INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016

IN THE MATTER OF AN ARBITRATION HELD IN LONDON

________________________________________________________________________

Claimant Respondent

Zeus Shipping and Trading Company Hestia Industries

________________________________________________________________________

MEMORANDUM FOR THE CLAIMANT

TEAM NO.4

Benjamin Adamson

Josh Kain

Kashmirra Thevar

Sienna Warne

i

Table of Contents

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS .......................... IV

LIST OF AUTHORITIES: LEGISLATION .................................................................. X

LIST OF AUTHORITIES: BOOKS AND JOURNALS ............................................. XI

LIST OF AUTHORITIES: RULES ............................................................................... XII

LIST OF DEFINED TERMS ......................................................................................... XIII

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

PART ONE: JURISDICTION ............................................................................................ 3

I. THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION ................... 3

II. THE ARBITRATION AGREEMENT IS GOVERNED BY ENGLISH LAW ........................ 3

III. THE ARBITRATION AGREEMENT IS VALID ............................................................ 4

The Arbitration Agreement is in writing .............................................................. 5 A.

The Arbitration Agreement submits present and future disputes to arbitration B.

......................................................................................................................... 5

IV. THE SCOPE OF THE ARBITRATION AGREEMENT COVERS ALL THE ISSUES IN

DISPUTE ................................................................................................................ 6

V. ALTERNATIVELY, IN THE EVENT THAT FRUSTRATION FALLS OUTSIDE THE

SCOPE OF THE ARBITRATION AGREEMENT THIS TRIBUNAL CAN STILL

DETERMINE THE DEMURRAGE CLAIM.................................................................... 7

ii

PART TWO: MERITS ......................................................................................................... 7

I. THE RESPONDENT FAILED TO SHIP THE CARGO BEFORE LAYTIME EXPIRED .......... 7

The Vessel was at the Respondent’s disposal when laytime expired ............... 8 A.

The interception of the Vessel was a suspension of laytime .............................. 8 B.

II. THE CHARTERPARTY HAS NOT BEEN FRUSTRATED ............................................. 10

The commercial purpose of the Charterparty can still be fulfilled .................. 11 A.

a.The commercial purpose of the Charterparty is limited to the transport of the

Cargo ................................................................................................................. 11

i.The express terms of the Charterparty focus on transport ..................... 12

ii.Time is not of the essence .................................................................... 12

iii.The surrounding circumstances demonstrate that the transport of the ....

Cargo was the commercial purpose ......................................................... 13

b.The Cargo can still be transported to Poseidon ............................................. 13

c.Alternatively, if the commercial purpose includes transport within a reasonable

time, the Charterparty remains in force because the Respondent has not been

deprived of the ‘whole benefit’ of contracting ................................................. 14

The parties foresaw the delay ............................................................................... 14 B.

III. THE CLAIMANT WAS REQUIRED TO COMPLY WITH THE ORDERS OF HADES ........ 15

Hades is the coastal state ....................................................................................... 15 A.

In any event, Hades was the flag state ................................................................ 16 B.

IV. THE RESPONDENT CANNOT RELY ON THE FM CLAUSE ....................................... 17

Government intervention is not a specified FM event ...................................... 17 A.

Alternatively the FM event was induced by the Respondent ........................... 18 B.

iii

V. ALTERNATIVELY, IF THE TRIBUNAL DECIDES THAT THE CLAIMANT IS NOT

ENTITLED TO DEMURRAGE, THE RESPONDENT IS LIABLE FOR DAMAGES FOR

THE DETENTION OF THE VESSEL ......................................................................... 19

The Cargo carried a greater risk of detention than ordinary cargo.................. 19 A.

The Claimant had no knowledge of the risk ....................................................... 20 B.

PART THREE: SALVAGE ............................................................................................... 21

I. THE SERVICE RENDERED WAS A CONTINUATION OF THE TOWAGE SERVICE ........ 21

II. THE VESSEL WAS NOT IN DANGER ...................................................................... 22

There was no danger .............................................................................................. 22 A.

In any event, the Respondent must satisfy a higher degree of danger because it B.

is a tug operator ...................................................................................................... 23

PRAYER FOR RELIEF ..................................................................................................... 24

iv

LIST OF AUTHORITIES: CASES AND ARBITRAL AWARDS

A.

AGL Sales (QLD) Pty Ltd v Dawson Sales Pty Ltd [2009] QCA 262 (4 September 2004) .... 18

Akerblom v Price (1881) 7 QBD 129 ...................................................................................... 23

Alanbert Pty Ltd v Bulevi Pty Ltd [2000] NSWSC 261 (6 April 2000) ................................... 14

Amann Aviation Pty Ltd v Commonwealth (1990) 22 FCR 527 .............................................. 14

Ange v First East Auction Holdings Pty Ltd (2011) 284 ALR 638 ......................................... 15

Ardee Pty Ltd v Collex Pty Ltd [2001] NSWSC 836 (28 September 2001) ............................ 13

Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202 (21 June 2012) ................. 12

Australia and New Zealand and Banking Group Ltd v Manasseh [2015] WASC 34 (2

February 2015) ......................................................................................................................... 13

B.

Bamfield v Goole and Sheffield Transport [1910] 2 KB 94 .................................................... 20

Barclays Bank plc v Nylon Capital LLP [2011] EWCA Civ 826 (18 July 2011) ..................... 6

Braes of Doune Wind Farm (Scotland) v Alfred McAlpine Business Services [2008] EWHC

(QB) 426 (13 March 2008) ........................................................................................................ 3

Brass v Maitland (1856) 26 LJQB 49 ...................................................................................... 20

Bremer Handelsgesellschaft mbH v C Mackprang Jr [1979] 1 Lloyd’s Rep 221 ................... 17

Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143 ...................... 10, 11, 13

Brown v Johnson (1842) 10 M and W 331 ................................................................................ 8

Budgett and Co v Binnington and Co [1891] 1 QB 35 ............................................................ 15

Bunge SA v Kyla Shipping Co Ltd [2012] 2 CLC 998 ............................................................. 10

C.

Capital Trust Investment v Radio Design AB [2002] EWCA Civ 135 (15 February 2002) ...... 6

Cero Navigation Corporation v Jean Lion and Cie ('The Solon’) [2000] 1 Lloyd’s Rep 292 .. 9

Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 ............................... 17

Christopher Brown Ltd v Genessenschaft Oesterreichisher Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8...................................................... 3

City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 .................................. 10

Claude Neon Ltd v Hardie [1970] QB R 93 ............................................................................ 14

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337

................................................................................................................................ 10, 11, 13, 14

Compania Naviera Aeolus SA v Union of India ('The Spalmatori’) [1964] AC 868 ................ 9

v

Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd

(1986) 160 CLR 226 .................................................................................................................. 9

Coomera Resort Pty Ltd v Kolback Securities Ltd [1998] QSC 20 (20 February 1998) ......... 14

D.

Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd

[2012] 4 SLR 837....................................................................................................................... 3

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 ................................ 17

David Wilson Homes Ltd v Survey Services Ltd (in liq) [2001] EWCA Civ 34 (18 January

2001) ...................................................................................................................................... 4, 5

Davis Contractors Ltd v Fareham UDC [1956] AC 696 ........................................................ 14

Davis v Pearce Parking Station Pty Ltd (1954) 91 CLR 642 .................................................... 9

Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd [2002] 1 SLR (R) 492 .......... 3

DGM Commodities Corp v Sea Metropolitan SA ('The Andra’) [2012] EWHC (QB) 1984 (18

July 1984)................................................................................................................................. 10

Dias Compania Naviera SA v Louis Dreyfus Corporation ('The Dias’) [1978] 1 Lloyd’s Rep

325.............................................................................................................................................. 8

Douglas v Cicirello [2006] WASCA 226 (8 August 2006) ..................................................... 12

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 .............................. 12, 13

E.

Earnshaw v Gorman and Sons Pty Ltd [2001] WASCA 50 (28 February 2001) .................... 12

ED and F Man Sugar Ltd vs Unicargo Transportgesellschaft mbH ('The Ladytramp’) [2012]

2 Lloyd’s Rep 660 ...................................................................................................................... 9

Edwinton Commercial Corporation v Tsavliris Tuss (Worldwide Salvage and Towage) Ltd

(‘The Sea Angel’) [2007] EWCA Civ 547 (12 June 2007) ...................................................... 10

Effort Shipping Co Ltd v Linden Management SA [1998] AC 605 .................................... 19, 20

Eighty-Second Agenda Pty Ltd v Handberg [2015] FCA 1136 (26 October 2015) ................ 11

Empresa Exportadora de Azucar v Industria Azucarera Nacional SA ('The Playa Larga’)

[1983] 2 Lloyd’s Rep 171 .................................................................................................... 6, 15

Ethiopian Oil Seeds and Pulses Export Corp v Rio del Mar Foods Inc [1990] 1 Lloyd’s Rep

86................................................................................................................................................ 6

F.

Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) .............. 6

Firth v Halloran (1926) 38 CLR 251 ...................................................................................... 10

vi

Flight Training International v International Fire Training Equipment Ltd [2004] EWHC

(QB) 721 (13 February 2004) ................................................................................................ 4, 5

Friedlander v The Bank of Australasia (1909) 9 CLR 85 ....................................................... 12

G.

Gem Shipping Co of Monrovia v Babanaft (Lebanon) SARL ('The Fontevivo’) [1975] 1

Lloyd’s Rep 339 ......................................................................................................................... 9

Government of Gibraltar v Kenney [1956] 2 QB 410 ............................................................... 6

Grant v Coverdale (1884) 9 App Cas 470 ................................................................................. 8

H.

Heifer International Inc v Helge Christiansen [2007] EWHC (QB) 3015 (18 December 2007)

................................................................................................................................................ 4, 5

Homburg Houtimport B.V. v Agrosin Private Ltd ('The Starsin’) [2004] 1 AC 715 ............... 17

Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 ..................... 14

Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd (2006) 236 ALR 115 .. 18

I.

In Marriage of Cawthorn (1998) 144 FLR 225 ........................................................... 10, 11, 13

Inverkip Steamship Co Ltd v Bunge and Co [1917] 2 KB 193 .............................................. 8, 9

Islamic Shipping Lines v Steamship Mutual Underwriting Association (Bermuda) Ltd [2010]

2 CLC 534 ................................................................................................................................ 10

J.

Jackson v Union Marine Insurances Co Ltd (1874) LR 10 CP 125 ........................................ 11

K.

Kruppa v Benedetti [2014] 2 Lloyd’s Rep 421 ...................................................................... 4, 5

L.

Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd 166 CLR 623 .......................... 12

Leonis Steamship Co Ltd v Rank Ltd [1908] 1 KB 499 ............................................................. 8

M.

Meredelanto Compania Naviera SA v Bergbau-Handel Gmbh ('The Mihalis Angelos’) [1970]

EWCA Civ 4 ............................................................................................................................ 10

Micada v Texim [1968] 2 Lloyd’s Rep 57 ............................................................................... 20

Mitchell, Cotts and Co v Steel Bros and Co Ltd [1916] 2 KB 610 .................................... 19, 20

vii

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990 ........... 11, 13

N.

National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 ........................................ 10

Navico AG v Vrontados Naftiki Etairia PE [1968] 1 Lloyd’s Rep 379 ..................................... 8

Naviera Amazonia Peruana SA v Compania Internacional de Seguros de Peru [1988] 1

Lloyd’s Rep 116 ......................................................................................................................... 3

Naviera Amazonica Peruana SA v Compania Internacional De Seguros del Peru [1988] 1

Lloyd’s Rep 116 ......................................................................................................................... 3

Nelson v Moorcraft [2014] WASCA 212 (13 November 2014).............................................. 10

O.

Ocean Tramp Tankers Corp v V/O Sovfracht ('The Eugenia’) [1964] 2 QB 226 ............. 10, 14

Oldendorff (EL) & Co GmbH v Tradax Export SA [1974] AC 479 .......................................... 8

Overseas Union Insurance Ltd v AA Mutual Insurance Co Ltd [1988] 2 Lloyd’s Rep 63 ........ 6

P.

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 ...................................................... 12

Penrith District Rugby League Football Club Ltd v Fittler (NSWSC, 8 February 1996,

Santow J, unreported) .............................................................................................................. 10

Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 .............................................. 12

Peterson Farms Inc v C and M Farming Ltd [2004] 1 Lloyd’s Rep 603 .................................. 3

Pioneer Shipping Ltd v BTP Tioxide Ltd ('The Nema’) [1982] AC 734 .................................. 10

PJ van der Zijden Wildhandel NV v Tucker& Cross Ltd [1975] 2 Lloyd’s Rep 240 .............. 17

Plainmar Ltd v Water Trading Co Ltd (1945) 72 CLR 304 .................................................... 18

Postlethwaite v Freeland (1880) 5 App Cas 599 ....................................................................... 8

Privatbrauerei Erdinger Weißbräu Werner Brombach GMBH v World Brands Australia Pty

Ltd [2016] WASC 9 (14 January 2016) ................................................................................... 12

Q.

Qantas Airways Ltd v Christie (1998) 193 CLR 280 .............................................................. 10

R.

R v Anderson (1868) LR 1 CCR 161 ....................................................................................... 16

Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194 ........................................... 10

Ringstad v Gollin and Co Pty Ltd (1924) 35 CLR 303............................................................ 14

viii

S.

Sailing Ship Garston Co v Hickie (1885) 15 QBD 580 ............................................................. 8

Samick Lines Co Ltd v Owners of the ‘Antonis P Lemos’ ('The Antonis P Lemos’) [1985] AC

771.............................................................................................................................................. 6

Saudi Arabia v Arabian American Oil Company (1963) 27 International Law Rep 117

(Award by Sauser-Hall, Badawi/Hassan, Habachy) ................................................................ 16

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 .......................... 10, 11, 13, 14, 18

Shevill v Builders Licensing Board (1982) 149 CLR 620 ....................................................... 12

Smith v Regional Development Australia Murraylands and Riverland Inc [2015] SADC 11

(11 November 2014) ................................................................................................................ 14

Stoker v Picken 209 FCR 132 .................................................................................................. 12

Sulmerica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638 (16

May 2012) .................................................................................................................................. 6

T.

Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 (6 July 2012) .......................... 15

Texaco Overseas Petroleum Co v Libyan Arab Republic, Preliminar Ad Hoc Award on

Jurisdiction (27 November 1975) IV YB Comm Arb 177 .......................................................... 3

Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union (No 2)

[2016] FCA 2 (4 January 2016) ............................................................................................... 12

The Athanasia Comninos [1990] 1 Lloyd’s Rep 277......................................................... 19, 20

The Cartela v The Inverness Shire (1916) 21 CLR 387 .......................................................... 21

The Eschersheim [1976] 1 WLR 430......................................................................................... 6

The Gorlitz [1917] P 233 ......................................................................................................... 23

The Kingalock (1854) 164 ER 153 .......................................................................................... 21

The Liverpool [1893] P 154 ..................................................................................................... 21

The Marechal Suchet [1971] P1 .............................................................................................. 21

The Minnehaha (1869) 167 E R 149.................................................................................. 21, 22

The Owners and/or Demise Charterers of the Tug ‘Sea Tractor’, Her Master, Officers and

Crew v The Owners of the Ship ‘Tramp’ (2007) WL 261207 ................................................. 22

The Princess Alice (1849) 3 W Rob 138 ................................................................................. 22

The Sellasia [1926] 26 Ll L Rep 26 ................................................................................... 21, 23

The Troilus and The Glenogle [1951] AC 820 ........................................................................ 22

The Westbourne (1889) 14 PD 132 .......................................................................................... 21

ix

The Whippingham [1934] 48 Ll L Rep 49 ............................................................................... 22

The White Star 1865-67 LR 1 .................................................................................................. 22

Thors v Weekes (1989) 92 ALR 131 ........................................................................................ 15

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 .......................................... 12

Tongue v Council of the City of Tamworth [2004] FCA 209 (23 March 2004) ...................... 10

Toyota Tsusho Sugar Trading Ltd v Prolat SRL [2015] 1 Lloyd’s Rep 344 ......................... 4, 5

TTMI Sarl v Statoil ASA [2011] 2 Lloyd’s Rep 220 .............................................................. 4, 5

U.

UBS AG v HSH Nordbank AG [2009] 1 CLC 934..................................................................... 6

Ulysses Compania Naviera SA v Huntingdon Petroleum Services (The Ermourpolis) [1990] 1

Lloyd’s Rep 160 ......................................................................................................................... 6

W.

Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (30 March 2016) ................. 17

Whiting v Halverson [2003] EWCA Civ 403 (6 March 2003) .................................................. 5

William Alexander and Sons v Aktieselskabet Dampskabet Hansa (1919) 25 CC 13 ............... 9

William Alexander and Sons v Aktieselskabet Dampskabet Hansa and others (1919) 25 CC

13................................................................................................................................................ 8

Woodlawn Capital Pty Ltd v Moto Vehicles Insurance Ltd) [2016] NSWCA 28 (08 March

2016) ........................................................................................................................................ 17

X.

