19th ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION

IN THE MATTER OF AN ARBITRATION HELD IN LONDON

UNIVERSITY OF VERSAILLES

FRANCE

CLAIMANT’S MEMORANDUM

CLAIMANT/ CHARTERER VS RESPONDENT/ OWNER

Cerulean Beans and Aromas Ltd Dynamic Shipping LLC

TEAM NO.3

Melissa Aourane

Constance Benoist

Alexandre Bergouli

Ophélie Lacaille

Faustine Lalle

Simon Wagner

I

TABLE OF CONTENTS

TABLE OF CONTENTS I

ABBREVIATIONS I

LIST OF AUTHORITIES III

PART I - STATEMENT OF FACTS - 1

PART II - JURISDICTION - 3

I. The arbitral procedure is governed by the English Law 3

II. The Tribunal has jurisdiction to rule on its own competence over the Dispute 3

A. Clause 27(a) grants a primary power to the Tribunal to rule on its own competence 3

B. The Tribunal has jurisdiction to rule over the claim for lien 3

III. The arbitration claim is admissible 4

A. The Dispute does not fall within the scope of Clause 27(e) 4

B. In the alternative, the claim is admissible since the expert agreement is unenforceable 5

PART III - MERITS OF THE CLAIMS - 7

I. The Charterparty is governed by the laws of New South Wales 7

II. The Respondent has committed multiple breaches of the Charterparty 8

A. The Respondent failed to provide a seaworthy Vessel 8

1. The Respondent provided the Vessel with faulty equipment 8

2. The Respondent’s lack of due diligence to provide a seaworthy Vessel 9

3. The unseaworthiness of the Vessel caused losses to the Claimant 10

B. The Respondent failed to take the most-direct route 11

C. The Respondent failed to deliver the Goods in time 12

1. The Respondent did not abide with the express delivery date provided by the Charterparty 12

II

2. The Respondent is not entitled to be exempted from its liability as no Force Majeure event

can be characterised 12

a. The strict requirements to establish Force Majeure events 12

b. The solar flares do not constitute a Force Majeure event 14

c. The storm does not constitute a Force Majeure event 15

D. The Respondent delivered damaged Goods 15

1. The Respondent had a duty to stow the Goods properly 15

2. The Respondent breached its duty to stow the Goods properly 16

3. The Respondent is not entitled to mitigate its liability pursuant to International Convention 17

III. The Respondent is not entitled to form any counterclaims 18

A. The Respondent’s breaches of the Charterparty prevent it from any claim for demurrage 18

1. The Claimant is not liable for demurrage cost under Clause 8(e) 18

2. The Respondent’s wrongful behaviour excludes any claims for demurrage 19

B. The Respondent cannot rightfully bring any counterclaim before the Tribunal due to its

negligent behaviour 19

PART IV - THE CLAIMANT’S VALID EXERCISE OF LIEN - 21

I. English law governs the existence of a maritime lien 21

II. The Claimant has a maritime equitable lien 21

A. The Claimant is subrogated to the crew’s wages right to exercise a lien 21

B. The Claimant is subrogated to the crew’s lien to prevent unjust enrichment 22

III. Alternatively, the Claimant is entitled to a statutory maritime lien 23

PART V - PRAYER FOR RELIEF - 25

I

ABBREVIATIONS

Act Arbitration Act 1996

Buyer Coffees of the World Ltd

Charterparty The voyage charterparty concluded by the Parties

Claimant Cerulean Beans and Aromas Ltd

Clause Clause of the Charterparty

COGSA The Carriage of Goods by Sea Act 1991

Dispute The arbitral proceeding between the Parties

Force Majeure event Act of God and perils of the sea

Goods/Cargo High quality coffee beans

i.e. That is to say

IMLAM Problem 2018 International Maritime Law Arbitration Moot Scenario

IMLAM Clarifications 2018 International Maritime Law Arbitration Moot Clarifications

ISM Code International Safety Management Code

LLMC The Convention on Limitation of Liability for Maritime Claims

LMAA London Maritime Arbitrators Association

NASA National Aeronautics And Space

Parties Claimant and Respondent

Respondent Dynamic Shipping

II

HVR The Hague-Visby Rules

Sales Contract The agreement between the Claimant and the Buyer

SOLAS Convention International Convention for the Safety of Life at Sea 1974

USD United States Dollars

Vessel Madam Dragonfly

Voyage Voyage from Cerulean to Dillamond

III

LIST OF AUTHORITIES

CASES AND ARBITRAL AWARDS REFERED TO AT PAGE:

Aiton Australia Pty v. Transfield Pty Ltd [1999] 153 FLR 236, 250 (N.S.W. S.Ct.)

5

Asfar v. Blundell [1898] 1 QB 123 20

Asia Pacific Resources Pty Ltd v. Forestry Tasmania [1998] Supreme Court of Tasmania, Supreme Court of New South Wales

14

Bankers Trust International Ltd v. Todd Shipyards Corporation (The Halcyon Isle) [1981] AC 221 (PC)

21

Banque Financière de la Cité v. Parc (Battersea) Ltd [1999] 1 AC 221 22

Borgship Tankers Inc v. Product Transport Corp Ltd. The Casco [2005] Int.Com.L.R. 02/25

7

Carboex SA v. Louis Dreyfus Commodities SA [2012] EWCA civ 83 18

Complaint of Tecomar SA |1991] 765F, S.D.N.Y.1991 10

Court Line Ltd v. Canadian Transport Co Ltd [1940] A.C. 934 15

Dampskibsselskabet Norden A/S v. Gladstone Civil Pty Ltd [2013] FCAFC 107

7

Davis v. Garrett [1830] 6 Bing 716 11

DGM commodities corp. v. Sea Metropolitan S.A (The Andra) [2012] EWHC 1984 (Comm) 2 Lloyd’s Rep. 587

19

Foreman & Ellams Ltd v. Federal Steam Navigation Co Ltd, [1928] 2 K.B. 424

11

IV

Great China Metal Industries Co Ltd v. Malaysian International Shipping Corporation Berhad [2012] FCA 696

15

Hadley v. Baxendale [1954] EWHC J70 11

Holloway v. Chancery Mead Ltd [2007] EWHC 2495 (TCC) 1 All ER (comm) 653

5

llis Shipping Corporation v. Voest Alpine Intertrading (The Lefthero) [1992] 2 Ll Rep 109

18

Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 W.L.R 896, 912

4

J. Gerber & Co. v. SS Sabine Howaldt [1971] 437 F.2d 580, 596 (2nd Cir. 1971)

10

Kirchner v. Venus [1859] 12 Moore PC 20

Kopitoff v. Wilson [1867] 1 QBD 377 8

Louisville & N.R. Co. v. Finlay [1939] 185 So. 904, 905 (Ala.1939) 13

Marc Rich & Co Ltd v. Tourloti Compania Naviera SA (The Kalliopi A) [1988] 2 Lloyd’s Rep 101

18

Margolle v. Delta Maritime [2002] EWHC 2452 17

McFadden v. Blue Star Line [1905]1 KB 697 8; 10

Monarch Steamship Co Ltd v. Karlshamns Oljefabriker [1949] AC 196 11

Navigazione Alta Italia S.p.A v. Concordia Maritime Chartering A.B (The “STENA PACIFICA”) [1990] 2 Lloyd's Rep. 234

7

Nichols v. Marsland [1876] Court of Appeal, 2 Ex. D. 1 14

V

Nugent v. Goss [2000] EWCA 130 17

Nugent v. Goss [2002] 2 Lloyd’s Rep 222, CA, per Auld LJ 17

Phelps, James & Co. v. Hill [1891] 1 QB 605 11

President of India v. NG Livanos Maritime Co (The John Michalos) [1987] 2 Lloyd’s Rep 188 Q.B.D. (Com.Ct)

18

Programmed Total Marine Services Pty Ltd v. Ship Hako Fortress [2012] FCA 805

22

Re Rooper [1927] 1 KB 879 19

Reardon Smith Line Ltd v. Black Sea & Baltic General Insurance Co Ltd [1939] AC 562

11

Reardon Smith Line Ltd v. East Asiatic Co [1938] 62 L 18

Rylands v. Fletcher [1868] UKHL 1, (1868) LR 3 HL 330

13

Scaramanga v. Stamp [1880] 5 CPD 295 11; 18

Shea-S&M Ball v. Massman-Kiewit-Early [1979] 606 F.2d 1245, 1249 n.6 (D.C. Cir. 1979)

13

Smith, Hogg & Co Ltd v. Black Sea and Baltic General Insurance Co Ltd [1940] AC 997

