16th INTERNATIONAL MARITIME LAW ARBITRATION MOOT,
2015
NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL
Team No. 16
MEMORANDUM FOR THE DEFENDANT
IN THE MATTER OF AN ARBITRATION
BETWEEN:
WESTERN TANKERS INC. Claimant/Owners
and
LDT PTE Defendant/Charterers
TEAM Amoolya Khurana Eikluvya Murray Karanvir Singh Goraya Nikita Goyal Page ii
TABLE OF CONTENTS
TABLE OF CONTENTS ...... ii INDEX OF AUTHORITIES ...... iv LIST OF ABBREVIATIONS ...... vii STATEMENT OF FACTS ...... 1 ARGUMENTS...... 2 Part One: Jurisdiction and Admissibility ...... 2 I. JURISDICTION ...... 2
A. THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION...... 2
B. THE SEAT OF ARBITRATION IN THE ARBITRATION AGREEMENT CONTAINED IN THE CHARTERPARTY IS MENTIONED AMBIGUOUSLY...... 2
C. EVEN IF THERE IS NO AMBIGUITY IN THE CHARTERPARTY, LONDON IS NOT THE PROPER SEAT OF ARBITRATION AS PER THE TRUE CONSTRUCTION OF THE CHARTERPARTY AND ACCORDING TO THE TRUE INTENTION OF THE PARTIES...... 3 a. The fixture recap constitutes a binding contract in itself...... 4 b. There was a mutual intention between the parties to exclude London as the seat of Arbitration...... 4 c. The term of the fixture recap relating to London as the seat of arbitration, when read in light with the intention of the parties, is inconsistent with the corresponding term of Charterparty...... 5 d. This term of the Fixture recap prevails over the corresponding term of the Charterparty...... 6 e. Thus, London is not the proper seat of arbitration...... 6
D. THE ARBITRAL TRIBUNAL AFTER CONSIDERING THE RELEVANT FACTORS COULD SELECT THE SEAT AND FORUM AS SINGAPORE AND SINGAPORE ARBITRATION...... 7 a. Arbitration still remains the forum of dispute resolution...... 7 b. The arbitral tribunal has the authority to select the seat of arbitration...... 8 c. The arbitral tribunal may decide the seat to be Singapore...... 8 II. ADMISSIBILITY ...... 10
A. ARBITRATION CLAUSE DOES NOT EXTEND TO INCLUDE ARBITRATION OF SUCH A CLAIM...... 10
B. THERE IS NO NEXUS BETWEEN THE TORTIOUS AND THE CONTRACTUAL CLAIM...... 11
C. THE PARTIES HAD NO INTENTION TO INCLUDE THE ARBITRATION OF TORTIOUS CLAIMS IN THIS ARBITRATION...... 13
Memorandum for the Defendant
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Part Two: Merits ...... 15 III. TORT OF FRAUD ...... 15
A. FRAUD HAS CERTAIN ESSENTIALS...... 15
B. THE ACTS OF THE CHARTERERS DO NOT FULFIL THE ESSENTIALS OF THE TORT OF FRAUD...... 15 a. The Charterers and their Agents did not make false or dishonest representations ...... 16 b. The loss suffered by the Claimant cannot be attributed to the acts of the Charterers...... 17
C. THE CHARTERERS ARE NOT LIABLE FOR THE ACTS OF ASA...... 18 IV. BREACH OF CHARTERPARTY ...... 19
A. HIRE WAS NOT DUE UNDER THE TERMS OF THE CHARTERPARTY AS THE VESSEL WENT OFF-HIRE...... 19
B. AFTER 04 JULY, 2014, THE CHARTERPARTY STOOD FRUSTRATED...... 20 V. COUNTER CLAIM ...... 21
A. OWNERS BREACHED THE CHARTERPARTY BY PROVIDING A VESSEL THAT WAS NOT FIT FOR SERVICE, AS REQUIRED BY THE CHARTERPARTY...... 21 a. The Master was incompetent when he followed instructions other than those given to the Vessel by Charterer...... 21 b. The Master also failed to follow anti-piracy precautions, as required by the Charterparty and/or industry practice relating to West Africa...... 22 c. Master did not comply with the special provisions to ST4 pro-forma concerning “piracy”...... 22
B. OWNERS CONVERTED, AND/OR BREACHED THEIR DUTY AS BAILEE IN RESPECT OF, PART OF THE CARGO ON THE VESSEL...... 22 PRAYER FOR RELIEF...... 24
Memorandum for the Defendant
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INDEX OF AUTHORITIES
Cases
Akerhielm v. De Mare ...... 21 Ballas v. Mann ...... 12 Bank Line v. Capel ...... 26 Bayoil SA v. Seawind Tankers Corporation (The Leonidas) ...... 10 Bradford Third Equitable Benefit Building Society v Borders ...... 20 Brodgen v Metropolitan Railway Co ...... 9 Brower v. Gateway 2000, Inc...... 12 Burress, Inc. v. John Deere Constr. & Forestry Co...... 13 Caxton Publishing Co. Ltd v. Sutherland Publishing Co. Ltd...... 28 Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH ...... 6 Citigroup, Inc. v. Amodio ...... 19 Cobelfret Bulk Carriers NV v. Swissmarine Services SA (The Lowlands Orchid) ...... 10 Derry v. Peek ...... 20 Diediker v. Peelle Financial Corp...... 21 Dubai Islamic Bank PJSC v. Paymentech ...... 14 Dusold v. Porta-John Corp...... 17 Eco 3 Capital Ltd and others v Ludsin Overseas Ltd ...... 20 Empressa Exportadora de Azucar v Industria Azucaera Nacional SA ( The Playa Larga) .... 16 Engineering Company v Engineering Company (Final Award)...... 6 Evans v. Famous Music Corp...... 8 Factory 5 Pty Ltd (In Liq) v State of Victoria (No 2) ...... 8 Gerling Global Reinsurance Co. v. ACE Property & Casualty Insurance ...... 15 Golden Ocean Group Ltd. v. Salgaokar Mining Industries PVT. Ltd ...... 11 Government of Gibraltar v. Kenney and Another ...... 15 Great Earth Co. v. Simons ...... 12 Hersman, Inc. v. Fleming Cos., Inc...... 17 Hirji Mulji v. Cheong Yue S.S...... 25 Hirshenson v. Spaccio ...... 18 In re Kinoshita & Co...... 15 In Re Kinoshita & Co...... 15 Interocean Shipping Co. v. National Shipping and Trading Corp...... 11 Koullas v. Ramsey ...... 17 Meade King Robinson v. Jacobs ...... 24 Mediterranean Enters v. Ssangyong Corp ...... 15 National Carriers v. Panalpina ...... 25 Newbury v Sun Microsystems ...... 8 Ocean Pride Maritime Ltd. Partnership v. Quindao Ocean Shipping Co. (The Northgate) ... 10 Pacemaker Corp. v. Euster 357 So.2d 208 ...... 18