XL Insurance v Owens Corning [2000] 2 Lloyd’s Rep 500 .................................................. 4, 5

XL Insurance v Owens Corning [2002] 2 Lloyd’s Rep 500 ...................................................... 3

x

LIST OF AUTHORITIES: LEGISLATION

Arbitration Act 1996 (UK) ................................................................................................. 3, 4, 5

International Convention on Salvage 1989 ....................................................................... 21, 22

Seas and Submerged Lands Act 1973 (Cth) ....................................................................... 15, 16

UNCITRAL Model Law on International Commercial Arbitration 2006 ........................ 5

United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 ....... 15, 16

xi

LIST OF AUTHORITIES: BOOKS AND JOURNALS

Anne Bardin, ‘Coastal State’s Jurisdiction over Foreign Vessels’ (2002) 14(1) Pace

International Law Review 27 ................................................................................................... 16

Blackaby et. al, Redfern and Hunter on International Arbitration (Oxford University Press,

5th ed, 2009) .............................................................................................................................. 3

Camille Goodman ‘The Regime for Flag State Responsibility in International Fisheries Law-

Effective Fact, Creative Fiction, or Further Work Required?’ (2009) 23 Australian and New

Zealand Maritime Law Journal 158 ........................................................................................ 16

Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol I3,

................................................................................................................................................... 6

Hilary Heilbron, A Practical Guide to International Arbitration in London (Informa, 2008) .. 5

Hugo Tiberg, The Law of Demurrage (Stevens and Sons, 2nd

ed, 1978) .................................. 8

John F Wilson, Carriage of Goods by Sea (Pearson Longman, 6th

ed, 2008) ........................... 8

John Schofield, Laytime and Demurrage (LLP, 7th

ed, 2016) ................................................... 8

JP Swanton ‘The Concept of Self-Induced Frustration’ (1990) 2 JCL 206 ............................. 14

Julian Cooke et al, Voyage Charterparties (Informa Law, 4th

ed, 2007) .................................. 8

Michael White, Australian Maritime Law (The Federation Press, 3rd

ed, 2014) ....................... 8

Phillip Bush ‘Delay and Detention’ (2001) 25 Tulane Maritime Law Journal 441 .................. 8

R A Bigwood with M P Ellinghaus, Cheshire and Fifoot Law of Contact (LexisNexis

Butterworths, 2012, 10th

ed) .................................................................................................... 14

Yvonne Baatz et al, Maritime Law (Sweet and Maxwell 2nd

ed, 2011) .................................. 16

xii

LIST OF AUTHORITIES: RULES

The Maritime Law Association of Australia and New Zealand Arbitration Rules (1 July 2007)

.................................................................................................................................................... 4

xiii

LIST OF DEFINED TERMS

AA : Arbitration Act 1996 (UK)

Arbitration Agreement : Clause 30 of the Charterparty

Cargo : 260 000m3 Hades Liquefied Natural Gas

Charterparty : The charterparty executed on 22 July 2014

Claimant : Zeus Shipping and Trading Company

FM : Force majeure

HLNG : Hades Liquefied Natural Gas

LNG : Liquefied Natural Gas

MLAANZ Rules : Maritime Law Association of Australia and New

Zealand Arbitration Rules

Respondent : Hestia Industries

SOF : The statement of facts issued on 7 October 2015

Tribunal : The arbitral tribunal

Vessel : The Athena

1

STATEMENT OF FACTS

The Charterparty

1. On 1 July 2014, Hestia Industries (Respondent) contacted Zeus Shipping and Trading

Company (Claimant) requesting a vessel capable of transporting 260 000m3 of Hades

Liquefied Natural Gas (HLNG) (Cargo).

2. On 14 July 2014, the Respondent stated their newest vessel, the Athena (Vessel),

would be able to complete the voyage. The Claimant attached a proposed

charterparty. On 16 July 2014, the Respondent rejected the initial charterparty. The

Claimant provided an amended charterparty on 21 July 2015, which the Respondent

executed on 22 July 2014 (Charterparty).

Arrival at Hades

3. On 20 September 2014, the Vessel left Poseidon to sail to Hades. It arrived at Hades

on 3 October 2014. It was met by violent protests at the port objecting to the export

of HNLG.

4. On 3 October 2014, the Master issued the Notice of Readiness, signifying the start of

laytime. The Vessel then commenced loading the Cargo.

The Delay

5. On 7 October 2014, the Hades Government was overthrown by a military coup.

President Simmons took power. The first act of the new government was to prohibit

the export of HLNG.

6. On 7 October 2014, the Vessel was intercepted by the Hades Coast Guard and was

ordered to return to port. The Master obeyed and returned to the Port of Hades.

7. Laytime expired on 13 October 2014. On 15 October 2014, the Claimant informed

the Respondent that demurrage had begun to accrue. On 15 April 2015, the Claimant

issued an invoice for 184 days of demurrage equal to US$9.2 million. On 30 April

2

2015, the Respondent informed the Claimant that it believed the Charterparty had

been frustrated by the delay.

8. On 30 September 2015, President Simmons resigned. On 5 October 2015, the Hades

Coast Guard released the Vessel. On 6 October 2015, the Claimant issued the final

invoice for US$17.9 million in demurrage.

Release of Vessel

9. On 7 October 2015, the Vessel attempted to leave Hades. However, the Vessel had

suffered damage to its propeller shafts, which broke and immobilised the Vessel.

Hestug, a company owned by the Respondent, provided assistance to the Vessel.

Arbitration

10. On 16 November 2015, the Claimant referred its claim for demurrage to arbitration in

London under Clause 30 of the Charterparty (Arbitration Agreement). On 23

November 2015, the Respondent objected to the Tribunal’s jurisdiction. The

Respondent claimed that demurrage and frustration should be determined by the

courts of Poseidon. The Respondent also counterclaimed for salvage.

3

PART ONE: JURISDICTION

1. The Claimant argues that this Tribunal has jurisdiction to hear the merits of this

dispute because: (I) the Tribunal has the power to rule on its own jurisdiction; (II) the

Arbitration Agreement is governed by English law; (III) the Arbitration Agreement is

valid; and (IV) the Arbitration Agreement covers all the issues in dispute.

Alternatively, in the event frustration falls outside the scope of the Arbitration

Agreement: (V) this Tribunal can still determine the demurrage claim.

I. THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION

2. An arbitral tribunal has the power to decide on its own jurisdiction.1 The Claimant

argues that this Tribunal has the power to rule on its own jurisdiction.

II. THE ARBITRATION AGREEMENT IS GOVERNED BY ENGLISH LAW

3. Parties can select the law which governs their arbitral proceedings.2 Any issues not

provided for in the chosen procedural rules will be governed by the law of the seat.3

England is the seat where it is chosen as the place of arbitration.4 The legislation that

1 Arbitration Act 1996 (UK) ch 23, s 30; Christopher Brown Ltd v Genessenschaft Oesterreichisher

Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8, 12-3 (Devlin J); Texaco Overseas

Petroleum Co v Libyan Arab Republic, Preliminar Ad Hoc Award on Jurisdiction (27 November 1975) IV YB

Comm Arb 177, 179 (1979); Gary B Born, International Commercial Arbitration (Kluwer Law International,

2009) vol I, 856. 2 Arbitration Act 1996 (UK) ch 23, s 4; Braes of Doune Wind Farm (Scotland) v Alfred McAlpine Business

Services [2008] EWHC (QB) 426 (13 March 2008) [17] (Akenhead J); Peterson Farms Inc v C and M Farming

Ltd [2004] 1 Lloyd’s Rep 603, 609 (Langley J); XL Insurance v Owens Corning [2002] 2 Lloyd’s Rep 500, 506

(Toulson J); Naviera Amazonica Peruana SA v Compania Internacional De Seguros del Peru [1988] 1 Lloyd’s

Rep 116, 119 (Kerr LJ). See Arbitration Act 1996 (UK) ch 23, s 103(2); Born, above n 1, 436; Blackaby et. al,

Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed, 2009). 3 Naviera Amazonia Peruana SA v Compania Internacional de Seguros de Peru [1988] 1 Lloyd’s Rep 116, 120

(Kerr LJ). See Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd [2012] 4

SLR 837 (Woo Bih Li J); Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd [2002] 1 SLR (R) 492

(Woo Bih Li JC). 4 Arbitration Act 1996 (UK) ch 23, s 4.

4

governs international arbitration agreements in England is the Arbitration Act 1996

(UK) (AA).5

4. The Claimant argues that English law governs the arbitral procedure. England is the

seat of the arbitration.6 Therefore the AA applies. The parties have chosen the

Arbitration Rules of the Maritime Law Association of Australia and New Zealand

(MLAANZ Rules) as the procedural rules.7 The MLAANZ Rules provide that a

tribunal’s jurisdiction is derived from the relevant legislation governing the

arbitration.8 Therefore the AA governs the jurisdiction of this Tribunal.

III. THE ARBITRATION AGREEMENT IS VALID

5. An international arbitration agreement must be in writing9

and submit present or

future disputes to arbitration.10

The Claimant argues that the Arbitration Agreement

is valid because it: (A) is in writing; and (B) submits present and future disputes to

arbitration.

