International Maritime Law Arbitration Moot
2017
In the matter of arbitration under
the International Arbitration Act (CAP 143A, Rev Ed 2002)
and the Singapore Chamber of Maritime Arbitration Rules
MASTER PROGRAM IN ARBITRATION AND INTERNATIONAL BUSINESS LAW
UNIVERSITY OF VERSAILLES – PARIS SACLAY
STATEMENT OF RESPONDENT’S CASE
COUNSEL – TEAM NUMBER 19
Arleen Gonzalez Charlotte Hauchard Vérane Pasi
Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa
BETWEEN
INFERNO RESOURCES SDN BHD
Suite No. 2, Level 3
South Wing, Pasar Borong Pandan
81100 Johor Bahru
MALAYSIA
&
FURNACE TRADING PTE LTD
2 Marina Boulevard #19-05 Singapore 0189990
SINGAPORE
(RESPONDENT) (CLAIMANT)
&
IDONCARE BERJAYA UTAMA PTY. LTD.
30 Pacific Street #02-04
Newcastle 2300
NEW SOUTH WALES, AUSTRALIA
(RESPONDENT 2, OR SHIPPER)
Team 19 Statement of Respondent’s Case
i
TABLE OF CONTENTS
Table of Contents ........................................................................................................................ i
Index of Abbreviations ............................................................................................................ iii
Index of Scholars ....................................................................................................................... v
Index of Case Law ................................................................................................................. viii
Index of Legal Sources ............................................................................................................. xi
Introduction ................................................................................................................................ 1
I. Arguments on Jurisdiction ...................................................................................................... 4
A. The Arbitral Tribunal has jurisdiction over the present dispute ................................... 4
B. The Arbitral Tribunal is not empowered to order interim relief ................................... 5
C. Finally, the Arbitral Tribunal should not grant an interim order allowing Claimant to
sell the Cargo ..................................................................................................................... 7
1. The Claimant has no prima facie case on the merits .................................................. 7
2. There is no urgent need for interim relief .................................................................. 8
3. The Claimant will not suffer any irreparable harm if the interim relief is not granted
by this Tribunal ....................................................................................................... 10
II. Arguments on the Merits ..................................................................................................... 11
D. Preliminary Issue: The applicable Law to the Dispute ............................................... 11
E. The Respondent did not breach the Voyage Charterparty........................................... 11
1. The congestion at Chinese ports made it impossible to nominate them as valid
discharge port .......................................................................................................... 12
2. By refusing the two alternative valid discharge ports nominated by the Respondent,
the Claimant breached its obligation to respect a nomination that is irrevocable ... 14
a. The Respondent reasonably nominated a safe discharge port in South Korea that
was refused by the Claimant .................................................................................... 14
i. Busan is a valid discharge port ......................................................................... 15
ii. Busan was arbitrarily refused by the Claimant as a discharge port ................. 16
b. The Claimant wrongfully terminated the contract even though the Respondent has
just suggested a discharge port valid under the contract.......................................... 19
F. The Claimant is not entitled to the liens over the Cargo and the Sub-Freight............. 20
1. The Claimant’s lien over the Cargo is unlawful ...................................................... 20
a. The Respondent is not the owner of the Cargo .................................................... 21
Team 19 Statement of Respondent’s Case
ii
b. The Claimant has not complied with its obligation under article 87 of the
Chinese Maritime Law ......................................................................................... 22
2. Singaporean law does not acknowledge lien on the Sub-Freight ............................ 23
Request for Relief .................................................................................................................... 25
Team 19 Statement of Respondent’s Case
iii
INDEX OF ABBREVIATIONS
& And
§/§§ Paragraph/Paragraphs
Agreement Development and Sales Agreement of 1
August 2010
Arbitral Tribunal/Tribunal
Panel consisting of the arbitrators
nominated in accordance with the SCMA
Rules
Art. Article/Articles
CLAIMANT
Furnace Trading Pte Ltd, a company
organised and existing under the laws of
Singapore
E.g. Exempli gratia; for example
Ed. Editor/Editors/Edition
Etc. Et cetera, “and so on”
Fn. Footnote
Ibid. Ibidem, in the same place
ICC International Chamber of Commerce
Lex arbitri The procedural law of the seat of arbitration
Ltd. Limited liability company
Model Law
UNCITRAL Model Law on International
Commercial Arbitration of 1985 with the
2006 amendments
Mr Mister
Ms Miss
Team 19 Statement of Respondent’s Case
iv
No. / Ns. Number / Numbers
NY Convention
New York Convention of 1958 on the
Recognition and Enforcement of Foreign
Arbitral Awards
p./pp. page/pages
PO1 Procedural Order Number 1
PO2 Procedural Order Number 2
PO3 Procedural Order Number 3
RESPONDENT Inferno Resources Sdn Bhd
RESPONDENT 2 Idoncare Berjaya Utama PTY. LTD
SCMA Singapore Center of Maritime Arbitration
Shipper Idoncare Berjaya Utama PTY. LTD
Statement Statement of Respondent’s Claims
UNCITRAL United Nations Commission on
International Trade Law
UNCITRAL Rules Arbitration Rules of United Nations
Commission on International Trade Law
USD United States Dollars
v. Versus; against
Team 19 Statement of Respondent’s Case
v
INDEX OF SCHOLARS
BORN, Gary B.
International Arbitration: Law and
Practice
Kluwer Law International
2nd Ed., 2015
Referred to in: §20, fn.
25; §29, fn. 31; §31, fn.
33-34; §44, fn. 51, of
the Statement
[cited as: BORN]
FURMSTON, Olivia
MARHINGER, Silvia
Liens on cargo
The Standard
2015
Available at:
http://www.standard-
club.com/media/1665027/defence-
class-cover-liens-on-cargo.pdf
Referred to in: §46, fn.
52, of the Statement
[cited as: FURMSTON &
MARHINGER CARGO]
FURMSTON, Olivia
MARHINGER, Silvia
Liens on Sub-Freight
The Standard
2015
Available at:
http://www.standard-
club.com/media/1774240/defence-
class-cover-liens-on-Sub-Freight.pdf
Referred to in: §46, fn.
52, of the Statement
[cited as: FURMSTON &
MARHINGER SUB-
FREIGHT]
KNIGHT, Stevie Seeing through the fog
www.portstrategy.com
03 February 2017
Available at:
http://www.portstrategy.com/news10
1/world/asia/seeing-through-the-fog
Referred to in: §64, fn.
77, of the Statement
[cited as: KNIGHT]
LEW, Julian M. Commentary on Interim and
Conservatory Measures in ICC
Arbitration Cases, 11(1)
Referred to in: §41, fn.
47, of the Statement
[cited as: LEW]
Team 19 Statement of Respondent’s Case
vi
ICC Ct. Bull. 23, 28
2000
RODRIGO, Ravindu
Liens on Cargo in a Nutshell,
2015
Available at : https://www.linkedin.com/pulse/liens
-cargo-nutshell-ravindu-rodrigo
Referred to in: §85, fn.
