TWENTIETH ANNUAL INTERNATIONAL MARITIME LAW

ARBITRATION MOOT COMPETITION 2019

IN THE MATTER OF AN ARBITRATION HELD IN LONDON

Claimant Respondent

Panther Shipping Inc Omega Chartering Limited

MEMORANDUM FOR THE CLAIMANT

TEAM NO. 4

Jessica Rapana

Nicholas Troy

Quinton Roberts

Reuben Pemberton-Ovens

i

TABLE OF CONTENTS

LIST OF AUTHORITIES ............................................................................................................. iii

LIST OF ABBREVIATIONS ....................................................................................................... xiii

STATEMENT OF FACTS .............................................................................................................. 1

PART ONE: HULL FOULING ...................................................................................................... 2

I THE RESPONDENT BREACHED THE CHARTERPARTY BY FAILING TO CLEAN

THE VESSEL’S HULL PRIOR TO REDELIVERY .............................................................. 2

The Respondent was obliged to clean the Vessel’s hull ........................................ 2

The Respondent was not prevented from cleaning the Vessel’s hull ..................... 3

(i) The Respondent was at liberty to call upon any port within Wahanda

range ............................................................................................................. 4

(ii) The quarantine only prevented the Vessel from berthing at Wahanda

port ................................................................................................................ 5

(iii) The Claimant did not prevent cleaning at North Titan or South Island ....... 5

II THE RESPONDENT CANNOT LIMIT ITS LIABILITY ........................................................ 6

All costs incurred travelling to South Island were reasonable ............................... 6

The Respondent’s lump sum offers do not alter its liability .................................. 7

PART TWO: REDELIVERY ......................................................................................................... 7

I THE RESPONDENT FAILED TO REDELIVER THE VESSEL WITH REASONABLE

DILIGENCE ............................................................................................................... 8

II THE RESPONDENT IS LIABLE FOR THE LOSS FLOWING FROM ITS DELAY IN

REDELIVERY ............................................................................................................ 9

The Respondent caused the loss of the Champion Fixture .................................... 9

The loss of the Champion Fixture was not too remote ......................................... 10

The Claimant took all reasonable steps to mitigate its loss .................................. 11

ii

The Respondent is liable for the loss of the option to extend the

Champion Fixture ................................................................................................. 11

PART THREE: OFF-HIRE ........................................................................................................ 12

I CLAUSE 44 MAKES EXHAUSTIVE PROVISION FOR OFF-HIRE EVENTS

ARISING OUT OF QUARANTINE ................................................................................ 13

II THE QUARANTINE EVENT WAS NOT AN OFF-HIRE EVENT WITHIN THE

MEANING OF CLAUSE 44 ......................................................................................... 14

III THE QUARANTINE EVENT DID NOT AMOUNT TO AN OFF-HIRE EVENT

UNDER CLAUSE 17 .................................................................................................. 15

PART FOUR: CARGO CLAIM ................................................................................................... 15

I THE CARGO CLAIM IS TIME BARRED ....................................................................... 16

The Parties did not extend the Notification Timeframe ....................................... 16

The Respondent failed to comply with the substantive requirement of

clause 6 within time .............................................................................................. 17

II THE CARGO CLAIM CANNOT BE VALIDLY APPORTIONED .......................................... 18

III THE CLAIMANT’S LIABILITY SHOULD BE APPORTIONED IN THE AMOUNT OF

50% ....................................................................................................................... 20

The Cargo Claim does not arise out of unseaworthiness ..................................... 20

(i) The available evidence cannot establish that the crew were

incompetent ................................................................................................. 20

(ii) The Vessel was in all respects cargoworthy ............................................... 21

The Cargo Claim only arises out of stowage or storage of the Cargo .................. 22

PART FIVE: PRAYER FOR RELIEF .......................................................................................... 25

iii

LIST OF AUTHORITIES: CASES

A.

Action Navigation Inc v Bottigliere di Navigazione SpA (The Kitsa) [2005] 1 Lloyd’s Rep 432

Actis Co Ltd v The Sanko Steamship Co Ltd (The Aquacharm) [1980] 2 Lloyd’s Rep 237

Agricultural, Horticultural & Forestry Industry Training Board v Aylesbury Mushrooms Ltd

[1972] 1 All ER 280

Ajum Goolam Hossen & Co v Union Marine Insurance Company Ltd [1901] AC 362

Alexander v Cambridge Credit Corporation Ltd (1987) 12 ACLR 202

Allied Maples Group Ltd v Simmons & Simmons (a firm) [1995] 1 WLR 1602

Anglo-Saxon Petroleum Company Ltd v Adamastos Shipping Company Ltd [1958] 1 Lloyd’s

Rep 73

Arnold v Britton [2015] AC 1619

AS Iverans Rederei v KG MS Holstencruiser Seeschiffahrtsgesellschaft mbH & Co (The

Holstencruiser) [1992] 2 Lloyd’s Rep 378

B.

Bank Line Ltd v Arthur Capel & Co [1919] AC 435

BCT Software Solutions Ltd v Arnold Laver & Co Ltd [2002] EWHC 1298

Ben Line Steamers Ltd v Pacific Steam Navigation Co (The Benlawers) [1989] 2 Lloyd’s

Rep 51

Bond Connolly & Co v Federal Steam Navigation Co Ltd (1905) 21 TLR 438

Brace v Calder [1895] 2 QB 253

British Westinghouse Electric & Manufacturing Company Ltd v Underground Electric

Railways of London Ltd [1912] AC 673

Brown v KMR Services Ltd [1995] CLC 1418

Brown v Turner, Brightman & Co [1912] AC 12

iv

C.

Caltex Refining Co Pty Ltd v BHP Transport Ltd (The Iron Gippsland) [1994] 1 Lloyd’s

Rep 335

Canada Shipping Co v British Shipowners’ Mutual Protection Association (1889) 23

QBD 342

Carmichael & Co v Liverpool Sailing Ship Owners’ Mutual Indemnity Association (1887) 19

QBD 242

Castlegate Steamship Company Ltd v Dempsey & Co [1891] 8 TLR 102

Castlegate Steamship Company Ltd v Dempsey & Co [1892] 7 Asp Mar Law Cas 186

Clifford v Hunter (1827) M&M 103

Cobelfret Bulk Carriers NV v Swissmarine Services SA (The Lowlands Orchid) [2010] 1

Lloyd’s Rep 317

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64

Compania Sud Americana de Vapores v Sinochem Tianjin Import & Export Corp (The

Aconcagua) [2010] 1 Lloyd’s Rep 1

Continental Pacific Shipping Ltd v Deemand Shipping Co Ltd (The Lendoudis Evangelos II)

[1997] 1 Lloyd’s Rep 404

D.

DS AS Idaho v Peninsular & Oriental Steam Navigation Co (The Strathnewton) [1983] 1

Lloyd’s Rep 219

Dunavant Enterprises Inc v Olympia Spinning & Weaving Mills Ltd [2011] 2 Lloyd’s

Rep 619

Dunkirk Colliery Co v Lever (1878) 9 Ch D 20

v

E.

Edwards v Society of Graphical & Allied Trades [1971] Ch 354

Elder, Dempster & Co Ltd v Paterson, Zochonis & Co Ltd [1924] AC 522

F.

Fairclough, Dodd & Jones Ltd v JH Vantol Ltd [1957] 1 WLR 136

F C Bradley & Sons Ltd v Federal Steam Navigation Company Ltd (1926) 24 Ll L Rep 446

Finagra (UK) Ltd v OT Africa Line Ltd [1998] 2 Lloyd’s Rep 622

Ford v Cotesworth (1868) LR 4 QB 127

G.

Galoo Ltd v Bright Grahame Murray (a firm) [1994] 1 WLR 1360

Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2

AC 353

Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1927) 29 Ll L Rep 190

Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1928) 32 Ll L Rep 91

H.

H Parsons (Livestock) Ltd v Uttley, Ingham & Co Ltd [1978] QB 791

Hadley v Baxendale (1854) 9 Exch 341

Hongkong Fir Shipping Company Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir)

[1961] 1 Lloyd’s Rep 159

Houndsditch Warehouse Co Ltd v Waltex Ltd [1944] KB 579

Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (The Doric Pride) [2006]

2 Lloyd’s Rep 175

vi

Hyundai Merchant Marine Co Ltd v Gesuri Chartering Co Ltd (The Peonia) [1991] 1

Lloyd’s Rep 100

I.

Ingram & Royle Ltd v Services Maritimes du Treport Ltd [1913] 1 KB 538

International Packers London Ltd v Ocean SS Co Ltd [1955] 2 Lloyd’s Rep 218

J.

Japy Freres & Co v RWJ Sutherland & Co (1921) 6 Ll L Rep 381

John v Lucasfilm Ltd [2018] EWHC 624

Joyce v Bowman Law Ltd [2010] EWHC 251

K.

Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350

L.

Larrinaga Steamship Company Ltd v The Crown (The Ramon de Larrinaga) (1944) 78 Ll L

Rep 167

Lindsay v Klein (The Tatjana) [1911] AC 191

London Arbitration 16/02 (2002) 600 LMLN 2

London Arbitration 10/15 (2015) 929 LMLN 3

London Arbitration 30/16 (2016) 967 LMLN 3

Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd (The Lipa) [2001] 2

Lloyd’s Rep 17

vii

M.

