memorandum for the clamaint - Murdoch School of Law

TENTH INTERNATIONAL MARITIME LAW 

ARBITRATION MOOT COMPETITION 2009 

BRISBANE, AUSTRALIA 

NATIONAL LAW UNIVERSITY 

JODHPUR, INDIA 

In the matter of an Arbitration held at Brisbane 

(AR 11/08) 

(Under the MLAANZ Arbitration Rules, 2007) 

MEMORANDUM FOR THE CLAMAINT 

CLAIMANT 

Horizon Shipping Inc. 

Level 12, Sky Harbour 

Building 

88 Nandong Road, Lai City 

Republic of Kailand 

-TEAM 6 - 

RESPONDENT 

Schwarz Line Containers 

Level 27, International House 

139 Hörst Strasse 

Bräan 

Hoogeland 

Aditi Patanjali ♦ Meherunissa Anand ♦ Nishant Kumar ♦ Pranav Atit ♦ Pranay Bagdi

TENTH INTERNATIONAL MARITIME LAW 

ARBITRATION MOOT COMPETITION 2009 

BRISBANE, AUSTRALIA 

MEMORANDUM FOR THE CLAIMANT 

TEAM 6

TABLE OF CONTENTS 

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

INDEX OF AUTHORITIES ................................................................................................ VI 

STATEMENT OF FACTS .................................................................................................... 1 

QUESTIONS PRESENTED .................................................................................................. 4 

PLEADINGS AND AUTHORITIES ....................................................................................... 5 

I. THE TRIBUNAL HAS JURISDICTION TO DECIDE THE PRESENT DISPUTE ................. 5 

[A] CLAIMANT HAS THE RIGHT TO BRING THE PRESENT PROCEEDINGS UNDER THE 

CHARTERPARTY AGREEMENT ................................................................................ 5 

[B] THE ARBITRATOR APPOINTED CANNOT BE CHALLENGED AT THIS STAGE......... 5 

[C] THE TRIBUNAL HAS THE AUTHORITY TO DECIDE ITS OWN JURISDICTION 

UNDER THE COMPETENCE/COMPETENCE PRINCIPLE ............................................. 7 

[D] THE CLAIMANT CANNOT ESTABLISH ‘BIAS’, WHETHER ‘REAL’ OR ‘APPARENT’ 

................................................................................................................................ 7 

[E] RULE 14 IS NEITHER OFFENDED NOR RENDERED IMPOSSIBLE. ......................... 9 

[F] DISCLOSURES MADE BY MR. TAN REFUTE ANY ALLEGATIONS OF LACK OF 

GOOD FAITH ......................................................................................................... 10 

[G] THREE-MEMBER PANEL .................................................................................. 10 

II. THE CHARTERER IS LIABLE AS PUERTO PAMATAR WAS AN UNSAFE PORT ...... 11 

[A] OBLIGATION OF THE CHARTERER TO NOMINATE A SAFE PORT ..................... 11 

[B] MEANING OF A SAFE PORT .............................................................................. 12 

[C] CHARACTERISTICS AND FACTORS TO DETERMINE SAFETY ............................ 13 

[D] PUERTO PAMATAR WAS AN UNSAFE PORT ...................................................... 13 


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[E] NATURE OF WARRANTY IS ABSOLUTE ............................................................ 15 

[F] MASTER ACTED WITH DUE DILIGENCE ........................................................... 16 

III. THE VESSEL WAS SEAWORTHY ........................................................................... 18 

[A] MEANING OF SEAWORTHINESS ....................................................................... 18 

[B] VESSEL WAS NOT UNSEAWORTHY ................................................................... 19 

[C] UNSEAWORTHINESS WAS NOT THE CAUSE OF THE GROUNDING ..................... 19 

[D] ACTS OF THE MASTER WOULD FALL UNDER THE EXCEPTION OF ERROR OF 

NAVIGATION ......................................................................................................... 20 

IV. THE RESPONDENT IS LIABLE TO PAY DAMAGES TO CLAIMANT FOR BREACH OF 

CHARTERPARTY. ....................................................................................................... 20 

[A] DAMAGES DUE TO BREACH OF CHARTERPARTY ............................................. 20 

[B] GENERAL AVERAGE ........................................................................................ 23 

[C] INTEREST ........................................................................................................ 24 

PRAYER FOR RELIEF ..................................................................................................... 25 


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2d Cir. Second Circuit 

App Cas or AC Appeal Cases 

LIST OF ABBREVIATIONS 

A&NZ Mar LJ Australia and New Zealand Maritime Law Journal 

ALR Australian Law Reports 

BIMCO The Baltic and International Maritime Council 

C.J. Chief Justice 

c.f. cited from 

CLR Commonwealth Law Reports (Australia) 

CMI Comite Maritime International 

Co. Company 

col. Column 

Colum. L. Rev. Columbia Law Review 

Corp. Corporation 

Ed./Edn. Edition 

EWHC (Admlty) England and Wales Admiralty Court 

EWHC (Comm.) England and Wales Commercial Court 

F.2d Federal Reporter, 2nd Series 

HCA High Court of Australia 

Ibid Ibidem [the same] 

Int. A.L.R International Arbitration Law Review 

J. Justice 

Ll L R Lloyd's List Law Reports 

Lloyd‘s Rep Lloyd‘s Reports 


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LOF Lloyd's Standard Form of Salvage Agreement 

Ltd. Limited 

LT Law Times 

MLAANZ Maritime Law Association of Australia and New Zealand 

No. Number 

NSWCA New South Wales Court of Appeal 

NYPE 93 New York Produce Exchange, 1993 

p./pp. Page(s) 

PD Probate Division (Law Reports) 

/ Paragraph(s) 

Sing. J. Legal Stud. Singapore Journal of Legal Studies 

Supra Above 

U.S. United States 

US$ United States Dollar 

UNCITRAL United Nations Commission on International Trade Law 

v. Versus 

VJ Vindobona Journal of International Commercial Law & Arbitration 

WLR Weekly Law Reports 


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INDEX OF AUTHORITIES 

Statutes & Conventions 

International Arbitration Act, 1974 .................................................................................. 7 

MLAANZ Arbitration Rules 2007 ................................................................................... 9 

UNCITRAL Model Law on International Commercial Arbitration (1985) ..................... 10 

Articles 

Partasides, Constantine The Selection, Appointment and Challenge of Arbitrators, 2001, 

5 VJ 217 .................................................................................................................... 11 

Gauci G., Risk Allocation in the Charterparty Relationship: An Analysis of English 

Caselaw Relating To Cargo and Trading Restrictions, 28 Journal of Maritime Law and 

Commerce ................................................................................................................. 14 

Gearing, Matthew, ―A Judge in His Own Cause?‖ - Actual or Unconscious Bias of 

Arbitrators, Int. A.L.R. 2000, 3(2) ................................................................................ 9 

Member of Board of Directors Designated by Corporation as Partisan Arbitrator Not 

Subject to Disqualification on Ground of Presumptive Bias, February, 1963, Colum. L. 

