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16TH INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2015 UNIVERSITAS PADJADJARAN TEAM 15 MEMORANDUM FOR THE CLAIMANT ON BEHALF OF AGAINST Western Tankers Inc. LDT Pte. CLAIMANT RESPONDENT TEAM BAGAS TIARNIKO SUSETIO • DEBBY YERICA CHRISTINE • FAUZI MAULANA HAKIM • M. N. MAHATMANTA • RICARDO YOHANES OLIVER TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT TABLE OF CONTENTS TABLE OF CONTENTS ....................................................................................................... i LIST OF ABBREVIATIONS ............................................................................................... v INDEX OF AUTHORITIES ................................................................................................ vi STATEMENT OF FACTS .................................................................................................... 1 ARGUMENTS I. THIS ARBITRAL TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE .............................................................................................................. 3 A. There is a Valid Arbitration Agreement between the Parties in the Charterparty ..................................................................................................... 3 B. London is the Seat of Arbitration as intended by the parties by virtue of the Arbitration Agreement ..................................................................................... 4 C. Tort of Fraud Claims submitted by the Claimant is within the Jurisdiction of this Arbitral Tribunal ....................................................................................... 5 II. THE RESPONDENT HAS HAMPERED THE FULFILLMENT OF THE CHARTERPARTY .............................................................................................. 6 A. The Respondent’s Failure Led to the Vessel’s Vulnerability .......................... 6 i. The Respondent has failed to implement doctrine of stages properly . 6 ii. The Respondent’s failure to implement doctrine of stages led to the Vessel’s inability to install security equipment .................................... 7 B. The Respondent Failed to Provide the Vessel with Sufficient Bunker ............ 8 III. THE RESPONDENT’S FAILURE LEADS TO UNAUTHORIZED INSTRUCTION ................................................................................................... 9 A. The Instructions from ASA2’s was under the Respondent’s Behalf ............. 10 ii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT B. The Vessel’s Compliance with ASA2’s Direction was a Result of Failure on the Part of the Respondent and Persons Acting on its Behalf........................ 11 i. The Respondent has failed to direct the Vessel to a safe location ..... 11 ii. ASA has failed to fulfill its obligations under its scope of employment ............................................................................................................ 11 IV. THE RESPONDENT IS OBLIGED TO PAY FULL HIRE BASED ON THE CHARTERPARTY ............................................................................................ 12 A. The Off-hire Clause is not Applicable in this Present Dispute ...................... 13 i. The Respondent’s off-hire claim cannot be based on its own fault ... 13 ii. Detention by pirates cannot be considered as an off-hire event ........ 13 iii. The Claimant is not liable for the speed reduction of the Vessel....... 14 iv. The Vessel’s deviation was justifiable ............................................... 15 B. The Charterparty Remains Enforceable Even after the Respondent’s Breach .. ........................................................................................................................ 15 V. THE RESPONDENT HAS COMMITED CONSTRUCTIVE FRAUD BASED ON ITS CLAIMS ON PROVIDING BUNKER IN DURBAN ........ 17 A. The Element of Misrepresentation was Present in this Case ......................... 17 B. The Element of Reliance was Present within this Case ................................. 18 C. The Element of Profit was Present within this Case ...................................... 18 VI. THE RESPONDENT OR ASA2 ON BEHALF OF THE RESPONDENT HAS COMMITED FRAUD .............................................................................. 19 A. The Pirate Attack was a Result of Coordination Between the Respondent or Persons on Its Behalf and the Attacking Parties Involved ............................. 19 B. ASA2’s Actions on Behalf of the Respondent Amount to Fraud .................. 20 iii TEAM 15, UNIVERSITAS PADJADJARAN VII. MEMORANDUM FOR THE CLAIMANT THE RESPONDENT IS LIABLE FOR ANY LOSS AND DAMAGE SUFFERED BY THE CLAIMANT ................................................................. 21 A. The Respondent Shall Recover the Claimant with Respect to its Loss and Damage .......................................................................................................... 21 i. There is a causal link from the Respondent’s conduct to the loss and damage thereof................................................................................... 22 ii. The loss and damage are foreseeable ................................................ 22 B. The Claimant is Entitled to Hire Payment from the Respondent................... 23 C. The Respondent is Liable for Damage to the Vessel Due to its Tort of Fraud .. ........................................................................................................................ 24 PRAYER FOR RELIEF...................................................................................................... 25 iv TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT LIST OF ABBREVIATIONS Arbitration Act United Kingdom Arbitration Act 1996 ASA Atlantic Service Agency ASA2 Atlantic STS Agency BIMCO Baltic and International Maritime Council BMP 4 Best Management Practices 4 FONASBA The Federation of National Associations of Ship Brokers & Agents IFO Intermediate Fuel Oil Lloyd’s Rep Lloyd’s Law Report LMLN Lloyd’s Maritime Law Newsletter OPL Off-Port Limit p. Page PDPR Per Day Pro Rata Master Captain Stelios Smith of Western Dawn mt Metric tonnes Respondent Less Dependable Traders Pte. § Section Shipbroker IMWMB STS Ship-to-Ship The Charterparty Shelltime 4 Charterparty with special provisions The Vessel Western Dawn USD United States Dollar v TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT INDEX OF AUTHORITIES CASES REFERRED TO IN: (1976) I Ybk Comm Arb 190....................................................................................................... 4 ABC Mobile Sys., Inc. v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985) .................................... 5 Abdullah M Fahem & Co v. Mareb Yemen Insurance Co & Another (1997) 2 Lloyd’s Rep. 738................................................................................................................................................ 5 Acme Grain Co. v. Wenaus (1917) 36 DLR 347 ......................................................................... 9 Aggeliki Charis Compania Maritima SA v Pagnan SpA - The Angelic Grace (The “Angelic Grace”), (1994) 1 Lloyd’s Rep. 168, QB .................................................................................... 5 AIC Ltd v. ITS Testing Services (UK) Ltd (The Kriti Palm) (2006) EWCA Civ 1601 ............... 21 Astro Venceder Compania Naviera SA of Panama v. Mabanaft GmbH, The Damianos (1971) 2 QB 588; ..................................................................................................................................... 5 Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto Buitrago) [1976] 1 Lloyd’s Rep 250 (CA) ................................................................................. 16 Attorney-General v. Blake [2001] 1 A.C., 268 ........................................................................... 22 Ballard (Kent) Ltd v. Oliver Ashworth (Holdings) Ltd (2000) 3 W.L.R. 57 .............................. 10 Bennett v. Skinner, 2012 WL 216164 .......................................................................................... 6 Big Color, Inc. v. Bishop Taylor Group, LLC, No. 07-CV-00233-MSK-CBS, 2007 WL 3407360, at 1 (D. Colo. Nov. 13, 2007) ...................................................................................... 5 Blaising v Mills (1978) 374 NE2d 1166 ..................................................................................... 18 Brown Jenkinson & Co Ltd v. Percy Dalton (London) Ltd, (1957) 2 QB 621 .......................... 21 Cambridge Water Co. v. Eastern Counties Leather plc [1994] 2 AC 264 ................................. 23 Capital Trust Investment v. Radio Design, YCA 2002, p. 557, CA. ........................................... 5 vi TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Coffin v. Newburyport Marine Insurance co., 9 Mass. Rep.436 ................................................ 15 Compagnie de Navigation et Transports S.A. v. MSC (Mediterranean Shipping Company) S.A , (Swiss Federal Tribunal, 16 January 1995), Yearbook Commercial Arbitration XXI (1996) .. 4 Consolidated Cork Corp. v. Jugoslavenka Linijska Plovidba 318 F. Supp. 1209 (S.D. N.Y. 1970) ........................................................................................................................................... 12 Cory v. Thames Ironworks & Shipbuilding Co Ltd (1868) L.R. 3 Q.B. 181 QB ....................... 24 Cosco Bulk Carrier Co. Ltd. v Team-Up Owning Co. Ltd (The Saldanha) [2010] EWHC 1340 (Comm) ....................................................................................................................................... 24 Cramaso LLP v. Ogilvie-Grant, Earl of Seafield (2014) UKSC 9 ............................................. 18 Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350 ......................................................... 22 Dallah Real Estate & Tourism Holding Co v Ministry of Religious Affairs [2010] UKSC 46 ... 3 Derry v Peek (1889) LR 14 App Cas 337 ................................................................................... 21 Doyle v. Olby (1969) 2 QB 158 ................................................................................................... 6 Eby v. York Division, Borg-Warner 455 (1983) N.E.2d 623 ...................................................... 18 Edge Telecom, Inc v. Sterling Bank 143 P.3d 1155 .................................................................... 4 Edgington v Fitzmaurice (1885) 29 Ch D 459............................................................................ 18 Esso Petroleum Co Ltd v Mardon (1976) QB 801 ..................................................................... 18 First Citizen Municipal Corp v. Donaldson, Lufkin & Jenrette Securities Corp. 546 F. Supp 884 (N.D. Ga. 1982) .................................................................................................................... 6 Fletamentos Maritimos SA v Effiohn Int'l BV (1996) 2 Lloyd’s Rep. 304, QB ........................... 5 Gagne v. Bertran (1954) 43 C.2d 481 ........................................................................................ 21 Kish v. Taylor (1912) A.C. 604................................................................................................... 15 Glencore Grain Ltd. v. Flacker Shipping Ltd. (The Happy Day), Case No. DMC/SandT/19/02, 15 July 2002, per Lord Justice Potter......................................................... 14 Hadley v. Baxendale [1854]........................................................................................................ 23 vii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Hagarty v. Ithaca City School District (1979) 423 N.Y.S. 2d 843 ............................................. 17 Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597 per Lord Wright MR. .. 