MEMORANDUM FOR RESPONDENT - Murdoch University · Total Gas Marketing Ltd v Arco British Ltd [1998] 2 Lloyd’s Rep 209 Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas)

20th Annual International Maritime Law Arbitration Moot

In the matter of an arbitration under the LMAA Terms

UNIVERSITY OF QUEENSLAND

A U S T R A L I A

MEMORANDUM FOR

RESPONDENT

CLAIMANT

Panther Shipping Inc

80 Broad Street, Monrovia

Liberia

v

RESPONDENT

Omega Chartering Limited PO Box 911, Vaduz

Liechtenstein

TEAM 10

COUNSEL

TESSA BOARDMAN | JONATHAN HOHL | MATTHEW SINGER | MIA WILLIAMS

Team 10 Memorandum for the Respondent

ii

TABLE OF CONTENTS

LIST OF ABBREVIATIONS ........................................................................................................................... iv

LIST OF AUTHORITIES ................................................................................................................................. v

A. Articles and books .................................................................................................................................. v

B. Cases ....................................................................................................................................................... v

C. Arbitral awards ..................................................................................................................................... viii

D. Legislation ............................................................................................................................................. ix

E. Other ...................................................................................................................................................... ix

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

SUBMISSIONS ON THE HULL CLEANING ............................................................................................... 3

I. THE RESPONDENT WAS RELIEVED OF ITS OBLIGATION TO PERFORM HULL

CLEANING AND IS NOT LIABLE TO THE CLAIMANT FOR THE COST OF THE SAME. ......... 3

A. The RESPONDENT’S performance was subject to the CLAIMANT’S consent. .......................................... 3

B. It was an implied term of the Charterparty that the CLAIMANT’S consent was not to be unreasonably

withheld. ...................................................................................................................................................... 4

C. The CLAIMANT unreasonably refused the RESPONDENT’S offer to perform in breach of this implied

term. ............................................................................................................................................................. 5

II. ALTERNATIVELY, THE RESPONDENT IS LIABLE ONLY FOR THE LUMP SUM

CLEANING COSTS IN THE AMOUNT OF USD33,000. ........................................................................ 6

A. The RESPONDENT was only obliged to pay the CLAIMANT a lump sum as it was prevented from

carrying out cleaning. .................................................................................................................................. 7

B. A reasonable lump sum payment is appropriately quantified at USD33,000. ........................................ 8

SUBMISSIONS ON THE LATE REDELIVERY OF THE VESSEL ........................................................... 9

I. THE CLAIMANT IS NOT ENTITLED TO DAMAGES CALCULATED AS THE LOSS OF HIRE

UNDER THE NEXT FIXTURE. ................................................................................................................. 9

A. The decision in The Achilleas applies by analogy. ............................................................................... 10


iii

B. The RESPONDENT did not have special knowledge of the Next Fixture. ............................................... 11

II. ALTERNATIVELY, THE RELEVANT PERIOD FOR CALCULATING DAMAGES UNDER

THE NEXT FIXTURE SHOULD BE THE MINIMUM PERIOD OF TWO YEARS. ........................ 13

III. FURTHER AND IN THE ALTERNATIVE, THE CLAIMANT MUST GIVE CREDIT FOR

HIRE RECEIVER UNDER THE SUBSTITUTE FIXTURE. ................................................................ 13

SUBMISSIONS ON THE CARGO DAMAGE ............................................................................................ 14

I. THE RESPONDENT IS ENTITLED TO BE INDEMNIFIED BY THE CLAIMANT AGAINST

100% OF THE CARGO CLAIM. .............................................................................................................. 14

A. Liability for the Cargo Claim is to be apportioned according to the ICA. ........................................... 15

B. The Cargo Claim is not time-barred under cl 6 of the ICA................................................................... 16

C. Under the ICA, 100% of the Cargo Claim is for the CLAIMANT’S account. ......................................... 17

II. ALTERNATIVELY, THE REPSONDENT IS ENTITLED TO BE INDEMNIFIED BY THE

CLAIMANT AGAINST 50% OF THE CARGO CLAIM. ...................................................................... 19

III. ALTERNATIVELY, THE CLAIMANT IS LIABLE IN DAMAGES FOR BREACH OF THE

CHARTERPARTY. ..................................................................................................................................... 19

SUBMISSIONS ON THE OFF-HIRE ISSUE .............................................................................................. 20

I. THE RESPONDENT IS ENTITLED TO RESTITUTION OF HIRE PAID FROM 7 MAY 2016 TO

26 JUNE 2016 AS THE VESSEL WAS OFF-HIRE DURING THIS PERIOD. .................................... 20

A. Delay was caused as alleged in paragraph 8 of the RESPONDENT’S Defence and Counterclaim

Submissions. .............................................................................................................................................. 21

B. The full working of the Vessel was prevented during the period of delay. ........................................... 21

C. The prevention of the full working of the Vessel was due to one of the causes listed in cl 17. ............ 23

D. As a result, 50 days were lost to the RESPONDENT. .............................................................................. 24

E. Clause 17 is engaged irrespective of the fault of the CLAIMANT. ......................................................... 24

II. ALTERNATIVELY, THE CLAIMANT IS LIABLE IN DAMGES FOR BREACH OF THE

CHARTERPARTY. ..................................................................................................................................... 25

PRAYER FOR RELIEF ................................................................................................................................. 25


iv

LIST OF ABBREVIATIONS

ABBREVIATION TERM

Cargo Claim The claim brought by the Receivers against the RESPONDENT

Champion Champion Chartering Corp

Charterparty Fixture between Panther Shipping Inc and Omega Chartering Ltd concluded on

18 March 2016

CLAIMANT Panther Shipping Inc

Fairwind Fairwind International

Hague Rules International Convention for the Unification of Certain Rules of Law relating

to Bills of Lading (1924)

Hague-Visby Rules Hague Rules as amended by the First Protocol (1968) and Second Protocol

(1979)

ICA Inter-Club New York Produce Exchange Agreement 1996 (as amended

September 2011)

Next Fixture Fixture between the Panther Shipping Inc and Champion Chartering Corp

concluded on 15 June 2016

NYPE 2015 New York Produce Exchange 2015 Time Charter Form

Receivers The receivers of the cargo of English breakfast tea

Record International Maritime Law Arbitration Moot Scenario (v2) released 30

January 2019

RESPONDENT Omega Chartering Limited

Substitute Fixture Fixture between Panther Shipping Inc and Fairwind International concluded

on 4 July 2016

Vessel MV Thanos Quest


v

LIST OF AUTHORITIES

A. Articles and books

Neil Andrews et al, Contractual Duties: Performance, Breach, Termination and Remedies (Sweet &

Maxwell, 2nd ed, 2017)

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

William Tetley, Marine Cargo Claims (Thomson Carswell, 4th ed, 2008)

B. Cases

Abu Dhabi National Tanker Co v Product Star Shipping Ltd (The Product Star) (No 2) [1993] 1 Lloyd’s

Rep 397

Actis Co Ltd v The Sanko Steamship Co Ltd (The Aquacharm) [1980] 2 Lloyd’s Rep 7

Agile Holdings Corp v Essar Shipping Ltd [2018] EWHC 1055 (Comm)

Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602

Alma Shipping Corpn of Monrovia v Mantovani (The Dione) [1975] 1 Lloyd’s Rep 115

Andre & Cie SA v Orient Shipping (Rotterdam) BV (The Laconian Confidence) [1997] 1 Lloyd’s Rep

139

Arta Shipping Co Ltd v Thai Europe Tapioca Service Ltd (The Johnny) [1977] 2 Lloyd’s Rep 1

ASM Shipping Ltd of India v TTMI Ltd of England (The Amer Energy) [2009] 1 Lloyd’s Rep 293

Belcore Maritime Corporation v Fratelli Moretti Cereali SpA (The Mastro Giorgis) [1983] 2 Lloyd’s

Rep 66

Ben Line Steamers Ltd v Pacific Steam Navigation Co (The Benlawers) [1989] 2 Lloyd’s Rep 51

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266

British Columbia & Vancouver’s Island Spar, Lumber & Saw-Mill Co Ltd v Nettleship (1868) LR 3 CP

499

British Westinghouse Electric & Manufacturing Co Ltd v Underground Electronic Railways Co of

London Ltd [1912] AC 673

Brogden v Investec Bank plc [2014] EWHC 2785 (Comm)

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

Ca Venezolana De Navegacion v Bank Line (The Roachbank) [1987] 2 Lloyd’s Rep 498


vi

Chaplin v Hicks [1911] 2 KB 786

Classic Maritime Inc v Lion Diversified Holdings Berhad [2010] 1 Lloyd’s Rep 59

Clearlake Shipping Pte Ltd v Privocean Shipping Ltd (The Privocean) [2018] 2 Lloyd’s Rep 551

Compania Sud American Vapores v MS ER Hamburg Schiffahrtsgesellschaft MBH & Co KG [2006] 2

Lloyd’s Rep 66

Compania Sud Americana de Vapores SA v Sinochem Tianjin Import & Export Co (The Aconcagua)

[2010] 1 Lloyd’s Rep 1

Cosmos Holidays Plc v Dhanjal Investments Ltd [2009] EWCA Civ 316

Court Line Ltd v Dant & Russell Inc (1939) 64 Lloyd’s Rep 212

D/S A/S Idaho v Peninsular & Oriental Steam Navigation Co Ltd (The Strathnewton) [1983] 1 Lloyd’s

