17th INTERNATIONAL MARITIME LAW ARBITRATION MOOT

JULY 2016

IN THE MATTER OF AN ARBITRATION HELD IN EXETER

CLAIMANT RESPONDENT
ZEUS SHIPPING AND HESTIA
TRADING COMPANY INDUSTRIES
_______________________________________________________

MEMORANDUM FOR THE CLAIMANT

TEAM NO. 18

Bernard Chiew Chia Shern

Kavita Gopalan
Marco Isidor Tan Kee Keat
Tan Tong Hwa
 TABLE OF CONTENTS

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

A. THE PARTIES.................................................................................................. 1
B. THE CHARTERPARTY................................................................................... 1
C. CRITICAL FACTS TO THE DISPUTE............................................................ 1
II. SUMMARY OF THE ISSUES ................................................................................ 4
III. PRELIMINARY ISSUE OF JURISDICTION ...................................................... 5
A. This Arbitral Tribunal Has Jurisdiction to Hear the Claims................................ 5
i. This Tribunal is Competent to Rule on Its Own Jurisdiction .............................. 5
ii. The Law Governing the Agreement to Arbitrate is English Law .................... 5
IV. SUBSTANTIVE CLAIMS ................................................................................... 9
A. The Charterparty Has Not Been Frustrated. ....................................................... 9
i. The Delay Has Not Caused the Contractual Obligations to Be Radically Different
...9
ii. Delay Is Not Sufficiently Grave to Frustrate A Contract. ............................. 10
iii. The Force Majeure Clause Can Be Raised. .................................................. 11
B. The Respondent Is Liable to The Claimant For Demurrage. ............................ 12
i. The Vessel Had Not Left The Loading Place When The Laytime Expired and
The Demurrage Accrued. ....................................................................................... 13
ii. The Respondent Took No Steps to Avoid the Delay Even Though the Detention
Was Caused by The Respondents Cargo. .............................................................. 14
iii. The Circumstances in This Dispute Is Not a Circumstance under Interruptions
to Laytime nor A Fault of the Claimant. ............................................................... 15
iv. Demurrage Has Accrued For 358 Days, Totaling USD$17.9m. .................... 16
C. The Respondent Is Not Entitled To A Salvage Reward. ................................... 16
i. The Salvage Services Were Not Voluntarily Provided. .................................... 17
ii. The Vessel Was Not In Apprehended Danger. ............................................. 18
V. PRAYER FOR RELIEF ........................................................................................ 20

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 TABLE OF AUTHORITIES

Statutes

Australian Navigation Act 1912 .................................................................................... 16

Treaties

International Convention on Salvage, 1989.................................................................... 16

United Nations Convention on the Law of the Sea ......................................................... 15

Cases

Bank Line v. Arthur Capel [1919] AC 435 .................................................................... 10

Budgett & Co v Binnington & Co [1891] 1 QB 35 ........................................................ 12
Compania Crystal de Vapores v Herman & Mohatta (India), Ltd (The Maria G) [1958]
1 Lloyd's Rep. 616 ..................................................................................................... 15
Davis Contractors Ltd v Fareham UDC [1956] AC 696 ................................................... 9
Fili Shipping Co Ltd v Premium Nafta Products Ltd (on appeal from Fiona Trust and
Holding Corpn v Privalov) [2007] UKHL 40. .............................................................. 5
Fiona Trust & Holding Corporation & Ors v Privalov & Ors [2007] EWCA Civ 20; [2008]
1 Lloyds Rep. 254. ..................................................................................................... 5
Gem Shipping Co. of Monrovia v Babanaft (Lebanon) S.A.R.L. (The Fontevivo) [1975]
1 Lloyd's Rep. 339 ..................................................................................................... 15
Novologistics SARL v Five Ocean Corporation (The Merida) [2009] EWC 3046 (Comm),
[2010] 1 Lloyds Rep. 274 ......................................................................................... 13
Owners of Spanish Steamship Sebastian v Sociedad Altos Hornos de Vizcaya (the
Sebastian) (1919) 1 Lloyd's List Law Reports 500.................................................. 14
Pioneer Shipping Ltd v B.T.P. Tioxide Ltd (The Nema) [1982] AC 724 .......................... 9
Sailing-ship Garston Co. v Hickie & Co. (1885) 15 Q.B.D. 580 ................................. 13
Sulamrica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others
[2012] EWCA Civ 638 ................................................................................................ 6

