18TH ANNUAL INTERNATIONAL MARITIME LAW
ARBITRATION MOOT COMPETITION 2017
IN THE MATTER OF AN ARBITRATION HELD IN SINGAPORE
CLAIMANT’S MEMORANDUM
Claimant: Respondent:
Furnace Trading PTE LTD Inferno Resources SDN BHD
Team 27
Amanda Lee Jing Min
Gabrielle Nicholas Rohan
Khoo Sher Rynn
Lee Suan Cui
Nurul Syafinas binti Ibrahim
TABLE OF CONTENTS
INDEX OF AUTHORITIES................................................................................................................. I
ABBREVIATIONS ........................................................................................................................... IV
SUMMARY OF FACTS .................................................................................................................... V
SUMMARY OF ISSUES .................................................................................................................. VI
I. THIS TRIBUNAL HAS JURISDICTION AND POWER TO ORDER THE SALE OF CARGO ON BOARD M.V. TARDY TESSA PENDENTE LITE ................................................................... 1
A. The Arbitration Clause in the Voyage Charterparty confers jurisdiction to this Tribunal to
hear this application over the Cargo ................................................................................................ 1
(a) This Cargo Dispute constitutes a dispute arising out of the Voyage Charterparty............ 1
(b) This Tribunal has jurisdiction over dispute arising out of or in connection with the B/L. 3
B. The International Arbitration Act explicitly confers power to this Tribunal to grant an order for sale of the Cargo ............................................................................................................... 4
(a) This Tribunal can grant an interim order for sale of the cargo under Section 12(1)(d) of
the IAA......................................................................................................................................... 4
(b) This Tribunal can grant an interim order for sale of the cargo under Section 12(1)(g) or (i) of the IAA................................................................................................................................ 5
C. This Tribunal is the proper forum to hear this application.................................................... 5
(a) The function of court-ordered interim measure is supportive in nature ............................ 5
(b) This application does not affect the rights of third parties ................................................ 6
(c) Initiating a proceeding in court for this application will amount to an abuse of power ......... 7
II. THE CLAIMANT IS ENTITLED TO EXERCISE A LIEN OVER THE CARGO ...................... 7
A. Under common law a ship owner is entitled to exercise a possessory lien for unpaid
freights ............................................................................................................................................. 7
B. The Claimant has an express contractual lien over the cargo ............................................... 8
(a) The debt in question is one which is presently due and payable ....................................... 9
(b) The B/L is between Claimant and Idoncare ...................................................................... 9
(c) The B/L incorporates the Voyage Charterparty............................................................... 10
(d) The lien clause in the Voyage Charterparty is incorporated into the B/L ....................... 10
(e) The Claimant has continuous possession of the Cargo, and entitled to exercise the lien
before and without arriving at any port of discharge ................................................................. 11
C. Alternatively, even if Claimant is not a party to the B/L, Claimant has the authority to exercise lien.................................................................................................................................... 12
(a) IMLAM had an implied obligation to confer Claimant rights to exercise lien ............... 12
(b) IMLAM had assigned their right through equitable assignment ..................................... 12
(c) Claimant has independent rights to exercise lien ............................................................ 13
D. An equitable lien may be imposed irrespective of possession. ................................................. 14
III. IT IS NECESSARY AND JUST FOR THE CARGO TO BE SOLD PENDENTE LITE ......... 14
A. The Claimant has a prima facie case against the respondent .............................................. 14
(a) The Respondent’s failure to pay freight amounts to a repudiatory breach ...................... 14
(b) The Respondent’s failure to nominate a legitimate discharge port on time is a repudiatory breach...................................................................................................................... 15
(c) There is a valid acceptance of repudiation by the Respondent........................................ 15
(d) Port congestion does not fall under the scope of “any other event whatsoever which
cannot be avoided or guarded against” under clause 24 ............................................................ 16
B. There is substantial risk of harm necessitating the sale of the Cargo ................................. 17
(a) The Cargo endangers the crew of the M.V. Tardy Tessa ................................................ 17
(b) The value of the cargo is depreciating ............................................................................. 18
C. There is urgency necessitating the sale of the Cargo .......................................................... 18
(a) The costs accrued are more than the value of the cargo .................................................. 18
(b) The Claimant has no other reliable alternatives .............................................................. 19
PRAYER OF RELIEF ....................................................................................................................... 21
I
INDEX OF AUTHORITIES
Cases
Alan Auld Associates Ltd v Rick Pollard Associates [2008] EWCA Ciy 655 ................................... 14
Albemarle Supply Co. Ltd v Hind & Co [1928] 1 K.B. 307, 318 .................................................... 8, 9
AT&T Technologies Inc v Communications Workers of America, 475 US 643 (1986) ...................... 2
Bentsen v. Taylor [1893] 2 Q.B. 274 ................................................................................................. 15
Bunge Corporation (New York) v Tradax Export SA (Panama) [1981] APP.L.R. 02/25 ................. 15
Caresse Navigation Ltd v Zurich Assurances MAROC & Ors [2014] EWCA Civ 1366 .................. 10
Central Insurance Co Ltd v Seacalf Shipping Corpn (The Aiolos) [1983] 2 Lloyd’s Rep 25 (CA).. 13
Comptoir Commercial Anversois v. Power [1920] 1 K.B. 868 ......................................................... 15
Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 LWR 501 .............................................. 16
Coulter v Chief Constable of Dorset Police [2004] 1 WLR 1425 ..................................................... 12
Damayanti Kantilal Doshi v Indian Bank [1998] 3 SLR(R) 851 ...................................................... 12
E.D.& F. Man Sugar Ltd v Unicargo Transportgesellschaft mbH (The “Ladytramp”) [2012]
EWHC 2879 ................................................................................................................................... 16
Emilia Shipping Inc v State Enterprise, For Pulp and Paper Industries [1991] 2 MLJ 379, 384 .. 4, 5
Enimont Overseas A.G. v Ro Jugatanker Zadar (‘’The Olib’’) (1991) 2 Ll.L. Rep. 108............ 17, 18
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc. (The Nanfri) [1979] 1 Lloyd’s Rep.
207,................................................................................................................................................. 14
Federal Commerce and Navigation Ltd. v. Molena Alpha Inc. SAME v. Molena Beta Inc. SAME v.
