INTERNATIONAL MARITIME LAW ARBITRATION MOOT
30 June- 05 July 2019 Rotterdam
MEMORANDUM FOR CLAIMANT
University of Hamburg
Team No. 19
Theresa Bardenhewer; Christin Sörnsen; Eliane Wolf; Laura Meyer
I MEMORANDUM FOR CLAIMANT
TABLE OF CONTENTS
Table of Abbreviations……………………………………………………………………….II
Table of Authorities…………………………………………………………………………III
Relief Sought …………………………………………………………………………………1
Submissions…………………………………………………………………………………...2
Statement of Facts (para. 1 - 3)……………………...………………………………………..2
Submissions on Jurisdiction (para. 4. - 8.)……………………...…………………………....3
Submissions on the Merits of the Claim ……………………...…………………………….4
9. Underwater Cleaning……………………...………………………………………………...4
10. Late Re-delivery……………………...…………………………………………………....8
Submissions of the Merits of the Counterclaim…………...………………………………11
11. Statement of Facts…………...…………………………………………………….…...…11
12. Cargo Claim………………….…………….…………….…………….……………....…11
13. Off Hire…………….…………….…………….…………….……….…….…………….16
Arbitration Costs and Fees (para. 14. -15.)...………….…………….…………………..…18
II MEMORANDUM FOR CLAIMANT
TABLE OF ABBREVIATIONS
cl. clause
Comm Commercial Court
DLOSP 1SP Dropping Off Last Sea Pilot
ed. editor
et seq. et sequens (and the following one or ones)
EWHC High Court of England and Wales
ICA Inter Club Agreement
INC Incorporated
J. Justice
Lloyd’s Rep. Lloyd’s Law Report
LMAA London Maritime Arbitrators Association
LMLN Lloyd's Maritime Law Newsletter
Ltd. Limited
M.R. Master of the Rolls
M/V Motor Vessel
NYPE New York Produce Exchange
OMS Organización Mundial de la Salud
P. & I. Protection and Indemnity
para. paragraph
QC Queen's Counsel
III MEMORANDUM FOR CLAIMANT
sec. section
TCC Technology and Construction Court
UK United Kingdom
USD US Dollar
WHO World Health Organisation
WOG Without Guarantee
TABLE OF AUTHORITIES
Statutes and Treaties
para.
Arbitration
Act 1996
An Act to restate and improve the law relating to
arbitration pursuant to an arbitration agreement; to make
other provision relating to arbitration and arbitration
awards; and for connected purposes dated 17th June 1996
2.; 6.
The Hague
Rules
International Convention for the Unification of Certain
Rules of Law relating to Bills of Lading dated 25th
August 1924, Brussels
12.4.1.; 12.4.2;
12.4.4.; 12.4.5.
General Terms and Conditions
NYPE 2015 New York Produce Exchange Form 2015 3.; 9.1.; 10.1.;
10.2.;
10.3.;10.4.;
12.1.;13.1.
ICA 2011 The Inter-Club New York Produce Exchange Agreement
1996 as amended on 1 September 2011
12.1.; 12.2.;
12.3.; 12.4.;
12.4.4.;
12.4.5.;
12.4.6.; 12.4.7.
IV MEMORANDUM FOR CLAIMANT
ICA 1984 The Inter-Club New York Produce Exchange Agreement
1984
12.3.
ICA 1970 The Inter-Club New York Produce Exchange Agreement
1970
12.2.
Rules
LMAA Terms London Maritime Arbitrators Association Terms 2017
4.; 5.
Scholarly Works and Articles
Terence Coghlin/ Andrew W. Baker/ Julian Kenny, John D. Kimball/ Thomas H.
Belknap
Time Charters,
7th Edition, London 2014
(cited: Coghlin, Time
Charters, at …, (nr.))
9.1.; 9.2.;
10.2.; 10.3.;
10.4.; 12.4.4.
Steven J. Hazelwood/ David Semark P. &. I. Clubs Law and
Practice, 4th Edition,
London 2010
(cited: P. & I. Clubs — Law
and Practice, para…)
12.4.5.
Howard N. Bennett/ Robert Bright Carver on Charterparties,
London 2017
(cited: Carver on
Charterparties at…)
12.4.4.
D. Rhidian Thomas Legal issues relating to time
charterparties, London 2008
(cited: Legal issues relating
to time charterparties, at…)
12.4.4.
Lloyd's Maritime Law Newsletter London Arbitration 16/02
NYPE Inter-Club
Agreement - Whether claim
time-barred (Appeared in
issue: 600 - 14 November
2002)
12.3.
