1
NINETEENTH ANNUAL
INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2018
THE UNIVERSITY OF HONG KONG
TEAM 15
MEMORANDUM FOR CLAIMANT
CHAN HIU IN FERRIDA
CHEUNG TSZ HIM RYAN
FUNG KING YIU
MA YU KIT
2
Table of Contents
ABBREVIATIONS 4
LIST OF AUTHORITIES 6
SUMMARY OF ARGUMENTS 9
SUMMARY OF FACTS 9
ARGUMENTS ON JURISDICTION 11
I. THE TRIBUNAL HAS JURISDICTION TO HEAR THIS CASE 11
ARGUMENTS ON THE MERITS OF THE CLAIM 12
II. THE VESSEL WAS UNSEAWORTHY 12
A. The Vessel was unseaworthy due to the lack of charts for the voyage 14
B. The Vessel was unseaworthy due to the lack of an updated satellite
communication system 14
III. RESPONDENT IS LIABLE FOR CONSEQUENCES ARISING FROM
UNSEAWORTHINESS 15
IV. RESPONDENT IS LIABLE FOR DAMAGE TO THE CARGO 17
V. CLAIMANT IS ENTITLED TO ALL DAMAGES AS CLAIMED 19
VI. CLAIMANT IS ENTITLED TO FULL DAMAGES WITHOUT LIMITATION BY
ANY INTERNATIONAL CONVENTION 21
VII. CLAIMANT IS ENTITLED TO A MARITIME LIEN 24
A. Maritime lien arising out of bottomry is recognised under Australian law 24
B. Alternatively, a foreign maritime lien arising out of bottomry under English law
is recognised in Australia 25
C. There is a valid bottomry bond between the Parties 27
ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM 29
VIII. CLAIMANT IS NOT LIABLE FOR DEMURRAGE 29
IX. CLAIMANT IS NOT LIABLE FOR GENERAL AVERAGE EXPENDITURE 32
3
REQUEST FOR RELIEF 33
4
ABBREVIATIONS
Buyer Coffees of the World Ltd
Cargo 70,000 k.g. native Cerulean coffee beans
Cargo Damages Loss in the amount of USD15,750,000 which CLAIMANT
sustained in respect of the damaged Cargo
Charterparty The voyage charterparty between CLAIMANT and
RESPONDENT
CLAIMANT Cerulean Beans and Aromas Ltd
Contract The contract for sale of the Cargo between CLAIMANT as
the seller and the Buyer as the buyer
Expert Determination Clause Clauses 27(d) – (g) of the Charterparty
Festival The coffee festival held in Dillamond from midday 29 July
2017 to midnight 31 July 2017
Hague Rules The International Convention for the Unification of Certain
Rules of Law Relating to Bills of Lading (Brussels 25 August
1924)
Hague-Visby Rules The Hague Rules as amended by the Brussels Protocol 1968
IMO The International Maritime Organisation
Master Independent master mariner
Navigation Act 2012 The Navigation Act 2012 of Australia
Parties CLAIMANT and RESPONDENT
Port Authority The port authority at Dillamond
PO2 Procedural Order No. 2
Record 2018 International Maritime Law Arbitration Moot Scenario
5
Replacement Payment The amount of USD9,450,000 which CLAIMANT incurred
for procuring replacement coffee beans
RESPONDENT Dynamic Shipping LLC
Settlement Payment The amount of USD5,000,000 paid by CLAIMANT to the
Buyer pursuant to a settlement agreement whereby the Buyer
released CLAIMANT from any claim it may have against it in
relation to CLAIMANT’s breach of the Contract
Senior Courts Act 1981 The Senior Courts Act 1981 of the United Kingdom (formerly
known as the Supreme Court Act 1981)
SOLAS The International Convention for the Safety of Life at Sea
Vessel The Madam Dragonfly
WWD Weather Working Day
6
LIST OF AUTHORITIES
Cases Referred to at
page:
British Shipowners v Grimond (1876) 3 Rett. 968 17
Brown Boveri (Aust) Pty Ltd v Baltic Shipping Co [1989] 1 Lloyd’s Rep
518
21, 24
Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd [1979] 1
WLR 401
23
Chartered Bank v British India S.N.Co. [1909] AC 369 17
Compania Naviera Azuero, S.A. v British Oil & Cake Mills Ltd [1957] 1
Lloyd’s Rep 312
29
C V Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Limited
[2007] FCAFC 77
13
Dairy Containers Ltd v Tasman Orient Line CV (The Tasman Discoverer)
[2004] UKPC 22
21
Davis v Garrett (1830) 6 Bing. 716 19
E. L. Oldendorff & Co. v Tradax Export (The Johanna Oldendorff) [1974]
AC 479
29, 31
El Greco v Mediterranean Shipping [2004] 2 Lloyd's Rep 537 21
Elbe Shipping South Australia v Ship Glory Peace (2006) 232 ALR 694 24, 25
Empresa Cubana Importadora de Alimentos Alimport v Iasmos Shipping
Co SA, The Good Friend [1984] 2 Lloyd’s Rep 586
19
Far East Chartering v Great Eastern Shipping [2012] EWCA Civ 180 18
Fisher v The Ship ‘Oceanic Grandeur’ (1972) 127 CLR 312 28
Grand Champion Tankers Ltd. V Norpipe A/S (The Marion) [1984] AC
563
14
Great China Metal Industries Co LTd v Malaytsian International Shipping
Corporation Bhd (1988) 196 CLR 161
12
Hain Steamship Co v Tate & Llye Ltd [1936] 2 All ER 597 32
Hall v Pim (1928) 33 Com. Cas. 20
Islamic Republic of Iran Shipping Lines v Ierax Shipping Co. (The Forum
Craftsman) [1991] 1 Lloyd’s Rep 81
29
James Morrison & Co Ltd v Shaw, Savill and Albion Co Ltd [1916] 2 KB
783
19
Kyokuyo Co Ltd v AP Moller-Maersk A/S (t/a Maersk Line) [2017]
EWHC654 (Comm)
22
Leighton Contractors Pty Ltd v Hooker Corporation Ltd (Full Federal
Court of Australia, 10 August 1989, unreported)
11
McFadden v Blue Star Line [1905] 1 KB 697 13, 15
Midgulf International Ltd v Groupe Chimiche Tunisien [2010] EWCA Civ
66
23
Monarch Steamship Co. Ltd. v. Karlshamns Oljefabriker (A/B) [1949] AC
196
15, 16
7
MT ‘Cape Bonny’ Tankschiffahrts GMBH & Co KG v Ping An Property
and Casualty Insurance Company of China Limited, Beijing Branch [2017]
EWHC 3036
32
Nea Agrex SA v Baltic Shipping Co Ltd (The Agios Lazarus) [1976] QB
933
21
New South Wales v Bannabelle Electrical Pty Ltd [2002] NSWSC 178 11, 12
Project Asia Line Inc and another v Shone (representative underwriter)
[2002] EWHC 24 (Comm)
12
PS Chellaram & Co Ltd v China Ocean Shipping Co [1989] 1 Lloyd's Rep