Molena Gamma Inc. (The “Nanfri”, “Benfri”, and “Lorfri”) [1978] 1 Llyod’s Rep. 581 ........ 3, 6
Fiona Trust and Holding Corporation and Others v Yuri Privalov and Others [2007] UKHL 40 1, 2
Fiumana Societa Di Navigazione v Bunge & Co. Ltd (1930) 36 Ll.L.Rep. 171 ............................... 17
Five Ocean Corporation v Cingler Ship Pte Ltd 2015 SGHC 211.......................................... 5, 10, 20
Gorringe v Irwell India Rubber Works (1886) 34 Ch D 128............................................................ 13
Heyman v Darwins Ltd [1942] AC 356 ............................................................................................. 16
Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26 ........................ 14
IM Skaugen SE v MAN Diesel & Turbo SE [2016] SGHCR ............................................................. 12
In The Bulk Chile [2013] 2 Lloyd’s Rep. 38...................................................................................... 12
Itex Itagrani Export SA v Care Shipping Corporation and others (The "Cebu) (No 2) [1990] 2
Lloyds Rep 316, 321 ...................................................................................................................... 10
Kallang Shipping SA Panama v Axa Assurance Senegal and Another (The “Kallang” (No.2))
[2008] EWHC 2761 ......................................................................................................................... 3
II
Knutsofrd v Tillmans [1908] A.C. 406 .............................................................................................. 16
Larsen Oil and Gas Pte Ltd v Petroprod Ltd [2011] SGCA 21 .......................................................... 1
Management & Tech. Consultants v. Parsons-Jurden, 820 F. 2d 1531 (1987) .................................. 2
Mihalios Xilas [1978] 2 Lloyd's Rep 186 .......................................................................................... 11
Miramar Maritime Corporation v Holborn Oil Trading Ltd [1983] 2 Llyod’s Rep. 319, 324 ......... 11
Mors-Le Blanch v Wilson (1873) L.R. 8 C.P. 227 ............................................................................... 8
National Westminster Bank plc v Kapoor [2011] EWCA Civ 1083 ................................................. 13
NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565 ....................... 6
Plama Consortium Limited v Republic of Bulgaria (ICSID Case No. ARB/03/24) ......................... 17
Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA [2016] SGCA 53 .......... 1
Roberts v Gill & Co [2010] UKSC 22; [2011] 1 AC 240.................................................................. 13
Ross T. Smyth & Co. Ltd. v T. D. Bailey, Son & Co [1940] 3 AII E.R. 60........................................ 14
Sang Stone Hamoon Jonoub Co Ltd v Bayue Shipping Co Ltd (“The Ba Yue”) [2015] EWHC 28819
Santiren Shippind Ltd v Unimarine S.A. (The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep. 159 8, 19
Santiren Shipping Ltd v Unimarine S.A. (1981) 1 Ll. L. Rep. 159 .................................................... 19
Seeley International Pty Ltd v Electra Air Conditioning BV [2008] FCA 29 ..................................... 2
Spar Shipping AS v Grand China Logistics Holding [2016] EWCA CIV 982 ................................. 14
Stapley v Towing Masters Pty Ltd (trading as Dynamic Towing) [2009] NSWSC 139...................... 7
Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40......................................... 16
The "Epic" [2000] SGCA 28.............................................................................................................. 10
The Nanfri [1978] 1 Lloyd’s Rep. 287, 392....................................................................................... 10
The Rena K [1978] 1 Lloyd's Rep 545, 551 ......................................................................................... 4
The Rewia [1991] 2 Lloyd’s Rep. 325 ................................................................................................. 9
The SLS Everest [1981] 2 Lloyd’s Rep. 389 ...................................................................................... 10
The’ Trade Resolve” [1999] SGHC 109 ............................................................................................ 11
Tillmanns & Co. v ss. Knutsford Ltd [1908] 1 K.B. 185 ................................................................... 16
Tjong Very Sumito vs Antig Investments Pte Ltd [2009] SGCA 41..................................................... 5
Tokios Tokelės v. Ukraine Case No. ARB/02/18 Order No. 3 ......................................................... 17
Transgrain Shipping (Singapore) Pte Ltd V Yangtze Navigation (Hong Kong) Co Ltd. [2016]
EWHC 3132 ................................................................................................................................... 19
Vertex Data Science Limited v Powergen Retail Limited [2006] EWHC 1340 .................................. 2
VK Holdings (HK) Ltd v Panasonic Eco Solutions (Hong Kong) Company Ltd HCCT 19/2014 ....... 2
III
Statutes
Article 26 (1) of the UNCITRAL Arbitration Rule ........................................................................... 17
International Arbitration Act (Chapter 143A) ..................................................................................... 5
Maritime Code Of The People’s Republic Of China ......................................................................... 11
Merchant Shipping Act (Chapter 179) (Original Enactment: Act 19 Of 1995). ............................... 20
Books
Gary Born, International Commercial Arbitration (Kluwer Law Internatifonal, 2nd ed, 2014) .. 1, 17
Halsbury’s Law of Singapore Vol 2 (LexisNexis 2003 Reissue) ........................................................ 6
M Smith, The Law of Assignment (2nd edn 2013)............................................................................. 13
Raoul Colinvaux, Carver's Carriage By Sea (13th edn, Stevens & Sons 1982) ................................. 7
Ship Arrest In India And Admiralty Laws Of India, by Shrikant Pareshnath Hathi (Dr) .................... 7
Sir Bernard Eder, Scrutton on Charterparties and Bill of Lading (Sweet & Maxwell, 19th ed, 1984) 3
Online Resources
China : Port Congestion Report as of 14th March 2017,
http://www.benlineagencies.com/congestion_china_pdf.php ....................................................... 16
Loh, W.Y. Ince & Co International Law Firm: “Shipping owners’ liens on cargo for unpaid freight
in china”, retrieve from https://www.skuld.com/Documents/Topics/Legal_Defence/InceCo ...... 11
World Seaport: Sea Route & Distance, http://ports.com/sea-route/port-of-
singapore,singapore/mawei-
port,china/#/?a=0&b=0&c=Port%20of%20Singapore,%20Singapore&d=ningbo%20Port,%20Ch
ina................................................................................................................................................... 15
IV
ABBREVIATIONS
Claimant Furnace Trading Pte Ltd
Parties Claimant and Respondent
Respondent Inferno Resources Ltd
The Vessel M.V. Tardy Tessa Time Charterer Imlam Consignorist GmbH
Time Charterparty The Time Charterparty between
Claimant and the Time Charterer Voyage Charterparty The Voyage Charterparty between
Claimant and Respondent
V
SUMMARY OF FACTS
A. THE CHARTERPARTIES
1. On 15 February 2016, Imlam Consignorist GmbH (“the Owner”) the owner of M.V. Tardy
Tessa (“the Vessel”) entered into a time charterparty (“Time Charterparty”) with Furnace
Trading Pte Ltd (“Claimant”) which later became the disponent owner of the Vessel.
2. The Claimant then entered into a voyage charterparty (“Voyage Charterparty”) with Inferno
Resources Ltd (“Respondent”) evidenced by a clean fixture recap (“the Fixture Recap”).
B. PERFORMANCE OF THE CHARTERPARTY
3. The Claimant voyage chartered the Vessel to the Respondent for the carriage of 80,000 mt 10%
MOLOO Australian Steam Coal from Newcastle to a China.
4. On 4 October 2016, a bill of lading (“B/L”) was issued by the Owner to Idoncare Berjaya Utama
Pty. Ltd (“Idoncare”) as the shipper, cosigned to order.
5. Pursuant to the Voyage Charterparty, the Respondent is to nominate a discharge port listed in the
Fixture Recap when the Vessel passes Singapore for bunkering, and make full payment of freight
within 5 banking days after completion of loading and singing/releasing of the B/L.
Nomination of discharge port
6. From 10 October 2016 to 15 October 2016, the Claimant requested for nomination of disport
from the Respondent in numerous occasions. The Respondent, however, failed to nominate a port
until the 16 October 2016 where they nominated Busan, a port not provided in the Voyage
Charterparty or B/L.
