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INTERNATIONAL MARITIME LAW ARBITRATION MOOT 2016

TEAM 1 SMU Respondent

Rodney Yap Thye Yi

Darren Lim Wei Xiang Sean Lim Zhan Hui

Teo Zhe Han Priscilla Nicole Santa Maria

1

Abbreviations AC Law Reports, Appeal Cases All ER All England Law Reports All ER (Comm) All England Law Reports (Commercial

Cases) Art Article Ch Law Reports Chancery CLR Commonwealth Law Reports E.G.L.R. Estates Gazette Law Reports EWCA (Civ) Court of Appeal (Civil Division) EWHC England and Wales High Court HLNG Hades Liquefied Natural Gas HST Hawaii Standard Time ICC International Chamber of Commerce ICJ International Court of Justice KB Law Reports King’s Bench Lloyd’s Rep Lloyd’s Law Reports LNG Liquefied Natural Gas M. & W Meeson & Welsby's Exchequer Reports Master the shipmaster of the Athena NSWSC New South Wales Supreme Court P Probate, Divorce and Admiralty Division QB Law Reports Queen’s Bench Division the Claimant Zeus Shipping and Trading Company the Port the Port of Hades the Respondent Hestia Industries UKHL United Kingdom House of Lords UKPC United Kingdom Privy Council UNCITRAL United Nations Commission on

International Trade Law UNCLOS United Nations Convention on the Law of

Sea WASC Western Australia Supreme Court WLR Weekly Law Reports

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Respondent’s table of authorities

Statutes and Arbitration Rules

International Arbitration Act 1974 7

Maritime Law Association of Australia & New Zealand Arbitration Rules 7

United Nations Commission on International Trade Law (UNCITRAL)

Model Law

7

Cases

Bangladesh Export Import Co v Sucden Kerry [1995] 2 Lloyd's Rep. 1 11

British Energy Power and Trading Ltd v Credit Suisse [2008] EWCA Civ 53 18

Budgett v Binnington & Co. [1891] 1 Q.B. 35. 20

Case Concerning Barcelona Traction, Light, and Power Company, Ltd [1970]

ICJ 1

11

CDV Software Entertainment AG v Gamecock Media Europe Ltd [2009]

EWHC 2965

19

Christie & Vesey v Helvetia [1960] 1 Lloyd’s Rep. 540 (EWHC) 19

Connaught Restaurants Ltd. v. Indoor Leisure Ltd [1994] 1 WLR 501 12

Davis v Garrett (1830) 6 Bing. 716 20

EL Oldendorff & Co GmbH v Tradax Export SA [1974] AC 479 15

Fiona Trust & Holding Corporation and others v Privalov and others [2007]

2 All ER (Comm) 1053

7

Francis Travel Marketing P/L v Virgin Atlantic Airways Ltd [1996] NSWSC

104

7

Freedom Maritime Corporation v International Bulk Carriers SA (The Khian

Captain) [1985] 2 Lloyd’s Rep 212 (EWHC)

14

Fyffes v Reefer Express (The Kriti Rex) [1996] 2 Lloyd’s Rep. 171 20

Grant v Maddox (1846) 15 M. & W. 737 13

Gem Shipping Co of Monrovia v Babanaft (Lebanon) SARL (The Fontevivo)

[1975] 1 Lloyd's Rep 339

20

General Feeds Inc v Burnham Shipping Corp (The Amphion) [1991] 2

Lloyd’s Rep. 101

22

High Seas Venture Ltd Partnership v Sinom (Hong Kong) Ltd (The

Newforest) [2008] 1 Lloyd’s Rep. 504 (EWHC)

14

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha [1962] EWCA Civ

7

25

International Chamber of Commerce Cases Nos 4555, 5946, 7722, 12172 and

13129

7

J. Lauritzen A.S. v Wijsmuller B.V, (The Super Servant Two) [1990] 1 Lloyd's

Rep 1

8

Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Co Ltd 17

3

[1939] 2 K.B. 544

Kopitoff v Wilson (1876) 1 QBD 602 25

Kish v Taylor [1912] A.C. 604 20

Lavabre v Wilson (1779) 1 Dougl. 284 20

Louis Dreyfus v Lauro (1938) 60 Ll.L.Rep. 94 20

Luigi Monta of Genoa v Cechofracht Co Ltd [1956] 2 Q.B. 552 17

Maritime National Fish v Ocean Trawlers [1935] AC 524 10

Minchillo v Ford Motor Co of Australia Ltd [1995] 2 VR 594 17

National Carriers Limited v Panalpina (Northern) Ltd [1981] 1 All ER 161 8

NEC Australia Pty Ltd v Gamif Pty Ltd 42 FCR 410 (1993) (Federal Court of

Australia, NSW)

18

Owners of S.S. Sebastian v de Vizcaya (The Sebastian) [1919] 1 Ll L Rep 500 22

Poussard v. Spiers and Pond (1876) 1 Q.B. 410 12

Produce Brokers Co Ltd v Olympia Oil and Cake Co Ltd [1917] 1 K.B. 320

(EWCA)

13

President of India v Moor Line, Ltd. [1958] 2 Lloyd's Rep. 205 (High Court

of Australia)

20

Price v Livingstone (1882) 9 Q.B.D. 679 14, 15, 16

Re Strand Music Hall Co Ltd (1865) 35 Beav. 153 16, 17

Sadler Brothers Co v Meredith [1963] 2 Lloyd’s Rep. 293 (EWHC) 19

Sailing Ship “Garston” Co v Hickie & Co (1885) 15 Q.B.D. 580 14, 15

SCA (Freight) Ltd v Gibson [1974] 2 Lloyd's Rep 533 (EWHC) 19

Scaramanga v Stamp (1880) 5 C.P.D. 295 (CA) 20

Schuler (L) AG v Wickman Machine Tool Sales Ltd [1974] A.C. 235 13

Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWHC 59 (Ch) 18

Societe Franco Tunisienne d’Armement v Sidermar S.P.A. (The Massalia)

[1961] 2 Q.B. 278

9

Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 E.G.L.R. 155 18

The Domald [1920] P. 56 22

The Homwood (1928) 31 Llyold’s Rep 336 24

The Lomonosoff [1921] P. 97. 25

The Sava Star [1995] 2 Lloyd’s Rep. 134 25

The Theseus (1925) 23 L.I.L. Rep. 136 27

The Tramp [2007] EWHC 31 (Admlty); 27

The Troilus [1951] 1 Lloyd's Rep. 467 27

Upper Hunter County District Council v Australian Chilling and Freezing Co

Ltd (1968) 118 CLR 429

17

Watson v Haggitt [1928] A.C. 127 18

4

Other authorities

Eric Sullivan, The Marine Encyclopaedic Dictionary (2nd Edition Lloyd’s of

London Press Ltd 1988)