12 Harbour Assurance Co. PLC v. Kansas General Insurance Co. Ltd, 1 Lloyd’s Rep (1993) 455................................................................................................................................................ 6 Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d l\42.ll57 .......................................... 19 Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964) AC 465 .............................................. 18 Heyman v. Darwins (1942) AC 356 at 360, the Similar Inc. v. Autolive Inc., (9th Cir. 1999) 175F.3d 716 .................................................................................................................................. 6 Horsfall v. Thomas (1862) 1 H&C 90 ........................................................................................ 18 Howard Marine v. Ogden (1978) QB 574 ................................................................................. 18 ICC Award No. 5477 JDI, 1988, p. 1204 .................................................................................... 5 Isabella Shipowner SA v. Shagang Shipping Co Ltd (The Aquafaith) (2012) EWHC 1077 ...... 17 Jackson v. Royal Bank of Scotland [2005] 1 WLR 377.............................................................. 22 Jarboe v. Landmark Comm. Newspapers (1994) 644 N.E.2d 118 .......................................... 17, 18 Jones v. Dumbrell (1981) VR 199 .............................................................................................. 17 Marsh v. Joseph EWHC J70 ....................................................................................................... 23 Joseph Constantine Steamship Line Ltd v Imperial Smelting Corporation Ltd (1942) AC 154 at, Per Lord Wright ..................................................................................................................... 12 Kinoshita & Co Ltd et al. v. American Oceanic Corporation, 287 F.2d 951 (U.S. Court of Appeals, 2nd Circuit 1961) ........................................................................................................... 6 Knauf Fiber Glass GmbH v. Stein 615 N.E.2d 115(1993) ...................................................... 18, 21 Kpohraror v Woolwich Building Society [1996] 4 All ER 119 .................................................. 22 Kuwait Rocks Co v AMN BulkcarriersInc (The Astra) [2013] 2 All ER (Comm) 689 .............. 24 Lidgett v. Williams (1845) EngR 662 (1845) 4 Hare 456 ............................................................ 9 Limpus v. London General Omnibus Company (1862) (158 ER 993) ....................................... 12 viii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Lingsch v. Savage (1963) 213 Cal.App.2d 729 .......................................................................... 19 Link v. Link (1971) 179 S.E.2d 697, 278 N.C. 181..................................................................... 17 Lombard North Central plc v. Butterworth (1987) QB 527 (CA) .............................................. 16 London Arbitration 12/08/2008, 752 LMLN 3(2) ...................................................................... 13 M.Cook & Son Ltd., et al. v. Saglieto (San Giuseppe), 122 F.2d 579, US Court of Appeals for the 4th Circuit (1941) ................................................................................................................... 15 Marsh v. Joseph [1897] 1 Ch. 213, 231 ................................................................................... 22, 23 Mayo Hotel Co. v. Danciger, 288 P. 309, 313 (Okla. 1930) ...................................................... 12 McMahon v. RMS Electronics Inc., 618 F. Supp 189, 191 (S.D.N.Y 1985); ............................. 6 McRae v. Commonwealth Disposals Commission (1951) 84 CLR 377 ..................................... 21 Mediteranean Enterprises Inc v. Ssangyong Corporation 708 F.2d 1458 (U.S. Court of Appeals, 9th Circuit 1983) ............................................................................................................ 6 Meridian Global Funds Management Asia Ltd v. Securities Commission [1995] UKPC 5; .... 12 Miserecchi v. Agnesi, Corte di Cassazione, 13 Dec 1971, No 3620 ............................................ 4 Monarch Steamship Co. Ltd. v. A/B Karlshamns Oljefabriker (1949) A.C. 196, 211, 212 ....... 15 Moschi.v Lep Air Services Ltd. (1972) 2 AII ER 393, Per Lord Diplock, para.403 ................... 12 Motor Oil Hellas (Corinth) Refineries SA v. Shipping Corporation of India (The Kanchenjunga) (1990) 1 Lloyd’s Rep 391 ................................................................................. 10 Northumbrian Shipping v. Timm (1939) AC 397 ........................................................................ 7 Obergericht of Basle, June 3 1971 (1979) IV Ybk Comm Arb 309 ............................................ 4 Odros Shipping Corp v. Empresa Cubana de Fletes (The Evia) (1982) Lloyd’s Rep 311, per Lord Roskill ................................................................................................................................ 13 Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711. 12 Parsons v. Uttley Ingham [1978] QB 791 ................................................................................. 22 Pasley v. Freeman (1789) 3 TR 51 ............................................................................................. 17 ix TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Per Mustill J in The Georges C Lemos (1991) 2 Lloyd’s Rep 107 ............................................ 10 Petr Schmidt, [1995] 1 Lloyd’s Rep 202 ..................................................................................... 3 Pilkington v. Wood [1953] Ch 770 ............................................................................................. 22 Pitman v Universal Marine Insurance Company [1882] 9 QBD 192 ........................................ 25 Robinson v. Harman (1848), 1 Exch 850 ................................................................................... 24 Rossiter v. Miller (1878) 3.App Cas.1124 ................................................................................... 9 Scudder v. Hart (1941) 45 N.M. 76, 110 P.2d 536 ..................................................................... 17 Sees v. Bank One (2005) NA, 839 N.E.2d 154 ........................................................................... 17 SIG Bergesen DY A/S v Mobil Shipping and Transportation Co (The Berge Sund),1993 2 Lloyd’s Rep 453 .......................................................................................................................... 13 Smith New Court Securities v. Scrimgeour Vickers (1996) 3 WLR 1051 .................................. 21 Smith v. Hughes (1871) LR 6 QB 597; ...................................................................................... 11 Société Anonyme d’Intermediares Luxembourgeouis v. Farex Gie (1995) L.R.L.R, 116, per Gatehouse J ................................................................................................................................. 14 South Australia Asset Management Corp v. York Montague Ltd [1997] A.C. 191 (HL) ........... 23 Stansfield v. Starkey (1990) 220 Cal.App.3d 59 ......................................................................... 21 Stilwell v. Walden (1984) 70 N. C. App. 543, 320 S. E. 2d 329.................................................. 19 Stocznia Gdanska SA v Latvian Shipping Co [1995] 2 Lloyd’s Rep 592 (QBD) ....................... 16 Strong v. Jackson (2002) 777 N.E. 2d 1141 ............................................................................ 17, 21 Suez Fortune Investments Ltd and Another v. Talbot Underwriting Ltd and Others (The “Brillante Virtuoso”) QBD (Comm Ct) (Flaux J) [2015] EWHC 42 (Comm) .......................... 25 Tankexpress v. Compagnie Financière Belge des Pétroles (1948) 82 LIL Rep. 43 (HL) .......... 13 Taylor v. Johnson (1983) 151 CLR 422 ..................................................................................... 11 Technology Co Ltd v. Alstom Technology Ltd, [2009] 3(SLR) R 396. ........................................ 3 Terry v. Terry (1981) 302 N. C. 77, 273 S. E. 2d 674 ................................................................ 17 x TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT The Alaskan Trader [1984] 1 AER 129 (QBD) ......................................................................... 16 The Andros Oceania (Arb. at N.Y. 1993) ................................................................................... 13 The Argentino (1889) 14 AC 519 (HL). ..................................................................................... 23 The Arpad (1934) P. 189, 200 (CA) ........................................................................................... 23 The Canadian Transport 43 Lloyd’s List Law Rep 409, 410-11 (CA 1932) ............................. 23 The Dynamic [2003] 2 Lloyd’s Rep 693 (QBD) ........................................................................ 16 The London Explorer (1971) 1 Lloyd’s Rep................................................................................ 8 The Madeleine (1967) 2 Lloyd’s Rep. ......................................................................................... 8 The Malcolm Baxter (1927) 277 U.S. 323 .................................................................................. 13 The Medita, SMA (Arb at N.Y. 1977) ....................................................................................... 12 The Odenfeld [1978] 2 Lloyd’s Rep 357 (QBD) ........................................................................ 16 The Playa Larga (1983) 2 Lloyd’s Rep. 171, 182-183, CA ........................................................ 5 Torvald Klaveness A/S v Arni Maritime Corpn (The Gregos) (1995) 1 Lloyd’s Rep 1 .............. 8 Tracer Research Corporation v. National Environmental Services Company, 42 F.3d 1292 (U.S. Court of Appeals, 9th Circuit 1994); .................................................................................. 6 Trail v. Baring (1864); With v O’Flanagan (1936) Ch 575 ....................................................... 18 Transfield Shipping Inc v. Mercator Shipping Inc (The Achilleas) [2008] UKHL 48 ............... 23 Triad Shipping v. Stellar Chartering and Brokerage Inc (The Island Archon) (1994) .............. 10 Tritonia shipping Inc Vs South Nelson Forest Products Corporation, [1966] Lloyd’s Rep. 114................................................................................................................................................ 5 United World Inc. v. Mobile Telecommunications Services Ltd (1998)10 Nigeria Weekly Law Report (Pt. 560) 106..................................................................................................................... 6 Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. [1949] 2 KB 528 CA .............. 22, 24 Volkswagenwerk, A.G. v. Klippan, GmbH, 611 P.2d 498, 503 (Alaska 1980)............................ 4 Waelands v. CLC Contractors (1992) 2 Lloyd’s Rep. 739, CA .................................................. 5 xi TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT White and Carter (Councils) Limited v McGregor (1961) AII ER 1178 at pp.1181.................. 16 Woolf v. Collis Removal Service, [1948] 1 K.B. 11 (C.A.) ......................................................... 6 BOOKS Alan Edward Branch & Michael Robarts, Branch’s Elements of Shipping, 9th Ed (Abingdon: Informa Law from Routledge,2014) ........................................................................................... 13 Ademuni Odeke, Bareboat and Charter (Ship) Registration, 1st Ed (New York: Springer, 1998) ........................................................................................................................................... 