INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2013

IN THE MATTER OF AN ARBITRATION HELD AT LONDON

MEMORANDUM FOR THE RESPONDENT

ON BEHALF OF: AGAINST:

TWILIGHT CARRIERS INC AARDVARK LTD

RESPONDENT CLAIMANT

TEAM NO. 1

ESTHER AJAYI DAVID BAKER

DANIEL ELBIRT KIRSTY KOOPMANS

PETER RICHARDS JAMES TAPLEY

I

TABLE OF CONTENTS

TABLE OF CONTENTS.........................................................................................................I

LIST OF AUTHORITIES.....................................................................................................III

LIST OF ABBREVIATIONS................................................................................................V

SUMMARY OF FACTS..........................................................................................................1

SUMMARY OF ARGUMENTS.............................................................................................2

ARGUMENTS PRESENTED.................................................................................................3

I. THE CLAIMANT ABANDONED THE CARGO TO THE SELLERS.................3

I.A. The CLAIMANT held conditional title in the goods until delivery of cargo........3

I.A.1. The CLAIMANT held conditional title due to the nature of a c.i.f.

contract........................................................................................................................3

I.A.2. The CLAIMANT held title as an owner-in-common of the undivided share of

the bulk cargo pursuant to S 20A of the Sale of Goods Act 1979................................3

I.B. The CLAIMANT rejected delivery of the cargo.....................................................5

I.C. The CLAIMANT rejected the cargo and title revested in the sellers......................5

I.D. The RESPONDENT delivered the cargo to the person entitled to the goods.........7

II. THE RESPONDENT WAS ENTITLED TO DISCHARGE THE CARGO IN

ROTTERDAM.............................................................................................................8

II.A. The RESPONDENT was entitled to discharge the cargo in Rotterdam pursuant

to clause 29 of the Charterparty, as incorporated into the Bills of Lading....................8

II.B. The RESPONDENT was under an obligation to deliver the cargo as per the

wishes of the sellers......................................................................................................10

III. THE CLAIMANT AGREED TO THE DISCHARGE OF CARGO IN

ROTTERDAM............................................................................................................11

III.A. The CLAIMANT affirmed the decision to discharge the cargo in

Rotterdam.....................................................................................................................11

II

IV. THE RESPONDENT MET ITS OBLIGATIONS UNDER ART. III. R.1(A)

AND/OR (B) OF THE HAGUE-VISBY RULES....................................................12

IV.A. The RESPONDENT exercised due diligence in making the ship seaworthy by

properly manning the Vessel pursuant to its obligation under Art.III. r.1(a) and (b) of

the Hague-Visby Rules.................................................................................................12

IV.A.1. The Master did not have a ‘disabling want of skill or knowledge’........ .....13

IV.A.2. The Master did not have an ‘inherent lack of ability’ or ‘a disinclination to

perform the job properly’...........................................................................................13

IV.A.3. The RESPONDENT satisfied the test for seaworthiness..............................14

IV.A.4. The RESPONDENT exercised due diligence in properly manning the

Vessel..........................................................................................................................15

V. THE RESPONDENT IS NOT LIABLE FOR ANY DAMAGE TO THE

CARGO.......................................................................................................................16

V.A. Under Art.IV. r.2(f) of the Hague-Visby Rules the RESPONDENT is not

responsible for loss or damage arising from an act of public enemies.........................16

V.B. In the alternative, under Art.IV. r.2(e) of the Hague-Visby Rules the

RESPONDENT is not responsible for loss or damage arising from an act of war......16

V.C. Further, and in the alternative, under Art.IV. r.2(q) of the Hague-Visby Rules

the RESPONDENT is not responsible for loss or damages arising from any cause

without the actual fault or privity of the RESPONDENT............................................17

VI. THE RESPONDENT IS NOT LIABLE IN BAILMENT IN THE TORT OF

CONVERSION...........................................................................................................19

VI.A. The RESPONDENT is not liable in the tort of conversion...............................19

VI.B. Further, and in the alternative, the sellers had a better right to the

property.........................................................................................................................20

PRAYER FOR RELIEF......................................................................................................21

III

LIST OF AUTHORITIES

CASES

Atlantic Barron, The [1975] QB 705........................................................................................11

Biddell Bros v E Clemens Horst Co [1912] AC 18 (HL)...........................................................3

Bolam v Friern Hospital Management Committee [1957] 1 WLR 582...................................18

Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1Lloyd’s Rep 240..................4

Charlotte, The [1908] P. 206......................................................................................................3

Charterbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 (HL)....................................9,10

Currie v Misa (1876) 1 App Cas 554 (HL)..............................................................................11

Edmonds v Lawson [2002] QB 501 (CA)...........................................................................11,12

Eurasian Dream, The [2002] EWHC 118; [2002] 1 Lloyd’s Rep 719............... .....12,13,14,15

Far East Chartering Ltd (formerly known as Visa Comtrade Asia Ltd) & Anon v Great

Eastern Shipping Co Ltd [2012] EWCA Civ 180 (CA); [2012] 1 CLC 427.............................7

Florida, The [2006] EWHC 1137..............................................................................................9

G.H. Renton & Co Ltd v Palmyra Trading Corporation of Panama [1956] 1 QB 462

(CA)............................................................................................................................................9

Gabbiano, The [1940] P. 166.....................................................................................................3

Glyn Mills Currie & Co. V East and West India Dock Co (1882) 7 App Cas 591 (CA)..........8

Healy v Howlett & Sons [1917] 1 KB 337.................................................................................4

Hoare v Dresser (1859) 7 HL Cas 290 (HL).............................................................................4

Hongkong Fir, The [1962] 2 QB 26.........................................................................................14

Houda, The [1994] 2 Lloyd’s Rep 541 (CA)........................................................................8,11