10

Siordet v. Hall [1828] 4 Bingham New Cases 607 13

Skandia Insurance Co. Ltd. v. Star Shipping AS [2001] 173 F 13

Smt. Inacia P. Carvalho v. Desk To Desk Courier and Cargo Limited [2001] (3) CPR 248

13

SS Pharmaceutical Co Ltd v. Qantas Airways Ltd [1991] 1 Lloyd’s Rep 288 17

VI

Stag Line v. Foscolo, Mango & Co [1932] AC 32 11; 18

Steele & Burges v. Townsend [1861] 37 Ala. 247, 256 (Ala. 1861) 13

Stolt Tankers v. Landmark Chemicals [2002] 1 Lloyd’s Rep 786. 19

The Edinburgh Castle [1999] 2 Lloyd’s Rep. 362 23

The Eurasian Dream [2002] 1 Lloyd’s Rep. 719 10

The Heart Research Institute Ltd and Anor v. Psiron Ltd [2002] NSWSC 646 4

The Maria [1937] A.M.C. 934 (C.A. 4.) 9

The Petone [1917] P 198 22

The Ship “Sam Hawk” v. Reiter Petroleum [2016] FCAFC 26; 246 FCR 337 21

The T.J. Hooper. v. Northern Barge Corp. [1932] 60 F.2d 737 9

The Union Amsterdam [1982] 2 Lloyd’s Rep 432 19

Thiess v. Australia SS. [1955] 1 Lloyd’s Rep. 459 18

United States v. Winstar Corp. [1996] 518 U.S. 839, 905–907 14

Virginia Carolina Chemical Co v. Norfolk & North American Steam Shipping Co [1912] 1 KB 229, 243, 244

8

Volcafe Ltd and Others v. Compania Sud Americana de Vapores SA (Trading AS “CSAC”) [2016] EWCA Civ 1103

16

VII

BOOKS REFERED TO AT PAGE:

A. Mandakara-Sheppard, Modern Admiralty Law, Cavendish Publishing Limited, 1st Edition, 2001

4

B. A. Garner, Black’s Law dictionary, H.C. Black, 8th Edition, 2004 10; 12

C. Mitchell, S. Watterson, Subrogation Law and Practise, Oxford University Press, 2007

22

C. Mitchell, P. Mitchell, S. Watterson, Goff and Jones: The law of unjust enrichment, Sweet & Maxwell, 8th Edition, 2011

23

C. Ambrose, K. Maxwell, M. Collett, London Maritime Arbitration, Lloyd’s Shipping Law Library, 4th Edition, 2018

3

J. F. Wilson, Carriage of goods by sea, Pearson Education Limited, 7th Edition, 2010

13; 19

J. Chitty, H. Beale, Chitty on contracts, Sweet & Maxwell Thomson Reuters, 31st Edition, 2012

4

J. Cooke and Al., Voyage Charters, Lloyd’s Shipping Law Library, 4th Edition, 2014

11

J. Kendall, Expert determination, Sweet & Maxwell, 4th Edition, 2008 4

Y. Baatz, Maritime Law, Lloyd’s Shipping Law Library, 3rd Edition, 2014 19

W. Tetley, Marine Cargo Claims, London: Stevens & Sons Ltd, 1st Edition, 1966

11

W. Tetley, Marine Cargo Claims, Les Editions Yvon Blais, 4th Edition, 2008 11

VIII

ARTICLES REFERED TO AT PAGE:

M. Augenblick and A. B. Rousseau “Force Majeure in Tumultuous Times: Impracticability as the New Impossibility”, in The Journal of World Investment & Trade, 2012

14

C. Freedman “Expert Determination”, in ICC Dispute Resolution Bulletin, No. 3, 2017

5

D. McNair, “Force majeure clauses”, in Asia Pacific Projects Update from DLA Piper, 2011

14

H. R. Dundas, “Expert determination: recent developments and the effective way forward in energy disputes”, in International Energy Law Review, 2008

5

J. M. Fraley, Yale law School, “Re-examining Acts of God”, in Pace Environmental Law Review, vol. 27, Issue 3, Article 4, 2010

13

J. Tyrell, “Unusual weather events, acts of God and legal liability”, in Royal Meteorological Society’s website, 2012

13; 14

K. Sachs, “Solving Tensions between Expert Determination and Arbitration under M&A Contracts”, in International Arbitration Under Review: Essays in Honour of John Beechey, 2015

4; 6

J. Sniffen, “In the Wake of the Storm: Nonperformance of Contract Obligations Resulting from a Natural Disaster”, in Nova Law Review, vol.3, issue 3, Article 9, 2007

12

W. Tetley, “Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege”, in Journal of Maritime Law and Commerce, vol.15, n°3, 1984

21

IX

STATUTES AND CONVENTIONS REFERED TO AT PAGE:

Arbitration Act 1996 3; 22

Carriage of Goods by Sea Act 1991 7

Convention on Limitation of Liability for Maritime Claims or LLMC Convention 1976 as amended by 1994 Protocol

17

ISM Code 1993 revised as from 1st January 2015 9

LMAA Rules 2017 3

Marine Order 27 (Safety of navigation and radio equipment), 2016 8

Navigation Act 2012 8

Solas Convention 1974 8; 9

The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968 multilateral.

7; 17

WEBSITE REFERED TO AT PAGE:

NASA.gov, The difference between flares and CMEs, M. Gleber, 2017 14

1

PART I - STATEMENT OF FACTS -

1. This memorandum is submitted on behalf of Cerulean Beans and Aromas Ltd1 (hereinafter the

“Claimant”) a Cerulean company incorporated under the Laws of the United Kingdom.2

2. On 18 July 2017, the Claimant entered into an agreement with Coffees of the World Ltd (hereinafter

the “Buyer”). This agreement (hereinafter the “Sales Contract”) pertains to the sale of high quality

coffee beans (hereinafter the “Cargo” or the “Goods”) in Dillamond for a coffee festival starting on

29 July 2017.3

3. Since the shipment was considered an urgent matter,4 the Claimant decided to entrust Dynamic

Shipping (hereinafter the “Respondent”), a Cerulean company also incorporated under the laws of

the United Kingdom. They then entered into a Voyage Charterparty (hereinafter the “Charterparty”)

on 22 July 2017.5 The Goods would be carried on the Madam Dragonfly (hereinafter the “Vessel”),

registered under Cerulean flag and owned by the Respondent.6 As a prerequisite to the shipment, the

Respondent requested the Claimant to pay the crew wages on a separate bank account.7 Such costs

were only paid as security to the crew and were expected to be refunded.

4. On 22 July 2017, the Claimant and the Respondent (hereinafter the “Parties”) agreed that the Vessel

would take the most direct route to Dillamond, and that the sealant used would be waterproof8 and

keep the Goods dry.9 The Goods were to be transported from Cerulean to Dillamond (hereinafter the

“Voyage”) from 24 to 28 July 2017 at 7 p.m.

1 IMLAM Problem, Points of claim delivered on behalf of the Claimant, p.37. 2 IMLAM Problem, background information and assumptions, p.45, para.1. 3 IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2, “the market price for the coffee is $300/kg”; IMLAM Problem, Charterparty, box 4, 1,000 bags of 70kg each were to be delivered: USD300 x 70 kg x 1, 000 bags = USD21, 000, 000. 4 IMLAM Problem, letter sent on 19 July 2017 from Jay Mizzone to Will Gardner, p.1. 5 IMLAM Problem, p.1, p.3, p.14, pursuant to the Charterparty and subsequent correspondence, 1000 bags of 70,00 kg of coffee beans were to be transported on the Vessel from Cerulean to Dillamond from 24 July to 28 July 2017 at 7:00 p.m., in return for a freight payment of USD 500.000. 6 IMLAM Problem, final inspection report, p.44. 7 IMLAM Problem, email sent on 19 July 2017 from Will Gardner to Jay Mizzone, p.1. 8 IMLAM Problem, letter sent on 22 July 2017 from Marc Simpson to Jay Mizzone, p.14. 9 IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2.

