FOURTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT COMPETITION 2013

IN THE MATTER OF AN ARBITRATION HELD IN SOUTHAMPTON

Claimant

Aardvark Ltd

Respondent

Twilight Carriers Inc

MEMORANDUM FOR THE CLAIMANT TEAM NO. 6

Clinton Bonomelli Tenille Fricker Bianca Grubor

Andrew Shinnick

 

i

TABLE OF CONTENTS  LIST OF AUTHORITIES iii LIST OF ABBREVIATIONS xi STATEMENT OF FACTS 1 PART ONE: JURISDICTION 2 A THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION 2 B THE CHARTERPARTY CONTAINS A VALID ARBITRATION AGREEMENT,

WHICH SPECIFIES LONDON AS THE SEAT 2

a. The London Arbitration Agreement is a valid arbitration agreement 3

b. The London Arbitration Agreement evinces the parties’ true intention to have London as the seat of their arbitration 4

C THE CLAIMANT IS A PARTY TO THE LONDON ARBITRATION AGREEMENT 5

a. The Contract of Carriage incorporates the London Arbitration Agreement 5

b. The Claimant is a party to the Contract of Carriage 6 D THE CLAIMANT HAS COMMENCED THESE ARBITRATION PROCEEDINGS IN

ACCORDANCE WITH THE ARBITRATION ACT 1996 7 E ANY AWARD RENDERED BY THIS TRIBUNAL IS LIKELY TO BE ENFORCEABLE

UNDER THE NYC 7

a. The London Arbitration Agreement is valid under English law 8

b. The Respondent was given proper notice of the appointment of the arbitrators and of the arbitration proceedings 8

PART TWO: MERITS 9 I Breach of Contract 9 A THE RESPONDENT FAILED TO DELIVER THE CARGO AT THE CORRECT

PORT OF DISCHARGE 9

a. The Respondent discharged the Cargo at a port other than the agreed Port of Discharge 10

b. The emails between the Claimant and Beatles did not amend the

Contract of Carriage 10

 

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B THE RESPONDENT DISCHARGED THE CARGO WITHOUT PRODUCTION OF THE BILLS OF LADING 11

C THE RESPONDENT DELIVERED THE CARGO TO AN INCORRECT PARTY 12

D FURTHER, THE RESPONDENT BREACHED CLAUSE 1(A) OF THE CHARTERPARTY 13 E CLAUSE 29 OF THE CHARTERPARTY DOES NOT EXCLUDE THE RESPONDENT’S

LIABILITY 14

a. There was no risk to the Vessel or its Cargo 15

b. Clause 29 of the Charterparty does not limit the Respondent’s liability for delivering the Cargo without production of the Bills of Lading 16

F THE RESPONDENT CANNOT RELY ON CLAUSE 17 OF THE CHARTERPARTY TO

EXCLUDE ITS LIABILITY 17

G THE RESPONDENT’S BREACHES OF THE CONTRACT OF CARRIAGE CAUSED THE CLAIMANT’S LOSS AND THE LOSS IS NOT TOO REMOTE 18

II Hague-Visby 19 A THE RESPONDENT BREACHED ARTICLE III, RULE 1 OF THE HVR 20 B FURTHER AND IN THE ALTERNATIVE, THE RESPONDENT BREACHED

ARTICLE III, RULE 2 OF THE HVR 21 C THE RESPONDENT’S BREACHES CAUSED THE CLAIMANT’S LOSS 22 D THE RESPONDENT CANNOT EXCLUDE ITS LIABILITY UNDER ARTICLE IV,

RULE 2 OF THE HVR 22

a. The Respondent did not fulfill Article III, rule 1 of the HVR 22

b. In any event, the HVR do not exclude liability for loss and damage arising from events of piracy 23

III Tort of Conversion 24 A THE CLAIMANT IS ENTITLED TO CLAIM IN CONVERSION 24 B THE RESPONDENT CONVERTED THE CARGO 24 C THE RESPONDENT’S ACTIONS CAUSED THE CLAIMANT’S LOSS AND THE LOSS

IS NOT TOO REMOTE 25 IV Prayer for Relief 25

 

iii

LIST OF AUTHORITIES: BOOKS

Aikens, Sir R. Bools, M. Lord, R. Bills of Lading (Informa, 2006) Ambrose, C. Maxwell, K. London Maritime Arbitration (Informa, 3rd ed, 2009) Arnaldez, J. J. Derains, Y. Hascher, D. Collection of ICC Arbitral Awards 1996-2000 (Kluwer

Law International, 2003) Balkin, R. P. Davis, J. L. R. Law of Torts (LexisNexis Butterworths, 3rd ed, 2004) Beale, H. G. et al (eds) Chitty on Contracts (Sweet & Maxwell, 30th ed, 2008)

vol 1 Blackaby, N. et al Redfern and Hunter on International Arbitration

(Oxford University Press, 5th ed, 2009) Born, G. B. International Commercial Arbitration (Kluwer Law

International, 2009) vol 1 Born, G. B. International Commercial Arbitration (Kluwer Law

International, 2009) vol 2 Cooke, J. et al Voyage Charters (Informa, 3rd ed, 2007) Dugdale, A. M. et al (eds) Clerk & Lindsell on Torts (Sweet & Maxwell, 19th ed,

2006) Eder, Sir B. et al Scrutton on Charterparties and Bills of Lading (Sweet

& Maxwell, 22nd ed, 2011) Gaillard, E. Di Pietro, D. (eds) Enforcement of Arbitration Agreements and

International Arbitral Awards: The New York Convention in Practice (Cameron May, 2008)

Garner, B. A. Black’s Law Dictionary (Thomson Reuters, 9th ed, 2010) Girvin, S. Carriage of Goods by Sea (Oxford University Press, 2nd

ed, 2011) Lewison, K. The Interpretation of Contracts (Sweet & Maxwell,

1989) McGregor, H. McGregor on Damages (Sweet & Maxwell, 18th ed,

2009)

 

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McKendrick, E. Force Majeure and Frustration of Contract (Lloyd’s of

London Press, 2nd ed, 1995) Michel, K. War, Terror and Carriage by Sea (Lloyd’s of London

Press, 2004) Richardson, J. A Guide to the Hague and Hague-Visby Rules (Lloyd’s

of London Press, 3rd ed, 1994) Rose, F. (ed) International Commercial and Maritime Arbitration

(Sweet & Maxwell, 1988) Sassoon, D. Orren Merren, H. CIF and FOB Contracts (Stevens and Sons, 3rd ed,

1984) Tetley, W. Marine Cargo Claims (Thomson Carswell, 4th ed, 2008)

vol 1 Tetley, W. Marine Cargo Claims (Thomson Carswell, 4th ed, 2008)

vol 2 Thomas, R. The Evolving Law and Practice of Voyage Charter

Parties (Informa, 2009) Treitel, Sir G. H. Frustration and Force Majeure (Sweet & Maxwell, 2nd

ed, 2004) Treitel, Sir G. H. Reynolds, F. M. B. Carver on Bills of Lading (Sweet & Maxwell, 2001) Wilson, J. F. Carriage of Goods by Sea (Pearson Education, 7th ed,

2010)

 

v

LIST OF AUTHORITIES: JOURNAL ARTICLES

Azubuike, L. ‘International Law Regime against Piracy’ (2009) 15 Annual Survey of International and Comparative Law 43

Curwen, N. ‘Title to Sue in Conversion’ [2004] Conveyancer and

Property Lawyer 308 Garmon, T. ‘International Law of the Sea: Reconciling the Law on

Piracy and Terrorism in the Wake of September 11th’ (2002-2003) 27 Tulane Maritime Law Journal 257

Guilfoyle, D. ‘Piracy off Somalia: UN Security Council Resolution

1816 and IMO Regional Counter-Piracy Efforts’ (2008) 57(3) International and Comparative Law Quarterly 690

Halberstam, M. ‘Terrorism on the High Seas: The Achille Lauro, Piracy

and the IMO Convention on Maritime Safety’ (1988) 82(2) American Journal of International Law 269

