Team 6 MEMORANDUM FOR RESPONDENT. 945 Moccasin Road v 23 Fuchsia Crescent Cerulean 9659 Curelean 1268 THE COUNSELS

Transcription

1 19th Annual International Maritime Law Arbitration Moot In the matter of an arbitration under the London Maritime Arbitrators Association (LMAA) Rules Team 6 MEMORANDUM FOR RESPONDENT CLAIMANT RESPONDENT Cerulean Beans and Aromas Ltd Dynamic Shipping LLC 945 Moccasin Road v 23 Fuchsia Crescent Cerulean 9659 Curelean 1268 THE COUNSELS Kayley Chan Yauting, Mohammad AL MUQAIMI, Ace Yuan

2 Table of Contents I. TABLE OF CONTENTS.. 1 II. III. IV. BIBLIOGRAPHY ABBREVIATIONS..6 PRELIMINARY MATTERS..6 V. STATEMENT OF FACTS..8 VI. PROCEDURAL SUBMISSIONS (a) THERE HAD NOT BEEN A VALID APPOINTMENT OF THE TRIBUNAL IN ACCORDANCE TO THE ENGLISH ARBITRATION ACT (b) WITHOUT PREJUDICE TO THE FIRST SUBMISSION AND EVEN IF THERE WAS A VALID APPOINTMENT OF THE TRIBUNAL, THE PROCEEDINGS SHOULD BE STAYED UNTIL THE TECHNICAL MATTERS ARE DEALT WITH.. 11 VI. SUBSTANTIVE SUBMISSIONS (a) THE RESPONDENT IS NOT LIABLE FOR DAMAGE OF THE CARGO...15 i. The issue of prolong use of the sealant ii. The issue of unprecedented rainfall iii. Liability shall be limited by the H/V Rules (b) DELAY OF THE CARGO WAS CAUSED BY EVENTS OF FORCE MAJEURE 19 i. Matter of deviation ii. No lawful justification in pursuant to cl. 27(g) of the Charterparty iii. Reasonable deviation should not be deemed as a breach of the Charterparty 2

3 (c) CLAIMANT HAS NO RIGHTS OF ASSERTION TO THE MARITIME LIEN OF THE VESSEL. 21 (d) THE CLAIMANT SHOULD PAY THE FREIGHT, DEMURRAGE AND THE FEES FOR THE REPAIRS TO THE HULL WITH IMMEDIATE EFFECT..22 VII. PRAYER FOR RELIEF..24 3

4 BIBLIOGRAPHY A. LEGISLATIONS Ecuador-U.S. Bilateral Investment Treaty (BIT) Article VI(2). The Arbitration Act 1996 Protection of the Sea (Civil Liability) Act The Australian Carriage of Goods by Sea Act 1991 The Hague Visby Rules As Amended by the Australian Carriage of Goods by Sea Act 1991 York-Antwerp Rules 2016 B. CASES Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Pakistan (Decision on Jurisdiction), ICSID Case No ARB/03/29, IIC 27; Goetz v Burundi (Award) ICSID Case No ARB/95/3, 6 ICSID Rep 3, IIC 16. Enron Corp v Argentina (Decision on Jurisdiction) ICSID Case No ARB/01/3, 11 ICSID Rep 268, IIC 92. Glencore Energy UK Ltd v Freeport Holdings Ltd [2017] EWHC 334. Kuwait Rocks Co v AMN Bulkcarriers Incorporation [2013] EWHC 865. Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1949] A.C Murphy Exploration and Production Co International v Ecuador (Award) ICSID Case No ARB/08/4, IIC 468. Navalmar UK Ltd v Kalemaden Navalmar UK Limited -v- Kale Made Hammadeeler Sanayi Ve Ticart AS [2017] EWHC 116 (Comm). Lebeaupin v Crispin [1920] 2 KB 714. Lobb Partnership Ltd v Aintree Racehorse Co Ltd [2000] BLR 65. Tate & Lyle, Ltd. v Hain Steamship Company Ltd. (1936) 55 Hol WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] 3 Sing LR

