thetwelfth!annualinternational …...team 22 memorandum for the respondent !! i! the fourteenth...

Team 22 Memorandum for the Respondent

I

THE FOURTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

COMPETITION 2013

The University of Southampton United Kingdom

IN THE RESPECT OF ARBITRAL PROCEEDINGS HELD IN LONDON

MEMORANDUM FOR THE RESPONDENT

On the behest of: Against: Twilight Carriers Inc. Aardvark Ltd. RESPONDENT CLAIMANT

Team 22 Henriette Nilsson Tøssebro Guérin Loisel Vasileios Mavrakis Tine Therese Trulsen Olga Kasatkina Bahar Sayhan

Team 3 Memorandum for the Claimant

1

THE THIRTEENTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

COMPETITION 2012

The University of Southampton

United Kingdom Team 3

IN RESPECT OF ARBITRAL PROCEEDINGS IN BRISBANE

MEMORANDUM FOR THE

CLAIMANT At the behest of: Against: Markka Trading Company Lira Steamship Company 10 Crow Street Level 4 Schilling West Circle

Paseta CLAIMANT RESPONDENT Contributors: Robert Veal Josua Nel Schoeman Angeliki Kofopoulou Mateusz Bek No Reiff Robert Caldwell

! "#$ %&' % % ( "$ ) *#+, -‐ $ %.) *%/"01)+, "+2%

I

THE TWELFTH ANNUAL INTERNATIONAL MARITIME LAW ARBITRATION MOOT

COMPETITION

2011

The University of Southampton

England Team 13

IN THE MATTER OF AN ARBITRATION HELD AT SINGAPORE

MEMORANDUM FOR THE RESPONDENT

On Behalf Of: Against: Neuland Petroleum Refinery Co Ltd Blue Sky Holdings Inc. 48 King Level 22, 80 Greater South Street Makai City Panama City Neuland Panama RESPONDENT CLAIMANT Team Ayodeji Sasegbon Robert Graham Caldwell Anne-Linn Heldens Forbord Kathryn Jane Law Alexandra Vella Oluwatobi Seriki Viktor Weber Nicole Lavalas Serhan Handani


II

TABLE OF CONTENTS

LIST OF ABBREVIATIONS .................................................................................................... IV

INDEX OF AUTHORITIES ....................................................................................................... V

SUMMARY OF FACTS ............................................................................................................ 1

1. JURISDICTIONAL ISSUES ................................................................................................. 2 1.2 THE LIEN CLAUSE (CL. 25) HAS NOT BEEN INCORPORATED INTO THE BS/L ........................... 2

1.3 THE ARBITRATION CLAUSE IS THUS ILLOGICAL AND CANNOT BE INCORPORATED INTO THE

BS/L .......................................................................................................................................... 3

1.3 THE CLAIMANT HAS NO TITLE TO SUE BECAUSE HE IS NOT A HOLDER OF BS/L IN GOOD

FAITH ......................................................................................................................................... 4

1.4 THE TRIBUNAL LACKS JURISDICTION TO AWARD CONSOLIDATED DAMAGES (S.49 AA) ....... 5

1.4.1 LONDON IS NOT THE SEAT OF THE ARBITRATION ............................................................... 5

1.4.2 ALTERNATIVELY, S. 49 AA 1996 DOES NOT APPLY ........................................................... 5

1. 5 THE TRIBUNAL SHOULD NOT RE-OPEN THE ISSUE OF COURT FEES FOR THE DUTCH

PROCEEDINGS BETWEEN THE CLAIMANT AND THE SELLER ........................................................ 6

1.5.1 THE ISSUE OF COSTS FALLS OUTSIDE THE ARBITRATION CLAUSE ....................................... 6

1.5.2 ALTERNATIVELY, THE CLAIMANT IS ESTOPPED FROM RAISING THE ISSUE OF COSTS ......... 7

2. THE RESPONDENT WAS JUSTIFIED IN NOT DELIVERING THE GOODS TO THE CLAIMANT AT LIVERPOOL ....................................................................................... 8

2.1 THE CLAIMANT WAS NOT THE LAWFUL HOLDER OF THE BS/L ............................................. 8

2.2 THE RESPONDENT IS ENTITLED TO CALL AT ANY PORT IN ANY ORDER ................................. 8

2.3 THE RESPONDENT HAD JUSTIFIABLE GROUNDS TO DEVIATE ................................................ 9

2.3.1 The Hague-Visby Rules ............................................................................................... 9

2.3.2 The liberty clause ....................................................................................................... 10

2.4 THE CLAIMANT HAD NO RIGHT TO DELIVERY UNDER COGSA 1992 .................................. 11

2.5 THE CLAIMANT HAD NO RIGHT TO DELIVERY UNDER COMMON LAW ................................. 11

2.6 THE CLAIMANT IS ESTOPPED FROM CLAIMING DELIVERY ................................................... 11

2.7 DAMAGES .......................................................................................................................... 12

2.7.1 THE RESPONDENT IS NOT LIABLE .................................................................................... 12

3. NON-LIABILITY: THE PIRATE ATTACK .................................................................... 13


III

3.1 THE RESPONDENT DID NOT BREACHED ART. 3 HVR AND THE VESSEL IS SEAWORTHY ...... 13

3.2 THE RESPONDENT IS NOT LIABLE UNDER THE HVR ........................................................... 14

3.2.1 The attack was one of the danger or perils of the sea ............................................... 14

3.2.2. Alternatively, the attack amounts to an act of war ................................................... 15

3.2.3 In the alternatively, there was an act of public enemies. .......................................... 16

2.4 IN ANY CASE THERE IS NO ACTUAL FAULT ON THE SIDE OF THE RESPONDENT .................... 17

4. TORT OF CONVERSION .................................................................................................. 18 4.1 THE RESPONDENT IS NOT LIABLE IN THE TORT OF CONVERSION ......................................... 18

4.1.1 The Claimant has no title to sue in conversion ......................................................... 19

4.1.2 The Respondent has never acted in a manner inconsistent with the rights of the true owner of the goods .............................................................................................................. 19

4.1.3 The Respondent had no intention to exercise dominion over the goods ................... 20

5. QUANTUM OF DAMAGES ............................................................................................... 21 5.1 THE CONTRACTUAL PLACE OF DISCHARGE WAS ROTTERDAM ............................................ 21

5.2 ALTERNATIVELY, THE CLAIMANT ACCEPTED THAT THE PORT OF DISCHARGE

SUBSEQUENTLY CHANGED ....................................................................................................... 21

5.3 THE CLAIMANT S ALTERNATIVE CLAIM SHOULD BE DISMISSED ......................................... 22

5.4 THE COSTS OF THE DUTCH APPEAL ARE NOT RECOVERABLE .............................................. 23

6. PRAYER FOR RELIEF ...................................................................................................... 23


IV

List of Abbreviations the Claimant Aardvark Ltd

the Respondent Twilight Carriers Inc

the Seller Beatles Oils & Fats Ltd

the Vessel m/v Twilight Trader the Charterparty, C/P Vegoilvoy charterparty between the Respondent and the Seller the arbitration clause Cl. 25 of the Charterparty

the Regulation Brussels I Regulation (Council Regulation (EC) No 44/2001)

B/L, Bs/L Bill(s) of lading

CIF Cost Insurance Freight

cl. Clause

GMQ Good Merchantable Quality

s. Section

Art. Article

r. Rule

para Paragraph

PFAD Palm Fatty Acid Distillate

HVR International Convention for the Unification of Certain Rules of

Law relating to Bills of Lading 1924 as amended by the Protocol

to Amend the International Convention for the Unification of

Certain Rules of Law Relating to Bills of Lading 1968

COGSA 1971 Carriage of Goods by Sea Act 1971

COGSA 1992 Carriage of Goods by Sea Act 1992

SOGA 1979 Sale of Goods Act 1979 (as amended)