Rev. 374 ...................................................................................................................... 9 

Pretty, Nicola S., Unseaworthiness — Turning A Blind Eye?, (2008) 22 A&NZ Mar LJ 

42 .............................................................................................................................. 19 

Prof. Tetley, William Q.C., General Average Now and in the Future, Liber Amicorum R. 

Roland, Larcier, Brussels, 2003 ................................................................................. 24 

Sian, David C.G., Revisiting the Safe Port , 1992 Sing. J. Legal Stud. 79....................... 16 


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Treatises 

Baughen, S., Shipping Law, (London, UK: Cavendish Publishing, 3rd ed. 2004.) 

Redfern, Alan & Hunter, Martin, Law And Practice of International Commercial 

Arbitration, (London, UK: Sweet & Maxwell Publishers, 4 th 

ed., 2004) 

Schoenbaum, Thomas J., Admiralty and Maritime Law: Admiralty and Maritime 

(Hornbook Series Student Edition), (St. Paul, MN: West Group Publishing, 4 th edn., 

2004) 

Sutton, D and Gill, J. Russell on Arbitration, (London, UK: Sweet & Maxwell Publishers 

22 nd Edition, 2003) 

Stephen, Ninian, & White, M.W.D., Australian Maritime Law, (Annalde, NSW: The 

Federation Press, 2 nd edition, 2000) 

Cases 

"The Glenfruin" (1885) 10 P.D. 103 .............................................................................. 15 

"The Product Star" (No. 2)”, [1991] 2 Lloyd's Rep. 468 ................................................ 16 

AIC Ltd. v. Marine Pilot Ltd (The Archimidis), [2008] 1 Lloyd‘s Rep. 597 (CA) ........... 12 

AT & T Corporation & Another v. Saudi Cable Company [2000] 2 Lloyd‘s Rep 127 .... 9 

Athenian Tankers Management SA v Pyrena Shipping Inc (The Arianna) [1987] 2 Ll L R 

376 ............................................................................................................................ 19 

Aussie Airlines Pty Limited v. Australian Airlines Pty Ltd and Another, 1996 WL 

1745231 (FCA), 135 ALR 753 .................................................................................... 9 

Bostrom v. Dreyfus (1932) LLR 136.............................................................................. 12 

Compania Naviera Maropan S/A v. Bowater's Lloyd Pulp and Paper Mills, Ltd. [1955] 

vol. 1 Lloyds Law Reports 349 .................................................................................. 21 


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Deutsche Shell Tanker Gesellschaft v. Placid Refining Co., 1993 AMC 2141 at p. 2143 (5 

Cir. 1993) .................................................................................................................. 24 

Ebner v. Official Trustee in Bankruptcy [2000] HCA 63, (2000)176 ALR 644 ................ 8 

Flint v. Christall (The Irrawaddy), 171 U.S. 187 (1898) ................................................ 24 

Folger Coffee Company v. Olivebank, 2000 AMC 844 .................................................. 24 

Grace (G. W.) & Co. Ltd. v. General Steam Navigation Ltd., (1950) 83 Ll.L.Rep. 297 .. 17 

Hedley v. Pinkney S.S. Co. [1894] A.C. 222 .................................................................. 15 

Johnson v. Johnson (2000) 201 CLR 488 ........................................................................ 9 

Johnston Brothers v. Saxon Queen Steamship Company, (1913) 108 L.T. 564 .............. 12 

Kodros Shipping Corporation of Monrovia v. Empresa Qubana De Fletes (The Evia No 

2), [1982] 1 Lloyd's Rep. 334 .................................................................................... 13 

Leeds Shipping Co v Societe Francaise Bunge SA (The Eastern City), [1958] 2 Lloyd‘s 

Rep 127 ............................................................................................................... 12, 19 

Lensen Shipping Ltd. v. Anglo-Soviet Shipping Co., Ltd. [1935] 52 Lloyds Law Reports 

341 ............................................................................................................................ 23 

Motor Oil Hellas (Corinth) Refineries. A. v. Shipping Corporation of India (The 

"Kanchenjunga"), [1987] 2 Lloyd‘s Rep. 509 ............................................................ 11 

Newa Line v. Erechthion Shipping Co. S.A. (The Erechthion), [1987] 2 Lloyd‘s Rep. 180 

.................................................................................................................................. 17 

Nitrate Corporation of Chile Ltd. v. Pansuiza Compania de Navegación S.A. (The 

Hermosa), (C.A.) [1982] 1 Lloyd‘s Rep. 570 ............................................................. 23 

Papera Traders Co. Ltd. v. Hyundai Merchant Marine Co. Ltd. (The "Eurasian Dream"), 

[2002] EWHC 118 (Comm) ....................................................................................... 17 


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Pearl Carriers Inc. v. Japan Line Ltd (―The Chemical Venture‖) [1993] 1 Lloyd‘s Rep. 

508 ............................................................................................................................ 15 

Reardon Smith Line, Ltd. v. Australian Wheat Board, [1954] 2 Lloyd's Rep. 148 12,13, 16 

Robert Dollar Co. v. Blood, Holman & Co., Ltd., [1920] 4 Lloyd's List L. Rep. 343 ..... 12 

Robinson v. Harman, (1848) 1 Ex. 850 .......................................................................... 21 

Rustal Trading Ltd. v. Gills & Duffus SA [2000] 1 Lloyd‘s Rep 14 .................................. 8 

Santa Martha Baay Scheepvart & Handelsmaatschappij N.V. v. Scanbulk A/S, (The 

“RIJN”) [1981] 2 Lloyd's Rep.267 ............................................................................ 23 

Sea Containers Ltd v. ICT Pty. Ltd. [2002] NSWCA 84 .................................................. 9 

Smits v. Roach [2006] HCA 36 ........................................................................................ 8 

Steel v. State Line Steamship Co. (1877) 3 App. Cas. 72................................................ 15 

The "Torepo", [2002] EWHC 1481 (Admlty) ................................................................ 18 

The Amstelslot,[1963] 2 Lloyd‘s Rep. 223 ..................................................................... 17 

The Archimidis, [2008] 1 Lloyd‘s Rep 597 (CA) ........................................................... 13 

The Evia (No. 2), [1982] 2 Lloyd's Rep. 307 (H.L.) ....................................................... 14 

The Jason, 225 U.S. 32 (1912) ...................................................................................... 24 

The Lucille, [1984] 1 Lloyd's Rep. 244 (C.A.) ......................................................... 14, 19 

The Polyglory, [1977] 2 Lloyd‘s Rep. 353 ..................................................................... 13 

The Saga Cob, [1991] 2 Lloyd's Rep. 398 ................................................................ 15, 16 

The Star Sea, [1997] 1 Lloyd‘s Rep. 360 ....................................................................... 17 

Triad Chipping Co. v. Stellar Chartering & Brokerage inc. (The "Island Archon") 

[1994] vol. 2 Lloyd's Law Reports 227 ...................................................................... 21 


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Vardinoyannis v. Egyptian General Petroleum Corporation (The Evaggelos TH.) [1971] 

2 Lloyd's Rep. 200 ..................................................................................................... 12 

Venore Transp. Co. v. Oswego Shipping Corp., 498 F.2d 469 ....................................... 11 