2

5. On 24 July 2017, the Vessel departed.10 Two days after, the Claimant received sudden indications

that the Vessel had lost its satellite communication for 17 hours.11 The Claimant was then informed,

on 27 July 2017, that the Vessel deviated to Spectre without permission.12

6. On 28 July 2017, the Respondent informed that the Vessel stopped its progress. The crew dropped

the anchor in order to avoid a storm, but eventually the hull was damaged.13 The Claimant dispatched

staff members at the discharge port. The Vessel never berthed on the agreed date.14

7. The Vessel only arrived on 29 July 2017, and the Cargo was ultimately available for collection at

8.42 p.m.15After pouring rainfalls at the port, the Claimant was only able to take delivery of the

Cargo on 31 July 2017. Three of the four containers were water damaged and could not be delivered

to the Buyer.16The Goods being unsalable the Claimant had to provide the Buyer with replacement

coffee.17

8. On 1 August 2017, the Claimant sought for damages as a result of the Respondent’s multiple

breaches and additional expenses paid to assist the Buyer.18 The Respondent denied its liability in

subsequent correspondence.19

9. On 7 August 2017, the Respondent sent an unjustified invoice to the Claimant, gathering peculiar

costs, never agreed upon, which the Claimant refused to pay.20

10. On 11 August 2017, the Claimant released a notice of dispute, which initiated arbitral proceedings

(hereinafter the “Dispute”). The Arbitral Tribunal (hereinafter the “Tribunal”) was constituted on 7

September 2017.

10 IMLAM Problem, letter sent on 24 July 2017 from Marc Simpson to Jay Mizzone, p.15. 11 IMLAM Problem, email sent on 26 July 2017 at 2:32 p.m. from Marc Simpson to Jay Mizzone, p.17. 12 IMLAM Problem, email sent on 26 July 2017 at 3:12 p.m. from Jay Mizzone to Marc Simpson, p.17; IMLAM Problem, email sent on 27 July 2017 at 7:17 a.m. from Marc Simpson to Jay Mizzone, p.18. 13 IMLAM Problem, email sent on 29 July 2017 at 8:58 a.m. from Marc Simpson to Jay Mizzone, p.20. 14 IMLAM Problem, Charterparty, box 16, p.3; IMLAM Problem, email sent on 29 July 2017 at 8:58 a.m. from Marc Simpson to Jay Mizzone, p.20. 15 IMLAM Problem, email sent on 29 July 2017 at 8:42 p.m. from Marc Simpson to Jay Mizzone, p.24. 16 IMLAM Problem, email sent on 1 August 2017 at 9:17 a.m. from Jay Mizzone to Marc Simpson, p.25. 17 IMLAM Problem, invoice sent on 31 July 2017 from Robert Priestley to Marc Simpson, p.28. 18 IMLAM Problem, letter sent on 1 August 2017 from Jay Mizzone to Marc Simpson, p.27: asked for USD 15,750,000 for the damaged coffee, USD 9,450,000 for the replacement coffee and USD 5,000,000 for the amount provided to COW as damages for the failure to provide the coffee beans in accordance with the sales contract. Total amount of USD 30,200,00. 19 IMLAM Problem, email sent on 2 August 2017 at 7:01 a.m. from Marc Simpson to Jay Mizzone, p.30. 20 IMLAM Problem, invoice sent on 7 August 2017 from Dynamic Shipping LLC to Cerulean Beans and Aroma Ltd, p.32: invoice amounting to USD 1,610,000, which involved USD 50,000 of reparations of the hull and USD 75,000 of agency fee at Spectre. It also addressed a USD 100,000 additional demurrage cost which DS unduly asked for.

3

PART II - JURISDICTION -

11. The Parties agreed on arbitration, governed by English law (I), to solve their dispute. The Tribunal is

thus competent to rule on its own jurisdiction (II), and shall decide the request for arbitration is

admissible (III).

I. The arbitral procedure is governed by the English Law

12. According to Clause 27(a) the arbitral proceedings are governed by the Arbitration Rules of the

London Maritime Arbitrators Association (hereinafter the “LMAA”), which brings about the

application of the English law. Indeed, the Parties did not expressly chose the applicable law.

However, the LMAA Terms specify that submitting the dispute to its terms leads to the application of

English law to the proceedings.21 Therefore, the Tribunal shall apply English law as the lex arbitri.

II. The Tribunal has jurisdiction to rule on its own competence over the Dispute

A. Clause 27(a) grants a primary power to the Tribunal to rule on its own competence

13. A Tribunal determines its own competence pursuant to the Kompetenz-Kompetenz principle.22 The

LMAA do not provide such a rule, but it is provided by Section 30 of the Arbitration Act 1996

(hereinafter the “Act”). In other words, the tribunal has the power to rule upon the scope of the

arbitration agreement.23

14. Therefore, the Tribunal shall rule its own jurisdiction to decide what matters fall within its

competence according to the arbitration agreement.

B. The Tribunal has jurisdiction to rule over the claim for lien

15. The Tribunal’s jurisdiction to rule over the claim for lien is governed by the procedural rules chosen

by the Parties. In this case, the Parties agreed on the LMAA Terms that are completed with the Act.

Section 38(4) of the Act empowers the Tribunal to “give directions in relation to any property which

is the subject of the proceedings (…), and which is owned by or is in the possession of a party to the

21 LMAA Terms, Term 6. 22 Section 30 of the Arbitration Act of 1996; A. K. Maxwell, M. Collett, London maritime arbitration, Lloyd’s shipping law library, 4th Edition, 2018, p.84. 23 Arbitration Act 1996, Section 30(1)(c).

4

proceedings”, such as the detention of the Vessel by a party. A maritime lien is a secured right on

maritime property,24 which implies that the Vessel is subject of the proceedings. Furthermore, the

owner is the Respondent who is also a party to the proceedings.

16. Therefore, the Tribunal has jurisdiction to order a maritime lien over the Vessel.

III. The arbitration claim is admissible

A. The Dispute does not fall within the scope of Clause 27(e)

17. The Parties agreed on expert determination to solve “any dispute as to technical matters arising out of

or in connection with this contract”.25 Clause 27(e) provides that “a party may not commence legal

proceedings (including arbitral proceedings under this clause) in respect of dispute” without first

complying with the expert’s provisions. However, the Claimant holds that these provisions do not

prevent arbitration since the Dispute is outside the scope of the expert’s determination.

18. The scope of the expert determination is limited to disputes involving technical matters, defined as

“matters surrounding the technical aspects of the performance of the charterparty”.26 The

interpretation of such scope is governed by all contractual rules set by the parties.27 In The Heart

Research Institute Ltd v. Psiron Ltd,28 it was held that “unlike arbitration, expert determination is not

governed by legislation, the adoption of expert determination is a consensual process by which the

parties agree to take defined steps in resolving disputes”. The expert clause is subject to the rules of

interpretation,29 and particularly, the intention of the parties.30 What a reasonable person would do

has to be taken into consideration to define what the parties intended.31 Behind the word “technical”,

a reasonable person would understand matters relating to the meaningful knowledge of a specialist in

relation to a particular field. A Master Mariner has an expert technical knowledge on the marine

field, and is then qualified to deal with matters such as the calculation of nautical speed or the

24 A. Mandakara-Sheppard, Modern Admiralty Law, Cavendish Publishing Limited, 1st Edition, 2001, p.22. 25 IMLAM Problem, Charterparty, Clause 27(d), p.12. 26 IMLAM Problem, Charterparty, Clause 27(g), p.12. 27 K. Sachs, “Solving Tensions between Expert Determination and Arbitration under M&A Contracts”, in International Arbitration Under Review: Essays in Honour of John Beechey, 2015, p.363. 28 The Heart Research Institute Ltd and Anor v. Prison Ltd [2002] NSWSC 646. 29 J. Kendall, Expert determination, Sweet & Maxwell, 4th Edition, 2008, p.162. 30 J. Chitty, H. Beale, Chitty on contracts, Sweet & Maxwell, Thomson Reuters, 31st Edition, 2012, para.12. 31 Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 W.L.R 896, 912.

5

strength of a vessel’s bilge. These matters are technical aspects which differ from legal aspects of the

performance of the Charterparty.

19. The Parties decided to submit to expert determination these types of dispute.32 The Parties could have

granted the expert jurisdiction to litigate on all disputes arising out of or in connection with the

contract.33 However, in our case, the Parties expressly chose to limit the expert’s competence, which

suggests that matters relating to non-technical aspects of the performance of the Charterparty are

excluded from the expert determination. The claim at hand is the breach of the Charterparty by the

Respondent. According to the Parties’ will, claims for damages for breach of the Charterparty fall

outside the scope of the expert determination. In addition, the Claimant contends that the Tribunal

shall continue the pending arbitral proceedings. Parties to a contract usually provide for expert

determination as a rapid and cost-effective alternative of resolving technical aspects of complex

disputes.34

20. In our case, a stay of proceedings would increase costs and lengthen the procedure, which would be

counterproductive. Thus, the expert provision will not reach the intended aim, which renders

arbitration even more appropriate.