Torts Act 1977 Torts (Interference with Goods) Act 1977

AA 1996 Arbitration Act 1996

FAA 1925 Federal Arbitration Act 1925

UNCLOS United Nations Convention on Law of the Seas (adopted 10

December 1982; entered into force 16 November 1994)

est Management Practices for

Protection against Somali Piracy

IMO International Maritime Organisation

UN United Nations


V

Index of Authorities A. Case Law

United Kingdom

A/S D/S Heimdal v Questier & Co. Ltd (1948-49) 82 Ll L Rep 452 .......................................... 22

Aegean Sea Traders Corporation v Repsol Petroleo SA (The "Aegean Sea") [1998] 2 Lloyd's

Rep 39 ....................................................................................................................................... 4

Atlas Levante Linie AG v Gesellschaft Fuer Getriedehandel AB (The "Phoenizien") [1966] 1

Lloyd's Rep 150 ........................................................................................................................ 2

Attorney General of the Republic of Ghana v Texaco Overseas Tankships Ltd (The "Texaco Melbourne") [1994] 1 Lloyd's Rep 473 .................................................................................. 21

Attorney General v Ard Coasters Ltd (The "Larrinaga") [1921] 2 AC 141 .............................. 15

Attorney-General v Adelaide Steamship Company Ltd [1923] AC 292 ..................................... 15

Bangladesh Chemical Industries Corp v Henry Stephens Shipping Co Ltd (SLS Everest) [1981]

.................................................................................................................. 10

Banning v Wright [1972] 1 WLR 972 ........................................................................................ 11

Barton v Wolliford (1688) Comb 56 1M (1690) 2 Vern Ch 176 ................................................ 15

Braes of Doune Wind Farm v Alfred McAlpine Business Services [2008] 1 Lloyd's Rep 608 .... 5

Bremer Handelsgesellschaft mbH v C Mackprang Jr (The "Pegasus") [1979] 1 Lloyd's Rep 221

................................................................................................................................................ 12

Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd's Rep 109 12

Castrique v Imrie (1869-70) LR 4 HL 414 ................................................................................... 8

Commonwealth Shipping Representative v Peninsular and Orient Branch Service [1923] AC

191 .......................................................................................................................................... 15

Compania Portorafti Commerciale SA v Ultramar Panama Inc. (No. 2) (The "Captain Gregos") [1990] 2 Lloyd's Rep 395........................................................................................ 22

Connolly Shaw v Nordenfieldske SS Co [1934] 50 TLR 418 ..................................................... 10

Cox v Harden (1803) 4 East 211 ............................................................................................ 8, 11

Cumming v Brown (1808) 9 East 506 ........................................................................................ 11

Curtis & Sons v Matthews [1919] 1 KB 425 .............................................................................. 15

Fiona Trust & Holding Corp v Privalov [2007] UKHL 40 ........................................................ 6

G. W. Ry v Fisher [1905] 1 Ch. 316 ........................................................................................... 23


VI

Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (The "Bunga Seroja") [1999] 1 Lloyd's Rep 512 ................................................................... 15

Hadley v Baxendale (1854) 9 Ex 341 ..................................................................................... 6, 23

Hain Steamship Co v Tate & Lyle (1936) 55 Ll LR 159 .............................................................. 9

Hill v Clifford [1907] 2 Ch 236 .................................................................................................... 8

Howard v Shepherd (1850) 9 CB 297 .......................................................................................... 8

John v George and Walton (1996) 71 P & CR 375 .................................................................... 22

Johnson v Taylor [1920] AC 144 at 155 ...................................................................................... 4

Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Company Ltd [1939] 2 KB

544 .................................................................................................................................... 15, 16

Kum v Wah Tat Bank [1971] 1 Lloyd's Rep 439 .......................................................................... 4

Lancashire & Yorkshire Ry Co v MacNicoll (1919) 88 LJKB 601 ................................ 19, 20, 21

Leduc v Ward (1888) 20 QBD 475 ............................................................................................... 9

Leesh River Tea Co v British India Steam Navigation Co (The "Chyebassa") Rep 193 ................................................................................................................................... 18

Lickbarrow v Mason (1787) 2 TR 63 ........................................................................................... 4

Lokumal (K) & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The "August Leonhardt") [1985] 2 Lloyd's Rep 28 ..................................................................................... 22

Low v Bouverie [1891] 3 Ch 82 .................................................................................................. 13

Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The "Kanchenjunga") .................................................................................................................... 11

Miramar Maritime Corp v Holborn Oil Trading (The "Miramar") [1984] 2 Lloyd's Rep 129 ... 3

Montgomery v Hutchins (1905) 94 LT 207 ................................................................................ 11

National Navigation Co v Endesa Generacion SA (The "Wadi SUDR") 666 .......................................................................................................................................... 10

National Navigation Co v Endesa Generacion SA (The "Wadi SUDR") [2009] EWCA Civ

1397 ............................................................................................................................. 7, 8

National Oil Co of Zimbabwe v Sturge ............................................. 15

Orinoco Naviagation Ltd v ecotrade Spa (The "Ikariada") [1999] 2 All ER 257 ..................... 10

Parsons Corporation and others v CV Scheepvaartonderneming Happy Ranger (The "Happy Ranger") [2006] 1 Lloyd's Rep 649........................................................................................ 13

Partenreederei M/S 'Heidberg' v Grosvenor Grain and Feed Co Ltd (The "Heidberg") [1994] 1

Lloyd's Rep 287 ...................................................................................................................... 10

Patterson Steamships v Canadian Co-operative Wheat Proders [1935] SCR 617 .................... 17


VII

Pesquerías y Secadores de Balacao de Espana v. Beer (1949) 82 Ll L Rep 501 ...................... 15

Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 ............................................. 12

Pickering v Barclay 2 Roll Ab 248 ............................................................................................ 15

Reardon Smith Line v. Ministry of Agriculture, Fisheries and Food [1962] 1 QB 42 ............... 16

Renton v Palmyra [1956] 1 QB 462 ........................................................................................... 10

Ross T Smyth & Co Ltd v T D Bailey Son & Co [1940] 3 All ER 60 ........................................... 4

Sanderson v Marsden (1922) 10 Ll. L. Rep 467 .................................................................. 19, 20

Smith (Administrator of Cosslett (Contrators) Ltd.) v Bridgend CBC [2001] UKHL 58 .......... 19

Stag Line v Foscolo, Mango & Co [1932] AC 328 ................................................................ 9, 10

Stroms Bruks Aktie Bolag v John and Peter Hutchison (A Firm) [1905] AC 515 ..................... 22

The Arpad (1935) 51 Ll L Rep 115 ...................................................................................... 11, 21

The City of Mecca 1879 C 275 ..................................................................................................... 7

The Future Express [1992] 2 Lloyd's Rep 79 ....................................................................... 11, 19

The Rena K [1979] 1 All ER 397 ................................................................................................. 2

The Tigress (1863) BR & L 37 ..................................................................................................... 8

TW Thomas & Co Ltd v Portsea Steamship Co Ltd. (The "Portsmouth") [1912] AC 1 .............. 2

Vogan v Oulton (1898) 79 L.T. 384 ........................................................................................... 23

Welex AG v Rosa Maritime Ltd (The "Epsilon Rosa") ...................... 10

Wilbraham v Snow (1669) 2 Wms. Saund. 47a .......................................................................... 19 Australia

Hi-Fert Pty Ltd and Cargill Fertilizer Inc v Kiukiang Maritime Carriers Inc and Western Bulk Carriers Ltd ...................................................................................... 16

United States

Connecticut v Jackson 1 Johns Ch 13 .......................................................................................... 6

Lemnos Broad Silk Works v Spiegelberg 27 Misc 855, 217 NYS 595 ......................................... 6

B. Statutes Sale of Goods Act 1979 (as amended) ................................................................................. 11, 20

Statute Law (Repeals) Act 1993 ................................................................................................. 17

Torts (Interference with Goods) Act 1977 ................................................................................. 20