Payment of freight
VI
7. The Respondent failed to pay freight that was due since 14 October 2016 despite the Claimant’s
daily request from the 12 October to 21 October 2016.
8. As of 21 October 2016, the loss incurred by the Claimant as the Vessel drifted outside Singapore
OPL amounted to USD 101, 666.67.
9. On 20 October 2016, the Claimant issue a notice of lien to the Respondent for the substantial
losses, costs, expenses and damages incurred by the Claimant as a result of the Respondent’s breach
of Voyage Charterparty for the failure to fulfil the two obligations. A notice of lien on sub-freight
was also issued to Idoncare.
10. On 22 October 2016, the Claimant issued a notice of termination to the Respondent. Upon
receiving the notice, the Respondent denies Claimant’s allegation and considered Claimant’s action
a breach of the Voyage Charterparty.
11. On 25 November 2016, the Claimant issued two notices of arbitration to the Claimant and
Idoncare respectively pursuant to Clause 29 in the Fixture Recap (“Arbitration Clause”). On 1
December 2016, the Claimant filed an urgent application (“this application”) to consolidate both
the arbitration and for the liberty to sell the cargo (“Cargo”) on board the Vessel pendente lite.
10. The Respondent declines to make any written and oral submissions and submits to the
jurisdiction of the Arbitral Tribunal (“this Tribunal”).
SUMMARY OF ISSUES
1. The following issues arise for determination for Tribunal:
a. Whether the Tribunal has the jurisdiction and/or power to grant liberty to the Claimant to
sell the cargo on board the Vessel pendente lite.
b. Whether the Respondent is liable to the Claimant for detention and/or other damages
under the Voyage Charterparty.
c. Whether the Claimant is entitled to exercise any lien over the cargo.
d. Whether it is necessary nor just for the cargo on board the Vessel to be sold pendente
lite.
1
I. THIS TRIBUNAL HAS JURISDICTION AND POWER TO ORDER THE SALE OF
CARGO ON BOARD M.V. TARDY TESSA PENDENTE LITE
A. The Arbitration Clause in the Voyage Charterparty confers jurisdiction to this
Tribunal to hear this application over the Cargo
1. Arbitration is a creature of contract and the jurisdiction of an arbitral tribunal encompasses
matters to the extent mutually agreed by the parties.1 Clause 26(c) of the Voyage Charterparty
confers jurisdiction to this Tribunal to hear “any dispute arising out of or in connection with the
Charterparty”, which ought to include any hearing on the sale of the cargo (“Cargo Dispute”).2
(a) This Cargo Dispute constitutes a dispute arising out of the Voyage
Charterparty
i. Singapore Law is the law governing the arbitration clause
2. Clause 26(c) the Voyage Charterparty provides for Singapore law and arbitration as per the
SCMA Rules. Therefore, it is undisputed that Singapore law is the law governing the arbitration
agreement and it should be applied in the construction of the present arbitration clause.
ii. The arbitration clause should be broadly construed to reflect
parties’ intentions
3. According to the case of Fiona Trust,3 the Singapore jurisdiction adopts a modern generous
approach in construing an arbitration agreement. The ratio is such that all manner of claims,
whether common law or statutory, should be regarded as falling within the agreement’s scope
unless there is good reason to conclude otherwise.4 The phrase “any dispute arising out of or in
1 Gary Born, International Commercial Arbitration (Kluwer Law Internatifonal, 2nd
ed, 2014), 1060.
2 Moot Scenario pg 32, Clause 26(c) of Voyage Charterparty.
3 Fiona Trust and Holding Corporation and Others v Yuri Privalov and Others [2007] UKHL 40
4 Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA [2016] SGCA 53 [30]; Larsen Oil and Gas
Pte Ltd v Petroprod Ltd [2011] SGCA 21 [19].
2
connection with this Charterparty”5 is without express qualification and exceptions, hence should
include all disputes.6
4. A broad interpretation of the scope of arbitration agreements also serves to advance the parties’
commercial intention. In Fiona Trust, the court highlighted a one-stop arbitration presumption that
the parties, as rational business people, are likely to have intended any dispute arising out of their
relationship to be decided by the same tribunal.7
5. With the increasing power of national courts in many jurisdictions to grant interim measures in
aid of foreign and local arbitration, parties can and often do carve out certain, if not all, procedural
remedies from the tribunal’s jurisdiction. 8 The fact that the Claimant and Respondent did not
exercise their autonomy to do so indicates their unequivocal intention to confer this Tribunal with
the jurisdiction to hear an application for an interim sale of the Cargo. As rational businessmen in
the shipping industry, the parties would have known that the sale of the cargo shipped under the
Voyage Charterparty is, at the very least, a consequence naturally flowing from any dispute9 arising
from the Voyage Charterparty. In mutually agreeing to Singapore (whose law provides for such
interim measure) as the seat of arbitration, it is fair to assume that parties intended to favour a one-
stop arbitration process.
6. Further, words of broad import, such as “in connection with this contract”, are to be given their
natural meaning in their context and are capable of meaning any dispute other than one which was
“entirely unrelated to the transaction covered by the contract”.10 A voyage charterparty is essentially
5 Moot Scenario pg 32.
6 Fiona Trust and Holding Corporation and Others v Yuri Privalov and Others [2007] UKHL 40[31], AT&T
Technologies Inc v Communications Workers of America, 475 US 643 (1986), 650. 7 Fiona Trust and Holding Corporation and Others v Yuri Privalov and Others [2007] UKHL 40 [13].
8 Cases where interim measure has been explicitly craved out from the arbitration clause : Seeley International Pty Ltd v
Electra Air Conditioning BV [2008] FCA 29; Vertex Data Science Limited v Powergen Retail Limited [2006] EWHC
1340. 9 Management & Tech. Consultants v. Parsons-Jurden, 820 F. 2d 1531 (1987), 1535.
10 VK Holdings (HK) Ltd v Panasonic Eco Solutions (Hong Kong) Company Ltd HCCT 19/2014 [31].
3
a contract to carry specified goods on a defined voyage.11 A dispute over the Cargo, of which a lien
can be imposed pursuant to the charterparty, cannot in any way be regarded as a dispute entirely
unrelated to the transaction covered by the same charterparty.