Investors Compensation Scheme Ltd v West Bromwich Building Society (No.1)

[1998] 1 WLR 896 (HL)............................................................................................................9

Jarvis v Williams [1955] 1 WLR 71 (CA)...............................................................................20

Kwei Tek Chao v British Traders and Shippers Ltd [1954] 2 QB 459....................................11

Latimer v AEC Ltd [1953] AC 643 (HL).................................................................................19

Lee v York Coach & Marine [1977] RTR 35 (CA)...................................................................5

London Wine Co (Shippers), Re [1986] PCC 121.....................................................................4

Makedonia, The [1962] 1 Lloyd’s Rep 316.............................................................................14

McFarlane v Tayside Health Board [1999] UKHL 50 (HL)...................................................19

Mongaldai Tea Co Ltd v Ellerman Lines Ltd (1920) 2 Lloyd’s Rep 639.............................9,10

Nulty v Milton Keynes Borough Council [2013] EWCA Civ 13 (CA0..........................13,14,15

Prenn v Simonds [1971] 1 WLR 1381 (HL)..............................................................................9

Rossenthal & Sons Ltd v Esmail [1965] 1 WLR 1117...............................................................6

Shore v Wilson 8 ER 450 (HL)...................................................................................................9

Smith (Administrator of Cosslett Contractors Ltd) v Bridgend County Borough Council

[2002] 1 AC 336 (HL)..............................................................................................................20

Standard Oil v The Clan Line Steamers [1924] AC 100 (HL).................................................13

Sterns Ltd v Vickers Ltd [1923] 1 KB 78 (CA) .........................................................................4

Tillmanns & Co v Knutsford SS Ltd [1908] 1 KB 185...............................................................9

Torepo, The [2002] 2 Lloyd’s Rep 535....................................................................................13

Tradax v European Grain [1983] 2 Lloyd’s Rep 100...............................................................6

Wait, Re [1927] 1 Ch 606 (CA).................................................................................................4

Wait v Baker (1848) 2 Exch 1....................................................................................................4

Wilbraham v Snow 85 ER 624.................................................................................................20

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA).......................11,12

IV

STATUTES

Section 49 Arbitration Act 1996..............................................................................................21

Section 18 Sale of Goods Act 1979.........................................................................................3,4

Section 20A Sale of Goods Act 1979.........................................................................................3

Section 27 Sale of Goods Act 1979............................................................................................6

Section 37 Sale of Goods Act 1979............................................................................................5

RULES

Art.III. r.1 Hague-Visby Rules.......................................................................................12,15,16

Art.IV. r.2 Hague-Visby Rules.......................................................................12,15,16,17,18,19

SECONDARY MATERIALS

Benjamin J, Bridge M, Benjamin’s Sale of Goods (8th edn, Sweet and Maxwell, 2010)...4,5,6

Chitty J, Beale H, Chitty on Contracts (31st edn, Sweet and Maxwell, 2012).........................11

Cooke J, Young T, Taylor A, Kimball J, Voyage Charters (3rd

edn, Informa Law, 2007)....17

“Dealing with pirates: North of England P&I Association” (2001) 15 MRI 3........................18

Eder H, Scrutton T, Scrutton on Charterparties and Bills of Lading (22nd

edn, Sweet and

Maxwell, 2011)........................................................................................................................21

Hill C, “The pirate still prospers” (2002) 16 MRI 9........................................................... .....17

Garmon T “International Law of the Sea: Reconciling the Law of Piracy and Terrorism in the

Wake of September 11th

” (2002) 27 Tul Mar LJ 257..............................................................17

V

LIST OF ABBREVIATIONS

Charterparty

CLAIMANT

PFAD

RESPONDENT

Sellers

Vessel

Charterparty agreement

Aardvark Ltd

Palm Fatty Acid Distillate

Twilight Carriers Ltd

Beatles Oils & Fats Ltd

The Twilight Trader

1

SUMMARY OF FACTS

1. Aardvark Ltd (‘CLAIMANT’) entered into a c.i.f. contract with Beatles Oils & Fats Ltd

(‘sellers’) for the purchase of 4000MT of Palm Fatty Acid Distillate (‘PFAD’). The sellers

contracted with Twilight Carriers Ltd (‘RESPONDENT’) on 12 September 2008 for a voyage

charter, incorporating the Hague-Visby Rules, on the Twilight Trader (‘Vessel’) with the port

of discharge listed as Liverpool.

2. On 14 November 2008 at 07:42 the Vessel entered the Gulf of Aden and commenced anti-

pirate watch.

3. On 15 November 2008 at 12:50 the Vessel, whilst traversing the Gulf of Aden was

hijacked by Somali pirates and held until 13 February 2009.

4. When the Vessel was released on 13 of February 2009, it proceeded to Fujairah, where on

the 23 and 25 February 2009 Julia Mynott of Aspinall Lewis International attended the

Vessel and inspected the cargo. Julia Mynott prepared an investigation report dated 19 March

2009.

5. Also on 25 February 2009, W.H. Cropper, of Thomas, Cropper, Benedict, boarded the

Vessel and conducted an analysis on samples of the cargo. W.H. Cropper prepared an

analysis report dated 18 March 2009.

6. On or about 18 March 2009 the sellers ordered the RESPONDENT to discharge the cargo

in Rotterdam.

7. On 19 March 2009 the sellers issued a letter of indemnity to the RESPONDENT

requesting that the cargo be discharged in Rotterdam to the sellers without production of Bills

of Lading.

2

8. On 20 March 2009 the RESPONDENT commenced discharge of the cargo at Rotterdam to

the sellers. Discharge occurred until 22 March 2009.

9. On 20 March 2009 the RESPONDENT received an email from the CLAIMANT alleging

that they were the lawful holders of the Bills of Lading PG1 to PG4 and that they had not

authorised the discharge of cargo in Rotterdam.

