memorandum for the claimant · 5. on monday 21st july 2014, the claimant addressed to the...

17TH INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2016

MEMORANDUM FOR THE CLAIMANT

In the Matter of arbitration under the MLAA Rules

TEAM 25 – CENTRE DROIT MARITIME ET DES TRANSPORTS (FRANCE)

Camille AUBERT Natalia GAUCHER Benoit GUILLOU

Rosaline JACQUET Fanny LECADRE

Evangeline MARCHAIS


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ON BEHALF OF

ZEUS SHIPPING AND TRADING COMPANY

The Claimant

AGAINST

HESTIA INDUSTRIES

The Respondent


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TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................................... 3 TABLE OF ABBREVIATIONS ................................................................................................... 4 INDEX OF AUTHORITIES ......................................................................................................... 5

I. DOCTRINE referred to .......................................................................................................... 5 II. Cases referred to ................................................................................................................... 6 III. LegislationS and rules referred to ....................................................................................... 7

STATEMENT OF FACTS ............................................................................................................ 8 MERITS ........................................................................................................................................ 12

I. THE ARBITRAL TRIBUNAL HAS JURISDICTION TO HEAR THE WHOLE CASE . 12 A. The Arbitration Clause and Law of Arbitration ............................................................. 12

1. The Arbitration Clause ................................................................................................ 12 2. The Law of Arbitration ............................................................................................... 12

B. Determination of this Tribunal’s Jurisdiction ................................................................. 13 1. The Arbitration Clause is Valid .................................................................................. 13

a. There was a mutual agreement on the terms ........................................................... 13 b. The parties relevantly conferred power to an arbitral Tribunal in London. ............ 14

2. The Tribunal is properly constituted and matters submitted to arbitration in accordance with the arbitration agreement ......................................................................... 15

C. Under this Clause, This Tribunal is invested to solve the whole case ............................ 15 1. Construction of the Arbitration Clause ....................................................................... 15 2. Solution: this Tribunal is invested to hear the whole case .......................................... 16

II. THE RESPONDENT’S CONTRACTUAL LIABILITY .................................................. 17 A. The Respondent accepted the risk of coup d’État .......................................................... 17 B. The Respondent is liable to the Claimant for demurrage ............................................... 18

1. The Vessel had not left the Loading Port .................................................................... 18 2. The Respond has exceed the allowed laytime under the Charter Party ...................... 20

C. The Claimant commited a breach of the Contract .......................................................... 21 1. The Respondent mentioned Hades as a “safe port” .................................................... 21 2. The Respondent knew at the time of the nomination of the safe port the risk of protest against transport of HLNG in Hades .................................................................................. 22 3. The political situation of Hades port made the port unsafe ......................................... 22 4. The Respondent failed in its obligation to guarantee a safe port ................................ 23 5. The Claimant is entitled to ask the Respondent for damages ..................................... 23

III. ALTERNATIVELY, ZEUS WAS DISCHARDED BY FORCE MAJEURE .................. 24 IV. ALTERNATIVELY, THE CHARTER PARTY WAS FRUSTRATED ......................... 25 V. On THE SALVAGE ISSUE – ANSWER TO HESTIA’S COUNTER CLAIM ............... 27

1. The towing operation following the propeller shafts damage is part of the port assistance towing contract and cannot be considered as salvage operation ....................... 27 2. Moreover, this operation could be considered as exceptional operation .................... 27

REQUEST FOR RELIEF ........................................................................................................... 29


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TABLE OF ABBREVIATIONS

COGSA Carriage of Goods by Sea Act (Australia)

ETA Estimated Time of Arrival

ETD Estimated Time od Departure

HLNG Hades Liquefied Natural Gas

ICC International Chamber of Commerce.

JDI Journal du Droit International (“Clunet”), France.

LNG Liquefied Natural Gas

MLAA Maritime Law Association of Australia & New Zealand Arbitration Rules, 2007.

NOR Notice Of Readiness

Rev. arb Revue de l’arbitrage, France.

WWD SHINC Weather Working Days, Sundays and Holidays Included


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INDEX OF AUTHORITIES

I. DOCTRINE REFERRED TO

AMBROSE (Clare) – MAXWELL (Karen) – PARRY (Angharad), London Maritime Arbitration,

3rd ed., London, Informa, 2009, XLIX-611 p.

BONASSIES (Pierre) – SCAPEL (Christian), Droit maritime, 2e éd., Paris, LGDJ-Lextenso, 2010, X-

946 p.