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Pagnan SpA v. Tradax Ocean Transportation SA ...... 10 Regency Group, Inc. v. McDaniels ...... 18 Richard C. Young & Co., Ltd. v Morris Leventhal, DDS MS ...... 13 Roe v. Amica Mutual Ins. Co...... 18 Rowe v. Great Atlantic & Pac. Tea Co., Inc...... 10 Scammell v. Ouston ...... 8 Seaboard Coast Line R.R. v. Trailer Train Co...... 18 Seifert v. U.S. Home Corp...... 17, 19 Sociedade Portuguesa de Navois Tanques v. Polaris ...... 8 Tatem v. Gamboa ...... 25 The Pioneer Containe ...... 28 The Playa Larga ...... 15 Tracer Research Corp v. National Environment Services Co ...... 15 Westbrook Int’l LLC v. Westbrook Tech., Inc...... 13
Books
Alan Redfern, Law and Practice of International Commercial Arbitration (Sweet & Maxwell, 2004) ...... 9, 14 Eric E. Bergsten, Stefan Kröll, International Arbitration and International Commercial Law: Synergy, Convergence, and Evolution (Kluwer Law International), 369 ...... 15 Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1 ...... 8, 9, 14, 15, 17 Halsbury‟s Laws of England (4th Edn, 2003) Volume 31...... 22 Julian D M Lew, Loukas A Mistelis, Stefan M Kroll, Comparitive International Commercial Arbitration (Kluwer Law International, 2007), 169 ...... 17 Michael Wildford, Terence Coghlin & John. D. Kimball, Time Charters (Lloyd‟s of London Press Ltd., 1995)...... 10 Nigel Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed, 2009) ...... 8 Sir Bernard Eder, Scrutton on Charterparties and Bills of Lading (Sweet and Maxwell, 22nd Revised Edition, 2011) ...... 25 Thomas Gilbert Carver, Carver's Carriage by Sea (British Shipping Laws Series) (Stevens, 1971)...... 26 Winfield, Province of the Law of Tort (1931) ...... 29
International Conventions, Treaties and Documents
Belgian Judicial Code ...... 9, 14 English Arbitration Act, 1996 ...... 9, 14 Japanese Arbitration Law ...... 9
Memorandum for the Defendant
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Netherlands Code of Civil Procedure ...... 9, 14 Swiss Law on Private International Law ...... 9, 14 United Nations Commission in International Trade Law, Model Law on International Commercial Arbitration 1985 ...... 9, 14, 15
Memorandum for the Defendant
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LIST OF ABBREVIATIONS
Art - Article
ASA - Atlantic Services Agency
BIMCO - Baltic and International Maritime Council
BMP - Best Management Practices
BVI - British Virgin Islands
Cl. - Clause
Inc. - Incorporation
OPL - Off Port Limit
Pte - Private
LDT - Less dependable traders
ST4 - Shelltime4
STS - Ship to Ship
UNCITRAL - United Nations Commission on International Trade Law
Memorandum for the Defendant
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STATEMENT OF FACTS
The Claimant is Western Tankers Inc (the “Owners”), a long-established and reliable company incorporated in the BVI. The Owners own, among other Vessels, the „Western
Dawn‟ (the “Vessel”). The Defendant is LDT Pte (the “Charterers”), a company incorporated in Singapore. The Charterers chartered the Vessel on an amended Shelltime 4 Charterparty with rider clauses dated 26 May 2014 for a period of three months, plus or minus 30 days (the
“Charterparty”). The Charterparty was for a time charter trip to include a voyage from
Singapore to OPL Luanda, West Africa, with re-delivery in the Mediterranean area. Pursuant to the terms of the Charterparty, voyage orders were given on 27 May 2014 for the Vessel to load “30,000mt MIN/MAX Jet A1 PLUS 70,000mt +/-10% MOLOO GASOIL” (the
“Cargo”). Bills of Lading for the Cargo were issued on 8 June 2014. Full payment for the
Cargo was received by the Charterers on 8 June 2014. The Vessel was then ordered to proceed to OPL Luanda for discharge of the Cargo. While proceeding towards Luanda,
Atlantic Services Agency (“Discharge Port Agents”) directed the Vessel to proceed to an alternative discharge place in international waters off the Angolan coast, to discharge Cargo and receive bunker supply, where the Vessel came under a Pirate Attack as a result of which not only did it suffer material damage but also loss of a quantity of Cargo. Consequently, the
Vessel was unable to meet her discharge target date at Luanda and also failed to discharge the full Cargo to Angola Energy Imports (the “Consignee”) in accordance with the voyage instructions and Bills of Lading. The Owners commenced arbitration proceedings against the
Charterers on 1 November 2014, alleging that the Charterers have breached the Charterparty by not paying hire due monthly in advance to the owners on 3 July 2014. Furthermore, they seek to hold the Charterers liable under the tort of fraud.
Memorandum for the Defendant
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ARGUMENTS
PART ONE: JURISDICTION AND ADMISSIBILITY
I. JURISDICTION
1. The Defendant argues that this tribunal does not have the jurisdiction to determine this matter
because: (A) This tribunal has the power to rule on its jurisdiction; (B) The seat of arbitration
in the arbitration agreement contained in the Charterparty is mentioned ambiguously; (C)
Even if there is no ambiguity in the Charterparty, London is not the proper seat of arbitration
as per the true construction of the Charterparty and according to the true intention of the
parties and (D) The arbitral tribunal after considering the relevant factors could select the seat
and forum as Singapore and Singapore arbitration.
A. THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION.
2. It is a well-established principle of international arbitration that an arbitral tribunal has the
inherent power to rule on its own jurisdiction.1The principle is almost universally accepted in
international arbitration conventions, national legislations, judicial decisions, institutional
rules and international arbitral awards.2 Therefore, this Tribunal has the power to rule on its
own jurisdiction.
B. THE SEAT OF ARBITRATION IN THE ARBITRATION AGREEMENT CONTAINED IN THE
CHARTERPARTY IS MENTIONED AMBIGUOUSLY.