13, 17

J Schofield, Laytime and Demurrage (6th ed) Lloyd’s Shipping Law Library 14

Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet &

Maxwell, 2011)

15, 17, 20, 21, 22

McKendrick, Force Majeure and Frustration of Contract, 2nd ed, (Informa

Law from Routledge, 2013)

17

Kim Lewison, The Interpretation of Contracts, 6th ed, (London, Sweet &

Maxwell, 2015)

18

The Baltic and International Maritime Council

<https://www.bimco.org/Education/Seascapes/Maritime_Matters/2002_11_0

4_The_maintenance_of_ships.aspx> (accessed 6 March 2016)

25

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I. SUMMARY OF FACTS

1. By a voyage charterparty (“Charterparty”) dated 21 July 2014, Zeus

Shipping and Trading Company ("the Claimant") chartered a vessel (“the Athena”)

to Hestia Industries ("the Respondent") for one voyage from Hades to Poseidon. This

was for the potential transport of Hades Liquefied Natural Gas (“HLNG”) from the

Respondent’s newly established LNG plant in Hades. The Claimant was the party that

drafted all the terms of the Charterparty.

2. The parties specifically arranged to use the Athena, a Hades flagged vessel,

for this voyage because the vessel is one of the few vessels, in the world, that is

equipped with technology to efficiently transport HLNG.

3. Before both parties formally entered into the Charterparty, there were

negotiations between the two parties that spanned from 14 July to 21 July 2014. The

Claimant emailed an initial draft to the Respondent on 14 July 2014. However, on 16

July 2014, the Respondent emailed the Claimant and requested for an amendment to

clause 30 of the Charterparty (“Arbitration clause”) to limit the scope of arbitrable

issues. On 21 July 2014, the Claimant sent the Respondent a revised Charterparty

where the Arbitration clause was amended. This was the version of the Charterparty

that was signed and agreed to.

4. On 3 October 2014, the Athena arrived at the Port of Hades (“the Port”).

Loading was completed within the allowed laytime, and the Athena left the loading

place early in the morning of 7 October 2014 at 0900. On the same day, the Hades

Opposition staged an unexpected coup. The winner of that power struggle, newly

appointed President Simmon, had directed the Coast Guard to intercept the Athena to

prevent the export of HLNG.

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5. The Coast Guard intercepted the Athena late in the day on 7 October 2014. As

the Athena was outside the territorial limits of Hades, the Athena’s shipmaster (“the

Master”) initially refused to submit to the Coast Guard. Nevertheless, the Master

finally complied the Coast Guard asserted that he had authority to take control over a

Hades-flagged vessel on the high seas.

6. The Athena would be then be detained at the Port for over a year. Around 30

April 2015, the Respondent attempted but failed to arrange for an alternative vessel to

transport the HLNG because only Hades-flagged vessels were permitted into the Port.

Finally, around 30 September 2015, the Opposition President Simmons resigned. On 5

October 2015, the Coast Guard released the Athena. The Claimant then instructed the

Athena to engage Hestug, incidentally a business owned by the Respondent, for

towage services.

7. After Hestug towed the Athena into open waters, an unfortunate discovery

was made – the Athena’s propeller shafts had broken down from tampering while it

was detained at the Port. Fortunately, Hestug’s tugboats were close enough to render

assistance to the distressed Athena, thus preserving the HLNG and the vessel.

II. THE TRIBUNAL DOES NOT HAVE THE JURISDICTION TO DETERMINE THE ISSUE OF FRUSTRATION

8. The Tribunal does not have the jurisdiction to determine whether or not

frustration arose for two reasons. Firstly, the presumption of “one-stop adjudication”

does not apply. Secondly, the Parties did not intend for clause 30 (“the Arbitration

clause”) to extend to the issue of frustration. As a preliminary point, under the Model

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Law1 the Tribunal has the right to determine the admissibility, relevance, materiality

and weight of the evidence offered.2

A. The presumption of one-stop adjudication does not apply 9. There is a general presumption of a “one-stop adjudication” that the Parties

intended for all matters to be resolved in one forum. 3 However, the general

presumption does not apply in the current case in the face of countervailing evidence.4

Parties did intended for different fora for different dispute resolutions.5

B. The Parties did not intend for the Arbitration clause to extend to frustration

10. The powers of the Tribunal extend as far as the Arbitration clause stipulates.

To arrive at the proper construction of the Arbitration clause, the Tribunal should

interpret the language of the arbitration clause as a whole with the Parties’ intention in

mind against the commercial background of the contract.6

11. Arbitral tribunals have considered extrinsic evidence of one Party’s subjective

understanding of the contract, and held that such evidence was decisive to the

meaning of the clause even though it contradicted with the plain meaning of the text.7

In the face of persuasive evidence of clear intent of the Parties, the meaning of the

terms can be overridden.8

1 Maritime Law Association of Australia & New Zealand Arbitration Rules s 2 which applies International Arbitration Act 1974 s 16. 2 Article 27(4) of the United Nations Commission on International Trade Law (UNCITRAL) Model Law. Applies in Australia. 3 Fiona Trust & Holding Corporation and others v Privalov and others [2007] 2 All ER (Comm) 1053 at [13]. 4 Letter to Zeus Shipping and Trading Company, Moot Scenario at p 25. 5 Ibid. 6 Francis Travel Marketing P/L v Virgin Atlantic Airways Ltd [1996] NSWSC 104; Fiona Trust & Holding Corporation and others v Privalov and others [2007] 2 All ER (Comm) 1053 at [5]. 7 ICC Case Nos 4555,5946,7722, 12172 and 13129. 8 Ibid

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12. The amendments made to the Arbitration clause clearly illustrate the Parties’

intention not to arbitrate on frustration.9 The original clause 30 allowed arbitration for

“any dispute arising out of or in connection with this contract, including any question

regarding its existence, validity, or termination”10 The amended clause 30, reads “Any

dispute arising under this contract shall be referred to arbitration…”11 Parties removed

the words “including any question regarding its existence, validity, or termination”.12

13. These words were removed following the request made by the Respondent.13

In the letter, the Respondent identified a category of issues that he is not prepared to

arbitrate, such as disputes that “relate to but do not arise out of the contract”, and

identified misrepresentation as one such example. 14 The effect of finding for

misrepresentation goes towards the validity and existence of a Charterparty. The

effect of finding for frustration is that the Charterparty is automatically terminated.15

Since disputes relating to termination of the Charterparty are not intended to be

arbitrated, frustration is similarly not intended to be arbitrated upon.

