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

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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

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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

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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).

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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.