Respondent’s Memoranda Of Argument (RMIT University)

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16th International Maritime Law Arbitration Moot, 2015

RESPONDENT’S MEMORANDA OF ARGUMENT

Team 18

IN THE LONDON ARBITRATION TRIBUNAL

BETWEEN:

WESTERN TANKERS INCORPORATED

(Claimants)

-AND-

LESS DEPENDABLE TRADERS PROPRIETARY LIMITED

(Defendants)

Team 18

| Elise Steegstra | Paul Melican | Olivia Dean | Naomi Keessen | Gavin van Rensburg |

Respondent’s Memoranda Of Argument (RMIT University)

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-TABLE OF CONTENTS-

ABBREVIATIONS Page 4 AUTHORITIES Page 5 PART ONE: JURISDICTION Page 15

A THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISIDCTION B UNDER THE CORRECT CONSTRUCTION OF THE ST4 AGREED BETWEEN

THE PARTIES IT DOES NOT CONTAIN A LONDON ARBITRATION CLAUSE C UNDER THE MOST APPROPRIATE FORUM TEST SINGAPORE IS THE JUST

AND NATURAL SEAT OF ARBITRATION D THERE IS WITHIN THE ST4 AN INTERNAL INCONSISTENCY WHICH

RENDERS THE CLAUSE 46 INOPERABLE AND IT OUGHT BE SEVERED FROM THE CONTRACT.

PART TWO: RESPONSE TO ALLEGATIONS OF BREACH BY DEFEDANT Page 18

A INSUFFICIENCY OF BUNKERS B ANY ACTIONS OF THE UNRELATED PARTY ASA2 C FAILING TO PROVIDE ORDERS AT CAPE TOWN

PART THREE: RESPONSE TO ALLEGATIONS OF TORT OF FRAUD Page 21

A THE DEFENDANT DID NOT MAKE A FALSE REPRESENTATION B THE DEFENDANT DID NOT INTEND OR INDUCE THE CLAIMANT TO

RELY ON SAID REPRESENTATION C THE LOSS SUFFERED BY THE CLAIMANT WAS DUE TO THEIR OWN

NON-PERFORMANCE OF THE CONTRACT NOT ANY SAID RELIANCE

PART FOUR: THE CLAIMANTS ARE LIABLE FOR BREACH OF CONTRACT FOR THE MASTER’S ACTIONS Page 23

A THE MASTER, CAPTAIN STELIOS, WAS INCOMPETENT B THE MASTER FAILED TO FOLLOW ANTI-PIRACY PRECAUTIONS AS

REQUIRED C THE MASTER FAILED TO ADHERE TO THE REPORTING REQUIREMENTS

SET OUT IN THE ST4 AND VESSEL ORDERS D THAT THE CLAIMANTS BREACHED AN IMPLIED TERM OF THE

MASTER’S OBEDIENCE E THAT THE CLAIMANTS ARE LIABLE FOR BREACH OF CONTRACT FOR

THE MASTERS ACTIONS

3

F THAT THE CLAIMANTS ARE LIABLE IN VICARIOUS LIABILITY FOR THE MASTERS ACTIONS

G THE COMPLETE AND ENTIRE COMBINED LOSS SUFFERED BY BOTH PARTIES WAS DUE TO THE MASTER’S ACTIONS RESULTING IN THE CLAIMANTS BEING LIABLE FOR SAID LOSS AND DAMAGE.

CHAPTER FIVE: THE CLAIMANTS HAVE ABROGRATED THEIR DUTY OF DUE DILIGENCE RESULTING IN AN OFF HIRE EVENT Page 28

A OWED A DUTY OF DUE DILIGENCE B DUTY TO MAINTAIN/ DUE DILIGENCE/ BREACH OF DUTY OF DUE

DILIGENCE/ REDUCTION OF HIRE PERIOD C FAILED TO FULFIL SAID DUTY D THE VESSEL WAS OFF-HIRE FROM AT LEAST 3-JUL-14 IF NOT EARLIER

CHAPTER SIX: BAILMENT Page 32

CHAPTER SEVEN: THE OWNERS WERE NOT ACTING AS AN AGENT OF NECESSITY Page 33

A MISDELIVERY OF GOODS BY SEA

CHAPTER EIGHT: THE DEFENDANTS HAVE NOT REPUDIATED THE CHARTERPARTY Page 34

CHAPTER NINE: THE CHARTERPARTY HAS BEEN FRUSTRATED OR IN THE ALTERNATIVE THE CLAIMANTS HAVE REPUDIATED THE CHARTERPARTY AND THE DEFENDANTS FACED IMPOSSIBILITY OF PERFORMANCE Page 36

A The result was an Impossibility of performance by the Defendants

CHAPTER TEN: QUANTIFICATION OF DAMAGES Page 37

PRAYER FOR RELIEF Page 38

Respondent’s Memoranda Of Argument (RMIT University)

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-ABBREVIATIONS-

B/L; BoL Bill of Lading Bunker Fuel used to operate ships Bunkering Action of supplying a ship with bunkers (fuel). Note stemming is placing

bunker into ship BMP4 Best Management Practices for Protection against Somalia Based Piracy,

Version 4 – August 2011 CHOPT Charterers options CP Charter party ENS Electronic navigation systems Ex pipe Used to describe a mode of delivery for marine fuels or bunkers to ships IFO Intermediate fuel oil Laycan Lay day cancelling date MEP Most Economic Power MT Metric tonnes NOP Normal operating power OPL Off port limitations PDPR Per day, pro rata Redel Redelivery ST4 Shelltime 4 Charter party contract STS Ship to ship transfer TCT Time charter trip VO Voyage orders WAF West Africa

Respondent’s Memoranda Of Argument (RMIT University)

-AUTHORITIES-

CASES

A

AB v South West Water Services Ltd [1993] Q.B. 507

Addis v Gramophone Co. Ltd [1909] A.C. 488

‘The Agios Lazaros’ [1976] 2 Lloyd’s Rep 47

Akai Pty Ltd v People’s Insurance Company Ltd [1999] I.L.Rd. 24

Alderslade v Hendon Laundry [1945] K.B. 189

Anastassia v Ungle-Export (1934) 49 L1.L.Rep. 1

Angus v Clifford [1981] 2 Ch 449 at 471

Annen v Woodman (1810) 3 Taunt. 299

Applyby v Myers (1867) L.R. C.P. 651

Armstrong v Strain [1951] 1 TLR 856 at 871

Assicurazione v Bessie Morris [1892] 2 Q.B. 652

Athens Maritime Enterprises Corporation v Hellenic Mutual War Risks Association (Bermuda) Ltd [1982] 2 Lloyd's Rep. 483 Australasian SN Company v Morse (1871-1873) LR 4 PC 222 B

Balihache J in Admiral Shipping Co v Weidner Hopkins [1916] 1 K.B.429.