95, of the Statement
[cited as: RODRIGO]
SAVOLA, Mika Interim Measures and Emergency
Arbitration proceedings.
Presentation at the 23rd Croatian
Arbitration Days : Access to Arbitral
Justice (Part IV)
2015
Available at:
http://arbitration.fi/wp-
content/uploads/sites/22/2016/04/23-
cad-savola-interim-measures-and-
emergency-arbitrator-
proceedings.pdf
Referred to in: §21, fn.
26, of the Statement
[cited as: SAVOLA]
SCHWARTZ, Eric A. The Practices and Experience of the
ICC Court in Conservatory and
Provisional Measures in
International Arbitration
45, 60 publication No.°519, 1993
Referred to in: §34, fn.
39, of the Statement
[cited as: SCHWARTZ]
TEO, Paul
LEACH, Jonathan
The International Comparative Legal
Guide to International arbitration
2016
Available at:
https://iclg.com/practice-
areas/international-arbitration-
/international-arbitration-2016
Referred to in: §23, fn.
27, of the Statement
cited as: TEO &
LEACH]
Team 19 Statement of Respondent’s Case
vii
WALLIS, Keith
GLOYSTEIN, Henning
As the smog lifts, China's ports
grapple with huge traffic jam of
ships
Thomson Reuters
Singapore
12 January 2017
Available at:
http://www.reuters.com/article/us-
shipping-china-congestion-
idUSKBN14W36R
Referred to in: §49, fn.
55; §64, fn. 77, of the
Statement
[cited as: WALLIS &
GLOYSTEIN]
WILSON, John F.
Carriage of Goods by Sea
Pearson Ed.
7th Ed., 2010
Referred to in: §78, fn.
89, of the Statement
[cited as: WILSON]
Team 19 Statement of Respondent’s Case
viii
INDEX OF CASE LAW
AWARDS ICSID Tokios Tokeles v. Ukraine, [2004]
Available at:
http://www.italaw.com/sites/default/files/
case-documents/ita0669.pdf
Referred to in: §43, fn.
49, of the Statement
[cited as: Tokios Tokeles
v. Ukraine]
Plama Consortium Ltd v. Repub. of
Bulgaria, [2005]
Available at:
http://www.italaw.com/sites/default/files/
case-documents/ita0669.pdf
Referred to in: §43, fn.
50, of the Statement
[cited as: Plama
Consortium Ltd v.
Repub. of Bulgaria]
AWARDS ICC Partial Award in ICC Case No. 8113,
11(1)
ICC Ct. Bull. 65 [2000]
Referred to in: §29, fn.
32, of the Statement
[cited as: Partial Award
in ICC Case No. 8113]
Interim Award in ICC Case No. 8894,
11(1)
ICC Ct. Bull. 94 [2000]
Referred to in: §42, fn.
48, of the Statement
[cited as: ICC Case No.
8894]
Interim Award in ICC Case No. 8786,
11(1)
ICC Ct.Bull.81, 83- 84 [2000]
Referred to in: §42, fn.
48, of the Statement
[cited as: Interim
Award in ICC Case No.
8786]
IRAN Islamic Repub. of Iran v. U.S.A.,
Decision No. DEC 116-A 15(IV) & A24-
FT of 18 May 1993, 29 Iran-US C.T.R.
214 [1993]
Referred to in: §42, fn.
48, of the Statement
[cited as: Iran v. USA]
Team 19 Statement of Respondent’s Case
ix
SINGAPORE Five Ocean Corporation v. Cingler Ship
Pte Ltd (PT Commodities & Energy
Resources, intervener) [2015] SGHC 311
Available at:
http://www.uncitral.org/docs/clout/SGP/S
GP_041215_FT.pdf
Referred to in: §39, fn.
46, of the Statement
[cited as: Five Ocean v.
Cingler]
CAA Technologies Pte Ltd v Newcon
Builders Pte Ltd [2016] SGHC 246
Available at:
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/case-law/free-law/high-
court-judgments/22615-caa-technologies-
pte-ltd-v-newcon-builders-pte-ltd
Referred to in: §63, fn.
69, of the Statement
[cited as: CAA
Technologies]
UNITED KINGDOM Anglo-Danubian Transport Co. v.
Ministry of Food, [1949] 83
Available at:
https://www.i-
law.com/ilaw/doc/view.htm?id=143726
Referred to in: §61, fn.
66, of the Statement
[cited as: Anglo-
Danubian Transport
Co. v. Ministry of
Food]
The Mihalios Xilas [1978] 2 Lloyd’s Rep
186, 191-192
Available at:
https://www.i-
law.com/ilaw/doc/view.htm?id=148593
Referred to in: §79, fn.
92, of the Statement
[cited as: The Mihalios
Xilas]
Bulk Shipping A.G. v. Ipco Trading S.A.
[1992] 1 Lloyd's Rep. 39
Queen’s Bench Division
Available at:
https://www.i-
law.com/ilaw/doc/view.htm?id=149741
Referred to in: §61, fn.
66, of the Statement
[cited as: The Jasmine
B]
Team 19 Statement of Respondent’s Case
x
SABIC UK Petrochemicals Ltd v Punj
Lloyd Ltd [2013]
Available at:
https://uk.practicallaw.thomsonreuters.com/D
-023-
2911?__lrTS=20170418232316527&transitio
nType=Default&contextData=(sc.Default)&f
irstPage=true&bhcp=1
Referred to in: §63, fn.
68, of the Statement
[cited as: SABIC]
Venizelos A.N.E of Athens v Societe
Commerciale De Cereales Et Financiere S.A
of Zurich [1974] 1 Lloyd’s Rep
Available at:
https://www.i-
law.com/ilaw/doc/view.htm?id=147203
Referred to in: §61, fn.
66, of the Statement
[cited as: The
Prometheus]
Team 19 Statement of Respondent’s Case
xi
INDEX OF LEGAL SOURCES
The New York Convention on
Recognition and Enforcement of
Foreign Arbitral Awards of 1958
- http://www.newyorkconvention.org/engli
sh
UNCITRAL Model Law - http://www.uncitral.org/pdf/english/texts/
arbitration/ml-arb/07-86998_Ebook.pdf
Singapore International Arbitration
Act (Chapter 143A) -
http://siac.org.sg/images/stories/articles/r
ules/IAA/IAA%20Aug2016.pdf
The Commercial Law of Singapore,
Chapter 8 on the Law of Contract -
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-8
The Commercial Law of Singapore,
Chapter 25 on Shipping Law -
http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-25
Singapore Merchant Shipping Act
(Chapter 179) -
http://statutes.agc.gov.sg/aol/search/displ
ay/view.w3p;page=0;query=DocId%3A
%22977a0eb4-e902-420e-abbd-
6b95a7d270b1%22%20Status%3Ainforc
e%20Depth%3A0;rec=0
Team 19 Statement of Respondent’s Case
1
INTRODUCTION
1. This memorandum is submitted on behalf of Inferno Resources Sdn Bhd (hereinafter
the “Respondent”), a company organised and existing under the laws of Malaysia, and in
accordance with Rules 8.1 and 9 of the Singapore Chamber of Maritime Arbitration Rules of
2015 (the “SCMA Rules”).