5 C. JOURNAL ARTICLES Callaway, Maritime and Claims ((1989) 6 MLAANZ Journal 15. Cohen, Particular charges in carriage of goods by sea and marine cargo insurance (2004) Lloyd's maritime and commercial law quarterly 453. Cullen, GENERAL AVERAGE THE FUTURE OF NON-SEPARATION AGREEMENT (2001) 2 MLAANZ Journal 15. Fulton Shipping Inc of Panama v Globalia Business Travel SAU (2015) HoL 465. Further Evidence of a Sea Change in Investor-State Arbitration or a Meaningless Ripple, 33 Hous. J. Int'l L. 589 (2011) [594]. Nyk Bulkship (Atlantic) NV v Cargill International SA [2016] UKSC 20. Richard Deutsch, An ICSID Tribunal Denies Jurisdiction for Failure to Satisfy BIT's Cooling-Off Period. D. BOOKS Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration (5th ed, OUP 2015). Hughes A.D. Casebook on Carriage of Goods by Sea (2nd ed, Blackstone Press Limited 1999). John F Wilson, Carriage of Goods by Sea (7th ed, Longman 2010). Richard Aikens, Richard Lord & Michael Bools, Bills of Lading (Informa Law from Routledge, 2nd Ed, 2016) at para E. OTHERS Oxford Dictionary XE, XE Currency Table: USD - US Dollar < accessed 10 March

6 ABBREVIATIONS Cerulean Beans and Aromas Ltd (hereafter The Claimant ) Dynamic Shipping LLC (hereafter The Respondent ) Voyage Charterparty (hereafter The Charterparty ) Mdm Dragonfly (hereafter The Vessel ) Hague Visby Rules (hereafter H/V Rules ) The English Arbitration Act 1996 (hereafter AA 1996 ) The London Maritime Arbitrators Association Rules (hereinafter LMAA Rules ) INTERNATIONAL MANAGEMENT CODE FOR THE SAFE OPERATION OF SHIPS AND FOR POLLUTION PREVENTION (INTERNATIONAL SAFETY MANAGEMENT (ISM) CODE) Effective as from 1 January 2015 (hereafter ISM Code ) PRELIMINARY MATTERS 1. This is an arbitration between Cerulean Beans and Aromas Ltd ( The Claimant ) and Dynamic Shipping LLC ( The Respondent ) for the alleged breach of the voyage charterparty ( The Charteparty ) dated 22nd July, The applicable law of the dispute is as follows: 6

7 I. THE PROCEDURAL MATTERS ARE GOVERNED BY THE AA AS WELL AS THE LMAA RULES 2 II. THE SUBSTANTIVE DISPUTE IS GOVERNED BY THE CHARTER PARTY, AND THE LAWS OF NEW SOUTH WALES AUSTRALIA 3, WHICH INCORPORATE: (a) The Australian Carriage of Goods By Sea Act (b) The Hague Visby Rules as amended by the Australian Carriage of Goods By Sea Act (c) The Admiralty Act (d) INTERNATIONAL MANAGEMENT CODE FOR THE SAFE OPERATION OF SHIPS AND FOR POLLUTION PREVENTION (INTERNATIONAL SAFETY MANAGEMENT (ISM) CODE) Effective as from 1 January Clause 27 (a) of the charter party provides that London is the seat of arbitration. It is provided under section 2(1) of English Arbitration Act 1996 that the provision of this Act shall be applied where the seat of the arbitration is in England. 2 See clause 27(a) of the charter party. 3 Moot problem pg

8 Statement of Facts 3. The Respondent concluded a Charterparty with the Claimant for the shipment of coffee beans on the 22 nd July According to the Charterparty, the Respondent was to discharge the cargo of 4 containers worth of 70,000kg specialty grade coffee beans by the 28 th July 2017, 7pm and to use waterproof containers for the storage of the coffee beans. 5. In consideration for the freight, the Claimant was to pay the freight service by telegraphic transfer to the Respondent s account 90% less full commissions, within two banking days of delivery of the cargo. 6. On or about 24 th July 2017, the vessel Madam Dragonfly MD 738, departed Cerulean. 7. Due to the occurrence of solar flares on or about 25 th July 2017, communications and satellite systems were knocked out and the Respondent had no contact with the Vessel. This inevitably led to the diversion of the Vessel as the Vessel passed the port of Spectre approximately 1,000 nautical miles to the west. Shortly after the communication systems resumed on or about 27 th July 2017, the Vessel left for Dillamond immediately. 8. Additionally, the unexpected massive storm on the 28 th July 2017 in Dillamond that the radar failed to capture caused the Vessel to be stagnant and to have difficulties continuing its journey. 8