VIII

C. Treaties International Convention for the Unification of Certain Rules of Law relating to Bills of Lading

(adopted 25 August 1924; entered into force 2 June 1931) as amended by the Protocol to

Amend the International Convention for the Unification of Certain Rules of Law Relating to

Bills of Lading (adopted 23 February 1968; entered into force 23 June 1977) ............ passim

United Nations Convention on Law of the Seas (adopted 10 December 1982; entered into force

16 November 1994) ................................................................................................................ 16

D. Other authorities IMO circular MSC.1/Circ.1334 (adopted 23 June 2009) ........................................................... 18

United Nations Security Council Resolution 1851 SC/9541 (adopted 16 December 2008) ...... 18

E. Books

Beale H.(ed), Chitty on Contracts (30th edn, Sweet & Maxwell 2008) ........................................ 6

Berlingieri F., The Travaux Preparatoires of the Hague Rules and of the Hague-Visby Rules (Comite Maritime International 1997) ................................................................................... 17

Cooke J. and others, Voyage charters (3rd edn, Informa London 2007) ............................. 16, 17

Debatistta C., Bills of Lading in Export Trade (3rd edn, Tottel 2009) ....................................... 19

Girvin S., Carriage of Goods by Sea (2nd edn, OUP Oxford 2011) .......................................... 12

McGregor H., McGregor on Damages (18th edn, Sweet & Maxwell 2009) ............................. 22

Michael G. Bridge and Judah P. Benjamin, Benjamin's sale of goods (8th edn, Sweet &

Maxwell 2010) ........................................................................................................................ 11

Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (Informa London 2005) . 2, 5,

11, 19

Thomas R., Carriage of Goods under the Rotterdam Rules (Informa London 2010) ............... 18

Thomas R., The Evolving Law and Practice of Voyage Charterparties (Informa, London 2009)

................................................................................................................................................ 13

Todd P., Marine Fraud & Piracy (2nd edn, Informa London 2010) ......................................... 16


IX

Treitel G., Reynolds F.M.B. and Carver T.G., Carver on Bills of Lading (3rd edn, Sweet &

Maxwell 2011) ........................................................................................................................ 10

Wilson J.F., Carriage of goods by sea (7th edn, Pearson Longman 2010) .......................... 10, 14

F. Journals

IMO, `BMP for protection against Somalia piracy` (14 September 2011). Available at

<http://www.imo.org/MediaCentre/HotTopics/piracy/Documents/1339.pdf> accessed 8

April 2013 ......................................................................................................................... 13, 18

International Chamber of Commerce International

............................................................................................................. 14

-ccs.org/piracy-

reporting-centre/advice-to-masters> assessed 21 April 2013 ................................................. 18

on acts of piracy and armed robbery against

....................................................................................................................................... 14

James Bridger, `Jihad on the High Seas? Pirates, Profit and the Islamist Connection`, published

by Atlantic treaty Association in Atlantic Voice Vol. 1, No. 1 (Oct 2011) 3. Available at <

http://issuu.com/atlantic_treaty_association/

docs/vol._1__no._1__oct_2011_> accessed 8 April 2013 16


1

Summary of facts

1 On 23 May 2008 the Seller sold a cargo of PFAD to the Claimant CIF Rotterdam, subsequently

changed to CIF Liverpool. The Seller contracted with the Respondent to use the Vessel, by C/P

dated 12 September 2008. On 25 October 2008 a set of four Bs/L were issued, which

incorporated the C/P, including the Law and Arbitration Clause. The contract price was paid on

26 January 2009 and the Bs/L were endorsed to the Claimant.

2 On 14 November 2008 the Vessel entered the Gulf of Aden and the crew commenced anti-

pirate watch.1 On 15 November the Vessel was boarded by Somali pirates and was held hostage

until 13 February 2009.

3 According to the PFAD sample analysis, cargo contamination was within normal limits. This

result might not have been indicative of the overall quality of the cargo and the possibility of

unauthorized access to the cargo during the period of captivity could not have been discounted.

4 On 2 December 2008 and 20 January 2009 the Claimant sold certain quantities of PFAD to

Delta Ltd. and Caspian BV. On 23 and 25 November 2009 these buyers confirmed that the

outstanding sale contracts were for technical use only and accordingly they were prepared to

take the original, now non GMQ, cargo.

5 On 6 March 2009 the Claimant informed the Seller that the latter was in repudiatory breach of

the sale contract, based on their failure to insure the cargo under the agreed terms and rejected

delivery of the cargo. The Seller accepted this as a notice of anticipatory breach of contract by

the Claimant and informed the Claimant that the latter had abandoned the cargo and was no

longer the legal holder of the Bs/L and that the Vessel would proceed to Rotterdam. Against a

letter of indemnity, issued by the Seller, the Respondent delivered the cargo to the Seller upon

arrival at Rotterdam, without production of the Bs/L.

1 see Report by Aspinall Lewis International. Moot scenario, 41


2

6 On 23 March 2009 the Seller arrested the cargo, as security against the Claimant. By

permission of the Dutch Court, the cargo was sold with the proceeds of the sale being held in

its account, pending a decision in this London arbitration. The Claimant made an unsuccessful

appeal to suspend enforcement of the sale and have the arrest of the cargo set aside.

7 The Claimant arrested the Vessel as a security for their claims for damages against the

Respondent for delivering the cargo without the production of the Bs/L. By order of the

Rotterdam Court the arrest of the Vessel was lifted in return for the Seller providing security of

USD 1,400,000 by way of the Paradox Bank Guarantee. The Respondents failed to have the

arrest of the Vessel set aside.

8 According to the expert jointly instructed by the Claimant and the Respondent, there is a

market for non GMQ PFAD in the UK and Europe; the price for non GMQ PFAD in the UK is

the same as for the GMQ product, while in the rest of Europe it is from 60% to 70% of the

GMQ PFAD.

9 The Claimant referred the dispute to arbitration.

1. Jurisdictional Issues 1.2 The lien clause (cl. 25) has not been incorporated into the Bs/L

10 The importance of precise drafting when incorporating a charter party arbitration clause into a

B/L was established in the leading authority on the issue, Thomas v Portsea.2 Precise drafting,

however, cannot incorporate clauses that are the said B/L,3 even

if a certain degree of manipulation has at times been allowed.4

2 TW Thomas & Co Ltd v Portsea Steamship Co Ltd. The Portsmouth [1912] AC 1 : Lord Robson held that deprive either party of his ordinary legal remedies, the contract cannot be too explicit and precise. It is difficult to hold that words which require modification to read as part of the bill of lading and then purport to deal only with disputes arising under a

3 Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (Informa London 2005) para 7.97; see also Atlas Levante Linie AG v Gesellschaft Fuer Getriedehandel AB (The Phoenizien) [1966] 1 Lloyd's Rep 150 4 The Rena K [1979] 1 All ER 397


3

11 The argument in that case, which Mr Justice Brandon rejected, was restricted to the fact that the

arbitration clause in the C/P referred to disputes under that contract and not under the B/L. It

appears, therefore, that there is a line that cannot be crossed by means of manipulating the

wording in an arbitration clause. In those cases, according to the abstract,5 the wording of the

clause in the B/L must incorporate only the germane part, if it is to be held valid.

12 In The Miramar,6 Lord Roskill rejected obiter with the approval of all their Lordships, that a

clause in an Exxonvoy charterparty, similar to the one in the present case, could be

incorporated into a B/L by general words of incorporation. Applying this to the present facts,

the lien clause has never been incorporated in the C/P.

1.3 The arbitration clause is thus illogical and cannot be incorporated into the Bs/L

13 In the present case cl. 31 of the C/P, apart from referring certain types of disputes to arbitration,

deadfreight and demurrage. Thereby,

this clause is wholly inappropriate in the content of a B/L and to the relationship between the

carrier and the consignee. Thus, any degree of manipulation short of re-drafting would be

insufficient to resolve this inconsistency.

14 This conclusion is strengthened by the fact that the standard form Bs/L present in the C/P do

not make a reference to the arbitration clause, despite incorporating the rest of the C/P clauses.