Malik v Bank of Credit & Commerce International SA [1998] AC 20

Manifest Shipping & Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea) [1997] 1 Lloyd’s

Rep 360

Marbienes Compania Naviera SA v Ferrostaal AG (The Democritos) [1976] 2 Lloyd’s

Rep 149

March v E & MH Stramare Pty Ltd (1991) 171 CLR 506

Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS) [1977] 1 Lloyd’s

Rep 368

Martrade Shipping & Transport GmbH v United Enterprises Corporation (The Wisdom C)

[2014] 2 Lloyd’s Rep 198

McGill v Sports & Entertainment Media Group [2017] 1 WLR 989

Metalfer Corp v Pan Ocean Shipping Co Ltd [1998] 2 Lloyd’s Rep 632

MH Progress Lines SA v Orient Shipping Rotterdam BV (The Genius Star 1) [2012] 1

Lloyd’s Rep 222

Modern Buildings Wales Ltd v Limmer & Trinidad Co Ltd [1975] 1 WLR 1281

Monarch Steamship Co Ltd v Karlshamns Oljefabriker AB [1949] AC 196

N.

Newa Line v Erechthion Shipping Co SA (The Erechthion) [1987] 2 Lloyd’s Rep 180

Northern Shipping Co v Deautshe Seereederei GmbH (The Kapitan Sakharov) [2000] 2

Lloyd’s Rep 255

O.

Ocean Tramp Tankers Corporation v VO Sovfracht (The Eugenia) [1963] 2 Lloyd’s Rep 381

Owners of the Steamship “Lord” v Newsum Sons & Co Ltd (1920) 2 Ll L Rep 276

viii

P.

Pagnan SpA v Tradax Ocean Transportation SA [1987] 2 Lloyd’s Rep 342

Pan Ocean Shipping Ltd v Creditcorp Ltd (The Trident Beauty) [1994] 1 WLR 161

Papera Traders Co Ltd v Hyundai Merchant Marine Co Ltd (The Eurasian Dream) [2002] 1

Lloyd’s Rep 719

Payzu Ltd v Saunders [1919] 2 KB 581

Petroleum Oil & Gas Corp of South Africa (Pty) Ltd v FR8 Singapore Pte Ltd (The Eternity)

[2009] 1 Lloyd’s Rep 107

Pilkington v Wood [1953] Ch 770

Pitmans Trustees Ltd v The Telecommunications Group Plc [2004] EWHC 181

Primegates Maritime Company Limited v Cargo Explorer (1995) D & CLD 617

R.

R v Secretary of State for Social Services; Ex parte Association of Metropolitan Authorities

[1986] 1 All ER 164

Re The Alexandros T [2014] 1 Lloyd’s Rep 223

Reed & Co Ltd v Page Son & East (1927) 27 Ll L Rep 114

Rey Banano del Pacifico CA v Transportes Navieros Ecuatorianos (The Isla Fernandina)

[2000] 2 Lloyd’s Rep 15

Rio Tinto Company Ltd v The Seed Shipping Company Ltd [1926] 24 Lloyd’s Rep 316

Roper v Johnson (1873) LR 8 CP 167

Royal Greek Government v Minister of Transport (1949) 82 Ll L Rep 196

Royal Greek Government v Minister of Transport (1950) 83 Ll L Rep 228

ix

S.

Sabah Flour & Feedmills Sdn Bhd v Comfez Ltd [1988] 2 Lloyd’s Rep 18

Santa Martha Baay Scheepvaart & Handelsmaatschappij NV v Scanbulk AS (The Rijn)

[1981] 2 Lloyd’s Rep 267

SBT Star Bulk & Tankers (Germany) GmbH & Co KG v Cosmotrade SA (The Wehr Trave)

[2016] 2 Lloyd’s Rep 170

Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd [2006] EWHC 89

Segovia Compania Naviera SA of Panama v R Pagnan & F LLI of Padova (The Aragon)

[1975] 1 Lloyd’s Rep 628

Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038

Sidermar SpA v Apollo Corporation (The Apollo) [1978] 1 Lloyd’s Rep 200

Sig Bergesden DY & Co v Mobil Shipping & Transportation Co (The Berge Sund) [1992] 1

Lloyd’s Rep 453

Skips AS Nordheim v Syrian Petroleum Co Ltd (The Varenna) [1983] 2 Lloyd’s Rep 592

Sonito Shipping Co Ltd v Sun United Maritime Ltd (The Lazos) (2007) 722 LMLN 2

Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG (The Alexandros T)

[2014] 2 Lloyd’s Rep 579

Stewart (CA) & Co v Phs Van Ommeren (London) Ltd [1918] 2 KB 560

Strutt v Whitnell [1975] 1 WLR 870

T.

Tennants (Lancashire) Ltd v CS Wilson & Company Ltd [1917] AC 495

Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s Rep 441

The Asia Star [2009] 2 Lloyd’s Rep 387

The Athelvictor (1945) 78 Ll L Rep 529

x

The Glenochil [1896] P 10

The Renée Hyaffil (1916) 32 TLR 660

The Sivand [1998] 2 Lloyd’s Rep 97

The Visurgis [1999] 1 Lloyd’s Rep 218

The Washington [1976] 2 Lloyd’s Rep 453

Thomas v Albutt [2015] EWHC 2187

Torvald Klaveness AS v Arni Maritime Corporation (The Gregos) [1995] 1 Lloyd’s Rep 1

Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2009] 1 AC 61

Transgrain Shipping (Singapore) PTE Ltd v Yangtze Navigation (Hong Kong) [2018] 1

Lloyd’s Rep 330

Transpacific Discovery SA v Cargill International SA (The Elpa) [2001] 2 Lloyd’s Rep 596

Triad Shipping Co v Stellar Chartering & Brokerage Inc (The Island Archon) [1994] 2

Lloyd’s Rep 227

W.

Wajilam Exports (Singapore) Pte Ltd v Transpacific Eternity SA (2003) 610 LMLN 3

Watson v Clark (1813) 1 Dow 336

Wellesley Partners LLP v Withers LLP [2016] Ch 529

Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [1999] 2

Lloyd’s Rep 209

Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [2001] 1

Lloyd’s Rep 147

Wuhan Ocean Economic & Technical Cooperation Co Ltd v Schiffahrts-Gesellschaft “Hansa

Murcia” mbH & Co KG [2013] 1 Lloyd’s Rep 273

xi

Y.

York Air Conditioning & Refrigeration (Australasia) Pty Ltd v Commonwealth (1949) 80

CLR 11

xii

LIST OF AUTHORITIES: LEGISLATION

Arbitration Act 1996 (UK) c 23

Limitation Act 1980 (UK) c 58

LIST OF AUTHORITIES: OTHER

Beale, HG (ed), Chitty on Contracts (Sweet & Maxwell, 33rd ed, 2018)

Baltic and International Maritime Council, Special Circular No. 3 (24 June 2013)

Carver, TG, A Treatise on the Law relating to the Carriage of Goods by Sea (Stevens & Sons,

Lim, 3rd ed, 1900)

Coghlin, Terence, Andrew Baker, Julian Kenny, and John Kimball, Time Charters (Informa

Law, 6th ed, 2008)

Edelman, James, James Varuhass, and Simon Colton (eds), McGregor on Damages (Sweet &

Maxwell, 20th ed, 2017)

Hazelwood, Steven, and David Semark, P&I Clubs Law and Practice (2010, 4th ed)

Inter-Club New York Produce Exchange Agreement 1996 (as amended September 2011)

International Maritime Solid Bulk Cargoes Code 2011 (as amended 11 June 2015)

Murdoch, Eric (ed), Master’s Guide to Hatch Cover Maintenance (Witherby Seamanship

International Ltd, 2002)

New York Produce Exchange Form (2015)

Soyer, Bariş, and Andrew Tettenborn, Charterparties: Law, Practice and Emerging Legal

Issues (Informa Law, 2018)

Spencer, Chris, and Nic Paines, Bulk Cargoes – Hold Preparation and Cleaning (Charles

Taylor & Co Ltd, 2011)

Rhidian Thomas, D (ed), Legal Issues Relating to Time Charterparties (Informa Law, 2008)

UK P&I Club Circular, 9/11 (August 2011)

xiii

LIST OF ABBREVIATIONS

ABT – About

BIMCO – Baltic and International Maritime

Council

ICA – Inter-Club Agreement 1996 (as

amended 2011)

mt – Metric Tonnes

NYPE – New York Produce Exchange 2015

standard form

TCT – Time Charter Trip

USD – United States Dollars

WOG – Without Guarantee

1

STATEMENT OF FACTS

1 On 18 March 2016, Panther Shipping Inc (Claimant) entered into a charterparty

(Charterparty) with Omega Chartering Limited (Respondent). The Charterparty was

for the hire of the MV Thanos Quest (Vessel) for one time charter trip between West

Coast to Wahanda range. Wahanda range includes the ports of Wahanda, South Island,

and North Titan. The Vessel was hired for about 50-55 days at USD 7,500 per day.

2 On 20 April 2016, the Vessel completed loading of 8,600mt of English Breakfast Tea

(Cargo). The crew undertook routine ballasting operations in preparation for the voyage.

During the course of ballasting there was an ingress of seawater into Cargo Hold No. 2,

causing damage to approximately 23% of the total Cargo. The ingress of seawater

resulted from a crew member mistakenly opening incorrect ballast valves. The third party

cargo interests (Receivers) have commenced proceedings against the Respondent for the

cargo damage (Receiver’s Claim).

3 On 7 May 2016, the Vessel arrived at Wahanda. Upon arrival, the Vessel was directed

to anchorage by Wahanda Port State Control (Port Authority) awaiting quarantine

inspection. On 11 May 2016, the Vessel was quarantined and indefinitely prevented from

berthing at Wahanda upon the suspicion that certain crew members were carrying the

Ebola virus. Whilst awaiting permission to berth the Vessel’s hull became significantly

fouled and required cleaning by the Respondent.