CHITTY (Joseph) – BALE (H. G.), Chitty on Contracts, 28th ed., 2 vol., London, Sweet & Maxwell,

1999, CCCXXVI-1659 p.

LOQUIN (Éric), L’arbitrage du commerce international, Issy-les-Moulineaux, Joly Éditions –

Lextenso Éditions, 2015, 460 p.

MCKENDRICK (Ewan), Contract Law, 8th ed., London, Palgrave-Basingstoke, 2009, XL-278 p.

PLOMARITOU (Evi), "A Review of Shipowner's & Charterer's Obligations in Various Types of

Charter.", Journal of shipping and Ocean Engineering, Vol. 4, Issue 11-12, p. 307-321.

ROB (John) – EDER (Sir Bernard), “Charterparties: nomination of ports”, Westlaw UK Inside, 9

September 2014, Sweet & Maxwell.

TETLEY (William), Marine Cargo Claims, 3rd ed., London, Blais, 1988. CXL-1305 p.


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II. CASES REFERRED TO

A.

Atlantic Lines & Navigation Co. Inc. v. Hallam Ltd., Queen’s Bench Division, 1982, [1983]

1 LLR 1988.

C.

Christopher Brown Ltd. V. Genossenschaft Oesterreichischer Waldbesitzer

Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8.

Cobelfret (UK) Limited v Austen and Butta (Sales) PTY Limited, New South Wales Supreme

Court, 24 February 1988 (unreported - jurisdata BC8802189).

D.

Dampskibsselskabet Norden A/S v Gladstone Civil Pty Ltd, Full Court of the Federal Court of

Australia,18 september 2013, [2013] FCAFC 107.

P.

Postlethwaite v Freeland [1880] 5 App Cas 599.

T.

Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals, Singaporean Cour

of Appeal, [2015] SGCA 57.


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ICC:

ICC award no. 2341, 1974, JDI 1975.938.

no. 214, 1974, JDI 1974.892.

no. 3327, JDI 1980.962.

no. 4131, JDI 1983.899.

no. 3131, Rev. arb. 1983.525.

III. LEGISLATIONS AND RULES REFERRED TO

Australian Carriage of Goods by Sea Act, 1991.

United Kingdom Arbitration Act, 1996.

Maritime Law Association of Australia & New Zealand Arbitration Rules, 2007.


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STATEMENT OF FACTS

1. On Tuesday, 1st July 2014, ZEUS SHIPPING AND TRADING COMPANY (hereinafter “the

Claimant”) received a request for proposal from HESTIA INDUSTRIES (hereinafter “the

Respondent”), a Liquefied Natural Gas (LNG) producer based in Hades, to hire a Gas LNG

tanker under a Voyage Charter Party. The Respondent thereby showed its intention to hire a

Vessel for the transport of 260,000 m3 of LNG produced from Hades Shale Gas from Hades to

Poseidon with an approximate loading date set for Wednesday 1st October 2014 and approximate

discharge date on Thursday 30th October 2014.

2. On Monday 14th July, the Claimant informed the Respondent of its recent purchase of the MV

ATHENA, an LNG tanker especially designed to transport LNG produced from Hades Shale Gas

(HLNG). The Claimant addressed to the Respondent detailed specifications of the MV

ATHENA. Notably, the Respondent informed the Claimant that the MV ATHENA had been

flagged with the Hades flag to show commitment to the development of Hades Shale Gas

industry. The Claimant also addressed a draft Charter Party for the voyage proposed by the

Respondent.

3. By way of an email dated Wednesday 16th July 2014, the Respondent requested that the

ARBITRATION clause (clause 30) contained in the first draft of the Charter Party which

provided that “(a) Any disputes arising out of or in connection with this contract, including any

question regarding its existence, validity or termination, shall be referred to arbitration in

London by a tribunal of 3 arbitrators in accordance with the Arbitration Rules of the Maritime

Law Association of Australia and New Zealand” be amended. As a result, the ARBITRATION


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clause (Clause 30) in the final and executed version of the Charter Party provides the following

“(a) Any dispute arising under this contract shall be referred to arbitration in London by a

tribunal of 3 arbitrators in accordance with the Arbitrations Rules of the Maritime Law

Association of Australia and New Zealand”.

4. On Sunday 20th July 2014, the newspaper “Hades Advocate” publically revealed the

Respondent’s intention to export its production of HLNG. The article also reported the hopes of

environmental objectors to stop the exports of HLNG from Hades and their plans to organise

significant protests around the commissioning of the Respondent’s HLNG plant.

