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INTERNATIONAL MARITIME LAW
ARBITRATION MOOT
ROTTERDAM, 2019
UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO
MEMORANDUM FOR CLAIMANT
ON BEHALF OF: AGAINST:
Panther Shipping Inc. Omega Chartering Ltd.
Claimant Respondent
GEMMA NAVEJA • MARÍA JOSÉ GONZÁLEZ •
BRENDA VALTIERRA • FRIDA CRUZ
TEAM 27
TABLE OF CONTENTS
TABLE OF ABBREVIATIONS…………………………………………………………………..…
TABLE OF LITERATURE………………………………………………………………………….
TABLE OF CASES…………………………………………………………………………………..
STATEMENT OF FACTS………………………………………………………………………...…1
ARGUMENT………………………………………………………………………………………….4
PART I: THE RESPONDENT BREACHED THE UNDERWATER HULL CLEANING
OBLIGATION……………………………………………………………………………………..…4
A. THE RESPONDENT WAS OBLIGED UNDER CLAUSE 83 OF THE RIDER CLAUSES TO
PERFORM UNDERWATER HULL CLEANING……………………………………...…….…4
B. THE ALTERNATIVES GIVEN BY THE RESPONDENT FOR THE AVOIDANCE OF THE
CLEANING OBLIGATION WERE INAPPROPRIATE..............................................................6
1. THE RESPONDENT’S OFFERS TO PAY A LUMP SUM WERE
INADEQUATE............................................................................................................................6
2. CLAIMANT’S DECISION OF UNDERWATER CLEANING PORT WAS
REASONABLE............................................................................................................................7
PART II: DELAY OF REDELIVERY……………………………………………………………...9
A. RESPONDENT FAILED TO REDELIVER THE VESSEL PRIOR TO THE EXPIRATION OF
THE MAXIMUM PERIOD OF THE CHARTERPARTY……………………………………………9
B. RESPONDENT IS LIABLE FOR CLAIMANT’S LOSS OF
PROFITS..............................................................................................................................................10
COUNTERCLAIMS DEFENSE.......................................................................................................12
PART I: THE CARGO IS INADMISSIBLE..................................................................................12
A. THE CARGO CLAIM IS TIME-BARRED..............................................................................12
B. EVEN IF CARGO CLAIM WAS WITHIN THE TIME LIMIT, THE CLAIMANT IS NOT
RESPONSIBLE FOR CARGO DAMAGE …………………………………………………………16
1. THE CLAIMANT IS NOT LIABLE FOR CARGO DAMAGE IN ACCORDANCE WITH
THE INTER-CLUB AGREEMENT…………………………………………………….16
2. THE CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE ARISING FROM
CREW NEGLIGENCE……………………………………………………………………18
3. CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE IN ACCORDANCE
WITH THE BILL OF LADING………………………………………………………….19
PART. II: THE VESSEL REMAINED ON-HIRE DURING THE ENTIRE TRIP..........20
A. THE DELAY WAS NOT DUE TO AN OFF-HIRE EVENT UNDER ARTICLE 17 OF
THE NYPE ..........................................................................................................................20
PRAYER FOR RELIEF…………………………………………………………………..…22
TABLE OF ABBREVIATIONS
Abbreviation Explanation
Art. Article
Arbitration
Act 1996
English Arbitration Act 1996
BOL Bill of Lading
Cargo 2,000 mt of cargo of loose-leaf English Breakfast Tea with a value of
US$50 per kg
Co. Company
Crew Crew of the Motor Vessel Thanos Quest
Ed. Edition
English Court of
Appeal
Court of Appeal of England and Wales
Hague Rules International Convention for the Unification of Certain Rules of
Law relating to Bills of Lading and Protocol of Signature (Brussels, 25
August 1924)
ICA Inter-Club New York Produce Exchange Agreement 1996 (As
Amended September 2011)
Inc. Incorporated
Ltd. Limited Company
Moot Scenario International Maritime Law Arbitration Moot 2019 ‘Moot Scenario’
No. 20, Version 3.
Mt. Metric Tonne
Next Fixture Fixture between Panther Shipping Inc. and Champion Chartering Corp.
for a period of two years, plus a further two years in charters’ option
NYPE 2015 New York Produce Exchange Charterparty 2015
NYPE 2015
Explanatory
Notes
New York Produce Exchange Charterparty 2015 Explanatory
Notes
Preliminary
Survey Report
Preliminary Survey Report of Mekon Surveyors Inc., dated 30 June
2016
TCP Time charterparty (between Panther Shipping Inc. and Omega
Chartering Ltd.) including the Rider Clauses
Underwater
Cleaning
Underwater Hull Cleaning Obligation pursuant clause 83 of the TCP.