2. Furnace Trading Pte Ltd (hereinafter the “CLAIMANT”) entered into a TIME CHARTERPARTY
with Imlam Consignorist G.m.b.H (hereinafter the “LEGAL OWNER”) of M. V. Tardy Tessa
(hereinafter the “VESSEL”), on 15 February 2016 (hereinafter the “TIME CHARTERPARTY”).1
3. On 1 September 2016, during an exchange of e-mails, the contents of a VOYAGE
CHARTERPARTY based on a proforma BIMCO Orevoy Charterparty (hereinafter the “VOYAGE
CHARTERPARTY”) were confirmed between the CLAIMANT, now disponent owner of the
VESSEL, and the RESPONDENT (together referred to as the “PARTIES”).2
4. One month later, on 1 October 2016, a Notice of Readiness was tendered by Mr. Tan Xiao
Ming (hereinafter the “MASTER” of the VESSEL) to Idoncare Berjaya Utama PTY. LTD.
(hereinafter the “RESPONDENT 2”, or, simply, the “SHIPPER”), informing that the VESSEL
arrived at Kooragang Precint, Australia, and that it was ready to load 84,000.052 metric tons
of Australian Steam Coal in Bulk (hereinafter the “CARGO”).3 Following this event, the
MASTER issued and signed the Bill of Lading on 4 October 2016, making express nomination
of the SHIPPER, as well as an express reference to an undated Charterparty.4
1 TIME CHARTERPARTY between the Legal Owner and the Claimant – Case Scenario, pp. 1-19.
2 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, pp. 20-33.
3 Notice of Readiness issued on the 1st of October 2016 – Case Scenario, p. 39.
4 Bill of Lading issued on the 4th of October 2016 – Case Scenario, p. 41.
Team 19 Statement of Respondent’s Case
2
5. As of 11 October 2016, the CLAIMANT informed it had not received the freight due and payable
on 9 October 2016, inviting the RESPONDENT to comply with its payment obligation under the
VOYAGE CHARTERPARTY. The CLAIMANT also requested the RESPONDENT to nominate a
discharging port before the VESSEL would pass Singapore.5
6. On 15 October 2016, the RESPONDENT informed the CLAIMANT that it was unable to nominate
the discharging port as their sub-charterer had yet to pay freight. The CLAIMANT failed to
consider this reasoning and unilaterally decided to possibly declare the failure to nominate the
discharge port to be a breach of the VOYAGE CHARTERPARTY.6
7. On 16 October 2016, the MASTER of the VESSEL informed the RESPONDENT that the VESSEL
was being kept adrift off the port of Singapore, without any precise instructions or directions.7
The RESPONDENT therefore nominated the port of Busan, South Korea, in view of the heavy
congestion at Chinese ports, and the inability of naming a Chinese port as the SHIPPER also
failed to give any instructions as regards to the discharging port. Nonetheless, the CLAIMANT
once again categorically refused to accept the nomination of Busan, against reasonability and
feasibility.8
8. On the same date, the RESPONDENT repeated its request for disport at Busan, and the CLAIMANT
refused such nomination on the following day, 17 October 2016.9 The CLAIMANT expressly
opposed to Busan as the discharging port, since the region was allegedly under zombie attacks
at that time.10 The RESPONDENT insisted that the area was safe, expressly informing the
5 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21.
6 E-mail sent on the 15th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 56.
7 E-mail sent on the 16th of October 2016 from Peter Girvin to Gordon Grill – Case Scenario, p. 34.
8 E-mail sent on the 16th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 57.
9 E-mail sent on the 17th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 60.
10 E-mail sent on the 17th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 60.
Team 19 Statement of Respondent’s Case
3
CLAIMANT that the Korean military forces had secured the area, as well as stating that other
vessels had been successfully redirected to Busan.11
9. On 19 October 2016, the RESPONDENT once again informed that it was unable to nominate the
discharge port as it had yet to receive nomination from its sub-charterer, the SHIPPER.12 The
CLAIMANT gave an unreasonable and unlawful notice, establishing a deadline to nominate
disport by 12:00 Local Time on 20 October 2016.13 Due to the short and unfeasible time gave
by the CLAIMANT, the RESPONDENT could only provide a port on 21 October 2016, 13:22 Local
Time, nominating the port of Ningbo, Zhejiang Province in China, for discharge, as well as
indicating it was impossible to provide for payment before the discharge at disport.14
Nonetheless, the previous day, the CLAIMANT decided to brutally terminate the VOYAGE
CHARTERPARTY and informed both the RESPONDENT and the SHIPPER it was exercising a lien
over CARGO and Sub-Freight.15
10. On 22 October 2016, the CLAIMANT sent a Notice of Termination16 of the VOYAGE
CHARTERPARTY to the RESPONDENT, alleging the latter’s renunciation and repudiatory breach
of the VOYAGE CHARTERPARTY in view of the default over payment of freight. The
RESPONDENT sent an answer17 considering the Notice of Termination wrongful, and the
CLAIMANT to be in repudiatory breach of the VOYAGE CHARTERPARTY.
11 E-mail sent on the 17th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 60.
12 E-mail sent on the 19th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62
13 E-mail sent on the 19th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 63.
14 E-mail sent on the 21st of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67
15 E-mails sent on the 20th of October from Gordon Grill to Eric Yan – Case Scenario, pp. 65-66.
16 Notice of Termination issued on the 22nd of October 2016 – Case Scenario, p. 68.
17 E-mail sent on the 22nd of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 69.
Team 19 Statement of Respondent’s Case
4
11. Over one month later, on 25 November 2016, two Notices of Arbitration were filed with the
SCMA by the CLAIMANT, against the SHIPPER and the RESPONDENT, according to clause 29 of
the VOYAGE CHARTERPARTY.18 The Responses to the Notices of Arbitration were filed on the
very next day, denying all claims made by the CLAIMANT.19 The SHIPPER brought a defence
reasoning that freight, if any, would be due only to the RESPONDENT. The SHIPPER and the
RESPONDENT admitted the jurisdiction of the SCMA arbitration with no objections.20
12. On 1 December 2016, the CLAIMANT filed an Urgent Application for Consolidation and Liberty
to sell the CARGO, requesting the Arbitral Tribunal to consolidate the proceedings initiated
against the SHIPPER and the RESPONDENT, and to issue an interim order with respect to the
liberty to sell the CARGO on board pendente lite.21
13. Regarding the consolidation, no particular objections were made, where with respect to the
liberty to sell the CARGO, the SHIPPER declined to make any submissions at the written and oral
hearings22, and the RESPONDENT challenged the interim order sought. On 3 December 2016,
the PARTIES filed a Joint Expert Report signed by a Mr. Caleb Coleman (hereinafter the
“Expert”) .23
I. ARGUMENTS ON JURISDICTION
A. THE ARBITRAL TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE
18 Notices of Arbitration – Case Scenario, pp. 70; 76.
19 Responses to Notices of Arbitration – Case Scenario, pp. 84; 86.
20 Responses to Notices of Arbitration – Case Scenario, pp. 84, 87.
21 Urgent application for consolidation and liberty to sell the cargo – Case Scenario, p. 89.
22 Response CLAIMANT’s urgent application for consolidation and liberty to sell the cargo pendent lite – Case
Scenario, pp. 93; 108, §2(3).