12 Adjoa Anyimadu. Maritime Security in the Gulf of Guinea: Lessons Learned from the Indian Ocean, (England: Chatham House, 2013) ................................................................................. 20 Arienne M. Dwyer, Ethics and Practicalities of Cooperative Fieldwork and Analysis is Essentials of Language Documentation (Berlin: Mouton de Gruyter, eds. Jost Gippert, Nikolaus P.Himmelmann, and Ulrike Mosel, 2006).................................................................... 9 Best Management Practices 4, Ship Protection Measures, 23-40, 2011 ..................................... 7 Clare Ambrose and Karen Maxwell, London Maritime Arbitration, 3rd Ed (London: Informa, 2009), p. 9, 31 .............................................................................................................................. 3 Douglas Guilfoyle, Modern Piracy: Legal Challenges and Responses, (Cheltenham: Edward Elgar Publishing Limited, 2013) ................................................................................................. 14 Dr. Richard Lawson & Susan Singleton, Commercial Contracts: A Practical Guide to Standard Terms, 3rd Ed (West Sussex: Bloomsbury Professional Ltd, 2011) ............................ 16 Duygu Damar, Wilful Misconduct in International Transport Law (New York: Springer, 2011) ........................................................................................................................................... 12 Edwin Peel, Treitel: the Law of Contract,12th Ed (London: Sweet & Maxwell, 2007) ............. 23 George T. Curtis, Digest of the Decisions of the Courts of Common Law and Admiralty in the United States, Volume II (Boston: Little, Brown and Company, 1863)..................................... 15 xii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT International Chamber of Shipping, 2014 Annual Review, (International Chamber of Shipping, 2014) ........................................................................................................................... 20 Jill Poole, Casebook on Contract Law, 12th Ed (New York: Oxford, 2014) ............................... 9 John Bouvier et.al., A Law Dictionary Adapted to the Constitution and Laws of the United States of America, and of the American Union with References to the Civil Law and Other Systems of Foreign Law, Volume I (Philadelphia: T & J.W. Johnson, Law Booksellers, 1839)15 Julian Cooke et al., Voyage Charters, 4th Ed, (New York: Informa Law from Routledge, 2014) .......................................................................................................................................... 15 Kendall, L and Buckley, J, Business of Shipping, 8th Ed (Maryland: Schiffer, 2008) ................. 7 Linda L. Schlueter, Punitive Damages, 5th Ed (Los Angeles: Lexis Nexis Publishing, 2005) § 4.4(B)(1)...................................................................................................................................... 12 Lindsay Warren & Frank Yates, Decisions of The Comptroller General of the United States, Volume 24 (Washington: United States Government Printing Office, 1946) ............................ 11 Ling Zhu, Compulsory Insurance and Compensation for Bunker Oil Pollution Damage, (New York: Springer, 2007) ................................................................................................................. 13 Margaret L. Moses, The Principle and Practice of International Commercial Arbitration, (New York: Cambridge University Press, 2008) ........................................................................ 4 Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd Ed (London: Cavendish, 2004) ................................................................................................................ 7, 10, 12, 13 Michael Furmston, GJ Tolhurst, Contract Formation: Law and Practice, (New York: Oxford, 2010) ............................................................................................................................................ 9 Nick Ridley, Terrorism in East and West Africa: The Under-focused Dimension, (England: Edward Elgar, 2015) ................................................................................................................... 20 Nigel Blackaby et al, Redfern and Hunter on International Arbitration, 5th ed (London: Oxford University Press, 2009) ................................................................................................... 3 xiii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Ozlem Gurses, Marine Insurance Law, (New York: Routledge, 2015) ..................................... 25 P. Gopalakrishman, M. Sundaresan, Materials Management: An Integrated Approach, (New Delhi: PHI Learning Private Limited 1977) ................................................................................ 9 Paul Todd, Maritime Fraud and Piracy, 2nd Ed (London: Informa, 2010) .............................. 7, 14 Paula Giliker, Vicarious Liability in Tort: A Comparative Perspective, (New York: Cambridge University Press, 2010) ............................................................................................ 12 Peter Brodie, Commercial Shipping Handbook, 3rd Ed (Routledge: Informa Law, 2015) .... 9, 11, 13 Raoul Colinvaux, Carver’s Carriage by Sea, Volume 2, 13th Ed (London: Stevens & Sons, 1982) ............................................................................................................................................. Richard Stone, The Modern Law of Contract, 8th Ed (London: Cavendish, 2009) ................... 21 Robert Force, et al., Admiralty and Maritime Law (Washington, D.C: Beard Books, 2006) ..... 8 Roger Miller, Gaylord Jentz, Business Law Today: The Essentials, (Stamford: Cengage Learning, 1999) ............................................................................................................................ 9 Simon Baughen, Shipping Law, 4th ed (London: Cavendish Publishing, 2009) ................. 8, 12, 13, 15 Simon Deakin et al., Markesinis and Deakin’s Tort Law, (Oxford: Oxford University Press, 2008) ........................................................................................................................................... 12 Sir Thomas Edlyne Tomlins, The Law Dictionary: Explaining the Rise, Progress, and Present State of the English Law: Defining and Interpreting the Terms or Words of Art: and also Comprising Copious Information on the Subjects of Trade, and Government (Philadelphia: R.H.Small, 1836) ................................................................................................. 15 Terrence Coghlin et.al., Time Charters, 6th Ed (Abingdon: Informa Law from Routledge, 2008) ................................................................................................................................... 9, 11, 12, 13 Yvonne Batz et al., Maritime Law, 3rd Ed (New York: Informa Law from Routledge, 2014) .. 16 JOURNALS AND OTHER ARTICLES xiv TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Emmanuel Gaillard and Yas Banifatemi, Philippe Fouchard et.al, International Commercial Arbitration.................................................................................................................................... 3 Gary P. Naftalis & Michael S. Oberman, Venue, Forum Selection and Transfer, in R. Haig, Business and Commercial Litigation in Federal Courts, Ch. 3 (2d ed. 2005) ............................ 4 Jack Lee Tsen-Ta, “Separability, Competence-Competence And The Arbitrator’s Jurisdiction In Singapore”, S.Ac.L.J ............................................................................................................... 3 Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration .. 3 John P. Goldberg et al., The Place of Reliance in Fraud, Arizona Law Review Vol. 48 2006 . 21 M.M. D’Souza, Lloyd’s Law Reports, Volume 2 (London: Lloyd’s of London Press, 1993) ... 10 Nirit Ben-Ari, Piracy in West Africa, Africa Renewal p. 12, December 2013 ........................... 20 Piracy and Acts of Armed Robbery of Ships.SURITEC, August 2014, p. 3............................ 7, 19 Rosenthal, E. (2010) Cargo skippers cry, ‘slow speed ahead’. International Herald Tribune, 17 Feb: 1, 4 ................................................................................................................................. 19 Slow Steaming in the Global Shipping Industry (Swedish Club) MAN Diesel & Turbo PrimeServ Copenhagen, p. 5 ....................................................................................................... 19 UNDOC, Transnational Organized Crime in West Africa: A Threat Assessment. (Vienna: UNDOC, 2013) ......................................................................................................................... 7, 19 W. Park, ‘The Arbitrability Dicta in First Options v. Kaplan’ in (1996) 12 Arb. Int’l 137 ........ 3 STATUTES Arbitration Act 1996 ................................................................................................................ 3, 4, 6 Misrepresentation Act 1967 ........................................................................................................ 21 New York Convention 1958 ...................................................................................................... 3, 4 UNCITRAL the Model Law 1985 ............................................................................................... 4 xv TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT MISCELLANEOUS BIMCO Piracy Clause .............................................................................................................. 7, 14 BIMCO Ship to Ship Transfer Clause for Time Charter Parties ............................................. 10, 11 Intertanko Piracy Clause ........................................................................................................... 7, 14 Skuld, www.skuld.com, 23-04-2012 ........................................................................................ 7, 19 The Baltic and International Maritime Conference, Baltime Charter....................................... 9, 11 The Baltic and International Maritime Conference, NYPE 93 ................................................ 9, 11 The Washington Post Associated Press. 27-02-2012 ............................................................... 7, 19 FONASBA, The Role, Responsibilities, and Obligations of the Ship Agent in the International Transport Chain, p. 6. https://www.fonasba.com/wp- content/uploads/2012/10/Role-of-Agent-Final1.pdf................................................................... 11 GCaptain, Liberian Registry Concludes Kerala Hijacking Investigation, 29 May 2014, http://gcaptain.com/liberian-registry-concludes-kerala-hijacking-investigation/ .................... 19, 20 DryadMaritime, MT Kerala Hijack – Game Changer or Inside Job?, 12 May 2014, <http://www.dryadmaritime.com/mt-kerala-hijack-game-changer-or-inside-job/>; both featuring an attack on the vessel “Kerala” off the coast of Angola ............................................ 19 Tradewind News, Nipah Sees Double Attack, 24 September <http://www.tradewindsnews.com/piracy/324129/nipah-sees-double-attack>, 2013, featuring an attack on the vessel “Nipah” ....................................................................................................... 20 Maritime Bulletin, Recent Tanker Hijack and IMB’s Showing, 6 October 2012, <http://www.odin.tc/news/read.asp?articleID=1407>, featuring an attack on an undisclosed vessel on October 4, 2012 ........................................................................................................... 20 Mike Schuler for GCaptain, Filipino Sailor Killed By Nigerian Pirates in Another Attack on a Tanker [UPDATE], 7 February 2013, <http://gcaptain.com/filipino-sailor-killed-by-nigerianpirates/>, featuring an attack on the vessel “Pyxis Delta” on February 4, 2013......................... 