10. On 25 March 2009 the CLAIMANT arrested the Vessel in Rotterdam as security for their

claim of damages against the RESPONDENT for delivery of the cargo in Rotterdam without

production of Bills of Lading. The sellers provided security to the RESPONDENT for the

action, and the Vessel was released.

SUMMARY OF ARGUMENTS

RESPONDENT is being sued by CLAIMANT for damages for breach of contract of carriage,

breach of bailment in the tort of conversion, and for breach of Art.III. r.2 of the Hague-Visby

Rules. The RESPONDENT rejects any liability for breach of contract of carriage on three

grounds, namely that: the RESPONDENT was entitled to deliver the cargo to Rotterdam

pursuant to clause 29 of the Charterparty; the CLAIMANT agreed to delivery in Rotterdam;

and the CLAIMANT abandoned the cargo, over which this dispute arises, to the sellers.

Liability under Art.III. r.2 of the Hague-Visby Rules is contested on the grounds that any

damage caused to the cargo can be attributed to the pirates who boarded the vessel during the

course of its voyage to Liverpool. Further, the RESPONDENT rejects any liability for breach

of bailment in the tort of conversion, on the grounds that the sellers had a better right to the

cargo.

3

ARGUMENTS PRESENTED

I. THE CLAIMANT ABANDONED THE CARGO TO THE SELLERS.

I.A. The CLAIMANT held conditional title in the goods until delivery of the cargo.

I.A.1. The CLAIMANT held conditional title due to the nature of a c.i.f. contract.

1. Only when the contract of carriage is complete and the buyer has accepted delivery of

the cargo does property in the goods pass in its entirety, and the sellers’ right of disposal

is extinguished1.

2. Due to the nature of the c.i.f. contract into which the CLAIMANT entered into with

the sellers, the CLAIMANT merely held conditional title in the goods until the delivery

of the cargo. When the CLAIMANT informed the sellers by email on 6 March 2009 at

14:002 that they would not accept delivery of the cargo, the CLAIMANT ceased to hold

conditional title in the PFAD cargo carried onboard the RESPONDENT’s Vessel.

I.A.2. The CLAIMANT held title as an owner-in-common of the undivided share of the

bulk cargo pursuant to S 20A of the Sale of Goods Act 1979.

3. Section 20A of the Sale of Goods Act 1979 applies to contracts concerning the sale of

a specified quantity of unascertained goods, and provides that the buyer holds

conditional title to those goods as an owner-in-common3, until such time as the goods are

appropriated to the contract, at which point property in those goods passes to the buyer4.

1 Biddell Bros v E Clemens Horst Co [1912] AC 18 (HL), per Kennedy LJ (decision by Kennedy LJ was made

at CA, and affirmed by HL); The Charlotte [1908] P.206; The Gabbiano [1940] P.166, 167 2 Moot Problem, 25 3 S 20A (2)(b) of the Sale of Goods Act 1979 4 S 18 r.3 of the Sale of Goods Act 1979

4

4. The contract to purchase the PFAD was a contract for unascertained goods, despite the

contract identifying the quantity to be sold5. Although there was contractual

appropriation, whereby the contract between the CLAIMANT and the sellers specified

4000mt of PFAD for delivery on a named Vessel6, this did not amount to proprietary

appropriation7. For proprietary appropriation to have occurred, the goods would need to

have been separated from the bulk, which could only occur on delivery of the cargo to

the CLAIMANT8. Thus, until delivery of the cargo was completed, unconditional

property in the goods had not passed, and the CLAIMANT merely held conditional title

to the cargo9.

5. In the emails sent by the CLAIMANT to the sellers on 6 March 2009 at 14:0010

and 16

March 2009 at 15:2011

the CLAIMANT explicitly stated that the cargo should not be

delivered to them in Liverpool. THE CLAIMANT further stated that there were better

alternative destinations for the cargo, namely Italy, Spain or Holland. However, the

CLAIMANT then refused12

to endorse the Bills of Lading to the sellers in order to

furnish delivery and discharge of the cargo in Rotterdam. As a result, the cargo could not

be appropriated to the contract to furnish the CLAIMANT with unconditional title to the

PFAD. Thus, until 6 March 2009, the CLAIMANT merely held conditional title to the

cargo as an owner-in-common. On the CLAIMANT’s refusal to accept the cargo, the

CLAIMANT’s conditional title in the PFAD as an owner-in-common was extinguished.

5 S 18, r.5 of the Sale of Goods Act 1979; Healy v Howlett & Sons [1917] 1 KB 337; Sterns Ltd v Vickers Ltd

[1923] 1 KB 78 (CA); Re London Wine Co (Shippers) Ltd [1986] PCC 121; Benjamin’s Sale of Goods (8th

edn), 19-183 6 Hoare v Dresser (1859) 7 HL Cas 290 (HL); Benjamin’s Sale of Goods (8th edn), 19-183 7 Wait v Baker (1848) 2 Exch , 8 per Parke B 8 Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd’s Rep 240, 255 per Pearson J 9 Re Wait [1927] 1 Ch 606 (CA) 10 Moot Problem, 25 11 Ibid, 27 12 Ibid, 33, 35.

5

I.B. The CLAIMANT rejected delivery of the cargo.

6. Section 37 of the Sale of Goods Act 1979 provides an implicit requirement that the

CLAIMANT, as buyer of the PFAD, accept delivery of the cargo. The right to reject

delivery of the cargo is independent of the right to reject the cargo itself13

. In order to

reject delivery, it must be evident that the CLAIMANT had a clear intention to reject the

cargo14

.