413
22
Reardon Smith Line v Ministry of Agriculture, Fisheries and Food [1963]
AC 691
29, 32
River Gurara (Owners of Cargo Lately Laden on Board) v Nigerian
National Shipping Line Ltd [1998] QB 610
22
Sea Tank Shipping AS (formerly known as Tank Invest AS) v Vinnlustodin
HF, Vatryggingafelag Islands FH [2018] EWCA Civ 276
21
Seabridge Shipping AB v AC Orssleff’s Eftf’s A/S (The Fjellvang) [1999] 2
Lloyd’s Rep 685
21
Stag Line Ltd v Board of Trade [1950] 2 KB 194 30
Sulamérica Cia Nacional de Seguros SA and others v Enesa Engelharia SA
and others [2012] EWCA Civ 638
11
Tharsis Sulphur v Morel [1891] 2 QB 647 30
The Atlas (1827) 2 Hagg 48 27
The Gratitudine (1801) 3 C. Rob. 240 28
The Halcyon Isle [1980] 2 Lloyd’s Rep 325 25, 26
The Ocean Dynamic [1982] 2 Lloyd’s Rep 88 20
The Rosa S [1989] QB 419 23
The Ship ‘Sam Hawk’ v Reiter Petroleum Inc [2016] FCAFC 26 25-27
The St George (1926) 25 Ll.L.Rep. 482 28
The Yorkshireman (1826) 2 Hagg. Adm. 30 20
Toll Holdings Pty Ltd v Stewart (2016) 338 ALR 602 18
Tradebe Solvent Recycling Ltd v Coussens of Bexhill Ltd [2013] EWHC
3786
20
United States Shipping Board v Bunge y Born (1925) 23 LI.L.Rep. 257 31
Wayne Tank and Pump Co Ltd v Employers Liability Corporation Ltd
[1974] QB 57
15
Yury Mogilyuk v Australian Maritime Safety Authority [2014] AATA 409 13, 14
8
Books Referred to at
page:
Cooke, Julian, Andrew Taylor, John D. Kimball, David Martowski and
LeRoy Lambert, Voyage Charters (Informa Law from Routledge, 4th ed,
2014)
16, 29, 30, 32
McGregor, Harvey, McGregor on Damages (Sweet & Maxwell, 20th ed,
2017)
19, 20
Schofield, John, Laytime and Demurrage (Lloyd’s Shipping Law Library,
7th ed, 2016)
29, 30, 31, 32
Thomas, D. Rhidian, Maritime Liens (Stevens, 1980) 28
Statutes and Conventions
Referred to at page:
Admiralty Act 1988 (Cth) 24, 25
Australian Law Reform Commission Report 33, Civil Admiralty
Jurisdiction, 1986
24
Carriage of Goods by Sea Act 1991 (Cth) 21
Guidelines for Voyage Planning 13
Hague Rules 9, 21, 22, 23
Hague-Visby Rules 21
International Convention for the Safety of Life at Sea (SOLAS), Chapter V 13, 14
Navigation act 2012 ((2012) NSW) 12, 14
New South Wales’ Sale of Goods Act 1923 (NSW) 18
Senior Courts Act 1981 (UK) 25
9
SUMMARY OF ARGUMENTS
1. It is CLAIMANT’S case that: (1) The Tribunal has jurisdiction to hear this case. (2)
RESPONDENT is liable for all damages as claimed as the Vessel’s unseaworthiness
led to deviation and eventually storm. (3) RESPONDENT is strictly liable for the
damage to the Cargo. (4) CLAIMANT is entitled to all damages as claimed. (5)
RESPONDENT’s liability is not limited by and is well below the applicable limit in
Article 4(5) of the Hague Rules. (6) CLAIMANT is entitled to a maritime lien. (6)
CLAIMANT is not liable to RESPONDENT’s counterclaim.
SUMMARY OF FACTS
2. On 18 July 2017, CLAIMANT entered into the Contract with the Buyer to deliver the
Cargo by 28 July 2017 for the Festival.
3. Under the Charterparty entered into between CLAIMANT and RESPONDENT on 22
July 2017, RESPONDENT agreed to ship the Cargo on board the Vessel from the
Port of Cerulean to the Port of Dillamond.
4. CLAIMANT also agreed, upon the request of RESPONDENT, to pay USD100,000
into a separate bank account prior to the voyage as security for the crew’s wages for
the shipment.
5. By a letter dated 22 July 2017, CLAIMANT reminded RESPONDENT of the urgency
of the shipment and the importance of timely arrival, and requested the use of
containers that would be entirely waterproof. By a letter of even date, RESPONDENT
replied that ‘We appreciate the commercial sensitivities and importance of the voyage
and confirm that your instructions will be followed at all times’.
6. The voyage was estimated to take 4 days and 8 hours. At or around 9 a.m. on 24 July
2017, the Vessel departed from Cerulean. Shortly thereafter, the Vessel’s
communications and satellite systems were knocked out by solar flares and changed
10
her course to Spectre because the only hardcopy maps available were for Spectre.
Only after 17 hours did the Vessel’s system reconnect. At or around 7:17 a.m. on 27
July 2017, the Vessel left the Port of Spectre and continued its journey to Dillamond.
7. At or around 4:30 p.m. on 28 July 2017, CLAIMANT’s staff attended the Port of
Dillamond and were ready to take delivery of the Cargo.
8. By an email at 4:58 p.m. on 28 July 2017, RESPONDENT informed CLAIMANT
that the Vessel could not proceed past its location because of a storm. RESPONDENT
subsequently informed CLAIMANT about a damage done to the hull of the Vessel
during the storm.
9. By an email dated 29 July 2017 at 8:58 a.m., RESPONDENT informed CLAIMANT
that the Vessel had been waiting at around 100 n.m. out from Dillamond for a berth
since 7 a.m. on 29 July 2017 upon instruction of the Port Authority, due to congestion
at the port caused by the storm.
10. By an email dated 29 July 2017 at 4:28 p.m., RESPONDENT informed CLAIMANT
that the Vessel was due to berth in 30 minutes and delivery of the Cargo would be
approximately 2 hours later. RESPONDENT also attached a barcode to the same
email for CLAIMANT to access the electronic storage facilities maintained by the
Port Authority for collection of the Cargo.
11. By an email dated 29 July 2017 at 8:42 p.m., RESPONDENT informed CLAIMANT
that the Cargo was available for collection. However, CLAIMANT could only take
delivery of the Cargo at around 1:17 p.m. on 31 July 2017 due to congestion at the
port.