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The Sava Star [1995] 2 Llyods Law Reports 134 ....................................................... 17
The Charlotte (1843) 3 Wm. Rob. 68 ............................................................................. 18
The Eugenia [1964] 2 QB 226 ....................................................................................... 10
The Glaucus (1948) 81 Lloyds Rep. 262 ...................................................................... 17
The Hamtun [1999] 1 Lloyd's Rep. 883 ......................................................................... 18
The Homewood (1928) 31 Lll Rep 336 ......................................................................... 19
The Jubilee (1879) 4 Asp. 275 ....................................................................................... 17
The Neptune (1824) 1 Hagg 227 .................................................................................... 17
The Princess Alice (1849) 3 W. Rob. 138 ................................................................ 16, 17
The Strathnaver (1875) 1 App. Cas. 58 .......................................................................... 17
The Troilus [1951] A.C. 820 ......................................................................................... 19

Statutes

Australian Navigation Act 1912 .................................................................................... 16

Books and Journals

Black, H.C. (1999). Blacks Law Dictionary, 7th Edi. St. Paul Minn: West Publishing Co.
.................................................................................................................................. 10
Boyd.S, Burros.A, Foxton.D. (2002). Scrutton on Charterparties and Bills of Lading. 20th
Edi. London: Sweet and Maxwell. ............................................................................. 11
Butterworths Australian Legal Dictionary. (1997). Sydney: Butterworths ...................... 10
Cooke.J, Young.T, Taylor.A, Kimball.J, Martowski.D, Lambert.L.Voyage
Charterparties.(2001). 2nd Edition. London: Llyods Shipping Law Library ................ 9
Kennedy, W.R. (1985). Kennedys Law of Salvage, 5th Edi. London: Stevens & Sons . 18

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 LIST OF ABBREVIATIONS

s. Section

Paragraph

Art Article

B/L Bill of Lading

CIF Cost, Insurance and Freight

Claimant Zeus Shipping and Trading Company / Shipowner

FOSFA Federation of Oils, Seeds and Fats Associations

HLNG LNG produced from Hades Shale Gas

HVR/Rules Protocol to Amend the International Convention for the Unification

of Certain Rules of Law Relating to Bills of Lading (Hague-Visby

Rules)(Brussels 1968)

Lloyds Rep. Lloyds Law Reports.

LNG Liquefied Natural Gas

Moot Scenario IMLAM Moot Scenario, 2016

Respondent Hestia Industries / Charterer

SHINC Sunday / Holidays Included

USD United States Dollars

WWD Weather Working Day

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 CLAIMANTS CASE

I. STATEMENT OF FACTS

A. THE PARTIES

The Claimant is Zeus Shipping and Trading Company based in Poisedon.

The Claimant is the owner of Athena (the Vessel), a modern bulk tanker capable of

transporting Liquefied Natural Gas (LNG) and the specialized form of LNG produced

from Hades Shale Gas, known as HLNG.

The Respondent is Hestia Industries, a new producer of HLNG based in Hades.

B. THE CHARTERPARTY

On 21 July 2014, the Claimant and the Respondent entered into a voyage charterparty

(the Charterparty) where the Respondent will charter the Claimants vessel, the

Athena (the vessel), to transport 260,000m of HLNG produced by the Respondent

(the Cargo) from Port of Hades (the Loading Place) to Poseidon (the Discharging

Port).

There is an arbitration clause in the Charterparty at Clause 30 (the Arbitration Clause)

which provides that any dispute arising under this contract shall be referred to

arbitration in London by a tribunal of 3 arbitrators in accordance with the Arbitration

Rules of the Maritime Law Association of Australia and New Zealand.

C. CRITICAL FACTS TO THE DISPUTE

At all material times, there are environmental groups in Hades who strongly oppose to

the extraction of gas from the coal seams in Hades and the production process to liquefy

that gas to which is said to emit ten times more Co2 than conventional gas liquefaction
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plants. The same environmental groups in Hades have also threatened to stop the export

of HLNG from Hades.