15 Furthermore, the Bs/L have a broad incorporation clause, but, according to Lord Robson,7 the

crucial factor is precision and not breadth. The Bs/L refer

Clause/Dispute Resolution Clause, [being] herewith incorporated .8 It is, however, evident that

the breadth of this incorporation clause is what ultimately causes inconsistencies and prevents

cl. 31 from being incorporated.

5 supra no2 6 Miramar Maritime Corp v Holborn Oil Trading (The Miramar) [1984] 2 Lloyd's Rep 129 7 supra no2 8 Moot scenario, 15


4

1.3 The Claimant has no title to sue because he is not a holder of Bs/L in good faith

16 Alternatively, the Tribunal has no jurisdiction to hear the claim; the Claimant has no title to sue

under the Bs/L because he is not the lawful holder within the scope of ss. 2(1) and 5(2)

COGSA 1992.

17 As evidenced

authorities,9 a seller in a CIF contract is under a separate duty to tender the shipping documents.

Analogy can be drawn with delivery by instalments, as

is found in both situations. In the present case, repudiation of the CIF contract before physical

delivery of the shipping documents brought the S ions to an end.

18 Additionally, the repudiatory conduct was alleged and accepted by the Claimant. 10

Subsequently and before the documents had been tendered this conduct was alleged and

accepted by the Seller. Therefore, there could be no doubt that the obligations had been

extinguished. Thus, when the Bs/L reached the Claimant, the tender did not correspond to any

obligation of the Seller.

19 In The Aegean Sea,11 Mr Justice Thomas the requirements of possession as a result

of the completion by delivery of an endorsement must have the consensual elements on the part

of the endorsee or transferee which are necessary 12 The lack of consent to the transfer of

the Bs/L is evidenced in the correspondence between the Claimant and the Seller during 6-18

March 2009,13 whereby the Claimant agreed to return the Bs/L to the Seller.

20 The Aegean Sea can be applied to the present case by looking at the purpose of the right of suit

under a B/L. Such a right complements the title of possession enshrined in a B/L.14

9 Johnson v Taylor [1920] AC 144 at 155, 156 per Lord Atkinson (summarizing previous authority); Ross T Smyth & Co Ltd v T D Bailey Son & Co [1940] 3 All ER 60 at 68 per Lord Wright 10 Moot scenario, 25 11 Aegean Sea Traders Corporation v Repsol Petroleo SA (The Aegean Sea) [1998] 2 Lloyd's Rep 39 12 Aegean Sea Traders Corporation v Repsol Petroleo SA (The Aegean Sea) [1998] 2 Lloyd's Rep 39, 60 13 Moot scenario, 25-33 14 e.g. see Kum v Wah Tat Bank [1971] 1 Lloyd's Rep 439, The bill of lading obtains its symbolic quality from the custom found in Lickbarrow v Mason (1787) 2 TR 63 and that is a cust negotiable and

by endorseme


5

21 Therefore, good faith must not only be considered when the B/L is indorsed but also or even

exclusively when it is delivered.15 It follows that the ratio of Thomas J can be applied to

situations only when delivery is made by mistake and not accepted. It is thus evident that the

Claimant was not in good faith and therefore has no right to initiate arbitral proceedings.

1.4 The Tribunal lacks jurisdiction to award consolidated damages (s.49 AA)

1.4.1 London is not the seat of the arbitration

22 The rider clause refer nothing more than designate the place

where the hearings are to take place. The elaborate contractual provisions of cl. 31 of the C/P,

which call for application of the FAA 1925, have been left untouched by the rider clause and

are still in effect. Mr Justice Akenhead in Braes of Doune Wind Farm v Alfred McAlpine

Business Services16 held that: where in substance the parties agree that the laws of one

country will govern and control a given arbitration, the place where the arbitration is to be

heard will not dictate wh 17 In that case the parties

selected Glasgow as the seat of arbitration and decided on application of the AA 1996.

However, Glasgow was held to be nothing but the place where the hearings would take place.

1.4.2 Alternatively, s. 49 AA 1996 does not apply

23 Even if London were the seat of arbitration, s. 49 AA 1996 would still be inapplicable. The

explicit reference to the FAA 1925 is restricted only as far as cl. 31 of the C/P contractually

overrides s. 49 AA 1996. This is in accordance with ss. 4(2), 5(1) AA 1996 and Schedule 1 and

the judgment of Mr Justice Saville in Union of India v. McDonnell Douglas.18 In that case, the

15 Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (Informa London 2005) para 8.55 16 [2008] 1 Lloyd's Rep 608 17 [2008] 1 Lloyd's Rep 608, 612 18 [1993] 2 Lloyd's Rep 48


6

24 The explicit reference to a seat together with the use of the

honourable judge to conclude that the internal conduct of the proceedings were to be carried

out according to Indian law as long as they are not contrary to mandatory provisions. Union of

India can be applied to the present case, as s.49 AA 1996 is not mandatory and therefore has

been struck out by the contract by virtue of s.4 (5) AA 1996. The law of New York applies and

thus compound interest is not permitted.19

1. 5 The Tribunal should not re-open the issue of court fees for the Dutch proceedings

between the Claimant and the Seller

1.5.1 The issue of costs falls outside the arbitration clause

25 The issue of court fees is primarily related to the scope of the arbitration clause. The wording of

the clause20 has been interpreted in Hi-Fert Pty Ltd v Kiukang Maritime Carriers Inc21 by the

Australian High Court as excluding non-contractual claims. This case is distinguishable from

Fiona Trust v Privalov22 on the basis of different wording, i.e.

.

26 In the present case the claim on court fees cannot be said to be a contractual one because the

connection to the contract is too remote. The claim arises out of the court proceedings and not

the contract itself, thus breaking the chain of causation. One could apply the general contract

law remoteness principle,23 thus court fees could not have been reasonably contemplated as

damage that would arise out of breach of the contract of carriage. Alternatively, authorities24

19 Lemnos Broad Silk Works v Spiegelberg 27 Misc 855, 217 NYS 595; Connecticut v Jackson 1 Johns Ch 13 20 performance or termin 21 22 [2007] UKHL 40 23 Hadley v Baxendale (1854) 9 Ex 341 24 Hugh Beale (ed), Chitty on Contracts (30th edn, Sweet & Maxwell 2008) para 26-078


7

regard expenses incurred after and as a result of the breach as not referring to expenditure

caused by litigation but to mitigation or substitute performance.

27 Further or alternatively, the dicta in Fiona Trust, namely that differences in wording used in

arbitration clauses can be immaterial,25 cannot be applied to the present case. Here the matter

has already been decided by the Dutch court26 in which the Respondent did not take part, as it

was between the parties to the sale contract.

1.5.2 Alternatively, the Claimant is estopped from raising the issue of costs

28 In The Wadi SUDR27 the Court of Appeal held that A [Brussels I] Regulation judgment can

however give rise to an issue estoppel as much in arbitration proceedings excluded from

the Regulation as in any other proceedings in an English court .28 Since the judgments by the

Dutch courts fall within the scope of the Regulation and can create an issue estoppel in

arbitration proceedings pursuant to Art. 33.1 of the Regulation. In this case there is a final

judgment concerning costs, which is inextricably linked to the determination of the merits as

evinced by the Dutch national legislation. Thus, the issue should not be re-opened by the

Tribunal because the Claimant is estopped from challenging the facts that led to the judgment

against him.

