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INTERNATIONAL MARITIME ARBITRATION
MOOT COMPETITION 2018
IMAM Moot organized by National Law University of Odisha, Cuttack, India
MOOT PROPOSITION
* The IMAM 2018 Moot Proposition has been prepared by Professor (Dr.) Proshanto K.
Mukherjee (Professor Emeritus WMU / Dalian Law School / Lund Law Faculty, Canada) and
reviewed by Mr. Pallab Das (Research Associate cum Teaching Associate, NLUO).
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CHARTER PARTY
It is hereby mutually agreed by the parties to this Charter party that they shall perform their
obligations in accordance with its terms, which include Parts I and II as set out below. In the
event of a conflict, the provisions of Part I shall prevail over those of Part II to the extent of
such conflict.
PART I
1. Place and date
Liuville, HELGALAND, 11 August, 2016
11. Freight rate (also state whether freight
prepaid or payable on delivery) (Cl.4)
USD 35/mt prepaid
2. Owner’s Name and Place of business
(Cl.1)
Shangrila Shipping Corporation, Nirvana,
NAVIGONIA
12. Freight payment (state currency and
method of payment, beneficiary and bank
account) (Cl.4)
As per Owners’ invoice in USD
3. Charterer’s Name and Place of business
(Cl.1)
Continental Chemicals Limited, Liuville,
HELGALAND
13. State if Vessel’s cargo handling gear
shall not be used (Cl.1)
Ship’s gear available for use
4. Vessel’s name (Cl.1)
MV Sulphur Express
14. Laytime (Cl.6)
Total laytime for loading and discharging -
25 days
5. GT/NT (Cl.1)
25, 070/40, 450
15. Shipper’s/Place of business (Cl.6)
Liuville, Helgaland
6. DWT all told on summer load line in
metric tons (abt.) (Cl.1)
23,000 mt
16. Demurrage rate and manner payable
(loading and discharging) (Cl.7)
USD 8,000
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7. Expected ready to load (abt.) (Cl.1)
10 October, 2016
17. Cancellation date (Cl.9)
30 November, 2016
8. Loading port or place (Cl.1)
Deeptara, Indisha
18. General Average to be adjusted at
(Cl.12)
Liuville
9. Discharging port or place (Cl.1)
Liuville, Helgaland
19. Freight Tax (state if for the Owner’s
account) (Cl.13(c))
For Owner’s account
10. Cargo (state quantity and margin at
Owners’ option, if agreed; if full and
complete cargo not agreed state “part
cargo”) (Cl.1)
Dry Sulphur 21,000 mt, 10% more or less at
Charterers option
20. Law and Arbitration
Cl. 17 shall apply
Signatures
Shangrila Shipping Corporation
(Owners)
Continental Chemicals Limited
(Charterers)
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CHARTER PARTY
PART II
1. INTRODUCTION
It is agreed between the parties mentioned in Box 2 as the Owners of the Vessel
named in Box 4, of the GT/NT indicated in Box 5 and carrying out the number of
metric tons of deadweight capacity all told on summer loadline stated in Box 6, and
expected ready to load under this Charter party about the date indicated in Box 7, and
the party mentioned as the Charterers in Box 3, that:
The said Vessel shall, as soon as her prior commitments have been completed,
proceed to the loading port(s) or place(s) stated in Box 8 or so near there to as she
may safely get and lie always afloat, and there load a full and complete cargo (if
shipment of deck cargo agreed same to be at the Charterers’ risk and responsibility) as
stated in Box 10, which the Charterers bind themselves to ship, and being so loaded
the Vessel shall proceed to the discharging port(s) or place(s) stated in Box 9 as
ordered on signing Bills of Lading, or so near there to as she may safely get and lie
always afloat, and there deliver the cargo.
2. OWNERS’ RESPONSIBILITY CLAUSE
The Owners are to be responsible for loss of or damage to the goods or for delay in
delivery of the goods only in case the loss, damage or delay has been caused by
personal want of due diligence on the part of the Owners or their manager to make the
Vessel in all respects seaworthy and to secure that she is properly manned, quipped
and supplied, or by the personal act or default of the Owners or their manager.
And the Owners are not responsible for loss, damage or delay arising from any other
cause whatsoever, even from the neglect or default of the Master or crew or some
other person employed by the Owners on board or ashore for whose acts they would
but for this Clause, be responsible, or from unseaworthiness of the Vessel on loading
or commencement of the voyage or at any time whatsoever.
3. DEVIATION CLAUSE
The Vessel has liberty to call at any port or ports in any order, for any purpose, to sail
without pilots, to tow and/or assist Vessel in all situations, and also to deviate for the
purpose of saving life and/or property.
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CHARTER PARTY
4. PAYMENT OF FREIGHT
(a) The freight at the rate stated in Box 11 shall be paid in cash calculated on the
intaken quantity of cargo.
(b) Prepaid. If according to Box 11 freight is to be paid on shipment, it shall be
deemed earned and non-returnable, Vessel and/or cargo lost or not lost. Neither the
Owners nor their agents shall be required to sign or endorse bill of lading showing
freight prepaid unless the freight due to the Owners has actually been paid.
(c) On delivery. If according to Box 11 freight, or part thereof, is payable at
destination it shall not be deemed earned until the cargo is thus delivered.
Notwithstanding the provisions under (a), if freight or part thereof is payable on
delivery of the cargo the Charterers shall have the option of paying the freight on
delivered weight/quantity provided such option is declared before breaking bulk and
the weight/quantity can be ascertained by official weighing machine, joint draft
survey or tally.
Cash for Vessel’s ordinary disbursements at the port of loading to be advanced by the
Charterers, if required, at highest current rate of exchange, subject to two (2) percent
to cover insurance and other expenses.
5. LOADING/DISCHARGING
(a) Costs/Risks
The cargo shall be brought into the holds, loaded, stowed and/or trimmed, tallied,
lashed and/or secured and taken from the holds and discharged by the Charterers,
free of any risk, liability and expense whatsoever to the Owners. The Charterers
shall provide and lay all dunnage material as required for the proper stowage and
protection of the cargo on board, the Owners allowing the use removing their
dunnage after discharge of the cargo under this Charter party and time to count
until dunnage has been removed.
(b) Cargo Handling Gear
Unless the Vessel is gearless or unless it has been agreed between the parties that
the Vessel’s gear shall not be used and stated as such in Box 13, the Owners shall
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CHARTER PARTY
throughout the duration of loading/discharging give free use of the Vessel’s cargo
handling gear and of sufficient motive power to operate all such cargo handling
gear. All such equipment’s to be in good working order. Unless caused by
negligence of the stevedores, time lost by breakdown of the Vessel’s cargo
handling gear or motive power, shall not count as laytime, such time lost being
calculated pro rata in relation to the total number of winches/cranes on the Vessel.
On request the Owners shall provide free of charge cranemen/winchmen from the
crew to operate the Vessel’s cargo handling gear, unless local regulations prohibit
this, in which latter event shore labourers shall be for the account of the Charterers
cranemen/winchmen shall be under the charter’s risk and responsibility and as
stevedores to be deemed as their servants but shall always work under the
supervision of the Master.
(c) Stevedore Damage
The Charterers shall be responsible for damage (beyond ordinary wear and tear) to
any part of the Vessel caused by Stevedores. Such damage shall be notified as
soon as reasonably possible by the Master to the Charterers or their agents and to
their Stevedores failing which the Charterers shall not be held responsible. The
Master shall endeavour to obtain the Stevedores’ written acknowledgement of
liability.
The Charterers are obliged to repair any stevedore damage prior to completion of
the voyage, but must repair stevedore damage affecting the Vessel’s
seaworthiness or class before the Vessel sails from the port where such damage
was caused or found. All additional expenses incurred shall be for the account of
the Charterers and any time lost shall be for the account of and shall be paid to the
Owners by the Charterers at the demurrage rate.
6. LAYTIME
(a) Separate laytime for loading and discharging
The cargo shall be loaded within the number of running days/hours as indicated in
Box 14, weather permitting, Sundays and holidays excepted, unless used, in which
event the time used shall count.
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CHARTER PARTY
(b) Total laytime for loading and discharging
The cargo shall be loaded and discharged within the number of total running
days/hours as indicated in Box 14, weather permitting, Sundays and holidays
excepted, unless used, in which event time used shall count.
(c) Commencement of laytime (loading and discharging)
Laytime for loading and discharging shall commence at 13.00 hours, if notice of
readiness is given up to and including 12.00 hours. Notice of readiness at loading port
to be given to the Shippers named in Box 15. Notice of readiness at the discharging
port to be given to the receivers or if not known to the Charterers.