On 3 October 2014, the vessel initially planned to commence loading of the Cargo on

the same day the NOR was tendered. However, the loading of the Cargo was delayed

due to the protests at the port and it could only recommence after the protests have

ended.

It is said that the export of HLNG by the Respondent has caused a flashpoint of

political and public anger in Hades. On 7 October 2014, the Opposition Leader of

Hades, Jacqueline Simmons, with the promise to stop the export of HLNG from Hades,

seized control of parliament.

As a result of the regime change, the Vessel was intercepted by the Coast Guard upon

sailing and it was directed to return to its berth at the Port of Hades on the orders of the

new president of Hades.

When the Vessel was intercepted by the Hades Coast Guard, the Master of the Ship

was made to comply with the Coast Guards direction to return to berth because the

Vessel bore a Hades flag.

Upon the Vessels return to berth at the Port of Hades, it was then detained by the

Coast Guard under the instructions of the new President of Hades.

In Clause 9 and Box 5 of the Charterparty, the time permitted for loading of the Cargo

is 10 WWD SHINC, which runs from the time when NOR is tendered until the vessel

leaves the Loading Place. As soon as the laytime expires, demurrage would accrue at

the rate of US$50,000/day according to Box 24 of the Charterparty.

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The vessel did not leave the Loading Place at Port of Hades until 6 October 2015.

Accordingly, demurrage has accrued in respect of 358 days overdue time for the

amount of USD $17.9m.

On 7 October 2015, the Vessel was allowed to leave Port of Hades with the Cargo.

However, when the Vessel was maneuvering away from the berth using the tug services

from Hestug (a tug company owned by the Respondent), it was discovered that the

propellers of the Vessel had been tampered with and thereafter, both the propeller shafts

broke shortly after setting sail under its own steam. On 16 November 2015, the

Claimant issued a notice to arbitrate pursuant to clause 30 of the Charterparty for its

demurrage claims against the Respondent.

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II. SUMMARY OF THE ISSUES

The issues to be determined by this Tribunal are:

a. Whether this tribunal has jurisdiction to determine the issue of frustration, given

that the Charterparty contains an express arbitration clause requiring arbitration

only of disputes arising under the Charterparty.

b. Whether the Charterparty has been frustrated by reason of delay.

c. Whether the Respondent is liable for demurrage totaling US$17.9m.

d. Whether the Claimant is liable to the Respondent for a salvage reward for

towage services.

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 III. PRELIMINARY ISSUE OF JURISDICTION

A. This Arbitral Tribunal Has Jurisdiction to Hear the Claims

i. This Tribunal is Competent to Rule on Its Own Jurisdiction

The Claimant submits that this tribunal is competent to rule on its own substantive

jurisdiction by virtue of section 30(1) of the Arbitration Act 1996, which codified the

Kompetenz-Kompetenz principle.

The Kompetenz-Kompetenz principle universally recognizes that an arbitral tribunal

may have competence, or jurisdiction, to rule as to the extent of its own competence on

an issue before it.

ii. The Law Governing the Agreement to Arbitrate is English Law

It is trite law that an agreement to arbitrate is autonomous and separable from other part

of the agreement pursuant to the doctrine of separability1. An agreement to arbitrate

can be in the form of an arbitration clause where it may be governed by a set of laws

different from other clauses within the same agreement.

In the present case, the Charterparty has provided for, among others:

a. The law governing the Charterparty is the laws of the State of Western Australia;

b. An arbitration agreement or clause where the venue of arbitration is London;

and

c. The procedures of the arbitration will be governed by the Arbitration Rules of

the Maritime Law Association of Australia and New Zealand.

1 Fiona Trust & Holding Corporation & Ors v Privalov & Ors [2007] EWCA Civ 20; [2008] 1 Lloyds Rep.
254.; Fili Shipping Co Ltd v Premium Nafta Products Ltd (on appeal from Fiona Trust and Holding Corpn
v Privalov) [2007] UKHL 40.