V MEMORANDUM FOR CLAIMANT
(cited: London Arbitration
16/02 (2002) 600 LMLN)
Gunter Rochow/ Agnes Czimbalmos/ Fidel
Arevalo/ Mary Cole/ Anand Dhavle/ Enid
Kaabunga/ David Lees/ Mart Leesti/ John
Miner/ Zakariaou Njoumemi/ Youssef
Ouadi/ Axel Rex/ Waldo Rochow/
Goberdhan Singh
Evaluacion completa de la
aplicacion de la Estrategia
mundial y plan de accion
sobre salud publica,
innovacion y propiedad
intelectual, Evaluation
institucional realizada a
peticion de la Oficina de
Evaluacion de la OMS,
20.12.2016:
(cited: Evaluacion completa
de la aplicacion de la
Estrategia mundial y plan
de accion sobre salud
publica, innovacion y
propiedad intelectual,
Evaluation institucional
realizada a peticion de la
Oficina de Evaluacion de la
OMS, 2016, at 35, 43, 52,
112
9.3.
ed. World Health Organization Review Report June 2017:
Independent review of the
implementation of the
WHO evaluation policy and
the framework for
strengthening evaluation
and organizational learning,
2016, p.32
(cited: Independent review
of the implementation of the
WHO evaluation policy and
the framework for
strengthening evaluation
and organizational
learning, WHO, 2016)
9.3.
VI MEMORANDUM FOR CLAIMANT
Judicial Decisions
Action Navigation Inc v Bottiglieri
Navigation SpA (The “Kitsa”) [2005] EWHC
177 (Comm)
Queen’s Bench
Division
9.5.
Ben Line Steamers Ltd v Pacific Steam
Navigation Co (The “Benlawers”) [1989] 2
Lloyd’s Rep. 51
Queen’s Bench
Division
12.4.4.
Donald Insall Associates Limited v Kew
Holdings Limited [2019] EWHC 384 (TCC)
High Court of Justice
Business and Property
Courts of England and
Wales (Queen’s Bench
Division)
8.
D/S A/S Idaho v Peninsular and Oriental
Steam Navigation Co (The “Strathnewton”)
[1983] 1 Lloyd’s Rep. 219
Court of Appeal 12.2.
IMT Shipping and Chartering GmbH v
Chansung Shipping Company Limited,
Owners of the “Zenovia” [2009] EWHC 739
(Comm)
Queen's Bench Division 10.3.
Imperator I Maritime Company v Bunge SA
Bunge SA v C Transport Panamax Ltd (The
“Coral Seas”) [2016] EWHC 1506 (Comm)
Queen’s Bench
Division
9.1.
Maestro Bulk Ltd v Cosco Bulk Carrier Co
Ltd [2014] EWHC 3978 (Comm)
Queen's Bench Division 10.3.
Medenta Finance Limited v Hitachi Capital
(UK) Plc [2019] EWHC 516 (Comm)
High Court of Justice
Business and Property
Courts of England and
Wales (Queen's Bench
Division)
8.
Skibsaktieselskapet Snefonn v Kawasaki
Kisen Kaisha Ltd (The “Berge Tasta”)
[1974] 1 Lloyd´s Rep. 422
Queen’s Bench
Division
10.2.
1 MEMORANDUM FOR CLAIMANT
IN THE MATTER OF THE ARBITRATION ACT 1996
AND IN THE MATTER OF AN ARBITRATION
B E T W E E N :
PANTHER SHIPPING INC
CLAIMANT/OWNER
- and -
OMEGA CHARTERING LIMITED
RESPONDENT/CHARTERER
M/V “Thanos Quest”
Charterparty dated 18 March 2016
MEMORANDUM FOR THE CLAIMANT
Represented by Thor & Loki Brothers
RELIEF SOUGHT
CLAIMANT requests the Tribunal to:
1. Declare that it has jurisdiction to hear CLAIMANT’s claim for damages caused by
RESPONDENT’s breach of contractual obligations and RESPONDENT’s defence of frustration;
2. Award CLAIMANT damages in the sum of USD15,426,567.42 or further or other relief as
the Tribunal considers meeting the justice of the case plus compound interest pursuant to
sec. 49 of the Arbitration Act 1996 in accordance with the decision of the Tribunal on this
2 MEMORANDUM FOR CLAIMANT
matter and award CLAIMANT further and other relief as the Tribunal considers meeting the
justice of the case;
3. Make the following findings: that the CLAIMANT may recover its costs associated with the
(1) underwater cleaning amounting to USD41,000.00 and (2) voyage to South Island in
order to perform underwater cleaning in the sum of USD55,567.42 and (3) damages for re-
delivery amounting to USD15,330,000.00 (loss of hire under the Next Fixture, calculated
as 4 years at USD10,500.00 per day);
4. Dismiss the RESPONDENT’s Defence and Counterclaim;
5. Impose all costs of Arbitration on the RESPONDENT.
SUBMISSIONS
STATEMENT OF FACTS
1. This dispute arises from a Charterparty dated 18 March 2016 (“the Charterparty”) according
to which Omega Chartering Ltd. (“Respondent” / “Charterer”) and Panther Shipping Inc.
(“Claimant” / “Owner”) agreed on a Time Charter of the M/V “Thanos Quest” (the
“Vessel”) at a daily hire rate of USD7,500.00 for about 50-55 days WOG.
2. Last port of discharge was DLOSP 1SP Wahanda; thus, the re-delivery should have taken
place in Wahanda range.