29 The main proceedings concerned an unsuccessful attempt by the Claimant to resist arrest and

sale of the cargo on board the Vessel, and leading to a judgment in rem by the Dutch Court of

Appeal for the sale of the arrested cargo by the Seller. Such proceedings have been recognised

by English law as being of an in rem nature.29 The effect of the sale of property by the court has

25 the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. Fiona Trust v Privalov [2007] UKHL 40, para 13 26 Moot scenario, 55 27 National Navigation Co v Endesa Generacion SA (The Wadi SUDR) [2009] EWCA Civ 1397 28 see The Wadi SUDR, para 59 per Lord Justice Waller 29 The City of Mecca 1879 C 275 applied per analogiam


8

been held to have a universal effect, precluding subsequent proceedings by any third party.30

The Dutch Code of Civil Procedure imposes in s. 237(1) the costs of the trial on the losing

party, making an order for costs a matter necessarily determined. Therefore, should the tribunal

decide to shift the costs to the Respondent, it would have to re-open the Dutch litigation that led

to the costs being awarded, thus in effect disregarding the judgment of the Dutch Courts,

something unacceptable under the Brussels I regime, as interpreted by The Wadi SUDR.

2. The Respondent was justified in not delivering the goods to the

Claimant at Liverpool

30 The Respondent contests that the Claimant is the lawful holder of the Bs/L. Further and

alternatively, the Respondent was entitled to deviate. Alternatively, the Claimant agreed to the

contractual route being changed to Rotterdam. In any case, the Respondent has a right to call at

Rotterdam by virtue of clause 21 of the C/P. Consequently, the Claimant cannot claim

damages.

2.1 The Claimant was not the lawful holder of the Bs/L

31 Possession of a B/L does not by itself confer upon its holder a right to the goods.31 In order to

maintain an action for non-delivery, the Claimant must show that he was a lawful holder.32 The

latter, however, has been proven to not be the case.33

2.2 The Respondent is entitled to call at any port in any order

32 Cl. 21 of the C/P, which was validly incorporated into the Bs/L, 34 entitles the Respondent to

30 Castrique v Imrie (1869-70) LR 4 HL 414 (where a mortgagee was not allowed to impeach a French decision for the sale of the mortgaged vessel); Hill v Clifford [1907] 2 Ch 236 (for the universal effect of condemnation of a vessel by the Admiralty court applied per analogiam) 31 Cox v Harden (1803) 4 East 211 32 The Tigress (1863) BR & L 37;; Howard v Shepherd (1850) 9 CB 297 33 supra under 1.3


9

of cargo.35

construed as meaning that he is dispensed from following the geographical route.36 Hence,

change of route is allowed by the contract of carriage.

33 Alternatively, if the breach took place, the Claimant waived it by election.37 Namely, he elected

to treat the contract as subsisting by insisting on delivery in Rotterdam and he did so with the

full knowledge of his rights as to the deviation. The e-mail correspondence between the Seller

and Claimant as well as the information letter sent to the Respondent on 20 March 2009,38

demonstrate that the Claimant was fully aware that the Respondents proceeded to Rotterdam.

The warning of contractual breach in the latter document must be regarded as stating nothing

more than that the Claimant did not accept delivery to the Seller. In two e-mails addressed to

Mark Wiggins, the Claimant explained that the cargo would be without value in Liverpool.39

Further, he found buyers in Rotterdam.40 Against this background the Claimant must be treated

as being bound by the contract.

2.3 The Respondent had justifiable grounds to deviate

34 There has been no deviation from the voyage contracted for. Alternatively, if the deviation took

place, it is justifiable under the HVR and/or the contract of carriage. Consequently, the

claimant has no right to damages.

2.3.1 The Hague-Visby Rules

35 It is submitted that there are reasonable grounds as described in Art. IV r. 4 HVR. In Stag Line

v Foscolo, Mango & Co,41 Lord Atkin ruled

made solely in the interests of the ship or solely in the interests of the cargo, or indeed in the

34 Moot scenario p 15: B/L cl. 1 35 Leduc v Ward (1888) 20 QBD 475 36 Leduc v Ward (1888) 20 QBD 475 37 compare Hain Steamship Co v Tate & Lyle (1936) 55 Ll LR 159 38 Moot scenario, 36 39 Moot scenario, 27 40 Moot scenario, 35 41 [1932] AC 328


10

42 In the present case deviation is in the interests of preserving the

cargo since by discharging it in Rotterdam there is at least one party to take the delivery.

2.3.2 The liberty clause

36 It is well-established case-law that the courts may nevertheless give effect to an incorporation

clause even if the date of the C/P is not provided.43 The Heidberg44 is of no authority in this

regard, as in that case the C/P was signed after the B/L was issued. Further, it is to be noted that

that case has been doubted in later case-law.45

37 The wording of cl. 1 of the B/L

46 is sufficient to

incorporate the liberty clause (cl. 11) of the C/P.47 This view is further supported by Connolly

Shaw v Nordenfjeldske,48 where the court considered a very widely drafted liberty to deviate

clause, such as in the present case, and held the deviation to be covered by the clause.

Presumably, the same result would follow where a B/L, issued under a C/P, includes a

provision expressly incorporating a liberty clause in the C/P.49

38 A liberty clause is not rendered void by virtue of the HVR regime pursuant to Art IV rule 8.

50 Hence, the clause is not out of line with the

HVR regime.

42 Stag Line v Foscolo, Mango & Co [1932] AC 328, 343 43 Bangladesh Chemical Industries Corp v Henry Stephens Shipping Co Ltd (SLS Everest) at 391;; Orinoco Naviagation Ltd v ecotrade Spa (The Ikariada) [1999] 2 All ER 257 at 267;; National Navigation Co v Endesa Generacion SA (The Wadi Sudr) [2009 44 Partenreederei M/S 'Heidberg' v Grosvenor Grain and Feed Co Ltd (The Heidberg) [1994] 1 Lloyd's Rep 287 45 see e.g. Welex AG v Rosa Maritime Ltd (The Epsilon Rosa) 46 Moot scenario, 15 47 GH Treitel, FMB Reynolds and Thomas Gilbert Carver, Carver on bills of lading (3rd edn, Sweet & Maxwell 2011), 114 48 [1934] 50 TLR 418 49 John Furness Wilson, Carriage of Goods by Sea (7th edn, Pearson Longman 2010), 20 50 Renton v Palmyra [1956] 1 QB 462, 510


11

2.4 The Claimant had no right to delivery under COGSA 1992

39 For the reasons stated in the arbitration section above, the Claimant cannot rely on s. 2(2)(a)

COGSA 1992 as they are not lawful holders.51 Thus, there is no right to sue for delivery.52

2.5 The Claimant had no right to delivery under common law

40 Alternatively, there is no right to delivery under common law.53 Consequently, the Claimant

has no property rights and cannot claim delivery of the goods. The contract of sale was for an

unascertained amount of cargo, which under s. 16 SOGA 1979 does not confer property rights

to the buyer. This position is unaltered in the current situation, since s. 20A(1)(a) SOGA 1979

cannot This is because on the current

facts no notice of contractual appropriation has been given.54

2.6 The Claimant is estopped from claiming delivery

41 Further and alternatively, the correspondence between the 6 and the 16 March 2009 evinces the

persistence of the Claimant not to accept delivery of the cargo for whatever reason, including

for the purpose of mitigating losses. The correspondence conveys a clear and unequivocal

message that the Claimant would not rely on their rights to the cargo. The Seller relied on the

correspondence, thus changing the contractual route of the Vessel.55

42 Despite the initial reservation of rights,56 the willingness of the Claimant to return the Bs/L to

the Seller, without any further reservation or mentioning of an obligation of the Seller to

reimburse the price paid for the cargo, evinces an unequivocal desire to divest the rights to the

cargo. This contention is further reinforced by the fact that the Claimant considered himself an

51 supra under 1.3 52 Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (Informa London 2005) para 5.3 53 Cox v Harden (1803) 4 East 211; Cumming v Brown (1808) 9 East 506, 513; Montgomery v Hutchins (1905) 94 LT 207, 208; The Arpad (1935) 51 Ll L Rep 115; The Future Express [1992] 2 Lloyd's Rep 79, 96 54 Michael G. Bridge and Judah P. Benjamin, Benjamin's sale of goods (8th edn, Sweet & Maxwell 2010) at para 18-295 55 Low v Bouverie [1891] 3 Ch 82; Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd's Rep 391; Banning v Wright [1972] 1 WLR 972 56 e-mail dated 16 March 2009. Moot scenario, 27


12

agent of the Seller when it came to the disposing of the cargo.57 The courts do not look

favourably upon a general reservation of rights followed by ambiguous conduct.58

43 The relevance of Bremer Handelsgesellschaft m.b.H. v C. Mackprang Jr. (Pegasus) 59 is

crucial, although not easily discernible: there the buyers reserved their rights but demanded

delivery of the cargo. It was held that they had in fact waived their rights to damages,

corresponding to the amount claimed for delivery. Likewise in the present case, the fact that the

Claimant unequivocally60 stated more than once that he was willing to return the Bs/L and even

acted as an agent for the Seller when disposing the cargo, clearly shows that the Claimant has

chosen to relinquish his rights to the cargo, despite the reservation.

