Team 26 Memorandum for the Respondent 19th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2018 IN THE MATTER BEFORE LONDON MARITIME ARBITRATORS ASSOCIATION MEMORANDUM FOR RESPONDENT APPLICANT Cerulean Beans and Aromas Ltd. 945 Moccasin Road Cerulean 9659 V RESPONDENT Dynamic Shipping LLC 23 Fuchsia Crescent Cerulean 1268 Team No. 26 COUNSEL Aditya Andrea Sunny Vasilia 1 Team 26 Memorandum for the Respondent TABLE OF CONTENTS ABBREVIATIONS A. LIST OF AUTHORITIES AND REFERENCES B. ARTICLES AND BOOKS C. CASE LAW D. LEGISLATION E. OTHER STATEMENT OF FACTS THE CHARTERPARTY CHART PART I: ARGUMENTS ON GOVERNING LAW A. LAWS OF NEW SOUTH WALES, AUSTRALIA GOVERNS THE CHARTER PARTY B. LAWS OF LMAA IS THE APPLICABLE LEX ARBITRI PART II: ARGUMENTS ON JURISDICTION A. THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION 1. SCOPE OF REFERENCE- PRE-CONDITION OF EXPERT DETERMINATION IS NOT FULFILLED 2. THE CLAIMS FALL UNDER THE CONTRACTUAL DEFINITION OF ‘TECHNICAL MATTERS’ 3. CHOICE OF ROUTE FALLS UNDER DEFINITION OF TECHNICAL MATTERS B. TIME LIMITATION PART III: ARGUMENTS ON MERITS A. DEVIATION 1. NO BREACH OF THE DUTY NOT TO DEVIATE (i) DEVIATION WAS REASONABLE AND JUSTIFIED: LIBERTY CLAUSE 2 Team 26 Memorandum for the Respondent (ii) DEVIATION UNDER HAGUE VISBY RULES (iii) DEVIATION UNDER COMMON LAW 2. CAUSATION 3. DEVIATION IS WAIVED B. FORCE MAJEURE 1. OCCURRENCE OF SOLAR FLARES AND THE STORM ARE ‘UNFORESEEN’ EVENTS 2. DUE DILIGENCE EXERCISED BY THE RESPONDENT C. SEAWORTHINESS OF THE VESSEL: RESPONDENT DID NOT BREACH THE CONTRACTUAL DUTY OF SEAWORTHINESS 1. RESPONDENT DID NOT BREACH THE CONTRACTUAL DUTY OF SEAWORTHINESS D. CARGO ON BOARD THE VESSEL: DAMAGE OF THE CARGO NOT CAUSED BY “UNSEAWORTHINESS” 1. DAMAGE TO THE CARGO WAS NOT CAUSED BY ‘UNSEAWORTHINESS’ E. MARITIME LIEN 1. THE APPLICANT IS NOT ENTITLED TO A LIEN OVER THE VESSEL 2. THE APPLICANT CANNOT RECEIVE THE BENEFIT OF A MARITIME LIEN OVER THE VESSEL EXERCISED BY THE CREW 3. THE APPLICANT DID NOT VALIDLY EXERCISE A MARITIME LIEN OVER THE VESSEL F. DELIVERY 1. BARCODE PASS CONSTITUTES DELIVERY G. DEMURRAGE IS ACCRUED 1. DEVIATION AND DELAY WERE AS A RESULT OF FORCE MAJEURE 2. CALCULATION OF LAYTIME 3 Team 26 Memorandum for the Respondent (i) LAYTIME STARTS WHEN VESSEL ARRIVES AT PORT - CLAUSE 8(C)(II) (ii) LAYTIME ENDS AFTER 0.5 WWD 3. DEMURRAGE IS CHARGED AS PER CHARTERPARTY H. DAMAGES 1. THE APPLICANT IS NOT ENTITLED TO DAMAGES 2. THE RESPONDENT IS ENTITLED TO DAMAGES (i) DAMAGE TO THE HULL: GENERAL AVERAGE INCIDENT (ii) AGENCY FEES AT THE PORT OF SPECTRE (iii) ELECTRONIC RELEASE SYSTEM (‘THE BARCODE PASS’) AT THE DISCHARGE PORT I. LIMITATION OF LIABILITY 1. UNDER THE HAGUE VISBY RULES 2. INVALID DECLARATION OF VALUE PART IV: PRAYERS FOR RELIEF 4 Team 26 Memorandum for the Respondent LIST OF ABBREVIATIONS Applicant Cerulean Beans and Aromas Ltd as Charterers who entered in the Charterparty with the Respondent for shipping the Cargo from the port of Cerulean to the port of Dillamond. Barcode Pass The barcode access document given by Respondent to Applicant as authority pass to take delivery of goods from Discharge port through electronic access system at