III. THE CHARTERPARTY HAD BEEN FRUSTRATED 14. In the alternative, the delay had frustrated the Charterparty, and the

Charterparty had therefore been terminated as of 1st January 2015. This submission

rests on a positive finding on the requirements of frustration. 16 Firstly, the

interception by the Coast Guard was a supervening event that changed the nature of

the outstanding obligations/rights from what the Parties reasonably contemplated.

9 clause 30 of original Charterparty, Moot Scenario at p 20; clause 30 of amended Charterparty, Moot Scenario at p 45. 10 clause 30 of original Charterparty, Moot Scenario at p 20. 11 clause 30 of amended Charterparty, Moot Scenario at p 45. 12 Moot Problem at p 25 13 Ibid. 14 Ibid. 15 J. Lauritzen A.S. v Wijsmuller B.V, (The Super Servant Two) [1990] 1 Lloyd's Rep 1 16 National Carriers Limited v Panalpina (Northern) Ltd [1981] 1 All ER 161 at 175

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Secondly, that the frustrating event occurred without default of either the Claimant or

the Respondent. Thirdly, that it was not sufficiently provided for in the Charterparty.

C. The delay had resulted in a radical departure from what the Parties reasonably contemplated at the point of signing

15. The delay in delivery of HLNG was disproportionate to the duration that was

originally contemplated by the Parties. To determine if the delay was

disproportionate, the obligations of the Parties and the intended duration should be

considered. Frustration is likely where the length of the delay is more than twice the

contemplated duration and where there is no alternative recourse.17

16. Presently, the voyage had been delayed for approximately 12 times longer

than intended.18 The original voyage duration contemplated by the Parties is for 1

month.19 While the Parties did contemplate for delays, the buffer period was for 3

days.20 In addition, HLNG was only available from Hades and there were no other

alternatives to transport the HLNG out of Hades.

17. This delay goes beyond the nature of the outstanding obligations and/or rights

of the Parties. The Respondent was relying on the timely delivery of the HLNG to

improve its financial state as its share prices have been falling for the past year.21

Especially in light of the extensive costs it had incurred in building the LNG plant in

Hades.22 The Respondent likely had subsequent contracts dependent on the timely

delivery of the HLNG and suffered significant losses as a result of the delay.23

17 Societe Franco Tunisienne d’Armement v Sidermar S.P.A. (The Massalia) [1961] 2 Q.B. 278 18 Message from the Athena, Moot Scenario at p 68. 19 Intended end date of voyage, Moot Scenario at p 2. 20 Letter to Zeus, Moot Scenario at p 2. 21 The Hades Advocate, Moot Scenario at p 26. 22 Ibid. 23 Letter to Zeus Shipping and Trading Company, Moot Scenario at p 61.

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18. Thus the delay had significantly changed the outstanding obligation/rights of

what the Parties had originally contemplated when signing the contract. Accordingly,

the Charterparty had been frustrated after the delay extended beyond 2 months.

D. The Charterparty was frustrated without the fault of either party

(1) If the Coast Guard did have the authority, the supervening event was

the presidential decree which is not attributable to either party.

19. The general rule is that in order for frustration to be made out, the frustration

must arise without blame or fault on either Parties.24 Whether an announcement by the

President amounts to a presidential decree depends on the Constitution of the

particular country. A common formality however, is that the decree has to be

countersigned by the Prime Minister or other relevant ministers.25

20. Given that President Simmons came to power through a coup backed by the

military,26 it is most likely that she would have nominated her own members of

parliament who would assist her with the countersigning. The Respondent submits

that the announcement amounted to a presidential decree. Thus the presidential decree

was the supervening event resulting in the delay without the fault of either Party.

(2) Alternatively, the delay was due to the negligence of the Master as the Coast Guard did not have authority to direct the Athena back to Port

21. In the alternative, it is submitted that the Charterparty was frustrated by the

Master’s negligence, without the fault of either Party. The Master was negligent in

believing that the Coast Guard that had the authority to direct the Athena back to Port.

24 Maritime National Fish v Ocean Trawlers [1935] AC 524 at 530. 25 This is a common formality for Austria, France, Germany, Italy, Korea, and Iceland, Parliamentary Reports of Australia, Papers on Parliament No. 31, 1998, Juliet Edeson, “Powers of Presidents in Republics. 26 Moot Problem, at p55.

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22. There was no authority as the Athena was outside the territorial waters of

Hades at the point of interception. Furthermore, Article 91 of UNCLOS did not apply

to extend the jurisdiction of Hades aboard the Athena, because there was no genuine

link between the Athena and Hades. 27 “Genuine link” requires a State to show

management, ownership, jurisdiction and control for its jurisdiction over a vessel to

be recognized by other States. 28

23. The Claimant is from Poseidon and does not operate primarily within Hades.

Thus, Hades is unlikely to have staffed the Athena therefore lacking any form of

management, ownership or control over the Athena. Consequently, there is no

genuine link between the Athena and Hades.

24. Accordingly, the Master had acted negligently in deciding to comply with the

Coast Guard, rather than seeking instructions or clarifications with the Parties. This is

further corroborated by the Claimants ordering him to step down.29 Since the Master

was acting negligently, his act cannot be attributed to either the Claimant or the

Respondent. Thus there is no fault by either party for the delay of the Athena.

E. The Charterparty made no sufficient provision for such a delay 25. The Respondent submits that the Charterparty did not make sufficient

provision for such a delay. The general rule is that the doctrine of frustration will only

apply if no provisions are made to cover the event (“Force Majeure event”) in the

express terms of the contract.30 To determine if the Parties had addressed the Force

Majeure event, the courts will turn to the force majeure clause as it stipulates the

consequence and secondary obligations of the Parties.

27 Art 91 United Nations Convention on the Law of Sea (UNCLOS). 28 Case Concerning Barcelona Traction, Light, and Power Company, Ltd [1970] ICJ 1 29 Letter to Athena, Moot Scenario at p 58. 30 Bangladesh Export Import Co v Sucden Kerry [1995] 2 Lloyd's Rep. 1.