1 United Nations Commission in International Trade Law, Model Law on International Commercial Arbitration 1985 art. 16(1); Arbitration Act 1996 s 30; Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8, 12-3; Engineering Company v Engineering Company (Final Award) (1999) XXIV Yearbook Commercial Arbitration 80, 83; Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol 1, 853; Nigel Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed, 2009) 346-7. 2 Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1, 855.
Memorandum for the Defendant
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3. It has been held that the arbitral seat should specify both the city and the country.3 Moreover,
the drafting of a clause selecting the arbitral seat shall be straightforward.4 Any failure to do
so will lead to ambiguities in the choice of seat of arbitration in the arbitration agreement.5 In
cases where the choice of arbitral seat is ambiguous, the arbitral tribunal has the authority to
decide the seat of arbitration according to the intentions of the parties.6
4. In the case at hand, the Charterparty merely states that Arbitration needs to be done in
London without mentioning the country. More importantly, it is not a clear and
straightforward clause for the selection of the arbitral seat since it uses the words „referred to
Arbitration in London‟ rather than „the seat of arbitration should be London‟. This leaves
room for ambiguity. Thus, the arbitral tribunal is authorized to decide the seat of arbitration
in accordance with the intention of the parties.
C. EVEN IF THERE IS NO AMBIGUITY IN THE CHARTERPARTY, LONDON IS NOT THE PROPER
SEAT OF ARBITRATION AS PER THE TRUE CONSTRUCTION OF THE CHARTERPARTY AND
ACCORDING TO THE TRUE INTENTION OF THE PARTIES.
5. The Defendant argues that London is not the proper seat of arbitration because: (a) The
fixture recap constitutes a binding contract in itself, (b) There was a mutual intention between
the parties to exclude London as the seat of arbitration; (c) The term of the fixture recap
relating to London as the seat of arbitration, when read in light with the intention of the
parties, is inconsistent with the corresponding term of Charterparty; (d) This term of the
3 Ibid 1694. 4 Ibid 1693. 5 United Nations Commission in International Trade Law, Model Law on International Commercial Arbitration 1985 art. 16(1). 6 Ibid Arts. 2(d), 20(1); Swiss Law on Private International Law, Art. 176 (3); English Arbitration Act, 1996, §§3(a), (b), (c); Netherlands Code of Civil Procedure, Art. 1037(1); Belgian Judicial Code, Art. 1693(1); Japanese Arbitration Law, Art. 28(1); Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1, 1720; Alan Redfern, Law and Practice of International Commercial Arbitration (Sweet & Maxwell, 2004), 79.
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Fixture recap prevails over the corresponding term of the Charterparty; (e) Thus, London is
not the proper seat of arbitration.
a. The fixture recap constitutes a binding contract in itself.
6. In order to be binding, it is a necessary requirement that the agreement must be sufficiently
definite or capable of being made definite without further agreement between the parties.7 On
a reading of the fixture recap8, it can be concluded that the terms, in specific the term relating
to seat of arbitration, although silent, is clear as the silence does not make a contract unclear
or ambiguous.9
7. Moreover, it has been decided by a court that if a term such as ''subject to contract'' is not
used, there can be a binding contract if the parties contemplate that a fixture has been
concluded, even if some of the terms of the contract remain to be agreed.10 References to
“subject to contract” or similar words have repeatedly been held to show an intention not to
be bound until a formal contract is subsequently entered into. The absence of such references
would mean that there was an intention to enter into a legally binding contract.11
8. The fixture recap in the moot scenario does not contain the words “subject to contract” or
similar words.12 Therefore, it can be inferred that the parties intended to conclude the fixture
recap as a binding contract and finally agree upon its terms.
b. There was a mutual intention between the parties to exclude London as the seat of
Arbitration.
7 Scammell v. Ouston [1941] A.C. 251; Michael Wildford, Terence Coghlin & John. D. Kimball, Time Charters (Lloyd‟s of London Press Ltd., 1995), 50. 8 Moot Scenario, pg. 5-6, Fixture recap. 9 Evans v. Famous Music Corp. 1 N.Y.3d 452, 458, 775 N.Y.S.2d 757, 807 N.E.2d 869 (N.Y.2004). 10 [1994] 1 Lloyd's Rep 526 11 Sociedade Portuguesa de Navois Tanques v. Polaris [1952] 1 Lloyd‟s Rep 71; Newbury v Sun Microsystems [ 2013] EWHC 2180;Factory 5 Pty Ltd (In Liq) v State of Victoria (No 2) [2012] FCAFD 150. 12 Moot Scenario, pg. 5-6, Fixture recap.
Memorandum for the Defendant
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9. The contemporaneous correspondence is an evidence of the fact that the Charterers had
expressly stated their intention to not have London as the seat of arbitration.13 There was no
express intention communicated by the Owners as to exclusion of London as the seat of
arbitration. However, it has been established in a case14 that non expression of consent
amounts to acceptance when the party required to give consent acts upon the agreement. In
the instant case, the Owners had agreed in the fixture recap to not have a clause relating to
seat of arbitration.15 This can be construed as an intention on their part to exclude London as
the seat of arbitration. Thus, the Charterers were under a reasonable impression that there
existed a mutual intention to exclude London as the seat of arbitration.
c. The term of the fixture recap relating to London as the seat of arbitration, when
read in light with the intention of the parties, is inconsistent with the corresponding
term of Charterparty.
10. Contractual silence is capable of creating a gap that requires the court to construe the terms in
light of the parties' intentions. This is an expression of the broader rule that “the
understanding of each promisor in a contract must include any promises which a reasonable
person in the position of the promisee would be justified in understanding were included.16
Therefore, the silence as to the seat of arbitration, when read in light of the intention of the
parties to exclude London as the seat of arbitration, shall be interpreted to mean a seat of
arbitration other than London.
11. Further, to be inconsistent a term must contradict another term or be in conflict with it, such
that effect cannot fairly be given to both clauses.17 While the relevant term of the fixture
13 Moot Scenario, Pg. 2, Charterer‟s Correspondence dated 23rd May, 2014 at 12:30. 14 Brodgen v Metropolitan Railway Co (1877) 2 App Cas 666. 15 Moot Scenario, Pg. 6, Fixture recap. 16 Rowe v. Great Atlantic & Pac. Tea Co., Inc. 46 N.Y.2d 62, 69, 412 N.Y.S.2d 827, 385 N.E.2d 566 (N.Y.1978). 17 Pagnan SpA v Tradax Ocean Transportation SA [1987] 2 Lloyd‟s Rep. 342.