USD United States Dollar
V. Versus
Vessel Motor Vessel Thanos Quest
TABLE OF AUTHORITIES
Cited as
Citation Cited in
para.
BIMCO BIMCO
BIMCO and industry partners to launch hull
underwater cleaning standard, amid environment
concerns; Maritime Risk International
5
HENDRIKSE, M.L./
MARGETSON,
N.H./
MARGETSON, N.J.
HENDRIKSE, M.L./ MARGETSON, N.H./
MARGETSON, N.J.
Aspects of Maritime Law, Claims Under Bills of
Lading, Kluwer Law International [2008]
52, 53
KONARSKI, Hubert KONARSKI, Hubert
International Business Law Journal, Force majeure and
hardship clauses in international contractual practice
[2003]
24
London Arbitration
25/17
LLOYD'S MARITIME LAW NEWSLETTER
London Arbitration 25/17
7
NIKAKI Theodora /
SOYER, Barış
NIKAKI, Theodora / SOYER, Barış
Enhancing standardization and legal certainty through
standard charterparty contracts: The NYPE 2015
experience 1, 3, 6
NYPE 2015.
EXPLANATORY
NOTES
NYPE 2015
Time Charter Party Explanatory Notes 29
SOYER, Bariş /
TETTENBORN,
Andrew
SOYER, Bariş / TETTENBORN, Andrew Charterparties: Law, Practice and Emerging Legal
Issues. Informa Law from Routledge [2017] 31, 66
TETLEY, William TETLEY, William Marine cargo claims, 4th edition, Thomson Carswell
[2008]
44, 56
YANG LIU, Edward YANG LIU, Edward
Disputes arising out of hull bottom fouling under time
charterparties, Lloyd's Shipping & Trade Law [2018]
4, 16
TABLE OF CASES
Cited as Citation Cited in
United Kingdom
Alize 1954 & Anor v
Allianz Elementar
Versicherungs AG &
Ors
Alize 1954 & Anor v Allianz Elementar
Versicherungs AG & Ors
Queen's Bench Division
[2019] EWHC 481
63
CARISBROOKE Shipping
v Bird Port Limited CARISBROOKE Shipping v Bird Port Limited
Queen's Bench Division
[2005] EWHC 1974
33
Channel Island Ferries
v. Cenargo Navigation
Channel Island Ferries Ltd. V. Cenargo Navigation
Ltd. (The “Rozel”)
Queen’s Bench Division
[1994] 2 Lloyd’s Rep 161
15
Deep Sea Maritime Ltd v
Monjasa A/S (The
¨Alhani¨)
Deep Sea Maritime Ltd v Monjasa A/S (The ¨Alhani¨)
Queen's Bench Division
[2018] EWHC 1495
47
Hawk Shipping Ltd v
Cron Navigation Ltd
Hawk Shipping Ltd v Cron Navigation Ltd
Queen's Bench Division
[2003] EWHC 1828
33
Lansat Shipping v.
Glencore Grain BV
Lansat Shipping Co Ltd v Glencore Grain BV.
England and Wales High Court
[2009] 551, 1 Lloyd's Rep 658
25
Pyrene Company v.
Scindia Steam
Navigation Company
Pyrene Company, Ltd. V. Scindia Steam Navigation
Company, Ltd.
Queen's Bench Division
[1954] 1 Lloyd's Rep. 321
64
Transfield Shipping Inc
v Mercator Shipping Inc
(The Achilleas)
Transfield Shipping Inc v Mercator Shipping Inc (The
Achilleas)
House of Lords
[2008] 2 Lloyd's Rep 275
32
1 | P a g e
STATEMENT OF FACTS
The parties to this arbitration are Panther Shipping Inc. (hereafter “Claimant”) which is
the registered shipowner of the Antigua and Barbuda-flagged M/V “Thanos Quest”
(hereafter the “Vessel”) and Omega Chartering Ltd (hereafter “Respondent”).
CLAIMANT is a company based in Liberia.
RESPONDENT is a company based in Liechtenstein.
18 March 2016
The Claimant time chartered the Vessel to Respondent for about 50-55
days from West Coast to Wahanda pursuant to a time charterparty
(hereafter the “Charterparty”)
The Charterparty comprised a fixture recap incorporating the NYPE
2015 form and additional rider clauses.
