EIGHTEENTH INTERNATIONAL MARITIME LAW ARBITRATION MOOT

2017

MEMORANDUM FOR THE CLAIMANT

\

THE UNIVERSITY OF AIRLANGGA

TEAM 18

FURNACE TRADING PTE LTD INFERNO RESOURCES SDN BHD

(Claimant) (Respondent)

V.

TEAM 18

ANGGRAENI KESUMA N. SAMPURNA

CRISTIAN

REGINE WIRANATA

SHOFY SUMA NISRINA

TAMARA MEILIANA SISWANTO

WALIDA AHSANA HAQUE

i

Table of Contents

ABBREVIATIONS ................................................................................................................. iii

LIST OF AUTHORITIES ...................................................................................................... iv

STATEMENT OF FACTS .......................................................................................................1

I. THE TRIBUNAL HAS THE JURISDICTION TO ORDER THE SALE OF THE

CARGO ON BOARD THE TARDY TESSA PENDENTE LITE ...........................................3

A. THIS TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE .................3

1. This Tribunal has jurisdiction over the Parties to the dispute ............................................3

2. This Tribunal has the jurisdiction to determine issues arising out of the Voyage

Charterparty ...........................................................................................................................3

3. This Tribunal has the jurisdiction to apply the International Arbitration Act (Cap

143A) ......................................................................................................................................4

B. THIS TRIBUNAL HAS JURISDICTION TO ORDER PENDENTE LITE SALE OF

THE CARGO ............................................................................................................................5

1. The Voyage Charterparty is incorporated into the Bill of Lading .......................................5

2. This tribunal has the authority to order pendente lite sale of the cargo. .............................6

II. CLAIMANT HAS A VALID AND ENFORCEABLE LIEN OVER THE CARGO

IN RESPECT OF FREIGHT, DETENTION, DAMAGES, AND ALL AMOUNTS DUE

UNDER THE CHARTERPARTY ...........................................................................................7

A. RESPONDENT HAS CONDUCTED A REPUDIATORY AS THE RESULT OF

BREACH OF VOYAGE CHARTERPARTY ........................................................................7

1. Respondent breached its obligation pertaining to the nomination of a discharging port ....7

2. Respondent has breached its obligation in paying freight, demurrage, and all other

expenses under the Charterparty ............................................................................................9

ii

3. Hence, Claimant’s termination of the Voyage Charterparty is appropriate ...................... 10

B. CLAIMANT HAS THE RIGHT TO ENFORCE LIEN OVER THE CARGO

AND ALL OTHER EXPENSES............................................................................................. 11

1. Claimant has the contractual right to lien ........................................................................ 11

2. Alternatively, Claimant may exercise lien over the cargo vis-a-vis Imlam ........................ 13

III. THE CIRCUMSTANCES OF THE CASE ARE SUCH THAT IT IS

NECESSARY AND JUST FOR THE TRIBUNAL TO ORDER THE SALE OF THE

CARGO ................................................................................................................................... 15

A. THE SALE ORDER OF THE CARGO PENDENTE LITE IS NECESSARY ............... 15

1. Sale of the cargo is necessary to preserve Claimant’s right to lien ................................... 15

2. Sale is necessary to alleviate the urgency of the situation ................................................. 16

3. There are no alternatives to the sale of the cargo ............................................................. 16

B. THE SALE ORDER OF THE CARGO PENDENTE LITE IS JUST ............................. 17

1. The balance of convenience favors the sale of the cargo .................................................. 17

2. The lack of an order to sell the cargo causes irreparable harm to Claimant .................... 18

REQUEST FOR RELIEF ....................................................................................................... 19

iii

ABBREVIATIONS

Voyage Charterer Inferno Resources Sdn Bhd

Time Charterer Furnace Trading PTE LTD

M/V Merchant Vessel

Master Tan Xiao Ming

SCMA Singapore Chamber of Maritime

Arbitration

SPSB Safe Port Safe Berth

Parties Claimant Respondent

Vessel M/V Tardy Tessa

Port Discharge port

IAA International Arbitration Act

Tribunal Present Arbitral Tribunal

iv

LIST OF AUTHORITIES

LEGISLATION

International Arbitration Act (Cap 143A) 2002 ............................................................. 4, 5, 6

Merchant Shipping Act (Chapter 179) 1996 ........................................................................ 17

Singapore Chamber of Maritime Arbitration Rules 2015 (SCMA Rules) ........................... 3, 4,

Merchant Shipping Act (Chapter 179) 1996 ............................................................... 7, 16, 17

CASES & ARBITRAL AWARDS

Akinlose v Ait [1961] WNLR 116 ........................................................................................ 18

Alfred Toepfer International GmbH v. Itex Itagrani Export SA

[1993] 1 Lloyd’s Rep 360 ................................................................................................ 10

American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 ............................................. 17, 18

Bayoil v. Seawind Tankers Corp.