Rep 219

Dalwood Marino Co v Nordana Line A/S (The Elbrus) [2010] 2 Lloyd’s Rep 315

Dallman v King (1837) 4 Bing NC 105; 132 ER 729

Fulton Shipping Inc v Globalia Business Travel SAU (formerly Travelplan SAU) of Spain [2016] 1

Lloyd’s Rep 383

George v Rockett (1990) 170 CLR 104

Global Maritime Investments Ltd v STX Pan Ocean Co Ltd [2012] 2 Lloyd’s Rep 354

Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd [1929] AC 223

Hadley v Baxendale (1854) 9 Exch 341

Harmony Shipping Co SA v Saudi Europe Line Ltd (The Good Helmsman) [1980] 1 Lloyd’s Rep 44

Hogarth v Miller, Brother & Co [1891] AC 48

Horne v Midland Railways Co (1873) LR 8 CP 131

Hussien v Chong Fook Kam [1970] AC 942

Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (The Doric Pride) [2006] 2 Lloyd’s

Rep 175

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

100

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896


vii

Jackson v Bank of Scotland [2005] 1 WLR 377

Kalamazoo Paper Co v Canadian Pacific Railway Co [1950] SCR 356

Kamilla Hans-Peter Eckhoff KG v A C Oerssleff’s EFTF A/B (The Kamilla) [2006] 2 Lloyd’s Rep 238

Koch Marine Inc v D’Amica Societa Di Navegazione ARL (The Elena D’Amico) [1980] 1 Lloyd’s Rep

75

Lansat Shipping Co Ltd v Glencore Grain BV (The Paragon) [2009] 2 Lloyd’s Rep 688

Leon Bernstein Co v Wilhelmsen, 232 F 2d 771 (5th Cir, 1956)

Liverpool City Council v Irwin [1977] AC 239

Liversidge v Anderson [1942] AC 206

M H Progress Lines SA v Orient Shipping Rotterdam BV (The Genius Star I) [2012] 1 Lloyd’s Rep

222

Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2015] 1 Lloyd’s Rep 315

Mamidoil-Jetoil Greek Petroleum Co SA v Okta Crude Oil Refinery AD [2001] 2 Lloyd’s Rep 76

Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS) [1977] 1 Lloyd’s Rep 368

Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742

Minnesota Mining & Manufacturing (Australia) Pty Ltd v The Ship ‘Novoaltaisk’ [1972] 2 NSWLR

476

Morris-Garner v One Step (Support) Ltd [2018] 2 WLR 1353

Nakkuda Ali v M F De S Jayaratne [1951] AC 66

Nippon Yusen Kaisha Ltd v Scindia Steam Navigation Co Ltd (The Jalagouri) [2000] 1 Lloyd’s Rep

515

Ocean Glory Compania Naviera SA v A/S PV Christensen (The Ioanna) [1985] 2 Lloyd’s Rep 164

Oceanfocus Shipping Ltd v Hyundai Merchant Marine Co Ltd (The Hawk) [1999] 1 Lloyd’s Rep 176

Oceanic Steam Navigation Co v Aitken, 196 US 589 (1905)

Orient Insurance Co v United Steamship Co [1961] AMC 1228

Pacific Basin IHX v Bulkhandling Handymax AS (The Triton Lark) [2012] 1 Lloyd’s Rep 151

Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266


viii

R v Inland Revenue Commissioner; Ex parte Rossminster Ltd [1980] AC 952

Robinson v Harman (1848) 1 Exch 850

Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] 1 Lloyd’s Rep

175

Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash and Oceanic Amity)

[1984] 1 Lloyd’s Rep 588

Shipping Corporation of India Ltd v NSB Niederelbe Schiffahrtsgesellschaft mbH & Co (The Black

Falcon) [1991] 1 Lloyd’s Rep 77

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

Sig Bergesen D Y & Co v Mobil Shipping & Transportation Co (The Berge Sund) [1993] 2 Lloyd’s

Rep 453

Supershield Ltd v Siemens Building Technologies FE Ltd [2010] EWCA Civ 7

Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd (The Sylvia) [2010] 2 Lloyd’s Rep 81

Team Tours Direct Ltd v Aspire Sport Tours Ltd [2018] EWHC 1541 (QB)

The Ferro [1893] P 38

The Glenochil [1896] P 10

The Rodney [1900] P 112

Timber Shipping Co SA v London & Overseas Freighters Ltd [1972] AC 1

Total Gas Marketing Ltd v Arco British Ltd [1998] 2 Lloyd’s Rep 209

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

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

UR Power GmbH v Kuok Oils & Grains Pte Ltd [2009] 2 Lloyd’s Rep 495

C. Arbitral awards

London Arbitration 7/80




ix

D. Legislation

Arbitration Act 1996 (UK)

Merchant Shipping Act 1995 (UK)

E. Other

Convention on Limitation of Liability for Maritime Claims 1976, as amended by the Protocol of 1996

Hague Rules as amended by the First Protocol (1968) and Second Protocol (1979)

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

International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (1924)

New York Produce Exchange 2015 Time Charter Form

The Baltic and International Maritime Council, Hull Fouling Clause for Time Charter Parties (Special

Circular No 3, 24 June 2013)


1

STATEMENT OF FACTS

1 On 18 March 2016, the CLAIMANT and RESPONDENT concluded a time charterparty for the charter of

the MV Thanos Quest for 50 to 55 days. The Vessel was delivered into the Charterparty on 29 March

2016 at West Coast with redelivery to occur within the Wahanda Range.

2 On 18 April 2016, a news article was published reporting serious concern about an outbreak of Ebola

virus in West Coast. On 20 April 2016, the cargo was loaded and the Vessel sailed for Wahanda. On

21 April 2016, a further article was published noting that the number of reported cases of Ebola had

increased and that there were to be no further arrivals or departures from West Coast Port.

3 The Vessel arrived at the Port of Wahanda on 7 May 2016. Port State Control ordered the Vessel to

remain at anchorage due to concerns that the crew might be carrying the Ebola virus. The

RESPONDENT informed the CLAIMANT that the Vessel was off-hire. On 11 May 2016, Port State

Control attended on board the Vessel and found that several crew members had a high fever. The

Vessel was then quarantined for a minimum of 28 days. The Vessel was ultimately granted free

pratique on 26 June 2016.

4 While the Vessel was anchored at Wahanda its hull was fouled. On 24 May 2016, the RESPONDENT

wrote to Wahanda Port Services to seek advice as to cleaning the Vessel’s hull, and was informed that

it was not possible to clean the hull at Wahanda. On 8 June 2016, the RESPONDENT informed the

CLAIMANT of this fact and proposed to pay a lump sum of USD15,000 in resolution of the issue. This

offer was rejected, and the CLAIMANT assured the RESPONDENT that it would arrange for inspection

and cleaning as per cl 83 at the next convenient port.

5 On 15 June 2016, despite the fact that the Vessel was still quarantined with no indication as to when

it would be released, the CLAIMANT entered into the Next Fixture with Champion for a period of two

years. On 28 June 2016 — the expiry of the laycan period of the Next Fixture — the Vessel was

facing significant delays with its discharging operations due to continuing bad weather. As such, the


2

Vessel could not be redelivered until 30 June 2016, and Champion cancelled the Next Fixture. The

CLAIMANT concluded a Substitute Fixture with Fairwind on 4 July 2016.

6 On 26 June 2016, the CLAIMANT informed the RESPONDENT that it would no longer be able to arrange

hull cleaning and requested that the RESPONDENT confirm its intentions regarding inspection and

cleaning. The RESPONDENT proposed to arrange cleaning at North Titan — the most proximate port

in the Wahanda Range — or alternatively to pay a lump sum of USD20,000. This offer was

inexplicably rejected by the CLAIMANT.

7 On 29 June 2016, the RESPONDENT served its one-day redelivery notice on the CLAIMANT. Following

this notice, the CLAIMANT specifically requested that the RESPONDENT sail the Vessel to South Island

— a voyage of between one and two days — to have the Vessel’s hull cleaned. The RESPONDENT

informed the CLAIMANT that cleaning at South Island would not be contractual and, as such, the

RESPONDENT made a further offer to pay a lump sum of USD30,000. This offer was also rejected.

The RESPONDENT redelivered the Vessel on 30 June 2016 at Wahanda. Relevantly, the Vessel was to

be delivered into the Substitute Fixture at South Island.

8 When discharge commenced it was discovered that the cargo had been extensively severely damaged

by water ingress. A crew member had erroneously pumped sea water into the cargo hold by incorrect

use of the non-return valves in the Vessel’s ballasting system. On 7 July 2016, the RESPONDENT

informed the CLAIMANT that the Receivers would be bringing a claim against them for the damaged

cargo, for which the RESPONDENT would seek to be indemnified. The RESPONDENT attached a

Preliminary Survey Report, which provided further details relating to the claim. The Receivers made

a claim within the time extensions granted to them by the RESPONDENT, the quantum of which has

now been ascertained.

9 On 15 October 2018, the CLAIMANT issued a notice of arbitration to the RESPONDENT seeking

damages for the cost of hull cleaning and for the loss of the Next Fixture. The RESPONDENT counter-

claimed an indemnity for the cargo claim and damages for overpayment of hire.