7. The email sent from the CLAIMANT to the sellers on 6 March 2009 at 14:0015

provided unequivocal representation that the CLAIMANT refused to accept delivery of

the cargo at the contractually agreed16

port of Liverpool. If any uncertainty existed as to

the CLAIMANT’s intention, this ambiguity was clarified in the email sent by the

CLAIMANT to the sellers on 16 March 2009 at 15:2017

. In this email, the CLAIMANT

alleged that the sellers were in “breach of contract [for] insisting [that the CLAIMANT]

take delivery of [the] cargo”, and it was strongly emphasised that the CLAIMANT

“made clear from the outset ... that the cargo should not be sent to Liverpool where it

would have no value.” It is submitted that these two emails sent by the CLAIMANT to

the sellers provides sufficient evidence of the CLAIMANT’s intention to refuse to accept

delivery of the cargo, in breach of S 37 of the Sale of Goods Act 1979.

I.C. The CLAIMANT rejected the cargo and title revested in the sellers.

8. Section 27 of the Sale of Goods Act 1979 states that:

13 Benjamin’s Sale of Goods (8th edn.), 9-003 14 Lee v York Coach &Marine [1977] RTR 35 (CA) 15 Moot Problem, 25 16 Ibid, 3, 13 17 Ibid, 27

6

It is the duty of the seller to deliver the goods, and of the buyer to accept and pay

for them, in accordance with the terms of the contract of sale. [emphasis added]

9. Accordingly, the CLAIMANT was under an obligation to accept the goods, and was

clearly required to accept delivery of the PFAD18

.

10. The position of the passing of property was considered in Kwei Tek Chao v British

Traders and Shippers Ltd19

. Devlin J held that under a c.i.f. contract:

“[W]hat the buyer obtains, when the title under the documents is given to him, is

the property in the goods, subject to the condition that they revest [in the seller] if

upon examination he finds them to be not in accordance with the contract”20

.

[emphasis added]

11. This position was affirmed by Bingham J in Tradax v European Grain21

, where it

was held that “a clear, unequivocal and bona fide rejection of goods liable to rejection

had the effect of preserving or revesting the ownership of the goods in the seller.”22

Thus

the conditional title in the cargo held by the CLAIMANT revested in the sellers when the

CLAIMANT refused to accept the cargo.

12. On 6 March 2009 at 14:0023

and 16 March 2009 at 15:2024

the CLAIMANT emailed

the sellers. Both emails asserted that the cargo would have “no value” on arrival in

Liverpool, even though at the time the emails were sent to the sellers, the cargo

18 Benjamin’s Sale of Goods (8th edn.), 9-003 19 [1954] 2 QB 459, 487 20 Kwei Tek Chao v. British Traders & Shoppers Ltd [1954] 2 QB 459, 487 per Devlin J 21 [1983] 2 Lloyd’s Rep 100 22 Ibid, 107; Rossenthal & Sons Ltd v Esmail [1965] 1 WLR 1117, 1131 23 Moot Problem, 25 24 Ibid, 27

7

Inspection Report25

, to be prepared by Aspinall Lewis International, had not yet been

completed26

.

13. Due to the nature of the c.i.f. contract, and the fact that the CLAIMANT held

conditional title in the unascertained cargo, when the CLAIMANT refused to accept the

cargo, title in the PFAD revested in the sellers. The CLAIMANT’s decision to reject the

PFAD entitled the sellers to treat the cargo as abandoned.

I.D. The RESPONDENT delivered the cargo to the persons entitled to the goods.

14. It is a common and accepted practice in international trade to deliver cargo against a

letter of indemnity27

. The practice of delivering cargo against a letter of indemnity is so

common within the shipping industry that the International Group of Protection and

Indemnity Clubs has made standard form letters of indemnity available to its members28

.

15. Clause 24 of the Charterparty, as incorporated into the Bills of Lading provided that:

“24. Bills of Lading

...The Charterer shall indemnify the Owner, the Master and the Vessel from all

consequences or liabilities that may arise from the Charterer or its agents or the

Master or the Vessel’s agents signing ... other documents inconsistent with this

Charter ... or from complying with orders of the Charterer or its agents.”

[emphasis added]

16. Thus clause 24 of the Charterparty expressly provided that if the RESPONDENT was

complicit with the sellers’ request to deliver not against a bill of lading, the sellers, as

charterers, would indemnify the RESPONDENT29

. On 19 March 200930

the sellers

25 Ibid, 40 26 The Report was completed on 19 March 2009. 27 Far East Chartering Ltd (formerly known as Visa Comtrade Asia Ltd) & Anon v Great Eastern Shipping Co

Ltd [2012] EWCA Civ 180 (CA); [2012] 1 CLC 427, 429-430 per Tomlinson LJ 28 Ibid, 430 per Tomlinson LJ 29 The Sagana [1984] 1 Lloyd’s Rep 194 30 Moot Problem, 72

8

granted a letter of indemnity31

to the RESPONDENT providing indemnity for delivery of

the cargo in Rotterdam, and discharge of the cargo to the sellers without production of a

bill of lading32

.

17. In the alternative, whilst the RESPONDENT acknowledges that there is a general

contractual obligation to deliver the cargo against production of a Bill of Lading, the

RESPONDENT rejects the CLAIMANT’s submission that they are entitled to damages

for failing to deliver the cargo against production of a Bill of Lading because the goods

were rightfully discharged to the person entitled to possession of the cargo33

.

II. THE RESPONDENT WAS ENTITLED TO DISCHARGE THE CARGO IN

ROTTERDAM.

II.A. The RESPONDENT was entitled to discharge the cargo in Rotterdam pursuant

to clause 29 of the Charterparty.