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 However, the Charterparty is silent on the law governing the arbitration agreement.2

In Shagang South Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics3, it was held

that in the absence of express wording or contrary indication, the named venue of

arbitration will typically be deemed to be the juridical seat of the arbitration and the

laws of that certain venue shall be the governing law for the arbitration agreement.4

In the present case, following the Shagang case, London can be deemed to be the Commented [skrine1]: Might as well put the Sulamerica
in the foot note of Shagang saying that the Court has also
considered the three stage test in reaching the decision in
juridical seat of arbitration and accordingly, the laws of England will be the governing Shagang.

law of the arbitration agreement notwithstanding the fact that the choice of governing

law of the Charterparty being Western Australia laws.

In C v D5, the English Court of Appeal held that English law was the governing law of

an arbitration agreement even though the contract is governed by New York Law. The

case also decided that the arbitration agreement should be presumed to be governed by

the law of the seat which usually coincides with the place with which the agreement to

arbitrate has the closest and most real connection. The Court went on to suggest that

an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction

clause.6

2 Moot Scenario at page 45: Charterparty, Clause 30.

3 [2015] EWHC 194 (Comm).
4
Sulamrica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ
638: the English Court of Appeal formulated a three-stage test to determine the law governing the arbitration
agreement: i) is there an express choice of law governing the arbitration agreement; ii) if not, can a choice be
implied; and iii) in the absence of choice, with which law does the arbitration agreement have the closest
and most real connection.
5 [2007] EWHC 1541 (Comm).
6 Confirming the statement in A v B (No 2) [2007] 1 Lloyds Rep 358, at 563; Weissfisch v Julius [2006] 1

Lloyds Rep 716 (CA); West Tankers v RAS (the Front Comor) [2007] 1 Lloyds Rep 391.

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 As such, it is submitted that the venue of arbitration is the implied seat of arbitration

and therefore the law of the seat should be the law governing the arbitration agreement.

It would be a rare case in which the law governing the arbitration agreement is not the

same as the law of the place or seat of the arbitration.7

a. This Tribunal has Jurisdiction to Hear the Present Dispute Involving an

Allegation of Frustration of the Charterparty

At the outset, the Claimant submits that the present arbitration is a result of the

Claimants claim for demurrage against the Respondent.

In the letter dated 16 July 2014, both the Claimant and the Respondent have clearly

intended that the arbitration clause in the Charterparty would cover a dispute about

demurrage between them.8

Although the Respondent is raising a ground of frustration as its defence, the Claimant

submits that the arbitration clause in the Charterparty is still sufficient to provide

jurisdiction to the present arbitral tribunal following the case of Fiona Trust and

Holding Corp v Privalov.9

In Fiona Trust, the Court of Appeal has adopted a liberal approach to the construction

of an arbitration clause where the differences in terminology in the arbitration clause

have become less important. In construing the arbitration clause, the Court would start

from the assumption that the parties, as rational businessmen, are likely to have

7Per the then Mustill J, Black-Clawson v Papierwerke [1981] 2 Lloyds Rep 446, at 483.
8Moot Scenario at page 25, paragraph 2.
9 Fiona Trust and Holding Corp v Privalov [2007] UKHL 40, [2007] 4 All ER 951.

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 intended any dispute arising out of the relationship into which they have entered or

purported to enter to be decided by the same tribunal.

Taking this presumption, the Court would construe the arbitration clause to be inclusive

of all disputes arising from the contract unless the language makes it clear that certain

questions were intended to be excluded from the arbitrators jurisdiction. As Longmore

LJ remarked in Fiona Trust at paragraph 17: if any businessman did want to exclude

disputes about the validity of a contract, it would be comparatively easy to say so.

In the present case, the Claimant submits that being rational businessmen, both parties

are likely to have intended any dispute arising from a claim on demurrage to be decided

by the same tribunal.10 The changes in the words of the arbitration clause from arising

out of to arising under would have not negate the parties intention to arbitrate all

dispute surrounding a demurrage claim.