12. By an email dated 1 August 2017 at 9:17 a.m., CLAIMANT informed
RESPONDENT that 3 out of 4 containers of the Cargo were water damaged. As a
result, CLAIMANT could only deliver one container to the Buyer. CLAIMANT
11
purchased and delivered replacement coffee beans as substitute to the Buyer.
13. By a letter dated 1 August 2017, the Buyer confirmed settlement with CLAIMANT
under which CLAIMANT was released from liability for failure to deliver the Cargo
on time and for delivery of inferior replacement coffee beans in consideration of the
Settlement Payment.
14. CLAIMANT commenced the present arbitral proceeding on 11 August 2017 for a
total claim of USD30,200,000 and for a maritime lien over the Vessel.
RESPONDENT counterclaimed for demurrage and other damages.
ARGUMENTS ON JURISDICTION
I. THE TRIBUNAL HAS JURISDICTION TO HEAR THIS CASE
15. Clause 28 of the Charterparty provides for the law of New South Wales to be the
governing law.1 The intention of the Parties must be that the law of New South Wales
governs the validity and the proper construction of the arbitration agreement
contained in Clause 27 of the Charterparty, including the Expert Determination
Clause.2
16. The Tribunal has jurisdiction over this case as the Expert Determination Clause,
which purported to make expert determination by a Master regarding disputed
technical matters a condition precedent to the commencement of arbitral proceedings,
is void for uncertainty.
17. Since the Parties could not have agreed to expert determination regardless of the
status or identity of the Master,3 in order for the Expert Determination Clause to be
1 Record 12. 2 Sulamérica Cia Nacional de Seguros SA and others v Enesa Engelharia SA and others [2012] EWCA
Civ 638, [26]. 3 Leighton Contractors Pty Ltd v Hooker Corporation Ltd (Full Federal Court of Australia, 10 August
1989, unreported).
12
sufficiently certain, it must either name a Master or expressly provide for a default
mechanism for appointing or nominating a Master.4 The Expert Determination Clause
provides for none of the afore-mentioned. Neither is there any express, let alone
implied obligation on the Parties to use best endeavours or to act in good faith to
agree to a Master. 5 The Expert Determination Clause is thus not sufficiently certain.
ARGUMENTS ON THE MERITS OF THE CLAIM
II. THE VESSEL WAS UNSEAWORTHY
18. The Vessel was unseaworthy for the following reasons: the lack of physical charts for
the voyage (A); and/or the lack of an updated satellite communication system in
compliance with the ‘current regulations of the Cerulean National Communications
Agency’6 (B).
19. Clause 1 of the Charterparty imports the obligation of seaworthiness by stipulating
that the Vessel should be ‘warranted tight, staunch and strong and in every way fitted
for the voyage … and proceed with all convenient speed’ to the Port of Dillamond.7
20. This is reinforced by Clause 15(a)(i) of the Charterparty which provides for
RESPONDENT to ensure that the Vessel complied with the Navigation Act 2012
(Cth)8, section 23 of which provides that:
‘A vessel is seaworthy if, and only if:
(a) it is in a fit state as to the condition of hull and equipment, …
machinery, … and in every other respect, to:
(i) encounter the ordinary perils of the voyage undertaken’ (Emphasis
added)
4 New South Wales v Bannabelle Electrical Pty Ltd [2002] NSWSC 178, [70]. 5 New South Wales v Bannabelle Electrical Pty Ltd [2002] NSWSC 178, [70]. 6 Record 35. 7 Record 4. 8 Record 8
13
22. This is in line with the common law test of seaworthiness in McFadden v Blue Star
Line9 in which the court considered ‘whether a prudent owner would have required
that the defect should be made good before sending his ship to sea had he known of
it’.
23. Furthermore, contravention to relevant conventions may also constitute
unseaworthiness.10
24. Specifically, SOLAS Chapter V, Regulation 19, titled ‘Carriage requirements for
shipborne navigational systems and equipment’, states that:
‘2.1 All ships irrespective of size shall have:
2.1.4 nautical charts and nautical publications to plan and display the
ship's route for the intended voyage … An electronic chart display and
information system (ECDIS) is also accepted as meeting the chart carriage
requirements of this subparagraph…
2.1.5 back-up arrangements to meet the functional requirements of
subparagraph .4, if this function is partly or fully fulfilled by electronic
means.
4 The navigational equipment and systems referred to in this regulation
shall be so installed, tested and maintained as to minimize malfunction.’
25. The Guidelines for Voyage Planning (adopted by the IMO) 11 also requires the
planning of voyages to include ‘gathering all information relevant to the contemplated
voyage or passage’.
9 [1905] 1 KB 697 (‘McFadden’), cited with approval in Great China Metal Industries Co LTd v
Malaytsian International Shipping Corporation Bhd (1988) 196 CLR 161, Project Asia Line Inc and
another v Shone (representative underwriter) [2002] EWHC 24 (Comm), [37], C V
Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Limited [2007] FCAFC 77. 10 Yury Mogilyuk v Australian Maritime Safety Authority [2014] AATA 409, [23] 11 By Resolution A.893(21) on 25 November 1999, see Yury Mogilyuk v Australian Maritime Safety
Authority [2014] AATA 409, [23].
14
A. The Vessel was unseaworthy due to the lack of charts for the voyage
26. Applying the above principles in this case, first and foremost, the lack of charts for
the particular voyage clearly does not satisfy the definition of ‘seaworthy’ in section
23 of the Navigation Act 2012, in that it is not in a fit state to encounter the ordinary
perils of the voyage.
27. The paramount importance of updated and corrected charts is confirmed in the House
of Lords in Grand Champion Tankers Ltd. v Norpipe A/S (The Marion)12 where it was
held that it was a ‘requirement… that the vessel should have on board and available
for use, the current versions of the charts necessary for such voyages’.
28. In Yury Mogilyuk v Australian Maritime Safety Authority,13 it was held that a ship
which used unofficial photocopied charts for the purposes of its voyage was in
contravention to section 23 of the Navigation Act 2012 and the above SOLAS
regulation, hence unseaworthy. A fortiori, the complete lack of charts must also
render the Vessel unseaworthy.
29. In any event, the lack of physical back-up charts is a clear contravention of paragraph
2.1.5 of SOLAS Chapter V, Regulation 19.
B. The Vessel was unseaworthy due to the lack of an updated satellite
communication system
30. The lack of prudence shown by RESPONDENT in omitting to test or exercise
maintenance of the satellite systems in light of the solar flare forecasts also renders
the Vessel unseaworthy.
31. It is unfathomable that a prudent shipowner within the shipping industry would ignore
such exceptional forecasts and did nothing to make sure that its communications
system in place would work in an event of such a magnitude.
12 [1984] AC 563. 13 [2014] AATA 409.