18. Clause 29 of the Charterparty, as incorporated into the Bills of Lading provided that:

“29. Liberty clauses

(a) In any situation whatsoever and wheresoever occurring … which in the

judgment of the Owner or Master is likely to give rise to risk of … delay or

disadvantage to … the Vessel or any part of her cargo, or to make it unsafe,

imprudent or unlawful for any reason to commence or proceed on or continue

the voyage or to enter or discharge the cargo at the port of discharge… the

Owner or Master may discharge … the cargo … The Owner may, when

practicable, have the Vessel call and discharge the cargo at another or

substitute port declared or requested by the Charterers.” [emphasis added]

31 Ibid, 53 32 Ibid, 53 33Glyn Mills Currie & Co. V East and West India Dock Co. (1882) 7 App Cas 591 (CA), 610 per Blackburn L;

The Houda [1994] 2 Lloyd’s Rep 541 (CA), 552 per Neill LJ.

9

19. It is a well established principle of English contract law that contractual agreements,

and clauses within these agreements, are to be given their natural meaning34

and that

extrinsic evidence should only be considered where there is ambiguity35

.

20. On analysis of an identically worded liberty clause, Tomlinson J in The Florida 36

clearly articulated that:

“it can be seen that the clause is setting out in such circumstances to give to the

[Vessel] Owners a wide liberty as how to deal with the cargo ... It is axiomatic

that the clause envisages that there is on board a cargo in respect of which the

[Vessel] Owners need to make appropriate arrangements in the event that, for

whatever reason, ... it is not to be delivered at the contractual discharge port”37

.

21. Clause 29 of the Charterparty is not ambiguous in any regard. It is very clearly

intended to offer the RESPONDENT the right to modify the contract of carriage in

accordance with the wishes of the sellers without that modification resulting in a breach

of the contract38

.

22. The sentence “[t]he [Vessel] Owner may, when practicable, have the Vessel call and

discharge the cargo at another or substitute port declared or requested by the Charterers”

can clearly be interpreted to mean that ‘the sellers were entitled to request the

RESPONDENT deliver the cargo to another port’. Further, it was at the discretion of the

RESPONDENT to decide whether it was ‘practicable’ to discharge the cargo at

Rotterdam; the substitute port requested by the sellers. As the Vessel was still en route to

34 Shore v Wilson 8 ER 450 (HL); Prenn v Simonds [1971] 1 WLR 1381 (HL), 1385 per Wilberforce L;

Investors Compensation Scheme Ltd v west Bromwich Building Society (No. 1) [1998] 1 WLR 896 (HL);

Charterbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 (HL) 35 Shore v Wilson (1842) 8 ER 450 (HL), 460 per Tindal CJ 36 [2006] EWHC 1137 37 Ibid, at [11] 38 Tillmanns & Co. V Knutsford SS Ltd [1908] 1 KB 185; Mongaldai Tea Co Ltd v Ellerman Lines Ltd (1920) 2

Lloyd’s Rep 639, 642 per Greer J; G. H. Renton & Co Ltd v Palmyra Trading Corporation of Panama

[1956] 1 QB 462 (CA)

10

Liverpool at the time the sellers requested a substitute port, it was not impracticable for

the RESPONDENT to discharge the cargo in Rotterdam.

23. Accordingly, the RESPONDENT was at liberty to have the Vessel call at, and

discharge the cargo in Rotterdam as requested by the sellers. The inclusion of the liberty

clause in the voyage Charterparty absolves the RESPONDENT from any liability for

breach of the contract for carriage39

.

II.B. The RESPONDENT was under an obligation to deliver the cargo as per the

wishes of the sellers.

24. Clause 24 of the Charterparty, as incorporated into the Bills of Lading provided that:

“24. Bills of Lading

...The Charterer shall indemnify the Owner, the Master, and the Vessel from

all consequences or liabilities that may arise ... from complying with any

orders of the Charterer or its agents.” [emphasis added]

25. In applying the natural meaning40

to the words used in clause 24 of the Charterparty,

it is abundantly clear that the purpose of this clause is for the sellers to provide indemnity

to the RESPONDENT in cases where the sellers’ orders do not comply with the Bills of

Lading. With the guarantee of an indemnity from the sellers, the RESPONDENT made a

prudent decision to deliver the cargo to Rotterdam as per the sellers’ orders.

26. The sellers, as the charterers of the vessel, were within their authority to order the

RESPONDENT to discharge the cargo in Rotterdam. The RESPONDENT had an

obligation to comply with the sellers’ orders with immediate effect, per Leggett LJ in

39 Mongaldai Tea Company Ltd v Ellerman Lines Ltd [1920] 2 Lloyd’s Rep 639, 642 per Greer J 40 Charterbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 (HL)

11

The Houda41

. It was therefore reasonable for the RESPONDENT to comply with the

sellers’ orders to discharge the cargo to Rotterdam, and in doing so, the RESPONDENT

was not in breach of the contract of carriage.

III. THE CLAIMANT AGREED TO THE DISCHARGE OF THE CARGO IN

ROTTERDAM.

III.A. The CLAIMANT affirmed the decision to discharge the cargo in Rotterdam.

27. When there is a variation of the original contract terms, some consideration must be

provided to the contracting party from whom assent is sought42

. Consideration must

consist of either a benefit to the promisor or a detriment to the promisee43

, although the

adequacy of consideration is not subject to scrutiny44

. Moreover, it has been held that

performance of an existing contractual duty may be sufficient consideration if it confers

a practical benefit45

.

28. On 18 March 2009 at 11:0046

, the CLAIMANT sent an email to the sellers asking

where they ought to send the bills of lading, indicating that they were satisfied with the

sellers’ proposed plans for disposal of the cargo.

29. Furthermore, by their own admission in the preliminary submissions, the

CLAIMANT did not object to the Vessel calling at Rotterdam to discharge the cargo47

.

This is sufficient evidence of the CLAIMANT’s acceptance of the sellers’ intention to

have the Vessel call at Rotterdam and discharge cargo.