(b) This Tribunal has jurisdiction over dispute arising out of or in
connection with the B/L
i. The B/L incorporated a dispute resolution clause from the
Voyage Charterparty and not the Time Charterparty
7. The general presumption of incorporating the head charterparty when the incorporated
charterparty is unidentified in a bill of lading does not apply in the present case. This presumption
will not extend to cases where the head charter is a time charter but where there is also a voyage
charter.12 Time charterparty are not contracts for the voyage to which the bills of lading relate, and
the shipowners' remuneration is not freight but periodic hire.13 The B/L provides that freight is
payable as per the charterparty. That is naturally a reference to the voyage charter under which
freight, as opposed to hire, is payable. Further the terms of the voyage charter are more naturally
germane to a bill of lading.14 It is clear that the intention was to incorporate the terms of the voyage
charter into the bill of lading contracts.15
8. The incorporation of the Voyage Charterparty in the B/L is undoubtedly accompanied by the
incorporation of the Arbitration Clause from the Voyage Charterparty. Clause 1 of the Condition of
Carriage 16 contain an explicit reference to incorporate the “Law and Arbitration Clause/Dispute
11
Sir Bernard Eder, Scrutton on Charterparties and Bill of Lading (Sweet & Maxwell, 19th
ed, 1984), 51. 12
Federal Commerce and Navigation Ltd. v. Molena Alpha Inc. SAME v. Molena Beta Inc. SAME v. Molena Gamma
Inc. (The “Nanfri”, “Benfri”, and “Lorfri”) [1978] 1 Llyod’s Rep. 581 [591]. 13
“Federal Commerce and Navigation Ltd. v. Molena Alpha Inc. SAME v. Molena Beta Inc. SAME v. Molena Gamma
Inc. (The “Nanfri”, “Benfri”, and “Lorfri”) [1978] 1 Llyod’s Rep. 581 [591]. 14
Kallang Shipping SA Panama v Axa Assurance Senegal and Another (The “Kallang” (No.2)) [2008] EWHC 2761
[64]. 15
Kallang Shipping (n 14). 16
Moot Scenario pg 42.
4
Resolution Clause” from the charterparty incorporated in the B/L. The special reference to the
arbitration clause was sufficient to incorporated such clause into the B/L.17
ii. This Tribunal’s jurisdiction extends to disputes under the B/L
upon incorporation
9. Where there is an incorporation of charterparty with a special reference made to the arbitration
clause, the wordings of the arbitration clause should manipulated and adapted so as to make it
applicable to disputes arising under the B/L.18 Upon incorporation, the arbitration clause is to be
read as and apply to any disputes arising out of or in connection with “this B/L” is stead of “this
Charterparty”. Such manipulation and adaptation is necessary to give effect to the intentions of the
parties to the B/L.19 Hence, this Tribunal has jurisdiction to hear any disputes over the Cargo
pursuant the to arbitration clause incorporated in the B/L from the Voyage Charterparty.
B. The International Arbitration Act explicitly confers power to this Tribunal to
grant an order for sale of the Cargo
10. Even though the Claimant’s right to lien over the Cargo does not confer a right to sale, the lien
clause is sufficient to invoke this Tribunal’s statutory power to grant an order for sale.20 Despite the
contractual nature of arbitration, this Tribunal is statutorily vested with wide power to grant interim
measures as conferred automatically by operation of law. Such power does not require specific
reference in the arbitration agreement or the main contract.
(a) This Tribunal can grant an interim order for sale of the cargo under
Section 12(1)(d) of the IAA
11. Arbitral tribunals in Singapore are empowered with wide power to grant interim measures, even
before the 2006 amendment to Article 17 of the UNCITRAL Model Law. The courts have also
17
The Rena K [1978] 1 Lloyd's Rep 545, 551. 18
The Rena K (n 17). 19
The Rena K (n 17). 20
Emilia Shipping Inc v State Enterprise, For Pulp and Paper Industries [1991] 2 MLJ 379, 384.
5
recognised that “an unequivocal judicial policy of facilitating and promoting arbitration has firmly
taken root in Singapore”.21 Thus, a pro-arbitration approach should be adopted in interpreting the
powers of arbitral tribunal in such way to reflect the drafter’s intention.
12. Section 12 of the IAA provides explicit power to the arbitral tribunal to make order for interim
measures including “the interim sale of any property which is or forms part of the subject-matter of
the dispute.”22 In the recent case of Five Ocean Corporation v Cingler Ship Pte Ltd23, which bears
close resemblance to the facts of the present case, the Singapore High Court recognised that the
cargo was the subject matter of the proceedings as it formed the subject-matter of the claims for
freight.24 Similarly, this Tribunal has clear power under Section 12(1)(d) of the IAA to order the
interim sale of Cargo in pursuance of the Claimant’s claim for unpaid freight.
(b) This Tribunal can grant an interim order for sale of the cargo under
Section 12(1)(g) or (i) of the IAA
13. Alternatively, this Tribunal is vested with the broad power under paragraph (g) and (i) of the
same sub-section to make “order for securing the amount in dispute” and “any other interim
measure” respectively. Hence, Section 12(1) of the IAA provides this Tribunal with wide powers to
grant interim measures including the sale of Cargo in the present application.
C. This Tribunal is the proper forum to hear this application
(a) The function of court-ordered interim measure is supportive in nature
14. Although international arbitral tribunals and national court have concurrent jurisdiction in
granting interim measures, the courts play only a supportive and limited supervisory functions over
21
Tjong Very Sumito vs Antig Investments Pte Ltd [2009] SGCA 41 [29] (“The role of the court is now to support, and
not to displace, the arbitral process.”). 22
International Arbitration Act (Chapter 143A) (Singapore), Section 12(1)(d). 23
2015 SGHC 211. 24
Five Ocean Corporation v Cingler Ship Pte Ltd 2015 SGHC 211 [54], Emilia Shipping Inc v State Enterprise, For
Pulp and Paper Industries [1991] 2 MLJ 379 at 384.
6
international arbitrations held in Singapore.25 In NCC International AB26, the Singapore Court of
Appeal established that the courts would only intervene in arbitrations where, inter alia, third
parties over whom the arbitral tribunal had no jurisdiction were involved.27
(b) This application does not affect the rights of third parties
15. This application does not affect any third parties’ right over whom this Tribunal has no
jurisdiction. This Tribunal has jurisdiction over parties to both the Voyage Charterparty and B/L.
IDONCARE, the holder of the B/L28 and presumptive owner of the Cargo, has already submitted to
this Tribunal’s jurisdiction29, and raises no opposition to the hearing of this application30.
16. The non-joinder of the carrier, IMLAM, is immaterial. The lien clause in the Time Charterparty
provides for their right of lien upon, inter alia, all cargoes, sub-freight, sub-hire due to the charterers
for any amount due under that charterparty.31 However, as of to date, there is no claim of unpaid
hire due from IMLAM. Hence, IMLAM’s rights will not be affected nor prejudiced in any manner.
It is unnecessary for this Tribunal or the court to go as far as to protect the shipowners' non-existent
interest concerning unpaid hire.32
17. Further, in Five Ocean, the application was not held to prejudice the rights of the carrier where
the plaintiff, in similar position with the present Claimant, has the full support of the carrier.
Pursuant to an email sent from the carrier to the Claimant dated 20 October 2016,33 the carrier
expressed willingness to assist the Claimant in exercising lien over the Cargo. It is safe to believe
that Claimant has the support of the carrier in this application that resulted from the exercise of lien.
25
Halsbury’s Law of Singapore Vol 2 (LexisNexis 2003 Reissue) at para 20.088. 26
NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565. 27
NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565 [53]. 28
Procedural Order No. 3, Clause 2(1). 29
Procedural Order No. 3, Clause 2(2). 30
Procedural Order No. 3, Clause 2(2), Moot Scenario, pg 93 31
Moot Scenario pg 10, Time Charterparty Clause 23 32
Federal Commerce and Navigation Ltd. v. Molena Alpha Inc. SAME v. Molena Beta Inc. SAME v. Molena Gamma
Inc. (The “Nanfri”, “Benfri”, and “Lorfri”) [1978] 1 Llyod’s Rep. 581 [591]. 33 Moot Scenario pg 36, Sent : Thursday 20 October, 2016 20:12 PM.