3

SUBMISSIONS ON THE HULL CLEANING

I. THE RESPONDENT WAS RELIEVED OF ITS OBLIGATION TO PERFORM HULL

CLEANING AND IS NOT LIABLE TO THE CLAIMANT FOR THE COST OF THE SAME.

1 The RESPONDENT did not breach cl 83 of the Omega Rider1 by redelivering the Vessel without having

cleaned the hull. The RESPONDENT was relieved of its obligation to perform hull cleaning under cl 83

because: (A) the RESPONDENT’S obligation to clean the Vessel was subject to a requirement that the

CLAIMANT consent to the RESPONDENT’S proposed cleaning arrangements; (B) it was an implied term

of the Charterparty that the CLAIMANT’S consent was not to be unreasonably withheld; and (C) the

CLAIMANT unreasonably refused the RESPONDENT’S offer to perform in breach of this implied term.

A. The RESPONDENT’S performance was subject to the CLAIMANT’S consent.

2 Pursuant to cl 83(c), cleaning of the Vessel’s hull was to be undertaken ‘in consultation with the

Owners’. Clause 83(c)(iii) specifically contemplates that the owners may ‘refuse to permit cleaning’.

Considered in context, the requirement of ‘consultation’ is properly understood as a requirement that

the owners consent to the charterers’ cleaning arrangements — if the owners are capable of rejecting

an arrangement put forward by the charterers, it necessarily follows that cleaning by the charterers

can only proceed where the owners accede to the charterers’ proposal. This conclusion is further

supported by the suggestion in the explanatory notes to the original BIMCO Hull Fouling Clause2

that the owners are to retain ultimate control over the cleaning process given their interest in ensuring

cleaning is properly conducted, and by the cl 83(c)(i) requirement that cleaning be carried out under

the supervision of the Master.

1 Record, 16. Clause 83 contains an amended version of the BIMCO Hull Fouling Clause for Time Charterparties. 2 The Baltic and International Maritime Council, Hull Fouling Clause for Time Charter Parties (Special Circular No 3,

24 June 2013) (‘BIMCO Explanatory Notes’). Resort may be had to the BIMCO Explanatory Notes when construing

the clause itself: see Pacific Basin IHX v Bulkhandling Handymax AS (The Triton Lark) [2012] 1 Lloyd’s Rep 151,

156 [30] (Teare J); Global Maritime Investments Ltd v STX Pan Ocean Co Ltd [2012] 2 Lloyd’s Rep 354, 356 [8]

(Christopher Clarke J).


4

B. It was an implied term of the Charterparty that the CLAIMANT’S consent was not to be

unreasonably withheld.

3 A term may be implied where it is necessary to give business efficacy to the contract.3 In the present

case, it is necessary to imply a term that the CLAIMANT’S consent to cleaning arrangements proposed

by the RESPONDENT must not be unreasonably withheld. Where a provision confers a discretion on a

party to make a decision that will materially affect the other party’s interests, and there is ample scope

for reasonable differences of view, the discretion is subject to an implied constraint that it be exercised

reasonably — that is, in good faith, for proper purposes and not in an arbitrary, capricious or irrational

manner.4 Here, it is necessary that such a term be implied as the parties cannot be taken to have

intended that consent to cleaning arrangements could be unreasonably withheld by the owners.

4 The requirement in cl 83(d) that cleaning always be carried out prior to redelivery would become

unduly burdensome to the charterers if the owners were able to withhold consent to a proposed course

of action without reason. In such circumstances, while it would remain open to the charterers under

cl 83(d) to negotiate a lump sum payment to avoid breach of the Charterparty, the implication of a

reasonableness requirement in sub-cl (c) would still be necessary to avoid the uncommercial result

that the charterers could effectively be prevented from carrying out cleaning on their own terms and

forced into negotiations by uncooperative owners.

3 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, PC, cited in Marks and Spencer

plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, 750 [18] (Lord Neuberger). See also

Liverpool City Council v Irwin [1977] AC 239, 266 (Lord Edmund-Davies); Harmony Shipping Co SA v Saudi Europe

Line Ltd (The Good Helmsman) [1980] 1 Lloyd’s Rep 44, 49 (Waller LJ). 4 Brogden v Investec Bank plc [2014] EWHC 2785 (Comm), [100] (Leggatt J). See also Abu Dhabi National Tanker

Co v Product Star Shipping Ltd (The Product Star) (No 2) [1993] 1 Lloyd’s Rep 397, 404 (Leggatt LJ); Cryer v Scott

Brothers (Sunbury) Ltd (1988) 55 P&CR 183, 193 (Slade LJ), 202 (Waite J); Niarchos (London) Ltd v Shell Tankers

Ltd [1961] 2 Lloyd’s Rep 496, 507–9 (McNair J); Dallman v King (1837) 4 Bing NC 105, 109; 132 ER 729, 730

(Tindal CJ).


5

C. The CLAIMANT unreasonably refused the RESPONDENT’S offer to perform in breach of this

implied term.

5 By rejecting the RESPONDENT’S offer to arrange cleaning at North Titan,5 the CLAIMANT has breached

the implied term that consent to cleaning arrangements not be unreasonably withheld. The CLAIMANT

having disclosed no reasons for its refusal, it may be concluded that the refusal was unreasonable

because: (i) the CLAIMANT was aware that the RESPONDENT could not conduct the cleaning at

Wahanda prior to redelivery and that North Titan was a suitable, proximate port; and (ii) the

CLAIMANT’S own request that the RESPONDENT arrange inspection and cleaning at South Island was

a clearly inappropriate compromise.

6 As to (i), the chronology of events establishes that the RESPONDENT had only a limited window in

which to comply with its obligation to clean the Vessel’s hull. The obligation arose on 26 June 2016,

when the CLAIMANT called for hull cleaning in satisfaction of cl 83(c).6 Prior to this, the CLAIMANT

had itself assumed responsibility for the cleaning: on 9 June 2016, the CLAIMANT represented that it

would arrange for the Vessel’s bottom to be inspected and cleaned as per cl 83 of the Charterparty at

the next convenient port.7

7 However, at 26 June 2016, it was clear that redelivery was anticipated to occur late, and it was not

possible for the RESPONDENT to arrange for inspection and cleaning without placing itself further in

breach of its redelivery obligations under the Charterparty. Nevertheless, on 27 June 2016, the

RESPONDENT offered to have the Vessel’s hull cleaned at North Titan — the most proximate port

within the Wahanda Range.8 By this time, the CLAIMANT’S own conduct had already severely

restricted the RESPONDENT’S ability to perform hull cleaning within the agreed duration of the

Charterparty. It was therefore unreasonable for the CLAIMANT to reject the RESPONDENT’S proposal,

5 Record, 72: Defence and Counterclaim Submissions [10](1); Record, 76: Reply and Defence to Counterclaim

Submissions [5](1). 6 Record, 34: email from Clark Kent Bulk to Omega Chartering dated 26 June 2016. 7 Record, 28: email from Hulk Hulls to Clark Kent Bulk dated 9 June 2016. 8 Record, 39: email from Clark Kent Bulk to Hulk Hulls dated 27 June 2016.


6

given that cleaning at any other port would compound the RESPONDENT’S breach of its redelivery

obligations.

8 As to (ii), the CLAIMANT’S request that the RESPONDENT arrange inspection and cleaning at South

Island following completion of discharge at Wahanda was inappropriate.9 South Island is between

one and two days’ voyage from Wahanda Port,10 while North Titan is only about half a day’s voyage.11

Based on the quotes obtained by the parties, inspection and cleaning at South Island was also

USD8,000 more expensive than inspection and cleaning at North Titan.12 Given that the RESPONDENT

had already suffered considerable delay in discharging and anticipated late redelivery,13 it was

unreasonable of the CLAIMANT to propose that the RESPONDENT continue paying hire for a voyage to

a less proximate location where it would be expected to arrange cleaning at a higher price.

9 Accordingly, the CLAIMANT breached the implied term of the Charterparty that consent to cleaning

arrangements not be unreasonably withheld by rejecting the RESPONDENT’S offer to have the Vessel

cleaned at North Titan. The RESPONDENT’S performance under cl 83 being contingent on the

CLAIMANT’S consent, this breach relieved the RESPONDENT from its obligation to perform.14

II. ALTERNATIVELY, THE RESPONDENT IS LIABLE ONLY FOR THE LUMP SUM

CLEANING COSTS IN THE AMOUNT OF USD33,000.

10 If the RESPONDENT was not altogether relieved of its obligations under cl 83 of the Charterparty, the

CLAIMANT is only entitled to USD33,000 in damages. Damages are appropriately limited to this sum

because: (A) even if the RESPONDENT was not relieved from performance, the RESPONDENT was only

obliged to pay the CLAIMANT a lump sum as it was ‘prevented’ from carrying out cleaning in

accordance with cl 83(d); and (B) damages for breach of the obligation to pay the lump sum cleaning

9 Record, 43: email from Clark Kent Bulk to Omega Chartering dated 29 June 2016. 10 Record, 52: Final Hire Statement, item 8; Record, 51: Statement of Vessel Disbursements; Procedural Order No 2,

[6]. 11 Record, 39: email from Clark Kent Bulk to Hulk Hulls dated 27 June 2016. 12 Record, 35: email from Titan Shipbuilders to Omega Charting dated 23 June 2016; Record, 50: South Island Port

Agency Co Ltd Invoice; Record, 51: South Island Port Agency Co Ltd Statement of Vessel Disbursements. 13 Record, 41: email from Hulk Hulls to Champion Chartering Corp dated 27 June 2016. 14 See UR Power GmbH v Kuok Oils & Grains Pte Ltd [2009] 2 Lloyd’s Rep 495, 499 [14]–[16] (Gross J). See also

Total Gas Marketing Ltd v Arco British Ltd [1998] 2 Lloyd’s Rep 209, 215 (Lord Slynn).