 

vi

LIST OF AUTHORITIES: CASES

A. A/S Hansen-Tangens Rederi III v Total Transport Corporation (The Sagona) [1984] 1 Lloyd’s Rep 194 Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53 Alexander v Cambridge Credit Corporation Ltd [1987] 9 NSWLR 310 Alfred C Toepfer Schiffahrtsgesellschaft GmbH v Tossa Marine Co Ltd (The Derby) [1985] 2 Lloyd’s Rep 325 American Trading & Production Corporation v Shell International Marine Ltd (The Washington Trader) [1972] 1 Lloyd’s Rep 463 Amoco Overseas Co v ST Averger, 1975 AMC 782 (SD NY, 1975) B. Bangladesh Chemical Industries Corporation v Henry Stephens Shipping Co Ltd (The SLS Everest) [1981] 2 Lloyd’s Rep 389 Barclays Bank Ltd v Commissioners of Customs & Excise [1963] 1 Lloyd’s Rep 81 Bolivia v Indemnity Mutual Marine Assurance Co Ltd [1909] 1 KB 785 Borealis AB v Stargas Ltd (The Berge Sisar) [2001] 1 Lloyd’s Rep 663 Bristol & West of England Bank v Midland Railway Co [1891] 2 QB 653 Bulk Shipping AG v Ipco Trading SA (The Jasmine B) [1992] 1 Lloyd’s Rep 39 C. Centre Optical (Hong Kong) v Jardine Transport Services [2001] 1 Lloyd’s Rep 678 Chabbra Corporation Pte Ltd v Owners of the Jag Shakti (The Jag Shakti) [1986] AC 337 Chartered Bank of India Australia & China v British India Steam Navigation Co Ltd [1909] AC 369 Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8 Club Cruise Entertainment & Travelling Services Europe BV v The Department for Transport (The Van Gogh) [2009] 1 Lloyd’s Rep 201 Cork v Kirby Maclean Ltd [1952] 2 All ER 402 County Ltd v Girozentrale Securities [1996] 3 All ER 834 D. Dowans Holding SA v Tanzania Electric Supply Co Ltd [2011] 2 Lloyd’s Rep 475 E. East West Corporation v DKBS 1912 [2003] 1 Lloyd’s Rep 239 Edwin Lord v Pacific Steam Navigation Co (The Oropesa) [1942] 74 Ll L Rep 86 Enichem Anic SpA v Ampelos Shipping Co Ltd (The Delfini) [1990] 1 Lloyd’s Rep 252 Eridania SpA v Rudolf A Oetker (The Fjord Wind) [1999] 1 Lloyd’s Rep 307 Evergreen Marine Corporation v Aldgate Warehouse (Wholesale) Ltd [2003] 2 Lloyd’s Rep 597 F. FC Bradley & Sons Ltd v Federal Steam Navigation Co [1926] 24 Ll L Rep 446 Federal Bulk Carriers Inc v C Itoh & Co Ltd (The Federal Bulker) [1989] 1 Lloyd’s Rep 103 Frota Oceanica Brasiliera SA v Steamship Mutual Underwriting Association (Bermuda) Ltd (The Frotanorte) [1995] 2 Lloyd’s Rep 254

 

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G. G H Renton & Co Ltd v Palmyra Trading Corporation of Panama [1957] AC 149 Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360 Global Process Systems Inc v Syarikat Takaful Malaysia Berhad (The Cendor Mopu) [2009] 2 Lloyd’s Rep 72 Glynn v Margetson & Co [1883] AC 351 Golden Fleece Maritime Inc v St Shipping & Transport Inc (The Elli & The Frixos) [2008] 1 Lloyd’s Rep 262 Goss v Lord Nugent (1833) 5 B & Ad 58 Grain Growers Export Co v Canada Steamship Lines Ltd (1918) 43 OLR 330 H. H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791 Hadley v Baxendale (1854) 9 Ex 341 Heinrich Hanno & Co v Fairlight Shipping Co (The Kostas K) [1985] 1 Lloyd’s Rep 231 Heskell v Continental Express Ltd [1950] 1 All ER 1033 Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] 1 Lloyd’s Rep 571 Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] 1 Lloyd’s Rep 159 Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1961] 2 Lloyd’s Rep 478 Huyton SA v Peter Cremer GmbH & Co [1999] 1 Lloyd's Rep 620 J. Jackson v Royal Bank of Scotland [2005] 1 Lloyd’s Rep 366 K. Knight Steamships Co v Fleming Douglas & Co (1898) 25 R 1070 Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350 Kum v Wah Tat Bank Ltd [1971] 1 Lloyd’s Rep 439 Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 & 5) [2002] 2 AC 883 Kuwait Petroleum Corporation v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 L. L’Estrange v F Graucob Ltd [1934] 2 KB 394 Leigh & Sillivan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] 2 Lloyd’s Rep 1 Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd [1918] AC 350 M. Manifest Shipping & Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea) [1995] 1 Lloyd’s Rep 651 March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506 Martindale v Smith (1841) 1 QB 389 Masefield AG v Amlin Corporate Member Ltd (The Bunga Melati Dua) [2011] 1 Lloyd’s Rep 630 Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] 2 Lloyd’s Rep 105 MB Pyramid Sound NV v Briese Schiffahrts GMBH & Co KGMS (The Ines) [1995] 2 Lloyd’s Rep 144 Metall Market OOO v Vitorio Shipping Co Ltd (The Lehmann Timber) [2012] 2 Lloyd’s Rep 73 Mitsui & Co Ltd v Flota Mercante Grancolombiana SA (The Ciudad De Pasto & Ciudad De Neiva) [1988] 2 Lloyd’s Rep 208

 

viii

Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1948] 82 Ll L Rep 137 Motis Exports Ltd v Dampskibsselskabet AF 1912 [2000] 1 Lloyd’s Rep 211 N. Nea Agrex SA v Baltic Shipping Co Ltd (The Agios Lazaros) [1976] 2 Lloyd’s Rep 47 Nirma Ltd v Lurgi Energie und Entsorgung GmbH (2003) XXVII Yearbook Commercial Arbitration 790 Northern Shipping Co v Deutsche Seereederei GmbH (The Kapitan Sakharov) [2000] 2 Lloyd’s Rep 255 Norris v Williams Moss & Sons [1954] 1 WLR 346 O. Orinoco Navigation Ltd v Ecotrade SpA (The Ikariada) [1999] 2 All ER 257 Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound) [1961] AC 388 Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty (The Wagon Mound No 2) [1967] 1 AC 617 Owners of Cargo on Board the Morviken v Owners of the Hollandia (The Hollandia) [1983] AC 565 Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The Eastern Saga) [1984] 2 Lloyd’s Rep 373 P. Papera Traders Co Ltd v Hyundai Merchant Marine Co Ltd (The Eurasian Dream) [2002] 1 Lloyd’s Rep 719 Peekay Intermark Ltd v Australia & New Zealand Banking Group Ltd [2006] 2 Lloyd’s Rep 511 Photo Productions Ltd v Securicor Transport Ltd [1980] AC 827 Primetrade AG v Ythan Ltd (The Ythan) [2006] 1 Lloyd’s Rep 457 R. Rhaman v Arearose Ltd [2001] QB 351 Royal Greek Government v Minister of Transport [1949] 83 Ll L Rep 228 S. SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266 Seabridge Shipping AB v AC Orsleff’s EFTS A/S [2000] CLC 656 Sewell v Burdick (The Zoe) (1884) 10 App Cas 74 Shipping Corporation of India Ltd v Gamlen Chemical Co (1980) 147 CLR 142 Skibsaktieselskapet Thor Thoresens Linje v H Tyrer & Co Ltd [1929] 35 Ll L Rep 163 Smith, Hogg & Co Ltd v Black Sea & Baltic General Insurance Co Ltd [1940] 67 Ll L Rep 253 Sonatrach Petroleum Corporation v Ferrel International Ltd [2002] 1 All ER 627 Stapely v Gypsum Mines Ltd [1953] AC 663 Suisse Atlantique Société d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1966] 1 Lloyd’s Rep 529 Svenska Petroleum Exploration AB v Lithuania (No 2) [2005] EWHC 2437 Svenska Traktor AB v Maritime Agencies (Southampton) [1953] 2 QB 295 Swiss Bank Corporation v Novorossiysk Shipping Co (The Petr Shmidt) [1995] 1 Lloyd’s Rep 202 Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114 T. T Comedy (UK) Ltd v Easy Managed Transport Ltd [2007] EWHC 611

 

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The British Shipowners’ Co (Ltd) v Grimond (1876) 3 R 968 The Dolphina [2012] 1 Lloyd’s Rep 304 The Makedonia [1962] 1 Lloyd's Rep 316 The Merak [1964] 2 Lloyd’s Rep 527 The Sivand [1998] 2 Lloyd’s Rep 97 The Stone Gemini [1999] 2 Lloyd’s Rep 255 Thomas & Co Ltd v Portsea Steamship Co Ltd [1912] AC 1 Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] 2 Lloyd’s Rep 622 U. Union of India v NV Reederij Amsterdam [1963] 2 Lloyd’s Rep 223 United British Steamship Co Ltd v Minister of Food [1951] 1 Lloyd’s Rep 111 V. Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 Vosnoc Ltd v Transglobal Projects Ltd [1997] 1 WLR 101 Voss v APL Co Pte Ltd [2002] 2 Lloyd’s Rep 707 Y. Yorkshire Dale Steamship Co Ltd v Minister of War Transport [1942] AC 691

 

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LIST OF AUTHORITIES: INTERNATIONAL CONVENTIONS, RULES AND STATUTES

International Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 Geneva Convention on the High Seas 1958 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1968 United Nations Commission on International Trade Law, Model Law on International Commercial Arbitration 1985 United Nations Commission on International Trade Law, Arbitration Rules 1976 United Nations Convention on the Law of the Sea 1982 Domestic Arbitration Act 1996 (UK) c 23 Carriage of Goods by Sea Act 1971 (UK) c 19 Carriage of Goods by Sea Act 1992 (UK) c 50 Federal Arbitration Act 9 USC (1947) Merchant Shipping and Maritime Security Act 1997 (UK) c 28 Sale of Goods Act 1979 (UK) c 54

LIST OF AUTHORITIES: OTHER Comité Maritime International ‘Status of the Ratifications of and Accessions to the

Brussels International Maritime Law Conventions’ CMI Yearbook 2009

Kahlid, N. ‘The Year of Shipping Dangerously’ (2008) 22(10)

Maritime Risk International Steer, J. ‘Piracy and General Average’ (2009) 23(8) Maritime

Risk International Whitherby Publishing Group Best Management Practices for Protection against

Somalia Based Pirates, version 4 (at August 2011)

 

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LIST OF ABBREVIATIONS Arbitration Act 1996 : Arbitration Act 1996 (UK) c 23

CAD : Cash Against Documents

CIF : Cost Insurance Freight

GMQ : Good Merchantable Quality

HVR : Hague Visby Rules

mt : Metric Tonne

NYC : Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958

PFAD : Palm Fatty Acid Distillate

UK : United Kingdom

 

  1

STATEMENT OF FACTS

1 On 23 May 2008, Aardvark Ltd (Claimant) entered into two sales contracts (Sales Contracts)

with Beatles Oils & Fats Ltd (Beatles) for a total of 4000 mt of GMQ PFAD (Cargo) for

USD 705.00 per mt CIF Rotterdam. The Claimant and Beatles subsequently amended the

Sales Contracts to USD 747.50 per mt CIF Merseyside, Gladstone Dock.