21. Therefore, the Tribunal shall hold the request for arbitration admissible.

B. In the alternative, the claim is admissible since the expert agreement is unenforceable

22. The Claimant submits that expert determination provisions are uncertain, and thusly unenforceable.

In Holloway v. Chancery Mead Ltd,35 Ramsey J stated that three requirements must be met for multi-

tiered clauses to be enforceable. First, (1) the clause shall be self-sufficient, meaning that no further

agreement shall be needed to action it. Secondly, (2) the process of expert determination shall

precisely be determined. Thirdly, (3) the body of rules and process, which the expert will apply in the

dispute, shall be amply determined in the clause.

32 IMLAM Problem, Charterparty, Clause 27(g), p.12. 33 C. Freedman, “Expert Determination”, in ICC Dispute Resolution Bulletin, 2017, N°3. 34 H. R. Dundas, “Expert determination: recent developments and the effective way forward in energy disputes”, in International Energy Law Review, 2008, 5, 162. 35 Holloway v. Chancery Mead Ltd [2007] EWHC 2495 (TCC), [2008] 1 All ER (comm) 653; see also Aiton Australia Pty v. Transfield Pty Ltd [1999] 153 FLR 236, 250 (N.S.W. S.Ct).

6

23. In the case at hand, (1) it is expressly provided that before complying with the expert determination

clause, a party cannot commence arbitral proceedings. The Parties agreed to expert determination,

and it should not be submitted to any further agreement to agree. (2) However, the Parties have not

foreseen the process that should be followed. It is only provided it should be an independent Master

Mariner.36 The above-mentioned clause does not provide any indication regarding the appointment of

the expert, or the rules that shall govern the expert determination. (3) Finally, once the expert

determination is fulfilled no specification is provided regarding the process to trigger arbitration. Yet,

the difference between arbitration and expert determination makes the demarcation between these

two proceedings necessary in multi-tiered dispute resolution clauses.37 As stated previously, these

uncertainties would go against the Parties’ intention to obtain a quick and cost-effective expert

determination. For the aforementioned reasons, the expert determination is ineffective.

24. As a consequence, the Tribunal shall hold its competence to rule on the merits, which are admissible.

36 IMLAM Problem, Charterparty, Clause 27(d), p.12. 37 K. Sachs, “Solving Tensions between Expert Determination and Arbitration under M&A Contracts”, in International Arbitration Under Review: Essays in Honour of John Beechey, 2015, p.363.

7

PART III - MERITS OF THE CLAIMS -

25. The Parties agreed on the law applicable to the merits, being the laws of New South Wales (I),

according to which the Tribunal shall hold the Respondent liable for multiple breaches (II). The

Tribunal shall finally reject any counterclaim raised by the Respondent (III).

I. The Charterparty is governed by the laws of New South Wales

26. Clause 28 states that the Charterparty shall be governed by the laws of New South Wales, Australia.

The Hague Visby Rules (hereinafter the ”HVR”) are not applicable to the present matter. Indeed,

Article 5 of the Carriage of Goods by Sea Act 1991 (hereinafter “COGSA”) - incorporating the HVR

- states that “the provisions of these Rules shall not be applicable to charter parties”. The Rules will

only apply if the Charterparty is covered by a sea carriage document,38 which is a document having

the same characteristics than a bill of lading or any similar document of title. Since voyage

charterparties are not considered as sea carriage documents,39 the incorporation of the HVR into a

charter party does not lead to the application of these provisions. Should the Parties’ will may give

force of law to the HVR, by incorporation into the Charterparty, the sole Article 4(5) applies.40

27. In the case at hand, the Parties included into the Charterparty Clause 28, which provides for the

application of Article 4(5) of the HVR. Further, there is no bill of lading or any equivalent document

of title. For this reason, the incorporation of the HVR into the Charterparty does not give rise to the

application of these provisions.

28. Therefore, the Tribunal shall exclude or limit the application of the HVR to the sole Article 4(5).

38 Article 10(6) of the Schedule IA of the Carriage of Goods by Sea Act 1991. 39 Dampskibsselskabet Norden A/S v. Gladstone Ci/il Pty Ltd [2013] FCAFC 107. 40 Navigazione Alta Italia S.p.A v. Concordia Maritime Chartering A.B (The “Stena Pacifica”) [1990] 2 Lloyd's Rep. 234; Borgship Tankers Inc v. Product Transport Corp., The Casco, [2005] Int.Com.L.R. 02/25.

8

II. The Respondent has committed multiple breaches of the Charterparty

A. The Respondent failed to provide a seaworthy Vessel

29. The Claimant argues that the Respondent is liable for a breach of its obligation to provide a

seaworthy Vessel. Clause 1 requires that the Vessel be “tight, staunch and strong and in every way

fitted for the voyage”.

1. The Respondent provided the Vessel with faulty equipment

30. The Vessel does not comply with the standard of seaworthiness according to the law governing the

Charterparty. Clause 15(a)(i) provides that the Vessel shall comply with several regulations.

31. First of all, the Navigation Act of 2012 defines seaworthiness as “a fit state as to the condition of (...)

the equipment” that can “encounter the ordinary perils of the voyage undertaken”.41 In this aspect, the

carrying vessel must be fit to safely sail and carry the goods at the time of the voyage. 42 For instance

in the McFadden v. Blue Star Line43 case, seaworthiness related to the degree of fitness, which a

vessel is required to have at the commencement of her voyage having regard to all the probable

circumstances.

32. In the case at hand, the Vessel went through two major events: a storm and solar flares. During each

of these events, it occurred to the Claimant that the Vessel was not fit to safely carry the Goods. The

Respondent provided a Vessel, which was only able to undertake one day of the voyage.44

33. Second of all, the Marine order 27, which is made under the Navigation Act of 2012,45 which

provides that the owner of a vessel must comply with the SOLAS Convention.46 The SOLAS

Convention47 provides that nautical charts and publications to plan the Vessel’s route and positions

throughout the voyage must be provided. The shipowner shall provide the vessel with “backup

arrangements”,48 which rely on paper nautical charts.49 Hardcopy maps and radio and satellite

41 Section 23, Part 4, Chapter 1 of the Navigation Act 2012 n°128, 2012. 42 Virginia Carolina Chemical Co v. Norfolk & North American Steam Shipping Co [1912] 1 KB 229, 243, 244. 43 Mcfadden v. Blue Star Line [1905] 1 KB 697; see also Kopitoff v. Wilson [1867] 1 QBD 377 (QBD). 44 IMLAM Problem, email sent on 26 July at 2:32 p.m. from Marc Simpson to Jay Mizzone, p.17. 45 Navigation Act 2012 - Division 1, Preliminary 3, Power (1). 46 Article 20 of the Marine Order 27 (safety of navigation and radio equipment) 2016. 47 Regulation 19.2.1.4 Chapter V of the Solas Convention. 48 Regulation 19.2.1.5 Chapter V of the Solas Convention.

9

communication equipment are mandatory on the Vessel.50 Radio receiver sets51 together with

adequate navigation charts52 were deemed essential for the safety of navigation.

34. In the case at hand, the Vessel’s radio and navigation equipment were damaged for 17 hours by the

solar flares.53 Newspapers attributed such damages to old and faulty equipment.54 Backup

arrangements should then have allowed the Vessel to continue the voyage. The Respondent failed to

provide such an alternative. Indeed, the sole hardcopy that were on board the Vessel led to Spectre’s

port.55

35. Therefore, the Tribunal shall declare that the equipment provided by the Respondent was deficient

since the beginning of the Voyage and rendered the Vessel unseaworthy.

2. The Respondent’s lack of due diligence to provide a seaworthy Vessel

36. The Respondent did not diligently ensure that the equipment was seaworthy. Clause 17(d) provides

that the Respondent is required to “exercise due diligence to ensure the ship is seaworthy (...) when

she sails on the voyage”. Under Clause 15(iii), the owner shall comply with the requirements of the

ISM Code. The ISM Code provides a due diligence test that involves an “operational maintenance

routine” of the equipment.56 Such a test aims to avoid hazardous situation triggered by malfunction

on the equipment. To avoid said situations, appropriate corrective actions must then be taken by the

shipowner.57

37. In our case, it has not been to the Claimant’s knowledge that such operational maintenance was done.

The Claimant respectfully requests this Tribunal to have the Respondent prove that the Vessel's

operational maintenance was up-to-date.

38. In addition, case law also provides a test that involves measures of prudence or assiduity as is

49 See appendix 6 to the Resolution A.817(19) of the Solas Convention. 50 Regulation 19.2.1.6 Chapter V of the Solas Convention. 51 The T.J. Hooper. v. Northern Barge Corp. [1932] 60 F.2d 737. 52 The Maria [1937] A.M.C. 934 (C.A. 4.). 53 IMLAM Problem, email sent on 27 July 2017 at 7:17 a.m. from Marc Simpson to Jay Mizzone, p.18. 54 IMLAM Problem, The Cerulean Mail dated on 25 July 2017, p.35. 55 IMLAM Problem, email sent on 27 July 2017 at 7:17 a.m. from Marc Simpson to Jay Mizzone, p.18. 56 Article 10.1 of the ISM Code under Maintenance of the ship and equipment. 57 Article 10.2 of the ISM Code.