29 March 2016 The Vessel was delivered to the Charterparty.
18 April 2016 West Coast Daily reported an outbreak of Ebola virus in West Coast.
20 April 2016
Loading of the cargo was completed.
The vessel sailed from the Port of Wahanda.
07 May 2016
The Vessel arrived at the discharge port of Wahanda. She waited at the
anchorage because immediate berthing was not available.
8 May 2016 Claimant notified the Respondent that the Vessel remained on-hire
2 | P a g e
25 May 2016
Wahanda Port recommended to the charterers that they choose another
port for the performance of the underwater cleaning.
08 June 2016
The Claimant notified to the Respondent that the Vessel was expected
to spend more than 30 days at the port of Wahanda and requested
confirmation regarding the arrangements for the underwater cleaning.
The Respondent offered to pay the Owners USD 15,000 in lieu of
cleaning.
09 June 2016
The Claimant responded that they could not agree to a lump sum
payment because there had been no hull inspection and it was not
possible to know the extent of any fouling.
The Respondent accepted to pay the cost in accordance with the original
invoice.
15 June 2016
The Claimant chartered the Vessel to Champion Chartering Corp. for a
period of two years, plus a further two years in charter’s option
(hereafter “Next Fixture”). The daily rate of hire was USD 10,500.
18 June 2016
23 June 2016
The Claimant sent an e-mail to the Respondent reserving their right to
make a claim against the Respondent for losses incurred as a result of
the Vessel being redelivered without hull cleaning having been
performed. The Claimant sent photos that clearly showed that the
vessel was heavily fouled and reminded the Respondent of their
obligation to arrange the cleaning.
The North Port submitted a quotation stating that the performance of
3 | P a g e
the underwater cleaning would cost USD 33,000.00
26 June 2016
The Claimant reported that the vessel has already been scheduled for
her next voyage.
27 June 2016
The Respondent offered to arrange hull cleaning at North Port or pay a
lump sum of 20,000 USD.
28 June 2016
Champion gave notice to the Claimant that they were canceling the
Next Fixture because the Vessel had missed the laycan.
29 June 2016
The Claimant sent an e-mail to the Respondent to arrange for the
Vessel’s hull to be cleaned at South Island to maintain on-hire in
accordance with clause 83 of the rider clauses. The Claimant informed
the Respondent that if the underwater cleaning was not performed prior
to redelivery the Claimant would arrange the cleaning in South Island
and bill the Respondent for all related expenses.
30 June 2016
The Respondent replied to the Claimant that any voyage to South Island
would be no-contractual.
The Respodent offered to pay 30,000 USD
The Claimant gave a final opportunity to comply with their contractual
obligations under clause 83 of the Charterparty by arranging for
underwater cleaning prior to redelivery.
The discharge of the cargo was completed.
The Vessel was redelivered without underwater hull cleaning.
1 July - 3 July
2016
The vessel arrived at South Island to perform underwater hull cleaning
and propeller polishing services.
The total cost of the cleaning was 41,000 USD.
4 | P a g e
ARGUMENT
PART I: THE RESPONDENT BREACHED THE UNDERWATER HULL
CLEANING OBLIGATIONS
A. THE RESPONDENT WAS OBLIGED UNDER CLAUSE 83 OF THE
RIDER CLAUSES TO PERFORM UNDERWATER HULL CLEANING
1. Hull fouling is the result of accumulation of marine growth at the bottom of vessels
sitting idle for lengthy periods in places located in warm waters.1
2. The article 83 of the rider clauses states:
(a) If, in accordance with Charterers’ orders, the Vessel remains
at or shifts/sails within a place, anchorage and/or berth and/or
port(s) for an aggregated period exceeding:
(…)
(ii) A period of 30 days outside such zones any warranties
concerning speed and consumption shall be suspended pending
inspection of the Vessel’s underwater parts including, but not
limited to, the hull, sea chests, rudder and propeller.2
3. In accordance with the above, the risk of the vessel suffering hull fouling was
foreseeable and foreseen by both sides at the time the TCP was concluded due to the
fact that the parties established that obligation in the TCP and agreed that the
Respondent would have to perform the cleaning.3
1 NIKAKI Theodora / SOYER, Barış, 83 2 Moot Scenario, 16 3 NIKAKI Theodora / SOYER, Barış, 84
5 | P a g e
4. Furthermore, the aim of the hull cleaning clause is to expressly state when the hull
conditions and the responsibility for bottom cleaning and liability for losses arising
therefrom will shift from owner to charterer4. Therefore, it was clear that the intention
was to establish that the burden of this obligation remains with the Respondent.