Webb & Hay v. The Queen [1994] HCA 30 ..................................................................... 8 

Whistler International Ltd. v. Kawasaki Kisen Kaisha Ltd. (The “Hill Harmony”) [2001] 

1 Lloyd‘s Rep. 147 .................................................................................................... 20 

Other Authorities 

Garner, Bryan A. (edt.), Black’s Law Dictionary, (West Publishing Co., New York, 8 th 

edn., 2004) ................................................................................................................ 18 

Opinion of BIMCO and CMI in Special Circular No. 1, July 2007, General Average: 

Revision of York-Antwerp Rules, Issued by the Documentary Department of BIMCO, 

available at 

http://www.bimco.org/~/media/2CE55A7CB0AC42B3ABB9EFAFB0CC9E64.ashx 24 


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STATEMENT OF FACTS 

1. Shwarz Line Containers, hereinafter called as the ―Charterers‖/RESPONDENT, 

requested Horizon Shipping Inc., hereinafter called as the ―Owners‖/CLAIMANT in 

the present matter, for a Vessel, and the Owners provided the same, namely, the MV 

―OCEAN EXPRESS‖, hereinafter referred to as the ―Vessel‖, to the Charterers on the 

basis of a Time Charter for five years, commencing from May 5 th , 2004. 

2. The agreement, hereinafter referred to as the Charterparty was signed on a NYPE 93 

Form, as was used by the Owners for all such transactions. 

3. The Owners invited tenders for appointing officer and crew for the Vessel and after a 

full and frank review of all tender proposals, selected the tender of Eastern Crewing 

Services Incorporated, who have a solid reputation for the highest quality and 

professional standards. 

4. Due to operational reasons, the Owners decided to change the current crew of the 

Vessel earlier than intended and informed Eastern Crewing Services of the same. 

5. Eastern Crewing Services Incorporated was also instructed to inform its carefully 

selected officer and crew to be well acquainted with all the Owner company 

procedures and onboard Manuals of the Vessel. 

6. Owing to the shortage of time, the Owners even sent a disk with all the relevant 

material to be perused by the Master and crew, providing a list of the important 

documents, knowledge of which was crucial. 

7. The scheduled time of joining the Vessel was at noon, but owing to the fact that the 

local agent did not have the immigration papers in order, there was a delay and the 


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Master and crew joined the Vessel at 22: 10 hours. The Vessel left the port of 

Bangaloon at 02:00 hours, as per instructions. 

8. The Vessel was bound for the port of Puerto Pamatar, which was experiencing 

difficult weather conditions, causing confused waters and severely reduced visibility 

during heavy and frequent showers. Due to such conditions, it often became difficult 

for the local body, Companie de Maritime to produce accurate sounding charts for the 

river. 

9. There was provision for compulsory pilotage for Vessels approaching this port, and in 

accordance with the same, two pilots boarded the Vessel, one of whom was trying an 

experimental DGPS system for the river. The pilots were well versed with river 

conditions and navigated the Vessel to its berth at Puerto Pamatar safely despite the 

steering problems at the mouth of the passage on the morning of 17 th December. 

10. At the port, cargo operations proceeded quickly, but the Master recommended that the 

Vessel leave the Port only at first light on the 18 th of December. However, due to 

instructions of the port authorities to vacate the berth, in favour of another Vessel, the 

Master was forced to leave the port the same evening, contrary to the Admiralty 

Sailing Directions issued for the port. 

11. At 20:52 hours, on its passage out of the port, the Vessel ran aground at Beacon X-12 

and the Master immediately informed the Charterers of the same, as well as the 

necessary local authorities. 

12. Under the Master‘s directions, ten containers from the upper deck were discharged 

and the Vessel, though listing dangerously at 35 degrees to port, returned to near 

upright and came clear of the sand bank. 


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13. Following this, the Vessel was being navigated at a slow speed to Bocas de Pelotas to 

be anchored and assessed for damages. The Master agreed by VHF to salvage 

assistance on LOF 2000 terms with the tug ―Parthia 41‖. After temporary repairs at 

Banton Bay ship repair facility, Bocas de Pelotas, the Vessel was taken to Calana Dry 

Dock for permanent repairs. 

14. The Vessel was returned to the Charterers on 20 th January 2006 

15. The Charterers, on 19 th December 2005 stated that they declared the Vessel to be on 

an off-hire basis from the date and time of grounding; pursuant to Clause 17 of the 

Charterparty and that they reserve all their rights under the same in all other respects. 

16. On 2 nd January 2006, the Owners declared General Average in connection with the 

grounding of the Vessel and in pursuance of Clause 25 of the Charterparty have asked 

average adjusters Banner Time and Associates of Dublis, Zeland, to conduct the 

average adjustment on their behalf. They informed the Charterers of this on the same 

day. 

17. Following this, on 1 st February 2006, the Owners notified the Charterers that the 

dispute was being referred to arbitration, as the Owners held them responsible for the 

grounding owing to the fact that the port of Puerto Pamatar was an unsafe port at all 

material times. 

18. In pursuance of this, the Owners appointed Mr. Tony Tan as arbitrator, who was a 

member of the panel of arbitrators of the MLAANZ in accordance with Clause 9 of 

the Association‘s rules and Clause 45 of the Charterparty. 

19. In pursuance of the same, the parties proceeded to exchange preliminary submissions. 


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PRELIMINARY QUESTION 

QUESTIONS PRESENTED 

1. DOES THE TRIBUNAL HAVE JURISDICTION TO DECIDE THE PRESENT DISPUTE? 

CLAIMS 

2. WAS PUERTO PAMATAR A SAFE PORT? 

3. WAS THE VESSEL UNSEAWORTHY? 

4. IS THE RESPONDENT LIABLE TO PAY DAMAGES FOR BREACH OF CHARTERPARTY? 


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PLEADINGS AND AUTHORITIES 

I. THE TRIBUNAL HAS JURISDICTION TO DECIDE THE PRESENT 

DISPUTE 

[A] CLAIMANT has the Right to bring the Present Proceedings under the 

Charterparty Agreement 

1. It is submitted that both the CLAIMANT and the RESPONDENT have signed the 

Charterparty dated 20 February 2004, following the NYPE 93 form substantially 

which contemplates ―all disputes arising out of this contract‖ to be arbitrated at 

Brisbane. It follows that either party has the right to bring proceedings before a 

validly constituted arbitral tribunal in accordance with Clause 45 of the Charterparty 

agreement. Thus, the CLAIMANT‘s right to bring proceedings cannot be denied. 

[B] The Arbitrator Appointed cannot be challenged at this stage 

2. Rule 15 of MLAANZ Arbitration Rules empower any Tribunal constituted under the 

Rules to have the same jurisdiction and powers set out in the relevant legislation 

governing the arbitration proceedings. 

(i) ‘Relevant Legislation’ Refers to the International Arbitration Act, 1974 

3. Since the seat of arbitration is in Australia, the lex arbitri or the law of arbitration 1 

applicable is the International Arbitration Act, 1974. Thus the ‗relevant legislation‘ 

referred to in Rule 15 is the International Arbitration Act, 1974. Section 16 of the 

same Act gives the UNCITRAL Model Law on International Commercial 

Arbitration, 1985 (hereinafter referred to as the Model Law) the force of law. 