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(1) The Force Majeure clause does not cover events relating to a Presidential Decree

26. The general rule is that force majeure clauses are to be interpreted narrowly.31

The Coast Guard was not acting as a “customs authority” within the meaning of

clause 19(d). A customs authority is concerned with regulating the import and export

of goods according to the law. Jacqueline Simmons issued a presidential decree

ordering the Coast Guard to “intercept the Athena and have it returned to port”.32 The

presidential decree did not declare that the export of HLNG is illegal; rather, it was

merely an order for the Athena to be prevented from leaving.

27. Therefore, the Coast Guard in acting on the orders of the President was merely

enforcing the presidential decree and not acting in the capacity of a customs authority.

As such the coast guards’ intervention does not fall within the scope of clause 19(d).

28. Further, bearing in mind the narrow reading of force majeure clauses, in order

for the event to be found to be addressed by the clause, clear words would be needed

to describe it.33 Clause 19(d) makes no reference to any authoritative acts by the

President or presidential decrees therefore, the current situation of a presidential

decree does not fall within the scope of clause 19(d).

IV. THE CLAIMANT IS NOT ENTITLED TO DEMURRAGE 29. The Claimant contends that it is entitled to demurrage because the Athena had

not left the Loading Place.34 This contention is misconceived.

31 Poussard v. Spiers and Pond (1876) 1 Q.B. 410. 32 Moot Problem at p55 33 Connaught Restaurants Ltd. v. Indoor Leisure Ltd [1994] 1 WLR 501. 34 for the purposes of Box 5 and clause 9(c)(i) of the Charterparty, Moot Scenario pg 34.

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A. The Athena did leave the Loading Place within the meaning of clause 9(c)(i) 30. Pursuant to clause 9(c)(i),35 laytime ends when the vessel “leaves the Loading

Place”. On a plain and ordinary construction, laytime ceases to run when the Athena

leaves the Port.

(1) The Athena is deemed to have left the Port by the issuance of the

Statement of Facts

31. Contractual terms should be interpreted according to their customary meaning

in a particular trade.36 The more reasonable the interpretation, the more likely the

parties had intended such interpretation.37

32. Under usual maritime custom, the issuance of the Statement of Facts by the

Master marks the departure of the vessel from port. 38 By industry definition, a

statement of facts records, inter alia, the time of commencement and completion of

cargo operations.39 It is therefore customary for the statement to be issued only when

cargo operations is completed, and the vessel’s visit to the port is at an end.40

33. Further, it is more reasonable that the Statement of Facts is intended for

laytime calculation. 41 This ensures certainty and renders laytime calculation

uncontentious. Courts accordingly recognise the strong evidential value of statements 35 Clause 9(c)(i) of the Charterparty, Moot Scenario pg 34. 36 Produce Brokers Co Ltd v Olympia Oil and Cake Co Ltd [1917] 1 K.B. 320 (EWCA) at 330 per Scrutton LJ: “…though the meaning of a contract is varied, you may use a custom first of all in the case where you are using the custom as a dictionary to explain what words in the contract mean…”; in Grant v Maddox (1846) 15 M. & W. 737 (Exchequer), a contract under which an actress was engaged for three years at a weekly salary was held to entitle her to be paid only during the theatrical season, for the word year had that special meaning in theatrical circles. 37 Schuler (L) AG v Wickman Machine Tool Sales Ltd [1974] A.C. 235 per Lord Reid: “The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.” 38 Moot Scenario pg 61. 39 E Sullivan, The Marine Encyclopaedic Dictionary (Lloyd’s of London Press Ltd 2nd ed, 1988), p 408. 40 Moot Scenario pg 61. 41 As required by the alternative interpretation of clause 9(c)(i)– to do so with reference to when the Athena actually leaves the geographical boundary of the Port.

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of facts.42 In contrast, unnecessary contention arises if laytime is taken to end when

the Athena crosses the Port’s geographical limits. It is difficult to determine when

exactly is this point of time. Parties could not have intended this peculiar construction.

34. Accordingly, “leaves the Loading Place”43 is intended to mean the moment the

Athena departs from Hades as recorded by the Statement of Facts. Since the

Statement of Facts was issued within the allowed laytime, 44 no demurrage was

accrued.45

(2) Further, and in any case, the Athena did in fact leave the Port within

the allowed laytime

35. The contractually understood boundaries of the “Port of Hades” under the

Charterparty does not refer to the actual legal boundaries of Hades’ territorial waters.

References to a particular port in a charterparty must be understood in its ordinary

commercial sense (“commercial Port of Hades”). 46 Beyond an area for cargo

operations, 47 the commercial Port of Hades only extends to waters where “port

discipline” is exercised. On such spaces of water, port authorities regularly exercise

42 High Seas Venture Ltd Partnership v Sinom (Hong Kong) Ltd (The Newforest) [2008] 1 Lloyd’s Rep. 504 (EWHC): the “evidential value of the SoF is unquestionably strong whether or not the requisite mutuality is achieved and almost regardless of its contractual status” – in this case, the owners submitted a demurrage claim accompanied by a copy of the statement of facts. The charterers rejected the claim. Although the statement of facts referred to bad weather, the owners subsequently asserted that the statement of facts was wrong, and that the real reason for delay in discharge was not bad weather but shortage of lighters or inadequate fenders. See also Freedom Maritime Corporation v International Bulk Carriers SA (The Khian Captain) [1985] 2 Lloyd’s Rep 212 (EWHC) at p 214 where the court accepted that the statement of fact did provide some prima facie evidence of adverse weather. 43 Under clause 9(c)(i) of the Charterparty, Moot Scenario pg 34. 44 Moot Scenario pg 54. 45 Ibid. 46 Price v Livingstone (1882) 9 Q.B.D. 679 at p 68. See also J Schofield, Laytime and Demurrage (6th ed) Lloyd’s Shipping Law Library at p 83. 47 Sailing Ship “Garston” Co v Hickie & Co (1885) 15 Q.B.D. 580 at p 588 per Brett MR.

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control over ships, and shipowners regularly submit to the jurisdiction claimed by

those authorities.48

36. On the facts, the Athena did leave the commercial Port of Hades. She was

intercepted at a location where port discipline is not exercised by the Hades Coast

Guard. When the Athena was intercepted, the Master initially refused to comply on

the basis that the Athena was outside Hades’ territorial waters.49 The Coast Guard did

not dispute this.50 Even the Claimant believed this was the case.51 The subsequent

compliance was only on account of the Athena flying Hades’ flag.52 From the parties’

conduct, port discipline is not exercised at that particular space of water. It follows

that the Athena had left the commercial Port of Hades53 within the allowed laytime.