41 [1994] 2 Lloyd’s Rep 541 (CA), 553 42 Chitty on Contracts (31st Edn) 3-079, 3-080 43 Currie v Misa (1876) 1 App Cas 554 (HL) 44 The Atlantic Baron [1979] QB 705 45 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA); Edmonds v Lawson [2000] QB 501

(CA) 46 Moot Problem, 31 47 Ibid, 67

12

30. The valid consideration in the present case, following the decision in Williams v

Roffey Bros & Nicholls (Contractors) Ltd48

, was the practical benefit49

that the

CLAIMANT would be able to realise a higher value in selling the cargo for burning

outside of the UK50

.

IV. THE RESPONDENT MET ITS OBLIGATIONS UNDER ART.III. R.1(A)

AND/OR (B) OF THE HAGUE-VISBY RULES.

31. Art III. r.1 of the Hague-Visby Rules states that:

1. The carrier shall be bound before and at the beginning of the voyage to exercise due

diligence to:

(a) Make the ship seaworthy;

(b) Properly man, equip and supply the ship;

IV.A. The RESPONDENT exercised due diligence in making the ship seaworthy by

properly manning the Vessel pursuant to its obligation under Art.III. r.1(a) and (b) of

the Hague-Visby Rules.

32. In order to prevent the RESPONDENT from relying on the Art IV. r.2 defences of

the Hague-Visby Rules, the CLAIMANT must prove that the RESPONDENT failed to

make the ship seaworthy, in accordance with The Eurasian Dream51

requirements

regarding the competence of the Master and crew.

48 [1991] 1 QB 1 (CA) 49 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA), 18-19 per Russell LJ and 23 per

Purchas LJ; Edmonds v Lawson [2000] QB 501 (CA) 50 Moot Problem, 27 51 The Eurasian Dream [2002] EWHC 118; [2002] 1 Lloyd’s Rep 719, 736-737 per Cresswell J

13

IV.A.1. The Master did not have a ‘disabling want of skill or knowledge’.

33. The Eurasian Dream52

confirmed the test laid out in Standard Oil v The Clan Line

Steamers53

, where it was held that a ship may be made unseaworthy by the master’s

disabling want of skill or knowledge:

“[A] ship may be rendered unseaworthy by the inefficiency of the master who

commands her ...There cannot be any difference in principle ... between disabling

want of skill and disabling want of knowledge. Each equally renders the master

unfit and unqualified to command, and therefore makes the ship he commands

unseaworthy” 54

.

34. The Master’s actions in operating the Vessel are insufficient to prove that the Vessel

was not seaworthy before and at the commencement of the voyage. The CLAIMANT

must establish a “prima facie case of unseaworthiness”55

, and there is insufficient

evidence56

to prove that the Master’s decision to commence anti-pirate watch on 14

November 200857

rendered the Master unfit and unqualified to command the vessel58

.

IV.A.2. The Master did not have an ‘inherent lack of ability’ or ‘a disinclination to

perform the job properly’.

35. Following The Eurasian Dream59

incompetence stems from, inter alia, “an inherent

lack of ability” or “a disinclination to perform the job properly”. It was held in The

Makedonia60

that it must be shown that a Master has a “disabling lack of will and

inclination to use his skill and knowledge so that they are well nigh useless to him. 61

”

52 Ibid, 736 per Cresswell J 53 Standard Oil v. The Clan Line Steamers, [1924] AC 100 (HL), 120-121 per Atkinson L 54 Ibid, 120-121 per Atkinson L 55 The Torepo [2002] 2 Lloyd’s Rep 535, 548 at [92] per Steel J 56 Nulty v Milton Keynes Borough Council [2013] EWCA Civ 13 (CA) 57 Moot Problem, 41 58 The Torepo [2002] 2 Lloyd’s Rep 535 59 The Eurasian Dream [2002] EWHC 118; [2002] 1 Lloyd’s Rep 719, 736-737 per Cresswell J 60 The Makedonia [1962] 1 Lloyd’s Rep 316, 335 per Hewson J 61 Ibid, 335 per Hewson J

14

There is a lack of evidence for the CLAIMANT to rely upon which demonstrate that the

Master had a disinclination to perform the job properly and to an extent that would

render the Vessel unseaworthy. Consequently on the grounds of lack of evidence, the

assumption cannot be made that any loss was caused by a fault of the RESPONDENT62

.

36. The commencement of anti-pirate watch on 14 November 200863

is sufficient

evidence to prove that the Master was not disinclined to a disabling extent to use his skill

and knowledge since it is the performance of some preventative action, demonstrating a

will to use his skill and knowledge to prevent damage to the ship. Further, it was a clear

indicator that the Master had the ability to perform his duties to the owner and charterer

accordingly, and did not suffer from a lack of ability.

IV.A.3. The RESPONDENT satisfied the test for seaworthiness.

37. The CLAIMANT is unable to prove that incompetence and inefficiency of the master

and crew rendered the vessel unseaworthy; the test for which was determined in The

Hongkong Fir64

and affirmed in The Eurasian Dream:65

“Would a reasonably prudent owner, knowing the relevant facts, have allowed

this vessel to put to sea with this master and crew, with their state of knowledge,

training and instruction?”66

[emphasis added]

38. There is a lack of evidence to suggest that a reasonably prudent owner would not

have allowed the Vessel to be chartered with the Master and crew provided, and this lack

of evidence does not warrant an assumption that any loss was caused by an error that can

be attributable to the RESPONDENT67

.