If the loading/discharging berth is not available on the Vessel’s arrival at or off the
port of loading/discharging, the Vessel shall be entitled to give notice of readiness
within ordinary office hours on arrival there, whether in free pratique or not, whether
customs cleared or not. Laytime or time on demurrage shall then count as if she were
in berth and in all respects ready for loading/discharging provided that the Master
warrants that she is in fact ready in all respects. Time used in moving from the place
of waiting to the loading/discharging berth shall not count as laytime.
If, after inspection, the Vessel is found not to be ready in all respects to load/discharge
time lost after the discovery thereof until the Vessel is again ready to load/discharge
shall not count as laytime. Time used before commencement of laytime shall count.
7. DEMURRAGE
Demurrage at the loading and discharging port is payable by the Charterers at the rate
stated in Box 16 in the manner stated in Box 16 per day or pro rata for any part of a
day. Demurrage shall fall due day by day and shall be payable upon receipt of the
Owners’ invoice
In the event the demurrage is not paid in accordance with the above, the Owners shall
give the charterers 96 running hours written notice to rectify the failure. If the
demurrage is not paid at the expiration of this time limit and if he Vessel is in or at the
loading port, the Owners are entitled at any time to terminate the Charter party and
claim damages for any losses caused thereby.
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CHARTER PARTY
8. LIEN CLAUSE
The Owners shall have a lien on the cargo and on all sub-freights payable in respect of
the cargo, for freight, dead freight, demurrage, claims for damages and for all other
amounts due under this Charter party including costs of recovering same.
9. CANCELLATION CLAUSE
(a) Should the Vessel not be ready to load (whether in berth or not) on the
cancellation date indicated in Box 17, the Charterers shall have the option of
cancelling this Charter party.
(b) Should the Owners anticipate that, despite the exercise of due diligence, the
Vessel will not be ready to load by the cancellation date, they shall notify the
Charterers thereof without delay stating the expected date of the Vessel’s readiness to
load and asking whether the Charterers will exercise their option of cancelling the
Charter party, or agree to a new cancellation date. Such option must be declared by
the Charterers within 48 running hours after the receipt of the Owners’ notice. If the
Charterers do not exercise their option to cancel, then this Charter party shall be
deemed to be amended such that the seventh day after the new readiness date stated in
the Owners’ notification to the Charterers shall be the new cancellation date. The
provision of sub-clause (b) of this clause shall operate only once, and in case of the
Vessel’s further delay, the Charterers shall have the option of cancelling the Charter
party as per sub-clause (a) of this clause.
10. BILL OF LOADING
Bill of lading to be signed as and when presented in any number of sets required by
Charterers for any portion of the cargo on board, such bills of lading being deemed to
incorporate and remain subject to all terms, conditions, clauses and exceptions as per
this Charter party. The cargo actually shipped, whether correctly estimated in bill of
lading or not, shall be deemed a full and complete cargo under this Charter. All bills
of lading issued under this Charter party are to incorporate the Carriage of Goods by
Sea Act 1971 of the United Kingdom incorporating the Hague-Visby Rules. Any
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CHARTER PARTY
dispute concerning the bills of lading and their issue shall be resolved pursuant to the
dispute resolution mechanism contained in this Charter party.
11. BOTH-TO-BLAME COLLISION CLAUSE
If the Vessel comes into collision with another Vessel as a result of the negligence of
the other Vessel any act, neglect or default of the Master, Mariner, Pilot or the
servants of the Owners in the navigation or in the management of the Vessel, the
Owners of the cargo carried hereunder will indemnify the Owners against all loss or
liability to the other or non-carrying Vessel or her Owners in so far as such loss or
liability represents loss of, or damage to, or any claim whatsoever of the Owners of
said cargo, paid or payable by the other or non-carrying Vessel or her Owners to the
Owners of said cargo and set-off, recouped or recovered by the other non-carrying
Vessel or her Owners as part of their claim against the carrying Vessel or the Owners.
The foregoing provisions shall also apply where the Owners; operators or those in
charge of any Vessel or Vessels or objects other than, or in addition to, the colliding
Vessels or objects other than, or in addition to, the colliding Vessels or objects are at
fault in respect of a collision or contact.
12. GENERAL AVERAGE AND NEW JASON CLAUSE
General average shall be adjusted in Liuville according to York Antwerp Rules 2016.
Proprietors of cargo to pay the cargos share in the general expenses even if the same
have been necessitated through neglect or default of the Owners’ servants.
13. TAXES AND DUES CLAUSE
(a) On Vessel - The Owners shall pay all dues, charges arid taxes customarily levied
on the Vessel, howsoever the amount thereof may be assessed.
(b) On cargo - The Charterers shall pay all dues, charges, duties and taxes customarily
levied on the cargo, howsoever the amount thereof may be assessed.
(c) On freight - Unless otherwise agreed in Box 19, taxes levied on the freight shall be
for the Charterers’ account.
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CHARTER PARTY
14. AGENCY
In every case the Owners shall appoint their own agent both at the port of loading and
the port discharge.
15. GENERAL STRIKE CLAUSE
(a) If there is a strike or lock-out affecting or preventing the actual loading of the
cargo, or any part of it, when the Vessel is ready to proceed from her last port or
(b) at any time during the voyage to the port or ports of loading or after her arrival
there, the Master or the Owners may ask the Charterers to declare, that they agree to
reckon the laydays as if there were no strike or lock-out. Unless the Charterers have
given such declaration in writing (by electronic telecommunication, if necessary) with
24 hours, the Owners shall have the option of cancelling this Charter party. If part
cargo has already been loaded, the Owners must proceed with same, (freight payable
on loaded quantity only) having liberty to complete with other cargo on the way for
their own account.
(c) If there is a strike or lock-out affecting or preventing the actual discharging of the
cargo on or after the Vessel’s arrival at or off port of discharge and same has not been
settled within 48 hours, the Charterers shall have the option of keeping the Vessel
waiting until such strike or lock-out is at an end against paying half demurrage after
expiration of the time provided for discharging until the strike or lock-out terminates
and thereafter full demurrage shall be payable until the completion of discharging, or
of ordering the Vessel to a safe port where she can safely discharge without risk of
being detained by strike or lock-out. Such orders to be given within 48 hours after the
Master or the Owners have given notice to the Charterers of the strike or lock-out
affecting the discharge. On delivery of the cargo at such port, all conditions of this
Charter party and of the bill of lading shall apply and the Vessel shall receive the
same freight as if she had discharged at the original port of destination, except that if
the distance to the substituted port exceeds 100 nautical miles, the freight on the cargo
delivered at the substitute port to be increased in proportion.
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CHARTER PARTY
(d) Except for the obligations described above, neither the Charterers nor the Owners
shall be responsible for the consequences of any strikes or lock-outs preventing or
affecting the actual loading or discharging of the cargo.
16. WAR RISKS
(1) For the purpose of the clause, the words:
(a) The “Owners” shall include the ship-owners, bareboat Charterers, disponent
Owners, managers or other operators who are charged with the management of the
Vessel, and the Master; and
(b) ”War Risks” shall include any war (whether actual or threatened), act of war, civil
war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying
of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility
or malicious damage, blockades (whether imposed against all Vessels or imposed
selectively against Vessels of certain flags or Ownership, or against certain cargoes or
crews or otherwise howsoever), by any person, body, terrorist or political group, or
the Government of any state whatsoever, which, in the reasonable judgment of the
Master and/or the Owners, may be dangerous or are likely to be or to become
dangerous to the Vessel, her cargo, crew or other person on board the Vessel.
(2) If at any time before the Vessel commences loading, it appears that, in the
reasonable judgment of the Master and/or the Owners, performance of the Charter
party, or any part of it, may expose, or is likely to expose, the Vessel, her cargo, crew
or other persons on board the Vessel to War Risks, the Owners may give notice to the
Charterers cancelling this Charter party, or may refuse to perform such part of it as
may expose, or may be likely to expose, the Vessel, her cargo, crew or other persons
on board the Vessel to War Risks; provided always that if this Charter party provides
that loading or discharging is to take place within a range of ports, and at the port or
ports nominated by the Charterers, the Vessel, her cargo, crew, or other persons on
board the Vessel may be exposed, or may be likely to be exposed, to War Risks, the
Owners shall first require the Charterers to nominate any other safe port which lies
within the range for loading or discharging, and may only cancel this Charter party if
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CHARTER PARTY
the Charterers shall not have nominated such safe port or ports within 48 hours of
receipt of notice of such requirement.