3. The Charterparty provides specific rules through Omega Chartering Rider Clauses and
incorporates the NYPE 2015 for matters not covered by specific clauses in the contract.
3 MEMORANDUM FOR CLAIMANT
SUBMISSIONS ON JURISDICTION
4. According to cl. 80 of the Charterparty, the law of the United Kingdom governs the
arbitration agreement. Further, the arbitration is to be held in London. As the parties agreed
in the Charterparty on the application of English law and the Tribunal to be located in
London, the LMAA Terms 2017 are applicable (Rule 6 of the LMAA Terms 2017).
5. The Arbitral Tribunal is to be constituted according to the Arbitration Agreement as
provided in cl. 80 of the Charterparty (Omega Chartering Rider Clauses). Accordingly, the
Tribunal consists of Ms. Mary Walker appointed by the Claimant and Captain Eric
Masterson appointed by the Respondent. The third arbitrator will be appointed by the two
Arbitrators before the first hearing according to Rule 8 of the LMAA Terms 2017 and cl.
80 of the Charterparty (Omega Chartering Rider Clauses). Alternatively, the parties are
willing to agree otherwise.
6. Further, sec. 30 of the Arbitration Act 1996 the Arbitral Tribunal may rule on its own
substantive jurisdiction.
7. If the Tribunal considers the claim to be substantially established, the Arbitration
Agreement grants the Arbitral Tribunal the competence to enter into final decisions on any
dispute arising between Owner and Charterer.
8. The Tribunal’s jurisdiction does not depend on prior negotiations between Claimant and
Respondent based on the Parol Evidence Rule exercised in common law.1
1Medenta Finance Limited v Hitachi Capital (UK) Plc [2019] EWHC 516 (Comm) at 8 (J Lord Hofmeyr QC);
Donald Insall Associates Limited v Kew Holdings Limited [2019] EWHC 384 (TCC) at 7 (J Lord O´Farrell).
4 MEMORANDUM FOR CLAIMANT
SUBMISSIONS ON THE MERITS OF THE CLAIM
9. The Respondent is liable for the full costs of the Underwater Cleaning.
9.1. Referring to cl. 4 (a) of the NYPE 2015 the Claimant is aware that ordinary wear and tear
of the Vessel is at its own risk. The parties contractually agreed on the re-delivery of the
Vessel in good order and condition except ordinary wear and tear of the ship. However, hull
fouling is not included in ordinary wear and tear.2 Adoption of a specific clause which
divides the responsibility for underwater cleaning between the parties in case of hull fouling
clearly shows the understanding and intention of the parties on this point. This issue is
specifically regulated in cl. 83 of the Charterparty (Omega Chartering Rider Clauses).
9.2. The Respondent was in breach of its obligation to perform underwater cleaning according
to cl. 83 of the Charterparty (Omega Chartering Rider Clauses). According to the terms of
the Charterparty the place of re-delivery of the Vessel is the Wahanda Range. Hence, in
case of hull fouling it was possible to easily arrange the cleaning at the re-delivery port to
be accordingly chosen in the Wahanda Range. The Respondent was obliged to perform
underwater cleaning prior to re-delivery if necessary, according to cl. 83 (d) of the
Charterparty (Omega Chartering Rider Clauses). The Vessel was severely fouled during her
extended stay at Wahanda port due to a detention by the Port Authorities because of which
she lay idle for almost a month. The Respondent was informed by the Wahanda Port
Services on the extraordinarily dirty water at Wahanda port. Due to this fact, it was
impossible to carry out underwater cleaning. According to the Charterparty, it is Charterer’s
duty to make sure that the cleaning is possible at the port where the Charterer plans to re-
deliver the Vessel. In their e-mail of 25 May 2016 to the Respondent, the Wahanda Port
services pointed out that they recommend cleaning at another port. This does not contradict
2Imperator I Maritime Co v Bunge SA (The “Coral Seas”) [2016] EWHC 1506 (Comm) at 6 (J Lord Phillips);
Coghlin, Time Charters at 271, 15.19.
5 MEMORANDUM FOR CLAIMANT
the contractual framework as the re-delivery was possible at any port in Wahanda Range.
For this reason, underwater cleaning and re-delivery should have been arranged at another
port in Wahanda Range. Since the Respondent failed to satisfy its contractual obligation the
Claimant was forced to undertake the cleaning arrangements. Due to time pressure for
honouring the following Time Charter the Claimant had no other choice than to make sure
that it could fulfil its duty to deliver the Vessel in a state of reasonable performance to the
next Charterer.3 Therefore, the Claimant organized the cleaning at South Island which
evidently is another port in Wahanda Range. According to cl. 83 (c) of the Charterparty
(Omega Chartering Rider Clauses) underwater cleaning is at Charterers risk and expense;
therefore, the Respondent is required to pay the cleaning costs as already claimed in the
sum of USD41,000.00.