23 Parties’ Joint Expert Report – Case Scenario, pp. 97-102.
Team 19 Statement of Respondent’s Case
5
14. The PARTIES have agreed on an arbitration agreement concluded in clause 29 of the VOYAGE
CHARTERPARTY. Said agreement established that all of their disputes, arising out of or in
connection with the VOYAGE CHARTERPARTY must be solved through arbitration. The PARTIES
made an express choice of the Singapore Law as the applicable law, without defining if such
choice was to be regarded as the lex contractus or the lex arbitri. The PARTIES also chose the
arbitration to be conducted under the SCMA Rules with 3 arbitrators. No objection neither to
the validity of the arbitration agreement, nor the jurisdiction of the Arbitral Tribunal or to the
consolidation of the disputes was made.
15. Under Rule 22.1. of the SCMA Rules, the seat of the Arbitration shall be Singapore whenever
the parties fail to expressly choose a different seat. Clause 29 of the VOYAGE CHARTERPARTY
is silent regarding such location, reason why the seat of this arbitration shall be Singapore.
16. Furthermore, Clause 29 indicates a choice of law that could be regarded as a choice of the
contractual law applicable to the substance of the dispute, as recognized by Rule 21 of the
SCMA Rules, or as a choice of the arbitration law. It must be noted that if not the latter, the
result would be the same, since the SCMA Rules, also under their Rule 22.1, establish that if
the seat of arbitration is Singapore, as it is the case explained above, then Singapore Law and
the International Arbitration Act (Cap 143A), hereinafter “SIAA”, shall apply as the lex arbitri.
B. THE ARBITRAL TRIBUNAL IS NOT EMPOWERED TO ORDER INTERIM RELIEF
17. It is the RESPONDENT’s contention that, in the present case, the Arbitral Tribunal does not have
the power to grant the interim relief requested by the CLAIMANT.24
24 Response to Claimant’s Urgent application for consolidation and liberty to sell the cargo – Case Scenario, p.
95, §2.1.
Team 19 Statement of Respondent’s Case
6
18. In international arbitration, the availability of provisional measures is dealt with by national
arbitration legislation and the parties’ arbitration agreement.25 In the present case, according to
the analysis of the arbitration agreement, the Singapore Law is the lex arbitri.
19. Therefore, it is necessary to apply the SIAA to determine the possibility of granting interim
measures. By virtue of Section 12A of the SIAA, the Arbitral Tribunal has the power to award
interim relief. But the limit it is that an Arbitral Tribunal cannot order interim measures of
protection before it has been properly constituted.26
20. In the present case, on 1 December 2016, at the time of the application for liberty to sell
pendente lite the cargo, the Arbitral Tribunal could not effectively act because the SCMA had
not yet appointed the arbitrators.
21. The SIAA establishes in Section 12A that the Singapore Court can order interim relief in
support of any international arbitration if, and only if, the arbitral tribunal has no power or is
unable for the time being to act effectively.27
22. It is generally understood that arbitral tribunals do not have authority to make orders against
third parties28, and, as it will be further demonstrated in section E, the CLAIMANT is not entitled
to exercise any lien over the CARGO.29 Consequently, the Arbitral Tribunal does not have the
power to order the sale of the CARGO on board because the CARGO is in the hands of a third
party.
25 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 209.
26 SAVOLA, Interim Measures and Emergency Arbitration proceedings. Presentation at the 23rd Croatian
Arbitration Days : Access to Arbitral Justice (Part IV). [2015].
27 TEO & LEACH, The International Comparative Legal Guide to International arbitration [2016].
28 Interim relief in aid of international commercial arbitration. A Critique on the International Arbitration Act.
29 See hereunder, ¶¶48-72
Team 19 Statement of Respondent’s Case
7
23. The CLAIMANT’s urgent application for interim relief should therefore be declared inadmissible
by the Arbitral Tribunal and rejected on such ground.
24. Alternatively, should the Arbitral Tribunal consider it is empowered to grant interim relief, it
will be further contended by the RESPONDENT that the Arbitral Tribunal should not grant
interim relief allowing the CLAIMANT to sell the CARGO.
C. FINALLY, THE ARBITRAL TRIBUNAL SHOULD NOT GRANT AN INTERIM ORDER ALLOWING
CLAIMANT TO SELL THE CARGO
25. If the Arbitral Tribunal were to consider that it has powers to grant interim measures,30 the one
sought by the CLAIMANT shall be dismissed since the claim fails to comply with the legal
requirements needed for such an order.
26. It is necessary to determine what standards the arbitral Tribunal should apply in order to grant
such measures. Three choices are possible for the law governing provisional measures: the law
of the seat of arbitration, the law governing the parties’ underlying agreement or international
standards.
27. The test that arbitral tribunals have to consider when deciding on provisional measures is
defined by sui generis sources of law.31
28. It is widely accepted that the test, as to whether request for provisional measures should be
granted, has three conditions: (1) whether the CLAIMANT has a prima facie case on the merits,
(2) whether there is an urgent need for interim relief; and (3) whether the CLAIMANT will suffer
serious or irreparable harm if the emergency relief is not granted.32
1. The CLAIMANT has no prima facie case on the merits
30 See above, §§17-24.
31 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 2463.
32 ICC Case No. 8113.
Team 19 Statement of Respondent’s Case
8
29. In order to make rational and business-sensible decision regarding provisional measures, an
arbitral tribunal shall first and foremost determine whether the party requesting the relief has a
prima facie case33. At the stage of a request for provisional measures, the inquiry into the merits
of the PARTIES’ claims and defences should be made without any detailed or binding
assessments of the evidence or the merits of parties’ legal arguments.34
30. In the present case, the CLAIMANT breached the contract by arbitrarily refusing the two
alternative discharge ports nominated by the RESPONDENT in compliance with the VOYAGE
CHARTERPARTY.35 In addition, the CLAIMANT also wrongfully terminated the contract.36
31. Moreover, the CLAIMANT has unlawfully exercised a lien over the CARGO as its Notice of Lien
has failed to meet all the necessary criteria to be considered a valid exercise of rights, and as it
has failed to consider the validity of such measure under Chinese law.37 Also, the CLAIMANT
claimed to exercise a lien over the Sub-freight but Singaporean law does not acknowledge such
a lien.38
32. For all the reasons stated above, it is clear that the CLAIMANT has no prima facie case on the
merits and thus, the Arbitral Tribunal should not grant any interim measures ordering the sale
of the CARGO.