9 9. On or about 29 th July 2017, there were congestions at the port of Dillamond due to the storm. This caused the Vessel to be stuck 100nm out from Dillamond since 7am that day and she was instructed by the port to wait there along with other ships. 10. During the point of time when the crew resumed its journey, the storm unexpectedly got worse. The anchor was dropped and got cut, leading to damage to the hull. 11. On the same day, the Respondent corresponded with the Claimant via stating that the Vessel was due to berth in 30 mins and the delivery cargo would be about 2 hours from the time of the at The Respondent invited the Claimant to collect the cargo by midnight and expressed that demurrage will accrue at USD 20,000/hour thereafter. 12. The Claimant collected the cargo at 31 st July 2017 at approximately 1.17pm and claimed that three containers of the coffee beans were water damaged. 13. ;To date, the Claimant has failed to pay the freight service, the agency fee at Spectre, the Demurrage charge and the usage of electronic access systems at the Port of Dillamond which constitute as material breaches of the Charterparty. 14. The Claimant has commenced arbitral proceeding before the Arbitral Tribunal in accordance with the Arbitration Rules of the London Maritime Arbitrators Association (LMAA) as provided in clause 27(a) under the Charterparty. The Respondent denies all liability. 9

10 PROCEDURAL SUBMISSIONS (1) THERE HAD NOT BEEN A VALID APPOINTMENT OF THE TRIBUNAL IN ACCORDANCE TO THE ENGLISH ARBITRATION ACT Under the English Arbitration Act and according to Clause 27(a) of the Charterparty, London is the seat of arbitration. Therefore, AA 1996, alongside the Arbitration Rules of the London Maritime Arbitrators Association (LMAA) 5 shall govern the arbitral proceedings. It is stated under s2(1) of AA 96 that: The provisions of this [Act] apply where the seat of the arbitration is in England and Wales or Northern Ireland. 16. S.17(1) of AA 96 provides that if the parties have agreed that each of them shall choose one arbitrator, but one party refuses or fails to do so within the time specified 6, the other party who appointed his arbitrator may give notice in writing to the contrasting party that he proposes to appoint his arbitrator to act as sole arbitrator. Subsection (2) follows to conclude that if the party does not within seven clear days of that notice being served, has not appointed his arbitrator and has not notify the contrasting party that he has done so, the other party may appoint his arbitrator as a sole arbitrator whose arbitral award shall bind both parties to the dispute. 17. It is submitted that s17(1) and s17(2) of AA 96 have not been satisfied, because the letter which was sent from the Claimant s lawyer to the Respondent s lawyer, has provided that the 4 The Arbitration Act Clause 27(a) of the charter party provides that the arbitral proceedings shall be constituted in accordance to the Arbitration Rules of the London Maritime Arbitrators Association (LMAA). 6 S. 15(5)(a) of AA 1996 states that each party shall appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so. 10

11 Claimant has appointed Mr. Friedman as his arbitrator. 7 The Respondent has failed to appoint his arbitrator, which means that s.17 shall be applied. The Claimant should follow the process under s. 17 to serve a written notice to the Respondent providing that the Claimant proposes that his appointed arbitrator (Mr Friedman) will act as a sole arbitrator. 18. There was no evidence of any written notice served from the Claimant to the Respondent providing that his appointed arbitrator will act as a sole arbitrator. Furthermore, s. 18 of AA 96 states that there is no failure if an appointment is duly made under section 17 (power in case of default to appoint sole arbitrator).... This failure of the Claimant -to follow the process under s.17(1) and s.17(2), and to comply with s.18 of AA 1996 which requires the parties to duly following the process under s. 17- has led to the clear conclusion that there is no lawful constitution of the Tribunal in accordance to the Act which means that the Tribunal lacks the jurisdiction to decide the current dispute. (2) WITHOUT PREJUDICE TO THE FIRST SUBMISSION AND EVEN IF THERE WAS A VALID APPOINTMENT OF THE TRIBUNAL, THE PROCEEDINGS SHOULD BE STAYED UNTIL THE TECHNICAL MATTERS ARE DEALT WITH. 19. Clause 27 (d) and (e) of the Charterparty provide that the arbitration proceedings may not be commenced unless in the event of a dispute which includes issues of technical matters nature, to be first determined by an expert who shall be appointed by the parties themselves. 7 Moot problem pg