Bank Line v Capel & Co [1919] A.C. 435

Bank of Australasia v Clanline [1916] 1 KB 39 55

Banques Bruxelles Lambert S.A. v Eagles Star Insurance Co. Ltd [1995] Q.B. 375

Black Sea & Danube Shipping Co v Goeland Transport & Trading Co. (1942) L.I.L.R. 192

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

6

Bradford Third Benefit BS v Borders [1941] 2 All ER 205

‘The Brimnes’ [1975] QB 929, CA

Briscoe v Powell (1905) 22 T.L.R. 128

British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd (1975) QB 303

British Transport Commission v Gourley [1956] A.C. 185 at p. 187 British Westinghouse Electric v Underground Electric Railways Co. of London Ltd [1912] A.C. 673 Byrne v Australian Airlines Ltd (1995) 185 CLR 411 B.T.P. Tiozafr Ltd v Pioneer Shipping Ltd and Armada Marine S.A. (The Nema) [1982] A.C. 72 Burgess v Wickham (1863) 3 B & S. 669

|C

Calico Printers’ Association v Barclays Banks (1931) 36 Com.Cas. 197

Canada Steamship Lines v The King [1952] A.C. 192 (p.C.)

Canadian Pacific (Bermuda) Ltd v Logan Martime Overseas (The Fort Kipp) [1885] 2 Lloyd’s Rep. 168 Caparo v Dickman [1990] 2 AC 605 ‘The Carron Park’ (1890) 15 P.D. 203 Chapelton v Barry Urban District Council [1940] 1KB 532 ‘The Captain George K’ [1970] 2 Lloyd’s Rep. 21 Cargo ex Argos, Gaudet v Brown (1872) LR 5 PC 134 Carras v. London and Scottish Assurance [1936] 1 K.B. 291

Chartered Mercantile Bank of India v Netherlands India S.N. Co (1883) Chellew Navigation Co v Applequist (1933) 38 Com.Cas 218 China Pacific SA v Food Corporation of India (‘The Winson’) [1982] AC 939 Christopher Brown Ltd v Genossenchaft Oestereichischer Waldbestizer Holwirtscafsbetriebe Registrierte GmbH [1954] i QB 7 City of Baroda (Owners) v Hall Line (1926) 42 T.L.R. 717 City of Lincoln v Smith [1904]

7

Cosmos Bulk Transport Inc v China National Foreign Trade [1978] 1 Lloyd's Rep 53 C.P.R. v Board of Trade (1925) 22 L.I.L.R. 1 (H.L.) Czarnikow v Koufos [1969] 1 A.C. 350 D

Dahl v Nelson, Donkin and Company (1881) 6 App Cas 38

Daniels v Harris (1874() L.R. 10 C.P. 1

‘The David Agmashenebli' [2003] 1 Lloyds Rep 92

Davis Construction Ltd v Foreham U.D.C. [1956] A.C. 14

De Clermont v General Steam Navigation Co. (1891) 7 T.L.R. 187

Derry v Peek (1989) 14 App.Cas. 337

The 'Dolphina' [2011] SGHC 273

E

‘The Eastern City’ [1958] 2 Lloyd’s Rep 127 E.Clemens Horst Co v Norfolk etc.& Co. (1906) 11 Comm.Cas. 141 Eddington v Fitzmaurice (18885) 29 ChD 459 Embiricos v Reid [1914] 3 K.B. 45 Empresa Cubana Importada de Alimentos “Alimport” v Iasmos Shipping Co. S.A. (The Good Friend) [1984] 2 Lloyd's Rep. 586 ‘The Eugenia’ [1964] 2 Q.B. 226 at p 240 F

Fercometal SARL v Msc Mediterranean Shipping Co SA (The Simona) [1988] 2 Lloyd's Rep 199

The ‘Fjord Wind’ [2000] 2 Lloyds Rep 191 (C.A.)

G

Geipel v Smith (1872) L.R. 7 Q.B. 404

Giertsen v Turnbull, 1908 S.C. 1101

Golden Arces Ltd v Queensland Estates Pty Ltd [1969] Qd R 378

8

Golden Fleece Maritime & another v. ST Shipping [2007] EWHC 1890 (Comm)

Goose v Wilson Sandford [2001] Lloyd's Rep PN 189

Gosse Millerd v Candaian Govt. Merchant Marine [1929] A.C. 223 (H.lL) Great Northern Railway Co v Swaffield (1874) LR 9 Ex 132 The ‘Gregos’ [1994] 1 WLR 1465 Gulnes v Imperial Chemcial Industries (1937) 43 Com.Cas 96 H Hadley v Baxendale (1854) 9 Ex. 341 Hedley Byrne & Co v Ltd v Heller Partners [1964] AC 465 Henderson v Stevenson (1875) LR 2HL Sc 470 ‘The Hermosa’ [1982] 1 Lloyd’s Rep 570, p 572-573 Hertford Foods Ltd v Lidl GmbH [2001] EWCA Civ 938 The ‘Hill Harmony’ [2001] 1 AC 638 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 1 All ER 474 Howard Marine & Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 Houghland v R.R. Low (Luxury Coaches) Ltd [1962] 1 QB 694 Hourani v Harrison (1927) 32 Com.Cas. 305 I

The ‘Indian City’ [1939] AC 562 The ‘Island Archon’ [1994] 2 Lloyd's Rep 227 Ingram v Little [1961] 1 QB 31 J

Jackson v Union Marine (1874) L.R. 10 C.P. 125

James Finlay & Co. v Kwik Hoo Tong [1929] 1 K.B. 400

James Buchanan & Co v Hay’s Transport Services and Duncan Barbour and Son [1972 2 L1.L.R 535

Joseph Constentine v Imperial Smelting Corporation [1942] A.C. 154

9

Joseph Travers and Sons Ltd v Cooper [1915] 1 KB 73

J. Lauritzen A.S. v Wijsmuller B.V. (The Super Servant Two) ˆ[1990] I1 Lloyd’s Rep 1

K

Kulukundis v Norwhich Union [1937] I K.B.

L

Larrinaga v Societe Franco-Americaine (1922) 28 Com.Cas 1

Leesh River Tea v British India Steam Navigation Co. [1966] 2 Lloyd's Rep. 193

Lewis v Averay [1972] 1 QB 198

Livingstone v Raywards Coal Co. (1880) 5 App. Cas. 25 at p. 39

Lloyd v Guibert (1865) LR 1 QB 115

London and North-Western Railway Company v Hudson and Sons [1920] AC 324

Ludsin Overseas Ltd v Eco3 Capital Ltd [2012] EWHC 1980 (Ch)

M

Maritime National Fish v Ocean Trawlers [1935] A.C. 524

Marriot v Yeoward [1909] 2 K.B. 987

McCarthy v St Paul International Insurance Co Ltd [2007] FCAFC 28; 175 FCR 402

McFadden v Blue Star Line [1905] 1 K.B. 697 at p 706

Mead v Babington [2007] EWCA 518

Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] 1 AC 676

Monarch SS Co v Karishamns [1949] A.C. 196

Morris v C.W. Martin & Sons Ltd [1965] 2 Lloyds Rep 63

Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The Kanchejunga) [1990] 1

Lloyd’s Rep 391

N

National carriers Ltd v Panalpina (Northern) Ltd [1981] A.C. 675

Nickoll v Ashton [1901] 2 K.B. 126

10

Norman v Binnington (1890) 25. Q.B.D. 475

Northumbrian Shipping v Timm [1939] AC 397

O

Owners of SS. Lord v Newsum [1901] 1 K.B. 846

Osmium Shipping Corp v Cargill International SA [2012] EWHC 571 (Comm)