5. Moreover, it is widely known that underwater cleaning is only allowed in a few
locations around the world,5 therefore the Respondent should have taken into account
where to perform the obligation in case it was necessary in order to comply with the
redelivery time established on the TCP.
6. Consequently, there can be no doubt that this is a clause which explicitly places the
risk, cost, and time of such cleaning on Charterers.6
7. In the London Arbitration case 25/17,7 the Arbitral Tribunal held a breach of the
hull cleaning clause due to the fact that the Vessel had to wait for berth staying idle at
the discharging port for 35 days and the Charterers redelivered the vessel with the hull
bottom fouled. Consequently Charterers were held responsible for damages realted to
the subsequent hull cleaning costs.
8. In the present case the circumstances in this matter were the same. For these reasons
this Arbitral Tribunal is requested to render its judgment on the same manner.
4 YANG LIU, Edward 5 BIMCO 6 NIKAKI Theodora / SOYER, Barış, 87 7 London Arbitration 25/17, 1
6 | P a g e
B. THE ALTERNATIVES GIVEN BY THE RESPONDENT FOR THE
AVOIDANCE OF THE CLEANING OBLIGATION WERE
INAPPROPRIATE
1.THE RESPONDENT‘S OFFERS TO PAY A LUMP SUM WERE
INADEQUATE.
9. In light of clause 83 (d) if the Respondent was prevented from carrying out
underwater cleaning, the parties shall, prior to but latest upon redelivery, agree to a
lump sum payment in full and final settlement of Claimant’s costs and expenses
arising as a result of or in connection with the need for cleaning.8
10. In the case at hand, the Respondent was not actually prevented from carrying out
underwater cleaning, since the Respondent could have arranged the performance in
another port, therefore, the Claimant was not obliged to agree on a lump sum.
11. In this sense, in the email sent on 8 June 2016,9 the Respondent offered a lump
sum of USD 15,000 to avoid the performance of its obligation without knowing the
extent of the fouling. In the same manner,on 23 June 201610 the Respondent received
the underwater cleaning quotation for an ammount of USD 33,000.00. On 27 June
2016, 11 the Respondent insisted on the avoidance of complying with the underwater
cleaning obligation by offering a lump sum of USD 20,000.
12. Finally, on 30 June 2016, the Respondent was persistent in requesting payment of
a lump sum, but the second request increased to USD 30,000 for the hull cleaning12
and the Claimant reiterated the importance of the Respondent’s compliance with their
8 Moot Scenario, 16-17 9 Moot Scenario, 29 10 Moot Scenario,35 11 Moot Scenario, 39 12 Moot Scenario, 42-43
7 | P a g e
obligation , furthermorethe Respondent did not consider the quoatation of the
ammount of 23 June 2016 .
13. Every lump sum offer made by the Respondent was insufficient because their
offers did not include the cost of the voyage from Wahanda to the North Port.
14. Moreover, the Respondent did not consider additional overtime worker costs
depsite knowing that the Vessel was already in delay.13
15. As a result, Claimant’s refusals to Respondent’s offers were reasonable because
the lump sums offered did not cover all the costs and expenses related to underwater
cleaning, hence the lump sums were inadequate and consequently irrelevant.14
16. As the hull fouling clause explicitly places the risk, cost, and time of such cleaning
on the Charterers,15 it is logical that if the parties did not reach an agreement regarding
the lump sum payment, the Respondent was responisble for reimbursing the amount
ultimately paid for the underwater cleaning as agreed upon by the Respondent in their
email sent on 9 June 2016.16
2. CLAIMANT’S DECISION OF UNDERWATER CLEANING PORT WAS
REASONABLE
17. On 25 May 2016, Wahanda Port reported that it was not possible to perform the
underwater cleaning therein.17
18. On 5 June 2016 the Vessel had been berthed at the Port for more than 30 days and
the Respondent had not informed the Claimant of any intentions to perform the
13 Moot Scenario, 35 14 Channel Island Ferries v. Cenargo Navigation 15 YANG LIU, Edward
16 Moot Scenario, 28 17 Moot Scenario, 26
8 | P a g e
cleaning even though the Respondent already knew that the performance would not
be possible at Wahanda Port; therefore, the Claimant had to remind the Respondent
of their underwater hull cleaning (the “underwater cleaning”) obligation on 8 June
2016,18 in order to make sure that necessary measures would be taken to perform said
obligation.