2 On 12 September 2008, Beatles entered into a charterparty (Charterparty) with Twilight

Carriers Inc (Respondent) for the sub-charter of the Twilight Trader (Vessel) for the carriage

of the Cargo.

3 On 25 October 2008, the Respondent issued four bills of lading (Bills of Lading) for the

Cargo to Beatles.

4 Between 15 November 2008 and 13 February 2009, Somali pirates hijacked the Vessel off the

coast of Somalia.

5 On 26 January 2009, the Claimant paid Beatles for the Cargo and Beatles subsequently

indorsed the Bills of Lading to the Claimant.

6 On 6 March 2009, the Claimant notified Beatles that it was in repudiatory breach of the Sales

Contracts.

7 On 15 March 2009, Beatles refuted the Claimant’s claim with respect to Beatles’ repudiatory

breach and placed the Claimant in anticipatory breach of the Sales Contracts for abandonment

of the Cargo.

8 On 20 March 2009, the Claimant informed the Respondent it was the lawful holder of the

Bills of Lading and stated that the Cargo should not be discharged at Rotterdam.

9 Between 20 and 22 March 2009, the Respondent discharged the Cargo at Rotterdam against a

letter of indemnity, which Beatles had previously issued to the Respondent.

10 On 25 August 2009, Beatles on-sold the Cargo to AB Buyers for USD 1 695 752.38. The

District Court of Rotterdam currently holds the proceeds of the sale.

 

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PART ONE: JURISDICTION

11 The Claimant argues that this tribunal (Tribunal) has jurisdiction to hear the merits of this

dispute because: (A) this Tribunal has the power to rule on its own jurisdiction; (B) the

Charterparty contains a valid arbitration agreement, which specifies London as the seat; (C)

the Claimant is a party to the London Arbitration Agreement; (D) the Claimant has

commenced these arbitration proceedings in accordance with the Arbitration Act 1996; and

(E) any award rendered by this Tribunal is likely to be enforceable under the NYC.

A THIS TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION

12 It is a well-established principle of international arbitration that an arbitral tribunal has an

inherent power to rule on its own jurisdiction, including questions as to the validity of the

arbitration agreement.1 The Claimant therefore argues that this Tribunal has the power to rule

on its own jurisdiction.

B THE CHARTERPARTY CONTAINS A VALID ARBITRATION AGREEMENT, WHICH

SPECIFIES LONDON AS THE SEAT

13 The Charterparty contains two conflicting arbitration agreements: the first is contained in the

‘Fixture Recap’ and specifies ‘London Arbitration’ (London Arbitration Agreement);2 the

second is contained in the standard Vegoilvoy form and provides for arbitration in New York

(New York Arbitration Clause).3

14 The Claimant concedes that the New York Arbitration Clause is valid. But, the Claimant

argues that the London Arbitration Agreement prevails because: (a) it is a valid arbitration

agreement; and (b) it evinces the parties’ true intention to have London as the seat of their

arbitration.

                                                                                                               1 Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Registrierte GmbH [1954] 1 QB 8, 12-3; 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 Moot Problem, 4. 3 Ibid 11.

 

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a. The London Arbitration Agreement is a valid arbitration agreement

15 The Claimant argues that the London Arbitration Agreement is valid under English law, being

the law applicable to it. Parties to an arbitration agreement may choose which law governs

the validity of that agreement.4 Where parties have not expressly chosen the law applicable to

the validity of an arbitration agreement, either the law of the seat or the law applicable to the

underlying contract will apply.5

16 The parties have not expressly chosen any law to apply to the validity of the London

Arbitration Agreement.6 The Claimant argues that English law is applicable because: English

law is the law of the seat (see below at paragraph 20-22); and English law is the law

applicable to the underlying contract because the ‘Fixture Recap’ states ‘English law to

apply’.7

17 An arbitration agreement is valid under English law when that agreement is in writing.8

Under section 5(2)(a) of the Arbitration Act 1996, an arbitration agreement is ‘in writing’

when it is made in writing (whether or not it is signed by the parties). The London

Arbitration Agreement fulfills this requirement as it is clearly in writing.

18 Further, an arbitration agreement is valid where it contains the requisite degree of certainty.9

Charterparties and bills of lading often contain abbreviated arbitration clauses.10 The English

courts have held that an abbreviated arbitration clause will contain the requisite degree of

certainty where it can give effect to the parties’ presumed intentions.11 In The Petr Shmidt,12

the arbitration clause stated ‘Arbitration in London’. The Queen’s Bench held that the

                                                                                                               4 Born, above n 1, 426-41; See, eg, Arbitration Act 1996 (UK) c 23, s 103(2); Federal Arbitration Act 9 USC (1947); United Nations Commission on International Trade Law, Model Law on International Commercial Arbitration 1985 arts 34(2)(a)(i), 36(1)(a)(i); NYC art v(1)(a). 5 Sonatrach Petroleum Corp v Ferrel International Ltd [2002] 1 All ER 627, [32]; Svenska Petroleum Exploration AB v Lithuania (No 2) [2005] EWHC 2437, [76]-[77]; Nirma Ltd v Lurgi Energie und Entsorgung GmbH (2003) XXVII Yearbook Commercial Arbitration 790, 803; Born, above n 1, 446-7. 6 Moot Problem, 4. 7 Ibid. 8 Arbitration Act 1996 (UK) c 23, s 5. 9 Blackaby et al, above n 1, 146; Clare Ambrose and Karen Maxwell, London Maritime Arbitration (Informa, 3rd ed, 2009) 31. 10 Ambrose and Maxwell, above n 9, 30. 11 Blackaby et al, above n 1, 146; Ambrose and Maxwell, above n 9, 30. 12 [1995] 1 Lloyd’s Rep 202.

 

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arbitration clause was sufficiently certain to give effect to the parties’ intention and was

therefore capable of being enforced.13

19 The London Arbitration Agreement provides ‘London Arbitration’. The Claimant argues that

the London Arbitration Agreement contains the requisite degree of certainty: it gives effect to

the parties’ intention to have any of its disputes arising out of or in connection with the

Charterparty resolved by arbitration in London. The Claimant therefore contends that the

London Arbitration Agreement is valid.

b. The London Arbitration Agreement evinces the parties’ true intention to have

London as the seat of their arbitration

20 Where a contract contains reference to two or more conflicting arbitral seats, tribunals and

courts attempt to identify which seat the parties intended to designate.14 In identifying which

seat the parties intended to designate, tribunals and courts will give greater weight to the

terms that the parties drafted, negotiated and specifically included in the contract than to the

terms of the standard form contract used.15

21 In The Petr Shmidt,16 a telexed fixture recap of the charterparty included a clause providing

‘Arbitration in London’. The fixture was attached to a standard Vegoilvoy form that provided

for arbitration in New York. In determining the prevailing clause, Potter J stated that ‘the

Vegoilvoy form was replaced by an agreement for arbitration in London with English law to

apply.’17 An analogous situation exists in the present case.

22 The Claimant therefore argues that the London Arbitration Agreement evinces the parties’

true intention because it is the agreement that the parties drafted, negotiated and specifically

included in the Charterparty. As such, the London Arbitration Agreement has replaced the

New York Arbitration Clause and London is the correct seat of this arbitration.

                                                                                                               13 Ibid 207. 14 Born, above n 1, 1719. 15 The Starsin [2003] 1 Lloyd’s Rep 571, 577; United British Steamship Company Ltd v Minister of Food [1951] 1 Lloyd’s Rep 111, 114; Sir Bernard Eder et al, Scrutton on Charterparties and Bills of Lading (Sweet & Maxwell, 22nd ed, 2011) 22. 16 [1995] 1 Lloyd’s Rep 202. 17 Ibid 206.

 

  5

C THE CLAIMANT IS A PARTY TO THE LONDON ARBITRATION AGREEMENT

23 Arbitration agreements are private arrangements that bind signatories.18 The Claimant is a

non-signatory to the London Arbitration Agreement.19 However, the Claimant argues that it

is a party to the London Arbitration Agreement because: (a) the Contract of Carriage

incorporates the London Arbitration Agreement; and (b) the Claimant is a party to the

Contract of Carriage.

a. The Contract of Carriage incorporates the London Arbitration Agreement

24 A bill of lading can evidence a contract of carriage.20 Where a bill of lading purports to

include the terms of a charterparty, the general terms of the charterparty are incorporated into

the contract of carriage.21 However, the bill of lading must make specific reference to an

arbitration clause if that clause is also to be incorporated.22 Where the details of the

charterparty, referred to in the bill of lading, are not specified on the face of the bill, the

reference to the charterparty will be construed as a reference to the charterparty under which

the cargo is carried.23 As such, where a bill of lading refers to an arbitration clause in a

charterparty but fails to provide the details of that charterparty, the reference will be construed

as a reference to the arbitration agreement contained in the charterparty under which the cargo

is carried.

