384 A Claimant Memo

384 A
2ND NATIONAL LAW UNIVERSITY ODISHA MARITIME LAW MOOT COURT

COMPETITION
2015
IN THE MATTER OF
AMDSC
V.
HAPPY TURDS GROUP
MEMORANDUM ON BEHALF OF THE CLAIMANT
ON BEHALF OF: AGAINST:
AMDSC HAPPY TURDS GROUP
CLAIMANT DEFENDANT
2ND NATIONAL LAW UNIVERSITY ORISSA MARITIME LAW MOOT COURT COMPETITION, 2015
TABLE OF CONTENTS
LIST OF ABBREVIATIONS ..................................................................................................... iii

INDEX OF AUTHORITIES ....................................................................................................... iv
STATEMENT OF FACTS .......................................................................................................... ix
ISSUES RAISED .......................................................................................................................... xi
SUMMARY OF ARGUMENTS ................................................................................................ xii
ARGUMENTS ADVANCED ....................................................................................................... 1
[A] THE TRIBUNAL HAS DOMINION OVER THE MERITS OF THE DISPUTE ............ 1
[A.1] THE ARBITRATION TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTES..................... 1
[A.1.1] The Owners and the Charterers are party to the NYPE 93 ................................ 1
[A.1.2] The Owners has commenced these arbitration proceedings in accordance with
the English Arbitration Act 1996......................................................................................... 2
[A.1.3] The Tribunal has the power to decide its own Jurisdiction ................................. 3
[A.1.4] The Charter Party evinces the parties’ true intention to have London as the
seat of their arbitration ........................................................................................................ 4
[A.2] THE ARBITRATION CLAUSE WAS VALIDLY INCORPORATED FROM THE FIRST CHARTER
PARTY INTO THE SECOND CHARTER PARTY .............................................................................. 5
[B] CHARTERERS ARE NOT ENTITLED TO MAKE AN ADJUSTMENT HIRE
FOLLOWING A PERIOD OF OFF-HIRE ............................................................................... 8
[C] THE CHARTERERS, AND NOT OWNERS, ARE RESPONSIBLE FOR THE
BREACH OF THE FIRST ALONG WITH THE SECOND CHARTERPARTY ............... 11
[C.1] THE OWNERS HAVE NOT COMMITTED ANY REPUDIATORY BREACH BY WITHDRAWING
THE VESSEL ................................................................................................................................ 11
[C.1.1] The alleged actions of the Owners does not fall under the ambit of any of the
essentials required for proving ‘Repudiatory Breach’ .................................................... 11
[C.1.2] The Notice of Withdrawal served by the Owners is in nature of a novation of
contract and thus is a valid notice ..................................................................................... 13
[C.1.3] In Arguendo, The owners were about the vessel being at the anchorage and
failed to order for re-delivery ............................................................................................ 14
[C.2] THE DEFENDANTS BY DEFAULTING IN THE PAYMENT OF THE HIRE HAVE BREACHED THE
CHARTER PARTY ....................................................................................................................... 15
i
MEMORANDUM ON BEHALF OF CLAIMANTS
[C.2.1] The ‘Hire Payment’ would be considered as a ‘Condition Precedent’ and a

‘contractual obligation’ on the part of the Charterers ................................................... 16
[C.3] MIS-DESCRIPTION OF SPEED WOULD NOT AMOUNT TO THE BREACH OF CHARTER
PARTY AND THE CHARTERERS CANNOT TERMINATE THE CHARTER PARTY ON THAT GROUND
.................................................................................................................................................... 16
[C.3.1] Even if there has been any Mis-Description with regards to speed of the vessel
the Charterers are estopped from using the same as the basis for termination ........... 17
[D] THE CONDUCT OF THE CHARTERERS HAS AMOUNTED TO WAIVER OF
THEIR RIGHTS TO TERMINATE THE CHARTER PARTY/CLAIM DAMAGES. ...... 18
[D.1] THE CHARTERERS CANNOT TERMINATE THE CHARTER PARTY ON THE BASIS OF ... MIS-
DESCRIPTION OF SPEED ............................................................................................................. 19
[D.1.1] The Charterers by continuing the Charter Party during the mis-description
have deemed to have waived their ‘Right to Terminate’ ................................................ 19
[E] REPUDIATION GIVES THE RIGHT TO ELECT TO THE OWNERS ...................... 21
[E.1] THE OWNERS INDEED HAD THE RIGHT TO ELECT TO CONTINUE WITH THE CHARTER
PARTY ........................................................................................................................................ 21
In Arguendo, The Charterer themselves failed to order for the re-delivery ................. 22
[F] THE CHARTERERS ARE LIABLE TO PAY THE OWNERS THE WITHHELD
HIRE AMOUNT AND THE AMOUNT PAYABLE FOR PERIOD OF 4 MONTHS ........ 23
[F.1] THE CHARTERERS ARE LIABLE TO PAY THE MONEY WITHHELD BY THEM ON THE
MONTH OF MAY ......................................................................................................................... 23
[F.2] THE CHARTERERS HAVE BREACHED OBLIGATION BY NOT PROVIDING ANY
INSTRUCTIONS TO THE VESSEL .................................................................................................. 23
PRAYER FOR RELIEF............................................................................................................. 25
ii
LIST OF ABBREVIATIONS
AB QB Alberta Court of Queen’s Bench (Canada)

QBD Law Reports Queen’s Bench Division
P&I Protection and Indemnity Insurance
Para Paragraph
Lloyd’s Rep Lloyd’s Law Reports
Ex Exchequer
KB King’s Bench
LR Law Reports
i.e. That is
EWHC England and Wales High Court
Com Cas Company Cases (England)
CLJ Cambridge Law Journal
All ER All England Law Reports
Art. Article
Cl. Clause
Bing NC Bingham New Cases
ASBATANKVOY Association of Ship Brokers & Agents
UNCITRAL Model United Nation Commission on International Trade Law, Model
Law, 1985 Law on International Commercial Arbitration, 1985
ISM Code International Safety Management Code
YBCA Yearbook Commercial Arbitration
Rules/ HVR The modified Hague Visby Rules as contained in Schedule 1A
of the Carriage of Goods by Sea Act 1991 (Commonwealth)
r/w Read with
B/L Bill of Lading
IBA International Bar Association
ISGOTT International Safety Guide for Oil Tankers and Terminals
iii
INDEX OF AUTHORITIES
TREATIES AND CONVENTIONS
1. Convention on the Recognition and Enforcement of the Foreign Arbitral Awards, 1958
1,2,4
2. International Convention for the Unification of Certain Rules relating to Bills of Lading,
1924 (Hague Rules) as amended by the Visby Protocol, 1968 (Hague-Visby Rules) 3, 5
STATUTES
1. The English Arbitration Act, 1996 1, 2

2. UNCITRAL Model Law on International Commercial Arbitration, 1985 1, 3, 4, 6
RULES
1. NYPE 93 Time Charter Party (Revised September 1993) 3, 6. 11, 15, 17,18
2. United Nations Committee of International Trade Law Rules, 1976 3
CASES
1. A/S Tankexpress v. Campagnie Financiere Belge des Petroles, [1949] AC 76 ..................... 15

2. ABB Lummus Global Ltd. v. Keppel Fels Ltd. (1992) 2 Lloyd’s Rep. 24 (LCIA rules)......... 4
3. Afovos Shipping CO SA v Pagnan, [1983] 1 WLR 195 ........................................................ 21
4. Arab National Bank v. El Abdali (2005) 1 Lloyd’s Rep. 541 .................................................. 4
5. Balfour Breatty Construction (Scotland) Ltd v. Scottish Power Plc (1994) SLR 807 ........... 24
6. Bank of Nova Scotia v. Hellenic Mutual War Risk Association (Bermuda) Ltd [1992] 1 AC
233, 267................................................................................................................................... 24
7. Behn v. Barness, 122 ER 281; Bettini v. Gye, (1876) 1 QBD 183......................................... 16
8. Bliss v. South East Thames Regional Health Authority, [1987] ICR 700. ............................. 12
9. Boone v. Eyre, 126 ER 160; Hunlocke v. Blacklowe, 85 ER 893.......................................... 16
10. Bradley v H Newsom Sons & Co [1919] AC 16 .................................................................... 21
11. Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd.
(2008) 1 Lloyd’s Rep. 608 ........................................................................................................ 4
12. Brinkibon Ltd. V. Stahag Stahl und Stahlwarenhandelsgessellschaft mbh, [1983] 2 AC 34 . 11
iv
13. Brinkibon Ltd. V. Stahag Stahl und Stahlwarenhandelsgessellschaft mbH, [1983] 2 AC 34 15

