16TH ANNUAL INTERNATIONAL MARITIME LAW · PDF fileConcessionaria Do Rodoanel Oeste S.A, ......

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16TH

ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION

MOOT, 2015

MEMORANDUM FOR THE DEFENDANTS / CHARTERERS

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY (BANGALORE, INDIA)

IN THE MATTER OF AN ARBITRATION

BETWEEN:

WESTERN TANKERS INC …CLAIMANTS/OWNERS

AND

LDT PTE …DEFENDANTS/CHARTERERS

TEAM NUMBER 5

BHUVANYAA VIJAY

GARGI ROHI

RADHIKA GOYAL

SHRADDHA GOME

TEAM 5, MEMORANDUM FOR THE DEFENDANTS/CHARTERERS

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TABLE OF CONTENTS

QUESTIONS PRESENTED/ISSUES RAISED ......................................................................................................... iv

LIST OF ABBREVIATIONS ................................................................................................................................... v

INDEX OF AUTHORITIES .................................................................................................................................. vii

CASES ............................................................................................................................................................ vii

STATUTES AND CONVENTIONS........................................................................................................................ x

BOOKS ............................................................................................................................................................. x

ARTICLES........................................................................................................................................................ xi

MISCELLANEOUS ........................................................................................................................................... xii

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

THE PARTIES, THE CHARTER PARTY AND THE BILL OF LADING .................................................................... 1

THE PROVISION OF BUNKERS .......................................................................................................................... 1

THE SAFETY EQUIPMENT ................................................................................................................................ 1

THE ALTERNATIVE DISCHARGE LOCATION .................................................................................................... 1

THE NON-PAYMENT OF HIRE AND SUBSEQUENT OFF-HIRE ........................................................................... 2

CARGO THEFT/PIRATE ATTACK ...................................................................................................................... 2

CLAIMS ............................................................................................................................................................ 2

ARGUMENTS ADVANCED ................................................................................................................................... 3

I. THE TRIBUNAL DOES NOT HAVE JURISDICTION OVER THE PRESENT DISPUTE ........................................ 3

A. There is a Latent Ambiguity in the Fully Fixed Recap with regard to the Incorporation of the

Arbitration Clause ....................................................................................................................................... 3

B. Pre-Contractual Negotiations Prove Charterers’ Intention against Arbitration in London ............. 4

C. All Sections of the Fully Fixed Recap have not become Binding on the Parties ............................ 4

D. The Seat and Forum of Arbitration should be Singapore ................................................................ 5

II. THE TORT OF FRAUD IS NOT ADMISSIBLE BEFORE THIS TRIBUNAL ................................................... 6

A. The Term “Disputes Arising out of this Charter” does not extend to the Tort of Fraud ................. 6

B. The Parties did not intend to Include the Tort of Fraud as an Admissible Matter before this

Tribunal....................................................................................................................................................... 7


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III. ASA2 IS NOT THE AGENT OF CHARTERERS .............................................................................. 8

A. Doctrine of Apparent Authority is not applicable due to Lack of Representation .......................... 8

B. Owners Knew or Ought to have Known that ASA2 does not have the Requisite Authority .......... 9

C. Charterers are not Bound by the Doctrine of Estoppel by Negligence .......................................... 11

IV. CHARTERERS DID NOT COMMIT TORT OF FRAUD ................................................................... 12

A. Charterers had no Dishonest Intention .......................................................................................... 12

B. The Owners did not Suffer any Damage due to Charterers’ Representation ................................. 13

V. CHARTERERS DID NOT BREACH THE C/P DUE TO NON PAYMENT OF HIRE ............................. 14

A. Vessel was Off-Hire on Due-Date ................................................................................................. 14

B. C/P was Frustrated ......................................................................................................................... 14

C. Vessel went Off-Hire from July 04 due to “Loss of Time” under Cl 21(a)(ii) .............................. 15

VI. OWNERS PROVIDED A VESSEL NOT “FIT FOR THE SERVICE” ................................................... 15

A. Piracy was a Reasonably Foreseeable Peril on the Contemplated Voyage ................................... 16

B. Vessel was not Fit to Encounter Piracy ......................................................................................... 17

C. Master was Incompetent ................................................................................................................ 19

D. Vessel was not Cargo-worthy ........................................................................................................ 20

VII. OWNERS ARE LIABLE TO CHARTERERS IN BAILMENT FOR LOSS OF CARGO ........................... 20

VIII. OWNERS ARE LIABLE TO CHARTERERS IN CONVERSION FOR NEGLIGENT LOSS OF CARGO. ... 22

A. Charterers have Title to Sue .................................................................................................. 22

B. Lack of Demand and Refusal does not Defeat the Claim of Conversion ...................................... 23

C. The Goods were Lost due to the Negligence of the Bailees .......................................................... 24

PRAYER ............................................................................................................................................... 25

ANNEXURES .......................................................................................................................................... a

ANNEXURE A: DISTANCE BETWEEN THE RELEVANT CO-ORDINATES .................................................. a

ANNEXURE B: PROVISION OF BUNKER SUPPLY (CALCULATIONS) ...................................................... d


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QUESTIONS PRESENTED/ISSUES RAISED

I. Does the Arbitral Tribunal have jurisdiction to hear the present dispute?

II. Is Tort of Fraud admissible before this Tribunal?

III. Whether ASA2 is the agent of the Charterers?

IV. Are Charterers liable for the Tort of Fraud?

V. Are Charterers in breach of Charterparty due to non-payment of hire due and owing?

VI. Did Owners provide a Vessel fit for the service?

VII. Are Owners liable to Charterers in bailment?

VIII. Are Owners liable to Charterers under Tort of Conversion?


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LIST OF ABBREVIATIONS

ADL Alternative Discharge Location

AEI Angola Energy Imports (Consignees)

Art. Article

B/L Bill of Lading

BMP4 Best Management Practices: Version 4, 2011

BVI British Virgin Islands

C/P Shelltime-4 Charterparty, Issued Dec. 1984 amended Dec. 2003

Cl Clause

CSO Company Security Officer

FO Fuel Oil

GO Gas Oil

HVR Hague-Visby Rules, 1968

IMB International Maritime Bureau

LDTP Less Dependable Traders Pte (Charterers/Defendant)

Med. Mediterranean region

Moot Scenario IMLAM Moot Scenario, 2015

MT Metric Tonnes


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OPL Off/Outer Port Limits

ROB Remaining on Board

S. Section

SIRE Ship Inspection Report

V/C Voyage Correspondence in Moot Scenario

WAF West Africa

WTI Western Tankers Inc. (Owners/Claimant)


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INDEX OF AUTHORITIES

CASES

Abuja International Hotels Ltd. v. Meridien Sas, [2012] EWHC 87 (Comm) ...................................... 5

Actis Co. v. Sanko Steamship Co. (‘The Aquacharm’), [1982] 1 Lloyd’s Rep 7 ................................ 16

Adamastos Shipping v. Anglo-Saxon Petroleum (‘The Saxon Star’), [1957] 1 Lloyd’s Rep. 271

(C.A.) ............................................................................................................................................... 15

Albacruz (Cargo Owners) v. Albazero (‘The Albazero’), [1977] AC 774 .......................................... 20

Alfred C Toepfer v. Tossa Marine Co. Ltd. (‘The Derby’), [1985] 2 Lloyd's Rep. 325 .......... 16, 17, 18

Armagas Ltd. v. Mundogas Ltd. (‘The Ocean Frost’), [1986] AC 717 ................................................. 9

Armstrong v. Strain, [1951] 1 T.L.R. 856, 871 ................................................................................... 12

Atapattu, R. v. The Secretary of State for the Home Department, [2011] EWHC 1388 (Admin) ...... 22

Banco Espirito Santo, S.A. v. Concessionaria Do Rodoanel Oeste S.A, 2012 NY Slip Op 06186 ....... 4

British Road Services Limited v. Arthur Crutchley & Co. Limited, [1968] 1 All ER 811 .................. 21

Cheikh Boutros Selim El-Khoury v. Ceylon Shipping Lines (‘The Madeleine’), [1967] 2 Lloyd’s Rep.

224.............................................................................................................................................. 16, 17

Chi Sun Hua Steel Co. Ltd. v. Crest Tankers, 1990 AMC 2816 (N.D.Cal. 1990) ................................ 4

China Pacific SA v. Food Corporation of India (‘The Winson’), [1982] AC 939 .............................. 23

Derry v. Peek, (1889) LR 14 App Cas 337.......................................................................................... 12

Dole Food Co. v. Watts, 303 F.3d, 1104 (9th

Cir. 2002) ....................................................................... 5

East West Corporation v. DKBS 1912 and AKTS Svenborg, [2003] QB 1509 ............................. 21, 23

Empresa Cubana Importadora de Alimentos Alimport v. Iasmos Shipping Co. SA (‘The Good

Friend’), [1984] 2 Lloyd’s Rep 586 ................................................................................................ 17

ENE Kos 1 Limited v. Petroleo Brasileiro SA (‘The KOS’), [2012] UKSC 17 ................................... 20

Ethiopian Oilseeds & Pulses Corp. v. Rio Del Mar Foods Inc., [1990] 1 Q.B. 86 ............................... 6


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FC Bradley & Sons Ltd v. Federal Steam Navigation Co, [1926] 24 Ll L Rep 446 ........................... 16

Fiona Trust and Holding Corp. v. Yuri Pavalov and Ors., [2007] UKHL 40 ...................................... 7

Glencore International AG v.Owners of the "Cherry", the "Epic" and the "Addax" (‘The Cherry’),

[2003] 1 SLR 471............................................................................................................................. 11

Golden Fleece Maritime Inc v. ST Shipping and Transport Inc. (‘The Elli’), [2007] EWHC 1890

(Comm) ............................................................................................................................................ 15

Great China Metal Industries Co Limited v. Malaysian International Shipping Corporation Berhad

(‘The Bunga Seroja’), (1998) 72 ALJR 1592 .................................................................................. 18

Greenfield v. Philles Records, 750 NYS2d 565 [2002] ......................................................................... 4

Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) ..................................................................................... 6

Hongkong Fir Shipping Co Ltd v. Kawasaki Kisen Kaisha Ltd (‘The Hongkong Fir’), [1961] 1

Lloyd's Rep. 159 .................................................................................................................. 15, 16, 17

Houghland v. RR Low (Luxury Coaches), (1962) 1 QB 694 ............................................................... 21

In Re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961) ...................................................................... 6

International Fina Services AG v. Katrina Shipping Ltd (‘The Fina Samco’), [1994] 1 Lloyd's Rep.