(3) The Owners shall not be required to continue to load cargo for any voyage, or to
sign bills of lading for any port or place, or to proceed or continue on any voyage, or
on any part thereof, or to proceed through any canal or waterway, or to proceed to or
remain at any port or place whatsoever, where it appears, either after the loading of
the cargo commences, or at any stage of the voyage thereafter before the discharge of
the cargo is completed, that, in the reasonable judgment of the Master and/or the
Owners, the Vessel, her cargo (or any part thereof), crew or other persons on board
the Vessel (or any one or more of them) may be, or are likely to be, exposed to War
Risks. If it should so appear, the Owners may by notice request the Charterers to
nominate a safe port for the discharge of the cargo or any part thereof, and if within
48 hours of the receipt of such notice, the Charterers shall not have nominated such a
port, the Owners may discharge the cargo at any safe port of their choice (including
the port of loading) in complete fulfillment of the Charter party. The Owners shall be
entitled to recover from the Charterers the extra expenses of such discharge and, if the
discharge takes place at any port other than the loading port, to receive the full freight
as though the cargo had been carried to the discharging port and if the extra distance
exceeds 100 nautical miles, to additional freight which shall be the same percentage
of the freight contracted for as the percentage which the extra distance represents to
the distance of the normal and customary route, the Owners having a lien on the cargo
for such expenses and freight.
(4) If at any stage of the voyage after the loading of the cargo commences, it appears
that, in the reasonable judgment of the master and/or the Owners, the Vessel, her
cargo, crew or other persons on board the Vessel may be, or are likely to be, exposed
to War Risks on any part of route (including any canal or waterway) which is
normally and customarily used in a voyage of the nature contracted for, and there is
another longer route to the discharging port, the Owners shall give notice to the
Charterers that this route will be taken. In this event the Owners shall be entitled, if
the total extra distance exceeds 100 nautical miles, to additional freight which shall be
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CHARTER PARTY
the same percentage of the freight contracted for as the percentage which the extra
distance represents to the distance of the normal and customary route.
(5) The Vessel shall have liberty-
(a) to comply with all orders, directions, recommendations or advice as to departure,
arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of
cargo, delivery or in any way whatsoever which are given by the Government of the
state under whose flag the Vessel sails, or other Government to whose laws the
Owners are subject, or any other Government which so requires, or any body or group
acting with the power to compel compliance with their orders or directions;
(b) to comply with the orders, directions or recommendations of any war risks
underwriters who have the authority to give the same under the terms of the war risks
insurance;
(c) to comply with the terms of any resolution of the Security Council of the United
Nations, the effective orders of any supranational body which has the right to issue
and give the same, and with national laws aimed at enforcing the same to which the
Owners are subject, and to obey the orders and directions of those who are charged
with their enforcement;
(d) to discharge at any other port any cargo or part thereof which may render the
Vessel liable to confiscation as a contraband carrier;
(e) to call at any other port to change the crew or any part thereof or other persons on
board the Vessel when there is reason to believe that they may be subject to
internment, imprisonment or other sanctions;
(f) where cargo has not been loaded or has been discharged by the Owners under any
provisions of this Clause, to load other cargo for the Owner’s own benefit and carry it
to any other port or ports whatsoever, whether backwards or forwards or in a contrary
direction to the ordinary or customary route.
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CHARTER PARTY
(6) If in compliance with any of the provisions of sub clause (2) to (5) of this Clause
anything is done or not done, such shall not be deemed to be a deviation, but shall be
considered as due fulfillment of the Charter party.
17. LAW AND ARBITRATION
This Charter party shall be governed by and construed in accordance with English law
and any dispute arising out of this Charter party shall be referred to arbitration in
London, in accordance with the Arbitration Act 1996 of the United Kingdom or any
statutory modification or re-enactment thereof for the time being in force. Unless the
parties agree upon a sole arbitrator, one arbitrator shall be appointed by each party
and the arbitrators appointed shall appoint a third arbitrator, the decision of the three-
man tribunal thus constituted or any two of them, shall be final. On the receipt by one
party of the nomination in writing of the other party’s arbitrator, that party shall
appoint their arbitrator within fourteen days, failing which the decision of the single
arbitrator appointed shall be final. For disputes where the total amount claimed by
either party does not exceed USD 250,000, the arbitration shall be conducted in
accordance with the Free and Low Cost Arbitration (FALCA) Rules or Small Claims
Procedure of the London Maritime Arbitrators Association (LMAA).
18. HOLD CLEANLINESS
Vessel’s holds and hatches are to be clean of any previous cargo remnants or residues
and Owner acknowledges the Helgaland Quarantine Inspection Services (HQIS)
requirements that on arrival at Liuville, there is zero tolerance for any foreign organic
matter. Owners must ensure the Vessel’s compliance with, HQIS zero tolerance
policy. If any remnants or residues of previous cargo carried on board the performing
Vessel are found in the holds of the Vessel, Owners agree to indemnify Charterers
with respect to any loss Charterers suffer as a result whatsoever, including, but not
limited to, loss of profits and consequential loss.
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CHARTER PARTY
Loose paint and rust scale are to be removed from all internal structures and any
painted surfaces must be properly applied and cured. Holds are to be washed and
dried prior to inspection.
Charterer may, as soon as reasonably practicable after receipt of Notice of Readiness
at the loading port, cause the holds to be inspected by a surveyor appointed by the
Charterer to determine whether it appears that the Vessel’s holds are sufficiently clean
as required by the Charter party. Owners shall provide all necessary access and
assistance to enable the inspection to be carried out.
Charterer’s designated representative and/or surveyor shall have the authority to act to
ensure Charterer’s interests are protected. This representative/surveyor will only be
certifying that the holds were inspected and found to have been presented clean, dry
and apparently free of remnants or residues of previous cargo in accordance with the
terms and conditions of this Charter party as stated by the Master.
Vessel to be inspected alongside by Charterer’s appointed surveyor alongside load
berth, or at a layby berth in case load berth is unavailable, or at Vessel’s previous port
as Charterer may require, subject to the Owner’s approval.
Berth and shifting costs are for Owner’s account in case a layby berth is required for
survey. Any time lost waiting for inspection to be performed shall count in
accordance with NOR/Laytime provisions, regardless of survey outcome.
Inspection to be performed in daylight hours only. Time taken for inspection after
laytime has commenced, (or after discharge at prior port has been completed), shall
count towards laytime, otherwise inspection time shall not count. Should Vessel fail
inspection then time from failing to passing inspection shall not count as or be added
to laytime.
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CHARTER PARTY
In the event the inspection reveals that the Vessel does not meet the requirements of
this Charter party, the parties agree that the Vessel is not ready in all respects to load
and laytime or time on demurrage, even if already on demurrage, will not count from
the time of discovery until the Vessel is at the loading berth.
Vessels’ holds to be cleaned and dried in accordance with the requirements of this
Charter party and without limitation to the satisfaction of Charterer.
Any approval or rejection by the Charterer following such inspection or any failure by
the Charterer to appoint a surveyor or arrange an inspection, will not relieve Owner of
its obligations under this Charter party.
……………………………… ………………………………
OWNER CHARTERER
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CONTINENTAL CHEMICALS LIMITED
17 October 2016
Owners of MV Sulphur Express
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
Dear Sirs,
Re: Dry Sulphur Bags Loaded on board MV Sulphur Express
We are the manufacturers of the dry sulphur cargo loaded on board the MV Sulphur Express
The Sulphur Express was loaded with 21,214.775 mt of dry sulphur (the cargo) at the Port of
Deeptara, Indisha.
As to the cargo, during an inspection after the loading was completed, Owner’s surveyor
apparently discovered, on the surface of the Cargo loaded in hold 1:
(a) lumps of solidified tar
(b) torn plastic
(c) two pieces of dunnage wood
Notwithstanding the foregoing, and having caused the cargo loaded on board the vessel to be
surveyed, we are satisfied and we warrant that the cargo meets the product specifications in
relation to moisture and absence of foreign objects, of the type discovered, neither of which
would affect the handling, storage or use of the cargo.
The applicable law of NAVIGONIA governs this warranty. Each party irrevocably and
unconditionally submits to the exclusive jurisdiction of the courts of NAVIGONIA in this
regard.
Yours truly,
CONTINENTAL CHEMICALS LIMITED.
Omar Qureshi
Managing Director
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CONGENBILL 2007
BILL OF LADING
To be used with charter parties
Page 1
Shipper
Continental
Chemicals Limited
Bill of Lading No.
BL1108
Reference No.
DS1991
Consignee
TO ORDER
Vessel
MV Sulphur Express
Notify address
Continental
Chemicals Limited
18 Cartiera Circle
Liuville
HELGALAND
Port of loading
Deeptara, INDISHA
Port of discharge
Liuville, HELGALAND
Shipper’s description of goods
Gross weight
21,214.775mt Dry Sulphur
21,214.775mt
(of which on deck at shipper’s risk; the Carrier not
being responsible for loss or damage howsoever arising)
Freight payable as per
CHARTER
PARTY dated:
11 August 2016
SHIPPED at the Port of Lading in apparent good
order and condition on the Vessel for carriage to the
Port of discharge or so near thereto as the Vessel may
safely get the goods specified above.