10

properly expected from, and ordinarily exercised by a reasonable and prudent man.58 Such prudence

is measured regarding relative facts of the case and is not an absolute standard. New technologies

continuously improve the due diligence obligation of the shipowner.59

39. In our case, the Respondent did not set the Vessel in consideration of the vicissitudes she was bound

to encounter during the Voyage. When preparing the Vessel for the departure, the Respondent had to

bear in mind the announced solar flare crisis.60 Nevertheless, navigational equipment was not fit to

encounter this event. This demonstrates that the Respondent did not diligently take into consideration

the peculiarities of the Voyage.

40. Therefore, the Respondent failed to demonstrate any due diligence in providing a seaworthy Vessel.

3. The unseaworthiness of the Vessel caused losses to the Claimant

41. The Claimant holds that the Respondent is liable due to the causal link between the two previous

obligations and the loss it triggered. In the Tecomar61 case, a causal link between the unseaworthiness

of a vessel and the standards of due diligence established in the ISM Code were used in order to

establish the shipowners liability. In any event, if the unseaworthiness is not the main cause of the

loss, its sole occurrence is sufficient to establish the causal nexus.62

42. In the case at hand, the defectiveness of the radio and satellite communication equipment, as well as

the lack of due diligence to provide a seaworthy Vessel, triggered the deviation to Spectre. This event

caused the late delivery and the damage to the Goods.

43. In light of the above, the Tribunal shall acknowledge that the Respondent breached the Charterparty

for failing to provide a seaworthy Vessel which caused damages to the Goods.

58 McFadden v. Blue Star Line, [1905] 1 KB 697. 59 The Eurasian Dream [2002] 1 Lloyd’s Rep. 719. QBD (Comm CT); see also B. A. Garner, Black’s Law dictionary, 8th Edition, 2004. 60 IMLAM Problem, The Cerulean Mail dated on 25 July 2017, p.35. 61 Complaint of Tecomar SA |1991] 765F, S.D.N.Y.1991; J Gerber & Co v. SS [1979] 437 F.2d 580, 596 (2nd Cir. 1971). 62 Smith, Hogg & Co Ltd v. Black Sea and Baltic General Insurance Co Ltd [1940] AC 997, 1004-1005.

11

B. The Respondent failed to take the most-direct route

44. The Respondent failed to comply with its obligation to follow the agreed route. The Respondent

never challenged this requirement63 and accepted it.64 A deviation is defined as “an intentional and

unreasonable change in the geographic route of the voyage as contracted”.65 Such event is regarded

as a fundamental breach of contract.66 The Stag Line v. Foscolo case67 establishes an obligation to

prevent any deviation. Furthermore, the Davis v. Garrett case68 confirms a duty for the owner “to

proceed without unnecessary deviation in the usual and customary course” which is deemed to be the

direct geographical route. The duty to avoid deviation and follow the specific route decided in the

Charterparty has since been confirmed.69 In the Phelps, James & Co v. Hill70 case, it was held that

the deviation must not be greater than a reasonable necessity.

45. The Respondent informed the Claimant that the Vessel had stopped at the port of Spectre. Being an

intentional change from the agreed route, such behaviour constitutes a breach. The crucial

specification given by the Claimant was to deliver the Goods in time consistent with the urgency of

the shipment.71 Given the short timescale between the delivery date and the moment the Goods were

to be used, the Respondent undoubtedly knew it had to follow the most direct route. The Respondent

should have avoided stopping at the port of Spectre.

46. The Respondent did not provide the Claimant with relevant information explaining why the deviation

was deemed necessary to protect the interests of one or both the Parties. Indeed, since the Respondent

neglected its obligation of due diligence in the first place, by obliterating to have suitable hard copy

maps on board,72 the latter was unable to justify this deviation.

63 IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2; IMLAM Problem, Points of defence and counterclaim delivered on behalf of the Respondent, p.40, para.3. 64 IMLAM Problem, letter sent on 22 July 2017 from Marc Simpson to Jay Mizzone, p.14: “we appreciate the sensitiveness and information of the voyage and confirm that your instructions will be followed at all times”. 65 W. Tetley, Marine Cargo Claims, 4th Edition, Les Editions Yvon Blais, Vol. 2, 2008, Chapter 35. 66 J. Cooke and Al., Voyage Charters, Lloyd’s Shipping Law Library, 4th Edition, 2014, p.275, para.12.3; see also W. Tetley, Marine Cargo Claims, London: Stevens & Sons Ltd, Vol. 1, 1966, p.1812; see also Reardon Smith Line Ltd v. Black Sea & Baltic General Insurance Co Ltd [1939] AC 562. 67 Stag Line v. Foscolo, Mango & Co [1932] AC 32; Scaramanga v. Stamp [1880] 5 CPD 295. 68 Davis v. Garrett [1830] 6 Bing 716. 69 Reardon Smith Line Ltd v. Black Sea & Baltic General Insurance Co Ltd [1939] AC 562. 70 Phelps, James & Co. v. Hill [1891] 1 QB 605; confirmed in Foreman & Ellams Ltd v. Federal Steam Navigation Co Ltd, [1928] 2 K.B. 424. 71 Hadley v. Baxendale [1954] EWHC J70: “in any case, the carrier’s prime duty is to “carry the cargo to its destination”. 72 See Memorandum, Part III, II, A, pp.8-10, paras. 29-43.

12

47. In any event, it should be noted that as unseaworthiness is established and the Respondent lacked its

due diligence obligation prior to the Voyage, the latter cannot argue the deviation justifies a breach of

contract.73 Thereby, the Respondent unreasonably deviated from the agreed route.

48. Therefore, the Tribunal should hold the Respondent liable for the breach of the obligation to take the

most direct route.

C. The Respondent failed to deliver the Goods in time

1. The Respondent did not abide with the express delivery date provided by the

Charterparty

49. The Respondent failed to deliver the Goods on time, and therefore, breached the Charterparty. By

mutual agreement, repeated several times between the Parties74 and incorporated in the

Charterparty,75 the delivery of the Goods had to occur by 7 p.m. on 28 July 2017.76

50. The Vessel arrived at its final destination on 29 July 2017, after the due delivery date, which the

Respondent never challenged.77

51. Thus, the Respondent breached its obligation to deliver the Goods on time and should be ordered to

pay damages consistent the settlement payment paid to the Buyer.

2. The Respondent is not entitled to be exempted from its liability as no Force

Majeure event can be characterised

a. The strict requirements to establish Force Majeure events

52. Force Majeure is an event that can be neither anticipated nor controlled.78 The Parties tend to

stipulate such clause in order to provide events that are likely to exempt their liability. Clause 17(b)

73 Monarch Steamship Co Ltd v. Karlshamns Oljefabriker [1949] AC 196. 74 IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2; IMLAM Problem, letter sent on 22 July 2017 from Marc Simpson to Jay Mizzone, p.14; IMLAM Problem, letter sent on 24 July 2017 from Marc Simpson to Jay Mizzone, p.15; IMLAM Problem, Charterparty, box 9, p.3. 75 IMLAM Problem, Charterparty, box 9, p.3. 76 IMLAM Clarifications 2, paras.8-9. 77 IMLAM Problem, email sent on 29 July 2017 at 4:28 p.m. from Marc Simpson to Jay Mizzone, p.22; IMLAM Problem, email sent on 29 July 2017 at 8:42 p.m. from Marc Simpson to Jay Mizzone, p.24; IMALM Problem, email sent on 1 August 2017 at 3:42 p.m. from Marc Simpson to Jay Mizzone, p.26; IMLAM Problem, Points of defence and counterclaim delivered on behalf of the Respondent, p.40, para.4a. 78 B. A. Garner, Black’s Law dictionary, 8th Edition, 2004; J. Sniffen, “In the Wake of the Storm: Nonperformance of Contract Obligations Resulting from a Natural Disaster”, in Nova Law Review, vol.3, issue 3, article 9, 2007.

13

provides a Force Majeure exemption notably as to acts of God.79 It occurs when there is an

intervention of an “extraordinary, violent, and destructive agent, [which due to] its very nature raises

a presumption that no human means could resist its effect”.80 The Rylands v. Fletcher81 case

established that three criteria must apply in order to consider an event as an act of God.82

53. First of all, (1) the event must have resulted from natural causes without human intervention.83

However, this criterion is not sufficient and the following are both essentials to exempt one’s

liability.