153, [1995] C.L.C. 1335 .................................................................................................................. 15

Investors Compensation Scheme Ltd v. West Bromwich, [1997] UKHL 28 ......................................... 4

Iran v. Barakat Galleries Ltd. [2007] EWCA Civ 1374 ..................................................................... 22

JI McWilliams Co. Inc. v. Mediterranean Shipping Company SA, (‘The Rafaela S’), [2005] UK HL

11...................................................................................................................................................... 22

Kass v. Kass, 91 N.Y.2d 554, 566 ......................................................................................................... 4

Kroft Entertainment Inc. v. CBS Songs, 653 F.Supp. 1530 (S.D.N.Y. 1987) ....................................... 4

Leigh and Sullivan Ltd. v. Aliakmon Shipping Co. Ltd. (‘The Alkiamon’), [1986] AC 785................ 23

McFadden v. Blue Star Line, [1905] 1 K.B. 697 ................................................................................. 20

Mercantile Credit Co. Ltd. v. Hamblin, [1965] 2 QB 242................................................................... 12


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Mitchell v. Ealing LBC, [1979] QB 1 .................................................................................................. 23

Moorgate Mercantile Co Ltd. v. Twitchings, [ 1977] AC 890 ............................................................ 11

Morris v. CW Martin & Sons Ltd., 1 QB 716 [1996] .......................................................................... 21

Northern Shipping Co. v. Deutsche Seereederei G.M.B.H. and Others (‘The Kapitan Sakharov’),

[2000] 2 Lloyd's Rep. 255 ................................................................................................................ 18

Notara v. Henderson, (1870) L.R 5 Q.B 354 ...................................................................................... 21

Obestain Inc v. National Mineral Development Corp Ltd, (‘The Sanix Ace’), [1987] 1 Lloyd's Rep

465.................................................................................................................................................... 23

P&O Trans European Ltd, [2001] EWCA Civ. 227 ........................................................................... 21

Pagnan v. Feed Products, [1987] 2 Lloyd’s Rep. 601 .......................................................................... 5

Papera Traders Co Ltd v. Hyundai Merchant Marine Co Ltd (‘The Eurasian Dream No.1’), [2002] 1

Lloyd’s Rep. 719. ............................................................................................................................. 16

Poseidon Schiffahrt GmbH v. Nomadic Navigation Co Ltd (‘The Trade Nomad’), [1997] C.L.C.

1542, [1999] C.L.C. 755 .................................................................................................................. 15

Rama Corporation Ltd. v. Proved Tin and General Investments Ltd., [1952] 2 QB 147 ..................... 8

Raynes v. Ballantyne, (1898) 14 T.L.R. 399 (H.L.) ............................................................................ 21

Reeve v. Palmer, (1858) 5 C.B. (N.S.) 84 ........................................................................................... 21

Rhodian River Shipping Co. SA and Rhodian Sailor Shipping Co. SA v. Halla Maritime Corp

(‘The Rhodian River’) [1984] 1 Lloyd's Rep 373 .............................................................................. 9

Schwarzchild v. Harrods, EWCH 528 [2008] ..................................................................................... 22

Shelton v. Andres, (1985) 106 Ill.2d 153 ............................................................................................... 4

Spectra International v. Tiscali UK, [2002] All E.R. (D) 209 .............................................................. 5

Spiliada Maritime Corp v. Cansulex Ltd, [1987] AC 460 ................................................................. 5, 6

St. Pierre v. Chriscan Enterprises Ltd., 2011 BCCA 97 ....................................................................... 4

Stapely v. Gypsum Mines, [1953] AC 663 ........................................................................................... 24


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State v. Home Indemnity Co., 66 N.Y.2d 669 (N.Y. 1985) ................................................................... 4

Sulamerica CIA Nacional De Seguros SA & Ors v. Enesa Engenharia SA & Ors., [2012] EWCA Civ

638...................................................................................................................................................... 5

Sutcliffe v. Chief Constable of Western Yorkshire, [1996] R.T.R. 86 ................................................. 21

Tancred v. Allgood, (1859) 4 H.&N. 438 ............................................................................................ 23

Texaco, Inc. v. American Trading Transp. Co., 644 F.2d 1152, 1154 (5th Cir. 1981); ........................ 6

The Arianna, [1987] 2 Lloyd’s Rep. 376 ................................................................................. 16, 17, 20

The Fjord Wind, [1999] 1 Lloyd’s Rep. 307 ....................................................................................... 17

Tracer Research Corp. v. National Environmental Services, 42 F.3d 1292 (9th Cir. 1994) ................ 6

Tradax Export SA v. Dorada Compania Naviera SA of Panama (‘The Lutetian’), [1982] 2 Lloyd’s

Rep. 140 ........................................................................................................................................... 14

United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960) .......... 7

Voss v. APL Co. Pte. Ltd., [2002] 2 Lloyd’s Rep. 707 ........................................................................ 22

Wald v. Chicago Shippers Association, (1988) 175 Ill.App.3d 607 ...................................................... 4

Wilson and Meeson v. Pickering, [1946] 1 K.B. 422 .......................................................................... 11

Yarde v. Artoglou, 2012 NY Slip Op 32793(U) .................................................................................... 4

STATUTES AND CONVENTIONS

The U.K. Torts (Interference with Goods) Act, 1977 .......................................................................... 22

BOOKS

Alan Redfern et al, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION (5th

edn., 2009) ........... 7

Benjamin’s Sale of Goods (8th

edn., 2010) ......................................................................... 20, 21, 22, 23

Clerk & Lindsell on Torts (20th

edn., 2010) ................................................................................... 22, 23

Gary Born, INTERNATIONAL ARBITRATION AND FORUM SELECTION AGREEMENTS: DRAFTING AND

ENFORCING (4th

edn., 2013) ................................................................................................................ 4


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Gary Born, INTERNATIONAL COMMERCIAL ARBITRATION: COMMENTARY AND MATERIALS (2nd

edn.,

2001) .............................................................................................................................................. 6, 7

Halsbury’s Laws of England, Vol. 7 (5th

edn., 2008) .................................................................... 17, 20

Halsbury’s Laws of England, Vol.3(1) (4th

edn., 2005) ...................................................................... 21

Jean-François Poudret and Sébastien Besson, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION

(2007) ................................................................................................................................................. 8

Kim Lewison, THE INTERPRETATION OF CONTRACTS (2nd

edn., 1997) .................................................. 4

N.Palmer, PALMER ON BAILMENT (3rd

edn., 2009). ..................................................... 20, 21, 22, 23, 24

Paul Todd, MARITIME FRAUD AND PIRACY (2nd

edn., 2010) ................................................................ 18

Philippe Fouchard et al, FOUCHARD GAILLARD GOLDMAN ON INTERNATIONAL COMMERCIAL

ARBITRATION (1999). ......................................................................................................................... 7

Simon Baughen, SHIPPING LAW (4th

edn., 2009).................................................................................. 20

Terence Coghlin et al, TIME CHARTERS (6th

edn., 2008). ........................................ 5, 14, 15, 16, 20, 21

Treitel, THE LAW OF CONTRACT (12th

edn., 2007). ................................................................................ 9

W.V.H. Rogers, WINFIELD AND JOLOWICZ ON TORT (18th

edn., 2010) ................................................ 22

ARTICLES

A. Tettenborn, Reversionary Damage to Chattels, 53(2) CAMBRIDGE LAW REVIEW 326 (1994) ....... 23

C. Hawes, Tortious Interference with Goods: Title to Sue, 17(2) CANTERBURY LAW REVIEW 331, 342

(2011) ......................................................................................................................................... 22, 23

D.J. Bentley, A New Found Halliday: The Eighteenth Report of the Law Reform Committee

(Conversion and Detinue) 35(2), THE MODERN LAW REVIEW, 171 (1972). .................................... 22

F.D. Rose Commercial Law, Bailment and a Correlative Right to Unjust Enrichment, LAW

QUARTERLY REVIEW (2011) ............................................................................................................. 20

G.H. Treitel, The Legal Status of Straight Bills of Lading, LAW QUARTERLY REVIEW (2003). .......... 22


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Mark D. Greenberg, The Appropriate Source of Law for Forum Non Conveniens Decisions in

International Cases: A Proposal for the Development of Federal Common Law Mark, 4(1)

BERKELEY JOURNAL OF INTERNATIONAL LAW (1986). ...................................................................... 6

N.E. Palmer, The Application of the Torts (Interference with Goods) Act 1977 to Actions in Bailment,

41(6) MODERN LAW REVIEW 629, (1978) ........................................................................................ 22

Robin Hickey , Wrongs and Possession of Property, CONVEYANCER AND PROPERTY LAWYER (2011)

.......................................................................................................................................................... 22

S. Douglas, The Abolition of Detinue, 30 CONVEYANCER AND PROPERTY LAWYER (2008). ........ 21, 23

MISCELLANEOUS

Ahmad Taleb, Piracy in West Africa Targets the Region’s Oil Industry, INTERNATIONAL POLICY

DIGEST AND GLOBAL RISKS INSIGHTS (Dec. 30 2014) ................................................................... 17

Gard Alert: West African piracy awareness areas expand (Feb. 26 2014) ................................... 17, 18

IMB Piracy Report Highlights Violence in West Africa, ICC COMMERCIAL CRIME SERVICE (July 15

2013) ................................................................................................................................................ 16

IMB Warns of West Africa Piracy Threat, ICC COMMERCIAL CRIME SERVICE (Mar. 7 2014) ..... 16, 17

Interim Guidelines for Owners, Operators and Masters for Protection Against Piracy in the Gulf of