62 Nulty v Milton Keynes Borough Council [2013] EWCA Civ 13 (CA) 63 Moot Problem, 41 64 The Hongkong Fir [1962] 2 QB 26, 34 per Salmon J 65 The Eurasian Dream [2002] EWHC 118 (Comm); [2002] 1 Lloyd’s Reports 719, 737 per Cresswell J 66 Ibid, 737 per Cresswell J 67 Nulty v Milton Keynes Borough Council [2013] EWCA Civ 13 (CA)

15

39. As shown, there is insufficient evidence to suggest that the RESPONDENT’s actions

fell below the minimum standards for seaworthiness before or at the commencement of

the voyage. There is nothing to suggest that the Master suffered from a disabling want of

skill or knowledge caused by an inherent lack of ability or disinclination to perform the

job properly. Furthermore, there is no factual basis which could lead to the conclusion

that a reasonable and prudent owner would not have allowed the Vessel to be put to sea.

For these reasons, the RESPONDENT should not be prevented from relying on the

defences provided under Art.IV. r.2. of the Hague-Visby Rules.

IV.A.4. The RESPONDENT exercised due diligence in properly manning the Vessel.

40. Under Art.III. r.1(b) of the Hague-Visby Rules, the RESPONDENT is required to

ensure that before and at the beginning of the voyage, due diligence has been exercised

to ensure that the Vessel is properly manned.

41. In ensuring that the Master was competent and that the crew received instructions on

how to carry the cargo for the duration of the voyage and how to heat the cargo one week

prior to arrival68

, the RESPONDENT met its obligations to make certain that the Vessel

was properly manned in accordance with Art.III. r.1(b) of the Hague-Visby Rules.

42. There is no evidence to suggest that the Master and crew failed to reach the necessary

level of competence required for a vessel to be seaworthy. The RESPONDENT submits

that it is not prevented from relying on the defences of Art. IV. r.2 of the Hague-Visby

Rules by a failure to satisfy the requirement of seaworthiness found in Art III. r.1.

68 Moot Problem, 42

16

V. THE RESPONDENT IS NOT LIABLE FOR ANY DAMAGE TO THE CARGO.

V.A. The RESPONDENT acknowledges that it is unlikely that Art.IV. r.2(e) of the

Hague-Visby Rules would include loss or damage arising from pirates as an act of war.

V.B. Under Art.IV. r.2(f) of the Hague-Visby Rules the RESPONDENT is not

responsible for loss or damage arising from an act of public enemies.

43. The exception of Art.IV. r.2(f) of the Hague-Visby Rules provides that the shipowner

is not liable for loss or damage arising from an act of public enemies. Although not

explicitly referring to pirates, the inclusion of pirates under this limb has academic and

extra-judicial support to suggest that it ought to extend to include pirates as public

enemies69

. Furthermore, Sir Norman Hill70

was quoted as saying that acts of public

enemies “may mean pirates"71

.

44. The hijackers are included within the definition of pirates, since the three elements

required for piracy are present72

: Unauthorised violence was used in taking the ship,

since the ship was boarded and the crew held hostage; the hijacking occurred on the high

seas, since the ship had entered the Gulf of Aden north of Socotra Island73

and the high

seas include all of the Gulf of Aden except Territorial Waters, within 12 nautical miles of

the coast;74

and the act was committed by one vessel against another vessel, since the

pirates boarded the ship in the Gulf. The act therefore constitutes piracy.

69 J Cooke, T Young, A Taylor, J Kimball, Voyage Charters (3rd edn, Informa Law, 2007), 85.303; C Hill, “The

pirate still prospers” (2002) 16 MRI 9 70 A drafter of the Hague Rules. The Hague Rules contain the same exceptions that are provided to the Carrier

under Art.IV. r.2 of the Hague-Visby Rules. 71 J Cooke, T Young, A Taylor, J Kimball, Voyage Charters (3rd edn, Informa Law, 2007), 85.303, fn 527; C

Hill, “The pirate still prospers” (2002) 16 MRI 9 72

T Garmon, ‘International Law of the Sea: Reconciling the Law of Piracy and Terrorism in the Wake of

September 11th’ (2002) 27 Tul. Mar. L. J. 1 257, 261 73 Moot Problem, 41 74 T Garmon, ‘International Law of the Sea: Reconciling the Law of Piracy and Terrorism in the Wake of

September 11th’ (2002) 27 Tul. Mar. L. J. 1 257, 264-265

17

45. At 12:50 on 15 November 2008 the RESPONDENT’s Vessel was boarded by pirates

and forced to sail to the coast of Somali where the Master and the crew were held

hostage and confined to the bridge.75

The pirates refused to let the Master and the crew

stand or look outside, restricting them to either sitting or lying down whilst they were

held hostage.76

Since the Master and the crew had been prevented from performing their

jobs by the pirates, who are considered public enemies, the RESPONDENT is not liable

for any damage caused to the cargo in accordance with Art.IV. r.2(f) of the Hague-Visby

Rules.

V.C. Further, and in the alternative, under Art.IV. r.2(q) of the Hague-Visby Rules the

RESPONDENT is not responsible for loss or damage arising from any cause without

the actual fault or privity of the RESPONDENT.

46. Article IV. r.2(q) of the Hague-Visby Rules provides that the carrier shall not be held

responsible for loss or damage unless it is the actual fault or privity of the carrier, or

where the fault or neglect of the servants of the carrier contributed to the loss or damage.

47. The RESPONDENT acknowledges that it owed a duty of care to the CLAIMANT,

and as a carrier, the appropriate test for whether the RESPONDENT fulfilled its duty is

that of a skilled defendant as determined in Bolam v Friern Hospital Management

Committee77

. The duty of care is satisfied where an ordinary skilled man exercising or

professing to have a skill exercises the skill in a way which an ordinary, competent

skilled man would do so. To prove that the master did not breach his duty of care, the

measures taken must be those which might an ordinary, competent Master might take.

75 Moot Problem, 41 76 Ibid, 42 77 Bolam v Friern Hospital Management Committee [1957] 1 WLR 582

18

48. This test must be applied to two instances; the actual hijacking of the Vessel by

pirates, and in relation to the care for the cargo during the period of time the Master and

crew were held hostage on board the Vessel.