25 In this case, the contract of carriage (Contract of Carriage) is evidenced by the Bills of

Lading. 24 Clause 1 of the ‘Conditions of Carriage’, located on the reverse side of each of the

Bills of Lading, states ‘[a]ll terms and conditions, liberties and exceptions of the Charter

Party, dated as overleaf, including the Law and Arbitration Clause/Dispute Resolution Clause,

                                                                                                               18 The Eastern Saga [1984] 2 Lloyd’s Rep 373, 379; Born, above n 1, 1131-2. 19 Moot Problem, 6. 20 Carriage of Goods by Sea Act 1992 (UK) c 50, s 5(1); Eder et al, above n 15, 1; Sir Guenter Treitel and F M B Reynolds, Carver on Bills of Lading (Sweet & Maxwell, 2001) 61. 21 Eder et al, above n 15, 95; Treitel and Reynolds, above n 20, 71. 22 Thomas & Co Ltd v Portsea Steamship Co Ltd [1912] AC 1; The Merak [1964] 2 Lloyd’s Rep 527; The Federal Bulker [1989] 1 Lloyd’s Rep 103. 23 The SLS Everest [1981] 2 Lloyd’s Rep 389, 391; The Ikariada [1999] 2 All ER 257, 267; Eder et al, above n 15, 97; Treitel and Reynolds, above n 20, 81-2. 24 Moot Problem, 66.

 

  6

are herewith incorporated.’ 25 On a plain reading of this clause, the Bills of Lading

incorporate, by reference, the general terms of ‘the Charter Party’. The Bills of Lading also

make specific reference to the applicable law and dispute resolution provisions contained in

‘the Charter Party’ and as such, these provisions are also incorporated. ‘The Charter Party’ is

not dated overleaf,26 but the Cargo was carried under the Charterparty. The Claimant

therefore argues that the terms of the Charterparty and the London Arbitration Agreement are

incorporated into the Contract of Carriage.

b. The Claimant is a party to the Contract of Carriage

26 When a bill of lading is issued ‘to order’, it has no stipulated consignee27 and can be indorsed

to a third party.28 When a bill of lading is indorsed to a third party, the original holder of the

bill of lading is no longer bound by the terms of the contract evidenced by the bill of lading.29

Rather, the rights and obligations under the contract, including all rights of suit, are

transferred to the third party, and the third party is entitled to act as if it was always a party to

the contract.30

27 Beatles indorsed the Bills of Lading to the Claimant upon receiving the purchase price for the

Cargo.31 The Claimant argues that, upon indorsement of the Bills of Lading, the rights and

obligations under the Contract of Carriage, including the right to have any disputes resolved

pursuant to the London Arbitration Agreement, were transferred to the Claimant. As such,

the Claimant argues that it is a party to the Contract of Carriage and to the London Arbitration

Agreement.

                                                                                                               25 Ibid 15, 17, 19, 21. 26 Ibid 14, 16, 18, 20. 27 The Berge Sisar [2001] 1 Lloyd’s Rep 663, 669; Eder et al, above n 15, 2; Treitel and Reynolds, above n 20, 2-3. 28 The Sormovskiy 3068 [1994] 2 Lloyd’s Rep 266, 270; The Dolphina [2012] 1 Lloyd’s Rep 304, 335; Eder et al, above n 15, 2; Treitel and Reynolds, above n 20, 2-3. 29 Carriage of Goods by Sea Act 1992 (UK) c 50, s 2(5)(a); Eder et al, above n 15, 44; Treitel and Reynolds, above n 20, 67. 30 Carriage of Goods by Sea Act 1992 (UK) c 50, s 2(1); The Ythan [2006] 1 Lloyd’s Rep 457, 461. 31 Moot Problem, 67.

 

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D THE CLAIMANT HAS COMMENCED THESE ARBITRATION PROCEEDINGS IN

ACCORDANCE WITH THE ARBITRATION ACT 1996

28 The Respondent may argue that the Claimant has failed to commence these arbitration

proceedings in accordance with section 14(4) of the Arbitration Act 1996. Section 14(4) of

the Arbitration Act 1996 provides that arbitration proceedings are commenced when one party

serves on the other party a notice in writing requiring that party to either appoint an arbitrator

or agree on the appointment of an arbitrator. In The Agios Lazaros,32 the English Court of

Appeal stated that a notice must be in writing in order for it to be valid.33 A valid notice must

contain an indication of the claim, the remedies sought and a reference to the arbitration

agreement.34 If no request is made in the notice, a notice carries with it an implied request in

relation to the appointment of an arbitrator.35

29 The ‘Claim Submissions’ are clearly in writing. They also indicate the nature of the

Claimant’s claim against the Respondent and the damages it seeks, and they make an implied

reference to the London Arbitration Agreement.36 In addition, the Tribunal has already been

appointed.37 The Claimant contends that the Claimant and the Respondent have agreed on the

arbitrators because they have met with the appointed arbitrators and agreed upon the

procedure of this arbitration.38 The Claimant therefore argues that it commenced these

proceedings in accordance with the Arbitration Act 1996.

E ANY AWARD RENDERED BY THIS TRIBUNAL IS LIKELY TO BE ENFORCEABLE UNDER

THE NYC

30 It is unclear on the facts where the Respondent has its main place of business or where its

assets are located. However, the Claimant argues that if the Respondent’s assets are located

                                                                                                               32 [1976] 2 Lloyd’s Rep 47. 33 The Agios Lazaros [1976] 2 Lloyd’s Rep 47, 51; See also Vosnoc Ltd v Transglobal Projects Ltd [1997] 1 WLR 101; Seabridge Shipping AB v AC Orsleff’s EFTS A/S [2000] CLC 656. 34 United Nations Commission on International Trade Law, Arbitration Rules 1976 art 6; Blackaby et al, above n 1, 24. 35 The Frotanorte [1995] 2 Lloyd’s Rep 254, 261; See also The Agios Lazaros [1976] 2 Lloyd’s Rep 47. 36 Moot Problem, 65-70. 37 Competition Rules, 2, 7. 38 Procedural Order 1, 1(a).  

 

  8

outside the UK, it is likely that the NYC will govern the recognition and enforcement of any

arbitral award rendered by this Tribunal.

31 Under Article V of the NYC, there are limited grounds on which a court may refuse to

recognise and enforce an arbitral award.39 These grounds are narrowly interpreted,40 and are

subject to judicial discretion.41 The Claimant argues that any award rendered by this Tribunal

is likely to be enforceable under the NYC because: (a) the London Arbitration Agreement is

valid under English law; and (b) the Respondent was given proper notice of the appointment

of the arbitrators and of the arbitration proceedings.

a. The London Arbitration Agreement is valid under English law

32 Under Article V(1)(a) of the NYC, a court may, upon request of a party, and if that party

furnishes proof, refuse to recognise and enforce an award where the ‘arbitration agreement is

not valid under the law to which the parties have subjected it or, failing an indication thereon,

under the law of the country where the award was made.’ The Claimant refers this Tribunal

to paragraphs 15-17 above and argues that the parties have indicated that English law is the

law applicable to the validity of the arbitration agreement, and in any event, that English law

is the law of the country where the award will be made. Further, the Claimant refers this

Tribunal to paragraphs 17-19 above and argues that the London Arbitration Agreement is

valid under English law. Article V(1)(a) of the NYC is therefore unlikely to preclude the

recognition and enforcement of an award rendered by this Tribunal.

b. The Respondent was given proper notice of the appointment of the arbitrators

and of the arbitration proceedings

33 Under Article V(1)(b) of the NYC, a court may, upon request of a party, and if that party

furnishes proof, refuse to recognise and enforce an award where ‘the party against whom the

award is invoked was not given proper notice of the appointment of an arbitrator or of the

                                                                                                               39 NYC art V(1)(b). 40 Herman Verbist, ‘Challenges on Grounds of Due Process Pursuant to Article V(1)(b) of the New York Convention’ in Emmanuel Gaillard and Domenico Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (Cameron May, 2008) 679, 687. 41 Dowans Holding SA v Tanzania Electric Supply Co Ltd [2011] 2 Lloyd’s Rep 475, 490.

 

  9

arbitration proceedings…’. There is no single interpretation of Article V(1)(b) of the NYC

that is universally adopted.42 The courts of different jurisdictions are cautious of liberally

interpreting the article; out of 136 court decisions reported (to 2006), only 14 cases in total

were successful on this point.43 The Claimant directs this Tribunal to paragraphs 28-29 above

and argues that it gave proper notice to the Respondent of the appointment of the arbitrators

and of the arbitration proceedings. Article V(1)(b) of the NYC is therefore unlikely to

preclude the recognition and enforcement of any award rendered by this Tribunal.

PART TWO: MERITS

I Breach of Contract

34 The Claimant argues that the Respondent breached the Contract of Carriage because: (A) the

Respondent failed to deliver the Cargo at the correct Port of Discharge; (B) the Respondent

discharged the Cargo without production of the Bills of Lading; (C) the Respondent delivered

the Cargo to an incorrect party; and (D) further, the Respondent breached Clause 1(a) of the

Charterparty. The Respondent is liable to pay damages to the Claimant for the above

breaches of the Contract of Carriage because: (E) Clause 29 of the Charterparty does not

exclude the Respondent’s liability; (F) the Respondent cannot rely on Clause 17 of the

Charterparty to exclude its liability; and (G) the Respondent’s breaches of the Contract of

Carriage caused the Claimant’s loss and the loss is not too remote.