Guinea Region (To be read in conjunction with BMP4), INTERNATIONAL MARITIME

ORGANISATION AND BIMCO (Dec. 21, 2012) ................................................................................. 18

International Maritime Bureau Piracy Reporting Centre Piracy Maps and News/Reports ................. 16

Law Com. No.196, Scot. Law Com. No.130, Right of Suit in Respect of Contracts for the Goods by

Sea, 26 (1991) ............................................................................................................................ 20, 21

Mary Harper, Danger zone: Chasing West Africa’s pirates, BBC NEWS (Nov. 13 2014) .................. 17

Report warns shipping of phishing scams, ICC COMMERCIAL SERVICES (May 09 2014) ................... 18

The ungoverned seas: The waters around Somalia are calmer, but piracy in west Africa is rising,

THE ECONOMIST (Nov. 29 2014)...................................................................................................... 17


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The United Nations Institute for Training and Research, UNOSAT Global Report on Maritime

Piracy-A Geospatial Analysis 1995-2013, (2014) ........................................................................... 16

The United Nations Office on Drugs and Crimes, Maritime Piracy in the Gulf of Guinea:

Transnational Organised Crime in West Africa (Feb 22, 2013). .................................................... 16

Updated Revised West Africa High Risk Area and Voluntary Reporting Area, Ship Security Advisory

No. 31-14, Dec. 22 2014 .................................................................................................................. 17


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STATEMENT OF FACTS

THE PARTIES, THE CHARTER PARTY AND THE BILL OF LADING

Less Dependable Traders Pte (the Defendants), a company incorporated in Singapore, entered into a

time charterparty (Shelltime-4) with Western Tankers Inc. (the Claimants), incorporated in the BVI.

Western Dawn (Vessel) was chartered to carry the oil cargo (comprising 30,000MT JET A1 and

72,199MT GO) from Singapore to OPL Luanda with redelivery at Med. The Master was Captain

Stelios Smith. The Bill of Lading named LDTP as both the consignor/shipper and the carrier and

Angola Energy Imports as the Consignee.

THE PROVISION OF BUNKERS

According to C/P and Voyage Order, Vessel was to be bunkered by Charterers at Singapore. The

Master requested for 1500MT FO, with 490MT FO ROB. Charterers provided 950MT FO at Port of

Loading due to inadequate credit, with an assurance to deliver the rest subsequently. On June 28,

Atlantic STS Agency (ASA2), a third party, represented to the Master that 300MT FO would be

made available at Alternative Discharge Location (ADL). Breaching C/P and Voyage Order, Master

followed ASA2’s instructions leading to cargo theft/pirate attack at ADL.

THE SAFETY EQUIPMENT

Owners were to provide a Vessel fit for service. They arranged for their CSO to review the

requirements of the Vessel, pursuant to which anti-piracy safety-items (such as razor wire,

torchlights, etc.) were to be procured. However, these were “not received” by Vessel.

THE ALTERNATIVE DISCHARGE LOCATION

As per Master’s information, the coordinates of STS location/“OPL Area 1” were 900S and

1130E. On June 28, Captain William Anya from ASA2 (third party), sent an email to the Master

changing these coordinates to 600S and 810E (ADL). He directed Western Dawn to proceed to

ADL, where, it was represented that STS Operations would be conducted by Vessel Antelope.


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Antelope had no relationship with Charterers’ agent, ASA. Master followed these instructions,

breaching C/P and Voyage Order. In the Voyage Correspondence to Charterers, Master only

mentioned the name of Vessel Antelope, without disclosing that ASA2 and not the named disport

agent ASA had contacted him. The exact coordinates of ADL were not disclosed either.

THE NON-PAYMENT OF HIRE AND SUBSEQUENT OFF-HIRE

On July 03, Owners sent a notice of default in respect of non-payment of hire to Charterers. The next

day, during the subsistence of the three-day grace period for hire-payment under C/P, Charterers

declared Vessel off-hire, due to “no contact with receiver/chrtr.”

CARGO THEFT/PIRATE ATTACK

Following instructions of ASA2 and thus, upon reaching ADL, Vessel went missing on July 04. She

faced pirate attack and cargo diversion from July 04 to 17. Consequently, 28190MT GO was

discharged. Vessel failed to meet her discharge target date and was unable to discharge full cargo in

accordance with B/L.

CLAIMS

Owners commenced arbitration proceedings in London on November 01 2014 claiming:

Hire, as due and owing under C/P, or alternatively damages for Charterers’ failure to pay the

same.

Loss and Damages arising out of the Tort of Fraud committed by Charterers who had no

intention of supplying bunkers either at Durban or at STS Area 1.

Charterers raised a counter-claim on the following matters:

Owners breached C/P by providing a Vessel that was not fit for service due to Master’s

incompetency and his failing to deploy BMP4 measures.

Owners are also liable for converting and/or breaching their duty as bailee in respect of part

of cargo on the Vessel.


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ARGUMENTS ADVANCED

I. THE TRIBUNAL DOES NOT HAVE JURISDICTION OVER THE PRESENT DISPUTE

1. Arbitration is a creature of consent and cannot continue against the intention of the parties.

Charterers did not intend for this Tribunal to have jurisdiction over the present dispute. This

intention must be respected because the incorporation of the arbitration agreement in the

Fully Fixed Recap was ambiguous in nature [A]. This ambiguity can be resolved by looking

to the pre-contractual negotiations between the Broker and Charterers which show the

Charterers’ intention to not hold arbitration in London [B]. In any case, not all provisions of

the Fully Fixed Recap, including the Law & Litigation section, had become binding on the

parties [C]. Therefore, the jurisdiction of this Tribunal should be vacated in favour of

Singapore, which would be a more suitable forum [D].

A. THERE IS A LATENT AMBIGUITY IN THE FULLY FIXED RECAP WITH REGARD TO THE

INCORPORATION OF THE ARBITRATION CLAUSE

2. The Fully Fixed Recap, which concludes the contract between Owners and Charterers, has

been left blank under the Law & Litigation section.1 This raises a doubt in the mind of a

reasonable person as to whether the arbitration clause of C/P has been included into the final

contract. Since, the parties differ in their intention as to the seat of the arbitration, this

omission in the Fully Fixed Recap, which amended and incorporated C/P is a material

omission. Further, leaving the Law & Litigation section blank could mean that the parties

were undecided with regard to the incorporation of the arbitration clause. Therefore, this

material omission is sufficient to create an ambiguity in the Fully Fixed Recap.

1 Moot Scenario, Page 5, Fully Fixed Recap, Email dated May 26 2014 17:09 (UTC+1).


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B. PRE-CONTRACTUAL NEGOTIATIONS PROVE CHARTERERS’ INTENTION AGAINST

ARBITRATION IN LONDON

3. Where an ambiguity exists, a strict reading of the contract itself would not be reflective of the

parties’ true intention.2 This ambiguity then needs to be resolved by the Tribunal through

admission of evidence of the parties’ intentions and the background in which the contract was

formed.3 It has been held that in such a situation, pre-contractual negotiations are helpful in

evincing parties’ intentions.4

4. Following this, the pre-contractual negotiations between Charterers and Broker need to be

looked into in order to resolve the aforementioned ambiguity. In the pre-contractual

correspondence between Charterers and Broker, the former had informed Broker that they

were “not too keen on a London arbitration” because of a “negative experience with it.”5 This

shows Charterers’ intention against having a London-seated arbitration. Therefore, the seat of

arbitration cannot be London as arbitration must occur at a mutually agreed seat.6

C. ALL SECTIONS OF THE FULLY FIXED RECAP HAVE NOT BECOME BINDING ON THE PARTIES

5. Owners may contend that since Charterers have agreed to make the Fully Fixed Recap

binding upon themselves, they cannot subsequently refuse to be bound by just the Law &

Litigation section of the Fully Fixed Recap. However, it is submitted that not all provisions of

the Fully Fixed Recap, including the Law & Litigation section, had become binding on the

parties. It is possible to conceive of a contract which has become binding on the parties but

2 St. Pierre v. Chriscan Enterprises Ltd., 2011 BCCA 97; Yarde v. Artoglou, 2012 NY Slip Op 32793(U); Shelton v.

Andres, (1985) 106 Ill.2d 153; Wald v. Chicago Shippers Association, (1988) 175 Ill.App.3d 607; Greenfield v. Philles

Records, 750 NYS2d 565 [2002]; Kroft Entertainment Inc. v. CBS Songs, 653 F.Supp. 1530, 1533 (S.D.N.Y. 1987); Chi

Sun Hua Steel Co. Ltd. v. Crest Tankers, 1990 AMC 2816, 2817–2818 (N.D.Cal. 1990). 3 Kim Lewison, THE INTERPRETATION OF CONTRACTS, 201, ¶7.05 (2

nd edn., 1997); Kass v. Kass, 91 N.Y.2d 554, 566;

Banco Espirito Santo, S.A. v. Concessionaria Do Rodoanel Oeste S.A, 2012 NY Slip Op 06186; State v. Home Indemnity

Co., 66 N.Y.2d 669 (N.Y. 1985). 4 Investors Compensation Scheme Ltd v. West Bromwich, [1997] UKHL 28;

5 Moot Scenario, Page 2, Charterer’s Correspondence, Email dated May 23 2014, 12:30 (UTC+8).

6 Gary Born, INTERNATIONAL ARBITRATION AND FORUM SELECTION AGREEMENTS: DRAFTING AND ENFORCING, 29 (4

th

edn., 2013).


5

with some sections of the contract still being subject to negotiations.7 When it is unclear

whether the parties intended to bind themselves fully on the issue, the Tribunal must examine

the background circumstances, the nature of the alleged contract and the negotiations

between the parties, and seek to infer what a reasonable person would have intended.8

6. It is a well-settled principle that only when all subjects are lifted does a charterparty become

binding.9 In the present case, only the management subjects had been lifted by Charterers and

it was not said that all subjects had been lifted.10

Further, simply because the parties have

used the term Fully Fixed Recap, it would not mean that the contract has been concluded,

leaving no scope for further negotiations.11

Thus, arbitration could still have been a subject of

negotiation as it is not clear whether parties intended to bind themselves on this issue.