1 Sutton, D and Gill, J. Russell on Arbitration, (London, UK: Sweet & Maxwell, 22 nd Edition, 2003) pp.68- 

70 


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(ii) Article 13 of the Model Law 

4. The procedure for challenging the appointment of an arbitrator has been given in 

Article 13 of the Model Law. As per its mandate, in the absence of any agreement by 

the parties as to the procedure to challenge the appointment, the appointment can only 

be challenged ―Failing such agreement, a party which intends to challenge an 

arbitrator shall, within fifteen days after becoming aware of the constitution of the 

arbitral tribunal or after becoming aware of any circumstance referred to in article 

12(2), send a written statement of the reasons for the challenge to the arbitral 

tribunal. Unless the challenged arbitrator withdraws from his office or the other 

party agrees to the challenge, the arbitral tribunal shall decide on the challenge.‖ In 

the present case the challenge procedure is provided as regards qualification of the 

Arbitrator only. 

5. It is admitted that the RESPONDENT did object to the appointment of Mr. Tan as the 

arbitrator by a letter addressed to the CLAIMANT dated 8 February, 2006. However 

it is emphasized that there was no ―written statement of the reasons for the challenge‖ 

which was sent to the Arbitral Tribunal within 15 days as per the requirement of the 

Article. The only written explanation to the challenge submitted to the Tribunal was 

in the form of preliminary submissions which were submitted on 26 November 2007. 

Thus a challenge to his appointment under Article 12 (2) grounds cannot be sustained 

as the procedure for challenge as regards impartiality has not been followed. 


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[C] The Tribunal has the Authority to decide its own Jurisdiction under the 

Competence/Competence Principle 

6. Article 16 of the model law 2 empowers the Arbitral Tribunal to rule on its own 

jurisdiction. The Article is nothing but an embodiment of the 

Competence/Competence principle which refers to the inherent power of the Tribunal 

to decide upon its own jurisdiction 3 . Thus, this Tribunal has the power to decide on its 

own jurisdiction. 

[D] The CLAIMANT cannot Establish ‘Bias’, whether ‘Real’ or ‘Apparent’ 

(i) That ‘Real Bias’ is not established in the Present Proceedings 

7. It is contended by the RESPONDENT that Mr. Tan who was associated with the 

CLAIMANT company as a Fleet Manager five years ago would have ‗Real Bias‘ 

However it is submitted that ‗Real‘ or ‗Actual Bias‘ is very hard to establish 4 . 

Establishment of ‗Real Bias‘ would involve proving that orders or actions undertaken 

by the Arbitral Tribunal were prejudicial to the RESPONDENT. Clearly this cannot 

be established in the present case. Mr. Tan is a member of the panel of arbitrators of 

the MLAANZ in addition to being an experienced commercial arbitrator. He has been 

detached from the CLAIMANT‘s business for over 5 years by the time of this 

hearing. Thus Real Bias is not established in the present proceedings. 

(ii) That the Arbitrator does not Fall Into any of the Categories of Disqualification 

2 

International Arbitration Act, 1974 is the lex arbitri as per 4 of the submissions. 

3 

See Redfern, Alan & Hunter, Martin, Law And Practice of International Commercial Arbitration, 

(London, Sweet & Maxwell Publishers, 4 th 

ed., 2004) pp. 252-253. 

4 nd 

See Sutton, D and Gill, J. Russell on Arbitration, (London, Sweet & Maxwell, 22 Edition, 2003) 

pp.106-107. 


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8. The High Court of Australia has broadly outlined four situations under which a judge 

could be disqualified which include interest, conduct, association and extraneous 

information. 5 It has also been held by the High Court that arbitrators are subject to the 

same standards as a judge. 6 

9. As far as a contention based on ‗interest‘ goes, whether pecuniary or otherwise, it is 

submitted that the relationship between Mr. Tan and the CLAIMANT has long ceased 

to exist. In fact at the time of hearing, more than five years would have gone by. Thus 

following the reasoning given in Rusal Trading 7 where even a time period of two 

years was considered a significant lapse of time, it will be unreasonable of the 

CLAIMANT to raise an objection to Mr. Tan‘s appointment. 

(iii) That Apprehended Bias is not established 

10. In their joint judgment in the case of Ebner v. Official Trustee in Bankruptcy 8 , 

Gleeson CJ, McHugh, Gummow and Hayne JJ said that the applicable principle 

requires two steps, ―First, it requires the identification of what it is said might lead a 

judge (or juror) to decide a case other than on its legal and factual merits. The 

second step is no less important. There must be an articulation of the logical 

connection between the matter and the feared deviation from the course of deciding 

the case on its merits. The bare assertion that a judge (or juror) has an 'interest' in 

litigation, or an interest in a party to it, will be of no assistance until the nature of the 

interest, and the asserted connection with the possibility of departure from impartial 

5 Webb & Hay v. The Queen [1994] HCA 30. 

6 As per Kirby J. in Smits v. Roach [2006] HCA 36. 

7 Rustal Trading Ltd. v. Gills & Duffus SA [2000] 1 Lloyd‘s Rep 14. 

8 Ebner v. Official Trustee in Bankruptcy [2000] HCA 63, (2000)176 ALR 644. 


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decision making, is articulated. Only then can the reasonableness of the asserted 

apprehension of bias be assessed.‖ 9 

11. The RESPONDENT has never identified the factor that would lead to bias and 

neither has there been an articulation of any logical connection between the matter 

and the feared deviation. Therefore there bare assertion of ‗real or apprehended bias‘ 

fails. 

12. It is further contended that the ‗Interest‘ if at all that Mr. Tan has is ‗de minimis’ 10 in 

nature and such that there can be no reasonable nexus between it and the dispute. 

Upon a similar issue being raised in the case of AT & T v. Saudi Cable Company 11 , 

such a far-fetched relationship was dismissed. 

13. The reasonable apprehension test of bias 12 has thus not been satisfied. It is further 

submitted that an arbitrator is not subject to disqualification merely on the grounds of 

presumptive bias. 13 

[E] Rule 14 is neither Offended nor Rendered Impossible. 

14. Rule 14 of the MLAANZ Arbitration Rules direct that an arbitrator shall act 

impartially and in such a manner that the objects of the Rules 14 are fulfilled. The 

proceedings have not gone beyond the preliminary meeting and therefore there has 

been no act done by the Tribunal that offends the operation of Rule 14. It is submitted 

9 

Ibid at 8. 

10 

Smits v. Roach [2006] HCA 36 at 105 & 116. 

11 

AT & T Corporation & Another v. Saudi Cable Company [2000] 2 Lloyd‘s Rep 127 

12 

Sea Containers Ltd v. ICT Pty. Ltd. [2002] NSWCA 84; Johnson v. Johnson (2000) 201 CLR 488; 

Aussie Airlines Pty Limited v. Australian Airlines Pty Ltd and Another, 1996 WL 1745231 (FCA), 135 

ALR 753. Also see Matthew Gearing, ―A Judge in His Own Cause?‖ - Actual or Unconscious Bias of 

Arbitrators, Int. A.L.R. 2000, 3(2), 46-51. 