2. There is no urgent need for interim relief
33 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 2478.
34 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 2479.
35 See below, §54.
36 See below, §§67-70.
37 See below, §§73-75.
38 See below, §§84-88.
Team 19 Statement of Respondent’s Case
9
33. In order to grant an interim order, the Tribunal has to make sure the case is one of urgency,
which has been formulated as follows: “ urgency is necessary…in order to make a provisional
decision as quickly as possible without awaiting a final decision”. 39
34. The main issue is then to determine whether the order to sell de CARGO sought by the
CLAIMANT could not wait the final award of the Arbitral Tribunal.
35. The SIAA provides that the arbitral tribunal shall have the power to order any interim
measure.40 Besides, it also gives the power to national courts to order interim reliefs for the
purpose of preserving the assets if the case is one of urgency.41
36. In the case at hand, the CLAIMANT applied for liberty to sell the CARGO pendent lite on 1
December 2016.42 The Arbitral Tribunal fixed the oral hearing during which it will hear party’s
arguments and rule on this issue, eight months after the application, namely in early July43. It
clearly appears that by fixing the hearing with eight months’ delay, the Arbitral Tribunal did
not consider the case was one of urgency.
37. In addition, to our knowledge, no other proceedings have been commenced in Singapore or
elsewhere.44 This means that the CLAIMANT itself does not consider it to be a case of urgency,
as it did not use its right to apply for interim measure before the national courts, as foreseen by
the SIAA,45 but would rather wait eight months for the hearings before the Arbitral Tribunal.
39 SCHWARTZ, The Practices and Experience of the ICC Court in Conservatory and Provisional Measures in
International Arbitration 45, 60 publication N°519, [1993].
40 SIAA, §12(1)(i).
41 SIAA, §12A(4).
42 Urgent application for consolidation and liberty to sell the Cargo on board pendente lite – Case Scenario, p. 89.
43 PO1 – Case Scenario, p. 104.
44 PO3 – Case Scenario, p. 110.
45 SIAA, §12A(4).
Team 19 Statement of Respondent’s Case
10
38. In a recent case, a Court of Singapore found that there “was a clear case of urgency” when the
crew lacked fresh food, water and medical supplies and the overheating of the Cargo generated
a risk of self-ignition and explosion.46 But such case is significantly different from the one at
hand. Indeed, in Five Ocean v. Cingler, the ship was drifting in high seas for more than 70
days, while in the case at hand, the VESSEL is drifting only 10 nautical miles outside
Singapore’s port limits, making it easier to supply the VESSEL and the Crew.
39. Moreover, there is no connection between the order to sell the CARGO and the lack of water,
fresh food and medicines on board, which can be resolved by taking on different supplies in
Singapore, merely 10 nautical miles away from the VESSEL’s location. The CARGO itself is in
no way in danger, in view of the Export Report showings that it remains intact, without
depreciation of its value, which nonetheless would have been avoidable if CLAIMANT
cooperated with the alternative nominations of the discharge ports made by the RESPONDENT.
3. The Claimant will not suffer any irreparable harm if the interim relief is not granted by this
Tribunal
40. Julian Lew considers that “it is not appropriate to grant a measure where no irreparable or
substantial harm comes to the movant in the event the measure is not granted”. 47
41. Considering the above, the Arbitral Tribunal may only order provisional measures if requesting
party has substantiated the thread of a no easily reparable prejudice.48
42. The interpretation of the word “irreparable” can either be narrow, suggesting that “irreparable”
harm is required for a grant of provisional measures49, or wide. Most decisions, which state
46 Five Ocean Corporation v. Cingler Ship §59.
47 LEW, Commentary on Interim and Conservatory Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23,
28 [2000].
48 ICC Case No.8786; ICC Case No. 8894; Iran v. USA.
49 Tokios Tokelés v. Ukraine.
Team 19 Statement of Respondent’s Case
11
that damage must be irreparable, require that there be a material risk of serious damage to the
plaintiff.50 This implies for the tribunal to consider the extent to which such injury appears
compensable in a final award and the extent to which it is just that the burden of loss during
the arbitral proceeding fall on one party or another.51
43. In this case, the only harm the CLAIMANT could suffer during the arbitral proceeding is the non-
payment of the freight, which can easily be compensate by a final award rendered by the
Tribunal. Furthermore, considering that the CLAIMANT breached the contract on many
occasions, putting all the burden of loss on the RESPONDENT is unfair and unjust. Therefore,
the Arbitral Tribunal shall dismiss the CLAIMANT’s request to obtain an interim measure
allowing it to sell the CARGO.
II. ARGUMENTS ON THE MERITS
D. PRELIMINARY ISSUE: THE APPLICABLE LAW TO THE DISPUTE
44. The RESPONDENT does not contest the application of Singaporean law to the contract. However,
the CLAIMANT avoids the discussion regarding the applicable laws to the lien. In common law,
the lien shall be valid at the place where it is supposed to be enforced.52
45. In the case at hand, the interim measure sought by the CLAIMANT involving a lien over the
CARGO would be enforced in a Chinese territory. Therefore, the Arbitral Tribunal shall apply
Singapore law over the contractual matters, and subsequently Chinese law with respect to the
CARGO.
E. THE RESPONDENT DID NOT BREACH THE VOYAGE CHARTERPARTY
50 Plama Consortium Ltd v. Repub. of Bulgaria.
51 BORN, International Arbitration: Law and Practice, Kluwer Law International 2nd Ed., [2015], p. 2470.
52 FURMSTON & MARHINGER, Liens on Cargo/Liens on Sub-Freight, The Standard, [2015].
Team 19 Statement of Respondent’s Case
12
46. Despite CLAIMANT’s best efforts to prove it in its statement of claims, the RESPONDENT did not
breach the VOYAGE CHARTERPARTY. On the contrary, the RESPONDENT showed great
determination to complete its contractual obligation considering the circumstances: a
congestion made it impossible for the VESSEL to discharge the CARGO in the ports listed in the
VOYAGE CHARTERPARTY (1). Also, it is the CLAIMANT that did not respect its contractual
obligations in refusing two valid ports suggested by the RESPONDENT (2).
1. The congestion at Chinese ports made it impossible to nominate them as valid discharge port
47. In the VOYAGE CHARTERPARTY, under clause 16(b), the PARTIES settled a way to deal with a
possible hindrance affecting or preventing the discharging of the CARGO in case the said-
hindrance lasts over 48 hours:53
“If there is a hindrance affecting or preventing the actual discharging of the cargo
on or after (…) arrival at or off port of discharge and same has not been settled
within 48 hours, the Charterers shall have the option (…) of ordering the vessel to
a safe port where she can safely discharge without risk of being detained by a
hindrance. Such orders to be given within 48 hours after the Master or the Owners
have given notice to the Charterers of the hindrance affecting the discharge. On
delivery of the cargo at such port, all conditions of this Charterparty and of the
Bill of Lading shall apply and the vessel shall receive the same freight as if she had
discharged at the original port of destination, except that if the distance to the
substituted port exceeds 100 nautical miles, the freight on the cargo delivered at
the substituted port to be increased in proportion.”