12 20. The word technique is defined as [a] way of carrying out a particular task, especially the execution or performance of an artistic work or a scientific procedure 8. In addition, the meaning of technical matters were defined in cl. 27(g) of the Charterparty which provides that technical matters are any issues which have a nature of technical aspects of the performance of the charter party. The subparagraph (g) continues to provides examples of technical matters 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 It is submitted that the current dispute includes issues that have a nature of technical matters which pursuant to cl. 27 (d)(e) of the Charterparty should be determined by an expert before the commencement of the arbitration. 22. There are many examples of technical issues in the current dispute which affect the performance of the contract as follows. Firstly, the deviation of the Vessel from the agreed en route is a technical feature that affect the performance of the contract and result in delaying the voyage which has consequently resulted in damaging the Cargo. The Vessel has deviated because of the lack of communication system of the ship due to the occurrence of the solar flare event. The solar flare event and the communication system of the vessel are issues that are related to the Science field which indeed need to be solved by a knowledgeable expert of that kind of fields. 23. The second example of technical matters is the decision of the time when the cargo was damaged, and the cause for the water to damage the cargo were a technical matters which Clause 27(g) of the charter party. 12

13 need to be determined by an expert. That is why the tribunal has ordered SIMON WEBSTER to provide a binding expert opinion in these two issues because the tribunal cannot determine these issues by their own knowledge The Claimant has commenced arbitral proceedings prior to the determination of the above technical matters by the expert as s. 27 requires. The breach of this provision by the Claimant shall lead to stay the arbitral proceedings until the parties appoint an expert to determine these technical issues. 25. The construction of the word may in cl. 27(e) should be interpreted to mean must and to bind the parties to not commence the arbitration before the determination of technical matters by a knowledgeable expert. Otherwise, it will be meaningless for the parties to conclude cl. 27(e) if the phrase is construed to mean an optional one. This argument is supported by the phrase in the same sentence which states that unless clause (d) has been complied with first. This statement provides strong indication that the parties want to not commence the arbitration unless the technical matters are first determined by an expert whose opinion shall bind the parties. It appears that the reason why the parties have concluded cl. 27(d) is that the determination of technical matters by an expert could assist the parties to solve their dispute amicably prior starting arbitration specially that the opinion of the expert is conclusive and binding on the parties as subparagraph (f) provides. This practice is called a cooling off period which is well-known in the investment treaties 11 and in investor-state 10 See page 43 of the moot s problem. 11 For example, Article VI(2) of the Ecuador-U.S. Bilateral Investment Treaty (BIT) states that In the event of an investment dispute, the parties to the dispute should initially seek a resolution through consultation and negotiation. If the dispute cannot be settled amicably, the national or company concerned may choose to submit the dispute, under one of the following alternatives, for resolution

14 disputes 12. The purpose of cooling off period clause is to encourages the parties to attempt to reach a resolution through negotiations 13 before bringing the dispute to arbitration. 26. At common law, there are many authorities of cases which held that the word may should be construed to bind the parties. It was ruled in the case of Lobb 14 and in WSG 15, that the use of the verb may is likely to be construed as giving rise to a binding arbitration agreement. 8. S.68 (2)(b)[4] and (c) of AA provides that the party may challenge the arbitral award in the court if there were serious irregularities caused by the tribunal when it exceeds its power or fails to conduct the proceedings in accordance with the procedure agreed by the parties. It is also provided in section 34 (1) of AA 1996 that the tribunal shall decide all procedural and evidential matters, subject to the right of the parties to agree any matter. 27. Therefore, the arbitral proceedings should be stayed until the parties appoint an expert to determine the dispute which relates to technical matters as the parties have agreed under clause 27 of the Charterparty. 28. S. 31 of Arbitration Act provides that the objection that the arbitral tribunal lacks substantive jurisdiction must be raised by a party not later than the time he takes the first step 12 See for examples: Murphy Exploration and Production Co International v Ecuador (Award) ICSID Case No ARB/08/4, IIC 468; Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Pakistan (Decision on Jurisdiction) ICSID Case No ARB/03/29, IIC 27; Goetz v Burundi (Award) ICSID Case No ARB/95/3, 6 ICSID Rep 3, IIC 16; Enron Corp v Argentina (Decision on Jurisdiction) ICSID Case No ARB/01/3, 11 ICSID Rep 268, IIC Richard Deutsch, An ICSID Tribunal Denies Jurisdiction for Failure to Satisfy BIT's Cooling-Off Period: Further Evidence of a Sea Change in Investor-State Arbitration or a Meaningless Ripple, 33 Hous. J. Int'l L. 589 (2011) [594]. 14 Lobb Partnership Ltd v Aintree Racehorse Co Ltd [2000] BLR WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] 3 Sing LR The Arbitration Act Arbitration Act 1996 s31. 14