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Charterparty, on its interpretation according to the intention of the parties as established
above, provides for exclusion of London as the seat, Cl. 46 of the Charterparty specifies
London as the seat. Clearly, these terms are inconsistent as both cannot be given effect.
d. This term of the Fixture recap prevails over the corresponding term of the
Charterparty.
12. It has been well established that where there is an inconsistency between negotiated terms
and pro-forma terms, the former will prevail. 18 A Charterparty may be drawn up and signed
by the parties, but where it has not been signed, the fixture recap terms need to be relied
upon. 19 The case of Gertrud Salamon20 laid down the rationale behind the prevalence of the
fixture recap terms over the proforma Charterparty by reasoning that the fixture recap is the
clearest representation of the parties‟ intentions at the time of negotiations and outweighs the
alternative language of the proforma Charterparty.
13. Accordingly, in this case, the term pertaining to the seat of arbitration in the fixture recap,
being inconsistent with the corresponding term in the Charterparty, a proforma,21 will prevail.
Therefore, the term of the fixture recap excluding London as the seat of arbitration prevails
over the term of the Charterparty which states London as the seat of arbitration.
e. Thus, London is not the proper seat of arbitration.
18 Cobelfret Bulk Carriers NV v. Swissmarine Services SA (The Lowlands Orchid) [2009] EWHC 2883 (Comm); Bayoil SA v. Seawind Tankers Corporation (The Leonidas) [2001] 1 Lloyd‟s Rep 533; Ocean Pride Maritime Ltd. Partnership v. Quindao Ocean Shipping Co. (The Northgate) [2008] 1 Lloyd‟s Rep 511. 19 Golden Ocean Group Ltd. v. Salgaokar Mining Industries PVT. Ltd. [2012] EWCA 265; [2012] 1 WLR 3674. 20 Gertrud Salamon SMA 4036 (2009) (Dooley, Mordhorst, Ring). 21 Moot Scenario, Pg. 5, Fixture recap.
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14. It has been established that where there is a disparity between the terms of the fixture recap
and the final Charterparty, the terms of the fixture recap should be viewed as having merged
in the subsequent Charterparty.22
15. In the instant case, merging the provision for seat of arbitration in the fixture recap with the
Charterparty, it can be concluded that the parties had agreed to arbitrate in a seat other than
London. However, a seat of arbitration was not specified.
D. THE ARBITRAL TRIBUNAL AFTER CONSIDERING THE RELEVANT FACTORS COULD
SELECT THE SEAT AND FORUM AS SINGAPORE AND SINGAPORE ARBITRATION.
16. The Defendant submits that the proper seat and forum are Singapore and Singapore
arbitration because: (a) Arbitration still remains the forum of dispute resolution; (b) The
arbitral tribunal has the authority to select the seat of arbitration; (c) The arbitral tribunal may
decide the seat to be Singapore.
a. Arbitration still remains the forum of dispute resolution.
17. The parties have objected to London as the seat of arbitration and not arbitration per se in the
contemporaneous correspondence.23This meant that they still intended to have arbitration as
the forum of dispute resolution.
18. Moreover, when the seat of arbitration is not specified in an arbitration agreement, the
underlying agreement to arbitrate is not vitiated.24The intention to arbitrate is upheld as the
22 Interocean Shipping Co. v. National Shipping and Trading Corp. 523 F.2d 527, 534 (2d Cir. 1975), 423 U.S. 1054 (1976). 23 Moot Scenario, Pg. 2, Charterer‟s Correspondence dated 23rd May, 2014 at 12:30. 24 Great Earth Co. v. Simons 288 F.3d 878,890 (6th Cir. 2002); Brower v. Gateway 2000, Inc. 246 A. D. 2d 246, 255 (N.Y.App. Div. 1998).
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dominant intention and is not permitted to be frustrated merely because a term like the seat of
arbitration is not mentioned.25
19. In the instant case, reading the terms of the fixture recap into the Charterparty, it can be said
that there existed an agreement to arbitrate even though the seat of arbitration was not
specified.
20. Thus, arbitration remains the forum of dispute resolution and the arbitral tribunal is to decide
only on the seat of arbitration, not whether arbitration was the selected forum for dispute
resolution.
b. The arbitral tribunal has the authority to select the seat of arbitration.
21. In cases where the parties have not specified the seat of arbitration, the arbitral tribunal has
the authority to select the seat of arbitration.26 It has also been established that selection of
arbitral seat should virtually always be considered in the first instance by the arbitral tribunal
rather than a national court because firstly, generally there is no dispute about the existence of
a valid agreement to arbitrate27 and secondly, because the arbitral tribunal is able to take steps
to mitigate any alleged inconvenience or unfairness.28 Therefore, the arbitral tribunal shall, in
the instant case, decide the seat of arbitration.
c. The arbitral tribunal may decide the seat to be Singapore.
25 Ballas v. Mann 82 N.Y.S. 2d 426, 446 (N.Y.S.Ct. 1948). 26 United Nations Commission in International Trade Law, Model Law on International Commercial Arbitration 1985 arts. 2(d), 20(1); Swiss Law on Private International Law, Art. 176 (3); English Arbitration Act, 1996, §§3(a), (b), (c); Netherlands Code of Civil Procedure, Art. 1037(1); Belgian Judicial Code, Art. 1693(1); Japanese Arbitration Law, Art. 28(1); Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1, 1720; Alan Redfern, Law and Practice of International Commercial Arbitration (Sweet & Maxwell, 2004), 79. 27 Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) vol 1, 1736 28 Richard C. Young & Co., Ltd. v Morris Leventhal, DDS MS 389 F. 3d 1, 3-4 (1st Cir. 2004); Burress, Inc. v. John Deere Constr. & Forestry Co. 2007 WL 30233975 (W.D. Va. 2007); Westbrook Int’l LLC v. Westbrook Tech., Inc. 17 F. Supp. 2d 681 (E.D. Mich. 1998).
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22. In general it has been agreed that arbitral tribunals should select an arbitral seat consistent
with the parties‟ intentions. Also, it may select an arbitral seat within a state that has acceded
to the New York Convention, has had a record of giving effect to international arbitration
agreements,29 and is equally convenient for both parties.30
23. In the instant case, it has already been established that the parties did not intend to have
London as the seat of arbitration. Moreover, Singapore is a party to the New York
Convention.31 It has been one of the most sought after seats of arbitration in the recent
times,32which proves the fact that it has had a record of giving effect to international
arbitration agreements. It has also been recognized as having a track record that ensures a
reasonably predictable and efficient arbitration.33 Therefore, Singapore is the appropriate seat
of arbitration.