4 On 15 June 2016, the Claimant chartered the Vessel to Champion Chartering Corp

(Champion Fixture) in anticipation of the diligent completion of the Charterparty.

5 On 26 June 2016, the Vessel was permitted to berth at Wahanda port. Discharge

commenced on 27 June 2016. The Vessel did not complete discharge, and redelivery did

not occur, until 30 June 2016. The Respondent redelivered the Vessel with a significantly

fouled hull.

2

PART ONE: HULL FOULING

6 The Claimant argues that the Respondent is liable for all costs and expenses associated

with cleaning the Vessel’s hull because: (I) the Respondent breached the Charterparty by

failing to clean the Vessel’s hull prior to redelivery; and (II) the Respondent cannot limit

its liability.

I The Respondent Breached the Charterparty by Failing to Clean the Vessel’s Hull

Prior to Redelivery

7 At common law a shipowner is ordinarily unable to recover the costs of cleaning a

vessel’s hull from the charterer.1 However, the Charterparty expressly allocates all

responsibility for hull cleaning to the Respondent charterers. Clause 83(c) of the

Charterparty requires the Respondent to undertake hull cleaning at its own risk, cost,

expense and time.2

8 On 30 June 2016, the Respondent redelivered the Vessel without arranging or undertaking

cleaning. The Claimant argues that the Respondent’s failure to clean the Vessel’s hull

prior to redelivery breached subclauses 83(c)–(d) of the Charterparty because: (A) the

Respondent was obliged to clean the Vessel’s hull; and (B) the Respondent was not

prevented from cleaning the Vessel’s hull.

The Respondent was obliged to clean the Vessel’s hull

9 The Claimant contends that the Respondent was duly notified of the extent of the hull

fouling in June 2016. The Respondent was therefore required to arrange inspection and

cleaning of the Vessel’s hull prior to redelivery.

10 Clause 83(b) allows either party to call for an inspection of the Vessel’s hull if, in

accordance with the Respondent’s orders, the Vessel remains at a place for a period

1 The Kitsa [2005] 1 Lloyd’s Rep 432, 439–440 [25]–[29] (Aikens J); The Island Archon [1994] 2 Lloyd’s Rep

227, 236 (Evans LJ), 238 (Nicholls VC); The Aquacharm [1980] 2 Lloyd’s Rep 237, 244–245 (Lloyd J). 2 Moot Problem, 16.

3

exceeding 30 days.3 Any inspection must be arranged jointly but performed at the

Respondent’s sole risk, cost, expense and time.4

11 Following an inspection under clause 83(b) either party may call for the cleaning of the

Vessel’s underwater parts.5 Any cleaning under clause 83(c) is to be undertaken with

consultation between the Parties.6 However, the Respondent was solely obliged to

arrange and undertake all necessary cleaning at its own risk, cost, expense and time.7

12 On 7 May 2016 the Vessel arrived at Wahanda port.8 From 7 June 2016, the Vessel had

spent more than 30 days at Wahanda anchorage. On 26 June 2016, the Master inspected

the Vessel’s hull and recorded significant fouling.9 Following inspection the Claimant

called for the Respondent to arrange cleaning of the Vessel’s hull prior to redelivery.10

Both Parties proceeded on the basis that the hull required cleaning.11 The Respondent

does not dispute the extent of the hull fouling.12 The required cleaning was available at

North Titan and South Island, but not Wahanda port.13 Accordingly, the Respondent was

obliged to undertake cleaning at North Titan or South Island prior to redelivery.

The Respondent was not prevented from cleaning the Vessel’s hull

13 Under clause 83(d) of the Charterparty the Respondent could be relieved of its obligation

to clean the Vessel’s hull if, and only if, it was prevented from undertaking that cleaning.14

A contracting party is ‘prevented’ from performing an obligation only where the relevant

obligation is rendered physically or legally impossible.15

3 Moot Problem, 16. 4 Moot Problem, 16. 5 Moot Problem, 16. 6 Moot Problem, 16. 7 Moot Problem, 16. 8 Moot Problem, 25, 66. 9 Moot Problem, 34. 10 Moot Problem, 34. 11 Procedural Order No. 2, [5]; Moot Problem, 27, 39, 42–43. 12 Procedural Order No. 2, [5]. 13 Procedural Order No. 2, [6]. 14 Moot Problem, 16. 15 Fairclough, Dodd & Jones Ltd v JH Vantol Ltd [1957] 1 WLR 136, 138–139 (Lord Morton), 142–143 (Lord

Tucker); Dunavant Enterprises Inc v Olympia Spinning & Weaving Mills Ltd [2011] 2 Lloyd’s Rep 619, 626 [29]

4

14 The Claimant argues that the Respondent was not relieved of its obligations as to cleaning

because: (i) the Respondent was at liberty to call upon any port within Wahanda range;

and (ii) the quarantine only prevented the Vessel from berthing at Wahanda port; and (iii)

the Claimant did not prevent cleaning at North Titan or South Island.

(i) The Respondent was at liberty to call upon any port within Wahanda range

15 In time charterparties the shipowner grants the charterer the exclusive right to give orders

as to the vessel’s employment, namely the ports that are called and the voyages that are

made.16 In a time charter trip, a charterer’s employment orders are constrained by agreed

geographical limitations on the vessel’s movements.17

16 The Charterparty’s geographical trip limits were expressed in the Fixture Recap as:18

FOR 1 [TIME CHARTER TRIP]/1 LOADED LEG VIA UK (EXCLUDING EUROPE) TO

WAHANDA RANGE…

REDEL DLOSP 1SP WAHANDA RANGE, PORT IN CHRTRS OPTION ATDNSHINC

17 The Respondent had the right to give employment orders until the conclusion of the trip

upon discharge of the Cargo at a port within Wahanda range. North Titan and South

Island are both ports within Wahanda range.19 Upon becoming obliged to clean the

Vessel’s hull, the Respondent was at liberty to call both North Titan and South Island.

(Burton J); Thames Valley Power Ltd v Total Gas & Power Ltd [2006] 1 Lloyd’s Rep 441, 451–452 [50] (Clarke J);

Brown v Turner, Brightman & Co [1912] AC 12, 15–16 (Loreburn LC), 16–17 (Lord Shaw); Tennants

(Lancashire) Ltd v CS Wilson & Company Ltd [1917] AC 495, 509 (Finlay LC), 510 (Earl Loreburn). 16 The Wehr Trave [2016] 2 Lloyd’s Rep 170, 173 [8] (Eder J); The Wisdom C [2014] 2 Lloyd’s Rep 198, 206

[28]–[29] (Popplewell J); The Aragon [1975] 1 Lloyd’s Rep 628, 632–633 (Donaldson J); The Erechthion [1987]

2 Lloyd’s Rep 180, 185 (Staughton J); The Ramon de Larrinaga (1944) 78 Ll L Rep 167, 174 (Lord Porter); The

Island Archon [1994] 2 Lloyd’s Rep 227, 234 (Evans LJ). 17 The Eugenia [1963] 2 Lloyd’s Rep 381, 388 (Lord Denning MR); The Wehr Trave [2016] 2 Lloyd’s Rep 170,

173 [8] (Eder J); The Wisdom C [2014] 2 Lloyd’s Rep 198, 206 [28]–[29] (Popplewell J); The Hill Harmony [1999]

2 Lloyd’s Rep 209, 217–218 (Potter LJ); The Aragon [1975] 1 Lloyd’s Rep 628, 632–633 (Donaldson J). 18 Moot Problem, 3–4. 19 Procedural Order No. 2, 2 [2], 4.

5

(ii) The quarantine only prevented the Vessel from berthing at Wahanda port

18 Detention in the context of a charterparty refers to some physical or geographical

constraint upon a vessel’s movements in relation to its service under the charter.20

19 The detention of the Vessel in quarantine by the Port Authority from 7 May 201621 to 26

June 201622 (Quarantine Event) did not render cleaning physically or legally impossible.

The Quarantine Event was limited to preventing the Vessel from berthing at Wahanda

port only.23 The Respondent retained the legal right and physical ability to order the

Vessel to leave Wahanda anchorage and sail to North Titan or South Island at any time

prior to redelivery.

(iii) The Claimant did not prevent cleaning at North Titan or South Island

20 Subclause 83(c) provides that cleaning shall be undertaken by the Charterers at their risk,

cost, expense and time in consultation with the Owners.24 The Claimant’s preference that

cleaning occur at South Island did not prevent the Respondent cleaning the Vessel’s hull

at North Titan. A party required to perform an obligation ‘in consultation’ with another

is not required to accept or defer to the other party’s opinion.25 Consultation only requires

genuine conferral between parties, and not the attainment of consent or agreement.26

21 Between 7 May 2016 and 30 June 2016, the Parties conferred regarding appropriate

cleaning arrangements.27 In doing so, the Respondent discharged its obligation to consult

with the Claimant. The Respondent was never required to accept or defer to the

Claimant’s opinion on where cleaning should take place. Accordingly, the Claimant’s

20 The Mareva AS [1977] 1 Lloyd’s Rep 368, 382 (Kerr J). 21 Moot Problem, 25. 22 Procedural No. 2, [7]; Moot Problem, 72. 23 Moot Problem, 24–25, 36. 24 Moot Problem, 16. 25 Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd [2006] EWHC 89 [23], [45] (Jackson J). 26 See generally Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd [2006] EWHC 89 [45] (Jackson J);

Pitmans Trustees Ltd v The Telecommunications Group Plc [2004] EWHC 181 [56] (Morritt VC); R v Secretary

of State for Social Services; Ex parte Association of Metropolitan Authorities [1986] 1 All ER 164, 167

(Webster J); Agricultural, Horticultural & Forestry Industry Training Board v Aylesbury Mushrooms Ltd [1972]

1 All ER 280, 284 (Donaldson J). 27 Moot Problem, 28–29, 34, 39, 42–43.

6

preference that cleaning occur at South Island28 did not, and could never, legally prevent

the Respondent from undertaking cleaning at another location within Wahanda range.

