien was not capable of being voluntarily transferred. This doctrine was strongly reinforced by the English courts The judgement of HILL J. in The Petone, established that persons in the position of volunteers who make payments in discharge of seamen s wages and master s disbursements do not thereby acquire the maritime lien which the seamen and master had in respect thereof. 58 Therefore, the submission of the Claimant that it possesses a maritime lien by virtue of paying wages does not hold true The Sydney Cove, 1815 (2 Dods.11) 54 Medina v. Marvirazon Compañía Naviera S.A., 709 F.2d 124, 125 (1st Cir. 1983) 55 Page 36, Moot Proposition 56 Aleka Mandaraka-Sheppard, Modern Maritime Law (Volume 1): Jurisdiction and Risks, 2013 Page The Sparti, [2000] 2 Lloyd s Rep The Petone [1917] P Page 1, Moot Proposition 16

24 48. The person who pays the seamen is not automatically assigned the wages lien: for an advancement the payer must show that the debtor actually used the money for the purpose it was intended for (i.e. paying off the seafarers wages); 60 and for an assignment the payer must show that it is genuinely independent from the debtor, so as to ensure that the debtor is not just paying the seamen under a guise and securing a lien in the process. 61 As clearly established, the amount to be used as security was not in effect used for the purpose of paying the crew, leading to the crew pursuing separate legal action against the owners. 62 IV. WHETHER THE CLAIMANT IS LIABLE TO PAY DAMAGES TO THE RESPONDENT? 49. On or around 1 august 2017, the RESPONDENT issued an invoice to the CLAIMANT in respect of certain amounts that were payable under the charter party. The CLAIMANT, however, failed to make the payment. In these premises the CLAIMANT is liable to the RESPONDENT for damages. In the next submissions it will be proved that the CLAIMANT had a liability towards the RESPONDENT in respect of amounts due under the charterparty. A. CLAIMANT is liable to pay freight 50. In order to earn freight, the shipowner must, unless otherwise agreed, carry the cargo to the destination provided for in the charterparty and be ready to deliver it there. 63 In the present case, both these conditions have been satisfied and therefore the CLAIMANT is liable to pay freight. 51. As stated above, freight normally remains payable in full although the cargo is delivered in a damaged condition; even if the owner is liable for the damage, the amount of the damage cannot be 60 William Tetley Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege? (1984) 15 Journal of Maritime Law and Commerce 393, William Tetley Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege? (1984) 15 Journal of Maritime Law and Commerce 393, Paragraph 20, Procedural Order 2, Moot Proposition 63 Lond. Arb. 22/91 (L.M.L.N. 316). 17

25 set off against freight. 64 In order for freight to be set off it is not enough that the cargo was merely damaged; the damage must be of such extent that the commercial identity of the cargo is destroyed In Dakin v. Oxley, 66 where a cargo of coal was damaged on the voyage, although still answering to the description coal, and the charterer argued that the damage could be set up in diminution or extinction of freight. Dealing with this argument, Willes J. said113: In both classes of cases, whether of loss of quantity or change in quality, the proper course seems to me to be the same, viz., to ascertain what was the thing for which freight was to be paid, and by the aid of a jury to determine whether that thing, or any and how much of it, had substantially arrived. Thus, since the cargo as delivered could properly be described as coal, albeit damaged coal, the freight was payable. 53. In the present case also, the water damage is not of such extent that the commercial identity is destroyed and therefore, the CLIAMANT remains liable to pay freight. B. The CLAIMANT is liable to pay demurrage to the RESPONDENT. 54. Pursuant to Clause 9 of the voyage charter, the CLAIMANT and the RESPONDENT have agreed that demurrage over and above the lay-days calculated and allowed and the loading port and discharge port, to be paid to the ship at the rate specified in Box 24 per day or part thereof pro-rata. Box 24 specifies the demurrage rate as USD 20,000/hour. It is claimed by the RESPONDNETS that demurrage had run for a period of 5 hours and thus, they are owed USD 100,000 by the CLAIMANTS. 55. In support of the above claim, the RESPONDENT will make submissions proving the following:(1) That lay-time permitted for discharging operations commenced at 7:00 AM on 29 th July (2) That time on demurrage commenced at 7:00 PM on 29 th July Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed., Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed., Dakin v. Oxley (1864) 15 C.B.(N.S.)