Overseas Tankship (U.K.) v Morts Dock & Engineering Co. (The Wagon Mound) [1961] A.C. 388

P

Pacific Basin IHX Ltd v Bulkhandling Handymax AS [2012] 1 C.L.C. 1QB (Commercial Court)

Palace Shipping Company v Gans Steamship Line [1916] 1 KB 138

Parker v South Eastern Railway Co Ltd [1877] 2 CPD 416

Pasley v Freeman (1789) 3 Term Rep 51

Paterson Steamships v Canadian Co-operative Wheat Producers [1934] AC 538 PC

‘The Pearlmoor’ [1904] P 286

Perera v Vandiyar [1953] 1 W.L.R. 672

Petroleo Brasileiro SA v ENE Kos 1 Ltd [2012] UKSC 17; [2012] 2 AC 164

Phillips v Brooks[1919] 2 KB 243

Photo Production Ltd v Securicor Transport Ltd [1980] AC 367

Potts v Union SS. Co. of New Zealand [1946] N.Z.L.R. 276

Price v Union Lighterage Co. [1904] 1 K.B. 412

Pyman v Hull and Barnsley Co. [1915] 2 K.B. 729

R

Re Privacy Hire Gentium [1934] A.C. 586 (P.C.)

Red “Superior” v Dewar & Webb [1909] 1 K.B. 998 (C.A.)

Republic of Bolivia v Indemnity [1909] I K.B. 784

Robinson v Harman (1848) I Exch 850

11

Rookes v Barnard [1964] A.C. 1129

Royscot Trust Ltd v Rogerson [1991] 3 All ER 294

Rutter v Palmer [1922] 2 K.B. 87

Ruxley Electronics & Construction Ltd v Forsyth [1995] 3 W.L.R. 118

S

Scottish Navigation Co. v Souter [1917] K.B. 222

Shearman v Folland [1950] 2 K.B. 43 at p. 49 Shipton Anderson v Harrison [1915] 3 K.B. 676 SK Shipping (S) PTE Ltd v Petroexport Ltd [2009] EWHC 2974 (Comm) Slough Estates plc v Welwyn Hatfield DC [1996] 2 PLR 50 Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460

Stanton v Richardson (1984) L.R. 9 C.P. 390

The’ Stork’ [1955] 2 QB 68 (Court of Appeal)

The ‘Starsin’ [2003] 1 Lloyds Rep 571

Sutcliffe v CC of West Yorkshire [1996] RTR 86

T

Tattersall v National Steamship Co. (884) 12 Q. B.D. 297

Taylor v Caldwell (1863) 3 B. & S. 826

Thin v Richards [1892] 2 Q.B. 141

Third Equitable Benefit BS v Borders [1941] 2 All ER 205

Transfield Shipping Inc v Mercator Shipping Inc [2008] 2 Lloyd’s Rep 275

Travers v Coopers [1915] K.B. 73

Tsakiroglou v Noblee Thori [1962] A.C. 93

TW Thomas & Co Limited v Portsea Steamship Company Limited [1912] 1 AC 1 at 129

V

Varnish v The Kheti (1949) 82 Li.L.R. 525

12

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949) 2 KB 528

W

Whalley v Wry (1799) 3 Esp 74

Worms v Storey (1855) ii Ex, 427; The Rona (1884) 51 L.T. 28

Wye SS. Co v Compagnie P.O. [1922] 1 K.B. 617

13

-AUTHORITIES-

BOOKS

R Aikens, R Lord and M Bools, Bills of Lading (Informa, 1st ed, 2006)

Simon Baughen, ‘Shipping Law’ (Cavendish Publishing, 3rd ed, 2004)

Hugh Beale, Chitty on Contracts (Sweet & Maxwell, 30th ed, 2008)

Terrance Coghlin, Andrew W. Barker et al, Time Charters (Informa, 6th ed, 2008)

Stewart Boyd, Andrew Burrows and David Foxton, Scrutton on Charterparties and Bills of Lading

(Sweet & Maxwell, 20th ed, 1996)

Norman Palmer, ‘Palmer on Bailment’, (Sweet & Maxwell, 3rd ed, 2009)

Martin Dockray, ‘Cases & Materials on the Carriage of Goods by Sea’, (Cavendish Publishing, 3rd

ed, 2004)

Brian Harris ‘Ridley’s Law of the Carriage of Goods by Land Sea and Air’, (Sweet & Maxwell, 8th

ed, 2010)

E.R. Hardy Ivamy, ‘Casebook on Shipping Law’, (Lloyd’s of London Press, 4th ed, 1987)

Lane Kendall and James Buckley. ‘Business of Shipping’, (Cornell Maritime, 7th ed, 2001)

John Mo, International Commercial Law (Lexis Nexis Butterowrths, 5th ed, 2013)

P M North, Cheshire’s Private International Law (Butterworths, 9th ed, 1974)

Jeannie Paterson et al ‘Principles of Contract Law’, (Thomson Reuters, 4th ed, 2009

Other

Chief Justice Allsop, ‘Recent Charterparty Decisions’, (Speech delivered at a lunchtime lecture for

MLAANZ and University of Newcastle, 26 June 2013).

14

-AUTHORITIES-

CONVENTIONS, RULES AND STATUTES

INTERNATIONAL

United Nations Commission on International Trade Law, Arbitration Rules 1976

Convention on Limitation of Liability for Maritime Claims 1976

Protocols to Amend the Limitation of Liability for Maritime Claims 1996

Protocol to Amend the International Convention for the Unification of Certain Rules of Law

Relating to Bills of Lading (The Hague Visby Rules) 1968

DOMESTIC

Arbitration Act 1996 (UK)

Carriage of Goods By Sea Act 1971 (UK)

Law Reform (Contributory Negligence) Act 1945 (UK)

Merchant Shipping Act 1995 (UK)

Misrepresentation Act 1967 (UK)

Torts (Interference with Goods) Act 1977 (UK)

MISCELLANEOUS ‘English law - Due diligence to maintain a vessel's condition’ The Gard News 188, November 2007, http://www.gard.no/ikbViewer/web/updates/content/52513/english-law-due-diligence-to-maintain-a-vessels-condition Charterparty repudiation’, Steamship Mutual, http://www.steamshipmutual.com/publications/Articles/ProVictor0210.html Chief Justice Allsop, ‘Recent Charterparty Decisions’, (Speech delivered at a lunchtime lecture for MLAANZ and University of Newcastle, 26 June 2013).

Respondent’s Memoranda Of Argument (RMIT University)

PART ONE: JURISDICTION

1. The Defendant submits that this Tribunal does not have jurisdiction to hear this dispute as: (A)

this Tribunal has the power to rule on its own jurisdiction; (B) under the correct construction of

the ST4 agreed between the parties it does not contain a London Arbitration Clause; (C) under

the most appropriate forum test Singapore is the just and natural seat of arbitration; and in the

alternate (D) there is within the ST4 an internal inconsistency which renders the Clause 46

inoperable and it ought be severed from the contract.

A THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN

JURISIDCTION

2. As per s30 Arbitration Act 1996 (UK) the tribunal may rule on issues of its own jurisdiction.

3. Further to this, the Defendant relies on the precedent that state that an arbitral tribunal has an

inherent power to rule on its own jurisdiction, including questions as to the validity of the

arbitration agreement1.

B UNDER THE CORRECT CONSTRUCTION OF THE ST4 AGREED

BETWEEN THE PARTIES IT DOES NOT CONTAIN A LONDON ARBITRATION

CLAUSE

4. The Defendant submits that under the true construction of the ST4, it does not contain a London

Arbitration Clause. It is clear from pre-contractual negotiations that there was never an intention to

include such a clause.

5. The Defendant did not attest to the inclusion of the London Arbitration Clause and contracted under the

belief that it was removed from the ST4 as attested by; ‘Really not keen on London arbitration as we

have had a bit of a negative experience on this recently’2.

6. The contract was not signed or confirmed in writing and as such it was incorporated through the

1 Christopher Brown Ltd v Genossenchaft Oestereichischer Waldbestizer Holwirtscafsbetriebe Registrierte GmbH [1954] i QB 7, 12-3. 2 Communication from Charles at LDP to Bill at IMWMB, May 23.

16

inclusion of multiple documents. The final offer and acceptance can found between Bill at IMWMB

acting on behalf of the Claimants at 1552 (UTC+1) 23rd July at this time Bill accepted the conter offer

which excluded the London Arbitration Clause.

7. From the express writings of the parties no such term could therefore be implied. Further if

anything could be implied from the contractual statements of the parties it would be that London

ought not be considered an appropriate forum given the express words to that effect.

8. On this basis Akai Pty Ltd v People's Insurance Company Ltd [1999] I.L.Pr. 24 ought to be

distinguished.

9. Similarly The 'Dolphina' [2011] SGHC 273 ought be distinguished on the basis that the clause

in that case allowed for a choice of forum whereas the relevant clause at issue here does not

provide for such a choice.

C UNDER THE MOST APPROPRIATE FORUM TEST SINGAPORE IS THE

JUST AND NATURAL SEAT OF ARBITRATION

10. The Jurisdictional issue is one of forum non conveniens, that is; Is the London Arbitration

Tribunal at least as appropriate a forum for the decision as the next most appropriate forum

having regard to the intentions of the parties at the time of contracting3.

11. The respondent submits that the under the most appropriate forum test articulated by Chiveley

LJ in Spiliada Maritime Corp v Cansulex Ltd4 at 476C where there exists a more appropriate

forum than England, jurisdiction ought not be found.

12. The respondents submits that Singapore is the just and natural seat of arbitration, as (a) The

headquarters of the respondents business, LDTP is in Singapore; (b) The contract was

negotiated and confirmed by the respondents whilst based in Singapore and (c) Singapore is the

discharge port and point of cargo loading for the vessel.

D THERE IS WITHIN THE ST4 AN INTERNAL INCONSISTENCY WHICH

RENDERS THE CLAUSE 46 INOPERABLE AND IT OUGHT BE SEVERED FROM

3 The Jurisdiction Clause in the Shelltime 4, cl 46 (a) as supported by - Akai Pty Ltd v People's Insurance Company Ltd 4 [1987] AC 460.

17

THE CONTRACT.

13. In the alternative to above submission if it is accepted that the incorporation clause within the

B/L covers all clauses ‘without exception’ then it is submitted that there is linguistic

inapplicability in this occurring. Clause 46 expressly refers to ‘this charter’ in reference to any

disputes and as such it cannot therefore also apply to the B/L. As stated in TW Thomas & Co

Limited v Portsea Steamship Company Limited ‘the terms of the charterparty when incorporated

or written into the bill of lading shall not be insensible or inapplicable to the document in which

they are inserted’,5 which was supported by Diplock LJ in Miramar Maritime Corporation v

Holborn Oil Trading Ltd,6 who rejected “verbal manipulation” of charterparty clauses to allow

for incorporation into bills of lading.7

5 [1912] 1 AC 1 at 129. 6 [1984] 1 AC 676. 7 Chief Justice Allsop, ‘Recent Charterparty Decisions’, (Speech delivered at a lunchtime lecture for MLAANZ and University of Newcastle, 26 June 2013).

18

PART TWO: RESPONSE TO ALLEGATIONS OF

BREACH BY DEFEDANT

14. The Defendants submits that Claimant’s allegations for breach of contract ought not be found

for; (A) insufficiency of bunkers; (B) any actions of the unrelated party ASA2; and (C) failing

to provide orders at Cape Town.

A INSUFFICIENCY OF BUNKERS

15. The Defendants submit that they fulfilled their obligation to provide sufficient bunkers under

the ST4 and in any event any insufficiency of bunkers was unrelated to any damage caused.

16. Captain Stelios Smith advised that ‘about 1,500 MT’8 was required to complete the voyage.

17. Originating bunkers were 570MT, as per the Master’s communication9.

18. Additional bunkers of 950MT10 were supplied leaving at least 20MT in reserve at the time of

leaving Singapore.

19. On 25-Jun-14 Captain Stelios advised that the estimates of bunkers were ‘about 130MT to

complete discharge which means I only have 220MT IFO left / for reserve’11 the defendant

submits that Captain Stelios protest for an increase in bunkers was in bad faith and that the true

motivation for his request to stop at Durban or Cape Town related to the provision of the anti-

piracy equipment detailed in Rich Evasion’s communication on 3-Jun-1412.

20. ‘The safety and protection of crew and vessel is owners’ obligation’13 and ‘Owners will at all

times adhere to the latest version of best management practices (including with respect to

routing) (“bmp”)14 specifically the BMP4 requires a Risk Assessment to be completed15, which

8 Communication “WESTERN DAWN Voyage Orders – VO Number LDTP/WD01”, from Master of WESTERN DAWN to Chris at LDTP 27-May-14 page 20/21 9 Ibid. 10 Communication “WESTERN DAWN bunkering at PBT”, from Master of WESTERN DAWN to Chris at LDTP 3-Jun-14 page 25 11 Communication “WESTERN DAWN Durban BUNKERS / ETA OPL Luanda”, from Master of WESTERN DAWN to Chris at LDTP 25-Jun-14 page 32 12 Communication No Subject, from Rich Evasion CSO at WTI Safety and Security to Lucius at Purchasing WTI, CC Master of WESTERN DAWN and others 3-Jun-14 13 Sub-Clause (6) Special Provisions to ST4 Proforma, page 8 14 Sub-Clause (1) Special Provisions to ST4 Proforma, page 7

19

was completed by Rich Evasion on 3-Jun-14. AS a result of the Risk Assessment provision for

Razor wire was recommended and arranged, however due to procurement and or logistical

issues this was not provided at Singapore16. Razor wire is recommended under the BMP417.