37. Accordingly, the Athena did leave the Loading Place within the laytime.

(3) It is immaterial that the Athena’s departure was temporary

38. The phrase “leaves the Loading Place”54 is analogous to a vessel’s “final

sailing”55 from port under certain voyage charters.56 Both expressions refer to the

point of commencement of the carrying voyage.57

39. A vessel has “finally sailed” from port when she had left the port for the

purpose of proceeding on the voyage.58 It is irrelevant that she was subsequently

driven back to port against her will by reasons such as bad weather.59

48 whether legally required or not; Id at p 590. 49 Moot Scenario pg 57. 50 Ibid. 51 The Claimant promptly removed the shipmaster from command after the Athena was returned to port– Moot Scenario pg 58. 52 Moot Scenario pg 57. 53 Sailing Ship “Garston” Co v Hickie & Co (1885) 15 Q.B.D. 580 at p 590 per Brett MR. 54 Under clause 9(c)(i) of the Charterparty, Moot Scenario pg 34. 55 Price v Livingstone (1882) 9 Q.B.D. 679 at p 681 56 Chapter 12, Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet & Maxwell, 2011) para 12–001; see Price v Livingstone (1882) 9 Q.B.D. 679 57 The carrying voyage is the third stage of the adventure contemplated by a voyage charter: EL Oldendorff & Co GmbH v Tradax Export SA [1974] AC 479 at 556 per Lord Diplock, HL.

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40. The Athena should be deemed to have left the Loading Place. Firstly, she had

left the Loading Place for the purpose of proceeding on the voyage, with no intention

to turn back.60 Secondly, the Coast Guard interception is irrelevant inasmuch as bad

weather was in Price v Livingstone since the English Court of Appeal did not restrict

this principle to instances of bad weather.61

41. Accordingly, the Claimant is not entitled to demurrage because the Athena

had left the Loading Place within the allowed laytime.

B. In any event, the the delay is covered by the laytime exception clause62 42. No demurrage was accrued since laytime was suspended under clause 9(e) of

the Charterparty.63 Under clause 9(e), laytime will not count during periods of delay

by reason of “arrests” or “delay or stoppage of goods in transit”.

(1) The Coast Guard’s interception amounts to an arrest under clause 9(e)

43. The expression “arrests” is intended to cover Coast Guard interceptions.

The ordinary meaning of “arrests” should be preferred 44. The parties intended for “arrests” to carry an ordinary commercial meaning,

rather than a technical meaning which specifically refers to Court issued arrests.

45. Contractual terms should be given commercially sensible interpretations over

narrow technical ones. 64 This applies with equal force for commercial shipping

contracts.65 58 Price v Livingstone (1882) 9 Q.B.D. 679 at p 681 59 Ibid. 60 Ibid. 61 “It is urged that she was driven back to Cardiff, and so had not finally sailed. That she was driven back is, to my mind, immaterial for the present purpose.” per Jessel M.R. Id at p 681. 62 clause 9(e) of the Charterparty, Moot Scenario pg 35. 63 Ibid.

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46. In the maritime commercial context, “arrests” is ordinarily understood as

vessel apprehension by state authority or by the exercising of a lien on the vessel.66

This holds a broad meaning which also covers Executive action.67 Similarly, Rule 10

of the Second Schedule of the Australian Marine Insurance Act 1909 states that in

interpreting maritime insurance policies, the term “arrest, &c., of kings, princes, and

people” only refers to executive acts, and does not refer to ordinary judicial process.

Such instances of use demonstrate that “arrests” does not exclusively refer to

apprehension of vessels by Court order.

47. The parties in the present case intended an ordinary meaning of “arrests”,

rather than an overly technical one. Being ordinary commercial parties, they would

not have in mind the niceties of public law, and would not intend to draw a pedantic

distinction between arrests initiated by the Executive, and in rem orders issued by

Court.68

The meaning of “arrests” under clause 9(e) is different from the meaning of “Court issued arrest proceedings” under clause 19(d)

48. In construing a contract, each part should be taken as deliberately inserted;

resulting in a presumption against redundant words.69 In the present case, “arrests”

64 Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437; 41 ALJR 348 per Barwick CJ (narrow approach not to be taken to intention of parties to commercial agreements); Minchillo v Ford Motor Co of Australia Ltd [1995] 2 VR 594 at 609 per Ormiston J (Fullagar J agreeing) (warranty by manufacturer was not to be construed in a technical way but in a manner which would be understood by a person in business). 65 Chapter 1, Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet & Maxwell, 2011) para 1–052, citing Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Co Ltd [1939] 2 K.B. 544 (‘‘war’’) and Luigi Monta of Genoa v Cechofracht Co Ltd [1956] 2 Q.B. 552 (‘‘government’’) 66 E Sullivan, The Marine Encyclopaedic Dictionary (Lloyd’s of London Press Ltd 2nd ed, 1988), p 28. 67 rather than the technical one which only refers to Court issued arrests. 68 In Kawasaki Kisen Kabushiki Kaisha of Kobe v. Bantham Steamship Co. Limited [1939] 2 K.B. 544, High Court at first instance said that “what he had to determine was what the parties meant by the clause of the charterparty. He thought they were using the word ‘war’...in the sense in which an ordinary commercial man would use it. He did not think the parties in a case of this sort were going into the niceties of international law.”– cited by McKendrick, Force Majeure and Frustration of Contract, 2nd ed, (Informa Law from Routledge, 2013) at p 88. 69 Re Strand Music Hall Co Ltd (1865) 35 Beav. 153: “The proper mode of construing any written instrument is, to give effect to every part of it, if this be possible, and not to strike out or nullify one

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stands alone under clause 9(e), while “arrest” under clause 19(d) is qualified to be

initiated by Court.

49. It follows that clauses 9(e) and 19(d) cannot both refer to Court-issued arrests.

The same word used in different parts of a contract should carry different

meanings70especially if the alternative interpretation is contrary to the presumption

against redundant words. 71 To illustrate, if “arrests” per se under clause 9(e) means

Court-initiated apprehensions, it would be redundant for clause 19(d) to qualify that

the “arrest” there is “Court issued”.

50. Furthermore, had the parties intended for clause 9(e) to refer specifically to

Court-issued arrests, they would have added similar qualifying words (as in clause

19(d)) to specify accordingly.