Discharge Port. CANA 2012 Commonwealth of Australia Navigation Act 2012 Cargo The carriage of 70000 kilograms (kgs) of coffee beans shipped in 4 containers. Charterparty Voyage charterparty dated 22 July 2017 entered between the Applicant and the Respondent for carriage of Cargo from Cerulean to Dillamond. COGSA 1991 Carriage of Goods by Sea Act 1991, Act No. 160 of 1991 as amended Crew Crew members of the Madam Dragonfly vessel. Discharge Port Port of Dillamond under clause 1 Box 9 the Charterparty HVR Hague Visby Rules LMAA London Maritime Arbitrators Association Loading Port Port of Cerulean under clause 1 Box 5 of the Charterparty NSWA New South Wales, Australia Parties Applicant and Respondent collectively referred as Parties. 5 Team 26 Memorandum for the Respondent Respondent Dynamic Shipping LCC as the Shipowners who carried the Cargo from Discharge Port to Loading Port. SOLAS The International Convention for the Safety of Life at Sea Tribunal Arbitral Tribunal constituted under clause 27 of the Charterparty. Voyage Journey of the vessel from Cerulean to Dillamond Vessel The Madam Dragonfly chartered under the Charterparty YAR 2004 The York-Antwerp Rules 2004 6 Team 26 Memorandum for the Respondent LIST OF AUTHORITIES AND REFERENCES A. Articles and books Cooke et al Voyage Charterers (Informa Law, 4th edition, 2014) [17.25]. Dicey and Morris, Conflict of Laws, 11th edition, at p.1163 J. F. Wilson, Carriage of Goods by Sea, 7th edt., p.16. M. Tsimplis, ‘Maritime Law’ Textbook 4th Edition p.514 Scrutton on Charterparties and Bill of lading, Sweet & Maxwell Y. Baatz, Maritime Law, 4th edt., p. 144 B. Case Law Albemarle Supply Co Ltd v Hind & Co [1928] 1 KB 307, 318 (Scrutton LJ) Alfred C Toepfer Schiffahrtsgesellschaft GmbH v Tossa Marine Co Ltd (The Derby) [1985] 2 Lloyd’s Rep 325 Arnold v Britton & Others [2015] UKSC 36 Atlantic Paper Stock Ltd. v. St. Anne-Nackawic Pulp and Paper Company Limited, [1976] 1 S.C.R. 580 Caspian Basin Specialised Emergency Salvage Administration v Bouygues [1977] 2 Lloyd’s Rep. 507 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, para 14 E. L. Oldendorff & Co. G.M.B.H. v. Tradax Export S.A. (The Johanna Oldendorff), [1974] A.C. 479 ; [1973] 2 Lloyd's Rep. 285 Glencore International AG v MSC Mediterranean Shipping Co SA [2017] EWCA Civ 365 para.57 Hain SS Co v Tate & Lyle [1936] 2 All ER 597 7 Team 26 Memorandum for the Respondent Kyokuyo Co Ltd v AP Moller-Maersk A/S (t/a Maersk Line) [2017] EWHC 654 (Comm) Matsoukis v Priestman & Co. [1915] 1 K.B. 681 Maxine Footwear Co. v Canadian Government Merchant Marine [1959] A.C. 589 Navalmar UK Ltd v Kale Maden Hammaddeler Sanayi Ve Ticart As (The Arundel Castle) [2017] EWHC 116 (Comm) Photo Production v Securicor Transport [1980] AC 827 Rio Tinto v Seed Shipping (1926) 24 Lloyd's Rep 316 Robertson v French (1803) 4 East 135 Sadler v Dixon (1841) 151 E.R.1303 Shore v. Wilson (1842) 9 Cl. & F. 355, 555; Smith v. Doe (1821) 3 B. & B. 473, 550, 602 Suisse Atlantique Societe d'Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 A.C. 361 The Arundel Castle, Supra note… The Happy Ranger [2002] 2 Lloyd’s Rep 364 The Kapitan Petko Voivoda [2003] 