19. Despite the above, the Respondent requested a quotation for underwater cleaning
at another Port until 22 June 2016,19 even when the Respondent was already in delay
since the Vessel should have been redelivered by 23 May 2016.20
20. On 27 June 2016 the Respondent announced their unwillingness to arrange the
underwater cleaning before redelivery of the Vessel21 which violated the following
contractual obligation established in Clause 83(d):
(...)
(d) Cleaning in accordance with this Clause shall always be
carried out prior to redelivery. If, nevertheless, Charterers are
prevented from carrying out such cleaning, the parties shall, prior
to but latest on redelivery, agree a lump sum payment in full and
final settlement of Owners’ costs and expenses arising as a result
of or in connection with the need for cleaning pursuant to this
Clause.22
21. In addition, the Respondent wrongfully attempted to establish the conditions in
which Claimant would have to perform the underwater cleaning by establishing that
18 Moot Scenario, 29 19 Moot Scenario, 36 20 Moot Scenario, 4 21 Moot Scenario, 39 22 Moot Scenario, 16- 17
9 | P a g e
the voyage to South Port would be non-contractual23.
22. Having regard to these considerations, the Claimant's decision to perform the
underwater cleaning obligation in the South Port was reasonable due to the fact that
in accordance with the quotation given by South Port the Claimant knew that the
underwater cleaning working period would be one day. Contrary to the offer made by
the Respondent, which did not contemplate the time working period of the cleaning,
despite the email sent on 26 June 2016 where the Claimant informed them that the
Vessel was scheduled for a voyage to the East Coast.24
23. For the reasons stated above, this Arbitral Tribunal should hold that the
Respondent is liable for paying the amount established on Claimant’s final hire
statement of 1st August 2016 of USD 96,567.42.25
PART II: DELAY OF REDELIVERY
A. RESPONDENT FAILED TO REDELIVER THE VESSEL PRIOR TO
EXPIRATION OF THE MAXIMUM PERIOD OF THE CHARTERPARTY
24. The principle of pacta sunt servanda, binds a person to their promises in order to
safeguard the interest of the promisee. The importance of this rule must be underlined
since "effective economic activity is not possible without reliable promises". 26
25. In the case of a time charter, the charterer is contractually bound to redeliver the
vessel to the owner at the end of the agreed period27, as a result, the charterer is liable
23 Moot Scenario, 43 24 Moot Scenario, 34 25 Moot Scenario, 52 26 KONARSKI, Hubert, 1 27 Lansat Shipping v. Glencore Grain BV
10 | P a g e
for damages if the vessel is not redelivered within the contractual period.28
26. In accordance with the fixture, the Vessel had to be redelivered between 50-55
days after the delivery date. Nevertheless, it took 91 days for the Respondent to make
redelivery of the Vessel.29
27. For the reasons set out above the Respondent breached the contractual obligations
regarding the redelivery of the vessel within the time established by the parties.
B. RESPONDENT IS LIABLE FOR CLAIMANT’S LOSS OF PROFITS
28. Clause 4 (c) of the NYPE 2015 establishes the following:
(c) Acceptance of redelivery of the Vessel by the Owners shall not
prejudice their rights against the Charterers under this Charter
Party.30
29. In this regard in accordance with the Explanatory notes of such clause, whatever
the circumstances under which the owners accept redelivery of the ship, they do not
affect the owners’ rights to claim damages from the charterers for any loss suffered
by the owners due to the charterers’ breach of any of its obligations under the charter
party.31
30. In this sense “any loss” should be interpreted as the simple use of the words,
therefore, the loss of the fixture with Champion Chartering Corp (“Champion”) is
included therein, consequently, this Arbitral Tribunal may determine the Respondent
28 The Peonia [1991] 29 Moot Scenario, 72 30 NYPE 2015, 3 31 NYPE 2015. EXPLANATORY NOTES, 7
11 | P a g e
liable for damages caused by late redelivery.
31. It is a persistent practice of owners to make plans for following fixtures based on
the expected date of redelivery, therefore any breach in this matter comes along with
detrimental consequences for them, since they risk losing their next fixture.32
32. In the case of Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas),
owners claimed damages that consisted of loss of profits for late redelivery of a time
charter vessel because the owners had a next future contract. The House of Lords held
that as a result of late redelivery, the Charterer would be liable for any loss, however
large, occasioned by a delay in the redelivery in circumstances where it had no
knowledge of, or control over, the new fixture.