D. THE SEAT AND FORUM OF ARBITRATION SHOULD BE SINGAPORE

7. In light of the aforementioned ambiguity and Charterers’ disinclination to have London as

seat, it is submitted that the Tribunal should vacate its jurisdiction in favour of Singapore

according to the doctrine of forum non conveniens. In the instant case both requirements of

the doctrine are being fulfilled; that is, an adequate forum exists elsewhere and the balance of

interests lies in favour of the dismissal of dispute from the present forum.12

8. Singapore is a better-suited seat as it has the closest and most real connection to the dispute.13

The Port of Loading was at Singapore14

and Charterers who are also the Consignors as well

7 Pagnan v. Feed Products, [1987] 2 Lloyd’s Rep. 601, “[T]here is no legal obstacle which stands in the way of the

parties agreeing to be bound now while deferring important matters to be agreed later.” 8 Spectra International v. Tiscali UK, [2002] All E.R. (D) 209.

9 Terence Coghlin et al, TIME CHARTERS, 25, ¶1.11 (6

th edn., 2008).

10 Procedural Order No. 2, ¶20.

11 Coghlin supra note 9, at 282, ¶16.18.

12 Spiliada Maritime Corp v. Cansulex Ltd, [1987] AC 460; Dole Food Co. v. Watts, 303 F.3d, 1104, 1118-1120 (9

th Cir.

2002). 13

Sulamerica CIA Nacional De Seguros SA & Ors v. Enesa Engenharia SA & Ors., [2012] EWCA Civ 638; Abuja

International Hotels Ltd. v. Meridien Sas, [2012] EWHC 87 (Comm). 14

Moot Scenario, Page 43, Bill of Lading.


6

as the Carrier have been transacting from Singapore.15

Further, the obligations to be

performed under C/P like provision of bunkers or providing a fit vessel were conducted in

Singapore making it an adequate forum whereas London does not have any connection with

C/P’s performance. Also, holding the proceedings in London would cause great hardship to

the Charterers in procuring witnesses and evidence, another factor to be considered under the

doctrine when determining the balance of interests.16

Therefore, with the two tests being

satisfied, the Tribunal should vacate its proceedings in favour of Singapore.

II. THE TORT OF FRAUD IS NOT ADMISSIBLE BEFORE THIS TRIBUNAL

9. Owners contend that Charterers have committed the Tort of Fraud by not providing bunkers

to Vessel and they wish to make the matter admissible before this Tribunal. However,

Charterers submit that the Tort of Fraud, if any, does not come within the scope of the

arbitration agreement as the term “disputes arising out of this charter” does not cover torts

[A] and was not intended to include the claim of Tort of Fraud [B].

A. THE TERM “DISPUTES ARISING OUT OF THIS CHARTER” USED IN C/P DOES NOT EXTEND TO

THE TORT OF FRAUD

10. Courts have interpreted the “arising out of” language in the agreement narrowly to cover only

those disputes that directly involve the “construction and performance of the contract”

itself.17

Significantly, courts have noted that such agreements ought to have used “relating to”

or “arising in connection with” if they intended to include a broader class of claims.18

15

Procedural Order No. 2, Dramatis Personae. 16

Spiliada Maritime Corp v. Cansulex Ltd, [1987] AC 460; Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947); Mark D.

Greenberg, The Appropriate Source of Law for Forum Non Conveniens Decisions in International Cases: A Proposal for

the Development of Federal Common Law Mark, 4(1) BERKELEY JOURNAL OF INTERNATIONAL LAW, 157(1986). 17

Gary Born, INTERNATIONAL COMMERCIAL ARBITRATION: COMMENTARY AND MATERIALS, 320 (2nd

edn., 2001); In Re

Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961). 18

In Re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961); Tracer Research Corp. v. National Environmental Services,

42 F.3d 1292 (9th Cir. 1994); Texaco, Inc. v. American Trading Transp. Co., 644 F.2d 1152, 1154 (5th Cir. 1981);

Ethiopian Oilseeds & Pulses Corp. v. Rio Del Mar Foods Inc., [1990] 1 Q.B. 86.


7

11. Owners may rely on the English case of Fiona Trust v. Privalov,19

to show that tortious

claims can be included within the scope of arbitration agreement when the agreement is with

regard to “disputes arising out of the charter.” However, in Fiona, unlike the present dispute,

the issue was whether the validity of the arbitration agreement when marred by bribery can

be arbitrated. The case should not be interpreted to mean, that in every contractual dispute

involving a tort, such a tortious claim would automatically become admissible in arbitration.

12. The Tort of Fraud as alleged by Charterers does not arise from C/P. The Master received

instructions to proceed to ADL from ASA2, a party that is not the agent of Charterers.

Actions, fraudulent or otherwise, undertaken by third parties do not arise out of C/P20

as they

are not privy to the contract. Therefore, the term “disputes arising out of this charter” does

not extend to the Tort of Fraud.

B. THE PARTIES DID NOT INTEND TO INCLUDE THE TORT OF FRAUD AS AN ADMISSIBLE

MATTER BEFORE THIS TRIBUNAL

13. The intention of parties is essential to determine the scope of the arbitration agreement.21

The

Tribunal must consider the dispute in question and then elicit from the arbitration agreement

whether or not the parties intended a dispute of the kind in question to be resolved by

arbitration.22

A party cannot be required to submit to arbitration any dispute which it has not

agreed to submit.23

14. In the instant case, C/P makes no mention of including tortious claims under the scope of the

arbitration agreement. The scope of arbitration agreement is based on the intention of the

parties who can choose to limit the jurisdiction of the Tribunal to only certain types of

19

Fiona Trust and Holding Corp. v. Yuri Pavalov and Ors., [2007] UKHL 40. 20

Born supra note 17, at 320. 21

Alan Redfern et al, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION, 94 (5th

edn., 2009); Philippe Fouchard et

al, FOUCHARD GAILLARD GOLDMAN ON INTERNATIONAL COMMERCIAL ARBITRATION, 296 (1999). 22

Redfern supra note 21, at 94. 23

United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960).


8

disputes or to clearly defined issues.24

Therefore, in absence of any evidence to suggest that

the parties intended to include Tort of Fraud claims, their inclusion cannot be assumed.

III. ASA2 IS NOT THE AGENT OF CHARTERERS

15. Owners contend that ASA2 is the agent of Charterers. However, Charterers submit otherwise

on three grounds: First, the Doctrine of Apparent or Ostensible Authority does not apply in

the absence of a representation [A]. Second, in any case, Owners knew or ought to have

known that ASA2 does not have the requisite authority [B]. Third, Charterers are not bound

by the Doctrine of Estoppel by Negligence [C].

A. DOCTRINE OF APPARENT AUTHORITY IS NOT APPLICABLE DUE TO LACK OF

REPRESENTATION

16. It is a well-settled principle that the Doctrine of Apparent Authority cannot be applied in the

absence of a representation, a reliance on that representation, and an alteration in position

resulting from such reliance.25

17. It is submitted that Charterers did not represent ASA2 as their agent, either by their words or

by conduct. In fact, Owners did not inform Charterers about the third party ASA2, who

directed them to proceed to ADL with a promise to provide 300MT FO bunkers.26

In the

Voyage Correspondence as well, Owners only mentioned the name of Vessel Antelope

without disclosing that ASA2 and not the named agent ASA had contacted them.27

Thus,

even though Charterers asked the Master to “continue to liaise with your STS coordinator”28

they were not referring to ASA2 as is contended by Owners.

24

Jean-François Poudret and Sébastien Besson, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION, 265 (2007). 25

Rama Corporation Ltd. v. Proved Tin and General Investments Ltd., [1952] 2 QB 147. 26

Moot Scenario, Page 38, V/C dated July 03 2014 16:28 (UTC+1); Moot Scenario, Page 35, V/C dated June 28 2014

18:02 (UTC+1). 27

Moot Scenario, Page 38, V/C dated July 03 2014 16:28 (UTC+1). 28

Moot Scenario, Page 41, V/C dated July 03 2014 12:24 (UTC+8).


9

18. In light of the Voyage Correspondence which clearly mentioned ASA as the disport agent,

who were also appointed by the Owners themselves,29

it was reasonable for Charterers to

assume that Owners were liaisoning with ASA.30

Considering the given facts and

circumstances, Charterers could not have foreseen that a third party (ASA2) had been

contacting the Master. In fact, practicing abundant caution Charterers had instructed Master

to “keep Chrtrs informed.” However, Master, by not marking a copy of his correspondence

with ASA2 to Charterers, failed to carry out this instruction.

19. Additionally, as per Voyage Order, the Master should not have relied on any other party

without “referring such instructions to Charterer for handling.”31

Moreover, as soon as

Charterers were informed about Master liaisoning with ASA2, a third party, they immediately

declared Vessel off-hire.32

This shows that they could not have instructed the Master to

“liaise with” ASA2 or represented ASA2 as their agent. Thus, a mere failure to spot the name

of Vessel Antelope in the correspondence despite express orders to the contrary does not

amount to giving ASA2 apparent authority.33

B. OWNERS KNEW OR OUGHT TO HAVE KNOWN THAT ASA2 DOES NOT HAVE THE REQUISITE

AUTHORITY

20. In any case, even if the Tribunal concludes that the conduct of Charterers amounted to a

representation as to ASA2’s authority, there can be no ostensible agency when the other party

knows that the agent’s authority does not extend to the power of giving directions.34

First,

Owners knew or ought to have known that ASA2 was a third party who could not issue any

29


Treitel, THE LAW OF CONTRACT, 761 (12th

edn., 2007). 31

Moot Scenario, Page 13, Voyage Order. 32


Rhodian River Shipping Co. SA and Rhodian Sailor Shipping Co. SA v. Halla Maritime Corp (‘The Rhodian River’)

[1984] 1 Lloyd's Rep 373. 34

Armagas Ltd. v. Mundogas Ltd. (‘The Ocean Frost’), [1986] AC 717.