24. Further, the UNCITRAL Model Law states that when the parties fail to choose a seat of
arbitration, the arbitral tribunal shall select the seat based on the circumstances of the case.34
In doing so, the arbitral tribunal shall have regard to any connections with one or more
particular countries that can be identified in relation to (i) the parties and (ii) the dispute
which will be the subject of the arbitration.35
25. In the instant case, the parties are most closely related to two places i.e. London and
Singapore. This is because the Owners were a company incorporated in BVI which is a
British overseas territory and therefore, connected to London, while the Charterers were a
29 Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol 1, 1679- 1685. 30 Ibid 1703. 31 Competition Rules, 2.2. 32 Eric E. Bergsten, Stefan Kröll, International Arbitration and International Commercial Law: Synergy, Convergence, and Evolution (Kluwer Law International), 369. 33 Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol 1, 1686. 34 United Nations Commission in International Trade Law, Model Law on International Commercial Arbitration 1985 art. 20. 35 Dubai Islamic Bank PJSC v. Paymentech [2001] 1 LLR 65.
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company incorporated in Singapore.36 Since London has been excluded from being the seat
of arbitration, the other option left with the parties is that of Singapore. In addition, there are
evidences to show that the dispute is more closely related to Singapore as Singapore was the
port of loading37 and the also place of issuing the Bill of Lading.38
26. Thus, it can be concluded that the proper seat and forum are Singapore and Singapore
arbitration.
II. ADMISSIBILITY
27. Irrespective of the seat of arbitration, the claim relating to fraud is not admissible in this
arbitration because: (A) The arbitration clause does not extend to include arbitration of such a
claim; (B) There is no nexus between the tortious and the contractual claim and (C) The
parties had no intention to include the arbitration of tortious claims in this arbitration.
A. ARBITRATION CLAUSE DOES NOT EXTEND TO INCLUDE ARBITRATION OF SUCH A CLAIM.
28. It has been established that clauses including all claims or controversies “arising out of” the
subject contract have been considered by courts to be narrow in scope and the scope of the
arbitration clause is considered to be limited.39
29. In the instant case, thus, the phrase “arising out of this charter” does not extend to include the
tort of fraud in this arbitration.
30. It has been established that narrower formulations, have been interpreted not to cover all
disputes arising out of a contractual relationship. Tort and non-contractual claims have been
held not to arise under a contract.40
36 Moot Scenario, Pg. 60, Statement of claim. 37 Ibid 13. 38 Ibid 43. 39 Mediterranean Enters., Inc. v. Ssangyong Corp. 708 F.2d 1458, 1464 (9th Cir.1983); In re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961).
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31. Also the terms “relating to” and “in connection with” are wider in meaning and scope as
compared to the phrase “arising out of” in a particular contract.41 In the present case, it is
clear that since the phrase “arising out of” was used instead of “in connection with”, the
scope of the arbitration clause would not include the arbitration of tortious claims under the
arbitration agreement contained in Charterparty.
32. Clear and express wording should be used if parties want to entrust the arbitration tribunal
with the task of gap filling and adaptation of the contract.42
33. In the case at hand, the wording used in the arbitration agreement contained in Charterparty is
not clear enough to show that the arbitration of tort claims is a part of the agreement.
34. It has also been held that claims in tort or other non-contractual claims do not arise under “an
agreement” and are not to be covered by an arbitration clause.43 It has been established in
several decisions that certain claims such as the claims under tort are non-arbitrable under the
arbitration agreement.44 Therefore, it is submitted that the arbitration clause used does not
extend to include the arbitration of tort of fraud.
B. THERE IS NO NEXUS BETWEEN THE TORTIOUS AND THE CONTRACTUAL CLAIM.
40 In Re Kinoshita & Co., 287 F2d 951 (1961); Mediterranean Enters v. Ssangyong Corp 708 F 2d 1458 (9th Cir 1984); Tracer Research Corp v. National Environment Services Co 42 F 3d 1292, 1295 (9th Cir 1994); Gerling Global Reinsurance Co. v. ACE Property & Casualty Insurance 17(8) Mealey‟s IAR 7(2002); Government of Gibraltar v. Kenney and Another [1956] 2 QB 410; The Playa Larga [1983] 2 Llyod‟s Rep 171. 41 Julian D M Lew, Loukas A Mistelis, Stefan M Kroll, Comparitive International Commercial Arbitration (Kluwer Law International, 2007), 169. 42 Ibid 170. 43 Ibid; Empressa Exportadora de Azucar v Industria Azucaera Nacional SA ( The Playa Larga) [1983] 2 Llyod‟s Rep 171. 44 Gary B Born, International Commercial Arbitration (Kluwer Law International, 2009) vol 1, 833.
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35. It has been reasoned that the key element in determining whether tort claims are subject to an
arbitration provision is the relationship between the claims asserted and the underlying
contractual obligations.45
36. For a tort claim to be considered “arising out of or relating to” an agreement, it must, at a
minimum, raise some issue the resolution of which requires reference to or construction of
some portion of the contract itself.46
37. In the case of Seifert v. U.S. Home Corp. 47, the tort claim filed neither relied on the
agreement nor referred to any provision within the agreement. Also, the tort claims were
related to duties wholly independent from the agreement and nothing within the agreement
indicated that in the event such claims did arise, any resulting tort claims would be subject to
arbitration. Therefore, it was held that the tort claim in the case did not have a sufficient
relationship to the agreement as to require submission of the cause to arbitration.
38. In the instant case, even if the tort of fraud was established to have been committed, there is
no nexus between the tortious and contractual claims and the tort claim is independent of the
Charterparty since the tort of fraud pertained to the misrepresentation made by the Charterers
and/or their persons acting on their behalf 48 and did not pertain to a duty arising out of the
Charterparty. For the resolution of this tort of fraud, no reference to the contract shall be
required. Nor was there an indication that in the event such tort claim did, it would be subject
to arbitration. Therefore, the tort of fraud cannot be subject to this arbitration.
45 Hersman, Inc. v. Fleming Cos., Inc. 19 F.Supp.2d 1282, 1287 (M.D.Ala.1998), aff'd, 180 F.3d 271 (11th Cir.1999). 46 Koullas v. Ramsey 683 So.2d 415, 417 (Ala.1996); Dusold v. Porta-John Corp. 167 Ariz. 358, 807 P.2d 526, 530 (Ct.App.1990). 47 Seifert v. U.S. Home Corp. 750 So. 2d 633, 636 (Fla. 1999). 48 Moot Scenario, Pg. 35, Voyage Correspondence dated 28th June, 2014 at 18:02.