(2) The Coast Guard’s interception amounts to a “delay or stoppage of

goods in transit”

51. In the marine insurance context, “transit” refers to the phase when goods are

being transported between two points.72 The transit phase begins when goods have

been placed on the means of carriage.73

clause in a deed, unless it be impossible to reconcile it with another and more express clause in the same deed.”– principle applied in Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWHC 59 (Ch) and accepted on appeal: [2011] EWCA Civ 1542– cited in Chapter 7, Kim Lewison, The Interpretation of Contracts, 6th ed, (London, Sweet & Maxwell, 2015) p 371. 70 Chapter 5, Kim Lewison, The Interpretation of Contracts, 6th ed, (London, Sweet & Maxwell, 2015) p 366; see Watson v Haggitt [1928] A.C. 127 per Lord Warrington of Clyffe: the presumption that the same words have the same meaning may only be used to resolve an ambiguity when necessary; in British Energy Power and Trading Ltd v Credit Suisse [2008] EWCA Civ 53, the same word was given different meanings in different parts of the contract; Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 E.G.L.R. 155 per Hoffmann J. 71 Re Strand Music Hall Co Ltd (1865) 35 Beav. 153: “The proper mode of construing any written instrument is, to give effect to every part of it, if this be possible, and not to strike out or nullify one clause in a deed, unless it be impossible to reconcile it with another and more express clause in the same deed.”– principle applied in Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWHC 59 (Ch) and accepted on appeal: [2011] EWCA Civ 1542– cited in Chapter 7, Kim Lewison, The Interpretation of Contracts, 6th ed, (London, Sweet & Maxwell, 2015) p 371. 72 NEC Australia Pty Ltd v Gamif Pty Ltd 42 FCR 410 (1993) (Federal Court of Australia, NSW): “The ordinary meaning of "transit" essentially connotes that goods are in motion between two points”

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52. In the present case, the Coast Guard’s interception amounts to a “delay… in

transit” 74 since transit had already begun when the Athena was intercepted. 75

Furthermore, even if the Tribunal finds that the Athena had not left port, transit had

nonetheless begun since the HLNG had been fully loaded on to the Athena.76

(3) The contra proferentem rule is not applicable even if there is ambiguity

53. By the contra proferentem rule, ambiguous clauses will be interpreted against

the interests of the party responsible for introducing them into the contract.77 The rule

is of little utility in the context of commercially negotiated agreements.78 Particularly,

the rule is inapplicable against the party who seeks to rely on a clause drafted by the

opposing party.79

54. In construing “arrests” in the present case, the contra proferentem rule cannot

be applied to construe any ambiguity against the Respondent. While the Respondent

relies on clause 9(e), the entire Charterparty is drafted by the Claimant.80 There is no

basis to construe any ambiguity against the Respondent. Furthermore, the rule is of

73 Sadler Brothers Co v Meredith [1963] 2 Lloyd’s Rep. 293 (EWHC) at 307 per Roskill J: “…one wants to bear in mind that transit has in its nature the element of carriage about it and the carriage starts not when the movement of the vehicle in which the carriage is taking place starts, but when the goods are placed on the vehicle”– applied in SCA (Freight) Ltd v Gibson [1974] 2 Lloyd's Rep 533 (EWHC) at p 534: “the transit had begun at least when the goods had been loaded onto the lorry.” 74 clause 9(e) of the Charterparty, Moot Scenario pg 35. 75 The Athena had sailed from the Port at 0900 hours on 7 October (Moot Scenario pg 54) while the intervening prohibition occurred late on 7 October 2014 (at Moot Scenario pg 55). 76 Moot Scenario pg 54 77 Christie & Vesey v Helvetia [1960] 1 Lloyd’s Rep. 540 (EWHC) at pg 546. 78 CDV Software Entertainment AG v Gamecock Media Europe Ltd [2009] EWHC 2965, at [56] per Gloster J: the principle was “of uncertain application and little utility in the context of commercially negotiated agreements”. 79 CDV Software Entertainment AG v Gamecock Media Europe Ltd [2009] EWHC 2965 at [56], per Gloster J: “The evidence showed that the clause in question had been proposed as an idea by the Legal and Business Affairs Adviser to CDV, but then actually drafted by the US lawyer then acting for Deep/Gamecock. In such circumstances, the rule can have no application.” 80 Moot Scenario pg 27.

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little utility since the present Charterparty has been commercially negotiated, and is

not a standard terms agreement.81

55. Accordingly, the contra proferentem rule cannot be used against the

Respondent.

C. In the event that the Coast Guard had no authority to intercept the Athena, the delay would be due to the Claimant’s fault

56. In the event this Tribunal finds that the Coast Guard had no authority to

intercept the Athena, any delay would be due to the Claimant’s own default. Thus, the

Respondent cannot be liable for demurrage.

57. A charterer will not be liable for demurrage if the delay arises though the

shipowner’s fault. 82 In a voyage charter adventure, the shipowner is generally

responsible for the shipmaster’s fault. 83 The Master is at fault for making a

unauthorised deviation.

58. In the absence of express stipulations to the contrary, shipowners have an

implied undertaking to their charterers that their vessels would not make unjustified

departure from their scheduled routes.84 Departure from the route is only justified if

necessary to save life85 or if it is involuntary.86

81 Moot Scenario pg 3. 82 President of India v Moor Line, Ltd. [1958] 2 Lloyd's Rep. 205 (High Court of Australia) at 212 per Dixon CJ, endorsing the rule in Budgett v Binnington & Co. [1891] 1 Q.B. 35. 83 Gem Shipping Co of Monrovia v Babanaft (Lebanon) SARL (The Fontevivo) [1975] 1 Lloyd's Rep 339 at pg 343 per Donaldson J: “there is no doubt as to [the shipowner’s] responsibility for the actions of the master who decided to leave the discharging berth.” 84 Davis v Garrett (1830) 6 Bing. 716: Scaramanga v Stamp (1880) 5 C.P.D. 295 (CA); Louis Dreyfus v Lauro (1938) 60 Ll.L.Rep. 94, Fyffes v Reefer Express (The Kriti Rex) [1996] 2 Lloyd’s Rep. 171 at 191– cited in Chapter 12, Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet & Maxwell, 2011) para 12–010 85 Scaramanga v Stamp (1880) 5 C.P.D. 295 (CA) where the vessel was held to have made an unjustified deviation because the deviation was not necessary to save the lives of the people on board. 86 Lavabre v Wilson (1779) 1 Dougl. 284; Kish v Taylor [1912] A.C. 604.