15
32. Therefore, not only did RESPONDENT fail to meet the requirements adopted by the
IMO as to a detailed planning of the journey, it did not satisfy the test of prudence set
out in McFadden.
III. RESPONDENT IS LIABLE FOR CONSEQUENCES ARISING FROM
UNSEAWORTHINESS
33. In respect of RESPONDENT’s liability, CLAIMANT makes two discrete arguments.
First, unseaworthiness is a dominant cause for CLAIMANT’s losses; and secondly,
that RESPONDENT cannot rely on the force majeure clause.
34. First, RESPONDENT shall be held liable for damages resulting from the deviation to
Spectre and damages caused by the storm on the basis of unseaworthiness alone being
the dominant cause.
35. In Monarch Steamship Co. Ltd. v Karlshamns Oljefabriker (A/B), 14 the British
Monarch could not sail timeously due to unseaworthiness; by the time she set sail, a
war broke out and the ship was diverted by the Crown from her original destination.
Losses were subsequently incurred by the consignees.
36. Lord Wright held that ‘… because [unseaworthiness] caused the delay,
unseaworthiness caused the Admiralty over diverting the vessel … the common law
would be right in picking out unseaworthiness from the whole complex of
circumstances as the dominant cause.’15 (Emphasis added)
37. It is clear from the facts that had the Vessel been equipped with back-up charts, the
Vessel would have continued, unscathed, on its usual and customary route to
Dillamond without the need to seek refuge at the Port of Spectre.
14 [1949] AC 196 (‘Monarch Steamship’). 15 Monarch Steamship, 228, cited with approval in Wayne Tank and Pump Co Ltd v Employers
Liability Corporation Ltd [1974] QB 57, 73.
16
38. The voyage was estimated to take 4 days and 8 hours to complete.16 This means that
in the ordinary course of events, the Vessel would arrive at Dillamond at about 5 p.m.
on 28 July 2017.
39. In this case, it was detected that the storm was ‘about to hit’ Dillamond at 4:58 p.m.
on 28 July 2017 and as such the Vessel was instructed to stay in its position, which is
100 n.m. away from Dillamond.17
40. By way of inference, therefore, if the Vessel was on its route within the estimated
time, it would in no way be affected by the storm because the Vessel would have been
very close to Dillamond, if not actually already finished the journey by 5 p.m. on 28
July 2017, just when the storm was ‘about to hit’ Dillamond.
41. In other words, the extra time taken by the Vessel as a result of the deviation to
Spectre led to the Vessel’s meeting the storm.
42. Therefore, the chain of events is entirely analogous to those in Monarch Steamship,
i.e. that the unseaworthiness in regards to charts and/or satellite systems caused the
deviation to Spectre, and that due to the delay caused by the deviation, the Vessel met
the storm 100 n.m. outside of Dillamond and hence RESPONDENT had failed to
deliver the Cargo on time.
43. Where the initial unseaworthiness is the cause of the deviation, the cargo owner will
have a claim in damages for loss caused by the deviation resulting damages.18 In this
case, this includes the Cargo Damages, the Replacement Payment and the Settlement
Payment.
44. In the alternative, CLAIMANT argues that even if the storm constitutes a ‘force
16 PO2, [7]. 17 Record 18. 18 Julian Cooke, Andrew Taylor, John D. Kimball, David Martowski and LeRoy Lambert, Voyage
Charters (Informa Law from Routledge, 4th ed, 2014) (‘Cooke’), [12.11]; Kish v Taylor [1912] AC
604.
17
majeure event’ in Clause 17 of the Charterparty,19 RESPONDENT should not be
absolved from liability.
45. The proviso at paragraph 6 of Clause 17 of the Charterparty reads, inter alia, ‘… all
the above exceptions are conditional on the exercise of due diligence to ensure the
ship is seaworthy and properly maned when she sails on the voyage.’
46. Since, as explained above, the Vessel was unseaworthy at the commencement of the
voyage for the lack of charts and/or updated satellite, RESPONDENT cannot absolve
itself from liability by claiming that the storm was a force majeure event.
IV. RESPONDENT IS LIABLE FOR DAMAGE TO THE CARGO
47. RESPONDENT is strictly liable for damage to the Cargo as the damage occurred
before delivery and such damage was the direct result of the Vessel deviating from the
agreed route.
48. It is trite that when the Cargo was carried by RESPONDENT, it was subject to a
bailment in favour of CLAIMANT. Such bailment was only terminated upon delivery
of the Cargo, or in other words, when the Cargo is placed under the absolute
dominion and control of CLAIMANT.20 RESPONDENT is thus liable for any damage
to the Cargo which occurred before delivery.
49. In this case, delivery took place and the bailment came to an end at 1:55 p.m. on 31
July 2017 when CLAIMANT took possession of the Cargo.21
50. Delivery was not effected by RESPONDENT’s issuance of the barcode which gave
CLAIMANT access to the Port Authority’s electronic storage facilities for taking
19 Record 9. 20 Chartered Bank v British India S.N.Co. [1909] AC 369, 375; British Shipowners v Grimond (1876) 3
Rett. 968, 972. 21 Record 37.
18
possession of the Cargo:22
(1) Delivery is not effected when the cargo is discharged into the hands of an
independent warehouse, unless the shipowner has also relinquished all its power
to compel any physical dealing with the cargo which can prevent the consignee
from obtaining possession of the cargo. 23 This may be achieved when the
shipowner either surrenders possession of the cargo to someone with
irrevocable instruction to allow only the consignee to take possession of the
cargo to the exclusion of the shipowner,24 or surrenders possession of the cargo
to a place accessible only by the consignee to the exclusion of the shipowner.
(2) The Federal Court of Australia held in Toll Holdings Pty Ltd v Stewart25 that
delivery26 was not effected when the shipowner issued to the consignee’s agent
an electronic delivery order with unique PIN numbers enabling the consignee’s
agent to access the wharves storing the cargo. The shipowner there could re-
enter the wharves and take possession of the cargo by using the PIN numbers on
the electronic delivery order, and thus had failed to relinquish all its power to
compel physical dealing with the cargo.
(3) It is submitted that the issuance of the barcode is materially similar to the
electronic delivery order in Toll Holdings. RESPONDENT had not relinquished
all its power to compel physical dealing with the Cargo through issuing the
barcode as RESPONDENT could use the barcode to re-enter the electronic
storage facilities and take possession of the Cargo.
51. The water damage to the Cargo took place from 4:30 a.m. on 30 July 2017 to 4:30
22 Record 22-23; PO2, [16]-[18]. 23 Far East Chartering v Great Eastern Shipping [2012] EWCA Civ 180, [45]. 24 Far East Chartering v Great Eastern Shipping [2012] EWCA Civ 180. [45]. 25 (2016) 338 ALR 602 (‘Toll Holdings’). 26 For the purpose of section 47(1) of the Sale of Goods Act 1923 (NSW).