5. On Monday 21st July 2014, the Claimant addressed to the Respondent a finalised Voyage Charter

Party draft for the hire of the MV Athena for the transport of 260,000m3 of HLNG from Hades to

Poseidon.

6. On Tuesday 22nd July 2014, the Respondent addressed an executed version of the proposed

Voyage Charter Party to the Captain of the MV ATHENA. Notably, the executed Voyage

Charter Party provided that the Vessel was expected to depart from Poseidon on Saturday 20th

September 2014 (Box 16) and estimated to be ready for loading in a safe port of Hades (Box 5)

on Friday 3rd October 2014. The Respondent requested the captain of MV Athena to inform them

of the Vessel’s progress in due course.

7. On Saturday 20th September 2014, in accordance with the Parties agreement, the Claimant

informed the Respondent that the MV ATHENA had sailed from Poseidon and that it was on it’s

way to Hades with an expected time of arrival (ETA) set for 9:00 on Friday 3rd October 2014.


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8. On Friday 3rd October 2014, the MV ATHENA tendered her Notice Of Readiness (NOR) at

09:15. In the meantime violent protests erupted and led to injuries and arrests. The Port was

closed from 10:00 until 12:00 as a result of the protests.

9. Loading commenced on Friday 3rd October at 14:30 and was completed on Monday 6th October

at 23:50. The MV Athena departed from Hades on Tuesday 7th October 2014, following customs

clearance and Port clearance.

10. On Saturday 4th October, the “Hades Advocates” reports that the arrival of the vessel surrounded

by the violent protests has caused a severe uprise of the opposition party which promises not to

rest until the end of the export of HLNG from Hades.

11. During the night of 6/7th October 2014, the leader of the Opposition Party in Hades took control

of the parliament. On 7th October 2014, the new President publically affirmed that “(Her) first act

as President has been to instruct the Hades Coast Guard to intercept the Athena and have it

return to port”.

12. On Wednesday 8th October 2014, the Hades Coast Guard intercepted the MV Athena inside the

port of Hades and directed the Master to return to the Port of Hades. In compliance with the flag

state control / port state control, the vessel returned to port in Hades.

13. On Friday 10th October, the Claimant informed the Respondent that because the delay was caused

by the nature of the cargo and as the coast guard considers the vessel had not left the port of

Hades; demurrage will accrue at the sum of USD 50,000/day, in accordance with the Charter

Party.


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14. On Wednesday 15th April 2015, the Claimant addressed an invoice to the Respondent for the

payment of 184 days of demurrage at the rate 50,0000 USD / day which amounts to the sum of

USD 9.2 million.

15. On Monday 5th October 2015, as a result of the President’s resignation, the coast guards released

the MV Athena

16. Towing operation began on 5th October 2015. The Claimant hired the services of HESTUG, a

business owned by the Respondent. Shortly after the end of the towing operations, it had become

clear that while at Hades the propellers of the vessel had been tampered with. As a result the

propeller shafts broke.

17. The Claimant, in need of assistance was successfully salvaged by HESTUG.

18. On Tuesday 6th October 2015, the Claimant addressed an invoice to the Respondent for the

payment of 358 days of demurrage at the rate of 50,000/day amounting to the sum of USD 17.9

million.

19. On Monday, 16th November 2015, the Claimant informed the Respondent of its intention to refer

the dispute to arbitration. The Claimant appointed John Grant as arbitrator.


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MERITS

I. THE ARBITRAL TRIBUNAL HAS JURISDICTION TO HEAR THE WHOLE CASE

A. THE ARBITRATION CLAUSE AND LAW OF ARBITRATION

1. The Arbitration Clause

20. .Clause 30 of the Charter Party provides:

30. ARBITRATION

(a) Any dispute arising under this contract shall be referred to arbitration in London by a sole arbitrator/a tribunal of 3 arbitrators (strike out whichever is inapplicable) in accordance with the Arbitration Rules of the Maritime Law Association of Australia and New Zealand. […] (d) The parties hereby agree that:-

(i) the Arbitrators may determine any questions by reference to consideration of general justice and fairness; (ii) a party may be represented by duly qualified legal practitioners or other representative; (iii) the Arbitrators shall include in the arbitration award their findings on the material questions of law and fact, including references to the matters.

2. The Law of Arbitration

21. The Clause does not define a legislation governing the Arbitration. The MLAA Rules provide:

2. In these Rules, unless the contrary intention appears: “Arbitration” means an arbitration conducted a) in Australia which concerns a dispute to which: […] ii) the International Arbitration Act 1974 (Cth) applies”.