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59. A shipmaster has no authority to deviate his vessel from the route unless there

is no possibility for him to communicate with the shipowner.87

60. In the present case, the Master’s decision to return the Athena to port is an

unnecessary and unjustified deviation. Firstly, it was unnecessary to return to port

since the Coast Guard did not have authority to arrest the Athena, as submitted

earlier.88 Secondly, in neglecting to seek advice from the Claimant before returning to

port,89 the Master had acted in excess of his authority in taking the extraordinary step

of deviation. Upon interception by the Coast Guard, the reasonable course of action

should have been to anchor the Athena and seek advice from the Claimant, since this

involves an issue of law that is outside the Master’s expertise.

61. Furthermore, no reasonable shipmaster would perceive any danger posed by

the Hades Coast Guard, that could at best deploy “two men with a rubber dinghy” 90

to apprehend a large vessel with crew on board.

62. Accordingly, the Respondent cannot be liable for demurrage since the delay

was caused by the Claimant’s own fault.

D. In any event, the Respondent bears no risk for delays arising from the nature of the cargo beyond its cargo loading obligations

63. In the present case, the Respondent has fully performed its cargo loading

obligations within the allowed laytime. 91 Subsequently, delay was caused by a

supervening prohibition on export of the Respondent’s HLNG.92

87 Chapter 12, Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet & Maxwell, 2011) para 12–003 88 As argued above in (ii) 89 Moot Scenario pg 56. 90 The Hades Advocate, 7 October 2014, Moot Scenario pg 55. 91 Cargo loading operations were completed at 2350 hours on 6 October 2014, Moot Scenario pg 54. 92 The prohibition on the export of HLNG was announced on 7 October 2014 (Moot Scenario pg 55), while the Charterparty was entered into on 21 July 2014 (Moot Scenario pg 29 Box 1).

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64. A charterer has obligations in respect of cargo loading.93 However, beyond

these obligations, the charterer is not liable for supervening delays caused by the

cargo94 provided that: 95

(a) the agreement was to carry a specific cargo;

(b) the parties have equal knowledge of the cargo’s potential for delays in

shipment; and

(c) the charterer had taken reasonable steps to enable the vessel to sail.96

65. In the present case, the Respondent bears no liability for the delay caused by

the supervening prohibition on export of the Respondent’s HLNG.

66. Firstly, the parties had specifically contracted to carry HLNG. This is

evidenced by the Respondent’s request for a special tanker that could transport HLNG

and the Claimant’s corresponding proposal.97

67. Secondly, both parties had equal knowledge (or lack thereof) of potential

difficulties in forwarding the cargo. Neither party would have anticipated the

intervening prohibition on the export of HLNG since it was brought about by a

sudden coup.98 Furthermore, the earliest protest against the export of HLNG (that

precipitated the coup)99 only occured after the Charterparty was entered into.100

68. Thirdly, although the Respondent did not enable the Athena to sail earlier, it

had acted reasonably. As the present case involves an absolute prohibition on export

93 EL Oldendorff & Co GmbH v Tradax Export SA [1974] AC 479 (House of Lords) at 556 per Lord Diplock. 94 Due to prohibition on the export of the cargo. 95 Owners of S.S. Sebastian v de Vizcaya (The Sebastian) [1919] 1 Ll L Rep 500; The Domald [1920] P. 56; General Feeds Inc v Burnham Shipping Corp (The Amphion) [1991] 2 Lloyd’s Rep. 101; cited in in Chapter 7, Scrutton on Charterparties and Bills of Lading, 22nd ed, (London, Sweet & Maxwell, 2011) para 7–039. 96 Owners of S.S. Sebastian v de Vizcaya (The Sebastian) [1919] 1 Ll L Rep 500 at 501 per Bailhache J. 97 Moot Scenario pg 2 and 3. 98 Moot Scenario pg 55. 99 Ibid. 100 The Hades Advocate, 4 October 2014, Moot Scenario pg 52– while the Charterparty was entered into on 21 July 2014, the first protest was staged on 4 October 2014.

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of HLNG, there was nothing in its power to enable the Athena to sail earlier. Thus,

the Respondent should be taken to have acted reasonably.

69. Accordingly, the Respondent bears no liability for this delay as it arises from

the nature of the cargo, and the Respondent had duly performed its cargo loading

obligations.

V. THE RESPONDENT IS ENTITLED TO A SALVAGE AWARD

A. The doctrine of separate legal personalities does not prevent the Respondent from claiming salvage

70. Hestia, not Hestug, owned the tugs and thus the doctrine of separate legal

personality does not apply to disentitle Hestia from its salvage claims.101

B. The elements of salvage have been established 71. Hestia is entitled to claim for salvage if it can satisfy these three requirements:

(1) Hestia must have been a volunteer; (2) The Athena was in danger at the time of

salvage (3) the salvage of the Athena must have been successful.102

72. It is submitted that, first, Hestia was a volunteer in this salvage operation.

Second, there was danger to the Athena upon the breakdown of its propeller. Third,

the salvage was successful; indeed, this is not disputed as the tugs had “rendered

assistance to the [Athena] … [And saved] many millions of dollars worth of cargo

and vessel.”103

(1) The respondents were volunteers during the salvage

The contractual relationship had ceased 101 Email dated 23rd November 2015, Page 73 of the Moot Problem 102 Supra n 1 103 7 October 2015, The Hades Advocate, Moot Problem 71.

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73. Zeus contends that the tow contract between Hestia and the Athena prevents

Hestia from being a volunteer in the salvage operation. However, it is submitted that

this contractual relationship had ceased.

74. The contract was solely for “tow services”. 104 The obligations under the

contract were discharged after the tugboats “had guided the Athena to open waters”

and “the towlines were release[d] from the vessel.”105 The parties to the towage

contract, Hestug and the Athena, did not contemplate that the Athena would have

been immobilized by the breakdown of its propellers. Thus when Hestug returned to

assist the distressed Athena, the contractual relationship had already ceased.

Even if a contractual relationship exists, the towage contract can still be converted into a salvage service

75. If this Honorable Tribunal finds that a contractual relationship still existed

between Hestug and the Athena, it is further submitted that the towage contract

between parties can be converted into a salvage contract.

76. For the towage contract to be converted into a salvage contract, Hestia needs

to show that – (1) the tow is in danger that could not reasonably have been

contemplated by the parties and (2) that risks are incurred or duties performed by

Hestug that could not reasonably be held to be within the scope of the contract.106

77. First, both parties, Hestia and Zeus, could not have reasonably contemplated

that the Athena’s sabotaged propeller shafts would break in the middle of its voyage.