21. Captain Stelios was aware of the failure of Claimants to provide the necessary anti-piracy

equipment and it is submitted that this was his overriding consideration to request the docking at

Durban or Cape Town and that the bunkers were not his primary consideration.

22. In the alternate if the Tribunal finds that the bunkers were not sufficient the defendant submits

that the Claimant has not demonstrated that there is any connection with any loss or damage.

B ANY ACTIONS OF THE UNRELATED PARTY ASA2

23. The Defendants submits that it cannot be held liable for any actions of the unrelated party

ASA2.

24. The Defendants identified their agents in the Voyage Orders, section 418 and this section does

not contain any reference to ASA2.

25. At no time did the defendants, hold out, introduce or any in other way suggest or communicate

that ASA2 were acting as there agents.

26. Captain Stelios received a communication from the Rogue ASA2 on 28-Jun-1419 and made no

enquiry as the validity of the orders received. From the principles articulated in Phillips v

Brooks20 where a party contracts with a Rogue the do so at their own peril. The principle ought

be articulated here that were a party takes instructions from a Rogue the resultant damage is

their own.

27. The case of Ingram v Little21 ought be distinguished as Captain Stelios did not take any steps to

15 Section 3, BMP4, Best Management Practices for Protection against Somalia Based Piracy Version 4 – August 2011, Witherby Publishing Group Ltd 2011, page 12. 16 Communication No Subject, From: Lucius at Purchasing WTI to To: Master of WESTERN DAWN & Rich Evasion CSO at WTI Safety and Security, 03-Jun-14. 17 8.5 Physical Barriers, Section 8, BMP4, Best Management Practices for Protection against Somalia Based Piracy Version 4 – August 2011, Witherby Publishing Group Ltd 2011, page 28. 18 Page 16. 19 Communication ‘WESTERN DAWN ETA OPL Luanda’ to Master of WESTERN DAWN from Atlantic STS Agency Ltd (ASA Angola Ltd) (Captain.William.Anya_GM@asa2.com.an ). 20 [1919] 2 KB 243 and Lewis v Averay [1972] 1 QB 198. 21 [1961] 1 QB 31.

20

uncover the true identity of the Rogue.

28. With the exception of the communication on 3-Jul-14 requesting additional fuel Captain Stelios

discontinued all communication with the defendants once communication with the Rogue had

been established.

C Failing to provide orders at Cape Town

29. As communication had ceased between the Charterer and the Vessel (Captain Stelios) and in an

event the contract had come to a conclusion either due to Frustration, or breach of contract.

30. In the alternate the vessel was ‘off-hire’ at the time of proceeding to Cape Town.

21

PART THREE: RESPONSE TO ALLEGATIONS OF

TORT OF FRAUD

31. The Defendant submits that they are not liable in the Tort of Fraud (A) the defendant did not

make a false representation; (B) the defendant did not intend or induce the claimant to rely on

said representation; (C) the loss suffered by the claimant was due to their own non-performance

of the contract not any said reliance.

32. Elements of the tort of deceit in England22; (1) the defendant made a false representation to the

plaintiff; (2) the defendant made the representation fraudulently i.e. knowing it to be false, or

having no belief in its truth, or being recklessly indifferent to its truth or falsity; (3) the

defendant intended the plaintiff to believe in and rely on the false representation; (4) the

plaintiff was induced to rely on the representation; and (5) the plaintiff suffered damage.

A THE DEFENDANT DID NOT MAKE A FALSE REPRESENTATION

33. The statement in question is ‘We have alternative bunker supply available passing Durban or

Cape Town reverting’23 made on 3-Jun-14.

34. At the time of making this statement there is nothing on the record that this representation was

false.

35. Further due to its vague nature it cannot be relied upon and no reasonable person would take it

to be of a promissory nature. It is therefore mere guidance.

36. On this basis the duty to correct a representation established in Slough Estates plc v Welwyn

Hatfield DC24 ought be distinguished.

B THE DEFENDANT DID NOT INTEND OR INDUCE THE CLAIMANT TO

RELY ON SAID REPRESENTATION

37. The Defendant submits that the statement made was not intended to be relied upon and did not

22 Magill v Magill (2006) 226 CLR 551; Derry v Peek (1889) 14 App Cas 337. 23 Communication “RE: WESTERN DAWN bunkering at PBT”, From Chris at LDTP To: Master of WESTERN DAWN, 03-Jun-14, page 26. 24 [1996] 2 PLR 50.

22

induce to Claimant to rely upon it.

38. It is requirement for third element of the Tort of Fraud that the reliance be an actual intention for

reliance, not only foreseeable reliance25.

39. At the time of making the statement the Defendant had no reason for the Claimant to rely upon

the statement and ultimately the duty to provide adequate bunkers was always the Defendant’s.

If the vessel ran out of bunkers it would clearly be the Defendant who would be liable so any

risk borne by the parties for insufficient bunkers would be the Defendants.

40. The reliance that the Claimants had on the stop at Durban or Cape Town was to take on

additional anti-piracy equipment, a fact not brought to the attention of the Defendants at any

time and not in existence at the time in question.

C THE LOSS SUFFERED BY THE CLAIMANT WAS DUE TO THEIR OWN

NON-PERFORMANCE OF THE CONTRACT NOT ANY SAID RELIANCE

41. As dealt with later in the Defendant’s submission the loss and damage to the vessel and the

cargo was due to the Claimants actions, breach of contract and breach of bailment. The

Claimants were bound to perform the contract and these requirements were absolute, the

Claimants cannot subsequently.

42. The Defendants submits that had the Claimant advised the Defendants of the necessity to take

additional anti-piracy equipment at Durban or Cape Town they may have acted differently, and

that withholding this information created the damage and loss not any alleged

misrepresentation.

25 Third Equitable Benefit BS v Borders [1941] 2 All ER 205.

23

PART FOUR: THE CLAIMANTS ARE LIABLE FOR

BREACH OF CONTRACT FOR THE MASTER’S

ACTIONS

43. The Defendants submit that the (A) the Master, Captain Stelios, was incompetent; (B) the

Master failed to follow anti-piracy precautions as required; (C) the Master failed to adhere to

the reporting requirements set out in the ST4 and Vessel orders; (D) that the claimants breached

an implied term of the Master’s obedience (E) that the Claimants are liable for breach of

contract for the Masters actions; in the alternate (F) that the Claimants are liable in vicarious

liability for the Masters actions; and (G) the complete and entire combined loss suffered by both

parties was due to the Master’s actions resulting in the Claimants being liable for said loss and

damage.

A THE MASTER, CAPTAIN STELIOS, WAS INCOMPETENT

44. The master took instructions from the Rogue (ASA2) which resulted in the vessel being

boarded by pirates.

45. The Master has a duty to the Defendants to obey their orders under the Charterparty26 and as an

obvious and natural requirement of the fulfilment of the agreement.