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22. The Parties hereby elected the seat in London. They must be considered to have set a contrary

intention under Sect. 2. of the MLAA Rules. Then, the Law of Arbitration shall be the Law of the

Seat. English Arbitration Act, 1996 applies.

23. Alternatively, Australian International Arbitration Act, 1974 may also apply.

B. DETERMINATION OF THIS TRIBUNAL’S JURISDICTION

24. Under the principle of Kompetenz-Kompetenz, this Tribunal is entitled to rule on its own

jurisdiction1. Arbitrators’ jurisdiction is the power conferred on them by the Parties to determine

the dispute and make a final decision, which is binding on the Parties2.

25. Under Clause 30(1) of the Arbitration Act, 1996, the principle is appreciated as follows:

(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to—

(a) whether there is a valid arbitration agreement, (b) whether the tribunal is properly constituted, and (c) what matters have been submitted to arbitration in accordance with the arbitration agreement.

1. The Arbitration Clause is Valid

a. There was a mutual agreement on the terms

26. Both parties agreed on the terms of the Arbitration Clause. The Claimant sent it to the

Respondent for review and signing: “We are pleased to enclose the finalized charter party…If the

1 Christopher Brown Ltd. V. Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 2 C. AMBROSE – K. MAXWELL – A. PARRY, London Maritime Arbitration, 3rd ed., London, 2009, p. 73.


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charterparty is in order, please sign where indicated and return it to us” (Mail from the Claimant

dated 21 July 2014).

27. The Respondent sent it back duly signed: “Pease find enclosed the charterparty for the Athena

executed on behalf of Hestia.”

b. The parties relevantly conferred power to an arbitral Tribunal in London.

28. Clause 30 of the Charter Party dated 21 July 2014 invests an Arbitral Tribunal in London. This

Arbitration Clause is valid under Australian Law.

29. In fact, foreign arbitration clauses in Voyage Charter Parties are legal under Australian Law, are

not considered as see carriage documents according to s. 11 of the Australian Carriage of Goods

by See Act, 1991:

16. Those matters indicate that the amended Hague Rules preserve the distinction between a charterparty including a voyage charterparty, and a sea carriage document. The point of distinction would be lost if, as the primary judge concluded, voyage charterparties were (other than as qualified by Art 10(6) and Art 10(7)) absorbed into the concept of a sea carriage document. 17. In my view, that distinction is also preserved by COGSA. The object of COGSA is to introduce a regime of marine cargo liability with certain aims.3.

30. Consequently, COGSA prohibition of foreign arbitration clauses does not bind parties to voyage

charter parties. The clause is valid.

3 Dampskibsselskabet Norden A/S v Gladstone Civil Pty Ltd, Full Court of the Federal Court of Australia,18 september 2013, [2013] FCAFC 107.


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2. The Tribunal is properly constituted and matters submitted to arbitration in accordance with the arbitration agreement

31. Claimant duly noticed the Respondent of the beginning of the ARBITRATION Clause

proceedings (Zeus’s letter date 16 November 20154 ), as required in Clause 30, (b).

32. Parties regularly submitted theirs points of claim to the Tribunal5.

C. UNDER THIS CLAUSE, THIS TRIBUNAL IS INVESTED TO SOLVE THE WHOLE CASE

1. Construction of the Arbitration Clause

33. International commercial Arbitration efficacy and justness imply an extensive construction of the

Arbitration Clause6, and give it an effet utile (useful effect).

34. According to the principle of an extensive construction of the Clause, arbitrators must decide in

favor of an arbitral solution of the case. A significant development was given in a 1974 ICC

sentence, pronounced in Sweden:

Lorsque les parties insèrent une clause d’arbitrage dans leur contrat, on doit présumer que leur intention a été d’établir un mécanisme efficace pour le règlement des litiges visés par la clause d’arbitrage.7 When the Parties insert an Arbitration Clause into their Contract, they are deemed to intend to settle an efficient mechanism for resolving the disputes contemplated by the Arbitration Clause.8

4 Moot scenario, p. 72. 5 Moot scenario, pp. 75-77. 6 E. LOQUIN, L’arbitrage du commerce international, Issy-les-Moulineaux, 2015, p. 150, no. 151. 7 ICC sentence no. 2341, reported in French (original language was English), in JDI 1975.938. 8 Our traduction.


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35. According to the principle of effet utile of the Clause, arbitrators must construe the Arbitration

Clause in a “useful” (utile) way: the potential strictness of the Clause cannot be an argument from

the Respondent to avoid a substantial part of the Claim.

36. This extensive interpretation of the Arbitration Clause is based on material international

commercial Law9.