(The Leonidas) [2001] 1 Lloyd’s Rep 533 ........................................................................ 11

Bovis Lend Lease Pte Ltd v Jay-Tech Marine Projects Pte Ltd

and Another Application [2005] SGHC 91 ......................................................................... 3

Bunge Corporation v. Tradax Export SA [1981] 1 WLR 711 ................................................. 8

Castleton Commodities Shipping Co Pte Ltd v Silver Rock Investments

(The “Clipper Monarch”) [2015] EWHC 2584 .................................................... 12, 13, 14

Cayne v Global Natural Resources Plc [1984] AII ER 225 ................................................. 17

Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618 ................................................... 15

Concordia Agritrading Pte Ltd v Cornelder Hoogewerft (Singapore) Pte Ltd

[1999] 3 SLR(R) 618 ......................................................................................................... 5

Elder Dempster v. Paterson, Zochonis [1924] A.C. 552 (H.L.) ............................................ 12

Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources,

intervener) [2015] SGHC 311 ................................................................ 5, 14,15, 16, 17, 18

Harrison v. Huddersfield Steamship [1903] 19 T.L.R. 386 .................................................. 12

Hongkong Fir Shipping v. Kawasaki Kisen Keisha [1961] EWCA Civ 7 .......................... 8, 10

v

Itex Itagrani Export SA v Care Shipping Corporation

and others (No 2) [1990] ................................................................................................... 5

J.Y.A. Lamaignere v. Selene Shipping Agencies, Ltd [1982] C. L. R. 227............................... 7

Jurong Engineering Ltd v Black & Veatch Singapore Pte Ltd [2003]

[2003] SGHC 292. P. 3 ...................................................................................................... 3

Kirchner v Venus [1859] 12 Moore 361, 390 ....................................................................... 14

L&M Concrete Specialist Pte Ltd v United Eng Contractors Pte Ltd

[2000] 2 SLR(R) 852 ......................................................................................................... 5

Lansing Linde Ltd v Kerr [1991] 1 WLR 251 ...................................................................... 17

Leeds Shipping Co v Societe Francaise Bunge

(The Eastern City) [1958] 2 Lloyd’s Rep 127 ..................................................................... 9

Maldives Airports Co Ltd and another v GMR Malé

International Airport Pte Ltd [2013] SGCA 16 ................................................................ 15

Miramar Maritime Corporation v. Holborn Oil Trading Ltd

(The Miramar) [1983] 2 Lloyd’s Rep 319 ........................................................................ 11

Motor Oil Hellas Refineries SA v Shipping Corp of India.

(The Kanchenjunga) [1990]............................................................................................... 9

Pagnan v. Tradax Ocean Transportation [1987] 2 Lloyd’s Rep 342 351 ............................. 11

Paradine v. Jane [1647] Aleyn 26; 82 ER 579, 897 ............................................................... 8

Samuel v. West Hartlepool Steam Navigation [1906] 11 Com Cas 115 ................................ 12

Santiren Shipping Ltd v. Unimarine S.A.

(The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep 159 ............................................... 11, 14

Seele Middle East FZE v. Drake & Scull International Co SA

[2014] EWHC 435 (TCC) ................................................................................................ 15

Spar Shipping AS v Grand China Logistic Holding

(Group) Co., Ltd [2015] EWCA CIV 982 ........................................................................ 10

Star-Trans Far East Pte Ltd v Norske-Tech Ltd [1996] 2 SLR(R) 196 ................................... 5

Stocznia Gdanska SA v. Latvian Shipping Co. [2002] EWCA Civ 889 [2002] 2 All ER

[Comm] 768, [2003] 1 CLC 282 (CA) ............................................................................. 10

Telenor East Holding H AS v. Altimo Hodling & Investment Ltd [2014]

EWHC B5 (Comm) ......................................................................................................... 15

The “Dwima 1” [1996] 2 SLR 670; [1996] SGHC 83 ......................................................... 14

vi

The “Rewia” [1991] 2 Lloyd’s Rep 325 (C.A.) ................................................................... 12

The “Star Quest” and others [2016] SGHC 100 .................................................................... 5

The Ardennes [1950] 84 LI. L. Rep. 304; [1951] 1 K.B. 55 (CA.) ....................................... 13

The Evia No. 2 [1982] 1 Lloyd’s Rep. 334............................................................................. 8

The Fort Kip [1985] 2 Lloyd’s Rep 168 .............................................................................. 10

The Jocelyne [1977] 2 Lloyd’s Rep. 121 ............................................................................... 6

The San Nicholas [1976] 1 Lloyd’s Rep 8 ............................................................................. 5

The SLS Everest [1981] 2 Lloyd’s Rep 389 ........................................................................... 5

Unitramp v. Garnac Grain Co. Inc

(The Hermine) [1979] 1 Lloyd’s Rep 212 .......................................................................... 5

Vitol SA v. Norell Ltd (The Santa Clara) [1996]OB 108 ...................................................... 10

Wegener v Smith [1854] 15 CB 285, 139 ER 432 .................................................................. 5

Welex AG v Rosa Maritime Ltd [2003] EWCA Civ 26........................................................... 5

Woodar Investment Development Ltd v. Wimpey Construction

(UK) Ltd [1980] 1 WLR 277 ............................................................................................ 10

OTHER SOURCES

Cooke, J, Young, T, Taylor, A, Kimball, JD, Martowski, D and Lambert, L, Voyage Charters,

3rd edn, LLP (2007) .......................................................................................................... 8

F Wilson, John. Carriage of Goods By Sea. 7th ed., Pearson Education Ltd., 2010 ........... 7, 9

Jones, Leonard. A., “A Treatise on the Law of Liens, Common Law, Statutory, Equitable and

Maritime” (New Jersey, The Lawbook Exchange, Ltd:2005) ........................................... 12

Julian Cooke, Tim Young, Michael Ashcroft, Andrew Taylor, John Kimball, Voyage Charters,

CRC Press. ................................................................................................................ 13, 14

Moser & Choong (eds) Asia Arbitration Handbook [1975] ................................................. 18

Richard Aikens, Richard Lord & Michael Bools, Bills of Lading,

(Oxon: Informa Law, 2016) ............................................................................................. 14

Voyage Charterparty. ........................................................................................................ 7, 8

1

STATEMENT OF FACTS

1. The vessel M/V Tardy Tessa was chartered by Furnace Trading Pte Ltd (CLAIMANT) on a

Time Charterparty from Imlam Consignorist GmbH. Under the time charter, the vessel was to

be employed within safe ports and safe places within Asia and Australia.