19
a.m. on 31 July 2017.27 This was before the Cargo was delivered; in other words, the
damage to the Cargo occurred when the bailment still subsisted.
52. RESONDENT is strictly liable for the damage to the Cargo because, as explained
above, the damage was caused by the Vessel’s deviation from the agreed route.28 The
burden is on RESPONDENT to show that the Cargo Damages must have occurred
even in the absence of the deviation.29 The Vessel had deviated from the agreed route
and the damage to the Cargo would not have occurred in the absence of deviation. 30
V. CLAIMANT IS ENTITLED TO ALL DAMAGES AS CLAIMED
53. CLAIMANT’s claims consist of the Cargo Damages, the Replacement Payment and
the Settlement Payment to the Buyer.31 It is submitted that CLAIMANT is entitled to
all damages as claimed.
54. Firstly, in respect of the claim for the Cargo Damages, the normal measure of
damages for any damage caused by the carrier on the goods carried is the diminution
in the value of the said goods.32 The damaged Cargo was unusable33 and there was no
willing buyer in the market.34 Thus RESPONDENT is liable for the full diminished
value of the damaged Cargo in the sum of USD 15,750,000.35
55. Secondly, CLAIMANT can recover the Settlement Payment, which essentially
consists of compensation to the Buyer for late delivery and compensation for delivery
27 Record 43. 28 James Morrison & Co Ltd v Shaw, Savill and Albion Co Ltd [1916] 2 KB 783. 29 Davis v Garrett (1830) 6 Bing. 716, 724; James Morrison & Co Ltd v Shaw, Savill, & Albion Co Ltd
[1916] 2 KB 783, 795 & 800. 30 See Part III. 31 Record 38. 32 Empresa Cubana Importadora de Alimentos Alimport v Iasmos Shipping Co SA, The Good Friend
[1984] 2 Lloyd’s Rep 586; Harvey McGregor, McGregor on Damages (Sweet & Maxwell, 20th ed,
2017) (‘McGregor’), 984, [32-002]. 33 Record 37, [6]. 34 Record 27. 35 Record 37, [7].
20
of inferior replacement coffee beans.36
56. CLAIMANT can recover compensation to the Buyer for late delivery as
consequential loss from RESPONDENT’s late delivery:
(1) If CLAIMANT could recover the loss of profit arising from RESPONDENT’s
late delivery, it necessarily follows that CLAIMANT could recover loss of
compensation to the Buyer;37
(2) CLAIMANT has informed RESPONDENT of CLAIMANT’s duty to deliver
the Cargo to the Festival by 28 July 2017 under the Contract. 38 Thus
RESPONDENT knew that late delivery under the Charterparty would result in
CLAIMANT’s breach of the Contract. Thus, loss of profit arising from
RESPONDENT’s late delivery is not remote and is recoverable. It follows that
the consequential loss of compensation to the Buyer is not remote and is
recoverable as well.
57. Similarly, the compensation for delivery of inferior replacement coffee beans, as
consequential loss from RESPONDENT’s delivery of the damaged Cargo, is not
remote and is recoverable, as the Contract was within the reasonable contemplation of
the Parties when entering into the Charterparty.39
58. Thirdly, CLAIMANT can recover the Replacement Payment as such payment was a
reasonable expense incurred in CLAIMANT’s attempt to minimize the recoverable
loss of compensation to the Buyer for delivery of inferior replacement coffee beans.40
36 Record 29. 37 Hall v Pim (1928) 33 Com. Cas. 324, 330; McGregor, 1004, [32-043]. 38 Record 2. 39 The Ocean Dynamic [1982] 2 Lloyd’s Rep 88. 40 Record 27-28; Record 37, [8]; The Yorkshireman (1826) 2 Hagg. Adm. 30n.; Tradebe Solvent
Recycling Ltd v Coussens of Bexhill Ltd [2013] EWHC 3786, [79].
21
VI. CLAIMANT IS ENTITLED TO FULL DAMAGES WITHOUT
LIMITATION BY ANY INTERNATIONAL CONVENTION
59. CLAIMANT is entitled to full damages as claimed as it is well below the applicable
limit under Article 4(5) of the Hague Rules.
60. It has been consistently held that the ‘Clause Paramount’, which is incorporated into
the Charterparty under Clause 28,41 refers to the Hague Rules instead of the Hague-
Visby Rules.42
61. Under Article 4(5) of the Hague Rules, the carrier shall not in any event be liable for
any loss or damage to or in connection with the Cargo in an amount exceeding 100
pounds sterling per package or unit.
62. It is submitted that Article 4(5) of the Hague Rules is qualified by Article 9; in other
words, the monetary units in Article 4(5) should refer to gold value instead, i.e. 100
pounds gold per package or unit.43 Parties must limit liability under the charterparty
by clear words in the charterparty, and any ambiguity in the limitation clause must be
resolved against the party seeking to limit its liability.44 As RESPONDENT is seeking
to rely on Clause 28 to limit its liability,45 the Tribunal should resolve the ambiguity
as to whether Article 4(5) as incorporated by Clause 28 is qualified by Article 9
against RESPONDENT, by adopting the higher limit of liability in the qualified
Article 4(5).
63. Further, ‘unit’ under Article 4(5) cannot mean the weight of the cargo, as ‘unit’ refers
41 Record 12. 42 Nea Agrex SA v Baltic Shipping Co Ltd (The Agios Lazarus) [1976] QB 933; Seabridge Shipping AB
v AC Orssleff’s Eftf’s A/S (The Fjellvang) [1999] 2 Lloyd’s Rep 685. The Hague-Visby Rules are not
applicable as a matter of law either. The Carriage of Goods by Sea Act 1991, which enacts the Hague-
Visby Rules in Australia, restricts the application of the Hague-Visby Rules to the situations under
section 10. None of the situations under section 10 applies to this case, as this case concerns a voyage
outside of Australia, under a charterparty instead of a bill of lading. 43 Brown Boveri (Aust) Pty Ltd v Baltic Shipping Co [1989] 1 Lloyd’s Rep 518; Dairy Containers Ltd v
Tasman Orient Line CV (The Tasman Discoverer) [2004] UKPC 22, [11]. 44 Dairy Containers Ltd v Tasman Orient Line CV (The Tasman Discoverer) [2004] UKPC 22. 45 Record 41, [6].