37. Consequently, this Tribunal’s powers must be established on the widener basis.

2. Solution: this Tribunal is invested to hear the whole case

38. One same fact engendered the subject-matter of this litigation: Hades coup d’État, that blockaded

ZEUS’ Vessel for almost one year. A true construction of the Arbitration Clause under the

principles hereinabove requires the Tribunal to admit its jurisdiction on all the case.

39. Firstly, ZEUS’s Claim is related to the Respondent’s obligations under the Contract: demurrage

(Clauses 9 and 10; Box 24). and the safe port warrant (Box 5). It is therefore a self-evident fact

that demurrage and safe port warrant are disputes arising under this contract. They do belong to

this Tribunal’s jurisdiction.

40. Secondly, Force Majeure issue was foreseen by the Parties at Clause 19. It is an execution of the

Contract, and therefore a dispute arising under this contract. It does belong to this Tribunal’s

power.

41. Thirdly, Frustration an Salvage issues,belong to the same fact (the coup d’État). Principles of

extensive interpretation and effet utile requires to integrate those questions into the Tribunal’s

9 ICC awards n° 4131, JDI 1983.899 ; n° 3327, JDI 1980.962 ; n° 3131, Rev. arb. 1983.525. E. LOQUIN, op. cit., p. 151, no. 152.


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jurisdiction. It would be inequitable and hazardous to exclude those questions from the

Arbitration award. Besides, the Parties’ intention was that the Arbitrators “determine any

questions by reference to consideration of general justice and fairness” (Clause 30, (d), (i)),

which imply a fair trial.

42. This Tribunal has jurisdiction to hear the whole Claim.

II. THE RESPONDENT’S CONTRACTUAL LIABILITY

A. THE RESPONDENT ACCEPTED THE RISK OF COUP D’ÉTAT

43. The Respondent remains bound by the Contract, as it was aware of the risk occurred by its own

exploitation. Thus, it cannot invoke the Force Majeure Clause, nor a frustration of the Contract.

All its obligations under the Contract are maintained.

44. Claimant and Respondent’s present situation is similar to the one judged in the 214 case by the

the ICC in 197410. In this case, FOB sales contracts had been entered into by the parties. The

Respondent failed to its obligation to take delivery of the Goods. Goods had to be delivered in a

developing country, where political instability was well-known. In particular, the Respondent

was established in this country, and political tensions broadcast through the press. The Arbitrators

denied Force Majeure defence and maintained the Respondent’s obligation, as:

À la date du contrat, la crise était de notoriété publique et faisait l'objet de nombreux articles de presse et même de déclarations gouvernementales" […]

10 ICC award no. 214, 1974, JDI 1974.892.


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Attendu qu’ainsi les éléments constitutifs de la force majeure ne se trouvent nullement réunis et qu’il y a donc lieu de rejeter comme inopérant l’argument tiré de la force majeure11.

45. In the case submitted to this Tribunal, Hestia – the Respondent – asked for voyage chartering a

Vessel from Hades, to transport HLNG. The Respondent is settled in Hades, and was aware of

the environmental opposition from at least 2010 in the Hades Advocate from July 20th12. On

July 20th, one day before the Contract, Hades Advocate reported the political situation remained

unstable. Therefore, the Respondent must be considered as aware of the situation when the

Contract was concluded. It entered into this Contract causa cognita. The Contract entirely

operates.

B. THE RESPONDENT IS LIABLE TO THE CLAIMANT FOR DEMURRAGE

1. The Vessel had not left the Loading Port

46. The parties have the possibility to fix in a clause a period of time allowed to the charterer in order

to load and discharge the cargo. It is called the laytime. The shipowner used to fix laytime in

order to pre-determine the length of time that his vessel will be engaged in loading or

discharging. It represents a Commercial interest of the shipowner.

47. In this case, according to the LOADING AND DISCHARGING Clause of the Charter Party13,

the “time permitted for loading (calculated from when NOR is tendered until the vessel leaves the

Loading Place) is 10 WWD SHINC.

11 ibid. Our traduction : At the date of the Contract, the crisis was known by the public and was broadcast by the press, and even by declarations of the Government. (…). Therefore there were no element of Force Majeure and the argument of Force Majeure shall be dismissed. 12 Moot scenario, p. 26. 13 Clause 9 (c) (i) of the Charter Party


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48. The laytime begins, in principle, to run when the Master of the vessel gives the Notice of

Readiness (NOR).14 The aim is to notice to the charterer that the vessel has arrived at the port and

is ready to load (or discharge). NOR is a prerequisite to the commencement of laytime at

common law. A NOR was emitted by the Master on 3rd October 2014 at 09:15. 15 The Vessel was

loaded in accordance with the Charter Party, on 3rd October 2014 at 14:30. The loading was

completed on 6th October at 23:50.