15 in the proceedings. As such, the Respondent has objected the jurisdiction of the tribunal at the early stage of the commencement of the arbitration. 18 Thus, the Respondent shall not lose the right to object. SUBSTANTIVE SUBMISSIONS I. THE RESPONDENT IS NOT LIABLE FOR DAMAGE OF THE CARGO 29. According to the expert opinion, 19 the damage of the cargo was due to a combination of two factors which are the prolonged use of the sealant and unprecedented rainfall 30. The Respondent is not liable for the damage of the cargo because the Respondent is not responsible for the two factors which caused the damage as follows. A. The issue of prolonged use of the sealant: 31. The Respondent has complied with the Claimant s request of using sealant, which is a waterproof material, to protect the containers. The Respondent has also stated unequivocally on the correspondence dated on 22 nd July to the Claimant that the containers would be guaranteed to be waterproof up to 5 days. The Claimants have unfortunately only collected the cargo approximately 41 hours after the arrival of the Vessel, 21 and this had inevitably led to the sealant being deteriorated. According to Mr Simon Webster s opinion, 18 Moot problem pg Moot problem pg Moot problem pg Moot problem pg

16 the leak started from 4:30am on 30 July This occurred after the delivery of the cargo by the Respondent. 32. The Respondent has fulfilled its obligation in protecting the cargo and it is also protected by the H/V Rules as evident from the Charterparty. 23 Hence, liability with regards to damages of the cargo should be discharged. B. The issue of unprecedented rainfall: 33. Clause of the Charterparty clearly states that the Respondent shall not be liable for any failure to perform the contract by reasons of any force majeure event. The event of the rainfall is an unforeseen event listed in this clause. The phrase failure to perform the contract in cl means failure to deliver the goods in a good condition without any damage. 34. In this scenario, the unprecedented rainfall which has contributed to the damage of the goods is an event of force majeure as classified under clause 17 (b). 26 The event of unprecedented rainfall was unforeseen weather event that causes a flood which has resulted in damaging the coffee beans. 27 Therefore, the Respondent is not liable for the damage of the goods. 22 ibid. 23 Glencore Energy UK Ltd v Freeport Holdings Ltd [2017] EWHC Moot problem pg ibid. 26 ibid. 27 Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1949] A.C

17 B. Any liability of the cargo shall be limited by the H/V Rules 35. However, without prejudice to the argument and reasoning above that the Respondent is not liable for the damage of the cargo and if the Tribunal finds the Respondent liable, the Respondent s liability is limited by the H/V Rules. 36. Although the H/V Rules do not mandatorily apply to charterparties under the H/V Rules article 5, 28 the Rules are incorporated by the clause paramount under clause 28 of this Charterparty According to Clause 28, 30 the Charterparty is governed by the laws of New South Wales, Australia. Therefore the H/V Rules are applicable as they were given force of law by the COSGA Although there was no bill of lading throughout the correspondence of the parties, a bill of lading is not necessary as the COSGA has amended this requirement. The Rules were adopted and amended under Australian law by the Australian Carriage of Goods by Sea Act 1991) as follows: (a) Contract of carriage applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid 28 The Hague Visby Rules article n(22). 30 ibid 31 ibid. 32 Carriage of Goods by Sea Act 1991, schedule 1A; Article 4(5)(a) of the Hague Visby Rules. 17

18 issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same. 33 (b) Contract of carriage means a contract of carriage covered by a sea carriage document (to the extent that the document relates to the carriage of goods by sea), and includes a negotiable sea carriage document issued under a charterparty from the moment at which that document regulates the relations between its holder and the carrier concerned This means that the amended H/V Rules do not require the contract of carriage to be a bill of lading. Moreover, the Claimant had declared the nature and value of such goods before shipment via an correspondence dated 22nd July Also stated under cl. 28, 36 the Respondent is to benefit from article 4(5) where it cannot be liable for certain amount of goods. This limitation of liability is also supported byarticle 4 (4.) of the H/V Rules which was incorporated in the COGSA states that: (a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the sea carriage document, 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 units of account per package or unit or 2 units of account per kilogramme of gross weight of the goods lost or damaged, whichever is the higher. 33 n(25). 34 ibid. 35 Moot problem pg ibid. 37 Carriage of Goods by Sea Act