5 See Arbitration Act 1996 (UK).

6 The Charterparty cl 30, 45.

7 Ibid.

8 The Maritime Law Association of Australia and New Zealand Arbitration Rules (1 July 2007) s 15.

9 Arbitration Act 1996 (UK) c 23, s 5(2). See Toyota Tsusho Sugar Trading Ltd v Prolat SRL [2015] 1 Lloyd’s

Rep 344, 351-2 (Cooke J); TTMI Sarl v Statoil ASA [2011] 2 Lloyd’s Rep 220, 230 (Beatson J); Heifer

International Inc v Helge Christiansen [2007] EWHC (QB) 3015 (18 December 2007) [289] (Toulmin J); XL

Insurance v Owens Corning [2000] 2 Lloyd’s Rep 500, 508 (Toulson J). 10

Arbitration Act 1996 (UK) ch 23, s 6(1); David Wilson Homes Ltd v Survey Services Ltd (in liq) [2001]

EWCA Civ 34 (18 January 2001) [11]-[12] (Longmore J); Kruppa v Benedetti [2014] 2 Lloyd’s Rep 421, 423-4

(Cooke J); Flight Training International v International Fire Training Equipment Ltd [2004] EWHC (QB) 721

(13 February 2004) [46] (Cresswell J).

5

The Arbitration Agreement is in writing A.

6. An arbitration agreement must be in writing.11

An arbitration agreement is in writing

if it is recorded in any form.12

7. The Claimant argues that the Arbitration Agreement is in writing. On 21 July 2014,

the Claimant sent a proposed charterparty to the Respondent.13

The Arbitration

Agreement is in Clause 30 of the Charterparty.14

On 22 July 2014, the Respondent

executed the Charterparty.15

The Claimant argues that the Arbitration Agreement is

in writing because it was recorded in the Charterparty.

The Arbitration Agreement submits present and future disputes to B.

arbitration

8. An arbitration agreement must submit present or future disputes to arbitration.16

It is

sufficient for a clause to state disputes ‘shall be referred’ to arbitration.17

9. The Claimant argues the Arbitration Agreement submits present and future disputes

to arbitration. It states that ‘[a]ny dispute arising under this contract shall be referred

to arbitration’.18

Therefore the Arbitration Agreement refers present and future

disputes to arbitration.

11 Arbitration Act 1996 (UK) ch 23 s 5(2). Toyota Tsusho Sugar Trading Ltd v Prolat SRL [2015] 1 Lloyd’s Rep

344, 351-2 (Cooke J); TTMI Sarl v Statoil ASA [2011] 2 Lloyd’s Rep 220, 230 (Beatson J); Heifer International

Inc v Helge Christiansen [2007] EWHC (QB) 3015 (18 December 2007) [289] (Toulmin J); XL Insurance v

Owens Corning [2000] 2 Lloyd’s Rep 500, 508 (Toulson J). 12

UNCITRAL Model Law on International Commercial Arbitration 2006 Art 7(3). 13

Moot Problem, 27. 14

The Charterparty cl 30, 45. 15

Moot Problem, 28. 16

Arbitration Act 1996 (UK) ch 23, s 6(1). David Wilson Homes Ltd v Survey Services Ltd (in liq) [2001]

EWCA Civ 34 (18 January 2001 [11]-[12] (Longmroe J); Kruppa v Benedetti [2014] 2 Lloyd’s Rep 421, 423-4

(Cooke J); Flight Training International v International Fire Training Equipment Ltd [2004] EWHC (QB) 721

(13 February 2004) [46] (Cresswell J). 17

See Hilary Heilbron, A Practical Guide to International Arbitration in London (Informa, 2008) 16; Whiting v

Halverson [2003] EWCA Civ 403 (6 March 2003). 18

The Charterparty cl 30, 45.

6

IV. THE SCOPE OF THE ARBITRATION AGREEMENT COVERS ALL THE ISSUES IN DISPUTE

10. International arbitration agreements are presumed to refer all disputes to arbitration.19

This presumption can only be rebutted if there is clear language excluding specific

disputes from arbitration.20

The words ‘arising under’ have been interpreted as

meaning the same as ‘arising out of’.21

The words ‘arising out of’ have been

interpreted as only excluding claims that arose prior to the execution of the

contract.22

11. The Arbitration Agreement provides that ‘any dispute arising under’ the Charterparty

shall be referred to arbitration.23

The Claimant argues that the words ‘arising under’

should be interpreted as meaning the same as ‘arising out of’. Therefore the words

‘arising under’ do not demonstrate an intention to exclude frustration disputes from

arbitration.

19 Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) [19] (Longmore LJ);

Sulmerica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638 (16 May 2012) [40]

(Moore-Bick LJ); Barclays Bank plc v Nylon Capital LLP [2011] EWCA Civ 826 (18 July 2011) [27]-[28]

(Thomas LJ); Ulysses Compania Naviera SA v Huntingdon Petroleum Services (The Ermourpolis) [1990] 1

Lloyd’s Rep 160, 164 (Steyn J); Born, above n 1, 1333-4. 20

Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) [13] (Hoffman J); UBS

AG v HSH Nordbank AG [2009] 1 CLC 934, 951 [83] (Lord Collins, Ward and Toulson LJJ). 21

Fiona Trust and Holding Corp v Privalov [2007] EWCA Civ 20 (17 October 2007) [12] (Hoffman J);

Overseas Union Insurance Ltd v AA Mutual Insurance Co Ltd [1988] 2 Lloyd’s Rep 63, 192 (Evans J); Samick

Lines Co Ltd v Owners of the ‘Antonis P Lemos’ (The Antonis P Lemos’) [1985] AC 771, 727 (Hirst J). 22

Capital Trust Investment v Radio Design AB [2002] EWCA Civ 135 (15 February 2002) [50] (Clarke LJ);

Government of Gibraltar v Kenney [1956] 2 QB 410, 421-2 (Sellers J); The Eschersheim [1976] 1 WLR 430,

437-8 (Lord Diplock); Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (The ‘Playa Larga’)

[1983] 2 Lloyd’s Rep 171, 182-3 (Ackner LJ); Ethiopian Oil Seeds and Pulses Export Corp v Rio del Mar

Foods Inc [1990] 1 Lloyd’s Rep 86, 97 (Hirst J). 23

The Charterparty, cl 30, 45.

7

V. ALTERNATIVELY, IN THE EVENT THAT FRUSTRATION FALLS OUTSIDE THE SCOPE OF

THE ARBITRATION AGREEMENT THIS TRIBUNAL CAN STILL DETERMINE THE

DEMURRAGE CLAIM

12. Alternatively, in the event that frustration falls outside the scope of the Arbitration

Agreement, the Claimant argues that this Tribunal can still determine the demurrage

claim. Demurrage is provided for in Clause 10 of the Charterparty.24

Therefore

demurrage does arise under the terms of the Charterparty.

PART TWO: MERITS

13. The Claimant argues that the Respondent must pay demurrage because: (I) the

Respondent failed to ship the Cargo before laytime expired. The Respondent cannot

avoid liability for demurrage because: (II) the Charterparty has not been frustrated;

(III) the Claimant was required to comply with the orders of Hades; and (IV) the

Respondent cannot rely on the force majeure (FM) clause. Alternatively, if the

Tribunal decides that the Claimant is not entitled to demurrage: (V) the Claimant

argues that the Respondent is liable for damages for the detention of the Vessel.

I. THE RESPONDENT FAILED TO SHIP THE CARGO BEFORE LAYTIME EXPIRED

14. The Claimant argues that the Respondent is liable to pay demurrage because the

Respondent failed to ship the Cargo before laytime expired. The Respondent failed to

ship the Cargo before laytime expired because: (A) the Vessel was at the

Respondent’s disposal when laytime expired; and (B) the interception of the Vessel

was a suspension of laytime.

24 Ibid.

8

The Vessel was at the Respondent’s disposal when laytime expired A.

15. A fixed laytime clause provides for the duration of the ‘loading operation’.25

The

‘loading operation’ is the period when a charterer has disposal of a vessel.26

A

charterer has disposal of a vessel if they have the power to direct the vessel for the

purposes of loading.27

A vessel that is within a loading port is at the charterer’s

disposal.28

Demurrage accrues if a charterer fails to load and release the vessel within

the fixed laytime period.29

16. Laytime expired on 13 October 2014.30

The Vessel was within the Port of Hades on

13 October 2014.31

The Port of Hades is the loading port.32

Therefore the Vessel was

at the Respondent’s disposal when laytime expired. .

The interception of the Vessel was a suspension of laytime B.