9.3. The Respondent is liable for problems arising from virus infections. This is set out in cl.
122 of the Charterparty (Omega Chartering Rider Clauses). The detention of the Vessel at
the outer anchorage of Wahanda Port was based on a possible threat of infected crew
members by the Ebola Virus. The Ebola Virus, like the ZIKA Virus,4 is a highly contagious
disease. These health emergencies are particularly dreaded on board a Vessel because all
workers are in a confined space. This increases the viral infection rate among seafarers. In
cases of such infections the whole Vessel is affected as a matter of fact, because the
treatment and handling of infections on a ship are not available as they are on shore, where
only the infected persons can be treated in a hospital. If there is a possible threat of a virus
outbreak on board the whole Vessel must be put in quarantine. This is why M/V “Thanos
Quest” was detained by the Wahanda Port Authority. Therefore, cl. 122 of the Charterparty
3 Coghlin, Time Charters at 74, 3.72 and 242, 11.21. 4 Evaluacion completa de la aplicacion de la Estrategia mundial y plan de accion sobre salud publica, innovacion
y propiedad intelectual, Evaluation institucional realizada a peticion de la Oficina de Evaluacion de la OMS, 2016,
at 35, 43, 52, 112; Independent review of the implementation of the WHO evaluation policy and the framework for
strengthening evaluation and organizational learning, WHO, 2016, at 32.
6 MEMORANDUM FOR CLAIMANT
(Omega Chartering Rider Clauses) is applicable in this case. Accordingly, the Charterer had
to take all relevant measures. As a matter of fact, the Ebola outbreak occurred at the delivery
port in West Coast, Challaland. Since the Respondent agreed to this delivery port it is
unconditionally liable for all consequences arising from the virus outbreak. Even if the
Claimant could be liable for the detention period, cl. 122 of the Charterparty (Omega
Chartering Rider Clauses) shifts the responsibility in consequence of a virus outbreak upon
the Respondent. Hull fouling is to be considered a consequence of the virus outbreak within
the meaning of cl. 122 of the Charter Party (Omega Chartering Rider Clauses). As such, the
Respondent was under a duty to take measures to resolve this matter.
9.4. Pursuant to cl. 83 (d) of the Charterparty (Omega Chartering Rider Clauses) the Claimant
was not obliged to accept any lump sum payment. Under this clause, unless the Respondent
is prevented from carrying out underwater cleaning, the parties can agree on a lump sum
payment prior to but at the latest on re-delivery. This proposition as a final settlement was
not possible, because the Respondent was not prevented from fulfilling its cleaning duty.
However, to the Claimant’s regret the Respondent tried to escape from its obligation to pay
the full costs arising from the underwater cleaning process by offering a lump sum payment
in advance several times. Moreover, the Claimant was not able to agree on a lump sum
payment since the extent of the hull fouling had not been ascertained by an inspection. The
report by Captain Rodgers which was forwarded to the Charterer on 26 June 2016 on the
severe hull fouling is not an official inspection by a professional surveyor. Although the
Respondent increased the amount of the offered lump sum payment with each further e-
mail, the costs had still not been fully covered. The Charterer started with a presumptuous
offer of USD15,000.00 which covered half of the average costs of underwater cleaning
procedures. The last offer of USD30,000.00 almost corresponds to the average costs of an
underwater cleaning operation. The additional costs of agency fees in the amount of
7 MEMORANDUM FOR CLAIMANT
USD11,000.00 are common costs relating to such operations. The Respondent has to reckon
with the foreseeable expenses. Hence, the Respondent is obliged to pay the Claimant’s
incurred expenses. The Respondent had already assured the Claimant on 9 June 2016 to pay
the costs against the original invoice if the Owner arranged the underwater cleaning.
Moreover, the Respondent was not prevented from carrying out the underwater cleaning
only until the Claimant agreed, in an e-mail dated 18 June 2016, to the re-delivery of the
Vessel in a dirty condition. In this e-mail, the Claimant reserved its “rights in due course
with their claim for costs/ time/ expenses for the vessels’ cleaning”. In its e-mail of 27 June
2016, the Respondent proposed that the underwater cleaning could be arranged at North
Titan Port. Since this offer was made after the Claimant had already agreed to the re-
delivery of the Vessel without prior underwater cleaning, the Claimant did not consider the
cleaning option at North Titan Port. At this point, as stated in its e-mail of 18 June 2016,
the Claimant had already arranged the underwater cleaning at South Island all rights
reserved. Thus, the repeated lump sum offers by the Respondent were irrelevant.
9.5. Furthermore, cl. 83 (d) of the Charterparty (Omega Chartering Rider Clauses) also states
that the Charterer is fully responsible to make all arrangements to undertake the underwater
cleaning. Consequently, the Respondent is required to cover all costs “arising as a result of
or in connection with the need for cleaning”5 – meaning also the costs of performing the
operation, including the costs for the voyage to any port where the cleaning can be
undertaken. As long as the Vessel is under the Charterer’s commercial control all costs for
carrying out the underwater cleaning process including voyage costs, especially trivial
bunker costs, are at the Charterer’s expense.6 It is clear that the Vessel was under Charterer’s
order until the de-fouling process was completed at South Island. Even if the Charterer had
5 Cl. 83 (d) Charterparty (Omega Chartering Rider Clauses). 6 Action Navigation Inc v Bottiglieri di Navigatione SpA (The “Kitsa”) [2005] EWHC 177 (Comm) at 4 et seq. (J
Lord Aikens).