22
to a physical item.46 ‘Package’ under Article 4(5) in this case refers to a bag instead of
a container. The Cargo was stuffed into 1,000 bags by CLAIMANT47 and was later
stuffed into 4 containers by RESPONDENT:48
(1) The Supreme Court of New South Wales in PS Chellaram & Co Ltd v China
Ocean Shipping Co49 held that ‘package’ under Article 4(5) meant the unit in
which the shipper packed the goods to prepare the cargo for shipment; a
container was functionally part of the ship and thus part of the means of
shipment, rather than a package of the cargo to prepare cargo for shipment;
(2) The English Commercial Court in Kyokuyo Co Ltd v AP Moller-Maersk A/S (t/a
Maersk Line)50 shared the same view and explained that the essence of the
efficiency of modern container transport was that the shipment journey began at
the door of the container not at the ship’s rail.
64. Although the Parties could agree on the identity of what is a relevant ‘package or unit’
for the purpose of Article 4(5) of the Hague Rules, 51 there was no agreement that the
relevant ‘package or unit’ referred to a container:
(1) Description of the quantity of the cargo in a carrier’s receipt is merely a
statement as to what the carrier admits as having received, and thus by no means
evidences an agreement between parties as to the identity of ‘package or unit’
under Article 4(5).52 Thus the statement of 4 containers in the box ‘No of
46 El Greco v Mediterranean Shipping [2004] 2 Lloyd's Rep 537; Sea Tank Shipping AS (formerly
known as Tank Invest AS) v Vinnlustodin HF, Vatryggingafelag Islands FH [2018] EWCA Civ 276. 47 Record 3, Item 4. 48 PO2, [18]. 49 [1989] 1 Lloyd's Rep 413. 50 [2017] EWHC654 (Comm). 51 River Gurara (Owners of Cargo Lately Laden on Board) v Nigerian National Shipping Line Ltd
[1998] QB 610. 52 River Gurara (Owners of Cargo Lately Laden on Board) v Nigerian National Shipping Line Ltd
[1998] QB 610; Kyokuyo Co Ltd v AP Moller-Maersk A/S (t/a Maersk Line) [2017] EWHC 654
(Comm), [68].
23
Packages’ in the Dock Receipt53 does not reflect any agreement that a container
is the relevant ‘package’ under Article 4(5);
(2) Item 4 of the Charterparty described the quantity of the Cargo as 1,000 bags
instead of 4 containers.54 CLAIMANT made an offer to RESPONDENT on 22
July 2017 under which Item 4 of the Charterparty described the quantity of the
Cargo as 1,000 bags. RESPONDENT subsequently requested an amendment of
the description of the Cargo to 4 containers to allow for an entry into
RESPONDENT’s internal database. 55 RESPONDENT considered such
amendment ‘inconsequential’56 as it merely altered the form rather than the
substance of Parties’ obligation under CLAIMANT’s offer. Accordingly,
although RESPONDENT’s reply did not precisely match the terms of the offer
in form, RESPONDENT had agreed to all the terms of the offer in substance,
and thus had effectively accepted CLAIMANT’s offer;57
(3) Further or alternatively, even if Item 4 of the Charterparty described the
quantity of the Cargo as 4 containers, such description cannot evidence Parties’
agreement that container is the relevant ‘package or unit’ under Article 4(5) for
two reasons. Firstly, there is no express provision in the Charterparty that such
description is for the purpose of limiting liability under the Hague Rules;
secondly, the stated purpose of the amendment from 1,000 bags to 4 containers
was to allow for an entry into RESPONDENT’s internal database,58 rather than
to alter the limitation of liability under the Hague Rules.
53 Record 16. 54 Record 3. 55 Record 14. 56 Record 14. 57 Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd [1979] 1 WLR 401; Midgulf
International Ltd v Groupe Chimiche Tunisien [2010] EWCA Civ 66. 58 Record 14.
24
65. Accordingly, the limit of liability under Article 4(5) is 100 pounds gold per bag with
the value of gold taken at the time of delivery,59 i.e. 31 July 2017.60 As 750 bags of
coffee beans were damaged,61 the limit of liability is around USD 1.5 billion, which
far exceeded the amount of the claim.
VII. CLAIMANT IS ENTITLED TO A MARITIME LIEN
66. It is submitted that CLAIMANT is entitled to a maritime lien arising out of bottomry
under Australian law, or alternatively, a foreign maritime lien arising out of bottomry
under the English law which is recognised in Australia.
A. Maritime lien arising out of bottomry is recognised under Australian law
67. Section 15(2) of the Admiralty Act 1988 (Cth) (‘the Admiralty Act’) provides that a
maritime lien ‘includes’ a lien for, inter alia, damage done by a ship, wages of the
master, or of a member of the crew, of a ship.
68. That this list is not exhaustive is supported by Australian Law Reform Commission
Report 33, Civil Admiralty Jurisdiction, 1986 (‘the ALRC Report’), upon which the
Admiralty Act was based. The Australian Law Reform Commission found it
unnecessary ‘to define maritime liens in detail merely to provide for them’,62 and that
the categories provided in section 15(2) only served as ‘an indicative list of the four
significant categories of lien’ 63 that ‘helps those unfamiliar with admiralty
jurisdiction’.64
69. Further, Allsop J (as he then was) in Elbe Shipping South Australia v Ship Glory
59 The Rosa S [1989] QB 419; Brown Boveri (Australia) Pty. v. Baltic Shipping [1989] 1 Lloyd’s Rep
518. 60 See Part IV. 61 Record 44. 62 The ALRC Report, [122]. 63 The ALRC Report, [122]. 64 The ALRC Report, [122].
25
Peace65 referred to the word ‘includes’ in section 15(2) and stated it ‘reflects the fact
that the [Australian] Act leaves open the possibility of other maritime liens being
recognised beyond those listed.’66 In fact, the ALRC Report recognised bottomry as
an orthodox maritime lien in Australia.67
70. Since bottomry has never been abolished, whether by way of statute or common law,
in Australian law and that section 15(2) is not an exhaustive list, bottomry is still
capable of giving rise to a maritime lien in Australia.
B. Alternatively, a foreign maritime lien arising out of bottomry under English
law is recognised in Australia
71. Alternatively, if the Tribunal does not agree that Australian law recognises a maritime
lien arising out of bottomry, it is submitted that there is an English maritime lien
arising out of bottomry which is capable of being recognised in Australia.
72. In order to assert a foreign maritime lien, the starting point is to identify the lex
causae. For the purpose of identifying the applicable choice of law rule, the lex situs
of the ship at the time when the relevant incident happened, or the law of the country
of the ship’s flag or registration would be relevant.68 In this case, as the Vessel is
flagged in Cerulean69 and the lex situs of the ship at the time when the USD100,000
was transferred is Cerulean,70 the only alternative would be English law.
73. Unlike the Admiralty Act, the UK counterpart which governed the admiralty
jurisdiction, namely the Senior Courts Act 1981, does not set out a list of categories of
lien. Hence, it is necessary to resort to the common law and, in particular, the Privy
65 (2006) 232 ALR 694. 66 Elbe Shipping South Australia v Ship Glory Peace (2006) 232 ALR 694, [131]. 67 The ALRC Report, [119]. 68 The Ship ‘Sam Hawk’ v Reiter Petroleum Inc [2016] FCAFC 26 (The ‘Sam Hawk’), [186] & [261]. 69 Record 44. 70 Record 1.