II The Respondent cannot Limit its Liability

22 The Claimant is entitled to recover all costs and expenses arising as a result of, or in

connection with, cleaning the Vessel’s hull.29 The Claimant is entitled to recover the full

sum of USD 96,567.42 in damages because: (A) all costs incurred travelling to South

Island were reasonable; and (B) the Respondent’s lump sum offers do not alter its liability.

All costs incurred travelling to South Island were reasonable

23 The Claimant expended USD 96,567.42 to clean the Vessel’s hull. This amount includes

USD 55,567.42 associated with sailing to South Island, which the Respondent contends

was not reasonably incurred. The Claimant accepts that it is under an obligation to take

reasonable steps to mitigate its loss.30 Mitigation only requires a party to act in the

ordinary course of business.31

24 The Claimant mitigated its loss by immediately sailing to South Island for hull cleaning.

South Island was nominated as the delivery port for the Claimant’s subsequent fixture.32

Cleaning the Vessel at the port of the next fixture is in the ordinary course of business.

Therefore, all costs that the Claimant incurred cleaning at South Island were reasonable.

28 Moot Problem, 43. 29 Moot Problem, 16–17. 30 Edwards v Society of Graphical & Allied Trades [1971] Ch 354, 377 (Lord Denning MR); Pilkington v Wood

[1953] Ch 770, 775–776 (Harman J); British Westinghouse Electric & Manufacturing Company Ltd v

Underground Electric Railways Company of London Ltd [1912] AC 673, 688 (Haldane LC); Roper v Johnson

(1873) LR 8 CP 167, 183–184 (Grove J). 31 British Westinghouse Electric & Manufacturing Company Ltd v Underground Electric Railways Company of

London Ltd [1912] AC 673, 689 (Haldane LC); Dunkirk Colliery Company v Lever (1878) 9 Ch D 20, 25

(James LJ); The Asia Star [2009] 2 Lloyd’s Rep 387, 392 [26] (Prakash J). 32 Moot Problem, 54.

7

The Respondent’s lump sum offers do not alter its liability

25 A plaintiff is not obliged to accept unreasonable settlement offers to mitigate its loss.33

An offer is not reasonable, for the purposes of mitigation, if it requires a party to

relinquish its claim for damages.34 An agreement ‘in full and final settlement’ of a matter

precludes a claimant from suing the other party for further expenses.35 Where the Parties

fail to agree on a reasonable lump sum, the term ‘shall agree’ in clause 83(d) does not

operate to preclude the Claimant from recovering damages.36

26 The Respondent made three offers in ‘full and final settlement’ of its cleaning obligation.

Despite the Respondent being aware that cleaning could not be performed at Wahanda,37

its offers did not account for any additional expenses associated with undertaking

cleaning at another port. The Respondent consistently made offers which were

substantially lower than the quoted, and actual, cost of hull cleaning.38 It follows that the

Claimant’s rejection of the Respondent’s unreasonable offers cannot be characterised as

a failure in mitigation.

PART TWO: REDELIVERY

27 The Claimant suffered USD 15,330,000 in lost hire payable under the Champion

Fixture.39 The Champion Fixture was cancelled because the Vessel was not delivered

prior to the expiry of that fixture’s laycan.40 The Claimant argues that the Respondent is

liable for its loss of the Champion Fixture because: (I) the Respondent failed to redeliver

33 Payzu Ltd v Saunders [1919] 2 KB 581, 588–589 (Bankes LJ), 589 (Scrutton LJ); Houndsditch Warehouse Co

Ltd v Waltex Ltd [1944] KB 579, 581 (Stable J); Brace v Calder [1895] 2 QB 253, 263–264 (Rigby LJ); Strutt v

Whitnell [1975] 1 WLR 870, 873 (Cairns LJ). 34 Strutt v Whitnell [1975] 1 WLR 870, 873 (Cairns LJ); Houndsditch Warehouse Co Ltd v Waltex Ltd [1944] KB

579, 581 (Stable J); HG Beale (ed), Chitty on Contracts (Sweet & Maxwell, 33rd ed, 2018) 1789, 1861 [26-101];

Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038, 1049 (Diplock J). 35 The Alexandros T [2014] 2 Lloyd’s Rep 579, 592 [58], 595 [72] (Flaux J); Re The Alexandros T [2014] 1 Lloyd’s

Rep 223, 253 [153]–[155] (Lord Mance). 36 BIMCO Special Circular No. 3 (24 June 2013), 3. 37 Procedural Order No. 2, [6]. 38 Moot Problem, 37, 52. 39 See Moot Problem, 69. 40 See Moot Problem, 40.

8

the Vessel with reasonable diligence; and (II) the Respondent is liable for the loss flowing

from its delay in redelivery.

I The Respondent Failed to Redeliver the Vessel with Reasonable Diligence

28 The Claimant contends that the Respondent was obliged to exercise its best endeavours

to redeliver the Vessel. The Respondent breached this obligation by failing to ascertain

whether redelivery of the Vessel was possible at alternative ports within Wahanda range.

29 The Claimant accepts that the words ‘without guarantee’ in the Fixture Recap rendered

the charter time period of 50-55 days an estimate rather than a binding term.41

Notwithstanding that a time charter trip may lack a strict date for redelivery, a charterer

must still redeliver the vessel.42 Where there is no binding time stipulation, a charterer

remains obliged to use their best endeavours to perform redelivery.43 The exercise of best

endeavours requires a charterer to act with reasonable diligence.44

30 The Charterparty was for one time charter trip to Wahanda range.45 The Vessel was to

be redelivered at one safe port in Wahanda range, at the Respondent’s option.46 North

Titan, South Island and Wahanda are all ports within Wahanda range.47

31 The Charterparty did not stipulate a date for redelivering the Vessel. Accordingly, the

Respondent was obliged to exercise reasonable diligence in performing its redelivery

obligation. On 11 May 2016, the Vessel was quarantined and prevented from berthing at

41 The Lipa [2001] 2 Lloyd’s Rep 17, 19 (Smith J); Japy Freres & Co v RWJ Sutherland & Co (1921) 6 Ll L Rep

381, 382 (Bankes LJ); The Lendoudis Evangelos II [1997] 1 Lloyd’s Rep 404, 405–406 (Longmore J). 42 The Peonia [1991] 1 Lloyd’s Rep 100, 107 (Bingham LJ); The Rijn [1981] 2 Lloyd’s Rep 267, 270 (Mustill J). 43 See especially The Peonia [1991] 1 Lloyd’s Rep 100, 117 (Slade LJ), 117 (Balcombe LJ). See also HG Beale

(ed), Chitty on Contracts (Sweet & Maxwell, 33rd ed, 2018) 1587, 1602–1603 [21-021]; The Democritos [1976] 2

Lloyd’s Rep 149, 152 (Lord Denning MR), 154 (Bridge LJ); Wuhan Ocean Economic & Technical Cooperation

Co Ltd v Schiffahrts-Gesellschaft “Hansa Murcia” mbH & Co KG [2013] 1 Lloyd’s Rep 273, 279 [21] (Cooke J). 44 See generally The Peonia [1991] 1 Lloyd’s Rep 100, 117 (Slade LJ); The Democritos [1976] 2 Lloyd’s Rep 149,

152 (Lord Denning MR), 154 (Bridge LJ); Bank Line Ltd v Arthur Capel & Co [1919] AC 435, 460–461 (Lord

Wrenbury); Ford v Cotesworth (1868) LR 4 QB 127, 133–137 (Cockburn CJ, Blackburn and Lush LJJ); Castlegate

Steamship Company Ltd v Dempsey & Co [1891] 8 TLR 102, 102–103 (Wright J); Castlegate Steamship Company

Ltd v Dempsey & Co [1892] 7 Asp Mar Law Cas 186, 189 (Lopes LJ); York Air Conditioning & Refrigeration

(Australasia) Pty Ltd v Commonwealth (1949) 80 CLR 11, 62 (Dixon J). 45 Moot Problem, 3. 46 Moot Problem, 4. 47 Procedural Order No. 2, 2 [2], 4.

9

Wahanda.48 The Respondent remained at liberty to order the Vessel to call North Titan

or South Island49 for discharge and subsequent redelivery.50 The Respondent did not

attempt to contact either of those ports to ascertain whether the Vessel could berth,

discharge, and be redelivered. Instead the Vessel remained idle at Wahanda anchorage

for 50 days.51 The Respondent breached its obligation to use reasonable diligence and,

in fact, made no attempt to redeliver the Vessel at the two available ports.

II The Respondent is Liable for the Loss Flowing from its Delay in Redelivery

32 The Claimant suffered USD 15,330,000 in lost hire payable under the Champion

Fixture.52 The Parties do not currently dispute the quantum of the Claimant’s damages.53

33 The Claimant argues that the Respondent is liable for the loss of the Champion Fixture

because: (A) the Respondent caused the loss of the Champion Fixture; (B) the loss of the

Champion Fixture was not too remote; and (C) the Claimant took all reasonable steps to

mitigate its loss. Further, (D) the Respondent is liable for the loss of the option to extend

the Champion Fixture.