13 

See Member of Board of Directors Designated by Corporation as Partisan Arbitrator Not Subject to 

Disqualification on Ground of Presumptive Bias, February, 1963, Colum. L. Rev. 374. 

14 

Rule 1 of the MLAANZ Arbitration Rules 2007 is ―The object of these Rules is to provide a dispute 

resolution procedure which is expeditious, flexible and cost effective.‖ 

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MEMORANDUM FOR THE CLAIMANT

that Mr. Tan being an experienced commercial arbitrator is well-aware of his duties 

of impartiality and has knowingly agreed to arbitrate in the present dispute. In such 

cases appointment is favoured. 15 

15. As already proved before in 8-14 there is no case established for bias whether real 

or apparent and hence Rule 14 of the MLAANZ Arbitration Rules is neither offended 

nor rendered impossible to perform. In fact the object of an expeditious dispute 

resolution is defeated by the RESPONDENT through raising such objections at an 

improper stage in the proceedings. 

[F] Disclosures made by Mr. Tan refute any Allegations of Lack of Good Faith 

16. Article 12 of the Model Law mandates disclosures of any facts that may give rise to 

‗justifiable doubts to his impartiality or independence‘ 16 by the Arbitrator appointed. 

It is axiomatic from the facts itself that the RESPONDENT was well-aware of the 

relationship shared between the CLAIMANT and Mr. Tan as the RESPONDENT 

objected to his appointment within a week in the letter dated 8 February, 2006. 

17. Further, in the Preliminary Meeting held on February 2, 2009, disclosures were made 

by Mr. Tan as regards his ‗financial interests‘ in the CLAIMANT Company as well 

as of the fact that his wife held shares in a family trust of which he was not a 

beneficiary. It is therefore asserted that no bad faith can be attributed to Mr. Tan‘s 

appointment as he had made the relevant disclosures. 

[G] Three-member Panel 

18. It is submitted that the arbitration clause gives each of the parties the unequivocal 

right to appoint an arbitrator who is a member of the MLAANZ panel of arbitrators. 

15 AT & T Corporation & Another v. Saudi Cable Company [2000] 2 Lloyd‘s Rep 127 

16 Article 12 (1) of UNCITRAL Model Law on International Commercial Arbitration (1985) 


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Thus, both parties have the right to appoint what can be termed as ‗predisposed but 

ultimately impartial‘ arbitrators 17 . There is a chairman who completes this three- 

member panel which also consists of a chairman. This composition of the arbitral 

tribunal insures that it is impartial and unbiased while resolving a dispute. 

II. THE CHARTERER IS LIABLE AS PUERTO PAMATAR WAS AN UNSAFE 

PORT 

[A] Obligation of the Charterer to Nominate a Safe Port 

19. As per clause 12 of the Charterparty, the Charterer was under an obligation to direct 

the Vessel to a port where it could safely lie and depart always afloat. This clause is 

one of strict liability as the Charterer has a non-delegable duty to provide a safe 

berth. 18 It is the submission of the claimants that the Charterer is in breach of this 

clause. 

20. The nomination of a port by the Owners does not affect the warranty about the safe 

port in any manner as observed in Motor Oil Hellas (Corinth) Refineries. A. v. 

Shipping Corporation of India (The "Kanchenjunga"), 19 by Hobhouse J., that the 

order to proceed to the nominated port does not deprive the ship-Owners of any of 

their rights. Such an order does not mean that the Owners have been obligated to elect 

the port. Mere compliance does not amount to any election 20 . 

21. Further at every point of time the Owners can not be put under the heavy burden of 

ensuring the safety and characteristics of the port after the nomination is made. As 

17 See Partasides, Constantine The Selection, Appointment and Challenge of Arbitrators, 2001, 5 VJ 217 

18 Venore Transp. Co. v. Oswego Shipping Corp., 498 F.2d 469, 472- 73 (2d Cir. 1974) 

19 [1987] 2 Lloyd‘s Rep. 509 

20 ibid at pg. 516, col. 1 


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stated by Dixon C.J (dissenting) in Reardon Smith Line, Ltd. v. Australian Wheat 

Board 21 , if each time a party performing his part of the contract is obligated to ensure 

that the other party to the contract has also performed his part properly, it shall render 

performance of the contract in the commercial world very difficult. 22 

[B] Meaning of a Safe Port 

22. The term ―safe port‖ is ―a place will not be safe unless in the relevant period of time 

the particular ship can reach it, remain in it, and return from it, without, in the 

absence of some abnormal occurrence, being exposed to danger.‖ 23 Safety or 

unsafety of a port must be assessed in regard to the actual Vessel which has been 

chartered to use the port, taking into account reasonably foreseeable changes in the 

circumstances 24 . The period for consideration is at least the whole period of the 

Vessel's use of the port and may take account of dangers likely to be incurred on the 

voyage to the port 25 . 

23. A port which is safe only in fair weather can not be called safe 26 . Four important facts 

are needed to be considered in every case regarding safe port 27 : (a) the port itself; (b) 

the access to the port; (c) the dangers of the voyage; and (d) the size, nature, draft and 

general circumstances of the ship itself when laden. 

21 

[1954] 2 Lloyd's Rep. 148 (High Court of Australia) 

22 

Later approved by Privy Council, as majority decision of High Court of Australia was reversed 

23 

Leeds Shipping Co v Societe Francaise Bunge SA (The Eastern City), [1958] 2 Lloyd‘s Rep 127. 

Affirmed in AIC Ltd. v. Marine Pilot Ltd (The Archimidis), [2008] 1 Lloyd‘s Rep. 597 (CA) (at pg. 603, 

para 22) 

24 

Roche J. in Bostrom v. Dreyfus (1932) LLR 136 

25 

Johnston Brothers v. Saxon Queen Steamship Company, (1913) 108 L.T. 564. (at Pg. 131, The Eastern 

City) 

26 

Vardinoyannis v. Egyptian General Petroleum Corporation (The Evaggelos TH.) [1971] 2 Lloyd's Rep. 

200. (Donaldson J. at pg. 206). 

27 

Robert Dollar Co. v. Blood, Holman & Co., Ltd., [1920] 4 Lloyd's List L. Rep. 343, 346 

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24. The critical time for assessing the conditions of unsafety is the time of nomination. 

The time to test whether there is a good or bad nomination is the date when it is 

given, viewing the probabilities and contingencies from that date 28 . 

[C] Characteristics and Factors to Determine Safety 

25. Characteristics of the port which need to be taken into account for determining its 

safety have often been a matter of consideration for Courts. In The Polyglory 29 the 

Court observed marine dangers are frequently minimized by lights, buoys, signals, 

warnings and other aids to navigation, and their availability determines the safety of 

the port. In words of Lord Denning, M.R. ―In order to be a "safe port", there must be 

buoys to mark the channel, lights to point the way, pilots available to steer, a system 

to forecast the weather, good places to drop anchor, sufficient room to manoeuvre, 

sound berths, and so forth.‖ 30 . If a ship needs to be lightened for the purpose of 

floating or to safely proceed in sea, the port is unsafe for the ship 31 . 