2. Subsequently, CLAIMANT chartered the vessel on a voyage charter to Inferno Resources

Pte Ltd (RESPONDENT) for a shipment of Australian Anthracite. A Voyage Charterparty

was received by CLAIMANT on September 1, 2016 from RESPONDENT. Under the

Charterparty, freight was to be paid 5 days after the beginning of the voyage, and the

discharge port was to be a safe port and safe berth in China, to be declared by

RESPONDENT when the vessel passed Singapore for bunkering.

3. In turn, RESPONDENT sub-let the vessel to Idoncare Berjaya Utama Pty Ltd, owners of the

shipped cargo. Pursuant to the Voyage Charterparty, a Bill of Lading was issued, naming

Idoncare as shipper and signed by the Master of the vessel. The vessel began its voyage on

December 4, 2016.

4. On October 10, 2016, the vessel arrived in Singapore for bunkering. RESPONDENT had

yet to pay freight, which had been due on October 9, nor had it declared a discharging port.

CLAIMANT notified RESPONDENT on the arrival of the vessel and the due freight.

5. The vessel finished loading on October 11, 2016, and drifted outside Singapore off-port

limits. CLAIMANT requested RESPONDENT to declare the discharging port and remit

freight, however RESPONDENT replied that they were unable to do either.

2

6. On October 16, 2016, RESPONDENT nominated Busan, South Korea as a discharge port.

CLAIMANT refused as it was outside of the permitted range under the Voyage Charterparty

and Time Charterparty, and was not a safe port due to the arrival of zombies onboard a train.

7. Due to RESPONDENT’s persistent failure to perform their obligations, CLAIMANT

declared that should RESPONDENT not perform them by October 20, 2016, CLAIMANT

reserved their right to terminate the Voyage Charterparty and claim all losses incurred.

8. RESPONDENT had neither nominated a discharge port nor remitted freight by October 20,

2016. CLAIMANT sent a notice of lien to RESPONDENT and Idoncare via All’s Good over

the cargo on board the vessel. In addition, CLAIMANT requested the Imlam’s assistance in

exercising lien over the cargo, to which Imlam agreed.

9. On October 21, 2016, RESPONDENT nominated the discharge port of Ningbo, China, and

promised to remit freight after discharge of the cargo. As RESPONDENT refused to perform

any of Charterparty obligations, on October 22, 2016, CLAIMANT terminated the Voyage

Charterparty.

10. CLAIMANT sent a notice of arbitration to RESPONDENT and Idoncare on November 25,

2016. In response, both RESPONDENT and Idoncare consented to it being dealt with by an

arbitration under the Singapore Chamber of Maritime Arbitration.

11. On November 30, 2016, Imlam notified CLAIMANT of a report by the Master on the

gravity of the situation on board the vessel. In response, CLAIMANT created an urgent

application for consolidation and liberty to sell the cargo, on December 1, 2016. Both

RESPONDENT and Idoncare agreed to the consolidation, and Idoncare declined to make

submissions at the oral hearing.

3

ARGUMENT ON JURISDICTION

I. THE TRIBUNAL HAS THE JURISDICTION TO ORDER THE SALE OF THE

CARGO ON BOARD THE TARDY TESSA PENDENTE LITE

A. THIS TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE

1. This Tribunal has jurisdiction over the Parties to the dispute

1. Parties to a dispute have the autonomy to choose the arbitration regime to govern their

dispute resolution.1 In the present dispute, the Parties have agreed to resolve their disputes

under the SCMA, pursuant to Clause 29 of the Voyage Charterparty.2 Pursuant to the urgent

application created by Claimant, the Parties have agreed to consolidate the arbitration

proceedings between Claimant and Respondent, and Claimant and Idoncare, into a single

arbitration proceeding.3 Under Rule 33.2 of the SCMA Rules which governs this Tribunal,

other parties may be added with their consent to an arbitration.4 Therefore, this tribunal has

the jurisdiction to determine and solve the parties’ dispute.

2. This Tribunal has the jurisdiction to determine issues arising out of the

Voyage Charterparty

2. This Tribunal has the jurisdiction to determine all disputes arising under or in connection

with the transaction or the subject of reference, pursuant to Rule 20 of the SCMA Rules. In

the present case, the subject of reference under which Claimant and Respondent have agreed

1 Jurong Engineering Ltd v Black & Veatch Singapore Pte Ltd [2003] SGHC 292; Bovis Lend Lease Pte Ltd v

Jay-Tech Marine Projects Pte Ltd and Another Application [2005] SGHC 91 2 Moot Scenario (9 December 2016) at 26, Clause 29 3 Moot Scenario (9 December 2016) at 90, 93, 95 4 Singapore Chamber of Maritime Arbitration Rules 2015 (SCMA Rules); Rule 33.2

4

to arbitrate is the Voyage Charterparty.5 In consequence, this Tribunal’s jurisdiction extends

to issues arising out of, or in connection with, the Voyage Charterparty.

3. This Tribunal has the jurisdiction to apply the International Arbitration Act

(Cap 143A)

3. Pursuant to Article 16 (1) of the UNCITRAL Model Law, the "Kompetenz-Kompetenz”

principle grants this tribunal with the competence to decide on their own jurisdiction of this

matter. Based on Rule 21 of the SCMA Rules, this Tribunal has decided to apply the law

designated by the parties as applicable to the substance of the dispute.6 Clause 29. Law and

Dispute Resolution designates that Claimant and Respondent have agreed to arbitrate under

Singapore law.7 As such, Rule 2 of the SCMA Rules gives a force of law to the International

Arbitration Act (Cap 143A),8 which applies to international arbitrations.