10

voyage-related directions (i). Second, in any case, even if ASA2 were to be Charterers’ agent,

their authority in that capacity was limited (ii).

(i) Owners knew or ought to have known that ASA2 was a third party

21. Owners submit that Voyage Correspondence clearly mentions Atlantic Services Agency

‘ASA’ ([email protected]) as the disport agent.35

ASA was appointed by Owners

themselves36

and Charterers, while corresponding with the Master, always marked a copy to

this email address.37

The order mandates that “the Master shall disregard any voyage-related

instructions received from third parties and immediately refer such instructions to Charterer

for handling.”38

Yet, in breach of the Order, Owners followed the directions received from a

third party [email protected]

/[email protected]

in breach of the Voyage Order. Thus, there cannot be an apparent agency when the Owners

knew (or ought to have known) that ASA2 was a third party who did not have the authority to

direct the vessel to ADL.

(ii) In any case, even if ASA2 were adjudicated to be the Charterers’ agent, their authority in

that capacity was limited

22. Assuming, but not conceding that Owners believed ASA2 to be ASA, they could still not

have relied on the representations made by ASA2. This is because Charterers’ agents had no

authority to issue directions relating to ADL.

23. As per Cl 12, C/P, it is the Charterers and not their agents who shall give the Master all

requisite instructions and sailing directions.41

Similarly, Cl 13 limits the power to issue

voyage-related instructions to Charterers only. Where the intention was to include

35



Moot Scenario, Page 33, V/C dated June 28 2014 16:27 (UTC+8); Moot Scenario, Page 34, V/C dated June 28 2014

18:43 (UTC+8). 38


Moot Scenario, Pages 35-38, V/C. 40

Moot Scenario, Page 35, V/C dated June 28 2014 18:02 (UTC+1). 41

C/P, Cl 12(b).

mailto:[email protected]


11

“Charterers or their agents” it has been expressly mentioned in the succeeding lines of the

same clauses.42

Thus, by specifying only “Charterers” and with the deliberate omission of “or

their agents,” these clauses make clear that the Master is only supposed to follow the

instructions given by Charterers. Owners relied on the instructions of ASA2, despite being

well aware of these express prohibitions and the limited authority of the agents.

24. In The Cherry,43

the court refused to accept ostensible agency on the ground that the

apparent agents had acted outside the scope of their authority.44

Similarly, in the instant case,

authority of the agent was limited; therefore, Owners should not have relied upon ASA2’s

instructions to proceed to ADL without informing Charterers.45

Thus, the Doctrine of

Apparent Authority cannot apply and ASA2 cannot be considered as Charterers’ agent.

C. CHARTERERS ARE NOT BOUND BY THE DOCTRINE OF ESTOPPEL BY NEGLIGENCE

25. Owners might contend that inability on part of Charterers to recognize the name of the vessel

“Antelope” which ASA2 purports to control, amounts to negligence and therefore they are

bound by Doctrine of Estoppel by Negligence. However, Charterers submit that to constitute

such an estoppel, negligent conduct must result in a clear and unequivocal representation.46

As previously submitted,47

Charterers did not represent ASA2 as their agent either by their

words or by conduct.

26. In any case, even if the Tribunal were to come to the conclusion that there was such a

representation, it is submitted that there cannot be an estoppel unless the same is the

proximate cause for the loss.48

The test in relation to negligence and its effect is

42

C/P, Cl 12, Lines 220-221; C/P, Cl 13, Lines 227, 233. 43

Glencore International AG v. Owners of the "Cherry", the "Epic" and the "Addax" (‘The Cherry’), [2003] 1 SLR 471. 44

The Cherry, [2003] 1 SLR 471. 45

The Cherry, [2003] 1 SLR 471. 46

Moorgate Mercantile Co Ltd. v. Twitchings, [ 1977] AC 890. 47

Refer to Issue III.A. in this Memorandum. 48

Wilson and Meeson v. Pickering, [1946] 1 K.B. 422.


12

foreseeability49

which is not fulfilled in the present case. It is submitted that the proximate

cause of Owner’s loss was ASA2 directing Master to ADL where a pirate attack took place50

and not any alleged negligence on the part of Charterers. As submitted earlier, this was not a

natural or foreseeable consequence of the representations.51

Hence, the Doctrine of Estoppel

is inapplicable in the instant case.

IV. CHARTERERS DID NOT COMMIT TORT OF FRAUD

27. As has been previously submitted, the parties did not intend to make the Tort of Fraud

admissible before the Tribunal. However, if the Tribunal were to find otherwise, it is

submitted that the Charterers did not commit the Tort of Fraud in the instant case. The

Owners contend that Charterers committed the Tort of Fraud by making untrue

representations regarding bunker-supply without having any intention to provide the same.

Further, they also attribute ASA2’s representations to Charterers.52

These contentions are

challenged by Charterers as the pre-requisites of the Tort of Fraud have not been fulfilled.

First, Charterers had no dishonest intention [A] and second, no actual damages were caused

to Owners due to Charterers’ representation [B].

A. CHARTERERS HAD NO DISHONEST INTENTION

28. Fraud is proved only when it is shown that the false representation was made knowingly53

or

without belief in its truth.54

However, in the present case, Charterers’ representations as to the

supply of bunkers were made without any dishonest intention or knowledge of their falsity.

As admitted by the Master, the place where the remaining bunkers were needed was OPL

49

Mercantile Credit Co. Ltd. v. Hamblin, [1965] 2 QB 242. 50

Moot Scenario, Page 42, V/C dated July 17 2014 23:25 (UTC+). 51

Mercantile Credit Co. Ltd. v. Hamblin, [1965] 2 QB 242; Refer to Issue III.A., ¶18 in this Memorandum. 52

Moot Scenario, Page 63, Statement of Claim, ¶17-21. 53

Armstrong v. Strain, [1951] 1 T.L.R. 856, 871. 54

Derry v. Peek, (1889) LR 14 App Cas 337.


13

Luanda, the discharge port. Mere non-supply of total amount of required bunkers at the Port

of Loading is insufficient to prove dishonest intention on Charterers’ part.

29. All representations made by Charterers were honest and true at the time they were made.

First, the intention of Charterers to further supply the bunkers during the course of the

voyage is clear from the credit line of US$ 750,000 to US$ 1,000,000 requested by them.55

This would have been sufficient to provide the requisite bunkers.56

However, the effort

fructified in a credit line of only US$ 650,000. Accordingly, Charterers assured the provision

of remaining bunkers at a later time.57

30. Admittedly, Charterers assured the next bunker supply at OPL Luanda. However, Vessel not

turning up there to receive bunkers was an event not in the control of Charterers. Owners

relied on the instructions of a third party (ASA2) against the Voyage Orders in going to ADL

and hence Charterers cannot be made liable for the same.58

B. OWNERS DID NOT SUFFER ANY DAMAGE DUE TO CHARTERERS’ REPRESENTATION

31. For a claim to arise in Tort of Fraud, it must be proved that the Owners suffered damages as a

result of relying on the defendants’ representations.59

First, Charterers submit that there was

no actual damage caused to Owners due to the non-supply of bunkers before reaching OPL

Luanda. Owners have already admitted that the bunker supply was sufficient to reach the Port

of Discharge (OPL Luanda).60

Further, the delay that may have been caused did not result in

any actual damage.

32. Second, the damage caused to Vessel was not suffered due to Charterers’ representation that

the bunkers would be supplied at OPL Luanda, but due to the representations made by a third

55

Moot Scenario, Page 20, V/C dated May 27 2014 12:00 (UTC+8). 56

Refer to Annexure B, ¶2 in this Memorandum. 57

Moot Scenario, Page 21, V/C dated May 27 2014 14:10 (UTC+8); Moot Scenario, Page 26, V/C dated June 03 2014

17:21 (UTC+8). 58


Moot Scenario, Page 13, Voyage Order; Moot Scenario, Page 35, V/C dated June 28 2014 19:50 (UTC+2). 60

Moot Scenario, Page 28, V/C dated June 03 2014 20:02 (UTC+8).


14

party to supply bunkers at ADL. This shows that no actual damage has been suffered by

Owners due to Charterers’ representations.

V. CHARTERERS DID NOT BREACH THE C/P DUE TO NON PAYMENT OF HIRE

33. Charterers are required to pay hire to Owners on an advanced-monthly basis, as per C/P

terms. Charterers submit that there is no hire due and owing to Owners as Vessel was off-hire

on due-date [A]. Further, in any event, C/P was frustrated [B] and Vessel went off hire no

later than July 4 under Cl 21(a)(ii), C/P due to “loss of time”[C].

A. VESSEL WAS OFF-HIRE ON DUE-DATE

34. The Charterers submit that there is no hire due and owing to Owners. It has been held in The

Lutetian,61

that Charterers are not obliged to pay hire if on the due-date Vessel is off-hire. It

is submitted that Vessel was off-hire at all times when hire was allegedly due and owing.

According to Cl 9(a), C/P, there is a three day grace period running till July 06. Thus it

follows that hire could be paid till July 06. As a result, when Vessel went off-hire before this

date, Charterers were not under any obligation to pay hire.

B. C/P WAS FRUSTRATED

35. In any event, C/P was frustrated and hire had ceased to be due at noon on July 04, pursuant to

Cl 20, C/P. As per this clause, should Vessel be missing, the “charter shall terminate and the

hire shall cease at the noon of the day she was last heard of.” It is submitted that Vessel went

missing62

from July 04-17 due to pirate attack/cargo theft, which attracted Cl 20. Thus, C/P

was frustrated by no later than July 04. As will be argued subsequently,63

the breach of

Owners’ obligation under Cl 1 and 2, C/P, by not providing a Vessel “fit for the service,”

61

Tradax Export SA v. Dorada Compania Naviera SA of Panama (‘The Lutetian’), [1982] 2 Lloyd’s Rep. 140 as cited in

Coghlin supra note 9 at 282, ¶16.18. 62

Moot Scenario, Page 46, Tanker Gone Missing News Report. 63

Refer to Issue VI. in this Memorandum.