46. The Master disobeyed the orders of the Defendant by failing to keep them informed of progress.

47. The Defendant instructed the Master to provide daily reports27 to the ‘Charterer and Agents at

the next port on a daily basis, at noon’28. From 28-Jun-14 the Master ceased sending the daily

reports to the identified Charterer (Chris at LDTP) and Agent (Atlantic Agency

(William@ASA.com.an)) in favour of sending said reports to the Rogue

(Captain_Anya_GM@asa2.com.an). Such action was in direct breach of the Voyage

instructions.

26 Clauses 4(a) and 12 ST4. 27 Section 3.2 Daily ETA Updates – Noon Report ‘VOYAGE ORDERS FOR M/T WESTERN DAWN’ page 14. 28 Ibid.

24

48. The Master took instructions from a Rogue third party in direct breach of voyage orders29.

49. The Master failed in his responsibilities to the vessel, the owner and the Defendant by

proceeding into a known piracy area30 without the precautions recommended by the risk

assessment31.

50. The result of the Master’s incompetency was that the vessel navigated into an area with a high

risk of piracy, without the necessary anti-piracy provisions and was directed there likely by the

very same pirates whom later the vessel was boarded.

51. The Master’s incompetency breached ST4 Clause 2 (a) (i) to (i) ‘prosecute all voyages with the

utmost despatch’.

52. Response to argument that Master was acting out of ‘Agency of Necessity’: This case should be

distinguished, as Lord Sumption (dissenting argument in The Ex Cargo Argos) claimed the

references to necessity refer to the necessity for the bailee to expend funds in order to fulfill his

or her duty to care for the bailor's goods, rather than an agency of necessity.

53. By deviating the ship to the coordinates of 06 Degrees 00 minutes South: 08 Degrees 10

minutes East, the Master had breached the voyage orders and neglected his duty. The

Charterparty indemnity clause 13 is not applicable in this situation as The ‘Hill Harmony’32

determined orders given relate to the employment of the vessel, not to the vessel’s navigation or

management, as the case in this instance.

B THE MASTER FAILED TO FOLLOW ANTI-PIRACY PRECAUTIONS AS

REQUIRED

54. As a matter of strict obligation, the Claimant, through their agent the Master were required to

adhere to the BMP4 anti-piracy provisions, specifically to complete a risk assessment and take

actions as required. The result that the Claimant must have provided the razor wire as an anti-

piracy provision.

29 Page 13 30 The point designated OPS Luanda is off the coast of Angola and is defined 31 The risk assessment completed by Rick Evasion page 32 [2001] 1 AC 638

25

55. The requirement to provide the anti-piracy provisions was a promise made and formed a term of

the contract, the Master’s ‘Vessel doing best to comply with BMP4 in circumstances as stores

and spares Sing order not received’ is insufficient to discharge the promise once made.

56. Anastassia v Ungle-Export (1934) 49 L1.L.Rep. 1. Where it was found that where a party has

‘contracted to supply the assistance, and that, in my opinion, means either by themselves or by

others, so that they cannot justify a failure to do so on the pretext that they had not the

icebreakers under their control and could not get them supplied by those who controlled them.

In that sense the obligation is absolute.

57. As in the case Anastassia v Ungle-Export33 the obligation in this case is absolute.

58. The Claimant’s failure to adequately provide the anti-piracy provisions contributed to the

damage and loss.

C THE MASTER FAILED TO ADHERE TO THE REPORTING

REQUIREMENTS SET OUT IN THE ST4 AND VESSEL ORDERS

59. The Defendant submits that the as outlined in submission B of this Chapter the reporting

requirements were an absolute obligation on the Master and even if the failure

60. The Claimant by the master’s conduct, or lack thereof as the case may be, breached Clause 1234

D THAT THE CLAIMANTS BREACHED AN IMPLIED TERM OF THE

MASTER’S OBEDIENCE

61. It is necessary so as not to render the contract worthless and seriously undermine the intention

of the parties that the Master reasonably follows the instructions of the Defendant.

62. A term should be implied if ‘(1) [the implication] must be reasonable and equitable; (2) it must

be necessary to give business efficacy to the contract, so that no term will be implied if the

contract is effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must

be capable of clear expression; (5) it must not contradict any express term of the contract.’35

33 (1934) 49 L1.L.Rep. 1. 34 ST4 35 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 as affirmed in Byrne v Australian Airlines Ltd (1995) 185 CLR 411

26

63. It is necessary to provide business efficacy to the contract that the Master obey the reasonable

orders given to him by the Defendant. The term meets the test above.

64. The Master’s disobedience of providing the reports on a daily basis, taking orders from a Rogue

third party and his failure to adequately prepare for the pirate infested waters breached this

implied term.

65. Terms of this nature have been implied in Time Charters in The ‘Hill Harmony’ [2001] 1 AC

638 at 641 and The ‘Gregos’ [1994] 1 WLR 1465 at 1468-1469.

E THAT THE CLAIMANTS ARE LIABLE FOR BREACH OF CONTRACT

FOR THE MASTERS ACTIONS

66. The Master’s performance of the charterparty is an express term and his failure to adequately

discharge his duties breaches clauses (2) and (3).

67. The Claimants are therefore liable to pay damages in breach of contract for the Master’s actions.

F THAT THE CLAIMANTS ARE LIABLE IN VICARIOUS LIABILITY FOR

THE MASTERS ACTIONS

68. The respondent submits that the conduct of the Mater and the Crew endangered the goods of the

respondent and claimant is liable under the doctrine of vicarious liability for said damage

caused.

69. In a time charter arrangement, the owner provides the vessel for commercial undertakings to the

charterer and retains possession of the vessel and employs master and crew.

70. An employer is vicariously liable for wrongdoing committed by employees who are in breach of

their employment contract where that wrongdoing was committed as part of the scope of general

duties.

71. Owners are vicariously liable for the actions of the Master owing to the servant and master

employment relationship.

G THE COMPLETE AND ENTIRE COMBINED LOSS SUFFERED BY BOTH

PARTIES WAS DUE TO THE MASTER’S ACTIONS RESULTING IN THE

27

CLAIMANTS BEING LIABLE FOR SAID LOSS AND DAMAGE.

72. The damage to the Claimant’s vessel, physical damage to the crew and to the Defendants cargo

are all as a direct result of the actions of the Master and therefore it is submitted that the

Claimant is wholly and solely liable.

73. But for the actions articulated above the vessel would not have been boarded by pirates and the

damage would not have occurred.

28

CHAPTER FIVE: THE CLAIMANTS HAVE

ABROGRATED THEIR DUTY OF DUE DILIGENCE

RESULTING IN AN OFF HIRE EVENT

75. The Defendant submits that the Claimants through their agent, the Master, (A) owed a duty of

due diligence; (C) failed to fulfil said duty and (D) the Vessel was off-hire from at least 3-Jul-14

if not earlier.

A OWED A DUTY OF DUE DILIGENCE

76. The carrier owes a tortious duty of care to exercise reasonable care to safeguard the goods and

as such the claimants are sensitive to liability in negligence.36

77. Once damage or loss has been established, the carrier bears the responsibility for proving those

goods were not damaged via negligence, but for another reason.37

78. Vessel did not comply with requirements to have equipment on board. Ensuring the vessel is

adequately equipped with anti piracy equipment is the responsibility and duty of the vessel

owners (as previously referenced). In not ensuring the requisite anti piracy equipment was on

board the vessel prior to its Singaporean departure, the owners breached this duty.