7

costs should be limited to USD33,000 — the quoted cost of cleaning at North Titan15 — and should

not extend to the CLAIMANT’S cost of cleaning at South Island or the cost of the voyage to this

location.

A. The RESPONDENT was only obliged to pay the CLAIMANT a lump sum as it was prevented

from carrying out cleaning.

11 The RESPONDENT was prevented from performing hull cleaning prior to redelivery as contemplated

by cl 83(d). Therefore, it can only be said to have breached the Charterparty by failing to agree a lump

sum payment to the CLAIMANT in lieu of cleaning prior to redelivery of the Vessel. The requirement

of ‘prevention’ is to be understood according to the natural and ordinary meaning of that word in its

context.16 The appropriate meaning in these circumstances is something akin to ‘commercial

impracticality’, as the imposition of a stricter threshold would distort the allocation of risk under the

clause. It is unnecessary to require that cleaning by charterers be strictly impossible before resort may

be had to the contingency built into cl 83(d). Where compliance with the hull cleaning requirement

has become markedly more difficult for the charterers, such that they are unusually or

disproportionately burdened by the obligation, it is appropriate that negotiations be commenced for

the payment of a lump sum to transfer the obligation to the owners.

12 As previously noted, the RESPONDENT was left with at most only a narrow window in which to arrange

inspection and cleaning prior to redelivery. In the circumstances, given the prospect of late redelivery

and the CLAIMANT’S rejection of the offer to clean at North Titan, it was commercially impractical

for the RESPONDENT to perform hull cleaning under the Charterparty. In this sense, the RESPONDENT

was prevented from carrying out cleaning. Accordingly, the mechanism set out in cl 83(d) should

properly have applied: the parties were, prior to but latest on redelivery, required to ‘agree a lump

sum payment in full and final settlement of the Owners’ costs and expenses arising as a result of or

15 Record, 35: email from Titan Shipbuilders to Omega Chartering dated 23 June 2016; Record, 37: Titan Shipbuilders

Quotation. 16 See Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 913 (Lord Hoffmann);

Cosmos Holidays Plc v Dhanjal Investments Ltd [2009] EWCA Civ 316, [17] (Anthony Clarke MR).


8

in connection with the need for cleaning’. Thus, on the ordinary measure of damages for breach of

contract,17 the CLAIMANT is entitled to no more than the amount of the lump sum payment.

B. A reasonable lump sum payment is appropriately quantified at USD33,000.

13 The RESPONDENT’S liability is properly limited to USD33,000 — the quoted cost of hull cleaning at

North Titan18 — because: (i) the lump sum payment under cl 83(d) is intended to reflect a reasonable

compromise between the parties and so does not extend to the higher cost of cleaning at South Island;

and (ii) the cost of the voyage to South Island falls outside the contemplation of cl 83(d) altogether

and therefore should not be borne by the RESPONDENT.

14 As to (i), cl 83(d) is on its face an ‘agreement to agree’; however, a term that the lump sum be

reasonable can readily be implied to give effect to the parties’ bargain.19 The clause requires the

parties to agree this reasonable lump sum ‘prior to but latest on redelivery’. It follows that the lump

sum payment is not intended to be precisely equal in amount to the costs and expenses ultimately

borne by the owner. Because the lump sum is agreed in advance of the hull cleaning, it can only ever

be an approximation derived from quotations that might then have been received.20

15 The quotation received from North Titan Shipbuilders established that hull cleaning could be

conducted at a cost of USD33,000. This sum should constitute the total damages payable to the

CLAIMANT for hull cleaning. It is not to the point that the actual cost borne by the CLAIMANT exceeded

this. Following redelivery, the CLAIMANT had full control over the Vessel and complete freedom as

to the choice of cleaning venue. The CLAIMANT was therefore entitled to clean at South Island to

advance its private commercial interests, despite the availability of a less expensive alternative;

however, the CLAIMANT cannot now also be entitled to increased damages from the RESPONDENT as

a result of its choice.

17 Robinson v Harman (1848) 1 Exch 850; Morris-Garner v One Step (Support) Ltd [2018] 2 WLR 1353, 1365 [32]

(Lord Reed JSC); Team Tours Direct Ltd v Aspire Sport Tours Ltd [2018] EWHC 1541 (QB), [60] (Keyser J). 18 Record, 37: Titan Shipbuilders Quotation. 19 See Mamidoil-Jetoil Greek Petroleum Co SA v Okta Crude Oil Refinery AD [2001] 2 Lloyd’s Rep 76, 85–90 [53]–

[69] (Rix LJ). 20 See BIMCO Explanatory Notes.


9

16 As to (ii), the language of cl 83(d) provides that the lump sum payment is to reflect the expenses

‘arising as a result of or in connection with the need for cleaning pursuant to this clause’. The phrase

‘in connection with’ is intended to cover only such things as vessel disbursements incidental to the

cleaning, and should not be taken to include the expense of the voyage to the cleaning location.21 The

flaw in the latter view is clear: if the charterers are to compensate the owners for all expenses of the

voyage, the owners are effectively left at liberty to arrange for cleaning at whatever location they

judge best, no matter how distant it may be. The charterers could then be required to bear costs

substantially in excess of what was in fact required to clean the vessel. This uncommercial outcome

should be avoided.

17 Accordingly, the RESPONDENT is not liable for the increased cost of the cleaning conducted by the

CLAIMANT at South Island, or for the expenses incurred by the CLAIMANT in its voyage to this

location. Damages are appropriately limited to USD33,000.

SUBMISSIONS ON THE LATE REDELIVERY OF THE VESSEL

I. THE CLAIMANT IS NOT ENTITLED TO DAMAGES CALCULATED AS THE LOSS OF

HIRE UNDER THE NEXT FIXTURE.

18 Though the RESPONDENT has admitted breach of the Charterparty by late redelivery of the Vessel at

Wahanda,22 the loss of hire payable under the Next Fixture was too remote a consequence of this

breach to sound in damages. At the time of contracting, the RESPONDENT did not assume

responsibility for loss of this type or kind because: (A) the time charterer of a vessel was not liable

for this same type of loss in the case of The Achilleas23 on facts that are not materially distinguishable

from those at present; and (B) the RESPONDENT had no special knowledge of the Next Fixture.

21 See, eg, Record, 35: email from Titan Shipbuilders to Omega Chartering dated 23 June 2016; Record, 51: South Island

Port Agency Co Ltd Statement of Vessel Disbursements. 22 Record, 68: Defence and Counterclaim Submissions [10](2). 23 Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2009] 1 AC 61.


10

A. The decision in The Achilleas applies by analogy.

19 The Achilleas concerned a time-chartered vessel that was redelivered late, causing the loss of a follow-

on fixture that had not been brought to the charterers’ attention by the owners. The House of Lords

unanimously held that the loss of hire payable under the follow-on fixture was not recoverable, though

different routes were taken to reach this conclusion.

20 Subsequent decisions have sought to reconcile the ‘assumption of responsibility’ approach advanced

by Lords Hoffmann and Hope with the orthodox application of the rule in Hadley v Baxendale24

preferred by Lord Rodger and Baroness Hale. The generally accepted synthesis of these approaches

offered by Hamblen J in The Sylvia25 provides that, while the principle of assumption of responsibility

formed part of the ratio decidendi of The Achilleas, only in the ‘unusual’ case — such as The Achilleas

itself — would resort to that principle be necessary.26 Application of the rule in Hadley v Baxendale

is ordinarily sufficient, and no new generally-applicable test of remoteness now prevails.27

21 However, the factual analogy between the The Achilleas and the present case is immediate and

inescapable. Accordingly, the principle of assumption of responsibility is not merely relevant to

consider in the course of the ordinary assessment of remoteness — it is, as in The Achilleas, entirely

decisive of the issue. Indeed, the two specific factors recognised in The Sylvia as making The

Achilleas an ‘unusual’ case are readily identifiable here: (i) the RESPONDENT was entitled to expect

on its understanding of the relevant market that damages would not extend to a loss of hire under any

follow-on fixture; and (ii) such a loss was, in the circumstances, unquantifiable.

22 As to (i), it was confirmed in The Achilleas itself that damages for late redelivery in the commercial

shipping market are ordinarily calculated as the difference between the charterparty rate of hire and

24 (1854) 9 Exch 341. 25 Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd (The Sylvia) [2010] 2 Lloyd’s Rep 81. 26 Ibid, 85–6 [39]–[48]. 27 See also ASM Shipping Ltd of India v TTMI Ltd of England (The Amer Energy) [2009] 1 Lloyd’s Rep 293, 295 [17]–

[19] (Flaux J); Classic Maritime Inc v Lion Diversified Holdings Berhad [2010] 1 Lloyd’s Rep 59, 71 [70]–[71]

(Cooke J); Supershield Ltd v Siemens Building Technologies FE Ltd [2010] EWCA Civ 7, [43] (Toulson LJ).