15

went to the root of the contract and deprived Charterers of substantially the whole benefit of

the charter due to cargo theft. This was a breach of an absolute obligation and not a minor

breach, thus justifying the frustration of C/P.64

C. VESSEL WENT OFF-HIRE FROM JULY 04 DUE TO “LOSS OF TIME” UNDER CL 21(A)(II)

36. Furthermore, Charterers submit that Vessel was off-hire from July 04 under Cl 21(a)(ii), C/P

as there was “an undisputed loss of time” resulting from “breach of orders or neglect of

duty”65

on the part of the Master. By not following Charterers’ instructions to liaise with the

Disport Agent (ASA) as mentioned in the Voyage Order66

and instead following orders given

by ASA2, a third party,67

the master exhibited “neglect of duty.”

37. Further by failing to deploy anti-piracy precautions as required by C/P and/or WAF industry

practice,68

Master breached his duty to provide a fit Vessel.69

Thus, the Master’s conduct

attracts Cl 21(a)(ii), C/P. This resulted in “loss of time” caused by way of interruption of

service first when the vessel went to ADL without authorization by Charterers and second,

when due to vessel being unfit, the piracy attack took place. Thus Vessel went off hire

according to the terms set out in Cl. 21, C/P.

VI. OWNERS PROVIDED A VESSEL NOT “FIT FOR THE SERVICE”

38. Charterers submit that Owners breached Cl 1(c), C/P by providing a Vessel that was not “fit

for the service”. Cl. 1 and 2(a) impose absolute obligations on Owners.70

Thus, whether the

64

Hongkong Fir Shipping Co Ltd v. Kawasaki Kisen Kaisha Ltd (‘The Hongkong Fir’), [1961] 1 Lloyd's Rep. 159. 65

Moot Scenario, Page 68, Statement of Defence, ¶14.c. 66


Refer to Issue III. in this Memorandum. 68

Moot Scenario, Page 12, BIMCO Piracy Clause, sub cl. (e) & (f). 69

Refer to Issue VI. in this memorandum. 70

International Fina Services AG v. Katrina Shipping Ltd (‘The Fina Samco’), [1994] 1 Lloyd's Rep. 153, [1995] C.L.C.

1335; Adamastos Shipping v. Anglo-Saxon Petroleum (‘The Saxon Star’), [1957] 1 Lloyd’s Rep. 271 (C.A.); Poseidon

Schiffahrt GmbH v. Nomadic Navigation Co Ltd (‘The Trade Nomad’), [1997] C.L.C. 1542, [1999] C.L.C. 755; Golden

Fleece Maritime Inc v. ST Shipping and Transport Inc. (‘The Elli’), [2007] EWHC 1890 (Comm); Coghlin supra note 9,

at 820, 822, 880, ¶38.24, 38.31, 38.143.


16

lower standard of due-diligence was exercised or not is irrelevant to any question of

compliance or breach.71

39. To discharge the said obligation, two requirements exist: first, Owners are bound to provide a

Vessel physically fit to encounter all reasonably foreseeable perils on the contemplated

voyage72

and to man the ship with a competent Master and Crew.73

Second, Vessel must be

cargoworthy74

i.e., nothing must endanger her safety or that of the cargo.

40. It is submitted that piracy was a reasonably foreseeable peril on the contemplated voyage [A],

that Owners failed to discharge absolute obligation to provide a Vessel ‘fit’ to encounter such

peril [B] and that the Master was incompetent [C]. Further, Vessel was not cargoworthy [D].

A. PIRACY WAS A REASONABLY FORESEEABLE PERIL ON THE CONTEMPLATED VOYAGE

41. In the present case, Vessel was undertaking a voyage to WAF (OPL Luanda),75

a stretch of

sea notorious for piracy76

with “rogue interests operating in the area”77

as suggested by

Owners themselves when they labelled it a “known security/piracy threat area.”78

42. It is submitted that WAF piracy is rising79

with incidents “stretching all the way from the

Ivory Coast to Angola”80

and accounting for 19% of attacks worldwide, as reported by the

71

Coghlin supra note 9, at 810, ¶38.5. 72

The Hongkong Fir, [1961] 1 Lloyd's Rep. 159; Cheikh Boutros Selim El-Khoury v. Ceylon Shipping Lines (‘The

Madeleine’), [1967] 2 Lloyd’s Rep. 224; Alfred C Toepfer v. Tossa Marine Co. Ltd. (‘The Derby’), [1985] 2 Lloyd's Rep.

325. 73

FC Bradley & Sons Ltd v. Federal Steam Navigation Co, [1926] 24 Ll L Rep 446, 454; The Hongkong Fir, [1961] 2

Lloyd’s Rep 478, 494; The Derby, [1985] 2 Lloyd’s Rep 325, 331, 333; Papera Traders Co Ltd v. Hyundai Merchant

Marine Co Ltd (‘The Eurasian Dream No.1’), [2002] 1 Lloyd’s Rep. 719. 74

Actis Co. v. Sanko Steamship Co., (‘The Aquacharm’), [1982] 1 Lloyd’s Rep 7; The Arianna, [1987] 2 Lloyd’s Rep.

376. 75

Moot Scenario, Page 43-44, Bill of Lading. 76

International Maritime Bureau Piracy Reporting Centre Piracy Maps and News/Reports available at https://icc-

ccs.org/piracy-reporting-centre/live-piracy-map and https://icc-ccs.org/piracy-reporting-centre/piracynewsafigures

[Accessed on Jan. 30 2015]; IMB Piracy Report Highlights Violence in West Africa, ICC COMMERCIAL CRIME SERVICE,

available at https://icc-ccs.org/news/865-imb-piracy-report-highlights-violence-in-west-africa (July 15 2013) [Accessed

on Feb. 1 2015]; IMB Warns of West Africa Piracy Threat, ICC COMMERCIAL CRIME SERVICE available at https://icc-

ccs.org/news/911-imb-warns-of-west-africa-piracy-threat (Mar. 7 2014) [Accessed on Feb. 12 2015]. 77

Moot Scenario, Page 46, Tanker Gone Missing News Report. 78

Moot Scenario, Page 22, V/C dated May 27 2014 16:59 (UTC+1). 79

The United Nations Institute for Training and Research, UNOSAT Global Report on Maritime Piracy-A Geospatial

Analysis 1995-2013, (2014) available at https://www.unitar.org/unosat/piracy [Accessed on Mar. 02 2015]; The United

https://icc-ccs.org/piracy-reporting-centre/live-piracy-map

https://icc-ccs.org/piracy-reporting-centre/live-piracy-map

https://icc-ccs.org/piracy-reporting-centre/piracynewsafigures

https://icc-ccs.org/news/865-imb-piracy-report-highlights-violence-in-west-africa


17

IMB.81

Further, as erroneously perceived, the attacks are not just limited to the Gulf of

Guinea region (which is a base)82

but gangs have shown inclination to attack even far south.83

In pursuance of this, the noted Norwegian Maritime Authority expanded its Security Level 2

Area “all the way to and including the waters off Angola”84

and the International Registries,

Inc. too updated its WAF High Risk Area to include “Angola: Luanda (off port limits).”85

This makes piracy a reasonably foreseeable peril in the area of Vessel’s discharged location.

B. VESSEL WAS NOT FIT TO ENCOUNTER PIRACY

43. While fitness merely implies seaworthiness,86

“fit for the service” as required by C/P creates

an absolute obligation that the Vessel must also be suitable for the given voyage to be

undertaken.87

It is a greater standard per se, as a Vessel may be seaworthy but still unfit.88

Further, Owners can be held to a higher standard when aware of the peculiarities of the

voyage.89

Nations Office on Drugs and Crimes, Maritime Piracy in the Gulf of Guinea: Transnational Organised Crime in West

Africa (Feb 22, 2013). 80

The ungoverned seas: The waters around Somalia are calmer, but piracy in west Africa is rising, THE ECONOMIST

(Nov. 29 2014), available athttp://www.economist.com/news/middle-east-and-africa/21635049-waters-around-somalia-

are-calmer-piracy-west-africa-rising [Accessed on Apr. 01 2015]. 81

Mary Harper, Danger zone: Chasing West Africa’s pirates, BBC NEWS (Nov. 13 2014) available at

http://www.bbc.com/news/world-africa-30024009 [Accessed on Mar. 26 2015]. 82

Ahmad Taleb, Piracy in West Africa Targets the Region’s Oil Industry, INTERNATIONAL POLICY DIGEST AND GLOBAL

RISKS INSIGHTS (Dec. 30 2014) available at http://www.internationalpolicydigest.org/2014/12/30/piracy-west-africa-

targets-regions-oil-industry/ [Accessed on Mar. 21 2015]. 83

IMB supra note 76. 84

Notification dated Jan. 31 2014, springing from recent and credible reports of Nigerian piracy activity off the coast of

Angola, available at http://www.gard.no/webdocs/NMA_ISPS.pdf and http://www.sjofartsdir.no/en/safety/isps-

maritime-security/security-level-for-ships-flying-the-norwegian-flag/; Gard Alert: West African piracy awareness areas

expand (Feb. 26 2014) available at http://www.gard.no/ikbViewer/web/updates/content/20738993/gard-alert-west-

african-piracy-awareness-areas-expand [Accessed on Apr. 01 2015]. 85

Updated Revised West Africa High Risk Area and Voluntary Reporting Area, Ship Security Advisory No. 31-14, Dec.