79. Delay to the voyage was required whilst en route in order to load the vessel with anti-piracy

equipment.

B DUTY TO MAINTAIN/ DUE DILIGENCE/ BREACH OF DUTY OF DUE DILIGENCE/ REDUCTION OF HIRE PERIOD

80. ST4: Cl. 3 requires the owners to ‘exercise due diligence so to maintain or restore the vessel as

soon as reasonably practicable’.

81. Where there is a breach of Clauses 1,2 or 10 under ST: Clause 3b there will be a reduction in

the hire period, and the vessel is taken as off-hire.

82. ‘Due diligence is equivalent to the common law duty of care and contains no limit on the

36 Whalley v Wry (1799) 3 Esp 74. 37 Joseph Travers and Sons Ltd v Cooper [1915] 1 KB 73.

29

expense involved in exercising that duty. Due diligence requires the exercising of reasonable

care and skill so that, once the owners become aware of a deficiency or, more accurately once

they should have become aware of a deficiency, the duty to exercise reasonable skill and care to

remedy the position arises. There may be some element of latitude about when, where and how

the work is done but there cannot be a financial limit to the obligation, unless issues of

frustration arise, which is not here suggested … No question of proportionality in terms of

financial expenditure arises’.38

83. Hague Rules- Positive Duty of Diligence on Owners requires in Art 3, Rule 1 requires the

owner to exercise due diligence ‘before and at the beginning of the voyage’. The ‘Fjord Wind’

[2000] 2 Lloyds Rep 191 (C.A.), a voyage charter, defined this as the whole period of the

charter, before the first cargo-carrying voyage.39 This positive duty to exercise due diligence is

excluded from liability by 4(1) which states not liable for unseaworthiness unless they caused

the unseaworthiness.

84. Argument that there was adequate time to arrange for the equipment to be on board and by not

ensuring this, the due diligence duty was breached. By breaching the due diligence duty, the

owners have failed to demonstrate reasonable satisfaction of their exercise of due diligence- the

vessel was ill equipped to respond to piracy attack and therefore this act reduces the hire period

for ‘such failure’ by the owners.

C FAILED TO FULFIL SAID DUTY

85. As per submissions made in chapter four.

D THE VESSEL WAS OFF-HIRE FROM AT LEAST 3-JUL-14 IF NOT

EARLIER

86. Seizure by Pirates held to be an Off-Hire Event in Osmium Shipping Corp v Cargill

38 Golden Fleece Maritime & another v. ST Shipping [2007] EWHC 1890 (Comm) - Due diligence discussed in ‘English law - Due diligence to maintain a vessel's condition’ The Gard News 188, November 2007, http://www.gard.no/ikbViewer/web/updates/content/52513/english-law-due-diligence-to-maintain-a-vessels-condition 39 Terence Coghlin et al, ‘Time Charters’, (Informa Law from Routledge, 6th ed, 2008). 163

30

International40, where a charterparty provided for off-hire in some provisions and remedies for

breach in others, the focus must be on the off-hire clause in determining an off-hire event. The

particular words used, and the grammatical structure and syntax of the clause, must be

considered. In this case, on a close reading of the off-hire clause, it was only “detention or

threatened detention” that was qualified by the words “by any authority”. This was clear from

the use of the word “or”, the linking of “capture” and “seizure” by the use of an oblique stroke,

and the positioning of the commas

87. Similarly in Pacific Basin IHX Ltd v Bulkhandling Handymax AS41an off hire clause operates

where the master or owners formed a reasonable judgment, first, that the vessel, her cargo or

crew ‘may be, or are likely to be, exposed’ to acts of piracy and second, that such acts of piracy

‘may be dangerous or are likely to be or to become dangerous'. The words ‘may be, or are likely

to be, exposed’ to war risks did not clearly state what the degree of risk had to be. The right of a

charterer to give directions as to the employment of the vessel was a key right of the charterer. It

followed that any limitation on that right had to be clearly expressed. The reasonable

construction was that the phrase ‘may be, or are likely to be, exposed’ to war risks was intended

to express a single degree of possibility or probability, the word ‘or’ being used in the sense of

‘that is'. It was not reasonable to construe ‘likely to be’ to mean that it was more likely than not

that the vessel would be exposed to acts of piracy. The parties' intentions were best captured by

the concept of a ‘real likelihood’, ‘real danger’ or ‘serious possibility’.

88. The arbitrators held that the phrase ‘may be, or likely to be’ connoted a serious risk that the

vessel would be exposed to acts of piracy. However, they had not understood ‘serious risk’ in

the sense of a real likelihood. They had focussed on the quality or nature of the event of which

there was a risk rather than on the likelihood of the risk materialising. Instead of asking whether

there was a serious chance that the vessel would be exposed to acts of piracy, the arbitrators

asked themselves whether there was a chance that the vessel would be exposed to the risk of a

40 SA [2012] EWHC 571 (Comm). 41 [2012] 1 C.L.C. 1Queen's Bench Division (Commercial Court).

31

serious event, namely acts of piracy. They had therefore erred in law. If the arbitrators were

wrong in law as to their understanding of the phrase ‘may be, or are likely to be, exposed to war

risks' then it followed that their conclusion that Bulkhandling formed a reasonable judgment

was also wrong in law.

89. As a result the vessel was off-hire no later than 3-Jul-14.

90. As the vessel was off-hire no payments were due as per Clause 942.

42 ST4.

32

CHAPTER SIX: BAILMENT

91. At the time of an off-hire period the Claimants became entered a Bailment arrangement in lieu

of the existing contractual arrangements in the ST4.

92. Upon receipt and acceptance of goods, private carriers become bailees of the goods delivered to

them for the purpose of carriage by sea and are liable for their welfare regardless if the bailment

terms are gratuitous or for reward.43

93. As bailees, carriers are not under the liability of an insurer, however are obliged to reasonably

care for the goods in their possession and to redeliver them in the condition that they received

them and any loss or damage incurred must be proved to be as a result of reasonable care not

being taken.44

94. The onus is on the bailee to prove the exercise of reasonable care and that any loss or damage

occasioned was not as a result of a lack of reasonable care on their part.45

95. The Master allowed the passing of illegal possession of part of the goods to an alleged agent of

the Charterer. The carrier as original and now intermediate bailee, remains responsible for the

proper and appropriate discharge of responsibilities and care for the cargo, even in the event of

breach such as theft by the sub-bailee.46

96. The degree of care that must be exercised by a bailee and gratuitous bailee is a degree a

reasonable man would exercise with his own goods.47

97. The concept of involuntariness is at odds with bailment as a voluntary undertaking. In any case,

an involuntary or voluntary bailee has a duty at law to take reasonable care of the goods and as

cargo was ultimately lost, it is argued the duty to reasonably care for the goods was not

discharged.