A THE RESPONDENT FAILED TO DELIVER THE CARGO AT THE CORRECT PORT OF

DISCHARGE

35 The Claimant argues that the Respondent failed to deliver the Cargo at the correct Port of

Discharge because: (a) the Respondent discharged the Cargo at a port other than the agreed

Port of Discharge; and (b) the emails between the Claimant and Beatles did not amend the

Contract of Carriage.

                                                                                                               42 Verbist, above n 40, 687. 43 Ibid 728.

 

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a. The Respondent discharged the Cargo at a port other than the agreed Port of

Discharge

36 The Claimant contends that Liverpool, Merseyside, UK, was the contracted port of discharge

(Port of Discharge) evidenced in the Bills of Lading. A bill of lading is interpreted using

ordinary methods of contractual interpretation.44 A party that signs a written contract is

bound by its terms.45 The Bills of Lading clearly provide that the agreed Port of Discharge

was Liverpool, Merseyside, UK.46 This express designation of the Port of Discharge is

conclusive evidence that the Claimant and the Respondent (Parties) agreed to discharge the

Cargo at Liverpool. The Respondent’s agents signed the Bills of Lading on behalf of the

master of the Vessel (Master). The Claimant therefore argues that Liverpool was the agreed

Port of Discharge.

37 Further, goods are discharged when they are offloaded into warehousing or storage.47 The

Claimant and the Respondent agree that discharge occurred when the Cargo was offloaded in

Rotterdam.48 The Claimant therefore argues that the Respondent discharged the Cargo at a

port other than the agreed Port of Discharge.

b. The emails between the Claimant and Beatles did not amend the Contract of

Carriage

38 A designated port of discharge on a bill of lading must be treated as if it had originally been

written into the charterparty: the charterer has no right to change it.49 However, parties may

alter the terms of a written contract where they agree to do so.50 The Claimant refers this

                                                                                                               44 The Starsin [2003] 1 Lloyd’s Rep 571, 577-8; Amoco Overseas Co v ST Averger, 1975 AMC 782, 789 (SD NY, 1975). 45 Peekay Intermark Ltd v Australia & New Zealand Banking Group Ltd [2006] 2 Lloyd’s Rep 511, 520; L’Estrange v F Graucob Ltd [1934] 2 KB 394, 403; A G Guest, ‘Exemption Clauses’ in H G Beale et al (eds), Chitty on Contracts (Sweet & Maxwell, 30th ed, 2008) vol 1, 909, 978. 46 Moot Problem, 14, 16, 18, 20 (The box titled 'Port of Discharge'). 47 See generally The MSC Amsterdam [2007] 2 Lloyd’s Rep 622; Huyton SA v Peter Cremer GmbH & Co [1999] 1 Lloyd's Rep 620, 624; The Lehmann Timber [2012] 2 Lloyd’s Rep 73. 48 Moot Problem, 72. 49 The Kostas K [1985] 1 Lloyd’s Rep 231, 235-6; The Jasmine B [1992] 1 Lloyd’s Rep 39; Julian Cooke et al, Voyage Charters (Informa, 3rd ed, 2007) 108-9. 50 Goss v Lord Nugent (1833) 5 B & Ad 58, 65; T Comedy (UK) Ltd v Easy Managed Transport Ltd [2007] EWHC 611; E G McKendrick, ‘Discharge by Agreement’ in H G Beale et al (eds), Chitty on Contracts (Sweet & Maxwell, 30th ed, 2008) vol 1, 1453, 1465.

 

  11

Tribunal to paragraphs 26-27 above and argues that the right to agree to amend the Contract

of Carriage was transferred to the Claimant upon indorsement of the Bills of Lading.

39 The Claimant concedes that it considered taking delivery of the Cargo in Rotterdam.51 But,

the Claimant contends that it never agreed with the Respondent to amend the Contract of

Carriage: the Claimant expressly told the Respondent not to discharge the Cargo in

Rotterdam.52 The Claimant therefore argues that the emails between the Claimant and Beatles

did not amend the Contract of Carriage.

B THE RESPONDENT DISCHARGED THE CARGO WITHOUT PRODUCTION OF THE BILLS OF

LADING

40 The Claimant argues that the Respondent breached the Contract of Carriage because it was

obliged to deliver the Cargo only against production of the Bills of Lading and it failed to do

so. The Bills of Lading state in the box titled ‘Shipped’:

In witness whereof the Master or Agent of the said vessel has signed the number of Bills

of Lading indicated below all of this tenor and date, any of which being accomplished

the others shall be void.53

This clause imposes an obligation on the Respondent to only deliver the Cargo against

production of the Bills of Lading.54

41 In The Sormovskiy 3068,55 Clarke J, in interpreting an analogous provision, held that:

A shipowner must not deliver the goods otherwise than against presentation of an

original bill of lading … one would expect one of the bills of lading to be

"accomplished" by being presented to the master or shipowner.56

The Claimant therefore argues that the Respondent was obliged to deliver the Cargo only

against production of the Bills of Lading.

                                                                                                               51 Moot Problem, 27, 29, 33. 52 Ibid 36. 53 Ibid 14-21. 54 The Starsin [2003] 1 Lloyd’s Rep 571, 575; Motis Exports Ltd v Dampskibsselskabet AF 1912 [2000] 1 Lloyd’s Rep 211, 217; The Dolphina [2012] 1 Lloyd’s Rep 304, 329. 55 [1994] 2 Lloyd’s Rep 266. 56 Ibid 272.

 

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42 A party delivers goods when it discharges them into another person’s possession, and that

person may then exercise dominion or control over them.57 The Respondent delivered the

Cargo when it discharged it into Beatles’ possession against a letter of indemnity.58 Beatles

subsequently on-sold the Cargo to AB Buyers.59 This demonstrates that Beatles was able to

exercise dominion or control over the Cargo.

43 The Claimant or its agents physically held the Bills of Lading at all times, including at the

time when the Respondent discharged the Cargo.60 Beatles therefore did not produce the Bills

of Lading when taking delivery of the Cargo from the Respondent. Consequently, the

Claimant argues that the Respondent failed to deliver the Cargo only against production of the

Bills of Lading.

C THE RESPONDENT DELIVERED THE CARGO TO AN INCORRECT PARTY

44 The Respondent was obliged to deliver the Cargo to the party entitled to possession of it.

When a bill of lading is indorsed and delivered to a third party, the indorser’s right to

possession of the goods is transferred to that party.61 In CAD sales contracts, the parties

intend to transfer the documents of title upon payment of the purchase price or an agreed

aggregate thereof.62 In the case of a CIF contract made CAD, title to the goods passes upon

payment of the purchase price or an agreed aggregate thereof.63

45 The Sales Contracts were made CAD.64 The Claimant held title to the Cargo and had the

immediate right to possess it at the time the Claimant paid the purchase price to Beatles and

Beatles indorsed the Bills of Lading to the Claimant. The Claimant therefore argues that as it

                                                                                                               57 Sale of Goods Act 1979 (UK) c 54, s 61(1); Chartered Bank of India Australia & China v British India Steam Navigation Co Ltd [1909] AC 369, 375; The British Shipowners’ Co (Ltd) v Grimond (1876) 3 R 968, 972; Knight Steamships Co v Fleming Douglas & Co (1898) 25 R 1070. 58 Moot Problem, 53, 72. 59 Ibid 54. 60 Procedural Order, 2[6]. 61 Carriage of Goods by Sea Act 1992 (UK) c 50, s 2(1); The Berge Sisar [2001] 1 Lloyd’s Rep 663, 669; Kum v Wah Tat Bank Ltd [1971] 1 Lloyd’s Rep 439, 446. 62 The Ciudad De Pasto & Ciudad De Neiva [1988] 2 Lloyd’s Rep 208, 214; The Delfini [1990] 1 Lloyd’s Rep 252, 269; Evergreen Marine Corporation v Aldgate Warehouse (Wholesale) Ltd [2003] 2 Lloyd’s Rep 597, 602-6. 63 The Zoe (1884) 10 App Cas 74, 105; The Delfini [1990] 1 Lloyd’s Rep 252, 268. 64 Moot Problem, 1-2.

 

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was the party entitled to possession of the Cargo, the Respondent failed to deliver the Cargo

to the party entitled to possession. Rather, it delivered the Cargo to Beatles, being an

incorrect and unentitled party.