8 MEMORANDUM FOR CLAIMANT
fulfilled its obligation to perform underwater cleaning at another port it would have been
obliged to cover all these expenses either way. As already mentioned, the Respondent left
the Claimant no choice but to organize the underwater cleaning on its terms. Thus, the
Claimant requires from the Respondent the sum of USD24,574.20 for the voyage from
Wahanda Port to South Island, where the cleaning was performed.
10. The Respondent is liable for all losses caused by the late re-delivery of the Vessel.
10.1. Although the Claimant has accepted the re-delivery on 30 June 2016 the acceptance of the
re-delivery does not, according to cl. 4 (c) of the NYPE 2015, “prejudice its rights against
the Charterers under th[e] Charter Party”.
10.2. The Respondent is liable for the late re-delivery according to the Charterparty. The Parties
contractually specified the duration. The Respondent did not adhere to this time period. Cl.
4 of the NYPE 2015 stipulates the conditions of the re-delivery of a Vessel under a Time
Charter. The Vessel must be re-delivered at the end of the agreed duration in the
Charterparty.7 In the present case the duration of the Charterparty was 50-55 days. On
scheduled development of events regarding the Charterparty the latest date of re-delivery
would have been 23 May 2016. The Claimant does not hold the Respondent to this date
anymore because of the detention of the Vessel by the Port Authority from 11 May 2016
until 8 June 2016 at Wahanda Port. With the detention period exempted from the calculation
the Respondent should have re-delivered the Vessel on 20 June 2016 to secure timely re-
delivery. The discharge of the cargo was not completed until the afternoon of 30 June 2016.
The Owner can accept re-delivery of the Vessel only if the cargo is completely discharged.8
For this reason, the Claimant was not able to accept the re-delivery before 30 June 2016.
Even if 20 June 2016 is taken as the newly estimated re-delivery date due to the
7 Coghlin, Time Charters at 9, I.37 8 Skibsaktieselskapet Snefonn v Kawasaki Kisen Kaisha Ltd (The “Berge Tasta”) [1974] 1 Lloyd´s Rep. 422 at
424 (J Lord Donaldson); Coghlin, Time Charters at 9, I.37
9 MEMORANDUM FOR CLAIMANT
governmental detention, the re-delivery of the Vessel was delayed nine days. Hence, the
Respondent is in clear breach of its contractual obligation for timely re-delivery.
10.3. Moreover, the Respondent did not fulfil its obligation to send to the Claimant a re-delivery
notice. Cl. 4 (b) of the NYPE 2015 presumes that the Respondent should have notified the
Claimant on the estimated re-delivery date prior to the arrival at the re-delivery port or place
in Wahanda Range. The re-delivery notice fulfils this requirement. If the re-delivery notice
is delayed it can have a detrimental impact upon the Owner’s following contracts.9 As soon
as the discharge process has started the Respondent should have notified the Claimant about
the expected time of re-delivery. The only notification given by the Respondent to re-deliver
the Vessel was the “1-Day Redelivery-Notice”10 in the e-mail of 29 June 2016. Furthermore,
the Claimant received an e-mail on 8 June 2016 regarding the discharge process lasting at
least until approximately 12 June 2016. Relying upon this statement the Claimant was
allowed to estimate the re-delivery of the Vessel around that date.11 The Claimant had a
follow-on fixture with Champion Chartering Corp. which was closed on 15 June 2016.
However, the Vessel was actually returned on 30 June 2016. Due to this late re-delivery the
Claimant suffered the cancellation of the Charterparty with Champion Chartering Corp with
a daily charter rate of USD10,500.00 for a duration of at least two years and in Champion
Chartering’s option up to four years. With this Charterparty the Claimant would have been
able to earn USD15,330,000.00. However, due to the late re-delivery of the Vessel by the
Respondent, the LAYCAN deadline between 22-28 June 2016 was missed. Hence, the
Claimant was forced to agree to another Charterparty with Fairwind International on less
favourable terms. Although the daily hire in the amount of USD11,000.00 is higher than the
9 IMT Shipping and Chartering GmbH v Chansung Shipping Company Limited, Owners of the “Zenovia” [2009]
EWHC 739 (Comm) at 7 (J Lord Tomlinson); Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2014] EWHC 3978
(Comm) at 5 et seq. (J Lord Cooke). 10 Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd [2014] EWHC 3978 (Comm) at 7 (J Lord Cooke). 11 Coghlin, Time Charters at 9, I.37.
10 MEMORANDUM FOR CLAIMANT
previous one, the Charterparty with Fairwind International was agreed only for a duration
of 50-55 days. As a matter of fact, this is a clear detriment for the Claimant as it had lost a
reliable source of income for at least the next two years.