22 2014, available at https://www.register-iri.com/forms/upload/SSAdvisory_31-14.pdf and https://www.register-

iri.com/index.cfm?action=page&page=244 [Accessed on Apr. 01 2015]. 86

The Madeleine, [1967] 2 Lloyd’s Rep. 224; The Hongkong Fir, [1961] 2 Lloyd’s Rep; The Derby, [1985] 2 Lloyd’s

Rep. 325 (C.A.). 87

Halsbury’s Laws of England, ¶465, Vol. 7 (5th

edn., 2008); The Fjord Wind, [1999] 1 Lloyd’s Rep. 307; Empresa

Cubana Importadora de Alimentos Alimport v. Iasmos Shipping Co. SA (‘The Good Friend’), [1984] 2 Lloyd’s Rep 586. 88

The Arianna, [1987] 2 Lloyd’s Rep. 376. 89

The Hongkong Fir, [1961] 2 Lloyd’s Rep 478.

http://www.gard.no/webdocs/NMA_ISPS.pdf

http://www.sjofartsdir.no/en/safety/isps-maritime-security/security-level-for-ships-flying-the-norwegian-flag/

http://www.sjofartsdir.no/en/safety/isps-maritime-security/security-level-for-ships-flying-the-norwegian-flag/

https://www.register-iri.com/forms/upload/SSAdvisory_31-14.pdf

https://www.register-iri.com/index.cfm?action=page&page=244

https://www.register-iri.com/index.cfm?action=page&page=244


18

44. In the present case, Owners ought to have borne in mind “international standards and the

particular circumstances of the problem at hand.”90

By failing to follow anti-piracy

precautions as required by C/P and/or standard industry practice relating to WAF, they failed

to meet the absolute obligation cast on them to supply a vessel fit for the service.

45. “(T)he problems associated with West Africa piracy are well known, reported and

documented”91

such that the Vessel’s Master and crew needed to be acutely prepared, alert,

competent and skillful to be able to combat the threat of piracy.92

46. In accordance with C/P,93

Owners should have taken “reasonable preventative measures to

protect the Vessel, her crew and cargo” which includes BMP4 to be implemented as the

minimum threshold (“default position”)94

irrespective of where Vessel is sailing to.

Additionally, as part of standard industry practice, Owners should have followed BIMCO’s

interim measures that aim to bridge the gap between the advice currently found in the BMP4

and the prevailing situation in WAF.95

However, there is evidence to show that the “stores

and spares Sing order (were) not received”96

and the indispensable ‘razor wire’ was not

deployed. It is no excuse to submit that “Vessel (was) doing best to comply with BMP4” as in

the absence of the safety-items being deployed, Master’s efforts were ineffective.

47. Owners ought to have known that imposters and phishing scams are likely97

in this area.

Hence, communications with third-parties (ASA2) ought not to have been made for

90

Paul Todd, MARITIME FRAUD AND PIRACY, 1.114 (2nd

edn., 2010); Northern Shipping Co. v. Deutsche Seereederei

G.M.B.H. and Others (‘The Kapitan Sakharov’), [2000] 2 Lloyd's Rep. 255; Great China Metal Industries Co Limited v.

Malaysian International Shipping Corporation Berhad (‘The Bunga Seroja’), (1998) 72 ALJR 1592. 91

Procedural Order No. 2, ¶8. 92

The Derby, [1985] 2 Lloyd’s Rep 325. 93

Moot Scenario, Page 11, BIMCO Piracy Clause; Moot Scenario, Page 8, Piracy Clause. 94

Gard Alert supra note 84. 95

Interim Guidelines for Owners, Operators and Masters for Protection Against Piracy in the Gulf of Guinea Region

(To be read in conjunction with BMP4), INTERNATIONAL MARITIME ORGANISATION AND BIMCO (Dec. 21, 2012)

available at

http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_protection_against_Piracy_in_the_Gulf_

of_Guinea_Region.pdf [Accessed on Mar. 1 2015]. 96


Report warns shipping of phishing scams, ICC COMMERCIAL SERVICES (May 09 2014) available at https://icc-

ccs.org/news/931-report-warns-shipping-of-phishing-scams [Accessed on Mar. 5 2015].

http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_protection_against_Piracy_in_the_Gulf_of_Guinea_Region.pdf

http://www.imo.org/OurWork/Security/WestAfrica/Documents/Guidelines_for_protection_against_Piracy_in_the_Gulf_of_Guinea_Region.pdf

https://icc-ccs.org/news/931-report-warns-shipping-of-phishing-scams

https://icc-ccs.org/news/931-report-warns-shipping-of-phishing-scams


19

“(U)nnecessary interaction with other parties creates opportunities for information regarding

the vessel’s position to be compromised,”98

as indeed occurred.

48. Further, email correspondence to Agents and Charterers should have been through controlled

address lists,99

which was blatantly disregarded by Master as he corresponded with a spurious

third party (ASA2).100

Section 7 of BMP4 lays down Master’s planning procedures, which

when read with industry practice relating to WAF, suggest that Master must avoid

waiting/slowing down and should not give away waiting positions. However, Master not only

gave away the location of Vessel to a third party but also the Vessel arrived and was

“drifting” at ADL101

clearly not applying the BMP4 self-defence measures like evasive

manoeuvres/ high speed.

C. MASTER WAS INCOMPETENT

49. It is also submitted that Master was incompetent when he followed instructions other than

those given to Vessel by Charterers, breaching Cl 12, C/P and Voyage Order. Such breaches

have been dealt with above.102

50. In addition, Cl 13(b), C/P specifies that when there is a request to discharge at an alternative

location (a) there must be a written communication by only the Charterers “that specifically

refers to this clause” and (b) this must be in consideration of Owners receiving a “charters

letter of indemnity,” none of which were satisfied, as no such instructions were given by the

Charterers.103

98

BIMCO supra note 95. 99

Id. 100

Moot Scenario, Page 35-38, V/C. 101


Refer to Issue III.B. in this Memorandum. 103

Refer to Issue III in this Memorandum.


20

D. VESSEL WAS NOT CARGO-WORTHY

51. Whether Vessel is fit is prima facie a question of fact104

which depends upon the effect of

unfitness on the security or integrity of her cargo.105

Due to reasons mentioned under VI(A)-

(C) and given that WAF piracy is known for violent cargo thefts, unfitness of Vessel

contributed to the theft of cargo.106

52. It is submitted that even a minimal contribution is sufficient to establish causation.107

As

such, the taking of anti-piracy measures substantially reduces the risk of a pirate attack. Thus,

by not taking such measures and by thereby increasing the pirates’ chances of a successful

hijacking, the vessel’s unfitness directly contributed to the loss of the cargo.

VII. OWNERS ARE LIABLE TO CHARTERERS IN BAILMENT FOR LOSS OF CARGO

53. The Vessel went missing from July 04-17, 2014.108

During this period 28190MT GO was

stolen and lost in a pirate attack. Charterers submit that Owners, due to a breach of their duty

as bailees, are liable for the loss of cargo.

54. First, there was a bailor-bailee relationship under the C/P109

between Charterers and Owners.

As Charterers are also the Shippers, they have a right to sue under C/P.110

This is evidenced

by Cl.27(c)(ii), C/P according to which Charterers may bring a claim “arising out of any loss

of…cargo.” Further, Charterers are also Cargo-Owners as they are the Sellers in the sales

contract between them and AEI111

under which they have retained title.112

Thus a bailment

104

Coghlin supra note 9, at 191, ¶8.37. 105

The Arianna, [1987] 2 Lloyd’s Rep. 376. 106

McFadden v. Blue Star Line, [1905] 1 K.B. 697, 703; Simon Baughen, SHIPPING LAW 92(4th

edn., 2009). 107

Id. 108

Moot Scenario, Page 42, V/C dated July 17 2014 dated 23:25 (UTC+1); Moot Scenario, Page 46, Tanker Gone

Missing News Report. 109

ENE Kos 1 Limited v. Petroleo Brasileiro SA (‘The KOS’), [2012] UKSC 17; F.D. Rose Commercial Law, Bailment

and a Correlative Right to Unjust Enrichment, LAW QUARTERLY REVIEW [2011]; Benjamin’s Sale of Goods, ¶18-076,

19-150, 18-226 (8th

edn., 2010); Halsbury supra note 87, at ¶325. 110

Law Com. No.196, Scot. Law Com. No.130, Right of Suit in Respect of Contracts for the Goods by Sea, 26(1991);

Albacruz (Cargo Owners) v. Albazero (‘The Albazero’), [1977] AC 774; Benjamin supra note 109, at ¶18-157. 111


Procedural Order 2, ¶ 22; N.Palmer, PALMER ON BAILMENT, 51 (3rd

edn., 2009).


21

arises independently from C/P,113

as Master has voluntarily taken possession of the goods.

Thus, the Defendants can additionally sue as Cargo-Owners.

55. Second, it is a well-established rule that it is the duty of the Master, on behalf of Owners,114

(as bailees) to take reasonable care of the goods entrusted to him.115

This duty includes

“taking active measures”116

and extends to the duty to protect goods from theft.117

Accordingly, the bailee is liable for any loss arising out of a breach of this duty. Further,

when the bailment arises from a contract, the bailee is required to fulfill his duty of care as

mentioned in that contract.118

In this case, Owners breached this duty under both common

law and C/P by providing an unfit Vessel119

and by not deploying “stores and spares” in

accordance with BMP4.120

Consequently, they are liable for the losses arising out of the

pirate-attack.

56. It is submitted that any exercise of due diligence on Master’s part was neither sufficient nor

adequate in relation to the special risks involved.121

Additionally, as in the case of damage or

loss of cargo, the bailee is prima facie liable “unless he can prove that such loss or damage

occurred without fault on his part.”122

As previously submitted, it was Master’s breach of

duty which led to the loss and thus the burden has not been discharged.

113

East West Corporation v. DKBS 1912 and AKTS Svenborg, [2003] QB 1509; Halsbury’s Laws of England, Vol.3(1),

¶1(4th

edn., 2005); Benjamin supra note 109, at ¶5-009, 18-155, 18-157; Law Com. No.196, Scot. Law Com. No.130,

Right of Suit in Respect of Contracts for the Goods by Sea, 26 (1991). 114

Raynes v. Ballantyne, (1898) 14 T.L.R. 399 (H.L.) as cited in Coghlin supra note 9, at 337, ¶19.8. 115

Notara v. Henderson, (1870) L.R 5 Q.B 354; S. Douglas, The Abolition of Detinue, 30 CONVEYANCER AND PROPERTY

LAWYER (2008). 116

Notara v. Henderson, (1870) L.R 5 Q.B 354; Palmer supra note 112, at 1108. 117

East West Corporation v. DKBS 1912 and AKTS Svenborg, [2003] QB 1509; Sutcliffe v. Chief Constable of Western

Yorkshire, [1996] R.T.R. 86; Houghland v. RR Low (Luxury Coaches), (1962) 1 QB 694. 118

Halsbury supra note 113, at ¶4; Wincanton Ltd v. P&O Trans European Ltd, [2001] EWCA Civ. 227. 119

Refer to Issue VI.B. in this Memorandum. 120


Refer to VI.B. in this Memorandum; British Road Services Limited v. Arthur Crutchley & Co. Limited, [1968] 1 All

ER 811 as cited in Sutcliffe v. Chief Constable of Western Yorkshire, [1996] R.T.R. 86. 122

Morris v. CW Martin & Sons Ltd., 1 QB 716 [1996]; Reeve v. Palmer, (1858) 5 C.B. (N.S.) 84; Houghland v. R R

Low (Luxury Coaches), (1962) 1 QB 694; Palmer supra note 112, at 52.