19 42. Hence, the H/V Rules apply and the Respondent will not in any event become liable for any loss or damage in connection with the goods in an amount exceeding units of account per package or unit or 2 units of account per kilogramme of gross weight of the goods damaged. From the calculations based on the latest conversion rate on 20 Feb 2018, 38 the maximum liability amount according to the rules would be 18, USD. B. DELAY OF THE CARGO WAS CAUSED BY EVENTS OF FORCE MAJEURE 43. Clause 17 of the Charterparty, as entitled Force Majeure provides that neither party shall be liable for any failure to perform or delay in performing its obligation under this Contract, where the party is delayed by reasons of any Force Majeure Event. 44. Force majeure is an act that is so serious that cannot be avoided by the owners. 39 It is evident from the news article that the storm is a fortuitous one as it is described as once in a lifetime. Moreover, the congestion at a port is not something which the Respondent can avoid or guard against. This is analogous to the case of Navalmar UK Ltd v Kalemaden 40 where the delivery of the cargo was late due to a very heavy port congestion. They were not liable for delays as well because port congestion is not something they could control. Similarly, the port congestion which happened on 29th July is clearly not an event the respondent could control as it is evident on the 41 that the Vessel was instructed to wait at near the port as there was nowhere for her to berth. 38 XE, XE Currency Table: USD - US Dollar < accessed 10 March Lebeaupin v Crispin [1920] 2 KB Navalmar UK Ltd v Kalemaden Navalmar UK Limited -v- Kale Made Hammadeeler Sanayi Ve Ticart AS [2017] EWHC 116 (Comm). 41 Moot problem pg

20 45. It is also clear from the news article 42 that the port was closed. As such, it is clear that the Respondent should not be liable for the port congestion which led to the delay of the cargo. Port congestion is an event that is relatively common in marine charters. In the event if the Tribunal allows the shippers to be liable for port congestions, it may potentially open up floodgates to large number of claims, resulting in unnecessary litigation in the marine industry. 43 A. Matter of Deviation 45. It is not beyond the Respondent s control that the deviation occurred because of the existence solar flares. Although it was in the news article 44 with regards to the solar flares, it has advised anyone in the Cerulean region who relies on satellite communication systems back up arrangements. However, the Vessel s route was due to leave the Cerulean region and hence, it is unexpected that the solar flares will affect even in regions outside the Cerulean. Moreover, by the time the newspaper released the news that the solar flares have knocked out global communications, the Respondent could not by the time reach the crew in the Vessel. B. No lawful justification in pursuant to Cl. 27(g) of the Charterparty. 46. Under Clause 27(g) of the Charterparty, 45 matters of enroute are classified under technical matters that should be assessed by a master or expert opinion. In this situation, there was no expert evidence from a master mariner in respect of the technical matters of the enroute. 42 Moot problem pg NYK Bulkship (Atlantic) NV v Cargill International SA [2016] UKSC Moot Problem pg n(22). 20

21 C. Reasonable deviation should not be deemed as a breach of the Charterparty. 47. Under s.4 of the COGSA 1991, 46 any reasonable deviation shall not be deemed to be an infringement or breach of this convention or of the contract of carriage, and the carrier shall not be liable for any loss and damage arising. As explained previously, the deviation was caused by events of force majeure and the Respondent had no alternatives but to deviate to Spectre. 47. In light of the above, the delay of the cargo was inevitable and the Respondent should not be liable for the delay by reasons above. Hence, the USD $15,750,000 for the damage of the cargo is not justified. The Respondent should also not be held liable for the replacement of cargo of USD $9,450,000 and the amount of USD $5,000,000 liable to Coffees Of The World. III. CLAIMANT HAS NO RIGHTS OF ASSERTION TO THE MARITIME LIEN OF THE VESSEL 48. The Claimant is not entitled to the lien as Clause. 10 of the Charterparty 47 governing lien rights to the parties did not confer any sort of maritime lien rights to the Claimant. Maritime lien rights could only be conferred to the claimant if it is expressly provided for in charterparties or expressly agreed by both parties The Claimant has no grounds to claim for neither a proprietary maritime right on the vessel nor a general maritime lien right. 46 The Carriage of Goods by Sea Act 1991 s4. 47 Moot problem pg See Richard Aikens, Richard Lord & Michael Bools, Bills of Lading (Informa Law from Routledge, 2nd Ed, 2016) at para