10.4. Further, the Claimant is sure that the delay in the re-delivery of the Vessel is also caused by
the prolonged discharge process. The Claimant is aware of the Master’s responsibility to
supervise all operations on the ship including cargo operations. However, there is a
difference between the ordinary responsibility to supervise the process and the legal
responsibility for the duration of the cargo operations and their legal implications.12
Master’s liability is only initiated if he had provoked a specific failure during cargo
operations. There is no evidence that the Master failed his duty to supervise which might
have caused the delay. The Claimant denies any negligent behaviour of the Master. The
Respondent is not in the position to blame the Claimant for the prolonged discharge process
caused by the Respondent as stated above. In any case the behaviour of the Master during
the cargo operations is not the reason for the extended discharge of the cargo and the
consequential late re-delivery. In addition, the Respondent is not “prevented having
primary responsibility under NYPE 2015 for discharge”.13 Since there is no specific
agreement regarding the distribution of liability and considering all circumstances and facts
of the present case, the Respondent remains liable for the matters relating to and any delay
caused by the discharge operations.
10.5. Finally, the Claimant demands the sum of USD15,330,000.00 for loss of profit.
12 Coghlin, Time Charters at 356, 20.13. 13 Coghlin, Time Charters at 359, 20.23.
11 MEMORANDUM FOR CLAIMANT
SUBMISSIONS ON THE MERITS OF THE COUNTERCLAIM
11. Statement of Facts
11.1. On 27 June 2016 the Owner received an e-mail from the Charterer notifying them of the
cargo damage for the first time. Since discharging operations were not completed by then,
the Charterer could not give further information on the extent of the damage.
11.2. On 29 June 2016 the Charterer sent another e-mail stating that there was a joint survey
taking place on board. Furthermore, their Receivers informed them that the cargo was likely
to be severely damaged due to a ballasting error and that it was not yet clear if the cargo
would be reconditioned or be sold in damaged condition.
11.3. On 07 July 2016 the Charterer sent an e-mail attaching a preliminary damage report of their
surveyors dated 30 June 2016. The e-mail also stated that the Charterer would revert once
the details of the cargo claim against them became clear and that the e-mail to be treated as
formal notice of claim against the Owner.
12. The Cargo Claim is not for Claimant’s account.
12.1. According to cl. 27 of the NYPE 2015, cargo claims between the Owner and the Charterer
should be settled according to the Inter-Club NYPE Agreement 1996 as amended on 1
September 2011 (ICA). The Respondent relies for its counterclaim arising from the cargo
damage on cl. 8 (a) of the ICA.
12.2. There is no evidence provided by the Respondent that the cargo claim between the
Respondent and the Receivers of the cargo has been properly settled or compromised and
paid as required by cl. 4 (c) of the ICA for the application of the apportionment under the
Agreement. In The Strathnewton14 the Court of Appeal handled a cargo claim between the
14 D/S A/S Idaho v Peninsular and Oriental Steam Navigation Co (The “Strathnewton”) [1983] 1 Lloyd’s Rep.
219.
12 MEMORANDUM FOR CLAIMANT
shipowners and time charterers. The 1970 version of the Inter-Club Agreement was
applicable to the Charterparty. In that case the court refers to cl. 1 (i) of the ICA 1970 which
also requires a properly settled or compromised claim. Hence, as Justice Kerr stated,
charterers ‘shall have “properly settled or compromised” the claims of the bill of lading
holders’15 before they can claim it from the Owners. As a result, pursuant to cl. 4 (c) of the
ICA the cargo claim of the Receivers should have been properly settled or compromised
and paid before it can be apportioned under the ICA. On the basis of the given facts it is
inferred that the Receivers’ claim has neither been settled nor been compromised (let alone
paid); therefore, the Respondent cannot claim the cargo damage under cl. 8 (a) of the ICA.
12.3. Furthermore, the cargo claim is time-barred since the Respondent failed to give a written
notification according to cl. 6 of the ICA. Pursuant to this provision the notification must
be given within 24 months of the date of delivery of the cargo or the date the cargo should
have been delivered. According to the preliminary survey report of 30 June 2016 the
Receivers agreed to take delivery of the damaged cargo. Although far more than two years
have passed since the discharge of the cargo the Respondent failed to give a written
notification which complies with the terms of cl. 6 of the ICA. As stated in an article in
Lloyd’s Maritime Law Newsletter 200216 reporting on a similar case where the 1984 version
of the Inter-Club Agreement was applicable, the charterers sought to recover a paid cargo
claim from the shipowners referring to the ICA 1984. They sent a message to the shipowners
stating “Please receive this message as our first notice of damage and be advised we hold
you responsible […]”. The Arbitral Tribunal discussed whether the claim was time-barred
pursuant to cl. (1)(iv) of the ICA 1984 (which is the equivalent of cl. 6 of the ICA 2011)
and held that the message from the charterers did not satisfy the requirements of a written
15 D/S A/S Idaho v Peninsular and Oriental Steam Navigation Co (The “Strathnewton”) [1983] 1 Lloyd’s Rep.
219 at (224). 16 London Arbitration 16/02 (2002) 600 LMLN.