Therefore, it is submitted that this Tribunal has jurisdiction to hear the present dispute

even though it involves an allegation of frustration as an excuse to avoid the

demurrage.11

10 Ibid, at paragraph 13 as per Lord Hoffman.

11 Moot Scenario at page 44: Charterparty, Clause 25.

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 IV. SUBSTANTIVE CLAIMS

A. The Charterparty Has Not Been Frustrated.

A Charterparty is frustrated when, as a result of an extraneous event outside the control

of either party, the commercial purpose of the contract becomes impossible to attain.12

The delay of 358 days in delivering the cargo has not caused the Charterparty to be

frustrated because:

i. the delay has not caused the contractual obligations to be radically different; and

ii. the delay is not sufficiently grave to frustrate the contract.

i. The Delay Has Not Caused the Contractual Obligations to Be Radically

Different

According to Lord Radcliffe in the case of Davis Contractors Ltd v Fareham UDC13,

frustration occurs whenever, without default of either party, performance on the

contract has been radically changed.

According to the House of Lords in Pioneer Shipping Ltd v B.T.P. Tioxide Ltd (The

Nema) 14 , the general yardstick in determining whether frustration has occurred is

whether the delay already suffered and the prospects of further delay from that cause

will make any ultimate performance of the relevant contractual obligations radically

different from those originally undertaken.

12 Cooke.J, Young.T, Taylor.A, Kimball.J, Martowski.D, Lambert.L. (2001). Voyage Charterparties. 2nd
Edition. London: Llyods Shipping Law Library, at page 612.
13 [1956] AC 696 at page 729.
14 [1982] AC 724 at page 726.

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 According to the Eugenia Case 15 , in determining what is radically different, the

tribunal must measure the consequence of the result against the demands of justice. It

is imperative to note that the purpose of the doctrine of frustration is to do justice. The

fact that it has become more onerous or more expensive for one party than he thought

is not sufficient to bring about a frustration. It must be more than merely more onerous

or more expensive.16

As such, the Respondent cannot claim that the contract was frustrated by relying on the

correspondence dated 22nd October 201517 in which the Respondent expressed that the

cargo is of significant value to them and that they will suffer significant losses should

the cargo not be delivered timeously.

ii. Delay Is Not Sufficiently Grave to Frustrate A Contract.

Secondly, the delay was not sufficiently grave to frustrate the Charterparty. According

to Bank Line v. Arthur Capel18, the probabilities of the length of delay was an important

factor in determining whether delay frustrated the contract. In the correspondence that

the Claimant directed to Respondent on the 15th October 201519, the Claimant stated

that it was unclear whether the vessel would be allowed to leave Hades. However, the

15 [1964] 2 QB 226 at page 226.

16 Butterworths Australian Legal Dictionary. (1997). Sydney: Butterworths: the primary meaning of onerous
is burdensome, or troublesome, or inconvenient, or difficult; Black, H.C. (1999). Blacks Law Dictionary,
7th Edi. St. Paul Minn: West Publishing Co.: a right is said to be onerous when the obligations attaching to
it counter-balance or exceed the advantage to be derived from it.
17 Moot Scenario at page 61.
18 [1919] AC 435.
19 Moot Scenario at page 60.

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 Respondent did not exercise the right to cancel the Charterparty in the response dated

22nd October 201520.

Moreover, in assessing whether the event was sufficiently grave, the commercial

purpose of both parties and the benefits that they expected to obtain from the charter

must be considered as well21.

In the present case, the commercial purpose of the charter was to ship the cargo by the

stipulated time. However, no urgency was specified anywhere in the Charterparty. As

such, the contract cannot be rendered frustrated and it would be unjust to impose

perfectly timeous delivery of cargo by Claimant as they had no knowledge of any such

urgency at the time that the Charter was entered into22.

iii. The Force Majeure Clause Can Be Raised.

If the parties apprehend the occurrence of a frustrating event, the parties can insert a

force majeure clause in the contract to prevent it from being rendered frustrated.