20 xvi TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Guidelines for Owners, Operators and the Masters for Protection against Piracy in the Gulf of Guinea Region, BIMCO ......................................................................................................... 20 xvii TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT STATEMENT OF FACTS 1. On 26 May 2014, Less Dependable Traders Pte. (“the Respondent”) as charterers agree on a time charter party, using a modified Shelltime 4 (“the Charterparty”) as a basis, with Western Tankers Inc. (“the Claimant”) as shipowners to charter the vessel Western Dawn (“the Vessel”) to carry a cargo of approximately 30,000mt of jet A1 and 70,000mt of gasoil (“the Cargo”) from Singapore to OPL (“Off-Port Limit”) Luanda for Ship to Ship (“STS”) transfer with Angola Energy Imports Ltd. as the consignee, for a period of 3 months. The Vessel is then bound by the Charter Party to travel to Bonny, Nigeria, to pick up Bonny Light and carry them to Augusta, Italy. 2. On 27 May, Captain Stelios (“the Master”) informs the Respondent that the required bunker for the itinerary is on 1500mt. Acknowledging the danger of West Africa, the destination area, the Claimant arranges safety upgrades and equipment for the Vessel. 3. On 3 June, the Master protests the 950mt bunker provided by the Respondent, stating that it is insufficient. As a response, the Respondent states that an alternative bunker supplies will be available in Durban or Cape Town. On the same date, the Claimant acknowledges its inability to provide the necessary safety upgrades and equipment for the Vessel and arranges to provide them in Durban. The Vessel set sail 5 days later, on 8 June. 4. On 20 June, the Master demands the Respondent for confirmation regarding its intention to provide bunker in Durban. Due to the lack of bunker and response, the Master on 25 June warns the Respondent that he will reduce the Vessel’s speed to 12 knots and neither he nor the Claimant will be responsible for the reduction. 5. On 28 June, the Respondent sets the rebunkering position as “STS Area 1”, in which the Vessel will also undergo cargo transfer. The Master then asks for confirmation on the coordinates. 1 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 6. William Anya from Atlantic STS Agency Ltd (hereon known as “ASA2”) informs the Master that the Respondent has passed control of the Vessel to them and gives the Master a new coordinate. ASA2 also states that the Vessel will meet with the vessel Antelope to perform STS transfer of cargo and receive 300mt bunker. The Master complies with the instruction. 7. On 3 July, the Master informs the Respondent that the Vessel will arrive at the new discharge place on 4 July. 8. On 4 July, the Respondent instructs the Master to continue to “liaise with your STS coordinator”. The Master confirms his arrival at the new coordinate and states that he has yet to see the Vessel Antelope, also stating that radar shows what look like 2 small fishing boats 5 miles to the West. On the same date, the Respondent sends an off-hire notice due to the Vessel’s failure in rendezvousing with the Antelope. 9. Sometime between 4 and 17 July, the Vessel is hijacked by pirates. The Master on 17 July sends an incident report to report crew injury, damaged Vessel, and the theft of about 28,190mt of the Cargo. On the same day, the Master informs the Claimant and the Respondent that the Vessel will be directed to Cape Town due to no bunker supply and lack of the Respondent’s instruction. 2 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT ARGUMENTS I. THIS ARBITRAL TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE 1. It is acknowledged that the “competence-competence” principle empowers an Arbitral Tribunal to rule on its own jurisdiction, and is affirmed in Article 16(1) of Schedule 1 to the Arbitration Act 1996. 1 The Claimant submits that this Arbitral Tribunal has jurisdiction, proven by (A) a valid arbitration agreement between the parties in the Charterparty; (B) having London as the seat of arbitration as it is intended by the parties in the arbitration agreement; and (C) tort of fraud claims submitted by the Claimant is capable of being settled by this Arbitral Tribunal. A. There is a Valid Arbitration Agreement between the Parties in the Charterparty 2. An Arbitral Tribunal may rule on its jurisdiction on a dispute arising in the future if there is an existence of a valid arbitration agreement. 2 The validity of an arbitration agreement could be established by an arbitration clause in the contract. 3 In this present dispute the existence of an arbitration agreement is proven under the arbitration clause in Clause 46 of the Charterparty which states “Any dispute arising out of this charter shall be referred to Arbitration in London in accordance with Arbitration Act 1996”. 4 3. The aforementioned arbitration clause has a distinct and specific agreement to arbitrate from both parties, especially as it is stipulated under S.6 of Arbitration Act 1996 (“the 1 Dallah Real Estate & Tourism Holding Co v Ministry of Religious Affairs [2010] UKSC 46; W. Park, ‘The Arbitrability Dicta in First Options v. Kaplan’ in (1996) 12 Arb. Int’l 137 at p. 149; Emmanuel Gaillard and Yas Banifatemi, Philippe Fouchard et.al, International Commercial Arbitration,p. 400; Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration, p. 922; Jack Lee Tsen-Ta, “Separability, Competence-Competence And The Arbitrator’s Jurisdiction In Singapore”, S.Ac.L.J, p. 421. 2 Art. V New York Convention; Art. 35 The Model Law, Arbitration Act 1996 section 30; Ambrose, London Maritime Arbitration, 2nd Ed. (London: Informa Law, 2003) p. 19. 3 Nigel Blackaby et al, Redfern and Hunter on International Arbitration 5th ed, (London: Oxford University Press, 2009) p. 146; Clare Ambrose and Karen Maxwell, London Maritime Arbitration (Informa, 3rd ed, 2009) p. 31. 4 Clause 46 of the Shelltime 4 Charterparty (“the Charterparty”). 3 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Arbitration Act”) which affirms that the arbitration clause contains an arbitration agreement. 5 Such agreement was derived from the parties’ intention to arbitrate any dispute that may arise in the future. It shows that the arbitration agreement is sufficiently certain and could give effect. 6 Moreover, the Respondent did not give any objection towards the arbitration agreement by the time the Charterparty was concluded. Thus, the Respondent has expressed its intention to settle any disputes between both parties by means of arbitration in London. 4. Another requirement that has to be fulfilled is that an arbitration agreement must be in written form, 7 despite the non-existence of a signature. 8 It is also emphasized in S. 5(2)(b) of the Arbitration Act that an arbitration agreement is in writing if the agreement is made by exchange communication in writing. 9 In this present dispute, the agreement is recorded through a fixture recap by the IMWMB, the shipbroker. 10 The Arbitration Agreement in this present dispute also fulfills this requirement as it is written and embodied in the Charterparty. Therefore, it is crystal clear that the arbitration agreement in the Charterparty is valid and binding to both parties. B. London is the Seat of Arbitration as intended by the parties by virtue of the Arbitration Agreement 5. A forum selection clause is simply a contract provision that designated by mutual agreement a specific forum for settlement of disputes, most typically by providing a 5 §6, UK Arbitration Act 1996. Petr Schmidt, [1995] 1 Lloyd’s Rep 202; Technology Co Ltd v. Alstom Technology Ltd, [2009] 3(SLR) R 396. 7 Margaret L. Moses, The Principle and Practice of International Commercial Arbitration, (New York: Cambridge University Press, 2008) p. 20; Art II, New York Convention; Art. 7 (2) UNCITRAL Model Law; Nigel Blackaby et al, Redfern and Hunter on International Arbitration, 5th Ed (London: Oxford University Press, 2009) p. 146; Clare Ambrose and Karen Maxwell, London Maritime Arbitration (Informa, 3rd ed, 2009) p. 31. 8 Nigel Blackaby et al, Redfern and Hunter on International Arbitration, 5th Ed (London: Oxford University Press, 2009) p. 90; Compagnie de Navigation et Transports S.A. v. MSC (Mediterranean Shipping Company) S.A , (Swiss Federal Tribunal, 16 January 1995) Yearbook Commercial Arbitration XXI (1996); see also Obergericht of Basle, June 3 1971 (1979) IV Ybk Comm Arb 309; Miserecchi v. Agnesi, Corte di Cassazione, 13 Dec 1971, No 3620; (1976) I Ybk Comm Arb 190. 9 §5(2)(a), UK Arbitration Act 1996. 10 Fixture Recap, Moot Problem 2015, p. 5-12. 6 4 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT particular location. 11 Pursuant to the Charterparty clause 46 it is clearly stipulated that any disputes arising out of Charterparty shall be referred to tahe Arbitration in London in accordance with Arbitration Act 1996. 12 6. In Tritonia shipping Inc v. South Nelson Forest Products Corporation,13 a charter party stated merely “arbitration to be settled in London”. The English Court of Appeal regarded the clause as sufficient to mean that disputes under the Charterparty should be arbitrated in London. 7. Similarly in this present case, it is clearly mentioned that both parties shall refer any disputes arising out of the Charterparty to the Arbitration in London. Such clause is sufficient to show the parties’ intention with respect to the forum selection of its dispute. Therefore, it can be put forward that this present dispute shall be settled in Arbitration in London. C. Tort of Fraud Claims Submitted by the Claimant is Capable of being Settled by this Arbitral Tribunal 8. It is well established by majority of laws that Arbitral Tribunal can also decide disputes relating to liability in tort. 14 The English courts also recognized the jurisdiction of arbitration with regard to tort claims if the arbitration clause refers to claims “arising out of”.15 9. The arbitration agreement refers to the clause “arising out of” 16 which is deemed as a wide clause upon the contract as it is also applied to non-contractual obligations in connection with the 11 Big Color, Inc. v. Bishop Taylor Group, LLC, No. 07-CV-00233-MSK-CBS, 2007 WL 3407360, at 1 (D. Colo. Nov. 13, 2007); Volkswagenwerk, A.G. v. Klippan, GmbH, 611 P.2d 498, 503 (Alaska 1980); Edge Telecom, Inc v. Sterling Bank 143 P.3d 1155 at 1158-59; cf. ABC Mobile Sys., Inc. v. Harvey, 701 P.2d 137, 139 (Colo. App. 1985) Gary P. Naftalis & Michael S. Oberman, Venue, Forum Selection and Transfer, in R. Haig, Business and Commercial Litigation in Federal Courts, Ch. 3 (2d ed. 2005). 12 Clause 46 of the Charterparty. 13 Tritonia shipping Inc Vs South Nelson Forest Products Corporation, [1966] Lloyd’s Rep. 114. 14 Astro Venceder Compania Naviera SA of Panama v. Mabanaft GmbH, The Damianos (1971) 2 QB 588; The Playa Larga (1983) 2 Lloyd’s Rep. 171, 182-183, CA; Aggeliki Charis Compania Maritima SA v Pagnan SpA The Angelic Grace (The “Angelic Grace”), (1994) 1 Lloyd’s Rep. 168, QB; Fletamentos Maritimos SA v Effiohn Int'l BV (1996) 2 Lloyd’s Rep. 304, QB; Abdullah M Fahem & Co v. Mareb Yemen Insurance Co & Another (1997) 2 Lloyd’s Rep. 738; Waelands v. CLC Contractors (1992) 2 Lloyd’s Rep. 739, CA; Capital Trust Investment v. Radio Design, YCA 2002, p. 557, CA. 15 Nigel Blackaby et al, Redfern and Hunter on International Arbitration, 5th Ed (London: Oxford University Press, 2009) p. 155, para 2-40; ICC Award No. 5477 JDI, 1988, p. 1204. 5 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT contractual relationship of the parties. 17 In the clause 6 of the Arbitration Act 1996 it states that an arbitration agreement is an agreement to submit to arbitration with respect to the future dispute whether it is contractual or not.18 Although the tort claim does not fall under the contractual obligations, the phrase “dispute whether it is contractual or not” indicates to give a wide clause to this present dispute with respect to tort claims. 