44 The Claimant is therefore estopped from claiming in contract or in tort against the Respondent

for wrongful delivery.

2.7 Damages

2.7.1 The Respondent is not liable

45 The Respondent is entitled to rely on any exception clause for protection. 61 The question of

enforcement of the contract to events happening after the alleged deviation, including the

exception clauses, depends on whether these clauses where intended to apply.62 It follows from

the circumstances of this case, that the Claimant was aware of the terms of the C/P by reference

in the email dated 12 September 2008, but did not take any opportunity to question them.

Furthermore, Art. IV r.

57 e-mail dated 17 March 2009. Moot scenario, 29 58 Bremer Handelsgesellschaft mbH v C Mackprang Jr (Pegasus) [1979] 1 Lloyd's Rep 221 per Shaw LJ: statement that they "reserved all their contractual rights" cannot of itself dissipate the inferences to be drawn from their

59 Bremer Handelsgesellschaft mbH v C Mackprang Jr (Pegasus) [1979] 1 Lloyd's Rep 221 60 Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd's Rep 109 per unequivocal representation or waiver, it is not necessary for the buyers to say It is quite enough if they behave or write in such a way that reasonable sellers would be led to believe that the buyers were waiving any defect there might be in the notice and were accepting it as 61 Stephen Girvin, Carriage of Goods by Sea (2nd edn, OUP Oxford 2011) 410 62 Photo Production Ltd v Securicor Transport Ltd [1980] AC 827


13

clause is not limited in its scope, but applies side by side of the HVR regime.63 Hence, the

exception clause incorporated in the Bs/L will apply. In the alternative, the Claimant will only

be entitled to damages resulting from the deviation itself. 64 As the goods were already

diminished in value before the deviation, the damages are nil.

3. Non-liability: the pirate attack

3.1 The Respondent did not breached Art. 3 HVR and the Vessel is seaworthy

46 Pursuant Art. III r.1 HVR the Respondent is under a duty, before and at the beginning of the

e the s the ship sure

that the whole ship is fit for carrying the cargo. The holding areas were properly maintained

and fit to carry cargo, the crew were well-informed, trained in how to specifically handle the

cargo,65 and were instructed to commence anti-piracy watch. This measure is accepted to be

efficient as stated in the BMP-4.66

47 Pursuant to Art. III r.2 HVR, the goods carried were properly and carefully loaded, handled and

carried up until and immediately after the unforeseeable capture of the Vessel.

48 All the necessary measures having been taken, neither the Respondent nor his crew were at

fault in the capture of the Vessel. The Respondent denies responsibility of any alleged damage

to the cargo resulting from the pirate attack pursuant to Art. IV HVR.

49 Without assuming responsibility or any prejudice to the Respondent's previous arguments, it

should also be noted that in the unlikely event that the competent crew of the Vessel is found to

63 compare Parsons Corporation and others v CV Scheepvaartonderneming Happy Ranger. The Happy Ranger [2006] 1 Lloyd's Rep 649, where a similar clause was given wide effect. See furthermore Rhidian D. Thomas, The Evolving Law and Practice of Voyage Charterparties (Informa, London 2009) 305 64 Stephen Girvin, Carriage of Goods by Sea (2nd edn, OUP Oxford 2011) 410 65Aspinall Lewis International Survey Report. Moot scenario, 41 66 attack is assured, and where defences can be readily deploye IMO, `BMP for protection against Somalia piracy` (14 September 2011). Available at <http://www.imo.org/MediaCentre/HotTopics/piracy/Documents/1339.pdf> accessed 8 April 2013

http://www.imo.org/MediaCentre/HotTopics/piracy/Documents/1339.pdf


14

be at fault regarding the hijacking; the Respondent denies any claims borne thereof. Pursuant to

Art. IV.2(a) HVR, the ship shall not be responsible for ct,

neglect, or default of the master or the servants of the carrier in the navigation or in the

50 Therefore, the Respondent is not liable to the Claimant, as the Respondent has fulfilled his

obligations by having exercised due diligence before and at the beginning of the journey as

required by the HVR incorporated in the Bs/L.

3.2 The Respondent is not liable under the HVR

51 The Respondent is not liable for any losses allegedly suffered by the Claimant as a

consequence of the piracy attack. The determination of the Respondents non-liability falls

within the HVR, which is duly incorporated into English law through the COGSA 1971.

52 The Respondent relies upon a number of exceptions under Art. IV HVR for why he is not liable

to the Claimant for any losses put forward. The piracy attack falls within four different

categories of non-liability under Art. IV r. 2 HVR. Each exception to strict liability must be

considered separately and on its own wording. Whether compiled together or viewed

separately, it is clear that the Respondent is not liable for any losses allegedly suffered by the

Claimant.

3.2.1 The attack was one of the danger or perils of the sea 53 One of the basic definitions of perils of the sea i

of a ship at sea, which canno .67 Piracy has long

been a danger any vessel operating at seas or navigable waters might face, and could occur

anywhere. In this case - .68 This should

not prevent piracy from being classified as a peril of the sea. The exemplary case Bunga Seroja

67 John F. Wilson, Carriage of goods by sea (7th edn, Pearson Longman 2010) 266

68 Years of 2001 to 2008, 206 of the 274 piracy attacks in East Africa has occured in Somalian waters, see International Chamber of Commerce ; International Maritime


15

stated neither do they have

to be preventable or inevitable.69

54 Previously, piracy has been accepted as a ,70 and thus the Respondent is non-

liable71 for any alleged losses concerning the cargo by reason of the Vessel having been

hijacked by Somali pirates.

55 Since there is no fault attributable to the Respondent for the hijacking of the Vessel72 and he

has exercised reasonable care in attempting to avoid the peril through anti-piracy watch and

instructing the crew of the danger in the area. Consequently, the said exception is clearly

applicable.

3.2.2. Alternatively, the attack amounts to an act of war 56 T [ ] for loss [ ] arising or resulting from [ ] .73

The expression given an ordinary commercial rather than a technical

public international law meaning.74 In the matter of deciding on whether facts fall within this

sub-rule, . 75 The

applicability of this sub-rule is a question of the specific facts in each case.76

57 The question then becomes whether the alleged loss is a direct consequence of the war. In other

words, there should be a sufficiently close causal connection between the facts and the claimed

loss.77 In this case, it is clear that the hostile acts by the pirates fall within this sub-rule.

69 Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (The Bunga Seroja) [1999] 1 Lloyd's Rep 512, 529:

w

70 Pickering v Barclay 2 Roll Ab 248; Barton v Wolliford (1688) Comb 56 1M (1690) 2 Vern Ch 176 71 Art. IV r.2(c) HVR 72 to be argued in detail supra 3.2.4 73 Art. IV r. 2(e) HVR 74 Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Company Ltd [1939] 2 KB 544; National Oil Company of Zimbabwe v Sturge 28 75 National Oil Co of Zimbabwe v Sturge 281

76 Attorney General v Ard Coasters Ltd (The Larrinaga) [1921] 2 AC 141; Commonwealth Shipping Representative v Peninsular and Orient Branch Service [1923] AC 191; Attorney-General v Adelaide Steamship Company Ltd [1923] AC 292.