14. Bulfracht (Cyprus) Ltd. v Boneset Shipping Company Ltd. (The Pamphilos) [2002] EWHC
2292........................................................................................................................................... 9
15. Camilin Denny Architects Ltd. v. Adelaide Jones & Co Ltd., [2009] EWHC 2110 (TCC) .. 13
16. Carlyle Finance Ltd v. Pallas Industrial Finance Ltd., [1999] 1 All E.R. (Comm) 659 ......... 14
17. CEP Holdings Ltd. and CEP Claddings Ltd. v. Steni AS, [2009] EWHC 2447 (QB) ........... 13
18. China Thai Joint Serv. Corp. Shenzhen Branch v. Gee Thai Holdings Co. XX Y.B. Comm.
Arb. 671 (H.K. High Court, S.Ct. 1994) (1995) ....................................................................... 6
19. Christopher Brown Ltd. v. Genossenschaft Oesterreichischer Waldbesitzer
Holzwirtschaftsbetriebe Regisrierte GmbH (1954) 1 QB 8 ...................................................... 3
20. Clifton v. Palumbo, [1944] 2 All E.R. 497 ....................................................................... 13, 19
21. Comandate Marine Corp v. Pan Australia Shipping Pty Ltd (2006) 157 FCR 45.................... 1
22. Consmaemma-Conzario Tra Produttori Agricola v. Hermantos Escot Madrid SA, XXVI Y.B.
Comm. Arb. 858 ....................................................................................................................... 7
23. Cutter v. Powell, (1795) 6 TR 320; Ritchie v. Atkinson, 103 ER 787 ................................... 16
24. De Medina v. Norman, (1842) 9 M&W 820 .......................................................................... 11
25. Demarest v. Hopper, 22 N.J. Law 019 .......................................................................... 6, 17, 20
26. Demarest v. Hopper, 22 N.J. Law 019; .................................................................................. 14
27. DIC of Delaware, Inc. v. Tehran Reede v. Corp, 8 Iran-US C.T.R. 144, 1985 ........................ 7
28. Dubai Islamic Bank PJSC v. Paymentech Merchant Services Inc. (2001) 1 Lloyd’s Rep. 65 4
29. Federal Commerce & Navigation Co. Ltd v. Molena Alpha Inc, [1979] AC 757.................. 12
30. Fercomental SARL v Mediterranean Shipping Co SA (The Simona) [1989] AC 788 .......... 22
31. Fiona Trust & Holding Corp. v. Privalov, (2007) Bus L R 1719 ......................................... 1, 7
32. Frost v. Knight, 178 US 1 ................................................................................................. 11, 15
33. Geogas SA v Trammo Gas Ltd (The Beleares) [1993] 1 Llyod’s Rep 215 ............................ 21
34. George D Emery Co. v. Wells, [1906] AC 515; Francis v. Lyon, (1907) 4 CLR 1023 ......... 12
35. Gill & Duffus Landauer Ltd v. London Export Corp. GmbH, [1982] 2 Lloyd’s Rep 627 .... 11,
15
36. Greenmast Shipping Co. SA v. Jean Lion et Cie (The Saronikos), [1986] 2 Lloyd’s Rep. 277
................................................................................................................................................. 14
v
37. Habas Sinai VeTibbiGazlarIsthisalEndustri A.S. v. Sometal S.A.L [2010] EWHC 29

(Comm) (“Habas Sinai”)........................................................................................................... 5
38. Hadley v. Baxendale (1854) 9 Ex. 341 ............................................................................. 23, 24
39. Hamblen J. in Sylvia ............................................................................................................... 24
40. Harvey v. Facey, [1893] A.C. 552 .................................................................................... 13, 19
41. Harvey v. Johnson, (1868) 6 C.B. 305 .................................................................................... 14
42. Highlands Wellmount Health Network v. John Deere Health Plan, 350 F. 3d 568 ............ 7
43. Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 ................... 21
44. Howard v. Pickford Tool Co Ltd [1951] 1 KB 417 ................................................................ 21
45. Hoxie v. Home Ins. Co., 32 Conn. 21 ..................................................................................... 20
46. Hoxie v. Home Ins. Co., 32 Conn. 21, 40 ............................................................................... 18
47. Hyundai Merchant Marine Co Ltd v. Furness Withy (Australia) Pty (The Doric Pride) [2006]
2 Lloyd’s Rep 175, .................................................................................................................... 8
48. Inland Revenue Commission v. Fry, [2001] S.T.C. 1715................................................. 13, 19
49. Interfoto Picture Library Ltd v. Stiletto Cisuals Programmes Ltd., [1989] Q.B. 433 ............ 14
50. Irving R. Boody & Co. v. Win Holdings Int’l Inc., 213 F. Supp. 2d 378 (S.D.N.Y 2002) ..... 7
51. Kent v. Warner, 12 Allen 561, 563 (1866) ................................................................... 18, 20
52. Koomphatoo Local Aboriginal Land Council v, Sanpine Pty Ltd, (2007) 233 CLR 115 ...... 11
53. Lumbermens Mutual Casualty Co v Klotz, 281 F 2d 499 ...................................................... 21
54. Martin v. Railroad Co. 83 Me. 100, 21 Atl. 740 ........................................................... 6, 17, 20
55. Mersey Steel & Iron Co. Ltd. v. Naylor Benzon & Co., (1884) 9 App Cas 434 .................... 12
56. Miserecchi v. Agnesi, Corte di Cassazione, December 13, 1971, No. 3620 ............................ 6
57. Monarch SS Co Ltd v. Karlshamns Oliefabriker (A/B) [1949] AC 196 ................................ 24
58. Moschi v Lep Air Services Ltd [1973] AC 331 ...................................................................... 22
59. Noonan v. Victorian Railways Commissioners, (1907) 4 CLR 1668..................................... 12
60. Pan Ocean Shipping Ltd v Credit Corp Ltd Trident Beauty" [1994] 1 WLR 161 ................. 10
61. Philip & Co. v. Knoblauch, 1907 S.C. 994 ....................................................................... 13, 19
62. Pips (Leisure Productions) Ltd. v. Walton, (1980) 3 P&CR 415 ........................................... 11
63. Ross v. Swan, 7 Lea (Tenn.) 463 ...................................................................................... 18, 20
64. Royal Greek Government v Minister of Transport [1949] 82 Ll. L. Rep, 196 ......................... 8
vi
65. Santa Martha BaayScheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The Rijn),
[1981] 2 Lloyd’s Rep 267 ......................................................................................................... 9
66. Scancarriers A/S v. Aotearoa International Ltd., [1985] 2 Lloyd’s Rep. 419 .................. 13, 19
67. Seabridge Shipping AB v AC Orsleff’s EFTS A/S [2000] CLC 656 ....................................... 2
68. Selwyn v. Garfit, L. R. 38 Ch. D. 273 .............................................................................. 18, 20
69. SK Shipping (S) Pte Ltd v. Petroexport Ltd (The Pro Victor) [2010] 2 Lloyd’s Rep 158 ..... 11
70. Steven v. Bromley & Son, [1919] 2 K.B. 722 ........................................................................ 14
71. Stretford v. Football Association Ltd. (2007) EWCA Civ 238 ................................................ 5
72. Sumukan v. Commonwealth Secretariat (2007) EWCA Civ 243........................................ 5
73. Supershield Ltd. v. Siemens Building Technologies FE Ltd. [2010] EWCA Civ 7 .............. 24
74. Tanenbaum Textile Co. V. Schlanger, 287 N.Y. 40, 404, 40 N.E. 2d 225, 226 (1942) .......... 7
75. The Aliakamon Progress (1978) 2 Llyod’s Rep. 499 ............................................................... 9
76. The Marika M (1981) 2 Llyod’s Rep. 622 ................................................................................ 9
77. The Nafri (1978) 2 Llyod’s Rep. 132 ....................................................................................... 9
78. The Nea Agrex S.A. v. Baltic Shipping Co. Ltd., (Agios Lazaros Case), [1976] 2 Lloyd’s
Rep 47 ....................................................................................................................................... 2
79. The Teno (1977) 2 Llyod’s Rep. 289........................................................................................ 9
80. Toller v. Law Accident Insurance Society, (1936) 55 Lloyd’s Rep 258 ................................ 11
81. Tonkstar Ltd. v. American Home Assurance Co (2006) EWHC 1234 (Comm.) ..................... 4
82. Tonnelier and Bolckow, Vaughan & Co v Smith and Weatherill & Co [1897] 2 Com Cas 258
................................................................................................................................................. 10
83. Transfield Shipping Inc. v. Mercator Shipping Inc. [2008] 3 WLR 345 ................................ 24
84. Tritonia Shipping Inc. v. South Nelson Forest Products Corp, (1996) 1 Lloyd’s Rep 114 ...... 4
85. University of Edinburgh v. Onifade, 2005 SLT (Sh CT) 63 .......................................... 13, 19
86. Vosnoc Ltd v. Transglobal Projects Ltd, [1997] 1 WLR 101 ................................................... 2
87. Walter v. Cooper, [1967] VR 583 ........................................................................................... 12
BOOKS
1. ALAN REDFERN, J. MARTIN HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL

ARBITRATION, 4th ed., Sweet & Maxwell, London (2004) 1, 3, 4
vii
2. ALAN REDFERN, J. MARTIN HUNTER, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION,

5th ed., Oxford University Press, (2009) 1, 2, 3, 4
3. ALAN REDFERN, MARTIN HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL
ARBITRATION, 3rd ed. Sweet & Maxwell, London (2003) 3, 4
4. ANTONIO J. RODRIGUEZ AND MARY CAMPBELL HUBBARD, “THE INTERNATIONAL SAFETY
MANAGEMENT (ISM) CODE: A NEW LEVEL OF UNIFORMITY”, 73 TULANE LAW REVIEW
1585 (1999) 10
5. C. AMBROSE, K. MAXWELL, LONDON MARITIME ARBITRATION, 2nd ed., Sweet & Maxwell,
London, (2002) 7
6. CHRIS P. THORPE; JOHN C. L. BAILEY, COMMERCIAL CONTRACTS: A PRACTICAL GUIDE TO
DEALS, CONTRACTS, AGREEMENTS & PROMISES, Kogan Page Publishers, (1999) 9

7. ROBERT MARKIN, ARBITRATION LAW, Informa, (2012) 12
8. STEWART C. BOYD, SCRUTTON ON CHARTER PARTIES, Sweet & Maxwell, London, (2008) 11
viii
STATEMENT OF JURISDICTION
This present dispute has been referred to the arbitral tribunal in pursuance to the arbitration
agreement entered into by the parties and under Cl. 46(1) of NYPE Standard Time Charter Party
amended 1993 which is the charter party signed by the parties in the present matter.
ix
STATEMENT OF FACTS
THE PARTIES-
AMDSC (hereinafter the owners/claimants) are the Owners of the vessel M.V.Anku (hereinafter
the vessel). Happy Turds Group (HTG) (hereinafter the defendants/Charterers) are the Charterers
in this present case.
1st CHARTER PARTY-
The Claimants and defendants entered into the contractual relationship on an amended ‘NYPE
93’ format Charter-party inclusive of rider clauses for hiring of the vessel on 20th January, 2008
for a period of 18 months. This Charter-Party was terminated by the Owners on 4th May 2008.
ENGINE BREAKDOWN
The vessel experienced an engine breakdown and due to which the vessel was grounded was 5
days. It didn’t happen because of the fault of owners.
DEFAULT IN PAYMENT-
The default in payment was done by the Charterers in the month of May and amount of USD
475000 was withheld by the Charterers consequently which led to the termination of the 1st
Charter-party as already been mentioned above.
2nd TIME CHARTER PARTY-
The 2nd Charter Party was entered into by the parties on 7th May 2008 for a period of 24 months.
The second Charter Party was terminated by the Owners on 1st January 2009 on the grounds that
the Charterers didn’t give any instruction to the vessel for more than 4 months.
ARBITRATORS-
Mr. Born has been appointed arbitrator by the Owners and Mr. Matt has been appointed
arbitrator by the Charterers in the present dispute.
x
ISSUES RAISED
1. Jurisdictional Issue
i. Whether the arbitral tribunal has jurisdiction to hear the present dispute.
ii. Whether the arbitration clause was validly incorporated from the first Charter Party into
the second Charter Party in the absence of specific incorporation.
2. Whether the Charterers were entitled to make an adjustment hire following a period of off -
hire?
3. Whether the Owners committed a repudiatory breach by withdrawing the vessel without
giving a valid notice pursuant to the Anti-Technicality Clause.
4. Whether non-payment of hire amounted to breach of the Charter Party by the charterers, and
the effect of subsequent payment.
5. Whether mis-description of speed in the second Charter Party amounted to breach and
entitled the charterers to terminate the charter party.
6. Whether by continuing with the Charter Party for 4 months, the charterers had waived their
right to terminate/claim damages.
7. If the Charterers had repudiated the Charter Party, whether the Owners were entitled to
exercise their right to elect and keep the vessel waiting at the anchorage.
8. Quantification of damages.
xi
SUMMARY OF ARGUMENTS
A. The Tribunal Has jurisdiction over the matters concerning the present dispute
Claimants submit that, this tribunal has been validly constituted and has contentious jurisdiction
over this dispute as the Charter-party provides that, the disputes arising out or in connection with
the charter party shall be settled by way of arbitration. The arbitration agreement namely NYPE
to which both owners and charterers are party to, specifies London as the seat of the Arbitration.
The arbitration clause was validly incorporated into the 2nd charter party and there is no
discrepancy with respect to the validity of the 2nd charter party. Hence, it can be safely concluded
that, tribunal has jurisdiction to hear the disputes arising out of this charter party.
B. Charterers are not entitled to make any adjustment on the hire amount
The breakdown of the engine was caused not by the fault of the owners but because of the latent
defect over which the owners had no control. The right to deduct the hire is limited to the cases
where the ship-owner has wrongly deprived the Charterers of the use of the vessel. The claim for
Equitable set-off would be available only when the Charterers are deprived of the use of the ship
by the fault of the owners. So as here the owners were not even remotely involved in the
unfortunate event of the engine breakdown ultimately leading to the grounding of the vessel, the
charterers should not be allowed to exempt themselves from the absolute obligation of payment
of the hire amount.
C. Charterers, and not Owners, are guilty of breaching any the two Charter parties
The act of the owners does not lead to the fulfilment of the essentials of the repudiatory breach of
a contract. The owners were more than willing to perform their part of the obligations and the
notice of withdrawal acts as a newly novated contract which was tacitly accepted by the
charterers and hence served as a valid notice. The Charterers infact, by defaulting in the payment
committed the breach of the charter party.
D. Charterers cannot terminate the charter-party on the grounds of mis-description of