22

VIII. OWNERS ARE LIABLE TO CHARTERERS IN CONVERSION FOR NEGLIGENT LOSS OF

CARGO

57. As per S.2(2) of UK’s Torts (Interference with Goods) Act,123

the bailee who allows the loss

or destruction of goods in breach of his duty will be liable under statutory conversion.124

It is

submitted that Owners by breaching their duty as bailees have attracted this liability.

Charterers submit that they have a sufficient title to sue under conversion [A]. Lack of

demand and refusal does not defeat the claim of conversion [B] and the goods were lost due

to the negligence of the bailees [C].

A. CHARTERERS HAVE TITLE TO SUE

58. It is submitted that according to the terms of the contract, the title to the goods is retained by

Charterers until the cargo passes the manifold of Vessel at the Port of Discharge.125

This

retention of title in the goods gives Charterers a possessory title,126

which is necessary to sue

in conversion.127

It is further submitted that AEI has not become entitled to immediate

possession of cargo, as even in a straight B/L, the holder must present the B/L in order to

claim delivery.128

As it is not known who currently holds the B/L,129

it is uncertain that AEI

is entitled to delivery or that they have an immediate right to possession.

123

Sec. 2(2), Torts (Interference with Goods) Act, 1977 applicable as per Cl 46, C/P. 124

Atapattu, R. v. The Secretary of State for the Home Department, [2011] EWHC 1388 (Admin); Schwarzchild v.

Harrods, EWCH 528 [2008]; N.E. Palmer, The Application of the Torts (Interference with Goods) Act 1977 to Actions in

Bailment, 41(6) MODERN LAW REVIEW 629, (1978). 125

Procedural Order 2, Page 3, ¶22. 126

Benjamin supra note 109, at ¶18-283; Palmer supra note 112, at ¶ 3-046, 242; Robin Hickey , Wrongs and Possession

of Property, CONVEYANCER AND PROPERTY LAWYER (2011): “if A is owner of something, she is entitled to have it. This

“right to possess” is seen as the most basic incident of ownership”; C. Hawes, Tortious Interference with Goods: Title to

Sue, 17(2) CANTERBURY LAW REVIEW 331, 342 [2011]. 127

W.V.H. Rogers, WINFIELD AND JOLOWICZ ON TORT, 834 (18th

edn., 2010); Clerk & Lindsell on Torts, 17-43 (20th

edn.,

2010); Iran v. Barakat Galleries Ltd. [2007] EWCA Civ 1374; D.J. Bentley, A New Found Halliday: The Eighteenth

Report of the Law Reform Committee (Conversion and Detinue) 35(2), THE MODERN LAW REVIEW, 171 (1972).

. 128 Benjamin supra note 109, at ¶18-094, 18-099; Voss v. APL Co. Pte. Ltd., [2002] 2 Lloyd’s Rep. 707 as upheld in JI

McWilliams Co. Inc. v. Mediterranean Shipping Company SA, (‘The Rafaela S’), [2005] UK HL 11; G.H. Treitel, The

Legal Status of Straight Bills of Lading, LAW QUARTERLY REVIEW (2003). 129

Procedural Order No.2, ¶15.


23

59. Further, as there is no hire due and owing under the C/P as submitted earlier,130

Owners do

not have a lien over the goods and thus cannot preclude Charterers right to possess.

Moreover, under common law, bailees are estopped from denying the bailors title to the

goods.131

Thus, Owners cannot contest Charterers’ title to sue.

60. In any event, Charterers can recover based on the damage to their reversionary interest.132

The loss of cargo constitutes a permanent damage, which is necessary to sue for reversionary

interest.133

This holds true even when there is no possession or immediate right to

possession.134

It is further submitted that even if economical loss is borne by a third party,

Charterers can still recover from bailees, as property had not passed to the third party.135

Thus Charterers can hold Owners liable for damaging their reversionary interest in the Cargo.

A. LACK OF DEMAND AND REFUSAL DOES NOT DEFEAT THE CLAIM OF CONVERSION

61. Owners may submit that ‘demand and refusal’ are necessary elements of statutory

conversion. However, Charterers submit otherwise. A bailor (Charterers) has been excused

from making a demand if he knew that the demand would not be heeded.136

It follows that in

the present case, no need for a demand arises, as it would not been met because the goods

were lost due to piracy. Furthermore, in a “goods lost” case there is no need for refusal when

the goods are lost before or after the demand137

as “lost goods” would constitute an implicit

refusal.138

The court in Mitchell v Ealing139

opined that even if the goods have been lost

130

Refer to Issue V. in this Memorandum. 131

China Pacific SA v. Food Corporation of India (‘The Winson’), [1982] AC 939; Palmer supra note 112, at 278. 132

Clerk supra note 127, at 17-22 ; C. Hawes supra note 126, at 339; Tancred v. Allgood, (1859) 4 H.&N. 438 cited in A.

Tettenborn, Reversionary Damage to Chattels, 53(2) CAMBRIDGE LAW REVIEW 326 (1994). 133

East West Corporation v. DKBS 1912 and AKTS Svenborg, [2003] QB 1509; Leigh and Sullivan Ltd. v. Aliakmon

Shipping Co. Ltd. (‘The Alkiamon’), [1986] AC 785; Tettenborn supra note 132. 134

East West Corporation v. DKBS 1912 and AKTS Svenborg, [2003] QB 1509; Clerk supra note 127, at 17-22. 135

Obestain Inc v. National Mineral Development Corp Ltd, (‘The Sanix Ace’), [1987] 1 Lloyd's Rep 465; Benjamin

supra note 109, at ¶18-157. 136

Palmer supra note 112, at 71. 137

Douglas supra note 115; Clerk supra note 127, at 17-22. 138


Mitchell v. Ealing LBC, [1979] QB 1.


24

before demand, the bailee (Owners) in the present case is liable if lost due to his negligence.

As submitted earlier140

owners have been negligent in fulfilling their duties as bailees.

62. Generally, the need for an unequivocal demand or refusal arises to mostly ascertain the date

of the cause of action for purposes of the limitation period.141

It is submitted that the Tribunal

is not faced with any such issue and hence, no need for proving demand and refusal arises.

Thus, Owners cannot rely on a lack of demand and refusal to evade liability in conversion in

the present dispute.

B. THE GOODS WERE LOST DUE TO THE NEGLIGENCE OF THE BAILEES

63. As previously submitted,142

the loss of cargo (28,500MT GO) is attributed to Owners in their

capacity as bailees. They failed to take reasonable care of the goods in breach of their duty.

The negligent actions of the bailee allowed the Pirate attack/cargo theft to take place.143

Thus

the causal link between negligent action of Owners and loss to cargo was proximate.144

64. Therefore, all requirements of statutory conversion have been fulfilled and the Owners are to

be held liable in breach of their duty as bailees.

140

Refer to Issue VII, ¶55 in this Memorandum. 141


Refer to Issue VII. in this Memorandum. 143

Refer to Issue VI.A. & B. in this Memorandum. 144

Yorkshire Dale Steamship Co. Ltd. v. Minister of War Transport, [1942] AC 691; Stapely v. Gypsum Mines

Ltd., [1953] AC 663.


25

PRAYER

In light of the above submissions, Charterers request the Tribunal to:

DECLARE that this Tribunal does not have jurisdiction to hear the present dispute.

ADJUDGE that

A. ASA2 is neither the actual nor the apparent agent of the Charterers

B. Owners are liable

1. Under Tort of Conversion

2. Under Bailment

C. Owners did not provide a Vessel ‘fit for the service’

D. Charterers are not liable

1. For the actions of ASA2

2. To pay hire to Owners

3. Under Tort of Fraud

E. Charterers are entitled to damages, interest or costs

F. Owners are not entitled to damages, interest or costs


a

ANNEXURES

ANNEXURE A: DISTANCE BETWEEN THE RELEVANT CO-ORDINATES

1. Distance between Singapore (Port of Loading) and OPL Luanda (Discharge Port): 10280 Km

2. Distance between OPL Luanda (Discharge Port) and Gibraltar ( Redelivery): 5319 Km


b

3. Distance between OPL Luanda and Alternative Discharge Location : 496 Km

4. Distance between Luanda and OPL Luanda: 191 Km


c

5. Distance between Luanda and Alternative Discharge Location : 641 Km


d

ANNEXURE B: PROVISION OF BUNKER SUPPLY (CALCULATIONS)

1. Credit line of US$ 650,000 sufficient to buy = Credit Line Gained

Cost of Fuel Provided =

650000

630.25 =1031.33MT FO

2. Credit line of US$ 1,000,000 sufficient to buy= Credit Line asked for

Cost of Fuel Provided =

1000000

630.25 =1586.67MT FO

3. Approximate Distance between Singapore (Port of Loading) and OPL Luanda (Discharge

Port)= 10280 Km [MAP 1]

4. Approximate Distance between Gibraltar (Place of Redelivery) from OPL Luanda (Discharge

Port) =5319 Km [MAP 2]

5. Estimated Fuel required to go from OPL Luanda to Gibraltar (Place of Redelivery)=

Approximate Distance between Singapore and OPL Luanda: Fuel required :: Approximate

Distance between OPL Luanda and Gibralter: Fuel required (x)= 10280: (490+950) :: 5319: x

x=745.07MT FO

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