Curtis & Sons v Matthews [1919] 1 KB 425, 429. See also Pesquerías y Secadores de Balacao de Espana v. Beer (1949) 82 Ll L Rep 501

77 Julian Cooke and others, Voyage charters (3rd edn, Informa London 2007) para 85.299


16

58 Commercially speaking, it is a fact that for a ship, its master and crew being attacked by armed

and dangerous men is an act of war where the opposing side is the pirates. This is especially

due to the blurring of lines between guerrilla, terrorism or asymmetric warfare in modern day

society. The pirates operating in these waters are at war with any ship passing by. The objective

of the pirates was to acquire the ship at any cost, sparing no one and to seek ransom for her

return. The ransom might even have been used to fund political change in Somalia.78

59 Clearly this amounts to an act of war, where the following consequences is not something the

Respondent cannot be held liable for. In addition, UNCLOS requires all states to cooperate to

the fullest possible extent in the repression of piracy on the high seas.79 This means that even if

the crew on board is deemed not to be an opposing side to the pirates, the international

community as a whole has united to form an opposing side to pirate activity.

60 Furthermore, there is no requirement that a formal declaration of war or the severing of

diplomatic relations between governments for an act to amount to an act of war.80

61 The fact that it was known that, off the coast of Somalia piracy attacks were occurring when the

contract of carriage was made, will not prevent this exception from operating.81

62 Due to the attack the ship was delayed, and any loss arising due to this is not something for

which the Respondent is liable.

3.2.3 In the alternatively, there was an act of public enemies.

63 The Respondent is als for loss [ ] arising or resulting from [ ]

.82 It is suggested83 that the term does include pirate activity, Sir Norman

78 James Bridger, `Jihad on the High Seas? Pirates, Profit and the Islamist Connection`, published by Atlantic treaty Association in Atlantic Voice Vol. 1, No. 1 (Oct 2011) 3. Available at < http://issuu.com/atlantic_treaty_association/ docs/vol._1__no._1__oct_2011_> accessed 8 April 2013 79 United Nations Convention on Law of the Seas 1982, Art. 107; see also Paul Todd, Marine Fraud & Piracy (2nd edn, Informa London 2010) para 1.023 80 Kawasaki Kisen Kaisha v Bantham Steamship Co (1939) 2 KB 544

81 see the reasoning in Reardon Smith Line v. Ministry of Agriculture, Fisheries and Food [1962] 1 QB 42. See also Julian Cooke and others, Voyage charters (3rd edn, Informa London 2007) para 85.301

82 Art. IV r. 2(f) HVR

83 Julian Cooke and others, Voyage charters (3rd edn, Informa London 2007) para 85.303


17

.84 This is not an unreasonable

suggestion as pirates are enemies of every civilised nation and to public order and stability.

64

apt to refer to enemies of mankind such as pirates.

65 The men who attacked the Vessel were acting as pirates, which is a fact neither party to this

arbitration has disputed,85 therefore the Respondent is not liable as the act was committed by

2.4 In any case there is no actual fault on the side of the Respondent86

66 The catch-all exception is equally applicable to our case as the previous exceptions to non-

Shipping Act 189487 now repealed,88 therefore it provides context and must not be ignored in

interpreting the sub-rule. Under that said Act, a shipowner could limit his liability as long as he

proved that the loss in question did not arise due to his actual personal fault or negligence, or

by way of his privity, i.e. his knowledge.89

67 The facts are clear: pirates attacked the ship with neither the aid of the Respondent nor was it

known to him that they would attack. The underpinning policy of this sub-rule is that loss

make the carrier liable.90

68 Yet, the Respondent did take measures to prevent attacks by pirates as the Vessel commenced

anti-pirate watch at 0742 on 14 November 2008 when it passed the entrance to the Gulf of

84 Francesco Berlingieri, The Travaux Preparatoires of the Hague Rules and of the Hague-Visby Rules (Comite Maritime International 1997) 408

85 see Moot scenario, Claimant and Respondent`s submissions, 65-74 86 Art. IV r. 4(q) HVR 87 see Patterson Steamships v Canadian Co-operative Wheat Proders [1935] SCR 617

88 Part XV, Statute Law (Repeals) Act 1993 89 Julian Cooke and others, Voyage charters (3rd edn, Informa London 2007) para 85.346 90 Leesh River Tea Co v British India Steam Navigation Co (The Chyebassa) , 200 and Rhidian Thomas, Carriage of Goods under the Rotterdam Rules (Informa London 2010) para. 8.48


18

Aden.91 This was then in place for over one day before the ship was boarded by pirates. All in

all, this means that the Respondent was not at fault nor negligent, as he did what could have

been expected of him with the prior knowledge of probable pirate activity at the time.

69 It should be noted that was not in place at the time of the piracy attack on the

Vessel.92 The scale of the pirate activity in the area was also so scarce that the IMO had not yet

released its advisory document.93

70 It was only on the 16 December 2008 that the UN allowed the states to undertake measures in

Somalia itself for the purpose of suppressing the attacks.94

71 This means that the Respondent acted more cautiously than could have been expected when he

commenced anti-pirate watch. Consequently it cannot be claimed, in hindsight, that the

Respondent should have acted in accordance with any later advice given by IMO or IMB, the

Respondent acted in accordance with the facts known at the time.

72 Therefore the Respondent cannot be held liable for the Claimant s losses and allegations in this

respect

.

4. Tort of Conversion

4.1 The Respondent is not liable in the tort of conversion

73 To establish the tort of conversion the Claimant must have title to sue;; 95 prove that the

Respondent dealt with the goods in a manner inconsistent with the rights of the Claimant to the

91 see Report by Aspinall Lewis Interntaional, Moot scenario 41

92 -ccs.org/piracy-reporting-centre/advice-to-masters> assessed 21 April 2013 93 IMO circular MSC.1/Circ.1334 (adopted 23 June 2009) 94 United Nations Security Council Resolution 1851 SC/9541 (adopted 16 December 2008) para 6 95 Wilbraham v Snow (1669) 2 Wms. Saund. 47a;; The Future Express [1993] Smith (Administrator of Cosslett (Contrators) Ltd.) v Bridgend CBC [2001] UKHL 58


19

goods,96 and, while doing so, held an intention to exercise permanent or temporary dominion

over the goods.97 It is respectfully submitted that the Claimant failed to establish that any of

these requirements is satisfied.

4.1.1 The Claimant has no title to sue in conversion

74 A person has title to sue in the tort of conversion if and only if he had, at the time the tort

occurred, either actual possession or the immediate right to possess the goods in question.98

75 It is established on the facts99 that at the time of the alleged conversion, the goods were in

actual possession of the Respondent.

76 Drawing from above,100 since the Claimant did not obtain the Bs/L in good faith, he cannot

bring himself within the meaning of lawful holder under s. 5(2) COGSA 1992 and

consequently cannot benefit from the rights conferred by s. 2(1)(a) COGSA 1992, which

include the right to demand delivery of the goods.101 Based on these grounds, the Claimant had

no immediate right to possess the goods at the relevant times and thus has no title to sue in

conversion.

4.1.2 The Respondent has never acted in a manner inconsistent with the rights of the true

owner of the goods

77

right whereby that other is deprived of the use and possession of it.102 It is submitted that

property in the goods remained with the Seller at all relevant times since the goods have never

96 Kuwait Airways v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, [425] 97 Lancashire & Yorkshire Ry Co v MacNicoll (1919) 88 LJKB 601;; Sanderson v Marsden (1922) 10 Ll. L. Rep 467, 472 98 Wilbraham v Snow (1669) 2 Wms. Saund. 47a;; The Future Express ;; Smith (Administrator of Cosslett (Contrators) Ltd.) v Bridgend CBC [2001] UKHL 58 99 Moot scenario, 28-35. 100 supra no1.3 101 Richard Aikens, Richard Lord and Michael Bools, Bills of Lading (Informa London 2005) 5.3;; Charles Debattista, Bills of Lading in Export Trade (3rd edn, Tottel Publishing 2009) 2.8 102 Kuwait Airways v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, [425]


20

been ascertained in favour of the Claimant.103 Indeed, the Claimant explicitly referred to the

Seller as the owner of the goods.104

78 Alternatively, based on the arguments outlined above,105 the Claimant divested himself of the

rights to the cargo in favour of the Seller. Drawing from the arguments above and relying on s.