speed
There was no mis-description of the speed on the part of the owners. It was just a pretence cloth
used to cover the actual reason for termination. The market prices prevailing that day were fairly
xii
low than what the charterers were paying to the owners and in order to avail the benefits of the
market fluctuations, they terminated the 2nd charter party. Even if we assume that, there was mis-
description of the speed, even then the termination of the Charter-party cannot be justified as the
vessel was under the direct supervision and control of the vessel and they are estopped from the
same as they had the vessel for more than 7 months. The charterers have waived their right of
termination due to the operation of, waiver by estoppel.
E. Owners being the non- repudiating party earned the right to election
As the Owners were the non-repudiating party and as the Charterers committed a repudiatory
breach, the owner had the right to elect either in favour of furtherance of the contract or against it
by way of termination. The owners exercised their right and chose to go ahead with the contract.
F. Charterers are liable to pay the amount withheld by them along with the hire amount
for the period of 4 months wherein the vessel was under their disposal
The hire amount was arbitrarily deducted by the charterers. The charterers were not entitled to
make any adjustment on the hire amount the off-hire clause could not be possibly attracted. The
charterers are also supposed to pay the hire amount of 4 months where the vessel was waiting at
the anchorage for their instructions. By failing to give instructions to the vessel, the charterers
have committed a breach of the Charter-party and they are obligated to compensate the owners
for that time period where the vessel was at the disposal of the charterers.
G. Charterers are liable to pay the damages suffered by the owners
As per the assessment made with bona fide intentions and reasonably, the charterers are liable to
pay the hire amount withheld by them on the month of May, along with the 4 Months hire
amount where the vessel was under their disposal and the interests therein.
(475000 + 16800000 + Compound Interests as the court deems fit)
xiii
ARGUMENTS ADVANCED
PART 1: JURISDICTION
[A] THE TRIBUNAL HAS DOMINION OVER THE MERITS OF THE DISPUTE
1. The Charter Party provides the arbitration panel with jurisdiction over ‘any dispute arising
out of or in connection with the Charter Party’.1 Arbitration clauses are interpreted broadly,
and with the presumption that, the parties agreeing with the arbitration clause, intended the
dispute to be heard before an arbitration tribunal2.
2. Broadly speaking, this dispute concerning the performance or non-performance of the
Charter Party and the presumption of arbitral jurisdiction has not been rebutted. Therefore,
the panel has been properly appointed and has jurisdiction to hear this dispute.
3. The Owners argues that, this tribunal has the contentious jurisdiction to hear the merits of
this dispute because:
a. The Owners and the Charterers are parties to the NYPE 93 Charter party.
b. The Owners has commenced these arbitration proceedings in accordance with the English
Arbitration Act 1996.3
c. This tribunal has the power to rule on its own jurisdiction.
d. The Charter-party clearly specifies London as the seat.4
[A.1] THE ARBITRATION TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTES
[A.1.1] The Owners and the Charterers are party to the NYPE 93
4. The Charterers and the Owners entered into a legally binding relationship by way of Charter
Party.5 For the purpose of both the New York Convention and the UNCITRAL Model law, it
is sufficient that, there should be defined legal relationship between the parties, whether
contractual or not. The underlying contract in the instant case, relating to hiring of the vessel
for rent, to which the parties entered into, provides for a contractual relationship between the
1
Cl. 45(b), NYPE 93 4, Standard Time Charter Party, (December, 2003).
2
Comandate Marine Corp v. Pan Australia Shipping Pty Ltd (2006) 157 FCR 45, at 89-90; Fiona Trust & Holding
Corporation v Privalov [2007] Bus L R 1719, at 1725-1726.
3
§2(1) ENGLISH ARBITRATION ACT 1996.
4
Clarification Point no. 2.
5
Refer Moot Proposition, Email Dt.- 10th January 2008.
1
parties. Such contractual relationships between the parties form the basis of the arbitral
proceedings. Thus subject to any provisions of the relevant applicable law, the terms of the
arbitral jurisdiction and powers in any particular case depend on a proper construction of the
Arbitration Agreement.
5. Relying upon the aforementioned submissions, it can be validly concluded that, all form
requirements of an arbitration agreement as specified under Art. II of NY Convention and
Article 21 of the UNCITRAL6 rules provides that- ‘The arbitral tribunal shall have the power
to determine the existence or the validity of the contract of which an arbitration clause forms
a part. For the purposes of Article 21, an arbitration clause which forms part of a contract and
which provides for arbitration under these Rules shall be treated as an agreement independent
of the other terms of the contract.
6. It is submitted that, both the Charterers and the Owners entered into a valid contract having a
valid arbitration clause.7 It is further submitted that, the disputing parties are party to the
NYPE 93 Charter Party8.
[A.1.2] The Owners has commenced these arbitration proceedings in accordance

with the English Arbitration Act 1996
7. S. 14(4) provides that, ‘Where the arbitrator or arbitrators are to be appointed by the
parties, arbitral proceedings are commenced in respect of a matter when one party serves on
the other party or parties notice in writing requiring him or them to appoint an arbitrator or
to agree to the appointment of an arbitrator in respect of that matter’.9
8. Further, a notice must be in writing in order for it to be valid.10 A valid notice must contain
an indication of the claim, the remedies sought and a reference to the arbitration agreement. 11
If no request is made in the notice, a notice carries with it an implied request in relation to the
appointment of an arbitrator.12
6
Art. 21(2), United Nations Commission on International Trade Law, UN Doc. A/RES/31/98; 15 ILM 701 (1976).
7
Cl. 45 (b), NYPE 93, Standard Time Charter Party, (September, 1993).
8
Refer Moot Proposition, Email Dt. 20th January 2008.
9
§.14(4), English ARBITRATION ACT, 1996.
10
The Nea Agrex S.A. v. Baltic Shipping Co. Ltd., (Agios Lazaros Case), [1976] 2 Lloyd’s Rep 47, at 51; Vosnoc
Ltd v. Transglobal Projects Ltd, [1997] 1 WLR 101; Seabridge Shipping AB v AC Orsleff’s EFTS A/S [2000]
CLC 656.
11
Art 6, UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW ARBITRATION RULES, UN Doc. A/RES/31/98;
15 ILM 701, (1976).
12
The Frotanorte [1995] 2 Lloyd’s Rep 254, at. 261; The Agios Lazaros, [1976] 2 Lloyd’s Rep 47.
2
9. It is humbly submitted that, the ‘notice was duly served by the owners to charterers which
contained all the valid requisites of a valid notice. Most importantly, a subtle reference has
been made to the arbitration agreement which in actuality contains the arbitration clause13.
10. The Owners therefore, argues that, it commenced these proceedings in accordance with the
provisions given under the English Arbitration Act 1996.
[A.1.3] The Tribunal has the power to decide its own Jurisdiction
11. It is an established principle of arbitration that, an arbitral tribunal has an inherent power to
rule on its own jurisdiction14. The jurisdiction of the arbitral tribunal is premised on the
existence of a valid agreement to arbitrate between the parties15. A tribunal may also rule on
its own jurisdiction under the provisions of the Arbitration Act.16
12. Principle of competence/competence17 is a general principle of commercial arbitration
according to which a tribunal is empowered to make a determination as to its own
jurisdiction to deal with the substantive claims in dispute. The arbitral tribunal shall have the
power to rule on objections that, it has no jurisdiction.18
13. The arbitrator shall be entitled to proceed with the arbitration to rule on his own
jurisdiction.19 The arbitral tribunal may rule on its own jurisdiction, including any objections
with respect to the existence or validity of the arbitration agreement. 20 If one of the parties
contests, before the arbitrator, the latter’s jurisdiction whether in principal or scope, it is for
the arbitrator to decide on the validity or scope of his mission.21
14. The jurisdiction clause in the Charter Party which came into existence with effect from 20th
January 2008, by way of an email22 must be construed against the Charterers such that the
13
Refer Moot Proposition , Mail dated 12th January 2009 ¶ 2
14
Christopher Brown Ltd. v. Genossenschaft Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe Regisrierte
GmbH (1954) 1 QB 8, 12-3; GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, vol. 1, p. 853, Kluwer
Law International 5th ed., (2009); NIGEL BLACKABY ET. AL, REDFERN AND HUNTER ON INTERNATIONAL
ARBITRATION, p.347, 5th ed., (2009).
15
ROBERT MARKIN, ARBITRATION LAW, pp. 5.1 - 5.2, Informa, (2012).
16
§. 30(1), ARBITRATION ACT, 1996.
This is sometimes described in a form of shorthand as Competence/Competence: it is expressed in German as
Kompetenz/kompetenz and in French as Competence de la Competence.
18
Art. 21(1), United Nations Commission on International Trade Law Rules, UN Doc. A/RES/31/98; 15 ILM 701
(1976).
19
Art. V(3) , EUROPEAN CONVENTION ON INTERNATIONAL COMMERCIAL ARBITRATION of 1961.
20
Art. 16 UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION 1985.
21
Art. 1466, FRANCE CODE OF CIVIL PROCEDURE, 1981.
22
Refer Moot Proposition, Email Dated 20th January 2008
3
Tribunal is given with the jurisdiction to determine matters “arising out of or in connection”
to this Email, and by extension, the Tribunal must have jurisdiction to determine the merits
of claims prefaced on it. The arbitral tribunal shall itself decide on its jurisdiction.23
15. It is thus humbly submitted that, this Tribunal has the power to rule on its own jurisdiction.
[A.1.4] The Charter Party evinces the parties’ true intention to have London as the
seat of their arbitration
16. The seat of the arbitration” means the juridical seat of the arbitration designated—
a) by the parties to the arbitration agreement, or
b) by any arbitral or other institution or person vested by the parties with powers in that
regard
c) by the arbitral tribunal if so authorized by the parties, or which, in the absence of any
such designation, has been determined having regard to the parties’ agreement24 and all
the relevant circumstances.25
17. A written agreement requiring that, “any dispute arising from this charter-party shall be
settled by arbitration in London” constituted a valid arbitration agreement26. The arbitration
clause contained in NYPE 93 stating that, ‘All disputes arising out of this charter shall be
Arbitrated at London’ presents a similar intention to arbitrate in London and goes further in
providing the forum and rules of arbitration27. It is further submitted that, S. 2(1)28 sets out
the basic rule governing the application of Pt. I of the Arbitration Act 1996. It applies where
the seat of the arbitration is in England.
18. By virtue of this clause29, the Owners and the Charterers, on an extensive reading of its
terms, have consented to matters arising out of or in connection with the c/p being resolved
23
Article 186 FEDERAL CODE ON PRIVATE INTERNATIONAL LAW, 1987.
24
ABB Lummus Global Ltd. v. Keppel Fels Ltd. (1992) 2 Lloyd’s Rep. 24 (LCIA rules); Dubai Islamic Bank PJSC
v. Paymentech Merchant Services Inc. (2001) 1 Lloyd’s Rep. 65, at 74; Arab National Bank v. El Abdali (2005)
1 Lloyd’s Rep. 541; Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd.
(2008) 1 Lloyd’s Rep. 608; Pertodulos (2002) L.M.C.L.Q. 66; Tonkstar Ltd. v. American Home Assurance Co
(2006) EWHC 1234 (Comm.).
25
§. 3, ARBITRATION ACT, 1996.
26
Tritonia Shipping Inc. v. South Nelson Forest Products Corp, (1996) 1 Lloyd’s Rep 114.
27
Cl. 45(b), NYPE 93, Standard Time Charter Party (September, 1993).
28
§.2(1), ENGLISH ARBITRATION ACT, 1996.
29
Cl. 45(b), NYPE 93
4
by arbitral procedure.30 In this present case, the parties had consented to the amended NYPE
93 Charter Party and there had been no objection raised by the Charterers with respect to the
seat of arbitration Tribunal. In addition to that, the parties have eliminated New York as the
seat of Arbitration which means that, the seat has to be London and nothing else.31
19. It is submitted that, there existed a valid agreement to arbitrate as the arbitration clause was
validly embedded in the NYPE 93 C/P which specified London as the seat for arbitration.32
20. This also can be inferred from an Email conversation33 wherein the owners clearly
mentioned that, both the Owners and the Charterers agreed for London to be the seat of
Arbitration and they consented to the arbitral awards which shall be given by them. Now, as
it was already agreed in past, then the Charterers should be restrained from challenging the
seat as London.
[A.2] THE ARBITRATION CLAUSE WAS VALIDLY INCORPORATED FROM THE FIRST
CHARTER PARTY INTO THE SECOND CHARTER PARTY
21. An Arbitration clause may be incorporated in a contract by reference or by course of dealing