11

the market rate of hire for the period of overrun.28 It followed there that the charterers were not to be

held liable for a risk that they would not reasonably be considered to have undertaken on entry into

that particular market — that is, the risk that a follow-on fixture would be lost by late redelivery.29

The use of the formula for damages for breach by late redelivery has not since fallen out of favour —

in fact, its general applicability has been made near-certain by The Achilleas. Accordingly, the

RESPONDENT was entitled to expect, on its understanding of the relevant market, that its liability

would be determined by reference to this formula and not inflated by the loss of the Next Fixture.

23 As to (ii), it was noted in The Achilleas that a follow-on fixture could be concluded for any length of

time on any particular terms, rendering the precise loss unquantifiable.30 It followed that the charterers

could not be taken to have assumed responsibility for such a loss at all. The same conclusion must

follow here. While the CLAIMANT’S 1 March 2016 Chatter post suggested that it was looking to fix

for three to five years, the parties to the present dispute immediately thereafter concluded a

charterparty of 50–55 days duration only — from which the RESPONDENT could infer that the

CLAIMANT might fix for any period at all. In such circumstances, it cannot be said that the

RESPONDENT at the time of contracting accepted responsibility for any particular loss of hire under a

follow-on fixture occasioned by late redelivery.

B. The RESPONDENT did not have special knowledge of the Next Fixture.

24 Under the second limb of the rule in Hadley v Baxendale a defendant may be liable for a loss the risk

of which was specifically brought to its attention by the plaintiff at the time the contract was entered

into.31 The rationale underlying this principle is again the assumption of responsibility — premised

28 See Timber Shipping Co SA v London & Overseas Freighters Ltd [1972] AC 1; Alma Shipping Corpn of Monrovia v

Mantovani (The Dione) [1975] 1 Lloyd’s Rep 115, 117–18 (Lord Denning MR); Arta Shipping Co Ltd v Thai Europe

Tapioca Service Ltd (The Johnny) [1977] 2 Lloyd’s Rep 1, 2 (Lord Denning MR); Shipping Corporation of India Ltd

v NSB Niederelbe Schiffahrtsgesellschaft mbH & Co (The Black Falcon) [1991] 1 Lloyd’s Rep 77; Hyundai Merchant

Marine Co Ltd v Gesuri Chartering Co Ltd (The Peonia) [1991] 1 Lloyd’s Rep 100, 118 (Bingham LJ); Lansat

Shipping Co Ltd v Glencore Grain BV (The Paragon) [2009] 2 Lloyd’s Rep 688. 29 The Achilleas [2009] 1 AC 61, 67–8 [10]–[11], 70–1 [23] (Lord Hoffmann), 74 [34] (Lord Hope); The Sylvia [2010]

2 Lloyd’s Rep 81, 85–6 [40], 89–90 [72]. 30 The Achilleas [2009] 1 AC 61, 70–1 [23] (Lord Hoffmann), 74–5 [34], [36] (Lord Hope), 88 [86] (Lord Walker); The

Sylvia [2010] 2 Lloyd’s Rep 81, 85–6 [40], 90 [73]. See also Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The

Great Creation) [2015] 1 Lloyd’s Rep 315, 325–6 [59]–[66] (Cooke J). 31 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528, 539 (Asquith LJ).


12

here on the actual knowledge of both parties that a particular loss would result from breach of the

agreement.32 In the present case, the RESPONDENT had no special knowledge of the Next Fixture at

the time of its contracting with the CLAIMANT.

25 On the Record, only the CLAIMANT’S Chatter posts of 1 January 2016 and 1 March 2016 pre-date the

Charterparty. Accordingly, it must be from these posts that the CLAIMANT has pleaded that the

RESPONDENT was fixed with special knowledge.33 However, the Chatter posts provide no basis upon

which to draw this conclusion. The bare suggestion of the possibility of a three to five year fixture

was not sufficient to put the ultimate loss of the Next Fixture in the parties’ contemplation.

26 The case law considering special knowledge provides that, for the possibility of a particular type of

loss to be in the parties’ contemplation, the details of that loss have to be known with some specificity

— not merely known in the abstract.34 The mention in passing of some lucrative deal that might be

lost by a breach of the immediate contract will not be sufficient to found liability.35 However, the

present case does not even go so far: here, not only has the CLAIMANT failed to bring the particular

details of the follow-on fixture to the RESPONDENT’S attention, this fixture was not even concluded at

the time of contracting. Moreover, as noted already, the RESPONDENT cannot be taken to have

specifically contemplated that such a three to five year fixture might, even eventually, be concluded

where it had just negotiated with the CLAIMANT a time charter of only about 50–55 days duration.

27 The counterfactual posed by Lord Rodger in The Achilleas offers a ready indication of what might

suffice to establish special knowledge in the present circumstances. On those facts his Lordship

suggested that liability might follow if ‘the owners drew the charterers’ attention to the existence of

a forward charter of many months’ duration for which the vessel had to be delivered on a particular

32 Jackson v Bank of Scotland [2005] 1 WLR 377, 386 [35]–[36] (Lord Hope); Satef-Huttenes Albertus SpA v Paloma

Tercera Shipping Co SA (The Pegase) [1981] 1 Lloyd’s Rep 175, 185 (Goff J); Neil Andrews et al, Contractual Duties:

Performance, Breach, Termination and Remedies (Sweet & Maxwell, 2nd ed, 2017) 485 [23-039]. 33 Record, 77: Reply and Defence to Counterclaim Submissions [6](2). 34 See Horne v Midland Railways Co (1873) LR 8 CP 131; British Columbia & Vancouver’s Island Spar, Lumber &

Saw-Mill Co Ltd v Nettleship (1868) LR 3 CP 499. 35 See British Columbia Sawmills Co v Nettleship (1868) LR 3 CP 499, 510 (Willes J).


13

date’.36 The present facts fall far short of this standard. The RESPONDENT therefore had no special

knowledge of the Next Fixture at the time of contracting and so cannot be taken to have assumed

responsibility for the loss.

II. ALTERNATIVELY, THE RELEVANT PERIOD FOR CALCULATING DAMAGES

UNDER THE NEXT FIXTURE SHOULD BE THE MINIMUM PERIOD OF TWO YEARS.

28 Under the Next Fixture, Champion was to charter the Vessel for a two-year period with an option to

extend the charter to four years. If the loss of the Next Fixture is not too remote, the CLAIMANT is

nonetheless entitled only to damages for the minimum two-year period of the Next Fixture, not the

maximum four-year period. The CLAIMANT cannot claim damages for the loss of an option.

29 If the contract had been performed, the CLAIMANT would receive the two additional years’ hire only

if Champion exercised its option to extend the 15 June 2016 Charterparty. Champion is not party to

the present dispute and there are no facts that may be drawn from the Record to suggest whether it

was likely to exercise its option. There is therefore no basis on which to assess even the probability

that the ultimate duration of the follow-on fixture would be two years or four. Where the outcome is

a matter of pure speculation — as in a case where it is entirely dependent on the unrestricted volition

of a third party — damages cannot follow.37 It is therefore inappropriate to impose additional liability

on the RESPONDENT for the loss of a contingency the likelihood of which cannot be known. Damages

are appropriately limited to the hire due for the minimum two-year period of the follow-on fixture.

III. FURTHER AND IN THE ALTERNATIVE, THE CLAIMANT MUST GIVE CREDIT FOR

HIRE RECEIVER UNDER THE SUBSTITUTE FIXTURE.

30 Damages for breach of contract are awarded to make good the net loss of the aggrieved party.38

Therefore, actions taken by the CLAIMANT, calculated to reduce its loss, may be brought into account

when determining the RESPONDENT’s liability. The precise rule was stated by Longmore LJ in The

36 The Achilleas [2009] 1 AC 61, 80 [59]. 37 See Chaplin v Hicks [1911] 2 KB 786, 792 (Vaughan Williams LJ); Allied Maples Group Ltd v Simmons & Simmons

[1995] 1 WLR 1602. 38 British Westinghouse Electric & Manufacturing Co Ltd v Underground Electronic Railways Co of London Ltd [1912]

AC 673, 689–91 (Viscount Haldane LC).


14

New Flamenco: ‘if a claimant adopts by way of mitigation a measure which arises out of the

consequences of the breach and is in the ordinary course of business and such measure benefits the

claimant, that benefit is normally to be brought into account in assessing the claimant’s loss unless

the measure is wholly independent of the relationship of the claimant and the defendant’.39

31 The case law makes clear that this rule is immediately applicable where there has been breach of a

time charterparty by early redelivery — the decision to arrange alternate employment of the vessel

on the market for the period during which the charterparty would otherwise have continued is

normally to be brought into account.40 Though the present case concerns late redelivery, the principle

remains readily applicable as its underlying rationale is unaffected: if credit is not given for the hire

received under the Substitute Fixture, the CLAIMANT stands to be over-compensated for its actual

loss. The CLAIMANT has, by way of mitigation, sought and arranged the Substitute Fixture as a direct

consequence of the RESPONDENT’S breach. The CLAIMANT must therefore give credit for the hire

received under the Substitute Fixture and the RESPONDENT’S liability should be reduced to the same

extent.

SUBMISSIONS ON THE CARGO DAMAGE

I. THE RESPONDENT IS ENTITLED TO BE INDEMNIFIED BY THE CLAIMANT

AGAINST 100% OF THE CARGO CLAIM.