The Respondent caused the loss of the Champion Fixture

34 A party is liable for damages where a causal link is established between a breach and the

loss suffered.54 To establish causation, an injured party must satisfy factual and legal

causation.55 Factual causation is satisfied where the loss is attributable to the actions of

48 Moot Problem, 24. 49 See above Memorandum for the Claimant, [15]–[21]. 50 Moot Problem, 3–4, 48. 51 See generally Moot Problem, 25; Procedural Order No. 2, [7]. 52 Moot Problem, 69. 53 Procedural Order No. 2, [14]. 54 Malik v Bank of Credit & Commerce International SA [1998] AC 20, 51 (Lord Steyn). 55 The Sivand [1998] 2 Lloyd’s Rep 97, 101 (Evans LJ); Royal Greek Government v Minister of Transport

(1950) 83 Ll L Rep 228, 236 (Devlin J).

10

the party in breach as a matter of common sense.56 Legal causation is satisfied where a

breach of contract is an ‘effective’ or ‘dominant’ cause of the loss.57

35 The Respondent failed to inquire about, or attempt to perform, redelivery at North Titan

or South Island. This resulted in the Vessel remaining at anchorage for 50 days. As a

matter of common sense, the Respondent’s complete inaction during the quarantine

period prevented the Vessel from being ready for delivery into the Champion Fixture.

36 Further, the Respondent’s failure to make any inquiries regarding the ability to berth at

North Titan or South Island was the effective cause of the unreasonable delay in

redelivery. As such, the loss of the Champion Fixture was caused by the Respondent.

The loss of the Champion Fixture was not too remote

37 A loss is not too remote if, at the time of contracting, such loss was within the reasonable

contemplation of the parties as a not unlikely result of the breach.58 A loss is in the

reasonable contemplation of the parties if it occurs in the usual course of things.59 The

parties need only contemplate the type of loss, not its extent.60 A vessel’s next fixture

will ordinarily begin as soon as possible following the conclusion of its previous fixture.61

38 The Respondent ought to have known that, at the time of contracting, the Vessel was

likely to be chartered for a subsequent fixture. It is immaterial that the Respondent did

not know the duration or rate of hire of the Champion Fixture. The Charterparty was only

estimated to run for 50-55 days.62 The Respondent knew that the Claimant intended to

56 Galoo Ltd v Bright Grahame Murray (a firm) [1994] 1 WLR 1360, 1373–1374 (Glidewell LJ); March v E &

MH Stramare Pty Ltd (1991) 171 CLR 506, 515 (Mason CJ); Alexander v Cambridge Credit Corporation Ltd

(1987) 12 ACLR 202, 247–248 (McHugh JA); The Sivand [1998] 2 Lloyd’s Rep 97, 101 (Evans LJ). 57 Monarch Steamship Co Ltd v Karlshamns Oljefabriker AB [1949] AC 196, 227–228 (Lord Wright); Galoo Ltd

v Bright Grahame Murray (a firm) [1994] 1 WLR 1360, 1374 (Glidewell LJ). 58 Hadley v Baxendale (1854) 9 Exch 341, 354–355 (Baron Alderson); The Heron II [1969] 1 AC 350, 385 (Lord

Reid), 424 (Lord Upjohn); The Achilleas [2009] 1 AC 61, 78 [52] (Lord Rodger), 90–91 [93] (Baroness Hale). 59 The Achilleas [2009] 1 AC 61, 78 [52] (Lord Rodger), 90–91 [93] (Baroness Hale). 60 H Parsons (Livestock) Ltd v Uttley, Ingham & Co Ltd [1977] 3 WLR 990, 999–1000 (Lord Denning MR),

1006–1007 (Scarman LJ); Brown v KMR Services Ltd [1995] CLC 1418, 1437–1438 (Gibson LJ). 61 The Achilleas [2009] 1 AC 61, 89 [90] (Baroness Hale). 62 Moot Problem, 4.

11

charter the Vessel for 3-5 years.63 As such, the Respondent ought to have known that the

Claimant would seek to charter the Vessel shortly after this estimated time period. If the

Respondent breached its obligation to exercise reasonable diligence in performing

redelivery, it was not unlikely that any delays thereby caused would result in the loss of

a subsequent fixture. Accordingly, the loss of the Champion Fixture arose in the ordinary

course of things and is not too remote from the Respondent’s breach.

The Claimant took all reasonable steps to mitigate its loss

39 An injured party has an ongoing obligation to take all reasonable steps to mitigate its

loss.64 The breaching party bears the onus of proving that an injured party did not take

all reasonable steps to mitigate.65 A commercial party is only obliged to act as it would

in the ‘ordinary course of business’ to mitigate its loss.66

40 Upon the cancellation of the Champion Fixture, the Claimant immediately chartered the

Vessel for a replacement fixture of 50-55 days (Fairwind Fixture).67 The daily hire rate

of the Fairwind Fixture was higher than that of the Champion Fixture.68 Obtaining the

Fairwind Fixture was plainly a reasonable and effective act of mitigation by the Claimant.

The Respondent is liable for the loss of the option to extend the Champion

Fixture

41 Damages may be awarded where a party’s breach causes the loss of a future chance.69

Where the opportunity to benefit from a chance relies on the actions of a third party there

63 Moot Problem, 1; Procedural Order No. 2, [3]. 64 British Westinghouse Electric & Manufacturing Company Ltd v Underground Electric Railways Company of

London Ltd [1912] AC 673, 689 (Haldane LC). 65 Edwards v Society of Graphical & Allied Trades [1971] Ch 354, 377 (Lord Denning MR); Pilkington v Wood

[1953] Ch 770, 775–776 (Harman J); British Westinghouse Electric & Manufacturing Company Ltd v

Underground Electric Railways Company of London Ltd [1912] AC 673, 688 (Haldane LC). 66 British Westinghouse Electric & Manufacturing Company Ltd v Underground Electric Railways Company of

London Ltd [1912] AC 673, 689 (Haldane LC); Dunkirk Colliery Company v Lever (1878) 9 Ch D 20, 25

(James LJ); The Asia Star [2009] 2 Lloyd’s Rep 387, 392 [26] (Prakash J). 67 Moot Problem, 55. 68 Moot Problem, 32, 55. 69 Allied Maples Group Ltd v Simmons & Simmons (a firm) [1995] 1 WLR 1602, 1611 (Stuart-Smith LJ); The

Golden Victory [2007] 2 AC 353, 376 (Lord Bingham); Commonwealth v Amann Aviation Pty Ltd (1991) 174

CLR 64, 119 (Deane J).

12

must be a real or substantial, not merely speculative, chance of obtaining that benefit.70

The correct approach was summarised by Lord Reid in Davies v Taylor:71

You can prove that a past event happened, but you cannot prove that a future event will happen and

I do not think that the law is so foolish as to suppose that you can. All that you can do is evaluate

the chance. Sometimes it is virtually 100 per cent: sometimes virtually nil. But often it is somewhere

in between.

42 The Champion Fixture was for a fixed term of two years and contained a charterer’s

option to extend for a further two years.72 There are no external facts or circumstances

which suggest that Champion would be very unlikely to decline its option. It follows that

the chance of the Claimant obtaining the benefit of Champion’s option was not merely

speculative. The Claimant has been deprived of a real or substantial chance of a benefit,

and therefore the Respondent is liable to compensate the Claimant for that loss.

PART THREE: OFF-HIRE

43 The Claimant argues that it does not owe the Respondent USD 375,000 for overpaid hire

because the Vessel was not off-hire. The purported off-hire event was the Quarantine

Event from 7 May 2016 to 26 June 2016.

44 In time charterparties, risks associated with delay are ordinarily borne by the charterers.73

Hire is continuously payable unless a charterer can bring itself squarely within the plain

meaning of an off-hire provision.74 Restitution is not available where a charterparty

contains a contractual remedy for the repayment of overpaid hire.75

70 Allied Maples Group Ltd v Simmons & Simmons (a firm) [1995] 1 WLR 1602, 1614 (Stuart-Smith LJ); McGill

v Sports & Entertainment Media Group [2017] 1 WLR 989, 1010 [60] (Henderson LJ); Wellesley Partners LLP v

Withers LLP [2016] Ch 529; Joyce v Bowman Law Ltd [2010] EWHC 251 [54] (Vos J); John v Lucasfilm Ltd

[2018] EWHC 624 [90]–[93] (Buehrlen J). 71 [1974] AC 207, 213. 72 Moot Problem, 31. 73 The Gregos [1995] 1 Lloyd’s Rep 1, 4 (Lord Mustill); The Doric Pride [2006] 2 Lloyd’s Rep 175, 179 (Rix LJ). 74 The Doric Pride [2006] 2 Lloyd’s Rep 175, 179 (Rix LJ); The Apollo [1978] 1 Lloyd’s Rep 200, 205 (Mocatta J);

The Berge Sund [1992] 1 Lloyd’s Rep 453, 463 (Steyn J); The Gregos [1995] 1 Lloyd’s Rep 1, 4 (Lord Mustill);

Royal Greek Government v Minister of Transport (1949) 82 Ll L Rep 196, 199 (Bucknill LJ). 75 The Trident Beauty [1994] 1 WLR 161, 164–165 (Lord Goff); Stewart (CA) & Co v Phs Van Ommeren (London)

Ltd [1918] 2 KB 560, 562–563 (Bankes LJ).

13

45 The Vessel was not off-hire because: (I) clause 44 makes exhaustive provision for off-

hire events arising out of quarantine; and (II) the Quarantine Event was not an off-hire

event within the meaning of clause 44. Alternatively, (III) the Quarantine Event did not

amount to an off-hire event under clause 17.

I Clause 44 Makes Exhaustive Provision for Off-Hire Events Arising out of

Quarantine

46 Clause 17 and clause 44 of the Charterparty both make provision for off-hire events, but

are inherently inconsistent. The Claimant argues that clause 44 is the relevant and

exhaustive provision dealing with off-hire events arising out of quarantine.