between the parties.34Arbitration agreements are private arrangements that bind signatories.35
The term “Agreement in writing” shall include an arbitral clause in a contract or an
arbitration agreement.36 A reference to a document containing an arbitration clause
constitutes a valid arbitration agreement if the clause is made a part of the contract.37 Herein,
the document which contained the Arbitration Clause was the Amended NYPE 93 Charter
Party (Second Charter Party) with the intention of making that particular clause, part of the
agreement. It is submitted that an arbitration agreement has been validly incorporated on 7 th
May, 2008.
30
Pacific Carriers Ltd. v. BNP Paribas (2004) 218 CLR 451
31
Moot Clarification , Point No. 2
32
Cl. 45(b), NYPE 93, Standard Time Charter Party, (September, 1993).
33
Refer Moot Proposition, Email Conversation Dated 12th January 2009
34
Stretford v. Football Association Ltd. (2007) EWCA Civ 238; Sumukan v. Commonwealth Secretariat (2007)
EWCA Civ 243.
35
The Eastern Saga (1984) 2 Lloyd’s Rep 373, 379; GARY BORN, INTERNATIONAL ARBITRATION CASES AND
MATERIALS, pp. 1131-2, Aspen Casebook Series, Wolters Kluwer (2011).
36
Art. 2(2), CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS, 1958.
37
Section 6(2), The English Arbitration Act 1996; Art. 7(6), UNCITRAL Model Law, 1985, as amended in 2006
r/w Section 2(1), The Singapore International Arbitration Act 2002; Habas Sinai VeTibbiGazlarIsthisalEndustri
A.S. v. Sometal S.A.L [2010] EWHC 29 (Comm) (“Habas Sinai”).
5
22. The first and foremost requirement of a valid arbitration agreement is to establish the
consensus ad idem of the parties. At the very outset the electronic communication regarding
the arbitration clause, the intention to resolve disputes or commitment to arbitration can be
observed as a common remainder. The Owners and Charterers have agreed in writing inter
alia to a clause which states that, ‘All other terms and conditions as per pervious C/P with
logical amendments’. Herein no specific reservations on the part of Charterers was shown
with respect to arbitration clause. This clearly suggests that, they accepted London to be the
seat of arbitration and no more specific incorporation hence was needed. The commonality of
intention establishes valid arbitration clause.
23. Apart from the issue of what terms are essential to an agreement to arbitrate, the question of
consent to an arbitration agreement doesn’t generally involve complicated legal issues.
Instead, it principally concerns question of facts.38 The only evidence of consent to an
arbitration agreement will be parties consent to the underlying contract, with no separate
indications of consent to the arbitration clause specifically.39 Most Legal systems recognize
that a party’s assent to contractual terms may be established by conduct.40
24. There are circumstances in which a party has accepted performance under a contract and
subsequently asserted objections to the formal validity of an arbitration agreement or clauses.
Such objections are fundamentally unattractive. New York Convention incorporates
principles of good faith and estoppels, which preclude parties from relying on Art. II’s form
requirement in some circumstances.41
25. At the onset, it is submitted that the Charterers are precluded by the operation of estoppel
from challenging the jurisdiction of this Tribunal.42 Not only did the Charterers consent, by
signature, to the terms of the Charter-party but also failed to object to the inclusion of the
arbitration clause in the NYPE 93 Second Charter Party. When a part is under a duty to
38
NIGEL BLACKABY ET. AL, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION, p.347, 5th ed., (2009).
39
Obergericht of Basel, (1979) IV Yearbook Commercial Arbitration 309; Miserecchi v. Agnesi, Corte di
Cassazione, December 13, 1971, No. 3620.
40
U.N. Convention on Contracts for the International Sale of Goods, 1980, Art. 18(1)
41
China Thai Joint Serv. Corp. Shenzhen Branch v. Gee Thai Holdings Co. XX Y.B. Comm. Arb. 671 (H.K. High
Court, S.Ct. 1994) (1995) ; Albert Jan Van Den Berg, The New York Arbitration Convention of 1958, 185
(1981).
42
Demarest v. Hopper, 22 N.J. Law 019; Martin v. Railroad Co. 83 Me. 100, 21 Atl. 740 , ‘Estoppel is a legal
principle which precludes a man from alleging or from denying a certain fact or statement of facts, in
consequence of his previous allegation or denial or conduct or admission’.
6
speak, or his failure to speak is inconsistent with honest dealings, and misleads another, then
his silence may be deemed as acquiescence.43
26. Similarly in the matter at hand, the Charterers has estopped by performing the contract and
maintaining the silence when there was a duty to speak. The Charterers’ challenge to the
incorporation of arbitration clause is negated by the principles of good faith and estoppel as it
supersedes Art. II’s Form Requirements. It raises an obligation for deciding authority to give
effect to principles of good faith and estoppel in considering formal objections to an
agreement to arbitrate.44 A party’s performance of its putative contractual obligations or
acceptance of its counter party’s performance is often regarded as a basis for finding as
assent to a contract.45
27. As per the facts of the dispute at hand, the Charterers having received the altered Charter
Party proceeded with the performance of the contract. It is a matter of common prudence
that, such a contractual performance relating to the shipment of goods would raise disputes
which shall be resolved as per the terms specified under the altered c/p. Consent can also be
established through conduct and through acquiescence such as failing to object to statements
on actions by other party. Hence, they may not challenge the jurisdiction.
28. The NYPE 93, Charter Party governing both the parties provides that, the relationship
between the parties shall be determined in accordance with the laws of England46.
All disputes arising out of this charter shall be referred to Arbitration in London in
accordance with the Arbitration Act 199647. Arbitration clauses should be interpreted broadly
so that, the presumption is maintained in favor of arbitration48.
29. An arbitral tribunal shall validly determine those disputes which the parties have agreed
upon. This rule is an inevitable and proper consequence of the voluntary nature of arbitration.
30. Based upon the Charterers’ conduct or behavior it is firmly submitted that principles of good
faith and estoppel have been violated. As these principles have universal and uniform
43
Tanenbaum Textile Co. V. Schlanger, 287 N.Y. 40, 404, 40 N.E. 2d 225, 226 (1942)
44
GARY BORN, INTERNATIONAL COMMERCIAL ARBITRATION, (1sr Indian Reprint, 2011)
45
DIC of Delaware, Inc. v. Tehran Reede v. Corp, 8 Iran-US C.T.R. 144, 1985; Irving R. Boody & Co. v. Win
Holdings Int’l Inc., 213 F. Supp. 2d 378 (S.D.N.Y 2002); Consmaemma-Conzario Tra Produttori Agricola v.
Hermantos Escot Madrid SA, XXVI Y.B. Comm. Arb. 858 (Spanish Tribunal Supremo) (2001)
46
Cl. 45(b), NYPE 93, Standard Time Charter Party, (September 1993).
47
Cl. 45(b), NYPE 93, Standard Time Charter Parties, (September 1993).
48
Fiona Trust & Holding Corp. v. Privalov, (2007) Bus L R 1719; Highlands Wellmount Health Network v. John
Deere Health Plan, 350 F. 3d 568, (6 th Cir. 2003); ALAN REDFERN, MARTIN HUNTER, LAW AND PRACTICE OF
INTERNATIONAL COMMERCIAL ARBITRATION, p. 548, 4th ed., Sweet and Maxwell, London, (2004).
7
application, they create an obligation which cannot be overlooked and superseded. Thus,
their consent to the arbitration clause is evident and hence the arbitration clause has been
validly incorporated.
PART II: MERITS
[B] CHARTERERS ARE NOT ENTITLED TO MAKE AN ADJUSTMENT HIRE