32 Following delivery of severely wet damaged cargo at Wahanda, a claim has been brought by the

Receivers against the RESPONDENT41 — the contractual carrier.42 The RESPONDENT is entitled to a

declaration that the CLAIMANT indemnify it against the entirety of the Cargo Claim because: (A)

liability for the Cargo Claim, as between the CLAIMANT and the RESPONDENT, is to be apportioned

39 Fulton Shipping Inc v Globalia Business Travel SAU (formerly Travelplan SAU) of Spain (The New Flamenco) [2016]

1 Lloyd’s Rep 383, 390 [23]. 40 See, eg, The New Flamenco [2016] 1 Lloyd’s Rep 383; Dalwood Marino Co v Nordana Line A/S (The Elbrus) [2010]

2 Lloyd’s Rep 315; The Great Creation [2015] 1 Lloyd’s Rep 315, 321 [32]–[33] (Cooke J). See also Koch Marine

Inc v D’Amica Societa Di Navegazione ARL (The Elena D’Amico) [1980] 1 Lloyd’s Rep 75. 41 Procedural Order No 2, [10]. 42 Record, 47: Draft Bill of Lading.


15

according to the ICA; (B) under the ICA, the Cargo Claim is not time-barred as between the

CLAIMANT and the RESPONDENT; and (C) the apportionment provisions of the ICA dictate that 100%

of the Cargo Claim is for the CLAIMANT’S account.

A. Liability for the Cargo Claim is to be apportioned according to the ICA.

33 The ICA is incorporated into the Charterparty by reference.43 The ICA therefore operates to apportion

liability between the parties, provided the pre-conditions to its application specified in its cls 3 and 4

are satisfied. The Cargo Claim fulfils these requirements.

34 Initially, the claim brought by the Receivers readily satisfies the definition of ‘cargo claim’ in cl 3 of

the ICA, being an ordinary claim for wet damage to cargo.

35 The Cargo Claim has also been made under a contract of carriage of the type required by cl 4(a),

which is evidenced by the draft bill of lading.44 As required by cl 4(a)(iv), the contract incorporates

the Hague Rules or Hague-Visby Rules by a General Paramount Clause.45 There is also no suggestion

that the contract was not authorised under the Charterparty, as required by cl 4(a)(i).46 The

requirement stated in cl 4(b) is also clearly met as the cargo responsibility clause in the Charterparty

— that is, cl 8(a) of the NYPE 2015 — has not been materially amended.

36 As to cl 4(c), it is not contended that the Cargo Claim has been ‘properly settled or compromised and

paid’. However, the Cargo Claim has been validly made by the Receivers47 and its quantum has been

agreed.48 Clause 4(c) need not bar apportionment under the ICA where the RESPONDENT seeks only

a declaration that the CLAIMANT is obliged to indemnify it against its liability to the Receivers.49 Such

43 Record, 12: Omega Rider, cl 53; NYPE 2015, cl 27. 44 Record, 47–9. 45 Record, 48: Draft Bill of Lading, cl 2. 46 In any case, the threshold set by cl 4(a)(i) is low — even in cases where the conformity of the bill of lading to the

Charterparty is subject to doubt, the ICA will apply provided that the bill otherwise incorporates the necessary

limitations by way of a General Paramount Clause or other equivalent: see Transpacific Discovery SA v Cargill

International SA (The Elpa) [2001] 2 Lloyd’s Rep 596, 601 [20] (Morrison J). 47 Procedural Order No 2, [11]. 48 Ibid. The quantum of the Cargo Claim has been agreed to amount to 2000mt of cargo at a value of USD50 per kilogram

(totalling USD100,000,000), subject to the limitation imposed by the Convention on Limitation of Liability for

Maritime Claims 1976, as amended by the Protocol of 1996. The Convention is incorporated into the law of the United

Kingdom by s 185 of the Merchant Shipping Act 1995 (UK). The Convention would apply as the claim for cargo

damage is a ‘claim subject to limitation’ under art 2(1)(a). 49 Agile Holdings Corp v Essar Shipping Ltd [2018] EWHC 1055 (Comm).


16

a declaration would accord with the commercial purpose of the ICA, namely the efficient settlement

of liability for cargo claims as between owners and charterers.50

B. The Cargo Claim is not time-barred under cl 6 of the ICA.

37 Clause 6 of the ICA allows 24 months from the date of delivery of the cargo for a written notification

of the claim to be given to the other side to the Charterparty. The cargo was discharged on 30 June

2016,51 and it can be inferred that delivery was effected on or immediately after this date. Before the

expiry of the 24-month period on 30 June 2018, the RESPONDENT gave the necessary written

notification of the Cargo Claim to the CLAIMANT.52

38 The CLAIMANT has pleaded that written notice of the claim has not been given as required by cl 6 of

the ICA.53 Clause 6 states that the notification is to ‘include details of the contract of carriage, the

nature of the claim and the amount claimed’. However, the language of the clause indicates that these

listed features are not mandatory — they are to be included only ‘if possible’. In the present case, this

information has been provided where available.

39 On 7 July 2016, the RESPONDENT furnished the CLAIMANT with the Preliminary Survey Report of 30

June 2016,54 from which the required information can be taken or inferred, and formally gave the

CLAIMANT notice of the claim to be brought.55 The purpose of the notice requirement is to allow the

recipient of the notice to investigate the potential claim and prepare to deal with it.56 The information

contained in the Report was sufficient for this purpose.

40 Initially, the Report clearly disclosed the nature of the Cargo Claim. Specifically, the Report provided

that the Receivers were to claim against the RESPONDENT for wet damage to the cargo of English

breakfast tea. The damage was the result of an error by a crew member during ballasting operations,

50 See Oceanfocus Shipping Ltd v Hyundai Merchant Marine Co Ltd (The Hawk) [1999] 1 Lloyd’s Rep 176, 185

(Diamond J). 51 Record, 68: Claim Submissions [17]. 52 Record, 45: email from Clark Kent Bulk to Hulk Hulls dated 7 July 2016. 53 Record, 77: Reply and Defence to Counterclaim Submissions [8](1); Procedural Order No 2, [15]. 54 Record, 45: email from Clark Kent Bulk to Hulk Hulls dated 7 July 2016. 55 See London Arbitration 16/02. 56 London Arbitration 32/04; London Arbitration 16/02.


17

the Vessel’s systems otherwise being entirely in order. The CLAIMANT was therefore fully informed

of the cause of the damage, allowing it to assess how liability might be apportioned under the ICA.

41 The Report also allowed the CLAIMANT to approximate the quantum of Cargo Claim. The Report

provided that the majority of the 8,000mt of cargo had been severely damaged and that this cargo

would be valued between USD60 and USD65 per kilogram on the local market. From these facts the

CLAIMANT could estimate the quantum of the Cargo Claim and prepare accordingly. It is not to the

point that no final figure was stated. Even by late 2017, the quantum had not been concluded as

between the RESPONDENT and the Receivers.57 The RESPONDENT — with the CLAIMANT’S consent —

had granted multiple time extensions to the Receivers while discussions continued.58 In accordance

with the language of cl 6, it was not ‘possible’ for the RESPONDENT to state the quantum with complete

specificity. The information in the Preliminary Survey Report was sufficient.

42 Similarly, the details of the contract of carriage provided by the RESPONDENT were adequate for the

purpose of the cl 6 written notification. The Report disclosed that the surveyor had been shown

documents by the Receivers indicating that the RESPONDENT was the contractual carrier. No

irregularities were reported. The CLAIMANT could therefore have inferred that the content of the

contract was entirely standard. It would be unreasonable for the CLAIMANT to escape liability

altogether by insisting that further information should have been provided where there is no evidence

that it is, or has been, incapable of preparing to deal with the Cargo Claim.

43 The pre-conditions to its application being satisfied, liability for the Cargo Claim is to be apportioned

according to provisions of the ICA.

C. Under the ICA, 100% of the Cargo Claim is for the CLAIMANT’S account.

44 Apportionment of a qualifying cargo claim is dictated by cl 8 of the ICA. In this case, the Cargo

Claim is to be apportioned 100% to the CLAIMANT pursuant to cl 8(a) as the claim has arisen out of

an error or fault in the navigation or management of the vessel.

57 Record, 57: email from Clark Kent Bulk to Hulk Hulls dated 23 November 2017. 58 Record, 58: email from Clark Kent Bulk to Omega Chartering dated 29 May 2017; Record, 57: email from Clark Kent

Bulk to Omega Chartering dated 28 August 2017.


18

45 The concept of error or fault in the navigation or management of the vessel under the ICA imports

the same legal principles as have developed under art IV, r 2(a) of the Hague Rules and Hague-Visby

Rules.59 Of foremost relevance is the distinction, long maintained in the authorities considering the

art IV, r 2(a) exception, between want of care of the vessel indirectly affecting the cargo and want of

care of the cargo itself.60 The enquiry considers the immediate or primary purpose of the act in

question: whether it was performed for the safety and good order of the vessel, or performed in the

care of the cargo.61 In the context of the ICA, the distinction separates those cases properly

apportioned pursuant to cl 8(a) from those apportioned pursuant to cl 8(b).