According to Clause 19(c) of the Charterparty, ...Neither party shall be liable for any

failure to perform or delay in performing its obligations under this Contract, where the

party is being delayed, interrupted or prevented from doing so by reasons of any Force

Majeure Event. For the purposes of this Contract, the term "Force Majeure Event"

means inability to obtain or delays in securing transportation facilities, stoppages of the

Shipper's fuel supply, hindrances of whatsoever nature in mining, processing, loading,

20 Supra, note 21.

21 Boyd.S, Burros.A, Foxton.D. (2002). Scrutton on Charterparties and Bills of Lading. 20th Edi. London:
Sweet and Maxwell.
22 Ibid.

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 shipping or discharging of products occurring without the negligence of the

Charterer23

Hence, Clause 19(c) clearly provides that neither the shipper nor the charterer shall be

liable for delay in delivery for loading or in discharging if the delay is caused by the

stoppages or hindrances of whatsoever nature occurring without the negligence of the

Charterer and the Claimant can certainly rely on this clause.

B. The Respondent Is Liable to The Claimant For Demurrage.

According to Budgett & Co v Binnington & Co 24 , the Charterer of a ship usually

undertakes in the contract to load and unload the cargo within a specified number of

days, and if default, to pay a certain sum of money to the shipowner by way of

demurrage.

Pursuant to Clause 9 of the Charterparty, time permitted (laytime) was to be calculated

from the time when NOR was tendered until the time when the vessel leaves the

Loading Place (Port of Hades) as defined in Box 5 of the Charterparty.

In the present facts, the vessel did not leave the Loading Place when the laytime of

10 WWD SHINC lapsed and subsequently, demurrage accrued.

23 Moot Scenario at page 40.

24 [1891] 1 QB 35.

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 i. The Vessel Had Not Left The Loading Place When The Laytime Expired

and The Demurrage Accrued.

Box 5 of the Charterparty provides that the Loading Place as one safe port in Hades,

which suggests that the Charterparty is a port Charterparty.25 Despite the requirement

of leaving the port for the calculation of laytime, the Statement of Facts merely suggests

that the Athena left the berth at 0900 on 7 October 2014,26 but there is no reliable

evidence that the Athena has left the port of Hades, which is the Loading Place

stipulated in Clause 9(a) of the Charterparty.

According to Brett M.R. in Sailing-ship Garston Co. v Hickie & Co., the space of

water over which the port authorities exercise port discipline is the strongest possible

evidence in determining how far the port extends beyond the place of loading and

unloading for the definition and geographical limitation of port in a legal sense.27

Applying the test used by Brett M.R., the space of waters over which the Coast Guard

was able to exercise their authority suggests the definition and geographical limitation

of port, i.e. the Loading Place in a legal sense. The fact that the coast guard was able

to exercise the presidential decree and instruct the Athena back to the port is strong

evidence that the Athena did not leave the port and was still within the territorial waters

of Port of Hades at the time of interception by the Coast Guard.28

25 Moot Scenario at page 29. See also, Novologistics SARL v Five Ocean Corporation (The Merida) [2009]
EWC 3046 (Comm), [2010] 1 Lloyds Rep. 274: the words one good and safeberth Xingang render
the Charterparty to be construed as a berth Charterparty.
26 Moot Scenario at page 54.
27 (1885) 15 Q.B.D. 580 at p.590.
28 Moot Scenario at page 55.

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 This contention is further supported by the correspondences dated 15 October 2014 and

15 April 2015. The correspondences suggest that the vessel had not left the Loading

Place, though it may have been at the outer limits of the Port of Hades, because it was

capable of being stopped by the Coast Guard with only a rubber dinghy and directed

by the Coast Guard to return to its berth.29

In the premises, the vessel had not left the Loading Place when the laytime expired and

the demurrage accrued. Therefore, the Respondent is liable to the Claimant for

demurrage.

ii. The Respondent Took No Steps to Avoid the Delay Even Though the

Detention Was Caused by The Respondents Cargo.

In Owners of Spanish Steamship Sebastian v Sociedad Altos Hornos de Vizcaya (the

Sebastian)30, the judge found that when it was the duty of the charterer to obtain the

export license without delay, the charterer should take all reasonable steps to secure

such license, failing which the charterer may be liable for demurrage.