17. A suspension is a temporary interruption to laytime.33

A suspension extends laytime

to recover the time lost due to the interruption.34

A suspension of laytime must be

25 William Alexander and Sons v Aktieselskabet Dampskabet Hansa and others (1919) 25 CC 13, 15 (Lord

Hunter); Postlethwaite v Freeland (1880) 5 App Cas 599, 608 (Lord Selbourne); John Schofield, Laytime and

Demurrage (LLP, 7th

ed, 2016) [6.19]; John F Wilson, Carriage of Goods by Sea (Pearson Longman, 6th

ed,

2008) 70; Michael White, Australian Maritime Law (The Federation Press, 3rd

ed, 2014) [3.3.3.1]. 26

Oldendorff (EL) & Co GmbH v Tradax Export SA [1974] AC 479, 495 (Buckley LJ); Leonis Steamship Co

Ltd v Rank Ltd [1908] 1 KB 499, 521-2 (Kennedy LJ). 27

Oldendorff (EL) & Co GmbH v Tradax Export SA [1974] AC 479, 548 (Viscount Dilhorne); Leonis Steamship

Co Ltd v Rank Ltd [1908] 1 KB 499, 505(Channell J); Sailing Ship Garston Co v Hickie (1885) 15 QBD 580,

595 (Bowen LJ). 28

Leonis Steamship Co Ltd v Rank Ltd [1908] 1 KB 499, 512 (Buckley J); Brown v Johnson (1842) 10 M and

W 331, 333 (Lord Abinger). 29

Inverkip Steamship Co Ltd v Bunge and Co [1917] 2 KB 193, 200-201 (Scrutton LJ); Navico AG v Vrontados

Naftiki Etairia PE [1968] 1 Lloyd’s Rep 379, 383 (Donaldson J); Oldendorff (EL) & Co GmbH v Tradax Export

SA [1974] AC 479, 520 (Viscount Dilhorne); Julian Cooke et al, Voyage Charterparties (Informa Law, 4th

ed,

2007) 449; Hugo Tiberg, The Law of Demurrage (Stevens and Sons, 2nd

ed, 1978) 567; Dias Compania Naviera

SA v Louis Dreyfus Corporation (‘The Dias’) [1978] 1 Lloyd’s Rep 325, 328 (Lord Diplock); Phillip Bush

‘Delay and Detention’ (2001) 25 Tulane Maritime Law Journal 441; Grant v Coverdale (1884) 9 App Cas 470,

475-6 (Selbourne LC). 30

Moot Problem, 60. 31

Ibid. 32

The Charterparty, box 5.

9

provided for in a laytime exclusion clause.35

Exclusion clauses are interpreted strictly

and objectively.36

The Charterparty provides for a suspension of laytime if goods are

delayed in transit.37

Transit is defined as the movement of goods from one point to

another.38

18. Clause 9(e) is a laytime exclusion clause.39

It provides that laytime will be suspended

in the event of ‘delay or stoppage of goods in transit’.40

The Vessel sailed on 7

October 2014.41

The Vessel was intercepted by the Hades Coast Guard42

and returned

to berth on the same day.43

When the Vessel sailed on 7 October 2014 it was en route

to deliver the Cargo to Poseidon.44

Therefore, the Claimant argues that the period

between the Vessel’s departure and return was a suspension to laytime.

33 Compania Naviera Aeolus SA v Union of India (‘The Spalmatori’) [1964] AC 868, 883 (Lord Cohen);

William Alexander and Sons v Aktieselskabet Dampskabet Hansa (1919) 25 CC 13, 15 (Lord Hunter). See Cero

Navigation Corporation v Jean Lion and Cie (‘The Solon’) [2000] 1 Lloyd’s Rep 292 (Thomas J). 34

See Gem Shipping Co of Monrovia v Babanaft (Lebanon) SARL (‘The Fontevivo’) [1975] 1 Lloyd’s Rep 339,

343(Donaldson J); Compania Naviera Aeolus SA v Union of India (‘The Spalmatori’) [1964] AC 868, 883 (Lord

Reid, Lord Cohen, Lord Morris, Lord Hodsson , Lord Guest); Cero Navigation Corporation v Jean Lion and

Cie (The ‘Solon’) [2000] 1 Lloyd’s Rep 292, 295 (Thomas J). 35

Compania Naviera Aeolus SA v Union of India (‘The Spalmatori’) [1964] AC 868, 899 (Lord Guest); Cero

Navigation Corporation v Jean Lion and Cie (‘The Solon’) [2000] 1 Lloyd’s Rep 292, 293 (Thomas J); Inverkip

Steamship Company, Limited v Bunge and Co [1917] 2 KB 193, 198 (Warrington LJ). 36

ED and F Man Sugar Ltd vs Unicargo Transportgesellschaft mbH (‘The Ladytramp’) [2012] 2 Lloyd’s Rep

660, 664 (Eder J); Davis v Pearce Parking Station Pty Ltd (1954) 91 CLR 642, 649 (Dixon CJ McTiernan,

Webb, Fullager, Kitto JJ). 37

The Charterparty, cl 9(e), 35. 38

Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR

226, [18] (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ). 39

The Charterparty cl 9(e), 10. 40

Ibid. 41

Moot Problem, 55. 42

Ibid. 43

Ibid, 63. 44

The Charterparty, box 9, 29.

10

II. THE CHARTERPARTY HAS NOT BEEN FRUSTRATED

19. The doctrine of frustration applies to voyage charterparties.45

A contract is frustrated

when an event renders performance radically different from what the parties

originally contemplated.46

However, frustration can be decided before performance

becomes radically different.47

This occurs if a reasonable businessperson would

consider the event likely to render performance radically different.48

A frustrating

event cannot be induced by either party.49

Frustration automatically discharges the

parties of their future contractual obligations.50

20. Delay alone is not sufficient to invoke frustration.51

Frustration requires

consideration of all the facts.52

Despite the delay, the Claimant argues that the

45 See DGM Commodities Corp v Sea Metropolitan SA (‘The Andra’) [2012] EWHC (QB) 1984 (18 July 1984)

(Hurley J); Pioneer Shipping Ltd v BTP Tioxide Ltd (‘The Nema’) [1982] AC 734 (Lord Diplock, Lord

Tullybelton, Lord Russell, Lord Kinkell and Lord Roskill); Meredelanto Compania Naviera SA v Bergbau-

Handel Gmbh (‘The Mihalis Angelos’) [1970] EWCA Civ 4 (Lord Denning MR, Edmund Davies and Megaw

LJJ); Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226 (Lord Denning MR). 46

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 357 (Mason J);

Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143, 160 (Stephen J); Qantas Airways Ltd v

Christie (1998) 193 CLR 280, 394 (Gaudron J); Tongue v Council of the City of Tamworth [2004] FCA 209 (23

March 2004) [61] (Jacobson J); Nelson v Moorcraft [2014] WASCA 212 (13 November 2014) [128] (Buss JA). 47

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 184 (Latham CJ); Penrith District Rugby League

Football Club Ltd v Fittler (NSWSC, 8 February 1996, Santow J, unreported) [173]-[174]; National Carriers

Ltd v Panalpina (Northern) Ltd [1981] AC 675, 706 (Lord Simon). 48

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 184 (Latham CJ); Penrith District Rugby League

Football Club Ltd v Fittler (NSWSC, 8 February 1996, Santow J, unreported) [173]-[174]; National Carriers

Ltd v Panalpina (Northern) Ltd [1981] AC 675, 706 (Lord Simon). 49

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 186 (Latham CJ); Codelfa Construction Pty Ltd v

State Rail Authority of New South Wales (1982) 149 CLR 337, 357 [40] (Mason J); In Marriage of Cawthorn

(1998) 144 FLR 225, 265 (Ellis, Lindenmayer and Joske JJ). 50

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 407 (Mason J);

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 203 (McTiernan J); Firth v Halloran (1926) 38

CLR 251, 266 (Higgens J); Re Continental C and G Rubber Co Pty Ltd (1919) 27 CLR 194, 201 (Knox CJ and

Barton J). 51

Edwinton Commercial Corporation v Tsavliris Tuss (Worldwide Salvage and Towage) Ltd (‘The Sea Angel’)

[2007] EWCA Civ 547 (12 June 2007) [110]-[111] (Rix LJ); Bunge SA v Kyla Shipping Co Ltd [2012] 2 CLC

998, 1012 [40] (Flaux J); Islamic Shipping Lines v Steamship Mutual Underwriting Association (Bermuda) Ltd

[2010] 2 CLC 534, 571 [110] (Beatson J). 52

Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143, 162-3 (Stephen J); Codelfa

Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 380 (Mason J); Tongue v Council of

the City of Tamworth [2004] FCA 209 (23 March 2004) [61] (Jacobson J); Nelson v Moorcraft [2014] WASCA

212 (13 November 2014) [128] (Buss JA); City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR

146, 164 [65] (Ipp JA).

11

Charterparty has not been frustrated because: (A) the commercial purpose of the

Charterparty can still be fulfilled; and (B) the parties foresaw the delay.

The commercial purpose of the Charterparty can still be fulfilled A.

21. A contract will not be frustrated if the commercial purpose can still be fulfilled.53

The

commercial purpose is the common reason that the parties entered into the contract.54

Identifying the commercial purpose is a matter of construction.55

22. The Claimant argues that the commercial purpose of the Charterparty can still be

fulfilled because: (a) the commercial purpose of the Charterparty is limited to the

transport of the Cargo; and (b) the Cargo can still be transported to Poseidon.