46 The Preliminary Survey Report states that the damage to the cargo was the result of an error in

ballasting operations: a crew member opened the wrong valves and pumped sea water into the hold.62

The case law makes clear that an error by a crew member can amount to an error in the management

of the vessel.63 The authorities also confirm that ballasting is ordinarily undertaken to ensure the

safety and stability of the vessel.64 The ballasting operation in the present case — undertaken to ready

the Vessel for its departure following discharge — was in this sense entirely standard. The operation

as a whole bearing primarily on the Vessel as a navigational unit and not on the cargo, the crew

member’s error must be classed as an error in the management of the vessel. This is indeed the usual

finding in the case law: ‘[i]f the primary purpose is to affect the ballast of the ship, the change is

59 See D/S A/S Idaho v Peninsular & Oriental Steam Navigation Co Ltd (The Strathnewton) [1983] 1 Lloyd’s Rep 219,

223 (Kerr LJ). 60 See Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd [1929] AC 223, 233 (Lord Hailsham LC)

(‘Gosse Millerd’). See also The Glenochil [1896] P 10; The Ferro [1893] P 38; The Rodney [1900] P 112; Clearlake

Shipping Pte Ltd v Privocean Shipping Ltd (The Privocean) [2018] 2 Lloyd’s Rep 551; Kalamazoo Paper Co v

Canadian Pacific Railway Co [1950] SCR 356. 61 See Gosse Millerd [1929] AC 223, 231 (Lord Hailsham LC), quoting The Glenochil [1896] P 10; Compania Sud

American Vapores v MS ER Hamburg Schiffahrtsgesellschaft MBH & Co KG [2006] 2 Lloyd’s Rep 66, 82 [60]

(Morison J); Compania Sud Americana de Vapores SA v Sinochem Tianjin Import & Export Co (The Aconcagua)

[2010] 1 Lloyd’s Rep 1, 53 [372] (Christopher Clarke J). 62 Record, 46. 63 See Gosse Millerd [1929] AC 223; Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash

and Oceanic Amity) [1984] 1 Lloyd’s Rep 588; Minnesota Mining & Manufacturing (Australia) Pty Ltd v The Ship

‘Novoaltaisk’ [1972] 2 NSWLR 476. 64 See The Privocean [2018] 2 Lloyd’s Rep 551, 561 [73] (Cockerill J), citing The Glenochil [1896] P 10.


19

management of the vessel’.65 Accordingly, the ballasting error in this case falls squarely within cl

8(a).

47 The CLAIMANT is therefore liable to indemnify the RESPONDENT against 100% of the Cargo Claim.

The apportionment exercise under the ICA is entirely mechanical.66 The quantum of the CLAIMANT’S

liability cannot therefore be contested by reference to principles of foreseeability and remoteness

raised due to an increase in the price of the cargo carried aboard the Vessel.67

II. ALTERNATIVELY, THE REPSONDENT IS ENTITLED TO BE INDEMNIFIED BY THE

CLAIMANT AGAINST 50% OF THE CARGO CLAIM.

48 Given the distinction previously noted, if the cause of the wet damage was not an error or fault in the

management of the vessel, it arose out of the handling of the cargo and falls to be apportioned under

cl 8(b) of the ICA. In this case, the Cargo Claim must be apportioned ‘50% Charterers 50% Owners’

as cl 8(a) of the NYPE 2015 has been amended precisely in the manner noted in cl 8(b) of the ICA

— that is, by the addition of the words ‘and responsibility’.68

III. ALTERNATIVELY, THE CLAIMANT IS LIABLE IN DAMAGES FOR BREACH OF

THE CHARTERPARTY.

49 Both cl 27 of the NYPE 2015 and cl 53 of the Omega Rider provide that liability as between the

parties for cargo claims is to be apportioned according to the ICA. Although the ICA operates as an

independent code,69 its terms have been validly incorporated into the Charterparty and have

contractual effect. Therefore, a refusal to comply with cls 27 and 53 amounts to a breach of the

Charterparty entitling the RESPONDENT to damages.70

65 The Privocean [2018] 2 Lloyd’s Rep 551, 561 [68] (Cockerill J), citing Oceanic Steam Navigation Co v Aitken, 196

US 589, 597–8 (1905) (Holmes J). See also Orient Insurance Co v United Steamship Co [1961] AMC 1228; Leon

Bernstein Co v Wilhelmsen, 232 F 2d 771, 772 (5th Cir, 1956); William Tetley, Marine Cargo Claims (Thomson

Carswell, 4th ed, 2008) vol 1, 969. 66 See The Strathnewton [1983] 1 Lloyd’s Rep 219, 224–5 (Kerr LJ); M H Progress Lines SA v Orient Shipping

Rotterdam BV (The Genius Star I) [2012] 1 Lloyd’s Rep 222, 224 [5] (Teare J). 67 Record, 21: Challaland Times — Commodities News 15 April 2016. See Kamilla Hans-Peter Eckhoff KG v A C

Oerssleff’s EFTF A/B (The Kamilla) [2006] 2 Lloyd’s Rep 238, 242–3 [15]–[17] (Morison J). 68 Record, 4: Recap of fixture between Panther Shipping Inc and Omega Charting Limited dated 18 March 2016. 69 Ben Line Steamers Ltd v Pacific Steam Navigation Co (The Benlawers) [1989] 2 Lloyd’s Rep 51, 56 (Hobhouse J). 70 Steven J Hazelwood and David Semark, P&I Clubs Law and Practice (Informa, 4th ed, 2010) 272 [15.32].


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50 The relevant loss arising from this breach is the amount of the RESPONDENT’S liability to the

Receivers. A causal relationship between the breach and the loss is readily identifiable. The loss is

also not too remote. Although the value of the cargo increased during the voyage, there is no

indication that this increase was extreme or of a magnitude unlikely to arise ‘according to the usual

course of things’.71 The possibility that this type of market fluctuation would affect the value of the

cargo and in turn affect the quantum of any cargo claim that might arise, would naturally be within

the reasonable contemplation of the parties.72 The CLAIMANT can therefore be taken to have

contemplated that it was not unlikely that breach of cls 27 and 53 would result in the RESPONDENT’S

loss. Thus, the RESPONDENT is entitled to damages in the amount of its liability to the Receivers under

the Cargo Claim.

SUBMISSIONS ON THE OFF-HIRE ISSUE

I. THE RESPONDENT IS ENTITLED TO RESTITUTION OF HIRE PAID FROM 7 MAY

2016 TO 26 JUNE 2016 AS THE VESSEL WAS OFF-HIRE DURING THIS PERIOD.

51 The Vessel was off-hire from 7 May 2016 until 26 June 2016 pursuant to cl 17 of the NYPE 2015 as:

(A) delay was caused as alleged in paragraph 8 of the RESPONDENT’S Defence and Counterclaim

Submissions; (B) the full working of the vessel was prevented during the period of delay; (C) this

was due to one of the causes listed under cl 17; (D) as a result, 50 days were lost to the RESPONDENT;

and (E) the off-hire clause is engaged irrespective of the fault of the CLAIMANT. Accordingly, the

RESPONDENT is entitled to restitution of hire overpaid during the relevant period in the amount of

USD375,000.

71 Hadley v Baxendale (1854) 9 Exch 341, 354–5 (Alderson B). See also The Achilleas [2009] 1 AC 61, 78–9 [53], 81

[60]–[61] (Lord Rodger). 72 C Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350, 382–3 (Lord Reid).


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A. Delay was caused as alleged in paragraph 8 of the RESPONDENT’S Defence and Counterclaim

Submissions.

52 Port State Control had reasonable grounds for suspecting that members of the Vessel’s crew might be

carrying the Ebola virus. A person has ‘reasonable grounds for suspicion’ where facts exist which are

sufficient to induce that state of mind in a reasonable person.73 ‘Suspicion’ arises where a person has

a positive feeling of apprehension that particular circumstances exist, but does not yet have evidence

to prove it.74 A reasonable person in the position of Port State Control would, based on the articles

published in the West Coast Daily Echo on 18 April 2016 and 21 April 2016,75 have had grounds to

suspect that members of the Vessel’s crew might be carrying the Ebola virus, particularly because

cases of Ebola had been reported among stevedores at West Coast Port two days before the Vessel

sailed from that port.76

B. The full working of the Vessel was prevented during the period of delay.

53 Clause 17 is engaged when the full working of the vessel is prevented by one of the events enumerated

in the clause.77 The test for whether the full working of the vessel is prevented is whether the vessel

is efficient to do what is immediately required of it by the charterers.78 A vessel which is legally or

administratively incapacitated may properly be characterised as ‘inefficient’, even if the ship itself is

otherwise physically efficient.79 It has been accepted that the full working of a vessel may be

prevented by action taken by authorities.80

73 Liversidge v Anderson [1942] AC 206; George v Rockett (1990) 170 CLR 104, 112 (Mason CJ, Brennan, Deane,

Dawson, Toohey, Gaudron and McHugh JJ); Nakkuda Ali v M F De S Jayaratne [1951] AC 66, 76–7 (Lord Radcliffe);

R v Inland Revenue Commissioner; Ex parte Rossminster Ltd [1980] AC 952, 1000 (Lord Wilberforce), 1011, 1017–

18 (Lord Diplock). 74 Hussien v Chong Fook Kam [1970] AC 942; Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266, 303 (Kitto J);

George v Rockett (1990) 170 CLR 104, 115 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ). 75 Record, 22–3. 76 Record, 22. 77 Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS) [1977] 1 Lloyd’s Rep 368, 382 (Kerr J); Andre

& Cie SA v Orient Shipping (Rotterdam) BV (The Laconian Confidence) [1997] 1 Lloyd’s Rep 139, 141 (Rix J). 78 Ca Venezolana De Navegacion v Bank Line (The Roachbank) [1987] 2 Lloyd’s Rep 498, 507 (Webster J). 79 The Laconian Confidence [1997] 1 Lloyd’s Rep 139, 150 (Rix J). 80 Ibid 149 (Rix J). See also Sidermar SpA v Apollo Corporation (The Apollo) [1978] 1 Lloyd’s Rep 200; Belcore

Maritime Corporation v Fratelli Moretti Cereali SpA (The Mastro Giorgis) [1983] 2 Lloyd’s Rep 66.