10. Arbitral Tribunal shall entertain the tort claim if there is a close connection between the tort claim and the contract to which the arbitration clause or agreement referred to. 19 In Woolf v. Collis Removal Service, though the claim was a claim in tort and not under contract, there was a sufficiently close connection between that claim and the transaction to bring the claim within the arbitration clause. 20 In this present dispute, tort claims submitted by the Claimant contains fraudulent directing of the Vessel which is related to the provisions of the Charterparty. In Conclusion, this Arbitral Tribunal has jurisdiction over the tort claims submitted by the Claimant. II. THE RESPONDENT HAS HAMPERED THE FULFILLMENT OF THE CHARTERPARTY A. The Respondent’s Failure Leads to the Vessel’s Vulnerability i. The respondent has failed to implement doctrine of stages properly 16 Clause 46 of the Charterparty. Kinoshita & Co Ltd et al. v. American Oceanic Corporation, 287 F.2d 951 (U.S. Court of Appeals, 2nd Circuit 1961); Mediteranean Enterprises Inc v. Ssangyong Corporation 708 F.2d 1458 (U.S. Court of Appeals, 9th Circuit 1983); Tracer Research Corporation v. National Environmental Services Company, 42 F.3d 1292 (U.S. Court of Appeals, 9th Circuit 1994); Bennett v. Skinner, 2012 WL 216164; McMahon v. RMS Electronics Inc., 618 F. Supp 189, 191 (S.D.N.Y 1985); First Citizen Municipal Corp v. Donaldson, Lufkin & Jenrette Securities Corp. 546 F. Supp 884 (N.D. Ga. 1982); Fahem & Co. v. Maraebs Yemen Insurance Co., 2 Lloyd’s Rep (1997) 783; Harbour Assurance Co. PLC v. Kansas General Insurance Co. Ltd, 1 Lloyd’s Rep (1993) 455 18 § 6, UK The Arbitration Act 1996. 19 Heyman v. Darwins (1942) AC 356 at 360, the Similar Inc. v. Autolive Inc., (9th Cir. 1999) 175F.3d 716; United World Inc. v. Mobile Telecommunications Services Ltd (1998)10 Nigeria Weekly Law Report (Pt. 560)106. 20 Woolf v. Collis Removal Service, [1948] 1 K.B. 11 (C.A.). 17 6 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 11. In Northumbrian Shipping v E. Timm, it was stipulated that refueling stages should be fixed not later than the start of the voyage. 21 In this present dispute, the Respondent created bunkering stages for the vessel through its bunker provision that was less than the Master’s request for the Vessel’s needs. 22 The confirmed and consented refueling stage, done before the commencement of the voyage, is beween Durban or Cape Town. 23 12. Regrettably, the Respondent’s intention to rebunker was unfulfilled for it did not give any response towards The Master’s inquiry for confirmation after the Vessel’s arrival. 24 Instead, the Respondent unilaterally changed the rebunkering location to STS Area 1. 25 13. From the facts and provision above it can be inferred that Respondent has failed to implement the doctrine of stages properly, in regards to setting a fixed stage for the Vessel to rebunker. ii. The Respondent’s failure to implement doctrine of stages leads to the Vessel’s inability to install security equipment 14. If the Vessel proceeds to or through an area exposed to the risk of piracy, the Claimant shall have the liberty to take reasonable preventative measures to protect the Vessel, crew and cargo including deploying equipment on or about the Vessel. 26 15. In this present dispute, the Vessel’s voyage will pass West Africa, 27 which is considered as an area exposed with the risk of piracy. 28 This circumstance makes provision stated 21 Northumbrian Shipping v Timm (1939) AC 397 per Lord Porter ; Kendall, L and Buckley, J, Business of Shipping, 8th Ed (Maryland: Schiffer, 2008), p. 183 ; Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd Ed (London: Cavendish, 2004) p. 53. 22 Voyage Correspondence, Moot Problem 2015, p. 21, 25. 23 Voyage Correspondence, Moot Problem 2015, p. 26. 24 Voyage Correspondence, Moot Problem 2015, p. 30-32. 25 Voyage Correspondence, Moot Problem 2015, p. 33. 26 BIMCO Piracy Clause, Clause C point (i) ; Best Management Practices 4, Ship Protection Measures, 23-40, 2011 ; Intertanko Piracy Clause, Clause 1 (a) ; Paul Todd, Maritime Fraud and Piracy, 2nd Ed (London: Informa, 2010) p. 265-266. 27 Fixture Recap, Moot Problem 2015, p. 5. 28 Piracy and Acts of Armed Robbery of Ships.SURITEC, August 2014, p. 3; Skuld, www.skuld.com, 23-042012; The Washington Post.Associated Press. 27-02-2012; UNDOC, Transnational Organized Crime in West Africa: A Threat Assessment. (Vienna: UNDOC, 2013) p. 45. 7 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT earlier be applicable and gives the Claimant the right to take reasonable preventative measures. 16. Considering the Respondent’s statement of bunker availability in Durban, 29 and Claimant’s representative statement of security equipment provision in the same location, 30 the Master in his reasonable judgement decided to rely on the appointments above and proceeded the voyage. 31 17. The Respondent’s lack of confirmation and sudden relocation of bunkering stages 32 resulted in the Vessel’s failure to retrieve security equipment which was provided and available in Durban. 33 By seeing the fact that the Master, although appointed by Claimant, shall be under the orders and direction of Respondent, 34 regarding employment of the Vessel, agency and other arrangements, 35 then the Master was left with no choice but to comply with the Respondent’s direction to proceed to OPL Luanda. 36 18. From the facts mentioned above, it can be inferred that Respondent’s failure to implement the doctrine of stages properly has resulted in the Vessel’s failure in installing security equipment against pirates in West Africa. B. The Respondent has Failed to Provide Vessel with Sufficient Bunker 19. The Charterparty provision and practices in time charterparty require the Respondent as charterer, to provide bunker for the execution of the voyage. As stated in clause 7(A) of the Charterparty, the Respondent shall provide and pay for all fuel, towage and pilotage, 29 Voyage Correspondence, Moot Problem 2015, p. 26. Voyage Correspondence, Moot Problem 2015, p. 26-27. 31 Voyage Correspondence, Moot Problem 2015, p. 29. 32 Paragraph 12 of this memorandum. 33 Procedural Order No. 2, p. 2. 34 The London Explorer (1971) 1 Lloyd’s Rep., para. 526 ; The Madeleine (1967) 2 Lloyd’s Rep., para. 238; TorvaldKlaveness A/S v Arni Maritime Corpn (The Gregos) (1995) 1 Lloyd’s Rep 1 per Lord Mustill at para. 7; Simon Baughen, Shipping Law, 4th Ed (London: Cavendish Publishing, 2009) p. 203 ; Robert Force, et al., Admiralty and Maritime Law (Washington, D.C: Beard Books, 2006) p. 289. 35 Clause 13 (a) of the Charterparty. 36 Voyage Correspondence, Moot Problem 2015, p. 33. 30 8 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT and agency fees. 37 Alongside the Charterparty, other forms and regulations of charterparty also hold Charterers liable for bunker provision. 38 20. Contrary to the provisions above, the Respondent failed to provide the Vessel with sufficient bunker as can be seen in the correspondence dated July 17th from the Master which stated that the Vessel has to deviate due to no instruction and bunker supply. 39 Therefore, it can be concluded that the Respondent has failed to do its obligation and has hampered the fulfillment of the Charterparty. III. THE RESPONDENT’S FAILURE LEADS TO UNAUTHORIZED INSTRUCTION 21. There must be an offer and acceptance, and the parties must have agreed all the essential terms, 40 either in writing or verbally to make a contract binding. 41 In this present dispute, both parties have already agreed and authorized on the existence of other parties involved in the voyage as stated in the Voyage Order. 42 22. However, ASA2 does not exist in any part of the Voyage Order. 43 Therefore, any instruction given by ASA2 to the Vessel will be unauthorized, for the Claimant has not consented and agreed towards its existence and scope of employment. A. The Instructions from ASA2 was under the Respondent’s Behalf 37 Clause 7 (a), of the Charterparty. The Baltic and International Maritime Conference, NYPE 93, Clause 7; The Baltic and International Maritime Conference, Baltime Charter, Clause 4; Peter Brodie, Commercial Shipping Handbook, 3rd Ed (Routledge: Informa Law, 2015) p. 35; Terrence Coghlin et.al., Time Charters, 6th Ed (Abingdon: Informa Law from Routledge, 2008) p. 795. 39 Voyage Correspondence, Moot Problem 2015, p. 42. 40 Rossiter v. Miller (1878) 3.App Cas.1124; Acme Grain Co. v. Wenaus (1917) 36 DLR 347; Michael Furmston, GJ Tolhurst, Contract Formation: Law and Practice, (New York: Oxford, 2010) p. 310; Jill Poole, Casebook on Contract Law, 12th Ed (New York: Oxford, 2014) p. 82; Roger Miller, Gaylord Jentz, Business Law Today: The Essentials, (Stamford: Cengage Learning, 1999) p. 214; P. Gopalakrishman, M. Sundaresan, Materials Management: An Integrated Approach, (New Delhi: PHI Learning Private Limited 1977) p. 128. 41 Lidgett v. Williams (1845) EngR 662; (1845) 4 Hare 456; Arienne M. Dwyer, Ethics and Practicalities of Cooperative Fieldwork and Analysis is Essentials of Language Documentation (Berlin: Mouton de Gruyter, eds. Jost Gippert, Nikolaus P.Himmelmann, and Ulrike Mosel, 2006) p. 44. 42 Voyage Order, Moot Problem 2015, page 13-14. 43 Ibid. 38 9 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 23. Mustill J in The Georges C Lemos stated that it is reasonable to assume that the consequences of a choice being made fall upon the party who made the choice. 44 24. Due to the Respondent’s responsibility in giving directions and instructions,45 specifically for a conduct of ship-to-ship operation, 46 then the decision on whether the Respondent will direct the vessel personally or through a third party is on Respondent itself. Here, acknowledging the circumstances of ASA2 not being a part of the Charterparty, then the Respondent’s choice of authorizing a third party to direct amounts to an uncontractual order, which allows the Claimant to claim for damages. 47 25. ASA2’s statement, stating that the Respondent has passed control of the Vessel to them as STS coordinator 48 combined with the Master’s notification, stating of the Vessel’s heading towards a new STS coordinate to conduct transfer with the Antelope, and the instruction “Please continue to liase with your STS Coordinator” expressed by the Respondent 49 indicated that it acknowledged the communication between ASA2 and the Master, and has consciously decided to turn in its obligations to direct the Vessel under the Charterparty to ASA2, consequently resulting in ASA2 to act on its behalf. 26. In the alternative, even if the Respondent failed to recognize the content of the notification given by the Master as information, then it would be said as a unilateral mistake that was not acknowledged by the Master, and thus was not exploited by him, which if such exploitation was actually the case would then allow the mistake to rescind the Respondent of liability. 50 44 The Georges C Lemos (1991) 2 Lloyd’s Rep 107 Per Mustill J; see also Triad Shipping v. Stellar Chartering and Brokerage Inc (The Island Archon) (1994) per Evans, L.J; M.M. D’Souza, Lloyd’s Law Reports, Volume 2 (London: Lloyd’s of London Press, 1993) p. 231 & 407. 45 Clause 4 (C) of the Charterparty. 46 BIMCO Ship to Ship Transfer Clause for Time Charter Parties, Clause (b). 47 Motor Oil Hellas (Corinth) Refineries SA v. Shipping Corporation of India (The Kanchenjunga) (1990) 1 Lloyd’s Rep 391; Ballard (Kent) Ltd v. Oliver Ashworth (Holdings) Ltd (2000) 3 W.L.R. 57; Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd Ed (London: Cavendish, 2004) p. 307-308. 48 Voyage Correspondence, Moot Problem 2015, p. 35. 49 Voyage Correspondence, Moot Problem 2015, p. 40. 50 Smith v. Hughes (1871) LR 6 QB 597; Taylor v. Johnson (1983) 151 CLR 422. 