54. Second of all, (2) the event must refer to circumstances that no human foresight can provide

against.84 For instance, in Siordet v. Hall85 it is stated that an event that was likely to happen, such as

the damage caused by water escaping from a burst pipe following a hard frost, cannot constitute an

act of God.

55. Finally, (3) the event must refer to the immediate and direct cause of the damage.86 Indeed, the act of

God defence will not apply in case an act or omission of the defendant contributed to damages.87 In

Smt. Inacia P. Carvalho v. Desk To Desk Courier and Cargo Limited88 case, it is stated that Force

Majeure does not cover deficiency and negligence. Thus, due diligence is required.89 In the Skandia

case, it is declared that when "a defendant has sufficient warning and reasonable means to take

proper action to guard against, prevent, or mitigate the dangers posed by the hurricane [or other act of

God] but fails to do so, then the defendant is responsible for the loss".

56. The Tribunal shall determine that these criteria are not fulfilled.

79 IMLAM Problem, Charterparty, Clause 17(b), p.9. 80 Louisville & N.R.Co v. Finlay [1939] 185 So. 904, 905 (Ala.1939), quoting Steele & Burges v. Townsend [1861] 37 Ala. 247, 256 (Ala. 1861). 81 Rylands v. Fletcher [1868] UKHL 1, (1868) LR 3 HL 330. 82 Houston [1953], quoted by J. Tyrell, “Unusual weather events, acts of God and legal liability”, in Royal Meteorological Society’s website, 2012, p.52. 83 Rogers |1994], quoted by J. Tyrell, “Unusual weather events, acts of God and legal liability”, in Royal Meteorological Society’s website, 2012, p.52. 84 J. Tyrell, “Unusual weather events, acts of God and legal liability”, in Royal Meteorological Society’s website, 2012, p.52. 85 Siordet v. Hall, [1828], 4 Bingham New Cases 607 quoted by J. F. Wilson, Carriage of Goods by Sea, 7th Edition, 2010, p.258. 86 Shea-S&M Ball v. Massman-Kiewit-Early, 606 F.2d 1245, 1249 n.6 (D.C. Cir. 1979): criteria are reiterated. 87 J. M. Fraley, “Re-examining Acts of God”, in Yale law School, Pace Environmental Law Review, 2010, vol. 27, Issue 3, article 4, p.6744. 88 Smt. Inacia P. Carvalho v. Desk To Desk Courier and Cargo Limited [2001] (3) CPR 248. 89 Skandia Insurance Co. Ltd. v. Star Shipping AS [2001] 173 F. Supp. at 124.

14

b. The solar flares do not constitute a Force Majeure event

57. The Claimant does not challenge the first requirement since solar flares clearly appear to be a natural

astrological event.

58. However, regarding the second requirement, (2) the solar flares were foreseen. These solar flares

were disclosed seven days prior the Voyage and were expected to last two weeks. The Respondent

could not have ignored this phenomenon. NASA makes predictions on when such events arrive in

order for the shippers to take all necessary precautions before it occurs.90 The Respondent could not

have ignored the occurrence of these solar flares when the Charterparty was signed since NASA

predictions were already published in the press before the shipment.91 The knowledge of this event

before the Charterparty’s conclusion prevents the Respondent to fulfil this criterion.92

59. Regarding the third requirement, (3) the impossibility for the Respondent to perform its obligations is

due to its own negligence. Newspapers broadly informed the necessity of back-up arrangements for

any machine relying on radio or satellite communications.93 Such information should have strongly

encouraged the Respondent to comply with current regulations, which would have allowed the

Vessel’s equipment to re-connect straight away after the solar crisis.94 The Respondent did not show

sufficient care towards the Voyage, and acted negligently, which is the sole reason of the 33 hours

long delay from the initial itinerary.95

60. Therefore, the Tribunal shall hold that the Respondent cannot rely on the act of God exemption as a

justification for the delayed delivery.

90 M. Gleber, The difference between flares and CMEs, NASA website, 2014 and updated in 2017. 91 IMLAM Problem, The Cerulean Mail dated on 18 July 2017, p.35. 92 Asia Pacific Resources Pty Ltd v. Forestry Tasmania [1998], Supreme Court of Tasmania, Supreme Court of New South Wales; D. McNair, “Force majeure clauses”, in Asia Pacific Projects Update from DLA Piper, 2011; see also United States v. Winstar Corp [1996], 518 U.S. 839, 905–907. 93 IMLAM Problem, The Cerulean Mail dated on 18 July 2017, p.35; IMLAM Problem, The Cerulean Mail dated on 25 July 2017, p.35. 94 IMLAM Problem, The Cerulean Mail dated on 25 July 2017, p.35. 95 IMLAM Problem, email sent on 27 July at 7:17 a.m. from Marc Simpson to Jay Mizzone, p.18.

15

c. The storm does not constitute a Force Majeure event

61. Regarding the first requirement, the Claimant contends that the storm was foreseeable. Professional

charterers are presumed to be aware of risks they could face.96 Extreme weather conditions are not

always unusual,97 storms are a common relative phenomenon offshore. In our case, even if the storm

was described to be violent, it does not appear unusual98 and the Respondent should have been

prepared in case such event would have occurred. Moreover, depending on the geographical

localisation, the probability of such a risk can be high.99 Therefore, the Respondent should have been

particularly prudent because of the Mediterranean well known capricious weather.

62. Finally, the last requirement is not fulfilled due to the Respondent’s negligence. The crew tried to

avoid the storm but ended up dropping the anchor at the worst location where the storm was at its

peak.100 Had the Vessel kept the original road, the consequences of the storm would have been

avoided. If the crew had not stopped, no time would have been wasted. The late delivery of the

Goods was not an act of God but a response to the Respondent’s negligence.

63. Therefore, the Tribunal shall find that no Force Majeure event can be characterised and hold the

Respondent liable for its late delivery.

D. The Respondent delivered damaged Goods

1. The Respondent had a duty to stow the Goods properly

64. The Claimant had full control on the Goods over the Voyage.101 However, the Claimant holds that

the Respondent had the duty to stow the Cargo safely by using waterproof sealant on containers.

Thus, the Respondent is liable for the Cargo damage caused by bad stowage, which is entirely

attributable to the Respondent.

96 M. Augenblick, A. B. Rousseau, “Force Majeure in Tumultuous Times: Impracticability as the New Impossibility”, in The Journal of World Investment & Trade, 2012. 97 J. Tyrell, “Unusual weather events, acts of God and legal liability”, in Royal Meteorological Society’s website, 2012, p.50. 98 Nichols v. Marsland, Court of Appeal, [1876] 2 Ex. D. 1. 99 Great China Metal Industries Co Ltd v. Malaysian International Shipping Corporation Berhad, [2012] FCA 696. 100 IMLAM Problem, email sent on 29 July at 8:58 a.m. from Marc Simpson to Jay Mizzone, p.20. 101 IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2.

16

65. In the Court Line case,102 Lord Wright held that it is part of the carrier’s duty to stow the goods

properly in order to avoid any damages to the cargo. In our case, the Claimant expressly stated that

the containers shall be “entirely waterproof”103 since the Goods were of “exceptionally rare, and of

high quality”.104 The Respondent never challenged these instructions and agreed to fulfil them.

66. Therefore, the Respondent is liable for stowage of the Goods.

2. The Respondent breached its duty to stow the Goods properly

67. The Claimant holds that the Respondent breached its duty to stow the Cargo in an appropriate

manner, which induced damage to the Goods. Damaged Cargo was caused by the negligence of the

Respondent. The Claimant gave special stowage requirements that were not followed properly and

carefully. In the Trading AS “CSAC”105 case, Lord Reid stated that “the obligation is to adopt a

system which is sound in light of all the knowledge which the carrier has or ought to have about the

nature of the goods. And if that is right then the respondents did adopt a sound system”.

68. In our case, the Respondent knew that special stowage was necessary. The only proper way to carry

the Goods was by using containers entirely waterproof.106 Yet, the Goods were delivered in a

damaged condition.107 The Respondent deliberately took the risk of using a brand new sealant, which

had never been tested on particularly fragile goods when it contracted “with a new supplier of

waterproof sealant”.108 Thus, the Respondent failed to secure the waterproofing of containers.