Sabotage of the vessel would not be an ordinary event that commercial parties apply

their minds to.

104 Email dated 5 October 2015 13:00. 105 The Hades Advocate, dated 7 October 2015. Moot problem p71. 106 The Homwood (1928) 31 Llyold’s Rep 336 at 339.

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78. The responsibility of ascertaining a ship’s seaworthiness, before voyage, falls

on the shipowner, Zeus.107 108 Assuming that Zeus had conducted a survey of the

Athena and the tampered propeller was undetected, this would mean that both Zeus

and Hestia were unaware of the unseaworthiness of the vessel. In the alternative

scenario where Zeus had not discharged its duty to survey the Athena, this would

mean that both parties had not applied their minds to the potential unseaworthiness

of the vessel. Secondly, since the danger was uncontemplated, Hestug’s salvage

operation did not fall within the scope of the intended obligations under the contract.

Hence the elements to convert a towage contract into a salvage service has been

established.

Self-interest is not a factor to be taken into account to disentitle parties from a salvage award

79. Traditionally, the concept of self-interest disentitles a salvor from being

characterised as a volunteer as seen in The Lomonsoff.109 However, subsequent

judicial commentary point to the irrelevance of self-interest in ascertaining whether a

salvor has been a volunteer.110

80. Furthermore, Australia is a signatory to the 1989 Salvage Convention (“The

Convention”). The Convention specifically permits ‘sister ship’ salvage under Art

12(3). Ships are entitled to a salvage award despite the self-interest in salvaging a ship

107 This is a practical reality since only the shipowners and their external surveyors would have the prior opportunity to inspect the Athena before it departs from the port at Hades. The Baltic and International Maritime Council <https://www.bimco.org/Education/Seascapes/Maritime_Matters/2002_11_04_The_maintenance_of_ships.aspx> (accessed 6 March 2016) 108 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha [1962] EWCA Civ 7; Kopitoff v Wilson (1876) 1 QBD 602 109 The Lomonosoff [1921] P. 97. 110 The Sava Star [1995] 2 Lloyd’s Rep. 134; In The Sava Star, Clarke J allowed a claim for salvage by the owners of cargo on board the distressed ship. This was despite the fact that the salvors were self-interested in the cargo.

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that belongs to the same owner. Thus the tenor of the provisions in the Convention

shows that self-interest is not a factor that disentitles claims for salvage awards.

Even if self-interest is a relevant factor, it was not the predominant motivation for the salvage

81. If this Honourable Tribunal finds that Hestug is self-interested in the salvage,

the respondent further submits that Hestug did not salvage the Athena only to save the

HLNG on board.

82. For self-interest to disentitle a party from a salvage award, the self-interest

must be the only reason for the salvage. In The Lomonosoff, the soldiers were held to

not have been self-interested in salvaging the ship despite their self-interest in saving

their own lives. There were alternative and less risky methods for them to escape

without using the salvaged ship. Thus there were two reasons for salvaging the ship –

(1) the preservation of their own lives and (2) to prevent the salvaged vessel from

falling into the possession of their Bolshevist enemies.111

83. In the present case, there were also two reasons for salvage operation (1)

preserving the HLNG cargo (2) saving the Athena. Saving the Athena is a separate

reason for the salvage operation because it is a precondition to the successful

preservation of the HLNG onboard. The Athena is “one of the newest vessels with the

latest technology to be able to safely transport LNG”.112 There were no available

vessels that could carry the HLNG from Hades as Athena is “the only Hades flagged

H Max HLNG carrier worldwide”.113 Thus Hestia could not preserve the HLNG on

the Athena without salvaging Athena.

84. The self-interest in saving the cargo should only be taken into account in

assessing the quantum of the salvage award. The presence of the self-interest in the 111 Supra n 11 112 Mail dated 14 July 2014 from Zues 113 Email dated 30 April 2015 1200 HST

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cargo should only disentitle Hestia from claiming a salvage award relating to the

cargo but not from the salved value of the Athena. 114

(2) There was danger to the Athena 85. The Athena had “both propeller shafts” break and was immobilized in open

waters.115 The attendant danger to the Athena and the HLNG on board was sufficient

to establish a salvage claim.

86. The test to determine danger is an objective one. When no reasonable person

in charge of the venture would refuse a salvor’s help - as this would put the vessel at

risk of damage - if it were offered to him in return for a salvage award, the salvor is

entitled to a salvage award.116

87. In the present case, the Respondent is entitled to the salvage award because no

reasonable person in the Claimant’s position would have refused the help offered. In

The Troilus, the propeller of the vessel had been fractured and the vessel was

similarly immobilized. There was an inference of a lack of immediate danger as there

was a three-day span before a tugboat towed the vessel to safety. However, a salvage

award was given in the case despite the lack of immediate danger, because the person

in charge of the venture would likely agree to the salvage for two reasons.

88. First, the tugboats that claimed a salvage award from the vessel were the

closest in proximity to the distressed vessel and thus were “the safest, quickest and

most convenient method of towage”.117 Secondly, the degree of danger was only

taken into account for the quantum of salvage award.

114 The Theseus (1925) 23 L.I.L. Rep. 136 at 137: In The Theseus, the shipowner salved cargo carried on board another ship owned by him. The shipowner was able to claim for a salvage award of the cargo but not the ship 115 The Hades Advocate, dated 7 October 2015. Moot problem p71. 116 The Tramp [2007] EWHC 31 (Admlty); [2007] 2 Lloyd’s Rep. 363 at [19] per David Steel J. 117 The Troilus [1951] 1 Lloyd's Rep. 467 at 471

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89. Analogously, the breakdown of the propellers might not be an obvious danger

but this is sufficient in a claim for salvage. Athena’s relatively innocuous breakdown

of the propellers only contributed to the degree and extent of the danger but did not

preclude the existence of a danger. Furthermore, Hestug’s tugboat was in the vicinity

after the Athena’s propeller broke down118. This also made the tugboats the safest and

most efficient method of salvage. Thus a reasonable party in the Athena’s position

would not have refused the salvage operation and there was sufficient danger.

PRAYER OF RELIEF For the reasons set out above, the Respondent requests the Tribunal to:

FIND that this Tribunal has no jurisdiction to determine the frustration claim

FIND that there was frustration of the charter

FIND that the Respondent is not liable to pay for demurrage and detention

FIND a salvage award for the Respondent

118 The Hades Advocate, dated 7 October 2015. Moot problem p71.