[D] Puerto Pamatar was an Unsafe Port 

(i) Characteristics of the port at the time of nomination are unsafe 

26. Puerto Pamatar was an unsafe port at all material times. The port was nominated on 

27 th October, 2005. The port was subject to tides of irregular nature of the range of 

0.6 meter. Further, between November and April, there was a probability of strong 

wind as provided in the Admiralty Directions 32 . Although Companie De Maritime 

was engaged to record the river soundings, ongoing technical difficulties prevailed. 

28 

Reardon Smith Line Ltd. v. Australian Wheat Board, [1956] 2 W.L.R. 403 

29 

[1977] 2 Lloyd‘s Rep. 353 

30 

Kodros Shipping Corporation of Monrovia v. Empresa Qubana De Fletes (The Evia No 2), [1982] 1 

Lloyd's Rep. 334 at p. 338 

31 

The Archimidis, [2008] 1 Lloyd‘s Rep 597 (CA) 

32 

Page 44, Proposition 

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The weather at the port did not allow accurate readings. The pilots were depending on 

these readings and the Charterers should have been aware of this. It only goes to show 

that the port was unsafe for the Vessel from the time of nomination itself. 

(ii) Secondary Obligation of the Charterers and their non-fulfillment 

27. The Respondent had a secondary obligation to change the order of nomination if 

subsequently the port becomes unsafe. In case of time charters, a secondary 

obligation arises on part of the Charterers if subsequent to the first nomination of the 

port, conditions of unsafety occur therein. It was observed by the House of Lords in 

The Evia (No. 2) 33 that there may be circumstances in which, by reason of a port, 

which was prospectively safe when the order to go to it was given, subsequently 

becoming unsafe, there is a secondary obligation on the Charterer when the Vessel is 

still proceeding towards the port, to cancel his original order, or when the Vessel is 

already in the port, to order her to leave if it is still possible for her to do so 34 . 

28. The sounding survey results, regularly provided by the Companie De Maritime, 

should have been taken into account by the Charterers, while considering the issue of 

safety of port. The results showed that the depth of the river, between Bocas de 

Pelotas and Puerto Pamatar, was subject to high variations, particularly at Beacon ‗X- 

12‘ 35 , where the depth was continuously decreasing 36 . Moreover, the Harbour Master 

Notice issued on 1 st December, 2005, stated that the maximum draft for Vessels 

33 

[1982] 2 Lloyd's Rep. 307 (H.L.) 

34 

The Lucille, [1984] 1 Lloyd's Rep. 244 (C.A.); Also Gauci G., Risk Allocation in the Charterparty 

Relationship: An Analysis of English Caselaw Relating To Cargo and Trading Restrictions, 28 Journal of 

Maritime Law and Commerce 629. 

35 

A point situated between Bocas de Pelotas to Puerto Pamatar, from where the Vessel has to necessarily 

pass. 

36 th th th 

In the soundings taken on dates 12 , 14 and 16 December (at all these times it was possible to give a 

new nomination avoiding the unsafe port) the depths at Beacon ‗X-12‘ were 31, 30 and 29 ft. respectively. 

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transiting the lower Río Magdem was 8.5 m. While leaving the port of Bangloon, the 

aft draft of the Vessel was 8.26 meters (8.48 after adding the squat, 27.8 ft), making 

the port and the passage unsafe, risky and highly hazardous for the Vessel. 

29. The weather forecast report published by Granland Times on 12 th December showed 

that for the coming week (the week during which the Vessel was to use the port), the 

area was going to be under the influence of a high pressure ridge. Heavy and frequent 

showers were expected, resulting in poor visibility. The Master had informed the 

Charterer of the passage at the mouth of the river being hampered as a result of 

confused waters due to which the Vessel experienced steering difficulties. 

30. These factors were sufficient to denote that the port was not safe for a Vessel of the 

size of the ―Ocean Express‖, thereby imposing an obligation upon the Charterers to 

order the Master not to enter the port or leave immediately which was not fulfilled. 

[E] Nature of Warranty is Absolute 

31. The Charterparty imposes an absolute liability on the Charterers for nomination of 

safe port which is not limited to the mere exercise of due diligence (Reasonable 

Foreseeability Approach) 37 . In The Saga Cob 38 the concept of reasonable 

foreseeability was used to determine the liability of the Charterers, but the contractual 

obligation on the Charterers was qualified by the expression ―due diligence‖ in the 

Charterparty. Therefore, this qualification diluted the liability. 

37 In a contractual setting, a strict and absolute standard is not alien to the law. For example, at common 

law, it is an absolute duty of the ship-Owner to provide a seaworthy Vessel for the carriage of goods. Steel 

v. State Line Steamship Co. (1877) 3 App. Cas. 72; Hedley v. Pinkney S.S. Co. [1894] A.C. 222 at 227 and 

"The Glenfruin" (1885) 10 P.D. 103. 

38 [1991] 2 Lloyd's Rep. 398. See also Pearl Carriers Inc. v. Japan Line Ltd (―The Chemical Venture‖) 

[1993] 1 Lloyd‘s Rep. 508 


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32. Sir Owen Dixon C.J. stated, in Australian Wheat Board v. Reardon Smith Line Ltd 39 ., 

―When the charter limits the choice to safe ports or safe berths the purpose is to 

impose upon the Charterer the necessity of doing in the interest of the ship what the 

ship-Owner would have done if the Charterer had been prepared to nominate to him 

a port of loading or discharge at the time of proposing the charter, namely avoiding 

an unsafe port .... If the safety of the port is in doubt, it seems better to suppose that 

the Charterer must bear the responsibility of his choice, if it is a wrong one.‖ 

33. Thus, the Charterers' contractual promise that the chartered ship will be employed 

between good and safe ports is a strict contractual duty 40 . This contractual promise 

imposes a strict duty and is not fulfilled by the Charterers' use of due diligence. 

However, a modification of the strict contractual duty may be achieved by the use of 

appropriate express contractual provisions as was done in "The Saga Cob" 41 and "The 

Product Star" (No. 2)‖ 42 . 

[F] Master Acted with Due Diligence 

(i) Liability only Subject to Novus Actus Interveniens 

34. If the Charterer breaches his duty of nominating a safe port, due to which the vessel is 

damaged, the Charterer is liable to indemnify the Owners, subject to novus actus 

interveniens (an intervening act, such as Master‘s negligence) 43 . Thus, the Charterer 

39 

[1954] 2 Lloyd's Rep. 148. 

40 

Sian, David C.G., Revisiting the Safe Port , 1992 Sing. J. Legal Stud. 79 

41 

[1991] 2 Lloyd's Rep. 398 

42 

[1991] 2 Lloyd's Rep. 468 

43 

Reardon Smith Line Ltd. v. Australian Wheat Board, [1956] 2 W.L.R. 403 


16 | P a g e

is liable if it exposes the vessel to such dangers that cannot be avoided with the 

exercise of reasonable care and skill 44 . 