49. Nevertheless, the laytime have to stop to run when the vessel “leaves the Loading Place”.

50. The Coast Guard intercepted the Vessel in the evening of the same day as the alleged departure; it

means less than 24 hours after.16 The Vessel was immediately intercepted before leaving the port

area and the Hades territorial water. The vessel was finally released on 5th October 2015,

approximately one year after its arrival at the port of Hades

51. The territorials’ limits of Hades are Hades Port limits. As per coast guard declaration, vessel was

still in territorial water.

52. Hence, it is manifest that the Vessel had not left the Loading Place. The MV Athena remained in

the Hades port limits which justify that the lay time had continue to run until the Vessel had left

the Port of Hades, almost one year after.

14 P. BONASSIES – C. SCAPEL, Droit maritime, 2nd ed., Paris, 2010. 15 NOR, p. 51 of the Moot Scenario. 16 Email between Jim Payne (Commander – Hades Coast Guard) and the new President of Hades and Email from the Master of the MV Athena to the Claimant – dated 8 October 2014 .


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2. The Respond has exceed the allowed laytime under the Charter Party

53. Demurrage is a sum to be paid as liquidated damages fixed by the terms of a charter party for

delay beyond the agreed time for loading or discharging (lay time).17

54. If the charterer fails to proceed with the loading or the discharging in the prescribed time, he will

pay demurrage.

55. If the charterer has agreed to load and unload within a fixed period of time, it is “an absolute and

unconditional engagement”18.

56. The rate is usually determined in the charter party. According to the DEMURRAGE AND

DISPATCH MONEY Clause19, the demurrage rate amounts to 50 000 USD per day.

57. In this case, the charterer – the Respondent – had committed a breach of the Charter Party.

Indeed, the Coast Guard of Hades had released the MV Athena on 6th October 2015. Until the 6

October 2015, the Vessel had not left the Loading Place.

58. The detention of the Vessel was due to the nature of the cargo, HLNG. The new President of

Hades had ordered to the Coast Guard to stop the Vessel in order to prevent the HLNG export.

Therefore, the Claimant has not to support the consequences of the interception as the result of

the cargo. The Respondent was aware of the unstable political situation in Hades and in spite of

its knowledge, the Respondent decided to ask for the transport of LNH from Hades to Poseidon.

59. As the Vessel left the Port of Hades the 6 October 2015, it is clear that the Respondent has to be

found liable for this delay and has to pay demurrage.

17 W. TETLEY, Marine Cargo Claims, 3rd ed., London, 1988. 18 Postlethwaite v Freeland [1880] 5 App Cas 599, at p.608. 19 Clause 10 of the Charter Party.


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60. The NOR had been issued the 3 October 2014 at 09:15 – the laytime started. The Vessel left the

Loading Place the 6 October 2015. The end of lay time occurred the 13 October 2014 (delay for

loading: 10 WWD SHINC)20. The MV Athena was in the Loading Place during 358 days after

the end of lay time. The rate of demurrage was 50 000 USD / day21. Hence, the total amount of

the demurrage is 17.9 millions USD.

C. THE CLAIMANT COMMITED A BREACH OF THE CONTRACT

1. The Respondent mentioned Hades as a “safe port”

61. The charterer has to make sure that the loading/discharge port are safe22:

Where a port (…) turns out to be unsafe causing loss to the Owner, e.g. through (…) trapped in a blockade. (…) Where the charter expressly provides that the vessel is to go to a “safe” (…) nominated port (…) this will be interpreted as a warranty by the Charterer that the named location is safe23.

62. The Respondent expressly mentioned that the Vessel is to go to the nominated “safe port” of

Hades (Box 5 of the Voyage Charter Party)24. Because of the political situation of Hades, the

Vessel returned to the Loading Port.

63. The Vessel had been retained in this nominated “safe port”. This retention must be considered as

the “trapped in a blockade” situation hereinabove referred to.

20 Clause LOADING AND DISCHARGING (Clause 9), (c) (i) of the Charter Party. 21 Clause 10 of the Charter Party. 22 J. ROB – Sir B. EDER, “Charterparties: nomination of ports”, Westlaw UK Inside, 9 September 2014, Sweet & Maxwell. 23 ibid. 24 Moot scenario, p. 29.


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2. The Respondent knew at the time of the nomination of the safe port the risk of protest against transport of HLNG in Hades

64. “Where the Charterer has warranted the safety of a particular port (…) he warrants only that, at

the time of the nomination, its characteristics are such that, in the absence of some expected and

abnormal event, it will be safe for the ship at the time when she actually arrives there”25. At the

20 July 2014 in the Hades Advocate “James Parker from the Save Hades Group said that his

group were planning significant protests around the commissioning of the Hestia HLNG plant”26.

The Charter Party with the nominated safe port of Hades was signed at 22 July 2014. Then the

Respondent knew at the time of the nomination that political hostilities against gas exploitation

were in progress.

3. The political situation of Hades port made the port unsafe

65. “The warranty of safety applies to the ship's (…) departure from the relevant port (…). "Safe"

means free from both physical and non-physical (e.g. political) dangers »27.

66. Political danger was real in Hades. Violences were reported by the press (The Hades Advocate of

October 4th, 2014 28 ). Military forces were involved: “the Opposition Leader of Hades,

Jacqueline Simmons, has seized control of the parliament, backed up by the Hades military”

(The Hades Advocate of October 7th, 201429).

25 J. ROB – Sir B. EDER, op. cit. 26 Moot Scenario The Hades Advocate dated on 20 July 2014, page 26. 27 J. ROB – Sir B. EDER, “Charterparties: nomination of ports”, Westlaw UK Inside, 9 September 2014, Sweet & Maxwell. 28 Moot Scenario, p. 52 29 Moot scenario, p. 55.


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67. In particular, environmental opponents to the exploitation of HLNG forced the Vessel to go back

to Hades port: “Good news! The Coast Guard intercepted the Athena late yesterday and directed

the Master to return to the Port of Hades immediately” (Memorandum from Jim Payne to

insurrection government President J Simmons, 8 October 201430).

68. Insurrection government retained the Vessel it in Hades port for almost one year.

69. The political opposition against the exploitation of HLNG in Hades, and against the departure of

the ship, clearly settle Hades port was not a “safe port”. This situation caused prejudices to the

Claimant.

4. The Respondent failed in its obligation to guarantee a safe port

70. The fact that the respondent has nominated a safe port was a guarantee for the ship to load in a

safe port. But the situation abovementioned reveals that the Respondent failed to its obligation to

guarantee the safety of Hades port.

5. The Claimant is entitled to ask the Respondent for damages

71. Retention of the Vessel caused prejudice to the Respondent, on three grounds;

• The Claimant had to maintain its Vessel while immobilized; • The Claimant could not exploit its Vessel for almost one year (from 7 October 2014 to

4 October 2015), and therefore lost money; • The Claimant had to require tug services to drive back the damaged ship.

30 Moot Scenario, p. 57.


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72. Fair damages would be settled considering:

• Costs of immobilization (electricity, …): US$ 50,000 • The economic loss: US$ 800,000; • The salvage costs (to determine31).

73. Thus, the Claimant asks US$ 850,000 + Salvage costs in damages.

III. ALTERNATIVELY, ZEUS WAS DISCHARDED BY FORCE

MAJEURE

74. If the Arbitral Tribunal nevertheless finds that the Respondent could not have been aware of the

risk, it would therefore admit the Parties are discharged under the FORCE MAJEURE Clause.

75. FORCE MAJEURE Clause of the Charter Party provides32:

Neither party shall be liable for any failure to perform or delay in performing its obligations under this Contract, where the party is being delayed, interrupted or prevented from doing so by reasons of any Force Majeure Event. For the purposes of this Contract, “Force Majeure Event” means: […] (d) mobilization, war (declared or undeclared), hostilities [...], riots […], Court issued arrest proceedings, act of the Queen’s enemies, […], enemies […] or other similar cause.

76. An in concreto interpretation of the facts, as it was engaged in Cobelfret (UK) Limited v Austen

and Butta (Sales) PTY Limited, 198833, requires the discharge of obligations under the FORCE

MAEURE Clause. In this case, the chartered Vessel could not discharge its cargo properly, due to 31 Procedural Order no. 2, p. 2. 32 Clause 19 of the Charter Party. 33 Cobelfret (UK) Limited v Austen and Butta (Sales) PTY Limited, New South Wales Supreme Court, 24 February 1988 (unreported - jurisdata BC8802189).


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sudden quota restrictions in the designated Port of Discharge. The judge stated after an in

concreto analysis (relationship between the parties, legal and economical contexts…) that this

situation belonged to the FORCE MAJEURE clause.