7
(c) Initiating a proceeding in court for this application will amount to an abuse
of power
18. In any event, the Claimant should and must sought an interim measure from this Tribunal and
not the national courts because opting for the latter is in contrary to the arbitration clause which
would amount to an abuse of process. In NCC International AB, the conduct of the appellant was
held to be an abuse of process because they sought an interim mandatory injunction from the court
despite having no genuine intention to commence arbitration.
19. The position taken in the case of NCC International AB imposed a reasonable obligation on the
parties to an arbitration agreement to commence arbitration in the event of dispute, pursuant to the
arbitration agreement or, at the very least, show genuine intention of doing so. The absence of such
conduct or intention amounts to an abuse of process where “process of court is not being fairly or
honestly used but is employed instead for some ulterior or improper purpose.” Hence, even though
this Tribunal and Singapore courts have concurrent jurisdictions in granting interim orders, this
Tribunal is the proper forum to hear this application before any such application is can be brought
before the courts.
II. THE CLAIMANT IS ENTITLED TO EXERCISE A LIEN OVER THE CARGO
A. Under common law a ship owner is entitled to exercise a possessory lien for
unpaid freights
20. In pursuant to common law, a carrier has a particular lien for freight.34 It is a possessory lien
permitting the carrier to retain goods until freight is paid 35 The carrier may retain them until his
charges are settled.36 Although, once he parts with either actual or constructive possession of the
34
Stapley v Towing Masters Pty Ltd (trading as Dynamic Towing) [2009] NSWSC 139. 35
Raoul Colinvaux, Carver's Carriage By Sea (13th edn, Stevens & Sons 1982). 36
Ship Arrest In India And Admiralty Laws Of India, by Shrikant Pareshnath Hathi (Dr) at chapter 44.
8
goods his right of lien is lost.37 There are two basic requirements for the exercise of a lien: first the
demand of the amount in respect of which it is to be exercised and second the retention of
continuous possession by the lienor. Although the sum of the demand must be made known, it was
illustrated in the authority of Albemarle Supply that a person claiming a lien must either claim it for
a definite amount or give the owners particulars from which he himself can claim the amount for
which the lien is due.38 In regards to the retention of continuous possession by the lienor the lienor
may retain possession either on board or on land as long as he retains exclusive control. 39 The
owner may do anything reasonable to maintain his lien and this has been held to include standing of
discharge port40
21. In the present case, the cargo is still on board the vessel and freight is yet to be paid, (as per VC
freight clause Cl.19 of the Fixture Recap). Respondent failed to pay freight which was due since 9
October 2016, despite the continuous reminder for freight. Due to failure of Respondent to pay
freight, a Notice of Lien was served on him on 20 October 2016.
B. The Claimant has an express contractual lien over the cargo
22. Under the Voyage Charterparty between the Claimant and Respondent, clause 19(a) stipulates
that “the owners shall have a lien on the cargo for freight, deadfreight, demurrage and general
average contribution due to them under this charterparty” 41 On the weight of this clause and the
foregoing reasons, the Claimant was legally entitled to exercise the lien over the Cargo.
37
Ibid at chapter 44 para 7. 38
Albemarle Supply Co. Ltd v Hind & Co [1928] 1 K.B. 307, 318. 39
Mors-Le Blanch v Wilson (1873) L.R. 8 C.P. 227. 40
Santiren Shippind Ltd v Unimarine S.A. (The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep. 159. 41
Moot Scenario pg 31.
9
(a) The debt in question is one which is presently due and payable
23. The freight was due be paid to the Claimant within “five (5) banking days after completion of
loading and signing/releasing B/Ls marked ‘freight payable as per charterparty’ and rcpt of owners’
FRT INV” under clause 19 of the Voyage Charterparty. 42
24. B/L was signed on 4 October 2016.43 The Claimant served an invoice on the Respondent on 9
October 2016.44 The payment of freight was therefore due on 14 October 2016. Respondent also
failed to nominate a legitimate discharge port on 11th October 201645 when the vessel passes
Singapore for bunkering46. From that day, costs started accruing on a daily basis. With such breach
of contractual obligation to nominate the port on time, the Claimant is entitled to claim damages
and detention resulting from the breach. The Claimant does not necessarily have to stipulate a
specific sum payable, so long as they provide the cargo owner with all the materials he could
possibly need in order to determine the amount to discharge the lien. From all the emails sent to the
Respondent which stipulated the calculation of daily hire and bunker costs and also the invoice
stating the amount of freight that was due, the Respondent is reasonably enabled to determine what
the correct sum is.47 Thus, the Claimant was entitled to exercise the lien, and has validly done so
when it gave notice to the Respondent via an email dated 20 October 201648.
(b) The B/L is between Claimant and Idoncare
25. Although the Master was the signatory of the B/L, his authority to sign was on the behalf of the
Claimant and not the owner. 49 Clause 26 of the Voyage Charterparty entitles the master to sign on
behalf of Claimant50, thus the B/L is between Claimant and Idoncare. The master is merely acting as
an agent to Claimant. Being the carrier of the vessel, the Claimant is in the physical possession of
42
Moot Scenario pg 22. 43
Moot Scenario pg 41. 44
Moot Scenario pg79. 45
Moot Scenario pg 52. 46
Moot Scenario pg 21, Clause 16 of the Voyage Charterparty. 47
Albermarle Supply Co Ltd. v Hind & Co. [1928] 1.K.B. 307, 318. 48
Moot Scenario pg 60. 49
The Rewia [1991] 2 Lloyd’s Rep. 325, 333 (Lord Justice Leggatt). 50
Moot Scenario pg 22, Clause 26 of Voyage Charterparty.
10
the cargo as the vessel is still drifting outside Singapore 51 and thus is entitled to exercise the lien
without relying on IMLAM.
(c) The B/L incorporates the Voyage Charterparty
26. If there is both a time charter party and a voyage charter party, the voyage charter party terms
will usually be incorporated52 as terms in a time charter are in many respects inapposite to the
carriage of goods on a voyage53. The usage of the word "freight” (as opposed to “hire”) in the B/L
must necessarily refer to the Voyage Charterparty, as it is the general practice of shipping trade. 54 It
is also noteworthy that the Voyage Charterparty stipulates the exact same voyage in the B/L
particularly where both documents provide for the same 7 ports in China as the legit imate
discharge ports.55
(d) The lien clause in the Voyage Charterparty is incorporated into the B/L
27. Claimant is entitled exercise lien on cargo belonging to Idoncare as the holder of B/L because
the lien clause 19 of the Voyage Charterparty had been incorporated into the bill of lading. The
term “all terms and conditions” in the Condition of Carriage attached to the B/L is wide enough to
incorporate the lien clause.56 Being a common clause in the trade, the parties to the bill clearly had
in mind that the lien clause 19(a) of the Voyage Charterparty is incorporated when referring to the
charterparty clause in question without the need for clarity and certainty by stating the
incorporation of lien clause explicitly.57 Another feature of shipping practice is that the shipowner
looks primarily to his lien in the event of dispute, since a lien is more extensive as against the
51
Moot Scenario pg 97. 52
The Nanfri [1978] 1 Lloyd’s Rep. 287, 392 (Lord Deninng M.R.). 53
The SLS Everest [1981] 2 Lloyd’s Rep. 389, The Nanfri [1978] 1 Lloyd’s Rep. 287. 54
Itex Itagrani Export SA v Care Shipping Corporation and others (The "Cebu) (No 2) [1990] 2 Lloyds Rep 316, 321 (Justice Sheen).
55 The "Epic" [2000] SGCA 28.
56 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015] SGHC
311.
57 Caresse Navigation Ltd v Zurich Assurances MAROC & Ors [2014] EWCA Civ 1366 (The Ranger case) at [12].
11
consignees than their own direct personal liability. 58 Since the clause intimately concerns the
interests of the consignee in the carriage and delivery of the cargo, the most general form of
incorporating words would be sufficient to incorporate it.
(e) The Claimant has continuous possession of the Cargo, and entitled to
exercise the lien before and without arriving at any port of discharge
28. Till to date, the Cargo remains on board the M.V. Tardy Tessa as it drifts outside Singapore’s
OPL59 Hence, it is undisputed that the Claimant still retains possession of the Cargo. The legitimate
discharge ports are all in China, whereby its local courts may not recognise the Claimant’s lien over
the Cargo. Article 87 of the Chinese Maritime Code provides that the shipowner is entitled to a lien
over the cargo of the debtor for freight and other amounts outstanding, but this right only to a
reasonable extent. 60 First, the shipowner must request the charterer to provide security before
exercising the lien.61 The shipowner can only exercise a lien if no security has been voluntarily
provided by the charterer. Secondly, the shipowner can only lawfully exercise a lien over the freight
if the cargo is owned by the party who is liable to pay the overdue freight. In certain maritime
courts in China, the lien clause has to be specifically referred to in order to incorporate such clause.
29. In light of the risk of losing the lien in if the Cargo is unloaded and kept at the Chinese ports,
the Claimant is legally justified to exercise a lien over the cargo before completing the carrying
voyage62.
58
The’ Trade Resolve” [1999] SGHC 109 at para [67], Miramar Maritime Corporation v Holborn Oil Trading Ltd
[1983] 2 Llyod’s Rep. 319, 324. 59
Moot Scenario pg 97 (Parties’ Joint Expert Report). 60
Maritime Code Of The People’s Republic Of China, Article 87 “ If the freight, contribution in general average,
demurrage to be paid to the carrier and other necessary charges paid by the carrier on behalf of the own er of the goods
as well as other charges to be paid to the carrier have not been paid in full, nor has appropriate security been given, the
carrier may have a lien, to a reasonable extent, on the goods.” 61
Loh, W.Y. Ince & Co International Law Firm: “Shipping owners’ liens on cargo for unpaid freight in china”, retrieve
from https://www.skuld.com/Documents/Topics/Legal_Defence/InceCo
Owners_liens_on_cargo_for_unpaid_freight_2014.pdf?epslanguage=en 62
Mihalios Xilas [1978] 2 Lloyd's Rep 186.
12
C. Alternatively, even if Claimant is not a party to the B/L, Claimant has the
authority to exercise lien
(a) IMLAM had an implied obligation to confer Claimant rights to exercise
lien
30. Ordinarily, there is an implied obligation on IMLAM to allow Claimant to collect the freight
due under an owners’ bill which is an implicit corollary to the employment clause 8 63 in the Time
Charterparty which provides 64 “The master shall be under the orders and directions of the
charterers as regards employment and agency”. Thus IMLAM is obliged to delegate the collection
of freight to the Claimant when the Claimant is not in default. This should extend to the exercise
of lien given that the lien clause in the Voyage Charterparty is incorporated.
(b) IMLAM had assigned their right through equitable assignment
31. An equitable assignment need not take a particular form and equity has always looked to the
intent rather than the form . What is of essence is a sufficient expression of an intention65 to assign
and conduct may be adequate evidence of such an intention 66 . IMLAM had expressed their
intention to assist Claimant in exercising their lien over the Cargo and impliedly assigning their
rights to Claimant in acting on their behalf. Once clear intention is conveyed, equitable assignment
is created.
32. An equitable assignment is absolute and complete without notice having been given to the
debtor. The debtor will only be bound after receiving notice of it. 67 Although the assignment was
only communicated between IMLAM and Claimant through exchange of emails68, the absence of
63
Moot Scenario pg 3. 64
In The Bulk Chile [2013] 2 Lloyd’s Rep. 38. 65
IM Skaugen SE v MAN Diesel & Turbo SE [2016] SGHCR 6 cited Coulter v Chief Constable of Dorset Police [2004]
1 WLR 1425 [12]. 66
Damayanti Kantilal Doshi v Indian Bank [1998] 3 SLR(R) 851. 67
See paragraph 41 of Halsbury 4th
edn. 68
Moot Scenario page 36 (Email: Thursday, 20 October, 2016 20:12 PM).
13
initial notice to Respondent is therefore not fatal 69 . The notice of lien is sufficient to alert the
Respondent of the assignment.
33. If valuable consideration had been given for the assignment, equity would give effect to it, "for
then equity looks on that as done which ought to be done”. The assignment of the lien from
IMLAM to Claimant was made in exchange of the Claimant paying the hire to IMLAM promptly70,
which the Claimant had done as evidenced by the bank slip of payment71. Thus, the assignment was
valid.
(c) Claimant has independent rights to exercise lien
34. The law of equitable assignment has developed and is often treated as tantamount to a transfer
of the assignor’s legal rights.72 It is increasingly accepted that an equitable assignee has a cause of
action which he can assert independently of the assignor, and the presence of the assignor can be
dispensed with by the court where there is no risk of double jeopardy. 73
35. As such, with IMLAM being well aware that the Claimant will be exercising the lien74, it is the
Claimant as the equitable assignee (and not IMLAM as the equitable assignor), which now has the
substantive legal right to exercise the lien. 75 The principle of joinder should only be confined to
situation where the assignor is a trustee for the assignee and not in the case of transfer of rights.76
The general requirement to join the assignor is merely procedural, and can be done at any time
before final judgment. Such procedural requirement can be dispensed with where the assignee is
seeking interlocutory relief,77 as is the case here as the Claimant is applying for the sale of cargo
pendente lite78. Hence, the non-joinder of IMLAM as a party is immaterial.
69
Gorringe v Irwell India Rubber Works (1886) 34 Ch D 128. 70
Moot Scenario pg 36 (Email: Thursday, 20 October, 2016 20:12 PM). 71
Moot Scenario pg 36 (Email: Tuesday, 1 November, 2016 10:21 AM). 72
M Smith, The Law of Assignment (2nd edn 2013) 231-236 [11.39] – [11.47]. 73
Central Insurance Co Ltd v Seacalf Shipping Corpn (The Aiolos) [1983] 2 Lloyd’s Rep 25 (CA) 33-34. 74
Moot Scenario pg 35 (Email : Thursday, 20 October, 2016 15:23 PM). 75
National Westminster Bank plc v Kapoor [2011] EWCA Civ 1083; [2012] 1 All ER 1201 at [43]. 76
Ibid [40]. 77
Roberts v Gill & Co [2010] UKSC 22; [2011] 1 AC 240 at [63] to [71]. 78
Moot Scenario pg 89.