FOLLOWING A PERIOD OF OFF-HIRE
31. The off hire clause together with other clauses sprinkled in charter parties specify the
circumstances which cause the ship to be off-hire and payment of hire to be reduced.
a) Charterers has the burden of proof
The Charterers has an obligation to continuously pay hire and bears the risk of delay49 unless
it can prove that the off hire is operational in that particular situation.50Therefore, the burden
of proof squarely falls on the Charterers. The cardinal rule is that the Charterers will pay hire
for the use of the ship unless they can bring themselves clearly within the exceptions.51
b) Exemption nature of off hire

The nature of an off hire clause is that of an exemption. The Charterers exempts himself from
paying hire and is usually then construed narrowly against him as it is for his benefit. The
general rule is that if there is doubt as to construction of any term in a contract, it should be
construed strictly against the party in whose favor it was made.52 If there is a doubt as to
what the words mean, then those words must be read in favor of the owners because the
Charterers is attempting to cut down the owner's right to hire.53
32. In a case where the vessel had grounded for more than 20 days, the court held that, although
the vessel was rightly off-hire during the period it was grounded, upon being refloated, it
became fully efficient and although the extra time waiting for an alternative berth was due to
the delay caused by the grounding it was not a proper ‘off-hire’ period. The Charterers can
49
Hyundai Merchant Marine Co Ltd v. Furness Withy (Australia) Pty (The Doric Pride) [2006] 2 Lloyd’s Rep 175,
p. 179.
50
The Berge Sund, [1993] 2 Lloyd's Rep.453, p. 463.
51
TERENCE COUGHLIN, TIME CHARTERS, 6th ed., para 25.1, pp.441 (2008).
52
JOHN WEALE, ‘THE NYPE OFF-HIRE CLAUSE AND THIRD PARTY INTERVENTION: CAN AN EFFICIENT VESSEL BE
PLACED OFF-HIRE?’ BRADEN VANDEVENTER, ‘ANALYSIS OF BASIC PROVISIONS OF VOYAGE AND TIME CHARTER
PARTIES’, p. 806, vol. 49 Tulane law Review (1974-1975).
53
Royal Greek Government v Minister of Transport [1949] 82 Ll. L. Rep, 196 at p. 199.
8
claim back the hire amount which they paid during the waiting period if they could prove
that, the grounding was caused by the ship-owner’s fault or breach.54
33. It was held that, the right to deduct the hire was limited to the cases where the ship-owner has
wrongly deprived the Charterers of the use of the vessel or has prejudiced him in the use of
it.55The claim for Equitable set-off would only be available only when the Charterers are
deprived of the use of the ship by the fault of the owners.56 Test for equitable deduction was
given wherein if any of the following conditions are fulfilled, the Charterers are entitled to
make an adjustment as in these two conditions the Charterers are deprived of the use of ship,
either total or partial.
a). Breach of speed warranty
b). failure to load full cargo57.
In this present case, the adjustment wasn’t made by either of the two conditions but because
of the breakdown of engine which indeed wasn’t caused by the fault of the owners.
34. The cause of the accident giving rise to the alleged off-hire pleaded by the Charterers must be
fortuitous and not one that could be said to originate from the natural use which the
Charterers makes of the ship.58 In a case, where the owners claimed the balance of hire and
interest on it due under a trip time charter deducted by the Charterers from the hire under
allegation that the vessel had underperformed by reason of her slow speed and excessive fuel
oil consumption. Court allowed Owners’ claim, considering as sufficient the evidence
provided by the owners with showed that, they were not at fault and all the preventive
measures were taken by them in order to maintain the sea-worthiness. The court gave
decision in their favor and the recovery of the due amount was duly made.59
35. In this present case, the claim by the Charterers for withholding the hire leading to further
adjustment was because of the engine breakdown which was not caused by any negligence or
fault on the part of the owners. It was a Latent defect which was beyond the comprehension
54
The Marika M (1981) 2 Llyod’s Rep. 622.
55
The Nafri (1978) 2 Llyod’s Rep. 132.
56
The Aliakamon Progress (1978) 2 Llyod’s Rep. 499.
57
The Teno (1977) 2 Llyod’s Rep. 289.
58
Santa Martha BaayScheepvaart and Handelsmaatschappij NV v. Scanbulk A/S (The Rijn), [1981] 2 Lloyd’s Rep
267 at pp. 271-2.
59
Bulfracht (Cyprus) Ltd. v Boneset Shipping Company Ltd. (The Pamphilos) [2002] EWHC 2292.
9
of the Owners.60 Giving heed to the established precedents, it would meant/mean that the
Charterers are not entitled to make any adjustment of hire if the owners are not at any fault
and have practiced due diligence.
36. It is further submitted that, except where otherwise specifically permitted in the provisions of
the c/p, the Charterers shall have no right to make arbitrary deductions from hire which shall
remain payable punctually and regularly as stipulated therein. the Owners shall have a right
of permanent withdrawal of their vessel when payment of hire has not been received by their
bankers by the due date by reason of oversight, negligence, errors or omissions of charterers
or their bankers61 In the absence of a provision to the contrary, Charterers are not entitled to
make a deduction for anticipated off-hire, however certain it may be. This principle has been
established by a long line of cases going back to Tonnelier and Bolckow, Vaughan & Co v
Smith and Weatherill & Co62 and was more recently confirmed by the House of Lords in Pan
Ocean Shipping Ltd v Credit Corp Ltd63.
37. Hence, it can be understood that, in order to make a deduction from a hire payable, there has
to be an express incorporation for the same which shall provide the Charterers the right to do
so, and in absence of any such agreement, the deduction shall be improper giving Owners the
right to withdraw the vessel. Express deductions of hire are considered to be exhaustive.
Unless a claim fell within them, the hire has to be paid continuously.
38. Hence, it can be said that, the Charterers in no circumstances had any right to provide for an
adjustment in the hire amount which they allegedly did and the act was unsustainable to the
core.
39. Even if it is assumed that, the Charterers did have the right to make adjustment, even then the
amount withheld is highly erroneous and inflated. The hire amount for 5 days64 comes down
to 3,75,000 USD and the amount which they withheld was 1,00,000 more than the payable
amount65 which means that the method of assessment was faulty and the Charterers were not
entitled to make any such decision arbitrarily.
60
Refer Moot Proposition, Email dated.- 3rd March.
61
http://www.uio.no/studier/emner/jus/jus/JUR5401/h10/undervisningsmateriale/kristina-maria-siig-charterparties
.pdf <last visited 6th February 2015>.
62
Tonnelier and Bolckow, Vaughan & Co v Smith and Weatherill & Co [1897] 2 Com Cas 258.
63
Pan Ocean Shipping Ltd v Credit Corp Ltd Trident Beauty" [1994] 1 WLR 161.
64
Moot Clarification Point No. 8, 9
65
Refer Moot Proposition Email Dated 4th May 2008
10
[C] THE CHARTERERS, AND NOT OWNERS, ARE RESPONSIBLE FOR THE
BREACH OF THE FIRST ALONG WITH THE SECOND CHARTERPARTY
40. A breach of contract66 can be defined as a situation where,