Weight, measure, quality, quantity, condition,
contents and value unknown.
IN WITNESS whereof the Master or Agent of the
said vessel has signed the number of Bills of Lading
FREIGHT ADVANCE
Received on account of
freight:
5th NLUO IMAM, 2017
19
indicated below any one of which being
accomplished the others shall be void.
FOR CONDITIONS OF CARRIAGE SEE
OVERLEAF
Date shipped on
board
10 October 2016
Place and
date of issue
Deeptara,
INDISHA
10 October
2016
Number of
original Bills
of Lading
3
Signature:
(i).....................................................................Master
Master’s name and signature
5th NLUO IMAM, 2017
20
CONGENBILL 2016
BILL OF LADING
(to be used with charter parties)
Page 2
Conditions of Carriage
(1) 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.
(2) General Paramount Clause
The International Convention for the Unification of Certain Rules of Law relating to
Bills of Lading signed at Brussels on 25 August 1924 (“the Hague Rules”) as
amended by the Protocol signed at Brussels on 23 February 1968 (“the Hague-Visby
Rules”) and as enacted in the country of shipment shall apply to this Contract. When
the Hague-Visby Rules are not enacted in the country of shipment, the corresponding
legislation of the country of destination shall apply, irrespective of whether such
legislation may only regulate outbound shipments.
When there is no enactment of the Hague-Visby Rules in either the country of
shipment or in the country of destination, the Hague-Visby Rules shall apply to this
Contract save where the Hague Rules as enacted in the country of shipment or if no
such enactment is in place, the Hague Rules as enacted in the country of destination
apply compulsorily to this Contract.
The Protocol signed at Brussels on 21 December 1979 (“the SDR Protocol 1979”)
shall apply where the Hague-Visby Rules apply, whether mandatorily or by this
Contract.
The Carrier shall in no case be responsible for loss of or damage to cargo arising prior
to loading, after discharging, or while the cargo is in the charge of another carrier, or
with respect to deck cargo and live animals.
5th NLUO IMAM, 2017
21
(3) General Average
General Average shall be adjusted, stated and settled according to York-Antwerp
Rules 2016 in Liuville, HELGALAND unless another place is agreed in the Charter
party.
Cargo’s contribution to General Average shall be paid to the Carrier even when such
average is the result of a fault, neglect or error of the Master, Pilot or Crew.
(4) New Jason Clause
In the event of accident, danger, damage or disaster before or after the
commencement of the voyage, resulting from any cause whatsoever, whether due to
negligence or not, for which, or for the consequence of which, the Carrier is not
responsible, by statute, contract or otherwise, the cargo, shippers, consignees or the
owners of the cargo shall contribute with the Carrier in General Average to the
payment of any sacrifices, losses or expenses of a General Average nature that may be
made or incurred and shall pay salvage and special charges incurred in respect of the
cargo. If a salving vessel is owned or operated by the Carrier, salvage shall be paid for
as fully as if the salving vessel or vessels belonged to strangers. Such deposit as the
Carrier, or his agents may deem sufficient to cover the estimated contribution of the
goods and any salvage and special charges thereon shall, if required, be made by the
cargo shippers, consignees, or owners of the goods to the Carrier before delivery.
(5) Both-to Blame Collision Clause
If the Vessel comes into collision with another vessel as a result of the negligence of
the other vessel and any act, neglect or default of the Master, Mariner, Pilot or the
servants of the Carrier in the navigation or in the management of the Vessel, the
owners of the cargo carried hereunder will indemnify the Carrier against all loss or
liability to the other or non-carrying vessels or her owners in so far as such loss or
liability represents loss of, or damage to, or any claim whatsoever of the owners of
said cargo, paid or payable by the other or non-carrying vessel of her owners to the
owners of said cargo and set-off, recouped or recovered by the other or non-carrying
vessel or her owners as part of their claim against the carrying Vessel or the Carrier.
5th NLUO IMAM, 2017
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The foregoing provisions shall also apply where the owners, operators or those in
charge of any vessel or vessels or objects other than, or in addition to, the colliding
vessels or objects are at fault in respect of a collision or contact.
For particulars of cargo, freight,
Destination, etc., see overleaf.
5th NLUO IMAM, 2017
23
HELGALAND QUARANTINE INSPECTION SERVICES
10 Downton Drive, Liuville, Helgaland
14 November 2016
To: The Master, Sulphur Express
Dear Captain Elliot,
Re: MV Sulphur Express Order into Quarantine
I refer to the attendance of our quarantine inspectors on your vessel on 10 November 2016.
Pursuant to section 35 of the Public Health and Quarantine Act, 2010, I order the vessel MV
Sulphur Express (“the vessel”) into quarantine. Set out below are my reasons.
Reasons
1. On 10 November 2016, the Vessel arrived at the Port of Liuville from the Port of Deeptara,
Indisha.
2. On board the Vessel is a cargo of 21,214.775 mt of dry sulphur.
3. Upon inspection by quarantine officers, solidified lumps of tar, dunnage wood and torn
plastic pieces were found in hold No. 1 which were remnants of a previous cargo. Upon
further inspection, certain residues were discovered stuck to the torn plastic, which were
determined to be NAVIGONIA wheat germ (NWG), a prohibited import into Helgaland.
4. It is impossible to determine the extent of the infestation of the cargo on board the Vessel
with NWG residues.
5. Pratique is refused and the Vessel must not discharge any cargo at the port of Liuville
unless and until I am satisfied that steps have been taken to remove any and all residues of
NWG in the cargo.
Yours truly,
HELGALAND QUARANTINE INSPECTION SERVICES.
Riju George
Chief Quarantine Officer
5th NLUO IMAM, 2017
24
SHANGRILA SHIPPING CORPORATION
14 November 2016
Omar Qureshi
Continental Chemicals Limited,
18 Cartiera Circle,
Liuville, HELGALAND
Dear Mr Qureshi,
MV Sulphur Express
We refer to the Voyage Charter party between us and you in respect of the Sulphur Express
dated 11 August, 2016 and to the Bill of Lading numbered BL1108 issued on 10 October,
2016.
The cargo which is the subject of the bill of Lading has been ordered into quarantine by the
Helgaland Quarantine Inspection Services due to the discovery of lumps of solidified tar,
pieces of dunnage and torn plastic in Hold No. 1.
These materials were the subject of a Letter of Indemnity from you to us dated 17 October,
2016. In that LOI, you warranted that the cargo meets the product specifications in relation to
moisture and absence of foreign objects, of the type discovered neither of which would affect
the handling, storage or use of the cargo.
On the basis of receipt of that LOI, the Master of the Sulphur Express issued a clean bill of
lading. We put you on notice that we will claim indemnity from you in respect of any claim
made against the Vessel by the holder of the bill of lading.
Yours truly,
SHANGRILA SHIPPING CORPORATION
Kevin Jones
Managing Director
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25
CONTINENTAL CHEMICALS LIMITED
15 November 2016
Kevin Jones
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
Dear Mr Jones,
Re: MV Sulphur Express
We refer to your letter of 14 November 2016.
Regarding your claim for indemnity pursuant to our letter of 17 October, 2016 we reject any
liability or obligation to indemnify you in respect of any claim made against the Sulphur
Express by the endorsee of the Bill of Lading.
The LOI relevantly provides-
“As to the cargo, during an inspection after the loading was completed, Owner’s surveyor
apparently discovered, on the surface of the Cargo loaded in hold 1:
(d) solidified lumps of tar
(e) torn plastic
(f) two pieces of dunnage wood
Notwithstanding the foregoing, and having caused the cargo loaded on board the vessel to be
surveyed, we are satisfied and we warrant that the cargo meets the product specifications in
relation to moisture and absence of foreign objects, of the type discovered, neither of which
would affect the handling, storage or use of the cargo”.
5th NLUO IMAM, 2017
26
The LOI does not record that the pieces of dunnage wood were contaminated with any
residues of NAVIGONIA Wheat Germ. The torn plastic or pieces of dunnage was not the
cause of the cargo being ordered into quarantine. Furthermore, in your letter of 14 November,
2016, you say that the Master issued a clean bill of lading because of our letter of 17 October,
2016. Our letter of 17 October, 2016 does not request or direct the Master to issue a clean bill
of lading. The taking of that step by the Master was a matter for him and he should have
taken all reasonable steps to inform himself as to whether it was appropriate for a clean bill of
lading to be issued.
Yours truly,
CONTINENTAL CHEMICALS LIMITED.
Omar Qureshi
Managing Director
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27
CONSTANTINE COMMODITY TRADERS LTD.
18 November 2016
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
(Through the Master, MV Sulphur Express)
Dear Sirs,
Re: MV Sulphur Express Bill of Lading No. BL1108
We purchased the sulphur cargo on board the above-named vessel from Continental
Chemicals Limited and are the endorsee of bill of lading (B/L) No. BL1108 in respect of that
cargo.
We are aware that the said cargo has been ordered into quarantine at the port of Liuville,
HELGALAND due to the presence of inter alia, NAVIGONIA wheat germ (NWG). In the
above-mentioned B/L which purports to be a clean bill of lading, there is no mention of the
cargo being contaminated by NWG or other foreign material including solidified lumps of tar
and torn plastic. The clean bill of lading issued at the port of Deeptara, INDISHA is evidence
of the fact that the cargo became contaminated while it was on board your vessel, the Sulphur
Express.
We have inquired into possibilities of de-contaminating the cargo and have made proposal to
the Helgaland Quarantine Inspection Services (HQIS) to that end. However, all our proposed
5th NLUO IMAM, 2017
28
options have been rejected and we have been ordered by the HQIS to re-export the cargo on
board the subject vessel.
We have, in the circumstances, looked into reselling the said cargo to buyers in a jurisdiction
where entry of NWG is not prohibited and have negotiated a resale with Heeru Sulphur
Products Ltd. in ANIKALAND which requires us to transport the cargo to the port of Ariela.
We have suffered a loss of USD 270,000 on the resale of the cargo which is payable by you
to us. Enclosed herewith are the relevant purchase and sale invoices. We request you to
confirm immediately that you will pay to us the amount of USD 2700,00 and transport the
cargo to the port of Ariela without any charge to us. The transportation costs relating to the
re-export of the cargo from Liuville to Ariela must be borne by you.
Yours truly,
Constantine Commodity Traders Ltd.
5th NLUO IMAM, 2017
29
INVOICE
SALE FROM: Continental Chemicals Limited
18 Cartiera Circle, Liuville, HELGALAND
SALE TO: Constantine Commodity Traders Ltd.
10 Chemlux Industrial Complex, Liuville, HELGALAND
DATE: 17 November, 2016
CARGO: 21,214.775 mt of dry Sulphur
@ USD 1,000/mt
USD 21,214,775
TERMS: LC against clean bill of lading
5th NLUO IMAM, 2017
30
INVOICE
Sale from: Constantine Commodity Traders Ltd.
10 Chemlux Industrial Complex, Liuville, HELGALAND
Sale to: Heeru Sulphur Products (Pvt) Ltd.
26 Boulevard des Armanis, Ariela, ANIKALAND
Date: 23 November, 2016
Cargo: 21,214.775 mt of dry sulphur
@ USD 850/mt
USD 18,032,558.75
Terms: LC against clean bill of lading
5th NLUO IMAM, 2017
31
SHANGRILA SHIPPING CORPORATION
25 November 2016
Omar Qureshi
Continental Chemicals Limited.
18 Cartiera Circle,
Liuville, HELGALAND
Dear Mr Qureshi,
Re: MV Sulphur Express
We refer to our letter of 14 November 2016 and enclose a copy of the letter dated 18
November, 2016 which we received from Constantine Commodity Traders Ltd., holders of
the bill of lading in respect of the cargo of dry Sulphur shipped on board the Sulphur Express
at Deeptara, INDISHA.
Please note that Constantine Commodity Traders, holders of the bill of lading in question, are
demanding payment in the amount of USD 270,000 as their losses on the resale of the cargo
and, in addition, transportation of the cargo from the port of Liuville to the port of Ariela in
Anikaland, without charge.
We have examined the claim made by Constantine Commodity Traders and consider it to be
reasonable. We have thus today made the payment to them of USD 270,000, in respect of
which we now demand to be indemnified by you pursuant to the Letter of Indemnity (LOI)
dated 17 October, 2016 provided to us by you.
Regarding the voyage from Liuville, HELGALAND to Ariela, ANIKALAND, we propose
that we enter into an Addendum to the Charter party dated 11 August, 2016 to cover that
voyage to include costs incurred by us in respect of that transportation for your account as per
the terms of the LOI. We are pleased to enclose such an Addendum with a request for you to
sign and return to us a copy without delay.
5th NLUO IMAM, 2017
33
ADDENDUM No. 1 DATED 27 NOVEMBER 2016
TO
CHARTER PARTY DATED 11 AUGUST 2016
between
SHANGRILA SHIPPING CORPORATION (Owners)
and
CONTINENTAL CHEMICALS LIMITED (Charterers)
It is hereby mutually agreed between Owners and Charters that the MV Sulphur Express will
proceed from Liuville, HELGALAND to Ariela, ANIKALAND and there deliver the cargo
remaining on board upon the following terms:
Freight: USD 23.66 per tonne free out for discharge Ariela, ANIKALAND
Vessel to have highest class Lloyd’s 100A1 or equivalent designation of an IACS member
Classification Society, fully covered by P&I insurance including wreck removal cover, ISM
certificated and IOPP certificate covered.
ARIELA DISCHARGING TERMS
Cargo is to be discharged at 1-2 safe anchorages in Ariela, where Charterers warrant a
minimum of 10.50 m. SW draft at all times. Charterers warrant Vessel will remain safely
afloat at all times basis maximum draft 10.50 m. SW, however, Charterers do not warrant the
working anchorage to be accessible at all times.
All discharging expenses from Vessel’s cargo holds to be for Charterer’s account but any
lightering costs shall always be for Receiver’s account.
The opening and closing of hatches shall at all times in the loading port be for Owner’s time
and expense.
Charterers to have full use of Vessel’s grabs for discharging but any damage or expenses and
responsibility shall be for Charterer’s/Receiver’s account.
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Cargo beams, boards and battens which Charterers may deem necessary to be removed in
order not to impede discharging operations, shall be removed by Owners at Owner’s time and
expense before commencement or during discharging as may be required by Charterers. In
any event, Charterers are not to be responsible for damage to cargo beams, boards and
battens.
Discharging Rate
Cargo to be discharged at the rate of 9,200 metric tons per weather working day of 24
consecutive hours FHEX EIU provided vessel can deliver at this rate.
Time from 17:00 hours on Friday or a day preceding a local holiday until 08:00 hours
Monday or the day following a local holiday is not to count as used laytime even if used
(EIU).
Notice of Readiness
All notices at discharging port shall be tendered to Charterers/Receivers and their nominated
agents during office hours. Office hours are deemed to be 09:00 to 17:00 hours Monday to
Friday.
Commencement of Laytime
Laytime shall commence to count 24 hours after Notice of Readiness is tendered within
office hours. Time used prior to commencement of laytime not to count as used laytime.
If upon entering the port the vessel fails to obtain free pratique or customs clearance, or is for
any other reason found unfit to discharge the cargo, then time shall cease to count as used
laytime or time on demurrage until the Vessel is fully ready to proceed with the discharging
operation.
Time taken steaming from the waiting anchorage to the working anchorage not to count as
used laytime or time on demurrage. Time taken shifting between anchorages not to count as
laytime or time on demurrage.
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All time lost by the inability of the Vessel to discharge in accordance with this contract shall
not count as used laytime or time on demurrage.
Demurrage/dispatch rate
In case the Vessel is delayed at the discharging port longer than the laytime allowed then the
Charterers shall pay demurrage at the rate specified in the governing Charter party per day for
every running day so detained and proportionately for any part of day.
Despatch is to be paid at half the demurrage rate for all working time saved.
Laytime allowed for discharging to be based on the metric ton bill of lading weight.
Any demurrage or dispatch incurred at the discharging port to be settled within 30 days of
presentation of Charterer’s dispatch calculation or Owner’s demurrage calculation.
Exceptions to Laytime
Any of the following causes are excepted, regardless of where they occur: strikes or lockouts
at the Charterer’s or Receiver’s factory, or at the ports of discharging; war or effects of war,
revolution, civil commotion, interruptions, stoppage or breakdowns at the factory of the
Charterers or Receivers now or hereafter under contract; stoppage or destruction of goods in
transit; epidemic, frost, fire, cyclones, storms, floods, earthquakes, unavoidable accidents to
machinery or equipment, or other unavoidable hindrances or delays in manufacturing,
transporting, discharging or receiving the material or goods; restraints of established
authorities; any delay caused by the Vessel, Master or crew; and any other causes whatsoever
and howsoever arising or happening without the fault of the Charterers or Receiver
preventing or delaying the discharging or receiving of the cargo. Charterers or Receiver shall
not be liable for any loss or damage resulting through any such excepted causes and time lost
by reason thereof shall not count as used laytime or time on demurrage.
Discharge Port Agents
Vessel to be consigned to port agents nominated by Charterers as identified below;
Zachariah Port & Shipping Agency Ltd.
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36
1704 Daliana Court,
Ariela, ANIKALAND
Tel: +88 152 4119 2804
E-mail: [email protected]
Claims Clause
Any claim of the Owners upon the Charterers and/or Receiver arising at the discharging port
shall be notified by the Owners to Charterers or Receiver before sailing from the discharging
port. No claim will be entertained unless proper notice has been given to and acknowledged
by Charterers or Receiver prior to completion of discharge.
Load and Discharge Port Notice
The Master or Owners shall give Charterers, Receiver and their agents notice on sailing from
Liuville 48 and 24 hours’ notice of the expected date on which the Vessel will arrive at the
discharging port.
Owners/Vessel must keep all parties closely advised of any changes of ETA. Owners to be
held responsible for any consequences and/or additional expenses arising from their failure to
keep Charterers and their agents so informed.
Except as otherwise specified herein, all notice required or permitted hereunder shall be sent
by e-mail to [email protected]
Draft Survey
Should Charterers or Receiver wish to conduct a draft survey at the discharging port to verify
the quantity of cargo on board, then the Vessel is not to take on or pump ballast, oil or water
at discharging port without first obtaining permission of the Charterers/Receiver or their
agents/inspectors, nor to switch oil or water from one tank to another in order to enable a
proper draft survey.
Vessel is to be presented for discharging in such trim and condition as to permit calculation
of the Vessel’s light displacement. Vessel is to furnish calibration scales for all tanks
including fore and aft peak, double bottom tanks and deep tanks. Vessel is to furnish capacity
5th NLUO IMAM, 2017
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plans, displacement scales, deadweight scales and hydrostatic information, all certified by the
Master as to correctness at the time of loading and discharging. Plimsoll marks amidships and
draught marks at port and starboard sides, bow and stern, to be clearly cut and marked on
shell plating. Additional costs and time lost by Vessel’s failure to comply shall be for
Owner’s account.
General Terms
The Vessel to release cargo to Receiver after receiving a letter of indemnity (LOI) in Owner’s
standard P&I Club wording. LOI to be issued by cargo Receiver solely and without bank’s
counter-signature.
The Vessel shall provide free use of power, cargo gear and electric lights as on board and as
required in holds or on deck.
The port shall have the right to perform loading operations day and night 7 days per week,
holidays included, on a 24-hour basis.
All dues/taxes/wharfages/charges levied on the vessel and/or freight calculated on same to be
for Owner’s account.
Overtime to be for the account of the party ordering same except that crew overtime always
to be for Owner’s/Vessel’s account.
The Vessel chartered by the Owner to pay all usual disbursements, agency fees and port
expenses as customary for the port/place of discharging.
DATED: 27 November 2016
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38
CONTINENTAL CHEMICALS LIMITED
27 November 2016
Kevin Jones
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
Dear Mr Jones,
Re: MV Sulphur Express
We refer to your letter of 25 November 2016 and our letter to you dated 15 November 2016.
For reasons set out in our letter of 15 November 2016, we deny any liability to indemnify you
against the claim made by Constantine Commodity Traders Ltd.
However, on a “without prejudice” basis, and to assist in the resolution of this matter, we
have signed the Addendum to the Charter party dated 11 August 2016 as proposed by you.
We reserve all rights to claim any amount of freight paid in respect of the voyage, which is
the subject of the Addendum, on the basis that the need for the extended voyage was
necessitated by the Vessel’s breach of the Charter party dated 11 August, 2016.
Yours truly,
CONTINENTAL CHEMICALS LIMITED.
Omar Qureshi
Managing Director
5th NLUO IMAM, 2017
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STATEMENT OF FACTS IN RESPECT OF
MV SULPHUR EXPRESS AT ARIELA
1. NAME OF VESSEL: MV Sulphur Express
2. NAME OF MASTER: Captain Sam Elliot
3. FLAG: Indisha
4. PORT OF REGISTERY: Deeptara
5. GT/DWT: 25, 070/41, 220
6. NAME OF CONSIGNEE/RECEIVER: Continental Chemicals Limited
7. PORT OF LOADING: Liuville, HELGALAND
8. PORT OF DISCHARGE: Ariela, ANIKALAND
9. TOTAL B/L QUANTITY: 21,214.775 mt
10. RETENTION CARGO: Nil
11. TIME & DATE ARRIVED: 9 December, 2016, 12:00 hours
12. TIME & DATE DEPARTURE: 25 December, 2017,11:00 hours
DATE TIME FROM-TO REMARKS 9 Dec, 2016 12:00 – 24:00 VESSEL ARRIVED ARIELA; CUSTOMS BOARDED
FOR INSPECTIONS
10 Dec, 2016 00:00 – 24:00 CUSTOMS CLEARANCE GRANTED; CARGO
DISCHARGE PERMITTED
11 Dec, 2016 00:00 – 24:00 SUNDAY
12 Dec, 2016 12:00 GOVERNMENT EMBARGO IMPOSED ON CARGO
DISCHARGE
18 Dec, 2017 00:00 – 24:00 EMBARGO LIFTED, CARGO DISCHARGE
COMMENCED
19 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS
20 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS
21 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS
22 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS
23 Dec, 2017 00:00 – 24:00 CARGO DISCHARGE IN PROGRESS
24 Dec, 2017 00:00 – 24:00 SUNDAY
25 Dec, 2017 00:00 – 08:00 CARGO DISCHARGE IN PROGRESS
08:00 – 11:00
11:00
CUSTOMS AND PORT CLEARANCE; VESSEL
PAPERS RETURNED TO MASTER;
VESSEL DEPARTED ARIELA
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SHANGRILA SHIPPING CORPORATION
12 December 2016
Omar Qureshi
Continental Chemicals Limited.
18 Cartiera Circle,
Liuville, HELGALAND
Dear Mr Qureshi,
Re: MV Sulphur Express
We refer to Addendum No 1 to the Charter party.
Under that Addendum, you are the charterers of the MV Sulphur Express and you directed
the vessel to sail the Port of Ariela.
The vessel arrived at the Port of Ariela on 9 December 2016 and received customs clearance
to unload on 10 December 2016. However, today, the Government of Anikaland imposed an
embargo on the discharging of cargo from the vessel.
As the voyage charterer you were under an obligation to nominate a safe port at which the
vessel could discharge the cargo on board in a timely manner.
It is not presently known how long this embargo is going to last.
We would request you provide lawful orders with which the vessel can comply so as to have
the cargo on board discharged without further delay.
Yours truly,
SHANGRILA SHIPPING CORPORATION
Kevin Jones
Managing Director
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41
CONTINENTAL CHEMICALS LIMITED
20 December 2016
Kevin Jones
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
Dear Mr Jones,
Re: MV Sulphur Express
We refer to your letter of 12 December 2016.
As you know, we are no longer the owners of the cargo on board the Sulphur Express. That
cargo was sold by us to Constantine Commodity Traders Ltd. which has in turn (as we
understand it) on-sold the cargo to a buyer in Hunaville, HARBINARA.
Whilst we are the voyage charterers of the Sulphur Express, we are not in a position to give
any orders which might infringe the rights of the cargo owner.
You should seek directions from the holders of Bill of Lading.
Meanwhile, we reserve all our rights against you in respect of your breach of the Charter
party dated 11 August 2016.
Yours truly,
CONTINENTAL CHEMICALS LIMITED.
Omar Qureshi
Managing Director
5th NLUO IMAM, 2017
42
CONGENBILL 2007
BILL OF LADING
To be used with charter parties
Page 1
Shipper
Continental
Chemicals Limited
Bill of Lading No.
BL1108
Reference No.
DS1992
Consignee
TO ORDER
Vessel
MV Sulphur Express
Notify address:
Zachariah Port &
Shipping Agency Ltd.
1704 Markham Court,
Ariela, ANIKALAND
Tel: +88 152 4119
2804
E-mail:
Port of loading
Liuville, HELGALAND
Port of discharge
Ariela, ANIKALAND
Shipper’s description of goods
Gross weight
21,214.775mt Dry Sulphur
21,214.775mt
(of which on deck at shipper’s risk; the Carrier not
being responsible for loss or damage howsoever arising)
Freight payable as per
CHARTER
PARTY dated:
11 August 2016
and Addendum dated 27
November, 2016
SHIPPED at the Port of Lading in apparent good
order and condition on the Vessel for carriage to the
Port of discharge or so near thereto as the Vessel may
safely get the goods specified above.
Weight, measure, quality, quantity, condition,
contents and value unknown. FREIGHT ADVANCE
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Received on account of
freight:
IN WITNESS whereof the Master or Agent of the
said vessel has signed the number of Bills of Lading
indicated below any one of which being
accomplished the others shall be void.
FOR CONDITIONS OF CARRIAGE SEE
OVERLEAF
Date shipped on
board
28 November 2016
Place and
date of issue
Liuville,
HELGALAN
D
28
November,
2016
Number of
original Bills
of Lading
3
Signature:
(i).....................................................................Master
Master’s name and signature
CONDITIONS OF CARRIAGE
(1) 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.
(2) General Paramount Clause
The international Convention for the Unification of Certain Rules of Law relating to Bill of
Lading signed at Brussels on 25August 1924 ("the Hague Rules") as amended by the Protocol
signed at Brussels on 2 February 1968 ('"the Hague-Visby Rules") and as enacted in the
country of shipment shall apply to this Contract. When The Hague-Visby Rules are not
5th NLUO IMAM, 2017
44
enacted in the country of shipment, the corresponding legislation of the country of destination
shall apply, irrespective of whether such legislation may only regulate outbound shipments.
When there is no enactment of The Hague-Visby Rules in either the country of shipment or
in the country of destination, The Hague-Visby Rules shall apply to this Contract save where
the Hague Rules as enacted in the country of shipment or if no such enactment is in place,
The Hague Rules as enacted in the country of destination apply compulsorily to this Contract.
The Protocol signed at Brussels on 21 December 1979 ("the SDR Protocol 1979") shall apply
where The Hague-Visby Rules apply, whether mandatorily or by this Contract.
The Carrier shall in no case be responsible for loss of or damage to cargo arising prior to
loading, after discharging, or while the cargo is in the charge of another carrier, or with
respect to deck cargo and live animals.
(3) General Average
General Average shall be adjusted, stated and settled and settled according to York-Antwerp
Rules 2016 in London unless another place is agreed in the Charter party.
Cargo's contribution to General Average shall be paid to the Carrier even when such average
is the result of a fault, neglect or error of the Master, Pilot or Crew.
(4) New Jason Clause
In the event of accident, danger, damage or disaster before or after the commencement of the
voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or
for the consequence of which, the Carrier is not responsible, by statute, contract or otherwise,
the cargo, shippers, consignees or the owners of the cargo shall contribute with the Carrier in
General Average nature that may be made or incurred and shall pay salvage and special
charges incurred in respect of the cargo. If a salving vessel is owned or operated by the
Carrier, salvage shall be paid for as fully as if the said salving vessel or vessels belonged to
strangers. Such deposit as the Carrier, or his agents, may deem sufficient to cover the
estimated contribution of the goods and any salvage and special charges theron shall, if
required, be made by the cargo shippers, consignees or owners of the goods to the Carrier
before delivery.
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(5) Both-to-Blame Collision Clause
If the Vessel comes into collision with another vessel as a result of the negligence of the other
vessel and any act, neglect or default of the Master Mariner, Pilot or the servants of the
Carrier in the navigation or in the management of the Vessel, the owners of the cargo carried
here under will indemnify the Carrier against all loss or liability to the other or non-carrying
vessel or her owners in so far as such loss or liability represents loss of,or damage to, or any
claim whatsoever of the owners of said cargo, paid or payable by the other or non-carrying
vessel or her owners as part of their claim against the carrying Vessel or the Carrier. The
forgoing provisions shall also apply where the owners, operators or those in charge of any
vessel or vessels or objects other than, or in addition to, thee colliding vessels or objects are
at fault in respect of a collision or contract.
For particulars of cargo, freight, destination, etc., see overleaf.
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46
ONLINE EDITION
10 December 2016
-------- BREAKING NEWS ---------
A ship loaded with a cargo of contaminated fertilizer has arrived at the Port of Ariela.
Authorities say they have taken appropriate steps to prevent the unloading of the highly toxic
cargo until full investigations can be carried out to ensure the safety of the people of Ariela.
The vessel, which has allegedly already been rejected from the Port of Liuville, arrived at
Ariela on 9 December 2016 under cover of darkness.
The cargo is consigned to Heeru Sulphur Products Ltd., a recently established trader in
distressed cargos. Local Ariela importers have been urging the Government to not allow
Heeru to use Ariela as a dumping ground for cargos rejected by other countries.
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47
SHANGRILA SHIPPING CORPORATION
8 June 2017
Omar Qureshi
Continental Chemicals Limited.
18 Cartiera Circle,
Liuville, HELGALAND
Dear Mr Qureshi,
Re: MV Sulphur Express
We refer to our previous correspondence.
The Sulphur Express has now been stranded at the Port of Ariela for about six months.
During this time, demurrage has obviously been accruing pursuant to the Charter party dated
11 August, 2016.
Our view is that demurrage is no longer an adequate remedy for the losses we are suffering.
Our reasons for this view include, but are not limited to:
1. The freight market has moved significantly since the execution of the Charter party. A
vessel of similar size and description to the Sulphur Express could presently attract hire of
approximately USD 45,000 per day.
2. Demurrage is liquidated damages for delay occurring in the cargo loading or discharging
of a vessel. The delay currently being experienced at the Port of Ariela is much more
significant than a delay during the loading or discharging of the vessel. It is a delay, which
the demurrage provisions of the Charter party were not designed to contemplate.
3. There is no indication at present as to when the Sulphur Express may be permitted to
discharge its cargo or to sail from the Port of Ariela. As you are aware, despite your failure to
5th NLUO IMAM, 2017
48
give directions for discharging at an alternative port, when the vessel recently attempted to
leave the Port of Ariela, it was prohibited from doing so by the ANIKALAND authorities.
In light of the above, we will be seeking damages for detention, calculated at market rates,
rather than the demurrage rate specified in the Charter party.
Yours truly,
SHANGRILA SHIPPING CORPORATION
Kevin Jones
Managing Director
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50
SHANGRILA SHIPPING CORPORATION
27 December 2017
Omar Qureshi
Continental Chemicals Limited.
18 Cartiera Circle,
Liuville, HELGALAND
Dear Mr Qureshi,
Re: MV Sulphur Express
We refer to our previous correspondence.
As you are aware, the Sulphur Express has discharged its cargo and has sailed from the Port
of Ariela.
We have received no response from you to our letter of 8 June 2017; nor has any payment of
freight been made by you in respect of the voyage from Liuville to Ariela.
In these circumstances, clearly there is a dispute between us in respect of which we are
hereby invoking Clause 17 (at Box 20) of the Charter party referring to arbitration. Pursuant
to said Clause 17, we hereby appoint Mr. Santos Basu as arbitrator, a person well versed and
experienced in maritime and shipping matters. We would request you to nominate an
arbitrator as contemplated by the LMAA Arbitration Rules within 14 days of the date of this
letter.
Further, since our last correspondence, we have now received a claim from the end user/
buyer of the cargo in Ariela, ANIKALAND, Heeru Sulphur Products (Pvt) Ltd. Heeru’s
claim arises from its contention that its production system machinery suffered damage as a
result of the presence of solidified lumps of tar in the cargo. Of course, the solidified lumps
of tar were the subject of your letter dated 17 October 2016. Therefore, you are liable to
5th NLUO IMAM, 2017
51
indemnify us against any claim made by Heeru Sulphur Products (Pvt) Ltd. against the
vessel. We will provide details of the amounts involved as soon as they are received by us.
Yours truly,
SHANGRILA SHIPPING CORPORATION
Kevin Jones
Managing Director
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52
CONTINENTAL CHEMICALS LIMITED
7 January 2018
Kevin Jones
Shangrila Shipping Corporation
Eton Place, Unit 1501
26 Linghai Avenue, New District
Nirvana, NAVIGONIA
Dear Mr Jones,
MV Sulphur Express
We refer to your letter of 27 December 2017.
We appoint Ms Minna Shao as an arbitrator for the purposes of Clause 17 (Box 20) of the
Charter party dated 11 August 2016 and the LMAA Arbitration Rules but in so doing, we
reserve all our rights regarding the arbitral tribunal’s competency and jurisdiction to hear the
dispute as it is currently framed in your previous correspondence.
We have investigated the basis of the claim of Heeru Sulphur Products (Pvt) Ltd., which
indicates that when the cargo was being loaded from the dock with the ship's cranes, the
cranes picked up, together with the cargo, some remains of solidified tar in lumps situated on
the newly paved dock.
For these reasons and for the reasons given in our previous correspondence regarding our
letter of 17 October 2016, we deny any liability to indemnify you against claims by Heeru
Sulphur Products (Pvt) Ltd. in respect of the lumps of solidified tar.
Yours truly,
CONTINENTAL CHEMICALS LIMITED.
Omar Qureshi
Managing Director
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53
IN THE MATTER OF: SHANGRILA SHIPPING CORPORATION
(Claimant)
and CONTINENTAL CHEMICALS LIMITED
(Respondent)
and SHIP MV SULPHUR EXPRESS
and CHARTER PARTY DATED 11 AUGUST, 2016
STATEMENT OF CLAIM
Delivered on behalf of Shangrila Shipping Corporation (Claimant)
1. The Claimant is the Owner of the vessel MV Sulphur Express.
2. The Claimant chartered out the Sulphur Express to the respondent for a voyage from the
Port of Deeptara, INDISHA to the Port of Liuville, HELGALAND.
3. The Respondent loaded a cargo of dry sulphur in bags on board the Sulphur Express.
4. After the cargo was loaded, the following foreign objects were found in the cargo:
(a) lumps of solidified tar;
(b) two pieces of dunnage wood; and
(c) pieces of torn plastic.
5. The Master of the Sulphur Express intended to clause the bill of lading in respect of the
cargo to indicate that it contained foreign objects.
6. The Respondent provided a letter of indemnity dated 17 October, 2016 to the Claimant
Shangrila Shipping in exchange for the issue of a clean bill of lading.
7. The Master, being satisfied that:
(a) the Respondent had caused an independent survey to be carried out;
(b) the Respondent was in the best position to know whether the foreign objects
would affect the suitability of the cargo for on-sale or discharge into Liuville,
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54
HELGALAND issued a bill of lading which did not make any reference to the foreign
objects.
8. Upon reaching the Port of Liuville, the cargo was ordered into quarantine by the Helgaland
Quarantine Inspection Services due to residues of NAVIGONIA Wheat Germ, a prohibited
import into HELGALAND, being present on the pieces of dunnage wood found in the cargo.
9. This endorsee of the bill of lading, Constantine Commodity Traders Ltd. (CCTL), re-sold
the cargo for re-export to Ariela, ANIKALAND.
10. CCTL claimed loss of profits of USD 3182.22
11. Being satisfied that the claim was reasonable, the Claimant made payment to CCTL of
the amount.
12. The Claimant entered into an Addendum to the Charter party with the Respondent for the
voyage of the Sulphur Express from Liuville to Ariela.
13. To date, the Respondent has failed, refused or otherwise neglected to pay the freight
owing under that Addendum.
14. Upon reaching Ariela, the Government of ANIKALAND placed an embargo on the
discharge of the cargo.
15. That embargo remained in place until 18 December 2017 when the vessel was permitted
to discharge its cargo.
16. The ultimate receiver of the cargo in Ariela has made a claim for damage sustained to its
processing facilities attributable to the presence of lumps of solidified tar in the cargo.
17. Pursuant to the terms of the Respondent's letter dated 17 October 2016, the Respondent is
liable to indemnify the Claimant against any liability, which the Claimant has to Heeru
Sulphur Products (Pvt) Ltd., in respect of this claim.
18. In the circumstances, the Respondent is liable, pursuant to the terms of the Respondent’s
letter dated 17 October 2016, to indemnify the Claimant against all losses and damage
suffered by the Claimant.
19. Further and alternatively, the Respondent is liable to the Claimant for the losses and
damages the Claimant has suffered and the Claimant claims damages in the amount of at least
USD 10,375,952.00.
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55
PARTICULARS
Claim by Constantine Commodity Traders
Ltd.
USD 3182.00
Freight unpaid
USD 650, 270.00
Damages for detention
USD 9,722,500.00
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56
IN THE MATTER OF: SHANGRILA SHIPPING CORPORATION
(Claimant)
and CONTINENTAL CHEMICALS LIMITED
(Respondent)
and SHIP MV SULPHUR EXPRESS
and CHARTER PARTY DATED 11 AUGUST, 2016
STATEMENT OF DEFENCE AND COUNTER-CLAIM
Delivered on behalf of Continental Chemicals Limited (Respondent)
1. The Respondent admits paragraphs 1 to 4 of the Statement of Claim.
2. The Respondent does not admit paragraph 5 of the Statement of Claim stating that the
Master had intended to clause the bill of lading, and is uncertain as to the state of mind of the
Master at the relevant time.
3. Regarding paragraph 6 of the Statement of Claim, the Respondent-
(a) admits that it sent a letter dated 17 October, 2016 to the Claimant;
(b) denies that it sent that letter in exchange for the issue of a clean bill of lading; and
(c) otherwise denies the statement made by the Claimant in that paragraph.
4. The Respondent does not admit the statement made in paragraph 7 of the Statement of
Claim and remains uncertain as to the state of mind of the Master as pleaded.
5. The Respondent admits paragraphs 8 to 10 of the Statement of Claim.
6. Regarding paragraph 11 of the Statement of Claim, the Respondent-
(a) admits the Claimant made a payment to Constantine Commodity Traders Ltd.
(CCTL) in the amount of USD 3182.22;
(b) denies that the payment was made reasonably.
7. Regarding paragraph 12 of the Statement of Claim, the Respondent-
5th NLUO IMAM, 2017
57
(a) admits it entered into an Addendum to the Charter party for the voyage of the
Sulphur Express from Liuville to Ariela
(b) did so, however, “without prejudice” to its rights against the Claimant under the
Charter party dated 11 August, 2016.
8. Regarding paragraph 13 of the Statement of Claim, the Respondent admits that it has not
made any freight payments to the Claimant in respect of the voyage from Liuville,
HELGALAND to Ariela, ANIKALAND and claims an entitlement to set off such payments
against its Counter-Claim pleaded below.
9. The Respondent admits paragraphs 14 and 15 of the Statement of Claim.
10. The Respondent does not admit paragraph 16 of the Statement of Claim because having
made reasonable inquiries, it remains uncertain of the verity of the facts or allegations made,
as the only evidence of the claim pleaded is an assertion made in the Claimant’s
correspondence.
11. The Respondent denies paragraph 18 of the Statement of Claim and states that it is not
liable to indemnify the Claimant against any liability it may have towards Constantine
Commodity Traders Ltd. because the presence of lumps of solidified tar was attributable to
causes unrelated to the Respondent’s obligations under the Charter party, and probable fault
on the part of the Vessel’s lifting gear operator.
12. The Respondent denies paragraph 17 of the Statement of Claim and states that-
(a) its letter of 17 October, 2016 is not a letter of indemnity;
(b) the Claimant is not entitled to be indemnified pursuant to the terms of that letter;
and
(c) even if the letter of 17 October, 2016 is a letter of indemnity, this arbitral tribunal
has no jurisdiction to hear any matters related to it as the letter provides that disputes
arising in relation to it are to be referred to the Courts of NAVIGONIA, which have
exclusive jurisdiction to hear such matters.
13. The Respondent denies paragraph 19 of the Statement of Claim on the basis that the
Claimant is not entitled to any damages from the Respondent; and further states in the
alternative, that it is entitled to set-off its liability, if any, against its Counter-claim pleaded
below:
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58
COUNTER-CLAIM
14. The cargo on board the Sulphur Express was ordered into quarantine at the Port of
Liuville because of the discovery of NAVIGONIA Wheat Germ (NWG) residues in the holds
of the Vessel.
15. The foreign material referred to in the Respondent’s letter of 17 October 2016 did not
contain on it any residues of NWG.
16. Pursuant to Clause 18 in Part II of the Charter party dated 11 August, 2016, the Claimant
was required to ensure prior to loading that the holds of the Vessel were clean and free of
remnants or residues of any previous cargo.
17. The Claimant is in breach of the said Clause 18 in Part II of the Charter party dated 11
August 2016, because NWG had previously been carried on board the Vessel and remnants
and residues of it remained in the holds of the Vessel.
18. In the circumstances, the Respondent is entitled to be indemnified by the Claimant
against any losses, including consequential losses, pursuant to the said Clause 18 in Part II of
the Charter party dated 11 August 2016.
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MISCELLANEOUS RELEVANT INFORMATION
- The laws of NAVIGONIA, INDISHA and HELGALAND, statutory and otherwise, are
virtually the same as those of England and Wales in the United Kingdom.
- ANIKALAND has adopted in the same terms, all the laws of England and Wales in the
United Kingdom, statutory and otherwise, except that it has no legal regime, statutory or
otherwise, governing quarantine matters.
- It is assumed that the parties concerned have properly executed all documents mentioned.
- It is assumed that notices and demurrage calculations have been provided by the Owners
prior to the Vessel’s departure from discharging ports.