26 i. Lay-time permitted for discharging operations commenced at 7:00 AM on 29th July Normally three conditions must be satisfied before the charterer can be required to start loading or discharging, as the case may be, and therefore before the laytime allowed starts to run. These are that: 67 (1) The ship must have arrived at the destination specified in the charter. (2) The ship must be ready and in a fit condition to receive or discharge her cargo. (3) Where required, notice of her readiness must have been given to the charterer. 57. In the absence of an express provision to the contrary, however, the last requirement applies only at the first load port. When these conditions have been met, the vessel is an Arrived ship and, subject to the expiry of any period prescribed in the charter, laytime begins to run. 58. Since there is no express provision in the charter party requiring the ship-owner to tender a Notice of Readiness before discharge, the RESPONDENT shall only prove that the first two requirements were satisfied as of 7:00 AM on 29 th July a. Madam Dragonfly arrived at the destination specified in the charter 59. Kennedy LJ noted in Leonis Steamship Company, Ltd v Rank, Ltd, 69 that "the answer to the inquiry whether the ship can or cannot properly be described as an "arrived" ship obviously depends upon the point which the parties have chosen to designate in the charterparty as the destination. Specified destination is that point both geographically and in time when the voyage stages end and the loading/discharging operations begin. 60. Clause 11 of the charter party provides for the destination of the voyage. It states that orders for port or ports of discharge to be given on signing of bills of lading if practicable otherwise 67 John Schofield, Laytime and Demurrage, Page 71, Informa Law, 6 th Ed., Clause 8 of the Voyage Charterparty, Page 5, Moot Proposition 69 Leonis Steamship Company, Ltd v Rank, Ltd [1908] 1 K.B. 499 at p

27 communicated as soon as possible after sailing. 70 Further, as per Clause 8(c)(ii) of the voyage charter, the time permitted for discharging (i.e. laytime) shall be calculated from when the vessel arrives at the discharge port. This indicates that the parties contemplated the voyage stage to end and the discharging operations to begin, when the vessel reached the port of discharge. Thus the parties must have intended the vessel to reach its specified destination and become an Arrived vessel when it reached the port of discharge. b. Whether the ship had was within the port limits? 61. Under a port charter, a vessel reaches its specified destination when it arrives within the port and is in such a position as to be at the immediate and effective disposition of the charterer. In the next submissions, it will be proved that Madam Dragonfly had fulfilled both these requirements. 62. In this case the Commercial Court considered the meaning of within port limits in the context of a charterparty on an amended Gencon 94 form which provided that: 71 [Notice of readiness] to be tendered at both ends even by cable/telex/telefax on vessels arrival at load/disch ports within port limits. The [notice of readiness] not to be tendered before commencement of laydays. 63. While considering generally when a vessel is an arrived ship, has the effect that, when determining whether a vessel is within port limits, you consider: 72 (i) Any national or local law that defines the limits of the port in question. If there is such a law, those limits will apply. (ii) If there is no such law, the area of exercise by the port authority of its powers to regulate the movements and conducts of ships. 70 Clause 11, Voyage Charterparty, Page 7, Moot Proposition 71 Navalmar Uk Ltd v. Kale Maden Hammaddeler Sanayi Ve Ticart AS [2017] EWHC 116 (Comm) 72 Joanna Oldendorff [1973] 2 Lloyd s Rep