Memorandum for the Defendant
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39. Further, in Hirshenson v. Spaccio49, the parties in the arbitration agreement incorporated a
broad arbitration provision which included the conduct of parties thereby leading to the non-
contractual claims being related to the contract.
40. The case at hand is distinct from the case mentioned since there is no express mention of the
conduct of the parties in the arbitration agreement contained in Charterparty. Therefore, tort
of fraud being a non-contractual claim shall not be considered to be relating to the
Charterparty.
C. THE PARTIES HAD NO INTENTION TO INCLUDE THE ARBITRATION OF TORTIOUS CLAIMS
IN THIS ARBITRATION.
41. The agreement of the parties determines the issues subject to arbitration.50 It has also been
established that only those claims which the parties have agreed upon as arbitrable may be
subject to Arbitration. It has been well established that the determination of whether an
arbitration clause requires arbitration of a particular dispute necessarily rests on the intent of
the parties.51 The natural corollary of this proposition is that no party may be forced to
arbitrate any claim which they had never intended to.
42. Whether an arbitration clause requires arbitration of a particular dispute is to be determined
by the intent of the parties, which is discerned from the language used in their agreement.52
43. In the instant case, the parties had never agreed to include the arbitration of the tort of fraud
in the arbitration agreement contained in the Charterparty or the fixture recap53.
49 Hirshenson v. Spaccio 800 So.2d 670 (Fla. 5th DCA 2001). 50 Pacemaker Corp. v. Euster 357 So.2d 208 (Fla. 3d DCA 1978); Roe v. Amica Mutual Ins. Co. 533 So.2d 279 (Fla. 1988). 51 Seaboard Coast Line R.R. v. Trailer Train Co. 690 F.2d 1343, 1352 (11th Cir.1982); Regency Group, Inc. v. McDaniels 647 So.2d 192, 193 (Fla. 1st DCA 1994). 52 Citigroup, Inc. v. Amodio 894 So. 2d 296 (Fla. 4th DCA 2005), den., 911 So. 2d 792 (Fla. 2005). 53 Moot Scenario, Pg. 5-6, Fixture recap.
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44. Further, it has been held that an agreement to arbitrate in contract between the parties does
not necessarily mandate arbitration of a subsequent and independent tort action based upon
common law duties54.
45. It is submitted that it had never been the intention of any of the parties to include the
arbitration of the tort of fraud as a part of the arbitrator‟s jurisdiction. Therefore, it can be
concluded that the tort of fraud is not admissible in this arbitration.
54 Seifert v. U.S. Home Corporation 750 So. 2d 633 (Fla. 1999).
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PART TWO: MERITS
III. TORT OF FRAUD
46. The Defendant argues that the tort of Fraud has not been perpetrated by the Charterers
because: (A) Fraud has certain essentials; (B) The acts of the Charterers do not fulfil the
essentials of the tort of Fraud; (B) The Charterers are not liable for the acts of ASA.
A. FRAUD HAS CERTAIN ESSENTIALS.
47. In the leading case of Derry v. Peek55, Lord Herschell laid down the essentials of fraud in the
following proposition: “Fraud is proved when it is shown that a false representation has been
made (i) knowingly, (ii) without belief in its truth, or (iii) recklessly, careless whether it be
true or false.” The same has been confirmed by the Court of Appeal stating that the tort of
deceit contains four ingredients:
1. a false representation;
2. the person giving the representation knows that it is false or he is reckless as to whether
it is true or false;
3. the person giving the representation intends that a person should act in reliance on it; and
4. the person given the representation relies on it and in consequence suffers loss.56
B. THE ACTS OF THE CHARTERERS DO NOT FULFIL THE ESSENTIALS OF THE TORT OF
FRAUD.
48. The acts of the Charterers do not fulfil the essentials of Fraud because the representations
made by them were made with the honest belief in the truth of such statements and the
55 Derry v. Peek (1889) L.R. 14 App.Cas.337. 56 Eco 3 Capital Ltd and others v Ludsin Overseas Ltd [2013] EWCA Civ 413; Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205.
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supervening events that resulted in the representations becoming untrue are not the fault of
the Charterers.
a. The Charterers and their Agents did not make false or dishonest representations.
49. The representations made by the Charterers and their agent do not amount to false and
dishonest representations because a representor will not, be fraudulent if he believed the
statement to be true in the sense in which he understood it, provided that was a meaning
which might reasonably be attached to it.57 Accordingly, a statement, honestly believed to be
true (however implausible it might be), is not capable of amounting to fraud.58 If defendant‟s
belief „is both honest and reasonable, the misrepresentation is innocent and there is no tort
liability.59 . The intentional wrong of fraud should be confined to situations where defendant
either knew of the falsity of the statements or was cognizant that he did not know whether
they were true or false.60
50. Further, a statement of intention is not a representation as to the matter said to be intended,
because that belongs to the future and is not a matter of present or past fact.61 The scienter
requirement mandates actual knowledge of the falsity of the representation or substantial
ignorance of its truth in order for a fraud to have been committed.
51. In the present case, the representations made by the Charterers and their Agents were made
with the belief that those statements were true. The representation made regarding the supply
of bunkers at Durban62 were made with the intention to bunker the Vessel at Durban.
However, due to unforeseen circumstances, refuelling of the Vessel could not happen.
57 Akerhielm v. De Mare [1959] AC 789. 58 Derry v. Peek, (1889) L.R. 14 App.Cas.337. 59 Diediker v. Peelle Financial Corp. (1997) 60 Cal.App.4th 288. 60 Daniel C. Emerson, Misrepresentation in Indiana: What Hath Fraud Wrought? Indiana University School of Law, Volume 53, Issue 3, Article 7 61 Halsbury‟s Laws of England (4th Edn, 2003) Volume 31, ¶705, Pg. 457. 62 Moot Scenario, Pg. 26, Voyage Correspondence dated 03 June, 2014 at 17:21.
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52. At which point, the Defendant decided to re-bunker the ship at the STS Area63 before the
discharge of Cargo for which they asked the Vessel to proceed to the STS Area.64 The
Charterers were fully aware of the fuel situation of the Vessel and were keen to re-bunker the
Vessel as soon as possible. However, before this could materialize the Vessel lost contact
with the Charterers due to a pirate attack.65
53. At all points of time when representations were made to the Claimant regarding the supply of
bunkers, the Charterers fully intended to provide bunkers and discharge Cargo at the STS
Area.
b. The loss suffered by the Claimant cannot be attributed to the acts of the Charterers.