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54 In this case, it was objectively required in furtherance of the voyage at the time81 that the Vessel

proceed to berth and discharge the cargo for timely delivery to the Receivers. The Vessel was clearly

prevented from pursuing this course of action from 7 May 2016 to 26 June 2016.

55 In determining whether a cause prevents the ‘full working’ of a vessel, a distinction is drawn between

causes which are totally extraneous and causes which are attributable to the condition of the vessel

itself.82 Only causes in the latter category are considered to prevent the full working of the vessel for

the purpose of determining whether the vessel is off-hire.83 The condition of the vessel is not limited

to the physical condition of the ship, but also encompasses other qualities and characteristics

including its history.84 Where a vessel is detained by port authorities, the question of whether this is

a ‘totally extraneous’ cause turns on whether the authorities were acting reasonably and properly

pursuant to a suspected inefficiency or incapacity of the vessel,85 or whether the interference was

capricious and unforeseeable.86

56 The detention of the Vessel in this case cannot be classed as a ‘totally extraneous’ cause. It was a

result of the history of the ship87 — specifically the fact that its crew had communication with an area

where there was an outbreak of Ebola virus. Port State Control had reasonable grounds for suspecting

that members of the Vessel’s crew might be carrying the Ebola virus. By reason of the action taken

by Port State Control, the Vessel was ‘just as much incapable in herself of performing the service

immediately required … as she would have been if she had suffered a breakdown in her engines’.88

81 See Sig Bergesen D Y & Co v Mobil Shipping & Transportation Co (The Berge Sund) [1993] 2 Lloyd’s Rep 453, 460

(Staughton LJ). 82 The Mastro Giorgis [1983] 2 Lloyd’s Rep 66, 67 (Lloyd J), referring to Court Line Ltd v Dant & Russell Inc (1939)

64 Lloyd’s Rep 212. 83 Ibid. 84 The Mastro Giorgis [1983] 2 Lloyd’s Rep 66, 66 (Lloyd J). 85 See The Apollo [1978] 1 Lloyd’s Rep 200. 86 The Laconian Confidence [1997] 1 Lloyd’s Rep 139, 151 (Rix J). 87 The Apollo [1978] 1 Lloyd’s Rep 200, 205 (Mocatta J). 88 The Mastro Giorgis [1983] 2 Lloyd’s Rep 66, 67 (Lloyd J).


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C. The prevention of the full working of the Vessel was due to one of the causes listed in cl 17.

57 The delay was an off-hire event under cl 17 because it amounted to either: (i) ‘detention by Port State

control or other competent authority for Vessel deficiencies’; or (ii) a similar cause preventing the full

working of the vessel.

58 As to (i), a vessel is ‘detained’ when there is a constraint on its ability to provide the service required

of it under the Charterparty at the time.89 At the relevant time, the service required of the Vessel was

that it proceed to berth at Wahanda in order to discharge the cargo. The action taken by Port State

Control imposed a constraint on the Vessel’s ability to perform that service. Accordingly, the Vessel

was ‘detained’ within the meaning of cl 17.

59 It has been accepted that the ‘personal characteristics’ and ‘essential entity’ of a vessel include not

only its physical structure but also ‘the crew and its health’ and ‘the history of the vessel’.90 In this

case, there were deficiencies in the crew and its health and the history of the vessel, in that it had

previously called at a port where there was an outbreak of the Ebola virus. A deficiency in one of the

‘personal characteristics’ or in the ‘essential entity’ of the Vessel must be classified as a ‘vessel

deficiency’. No responsible person would use a ship reasonably suspected of carrying a serious

disease, such as the Ebola virus.91 That the Vessel would be likely to receive the same treatment at

any port indicates that there was an inherent deficiency in the Vessel’s status.92

60 As to (ii), the words ‘any other similar cause’ are interpreted ejusdem generis in accordance with

other causes specifically listed in cl 17 and in the context of the Charterparty as a whole.93 Without

prejudice to the foregoing submissions, even if these circumstances are not found to amount to a

89 Nippon Yusen Kaisha Ltd v Scindia Steam Navigation Co Ltd (The Jalagouri) [2000] 1 Lloyd’s Rep 515, 518–19

(Tuckey LJ), citing The Mareva AS [1977] 1 Lloyd’s Rep 368. 90 The Roachbank [1987] 2 Lloyd’s Rep 498, 501 (Webster J). See also the comment of Webster J at 507 that ‘the state

of a vessel’s documentation and her crew are matters which may be relevant to her efficiency’. 91 See Actis Co Ltd v The Sanko Steamship Co Ltd (The Aquacharm) [1980] 2 Lloyd’s Rep 7, 11 (Griffith LJ), referring

to The Apollo [1978] 1 Lloyd’s Rep 200. 92 Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (The Doric Pride) [2006] 2 Lloyd’s Rep 175, 182

[49] (Rix LJ). Note also London Arbitration 7/80, where a vessel was off-hire because it failed to clear a port in

Vietnam, as it had sailed directly from the Taichung Pilot station which was in a Communist-controlled area. 93 See, eg, Hogarth v Miller, Brother & Co [1891] AC 48, 53 (Lord Halsbury LC); The Apollo [1978] 1 Lloyd’s Rep

200, 205 (Mocatta J).


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‘vessel deficiency’, they amount to a ‘similar cause’ preventing the full working of the vessel. Clause

17 contemplates that a vessel may be off-hire where there are complications with the status of the

crew amounting to ‘deficiencies’ or ‘defaults’. The fact that there were reasonable grounds to suspect

that members of the Vessel’s crew might have been carrying the Ebola virus altered the status of the

crew and therefore amounted to a ‘similar cause’.

61 Clause 17 also clearly contemplates that a vessel may be off-hire where it is detained for any one of

several listed reasons. Moreover, having regard to the Charterparty as a whole, detention on the

grounds of suspected infection of the crew due to communication with an infected area was

specifically contemplated by the parties to be an off-hire event under cl 44 of the Omega Rider.

62 The RESPONDENT does not seek to rely on cl 44. However, cl 44 serves to demonstrate that the parties

contemplated that delay in quarantine could amount to an off-hire event, responsibility for which

would rest with the CLAIMANT.

D. As a result, 50 days were lost to the RESPONDENT.

63 Time is lost to the charterers if the vessel is not efficient to do what is required of it — in this case,

proceed to berth and discharge the cargo.94 Excluding 26 June 2016, when the Vessel obtained free

pratique and was cleared to berth, the Vessel was off-hire for 50 days. The rate of hire being USD7,500

per day including overtime, a total of USD375,000 was wrongfully paid by the RESPONDENT.

E. Clause 17 is engaged irrespective of the fault of the CLAIMANT.

64 Clause 17 is triggered by the occurrence of an off-hire event irrespective of the fault of the

shipowner.95 Even if the CLAIMANT reasonably believed that there were no grounds for suspecting

that any member of the crew was carrying the Ebola virus,96 the off-hire clause must apply.

94 Hogarth v Miller, Brother & Co [1891] AC 48, 56–7 (Lord Halsbury LC). 95 See The Aquacharm [1980] 2 Lloyd’s Rep 7, 9 (Lord Denning MR); The Berge Sund [1993] 2 Lloyd’s Rep 453, 463

(Steyn J); Ocean Glory Compania Naviera SA v A/S PV Christensen (The Ioanna) [1985] 2 Lloyd’s Rep 164, 167

(Staughton J). 96 See Record, 24: email from Hulk Hulls to Clark Kent Bulk dated 11 May 2016, where the CLAIMANT asserted that

while the cook and possibly one of the motormen may have had a cold, none of the crew members had a fever.


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II. ALTERNATIVELY, THE CLAIMANT IS LIABLE IN DAMGES FOR BREACH OF THE

CHARTERPARTY.

65 In the alternative, the CLAIMANT has breached cl 17 by failing to refund hire which was paid during

the period when the Vessel was off-hire. The CLAIMANT is liable in damages for this breach in the

amount of USD375,000 — that is, the amount of hire wrongfully paid by the RESPONDENT while the

Vessel was off-hire.

PRAYER FOR RELIEF

For the reasons set out above, the RESPONDENT seeks the following orders and declarations:

a. a declaration that it was relieved of its obligation to perform hull cleaning under cl 83 of the

Charterparty;

b. a declaration that the CLAIMANT is entitled only to damages for late redelivery of the Vessel calculated

as the difference between the market rate of hire and the Charterparty rate of hire for the period of

overrun;

c. a declaration that the CLAIMANT is obliged to indemnify the RESPONDENT against 100% of the Cargo

Claim;

d. restitution of hire overpaid from 7 May 2016 to 26 June 2016 in the amount of USD375,000;

e. an award for interest pursuant to s 49 of the Arbitration Act 1996 (UK); and

f. an order for costs.

Documents

MEMORANDUM FOR RESPONDENT - Murdoch University · Total Gas Marketing Ltd v Arco British Ltd [1998] 2 Lloyd’s Rep 209 Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas)