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INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2014TEAM No. 9- DEFENDENT
EAST CHINA UNIVERSITY OF POLITICAL SCIENCE AND LAW
(CHINA)
IN THE MATTER OF AN ARBITRATION HELD AT HONGKONG
MEMORANDUM FOR THE DEFENDENT
ON BEHALF OF: AGAINST:
SUPER CHARTERS INC. RELIABLE HOLDINGS INC.
“RELIABLE BUTTERLY”
CLAIMANT/CHARTERERS RESPONDENT/OWNERS
TEAM NUMBER 9
FAN DI, ZHONG YAOYAO,
TAN WEN, SONG HONG, JIANG SHENGLI
II
MEMORANDUM FOR THE CHARTERERS
TABLE OF CONTENTS
Summary of Argument................................................................................................1
Summary of Facts ........................................................................................................1
1. The arbitration proceeding brought in the name of Reliable Tanker Inc. was not an arbitration proceeding under Charterparty and Reliable Holdings Inc. was not allowed to bring counterclaim in the second reference. .............................3
1.1 The Clause 4 of Super Charters’ Standard Terms is void. .................................3
1.2 Arbitration proceeding commenced in the name of Reliable Tanker Inc. would not be deemed as a commencing proceeding under Charterparty. .....................4
1.3 Reliable Holdings Inc. did not commence arbitration proceedings within the limitation of arbitration. ......................................................................................................6
1.4 The second arbitration proceeding commenced by Charterers is within the limitation of arbitration. ......................................................................................................7
1.5 Reliable Holdings Inc. was not allowed to bring counterclaim in the arbitration commenced by Charterers...............................................................................7
2. The Owners failed to commence the approach voyage (or failed to conduct with convenient dispatch by the cancelling date), which amounted to repudiatory breach and/or renunciation.........................................................................................8
2.1 The Charterparty was formed on 19 November 2011. ........................................8
2.2 The Owners failed to commence the approach voyage, which breach the Charterparty.........................................................................................................................8
2.3 Alternatively, Owners failed to proceed with convenient dispatch, which breached the Charterparty................................................................................................10
2.4 Those breaches aforementioned amounted to repudiatory breach and/or renunciation, the Charterer, therefore, could cancel the Charterparty. ......................11
2.5 Upon Owners’ repudiation, Charterers chose to terminate the Charterparty and claimed for related damages. .....................................................................................14
3. Alternatively, Owners failed to inform the Charterers ETA and changes of ETA, which amounted to repudiatory breach of the Charterparty......................14
3.1 The Owners failed to inform the Charterers (other parties) ETA and changes of ETA, which breached the Charterparty. .....................................................................14
III
3.2 The breach aforementioned amounted to repudiatory breach of the Charterparty. The Charterers therefore could cancel the Charterparty. ....................15
4. The Owners are liable for damages suffered by Charterers..........................16
4.1 Charterers’ damages are related to the Owners’ breach. .................................16
4.2 Charterers’ damages are not too remote. ...........................................................17
4.3 Charterers’ damages are not based on a failure to mitigate loss......................17
5. Clause 2 of Reliable Tanker Inc.’s Standard Terms did not apply to the condition that Owners’ conducts constituted repudiation. ....................................18
5.1 The Clause 2 did not apply to the condition that Owners breached Charterparty.......................................................................................................................18
5.2 Alternatively, should Clause 2 applied, it cannot be constructed as both parties released from any further obligations to perform the Charterparty of further liabilities thereunder. .........................................................................................................19
6. The Charterers were no longer obligated to pay the freight due to the termination of Charterparty. ....................................................................................21
6.1 Freight thereon was not earned until the delivery of the goods at destination..................................................................................................................................21
6.2 The freight thereon was not an accrued debt and did not survive upon termination of the Charterparty. ......................................................................................22
6.3 Alternatively, Charterers thereon were entitled to set off against such entitlement their claim for damages for loss resulting from the Owner’s repudiation of the Charterparty. ...........................................................................................................24
6.4 In further alternative, should the ”canceled without recourse” Clause is constructed as a mutual release both parties of obligations and liabilities (which is denied by us), Charterers were thereby released from obligation to pay the freight. .24
PRAYER FOR RELIEF............................................................................................25
IV
LIST OF AUTHORITIESCASESAIC Ltd. v. Marine Pilot Ltd. [2008] 1 Lloyd’s Rep. 597............................................10Antaios Cia Naviera SA v. Salen Rederierna AB [1985] A.C. 191..............................21British W/estinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London Ltd. [1912] AC 673, 689.......................................................18Calico Printers’ Asspciation v. Barclay Bank Ltd.[1931] 145 L. T. 51.......................20Cehave N.V. v. Bremer Handelsgesellschaft [1976], Q.B. 44.................................13,15Chamber Colliery Ltd. v. Twyerould [1893][1915] 1 Ch. 268.....................................20Chartbrookv. Persimmon Homes [2009] UKHL 38......................................................6Chilean Nitrate Sales Co. v. Marine Transportation Co. Ltd. & Pansuiza Compania DeNavegacion S.A. (The“Hermosa”) [1982] 1 Lloyd’s Rep. 570..............................12Cocking v. Sandhurst Ltd. [1974] ICR 650....................................................................6Colonial Bank v. European Grain & Shipping (The “Dominique”) [1989] A.C. 1056....................................................................................................................21,22,23Compania Naviera General S. A. v. Kerametal Ltd. (the“Lorna I”)[1983] 1 Lloyd's Rep. 373......................................................................................................................21,22,23Dumford TradingAg v. Oao Atlantrybflot [2005] EWCA Civ 24..................................6Eminence Property Developments Ltd. v. Heaney [2010] EWCA Civ 1168...............13Federal Commerce & Navigation Co. Ltd. v. Molena Alpha Inc. [1979] A.C. 757…13Forslind v. Becheley Crundall [1922 ]S.C.(H.L.)173..................................................12Fyffes Group Ltd v.Reefer Express Lines Pty Ltd. [1996] 2 Lloyd’s Rep. 171......................................................................................................................10,11,12Galoo v. Bright GrahameMurray [1994] 1 WLR 1360, CA.......................................17Glynn and Others v. Margetson & Co and others [1983] A .C . 351..........................21Heymanv. Darwin, Ltd. [1942] A. C. 356..........................................................11,13,15Hollins v. Davy (J) Ltd. [1963] 1 Q.B. 844..................................................................20Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, 72..................................................................................................................................13Jackson v. Royal Bank of Scotland plc.[2005] 1 WLR 377, HL..................................17Jackson v. Union Marine Insurance Co.[1874] L. R. 10 C.P. 125..............................13Law. v. London Chronicle (Indicator Newspapers),Ltd.,[1959]1W.L.R.698..............12Liberty Mercian Ltd. v. Cuddy Civil Engineering Ltd. [2013] EWHC 2688 (TCC).....6MacAndrew v. Chapple [1866]L.R. 1C.P.643.............................................................13Marbienes Compania Naviera SA v. Ferrostaal AG (the “Democritos”) [1976] 2 Lloyd's Rep. 149......................................................................................................10,19Mersey Steel & Iron Co. v. Naylor, Benzon & Co. [1884] 9 App. Cas. 434...........13,15Metalfer Corporation v. Pan Ocean Shipping [1997] CLC 1547..................................8Nanjing Tianshun Shipbuilding Co. Ltd. v. Orchard Tankers PTE Ltd.[2011] EWHC 164..................................................................................................................................8Nelson & Sons v. The Dundee East Coast Shipping Co. Ltd. [1907] 44 S.L.R. 661...10Neptune Maritime Co. v. Vessel Essi Camilla [1978] AMC 2049...............................10
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Parker v. South Eastern Railway Co. [1877] 2 CPD 416, 423, CA...............................4Photo Production Ltd. v. Securicor Transport Ltd. [1980] 1 Lloyd’s Rep. 545 ...........4Rainy Sky S.A. and others v. Kookmin Bank [2011] UKSC 50...............................21,24Society of Lloyd’s v. Robinson [1999] 1 All ER (Comm) 545, 551........................21,24Stx Pan Ocean Co. Ltd. v. Ugland Bulk Transport A.S. [2008] 1 Lloyd’s Rep. 86.....10Suisse Atlantique Societe’d Armement Martime S.A. v. N.V. Kolen Centrale [1967] 1 A.C.361...................................................................................................................13,15Supershield Ltd v. Siemens Building Technologies FE Ltd. [2010] EWCA Civ 7......17Suzuki Co. Ltd. v. T Benyon Co. Ltd. [1926] 24 Ll LR 94...........................................11Thornton v. Shoe Lane Parking [1971] 2 QB 163, 171-172, CA..................................4Trade and Transport Inc. v. Iino Kaiun Kaisha, Ltd. [1973] 1 W.L.R. 210................13Universal Cargo Carriers Corporation v. Citati [1957] 2 Q.B.401.......................11,12Wallis, Son and Well v. Pratt and Haynes [1910] 2 K.B. 1003..............................13,15White and Carter (Councils), Ltd. v. McGregor [1962] A.C. 413...............................24Wholecrop Marketing Ltd. v. Wolds Produce Ltd.[2013] EWHC 2079 (Ch)................8Wickman Machine Tools Sales Ltd. v. Schuler AG [1974] AC 235..........................4,22Woodar Investment Development Ltd. v. Wimpey Construction UK Ltd. [1980] 1 WLR277.......................................................................................................................13STATUTESArbitration Act 1996(UK)..............................................................................................5Limitation Act 1980(UK) ..............................................................................................7OTHER AUTHORITIES
Neil Andrews，Contract Law（Cambridge University Press，1st ed, 2011）.
.........4,18John F Wilson, Carriage of Goods by Sea(Pearson Longman,7th ed, 2010)................9Stephen Girvin, Carriage of Goods by Sea(Oxford University Press,2nd ed, 2011)....10David Chong Gek Sian, ‘Reasonable Dispatch in Voyage Charterparty’(1993) Singapore Journal of Legal Studies 401......................................................................10Sir William Raywell Anson & Anthony Gordon Guest, Anson's Law of Contract (Oxford University Press, 26th ed, 1985).....................................................................12
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Summary of Argument
Super Charters Inc. (‘Charterers’) sued Reliable Tanker Inc. (‘Owners’) for
repudiation and/or renunciation of the Charterparty(‘Charterparty’), due to Owners’
failure to commence the voyage and/or proceed with convenient dispatch. Following
the Owners’ breach, Charterers terminated the Charterparty, which extinguished the
Owners’ contractual right to claim for freight. The Charterers contended that the
Owners are liable for all loss relating to delayed arrival. And Owners are also
precluded to bring counterclaim in arbitration due to contractual limitation of
arbitration.
Summary of Facts
1. Charterers contacted with Owners to use Owners’ vessel, MT Reliable
Butterfly（‘Reliable Butterfly’）by Charterparty dated 19 November. The
Charterparty required Owners to transport 260,000mt crude oil from Blueland
(‘loading port’) to Indigoland (‘discharging port ’).
2. Before the Charterparty, Reliable Butterfly had finished discharging her last
cargo and had started heading to a Redland (‘bunker port’). As discussed and
agreed by E-mail, Reliable Butterfly should completed the voyage early in
January 2012, say 10th January, due to the planned refinery shutdown on 15
January 2012. According to Charterparty, Owners were also obligated to inform
Charterers ETA and changes of ETA.
3. By E-mail dated 22 November 2011, Charterers learned by back channels that
Reliable Butterfly had been arrested at Bunker Port. Charterers therefore required
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the Owners to provide a revised ETA at loading Port and narrowed laycan to 5
December.
4. Owners promised to release Reliable Butterfly but failed to do so. Owners also
failed to give any revised laycan, which definitely would lead to the missing of
laycan. On 27 November, Charterers chose to terminate Charterparty and
declared to reserve all related rights including but not limited to any losses
resulting from the Owners’ breach of the Charterparty.
5. On 28 November, Owners rejected that they were in breach, argued that they
were relieved of all liabilities by terms of “Cancellation Provision” in their
Standard Terms, and reminded that freight remained outstanding. In addition,
Owners suggested that they have a sister VLCC to Reliable Butterfly, which may
be suitable to perform the fixture in her place a few days later. However,
Charterers did not adopt this suggestion.
6. In December 2011, Reliable Tanker Inc. (‘RTI’) merged with Reliable Holdings
Inc. (‘RHI’), with RHI being the surviving entity.
7. By E-mail dated 28 January 2012, RTI required to refer to arbitration and
appointed Mr. Smith as an arbitrator. On 12 February 2012, Charterers
responded to RHI declaring that appointment under the name of RTI was invalid
due to RTI no longer existed as an entity. Without prejudice to this, it appointed
Mr. John as an arbitrator.
8. On 14 March 2012, Owners submitted the letter of claim to arbitration. Owners
claimed a declaration of cancellation as set out, the sum of USD 4,935,368.75 by
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the way of freight or damages, interest, costs, and further of other relief.
Charterers, however, counterclaimed that there are two references, that the first
reference commenced by Reliable Tanker Inc. was nullity, that Reliable Holding
Inc. was precluded the right to bring counterclaim in the second reference due to
the contractual time bar in Clause 4 of Charterers’ Stander Terms, and that RHI
was liable for damages of increasing freight, about USD 824,000, extra payment
to both loading port and discharging port for delayed arrival in amount of
USD450,000, other interest and costs.
ARGUMENTS PPESENTED
1. The arbitration proceeding brought in the name of Reliable
Tanker Inc. was not an arbitration proceeding under
Charterparty and Reliable Holdings Inc. was not allowed to
bring counterclaim in the second reference.
1.1 The Clause 4 of Super Charters’ Standard Terms is void.
First, Clause 4 was incorporated as a part of Charterparty. Clause 4 was
incorporated in the Charterparty by mutual consent.
Secondly, even if Clause 4 of Super Charters’ Standard Terms is deemed as an
exclusion clause, it also was incorporated as a part of Charterparty. The test for
incorporation refers to whether the party subject to the exclusion clause knew that
there was a contractual document containing terms or at least referring to them; or
the other party (seeking to raise the exclusion clause as a defense) took reasonable
steps to give the other side notice of the conditions.1 In this case, the Owners
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knew the 20-days time bar provision in Charterer’s Standard Terms,2 and both
parties had agreed to extend this provision to 30 days.3 Therefore, the 30-days
time bar for Owners had been incorporated as a part of Charterparty. Moreover,
commercial contracts negotiated between businessmen are capable of looking
after their own interests and of deciding how risks inherent in the performance of
various kinds of contract can be most economically borne, it is wrong to placed a
strained construction upon words in an exclusion clause which are clear and fairly
susceptible of one meaning.4 In the present case, the Charterparty was negotiated
between two incorporations,5 which means both of them were capable of
understanding the interests and risks under this Charterparty. In addition, Clause 4
is clear and only has one meaning, the meaning of Clause is abundantly clear6.
As a result, Clause 4 of Charterers’ Standard Term is void, and the arbitration
limitation for Owner against Charterer only has 30 days.
1.2 Arbitration proceeding commenced in the name of Reliable Tanker Inc.
would not be deemed as a commencing proceeding under Charterparty.
To begin with, RTI is no longer a party under Charterparty. According to Expert
Report of Tim Bowman, two entities in Fruitland could choose to merge by
universal succession by mutual consent,7 and the surviving company should
1 Parker v. South Eastern Railway Co. (1877) 2 CPD 416, 423, CA; Thornton v. Shoe Lane Parking [1971] 2 QB 163, 171-172, CA.Contract Law, Neil Andrews, P 420-421.2 Fact P88, Cl. 4 of Super Charters Inc.’s Standard Terms3 Fact P91, Reliable Tankers Inc.’s internal E-mail, at Para1-2.4 Photo Production Ltd. v. Securicor Transport Ltd. [1980] 1 Lloyd’s Rep. 545, at 554.5 Fact P113, as Para16 Wickman Machine Tools Sales Limited v Schuler AG [1974] AC 2357 Fact P113, “Expert Report of Tim Bowman” at Para3
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automatically take over all the rights and liabilities of the discontinuing
corporation.8 In this case, both RTI and RHI are corporations of Fruitland.9 And
RTI merged with RHI in December 2011, with RHI being surviving entity.10
Therefore, after merger, RHI would take over all rights and liabilities of RTI. In
other words, it is the RHI not the RTI that being a party of the Charterparty.
Moreover, arbitration proceedings commenced only in the name of RTI or
Charterers would be deemed as commencing proceedings under Charterparty.
According to article 14(4) of the 1996 Arbitration, “Where the arbitrator or
arbitrators are to be appointed by the parties, arbitral proceedings are commenced
in respect of a matter when one party serves on the other party or parties notice in
writing requiring him or them to appoint an arbitrator or to agree to the
appointment of an arbitrator in respect of that matter.”11 To put it in another way,
the arbitration proceedings commenced when one party served the appointment of
its arbitrator to the other party in writing or when one party require the other party
to finish its appointment.
Therefore, a proceeding commenced by RHI would not be deemed as a
commencing proceeding under Charterparty.
To go further, there did not exist any misnomer. The test for misnomer is whether
there was a genuine mistake and was not misleading or such as to cause
8 Fact P113, “Expert Report of Tim Bowman” at Para49 Fact P113, “Expert Report of Tim Bowman” at Para110 Fact P100, “the news paper”11 Article 14(4) of the 1996 Arbitration Act, Commencement of arbitral proceedings. 14(4) “Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter.”
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reasonable doubt as to the identity of the person intending to claim or, as the case
may be, to be claimed against.12 Or it is only language mistake, and nothing more
has gone wrong.13 In other words, it could not be called a mere “misnomer”: when
it went to the actual identity of the party to the arbitration.
1.3 Reliable Holdings Inc. did not commence arbitration proceedings within the
limitation of arbitration.
Arbitration was not commended in any reference involving RHI until 12 February, 14
which exceeded the 30-days limitation. According to Clause 4 of Charterers’
Standard Terms, arbitration should be notified within 10 days and should be
commenced within 20 days after discharge/re-delivery and/or when
discharge/redelivery would have taken place.15 By E-mail dated 20 November,
both parties agreed to extend the limitation of arbitration to 30 days.16
In the present case, due to Owners’ failure to complete the voyage,17 the starting
point for limitation would be the time when discharge would have taken place. It
should be 10 January.18 Thereby, we could reasonably conclude that the last date
for RHI to commence arbitration was 9 February. And as mentioned above,
Arbitration was not commended in any reference involving RHI until 12 February,
which is 3 days after the last day RHI could bring their claim.
12 Cocking v Sandhurst Ltd [1974] ICR 65013 Liberty Mercian Limited v Cuddy Civil Engineering Limited [2013] EWHC 2688 (TCC); Dumford Trading Ag v Oao Atlantrybflot [2005] EWCA Civ 24 (26 January 2005); see also Chartbrook v Persimmon Homes [2009] UKHL 38.14 Fact P103 Super Charters’ E-mail; see also Fact P109, at 315 Fact P88, “Super Charters Inc.’s Standard Terms” at Cl. 416 Fact P89, at Para 217 Fact P95, at Para 1; see also Fact P96 at Para1-3.18 Fact P89, at Para 2
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RHI failed to commence arbitration proceedings within the date mentioned above,
therefore, they were precluded to bring claim for freight.
1.4 The second arbitration proceeding commenced by Charterers is within the
limitation of arbitration.
The arbitration proceeding commenced by Charterers is valid. There is a 6-year
time limit for actions for sums recoverable provided by the article 9(1) of
Limitation Act 1980.19 Clause 4 of Charterers’ Standard Terms stated “all claim
against Super Charters…within a further 10 days thereafter”.20 Put it another way,
the 30-day time bar of commencing arbitration proceedings was merely for the
Owners. Hence, according to Limitation Act 1980. It was a 6-year time limit for
Charterers to bring arbitration and the arbitration proceeding commenced by
Charterers is valid.
1.5 Reliable Holdings Inc. was not allowed to bring counterclaim in the
arbitration commenced by Charterers.
The claim for freight was absolutely time barred due to its failure to commence
the arbitration within contractual limitation. The contractual time limit for
commencing arbitration operated as an absolute time bar for a claim.21 It was not
necessary for there to be express and unambiguous wording in the arbitration
19 Limitation Act 1980 9(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.20 Fact P88, at Para4, Fact P91 at Para2.21 Wholecrop Marketing Ltd v. Wolds Produce Ltd, [2013] EWHC 2079 (Ch); Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd, [2011] EWHC 164; see also Metalfer Corporation v Pan Ocean Shipping [1997] CLC 1547 “effect of such a clause was to bar the claim and not simply the remedy of arbitration”.
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clause in order that the shorter time bar applied.22 Generally, the arbitration
clauses containing a time limit are compelling.23 Regarding this case, the
limitation of arbitration for RHI was 30 days and the starting point would be no
later than 15 January.24 Moreover, the arbitration proceedings were not
commended in any reference involving RHI until 12 February.25
Therefore, RHI’s claim for freight was absolutely time barred due to their failure
to commence the arbitration within contractual limitation and RHI thereby could
not bring a counterclaim in the arbitration proceeding, which was commenced by
Charterers.
2. The Owners failed to commence the approach voyage (or failed
to conduct with convenient dispatch by the cancelling date),
which amounted to repudiatory breach and/or renunciation.
2.1 The Charterparty was formed on 19 November 2011. 26
2.2 The Owners failed to commence the approach voyage, which breach the
Charterparty.
First, the voyage to the bunker port is not a voyage under this Charterparty. The
approach voyage, called preliminary voyage, is a voyage to the agreed loading
port, and this voyage formed the first stage in the performance of voyage
22 Wholecrop Marketing Ltd v. Wolds Produce Ltd, [2013] EWHC 2079 (Ch); see also Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd, [2011] EWHC 16423 Ibid24 Fact P89, at Para 225 Fact P103 Super Charters’ E-mail; see also Fact P109, at 3, both parties agreed that all subjects were lifted on 19 November.26 Fact P107 at 15, also see Fact P111 at 19.
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charterparty.27 In other word, the approach voyage is corporated as a part of
contracted voyage. According to Clause 2 of Charterers’ Standard Terms, any
bunkering is only allowed with Charterers’ sanction,28 and ship will be fully
bunkered to perform the contracted voyage under the governing charterparty.29 In
other words, the contracted voyage should be commenced after the ship fully
bunkered, and any bunkering during the contractual voyage is only allowed with
Charterers’ sanction. In this case, Charterparty was concluded on 19 November
2011,30 and the voyage to the bunker port was commenced before the Charterparty
was concluded.31 Moreover, the object of the voyage to the bunker port is to be
fully bunkered to perform the contracted voyage,32 and is without Charterer’s
sanction.33 Therefore, reasonable conclusion should be that it is the voyage from
bunker port to loading port that being the preliminary voyage under Charterparty.
Secondly, Owners failed to commence the preliminary voyage, which constituted
breach of Charterparty. Where the port is specified in the charterparty, the
shipowner is under an absolute obligation to go there.34 In this case, as the
BlueLand had been nominated as the loading port,35 the Owners were obligated to
go there. However, due to Owners’ failure to release Reliable Butterfly, they failed
to commence the preliminary voyage from bunker port to loading port, which
27 Carriage of Goods by Sea, 7th, John F Wilson, Chapter 3.3.328 Fact P88, Super Charters’ standard terms, at Cl. 229 Fact P88, Super Charters’ standard terms, at Cl. 230 Fact P46, at Para131 Fact P89, at Para132 Fact P89, at Para133 Fact P89, at Para134 Aic Ltd. v. Marine Pilot Ltd. (The Archimidis) [2008] 1 Lloyd’s Rep 597; Stx Pan Ocean Co. Ltd. v. Ugland Bulk Transport AS (The Livanita) [2008] 1 Lloyd’s Rep 86；M/V Naiad [1978] AMC 2049 at P2056. 35 Fact P47 “LOAD 1/2 SP BLUELAND”
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constituted breach of Charterparty.
2.3 Alternatively, Owners failed to proceed with convenient dispatch, which
breached the Charterparty.
By failing to proceed with convenient dispatch to the loading port, Owners
breached the Charterparty. According to Clause 1 of ASBATANKVOY, Owners
were obligated to proceed with all convenient dispatch to the loading port.36 As
convenient dispatch is identical to reasonable dispatch,37 Owner thereon should
use reasonable dispatch by the canceling date,38 or use reasonable diligence to
deliver the ship in a fit condition by the canceling date.39 The test for reasonable
diligence refers to whether the shipowner had used their best endeavors and
whether the delay was unavoidable accident or perils of the sea.40 Moreover, it is
clear that the object of dispatch clause is established on the commercial efficacy41
or the merchant policy of saving time.42
In this case, the Owners could have to provide security to release the vessel but
decided not to do that.43 Reliable Butterfly, therefore, became evident that it would
miss the laycan.44 The Owners’ failure to take reasonable or customary to provide
36 Fact P54 Clause1 “ WARRANTY-VOYAGE-CARGO”37 Carriage of Goods by Sea, second edition, Stephen Girvin, 26.04, at P414,38 Fyffes Group Ltd v. Reefer Express Lines Pty Ltd. [1996] 2 Lloyd’s Rep 171, 191. See, generally, Scrutton (2008), art 52; Carver (2005), Para 9-033. See also David Chong Gek Sian.” Reasonable Dispatch in Voyage Charterparty”[1993] SJLS 401.39 Marbienes Compania Naviera SA v Ferrostaal AG (the Democritos) [1976] 2 Lloyd's Rep. 149. at P15240 Nelson & Sons v. The Dundee East Coast Shipping Co. Ltd. (1907) 44 S.L.R. 661; also see the “reasonable dispatch” in Marbienes Compania Naviera SA v Ferrostaal AG (the Democritos) [1976] 2 Lloyd's Rep. 149. at P152.41 Fyffers Group Ltd. v. Reefer Express Lines Pty Ltd. [1996] 2 Lloyd’s Rep. 171, at 191.42 Suzuki Co. Ltd. v. T Benyon Co. Ltd. (1926) 24 Ll LR 94, at 97.43 Fact P93 at para344 Fact P95 at Para1
11
security could not be deemed as that they used best endeavor, and the delay was
due to their own breach rather an unavoidable accident or perils of the sea.
Owners’ conducts are inconsistent with commercial efficacy or merchant policy
of saving time.
Therefore, Owners breached the obligation to proceed with all convenient
dispatch to the loading port.
2.4 Those breaches aforementioned amounted to repudiatory breach and/or
renunciation, the Charterer, therefore, could cancel the Charterparty.
Under a contract, the innocent party can discharge its obligations when the other
party has repudiated his contract obligations by way of:45
1) Renouncing his liabilities under it;
2) By his own act making it impossible that he should fulfill them;
3) Failing to perform what he has promised.
Moreover, the consequences of discharge is that not only the innocent party is
released from further performance of future obligations on his part which remain
still be performed, but also he is not bound to, or pay for, any further performance
by the party in breach.46 And the party in fault is obligated to pay compensation to
the injured party for the breach.47
First, Owners thereupon renounced his liabilities by conduct. Renunciation occurs
45 This statement of the law was approved by Lord Porter in Heyman v. Darwin, Ltd. [1942] A. C. 356, at P. 397 and by Devlin J. in Universal Cargo Carriers Corporation v. Citati, [1957] 2 Q.B.401, at P. 436 (affirmed in part [1957] 1 W.L.R979 and revised in part [1958] 2Q.B.254).46 ANSON’S LAW OF CONTRACT, 26th edition, at P48347 Ibid, at P484
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where on of the parties evinces an intention not to go on with the contract.48 The
intention can be convey by word or by conduct.49 The test is whether the party
renunciating has acted in such a way as to lead a reasonable person to the
conclusion that he does not intend to fulfill his part of the contract.50 In this case,
the Owners knew the time was very tight due to terminal’s need for programmed
maintenance shutdown,51 and also knew that missing the laycan could have
disaster effects at loading port and discharging port.52 The Owners could have to
provide security to release the vessel to the meet of laycan, but decided not to do
that. In addition, it refused to give a new ETA and laycan,53 which left the Vessel
to undetermined dates. Therefore, taking all facts aforementioned into account,
under the view of reasonable person, Owners thereupon in fact objectively
showed an intention to not to go on with this Charterparty and Owners’ conducts
constituted renunciation of the Charterparty.
Secondly, and most importantly, the Owners failed to perform what he has
promised in the Charterparty, and the breach deprived Charterers the substantially
whole benefit under the Charterparty. The most common test for this is that
breach goes to the root of the contract.54 It has also been said that the breach must
48 Universal Cargo Carriers Corporation v. Citati, [1957] 2 Q.B.40149 Ibid50 Universal Cargo Carriers Corporation v. Citati, [1957] 2 Q.B.401, at P. 436. See also Forslind v. Becheley Crundall, 1922 S.C.(H.L.)173; Law. v. London Chronicle (Indicator Newspapers),Ltd.,[1959]1W.L.R.698; Chilean Nitrate Sales Corporation v. Marine Transportation Co. Ltd. And Pansuiza Compania De Navegacion S.A. (The Hermosa), [1982] 1 Lloyd’s Rep. 570.51 Fact P90 Fixing Comments at Para 252 Fact P92 at Para 153 Fact P95 at Para 254 Mersey Steel & Iron Co. v. Naylor, Benzon & Co. (1884), 9 App. Cas. 434, at P. 444; Heyman v. Darwin, Ltd., [1942] A.C. 356, at P. 397; Suisse Atlantique Societe’d Armement Martime S.A. v. N.V. Kolen Centrale [1967] 1 A.C.361, at P.422; Cehave N.V. v. Bremer Handelsgesellschaft, [1976], Q.B. 44, at PP.60, 73; Federal Commerce & Navigation Co. Ltd. v. Molena Alpha Inc., [1979] A.C. 757, at P.779.
13
be fundamental,55 that it must affect the very substance of the contract,56 or
frustrate the commercial purpose of the venture.57 The test nowadays frequently
applied is that whether the occurrence of the event deprive substantially the whole
benefit which it was the intention of the parties as express in the contract that he
should obtain as the consideration for performing those undertakings.58 Moreover,
whether or not there has been a repudiatory breach is highly fact sensitive59 and
on objective basis.60
In this case, as Reliable Butterfly was the only available VLCC on near dates from
a thin tonnage list for the voyage,61 and as both parties knew that the time is very
tight due to terminal’s need for programmed maintenance shutdown,62 and also as
Owners were obligated to proceed the voyage to loading port with convenient
dispatch,63 the substantial part of benefits, which Charterers were entitled under
this Charterparty, is ensuring Reliable Butterfly complete the voyage within a
reasonable time. However, Due to Owners’ failure to release the vessel, due to
Owners’ refusing to give a new ETA and laycan to loading port, it would be
impossible for Reliable Butterfly to arrive at the loading port on time, and it also
would be impossible for Reliable Butterfly to compete the voyage within a
reasonable time. In other words, Charterers thereon was deprived of substantially
55 Suisse Atlantique Societe’d Armement Martime S.A. v. N.V. Kolen Centrale [1967] 1 A.C.361, at P.42256 Wallis, Son and Well v. Pratt and Haynes, [1910] 2 K.B. 1003, at P.101257 MacAndrew v. Chapple (1866), L.R. 1C.P.643, at PP. 647, 648; Jackson v. Union Marine Insurance Co. (1874), L. R. 10 C.P. 125, at PP. 145,147,148; Trade and Transport Inc. v. Iino Kaiun Kaisha, Ltd., [1973] 1 W.L.R. 210, at P.223.58 Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, 72.59 Eminence Property Developments Ltd. v. Heaney [2010] EWCA Civ 1168 at 32-36.60 Woodar Investment Development Ltd. v. Wimpey Construction UK Ltd [1980] 1 WLR 277; also see Federal Commerce & Navigation Co. Ltd. Respondents v Molena Alpha Inc. and Others Appellants [1978] 3 W.L.R. 991.61 Fact P90 Fixing Comments at Para 162 Fact P90 Fixing Comments at Para 263 Fact P54 Clause1 “ WARRANTY-VOYAGE-CARGO”
14
the whole benefit which it was the intention of the parties they should obtain from
further use of the vessel under the Charterparty. Owner’s conducts, therefore,
amounted to repudiation.
To go further, although a sister vessel had been provided by the Owners,64 the
sister vessel was only provided after the Charterparty was terminated. And the
vessel provided still could not arrive at the loading port on time.65
As a result, the Charterers’ conducts constituted a repudiatory breach and/or
renunciation, and the Charterers were entitled to cancel the contract.
2.5 Upon Owners’ repudiation, Charterers chose to terminate the Charterparty
and claimed for related damages.
3. Alternatively, Owners failed to inform the Charterers ETA and
changes of ETA, which amounted to repudiatory breach of the
Charterparty.
3.1 The Owners failed to inform the Charterers (other parties) ETA and
changes of ETA, which breached the Charterparty.
The Owners failed to inform the Charterers ETA and changes of ETA by way of
stipulated in the Charterparty, which breached the Charterparty. Under this
Charterparty, the Owners were obligated to advise the Charterer changes which
affect ETA 6 hours or more (3 hours or more if the vessel is within 24 hours of the
vessel),66 and is also obligated to give the Charterer notices of arrival every 5 days
64 Fact P97 at Para 565 Fact P97 at Para 566 Fact P67 at 27, P87 at1
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and then 96, 72, 48, 24 and 12 hours.67
In this case, the Owners only gave ETA at loading port on 19 November.68 They,
however, failed to give any new ETA on 24 November and failed to inform
Charterers changes of ETA by way of mentioned above. Owners, therefore,
breached the Charterparty.
3.2 The breach aforementioned amounted to repudiatory breach of the
Charterparty. The Charterers therefore could cancel the Charterparty.
As mentioned above, the most common test for this is whether the breach goes to
the root of the contract.69 Under voyage charter party, the vessel is totally out of
charterer’s control without being informed of ETA. In this case, the Owner
thereof knew its obligations inform the Charterers ETA and changes of ETA but
failed to fulfill either of them, which went to the very root of the Charterparty.
As a result, the Owner’s conducts constituted repudiatory breach of the
Charterparty. The Charterers, therefore, could cancel the Charterparty and reserve
all related rights.
4. The Owners are liable for damages suffered by Charterers.
The damage, which Charterers suffered, including but not limited to the increasing
freight in amount of US$824,000, extra payment to loading port terminals and
67 Fact P88 at 368 Fact P47 at “ITINERARY”69 Mersey Steel & Iron Co. v. Naylor, Benzon & Co. (1884), 9 App. Cas. 434, at P. 444; Heyman v. Darwin, Ltd., [1942] A.C. 356, at P. 397; Suisse Atlantique Societe’d Armement Martime S.A. v. N.V. Kolen Centrale [1967] 1 A.C.361, at P.422; Cehave N.V. v. Bremer Handelsgesellschaft, [1976], Q.B. 44, at PP.60,73; Federal Commerce & Navigation Co. Ltd. v. Molena Alpha Inc., [1979] A.C. 757, at P.779.
16
discharging port terminals in amount of US$450,000, and interests.
Common to measures of damages are the requirement that the loss should be:
a) neither causally unrelated to the breach;
b) nor too remote;
c) nor based on a failure to mitigate loss.
4.1 Charterers’ damages are related to the Owners’ breach.
Due to Owners’ breach was an effective cause of the Charterers’ damages,
Charterers’ damages are related to Owner’s Breach. In contract law, the notion of
causation imposes not just the “but for” requirement, whether the loss would not
have occurred without the breach, but the more technical requirement that the
breach was a legally significant cause of the alleged loss.70
In the present case, should Owners fulfill their obligation under the Charterparty,
Charterers thereof would not suffer the damages of increased freight and payment
of delayed arrival for both the loading port and discharging port.71 Moreover, the
increased freight and other payment of delayed arrival for both the loading port
and the discharging port were directly resulted from Owner’s breach.72 In other
words, the Owners’ breach was an effective cause of the Charterers’ damages.
Therefore, Charterers’ damages of increased freight and payment of delay arrival
for both the loading port and discharging port are related to Owners’ breach.
70 Galoo v. Bright Grahame Murray [1994] 1 WLR 1360, CA; Supershield Ltd v. Siemens Building Technologies FE Ltd. [2010] EWCA Civ 771 Fact P96, “notice of cancelation” at last Para.72 Fact P96, “notice of cancelation” at last Para.
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4.2 Charterers’ damages are not too remote.
Charterers’ damages are not to remote due to the loss is with Owners’ reasonable
contemplation. The test concerns that the contract breaker knew or must have
know so as to bring the loss within their reasonable contemplation of the parties.73
In this case, the Owner knew the time is very tight due to terminal’s need for
programmed maintenance shutdown,74 and also knew that missing the laycan
could have disaster effects at the loading port and discharging port.75 As a
shipowner, the extra payment of delayed arrival for both the loading port and
discharging port should be within its contemplation. So is the increasing freight,
which resulted from failure to compete the voyage.
Therefore, Owners’ damages are not too remote to Charterers’ breach.
4.3 Charterers’ damages are not based on a failure to mitigate loss.
Charterers’ damages are not based on a failure to mitigate loss. The claimant must
take reasonable steps to mitigate, either by reducing or by eliminating that loss.76
If the mitigation efforts are successful, the defendant’s liability is adjusted
accordingly; and if there is a failure to mitigate, to that extent damages will also
be reduced.77 In the present case, the Charterers had tried their best to minimize
the damages.78 The Owners’ liabilities for damages should be adjusted. Therefore,
the Charterers’ damages are not based on a failure to mitigate loss.
As a result, we could reasonably conclude that the Owners are liable for
73 Jackson v. Royal Bank of Scotland plc., [2005] 1 WLR 377, HL, at P46-4874 Fact P90 Fixing Comments at Para 275 Fact P92 at Para 176 [1912] AC 673, 68977 Contract Law, Neil Andrews, at P57378 Fact P97, at the last Para
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Charterers’ damages of increased freight and payment of delay arrival for both the
loading port and discharging port.
5. Clause 2 of Reliable Tanker Inc.’s Standard Terms did not apply to the condition that Owners’ conducts constituted repudiation.
5.1 The Clause 2 did not apply to the condition that Owners breached
Charterparty.
The effect of canceling clause is that, although there may have been no breach by
the owners nevertheless the charterers are, for their own protection, entitled to
cancel if the vessel is not delivered in a proper condition by the canceling date.79
This is the sole effect of cancelling clause.80 In other words, cancelling clause did
not apply to a condition that owner is in breach.
In the present case, Clause 2 is a cancelling clause, and shall apply to a condition
that the Owners had used reasonable diligence to deliver the ship in a fit condition
or to commence the voyage but still miss the laycan. Owner’s failure to take
reasonable or customary to provide security to release Reliable Butterfly could not
be deemed as using reasonable diligence, which means that “canceled without
recourse” Clause did not apply to this condition.
To go further, “canceled without recourse” Clause applied only when Owners
gave a new ETA or laycan.81 In this case, Owners did not gave any new ETA as
well as laycan, which means that Charterer’s option to terminate the Charterparty
did not come from this the “canceled without recourse” Clause.
79 Marbienes Compania Naviera SA v Ferrostaal AG (the Democritos) [1976] 2 Lloyd's Rep. 149. at P15280 Ibid81 Fact P87 Reliable Tanker Inc.’s Standard Terms, at Cls2
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As a result, the entitlement to claim for damages came from the repudiatory
breach of Owners rather the “miss the laycan” Clause.
5.2 Alternatively, should Clause 2 applied, it cannot be constructed as both
parties released from any further obligations to perform the Charterparty of
further liabilities thereunder.
The Charterers’ construction rather Owners’ construction should be adopted, due
to the rule of constructing exemption clause and/or rule of constructing with
business common sense. Regarding “cancelled without recourse” Clause, there
existed two constructions. The Owners took the view that it should be construed
as both parties released from any further obligations to perform the Charterparty
of further liabilities thereunder.82 However, Charterers believed this clause should
only be constructed as an automatic cancelation without either party being
required to act further.83
First, when constructing clauses of a contract, it should be read as a whole84 rather
a part itself.85 And if there are two reasonable constructions for a phrase or a word
for exemption clauses, then the construction least favorable to the defendant will
be adopted.86 In this case, according to the “Affiliates’ Claims Clause"87, the
Owners were liable to the full extent of Charterers’ Affiliates’ losses and/or
82 Fact P106 at 1283 Fact P111 at 1684 Chamber Colliery Ltd. v. Twyerould (1893)(1915) 1 Ch. 26885 Calico Printers’ Asspciation v. Barclay Bank Ltd. (1931) 145 L. T. 5186 Hollins v. Davy (J) Ltd. (1963) 1 Q.B. 84487 Fact P64, 20 Affiliates’ Claim “…any breach of this Charter Party by Owner…the owner shall be liable to Charterer to the full extent of Charterer’s Affiliates’ losses and/or liabilities including those arising any Bills of Lading issued under this Charter Party…”
20
liabilities. Should the “canceled without recourse” Clause was constructed as
releasing both parties from any further obligations to perform the Charterparty of
further liabilities thereunder, there are contradicts between the “Affiliates’ Claims
Clause" and the “Canceled without recourse” Clause. Therefore, the construction
that automatic cancelation without either party being required to act further should
be adopted.
Secondly, should there are two construction for a clause, the construction which is
more comply with business common sense should be adopted.88 And business
sense is that which businessmen, in the course of their ordinary dealings, would
give the documents.89 In the course of ordinary dealings, almost no businessman
will incorporate a clause, which would release the other party’s all liabilities upon
the other party’s breach, in its contract. However, in the present case, Owners’
construction will lead to a conclusion that, even if the Charterers terminated the
Charterparty for Owners’ breach, they would release all further liabilities.
However, Charterers’ construction will not lead to the above conclusion, which
means that Charterers’ construction is more comply with business common sense.
As a result, the Charterers’ construction, automatic cancelation without either
party being required to act further, should be adopted.
88 Antaios Cia Naviera SA v. Salen Rederierna AB [1985] A.C. 191; Society of Lloyd’s v Robinson [1999] 1 All ER (Comm) 545, 551; also see Rainy Sky SA and others v. Kookmin Bank [2011] UKSC 5089 Glynn and Others v. Margetson & Co and other [1983] A .C . 351. p359
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6. The Charterers were no longer obligated to pay the freight due to
the termination of Charterparty.
6.1 Freight thereon was not earned until the delivery of the goods at destination.
There is no special contractual provisions regarding when the freight is earned,
therefore, the freight is only earned upon the delivery of the goods at destination.
Freight earned and freight payable are different conceptions.90 In the absence of
special contractual provisions, it is earned upon the delivery of the goods at their
destination.91 And in this case, according to Clause 4 of Owners’ Standard Terms,
freight deemed earned in full discountless non-returnable.92 This clause can only
be constructed as the freight is fully discountless and non-returnable if freight is
earned. It could be constructed as the freight is earned upon lifting subjects only
if the words of the clause are abundantly clear.93 In addition, although 95% of the
minimum freight is payable upon lifting subjects,94 it, however, cannot be
directly understood as freight is also earned upon lifting subject.
As a result, due to the absence of provisions regarding when the freight is earned,
the freight is not earned until upon the delivery of the goods at destination.
6.2 The freight thereon was not an accrued debt and did not survive upon
termination of the Charterparty.
First, the freight thereon is not an accrued debt. The freight becomes an accrued
90 Compania Naviera General S. A. v. Kerametal Ltd. (the “Lorna I”) ［1983］1 Lloyd's Rep. 373, at 374; Colonial Bank v. European Grain & Shipping (The Dominique) [1989] A.C. 1056; 91 Compania Naviera General S. A. v. Kerametal Ltd. (the “Lorna I”) ［1983］1 Lloyd's Rep. 373, at 374.92 Fact P87, “Reliable Tanker Inc.’s Standard Terms” at Cl.493 Wickman Machine Tools Sales Limited v Schuler AG [1974] AC 23594 Fact P87, “Reliable Tanker Inc.’s Standard Terms” at Cl.4
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debt at the time when the freight is earned or deemed earned.95 In the present
case, by E-mail dated 27 November, the Charterers chose to terminate the
Charterparty.96 And at the time Charterers chose to terminate the Charterparty, 95%
of freight was only payable,97 but not earned. It is not until the delivery of the
goods at destination that the freight is earned. Moreover, the delivery of goods at
destination never happened, which means that the freight never earned. Therefore,
freight thereon was not an accrued debt under this Charterparty.
Secondly, the freight thereon did not survive upon the termination of the
Charterparty. Once the obligation to pay freight crystallised as a debt it was not
charged by the owners’ accepted repudiation before the date of payment arrived.98
A liability to pay freight does not pre se affect the time when freight is earned.99
It is simply an obligation to make a payment on account of freight at a time when
it is not to be earned.100 Without express stipulation, advance freight paid
pursuant to the contract is returnable or recoverable should the contract be
frustrated before the freight earned.101 The case of “Lorna I”102 and “the
Dominique”103 contains ideas that freight payable is different from freight earned,
and freight only payable did not survive shipowner’s repudiation. In this case,
although 95% of the minimum freight is payable upon lifting subjects,104 the
95 Colonial Bank v. European Grain & Shipping (The Dominique) [1989] A.C. 105696 Fact P96, Super Charters Inc.’s E-mail for “notice of cancellation”97 Fact P87, “Reliable Tankers Inc.’s Standard Terms” at Cl.498 Colonial Bank v. European Grain & Shipping (The Dominique) [1989] A.C. 1056, at 109999 Compania Naviera General S. A. v. Kerametal Ltd. (the “Lorna I”) ［1983］1 Lloyd's Rep. 373, at 374. 100 Ibid101 Ibid102 Ibid103 Colonial Bank v. European Grain & Shipping (The Dominique) [1989] A.C. 1056104 Fact P87, “Reliable Tanker Inc.’s Standard Terms” at Cl. 4
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freight, however, is not earned.
Therefore, the freight thereon did not survive its repudiation of the Charterparty.
As to the counterclaim, Owners might claim Charterers’ failure to pay the freight
constituted a breach of condition. Therefore, the Owners were released of
obligations under Charterparty due to the breach mentioned above, and their
failure to arrive at the loading port should be deemed as withdrawal of vessel.
Moreover, due to the freight is earned on 19 November, it reserved the
entitlement to freight even if its own repudiation.
To begin with, as a matter of construction with business common sense105, freight
thereon was only payable not earned. Thus, the entitlement to freight thereupon
did not survive upon Owners’ repudiation of Charterparty.
Moreover, should the repudiation of the contract occurred, the contract will not
automatically be terminated.106 The innocent party is only entitled the option
either to treat the contract as still continuing or regard himself as discharged by
reason of the repudiation of the contract by the other party.107 In the present case,
even if Owners were entitled the right to choose to terminate the Charterparty and
claim for damages when Charterers failed to pay the freight (payable but not
earned) on time. They, however, never informed the Charterers to pay the freight
or showed any intention to terminate the Charterparty. In addition, although the
105 Rainy Sky SA and others v. Kookmin Bank [2011] UKSC 50; see also Society of Lloyd’s v Robinson [1999] 1 All ER (Comm.) 545, 551.106 White and Carter (Councils), Ltd. v. McGregor [1962] A.C. 413. 107 Ibid
24
freight was still unpaid on 23 November, the Owners told Charterers that they
would release Reliable Butterfly and meet the laycan,108 which conveyed an idea
that Owners chose to continue Charterparty. The Charterparty was continuing
until the time when Charterers chose to terminate the Charterparty for Owner’s
repudiation.
As a result, the Owners were not discharged of obligations under this
Charterparty, and their failing to arrive at the loading port should not be deemed
as withdrawal of vessel.
6.3 Alternatively, Charterers thereon were entitled to set off against such
entitlement their claim for damages for loss resulting from the Owner’s
repudiation of the Charterparty.
6.4 In further alternative, should the ”canceled without recourse” Clause is
constructed as a mutual release both parties of obligations and liabilities
(which is denied by us), Charterers were thereby released from obligation to
pay the freight.
PRAYER FOR RELIEF
For the reasons submitted above, the Charterers respectfully requests this Tribunal to:
DECLARE that Owners are not allowed to bring any counterclaim in arbitration.
Further,
ADJUDGE that the Owners are liable to the Claimant for:
108 Fact P94, at Para1
25
1. Increase in freight in amount of USD 824,000;
2. Sums due and payable to the loading port terminal/sellers pursuant to
delayed arrival, in amount of USD 150,000;
3. Sums due and payable to the loading port terminal/sellers pursuant to
delayed arrival, in amount of USD 300,000; and
4. Interest on any sums found owing to Charterers pursuant to section 49 of the
Arbitration Act 1996 at such a rate and with such rests and for such a period
of time as Tribunal see fit.
Further,
ADJUDGE that the Owners are not liable to pay freight thereupon;
Further,
ADJUDGE that the Charterers are entitled to set off against such entitlement their
claim for damages for loss resulting from Owners’ repudiation of the Charterparty.
Further and alternatively,
ADJUDGE that the Charterers are entitled, according to Clause 2 of Owners’
Standard Terms, to release from obligation to pay the freight.