49. On 14 November 2009 at 07:4278

the Master instructed that anti-pirate watch be

commenced. The decision to commence anti-pirate watch was one which an ordinary,

competent skilled master would likely have made when preparing to sail through the

Gulf of Aden79

. Therefore there was no breach of the duty of care on the part of the

RESPONDENT’s servants.

50. As the skill required of a person checking cargo is not considered skilled in the same

way as that of a person operating a vessel80

, the RESPONDENT only owed the

CLAIMANT an obligation to take reasonable measures to fulfil his duty81

; subject to

practical considerations82

. At 12:50 on 15 November 200883

, over a full day after anti-

pirate watch was commenced, the Vessel was hijacked by pirates and the Master and

crew were held hostage until 12 February 200984

. During the period of captivity, the

Master and the crew were confined to the bridge with the exception of meal times in the

mess room85

.Whilst confined to the bridge, the Master and the crew were only permitted

to sit or lie down, and were prevented from standing or looking outside by the pirates86

.

As the Master and crew were being held hostage by the pirates, the failure by the

RESPONDENT’s servants to check the cargo temperature was not an act of negligence.

78 Moot Problem. 41 79 “Dealing with pirates: North of England P& I Association” (2001) 15 MRI 3 80 McFarlane v Tayside Health Board [1999] UKHL 50 (HL) 81 Ibid 82 Latimer v AEC Ltd [1953] AC 643 (HL) 83 Moot Problem, 41 84 Moot Problem, 41 85 Ibid, 42 86 Ibid, 42

19

Under the circumstances, the RESPONDENT’s servants could not reasonably have

ensured that the cargo temperature was maintained during that portion of the voyage.

51. The RESPONDENT submits the acts of the pirates fall within Art.IV. r.2(q) of the

Hague-Visby Rules, and that the act of piracy did not arise from the RESPONDENT’s

fault or privity as the pirates were wholly independent of the shipowners. Furthermore,

the RESPONDENT submits that it is not liable for the damage to the cargo during the

period of time from 15 November 2008 to 12 February 2009 as the RESPONDENT

cannot be held liable for acts where its servants were not at fault and did not negligently

contribute to the loss or damage.

VI. THE RESPONDENT IS NOT LIABLE IN BAILMENT IN THE TORT OF

CONVERSION.

VI.A. The CLAIMANT does not have an actual or immediate right to possession of the

cargo.

52. In order for the CLAIMANT to bring an action against the RESPONDENT in the tort

of conversion, the CLAIMANT must have an actual or an immediate right to possess the

property87

. Further, if the CLAIMANT has this right to possess the property, it must be a

proprietary in nature; a mere contractual right will not suffice88

.

53. Since the contract entered into by the CLAIMANT with the sellers was a c.i.f.

contract for unascertained goods, property would only pass on delivery of the goods89

.

The CLAIMANT’s right to possession reverted to the sellers when they rejected delivery

87 Wilbraham v Snow 85 ER 624 88 Smith (Administrator of Cosslett Contractors Ltd) v Bridgend County Borough Council [2002] 1 AC 336

(HL); Jarvis v Williams [1955] 1 WLR 71 (CA) 89 Smyth v Bailey (1940) 45 Com Cas 292, 300-301; See Argument I.A. The CLAIMANT held conditional title

in the goods until delivery of the cargo.

20

of the cargo90

. The CLAIMANT did not have anything amounting to more than a

contractual right to delivery of the property. Further, by refusing to accept delivery of the

cargo, and in rejecting the goods, the CLAIMANT subsequently lost any proprietary

interest it might have held in the cargo. As a result, the CLAIMANT is not entitled to

bring an action against the RESPONDENT in the tort of conversion.

VI.B. Further, and in the alternative, the sellers had a better right to the property

pursuant to S 8(1) of the Torts (Interference with Goods) Act 1977.

54. Section 8(1) of the Torts (Interference with Goods) Act 1977 provides the

opportunity for the RESPONDENT to show that a third party has a better right to the

cargo in an action for wrongful interference, including the tort of conversion.

55. In the alternative to the submission directly preceding this; the RESPONDENT is not

liable in the tort of conversion on the grounds that title to, and the right to possession of

the cargo revested in the sellers when the CLAIMANT abandoned the cargo, by their

emails on 6 March 2009 at 14:0091

and 16 March 2009 at 15:2092

to the sellers.

90Smyth v Bailey (1940) 45 Com Cas 292, 300-301; See Argument I.C. The CLAIMANT rejected the cargo and

title revested in the sellers. 91 Moot problem, 25 92 Ibid, 27

21

PRAYER FOR RELIEF

For the foregoing reasons, the RESPONDENT hereby prays for the reliefs set out below.

AWARD that the RESPONDENT is not liable to the CLAIMANT for any damages for

breach of duties under the Bills of Lading and/or in bailment for the tort of conversion;

Further

AWARD that the RESPONDENT is not liable to the CLAIMANT for the difference in cargo

value calculated on the date of expected delivery and Dutch Court costs totalling USD

3,236,756.26;

Further and/or Alternatively

AWARD that the RESPONDENT is not liable to the CLAIMANT for the difference in value

from GMQ to non-GMQ cargo including interest and costs as follows:

1. Price of cargo USD 2,090,000;

2. Dutch Court fees USD 138,843.13; and

3. Legal fees for the Dutch Court proceedings USD 107,913.12.

Further

AWARD that the RESPONDENT is not liable to the CLAIMANT for:

1. Interest calculated on a compound basis pursuant to S 49 of the Arbitration Act 1996;

and

2. Costs calculated with compound interest.

Further and/or Alternatively

AWARD that any liability of the RESPONDENT is limited to USD 1,400,000.