2 Lloyd’s Rep. The Petone [1917] P 198; The Leoborg (No 2) (fn 112) The Teutonia (1872) LR 4 PC 171 C. Legislation 1976 Convention on Limitation of Liability for Maritime Claims (LLMC) Carriage of Goods by Sea Act, 1991 Hague Visby Rules York Antwerp Rules 2004 8 Team 26 Memorandum for the Respondent D. Other Arbitration Rules of the London Maritime Arbitrators Association (LMAA) 9 Team 26 Memorandum for the Respondent STATEMENT OF FACTS 1. On 22 July 2017, the Cerulean Beans and Aromas Ltd (“the Applicant”) entered into a voyage Charterparty with Dynamic Shipping LLC (“the Respondent”) for the carriage of 1,000 70 kilograms (kgs) bags of coffee beans (the ‘Cargo’), packed in four containers (each containing 250 bags), from Cerulean to Dillamond (“the Charterparty”).1 2. The containers which the Cargo was transported were water proofed as instructed by the Applicant. The Respondent guaranteed that the waterproofing of the containers was suitable for short voyages up to five days.2 3. On 24 July 2017, the Vessel departed from the port of Cerulean (“the Loading Port”) towards the port of Dillamond (“the Discharge Port”). The delivery of The Cargo was agreed to be completed by 19:00 on 28 July 2017.3 4. The Respondent received the dock receipt of the Cargo, including the number of ‘4 containers’ and specifying the state of the Cargo: ‘No damage observed on receipt’.4 5. On 26 July 2017, contact was re-established after the absence of any communication between Respondent and the Vessel and Applicant for 17 hours. Accordingly, the Respondent informed the Applicant via email about the non-communication with the Vessel.5 6. During the knock down of the navigational communication systems due to solar flares, the Vessel had deviated to the port of Spectre because the crew had noted that The Vessel had passed the port of Spectre approximately 1,000 nautical miles to the West. The Respondent reported the deviation to Spectre via sending an email to the Applicant dated on 27 July 2017 at 7:17.6 7. On 27 July 2017, the Vessel had departed from Spectre towards the Discharge Port.7 1 Box 4, The Charterparty, p. 3 of the Moot Scenario. 2 Letter dated 22 July 2017 from the respondent to the Applicant, p.14 of the moot scenario. 3 Box 9, The Charterparty dated 22 July 2017, p. 3 of the Moot Scenario 4 The Dock receipt, p.16 of the Moot scenario. 5 Email from the Respondent to the Applicant dated 26 July 2017 at 2:32pm, p.17 of the moot scenario. 6 Email from the Respondent to the Applicant dated 27 July 2017 at 7:17am, p.18 of the moot scenario. 7 Ibid., 10 Team 26 Memorandum for the Respondent 8. In the evening of the 28 July 2017, a massive storm hit the Dillamond area where the Discharge Port is located, consequently rendering the vessel unable to proceed past its location. The storm was sudden and was not picked up on radars until approximately 45 minutes before it hit Dillamond with rain, hail and severe winds which ripped out trees and upturned cars. 9. During the storm, the Vessel’s anchor was dropped to avoid the storm but when an attempt was made to lift it, it tangled on a coral bed and there was a damage to the hull.8 10.