28 64. In the present circumstances, the Madam Dragonfly was instructed by Port Authorities to stop 100 nautical miles from the port of Dillamond since 7 a.m. and therefore, when read with the aforementioned clause (ii), the exercise by the port authority of its powers constitutes the port limit and hence, the arrival at the port should be read as 29 th July 7 a.m The facts of The Aello were unusual. The shortage of maze, and not of berths or loading facilities, in the port of Buenos Aires was so acute that by the month of August 1954, ships waiting for maize cargoes began to pile up in the inner harbour, lying in second and third tier off the quays, in basins and in the waters of the harbour, while only one elevator of several was operating, because its capacity being more than sufficient to deal with all the maize that was available for loading. As a result, the congestion of shipping in the vicinity of the loading elevator had got so bad that the port authority and the Grain Board on 1 September the authority adopted a resolution that no vessel was to be allowed to berth in third tier at the elevator but all maize vessels were to anchor and wait at the free anchorage in the roads, some 22 miles away, until a berth was available either in first or second tier at the elevator. The Aello arrived on 12th of October had to wait there. Another consequence of this congestion was that vessels at waiting anchorage were not granted neither berthing nor police permits. 66. Application of general principles stated in The Leonis by their Lordships in the House of Lords led to result that majority adopted Parker LJ test (below) that under a port charterparty a vessel was not an arrived ship until she was within the commercial area of the port, which is a physical area where ships could be loaded when a berth was available. 67. Applying that test to the facts of the present case, it is claimed that all the conditions were fulfilled. Reading the test literally that may be true, but there is a real danger of interpreting words of a 73 Page 20, Moot Proposition 21

29 judgment as if they were in a statute and without regard to the facts of the case. In the Leonis SS Co., Ltd v. Joseph Rank, Ltd. the ship in question was not twenty-two miles away from the dock area - she was anchored but a few ship s-lengths off the pier alongside which loading took place. I agree, of course, that distance is not a conclusive factor, but what KENNEDY, LJ., was I think, contrasting throughout his judgment was an area where loading takes place as opposed to the actual loading spot. The commercial area was intended to be that part of the port where a ship can be loaded when a berth is available, albeit she cannot be loaded until a berth is available. C. Agency fees as well as the cost for E-Access pass is payable by the CLAIMANT. 68. Pursuant to clause 22 of the charter party freight shall be calculated in full of all port charges, pilotages, light dues and all other dues usually paid by the vessel. The invoice sent to the CLAIMANT was a quotation for this full freight inclusive of customary agency fees at the port of Dillamond and the Port of Spectre. 69. It is thus, submitted that the liability to pay the customary agency fees lies with the CLAIMANT and therefore, the RESPODENTs have a right to claim the said amount. It is further submitted that RESPONDENT maintains the same position with respect to the cost of issuing the e-access pass as well. D. CLAIMANT is liable for the cost of repair to hull. 70. It is submitted that the CLAIMANT is liable to make a General Average contribution to the RESPONDENT in respect of the costs of repair to the hull of Madam Dragonfly. 71. Clause 19 provides that General Average shall be payable according to the York/Antwerp Rules. 72. Rule A states that There is a general average act, when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure. 22

30 73. In a bid to avoid the storm at the Port of Dillamond the crew of the RESPONDENT vessel dropped the anchor. However, the storm was worse there and the crew tried to cut the anchor as a result of which there was damage to the hull. The cost of repairs was an extraordinary expenditure made for the common safety and therefor is a general average act. 74. The original peril, which is an essential feature of any general average act, will always be accidental, at any rate so far as the parties to the adventure are concerned, and any losses which flow directly and immediately from it are not made good. Thus, if a ship is holed in a collision, the damage to the hull, and the damage to cargo by the consequent ingress of water, are not made good, but if, in order to bring the ship to safety, some cargo is jettisoned and towage assistance is engaged, that loss and expense is general average It is further stated that the said Genreal Average Act was reasonable. The reasonableness of the act must be judged in the light of the emergency in which it was carried out, and the question is whether the act was reasonable in the circumstances as they appeared at the time, not whether with the benefit of hindsight it turns out to have been a good course to adopt. In the present case, because of the unprecedented storm, the crew had dropped the anchor. When the anchor got tangled on a coral, the crew had to cut the anchor, having no other option in such weather. 74 Julian Cooke et al, Voyage Charters, Informa Law, Pg 598, 4 th Ed.,