8(1) of Torts Act 1977, the Seller is and has been a true owner of the goods at all relevant times

and thus had a better possessory title to the goods than the Claimant.106 At no times did the

Respondent act in a manner inconsistent with the rights of the Seller or deprive him of the use

and possession of the goods.

4.1.3 The Respondent had no intention to exercise dominion over the goods

79 As a further prerequisite for establishing conversion the tortfeasor must hold an intention to

negative the right of the true owner and exercise permanent or temporary dominion over the

goods at stake.107

80 Intention to exercise dominion over the goods can be discerned from the actions of an alleged

tortfeasor.108

81 Since the Respondent merely delivered the goods to their true owner in accordance with his

exercise dominion over them109 can be made out.

103 s. 16 SOGA 1979;; supra no 2.5 104 Moot scenario, 27 105 supra no 2.6 106 Armory v Delamirie (1721) 1 Stra. 505 107 Lancashire & Yorkshire Ry Co v MacNicoll (1919) 88 LJKB 601;; Sanderson v Marsden (1922) 10 Ll. L. Rep 467, 472 108 Kuwait Airways v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883 109 Lancashire & Yorkshire Ry Co v MacNicoll (1919) 88 LJKB 601;; Sanderson v Marsden (1922) 10 Ll L Rep 467, 472


21

5. Quantum of Damages

5.1 The contractual place of discharge was Rotterdam

82 As it has been previously stated, the Respondent was entitled to discharge in Liverpool

pursuant to cl. 29 of the C/P as it is interpreted in the light of Art. IV r.2 HVR, which has been

incorporated into the Bs/L. Art. IV r.5(b) HVR states that the quantum of damages is calculated

by reference to the place of contractual delivery.

83 The fact that the contract of carriage, contained in or evidenced by the Bs/L, provided for a

possible multitude of discharge ports, points to the fact that the price of the cargo is to be

calculated by reference to the market price in the port of actual discharge.110

5.2 Alternatively, the Claimant accepted that the port of discharge subsequently

changed

84 In any case, the Claimant never insisted on the cargo being delivered to Liverpool since the

essel would not sail to Liverpool. This

email came as a response to the Claimant admitting that the cargo would be of no value at

Liverpool and that whether the discharge port should be Liverpool was an issue left entirely to

the Sellers.

85 Further and alternatively, the Claimant did not object to the cargo being discharged at

Liverpool and only described it as a deviation from the contract several days after they had

agreed to send the Bs/L to Liverpool.111

86 the Seller, that the latter was entitled to choose the discharge

port, took place in , evincing that the Claimant was aware of the

possible implications on th

110 The Arpad (1935) 51 Ll L Rep 115; Attorney General of the Republic of Ghana v Texaco Overseas Tankships Ltd (Texaco Melbourne) [1994] 1 Lloyd's Rep 473 111 Moot scenario, 36


22

87 letter to the Respondent dated 20 March 2009,

where the Claimant did not treat Rotterdam as having been selected wrongfully as a port of

discharge but merely objected to the cargo being delivered to the Seller.

88 Therefore, the Claimant acted with intention or at least expectation that the information

conveyed to the Seller would reach the Respondent, i.e. 112 The

Claimant did not object to the cargo being discharged in Rotterdam, which constitutes his

.113 The Respondent relied on said conduct and discharged the

cargo in Rotterdam instructions.114

intention was made evident through the liberty clauses,115 incorporated into the C/P.

89 If the Claimant was allowed to claim against the impression he had conveyed to the

Respondent, the latter would -to his detriment- bear severe liabilities under the Bs/L, rendering

nt claim unjust.116

90 For these reasons, the Claimant is estopped from claiming that the lawful port of discharge was

Liverpool instead of Rotterdam and the latter needs be taken as a point of reference for the

calculation of damages.

5.3 ative claim should be dismissed117

91 The general principles of mitigation 118 demand that the Claimant choose the less costly

measure to mitigate damages. In cases where substitute means of transportation is available in

due time, the Claimant is entitled to the costs of transhipment only.119 On the facts, the

Claimant cannot prove that such transportation was unavailable or that their buyers would

112 Lokumal (K) & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (August Leonhardt) [1985] 2 Lloyd's Rep 28; Compania Portorafti Commerciale SA v Ultramar Panama Inc. (No. 2) (Captain Gregos) [1990] 2 Lloyd's Rep 395 distinguished on the basis of existing representation 113 Lokumal (K) & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (August Leonhardt) [1985] 2 Lloyd's Rep 28 114 cl. 29 C/P 115 See cl. 29 (a) C/P 116 Lokumal (K) & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (August Leonhardt) [1985] 2 Lloyd's Rep 28; John v George and Walton (1996) 71 P & CR 375 117 para 25 of the claims submissions 118 Harvey McGregor, McGregor on Damages (18th edn, Sweet & Maxwell 2009) 27-049 119 Stroms Bruks Aktie Bolag v John and Peter Hutchison (A Firm) [1905] AC 515 applied in A/S D/S Heimdal v Questier & Co. Ltd (1948-49) 82 Ll L Rep 452


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reject the cargo due to a possible delay. The considerable difference in costs between

transhipment and purchase of substitute PFAD proves that this basis should be dismissed.

5.4 The costs of the Dutch appeal are not recoverable

92 If, contrary to what is contended,120 the Tribunal has jurisdiction to rule on the issue of court

fees, the claim should be reduced to the court fees for the litigation only at first instance.

Damages, whether in contract or in tort require the losses incurred not to be too remote.121

93 The costs of the appeal are not considered reasonable and therefore fail the remoteness test

when the Claimant lost the case at first instance.122 The authorities for this proposition are

indistinguishable in this case and the limited exceptions scholars tentatively recognize123 are

not applicable.

6. Prayer for Relief

Based on the submissions presented above, the Respondent respectfully requests this Tribunal

to:

DECLARE that it does not have jurisdiction to hear the disputes arising out of the Bs/L;;

Further and alternatively,

ADJUDGE that the Respondent is in not in breach of the contract of carriage for failing to

deliver the goods to the Claimant;;


ADJUDGE that the Respondent was entitled to change the route to Rotterdam and/or this

constituted a reasonable deviation;;

Alternatively,

ADJUDGE that the Claimant had agreed to said change of discharge port;; 120 supra under 1.5 121 Hadley v Baxendale (1854) 9 Ex 341 122 Vogan v Oulton (1898) 79 L.T. 384 aff. (1899) 81 L.T. 435 CA, G. W. Ry v Fisher [1905] 1 Ch. 316 123 Harvey McGregor, McGregor on Damages (18th edn, Sweet & Maxwell 2012) 17-093


24


ADJUDGE that the Respondent is not liable to the Claimant for the loss of value of the cargo

resulting from the piracy attack;;

Alternatively,

AWARD damages calculated by reference to the value of the other PFAD parcel on board the

Vessel in Rotterdam on 19 March 2009, namely USD 1.4 million;;


ADJUDGE that PFAD market value in Liverpool on or about 20-30 March 2009 falls to be

calculated by reference to PFAD market value in Rotterdam increased by the cost of

transhipment to Liverpool, namely USD 1.52 million;;

Further,

ADJUDGE that the Respondent is not liable to the Claimant in the tort of conversion;;

AND

DECLARE that the Tribunal does not have jurisdiction to rule on the issue of costs in respect

of the Dutch proceedings;;

Further and Alternatively,

ADJUDGE that the Respondent is not liable to the Claimant for the expenses of the

unsuccessful appeal in the Dutch proceedings.