69. Subsequently, the Cargo was damaged when the leak occurred and the Respondent delivered the

damaged Goods. The Claimant does not question the expert’s opinion.109 However, the Cargo was

checked after the rainfalls. For this reason, it cannot be certified that there was no water damage at

the time of its delivery.110 Furthermore, the final inspection report111 confirms that three containers

102 Court Line Ltd v. Canadian Transport Co Ltd [1940] A.C. 934. 103IMLAM Problem, letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2.104 Ibid. 105 Volcafe Ltd and Others v. Compania Sud Americana de Vapores SA (Trading AS “CSAC”) [2016] EWCA Civ 1103.106IMLAM Problem,letter sent on 22 July 2017 from Jay Mizzone to Marc Simpson, p.2.107 IMLAM Problem, email sent on 31 July 217 at 4:21 p.m. from Jay Mizzone to Marc Simpson, p.24. 108 IMLAM Problem, letter sent on 22 July 2017 from Marc Simpson to Jay Mizzone, p.14. 109 IMLAM Problem, statement of expert opinion of Simon Webster, p.43. 110 IMLAM Problem, Points of defence and counterclaim delivered on behalf of the Respondent, p.40, para.5. 111 IMLAM Problem, final inspection report from DSM Surveyors, p.44.

17

were completely water damaged. However, the fourth one “carried on the Vessel” wasn’t. This

induces that the fourth container has been carried in a different place than the three others. It would

then be reasonable to believe that the three containers were placed where the hull was damaged,

creating water infiltrations, which reached containers stored at this location.

70. The delivery of damaged Goods led to an economic loss attributable to the Respondent. Indeed in

addition to the wet damage (USD15,750,000), the Claimant urgently provided replacement coffee at

a price of USD9,450,000 and entered into a settlement agreement, which cost USD5,000,000.

71. Therefore, the Tribunal shall hold the Respondent liable to pay USD30,200,000 of damages, which

represents the overall loss.

3. The Respondent is not entitled to mitigate its liability pursuant to International

Conventions

72. The Tribunal shall find that the Respondent's liability for the delivery of damaged Goods cannot be

limited pursuant to International Conventions. Indeed, both Article 2(1)(a) of the Convention on

Limitation of Liability for Maritime Claims (hereinafter “LLMC”) and Article 4(5)(e) of the HVR

provide an exception for the limitation of liability. Indeed, when the damages result from the personal

act or omission of the Respondent, committed recklessly and with knowledge that such loss would

probably result, liability cannot be limited.

73. In our case, the loss of time caused by the Respondent’s faulty deviation had the direct consequence

to force the Vessel to stop in order to avoid a storm it would never have met otherwise. When the

Respondent removed the anchor, it caused damage to the hull because of the obsolescence of the

Vessel. Yet, should the Respondent had been careful, it would have taken necessary steps to protect

the Goods which were highly sensitive to water, as expressly informed by the Claimant.112 This

omission made the coffee unusable. The Respondent’s reckless behaviour, in full knowledge of the

consequences that resulted, makes any limitation of liability impossible.113

112 IMLAM Problem, letter sent on 22 July 217 from Jay Mizzone to Marc Simpson, p.2. 113 SS Pharmaceutical Co Ltd v. Qantas Airways Ltd [1991] 1 Lloyd’s Rep 288; Nugent v. Goss [2000] EWCA 130; Margolle v. Delta Maritime [2002] EWHC 2452, per Gross J; Nugent v. Goss [2002] 2 Lloyd’s Rep 222, CA, per Auld LJ.

18

74. Therefore, the Tribunal shall not limit the Respondent’s liability either under the LLMC or the HVR.

III. The Respondent is not entitled to form any counterclaims

A. The Respondent’s breaches of the Charterparty prevent it from any claim for

demurrage

1. The Claimant is not liable for demurrage cost under Clause 8(e)

75. The Claimant contends that no liability for demurrage should be held against it. The breaching party

cannot rely on claims based on any favourable contractual stipulation.114 Therefore, the carrier’s

contractual right to payment of demurrage fades away as soon as the breach is committed.115 In our

case, the Respondent’s multiple breaches of the Charterparty116 prevent it to claim for demurrage.

76. In any event, Clause 8(e) provides numerous causes of interruption of the laytime, such as

congestions.117 Such clause should expressly provide that it stops the running of laytime to exempt

liability for demurrage.118 Therefore, as congestions are expressly mentioned in Clause 8(e), laytime

shall be interrupted and then such a reference releases Claimant from the liability for demurrage.119

Furthermore, Clause 8(e) also covers floods and rain that triggered the congestions at the port of

Dillamond.120 As the congestion, delaying the discharging, is mentioned in the said clause, the

liability for demurrage shall not be held.121

77. In our case, the congestion occurred consequently to rain and flood events, which are a cause of

interruption of the laytime mentioned under Clause 8(5). The Claimant diligently tried to discharge

the Vessel, but was prevented from doing so by congestion at the port.

78. Therefore, the Tribunal shall exempt the Claimant from any demurrage costs.

114 Stag Line v. Foscolo, Mango & Co [1932] AC 32; Scaramanga v. Stamp [1880] 5 CPD 295. 115 Thiess v. Australia SS. [1955] 1 Lloyd’s Rep. 459, 464. 116 See Memoranda, Part II, II, p. 8-18, paras 29-74. 117 IMLAM Problem, Charterparty, Clause 8(e), p.6. 118 Marc Rich & Co Ltd v. Tourloti Compania Naviera SA (The Kalliopi A) [1988] 2 Lloyd’s Rep 101, 106; llis Shipping Corporation v. Voest Alpine Intertrading (The Lefthero) [1992] 2 Lloyd’s Rep 109. 119 President of India v. NG Livanos Maritime Co (The John Michalos), [1987] 2 Lloyd’s Rep 188 Q.B.D. (Com.Ct). 120 IMLAM Problem, The Dillamond Times dated on 1 August 2017, p.36. 121 Carboex SA v. Louis Dreyfus Commodities SA [2012] EWCA civ 83; Reardon Smith Line Ltd v. East Asiatic Co [1938] 62 L.

19

2. The Respondent’s wrongful behaviour excludes any claims for demurrage

79. In any case, the Respondent cannot claim for demurrage since the Cargo was delivered behind

schedule as a result of its wrongful behaviour. Shipowners are not entitled to claim for demurrage

when liable for delays.122 According to The Andra123 case, laytime does not run when a cargo’s

operation is delayed by the shipowner’s fault. Such rule is based upon the prohibition to benefit from

its own wrongdoing.124

80. In our case, the delay was solely caused by the Respondent’s breaches of contract. The Respondent

failed to deliver Goods in time due to its own failure to deliver a seaworthy Vessel, which caused an

unplanned deviation.125

81. Therefore, the Tribunal shall reject the Respondent’s claim for payment of demurrage.

B. The Respondent cannot rightfully bring any counterclaim before the Tribunal due to its

negligent behaviour

82. The Respondent’s wrongful behaviour deprives it from bringing any additional counterclaim. Not

only did the Respondent failed to provide a seaworthy vessel but the Vessel was also unfitted to

safely encounter the solar flare crises. The income of this crisis could have however been decreased

had the Respondent provided relevant back-up arrangements, which forced the Vessel to deviate.

Therefore, the Respondent is not entitled to claim agency fees that the Vessel had to pay at the port of

Spectre.

83. On 28 July 2017, the Vessel was still sailing instead of arriving at Dillamond’s port, which would

have allowed a complete circumvention of the storm and thus avoided damages to the Vessel. Instead

of undergoing this event accordingly, the Vessel was stopped in a fault-finding position, which later

on damaged the hull. For that reason, the cost of repairs for damages to the Vessel are not due.

122 DGM commodities corp. v. Sea Metropolitan S.A (The Andra) [2012] EWHC 1984 (Comm) 2 Lloyd’s Rep. 587; Re Rooper [1927] 1 KB 879; The Union Amsterdam [1982] 2 Lloyd’s Rep 432; Stolt Tankers v. Landmark Chemicals [2002] 1 Lloyd’s Rep 786 and see also J. F. Wilson, Carriage of goods by sea, Pearson Education Limited, 7th Edition, 2010, p.77. 123 DGM commodities corp. v. Sea Metropolitan S.A (The Andra) [2012] EWHC 1984 (Comm). 124 Y. Baatz, Maritime Law, Lloyd’s Shipping Law Library, 3rd Edition, 2014, p.172. 125 See Memoranda, Part III, II, C, p.12-15, paras. 49-63.

20

84. Moreover, damage to the hull generated water infiltration, which eventually damaged the Goods.

Subsequently, the Respondent is not entitled to full freight since the Goods were not delivered in

merchantable conditions.126 Besides, Clause 22 does not provide that freight is due under any

circumstances. Therefore, the Respondent’s multiple breaches prevent it from bringing a

counterclaim for freight payment.

85. Finally, all these events led to a delayed delivery, which is attributable to the Respondent. Thus, the

Respondent can neither require payment of agency fees nor of the use of electronic access systems at

the port of Dillamond.