a) The promisor/promisee fails to perform a contractual obligation within the stipulated time
period
b) There is an anticipatory breach of the contract
A breach of contract can be established by the proof that the promisor/promisee failed to
perform a contractual obligation within the time period stipulated for the performance of the
obligation.67 It is submitted that, in the present case, there has been no breach by the Owners
in regard to the first and the second Charter Party.
[C.1] THE OWNERS HAVE NOT COMMITTED ANY REPUDIATORY BREACH BY WITHDRAWING
THE VESSEL
41. It is submitted that, there has been no repudiatory breach of the charter party as the valid
requisites for proving repudiatory breach, has not been fulfilled by. In addition to that there
has been a valid acceptance of the 42 hour notice by the Charterers. Thus, it is submitted that,
the allegation of repudiatory breach being made against the Owners is without any valid
basis.
[C.1.1] The alleged actions of the Owners does not fall under the ambit of any of the
essentials required for proving ‘Repudiatory Breach’
42. Repudiation can be described as a repudiation of obligation that is a clear absence of

readiness or willingness to perform satisfying the requirement of seriousness. 68 The
definition provides for certain requirements for establishing repudiatory breach of contract.
a) The ‘clear absence of readiness or willingness’ to perform the contract69
66
J.W. CARTER, CARTER’S BREACH OF CONTRACT, p. 3, 1st ed., Lexis Nexis Butterworths, Australia (2011).
67
Brinkibon Ltd. V. Stahag Stahl und Stahlwarenhandelsgessellschaft mbh, [1983] 2 AC 34; Gill & Duffus
Landauer Ltd v. London Export Corp. GmbH, [1982] 2 Lloyd’s Rep 627; Frost v. Knight, 178 US 1.
68
Koomphatoo Local Aboriginal Land Council v, Sanpine Pty Ltd, (2007) 233 CLR 115; SK Shipping (S) Pte Ltd
v. Petroexport Ltd (The Pro Victor) [2010] 2 Lloyd’s Rep 158; Toller v. Law Accident Insurance Society, (1936)
55 Lloyd’s Rep 258.
69
De Medina v. Norman, (1842) 9 M&W 820 at 827; Pips (Leisure Productions) Ltd. v. Walton, (1980) 3 P&CR
415 at 418.
11
b) The absence of readiness or willingness should satisfy the requirement of seriousness70
[C.1.1.a] There was no absence of willingness to perform the terms of the Charter
Party
43. Readiness and willingness in this context means readiness and willingness to perform, i.e. the
willingness and the ability of the promisor/promisee to perform in accordance with the
contract.71 The assertion whether the party is willing to perform its obligation or not is
however a question of fact.72
44. In the present matter if the facts are to be concerned then the phrase ‘absence or the
willingness to perform’ cannot be used in case of the Owners as they have adhered to their
duty of reminding the Charterers of their default thereby suggesting that, they had all the
bonafide intention to continue with the Charter Party and for the appraisal of the same they
also even informed the Charterers of their duty and thereby serving them the notice of
payment before instituting the withdrawal.
[C.1.1.b] The allegation lacks the essential ground of ‘Requirement of Seriousness’

for establishing ‘Repudiatory Breach’
45. With regards to the establishment of the ‘repudiatory breach’ the requirement of seriousness
is satisfied only when the ‘absence of willingness’ leads to any prospective breach of a
condition/ contract/ charter party or results in the refusal of the performance of the
contract/Charter Party.73
46. In the present matter it is submitted that there is no absence of any willingness on behalf of
the Owners that could actually lead to any prospective breach of the Charter Party. The
termination of the Charter Party was done after the expiration of the notice of withdrawal that
was submitted to the Charterers by the Owners after they had defaulted in the payment of the
hire amount. Hence, the second essential ground for establishing the ‘repudiatory breach’ is
70
Mersey Steel & Iron Co. Ltd. v. Naylor Benzon & Co., (1884) 9 App Cas 434, George D Emery Co. v. Wells,
[1906] AC 515; Francis v. Lyon, (1907) 4 CLR 1023; Noonan v. Victorian Railways Commissioners, (1907) 4
CLR 1668; Federal Commerce & Navigation Co. Ltd v. Molena Alpha Inc, [1979] AC 757; Woodar Investment
Development Ltd. v. Wimpey Construction UK Ltd., [1980] 1 WLR 277; Bliss v. South East Thames Regional
Health Authority, [1987] ICR 700.
71
Supra Note 4.
72
Walter v. Cooper, [1967] VR 583.
73
12
also not satisfied. Thus, it is humbly submitted that the allegations of ‘repudiatory breach’
being made by the Charterers cannot be sustained.
[C.1.2] The Notice of Withdrawal served by the Owners is in nature of a novation of