10 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT B. The Vessel’s Compliance with ASA2’s Direction was a Result of Failure on the Part of Respondent and Persons Acting on its Behalf i. The Respondent has Failed to Direct the Vessel to a Safe Location 27. As provided in Clause 12 & 4 (C) of the Charterparty, the Respondent shall from time to time give the Master all requisite instructions and sailing directions, 51 and use due diligence to ensure that the Vessel is only employed between and at safe places where she can always safely lie afloat, 52 including for the conduct of STS operations. 53 28. However, in this present case, the Respondent failed to direct the Vessel at all by giving ambiguous correspondence in regards to The Master’s inquiry for direction 54 and due to the non-existent protest in ASA2’s re-direction of the Vessel. In conclusion, the Respondent failed to direct the Vessel to a safe location. ii. Atlantic Services Agency Has Failed to Fulfill it’s Obligations under its Scope of Employment 29. As a discharge port agent 55 of the Respondent, 56 ASA has both the authority and obligation to organize, coordinate, and oversee all aspects of the port call and discharging activity, and to act as a conduit for all information exchanged between the Vessel and the shore. 57 In this present dispute, ASA has failed to fulfill its obligations under its scope of employment based on the fact that they did not make any contact or communication with the Master to organize the discharging activity. 58 51 Clause 12 of the Charterparty; The Baltic and International Maritime Conference, NYPE 93, Clause 15; Peter Brodie, Commercial Shipping Handbook, 3rd Ed (New York: Informa Law, 2006) p. 38; Terrence Coghlin et.al., Time Charters, 6th Ed (Abingdon: Informa Law from Routledge, 2008) p. 790; Lindsay Warren & Frank Yates, Decisions of The Comptroller General of the United States, Volume 24 (Washington: United States Government Printing Office, 1946) p. 403. 52 Clause 4 (C) of the Charterparty. 53 BIMCO Ship to Ship Transfer Clause for Time Charter Parties, Clause (b). 54 Voyage Correspondence, Moot Problem 2015, p. 34. 55 Voyage Order, p. 14. 56 Procedural Order No. 2, p. 3. 57 FONASBA, The Role, Responsibilities, and Obligations of the Ship Agent in the International Transport Chain, p. 6. <https://www.fonasba.com/wp-content/uploads/2012/10/Role-of-Agent-Final1.pdf> 58 Voyage Correspondence, Moot Problem 2015, p. 34-42. 11 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 30. Vicarious Liability is described as a relationship between an employer and an employee which makes the former liable for the actions of the latter. 59 In maritime law, a carrier shall be liable if its servants or agents are at fault or negligent in acting within its scope of employment. 60 This doctrine also can be seen in maritime conventions, either explicitly or implicitly. 61 31. Since ASA is an agent acting on behalf of the Respondent, therefore the Respondent shall be vicariously liable for any failure from its agent in coordinating and organizing STS operation or discharge activity, for it is inside its scope of employment. IV. THE RESPONDENT IS OBLIGED TO PAY FULL HIRE BASED ON CHARTERPARTY 32. A time charter is defined by a certain named period of time, 62 where throughout that period, payment of hire is a primary63 and absolute 64 obligation of the Charterer under the terms of time charterparty. Hire itself is the considered amount agreed to be paid to the shipowner for the use and service of the ship and the crew. 65 59 Mayo Hotel Co. v. Danciger, 288 P. 309, 313 (Okla. 1930); Limpus v London General Omnibus Company (1862) (158 ER 993); Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] UKPC 5; Linda L. Schlueter, Punitive Damages, 5th Ed (Los Angeles: Lexis Nexis Publishing, 2005) § 4.4(B)(1); Paula Giliker, Vicarious Liability in Tort: A Comparative Perspective, (New York: Cambridge University Press, 2010), p. 1; Simon Deakin et al., Markesinis and Deakin’s Tort Law, (Oxford: Oxford University Press, 2008), p. 665. 60 Consolidated Cork Corp. v. Jugoslavenka Linijska Plovidba 318 F. Supp. 1209 (S.D. N.Y. 1970). 61 Duygu Damar, Wilful Misconduct in International Transport Law (New York: Springer, 2011) p. 189. 62 Simon Baughen, Shipping Law, 4th Ed (New York: Routledge-Cavendish, 2009) p. 10 & 201; Ademuni – Odeke, Bareboat and Charter (Ship) Registration, 1st Ed (New York: Springer, 1998) p. 44; Ling Zhu, Compulsory Insurance and Compensation for Bunker Oil Pollution Damage, (New York: Springer, 2007) p. 140. 63 Moschi.v Lep Air Services Ltd. (1972) 2 AII ER 393, Per Lord Diplock, para.403; Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd Ed (London: Cavendish, 2004) p. 314. 64 Joseph Constantine Steamship Line Ltd v Imperial Smelting Corporation Ltd (1942) AC 154 at, Per Lord Wright, para.184; The Medita, SMA (Arb at N.Y. 1977); Terrence Coghlin et.al., Time Charters, 6th Ed (Abingdon: Informa Law from Routledge, 2008) p. 117; Henry Gold Fischer, Pike & Fischer Shipping Regulation: Current Service (Silver Spring: Pike & Fischer Arlington, 1961) p. 116. 65 Tankexpress v. Compagnie Financière Belge des Pétroles (1948) 82 LIL Rep. 43 (HL); Odros Shipping Corp v. Empresa Cubana de Fletes (The Evia) (1982) Lloyd’s Rep 311, per Lord Roskill; Peter Brodie, Dictionary of Shipping Terms, 5th Ed (Abingdon: Informa Law from Routledge, 2003); Alan Edward Branch & Michael Robarts, Branch’s Elements of Shipping, 9th Ed (Abingdon: Informa Law from Routledge,2014) p. 306; Ling 12 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 33. Consistent with provisions above, the Charterparty has stated that the Claimant agreed to let and the Respondent agreed to hire the Vessel for a period of 3 months +/- 30 days in Respondent’s option commencing from the time and date of delivery of the Vessel, 66 and that the agreed hire is on USD 19,950 PDPR.67 However, the Respondent refused to pay hire due to reasons of off-hire. A. Off-hire Clause Is Not Applicable In This Present Dispute i. The Respondent’s off-hire claim cannot be based on its own fault 34. Off-hire clauses are not operable if the off-hire events were due to the fault of the charterer. 68 In The Berge Sund, the owner was not liable for the loss of time used to clean the vessel’s holds due to contamination due from the charterer’s fault. 69 As such, off-hire does not apply in the event of a delay caused by the Respondent’s breach of contract. 35. In the instant case, the Respondent utilizes the fact that there was no contact between the Vessel and the Antelope as a justification to consider it as an off-hire event. 70 The Vessel arrived at the location determined by the Respondent and/or persons acting on its behalf and fulfilled proper procedures to conduct cargo discharge by issuing a notice of readiness, 71 but the Antelope never arrived. Therefore, the period of time, when there was no contact between the Vessel and the Antelope, should not be considered as off-hire. ii. Detention by pirates cannot be considered as an off-hire event Zhu, Compulsory Insurance and Compensation for Bunker Oil Pollution Damage, (New York: Springer, 2007) p. 140. 66 Clause 4(a) of the Charterparty. 67 Fixture Recap, Moot Problem 2015, p. 5. 68 SIG Bergesen DY A/S v. Mobil Shipping and Transportation Co (The Berge Sund),1993 2 Lloyd’s Rep 453; The Andros Oceania (Arb. at N.Y. 1993); Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, 3rd Ed (London: Cavendish, 2004) p. 318; Simon Baughen, Shipping Law, 4th Ed (London: Cavendish Publishing, 2009) p. 205; Terrence Coghlin, et.al., Time Charters, 6th Ed (Abingdon: Informa Law from Routledge, 2008) p.469; London Arbitration 12/08/2008, 752 LMLN 3(2). 69 Ibid. ,para. 205 (The Berge Sund). 70 Voyage Correspondence, Moot Problem 2015, p. 41. 71 Ibid. 13 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 36. In the case at hand, pirates detained the Vessel for thirteen days and stole its cargo. 72 However, it is clear that if the Vessel is attacked by pirates, any time lost shall be on the Respondent’s account and the Vessel shall remain on hire, for none of the requirements of the off-hire clause is fulfilled by the event of pirate’s seizure. 73 37. In addition, in the The Saldanha, both Arbitral Tribunal and Court of Appeal decided that a period of detention by pirates cannot be considered as off-hire, since default or deficiency of men, vessel, and average accident was not meant to be extended to detention by pirates. 74 Therefore, the detention period of Western Dawn by pirates, between July 4 and 17, 75 should not be considered as an off-hire event. iii. The Claimant is not liable for the speed reduction of the vessel 38. A silence in response to a notification in the sense of a failure to express rejection may amount to a waiver or an acceptance of the condition stated in said notification. 76 39. In this present dispute, due to the lack of bunker supply from the Respondent, the Master, in his reasonable judgement decided to reduce the Vessel’s speed in order to conserve the fuel remaining on board. 77 In regards to this conduct, the Master had also warned the Respondent that the Claimant will not be responsible for any delays due to the speed reduction since it is caused by the Respondent’s omission to supply fuel in good time. 78 However, the Respondent in response did not express any protest. 79 40. From the facts and provision stated above, it can be inferred that the lack of rejection or protest from the Respondent indicated that the Respondent has waived and accepted the 72 Voyage Correspondence, Moot Problem 2015, p. 41-42. BIMCO Piracy Clause, point (e); Charterparty, Clause 21; Intertanko Piracy Clause, Clause 3; Paul Todd, Maritime Fraud and Piracy, 2nd Ed, (London: Informa, 2010), p. 266; Douglas Guilfoyle, Modern Piracy: Legal Challenges and Responses, (Cheltenham: Edward Elgar Publishing Limited, 2013) p. 318. 74 Cosco Bulk Carrier Co. Ltd. v Team-Up Owning Co. Ltd (The Saldanha) [2010] EWHC 1340 (Comm). 75 Voyage Correspondence, Moot Problem 2015, p. 42. 76 Glencore Grain Ltd. v. Flacker Shipping Ltd. (The Happy Day), Case No. DMC/SandT/19/02, 15 July 2002, per Lord Justice Potter; Société Anonyme d’Intermediares Luxembourgeouis v. Farex Gie (1995) L.R.L.R, 116, per Gatehouse J. 77 Voyage Correspondence, Moot Problem 2015, p. 32. 78 Ibid. 79 Voyage Correspondence, Moot Problem 2015, p. 33. 73 14 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT Master’s notification, and thus the Claimant should not be held liable for it and the loss of time resulted from it should not be considered as off-hire. iv. The Vessel’s deviation was justifiable 41. Deviation is a voluntary departure without necessity or reasonable cause from the regular and usual course of the voyage. 80 Furthermore, in shipping practices, there are some conducts of deviation which are deemed to be justifiable. 81 42. An unseaworthy ship deviating to a port of refuge for the sake of remedying unseaworthiness is justifiable. 82 Furthermore Lord Porter, in Monarch SS. Co. v. Karlshamns Oljefabriker affirmed that such deviation conducted by the Master is not only justified but also obligatory if the safety of the voyage is threatened. 83 43. Pursuant to the fact that the Vessel has suffered several damages resulting from the Respondent’s aforementioned fault, 84 and due to the lack of instruction, direction, and bunker supply from the Respondent, the Master for the sake of the Vessel’s safety directed the Vessel to Cape Town for assistance. 