53 VOYAGE CHARTERPARTY – Case Scenario, p. 29, §16(b).
Team 19 Statement of Respondent’s Case
13
48. As stated in an e-mail sent by the shipbroker to the CLAIMANT on 16 October 201654, the
MASTER and the crew found themselves unable to proceed with the discharging operations in
the ports mentioned in the VOYAGE CHARTERPARTY due to congestion at Chinese ports. The
congestion made it impossible for the VESSEL to reach any of the ports and complete its
mission.
49. Congestions are common in Chinese ports and ships can be forced to berth for days before
being able to discharge when the major northern ports do not simply suspend the loading or
discharging of ships.55 When a charterer encounters such impossibility, the nomination is not
a valid exercise to the right of election. The charterer has an obligation to solve such precarious
situation.56
50. Clause 16 of the VOYAGE CHARTERPARTY offers two options to charterers. The first one is to
keep the VESSEL waiting until the hindrance is over and paying half demurrage from when
expires the time provided to initially discharge until the actual completion of discharging. The
second is to order the VESSEL to a safe port where it can safely discharge without risk of being
detained by a hindrance. The condition is that orders have to be given within 48 hours after the
MASTER or the Owners have given notice to the charterers of the hindrance affecting the
discharge.
51. In this very case, the RESPONDENT has complied with its contractual obligation, bearing in mind
the damages that could be inflicted on the VESSEL, the CARGO and the crew if the VESSEL was
left adrift for days on end in the coming winter before the congestion blew over. Hence it chose
the second option that was offered to it in the VOYAGE CHARTERPARTY and decided to order
54 E-mail sent on the 16th of October 2016 from Gordon Grill to Eric Yan– Case Scenario, p. 57.
55 WALLIS & GLOYSTEIN, As the smog lifts, China's ports grapple with huge traffic jam of ships
[2017].
56 The Springbank.
Team 19 Statement of Respondent’s Case
14
the VESSEL to Busan, South Korea, which was a safe port where it was possible to safely
discharge the CARGO.
52. In terms of delay, the RESPONDENT immediately nominated an alternative discharge port
considering that it was informed by the shipbroker of congestion in Chinese ports.57 The
RESPONDENT diligently respected the 48 hours deadline. Several e-mails sent from the
CLAIMANT, between 11 October 2016 and 16 October 2016, were urging the RESPONDENT to
nominate a discharge port, and although the RESPONDENT did as soon as it was in capacity to
do so, the latter had to wait for its sub-charter, the SHIPPER, to complete its obligation to first
nominate a discharge port.58
53. Accordingly, the Arbitral Tribunal shall acknowledge that the RESPONDENT, facing an
impromptu situation, diligently performed the VOYAGE CHARTERPARTY.
2. By refusing the two alternative valid discharge ports nominated by the RESPONDENT, the
CLAIMANT breached its obligation to respect a nomination that is irrevocable
a. The Respondent reasonably nominated a safe discharge port in South Korea that was
refused by the Claimant
54. Considering the congestion of all the Chinese ports59 contained in the list of discharge ports in
the VOYAGE CHARTERPARTY60, the RESPONDENT was unable to nominate one of these ports to
57 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario p. 57.
58 E-mail sent on the 15th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, pp. 55-56; E-mail sent
on the 19th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62.
59 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 57.
60 VOYAGE CHARTERPARTY, Status, 16. Discharge Port – Case Scenario, p. 21.
Team 19 Statement of Respondent’s Case
15
discharge the CARGO. The RESPONDENT, fulfilling its obligation to nominate a discharge port,
suggested a South Korean port to the CLAIMANT.61
i. Busan is a valid discharge port
55. The CLAIMANT persistently refused to validate Busan as discharge port despite all better
judgment and the RESPONDENT's repeated requests to do so.
56. As it has been demonstrated62, the RESPONDENT faced a significant congestion preventing the
VESSEL to dock at any Chinese ports and had a contractual right and obligation to solve the
predicament of the VESSEL, the crew and the CARGO were in. Considering that the entire list of
potential discharge ports settled between the Owners and Charterers in the VOYAGE
CHARTERPARTY was compromised by the congestion, the RESPONDENT scrupulously
nominated an alternative discharge port out of the mentioned list, as it was contractually bound
to. This alternative port was Busan and the RESPONDENT also offered to pay for all additional
costs generated by the deviation of course, according to its legal obligations.63
57. The CLAIMANT kept refusing to validate Busan alleging a rumoured arrival of zombies by train
from Seoul to Busan.64 These hearsays were supposed to be cleared up by an e-mail from the
RESPONDENT to the SHIPPER, transferred to the CLAIMANT, explaining that the Korean military
had secured the area of Busan and that several vessels under the RESPONDENT's supervision
safely called at port in Busan.
61 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 57.
62 See above, §§49-55.
63 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 58.
64 E-mail sent on the 17th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 58.
Team 19 Statement of Respondent’s Case
16
58. Without any further explanation as to why they were so determined not to validate Busan as a
discharge port when it was proved to be safe, the disponent Owners reiterated their position
and refused the nomination.
59. It has to be stressed that the RESPONDENT, as a voyage charterer, is contractually obliged to
warrant the safety of the nominated port of discharge that was not mentioned in the contract65.
The RESPONDENT would take responsibility for all the responsibility towards the VESSEL in
case of a breach of this obligation of safety. The RESPONDENT, in declaring Busan as the
discharging port, was aware of this responsibility and still estimated the situation secured
considering that ships under its supervision already had called at port in Busan and that it
confirmed its demand to validate Busan as discharge port. Mutual trust is essential to the good
functioning of a contractual relationship.
60. Once a valid nomination of a discharge port is made, the PARTIES’ contractual obligations are
fulfilled and, thus, irrevocable.66 Accordingly, it means that the valid nomination has to be
treated as if the port designated was originally written into the CHARTERPARTY.
ii. Busan was arbitrarily refused by the Claimant as a discharge port
61. By increasing pressure over the RESPONDENT, without considering the complexity of the
situation and disregarding the RESPONDENT’s will to nominate a valid discharge port, the
CLAIMANT failed to fulfil its own obligation of due diligence towards the VOYAGE
CHARTERPARTY. This violation is a breach of the contract by the CLAIMANT.
65 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 26, §8.