(ii) Due Diligence 

35. The exercise of due diligence is equivalent to the exercise of reasonable care and 

skill. 45 The fact that it is possible to take extra precautions does not mean that due 

diligence was not exercised. 46 One mistake or even more than one mistake does not 

necessarily render the Master incompetent. 47 Thus, the mistakes of the Master should 

be substantial enough to have caused the damage. 

(iii) Master acted with Reasonable Care and Skill 

36. The Master duly sent the required updates to the Charterers, measured the draft and 

kept himself updated with the chart of the river. He also conveyed the difficulties of 

the port to the Charterers beyond which it would become a matter of employment and 

the Charterers would direct them to leave the port. He had, in fact, recommended 

daylight departure on basis of information gathered with regard to the weather. 

37. There was no additional care or skill that the Master needed to exercise to avoid the 

grounding. He exercised his duty of navigation 48 to a reasonable extent beyond which 

he was dependant on the local pilots‘ knowledge while navigating as they were in a 

44 

Grace (G. W.) & Co. Ltd. v. General Steam Navigation Ltd., (1950) 83 Ll.L.Rep. 297 (at pg. 363), As a 

matter of law, a tribunal of fact which had to determine whether a port was safe or not should in general be 

… exposed were dangers which could be avoided by the exercise of ordinary reasonable care and skill, that 

port was not unsafe and the order to proceed to it was not a breach. 

45 

The Amstelslot,[1963] 2 Lloyd‘s Rep. 223 at p. 235 

46 

Papera Traders Co. Ltd. v. Hyundai Merchant Marine Co. Ltd. (The "Eurasian Dream"), [2002] EWHC 

118 (Comm) 

47 

The Star Sea, [1997] 1 Lloyd‘s Rep. 360 at pp. 373-374 

48 

Newa Line v. Erechthion Shipping Co. S.A. (The Erechthion), [1987] 2 Lloyd‘s Rep. 180 at p. 185, 

Taking the advice of the pilot… is "navigation". 

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etter position to understand the conditions of the port and the likelihood of the 

Vessel remaining afloat. 

(iv) Dependence on Local Pilots 

38. In the The "Torepo" 49 , the Master was not held to be rendered inefficient or 

incompetent merely because he failed to identify the defects in a plan prepared by the 

local pilot for transit through difficult waters. The Master should have had enough 

reason to believe that the pilot was not competent to perform his function 50 . By 

depending on the local pilot, the Master acted reasonably as there was no indication 

of their incompetence. The plan was prepared by the pilots, who regularly took 

vessels through the route, and not the Master. 

39. Therefore, in the absence of any unreasonable act or omission on the part of the 

Master, he can be said to have exercised due diligence. 

III. THE VESSEL WAS SEAWORTHY 

40. As opposed to paragraph 22 of the respondent‘s reply the damage to the Vessel was 

not caused due to the unseaworthiness. 

[A] Meaning of Seaworthiness 

41. A seaworthy ship has been defined as properly equipped and sufficiently strong and 

tight to resist the perils reasonably incident to the voyage 51 . Section 45(4) of the 

Marine Insurance Act, 1909 defines it in similar terms. 

49 

[2002] EWHC 1481 (Admlty) 

50 

ibid 

51 th 

Garner, Bryan A. (edt.), Black’s Law Dictionary, (New York, West Publishing Co., 8 edn., 2004) p. 

1380 


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42. Unseaworthiness of the Vessel is a question of fact to be determined in each case. Not 

every defect that requires repair makes a Vessel unseaworthy. Vessel is presumed to 

be unseaworthy only when ‗there is something about it which endangers the safety of 

the Vessel or its cargo or which might cause significant damage to its cargo‘ 52 . 

[B] Vessel was not Unseaworthy 

43. As opposed to the contention of the respondents, the Vessel was, in fact, seaworthy. 

There was no structural or functioning defect in the Vessel which would expose it to 

the perils of the sea. Further, the mere fact, that at the time of taking charge of the 

Vessel, the Master and the joining crew had little time to discuss the operation with 

the departing crew, is not indicative of incompetence, unfamiliarity or inefficiency of 

any kind. At all material times, Master showed complete skills in handling the Vessel. 

[C] Unseaworthiness was not the Cause of the Grounding 

44. The unseaworthiness should be such as to break the chain of causation making the 

damage a consequence of the same, and not one of the Charterer‘s breach of their 

obligation 53 . The Owners can only be held liable if the navigation and handling was 

negligent enough to cause the occurrence resulting in damage 54 . Therefore, even if it 

is assumed that the Vessel was unseaworthy because of the unfamiliarity of the 

Master with documents and handling of the Vessel, such unseaworthiness was not the 

cause of the damage or the danger to which the Vessel was exposed. The only cause 

for the damage to the Vessel was the unsafe port of Puerto Pamatar which was not at 

52 Athenian Tankers Management SA v Pyrena Shipping Inc (The Arianna) [1987] 2 Ll L R 376. [c.f. – 

Pretty, Nicola S., Unseaworthiness — Turning A Blind Eye?, (2008) 22 A&NZ Mar LJ 42]. 

53 The Lucille, [1984] 1 Lloyd's Rep. 244 (C.A.) 

54 Leeds Shipping Co. Ltd. v. Society Francaise Bunge(The Eastern City ), [1958] 2 Lloyd‘s Rep. 127 at 

131 


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all suitable for Vessels like ―Ocean Express‖. Any additional skill on part of the 

Master could not have avoided the damage in such situation. 

[D] Acts of the Master would fall under the exception of Error of Navigation 

45. According to clause 21 of the Charterparty, errors of navigation are mutually 

excepted. The Court in The “Hill Harmony” 55 stated that, while the Vessel is at the 

berth, the Master‘s decision as to the whether the Vessel‘s draft would permit a safe 

departure during a certain state of tide, assuming that the damage was caused due to 

this decision, would fall under the exception of ‗error of navigation‘. Thus, even then 

the Owner cannot be held liable for the loss. In the present case, even if it is assumed 

that the Master made a mistake when he thought that the Vessel‘s draft would allow a 

safe departure, it would only constitute an error of navigation which is mutually 

excepted by the Charterparty. 

IV THE RESPONDENT IS LIABLE TO PAY DAMAGES TO CLAIMANT FOR 

BREACH OF CHARTERPARTY. 

[A] Damages due to Breach of Charterparty 

(i) Breach of Charterparty 

49. It is asserted that because of the RESPONDENT‘s breach of the Charterparty the 

CLAIMANT have suffered loss and damage and this is claimed by the CLAIMANT 

from the RESPONDENT as damages. The ordinary law of contract applies to a 

charter-party, and even if the Charterers nominate a place which was unsafe, the 

Owners may accept such nomination, reserving their right to claim damages for 

55 Whistler International Ltd. v. Kawasaki Kisen Kaisha Ltd. (The “Hill Harmony”) [2001] 1 Lloyd‘s Rep. 

147 


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each of their obligation to nominate a safe port. 56 In the present matter, the 

RESPONDENT nominated an unsafe port, contrary to the Charterparty hence, they 

are liable to pay damages for breach of the warranty. 