85 44. Thus, the Claimant is not liable for the Vessel’s deviation and the Respondent failed to fulfill its part in order to make the Vessel capable of completing the voyage. B. The Charterparty Remains Enforceable Even after the Respondent’s Breach 80 M.Cook & Son Ltd., et al. v. Saglieto (San Giuseppe), 122 F.2d 579, US Court of Appeals for the Fourth Circuit (1941); Coffin v. Newburyport Marine Insurance co., 9 Mass. Rep.436; George T. Curtis, Digest of the Decisions of the Courts of Common Law and Admiralty in the United States, Volume II (Boston: Little, Brown and Company, 1863) p. 580; Julian Cooke et al., Voyage Charters, 4th Ed, (New York: Informa Law from Routledge, 2014) p. 293; John Bouvier et.al., A Law Dictionary Adapted to the Constitution and Laws of the United States of America, and of the American Union with References to the Civil Law and Other Systems of Foreign Law, Volume I (Philadelphia: T & J.W. Johnson, Law Booksellers, 1839) p. 320; Sir Thomas Edlyne Tomlins, The Law Dictionary: Explaining the Rise, Progress, and Present State of the English Law: Defining and Interpreting the Terms or Words of Art: and also Comprising Copious Information on the Subjects of Trade, and Government (Philadelphia: R.H.Small, 1836) p. 232. 81 Raoul Colinvaux, Carver’s Carriage by Sea, Volume 2, 13th Ed (London: Stevens & Sons, 1982) p. 869; Simon Baughen, Shipping Law, 4th Ed (London: Cavendish Publishing, 2009) p. 97. 82 Kish v. Taylor (1912) A.C. 604; The Malcolm Baxter (1927) 277 U.S. 323; Stephen Girvin, Carriage of Goods by Sea, 2nd Ed (New York: Oxford University Press, 2011) p. 404. 83 Monarch Steamship Co. Ltd. V. A/B Karlshamns Oljefabriker (1949) A.C. 196, 211, 212; Raoul Colinvaux, Carver’s Carriage By Sea, Volume 2, 13th Ed (London: Stevens & Sons, 1982) p. 872. 84 Paragraph 22-32 of this Memorandum. 85 Voyage Correspondence, Moot Problem 2015, p. 42. 15 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 45. The Respondent’s wrongful act for refusing to pay for Vessel’s hire 86 and for not giving bunker supply and direction 87 is a negligence to do his part of the contract which leads to a breach of contract. 88 Regardless of whether the breach was repudiatory or not, failure to pay for hire entitles the owner to terminate the contract. 89 46. Moreover, Lord Reid in White and Carter (Councils) Limited v McGregor explains that if one party to a contract repudiates it, in the sense of making it clear to the other party that he refuses or will refuse to carry out his part of the contract, the innocent party has the option of either accepting repudiation and suing for damages for breach of contract, or refusing, and thus affirming the continuation of the contract. 90 47. Seeing the fact that there is no conduct done by the Claimant which can be amounted as an act of termination of the contract and the Respondent as a party who has done a wrongful act is unable to end a contract if it is against the wish of the other party, 91 then it is clear that the contract remained enforceable and binding to both parties. 48. In The Aquafaith, Cooke J explains that it is possible for owners to claim hire from the charterers under a time charter without the need for the charterers to do anything under the charter, even if charterers failed to give any orders and the vessel’s voyage would be ceased, the owners will still be entitled to gain hire payment. 92 49. Due to the reasons above, the Charterparty remains enforceable and the Respondent is still obligated to pay for full hire. 86 Voyage Correspondence, Moot Problem 2015, p. 41. Voyage Correspondence, Moot Problem 2015, p. 42. 88 Clause 7 & 8 of the Charterparty. 89 Kuwait Rocks Co v AMN BulkcarriersInc (The Astra) [2013] 2 All ER (Comm) 689; Lombard North Central plc v. Butterworth (1987) QB 527 (CA); Yvonne Batz et al., Maritime Law, 3rd Ed (New York: Informa Law from Routledge, 2014) p. 156; Jill Poole, Casebook on Contract Law, 12th Ed (New York: Oxford, 2014) p. 82; Dr. Richard Lawson & Susan Singleton, Commercial Contracts: A Practical Guide to Standard Terms, 3rd Ed (West Sussex: Bloomsbury Professional Ltd, 2011) p. 365. 90 White and Carter (Councils) Limited v McGregor (1961) AII ER 1178 at pp.1181; see also Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto Buitrago) [1976] 1 Lloyd’s Rep 250 (CA); The Odenfeld [1978] 2 Lloyd’s Rep 357 (QBD); The Alaskan Trader [1984] 1 AER 129 (QBD); The Dynamic [2003] 2 Lloyd’s Rep 693 (QBD); Stocznia Gdanska SA v Latvian Shipping Co [1995] 2 Lloyd’s Rep 592 (QBD). 91 Hain Steamship Company Ltd v Tate & Lyle Ltd [1936] 2 All ER 597 per Lord Wright MR. at p.608. 92 Isabella Shipowner SA v Shagang Shipping Co Ltd (The Aquafaith) (2012) EWHC 1077 Per Cooke J, para.37. 87 16 TEAM 15, UNIVERSITAS PADJADJARAN V. MEMORANDUM FOR THE CLAIMANT THE RESPONDENT HAVE COMMITED CONSTRUCTIVE FRAUD BASED ON ITS CLAIMS ON PROVIDING BUNKER IN DURBAN 50. The Respondent on its correspondence dated June 3 stated that it will provide the necessary amount of bunker for the vessel in Durban but did not fulfill the aforementioned promise. 93 51. Where bad intent is not a prerequisite, 94 the Respondent based on the aforementioned correspondence have committed constructive fraud 95 due to its fulfillment of the elements of (A) misrepresentation, 96 (B) reliance and a duty of the feasor due to its relationship,97 and (C) profit to the detriment of the party defrauded. 98 A. The Element of Misrepresentation was Present in this Case 52. The promissory misrepresentation 99 aspect was present within the Respondent’s bunker provision claim made on June 3, on which it stated true intentions on the time the claim was made. 100 53. However, the Respondent failed to disclose a reason for cancelling its promise 101 or, in the event of a change of circumstances 102 to inform the Master. The answer would have 93 Voyage Correspondence, Moot Problem 2015, p. 27. Hagarty v Ithaca City School District (1979) 423 N.Y.S. 2d 843; Scudder v. Hart (1941) 45 N.M. 76, 110 P.2d 536. 95 Link v Link (1971) 179 S.E.2d 697, 278 N.C. 181; Strong v Jackson (2002) 777 N.E.2d 1141, 1150-52; Terry v. Terry (1981) 302 N. C. 77, 273 S. E. 2d 674. 96 Eby v. York Division, Borg-Warner 455 (1983) N.E.2d 623; see also: Blaising v Mills (1978) 374 NE2d 1166. 97 Jarboe v. Landmark Comm. Newspapers (1994) 644 N.E.2d 118; Sees v. Bank One (2005) NA, 839 N.E.2d 154. 98 Jones v Dumbrell (1981) VR 199; Pasley v. Freeman (1789) 3 TR 51; Derry v Peek (1889) LR 14 App Cas 337. 99 Eby v. York Division, Borg-Warner (1983) 455 N.E.2d 623; Edgington v Fitzmaurice (1885) 29 Ch D 459; see also: Blaising v Mills (1978) 374 NE2d 1166. 100 Voyage Correspondence, Moot Problem 2015, p. 68. 101 Howard Marine v Ogden (1978) QB 574. 102 Cramaso LLP v. Ogilvie-Grant, Earl of Seafield (2014) UKSC 9; Trail v. Baring (1864); With v O’Flanagan (1936) Ch 575. 94 17 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT affected the direction of the Vessel, and so the Respondent was in the position of having a duty to speak but did not act upon that obligation. 103 54. Thus, the unfulfilled representation made by the Respondent and its weight on the situation amounts to actionable misrepresentation. B. The Element of Reliance was Present within this Case 55. The element of reliance 104 was present, for the Respondent must have known that the Master would be relying on its bunker claim. 105 The Respondent, acknowledging this reliance, failed to take into account any reason 106 on why it might not be able to provide bunker, and acted as if it was going to be done. 107 As such, the facts show the reliance between the Master towards the Respondent was not responsibly held. C. The Element of Profit was Present within this Case 56. Furthermore, there was an element of profit for the Respondent. Had the captain knew that the bunkering would not have taken place then he would have reasonably not proceeded 108 until further confirmation of bunker provision. 109 This reduction of speed coming from lack of bunker, of which the Respondent is responsible for, would be detrimental to the performance of the Charterparty which it would want to reasonably avoid. Thus, profit by avoidance of self-imposed loss is proven. 103 Knauf Fiber Glass GmbH v Stein (1993) 615 N.E.2d 115; Lingsch v. Savage (1963) 213 Cal.App.2d 729. Horsfall v Thomas (1862) 1 H&C 90; Jarboe v. Landmark Comm. Newspapers (1994) 644 N.E.2d 118; Stilwell v. Walden (1984)70 N. C. App. 543, 320 S. E. 2d 329. 105 Voyage Correspondence, Moot Problem 2015, p. 25. 106 Esso Petroleum Co Ltd v Mardon (1976) QB 801; Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964) AC 465. 107 Voyage Correspondence, Moot Problem 2015, p. 26. 108 See Lingsch v. Savage (1963) 213 Cal. App.2d 729 on concealment to avoid a different outcome from the opposite party. 109 Rosenthal, E. (2010) Cargo skippers cry, ‘slow speed ahead’. International Herald Tribune, 17 Feb: 1, 4; Slow Steaming in the Global Shipping Industry (Swedish Club) MAN Diesel & Turbo PrimeServ Copenhagen, p. 5. 104 18 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 57. In summation, upon the fulfillment of all elements shall be inferred that the Respondent had committed constructive fraud when it claimed that bunkering were to be done at Durban, but did not follow up with the appropriate action. VI. THE RESPONDENT OR ASA2 ON BEHALF OF THE RESPONDENT HAS COMMITED FRAUD A. The Pirate Attack was a Result of Coordination Between the Respondent or Persons on Its Behalf and the Attacking Parties Involved 58. In Harris v. Capital Growth Investors XIV, it is specified that “prior decisions are controlling only as to cases with the same factual situation”, 110 meaning that with enough factual evidence, it is possible to come to a conclusion by inferring well known facts or similar cases. 59. It is well known that piracy is a prevalent case in West Africa, 111 in which recorded cases go as far South as Angola, 112 with attacks while ships are preparing for STS transfers also being common. 113 Regarding cargo theft in such cases, BIMCO states that “these incidents are well-organized, often involving a criminal element with commercial 110 Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d l\42.ll57. Piracy and Acts of Armed Robbery of Ships. SURITEC, August 2014, p. 3; Skuld, www.skuld.com, 23 April 2012; The Washington Post. Associated Press. 27 February 2012; UNDOC, Transnational Organized Crime in West Africa: A Threat Assessment, (Vienna: UNDOC, 2013) p. 45. 112 GCaptain, Liberian Registry Concludes Kerala Hijacking Investigation, 29 May 2014, <http://gcaptain.com/liberian-registry-concludes-kerala-hijacking-investigation/>; DryadMaritime, MT Kerala Hijack – Game Changer or Inside Job?, 12 May 2014, <http://www.dryadmaritime.com/mt-kerala-hijack-gamechanger-or-inside-job/>; both featuring an attack on the vessel “Kerala” off the coast of Angola. 113 Tradewind News, Nipah Sees Double Attack, 24 September 2013, <http://www.tradewindsnews.com/piracy/324129/nipah-sees-double-attack>, featuring an attack on the vessel “Nipah”; Maritime Bulletin, Recent Tanker Hijack and IMB’s Showing, 6 October 2012, <http://www.odin.tc/news/read.asp?articleID=1407>, featuring an attack on an undisclosed vessel on October 4, 2012; Mike Schuler for GCaptain, Filipino Sailor Killed By Nigerian Pirates in Another Attack on a Tanker [UPDATE], 7 February 2013, <http://gcaptain.com/filipino-sailor-killed-by-nigerian-pirates/>, featuring an attack on the vessel “Pyxis Delta” on February 4, 2013. 111 19 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT interests ashore”, 114 making safe the conclusion that such attacks come from the highlycoordinated West African Pirates, 115 together with local parties. 60. In this present case, ASA2, acting as the local agent, redirected the Vessel to a certain location within international waters off the Angolan coast, where the Vessel was then raided. Noting the standard practices of West African pirates, and the article, 116 there are possibilities that the pirates must have had preparations beforehand, and conspiracy with ASA2 could be regarded as more than mere plausibility. 61. In addition, West African Pirates require sensitive information to make its attacks successful. 