D FURTHER, THE RESPONDENT BREACHED CLAUSE 1(A) OF THE CHARTERPARTY

46 The Claimant argues that the Respondent breached Clause 1(a) of the Charterparty because it

failed to exercise due diligence. Clause 1(a) of the Charterparty required the Respondent to

‘before and at the commencement of the voyage, exercise due diligence to make the Vessel

seaworthy, properly manned, equipped, and supplied for and during the voyage’.65

47 In The Eurasian Dream,66 the Queen’s Bench stated that ‘the exercise of due diligence is

equivalent to the exercise of reasonable care and skill’.67 Seaworthiness depends on the type

of vessel and the voyage to be undertaken.68 In order to be seaworthy, a vessel must be fit for

foreseeable perils of the sea and the duty relates to, amongst other things, the competence of

the master and crew, and the vessel’s equipment.69 An owner can be held to a higher standard

if it is aware of the peculiarities of the voyage.70 The test for determining whether the vessel

is unseaworthy due to the incompetence of the master or crew is: ‘Would a reasonably

prudent owner, knowing the relevant facts, have allowed this vessel to be put to sea with this

master and crew, with their state of knowledge, training and instruction?’71

48 The Vessel journeyed through the Gulf of Aden, a stretch of sea notorious for piracy.72 The

Vessel’s Master and crew (Crew) needed to be acutely prepared, alert, competent and skillful

                                                                                                               65 Moot Problem, 7. 66 [2002] 1 Lloyd’s Rep 719. 67 [2002] 1 Lloyd’s Rep 719, 737; See also Union of India v NV Reederij Amsterdam [1963] 2 Lloyd’s Rep 223, 231; The Elli & The Frixos [2008] 1 Lloyd’s Rep 262, 275. 68 The Fjord Wind [1999] 1 Lloyd’s Rep 307, 315. 69 FC Bradley & Sons Ltd v Federal Steam Navigation Co [1926] 24 Ll L Rep 446, 454; The Hongkong Fir [1961] 2 Lloyd’s Rep 478, 494; The Derby [1985] 2 Lloyd’s Rep 325, 331, 333; The Eurasian Dream [2002] 1 Lloyd’s Rep 719, 736. 70 The Hongkong Fir [1961] 2 Lloyd’s Rep 478. 71 Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] 1 Lloyd’s Rep 159, 168; The Eurasian Dream [2002] 1 Lloyd’s Rep 719, 737. 72 Douglas Guilfoyle, ‘Piracy off Somalia: UN Security Council Resolution 1816 and IMO Regional Counter-Piracy Efforts’ (2008) 57(3) International and Comparative Law Quarterly 690; Nazery Khalid, ‘The Year of Shipping Dangerously’ (2008) 22 (10) Maritime Risk International.

 

  14

to be able to combat the threat of piracy.73 The Crew commenced anti-pirate watch when the

Vessel entered the Gulf of Aden.74 Pirates successfully boarded the Vessel the following

day.75 As a result, the Cargo lost its GMQ status because it lacked traceability.76 The

Claimant argues that a reasonably prudent owner, knowing the relevant facts, would not have

allowed the Vessel to undertake its voyage with this Master and Crew as the Master and Crew

were incompetent and under-skilled for the voyage in question. The Respondent therefore

failed to exercise due diligence to ensure the Vessel was seaworthy and properly manned.

49 Further, the Claimant argues that the Respondent failed to exercise due diligence to ensure the

Vessel was properly equipped and supplied for and during the voyage. This is because a

reasonably prudent owner in the position of the Respondent, exercising due diligence, would

have ensured that the Vessel was equipped and supplied with defence mechanisms such as

barricades, water cannons and firearms to prevent pirates boarding the Vessel.77 There is no

evidence on the facts to show that the Vessel was equipped and supplied with these anti-

piracy measures. The only measure the Respondent took when entering the Gulf of Aden was

commencing anti-pirate watch.78 As such, the Claimant argues that the Respondent failed to

exercise due diligence in accordance with Clause 1(a) of the Charterparty, rendering the

Vessel unseaworthy. Further, the Claimant argues that the Respondent should be held to a

higher standard because, as a carrier of goods by sea, the Respondent knew that the Gulf of

Aden was renowned for piracy.

E CLAUSE 29 OF THE CHARTERPARTY DOES NOT EXCLUDE THE RESPONDENT’S

LIABILITY

50 Clause 29 of the Charterparty provides that where a situation is likely to give rise to a risk of

delay or disadvantage to the vessel, or its cargo, the owner may, when practicable, have the                                                                                                                73 The Derby [1985] 2 Lloyd’s Rep 325, 331, 333; The Eurasian Dream [2002] 1 Lloyd’s Rep 719, 736; See also The Makedonia [1962] 1 Lloyd's Rep 316. 74 Moot Problem, 41. 75 Ibid. 76 Ibid 27. 77 Whitherby Publishing Group, Best Management Practices for Protection against Somalia Based Pirates, version 4 (at August 2011). 78 Moot Problem, 41.

 

  15

Vessel call and discharge the cargo at another or substitute port requested by the charterers.

Further, the clause provides that where cargo is discharged pursuant to this clause ‘such

discharge shall constitute complete delivery and performance under this contract and the

[o]wner shall be freed from any further responsibility.’79 The Respondent may argue that it is

entitled to exclude its liability under Clause 29 for failing to discharge the Cargo at the Port of

Discharge and for failing to perform its obligation to only deliver against production of the

Bills of Lading. However, the Claimant argues that Clause 29 of the Charterparty does not

exclude the Respondent’s liability because: (a) there was no risk to the Vessel or its Cargo;

and (b) Clause 29 of the Charterparty should not limit the Respondent’s liability for

delivering without production of the Bills of Lading.

a. There was no risk to the Vessel or its Cargo

51 A liberty clause of the kind contained in Clause 29 of the Charterparty is not intended to

apply where delivery of the cargo can be made to the contractually designated port of

discharge.80

52 The Claimant contends that the Respondent cannot rely on Clause 29 of the Charterparty

because when the Respondent decided to deliver the Cargo at Rotterdam, there was no

situation which was likely to give rise to a risk of delay or disadvantage to the Vessel or to the

Cargo as required by the express words of Clause 29. Rather, the piracy had already

occurred. As such, the Vessel had already been delayed and the Cargo had already been

disadvantaged in that it had lost its GMQ status. Delivery to the agreed Port of Discharge

was still possible. Further, the piracy was not an unexpected circumstance or hazard as the

Respondent knew that the Vessel would journey through the Gulf of Aden and that the Gulf

of Aden was well-renowned for acts of piracy. The Claimant therefore argues that the

Respondent is unable to rely on the Liberty Clause.

                                                                                                               79 Moot Problem, 11. 80 The Washington Trader [1972] 1 Lloyd’s Rep 463, 468.

 

  16

b. Clause 29 of the Charterparty should not limit the Respondent’s liability for

delivering the Cargo without production of the Bills of Lading

53 The Claimant argues that Clause 29 of the Charterparty should not limit the Respondent’s

liability for delivering the Cargo without production of the Bills of Lading because this is a

fundamental breach of contract. A fundamental breach occurs where a party fails to perform

an obligation that goes to the core of a contract.81 Where a contract obliges a party to deliver

cargo only against production of the bills of lading, this obligation is fundamental to the

performance of the contract.82 The Claimant refers this Tribunal to paragraphs 40 to 42

above; the Respondent was obliged to deliver the Cargo only against production of the Bills

of Lading. The Respondent failed to fulfill this obligation and therefore committed a

fundamental breach of the Contract of Carriage.

54 If a fundamental breach renders the object and purpose of the contract nugatory, an exclusion

clause will not operate to exclude or limit liability for that fundamental breach.83 In Motis

Exports Ltd v Dampskibsselskabet AF 1912,84 the English Court of Appeal held that even if

the clause was specific enough to limit liability for delivery without the production of the bills

of lading, the courts should not interpret the clause in this way.85 The Claimant argues that

the object and purpose of the Charterparty is for the Respondent to deliver the Cargo to the

party entitled to possession of it. This object and purpose was rendered nugatory when the

Respondent committed a fundamental breach by failing to deliver the Cargo against

production of the Bills of Lading. On this basis, the Claimant contends that Clause 29 of the

Charterparty should not operate to exclude or limit the Respondent's liability for failing to

deliver the Cargo against production of the Bills of Lading.

                                                                                                               81 See, eg, Suisse Atlantique Societe d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1966] 1 Lloyd’s Rep 529; Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114; The Hongkong Fir [1961] 2 Lloyd’s Rep 478; Guest, above n 45, 924. 82 See Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114, 119-121; Motis Exports Ltd v Dampskibsselskabet AF 1912 [2000] 1 Lloyd’s Rep 211, 216; The Ines [1995] 2 Lloyd’s Rep 144. 83 See Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114, 119-21; East West Corporation v DKBS 1912 [2003] 1 Lloyd’s Rep 239; The Ines [1995] 2 Lloyd’s Rep 144. 84 [2000] 1 Lloyd’s Rep 211, 216. 85 Ibid 216-8.  

 

  17

F THE RESPONDENT CANNOT RELY ON CLAUSE 17 OF THE CHARTERPARTY TO EXCLUDE

ITS LIABILITY

55 The Claimant argues that the Respondent cannot rely on Clause 17 of the Charterparty to

exclude its liability for the loss of the Cargo’s GMQ status because the relevant parts of

Clause 17 of the Charterparty on which the Respondent may seek to rely are invalid under the

HVR. The HVR apply to a bill of lading when the contract it evidences expressly

incorporates them or legislation giving effect to them.86 The HVR have the force of law when

they are validly incorporated into a contract.87 The HVR as contained in the Carriage of

Goods by Sea Act 1971 (UK) c 19 apply to the Bills of Lading88 because, the ‘Conditions of

Carriage’, set out on the back of the Bills of Lading, specify that the HVR apply where the

country of shipment or the country of destination has enacted them. The UK, as the country of

destination, has enacted them.