Alternatively, if the commercial purpose includes transport within a reasonable time,

the Charterparty remains in force because: (c) the Respondent has not been deprived

of the ‘whole benefit’ of contracting.

a. The commercial purpose of the Charterparty is limited to the transport of the

Cargo

23. The Claimant argues that the commercial purpose of the Charterparty is limited to the

transport of the Cargo because: (i) the express terms of the Charterparty focus on

transport; (ii) time is not of the essence; and (iii) the surrounding circumstances

demonstrate that the transport of the Cargo was the commercial purpose.

53 Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143, 162-3 (Stephen J); Scanlan's New

Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 176 (Latham CJ, McTiernan and Williams J); In Marriage of

Cawthorn (1998) 144 FLR 255, 262 (Ellis, Lindenmayer and Joske JJ). 54

Jackson v Union Marine Insurances Co Ltd (1874) LR 10 CP 125, 130 (Cleasby and Bramwell BB);

Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 179 (Stephen J); Empresa Exportadora de Azucar v

Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd’s Rep 171, 189 (Ackner LJ). 55

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 351 (Mason J); Mount

Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 89 ALJR 990, 1006-7 [108] (Kiefel and Keane JJ);

Eighty-Second Agenda Pty Ltd v Handberg [2015] FCA 1136 (26 October 2015) [40] (Middleton J).

12

i. The express terms of the Charterparty focus on transport

24. Words in a contract are construed according to their ordinary and objective

meaning.56

The parol evidence rule restricts the tribunal’s reference to extrinsic

evidence.57

25. The Charterparty states that the Cargo was to be loaded at Hades58

and transported to

Poseidon.59

The Claimant argues that the express terms of the Charterparty focus on

the transport of the Cargo.

ii. Time is not of the essence

26. Time is of the essence when a contract includes time as a condition.60

A term is a

condition when it goes to the root of a contract.61

Performance within a ‘reasonable

time’ will only be a condition if it is expressly stated as such.62

27. Clause 1 of the Charterparty states that the voyage must be completed at a ‘reasonable

speed’.63

The Charterparty does not expressly state that this clause is a condition.

Therefore time is not of the essence.

56 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40] (Gleeson CJ, Gummow, Hayne,

Callinan and Heydon JJ); Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 461-2 [22] (Gleeson CJ,

Gummow, Hayne, Callinan and Heydon JJ); Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry

Employees Union (No 2) [2016] FCA 2 (4 January 2016) [115] (Buchanan J); Privatbrauerei Erdinger

Weißbräu Werner Brombach GMBH v World Brands Australia Pty Ltd [2016] WASC 9 (14 January 2016) [20]

(Acting Master Gething). 57

Bacchus Marsh Concentrated Milk Co Ltd v Joseph Nathan and Co Ltd (1919) 26 CLR 410, 451-2 (Isaacs,

Higgens and Gavan Duffy JJ); Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 417, 482-3

[35] (Gleeson CJ, McHugh, Kirby and Callinan JJ); B and B Constructions (Aust) Pty Ltd v Brian A Cheeseman

and Asssociates Pty Ltd (1994) 25 NSWLR 227, 243 (Mahoney JA). 58

The Charterparty, box 5, 29. 59

Ibid, box 9, 29. 60

Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 554 (Mason J); Friedlander v The Bank of

Australasia (1909) 9 CLR 85, 99 (O’Connor J); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd

166 CLR 623, 628 [16] (Mason CJ); Earnshaw v Gorman and Sons Pty Ltd [2001] WASCA 50 (28 February

2001) [26] (Malcolm CJ). 61

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 431 (Stephen, Mason and Jacobs JJ);

Shevill v Builders Licensing Board (1982) 149 CLR 620, 636 (Wilson J); Stoker v Picken 209 FCR 132, 141-2

[41] (Dowsett J); Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202 (21 June 2012) [546]

(Kenneth Martim J); Douglas v Cicirello [2006] WASCA 226 (8 August 2006) [13] (Steytler P). 62

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 430-1 (Stephen, Mason and Jacobs JJ);

Earnshaw v Gorman and Sons Pty Ltd [2001] WASCA 50 (28 February 2001) [26] (Malcolm CJ); Douglas v

Cicirello [2006] WASCA 226 (8 August 2006) [15] (Steytler P).

13

iii. The surrounding circumstances demonstrate that the transport of the Cargo was

the commercial purpose

28. Extrinsic evidence of circumstances prior to the execution of a contract is

admissible.64

This includes pre-contractual negotiations.65

29. On 1 July 2014, the Respondent requested a LNG tanker capable of transporting the

Cargo from Hades to Poseidon.66

This was the Respondent’s reason for entering into

the Charterparty. Therefore the commercial purpose of the Charterparty was to

transport the Cargo from Hades to Poseidon.

b. The Cargo can still be transported to Poseidon

30. A contract will not be frustrated if the commercial purpose of the contract can still be

achieved.67

31. The commercial purpose of the Charterparty is to transport the Cargo from Hades to

Poseidon.68

Transport within a reasonable time does not form part of the commercial

purpose. The Vessel was detained in Hades with the Cargo.69

The Vessel can still

deliver the Cargo to Poseidon.

63 The Charterparty, cl 1, 31.

64 Australia and New Zealand and Banking Group Ltd v Manasseh [2015] WASC 34 (2 February 2015) [158]

(McKechnie J); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 325 ALR 188, 198 [48]

(French CJ, Nettle and Gordon J); Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR

337, 352 (Mason J); DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 439 (Stephen, Mason

and Jacobs JJ). 65

Australia and New Zealand and Banking Group Ltd v Manasseh [2015] WASC 34 (2 February 2015) [158]

(McKechnie J); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 325 ALR 188, 198 [48]

(French CJ, Nettle and Gordon J); Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR

337, 352 (Mason J). 66

Moot Problem, 2. 67

Brisbane City Council v Group Projects Ltd (1979) 145 CLR 143, 158 (Stephen J); Scanlan's New Neon Ltd v

Tooheys Ltd (1943) 67 CLR 169, 176 (Latham CJ, McTiernan and Williams JJ); In Marriage of Cawthorn

(1998) 144 FLR 255, 262 (Ellis, Lindenmayer and Joske JJ); Ardee Pty Ltd v Collex Pty Ltd [2001] NSWSC

836 (28 September 2001) [52] (Palmer J). 68

See above, Part II(A)(a). 69

Moot Problem, 65.

14

c. Alternatively, if the commercial purpose includes transport within a reasonable

time, the Charterparty remains in force because the Respondent has not been

deprived of the ‘whole benefit’ of contracting

32. A contract will be frustrated where parties lose the ‘whole benefit’ of contracting.70

A

contract will not be frustrated merely because the parties did not receive all the

expected benefits of a contract.71

33. The Vessel and the Cargo have been released after a 358 day delay.72

The Vessel can

still transport the Cargo to Poseidon. The Claimant accepts that ‘reasonable time’ has

expired. Transport of the Cargo from Hades to Poseidon is a benefit of the contract.

The Respondent has not been deprived of the ‘whole benefit’ of contracting because

the Cargo can still be transported.

The parties foresaw the delay B.

34. A contract may be frustrated where the parties foresee a risk.73

A frustrating event is

foreseen if it is provided for in a contract.74

The clause must outline the position of

70 Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 230 (Latham CJ); Amann Aviation Pty Ltd v

Commonwealth (1990) 22 FCR 527, 532 (Davies J); Smith v Regional Development Australia Murraylands and

Riverland Inc [2015] SADC 11 (11 November 2014) [109] (Millsteed J); JP Swanton ‘The Concept of Self-

Induced Frustration’ (1990) 2 JCL 206, 206-7. 71

Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 185 (Latham CJ); Davis Contractors Ltd v

Fareham UDC [1956] AC 696, 715 (Lord Radcliffe); Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha

Ltd [1962] 2 QB 26, 66 (Diplock LJ); N C Seddon, R A Bigwood with M P Ellinghaus, Cheshire and Fifoot

Law of Contact (LexisNexis Butterworths, 2012, 10th

ed) 1008. 72

Moot Problem, 71. 73

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 359 (Mason J); Scanlan’s

New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 222-3 (Williams J); Coomera Resort Pty Ltd v Kolback

Securities Ltd [1998] QSC 20 (20 February 1998) [49] (Fitzgerald P, McPherson JA and Mackenzie J); Alanbert

Pty Ltd v Bulevi Pty Ltd [2000] NSWSC 261 (6 April 2000) [45] (Hamilton J). 74

Ocean Tramp Tankers Corp v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226, 239 (Lord Denning). See

Ringstad v Gollin and Co Pty Ltd (1924) 35 CLR 303 (Knox CJ, Isaacs and Starke JJ); Claude Neon Ltd v

Hardie [1970] QB R 93 (Hardie, Wanstall, Lucas and Campbell JJ).