43 Norman Palmer, ‘Palmer on Bailment’, (Sweet & Maxwell, 3rd ed, 2009). 44 Ibid. 45 Ibid. 46 Morris v C.W. Martin & Sons Ltd [1965] 2 Lloyds Rep 63. 47 James Buchanan & Co v Hay’s Transport Services and Duncan Barbour and Son [1972 2 L1.L.R 535.

33

CHAPTER SEVEN: THE OWNERS WERE NOT

ACTING AS AN AGENT OF NECESSITY

98. The claimants assert they were acting as an agent of necessity in responding and acting upon the

communication from ASA2 (date) and in then redirecting the vessel to sail towards Cape Town

following the seizure event. The case provided was Australasian SN Company v Morse48

however this should be distinguished on the basis it related to sale of cargo and not theft by

third party pirates and as such there was no actions taken by the Master, crew or owners in

protecting, preserving or disposing of goods.

99. In addition, the three-limb test for the agency of necessity to be invoked as set out in the Unique

Mariner49 has not been satisfied by the circumstances of the facts at hand.

100. Impracticable for the principle to be contacted (Ref- Master did not CC Angola Sea in

subsequent communications of deviation or return to Cape Town)

101. Steps taken must be for the benefit of the principal (it was not in the benefit of the cargo or

arguably the ship to sail to Cape Town as Luada OPL much closer and would have delivered the

remaining cargo to the owners)

102. Agent acting bona fide in principals interest

A MISDELIVERY OF GOODS BY SEA

103. As a result of the goods being delivered to a non-authorised point of destination due west of

OPL Luanda, the charterers claim breach of contract and a tortious conversion of goods.

48 (1871-1873) LR 4 PC 222. 49 The Unique Mariner [1978] 1 Lloyds Rep 438 (Master signed a salvage agreement).

34

CHAPTER EIGHT: THE DEFENDANTS HAVE NOT

REPUDIATED THE CHARTERPARTY

104. The Defendants submit that they did not repudiate the Charterparty

105. Four Elements for renunciation/ repudiation to arise:50 (1)a clear, unequivocal and absolute

expression; (2) by words or conduct; (3) that would lead a reasonable person to conclude that

the other party does not intend to fulfil its contractual obligations; and (4) which the innocent

party, in fact, takes as a demonstration that the other party does not intend to perform the

contract.

106. The question of whether certain words or conduct amount to renunciation of the charter

party must be considered taking into account all the circumstances and history of the

commercial relationship up to the point of termination, “The Hermosa”51.

107. While charterers’ individual actions or communications may not have amounted to a

renunciation of the contract, taking charterers’ communications and conduct as a whole, and

considering all relevant circumstances (including the history of the contractual relationship), a

reasonable person would have considered that charterers had demonstrated a clear intention not

to perform. Owners were therefore entitled to accept charterers’ repudiatory breach of contract

and terminate the charterparty. Consistent with the SK Shipping (S) PTE Ltd v Petroexport Ltd52

108. The charterers at no time demonstrated a repudiation of the contract by words or conduct.

Indeed there are a number of communications, which show that the charterers were acting in

line with the contract remaining on foot.

109. On 8 June Chris LDP communicated with Angola Energy Imports to confirm payment

received for the GasOil and Jet Cargo. This message assumes continued performance by stating

the ETA as 3 July. This evinces a legal intention to continue with the voyage and dispatch of

50 ‘Charterparty repudiation’, Steamship Mutual, http://www.steamshipmutual.com/publications/Articles/ProVictor0210.html 51 [1982] 1 Lloyd’s Rep 570, p 572-573 52 [2009] EWHC 2974 (Comm)

35

cargo.

110. In any case, the parties obligations to perform will remain until the repudiation is accepted.53

In 199. The owners sought to extend the cancellation date and the charterers refused- as this was

before the contract cancellation date the charterers were in breach (anticipatory breach). As the

owners did not accept this breach and instead issued a revised NOR, it was held the contract was

still on foot.

111. In a similar fashion, whilst it is acknowledged there was a prolonged lack of communication

from the charterers to the Master, this was not accepted at the time as an anticipatory breach, or

repudiation of contract and the Master/ owners continued to perform as per the contract.

53 Fercometal SARL v Msc Mediterranean Shipping Co SA (“The Simona”) [1988] 2 Loyd’s Rep

36

CHAPTER NINE: THE CHARTERPARTY HAS BEEN

FRUSTRATED OR IN THE ALTERNATIVE THE

CLAIMANTS HAVE REPUDIATED THE

CHARTERPARTY AND THE DEFENDANTS FACED

IMPOSSIBILITY OF PERFORMANCE

112. The Charterparty was frustrated at no later than 4-Jul-14 as a result of the Rogue third party

being in control of the vessel and the Master no longer taking instructions (or orders) from the

Defendant.

113. Imposter intercepting communications is not a foreseeable event and as such this is a

frustrating event.

A The result was an Impossibility of performance by the Defendants

114. According to the Starsin54 case, the contract is concluded by the exchange of performance,

not promises.55 This case articulated that the goods owner, acting via the carrier provisions

consideration by presenting goods for carriage and or discharge via the B/L and the sub-

contractor (owner in the instant case) provides consideration by carrying or discharging the

goods in line with the B/L.

115. If contact was received from the receivers, then performance of contract may have been

possible. In this way, this is a similar situation to SK Shipping (S) PTE Ltd v Petroexport Ltd,56

where there could have been at least a chance that charterers might secure a buyer for the cargo

at the final hour. Owner’s reliance on “impossibility” is risky as a further change of

circumstances might still allow charterers to perform their obligations.

54 The ‘Starsin’ [2003] 1 Lloyds Rep 571. 55 Brian Harris ‘Ridley’s Law of the Carriage of Goods by Land Sea and Air’, (Sweet & Maxwell, 8th ed, 2010). 56 [2009] EWHC 2974 (Comm).

37

CHAPTER TEN: QUANTIFICATION OF DAMAGES

116. The Defendant submits that the loss suffered forms both reliance loss and actual loss.

117. The Defendant ought be compensated for the loss of the cargo and the lost profit that would

have been made had the charter been successful.

118. ‘reliance losses are a species of expectation losses’57.

119. ‘Where a party sustains a loss by reason of a breach of a contract, he is, so far as money

can do it, to be placed in the same situation, with respect to damages, as if the contract had

been performed’58.

57 The ‘Mamola Challenger’ [2010] EWHC 2026 (Comm) at 42. 58 Robinson v Harman (1848) 1 Exch 850.

38

-PRAYER FOR RELIEF- For the reasons set out above, the Claimant requests this Tribunal to: DECLARE that this Tribunal does not have jurisdiction to hear the merits of the claims; IN THE ALTERNATIVE FIND that the Respondent did not breach the contract, and/or are not liable for breach of contract; and/or are not liable in tort; and/or are not liable to the claimant for any reason whatsoever; and/or are not liable to the claimant for whatever reason the Tribunal considers fit. AND/OR AWARD damages to the Claimant;

(a) Declaration of no liability. (b) Damages as particularised in the phase relating to quantification of damages. (c) Interest. (d) Costs. (e) Further or other relief as the Tribunal considers fit.