47 Where clauses incorporated by reference conflict with specifically negotiated clauses, the

specifically negotiated clauses must prevail.76 Terms are inconsistent where they cannot

operate compatibly.77

48 Clause 44 was specifically negotiated between the parties, and stipulates:78

Owners shall be liable for any delay in quarantine arising from the Master, Officers, or crew having

communication with the shore or any infected area without the written consent of Charterers or their

Agents… Any time lost by such causes may be deducted as off-hire.

49 Clause 17 is a standard NYPE term, and was incorporated into the Charterparty by

reference only.79 Clause 17 relevantly provides that any ‘detention by Port State control

76 HG Beale (ed), Chitty on Contracts (Sweet & Maxwell, 33rd ed, 2018) 1011, 1062–1063 [13-071]; Anglo-Saxon

Petroleum Company Ltd v Adamastos Shipping Company Ltd [1958] 1 Lloyd’s Rep 73, 81–82 (Viscount

Simonds), 95–96 (Lord Keith); Modern Buildings Wales Ltd v Limmer & Trinidad Co Ltd [1975] 1 WLR 1281,

1289 (Buckley LJ); Sabah Flour & Feedmills Sdn Bhd v Comfez Ltd [1988] 2 Lloyd’s Rep 18, 20 (Parker LJ);

Metalfer Corp v Pan Ocean Shipping Co Ltd [1998] 2 Lloyd’s Rep 632, 637 (Longmore J); Finagra (UK) Ltd v

OT Africa Line Ltd [1998] 2 Lloyd’s Rep 622, 627 (Rix J); BCT Software Solutions Ltd v Arnold Laver & Co Ltd

[2002] EWHC 1298 [42] (Garnett J); The Eternity [2009] 1 Lloyd’s Rep 107, 113 [20] (Steel J); The Lowlands

Orchid [2010] 1 Lloyd’s Rep 317, 320 [20] (Beatson J). 77 Pagnan SpA v Tradax Ocean Transportation SA [1987] 2 Lloyd’s Rep 342, 350 (Bingham LJ); The Lowlands

Orchid [2010] 1 Lloyd’s Rep 317, 320 [20] (Beatson J). 78 Moot Problem, 9. 79 Moot Problem, 5.

14

or other competent authority for Vessel deficiencies… or by any other similar cause

preventing the full working of the Vessel’ will constitute an off-hire event.80

50 Clause 44 is objectively intended to, and does, exhaustively regulate when a quarantine

will amount to an off-hire event. The operation of clause 44 is restricted by the

requirement that the quarantine must arise from a crew member communicating with the

shore without the charterer’s written consent.81 In contrast, to the extent that a quarantine

might fall within clause 17, there are no restrictions on which quarantine events will

amount to off-hire. To that end, every quarantine would constitute an off-hire event under

clause 17. This would render the existence of clause 44 entirely redundant. Clause 17

and clause 44 cannot operate compatibly with respect to quarantine events. Accordingly,

clause 44, as a specifically negotiated clause, must prevail.

II The Quarantine Event was not an Off-Hire Event within the Meaning of Clause 44

51 The party alleging off-hire bears the onus of proving that an event falls squarely within

the plain meaning of the relevant off-hire provision.82

52 The Quarantine Event arose from the crew’s contact with West Coast, where there had

been an Ebola outbreak.83 The Quarantine Event would only amount to off-hire if the

Respondent did not consent to the crew’s communication with West Coast port.84 The

Respondent provided written consent to that contact by contracting on the terms of the

Charterparty. The port of West Coast was the specifically negotiated port of delivery,

and loading, under the Charterparty.85 Further, the crew’s services expressly included

supervising, directing, and controlling loading operations.86 It follows that, the

80 NYPE, clause 17. 81 Moot Problem, 9. 82 The Doric Pride [2006] 2 Lloyd’s Rep 175, 179 (Rix LJ); The Apollo [1978] 1 Lloyd’s Rep 200, 205 (Mocatta J);

The Berge Sund [1992] 1 Lloyd’s Rep 453, 463 (Steyn J); The Gregos [1995] 1 Lloyd’s Rep 1, 4 (Lord Mustill);

Royal Greek Government v Minister of Transport (1949) 82 Ll L Rep 196, 199 (Bucknill LJ). 83 Moot Problem, 22–23; Procedural Order No. 2, [3]. 84 Moot Problem, 9. 85 Moot Problem, 3–4. 86 Moot Problem, 14.

15

Respondent plainly consented to the crew’s communication with the port of West Coast

by entering into the Charterparty. The Respondent cannot bring itself within clause 44

and the Vessel was not off-hire.

III The Quarantine Event did not Amount to an Off-Hire Event under Clause 17

53 A charterer cannot claim off-hire for an event which it caused.87 In the event that clause

17 applies, the Quarantine Event which is claimed as off-hire must not have been caused

by the Respondent.

54 The Respondent was obliged to exercise reasonable diligence in discharging the Cargo

and performing redelivery of the Vessel.88 The delay arising out of the Quarantine Event

was caused by the Respondent’s own lack of diligence.89 Accordingly, the Respondent

is not entitled to recover any hire paid during the 50 days it elected to have the Vessel

remain idle at Wahanda anchorage.

PART FOUR: CARGO CLAIM

55 The Cargo Claim is brought pursuant to the terms of the ICA. The Parties incorporated

the ICA into the Charterparty90 as a mechanism for apportioning liability arising out of

third party cargo claims. The Respondent contends that pursuant to clause 8(a) of the

ICA the Claimant is liable to indemnify, or otherwise pay damages to, the Respondent

for 100% of the Receiver’s Claim.91 Alternatively, the Respondent claims pursuant to

clause 8(b) of the ICA like relief for 50% of the Receiver’s Claim.92

56 The Claimant argues that it is not liable to indemnify, or otherwise pay damages to, the

Respondent under the Cargo Claim because: (I) the Cargo Claim is time barred; (II) the

87 The Rijn [1981] 2 Lloyd’s Rep 267, 272 (Mustill J). 88 See above Memorandum for the Claimant, [29]–[31]. 89 See above Memorandum for the Claimant, [31]. 90 Moot Problem, 10. 91 Moot Problem, 74. 92 Moot Problem, 74.

16

Cargo Claim cannot be validly apportioned; and, in any event (III) the Claimant’s liability

should be apportioned in the amount of 50%.

I The Cargo Claim is Time Barred

57 Clause 6 of the ICA requires that a party seeking apportionment of a cargo claim must

notify any other contracting party of its claim within 24 months from the date of cargo

delivery (Notification Timeframe).93 The Cargo was discharged and delivered on 30

June 2016.94 The Notification Timeframe expired on 30 June 2018. Clause 6 further

provides that a party seeking apportionment shall, if possible, provide any other

contracting party with all relevant details of the contract of carriage.95

58 The Claimant argues that the Cargo Claim is time barred under clause 6 of the ICA

because: (A) the Parties did not extend the Notification Timeframe; and (B) the

Respondent failed to comply with the substantive requirement of clause 6 within time.

The Parties did not extend the Notification Timeframe

59 The Parties agree that the Respondent informed the Claimant of the existence of the Cargo

Claim on 7 July 2016.96 However, on 7 July 2016, the Respondent failed to provide the

required details of the contract of carriage and the Claimant did not extend the time for

complying with that requirement.

60 The Notification Timeframe applies with respect to notification of the relevant claim for

apportionment;97 a party making a claim for apportionment then has six years to

commence proceedings.98 The Notification Timeframe applies even if a charterparty

93 ICA, clause 6. 94 Moot Problem, 68. 95 ICA, clause 6. 96 Procedural Order No. 2, [15]; Moot Problem, 45. 97 The Genius Star 1 [2012] 1 Lloyd’s Rep 222, 226 [19] (Teare J); Terence Coghlin, Andrew Baker, Julian Kenny,

and John Kimball, Time Charters (Informa Law, 6th ed, 2008) 353, 373 [20.71]. 98 Terence Coghlin, Andrew Baker, Julian Kenny, and John Kimball, Time Charters (Informa Law, 6th ed, 2008)

353, 373 [20.71]; The Genius Star 1 [2012] 1 Lloyd’s Rep 222, 226 [19] (Teare J); Limitation Act 1980 (UK) s 5.

17

incorporates the Hague-Visby Rules time bar.99 A failure to comply with the Notification

Timeframe irrevocably waives, and absolutely bars, any claim for apportionment under

the ICA.100

61 The Parties proceeded on the mistaken belief that the Respondent was subject to a one

year time bar to commence proceedings, as exists under the Hague-Visby Rules. On 23

May 2017, the Respondent first requested an extension for the purpose of commencing

proceedings.101 This extension was requested immediately prior to the expiry of one year

since the delivery of the Cargo. All subsequent requests were similarly formulated as

extensions for the time in which to commence substantive proceedings.102 None of the

Respondent’s extension requests so much as mentioned the Notification Timeframe. As

such, the Claimant did not grant extensions for the Notification Timeframe.