77. In the case submitted to this Arbitral Tribunal, Parties shall be considered as having contemplated

Jacqueline Simmons’ coup d’État. This act was supported by Hades armed forces (The Hades

Advocate, 7 October 201434) and is a mobilisation or hostilities or other similar cause according

to the FORCE MAJEURE Clause.

78. Environmental opponents coup d’État shall be considered as a cause of Force Majeure as

intended by the Parties in this Clause.

79. Therefore, performance of the Contract was no longer required, and the Claimant is discharged of

its obligations from 7 October 2014, that is to say from the moment the Coast Guard required the

Master.

IV. ALTERNATIVELY, THE CHARTER PARTY WAS

FRUSTRATED

80. If the Arbitral Tribunal however finds that the Contract does not apply, nor was FORCE

MAJEURE Clause engaged, it would recognize that the Claimant was discharged by frustration.

81. A contract is frustrated where something occurs after the formation of the contract, which renders

its operation physically or commercially impossible, or transforms the obligation to perform into

34 Moot scenario, p. 55.


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a radically different obligation from the one defined by the parties35. Performance of the contract

is rendered “impossible, illegal or something radically different from that which was in the

contemplation of the parties at the time they entered into the contract.”36.

82. In this case, MV ATHENA was voyage chartered from 1 October 2014, between Hades to

Poseidon. On October 7th, opponents overran the Parliament of Hades and forced MV ATHENA

to go back to the Port of Loading. The Vessel had to remain docked until 5 October 2015, that is

to say it was blocked for almost one year.

83. This duration could not have been foreseen by the Claimant. Due to the duration of this

immobilization of the Vessel, the Charter Party must be considered frustrated, as it was settled in

Hirji Mulji v Cheong Yue SS. Co. Ltd, 192637.

84. The Contract is frustrated since 7 October 21014. Therefore, both Parties were automatically

discharged of their obligations from this date38.

35 J CHITTY – H. G. BEALE, Chitty on Contracts, 28th ed., vol. 1, London, 1999, no. 24-001. 36 MCKENDRICK, Contract Law, 8th ed., London, 2009, 14.8. 37 Hirji Mulji v Cheong Yue SS. Co. Ltd, Supreme Court of Hong Kong, 25 February 1926, [1926] A.C. 497. 38 J CHITTY – H. G. BEALE, Chitty on Contracts, op. cit., no. 24-068.


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V. ON THE SALVAGE ISSUE – ANSWER TO HESTIA’S COUNTER CLAIM

1. The towing operation following the propeller shafts damage is part of the port assistance towing contract and cannot be considered as salvage operation

85. HESTUG did not give any information about the position where the towing line has been linked

up. The terms « OPEN WATERS » are only describing the area environment of the convoy so

that MV ATHENA could still be under Ports Limits.

86. Then, the damage took place immediately after that towing lines were released and when

MV ATHENA manoeuvred only with her engines by asking full power. This situation cannot be

tested during towing operation. In case of the propeller shaft damage arrived while the Vessel

was still towed, the vessel would have bring back to berth in the context of port assistance towing

contract.

87. As no salvage contract was signed between parties, International Convention of Salvage 1989 has

to be applied, particularly article 17 of the convention has to be considered “No payment is due

under the provisions of this Convention unless the services rendered exceed what can be

reasonably considered as due performance of a contract entered into before the danger arose.”

2. Moreover, this operation could be considered as exceptional operation

88. In the alternative, the operation will be considered as Salvage Operation, followed statement have

to be heard in order to estimate the reward value:


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89. HESTUG effort were very limited, tugs were near MV ATHENA. Tugs crew knew the procedure

and place were tug lines have to be connected. This operation was not more difficult than port

towing operation.

90. It was not reported that tugs had to use their equipment over normal load (specially towing

equipment and engines).

91. Finally, as the gas is HESTIA’s cargo, HESTIA’s involvement is an act of due precaution in

order to protect her interests. HESTIA cannot pretend for a reward concerning the salvage of her

own cargo.


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REQUEST FOR RELIEF

For the reasons set out above, the Owners request this Tribunal to:

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

(II) FIND that the Charter Party still operates;

(III) FIND that the Claimant duly executed its obligations under the Charter Party;

(IV) FIND that the Respondent is liable to the Claimant for demurrage;

(V) FIND that the Respondent is liable to the Claimant for breach of the Charter Party;

(VI) AWARD USD 17.9 millions demurrage;

(VII) AWARD USD 850,000 + Salvage costs damages.

memorandum for the claimant · 5. on monday 21st july 2014, the claimant addressed to the...

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