117 In the case at hand, ASA2 acquired the email address of the Master 118 and knew that the Vessel was planned to conduct STS, and was further going to be provided bunker. Since the voyage correspondence does not show any kind of coordination by the Master with ASA2, then the information could only be acquired through the Respondent, and/or ASA, the only parties involved within the correspondence. 119 Therefore, accounting the vicarious responsibility120 the Respondent has over ASA, it is liable for the attack regardless of which of the two parties were at fault. B. ASA2’s Actions on Behalf of the Respondent Amount to Fraud 62. The attack on the Vessel by pirates, between 4-10 July, was conducted after the Vessel was fraudulently redirected to the location under representation that the Vessel will undergo cargo transfer and be provided bunker. 121 114 Guidelines for Owners, Operators and The Masters for Protection against Piracy in the Gulf of Guinea Region, BIMCO, p. 4. 115 Adjoa Anyimadu. Maritime Security in the Gulf of Guinea: Lessons Learned from the Indian Ocean, (England: Chatham House, 2013), p. 4; International Chamber of Shipping, 2014 Annual Review, (International Chamber of Shipping, 2014), p. 19; Nick Ridley, Terrorism in East and West Africa: The Under-focused Dimension, (England: Edward Elgar, 2015), p. 118-157. 116 Newspaper Article, Moot Problem 2015, p. 46. 117 Guidelines for Owners, Operators and The Masters for Protection against Piracy in the Gulf of Guinea Region, BIMCO, p. 4; Nirit Ben-Ari, Piracy in West Africa, Africa Renewal p. 12, December 2013. 118 Voyage Correspondence, Moot Problem 2015, p. 35. 119 Voyage Correspondence, Moot Problem 2015, p. 28, 33. 120 Paragraph 30-31 of this memorandum. 121 Voyage Correspondence, Moot Problem 2015, p. 35. 20 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 63. Lord Herschell in Derry v. Peek defined fraudulent representation as misrepresentation, or manipulation of truth, done despite acknowledging, or being careless of, the status of the statement, done by the tortfeasor for the sake of gain to the detriment of the party defrauded under his reliance. 122 The defrauded party is entitled to claim for damages. 123 64. In the instant case, ASA2 only purported 124 to control the Antelope and had no intention to provide bunker to generally proceed with the Charterparty as agreed so the party commencing the attack could acquire the Vessel’s cargo illegally. Consequently, the Antelope never arrived and without sufficient reason to justify her failure to arrive.125 Upon arrival on the STS Area, the Vessel was never provided bunker and damage was sustained as a result of relying on the Respondent. 126 65. Therefore, the Claimant contends that ASA2 has conducted a tort of fraud. Noting the Respondent’s liability toward the actions of ASA2, 127 the Respondent is ultimately liable for such actions. VII. THE RESPONDENT IS LIABLE FOR ANY LOSS AND DAMAGE SUFFERED BY THE CLAIMANT A. The Respondent Shall Recover the Claimant with Respect to its Loss and Damage 122 AIC Ltd v. ITS Testing Services (UK) Ltd (The Kriti Palm) (2006) EWCA Civ 1601; Brown Jenkinson & Co Ltd v. Percy Dalton (London) Ltd, (1957) 2 QB 621; Derry v. Peek (1889) 14 AC 337 at 374. 123 Doyle v. Olby (1969) 2 QB 158; Smith New Court Securities v. Scrimgeour Vickers (1996) 3 WLR 1051; Richard Stone, The Modern Law of Contract, 8th Ed (London: Cavendish, 2009), p. 345; Misrepresentation Act 1967, s (2) 1. 124 Procedural Order 2, paragraph 12. 125 Knauf Fiber Glass GmbH v Stein 615 N.E.2d 115(1993) above no. 6; Strong v Jackson (2002) 777 N.E. 2d 1141. 126 Gagne v. Bertran (1954) 43 C.2d 481; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; Stansfield v. Starkey (1990) 220 Cal.App.3d 59; Richard Stone, The Modern Law of Contract, 8th Ed (London: Cavendish, 2009), p. 610; John P. Goldberg et al., The Place of Reliance in Fraud, Arizona Law Review Vol. 48 2006, p. 1004. 127 Paragraph 23-26 of this Memorandum. 21 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 66. The Claimant argues that the conduct of the Respondent has caused loss and damage and it shall be held liable since (i) there is a causal link from the Respondent’s conduct to the loss and damage thereof and (ii) the loss and damage are foreseeable. i. There is a causal link from the Respondent’s conduct to the loss and damage thereof 67. The chain of events of the Respondent which amounts breach of the Charterparty and tort of fraud have caused loss to the Claimant. Firstly, the Respondent has failed to fulfill its obligation under the Charterparty in which it must pay hire as both parties agreed for period of 3 months. 128 The Claimant may only recover losses which may reasonably be considered as arising naturally from the breach. 129 68. As it is affirmed in Attorney-General v. Blake, the essential basis of contractual damage is to compensate for pecuniary loss naturally flowing from the breach. 130 In this present case, the loss suffered by the Claimant naturally arose from the breach of the Charterparty by the Respondent, and thus the loss shall be recovered. 69. Secondly, the Respondent will be liable for any damages that are caused by its breach of duty and are reasonably consequence of its actions, 131 which in this present case lead to the piracy. It is clear that the damage to the Vessel is a direct consequence of the Respondent’s tort as it infringed its duty to direct the Vessel to a safe location. 70. Hence, the causal link from the Respondent’s conduct and the loss and damage suffered by the Claimant is established. ii. The loss and damage are foreseeable 128 Fixture Recap, Moot Problem 2015, p. 5. Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528; Kpohraror v Woolwich Building Society [1996] 4 All ER 119; Pilkington v Wood [1953] Ch 770; Jackson v Royal Bank of Scotland [2005] 1 WLR 377; Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350; Parsons v Uttley Ingham [1978] QB 791 130 Attorney-General v. Blake [2001] 1 A.C., 268. 131 The Arpad (1934) P. 189, 200 (CA); The Argentino (1889) 14 AC 519 (HL).); Cambridge Water Co. v. Eastern Counties Leather plc [1994] 2 AC 264; Marsh v. Joseph [1897] 1 Ch. 213, 231; The Canadian Transport 43 Lloyd’s List Law Rep 409, 410-11 (CA 1932); The Arpad (1934) P. 189, 200 (CA); Edwin Peel, Treitel: the Law of Contract,12th Ed (London: Sweet & Maxwell, 2007) p.1047. 129 22 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 71. Foreseeability of a loss as a not unlikely consequence of a breach is neither necessary nor sufficient for a finding that the loss is not too remote and therefore recoverable. 132 In this case, by the time the contract was concluded, it is the obligation of the Respondent to pay hire and the consequence for failing is foreseeable. A party shall be held liable for any loss which is a probable result of the breach of contract. 133 The parties have the opportunity to anticipate certain breaches and can estimate in advance the damage they will cause. 134 Presently, the Claimant has lost its future earning as the result of the hire payment for certain period which the Respondent has infringed. 72. The consequence of the Respondent’s tort is also foreseeable. By failing to conduct its duty to give direction to the Master 135 and authorizing ASA2 to give direction 136, the piracy incident lead to the damage to the Vessel. In Transfield Shipping Inc v. Mercator Shipping Inc 137 it is affirmed that the defendant in tort will be liable for any type of loss and damage which is reasonably foreseeable as likely to result from the act for which he is liable. 73. The Vessel would not have been attacked by pirates if the Respondent had not breached and neglected its duty. Hence, the Claimant argues that the damage to the Vessel shall be imputed to the Respondent. B. The Claimant is Entitled to Hire Payment from the Respondent 74. Pursuant to correspondence on 3 July 2014, the Claimant had asked the Respondent to complete the second hire payment. 138 However the Respondent contended that the Claimant cannot claim for hire based on the grounds that the Vessel was off-hire. 139 132 South Australia Asset Management Corp v York Montague Ltd [1997] A.C. 191 (HL); Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48; [2009] 1 A.C. 61 (HL). 133 Hadley v Baxendale [1854] Marsh v. Joseph EWHC J70. 134 Czarnikow Ltd v Koufos [1969] 1 AC 350, HL. 135 Paragraph 18 of this Memorandum. 136 Paragraph 13 of this Memorandum. 137 Transfield Shipping Inc v. Mercator Shipping Inc (The Achilleas) [2008] UKHL 48. 138 Voyage Correspondence, Moot Problem 2015, p. 39. 139 Voyage Correspondence, Moot Problem 2015, p. 41. 23 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT 75. As it is aforementioned, 140 the Claimant submits that the Vessel still remained on-hire. The Respondent’s failure to pay a single hire payment entitles the Claimant to claim loss of profit for the remaining charter period. 141 Under the rules of the common law, it is established that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. 142 76. The rule from Cory v. Thames Ironworks & Shipbuilding Co Ltd143 and the Victoria Laundry 144 allows the Claimant to still recover the normal amount of a loss of profits. Subsequently, the Respondent shall pay hire for the amount of USD 2,433,899.98. Alternatively, the Respondent shall pay second hire payment period, for the amount of USD 1,216,949.99 C. The Respondent is Liable for Damage to the Vessel Due to its Tort of Fraud 77. The ASA2’s conduct on behalf of the Respondent caused losses to the Claimant. The pirate attack has caused several damages to the Vessel, such as the navigating and radio equipment, main hose deck crane and ladder. 145 Due to the damages, by reasonable contemplation the Vessel cannot be used properly. 78. The Claimant claims the reparation cost for the Vessel is at the amount of USD 60 Million as stipulated under the Hull and Machinery value. 146 In Brillante Virtuoso,147 it was held that the overall cost of repair exceeded the vessel’s insured value of USD 55 Million. The relevant standard is what it would cost to make the vessel as good as she was 140 Paragraph 22 of this Memorandum. Kuwait Rocks Co v AMB Bulkcarriers Inc (The Astra) [2013] EWHC 865 (Comm). 142 Robinson v. Harman (1848), 1 Exch 850 per Parke B p. 855. 143 Cory v. Thames Ironworks & Shipbuilding Co Ltd (1868) L.R. 3 Q.B. 181 QB. 144 Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. [1949] 2 KB 528 CA. 145 Voyage Correspondence, Moot Problem 2015, p. 42. 146 Fixture Recap, Moot Problem 2015, p. 5. 147 Suez Fortune Investments Ltd and Another v Talbot Underwriting Ltd and Others (The “Brillante Virtuoso”) QBD (Comm Ct) (Flaux J) [2015] EWHC 42 (Comm). 141 24 TEAM 15, UNIVERSITAS PADJADJARAN MEMORANDUM FOR THE CLAIMANT before. 148 The Claimant argues that the repair cost of the Vessel shall be determined based on the Hull and Machinery value. Therefore, the Respondent shall be held liable for the damage and shall bear the cost of repair of the Vessel. PRAYER FOR RELIEF In light of the submissions above, the Claimant respectfully requests the Tribunal to: DECLARE that the Tribunal has jurisdiction to hear the present dispute; Further, ADJUDGE that the Respondent is liable towards the Claimant for: a. Breach of the Charterparty; and b. Tort and Fraud; And that the Respondent’s Counterclaim is not maintainable. ADJUDGE that the Respondent is liable for loss and damage suffered by the Claimant Therefore, AWARD the Claimant: a. For hire payment at the amount of USD 2,433,899.98; b. Alternatively, for the second hire period payment for the amount of USD 1,216,949.99; c. For the damage to the vessel based on Hull and Machinery Value for the amount of USD 60 Million; d. Interest on a compound basis pursuant to s. 49 of the Arbitration Act 1996; and e. The costs of the present proceeding with compound interest on costs. 148 Pitman v Universal Marine Insurance Company [1882] 9 QBD 192, 195, Lindsey J; Ozlem Gurses, Marine Insurance Law, (New York: Routledge, 2015), p. 204. 25