The Respondent failed to comply with the substantive requirement of clause 6

within time

62 The word ‘shall’ in clause 6 imports an obligation to provide the required details in all

circumstances where it is factually possible to do so.103 If a party fails to provide such

details within 24 months its claim for apportionment is barred.104

63 The Respondent was required to provide the available details of the contract of carriage

within the Notification Timeframe, which elapsed on 30 June 2018. The draft booking

note and bill of lading are relevant details of the contract of carriage.105 The draft booking

99 The Genius Star 1 [2012] 1 Lloyd’s Rep 222, 228 [37] (Teare J); The Strathnewton [1983] 1 Lloyd’s Rep 219,

225 (Kerr LJ); ICA, clause 2. 100 ICA, clause 6. 101 Moot Problem, 58. 102 Moot Problem, 57, 58. 103 London Arbitration 16/02 (2002) 600 LMLN 2, 2–3; Bariş Soyer and Andrew Tettenborn, Charterparties: Law,

Practice and Emerging Legal Issues (Informa Law, 2018) 103, 123–124 [7.11]; The Varenna [1983] 2 Lloyd’s

Rep 592, 596 (Oliver LJ); Arnold v Britton [2015] AC 1610, 1628 [17] (Lord Neuberger). 104 ICA, clause 6; London Arbitration 16/02 (2002) 600 LMLN 2, 2–3; Bariş Soyer and Andrew Tettenborn,

Charterparties: Law, Practice and Emerging Legal Issues (Informa Law, 2018) 103, 123–124 [7.11]; The Varenna

[1983] 2 Lloyd’s Rep 592, 596 (Oliver LJ); Arnold v Britton [2015] AC 1610, 1628 [17] (Lord Neuberger). 105 Procedural Order No. 2, [8], [15].

18

note was dated 18 March 2016 and listed the Respondent as the sole contractual carrier.106

Accordingly, all relevant details were available to the Respondent prior to the expiry of

the Notification Timeframe. It was factually possible for the Respondent to provide the

Claimant these relevant details and, to that end, the Respondent was required to do so

within time.

64 The Respondent accepts that the draft booking note and bill of lading were not provided

to the Claimant until the matter was referred to arbitration.107 On 17 December 2018, the

Respondent’s Submissions containing these details were served on the Claimant.108

Accordingly, the Respondent failed to provide the relevant details by 30 June 2018, and

the Cargo Claim is irrevocably waived, and absolutely barred, from being apportioned.

II The Cargo Claim cannot be Validly Apportioned

65 The Claimant contends that the Respondent has not satisfied a condition precedent to the

valid apportionment of liability under the ICA. The Respondent cannot have its claim

apportioned and has not accrued a right to any form of relief from this Tribunal.

66 Clause 4(c) of the ICA provides that apportionment shall only occur after the relevant

substantive cargo claim has been settled or compromised and paid to the relevant third

party cargo interests.109 Clause 4(c) is a condition precedent to the apportionment of any

claim under the ICA.110 The award of an indemnity is an act of apportionment which

cannot occur unless the condition precedent has been satisfied.111

106 Moot Problem, 47. 107 Procedural Order No. 2, 2 [15]. 108 See generally, Moot Problem, 74; Procedural Order No. 2, [15]. 109 ICA, clause 4(c). 110 UK P&I Club Circular, 9/11 (August 2011), 2. 111 The Genius Star 1 [2012] 1 Lloyd’s Rep 222, 224 [5] (Teare J); Terrence Coghlin, Andrew Baker, Julian Kenny,

and John Kimball, Time Charters (Informa Law, 6th ed, 2008) [20.68]; Steven Hazelwood and David Semark, P&I

Clubs Law and Practice (2010, 4th ed), 273 [15.61]–[15.64].

19

67 The third party claim must actually be paid; the mere ascertainment of a claim cannot

satisfy the condition precedent.112 The purpose of the condition precedent is to prevent

litigation prior to the accrual of actual liability.113

68 The ICA was drafted by the major international P&I Clubs for the historical purpose of

facilitating the settlement of cargo claims between Clubs.114 The United Kingdom P&I

Club authoritatively construed clause 4(c) as follows:115

The Group has taken the view, which counsel has confirmed, that [clause 4(c)] makes payment of a

cargo claim (as defined under clause (3) of the 1996 Agreement) a condition precedent to a right to

an indemnity. Accordingly in the absence of payment, no accrued cause of action crystallises and

there is therefore no right, prior to payment, for the party sued in respect of a cargo claim to require

that the other party to the charterparty, provide security which could be sought, by for example,

arresting or threatening to arrest a vessel or other property.

69 The Receivers have commenced a claim against the Respondent.116 The quantum of the

Receiver’s Claim has also been agreed.117 These facts do not establish that the Receiver’s

Claim has actually been paid. In fact, because the Receiver’s Claim is still underway, it

is apparent that the claim has not been paid. Absent the payment of the Receiver’s Claim

the Respondent cannot seek apportionment of the Cargo Claim and has accrued no right

to indemnification or damages.

112 Terrence Coghlin, Andrew Baker, Julian Kenny, and John Kimball, Time Charters (Informa Law, 6th ed, 2008)

[20.68]; Steven Hazelwood, P&I Clubs Law and Practice (2010, 4th ed), 273 [15.61]–[15.64]; London Arbitration

10/15 (2015) 929 LMLN 3, 3; London Arbitration 30/16 (2016) 967 LMLN 3, 3–4; Wajilam Exports (Singapore)

Pte Ltd v Transpacific Eternity SA (2003) 610 LMLN 3, 3–4 (Pillay J); Sonito Shipping Co Ltd v Sun United

Maritime Ltd (The Lazos) (2007) 722 LMLN 2, 2–3 (Haight J); Primegates Maritime Company Limited v Cargo

Explorer (1995) D & CLD 617; The Genius Star 1 [2012] 1 Lloyd’s Rep 222, 224 [5] (Teare J). 113 See generally The Strathnewton [1983] 1 Lloyd’s Rep 219, 223 (Kerr LJ). 114 Transgrain Shipping (Singapore) PTE Ltd v Yangtze Navigation (Hong Kong) [2018] 1 Lloyd’s Rep 330, 332

[10]–[11] (Longmore LJ); The Strathnewton [1983] 1 Lloyd’s Rep 219, 223 (Kerr LJ); The Benlawers [1989] 2

Lloyd’s Rep 51, 60 (Hobhouse J). 115 UK P&I Club Circular, 9/11 (August 2011), 2. 116 Procedural Order No. 2, [10]. 117 Procedural Order No. 2, [11].

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III The Claimant’s Liability should be Apportioned in the Amount of 50%

70 If the Cargo Claim is not time barred, and is validly apportionable, the Claimant’s liability

should only be apportioned in the amount of 50% because: (A) the Cargo Claim does not

arise out of unseaworthiness; and (B) the Cargo Claim only arises out of stowage or

storage of the Cargo.

The Cargo Claim does not arise out of unseaworthiness

71 Clause 8(a) of the ICA relevantly provides that cargo claims shall be apportioned 100%

to the vessel owner where the claim factually arises out of unseaworthiness.118

72 There is insufficient evidence to establish that the Cargo Claim factually arose out of

unseaworthiness. The Claimant argues that: (i) the available evidence cannot establish

that the crew were incompetent; and (ii) the Vessel was in all respects cargoworthy.

(i) The available evidence cannot establish that the crew were incompetent

73 The burden of proving unseaworthiness is upon the partying alleging unseaworthiness.119

A vessel is unseaworthy if it does not sail with a competent crew.120 However, there is a

distinction between incompetence and negligence, as only incompetence will meet the

threshold of unseaworthiness.121 One or more negligent mistakes by a crew member will

not necessarily demonstrate incompetence.122 Incompetence must be evidenced by a

disabling want of skill or knowledge.123 The relevant test is whether, prior to the

commencement of the voyage, a prudent shipowner would have allowed the vessel to sail

with its particular crew.124

118 ICA, clause 8(a). 119 The Tatjana [1911] AC 191, 203–204 (Lord Shaw); Watson v Clark (1813) 1 Dow 336, 344 (Redesdale LJ),

348 (Eldon LJ); Ajum Goolam Hossen & Co v Union Marine Insurance Company Ltd [1901] AC 362, 366 (Lord

Lindley). 120 Clifford v Hunter (1827) M & M 103, 104 (Lord Tenterden); The Hongkong Fir [1961] 1 Lloyd’s Rep 159, 168

(Salmon J). 121 The Eurasian Dream [2002] 1 Lloyd’s Rep 719, 737 (Cresswell J). 122 The Star Sea [1997] 1 Lloyd’s Rep 360, 374 (Leggatt LJ); The Isla Fernandina [2000] 2 Lloyd’s Rep 15, 33

(Langley J). 123 Eurasian Dream [2002] 1 Lloyd’s Rep 719, 736 (Cresswell J). 124 Rio Tinto Company Ltd v The Seed Shipping Company Ltd [1926] 24 Lloyd’s Rep 316, 318 (Roche J); The Isla

Fernandina [2000] 2 Lloyd’s Rep 15, 33 (Langley J); The Eurasian Dream [2002] 1 Lloyd’s Rep 719, 737

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74 In this case, when readying the Vessel to sail, a crew member erroneously pumped

seawater into Cargo Hold No. 2 instead of the ballast tanks.125 The crew member’s error

was limited to storing ballast in an incorrect location.126 However, the Vessel’s cargo

holds were floodable and ordinarily capable of storing ballast.127 Further, the amount of

ballast taken on was appropriate,128 and the Vessel sailed safely to Wahanda.129 This

demonstrates that the crew member’s error did not affect the safety of the Vessel. The

available evidence in fact demonstrates that the crew member’s error was a single

negligent act, and is not indicative of a disabling lack of skill or knowledge.

75 The erroneous ballasting and damage to cargo was not discovered until 26 June 2016

when the relevant cargo hatch was opened.130 This does not support a finding of

incompetence. It is not unusual for a vessel carrying dry bulk cargo to have its hatch

covers remain sealed once loading is completed until the vessel arrives at the discharge

port.131 The fact that the cargo damage was not discovered until discharge has no bearing

on the crew’s competence.