56 Article IV, rule 2 of the HVR sets out the circumstances in which a carrier's liability is

excluded for loss or damage arising from certain events. Article IV, rule 2(q) of the HVR

excludes the carrier from liability where loss or damage arises due to no fault of the carrier (or

its agents). Article III, rule 8 of the HVR invalidates clauses in a contract (or the offending

parts of the clauses)89 that attempt to exclude liability beyond that which is already excluded

under Article IV, rule 2(q) of the HVR.90

57 The Claimant refers this Tribunal to paragraphs 46 to 49 above and argues that the

Respondent’s liability for the loss of the Cargo’s GMQ status arose due to its own failure to

exercise due diligence and therefore due to a fault of its own. As such, the Claimant argues

that the Respondent cannot bring itself within the exclusion provided in Article IV, rule 2(q)

of the HVR. The effect of this is that under Article III, rule 8 of the HVR any part of Clause

                                                                                                               86 HVR art X. 87 Carriage of Goods by Sea Act 1971 (UK) c 19, s 1(2), (3), (6), (7); Treitel and Reynolds, above n 20, 456. 88 Moot Problem, 15, 17, 19, 21; Comité Maritime International, ‘Status of the Ratifications of and Accessions to the Brussels International Maritime Law Conventions’ CMI Yearbook 2009 488. 89 Svenska Traktor AB v Maritime Agencies (Southampton) [1953] 2 QB 295, 301. 90 The Hollandia [1983] AC 565, 574; William Tetley, Marine Cargo Claims (Thomson Carswell, 4th ed, 2008) vol 2, 2080; Treitel and Reynolds, above n 20, 451.

 

  18

17 that attempts to exclude the Respondent's liability, beyond that which is already excluded

under Article IV, rule 2(q) of the HVR, is invalid. The Claimant therefore argues that the

Respondent cannot rely on the exclusion in Clause 17 of the Charterparty for liability arising

as a result of deterioration or an act of public enemies, pirates, or assailing thieves because

these parts of the exclusion clause are invalid. As such, the Respondent cannot exclude its

liability under Clause 17 of the Charterparty for a breach of Clause 1(a) of the Charterparty.

G THE RESPONDENT’S BREACHES OF THE CONTRACT OF CARRIAGE CAUSED THE

CLAIMANT’S LOSS AND THE LOSS IS NOT TOO REMOTE

58 The Claimant argues that it is entitled to damages for the Respondent's breaches of the

Contract of Carriage because the Respondent’s breaches caused the Claimant’s loss and the

loss is not too remote. Determining causation requires consideration of the factual and legal

causes of the loss.91 The factual cause of the loss is determined as a matter of common

sense.92 The legal cause of the loss is determined by identifying the ‘effective’ or ‘dominant’

cause of the loss.93

59 The Claimant contends that, as a matter of common sense, the Respondent’s breaches of the

Contract of Carriage were the factual cause of the Claimant's loss. The Claimant was unable

to fulfill its obligations under the sales contracts,94 which it had with third parties, and had to

purchase substitute PFAD in order to perform its obligations under these sales contracts. This

was because the Respondent failed to deliver the Cargo in accordance with the Contract of

Carriage. Further, the Claimant suffered loss as a result of the Cargo becoming non-GMQ

because, in breach of Clause 1(a) of the Charterparty, the Respondent failed to exercise due

                                                                                                               91 The Sivand [1998] 2 Lloyd’s Rep 97, 101; Royal Greek Government v Minister of Transport [1949] 83 Ll L Rep 228, 236. 92 Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd [1918] AC 350; Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1948] 82 Ll L Rep 137; Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360; March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506. 93 Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360, 1374-5; County Ltd v Girozentrale Securities [1996] 3 All ER 834; H G Beale, ‘Damages’ in H G Beale et al (eds), Chitty on Contracts (Sweet & Maxwell, 30th ed, 2008) vol 1, 1597, 1617. 94 Moot Problem, 22, 23.

 

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diligence and the Vessel consequently became unseaworthy, and but for the Vessel’s

unseaworthiness, pirates would not have been able to hijack the Vessel.

60 In addition, the Claimant contends that the Respondent's breaches of the Contract of Carriage

were the legal cause of the Claimant's loss. The fact that the Claimant did not receive the

Cargo was the only factor precluding the Claimant from performing its obligations under its

sales contracts.95 The Respondent's failure in this regard was therefore the only, and as such

the effective or dominant, cause of the Claimant's loss. Further, the Respondent's failure to

exercise due diligence was the effective or dominant cause of the Claimant's loss: had the

Vessel been seaworthy the Cargo would not have deteriorated.

61 A loss will not be too remote if it was in the reasonable contemplation of the contracting

parties that such a loss would not be an unlikely effect of such a breach.96 Only the type of

loss need be reasonably contemplated and not the extent.97 The Claimant argues that its loss

arising from the non-delivery of the Cargo is not too remote because it flows naturally from

the breach. The Charterparty expressly contemplated98 the issuing of a letter of indemnity

where the owner obeyed the charterers’ orders. This indicates that the Respondent's liability

would arise where the Respondent obeyed Beatles’ orders outside the terms of the Contract of

Carriage. Further, the Claimant contends that the loss caused by the Respondent's failure to

exercise due diligence was in the reasonable contemplation of the Parties as the deterioration

of the Cargo was a likely effect of the Vessel’s unseaworthiness.

II Hague-Visby

62 The HVR apply to a contract of carriage from the time at which the cargo is loaded onto a

vessel.99 The Claimant argues that the Respondent is liable to the Claimant for damages for

breach of the Contract of Carriage based on the HVR because: (A) the Respondent breached

                                                                                                               95 Ibid. 96 Hadley v Baxendale (1854) 9 Ex 341, 354; Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528, 539; The Heron II [1969] 1 AC 350, 384-5, 425. 97 Jackson v Royal Bank of Scotland [2005] 1 Lloyd’s Rep 366; H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791. 98 Moot Problem, 10. 99 Treitel and Reynolds, above n 20, 465; See also Eder et al, above n 15, 419.

 

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Article III, rule 1 of the HVR; (B) further and in the alternative, the Respondent breached

Article III, rule 2 of the HVR; (C) the Respondent’s breaches caused the Claimant’s loss; and

(D) the Respondent cannot exclude its liability under Article IV, rule 2 of the HVR.

A THE RESPONDENT BREACHED ARTICLE III, RULE 1 OF THE HVR

63 Article III, rule 1 of the HVR imposes a duty on a carrier to exercise due diligence before and

at the beginning of the voyage to make the vessel seaworthy and to properly man, equip and

supply the vessel. The Claimant argues that the Respondent breached Article III, rule 1 of the

HVR because the Respondent failed to exercise due diligence before and at the

commencement of the voyage.

64 The Claimant refers this Tribunal to paragraphs 47-48 above and argues that the Respondent

failed to exercise due diligence before and at the beginning of the voyage to ensure the Vessel

was seaworthy and properly manned for and during the voyage. The Respondent failed to

ensure that the Master and the Crew were competent to deal with pirates in the event that

pirates attempted to board the Vessel. The Claimant contends that the fact that the Somali

pirates were able to board the Vessel and hold it hostage for three months, resulting in the

deterioration of the Cargo, evinces the incompetence of the Master and the Crew.

65 Further, the Claimant refers this Tribunal to paragraph 49 above and contends the Vessel was

unseaworthy due to the Respondent’s failure to exercise due diligence before and at the

beginning of the voyage to ensure the Vessel was properly equipped and supplied for and

during the voyage. The Respondent did not equip or supply the Vessel with any defence

mechanisms: the only measure the Respondent took to avoid pirates was commencing anti-

pirate watch when entering the Gulf of Aden.100 As such, the Claimant argues that the

Respondent breached Article III, rule 1 of the HVR.

                                                                                                               100 Moot Problem, 41.

 

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B FURTHER AND IN THE ALTERNATIVE, THE RESPONDENT BREACHED ARTICLE III, RULE

2 OF THE HVR

66 Article III, rule 2 of the HVR imposes a duty on the carrier to properly and carefully carry,

keep and care for the cargo. The Claimant argues that the Respondent breached Article III,

rule 2 of the HVR because the Respondent failed to have systems in place to adequately deal

with pirates, resulting in the deterioration of the Cargo.

67 ‘Properly’ means ‘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’.101 ‘A sound system does not mean

a system suited to all the weaknesses and idiosyncrasies of a particular cargo, but a sound

system under all the circumstances in relation to the general practice of carriage of goods by

sea.’102 The necessity for a sound system is additional to the requirement to act carefully.103

These duties are imposed for the duration of the voyage.104

68 The Claimant contends that the deterioration of the Cargo establishes, prima facie, that the

Respondent breached Article III, rule 2 of the HVR. This is because the Claimant argues that

the deterioration in the status of the Cargo would not have occurred had the Respondent had

sound systems in place to prevent pirates boarding the Vessel. The Respondent ought to have

known of the type of system it needed to have in place to properly and carefully carry, keep

and care for the Cargo because its expertise as a carrier relates to the carriage of goods by sea.

The Claimant argues that the Respondent cannot have had sound systems in place because

pirates successfully boarded the Vessel and the Cargo’s status subsequently deteriorated from

GMQ to non-GMQ.105 As such, the Claimant argues that the Respondent breached Article

III, rule 2 of the HVR.

                                                                                                               101 Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53, 58. 102 Ibid 62. 103 Ibid 64. 104 John Richardson, A Guide to the Hague and Hague-Visby Rules (Lloyd’s of London Press, 3rd ed, 1994) 39. 105 Moot Problem, 41.