(ii) Implied Right to be Indemnified 

50. It is submitted that although, there is no express clause in the Charterparty providing 

for damages in case of breach, there is an implied right to the Owners to be 

indemnified against the consequences of complying with the Charterer‘s orders. 57 In 

the present matter thus, even though there is no express provision for damages for 

breach of Charterparty, the CLAIMANTS have an implied right to be indemnified by 

the RESPONDENT for the same. 

(iii) Principle for Damages 

51. It is submitted that the underlying principle behind awarding damages to the 

aggrieved party is founded upon the principle of restitution in integrum, which seeks 

to put the aggrieved person in the same situation he would have been in, had the 

contract been performed as anticipated. 58 In the present matter, as per the 

Charterparty the vessel was to be in full operational condition with the 

RESPONDENTS for a period of 5 years within the agreed trading limits. Due to the 

grounding of the vessel, the same was not possible. Hence, the CLAIMANT should 

be awarded damages for all the expenses and/or losses incurred by them due to the 

56 

Compania Naviera Maropan S/A v. Bowater's Lloyd Pulp and Paper Mills, Ltd. [1955] vol. 1 Lloyds 

Law Reports 349 

57 

Triad Chipping Co. v. Stellar Chartering & Brokerage inc. (The "Island Archon") [1994] vol. 2 Lloyd's 

Law Reports 227 

58 

Robinson v. Harman (1848) 1 Ex. 850, at p. 855 

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grounding of the vessel so as to bring him to the position as if the Charterparty had 

been performed as anticipated. 

(iv) Damages and/or an Indemnity 

52. The RESPONDENT is liable to pay damages or indemnify the CLAIMANT for all 

expenses incurred by them due to the grounding of the vessel. The CLAIMANTS 

have paid US $4.8 million as salvage costs and expenses to AMCO Maritime LLC. 59 

Further, the CLAIMANTS have incurred expenses on account of repairs; firstly, US 

$620,007.52 to Banton Bay Repair Facility for temporary repairs 60 and finally, US 

$7,567,493.23 to Calana Dry-Dock for permanent repairs of the vessel. 61 On the 

whole, the RESPONDENT is liable to pay USD $12,429,500.75 on account of 

indemnity or damages for the expenses incurred by the CLAIAMANT. 

(v) Not Off Hire 

53. The vessel was wrongfully treated as off-hire by the RESPONDENT for 33.633 days 

following the grounding. Clause 17 of the Charterparty reads, “In the event of loss of 

time from deficiency and/or default and/or strike of officers or crew, or deficiency of 

stores, fire, breakdown of, or damages to hull, machinery or equipment, grounding, 

detention by the arrest of the Vessel, (unless such arrest is caused by events for 

which the Charterers, their servants, agents or subcontractors are responsible), or 

detention by average accidents to the Vessel… by any other similar cause preventing 

59 Page 74, Proposition 




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the full working of the Vessel, the payment of hire and overtime, if any, shall cease for 

the time thereby lost….” 

54. It was laid down in Santa Martha Baay Scheepvart & Handelsmaatschappij N.V. v. 

Scanbulk A/S 62 that where the cause of delay flows naturally from compliance with 

the Charterer‘s orders, it will fall outside the scope of the off-hire clause. Also, as a 

matter of law, if the Charterers are allowed to put the Vessel off-hire because of the 

damage caused to it as a result of their own fault, it would defeat the natural principle 

that, ―a man cannot take advantage of his own wrong‖. 63 Although, unseaworthiness 

is contended by the RESPONDENT, this alone cannot be accepted as a ground to 

bring it under the off-hire clause. 64 The delay was caused due to the grounding of the 

Vessel, which was a consequence of the RESPONDENT‘S orders to proceed to an 

unsafe port as has been established earlier. Hence, there remains due an outstanding 

balance of hire in the amount of US $390,142.80 (US $11,600 * 33.633 days) by the 

RESPONDENT. 

[B] General Average 

55. The CLAIMANT is entitled to a contribution in adjustment of the General Average. 

56. The relevant rules for adjusting the General Average are the York-Antwerp Rules, 

1974 with the amendments made in 1990; only as opposed to the revised rules of 

1994 and 2004 as the 1974 Rules have been chosen by the parties expressly 65 . The 

62 (The “RIJN”) [1981] 2 Lloyd's Rep.267 (per Mustill J, at p.272) 

63 Lensen Shipping Ltd. v. Anglo-Soviet Shipping Co., Ltd. [1935] 52 Lloyds Law Reports 341 

64 Nitrate Corporation of Chile Ltd. v. Pansuiza Compania de Navegación S.A. (The Hermosa), (C.A.) 

[1982] 1 Lloyd‘s Rep. 570 

65 Clause 25 of the Charterparty 


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phrase ―any subsequent modification thereof‖ is not to be misinterpreted to mean the 

1994 Rules or the 2004 Rules as those are considered to be separate codes 66 . 

57. Reading the York-Antwerp Rules 1974 along with the New Jason 67 clause present in 

the Charterparty agreement itself 68 , it is clear that the CLAIMANT can seek the 

adjustment so sought, as it has already been proved that the vessel was seaworthy 69 . 

In fact, as long as the Owner or the CLAIMANT had exercised due diligence to make 

the vessel seaworthy prior to the voyage, his claim will succeed 70 . 

[C] Interest 

58. The CLAIMANT claims interest pursuant to Section 25 of the International 

Arbitration Act 1974, on such sums as are found due to it, for such period(s) and at 

such rates(s) as the Tribunal thinks fit. 

66 

See the Opinion of BIMCO and CMI in Special Circular No. 1, July 2007, General Average: Revision of 

York-Antwerp Rules, Issued by the Documentary Department of BIMCO, available at 

http://www.bimco.org/~/media/2CE55A7CB0AC42B3ABB9EFAFB0CC9E64.ashx, last visited on 27 

24 | P a g e 


th 

April, 2009. 

67 

See Flint v. Christall (The Irrawaddy), 171 U.S. 187 (1898); The Jason, 225 U.S. 32 (1912); Prof. 

William Tetley, Q.C., General Average Now and in the Future, Liber Amicorum R. Roland, Larcier, 

Brussels, 2003 at pp. 419-450. 

68 

Clause 31 (c) 

69 

40-43 

70 

Deutsche Shell Tanker Gesellschaft v. Placid Refining Co., 1993 AMC 2141 at p. 2143 (5 Cir. 1993); 

Folger Coffee Company v. Olivebank, 2000 AMC 844 at p. 847 (5 Cir. 2000).

PRAYER FOR RELIEF 

In light of the submissions above the Claimant requests this Tribunal to: 

DECLARE that the Tribunal has the jurisdiction to hear the dispute 

ADJUDGE that the Respondent is liable- 

a) To the Claimant for breach of the Charterparty; 

b) To indemnify the Claimant for liabilities incurred due to the Respondent‘s breach; 

And require the respondent to compensate the claimant in full for US $ 12,429,500.75 

And therefore AWARD the Claimant 

a) Damages; 

b) Balance of hire in the amount of US $ 390,142.80; 

b) The aforesaid Interest; and 

c) Costs 

Alternatively, 

DIRECT the respondent to contribute in general average. 


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