76 In all of the circumstances, the Respondent has failed to discharge its evidentiary burden

to establish that the Vessel was unseaworthy. Therefore, the damage to the Cargo did not

arise from unseaworthiness for the purposes of clause 8(a) of the ICA.

(ii) The Vessel was in all respects cargoworthy

77 The Claimant argues that the Vessel was fit for the purpose of carrying the intended cargo

of bulk harmless goods from West Coast to Wahanda range.

(Cresswell J); F C Bradley & Sons Ltd v Federal Steam Navigation Company Ltd (1926) 24 Ll L Rep 446, 454

(Scrutton LJ); T G Carver, A Treatise on the Law relating to the Carriage of Goods by Sea (Stevens & Sons, Lim,

3rd ed, 1900). 125 Moot Problem, 46; Procedural Order No. 2, [11]. 126 See generally Moot Problem, 12, 46. 127 See generally Moot Problem, 2–3, 12–13, 46. 128 Moot Problem, 46. 129 Moot Problem, 25. 130 Moot Problem, 38. 131 See generally Moot Problem, 4, 14; Eric Murdoch (ed), Master’s Guide to Hatch Cover Maintenance (Witherby

Seamanship International Ltd, 2002), 5; IMSBC Code (as amended 11 June 2015).

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78 A vessel will be uncargoworthy, and therefore unseaworthy, when it is not fit to receive

and safely carry the contemplated cargo for the relevant voyage.132 Errors in the stowage

of cargo which affect only the integrity of the cargo, and not the safety of the vessel, will

not render a vessel unseaworthy.133

79 The Vessel sailed from West Coast to Wahanda port in a timely manner.134 There is no

evidence of structural concerns or other inherent physical defects affecting the Vessel. In

fact, the Vessel’s ballast system was found to be standard and in working order.135 The

Vessel was ordinarily fully capable of safely storing and carrying the Cargo.136 The

Vessel was cargoworthy, and therefore seaworthy, because it was fit for the voyage that

it was chartered to undertake.

The Cargo Claim only arises out of stowage or storage of the Cargo

80 The Claimant argues that the cargo damage factually arose out of an error in storing or

stowing the Cargo, not navigating or managing the Vessel.

81 Under ICA clause 8(a) the vessel’s owner is 100% liable for claims arising out of errors

in navigation or management of the vessel.137 ICA clause 8(b) provides that claims

arising out of loading, stowage, discharge, storage or other handling of cargo shall be

apportioned ‘50% Charterers 50% Owners’.138 This only applies where the words ‘and

responsibility’ are included in the cargo handling clause,139 as the Parties have done in

this Charterparty.140

132 The Benlawers [1989] 2 Lloyd’s Rep 51, 59 (Hobhouse J); Reed & Co Ltd v Page Son & East (1927) 27 Ll L

Rep 114, 119 (Lord Hewart). 133 Elder, Dempster & Co Ltd v Paterson, Zochonis & Co Ltd [1924] AC 522, 561–562 (Lord Bankes); The

Visurgis [1999] 1 Lloyd’s Rep 218, 223–224 (Gatehouse J); Bond Connolly & Co v Federal Steam Navigation Co

Ltd (1905) 21 TLR 438, 440 (Channell J); The Aconcagua [2010] 1 Lloyd’s Rep 1, 52 [360] (Clarke J); The

Kapitan Sakharov [2000] 2 Lloyd’s Rep 255. 134 Moot Problem, 66. 135 Moot Problem, 46. 136 See generally Moot Problem, 2–4, 46. 137 ICA, clause 8(a). 138 ICA, clause 8(b). 139 ICA, clause 8(b). 140 Moot Problem, 5.

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82 The cargo damage did not arise out of any error in the navigation of the Vessel.

Navigation of the vessel refers to matters of seamanship,141 encompassing the course of

the voyage, sailing directions, and nautical route.142 The factual cause of the damage to

Cargo is, in no way, linked to navigation of the Vessel.

83 An error in the management of the vessel arises from doing something necessary for the

safety of the vessel itself.143 An error in the use of equipment primarily in connection

with the care of cargo is not an error in the management of the vessel.144 The equipment’s

primary use is immaterial if, at the time cargo damage occurs, the equipment is being

used for the specific purpose of caring for the cargo.145 Errors in the stowage of cargo

which only affect the integrity of the cargo, and not the vessel’s safety, do not constitute

an error in management of the vessel.146

84 The cargo damage was caused by a crew member erroneously opening incorrect valves

during the ballasting operation at the port of loading, causing seawater to enter Cargo

Hold No. 2, rather than the ballast tanks.147 The Vessel’s ballast system was found to be

in ordinary working order.148 The Vessel’s cargo holds are floodable, meaning that they

141 The Hill Harmony [2001] 1 Lloyd’s Rep 147, 159–160 (Lord Hobhouse); The Erechthion [1987] 2 Lloyd’s Rep

180, 185 (Staughton J). 142 The Hill Harmony [2001] 1 Lloyd’s Rep 147, 151 (Lord Bingham); Carmichael & Co v Liverpool Sailing Ship

Owners’ Mutual Indemnity Association (1887) 19 QBD 242; Canada Shipping Co v British Shipowners’ Mutual

Protection Association (1889) 23 QBD 342; The Ramon de Larrinaga (1945) 78 Ll L Rep 167; The Renée Hyaffil

(1916) 32 TLR 660, 660 (Eady LJ); Owners of the Steamship “Lord” v Newsum Sons & Co Ltd (1920) 2 Ll L Rep

276, 279 (Bailhache J). 143 Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1927) 29 Ll L Rep 190, 192 (Scrutton LJ),

198 (Greer LJ); Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1928) 32 Ll L Rep 91, 94

(Hailsham LC), 96 (Lord Sumner). 144 Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1927) 29 Ll L Rep 190, 198 (Greer LJ); The

Glenochil [1896] P 10, 19 (Barnes J); Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1928) 32

Ll L Rep 91, 94 (Hailsham LC), 96 (Lord Sumner); The Washington [1976] 2 Lloyd’s Rep 453, 460 (Heald J);

The Athelvictor (1945) 78 Ll L Rep 529, 538–539 (Pilcher J); International Packers London Ltd v Ocean SS Co

Ltd [1955] 2 Lloyd’s Rep 218, 234 (McNair J). 145 The Glenochil [1896] P 10, 18 (Barnes J); Hourani v T & J Harrison (1927) 28 Lloyd’s Rep 120, 123

(Bankes LJ); The Iron Gippsland [1994] 1 Lloyd’s Rep 335, 358 (Carruthers J); The Eternity [2009] 1 Lloyd’s

Rep 107, 114 [24]–[28] (Steel J); Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1927) 29 Ll

L Rep 190, 196–200 (Greer LJ). 146 Elder, Dempster & Co Ltd v Paterson, Zochonis & Co Ltd [1924] AC 522, 561–562 (Lord Bankes); The

Visurgis [1999] 1 Lloyd’s Rep 218, 223–224 (Gatehouse J); Bond Connolly & Co v Federal Steam Navigation Co

Ltd (1905) 21 TLR 438, 440 (Channell J); The Aconcagua [2010] 1 Lloyd’s Rep 1, 52 [360] (Clarke J); The

Kapitan Sakharov [2000] 2 Lloyd’s Rep 255. 147 Moot Problem, 46. 148 Moot Problem, 46.

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are ordinarily capable of storing ballast.149 Notwithstanding the crew member’s error, the

correct amount of ballast was taken on and the Vessel safely completed its voyage.150

85 A ballast pump is ordinarily used to ensure the safety of the vessel. The Vessel’s ballast

system has non-return valves which can be used to elect where ballast is stored.151 The

purpose of having non-return valves in this particular system is to enable the safe storage

of cargo by allowing ballast to only be pumped into empty cargo holds.152 The crew

member’s error was solely in opening the wrong valves resulting in ballast being stored

in the wrong location. Notwithstanding the crew member’s error, the immediate purpose

that the ballast system was being used for was ensuring that the Cargo was not damaged

by ballast being pumped into Cargo Hold No. 2.

86 The crew member’s error was not an error in the management of the Vessel because the

Vessel’s safety is maintained so long as the appropriate amount of ballast is taken on and

stored in a location ordinarily capable of holding ballast. The error was not connected

with the ballast system’s primary purpose of ensuring the Vessel’s safety, rather it was

solely a mistake affecting the integrity of the Cargo. Further, because the error had no

effect on the safety of the Vessel, the Vessel was not unseaworthy by reason of an error

in stowage of the Cargo.

87 In these circumstances, the crew’s operation of the ballast system failed to ensure the safe

stowage and storage of the Cargo. Accordingly, the damage to Cargo was factually

caused by an error in its stowage or storage, rather than an error in the management of the

Vessel. Therefore, under clause 8(b) of the ICA, the Claimant is only liable to indemnify

or otherwise pay damages to the Respondent for 50% of the Cargo Claim.

149 See generally Moot Problem, 12, 46. 150 Moot Problem, 46. 151 Moot Problem, 46. 152 Chris Spencer and Nic Paines, Bulk Cargoes – Hold Preparation and Cleaning (Charles Taylor & Co Ltd,

2011), 15.

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PART FIVE: PRAYER FOR RELIEF

For the reasons set out above, the Claimant respectfully requests this Tribunal to:

FIND that the Respondent is liable for breaches of contract under the Charterparty;

AWARD damages to the Claimant and interest on the amounts claimed;

FIND that the Vessel was not off-hire at any time during the charter period; and

DECLARE that this Tribunal cannot apportion the Cargo Claim, or that the Claimant’s liability

must be limited to 50% of that claim.