33.Moreover, it is of course a general principle that the claimant must prove its loss33,
in the CARISBROOKE Shipping v Bird Port Ltd case the claimant failed to point out
evidence of the time expended in dealing with consequences caused by the incident,
and the profits which would have been earned.
34. In the case at bar the claimant proved the evidence of the profits which would
have been earned in the time period for the delay of the redelivery by the loss of hire
under the Next Fixture (15 June 2016).34
35. This Arbitral Tribunal should take into consideration the case law mentioned
above to determine that the respondent must pay for damages caused by late redelivery
in the amount of USD 15,330,000, which includes the loss of fixture for 4 years at
USD 10,500 per day.
32 SOYER, Bariş / TETTENBORN, Andrew, 79 33 Hawk Shipping Ltd v Cron Navigation Ltd; CARISBROOKE Shipping v Bird Port Limited 34 Moot Scenario, 30
12 | P a g e
COUNTERCLAIMS DEFENSE
PART I: THE CARGO CLAIM IS INADMISSIBLE
A. THE CARGO CLAIM IS TIME-BARRED
36. By virtue of clause 27 of the NYPE35, the parties agreed to be settled their cargo
claims in accordance with the Inter-Club NYPE Agreement 1996 (as amended 1
September 2011) which establishes:
Time Bar
(6) Recovery under this Agreement by an Owner or Charterer
shall be deemed to be waived and absolutely barred unless written
notification of the Cargo Claim has been given to the other party
to the charterparty within 24 months of the date of delivery of the
cargo or the date the cargo should have been delivered, save that,
where the Hamburg Rules or any national legislation giving effect
thereto are compulsorily applicable by operation of law to the
contract of carriage or to that part of the transit that comprised
carriage on the chartered vessel, the period shall be 36 months.
Such notification shall if possible include details of the contract of
carriage, the nature of the claim and the amount claimed.
37. In order to define the applicable time period to make such a claim it is necessary
to refer to the applicable law regarding the contract of carriage.
35 NYPE 2015, 12
13 | P a g e
38. In accordance with the Clause 19 of the bill of lading, the parties agreed to the
following:
(a) Goods may be stowed by the Carrier as received, or, at
Carrier's option, by means of containers, or similar articles of
transport used to consolidate goods.
(b) Containers, trailers and transportable tanks, whether stowed
by the Carrier or received by him in a stowed condition from the
Merchant, may be carried on or under deck without notice to the
Merchant.
(c) The Carrier's liability for cargo stowed as aforesaid shall be
governed by the Hague Rules as defined above notwithstanding
the fact that the goods are being carried on deck and the goods
shall contribute to general average and shall receive
compensation in general average.36
39. Hence, as the cargo was stowage the applicable Rules on this matter are the
Hague Rules.
40. Furthermore, the Hague Rules do apply to charterparties in two occasions:
a) When a bill of lading is issued under a charterparty and the bll of lading rather
than the charterparty regulates the relations between the carrier and the holder of the
bill of lading (i.e. when the bill of lading is in the hands of a person not a party to the
charterparty);
36 Moot Scenario, 48
14 | P a g e
41. In this sense, the art. 5, second paragraph of the Hague Rules sets out:
(…)
“… but if bills of lading are issued in the case of a ship under a
Charterparty, they shall comply with the terms of this Convention
…”
42. In the same vein, it is important to mention that the BOL was issued at the same
moment of the TCP (18 March 2016),37 determining the relations between the carrier
and the merchant within the BOL.
43. Furthermore, the Clause 1 of the BOL establishes the following:
1. Definition.
Wherever the term “Merchant” is used in this Bill of Lading, it
shall be deemed to include the Shipper, the Receiver, the
Consignee, the Holder of the Bill of Lading and the Owner of the
Cargo38
44. In conclusion it is evident that the Hague Rules are applicable in this dispute
because the documents were finalized on the same day and the BOL does not regulate
the relation with the owner.
b) When the Charterparty specifically incorporates the Rules, usually by means of a
paramount clause.39
37 Moot Scenerio, 2, 47 38 Moot Scenerio, 48 39TETLEY, William, 76
15 | P a g e
45. In the present case, the paramount clause is entitled in the clause 33 (a) of the
NYPE and establishes the following:
(…)
a) General Clause Paramount
This bill of lading shall have effect subject to the provisions of
the Carriage of Good by Sea Act of the United States, The Hague
Rules, or the Hague Visby Rules…40
46. In consequence, the Respondent had to give written notification of the cargo claim
adding the details of the contract of carriage, the nature of the claim, and the amount
claimed within 24 months of the date of delivery of the cargo (30 June 2016). The
Respondent did not fulfill said requirements since the Respondent did not mention the
amount claimed until this Arbitration, which exceeded the allowable time.