66 Anglo-Danubian Transport Co. v. Ministry of Food; The Prometheus; The Jasmine B.
Team 19 Statement of Respondent’s Case
17
62. The obligation of due diligence is the care the contractor exercises to avoid its co-contractor
failure to fulfil its obligations.67 According to Common Law68, due diligence shall not require
the contractor to achieve the impossible. Moreover, the Singapore High Court considers the
lack of due diligence as a breach of contract.69
63. In the case at hand, the violation of the obligation of due diligence from the CLAIMANT arises
in three different ways. Firstly, the CLAIMANT puts pressure on the RESPONDENT in order to
obtain the nomination of a discharge port, even though it was unable to do so since the sub-
charterer had not yet designated a port in the first place70. Ignoring the delicate position the
RESPONDENT was in, torn between its obligation to the ship-owner and the incapacity to comply
because of its sub-charterer, the CLAIMANT persistently kept requesting the nomination of a
Chinese port71. Indeed, from 11 October 2016 until 14 October 2016, the CLAIMANT daily
requested such nomination of a discharge port from the RESPONDENT.72
64. Secondly, the CLAIMANT refused to cooperate with the RESPONDENT in order to find an
agreeable alternative solution. The RESPONDENT, having at last heard from its sub-charterer,
informed the CLAIMANT that the Chinese ports were congested and immediately suggested
another discharge port, Busan in South Korea.73 The CLAIMANT refused this alternative arguing
that Busan was not permitted by the contractual list of discharge ports pursuant to the VOYAGE
67 Merriam Webster Law Dictionary.
68 SABIC.
69 CAA Technologies.
70 E-mail sent on the 15th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, pp. 55-56.
71 E-mails sent on the 15th and 16th of October 2016 from Gordon Grill to Eric Yan – Case Scenario pp. 56-57.
72 E-mails sent from the 11th to 14th of October 2016 from Gordon Grill to Eric Yan - Case Scenario p. 50-56.
73 E-mail sent on the 16th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 57.
Team 19 Statement of Respondent’s Case
18
CHARTERPARTY74 even though it had been informed that the congestion made it impossible for
the VESSEL to use any of the Chinese ports.75 The RESPONDENT, running out of options, insisted
on Busan as a discharge port, assuring that it would pay for every additional cost. The
CLAIMANT then categorically refused the South Korean port.76 This refusal is unwelcome as
well as it is customary to turn away vessels sailing for Chinese ports to Korean ports for
congestion or meteorological reasons.77
65. It seems quite surprising that the CLAIMANT would refuse a valid solution in such a precarious
situation as the one at hand, solely based on rumours and an occurrence as peculiar as a zombie
attack. Whereas the RESPONDENT reaffirmed that the area around Busan had been secured and
that several ships under its command had been calling at port there78, the CLAIMANT kept
arbitrarily rejecting Busan.79
66. Third and lastly, the CLAIMANT used aggressive methods against the RESPONDENT. Despite the
best efforts of the RESPONDENT to fulfil its undertakings, the CLAIMANT threatened the
RESPONDENT to have a lien imposed on the CARGO80, in a persistent non-cooperative state of
minds. Further, when the RESPONDENT asked for patience while waiting for a nomination from
74 VOYAGE CHARTERPARTY, clause n°16 – Case Scenario, p. 21.
75 E-mail sent on the 16th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 57-58.
76 E-mail sent on the 17th of October 2016 from Gordon Grill to Eric Yan– Case Scenario, p. 58
77 KNIGHT, Seeing through the fog [2017]; WALLIS & GLOYSTEIN, As the smog lifts, China's ports grapple
with huge traffic jam of ships [2017].
78 E-mail sent on the 17th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 60.
79 E-mail sent on the 17th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, p. 60.
80 E-mail sent on the 18th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 60-62.
Team 19 Statement of Respondent’s Case
19
the sub-charterer81, the CLAIMANT turned a deaf ear to this legitimate request, and set an
unreasonable ultimatum on 19 October 201682.
b. The Claimant wrongfully terminated the contract even though the Respondent has just
suggested a discharge port valid under the contract
67. Following the Notice of Lien83 from the CLAIMANT to the SHIPPER and a long-lasting silence
from the CLAIMANT on the second request of validation of Busan as discharge port, the
RESPONDENT nominated as a discharge port the Chinese port of Ningbo on 21 October 2016.84
68. At this point, the RESPONDENT was able to nominate this port since the congestion of the
Chinese ports was over. This port is one of the discharge ports listed in the VOYAGE
CHARTERPARTY.85 Therefore, this nomination shows the RESPONDENT’s initial will to nominate
a Chinese port as required in the VOYAGE CHARTERPARTY and that this will strongly persists
although the CLAIMANT has notified the Notice of Lien to the RESPONDENT. Consequently, the
RESPONDENT has respected its obligation to identify a discharge port consistent with the
VOYAGE CHARTERPARTY.
69. On the following day, the CLAIMANT sent a Notice of Termination to the RESPONDENT86 even
though it had just nominated a valid discharge port. This shows the CLAIMANT’s behaviour to
go against the proper performance of the VOYAGE CHARTERPARTY by the RESPONDENT.
70. Therefore, the RESPONDENT cannot be held accountable for the breach of the contract.
81 E-mail sent on the 19th of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 62.
82 E-mail sent on the 19th of October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 63-64.
83 Notice of Lien issued on the 20th of October 2016 from Furnace to Idoncare – Case Scenario, p. 65.
84 E-mail sent on the 21st of October 2016 from Eric Yan to Gordon Grill – Case Scenario, p. 67.
85 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21, §16.
86 Notice of Termination issued on the 22nd of October 2016 from Furnace to Inferno – Case Scenario, p. 68.
Team 19 Statement of Respondent’s Case
20
F. THE CLAIMANT IS NOT ENTITLED TO THE LIENS OVER THE CARGO AND THE SUB-FREIGHT
71. It is undisputed that a ship-owner may have certain rights for remedies regarding its payments,
arising from the Common Law or from the contractual relationship established between the
contracting parties. However, such remedies must be recognized by both law and contract, and
abide to a set of requirements to be validly enforced.
72. Therefore, it is the RESPONDENT’s position that the CLAIMANT has enacted an unlawful lien
over the CARGO (1), and enacted an unlawful lien over the Sub-Freights (2).
1. The CLAIMANT’s lien over the CARGO is unlawful
73. The CLAIMANT’s notice of lien over the CARGO87 has failed to meet all the necessary criteria
to be considered a valid exercise of rights. In a very opportunistic approach, the CLAIMANT has
unlawfully exercised a lien over the CARGO, in contradiction to the laws of the discharge port
(a); and to the VOYAGE CHARTERPARTY terms (b).
74. As it will be further explained, the lien over the CARGO has to be recognized by the laws of the
discharging port, which in the present case, and in view of the CLAIMANT’s own demand, was
to be any out of six possible ports in China, and therefore, Chinese law must be regarded to
this subject. Also, the lien over the CARGO, as a contractual remedy, must be established
between the Parties, and the CLAIMANT has wrongfully communicated the RESPONDENT of such
lien, even though the RESPONDENT is not the owner of the CARGO.