15

the parties if the event occurs.75

A broad clause should be interpreted as foreseeing a

wide variety of situations.76

A demurrage clause evidences that the parties foresaw

delays during loading.77

35. Clause 10 of the Charterparty provides for demurrage.78

This is a broad clause, which

states that the Respondent will be liable to pay demurrage if laytime is exceeded.79

The Claimant argues that Clause 10 contemplates that the Respondent may exceed

laytime. Therefore delays during loading were foreseen by the parties.

III. THE CLAIMANT WAS REQUIRED TO COMPLY WITH THE ORDERS OF HADES

36. The Claimant argues that it was required to comply with the orders of Hades because:

(A) Hades is the coastal state; and in any event (B) Hades was the flag state.

Hades is the coastal state A.

37. A coastal state is a state with jurisdiction over activities taking place within its

waters.80

Hades has sovereign rights to protect its environment out to the end of its

Exclusive Economic Zone.81

Hades’ Exclusive Economic Zone extends outwards for

75 Thors v Weekes (1989) 92 ALR 131, 142 (Gummow J); Ange v First East Auction Holdings Pty Ltd (2011)

284 ALR 638, 652 (Sifris AJA); Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (‘The

Playa Larga’) [1983] 2 Lloyd’s Rep 171, 188 (Ackner LJ). 76

Thors v Weekes (1989) 92 ALR 131, 142 (Gummow J); Ange v First East Auction Holdings Pty Ltd (2011)

284 ALR 638, 652 (Sifris AJA); Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 (6 July 2012)

[105] (Cowdroy J). 77

See Budgett and Co v Binnington and Co [1891] 1 QB 35 (Lord Esher, Lindley and Lopes LJJ). 78

The Charterparty, cl 10, 36. 79

Ibid. 80

United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 art 220. 81

United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 Part 2 art 2. See also Seas

and Submerged Lands Act 1973 (Cth) pt II div 1A s 10A.

16

200 Nautical Miles from its baseline.82

A vessel is obliged to comply with orders

given by the coastal state.83

38. The Vessel was loading within Hades.84

The Respondent shipped cargo that

contravened the local Hades law.85

Therefore, Hades exercised its sovereign right

over a vessel within its waters. The Claimant argues that the Vessel was required to

comply with the orders of the Hades Coast Guard because it was within Hades’

waters.

In any event, Hades was the flag state B.

39. A nation has exclusive jurisdiction over a vessel if it is flagged to that particular

nation.86

A vessel is bound by the laws of its flag state87

regardless of its location.88

A vessel must comply with the orders of its flag state.89

40. On 7 October 2014 the Vessel was intercepted by the Hades Coast Guard.90

The

Vessel was ordered to return to port because it was carrying banned cargo.91

The

Coast Guard acted under the authority of the Hades government.92

The Vessel was

82 United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 art 55, 57; Seas and

Submerged Lands Act 1973 (Cth) pt I div1A s10B. 83

Anne Bardin, ‘Coastal State’s Jurisdiction over Foreign Vessels’ (2002) 14(1) Pace International Law Review

27, 41; Yvonne Baatz et al Maritime Law (Sweet and Maxwell 2nd

ed, 2011) 380. 84

Moot Problem, 51. 85

Ibid, 55. 86

Anne Bardin, ‘Coastal State’s Jurisdiction over Foreign Vessels’ (2002) 14(1) Pace International Law Review

27, 49; Camille Goodman ‘The Regime for Flag State Responsibility in International Fisheries Law- Effective

Fact, Creative Fiction, or Further Work Required?’ (2009) 23 Australian and New Zealand Maritime Law

Journal 158. 87

United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 art 82; R v Anderson

(1868) LR 1 CCR 161, 169 (Blackburn J). 88

United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 art 82; R v Anderson

(1868) LR 1 CCR 161, 169 (Blackburn J). See Saudi Arabia v Arabian American Oil Company (1963) 27

International Law Rep 117 (Award by Sauser-Hall, Badawi/Hassan, Habachy). 89

Bardin, above n 86, 51. 90

Moot Problem, 55. 91

Ibid, 62. 92

Ibid, 55.

17

carrying the Hades flag.93

Therefore Hades was the flag state of the Vessel. The

Vessel was bound to follow the orders of the Coast Guard. Therefore the Claimant

was required to comply with the orders of Hades.

IV. THE RESPONDENT CANNOT RELY ON THE FM CLAUSE

41. A FM clause exempts parties from liability if a specified supervening event occurs.94

The Claimant argues that the Respondent cannot rely on the FM clause because (A)

government intervention is not a specified FM event. Alternatively: (B) the FM event

was induced by the Respondent.

Government intervention is not a specified FM event A.

42. Words in a FM clause are assigned their natural and ordinary meaning read in light of

the contract as a whole.95

Courts must ‘give effect to the intentions of the contracting

parties’ when construing a contract.96

43. Clause 19 of the Charterparty is a FM clause.97

Clause 19 does not list government

interventions as a FM event.98

On 7 October 2014, the Vessel was detained by the

Hades Government.99

This detention caused delay.100

The Claimant argues that the

93 Moot Problem, 3.

94Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, 328 [67] (Ralph Gibson LJ). See

Bremer Handelsgesellschaft mbH v C Mackprang Jr [1979] 1 Lloyd’s Rep 221 (Lord Denning, Stephenson LJ,

Shaw LJ); PJ van der Zijden Wildhandel NV v Tucker& Cross Ltd [1975] 2 Lloyd’s Rep 240 (Donaldson J). 95

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500, 510 (Mason, Wilson, Brennan,

Deane, and Dawson JJ); Woodlawn Capital Pty Ltd v Moto Vehicles Insurance Ltd) [2016] NSWCA 28 (08

March 2016) [185] (Gleeson JA). 96

Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (30 March 2016) [23] (Buchanan J); Homburg

Houtimport B.V. v Agrosin Private Ltd (‘The Starsin’) [2004] 1 AC 715, 737 (Lord Steyn). 97

The Charterparty, cl 19, 39-41. 98

Ibid. 99

Moot Problem, 55. 100

Ibid, 71.

18

Respondent cannot rely on Clause 19 to escape liability because government

intervention is not a specified FM event.

44. Further, the Claimant expressed that it normally contracts on a ShellLNGTime 1

Charterparty.101

ShellLNGTime 1 refers to a series of exceptions excusing liability in

the event of ‘restraint of princes, rulers or people’.102

The Claimant argues that the

Charterparty provides a comprehensive list of FM events.103

It does not incorporate

terms similar to ShellLNGTime 1. This is evidence that the parties did not intend to

excuse liability for other events that are usually contained in standard term

charterparties. Therefore the Respondent cannot rely on the FM clause as government

intervention is not a specified FM event.

Alternatively the FM event was induced by the Respondent B.

45. A contract cannot be discharged by an event that has been brought about by the

actions of one of the parties.104

If a charterer induces a FM event they cannot rely on

a FM clause to escape liability.105

46. The Hades Government banned the export of the Cargo.106

Despite this, the

Respondent still shipped the Cargo. 107

The Hades Coast Guard detained the Vessel to

prevent it from exporting banned cargo.108

The Government’s actions were in

101 Ibid, 3.

102Fate Offshore, Sample copy ShellLNGTime 1 (November 2005) Fate Offshore.com

<http://fateoffshore.com/wp-content/uploads/2014/10/Sample-Copy-SHELLLNGTIME-1.pdf>. 103

The Charterparty, cl 19, 39-41. 104

Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 186 (Latham CJ). 105

Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd (2006) 236 ALR 115, 130 (Kiefel J);

AGL Sales (QLD) Pty Ltd v Dawson Sales Pty Ltd [2009] QCA 262 (4 September 2004) [284] (Chesterman JA).

See Plainmar Ltd v Water Trading Co Ltd (1945) 72 CLR 304 (Rich, Dixon and McTiernan JJ). 106

Moot Problem, 65. 107

See above Part II(B). 108

Moot Problem, 68.

19

response to the Respondent’s attempt to ship the banned cargo. Therefore the

Respondent cannot rely on the FM clause because the FM event was self-induced.

V. ALTERNATIVELY, IF THE TRIBUNAL DECIDES THAT THE CLAIMANT IS NOT

ENTITLED TO DEMURRAGE, THE RESPONDENT IS LIABLE FOR DAMAGES FOR THE

DETENTION OF THE VESSEL

47. A charterer is liable for loss caused by shipping dangerous cargo.109

The Vessel’s

ETD at Poseidon was 30 October 2014 +/- 3 days.110

The Vessel was delayed for 358

days until 5 October 2015.111

The Claimant argues that the Respondent is liable for

damages for the Claimant’s loss of use of the Vessel because: (A) the Cargo carried a

greater risk of detention than ordinary cargo; and (B) the Claimant had no knowledge

of the risk.

The Cargo carried a greater risk of detention than ordinary cargo A.