 

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C THE RESPONDENT’S BREACHES CAUSED THE CLAIMANT’S LOSS

69 The question which this Tribunal must answer in determining whether the Respondent’s

breaches of Article III, rules 1 and 2 of the HVR caused the Cargo to lose its GMQ status is:

‘Would the disaster not have happened if the ship had fulfilled the obligation of

seaworthiness, even though the disaster could not have happened if there had not also been

the specific peril or action?’106

70 The Claimant contends that this question must be answered in the affirmative: but for the

Respondent’s breaches of Article III, rule 1 and/or Article III, rule 2 of the HVR, the Cargo

would not have deteriorated from GMQ to non-GMQ status. 107 This is because the

Respondent’s failure to exercise due diligence to make the Vessel seaworthy, properly

manned, equipped and supplied, and its failure to properly and carefully carry, keep and care

for the Cargo, resulted in pirates hijacking the Vessel which in turn caused the Cargo’s status

to deteriorate.

D THE RESPONDENT CANNOT EXCLUDE ITS LIABILITY UNDER ARTICLE IV, RULE 2 OF

THE HVR

71 Article IV, rule 2 of the HVR provides a list of perils for which the Respondent will not be

liable if loss or damage results. The Claimant argues that the Respondent cannot exclude its

liability under Article IV, rule 2 of the HVR because: (a) the Respondent did not fulfill

Article III, rule 1 of the HVR; and (b) in any event, the HVR do not exclude liability for loss

and damage arising from events of piracy.

a. The Respondent did not fulfill Article III, rule 1 of the HVR

72 The Respondent is not entitled to rely on Article IV, rule 2 of the HVR because it has not

fulfilled its obligations under Article III, rule 1 of the HVR. In Maxine Footwear Co Ltd v

Canadian Government Merchant Marine Ltd,108 the Privy Council held that ‘Article III, Rule

                                                                                                               106 Smith, Hogg & Co Ltd v Black Sea & Baltic General Insurance Co Ltd [1940] 67 Ll L Rep 253, 259. 107 Jonathan Steer, ‘Piracy and General Average’ (2009) 23(8) Maritime Risk International. 108 [1959] 2 Lloyd’s Rep 105.

 

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1, is an overriding obligation’.109 ‘If it is not fulfilled and the non-fulfillment causes the

damage the immunities of Article IV cannot be relied on.’110

73 The Claimant refers this Tribunal to paragraphs 63-65 above and argues that the Respondent

cannot rely on Article IV, rule 2 of the HVR to exclude its liability because the Respondent

did not fulfill its obligations under Article III, rule 1 of the HVR and the Respondent’s failure

caused the Claimant’s loss.

b. In any event, the HVR do not exclude liability for loss and damage arising from

events of piracy

74 The Claimant argues that the HVR do not exclude liability for loss and damage arising from

events of piracy. Article IV, rule 2 of the HVR does not expressly provide for pirates or the

act of piracy as an event that excludes the Respondent’s liability.

75 Further, the Claimant argues that piracy does not fall within the ‘public enemies’ exception

contained in Article IV, rule 2(f) of the HVR. Piracy means either the threat of robbery or

actual robbery, without the authority of a lawful state,111 committed for personal ends.112 The

Claimant argues that piracy does not fall within the ‘public enemies’ exception because acts

of piracy are generally not connected to specific states nor done in pursuance of any states’

objectives.113 Pirates pursue private objectives and as such, piracy is considered a private

act.114 When acts of piracy are connected to a particular state, the acts of national insurgents

on the high seas against neutral commercial vessels are considered acts of piracy and thereby

private acts.115 The Claimant therefore argues that the Respondent cannot exclude its liability

under Article IV, rule 2(f) of the HVR because the piracy was a private act.

                                                                                                               109 Ibid 113. 110 Ibid. 111 Cooke et al, above n 49, 689. 112 Bolivia v Indemnity Mutual Marine Assurance Co Ltd [1909] 1 KB 785. 113 Lawrence Azubuike, ‘International Law Regime against Piracy’ (2009) 15 Annual Survey of International and Comparative Law 43, 52. 114 Geneva Convention on the High Seas 1958 art 15; United Nations Convention on the Law of the Sea 1982 art 101; Merchant Shipping and Maritime Security Act 1997 (UK) c 28, s 26(1); Bolivia v Indemnity Mutual Marine Assurance Co Ltd [1909] 1 KB 785. 115 Tina Garmon, ‘International Law of the Sea: Reconciling the Law on Piracy and Terrorism in the Wake of September 11th’ (2002-2003) 27 Tulane Maritime Law Journal 257, 262; Malvina Halberstam, ‘Terrorism on the

 

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III Tort of Conversion

76 The Claimant argues that the Respondent is liable to pay damages to the Claimant for the tort

of conversion because: (A) the Claimant is entitled to claim in conversion; (B) the

Respondent converted the Cargo; and (C) the Respondent’s actions caused the Claimant’s

loss and the loss is not too remote.

A THE CLAIMANT IS ENTITLED TO CLAIM IN CONVERSION

77 A party is entitled to claim in conversion when it has a proprietary right or the right to

immediate possession in the converted cargo.116 Upon indorsement of a bill of lading, the

indorsee is vested with the right to possession of the cargo.117 The Claimant refers this

Tribunal to paragraphs 26-27 above and contends that it is entitled to claim in conversion

because it gained a proprietary right in the Cargo upon the indorsement of the Bills of Lading.

B THE RESPONDENT CONVERTED THE CARGO

78 A carrier that delivers cargo other than against production of bills of lading does so at its own

peril.118 Conversion will occur when cargo is delivered without production of the Bills of

Lading.119 The Claimant refers this Tribunal to paragraphs 42-43 above and argues that the

Respondent converted the Cargo by delivering the Cargo without production of the Bills of

Lading.

                                                                                                                                                                                                                                                                                                                                                         High Seas: The Achille Lauro, Piracy and the IMO Convention on Maritime Safety’ (1988) 82(2) American Journal of International Law 269, 272-3. 116 The Aliakmon [1986] 2 Lloyd’s Rep 1; The Jag Shakti [1986] AC 337; A Tettenborn, ‘Wrongful Interference with Goods’ in Anthony M Dugdale et al (eds), Clerk & Lindsell on Torts (Sweet and Maxwell, 19th ed, 2006) 1003, 1025; Nick Curwen, ‘Title to Sue in Conversion’ [2004] Conveyancer and Property Lawyer 308. 117 The Berge Sisar [2002] 2 AC 205, 219; Barclays Bank Ltd v Commissioners of Customs and Excise [1963] 1 Lloyd’s Rep 81, 88-9. 118 Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114, 120; Skibsaktieselskapet Thor Thoresens Linje v H Tyrer & Co Ltd [1929] 35 Ll L Rep 163, 170; Voss v APL Co Pte Ltd [2002] 2 Lloyd’s Rep 707, 716. 119 Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114, 120; The Houda [1994] 2 Lloyd’s Rep 541, 552; Motis Exports Ltd v Dampskibsselskabet AF 1912 [2000] 1 Lloyd’s Rep 211, 215; East West Corporation v DKBS 1912 [2003] 1 Lloyd’s Rep 239, 257; Bristol & West of England Bank v Midland Railway Co [1891] 2 QB 653; The Stone Gemini [1999] 2 Lloyd’s Rep 255, 262-3.

 

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C THE RESPONDENT’S ACTIONS CAUSED THE CLAIMANT’S LOSS AND THE LOSS IS NOT

TOO REMOTE

79 A defending party will be liable for the loss if its actions are the legal cause of the loss.120

There is no requirement to establish factual causation in conversion.121 The legal cause of the

loss is determined, as a matter of common sense, by identifying the predominant cause of the

loss.122 The Claimant argues that by discharging the Cargo to the incorrect party, without

production of the Bills of Lading, the Respondent deprived the Claimant of its ability to sell

the Cargo to its prospective buyers and consequently caused the Claimant’s loss.

80 Further, loss will not be too remote when it was a reasonably foreseeable result of the

defending party’s actions:123 that is, a result that would not be considered far-fetched.124 The

Claimant argues that it was reasonably foreseeable that delivering the Cargo to the incorrect

party, without production of the Bills of Lading, would deprive the Claimant of its ability to

on-sell the Cargo. As such, the Claimant argues that its loss was not too remote.

IV Prayer for Relief

For the reasons set out above, the Claimant requests this Tribunal to:

DECLARE that this Tribunal has jurisdiction to hear the merits of the Claimant’s claims;

FIND that the Respondent is liable for the breaches of contract, the HVR and the tort of

conversion as argued above; and

AWARD damages to the Claimant and interest on the amounts claimed.

                                                                                                               120 Rhaman v Arearose Ltd [2001] QB 351, 367-8; M A Jones, ‘Causation in Tort: General Principles’ in Anthony M Dugdale et al (eds), Clerk & Lindsell on Torts (Sweet and Maxwell, 19th ed, 2006) 43, 44. 121 Kuwait Airways Corporation v Iraq Airways Co (Nos 4 & 5) [2002] 2 AC 883, 1093. 122 Yorkshire Dale Steamship Co Ltd v Minister of War Transport [1942] AC 691, 706; Stapely v Gypsum Mines Ltd [1953] AC 663, 681; Cork v Kirby Maclean Ltd [1952] 2 All ER 402, 407. 123 Kuwait Airways Corporation v Iraq Airways Co (Nos 4 & 5) [2002] 2 AC 883; Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound) [1961] AC 388. 124 Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty (The Wagon Mound No 2) [1967] 1 AC 617.