75. Briefly, Chinese law has a very strict application of liens over cargoes. Article 87 of the Chinese
Maritime Code88 establishes that the lien over cargo must be exercised against the debtor for
87 Notice of Lien issued on the 20th of October 2016 from Furnace to Idoncare, Case Scenario, p. 65.
88 “Article 87 – If the freight, contribution in general average, demurrage to be paid to the carrier and other
necessary charges paid by the carrier on behalf of the owner of the goods as well as other charges to be paid to
Team 19 Statement of Respondent’s Case
21
freight, who must also be the owner of the goods involved. Moreover, the ship-owner can only
exercise such lien if it has previously requested the debtor for a security, and only in the
hypothesis where such security has not been voluntarily provided, the lien will be lawfully
exercised.
a. The Respondent is not the owner of the Cargo
76. As it is broadly accepted, bills of lading are a type of contract that serves mainly three purposes:
it functions as a receipt for goods shipped; as evidence of the contract of carriage; and as
document of title89. In the present case, the Bill of Lading are issued “to order”, meaning they
are a negotiable instrument. However, according to the sole information provided by this
Tribunal90, the SHIPPER is the one person in hold of the Bill of Lading, without any further
information as to their possible consignation, and must therefore be considered the rightfully
owner of the CARGO.
77. As previously seen, the laws of the discharge port must be used as a guidance to determine the
conditions on which a lien can be exercised.
78. Chinese law is the relevant law at the present case because the CLAIMANT has expressly
requested the discharge port to be in China, to the exclusion of any other.91 The CLAIMANT is
resorting to a contradictory position by requesting this Tribunal to make considerations to the
laws of the bunkering port, that is, Singapore. Not only contradictory, but also unacceptable,
the carrier have not been paid in full, nor has appropriate security been given, the carrier may have a lien, to a
reasonable extent, on the goods.”
89 WILSON, Carriage of Goods by Sea, Pearson Ed. 7th Ed., [2010], pp. 117-142.
90 PO3 – Case Scenario, p. 108. §2(1).
91 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 21, §16; E-mail sent on the
19 October 2016 from Gordon Grill to Eric Yan – Case Scenario, pp. 63-64.
Team 19 Statement of Respondent’s Case
22
since the CARGO is still considered to be in sail, and the lien of cargo can only be accepted at
the discharge port.92
79. Therefore, the Chinese law should be analysed and this will lead this Tribunal to the conclusion
that the RESPONDENT has failed to comply with such law.
b. The Claimant has not complied with its obligation under article 87 of the Chinese
Maritime Law
80. As previously mentioned, the rights of lien over cargo are regulated by article 87 of the Chinese
Maritime Code, as the relevant law to analyse the lien over the CARGO. Two important criteria
are set out by such article, mainly: the necessity that the debtor be also the owner of the goods
envisaged by the lien; and that the party against who the lien is opposed is presented with a
previous opportunity to provide for security before the ship-owner can exercise its remedy of
lien.
81. The first requirement is squashed with the fact that the CARGO is actually in property of the
SHIPPER, as established by the Bill of Lading.93 The CLAIMANT therefore cannot notify the
RESPONDENT about a lien over the CARGO that the RESPONDENT itself has no property over.
82. The second requirement was also not complied with by the CLAIMANT since, as seen on the
exchange of e-mails of the 22 October 201694, the CLAIMANT sent a direct notice of termination
and lien to the RESPONDENT, without demanding the necessary previous security from the
RESPONDENT.
92 The Mihalios Xilas.
93 Bill of Lading of 4 October 2016 – Case Scenario, p. 43.
94 Case Scenario, pp. 65-68.
Team 19 Statement of Respondent’s Case
23
83. This factual analysis of the present case leads the Tribunal to the single possible solution that
the CLAIMANT has made an unlawful exercise of the right to a lien over the CARGO under the
discharge port (Chinese) law.
2. Singaporean law does not acknowledge lien on the Sub-Freight
84. The lien must be recognized and enforceable under local law.95 If the owners exercise a lien
unlawfully under local law, then the owners can potentially be exposed to a claim in damages.
As the lien over Sub-Freight is a contractual right, the relevant law to be considered is the law
applicable to the contract. Clause 29 about Law and Dispute resolution of the VOYAGE
CHARTERPARTY between the CLAIMANT and the RESPONDENT is express in determining that
Singapore law is applicable.96
85. Article B(2) of the Section 3 of the Singaporean Shipping Law is express and so determines:
“The ship-owner is remunerated by the payment of the freight” and thus “under
the common law, a ship-owner is entitled to exercise a possessory lien for unpaid
freight”.
86. Moreover, article H(3) of the section 5 of the Singaporean Shipping Law gives the definition
of the possessory lien. The essence of the exercise of a lien is the denial of possession of the
cargo to someone who wants it, thus forcing the interested party in paying the freight to the
lien possessor. Singaporean Shipping Law only acknowledges lien over the cargo. Indeed,
Singaporean Shipping Law never mentions the possibility for the charterer to exercise a lien
over Sub-Freight. If the domestic law does not recognise this possibility, the charterer cannot
exercise a lien over the Sub-Freight.
95 RODRIGO, Liens on Cargo in a Nutshell, [2015].
96 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 23.
Team 19 Statement of Respondent’s Case
24
87. Therefore, the CLAIMANT is not admissible to exercise a lien over the Sub-Freight since the
domestic law does not expressly authorize it. Moreover, clause 19(a) of the VOYAGE
CHARTERPARTY97 provides that:
“The Owners shall have a lien on the cargo for freight, dead freight, demurrage
and general average contribution due to them under the Charterparty”.
88. Both Singaporean Law and the Charterparty signed between the PARTIES authorize the
CLAIMANT to exercise a lien over the CARGO but there is no acknowledgement regarding the
possibility to exercise a lien over the Sub-Freight.
97 Voyage Charterparty between the Claimant and the Respondent – Case Scenario, p. 31, §19(a).
Team 19 Statement of Respondent’s Case
25
REQUEST FOR RELIEF
For the above reasons, Counsel for RESPONDENT respectfully requests the Arbitral Tribunal to:
I) DECLARE that the RESPONDENT has not committed a repudiatory breach of the VOYAGE
CHARTERPARTY, since the CLAIMANT was in breach of its obligations and out of reasonability
regarding the discharge port matter;
II) DECLARE that the CLAIMANT is the party incurring in a repudiatory breach of the VOYAGE
CHARTERPARTY, by unilaterally and unlawfully terminating the contract, against its contractual
freight;
III) DECLARE that the CLAIMANT has unlawfully exercised its rights of lien over the CARGO
and over Sub-Freight;
IV) DECLARE inadmissible the requested interim order for the sale of the CARGO, as the legal
requirements to grant such request were not met by the CLAIMANT.
On behalf of Inferno Resources Sdn Bhd,
Versailles, 19 April 2017
Arleen Gonzalez Charlotte Hauchard Vérane Pasi
Yuri Pedroza Leite Marie Terrien Taha Zahedi Vafa
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