86. Therefore, the Tribunal shall reject any counterclaim brought by the Respondent.

126 Asfar v. Blundell [1898] 1 QB 123; Kirchner v. Venus [1859] 12 Moore PC, p.361-390.

21

PART IV - THE CLAIMANT’S VALID EXERCISE OF LIEN -

87. The Claimant requests the right to exercise a maritime equitable lien over the Vessel (II), by

implication of the laws of the United Kingdom that recognises its existence (I).

I. English law governs the existence of a maritime lien

88. The English law governs the existence of a maritime lien. In The Halcyon Isle,127 it was held that

the existence of a maritime lien is subject to the law of the forum. Since the seat of arbitration in the

case at hand is London, the Tribunal shall rule over the lien claim pursuant to English law.

II. The Claimant has a maritime equitable lien

A. The Claimant is subrogated to the crew’s wages right to exercise a lien

89. The Claimant is entitled to crew’s wages right to exercise a lien, since it was forced to pay the

Respondent’s debt due to the crew.

90. First of all, subrogation shall be allowed as a restitution remedy since the Claimant paid off the

Respondent’s obligation. Subrogation is a fictional assignment aiming to ensure “a transfer of rights

from one person to another, without assignment or assent of the person from who the rights are

transferred”.128 This mechanism leads to a transfer of proprietary rights, namely a maritime lien,

which are not extinguished.

91. In our case, the crew has still not been paid and is considering initiating legal action against the

Respondent to recover unpaid wages.129 The Claimant covered the Respondent’s obligation to pay

crew wages because of its financial difficulties.130 The payment of the wages was a security for the

crew, and the Claimant expected to be refunded.131 The Claimant paid the amount of USD100,000,

which should have been used to pay off the Respondent’s obligation. Therefore, the Claimant shall

be subrogated to the crew’s lien.

127 Bankers Trust International Ltd v. Todd Shipyards Corporation (The Halcyon Isle) [1981] AC 221 (PC), confirmed in The Ship “Sam Hawk” v. Reiter Petroleum [2016] FCAFC 26; 246 FCR 337. 128 W. Tetley, “Assignment and Transfer of Maritime Liens: Is There Subrogation of the Privilege”, in Journal of Maritime Law and Commerce, vol.15, n°3, [1984], p.402. 129 IMLAM Clarifications, p.3, para.20. 130 IMLAM Problem, email sent on 19 July 2017 from Will Gardner to Jay Mizzone, p.1. 131 Ibid.

22

92. Second of all, the Claimant argues that the payment of crew wages was not voluntary. In The

Petone,132 it was held that a third party that voluntarily paid crew wages, and was “under no

compulsion and under no necessity to protect his own property”,133 do not acquire the crew wages

lien. However, according to the Ship Hako Fortress134 case, if the third party did not voluntarily

proceed to payment, it could be subrogated to the security of the crew’s maritime lien.

93. In our case, payment was not voluntary, even though the Claimant had no legal duty to do so, the

payment was a prerequisite for the shipment to occur. The Claimant was aware of the Buyer’s

intention to initiate legal action if the Goods were not shipped on time.135 Furthermore, the

Claimant never intended to pay the crew wages to protect his own property but to provide a security

for the crew.136

94. Therefore, the Claimant holds a maritime equitable lien over the Vessel pursuant to the subrogation.

B. The Claimant is subrogated to the crew’s lien to prevent unjust enrichment

95. The Claimant holds that the Tribunal has power to order a restitution award on the ground of unjust

enrichment. Section 48(5)(a) of the Act states that the Tribunal “has the same powers as the Court

to order a party to do or refrain from doing anything”.137

96. Subrogation can be awarded as a remedy for unjust enrichment. Courts state that subrogation is

described as an equitable remedy to reverse or prevent unjust enrichment, which is not based on any

agreement.138 Three conditions constitute an unjust enrichment: (1) there must be an enrichment, (2)

the enrichment must be at the claimant’s expenses, (3) the enrichment must be unjust.139

97. First of all, the enrichment lies in the exchange of value.140 In this case, the Claimant transferred

USD100,000 for the payment of crew wages. The Respondent does not dispute that this amount has

132The Petone case [1917] P 198. 133 Ibid., para.625. 134 Programmed Total Marine Services Pty Ltd v. Ship Hako Fortress [2012] FCA 805. 135 IMLAM Problem, email sent on 19 July 2017 from Will Gardner to Jay Mizzone, p.1. 136 Ibid. 137 Section 48(5)(a) of the Arbitration Act 1996. 138 Banque Financière de la Cité v. Parc (Battersea) Ltd [1999] 1 AC 221. 139 C. Mitchell, S. Watterson, Subrogation: Law and Practice, Oxford University Press, 2007. 140 C. Mitchell, P. Mitchell, S. Watterson, Goff & Jones: The law of unjust enrichment, Sweet & Maxwell, 8th Edition, 2011, p.109.

23

been paid.141 From the moment the Respondent is discharged of its duty to pay crew wages, there is

no doubt he is enriched.

98. Second of all, the enrichment was clearly made at the Claimant’s expense since it is established the

funds paid have been spent.142 The Respondent never hid its financial difficulties, which leads the

Claimant to believe that the use of this money for other purposes improved its situation. Besides, to

consider that the enrichment has been at the Claimant’s expense, the latter must have suffered a loss

closely linked with the Respondent’s gain. In this situation, the Respondent’s gain and the

Claimant’s loss can easily be connected since the same funds paid on a separate bank account,

aimed at crew’s wages, have been spent.

99. Finally, the enrichment is unjust on the ground of mistaken assumption. Indeed the Claimant’s

belief that these funds would serve as a security by the crew was incorrect. The Claimant was not

aware of any “behind the scenes legal deal”143 and acted on the basis of an incorrect assumption.

The Respondent illegally used the amount paid by the Claimant. The latter was mistaken and the

incorrect assumption has caused the Claimant’s payment of the crew wages prior to the Voyage.

100. Therefore, the Tribunal shall render a restitutionary award on the ground of unjust enrichment.

III. Alternatively, the Claimant is entitled to a statutory maritime lien

101. The Claimant argues he is entitled to a statutory lien, under Section 20(2)(m) of the Senior Court

Act. It concerns “any claim in respect of goods or materials supplied to a ship for her operation or

maintenance”. In The Edinburg castle case,144 it was considered that the provision of officers and

crew of suitable calibre for the operation and the manning of the vessel was “necessaries” and thus

covered by Section 20(2)(m). This reasoning was confirmed in Courts, ruling that the expression

“goods or materials” used in Section 20(2)(m) does not solely cover physical items, and personal

services could just as much be necessary as the provision of materials.

141 IMLAM Problem, Points of defence and counterclaim delivered on behalf of the Respondent, p.41, para.10. 142 IMLAM Clarifications, p.3. 143 IMLAM Problem, email sent on 8 August 2017 at 9:17 a.m. from Jay Mizzone to Marc Simpson, p.33. 144The Edinburg castle case [1999] 2 Lloyd’s Rep. 362.

24

102. In this case, the Claimant paid crew wages for the timely and efficient transportation of Goods. By

paying this amount, it secured crew wages and supplied to the Vessel personal services, which

made the shipment possible.

103. Such a claim can be brought where “(a) the claim arises in connection with a ship; and (b) the

person who would be liable on the claim in an action in personam was, when the cause of action

arose, the owner (...) of the ship”.145

104. In our case, these requirements are satisfied. The claim gives rise to a maritime lien over the Vessel

and is brought against it. Also, the Respondent is the owner of the Vessel.

105. Therefore, the Tribunal shall grant the Claimant a statutory maritime lien pursuant to section

20(2)(m) of the Senior Court Act.146

145 Section 21(4) of the Senior Court Act 1981. 146 Senior Court Act 1981.

25

PART V - PRAYER FOR RELIEF -

In light of the foregoing submissions, the Respondent respectfully request this Tribunal to:

DECLARE that it has jurisdiction over all disputes arising out of the Charterparty;

DECLARE the request for arbitration admissible;

FIND the Respondent liable for the following breaches of the Charterparty:

1. the unseaworthiness of the Vessel

2. the deviation to Spectre

3. the delay in the delivery of the Goods

4. the damages inflicted to the Goods

FIND the Respondent not entitled to limit its liability under the Limitation of Liability for Maritime

Claims Act 1976;

DECLARE the Respondent liable for the payment of the replacement coffee bought from the Buyer;

AWARD the Claimant damages;

ORDER the Claimant holds a maritime lien over the Madam Dragonfly;

REJECT the Respondent’s counterclaim;

DECIDE that the Respondent is liable to pay legal and other costs that may incur arising out of or in

relation to the present arbitration.