22 (a) Proprietary maritime right Proprietary maritime claims is for the owners and co-owners of the ship. 49 These claims mainly concern with claims between co-owners on the one hand and with a mortgage of a ship or her freight on the other hand. 50 (b) General maritime right A general maritime claim relates to a claim for damage done by a ship (collision or otherwise), liability arising under the Protection of the Sea (Civil Liability) Act However, there was no damage done by the ship to the cargo in this scenario. 50. With these reasons, there is no lawful justification for the Claimant to have the right to a maritime claim with respect to the Vessel. IV. THE CLAIMANT SHOULD PAY THE FREIGHT, DEMURRAGE AND THE FEES FOR THE REPAIRS TO THE HULL WITH IMMEDIATE EFFECT Duty to pay freight 50. Breaching the duty to pay freight is a fundamental breach of the Charterparty and allows the Respondent to obtain full compensation for any pecuniary losses suffered as a result of the non-payment. 52 Moreover, in Hain Steamship Co v Tate & Lyle, 53 the freight amount will still be payable even if the Vessel deviated as long as the cargo reached its destination safely, which was what the Respondent ensured in this case. However, to date, the Claimant has not paid for the freight payment of USD $500,000 even though it was to be due two days upon 49 Admiralty Act 1996 s4(2). 50 Callaway, Maritime and Claims ((1989) 6 MLAANZ Journal Protection of the Sea (Civil Liability) Act Kuwait Rocks Co v AMN Bulkcarriers Incorporation [2013] EWHC Tate & Lyle, Ltd. v Hain Steamship Company Ltd. [1936] 55 Hol

23 the delivery of the cargo. 54 The payment is long-overdue and the Respondent has the right to obtain any pecuniary losses suffered as the result of this non-payment. 55 Demurrage fees 51. The Claimant owes a demurrage of USD $100,000 as the Claimant had only collected the goods at approximately. 1.15pm on 31 st July, five hours beyond the laytime period. 52. The Respondents have also explicitly stated in the dated 29 July 56 informing the Claimants that should they not collect the cargo 12am 30 July, there will be a demurrage of USD 20,000 per hour and the Claimant should have made arrangements to collect the cargo on time upon knowing this information. Repairs to the hull 53. The inclusion of the General Average and the New Jason Clause by Clause 19 of the Charterparty 57 under Rule XVIII of the York/Antwerp Rules 58 is to protect the shipowner, who is the Respondent. 59 Even if the damage of the hull was caused by the event of the bad weather conditions which ultimately led to the act of the crew who dropping it, the New Jason clause effectively establishes that the cargo owner, who is the Claimant, has to contribute in the general average even when the damaging incident is caused by an act of the Respondent Moot problem pg Fulton Shipping Inc of Panama v Globalia Business Travel SAU (formerly Travelplan SAU) [2015] HoL Moot problem pg Moot problem pg York-Antwerp Rules 2016, Rule XVIII Damage to Ship. 59 Cohen, Particular charges in carriage of goods by sea and marine cargo insurance (2004) Lloyd's maritime and commercial law quarterly Cullen, GENERAL AVERAGE THE FUTURE OF NON-SEPARATION AGREEMENT (2001) 2 MLAANZ Journal

24 54. Moreover, as pursuant to clause 21 of the Charterparty, 61 the Respondent has the obligation to report any instance of jettison to the Charterers as soon as practicable. The Respondent has fulfilled this obligation by explaining the drop of the hull to the Claimant on the correspondence dated 29th July PRAYER FOR RELIEF i. AWARD the following interest and costs in favour of the Respondent with immediate effect: a) Repairs to the hull b) Demurrage fees c) Freight service ii. DISCHARGE the following payments made against the Respondent: a) Damage of the cargo b) Replacement of cargo c) Amount liable to Coffees of the World iii. DISCHARGE the maritime lien rights in favour of the Respondent. iv. AWARD the pecuniary costs incurred by the Respondent due to result of non-payment by the Claimant. 61 Moot problem pg Moot problem pg