14
D. An equitable lien may be imposed irrespective of possession.
36. An equitable lien defined as an equitable right, conferred by law upon one person, to a charge
upon the real or personal property of another until certain specific claims have been satisfied79
Alternatively, in this case, even if it is decided that the Claimant cannot impose a possessory lien
because it does not have possession over the Cargo. The Claimant may still impose an equitable lien
in respect that the owners whom are in a Time Charter with the Claimants80 have possession over
the Cargo.
III. IT IS NECESSARY AND JUST FOR THE CARGO TO BE SOLD PENDENTE LITE
A. The Claimant has a prima facie case against the respondent
(a) The Respondent’s failure to pay freight amounts to a repudiatory breach
37. Payment of freight is an innominate term, 81 as non-payment would deprive the Claimant
substantially the whole benefit that the Claimant can obtain from the Voyage Charterparty,82 hence
goes to the root of the contract.83 The Respondent’s non-payment of the freight within 5 days of the
issuance of the Claimant’s invoice on 9 October 2016 is a clear breach of this innominate term.
38. The Respondent’s suggestion to pay the freight once the Cargo has been delivered to Ningbo is
substantially inconsistent with its obligation as laid down in the Voyage Charterparty, hence cannot
be deemed as a valid and genuine attempt to remedy its breach.84 The Respondent’s non-payment of
freight was persistent and cynical, and it would not be reasonable for the Claimant to assume that
the Respondent would finally make good on its promise.85 Since the last reported location of the
79
See Butterworths, Halsbury’s Laws of England (4th ed reissue, 1997) vol 28 [754] 80
Moot Scenario pg 1 81
Spar Shipping AS v Grand China Logistics Holding [2016] EWCA CIV 982. 82
Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, 72 (Lord Justice Diplock). 83
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc. (The Nanfri) [1979] 1 Lloyd’s Rep. 207, 207 (Lord
Justice Wilberforce). 84
Ross T. Smyth & Co. Ltd. v T. D. Bailey, Son & Co [1940] 3 AII E.R. 60,72 (Lord Justice Wright). 85
Alan Auld Associates Ltd v Rick Pollard Associates [2008] EWCA Ciy 655.
15
Vessel was at OPL Singapore, the Claimant had to wait for 11 days for the Vessel to reach Ningbo86
and for the Respondent to pay their freight. Hence, on the law and factual circumstances, the
Claimant was fully entitled to terminate the Voyage Charterparty to avoid further damages.
(b) The Respondent’s failure to nominate a legitimate discharge port on
time is a repudiatory breach
39. The intention of the parties were to treat the nomination of a legitimate discharge port on time
as a condition precedent by which the failure to perform will relieve the other party of its liability.87
A voyage charterparty is essentially a contract to carry specified goods on a defined voyage or
series of voyages in which is dependent on the Respondent’s nomination of permitted port expressly
stipulated in clause 16 of the Voyage Charterparty when the Vessel passes Singapore for bunkering.
Since the list of ports is expressly listed in the Voyage Charterparty, the obligation of the
Respondent to nominate either one of the seven ports named is absolute. Hence, the Respondent’s
failure to nominate a legitimate discharge port on time amounts to a repudiatory breach. Since 11
October 2016, the Claimant has imposed upon the Respondent a total USD10,000 per day pro-rata
which consists of USD8,000 daily hire and USD2,000 bunker consumption of the Vessel.88 Since
the Respondent has breached this absolute obligation of nomination of a discharge port under the
Voyage Charterparty, the Respondent is liable to pay damages of USD10,000 that accrued on a
daily basis until the nomination of a discharge port is validly made.
(c) There is a valid acceptance of repudiation by the Respondent
40. The Claimant, as the innocent party to the breach, has communicated clearly and unequivocally
expressed its intention to terminate the Voyage Charterparty via the email to the Respondent on 22
86
World Seaport: Sea Route & Distance, http://ports.com/sea-route/port-of-singapore,singapore/mawei-
port,china/#/?a=0&b=0&c=Port%20of%20Singapore,%20Singapore&d=ningbo%20Port ,%20China 87
Bentsen v. Taylor [1893] 2 Q.B. 274 at 281 (Bowen L.J. as then he was) , Comptoir Commercial Anversois v. Power
[1920] 1 K.B. 868, 899 (Scrutton L.J.), Bunge Corporation (New York) v Tradax Export SA (Panama) [1981] APP.L.R.
02/25. 88
Moot Scenario pg 51.
16
October 2016.89 The Respondent acknowledged the termination. 90 As such, the termination was
valid, and the Claimant is further entitled to sue for damages.91
(d) Port congestion does not fall under the scope of “any other event
whatsoever which cannot be avoided or guarded against” under clause
24
41. Clause 24 (Force Majeure) of Part II Coal Orevoy92 can be construed as a laytime exception
clause.93 Generally, in laytime exception clause cases, the eiusdem generis rule shall apply.94 Force
majeure clauses should be construed according to the eiusdem generis rule,95 which restricts the
interpretation of “any other event…..cannot be avoided or guarded against” to the terms in the
preceding phrase. “Port congestion” is not expressly stated as one of situations falling under force
majeure, 96 and neither can it be reasonably deemed to be of the same category as the listed
situations which includes “Act of God, war, terrorism, civil commotion….arrest or restraint of
princes, rulers and peoples”.97
42. In any event, the allegation of port congestion lacks factual basis. The average time for a vessel
to wait at China ports is between 0-2 days.98 After passing Singapore on 11 October 2016,99 the
Respondent was obliged to nominate a discharge port among the seven China ports stated in the
B/L. 100 However, it took the Respondent 5 days to notify the Claimant of the alleged port
congestion at all 7 ports. The Respondent only requested to discharge at Ningbo on 21 October
89
Moot Scenario pg 68. 90
Ibid. 91
Heyman v Darwins Ltd [1942] AC 356, 361 (Viscount Simon). 92
Moot Scenario pg 32. 93
E.D.& F. Man Sugar Ltd v Unicargo Transportgesellschaft mbH (The “Ladytramp”) [2012] EWHC 2879 (Comm). 94
Knutsofrd v Tillmans [1908] A.C. 406 affirming [1908] 2 K.B. 385 95
Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm). 96
Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 LWR 501. 97
Tillmanns & Co. v ss. Knutsford Ltd [1908] 1 K.B. 185. 98
China : Port Congestion Report as of 14th
March 2017, http://www.benlineagencies.com/congestion_china_pdf.php 99
Moot Scenario pg 50. 100
Moot Scenario pg 45.
17
2016, which is 10 days later. Hence, it is highly doubtful that all 7 Chinese ports in China were
congested at the same time for so long.