In the present case, the Respondent did not take any steps to obtain permission from

the authority to export the HLNG (the cargo causing the dispute) before or after the

change of government which occurred after the Charterparty was made. Furthermore,

the Respondent also did not take any steps in ordering the vessel to unload the disputed

cargo to flee the vessel from detention and avoid accrual of demurrage.

29 Ibid, pp. 60 & 63.

30 (1919) 1 Lloyds List Law Reports 500.

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 iii. The Circumstances in This Dispute Is Not a Circumstance under

Interruptions to Laytime nor A Fault of the Claimant.

In Compania Crystal de Vapores v Herman & Mohatta (India), Ltd (The Maria G),

the Queens Bench held that the Charterer will be liable for demurrage unless they are

covered by exceptions to laytime in the charterparty or arise through the fault of

shipowner.31

In the present facts, the detention caused by prohibited cargo after a change of

government does not fall within any of the circumstances stipulated in Clause 9(e) of

the Charterparty, capable to interrupt the laytime. 32

In determining the fault of shipowner, the Queens Bench in Gem Shipping Co. of

Monrovia v Babanaft (Lebanon) S.A.R.L. (The Fontevivo) held that the test

applicable is the disputed action done by the shipowner was involuntary. 33 In the

present facts, the Respondent contended that the Masters incompetence and

negligence in complying the Coast Guards instruction was the main cause to the

detention. 34

According to Article 92 of the UNCLOS, the Vessel is subject to the law of the flag

state.35 Therefore, the Master has the duty, at all times, to comply with the law and

order of the flag state, Hades, including the presidential decree. Applying the test in

The Fontevivo, as the Master returned the Vessel involuntarily due to rightful

31
[1958] 1 Lloyd Rep. 616.
32 Moot Scenario at page 35.
33
[1975] 1 Lloyds Rep. 339 at page 342.
34
Moot Scenario at page 65.
35
United Nations Convention on the Law of the Sea, Article 92.

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 compliance of the presidential decree, there is no fault on the Claimant. In the absence

of applicable exceptions to laytime nor fault of the Claimant, the Respondent is liable

to the Claimant for demurrage.

iv. Demurrage Has Accrued For 358 Days, Totaling USD$17.9m.

Pursuant to Clause 9 of the Charterparty, time permitted for loading is 10 WWD

SHINC and time began to accrue when NOR was issued on 3 October 2014. In the

premises, the vessel was permitted to remain at the Loading Place until 12 October

2014 and demurrage accrued at the rate of US$50,000 for every day of delay beyond

the permitted time.

The time permitted expired on 13 October 2014 and demurrage started to accumulate

from that day until the vessel left the Loading Place on 5 October 2015. At the rate of

US$50,000/day for 358 days from 13 October 2014 until 5 October 2015, demurrage

amounts to US$17.9m.

C. The Respondent Is Not Entitled To A Salvage Reward.

It is of utmost importance to note that the onus of proving danger lies justly upon the

salvors, as per stated in The Princess Alice.36

According to Article 12(1) of the International Convention on Salvage, 1989

(hereinafter referred as the Salvage Convention)37, which has been incorporated in

Australian law by virtue of the Navigation Act 1912,38 every salvage operation with a

useful result gives the salvors right to a reward. According to Article 1(a) of the same

36 (1849) 3 W.Rob.138.
37 Incorporated in Part A, Schedule 9, Australian Navigation Act 1912.
38 Australian Navigation Act 1912, Volume 2, Schedule 1.

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 convention, salvage operation means any act done to assist a vessel in danger in

navigable waters or any other waters. It is the Claimants contention that the

Respondent did not partake in a salvage operation as two elements needed for such a

claim, as per the following, were not fulfilled:

a. Voluntariness; and

b. Danger (or peril), real or apprehended.

i. The Salvage Services Were Not Voluntarily Provided.

The definition of salvor has been best expressed by Lord Stowell in The Neptune as:

A person who, without any particular relation to a ship in distress, proffers useful

service, and gives it a volunteer adventurer, without any pre-existing covenant that

connected him with the duty of employing himself for the preservation of that

ship.39

As such, it is clear that a salvor must be a volunteer.