47. During a case involving Deep Sea Maritime Ltd v Monjasa A/S, the Claimant
incorrectly commenced a proceeding for damages within the time period and
subsequently submitted said claim in a correct form after the required time period. As
a result, the QBD held that the corrected claim was time-barred because it was
submitted after the time limit.
48. In the present case, even if the Respondent had submitted a cargo claim, he did it
incorrectly, and when the Respondent provided the details of the claim in order to
fulfill the requirements for doing so, it was not within the time established by the
Clause 6 of the ICA (p. 82)., therefore, the cargo claim is time-barred.
40 NYPE 2015, 14
16 | P a g e
B. EVEN IF CARGO CLAIM WAS WITHIN THE TIME LIMIT, THE
CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE
1. THE CLAIMANT IS NOT LIABLE FOR CARGO DAMAGE IN
ACCORDANCE WITH THE INTER-CLUB AGREEMENT
49. The Respondent’s argument regarding the Claimant’s liability for cargo damage
in contrary to Clause 8 (a) of the ICA which provides the following:
(8) Cargo Claims shall be apportioned as follows:
(a) Claims in fact arising out of unseaworthiness and/or error or
fault in navigation or management of the vessel: 100% Owners
Save where the Owner proves that the unseaworthiness was
caused by the loading, stowage, lashing, discharge or other
handling of the cargo, in which case the claim shall be
apportioned under sub-clause (b).
(b) Claims in fact arising out of the loading, stowage, lashing,
discharge, storage or other handling of cargo: 100% Charterers
unless the words „and responsibility“ are added in clause 8 or
there is a similar amendment making the Master responsible for
cargo handling in which case: 50% Charterers 50% Owners
Save where the Charterer proves that the failure properly to
load, stow, lash, discharge or handle the cargo was caused by
the unseaworthiness of the vessel in which case: 100% Owners.
50. The requirements of the Clause mentioned above were not satisfied because one
of the elements is the existence of unseaworthiness.
17 | P a g e
51. The Inter-Club Agreement does not provide any definition or content of the
obligation of seaworthiness, ergo, it is useful to analyze the content of said obligation
pursuant to the Hague Rules.
52. The article 3.1 of the Hague Rules establishes the following:
1. The carrier shall be bound before and at the beginning of the
voyage to exercise due diligence to:(a) Make the ship seaworthy.
(...)
Before and at the beginning of the voyage means the period from
at least the beginning of the loading until the vessel starts on her
voyage.41
53. The moment of departure is the beginning of the voyage. The voyage starts when
the ship breaks grounds for the purpose of departure. Thereafter, pursuant to the Hague
Rules the obligation to use due diligence for seaworthiness ends.42
54. The Article 3 makes it clear that the duty of due diligence is before and at the
beginning of the voyage, consequently there is no way that the acts of the crew after
this time are included under the responsibilities of the Article 3. Therefore the owner
is not liable for crew negligence during the voyage.
55. Due diligence to make the vessel seaworthy may be defined as a genuine,
competent and reasonable effort of the carrier to fulfill the obligations set out in
subparagraph (a), (b) and (c) of art. 3(1) of the Hague or Hague/Visby Rules.
41 HENDRIKSE, M.L./ MARGETSON, N.H./ MARGETSON, N.J.; 60-61 42 HENDRIKSE, M.L./ MARGETSON, N.H./ MARGETSON, N.J.; 62
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56. The English Court of Appeals has held that the test of due diligence is whether the
carrier, its servants, agents and independent contractors have exercised “all
reasonable skill and care to ensure that the vessel was seaworthy at the
commencement of its voyage, namely, reasonable fit to encounter the ordinary
incidents of the voyage….”43
57. Even though ballasting errors can be considered as an error or fault on the
navigation or management of the ship, there is an exception in this matter. This
exception states that the error must not have taken place before the voyage began.
58. In the case at bar the crew performed the ballasting of the vessel at the end of the
voyage; thus, the exception applies since the crew was taking steps to ballast the vessel
for her departure once the cargo had been discharged44.