54. The Claimant alleges losses to the Cargo, damage to the Vessel and injuries to the crew of the
Vessel66 and attribute these to the representations made by the Charterers. However, these
acts are not the responsibility of the Charterers.
55. When the voyage instructions were issued to proceed to the STS Area,67 they were not done
with the knowledge that the Vessel would be attacked by pirates. The instructions were
issued for discharge of Cargo through STS transfer and for re-bunkering of the Vessel before
its next voyage.68 At no point in time, did the Charterers become aware of or presume that the
Vessel would be attacked by pirates if it proceeded to the STS Area.
56. Further, the Charterers never issued instructions for the Vessel to proceed to an area in the
international waters off the Angolan coast.69 The directions issued were for the STS Area.70
63 Moot Scenario, Pg. 33, Voyage Correspondence dated 28 June, 2014 at 16:27. 64 Moot Scenario, Pg. 34, Voyage Correspondence dated 28 June, 2014 at 18:43. 65 Moot Scenario, Pg. 41, Voyage Correspondence dated 17 July, 2014 at 23:20. 66 Ibid. 67 Moot Scenario, Pg. 34, Voyage Correspondence dated 28 June, 2014 at 18:43. 68 Ibid. 69 Moot Scenario, Pg. 34, Voyage Correspondence dated 28 June, 2014 at 18:43. 70 Ibid.
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57. Arguendo, under the terms of the Charterparty,71 the Owners or the Masters of the Vessel
have the right to not proceed through an area which they think is at high-risk of piracy. In
such a case, they can either inform the Charterers about such area, consequent to which the
Charterer is obliged to issue alternative voyage orders. The Owners also have the liberty to
take reasonable preventive measures when proceeding through an area exposed to the risk of
Piracy.72
C. THE CHARTERERS ARE NOT LIABLE FOR THE ACTS OF ASA.
58. ASA is not an agent of the Charterers, ASA has been nominated as a discharge port agent.73
A discharge port agent responsibilities are limited to taking care of the ship‟s business at the
port of discharge74 and do not include the right to give instructions to the Vessel. An agent is
personally bound unless agency is shown clearly.
59. The instructions issued by ASA, to the Master of the Vessel to proceed to an area in the
international waters off the Angolan coast75 was done of their own volition and not under the
authority, if any, of the Charterers. The Vessel proceeded to the STS Area on the instructions
of ASA and not on the instructions of the Charterers.
60. Further, to reiterate a pervious point, the exact instructions to proceed to the STS Area were
issued solely by ASA and the communication describing this was only between the Master of
the Vessel and ASA.76
61. Thus, the Charterers are not liable for the tort of Fraud due to any act of their own or of ASA.
71 Cl. (a), BIMCO Piracy Cl. for Time Charter Parties 2013 as given in the Charterparty. 72 Cl. (c), BIMCO Piracy Cl. for Time Charter Parties 2013 as given in the Charterparty. 73 Moot Scenario, Pg. 15, 4.0 Agency Requirements. 74 Charterers Agent, available at http://www.shipinspection.eu/index.php/component/k2/item/205-charterer-s- agents last accessed on 19th April, 2014. 75 Moot Scenario, Pg. 34, Voyage Correspondence dated 28 June, 2014 at 18:43. 76 Moot Scenario, Pg. 35, Voyage Correspondence dated 28 June, 2014 at 18:02.
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IV. BREACH OF CHARTERPARTY
62. Hire is liable to be paid unless: (i) liability is suspended by an express provision in the
Charter; (ii) the owner breaches contractual duties and fails to render services; (iii) or when
the contract is frustrated.77
63. The Defendant argues that there has been no breach of the Charterparty because: (A) Hire
was not due under the terms of the Charterparty as the Vessel went Off-Hire; (B) After 04
July, the Charterparty stood frustrated.
A. HIRE WAS NOT DUE UNDER THE TERMS OF THE CHARTERPARTY AS THE VESSEL WENT
OFF-HIRE.
64. Hire became due on 03 July, 201478 but before such payment could be made, the Vessel was
given a notice of off-hire.79
65. Under the terms of the Charterparty, if there is an undisputed loss of time in any manner and
such loss continues for more than six consecutive hours then, the Vessel shall be on off-
hire.80 This period of off-hire commences from the beginning of such loss of time81 and
continues until the Vessel is ready again to resume service from a position not less favorable
to the Charterers.82
66. In the instant case, before payment of hire could be made, the Vessel had gone off-hire as it
had been out of contact with the Charterers for a period of more than six hours.83 Also, the
Vessel also went missing and under the terms of the Charterparty, hire would have ceased on
77 Sir Bernard Eder, Scrutton on Charterparties and Bills of Lading (Sweet and Maxwell, 22nd Revised Edition, 2011). 78 Moot Scenario, Pg. 35, Voyage Correspondence dated 28 June, 2014 at 18:02. 79 Moot Scenario, Pg. 35, Voyage Correspondence dated 28 June, 2014 at 18:02. 80 Cl. 21(a)(i), Charterparty. 81 Meade King Robinson v. Jacobs [1915] 2 KB 640. 82 Cl. 21(a)(v), Charterparty. 83 Moot Scenario, Pg. 41, Voyage Correspondence dated 04 July, 2014 at 12:24.
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that day.84 The Charterers clarified that the payment for the second hire period would not be
due until the Vessel was back on-hire but by that point of time, the Charterparty had been
frustrated.85
67. Further, the Vessel was also off-hire due to the breach of orders and neglect on the part of the
Master.