13 MEMORANDUM FOR CLAIMANT
notification pursuant to cl. (1)(iv) of the ICA 1984. It “simply advised as to certain
conditions found”. Furthermore, the Tribunal held that “[t]he point of notice requirements
such as clause (1)(iv) was, essentially, that the recipient of the notice had to be able to
investigate the potential claim and prepared himself to deal with it”. The e-mail dated 07
July 2016 from the Respondent declaring the message to be treated as a formal notice of
claim cannot be considered as a written notice in the context of cl. 6 of the ICA either. It
did not include any details of the contract of carriage, the nature of the claim and the amount
claimed as required by cl. 6 of the ICA. It is admitted that it was not possible for the
Respondent to include the amount of the cargo damage at that time but it indeed could have
included the details of the contract of carriage. Furthermore, in its e-mail of 23 August 2017,
the Respondent indicates that it was aware of the approximate amount of the cargo claim
by that time. In its email of 23 November 2017, the Respondent also stated that detailed
discussions were held with the Receivers in relation to the quantum of the claim as well as
to other issues with regard to the contract of carriage. The Respondent could have informed
the Claimant on these points within the requisite period of 24 months under cl. 6 of the ICA.
Since the Respondent did not provide such information the Claimant was not able to conduct
its own investigation of the potential claim in order to deal with it. Despite the possibility
of a written notification including detailed information on the extent of the cargo claim
within 24 months, the Claimant has been provided detailed information for the first time
during the course of reference from 15 March 2019. Cl. 6 of the ICA requires the details in
question to be included if possible. The above-mentioned facts prove that the Respondent
clearly had the possibility, but nevertheless chose not to inform the Claimant accordingly.
Thus, recovery by the Respondent is deemed to be waived and absolutely time-barred
pursuant to cl. 6 of the ICA.
14 MEMORANDUM FOR CLAIMANT
12.4. The Cargo Claim does not fall within the scope of cl. 8 (a) of the ICA, since the claim was
not caused by unseaworthiness and/or error or fault in the navigation or management of the
Vessel.
12.4.1. For the following it is important to mention that the International Convention for the
Unification of Certain Rules of Law relating to Bills of Lading dated 25 August 1924
(“Hague Rules”) are applicable to the cargo claim between the Respondent and the cargo
Receivers.
12.4.2. According to cl. 2 of the Full Terms of the Carrier‘s Bill of Lading Form the Hague Rules
as enacted in the country of shipment should be applicable. In the present case, the country
of shipment is Challaland whose laws closely resemble the laws of the United States
according to the Procedural Order No. 2. Since the Hague Rules are in force in the United
States the same applies to Challaland.
12.4.3. M/V “Thanos Quest” was not unseaworthy.
12.4.4. First, the term “unseaworthiness” must be considered in the context of the ICA. In The
Benlawers,17 Justice Hobhouse upheld that “unseaworthiness” in the ICA must be used in
the broader sense of the underlying rules that are incorporated by the bill of lading. As a
consequence, if the Hague or Hague-Visby Rules are incorporated the term
unseaworthiness includes uncargoworthiness18 just as in Art. 3 § 1 of the Hague and Hague-
Visby Rules meaning that the Vessel must be fit to carry the contract cargo. The cause for
damage to the cargo (onions) in The Benlawers was that the Vessel was not fitted with a
ventilation system. In the present case, since the contract of carriage between the
Respondent and the cargo Receivers incorporates the Hague Rules, unseaworthiness also
17 Ben Line Steamers Ltd v Pacific Steam Navigation Co (The “Benlawers”) [1989] 2 Lloyd’s Rep. 51 at 60. 18 Carver on Charterparties, 5-265; Legal Issues relating to Time Charterparties at 244; Coghlin, Time Charters at
375, 20.78.
15 MEMORANDUM FOR CLAIMANT
includes uncargoworthiness. The Vessel M/V “Thanos Quest” indeed was fit to carry the
contract cargo. It was fitted with all necessary equipment to keep the cargo safe and
undamaged. There was no leak or the like that could have caused the damage. An error in
the ballasting by a crew member does not change the fact that the Vessel was seaworthy as
well as cargoworthy.
12.4.5. Furthermore, the damage was not caused by an error or fault in navigation or management
of the Vessel either. Even if there was a navigation or management error the Respondent
could not claim the cargo damage under the ICA. According to Art. 4 § 2 (a) of the Hague
Rules neither the carrier nor the ship should be liable for loss or damage arising or resulting
from the act, neglect, or default of the master, mariner, pilot, or the servants of the carrier
in the navigation or in the management of the ship. Concerning cl. (8)(a) of ICA, P. & I.
Clubs —Law and Practice states: ‘[S]ub-clause (a) made the apportionment applicable to
claims arising out of error or fault in the navigation or management of the vessel; for
example, collisions. This is designed to deal with claims under the Hamburg Rules. Under
the Hague and Hague-Visby Rules there is already an “error of navigation” exemption in
respect of loss or damage caused by collision and so the carrier will not be liable for such
claims where the contract of carriage is subject to those rules.’19 The Respondent is the
carrier pursuant to Art. 1 (a) of the Hague Rules and therefore not liable for loss or damage
arising from navigation or management errors caused by the crew. Hence, even if the cargo
claim arose from an error or fault in the navigation or management of the Vessel it should
have been dismissed pursuant to Art. 4 § 2 (a) of the Hague Rules. The Claimant cannot be
liable for such an unfounded claim.