59. Furthermore, the Preliminary Survey Report on 30 June 2016, established that the
ballasting system was found in order.45
60. Consequently, in the present case the Claimant fulfilled its responsibility of due
diligence to make the Vessel seaworthy before and at the beginning of the voyage.
2. THE CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE
ARISING FROM CREW NEGLIGENCE
61. The article 4 of the Hague Rules establishes:
43 William Tetley, Marine Cargo Claims, 4th edition, Thomson (2008), 969-970 44 Moot Scenario, 46 45 Ibid.
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2. Neither the carrier nor the ship shall be responsible for loss or
damage arising or resulting from:
(a) Act, neglect, or default of the master, mariner, pilot, or the
servants of the carrier in the navigation or in the management of
the ship.
62. In light of the above, the owner is exempt from all liability in this regard due to
acts, neglect, or default by the servants of the carrier in the navigation or in the
management of the ship performed after the beginning of the voyage.
63. Therefore, if the vessel is seaworthy and the cargo is lost by reason of negligent
navigation, the carrier is exempted from liability in accordance with the Hague
Rules.46
3. CLAIMANT IS NOT RESPONSIBLE FOR CARGO DAMAGE IN
ACCORDANCE WITH THE BILL OF LADING
64. In the case Pyrene Company v. Scindia Steam Navigation Company, it was held
that the interpretation and applicability of the Hague Rules, establishes that rules must
be limited in accordance with the provided in the contract of carriage by sea.47 65.
Therefore, if the BOL does not stipulate any type of liability against the owner for
damages during the loading or discharging of the goods, the charterers are responsible
for those damages.
65. Consequently, under all of the possible scenarios in this case the Claimant is not
liable for and damages to the cargo.
46 Alize 1954 & Anor v Allianz Elementar Versicherungs AG & Ors 47 Pyrene Company v. Scindia Steam Navigation Company; 328,329
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PART. II: THE VESSEL REMAINED ON-HIRE DURING THE ENTIRE
TRIP
A. THE DELAY WAS NOT DUE TO AN OFF-HIRE EVENT UNDER
ARTICLE 17 OF THE NYPE
66. According with the principles of off-hire, the following is necessary to
consider an event as such:48
a)The off-hire regime is created by the terms of the contract.
67. The meaning of this principle is to consider the will of the parties to agree to
the most convenient terms for their contractual interests.
68. None of the circumstances contemplated under the clause 17 of the NYPE
provide the decisions of the Port State Authority to stop the vessel regarding fear
of crew infection; thus, the liability of the Claimant cannot go beyond the
responsibilities contemplated in the contract.
b)The burden is on the Charterer to show that the off-hire clause operates in the
relevant circumstances; furthermore, as a matter of interpretation the Charterer
must bring itself clearly within the clause.
69. The Respondent´s facts specified on emails are beyond the scope of the Clause
17 of the NYPE.
c) Off-hire clauses operate as an exception to the general rule. This means such
clauses are interpreted strictly as well as narrowly. They are construed contra
proferentem with the Charterer regarded as the proferens – in other words, any
ambiguity will usually be resolved in favour of the Owner and against the Charterer
48 SOYER, Bariş / TETTENBORN, Andrew, 33
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(i.e. the party seeking to rely on the clause).
70. In the case at hand it is clear that the event is not contemplated in the off-hire
clause of the NYPE, as a result, if the Respondent would like to interpret this clause,
the interpretation would be on behalf of the owner’s interests.
71. For the reasons set out above, the Arbitral Tribunal should find that the Vessel
remained on-hire at all times. As a result, the Respondent did not overpay for the hire
and the Respondent shall reimburse the Claimant’s loss of profits.
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PRAYER FOR RELIEF
Claimant respectfully requests the Arbitral Tribunal to:
1. ORDER the Respondent to pay the total amount of USD 15,426,567.42
consisting of:
a. USD 41,000 for hull cleaning;
b. USD 55,567.42 for the cost of the voyage to South Island in order to perform
hull cleaning;
c. USD 15,330,000 for late redelivery (loss of hire under the Next Fixture,
calculated as 4 years at USD10,500 per day)
2. FIND that the cargo claim asserted by the Respondent is time-barred;
3. Alternatively, FIND that the Claimant is not liable for the cargo damage
4. FIND that the Vessel remained on-hire at any time
5. AWARD interest and costs in favor of the Claimant as the Tribunal deems
appropriate pursuant to section 49 of the Arbitration Act 1996.
Dated this 29th day of April 2019
Solicitors for the Claimant
Panther Shipping Inc.