B. AFTER 04 JULY, 2014, THE CHARTERPARTY STOOD FRUSTRATED.
68. The test of frustration of a contract can be seen when a reasonable man in the position of the
party alleging frustration, comes to the conclusion that the interruption was of such a
character and likely to last so long that the subsequent performance or further performance of
the contract would really amount to the performance of a new contract.86 It is when the
foundation of the contract goes, either by the destruction of or by the reasons of such long
delay, and then performance of contract is to be regarded as frustrated.87 The effect of
frustration is to discharge both parties from discharging their liabilities under the contract.88
69. On 17 July, 2014, pursuant to communication by the Master of the Vessel after the Vessel
went off-hire,89 it was discovered that the Vessel had been attacked by pirates. During this
attack, there was loss of Cargo and damage to the Vessel along with injuries to the crew.90
The Vessel then proceeded to Cape Town for assistance.91 At this point, the Charterparty had
already been delayed by 13 days.92
70. Under the terms of the Charterparty, should the Vessel be lost or should there be total
constructive loss or should the Vessel go missing, the charter would terminate and hire shall
84 Cl. 20, Charterparty. 85 Ibid. 86 Thomas Gilbert Carver, Carver's Carriage by Sea (British Shipping Laws Series) (Stevens, 1971). 87 Tatem v. Gamboa (1939) 1 KB 832. 88 National Carriers v. Panalpina [1981] A.C. 675 at Pg. 712; Hirji Mulji v. Cheong Yue S.S. [1926] AC 497. 89 Moot Scenario, Pg. 41, Voyage Correspondence dated 17 July, 2014 at 23:20. 90 Ibid. 91 Ibid. 92 Moot Scenario, Pg. 42, Voyage Correspondence dated 17 July, 2014 at 23:25.
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cease.93 Hire would cease at noon on the day of the loss of the Vessel.94 The last
communication received from the Vessel was on 04 July, 201495 and as of noon of that day,
the charter stood terminated and hire ceased.
71. Post the pirate attack, Cargo had been stolen and the voyage had also been delayed,
frustrating the Charterparty and making it impossible for the contract to subsist.
72. In Arguendo, if frustration has not been included expressly, it is considered to have been
included impliedly by the presumed common intention of the parties.96
V. COUNTER CLAIM
73. The Counterclaim of the Defendant rests on the twin grounds of: (A) Non- Seaworthiness of
the Vessel; (B) Breach of Duty by the Owners/Claimant.
A. OWNERS BREACHED THE CHARTERPARTY BY PROVIDING A VESSEL THAT WAS NOT FIT
FOR SERVICE, AS REQUIRED BY THE CHARTERPARTY.
a. The Master was incompetent when he followed instructions other than those given
to the Vessel by Charterer.
74. Charterers at no time issued instructions to the Owners or the Vessel for the Vessel to
proceed to an alternative discharge place in international waters off the Angolan coast, or
anywhere else. The Master acted on the instructions97 given by the Discharge Port Agents
and led the Vessel to proceed to an alternative discharge place in international waters off the
Angolan coast. Further, the STF 4 also stipulates that Charterers shall from time to time give
93 Cl. 20, Charterparty. 94 Ibid. 95 Moot Scenario, Pg. 42, Voyage Correspondence dated 04 July, 2014 at 05:20. 96 Bank Line v. Capel (1919) 2 A.C. 435. 97 Moot Scenario, Pg. 35, Voyage Correspondence dated 28 June, 2014 at 18:02.
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the master all requisite instructions and sailing directions.98 Therefore, the Master ought not
to have acted upon the instructions other than those given by the Charterer.
b. The Master also failed to follow anti-piracy precautions, as required by the
Charterparty and/or industry practice relating to West Africa.
75. Master failed to deploy the razor wire99 as required under BMP 4. Further, the Master in
voyage correspondence100 had reported heavy damage to bridge equipment which suggests
that the BMP4 measures vis-à-vis „enhanced bridge protection‟101 were not adequately
adhered to. West Africa being a piracy infected area102, owners were to at all times adhere to
the latest version of BMP.103
c. Master did not comply with the special provisions to ST4 pro-forma concerning
“piracy”.
76. Cl. (a) of the BIMCO Piracy Clause for Time Charter Parties 2013, provides that, the Vessel
shall not be obliged to proceed or required to continue to or through, any port, place, area or
zone, or any waterway or canal which, in the reasonable judgment of the Master and/or the
Owners, is dangerous to the Vessel, Cargo, crew or other persons on board the Vessel due to
any actual, threatened or reported acts of piracy and/or violent robbery and/or capture/seizure,
whether such risk existed at the time of entering into this Charter Party or occurred thereafter.
77. Clearly, the Master was under no obligation to act on the directions other than those given by
the charterer and proceed to the piracy infected area.
B. OWNERS CONVERTED, AND/OR BREACHED THEIR DUTY AS BAILEE IN RESPECT OF, PART
OF THE CARGO ON THE VESSEL.
98 Cl. 12, Charterparty. 99 Best Management Practices for Protection against Somali Based Piracy (Version 4, 2011) ¶ 8.5 at Page 28. 100 Moot Scenario, Pg. 41, Voyage Correspondence dated 17 July, 2014 at 23:20. 101 Best Management Practices for Protection against Somali Based Piracy (Version 4, 2011) ¶ 8.3 at Page 25. 102 Stephen Starr, MARITIME PIRACY ON THE RISE IN WEST AFRICA, April 28, 2014, available at: https://www.ctc.usma.edu/posts/maritime-piracy-on-the-rise-in-west-africa last accessed on 19th April, 2014. 103 Moot Scenario, Pg. 7, Special Provisions to ST4 Proforma: Piracy Cl. Sub-Cl. (1).
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78. A bailment is constituted between two parties if one party is in voluntary possession of the
other‟s goods or documents, regardless of the other party‟s consent.104 Its essence involves
the transfer of possession of a chattel to the Bailee105 so that the Bailee becomes subject to
certain obligations in relation to the goods. In addition to his obligation to return the goods,
the Bailee is under a duty to his bailor not to convert the chattel, i.e. not to do intentionally in
relation to the chattel an act inconsistent with the bailor‟s right of property in it and which
excludes him from use and possession of chattel.106 The fact that about 28,500mt of gasoil
was removed from the Vessel between 4 and 17 July and the receivers named in the Bill of
Lading did not receive the gasoil so removed demonstrates that the Owners converted, and/or
breached their duty as Bailee in respect of, part of the Cargo on the Vessel.
104 The Pioneer Container [1994] 2 AC 324. 105 Winfield, Province of the Law of Tort (1931), pp. 101-102. 106 Caxton Publishing Co. Ltd v. Sutherland Publishing Co. Ltd. [1939] A.C. 178, 202.
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PRAYER FOR RELIEF
For the reasons set out above, the Defendant requests this Tribunal to:
DECLARE that this Tribunal has no jurisdiction determine this matter;
FIND the Defendant not liable the tort of Fraud as argued above and for the Breach of
Charterparty; and
AWARD to the Defendant: a) Damages as particularised in the phase relating to quantification of damages. b) Interest. c) Costs. d) Further or other relief as the Tribunal considers fit.
Memorandum for the Defendant