26
Council decision in The Halcyon Isle71 which recognised that bottomry could give rise
to maritime claims.
74. The Full Court of the Federal Court of Australia in The ‘Sam Hawk’ approved of the
possibility for foreign maritime liens to be recognised. The majority comprising of
Allsop CJ, Kenny, Besanko and Edelman JJ laid down a two-step approach as
follows: ‘[t]he first step was to identify the foreign law right asserted. The issue had to
be characterised so that any foreign right that arose could be identified by reference to
its lex causae. The second step was to characterise, by reference to Australian law, the
identified foreign right in the circumstances in which it arose in order to determine
whether it was, or was sufficiently analogous to, a maritime lien recognised by
Australian law’.72
75. The Full Court of the Federal Court of Australia emphasised strongly that a maritime
lien should not be decoupled from its priority consequence 73 and the two-step
approach was developed to ensure that a foreign maritime lien would not be easily
recognised so as to affect the stable structure of in rem action in Australian maritime
legal system which governed the priority between a limited class of maritime liens
and a wide class of unsecured general maritime claims.
76. In The ‘Sam Hawk’, the claimant company sought to enforce a US maritime lien
arising out of necessaries in Australia. However, as succinctly analysed by the Privy
Council in The Halcyon Isle,74 US admiralty law in effect treated all maritime claims
as being able to give rise to a maritime lien, which is of one extreme as opposed to the
other extreme presented in the UK, where only six categories of liens including
bottomry were recognised. Thus, to recognise such US lien would give the foreign
71 [1980] 2 Lloyd’s Rep 325. 72 The ‘Sam Hawk’, [102] – [104]. 73 The ‘Sam Hawk’, [82]. 74 [1980] 2 Lloyd’s Rep 325.
27
claimant priority over the local one when the equivalent local claim does not give rise
to a lien.75 It was on this basis that the Full Court of the Federal Court of Australia
developed the two-step approach that would filter out such US lien, which was so
alien to the Australian admiralty jurisdiction.
77. It is submitted that The ‘Sam Hawk’ is clearly distinguishable from this case. The
maritime lien here is based on English law which was the root of Australian maritime
law.76 Further, not only is bottomry a traditionally accepted lien in English law, but
also a category the law of New South Wales is so familiar with. Therefore, to
recognise an English bottomry lien would certainly bring no disturbance to the
consistency, clarity, simplicity and predictability of the stable structure in Australian
maritime legal system. The two-step approach should not be followed.
78. Alternatively, the Tribunal should adopt the approach of the dissenting judge in The
‘Sam Hawk’, Rares J. Contrary to the view of the majority, Rares J held that maritime
liens were substantive in nature and hence their recognition should be resolved by
reference to lex causae. 77 In this way, the contracting parties could be given
commercial certainty when entering into contract with their own choice of law.78 The
logical conclusion here would be that, under lex causae, a lien would be arising out of
bottomry under English law. There is no difficulty for the Tribunal to recognise it in
Australia as it would not interfere with the current established admiralty jurisdiction
and priority system.
C. There is a valid bottomry bond between the Parties
79. If the Tribunal is of the view that bottomry would give rise to either a domestic
75 The ‘Sam Hawk’, [96]; The ALRC Report, [123]. 76 The ‘Sam Hawk’, [71] – [72]. 77 The ‘Sam Hawk’, [394]. 78 The ‘Sam Hawk’, [408], [417] & [428]; The ALRC Report, [123].
28
maritime lien or a foreign maritime lien recognised in Australia, there is a valid
bottomry bond between Parties, hence a maritime lien attaching to the Vessel.
80. A valid bottomry bond depends upon a twofold necessity, namely: (1) the necessity of
obtaining funds for purposes of the adventure; and (2) the necessity of obtaining them
by bottomry because they cannot be obtained in any other way.79 Regarding the test of
necessity, courts have consistently adopted a generous approach, such that the law
treats whatever is reasonable and just as constituting necessity.80 CLAIMANT can
satisfy both limbs.
81. Insofar as the first limb is concerned, circumstances must exist which represent, inter
alia, a threat to the successful completion of the commercial enterprise on which the
ship is employed.81 The fact that the crew ‘would not sail before’ the USD100,000
was paid into the trust account prior to the voyage82 shows that it was a necessity for
RESPONDENT to obtain the funds for the completion of the voyage. A bottomry
bond for expenses including advances to seamen would suffice as necessity that the
money should be raised if the ship was to continue her voyage.83
82. As for the second limb, the lender was required to be assured the necessity for the
advance, but that would generally be presumed where the advance was made with the
consent of the owners of the ship or cargo.84 In this case, it is clearly evident that
RESPONDENT requested such loan to be advanced for the crew to sail as
RESPONDENT also informed CLAIMANT of its financial difficulty.85
79 The ‘Atlas’ (1827) 2 Hagg 48. 80 The Gratitudine (1801) 3 C. Rob. 240, 266; The ‘St George’ (1926) 25 Ll.L.Rep. 482, 486. 81 D. Rhidian Thomas, Maritime Liens (Stevens, 1980), 216-217 [389]. 82 Record 1. 83 The St George (1926) 25 Ll.L.Rep. 482. 84 The ALRC Report, [50]; Fisher v The Ship ‘Oceanic Grandeur’ (1972) 127 CLR 312, 331. 85 Record 1.
29
ARGUMENTS ON THE MERITS OF THE COUNTERCLAIM
VIII. CLAIMANT IS NOT LIABLE FOR DEMURRAGE
83. Laytime is the period of time within which charterers are allowed to pursue their
cargo-handling operations. Liability for demurrage, on the other hand, is one for
liquidated damages on the part of charterers for failing to discharge within the
permitted laytime.86
84. Clause 8(c)(ii) of the Charterparty provides that the permitted laytime for discharge is
0.5 WWD, starting from the time when the Vessel arrives at the discharge port until
all of the Cargo is discharged.87
85. A WWD is a day on which the weather permits the relevant work to be done;88 and
whether a day is a WWD or not depends not on whether work was actually interfered
with, but on the character of the day.89
86. Upon the expiry of the permitted laytime, demurrage will accrue at the rate of USD
20,000 per hour.90
87. As a general rule, laytime only begins to run when a vessel becomes an ‘arrived ship’.
An ‘arrived ship’ is one which has arrived at the destination specified in the
charterparty and is at the immediate and effective disposition of the charterer. 91
Laytime ceases to run when the discharging operation is completed.92
88. The ‘destination’ specified in the charterparty has an important bearing on when a
vessel becomes an arrived ship, and a distinction has to be made between port and
86 Cooke, 352 [15.4]; Islamic Republic of Iran Shipping Lines v Ierax Shipping Co. (The Forum
Craftsman) [1991] 1 Lloyd’s Rep 81, 87. 87 Record 6. 88 Compania Naviera Azuero, S.A. v British Oil & Cake Mills Ltd [1957] 1 Lloyd’s Rep 312, 329. 89 Cooke, 356 [15.17]; Reardon Smith Line v Ministry of Agriculture, Fisheries and Food [1963] AC
691, 740. 90 Record 3, Box 24. 91 Cooke, 359 [15.26]; E. L. Oldendorff & Co. v Tradax Export (The Johanna Oldendorff) [1974] AC
479, 535. 92 John Schofield, Laytime and Demurrage (Lloyd’s Shipping Law Library, 7th ed, 2016) (‘Schofield’),
381 [5.37].