48. Cargo is deemed dangerous when it exposes a vessel to a risk of loss or damage.112

Cargo that carries a greater risk of detention or delay is treated as dangerous cargo.113

49. In Mitchell Cotts v Steel Bros and Co Ltd114

a vessel carrying rice was detained. The

charterer did not obtain permission to import the cargo.115

The rice carried a greater

risk of detention due to the failure to obtain permission and was therefore considered

109 Mitchell, Cotts and Co v Steel Bros and Co Ltd [1916] 2 KB 610, 614 (Atkin J); Effort Shipping Co Ltd v

Linden Management SA [1998] AC 605, 618-9 (Lord Berwick); The Athanasia Comninos [1990] 1 Lloyd’s Rep

277, 283-4 (Mustill J). 110

Moot Problem, 2. 111

Ibid, 70. 112

Mitchell, Cotts and Co v Steel Bros and Co Ltd [1916] 2 KB 610, 614 (Atkin J); Effort Shipping Co Ltd v

Linden Management SA [1998] AC 605, 618-9 (Lord Berwick); The Athanasia Comninos [1990] 1 Lloyd’s Rep

277, 283-4 (Mustill J). 113

Mitchell, Cotts and Co v Steel Bros and Co Ltd [1916] 2 KB 610, 614 (Atkin J); Effort Shipping Co Ltd v

Linden Management SA [1998] AC 605, 618-9 (Lord Berwick). 114

[1916] 2 KB 610 (Atkin J). 115

Mitchell, Cotts and Co v Steel Bros and Co Ltd [1916] 2 KB 610, 614 (Atkin J).

20

to be dangerous cargo.116

The charterer was held liable for the loss incurred by the

shipowner for shipping this cargo.117

50. When the Vessel arrived at Hades on 3 October 2014, there were violent protests in

response to the proposed export of HLNG.118

The Hades Government banned the

export of HLNG.119

The Government detained the Vessel to prevent the export of the

Cargo120

The Claimant argues that the Cargo was dangerous.

The Claimant had no knowledge of the risk B.

51. A charterer must notify the shipowner if the cargo carries a greater risk of delay than

ordinary cargo.121

A charterer will be liable for any loss incurred from the delay if

they fail to notify the shipowner of this risk.122

In any event, the charterer will be

liable even if neither party is aware of the risk of delay or detention.123

52. On 3 October 2014, violent protests occurred at the Port of Hades in response to the

proposed export of the Cargo.124

The Respondent is an exporter of HLNG in

Hades.125

The Claimant operates a Vessel from Poseidon.126

On 3 October 2014, the

116 Ibid.

117 Ibid.

118 Moot Problem, 52-4.

119 Ibid, 55.

120 Ibid, 60.

121Micada v Texim [1968] 2 Lloyd’s Rep 57, 60 (Donaldson J); Mitchell, Cotts and Co v Steel Bros and Co Ltd

[1916] 2 KB 610, 611 (Atkin J); Effort Shipping Co Ltd v Linden Management SA [1998] AC 605, 618-9 (Lord

Berwick). 122

Brass v Maitland (1856) 26 LJQB 49, 50 (Campbell CJ); Bamfield v Goole and Sheffield Transport [1910] 2

KB 94, 103 (Vaughn Williams LJ). 123

Brass v Maitland (1856) 26 LJQB 49, 50 (Campbell CJ); Mitchell, Cotts and Co v Steel Bros and Co Ltd

[1916] 2 KB 610, 614 (Atkin J); The Athanasia Comninos [1990] 1 Lloyd’s Rep 277, 282 (Mustill J). 124

Moot Problem, 54. 125

Ibid, 26. 126

Ibid, 2.

21

Master emailed the Claimant and said that protests had occurred at the port.127

The

export of HLNG was banned on 7 October 2014.128

53. The Claimant argues that the Respondent did not notify the Claimant of the possibility

of the significant risk of detention. The Respondent did not inform the Claimant that

the export was banned. The Claimant argues that it had no means of knowing that the

Cargo carried a risk of detention. Therefore, regardless of whether the Respondent

was aware of the risk of detention, the Respondent is liable for the delay in attempting

to ship dangerous goods.

PART THREE: SALVAGE

54. The Claimant argues that the Respondent is not entitled to a salvage award because:

(I) the service rendered was a continuation of the towage service; and (II) the Vessel

was not in danger.

I. THE SERVICE RENDERED WAS A CONTINUATION OF THE TOWAGE SERVICE

55. Salvage is awarded where a party saves property without an existing obligation.129

Salvage can only be granted if the service provided exceeds what is normally

expected.130

56. The Respondent was required to provide tugs and tow the Vessel to open waters.131

The Respondent towed the Vessel from the Port of Hades to open waters.132

When

127 Ibid, 54.

128 Ibid, 55.

129 The Cartela v The Inverness Shire (1916) 21 CLR 387, 404 (Issacs J); The Minnehaha (1869) 167 E R 149

[335] (Lord Kingsdown). 130

International Convention on Salvage 1989 art 17; The Minnehaha (1869) 167 E R 149 [335] (Lord

Kingsdown); The Sellasia [1926] 26 Ll L Rep 26, 28 (Gardiner J), The Liverpool [1893] P 154, 159 (Gorel

Barnes J). See The Kingalock (1854) 164 ER 153 (Dr Lushington), The Westbourne (1889) 14 PD 132 (Lord

Esher, Lindley MR, Bowen LJ); The Marechal Suchet [1971] P1 (Samuel Evans P). 131

Moot Problem, 68. 132

Ibid.

22

the towlines were released, the Vessel’s propeller shafts broke.133

The Respondent’s

tugs reconnected the towlines and returned the Vessel to the Port of Hades.134

Reconnecting towlines is normally expected when performing towage services.

Therefore the Respondent is not entitled to a salvage award because towing the Vessel

was a continuation of the towage agreement.

II. THE VESSEL WAS NOT IN DANGER

57. The Claimant argues that the Respondent is not entitled to a salvage award because:

(A) there was no danger; and in any event (B) the Respondent must satisfy a higher

degree of danger because it is a tug operator.

There was no danger A.

58. Danger is required for salvage to be awarded.135

Danger may arise when there is a

supervening event.136

Where a supervening event causes a vessel to become

immobile, it is not necessarily in danger.137

59. The Vessel’s propeller shafts broke after the Vessel departed Hades.138

The Vessel

became immobile.139

The Vessel was in clear, open waters.140

The tugs were in close

proximity and could assist the Vessel.141

The only detriment to the Vessel was its

133 Ibid, 71.

134 Ibid, 71.

135 International Convention on Salvage 1989 art 1(a). See The Owners and/or Demise Charterers of the Tug

‘Sea Tractor’, Her Master, Officers and Crew v The Owners of the Ship ‘Tramp’ (2007) WL 261207 [19]; The

Princess Alice (1849) 3 W Rob 138 (Dr Lushington). 136

The Minnehaha (1869) 167 E R 149 [335] (Lord Kingsdown). See The Whippingham [1934] 48 Ll L Rep 49

(Bateson J); The White Star 1865-67 LR 1 (Bateson J). 137

The Troilus and The Glenogle [1951] AC 820, 830 (Lord Potter). 138

Moot Problem, 71. 139

Ibid. 140

Ibid. 141

Ibid.

23

immobilisation. There was no danger to the Vessel because it was in open waters and

had tugs standing by. Therefore the Vessel was not in danger.

In any event, the Respondent must satisfy a higher degree of danger because B.

it is a tug operator

60. To claim salvage, tug operators must prove that there was a higher degree of danger

or that they displayed a special skill.142

A salvor is not entitled to an award if the

service they performed was no more difficult or dangerous than that normally

undertaken in the course of their business.143

61. The Respondent operates ‘Hestug’, a recognised tug business in the Port of Hades.144

Hestug towed the Vessel back to Hades after it became immobile.145

Hestug provided

a service that was within their skill and knowledge. Therefore the Respondent cannot

prove that the salvage operation involved a sufficient degree of danger that met the

threshold required for a professional tug operator.

142 The Sellasia [1926] 26 Ll L Rep 26, 29 (Gardiner J); The Gorlitz [1917] P 233, 234 (The President).

143 Akerblom v Price (1881) 7 QBD 129, 132 (Brett LJ).

144 Moot Problem, 26.

145 Ibid.

24

PRAYER FOR RELIEF

For the reasons set out above, the Claimant requests this Tribunal to:

(I) DECLARE that this Tribunal has jurisdiction to hear the merits of this dispute;

(II) FIND that the Charterparty has not been frustrated;

(III) FIND that the Respondent is liable to pay demurrage; or

(IV) FIND that the Respondent is liable for the delay; and therefore

(V) AWARD the Claimant the sum of US$17.9 million with interest on the amounts

claimed; and further

(VI) DECLARE that the Respondent is not entitled to a salvage award.