19 P. & I. Clubs — Law and Practice, para 15.69.
16 MEMORANDUM FOR CLAIMANT
12.4.6. The Respondent cannot claim damages for breach of clauses 27 and 53 of the Charterparty
since there has been no breach by the Claimant. Clauses 27 and 53 of the Charterparty are
simply references to the application of the ICA and they therefore cannot be breached.
12.4.7. The cargo claim cannot alternatively be apportioned under cl. 8 (b) of the ICA. According
to cl. 8 (b), the cargo damage must have been caused by the loading, stowage, lashing,
discharge, storage or other handling of the cargo. In the present case, the loading, stowage
and lashing operations were finished before the cargo was damaged by the water ingress
into hold No.2 and therefore cannot be the cause. Additionally, the cargo damage did not
derive from the storage. The storage in principle satisfied the usual conditions. The tea was
stored in a hold of a Multi Purpose Dry Cargo Ship without any deficiencies. The
discharging operations are not relevant in any way to the cargo damage either. When
discharging operations started the cargo had already been damaged. Generally, the handling
of the cargo should be distinguished from other operations, in particular the handling of the
ballasting system of the vessel. A crew member opened the wrong valve which caused the
water ingress causing the cargo damage. The handling of the ballast system by the crew
member is clearly not the handling of the cargo.
12.5. For the above-mentioned reasons, the Claimant is not liable for the cargo damage.
13. The Respondent is not entitled to an indemnification due to Off-Hire.
13.1. The Vessel was not off-hire from 07 May 2016 until 26 June 2016 since the period in
question does not represent an off-hire event under cl. 17 of the NYPE 2015. In the present
case M/V “Thanos Quest” was detained due to a required quarantine by Wahanda Port State
Authority. In marked contrast to cl. 21(a)(iv) of the Shelltime 4, quarantine is not
specifically mentioned as an off-hire event in cl. 17 of the NYPE 2015. In fact, detention
by Port State control in pursuance of this clause merely represents an off-hire event if the
detention is caused by the deficiencies of the Vessel. The Vessel was detained because of a
17 MEMORANDUM FOR CLAIMANT
reasonable doubt that certain crew members might be suffering from the Ebola virus. Hence,
the detention was not the result of a deficiency of the Vessel and does not fall within the
scope of cl. 17 of the NYPE 2015.
13.2. An off-hire event does not arise from cl. 44 of the Charterparty (Omega Chartering Rider
Clauses) either. This clause stipulates that the Owners should be liable for any delay in
quarantine arising from the Master, Officers, or crew having communication with the shore
or any infected area without the written consent of the Charterers or their Agents. It was
agreed by the Charterparty that the Vessel would be delivered at West Coast which indeed
constitutes a written consent of the Respondent.
13.3. Cl. 122 of the Charterparty (Omega Chartering Rider Clauses) on the ZIKA Virus
Protection could be applied in analogy for the present case since Ebola is a highly
contagious virus as well. It provides for Charterers’ liability for calling the Vessel to a port
considered as an area of ZIKA virus infection. It also stipulates that the Vessel should
remain on hire throughout. The West Coast Daily Echo of 18 April 2016 published an article
concerning the outbreak of Ebola virus in the City of West Coast and outlying areas. They
expected restrictions on the movement of ships. In the present case, loading of the cargo
was completed on 20 April 2016. This was two days after the newspaper published the
article. Thus, the Respondent should have known about the Ebola outbreak at West Coast.
Since the Claimant delivered the Vessel already on 29 March 2016 they could not have
estimated the future circumstances. Thus, the detention at Wahanda anchorage was at
Respondent’s risk. Therefore, the period of quarantine cannot be deducted as off-hire.
18 MEMORANDUM FOR CLAIMANT
ARBITRATON COSTS AND FEES
14. The Claimant respectfully requests the Arbitral Tribunal to decide that all the costs as well
as legal fees related to this arbitration should be borne by the Respondent, since its breaches
of the Charterparty gave rise to this arbitration.
15. According to sec. 59 of the Arbitration Act 1996 the costs of the arbitration are to the
arbitrators’ fees and expenses, the fees and expenses of any arbitral institution concerned,
and the legal or other costs of the parties including the costs of or incidental to any
proceedings to determine the amount of the recoverable costs of the arbitration.
In light of the above, the CLAIMANT respectfully requests the Arbitral Tribunal to:
16. Award damages in the sum of USD15,426,567.42 at such rate and compounded at such
interests;
17. Dismiss the RESPONDENT’s Defence and Counterclaim;
18. Impose all costs of Arbitration on the RESPONDENT.
Served this 29th day of April 2019 by Thor & Loki Brothers of Deck House, Mooring
Lane, London EC3, Solicitors for the Claimant.