9 The present dispute

constitutes an international arbitration as two Parties, Respondent and Idoncare, have their

places of business outside of Singapore, in Malaysia and Australia respectively.10

5 Moot Scenario (9 December 2016) at 76-82, 86-88 6 SCMA Rules; Rule 21 7 Moot Scenario (9 December 2016) at 23 8 SCMA Rules; Rule 2 9 International Arbitration Act (Cap 143A) 2002 (“International Arbitration Act”); Sect 5(2) 10 Moot Scenario (9 December 2016) at 71, 77

5

B. THIS TRIBUNAL HAS JURISDICTION TO ORDER PENDENTE LITE SALE OF

THE CARGO

1. The Voyage Charterparty is incorporated into the Bill of Lading

4. Clauses within a charterparty can be incorporated into a bill of lading,11

if it is applied in

specific and adequately clear terms.12

The Bill of Lading contains the special instruction of

“freight payable as per charterparty”, and the Conditions of Carriage states “all terms and

conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the

Law and Arbitration Clause/Dispute Resolution Clause, are herewith incorporated.”

Although no charter party has been identified, it does not negate the incorporation of the

Voyage Charterparty.13

5. First, the word “freight” in Bill of Lading indicates that it refers to a voyage charter party.14

Second, whereby there is an absence of identification, reference is considered to be made

towards any charter under which the goods are being carried.15

In the present dispute, the

Voyage Charterparty is the only substantive charter containing carriage of the goods. Finally,

extrinsic evidence is admissible to prove the charter party in question,16

and demonstrates

support that the Voyage Charterparty is incorporated. Pursuant to Clause 26. BILL OF

LADING, the Master may sign and issue non-liner bills of lading on behalf of Claimant. The

Bill of Lading in question fulfills the provisions of the Voyage Charterparty, as it is signed by

the Master and is not a liner bill of lading.

11 International Arbitration Act; Art 2A(8), Wegener v Smith (1854) 15 CB 285, 139 ER 432 12 Star-Trans Far East Pte Ltd v Norske-Tech Ltd [1996] 2 SLR(R) 196; Concordia Agritrading Pte Ltd v

Cornelder Hoogewerft (Singapore) Pte Ltd [1999] 3 SLR(R) 618; L&M Concrete Specialist Pte Ltd v United

Eng Contractors Pte Ltd [2000] 2 SLR(R) 852 13 The San Nicholas [1976] 1 Lloyd’s Rep 8; The SLS Everest [1981] 2 Lloyd’s Rep 389 14 Five Ocean Corporation v Cingler Ship Pte Ltd [2015] SGHC 311; Itex Itagrani Export SA v Care Shipping

Corporation and others (No 2) [1990] 15 The “Star Quest” [2016] SGHC 100 16 Welex AG v Rosa Maritime Ltd [2003] EWCA Civ 26

6

2. This tribunal has the authority to order pendente lite sale of the cargo.

6. Section 12 (1) of International Arbitration Act grants the Tribunal the power to make order

sale of any property which forms part of the subject-matter of the dispute17

. Whereby a bill of

lading is issued under a charter party, it is governed by the terms of the latter.18

As such, the

Bill of Lading, having incorporated, inter alia, Clause. 29. LAW AND DISPUTE

RESOLUTION,19

is included into the present dispute. Hence, the cargo constitutes part of the

subject-matter of the dispute, and this Tribunal is empowered to order pendente lite sale

thereof.

17 International Arbitration Act; Sect 12(1) 18 The Jocelyne [1977] 2 Lloyd’s Rep. 121 19 Moot Scenario (9 December 2016) at 23

7

ARGUMENT ON MERITS

II. CLAIMANT HAS A VALID AND ENFORCEABLE LIEN OVER THE

CARGO IN RESPECT OF FREIGHT, DETENTION, DAMAGES, AND ALL

AMOUNTS DUE UNDER THE CHARTERPARTY

A. RESPONDENT HAS CONDUCTED A REPUDIATORY BREACH OF THE

VOYAGE CHARTERPARTY

1. Respondent breached its obligation pertaining to the nomination of a discharging

port

7. Whereby a voyage charter provides a range of discharge ports, a charterer has no right to

nominate a discharge port outside of the agreed range.20

In the present dispute, Clause 16.

DISCHARGE PORT in the Voyage Charterparty provides that Respondent must declare one

safe port, safe berth in China.21

On the contrary, Respondent had failed to perform its

obligation, and is personally liable for such a failure.22

a. Respondent’s failure to nominate a legitimate discharge port is a fundamental breach

8. In a Voyage Charterparty, there is implied undertaking where the vessel will proceed on the

voyage, load and discharge at the time agreed or within a reasonable period of time.23

Under

Clause 16. DISCHARGE PORT, Respondent is obliged to nominate a discharge port after the

20 Shipping Law 21 Voyage Charterparty, Clause 16 22 J.Y.A. Lamaignere v. Selene Shipping Agencies, Ltd (1982) C.L.R. 227. 23 F Wilson, John. Carriage of Goods By Sea. 7th ed., Pearson Education Ltd., 2010, page. 15

8

vessel passed Singapore for bunkering.24

However, until the vessel had drifted past

Singapore, Respondent had not nominated a discharge port to Claimant.25

9. A delay in the nomination of a port constitutes a breach of the promise contained in a

contract.26

Whether such a breach constitutes a fundamental breach depends on the nature of

the term, be it a condition, warranty, or innominate term.27

When a term is not expressly

categorized as a condition, and a breach of which may have trivial, minor, or grave

consequences, it constitutes an innominate term,28

a breach of which is fundamental when it

has grave factual consequences.29

As such, the timely nomination of a discharge port under

Clause 16. DISCHARGE PORT falls within the category of an innominate term. In the

present case, Respondent’s failure to nominate a legitimate discharge port has caused severe

distress to the vessel and its crew, due to inadequate supplies to accommodate the delay, and

the unstable condition of the cargo.30

Hence, Claimant is entitled to treat the breach as

repudiatory.

b. Respondent’s discharge port nomination of Busan is not justified

10. An agreement on the range of ports from which a discharge port is to be nominated creates an

assumption that the parties have agreed to the safety of such ports.31

As such, any nomination

outside of the agreed range is illegitimate.32

On the other hand, Respondent had insisted on

24 Voyage Charter Party, Clause 16

25 Moot Scenario (9 December 2016) at 51

26 Unitramp v. Garnac Grain Co. Inc (The Hermine) [1979] 1 Lloyd’s Rep. 212; The Evia (No. 2) [1982] 1

Lloyd’s Rep 334

27 Hongkong Fir Shipping v. Kawasaki Kisen Keisha [1961]

28 Bunge Corporation v. Tradax Export SA [1981] 1 WLR 711

29 Hongkong Fir Shipping v. Kawasaki Kisen Keisha [1961] EWCA Civ 7 30 Moot Scenario (9 December 2016) at 34,37. 31 Cooke, J, Young, T, Taylor, A, Kimball, JD, Martowski, D and Lambert, L, Voyage Charters, 4th ed

(London: Informa Law, 2014) 32 Paradine v. Jane (1647) Aleyn 26; 82 ER 579, 897.

9

discharge at Busan, which was outside of the agreed range in the Voyage Charterparty and

Time Charterparty.33

As such, its nomination is not a valid one.

11. Furthermore, the port is inherently unsafe. A port will not be safe unless, in the relevant

period of time, the particular ship can reach it, use it, and return from it without, in the

absence of some abnormal occurrence, being exposed to danger which cannot be avoided by

good navigation and seamanship.34

On the contrary, there are zombies arriving from Seoul

onboard a train, and there is insufficient time to make necessary arrangement for vessel to

safely call at Busan.35

This condition refer to an abnormal risk or occurrences, and not within

the scope of the safe port.36

Whereby the nominated port is unsafe, a shipowner has the right

to consider whether to accept such a nomination, and subsequently reject it.37

Should

Claimant agree to sail to Busan, which is an unsafe port, it would be liable to novus actus

interveniens, and would be unable to recover damages subsequently suffered by the vessel.38

As such, its refusal to discharge the cargo at Busan is appropriate.

2. Respondent has breached its obligation in paying freight, demurrage, and all other

expenses under the Charterparty

12. Respondent has failed to remit freight, which had become due on October 9, 2016,39

in spite

of repeated notices by Claimant, as well as an extension of time.40

Additionally, Respondent

requested for payment to be made after the discharge of the cargo,41

contradicting the

provision under Clause 19. FREIGHT that in any case, payment must be done before

33 Moot Scenario (9 December 2016), at 57-58, 60 34 Leeds Shipping Co v Societe Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep. 127 at p.131. 35 Moot Scenario (9 December 2016), at 58. 36 Leeds Shipping Co v Societe Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep. 127; 37 Motor Oil Hellas Refineries SA v Shipping Corp of India. The Kanchenjunga [1990] 1 Lloyd’s Rep 391. 38 F Wilson, John. Carriage of Goods By Sea. 7th ed., (Harlow, Pearson Education Ltd: 2010) p. 28. 39 Moot Scenario (9 December 2016) at 51-68. 40 Moot Scenario (9 December 2016), at 51,54, 56, 62, 64. 41 Moot Scenario (9 December 2016), at 67

10

breaking bulk.42

The obligation to make a timely payment of freight is an innominate term,43

and gives rise to a shipowner’s right to terminate the contract if it is denied the benefit of the

contract.44

The benefit of the contract, in the present case, is the freight earned Claimant prior

to the discharge of the cargo, which would allow it to retain a lien on the cargo aboard the

ship. Should freight be payable after discharge, Claimant as an owner would be forced to

exercise it off-ship through intercepting the cargo before it is delivered, and seek alternative

storage facilities.45

3. Hence, Claimant’s termination of the Voyage Charterparty is appropriate

13. Repudiation is considered to occur whereby a party’s conduct indicates an intention to

abandon and refuse performance of the contract,46

in that they renounce or are incapacitated

to perform their obligations.47

Where an innocent party elects to treat a breach as repudiatory,

it can be effective if communicated to the other party.48

In the present case, Claimant had sent

an ultimatum to Respondent stating that in the event that they did not perform their

obligations to remit freight or nominate a discharge port by October 20, 2016, it would treat

Respondent as having conducted a repudiatory breach of the Voyage Charterparty.49

14. On the contrary, Respondent failed to demonstrate its willingness to perform the contract by

the set date, and did not contact Claimant in any manner.50

Such a silence could be inferred to

mean a continuing refusal to perform the obligations under a contract,51

hence allowing

Claimant to treat the breach as repudiatory. Furthermore, when Respondent did communicate

42 Moot Scenario (9 December 2016) at 22 43 Spar Shipping AS v Grand China Logistic Holding (Group) Co., Ltd [2015] EWHC 718 (Comm) 44 Hongkong Fir Shipping v. Kawasaki Kisen Keisha [1961] EWCA Civ 7 45 The Fort Kip [1985] 2 Lloyd’s Rep 168 46 Woodar Investment Development Ltd v. Wimpey Construction (UK) Ltd [1980] 1 WLR 277 47 Alfred Toepfer International GmbH v. Itex Itagrani Export SA [1993] 1 Lloyd’s Rep 360 48 Vitol SA v. Norell Ltd (The Santa Clara) [1996] QB 108. 49 Moot Scenario (9 December 2016) at 56, 84. 50 Moot Scenario (9 December 2016), at 52-55. 51 Stocznia Gdanska SA v. Latvian Shipping Co. [2002] EWCA Civ 889, [2002] 2 All ER [Comm] 768, [2003] 1

CLC 282 (CA).

11

with Claimant after the set date, it refused to perform its obligation to pay freight.52

Hence,

Claimant had the right to terminate the Voyage Charterparty.

B. CLAIMANT HAS THE RIGHT TO ENFORCE LIEN OVER THE CARGO

1. Claimant has the contractual right to lien

a. Claimant has a right to lien under the charterparty

15. Within a voyage charter party, an owner has the right to exercise lien over cargo belonging to

a third party, provided that such a right is incorporated into the bill of lading.53

The Voyage

Charterparty in the present case is a modification of the Standard Coal-Orevoy form, attached

in the e-mail containing the Voyage Charterparty.54

Whereby parties contract upon a standard

form of charter, effect must be given to its provisions, and the terms of the standard form are

only undermined by inconsistencies between the negotiated clauses between the parties.55

Clause 19. Lien of the Standard Coal-Orevoy grants Claimant as owners a lien on the cargo

for freight, deadfreight, demurrage, and general average contribution due to them under the

charterparty.56

Such a term was incorporated into the Bill of Lading, through the statement of

“all terms and conditions … of the Charter Party … are herewith incorporated”. No

provision within the Voyage Charterparty contradicts the lien clause, and if any, Clause 19.

FREIGHT is consistent with the right to lien as freight must be paid before breaking bulk.57

52 Moot Scenario (9 December 2016) at 56-63. 53 Miramar Maritime Corporation v. Holborn Oil Trading Ltd (The Miramar); Santiren Shipping Ltd v.

Unimarine S.A. (The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep 159. 54 Moot Scenario (9 December 2016) at 20-23. 55 Pagnan v. Tradax Ocean Transportation [1987] 2 Lloyd’s Rep 342, 351; Bayoil v. Seawind Tankers Corp.

(The Leonidas) [2001] 1 Lloyd’s Rep 533. 56 Moot Scenario (9 December 2016) at 31. 57 Moot Scenario (9 December 2016) at 22.

12

b. Claimant has the right to a carrier’s lien under the Bill of Lading

16. Under a bill of lading, a time charterer who has taken the role of carrier has the right to

freight.58

Such a right grants it with the right to a carrier’s lien.59

In the present case, Claimant

fulfills the elements necessary to be a carrier under the Bill of Lading.

17. First, the Bill of Lading must be made with Claimant alone, and not Imlam.60

The vessel is

under a time charter by Claimant, and Clause 1. Duration/Description of the Time

Charterparty states that Claimant has the right to sublet the vessel.61

Further, the vessel has

yet to be delivered to Imlam,62

and as such remains under the employment of Claimant.

18. Second, the Master must have the authority to sign, and signed on behalf of Claimant.63

Clause 26. BILLS OF LADING of the Voyage Charterparty stipulates that Claimant has

given the Master the authority to sign and issue Bills of Lading on behalf of Claimant.64

19. Third, the wording of the bill of lading and surrounding circumstances must state that the

Master, in signing, acts as agent of Claimant.65

The Bill of Lading incorporates the terms of

the Voyage Charterparty,66

Clause 26 of which stipulates no liner bills of lading are to be

issued by the Master.67

Further, the Notice of Readiness signed by the Master states that it is

issued in accordance with the Charterparty.68

58 Castleton Commodities Shipping Co Pte Ltd v Silver Rock Investments [2015] EWHC 2584 (Comm) 59 Jones, Leonard A., A Treatise on the Law of Liens, Common Law, Statutory, Equitable and Maritime (New

Jersey, The Lawbook Exchange, Ltd: 2005) 60 The “Rewia” [1991] 2 Lloyd’s Rep 325. 61 Moot Scenario (9 December 2016) at 1. 62 Moot Scenario (9 December 2016) 63 The “Rewia” [1991] 2 Lloyd’s Rep 325. 64 Moot Scenario (9 December 2016) at 22. 65 Harrison v. Huddersfield Steamship [1903] 19 T.L.R. 386; Samuel v. West Hartlepool Steam Navigation [1906] 11 Com Cas 115; Elder Dempster v. Paterson, Zochonis [1924] A.C. 552 (H.L.). 66 Moot Scenario (9 December 2016) at 42, 44, 46. 67 Moot Scenario (9 December 2016), at 22. 68 Moot Scenario (9 December 2016), at 39.

13

c. Claimant may direct the Master to exercise lien over the cargo

20. An employment clause under a time charter party grants a time charterer the right to direct

the Master of the vessel to exercise a lien over the cargo in his possession.69

The Master in

effect acts as the trustee of the time charterer.70

In the present case, Clause 8. Performance of

Voyages stipulates that the Master shall be under the orders and direction of Claimant as

regards employment and agency.71

Consequently, Claimant has the right to direct the Master

to exercise lien over the cargo pursuant to its contractual right thereof.

2. Alternatively, Claimant may exercise lien over the cargo vis-a-vis Imlam

a. Claimant’s right to freight is incorporated into the Bill of Lading

21. Clause 19. FREIGHT of the Voyage Charterparty provides that freight must be paid to

Claimant 5 days after the completion of loading and signing/release of bills of lading.72

Due

to Respondent having not remitted freight after Claimant has become entitled to it,73

Claimant’s right to freight remains. Such a right was incorporated into the Bill of Lading via

the term “freight payable as per charterparty”, which creates an obligation to pay freight in

accordance with the terms of the Voyage Charterparty.

b. Imlam may exercise lien on the cargo for sums due to it

22. Bill of lading is not a contract, but only the best evidence of a contract.74

Under the term

“freight payable as per charterparty”, a shipowner has the legal right to receive freight due

to it under the bill of lading, in accordance with the terms of the charter party, whoever may

69 Castleton Commodities Shipping Co Pte Ltd v Silver Rock Investments [2015] EWHC 2584 (Comm) at [58-

85]. 70 Julian Cooke, Tim Young, Michael Ashcroft, Andrew Taylor, John Kimball, Voyage Charters, CRC Press. 71 Moot Scenario (9 December 2016) at 3. 72 Moot Scenario (9 December 2016), at 22. 73 Moot Scenario (9 December 2016), at 64. 74 The Ardennes (1950) 84 LI. L. Rep. 304 at p. 344; [1951] 1 K.B. 55 at p. 59 (CA.)

14

have an equitable right to the freight vis-a-vis it.75

As such, the freight due under the Voyage

Charterparty may be demanded by Imlam from Idoncare as a shipper.

23. However, as Idoncare has failed to pay such freight, Imlam is entitled as a shipowner to

exercise common law lien over the cargo. A right to lien at common law, which is recognized

by Singaporean law,76

arises independently by implications of law for freight due under a

carriage.77

Such right is a self-help remedy enacted in defense to a recovery action of the

goods by a person who would otherwise be entitled to immediate possession.78

In the event

that this tribunal holds that claimant as time charterer is not the right carrier,79

Imlam’s right

to exercise lien as shipowner remains.80

c. Consequently, Claimant may exercise lien on the cargo as an equitable asignee

24. Claimant as the time charterers can secure a lien in favour of shipowner81

from Idoncare as

the cargo owner.82

A time charterer may exercise lien on cargo on board the vessel as an

equitable assignee, where the head owners have agreed to grant it such a right.83

Claimant’s

action in exercising the lien over the cargo for sub-freight due to it has been done with the

consent of Imlam, as Claimant has paid hire in a timely manner as requested by Imlam.84

75 Julian Cooke et al., Voyage Charters (London: Informa Law, 1993) 76 Five Ocean Corporation v Cingler Ship Pte Ltd [2015] SGHC 311, at 44.

77 Kirchner v Venus [1859] 12 Moore 361, 390.

78 The “Dwima 1” [1996] 2 SLR 670; [1996] SGHC 83.

79 Moot Scenario (9 December 2016) at 10, Clause 26.

80 Richard Aikens, Richard Lord & Michael Bools, Bills of Lading, (Oxon: Informa Law, 2016).

81 Castleton Commodities Shipping Company Pte Limited v. Silver Rock Investment, The Clipper Monarch

[2015] EWHC 2584 (Comm); [2016] 1 Lloyds’ Law Rep 1. 82 Santiren Shipping Ltd v Unimarine SA (The Chrysovalandou Dyo) [1981] 1 Lloyd’s Rep 161 at 28.51. 83 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, at 61 84 Moot Scenario (9 December 2016) at 36.

15

III. THE CIRCUMSTANCES OF THE CASE ARE SUCH THAT IT IS

NECESSARY AND JUST FOR THE TRIBUNAL TO ORDER THE SALE OF THE

CARGO

A. THE SALE ORDER OF THE CARGO PENDENTE LITE IS NECESSARY

1. Sale of the cargo is necessary to preserve Claimant’s right to lien

25. A tribunal’s order of sale of a cargo forming the subject-matter of a dispute may be justified

as a legal action through the presence of the urgency of the order,85

as well as the necessity

thereof.86

The definition of “necessary” within the International Arbitration Act imports the

notion that without the order from the Tribunal to order a sale of the cargo in question, the

evidence or asset which is sought to be preserved would be lost.87

In other words, there are no

other alternatives available to preserve the assets.88

Such an asset could take the form of

Claimant’s right to exercise lien over the cargo.89

26. Sale may be held necessary when the liened cargo is perishable in nature,90

and there is a

non-negligible risk that the value of the cargo would be diminished over time due to its

condition.91

Furthermore, whereby there is a risk that the value of the cargo would be

superseded by the costs and expenses, sale is necessary so as to not render the lien

ineffective.92

In the present case, the coal which constitutes the cargo is overheating and risks

85 Telenor East Holding H AS v. Altimo Hodling & Investment Ltd [2014] EWHC B5 (Comm). 86 Seele Middle East FZE v. Drake & Scull International Co SA [2014] EWHC 435 (TCC) 87 Maldives Airports Co Ltd and another v GMR Malé International Airport Pte Ltd [2013] SGCA 16 88 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, p.61 89 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, p.61 90 I Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, p.61; Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618 91 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, at 62 92 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311, at 62

16

self-ignition.93

Furthermore, there is a risk that the costs and expenses which are mounting in

the maintenance of the cargo onboard the vessel, may eventually exceed its value.94

2. Sale is necessary to alleviate the urgency of the situation

27. Considerations of the condition of the vessel and her crew, the cargo, and the surrounding

circumstances must be taken into account in considering necessity.95

In the present case, such

conditions must be taken from the Master’s judgment, as his voice carries much weight.96

First, the vessel has been kept adrift in open seas since October 11, 2016.97

Second, supplies

onboard the vessel are running dangerously low. Third, the cargo shows signs of overheating

and has the potential to self-ignite and explode. And finally, the monsoon season exacerbates

the already dire situation. As stated by the Master, consequently, an urgent measure needs to

be taken immediately.98

3. There are no alternatives to the sale of the cargo

28. Necessity further stipulates that the cargo in question cannot be preserved by the means of its

discharge.99

In the present case, although Claimant can indeed discharge the cargo in

Singapore, where the vessel is floating off-port limits,100

such a measure is ineffective to

preserve Claimant’s right to the value of the cargo. Singaporean law requires that liened

cargo must be discharged to the custody of a wharfinger or warehouseman.101

Such a cargo

could be discharged only through the deposit of a receipt or a sum of money in the value of

93 Moot Scenario (9 December 2016) at 37. 94 Moot Scenario (9 December 2016, at 65. 95 Moot Scenario (9 December 2016, at 56, 57, 58. 96 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 311,p.58 97 Moot Scenario (9 December 2016) at 34, 37, 61-63. 98 Moot Scenario (9 December 2016, at 37-38, 62. 99 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 31 100 Moot Scenario (9 December 2016) at 97. 101 Merchant Shipping Act (Chapter 179) 1996; Art. 127

17

the cargo,102

otherwise it would be subject to sale at the expiration of 90 days.103

The

proceeds of such a sale must be applied to various parties, including for the rent, rates, and

other charges due to the wharfinger or warehouseman.104

As such, there is a threat that

Claimant would earn less than the value due to it from Respondent.

B. THE SALE ORDER OF THE CARGO PENDENTE LITE IS JUST

1. The balance of convenience favors the sale of the cargo

29. The main question in granting interim measure is the balance of doing injustice;105

or the

balance of convenience.106

The assessment of balance of convenience is that the tribunal has

to seek whether it does less harm to grant an order which subsequently turns out to be

unjustified,107

or to refuse one if it subsequently turns out that it should have been granted.108

Should this Tribunal not grant Claimant a right to sell the cargo, Claimant would be harmed

more substantially than Respondent would if an order of sale were to be granted. Should

Claimant be forced to lien the cargo off the ship, as argued supra, there is a threat that the

value received by Claimant in the event that this Tribunal grants an award in favor of

Claimant’s lien will have been diminished. Meanwhile, in the event that this Tribunal

eventually grants an award in favor of Respondent, Idoncare would all the same be entitled to

the proceeds of the sale made by Claimant.109

102 Merchant Shipping Act (Chapter 179) 1996; Art. 128 103 Merchant Shipping Act (Chapter 179) 1996; Art. 130 104 Merchant Shipping Act (Chapter 179) 1996; Art. 131(1); 132 105 Cayne v Global Natural Resources Plc [1984] 1 AII ER 225. 106 American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 107 American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 108 Lansing Linde Ltd v Kerr [1991] 1 WLR 251 109 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 31

18

2. The lack of an order to sell the cargo causes irreparable harm to Claimant

30. Irreparable damage must be utilized in considering where the balance of convenience lies.110

Such a damage exists whereby if a relief is not granted, the applicant’s legal rights would be

violated in a manner that would be incapable of being compensated.111

A lack of

compensation could be inferred from the actions of the charterer and shipper, in their inability

or unwillingness to obtain the cargo through a payment of the sums due.112

In the present

case, neither Respondent nor Idoncare have demonstrated any steps towards releasing the

cargo,113

and there is no guarantee that they are able to compensate Claimant in the event that

this Tribunal grants an award in favor of Claimant. Meanwhile, as argued supra, the value of

the cargo continues to steadily diminish, potentially rendering it worthless even if it is

awarded to Claimant.

110 Akinlose v Ait [1961] WNLR 116 111 American Cyanamid Co v Ethicon Ltd [1975] AC 396. 112 Five Ocean Corporation v Cingler Ship Pte Ltd (PT Commodities & Energy Resources, intervener) [2015]

SGHC 31 113 Moot Scenario (9 December 2016), at 73

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REQUEST FOR RELIEF

1. For the reasons set out above, CLAIMANT seeks an award for various reliefs including

but not limited to:

a) Freight in the sum of US$771,120.48 or such amount to be assessed;

b) Damages for detention to be assessed;

c) Further damages which are continuing to accrue on a daily basis until such time

the lien over the Cargo is discharged and such damages to be assessed;

d) Costs and expenses including the costs of exercising the lien to recover the

freight and other sums due;

e) Damages for breach or breach of the Voyage Charterparty to be assessed;

f) A declaration that the Claimant is entitled to exercise a lien over the Cargo and

all sub-freight payable in respect of the Cargo for freight, demurrage, claims, for

damages and for all other amounts due under the Voyage Charterpary including

costs of recovering the same;

g) A declaration that the exercise of the lien over the Cargo is a valid and lawful

one;

h) An indemnity in respect of any and all costs, claims, damages, losses and

expenses whatsoever incurred as a result of the exercise of their lien;

i) Such order for the preservation, detention, interim custody or sale of the Cargo as

may be necessary;

20

j) Interest on such amount at such rate and for such period as the Arbitral Tribunal

deems fit;

k) Costs (including but not limited to costs of the arbitration and the Claimant’s

legal and other costs); and

l) Such further and/or other relief, remedies or orders as the Arbitral Tribunal

deems fit.

2. The Claimant reserves the right to claim such further or other losses, damages, costs

and/or expenses and seek such further or other reliefs or remedies as the Claimant may

be entitled to at the time the Claimant submits its Statement of Claim.