Notwithstanding that the tug service40 was provided by the Respondent, cargo owners

are not within the recognised categories of salvor. There is no good reason to not allow

such a claim because they are bound up in the maritime adventure with the shipowners

and as such, owe a duty to render such assistance as they can to salve ship and cargo41.

The duty is sufficient to negative voluntariness and to bar a claim for salvage.

39 (1824) 1 Hagg. 227 at page 236.

40 The Princess Alice (1843) 3 W. Rob. 138 at 139-140 per Dr Lushingotn; approved in The Strathnaver
(1875) 1 App. Cas. 58 at 63; The Jubilee (1879) 4 Asp. 275 at 276; The Glaucus (1948) 81 Lloyds Rep. 262
at 266. Towage service has been described as the employment of one vessel to expedite the voyage of another
when nothing more is required than the accelerating of her progress.
41 The Sava Star [1995] 2 Llyods Law Reports 134 at page 137.

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 According to Kennedy and Rose on the Law of Salvage 42 , the public policy of

encouraging salvage by cargo owners may be thought to be inapposite in the case of a

salvor salvaging his own property for self-interest might be inducement enough. As

such, self-interest is inducement enough and a cargo owner who renders salvage

services as for the purposes of self-preservation should not be treated as a volunteer. 43

Owing to the duty owed by the Respondent through the pre-existing maritime

adventure, the Respondent did not render assistance to the Vessel voluntarily out of

humanity and moral obligations and is thus precluded from claiming a salvage reward.

ii. The Vessel Was Not In Apprehended Danger.

According to the Court in The Charlotte, in determining whether the vessel is in danger,

it will be sufficient if, at the time at which assistance is rendered, the vessel has

encountered any damage or misfortune which might possibly expose it to loss or

damage if the services were not rendered44. However, as stated in The Hamtun, the

court will be slow to find that the apprehension of the danger was reasonably held but

will presume that the danger was in fact illusory. 45 The subjective apprehension made

by the Master of Ship that there was a salvage danger does not preclude the Court from

coming to a different view.

42 Kennedy, W.R. (1985). Kennedys Law of Salvage, 5th Edi. London: Stevens & Sons, at para. 398.
43 Ibid at paragraph 400.
44 (1843) 3 Wm. Rob. 68. Also, as per the case of Mount Cynthos, there must be such reasonable, present

apprehension of danger that, in order to escape or avoid the danger, no reasonably prudent and skilful person
in charge of the venture would refuse a salvors help if it were offered to him upon the condition of his paying
a salvage reward.
45 [1999] 1 Lloyds Rep. 883 at page 885.

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 With regards to the present case, the breakdown of the propeller shafts holds no risk of

exposing the vessel to loss or damage due to immobility in the open waters. The damage,

although it would immobilize the vessel, would not subject it to a danger amounting to

salvage danger.

According to the Court in The Troilus46, there is no general rule that, where a ship is

for some reason without means of propulsion, she and her cargo are necessarily in

danger until she is repaired.

In the Moot Scenario, the propeller shafts of the vessel were broken in the open waters

thus hindering it from moving to pursue her voyage but certainly, that condition is not

sufficient for the vessel to be in danger. There are also no facts in the moot scenario

about rough sea waters or high-risk weather.

According to The Homewood47, the Court held that it may not necessarily be the case

that property is in danger merely because it is not currently subject to any immediate

physical control or means of physical control. Hence, the immobility of Athena is not

a predeterminant for the vessel to be regarded as being in danger.

In the premises, the Respondent is not entitled to salvage reward.

46 [1951] A.C. 820.

47 (1928) 31 LLL Rep 336 at page 339.

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 V. PRAYER FOR RELIEF

In light of the above submissions, the Respondents request the Tribunal to:

i. FIND that this Tribunal has jurisdiction to hear the issue of frustration and

therefore, demurrage.

ii. FIND that the Charterparty has not been frustrated by reason of delay which

occurred in delivery of the cargo.

iii. FIND that the Claimant is entitled to the sum US$ 17,900,000 by way of the

demurrage claim.

iv. DECLARE that the Claimant is not liable for the Respondents counter-claim

of the salvage reward.

v. AWARD interests & costs in favour of the Claimant.

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