B. There is substantial risk of harm necessitating the sale of the Cargo
43. Interim measures are usually granted in situations where it is crucial to avoid irreparable
harm.101 In order to decide if an interim measures can be issued, the tribunal would look at the
nature of the measures requested and the effect that it will have onto the parties of the dispute.102
More often than not, the term ‘irreparable’ is not used to gauge the injury that will be suffered by
the Claimant but rather the substantial risk of serious damage that might occur. If irreparable harm
cannot be proven, it is sufficient that there is substantial or material risk. It is also necessary to order
for an interim measure if acts of prejudice may be taken before the final awards are ordered.103
(a) The Cargo endangers the crew of the M.V. Tardy Tessa
44. A cargo can be ordered for sale if the goods it is carrying is perishable 104 or deteriorating.105 If
there is a possibility that an injury may occur, an immediate action must be taken in order to prevent
it. The cargo has been seen to be overheating, which may lead it to self- ignite and explode.106 The
urgency in this case extends to more than monetary loss but also to the safety of the vessel crew.
Since coal is combustible in nature, spontaneous combustion can occur without any warning, as
what happened to the vessel in Alberto Fassini.107 In that case, Dr R Lessing who is a chemical
expert stated that when coal is exposed to oxygen at a temperature that is moderately warm or hot, it
can lead to actual ignition. Based on the report by the Master of the Vessel, he stated that the Cargo
has signs of overheating.108 This due to the long retention of the cargo as a result from the delay,
101
Plama Consortium Limited v Republic of Bulgaria (ICSID Case No. ARB/03/24). 102
Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd ed, 2014).
103 Tokios Tokelės v. Ukraine Case No. ARB/02/18 Order No. 3.
104 Article 26 (1) of the UNCITRAL Arbitration Rules.
105 Enimont Overseas A.G. v Ro Jugatanker Zadar (‘’The Olib’’) (1991) 2 Ll.L. Rep. 108.
106 Moot Scenario pg 37 (Email: Sunday, 30 November, 2016 14:12 PM).
107 Fiumana Societa Di Navigazione v Bunge & Co. Ltd (1930) 36 Ll.L.Rep. 171.
108 Enimont Overseas (n 106).
18
coupled by the bad weather and sea conditions that have a tendency to affect the temperature of the
Cargo. The risk of combustion is real. Hence, it is urgent for the cargo to be sold in order to ensure
their safety and not prolong the retention of the cargo.
(b) The value of the cargo is depreciating
45. Based on the report made by Caleb Coalman,109 the market price of coal in China (where the
Cargo ought to be delivered under the Voyage Charterparty) has decreased significantly from the
Spring of 2011 till May 2016. Since the Respondent has delayed the discharge of the vessel, there is
a possibility that the value will decline even further. If the value of the cargo depreciates as
substantially as what was stipulated in the report, the Claimant will suffer grave monetary loss. In
the circumstance that the Claimant receives the final award, they may not be able to compensate for
the loss that they have suffered due to the failure of the Respondent to nominate a discharge port.
C. There is urgency necessitating the sale of the Cargo
(a) The costs accrued are more than the value of the cargo
46. Respondent had failed to nominate a discharge port after passing by Singapore for bunkering110
and had left the Vessel adrift at sea for 20 days as per 30 November 2016. 111 Since the Respondent
had delayed the discharge, costs for the Vessel on sail have accrued, causing the Claimant to pay
hire longer than necessary to the Vessel owner and hinder them for entering into other voyage
charterparties. The costs that are borne by the Claimant may increase more than the value of the
freight, detention or other costs that are owed to them.
109
Coal Report, pg 3, Moot Scenario pg 99. 110
Moot Scenario pg 21, Clause 16 Voyage Charterparty 111
Enimont Overseas (n 99).
19
47. The additional costs that had accrued had amounted up to USD 101, 666.67 based on the time
and bunker consumption in that duration.112 The freight and additional costs that are owed by the
Respondent are clearly crucial to the Claimant in order for the latter to fulfil their obligations under
the Time Charterparty with IMLAM.113 Further, the sooner the Claimant disposes with the Cargo,
the sooner it would be able to enter into a new voyage charterparty and mitigate its losses. Any
delay would only expose the Claimant to greater costs than may be recoverable under the final
award. Hence, there is an urgency to sell the cargo pending litigation.
(b) The Claimant has no other reliable alternatives
48. The Claimant is requesting for the sale of the cargo due to the lack of reliable alternatives. The
reliability of the alternatives are in question since the present case, the methods available may not
be ideal and may even lead to the detriment of the Claimant. The alternatives present are a) for the
vessel to wait outside the discharge port114 b) dock at a bonded warehouse.115 The first alternative,
which is to wait off the discharge port bears some risks to the Claimant. If they decide to wait
outside the port in order to avoid unnecessary charges, there is no guarantee that the Respondent
will pay the outstanding amount due. The condition of the vessel and Cargo must also be a factor to
consider, as such any possible risk damage towards the vessel and the Cargo if the Claimant were to
allow the vessel to be at sea.116 In the case of Transgrain Shipping, the charterers ordered for the
vessel to wait outside the discharge port for a period of 4 months. Damage on the cargo was found
and the tribunal held it to be due to the prolonged period at the anchor along with the nature of the
cargo.
49. The second option is to dock at a bonded warehouse. Although it might be convenient for the
Claimant to request for the Cargo to be stored at a Singapore warehouse (considering its last
112
Moot Scenario pg 67 (Email: Friday, 21 October, 2016 11:00 AM). 113
Moot Scenario pg 6, Clause 11 (a) Time Charterparty. 114
Santiren Shipping Ltd v Unimarine S.A. (1981) 1 Ll. L. Rep. 159. 115
Sang Stone Hamoon Jonoub Co Ltd v Bayue Shipping Co Ltd (“The Ba Yue”) [2015] EWHC 288 (Comm). 116
Transgrain Shipping (Singapore) Pte Ltd V Yangtze Navigation (Hong Kong) Co Ltd. [2016] EWHC 3132 (Comm).
20
reported position was closer to the Singapore port), 117 the Claimant faces the risk of monetary loss
or inability to enforce lien. 118 Section 130 of the Merchant Shipping Act 119 states that the
warehousemen can sell the goods within 90 days or if it is perishab le in nature. The proceeds of the
sale will be given based on the priority in Section 131 where the shipowner is third in line. There is
no certainty that the Claimant would be able to recover its losses if the Cargo is sold in this manner.
It must be noted that the additional costs that are due by the Respondent to the Claimant is
increasing by USD 10 000 per day. The possibility for the amount to increase is existent, as there is
no way to know when the litigation will take place.
50. In the case of Five Oceans Corporation,120 the court had resorted to sell the cargo pendent lite
due to the fact that there are no other alternatives available. It was contended that the discharge port
India, does not protect the enforcement of lien. Here, it is not stipulated as to whether the discharge
port would protect the lien owner’s right. Since there is a risk of such, the Claimant should be
allowed to sell the cargo.
117
Moot Scenario pg 67 (Email: Friday, 21 October, 2016 11:00 AM). 118
Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities Energy Resources, intervener) [2015] SGHC 311. 119
Merchant Shipping Act (Chapter 179) (Original Enactment: Act 19 Of 1995). 120
Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities Energy Resources, intervener) [2015] SGHC 311.
21
PRAYER OF RELIEF
For the reason set out above, the Claimant requests this Tribunal to:
FIND that it has jurisdiction and power to order the sale of Cargo on board M.V. Tardy Tessa
pendente lite
FIND that the Claimant is entitled to exercise a lien over the Cargo
FIND that it is necessary and just for the Cargo to be sold pendente lite