30
berth charters. Where a berth at which the vessel ultimately has to discharge is named
in the charterparty or where the charterer is given an express option to nominate a
berth within the port, then, as a matter of construction, the charterparty in question is a
berth charter. It follows that the vessel does not become an arrived ship until she
arrives at the berth. If, on the other hand, no berth is named in the charterparty, nor is
the charterer given the power of nomination, then the charterparty in question is a port
charter and the vessel becomes an arrived ship only when she arrives at the port. 93
89. In this case, CLAIMANT was given an express option to nominate a berth within the
port by virtue of Clause 1 of the Charterparty.94 The Charterparty is therefore a berth
charter as opposed to a port charter. As a result, the Vessel does not arrive until she
reaches the berth. In the event of default of any nomination by CLAIMANT, the
Vessel should proceed to discharge at a usual berth in the port.95
90. The Vessel berthed at the Port of Dillamond on 29 July 2017 at around 5:00 p.m.,96
and laytime only started to run at that point in time.
91. In fact, the Cargo was completely discharged at or around 8:42 p.m. on 29 July 2017,
almost 8 hours before the agreed laytime expired, when RESPONDENT intimated to
CLAIMANT that the Cargo was available for collection. 97 Accordingly, no
demurrage had ever accrued.
92. Even if the discharging operation only came to an end upon the issuance of the
barcode at 12:02 a.m. on 30 July 2017,98 laytime still had not stopped at that time.
93. Further, even if the Charterparty were a port charter, the Vessel would only become
93 Cooke, 359 [15.26]; Schofield, 95 [3.52]; Stag Line Ltd v Board of Trade [1950] 2 KB 194, 195;
Tharsis Sulphur v Morel [1891] 2 QB 647. 94 Record 4, Clause 1. 95 Record 7, Clause 11. 96 Record 22. 97 Record 24. 98 Record 23.
31
an arrived ship at or around 4:28 p.m. on 29 July 2017 when RESPONDENT
intimated to CLAIMANT that the Vessel was due to berth in about 30 minutes.99
RESPONDENT’s contention that the Vessel became an arrived ship on 29 July 2017
at or around 7:00 a.m. is untenable.
94. On 29 July 2017, at around 7:00 a.m., the Vessel was located at a position which was
100 n.m. out from the Port of Dillamond.100 Even though the Vessel was instructed to
wait there by the Port Authority, that location can hardly be considered a customary
place where waiting ships lie, nor can that location be within the legal, fiscal and
administrative area of the port.
95. Even if, for argument’s sake only, the Vessel was considered to have come within the
immediate vicinity of the Port of Dillamond by reason of the Vessel’s being subject to
the jurisdiction of the Port Authority, the Vessel could not be said to have reached a
position within the port where she was at the immediate and effective disposition of
CLAIMANT. A voyage charter is traditionally divided into four stages, each of
which must be completed before the next can begin: the loading voyage, the loading
operation, the carrying voyage and the discharging operation.101 Since the Vessel was
then 100 n.m. away from the Port of Dillamond, the carrying voyage had yet to come
to an end at that time. It follows that the Vessel was not ready in all respects for the
discharging operation at that point in time.
96. In any event, laytime stopped to run during hours commencing from 1:00 a.m. on 29
July 2019 given the heavy rainfall102. This period would not count as a WWD, and
99 Record 22. 100 Record 20. 101 Schofield, 83 [3.2]; E. L. Oldendorff & Co. v Tradax Export (The Johanna Oldendorff) [1974] AC
479, 556. 102 Record 36.
32
this is so whether or not RESPONDENT had in fact carried out the work.103
97. Finally, if demurrage did accrue at such rate and for such period as alleged, the fact
that there was an unjustified deviation104 has effectively precluded the enforcement of
the demurrage provision.105
IX. CLAIMANT IS NOT LIABLE FOR GENERAL AVERAGE
EXPENDITURE
98. On the basis that RESPONDENT sought to recover the agency fee incurred in Spectre
and the cost of repairing the damaged hull on the basis of general average, even if the
voyage to the Port of Spectre and the dropping of anchor in anticipation of the storm
were general average acts, CLAIMANT was not liable to contribute, for the Vessel
was at the material time unseaworthy and had deviated from its intended voyage.
99. As explained above, the Vessel was unseaworthy as a result of RESPONDENT’s
failure to ensure that the Vessel had physical charts for the voyage and an undated
satellite communication system, 106 and the Vessel’s unseaworthiness led to its
deviation to the Port of Spectre. 107 The general average expenditure incurred by
RESPONDENT was therefore due to actionable fault. It follows that CLAIMANT is
not liable to make a general average contribution by reason of the Vessel’s
unseaworthiness108 and unjustified deviation.109
103 Cooke, 356 [15.17]; Reardon Smith Line v Ministry of Agriculture, Fisheries and Food [1963] AC
691, 740. 104 See Part III. 105 Schofield, 466 [6.169]; United States Shipping Board v Bunge y Born (1925) 23 LI.L.Rep. 257;
Hain Steamship Co v Tate & Llye Ltd [1936] 2 All ER 597. 106 See Part II. 107 See Part III. 108 MT ‘Cape Bonny’ Tankschiffahrts GMBH & Co KG v Ping An Property and Casualty Insurance
Company of China Limited, Beijing Branch [2017] EWHC 3036. 109 Hain Steamship Co v Tate & Lyle Ltd [1936] 2 All ER 597.
33
REQUEST FOR RELIEF
100. For the reasons set out above, CLAIMANT requests that the Tribunal:
(1) Declare that it has jurisdiction to hear this case;
(2) Declare that CLAIMANT is entitled to the Cargo Damages, Replacement
Payment and Settlement Payment;
(3) Declare that CLAIMANT holds a maritime lien over the Vessel;
(4) Declare that RESPONDENT is only entitled to the agreed freight and agency
fee at Dillamond, but no further;
(5) Award further or other relief as the Tribunal considers fit.