contract and thus is a valid notice
47. Novation extinguishes the original contract and replaces it with a new contract which takes
position of a subsequent offer and requires acceptance in order to be considered as a part of
the original contract. A novation of contract can occur in the absence of any formal deed of
novation. Further the consent to a novation of contract can either be expressly given or can
be inferred from the conduct of the parties.74
48. The Notice of Withdrawal75 served by the Owners in their mail dated 2nd May 2008 is in
nature of a novation of contract which was subsequently accepted by the Charterers though
tacitly. Therefore it would not be considered as a violation of the provision of the ‘Anti-
Technicality’ clause which mandates a 48 hour notice to be served before the withdrawal is
affected.
49. Also, the notice being in the nature of a subsequent offer therefore on receiving acceptance of
the Charterers, it would have an overriding effect on the rider clauses.
[C.1.2.a] There was ‘implied acceptance’ for the novation of the contract on behalf
of the Charterers.
50. An acceptance is a final and unqualified expression of assent to the terms of an offer. 76 The
mere acknowledgement of offer in the sense of an acknowledgement would not amounts to
acceptance. The ‘acceptance’ should either expressly or in any implied manner should
contain a statement suggesting the assent of the offeree towards the acceptance of the offer.77
74
Camilin Denny Architects Ltd. v. Adelaide Jones & Co Ltd., [2009] EWHC 2110 (TCC); CEP Holdings Ltd. and
CEP Claddings Ltd. v. Steni AS, [2009] EWHC 2447 (QB).
75
Refer Moot Proposition, p. 5, mail dated 2nd May, 2008.
76
Inland Revenue Commission v. Fry, [2001] S.T.C. 1715 at 6, 7; University of Edinburgh v. Onifade, 2005 SLT
(Sh CT) 63.
77
Harvey v. Facey, [1893] A.C. 552; Clifton v. Palumbo, [1944] 2 All E.R. 497; Scancarriers A/S v. Aotearoa
International Ltd., [1985] 2 Lloyd’s Rep. 419, Philip & Co. v. Knoblauch, 1907 S.C. 994.
13
51. The acceptance to an offer can also be made through conduct. 78 In the present matter the
notice which was made by the Owners suggesting terms, which was different from the
original terms agreed upon in the rider clauses. Such a notice thereby required expressed
rejection in any form so as not to be considered by the parties. The Charterers therefore by
not objecting to the notice containing the new provisions served by Owners would be
considered to have accepted to the terms of the contract.
[C.1.2.b] The Charterers would be estopped from denying their acceptance of the
‘notice of withdrawal’
52. ‘Estoppel is a legal principle which precludes a man from alleging or from denying a certain
fact or statement of facts, in consequence of his previous allegation or denial or conduct or
admission’.79
53. In the present matter the Charterers had the choice of objecting to the 42 hour notice given to
them by the Owners. In addition to that they had the full duration of 42 hours to revert to the
Owners regarding their objection to the time period mentioned in the notice and showing
their reservation to the provisions of the rider clauses i.e. the ‘Anti-Technicality’ clause. But,
the failure of the Charterers in doing so would amount to a default on their behalf. On the
basis of such default it is thus submitted that the Charterers would be estopped from making
any further objections with relation to the payment of hire because by their conduct they
impliedly accepted the new conditions of the owners and are estopped by the same.
[C.1.3] In Arguendo, The owners were about the vessel being at the anchorage
and failed to order for re-delivery
54. Hire is the most sensitive element of the C/P. Rent in this case was payable on advance
monthly basis. As the vessel was duly delivered on 1st February 2008, the rent was supposed
to be paid on 1st March, 1st April and so on and so forth. Charterers did not pay the rent
which actually became due on 1st May 2008. They subsequently were asked to pay the same
by way of notice on 2nd May. They defaulted the payment on 3rd May as well.
78
Harvey v. Johnson, (1868) 6 C.B. 305; Steven v. Bromley & Son, [1919] 2 K.B. 722 at 728; Greenmast Shipping
Co. SA v. Jean Lion et Cie (The Saronikos), [1986] 2 Lloyd’s Rep. 277; Interfoto Picture Library Ltd v. Stiletto
Cisuals Programmes Ltd., [1989] Q.B. 433 at 436; Carlyle Finance Ltd v. Pallas Industrial Finance Ltd., [1999] 1
All E.R. (Comm) 659, at. 670.
79
Demarest v. Hopper, 22 N.J. Law 019; Martin v. Railroad Co. 83 Me. 100, 21 Atl. 740.
14
Chronologically, the 48 hours’ time period has already been expired. In addition to that, they
were given 18 more hours to make payment and when they failed to perform the same, then
the vessel was withdrawn.
a. The owners are forming a contract with an entirely strange corporation involving money
up to USD 4.05 millions.80
b. The Charterers already defaulted for more than 3 days and they did not respond to the e-
mails sent by the Owners. This casts serious doubts on Charterers’ intentions of paying
the hire amount.
c. Owners were not being taken seriously by the Charterers and were exempting themselves
from the absolute obligation which here is payment of the hire amount.
Hence, the Owners had no choice but to withdraw the vessel.
[C.2] THE DEFENDANTS BY DEFAULTING IN THE PAYMENT OF THE HIRE HAVE BREACHED
THE CHARTER PARTY
55. A breach of contract81 can be defined as a situation where,

a) The promisor/promisee fails to perform a contractual obligation within the stipulated
time period.
b) There is an anticipatory breach of the contract
A breach of contract can be established by the proof that the promisor/promisee failed to
perform a contractual obligation within the time period stipulated for the performance of the
obligation.82 Failure to perform an obligation also means a failure to perform an obligation in
accordance with the duty applicable to a certain duty.83
56. The Charterers’ most basic obligation under a time charter is to ensure full and regular
payment of the hire amount. The obligation to pay on the due date is an absolute obligation
and the reasons provided in case of any default are immaterial.84In the present matter, it is
submitted that, the payment of the hire amount was a contractual obligation on part of the
Charterers which was a condition precedent of the contract. Thereby, a default on part of the
80
USD 75,000 * 30 * 18 = 4,05,00,000 (assuming each month to be of 30 days)
81
82
Brinkibon Ltd. V. Stahag Stahl und Stahlwarenhandelsgessellschaft mbH, [1983] 2 AC 34; Gill & Duffus
Landauer Ltd v. London Export Corp. GmbH, [1982] 2 Lloyd’s Rep 627; Frost v. Knight, 178 US 1.
83
J.W. CARTER, CARTER’S BREACH OF CONTRACT, p. 24, 1st ed., Lexis Nexis, Australia (2011).
84
A/S Tankexpress v. Campagnie Financiere Belge des Petroles, [1949] AC 76.
15
Charterers to ensure the proper payment of the hire amount constituted to breach of the
contractual obligation on behalf of the Charterers.
[C.2.1] The ‘Hire Payment’ would be considered as a ‘Condition Precedent’ and a

‘contractual obligation’ on the part of the Charterers
57. When the promisor’s obligation is dependent upon the occurrence of a particular event, then
the occurrence of such event is a condition precedent to the right of the promisee to receive
performance from the promisor.85 The condition precedent is pre-requirement imposing the
obligation on the Promisor.86
58. The condition precedent in general parlance refers to the contractual terms and promises87
that are required to be fulfilled on the part of one party before the contractual obligations can
be imposed upon the other contracting party. In the present matter the payment of the hire88
is a condition precedent that is by all means is required to be fulfilled if at all any obligations
are to be imposed upon the Owners.
59. If the facts of the present case are to be analyzed then there has been a continuing default on
part of the Charterers when they first defaulted in the payment of the ‘hire amount’ on 1st
May 2008. This default continued up to 4th May 2008 when even after receiving and
accepting the modified notice of withdrawal from the Owners, the Charterers did not make
the payment of the required ‘hire amount’. Therefore, the act of non-payment of hire by the
‘Charterers’ would amount to a breach of the charter party as it was a condition precedent as
well as a contractual obligation on behalf of the ‘Charterers’ which was essential for the
continuation of the charter party.
[C.3] MIS-DESCRIPTION OF SPEED WOULD NOT AMOUNT TO THE BREACH OF CHARTER

PARTY AND THE CHARTERERS CANNOT TERMINATE THE CHARTER PARTY ON THAT
GROUND
60. It is submitted that in the present matter there has been no mis-description of speed as being
contemplated by the Charterers. This is because the second charter party under which the
85
Cutter v. Powell, (1795) 6 TR 320; Ritchie v. Atkinson, 103 ER 787 at 791.
86
Boone v. Eyre, 126 ER 160; Hunlocke v. Blacklowe, 85 ER 893 at 896.
87
Behn v. Barness, 122 ER 281; Bettini v. Gye, (1876) 1 QBD 183 at 187.
88
Cl. 11(a), NYPE 93 Time Charter Party, Revised 14 th September 1993.
16
claim for mis-description of the speed was brought is merely a continuation of the first
charter party,89 on certain modified terms and conditions for the same vessel,90
61. Further, if the possession of the vessel is concerned, then throughout the first Charter party
and even during the signing of the second charter party the possession of the vessel was with
the charterers and not with the Owners. Thus, the allegation of mis-description being made
here is without any basis because the Owners cannot reasonably be expected to be aware
about the any latent change in the speed levels of the vessel if they never had the vessel in
their possession since 1st February 2008.91
[C.3.1] Even if there has been any Mis-Description with regards to speed of the
vessel the Charterers are estopped from using the same as the basis for termination
62. ‘Estoppel is a legal principle which precludes a man from alleging or from denying a certain
admission’.92From legal perspective, estoppel is a set of doctrines in which a court prevents a
litigant from taking an action the litigant normally would have the right to take, in order to
prevent an inequitable result. Estoppel occurs when a party "reasonably relies on the promise
of another party, and because of the reliance is injured or damaged".93
63. In the present matter, it is submitted that, even if there has been any kind of inadvertent mis-
description of the speed levels of the vessel, the Charterers are debarred from taking that as a
ground for terminating the charter party as they are estopped from doing the same.
64. The Charterers said to have been estopped from alleging the mis-description of speed
because the time period of 4 months that has passed between the entering into the Charter
Party and date of making of the allegations. This surpasses the reasonable time period and
this time period was enough for the Charterers for complaining about inadequate speed, had
there been any. It is clearly evident from the situation that the Charterers had only terminated
the Charter Party due to fluctuating market rate which was in their favor. Charterers had
hired the vessel at USD 150000/day from AMDSC but at the time of terminating the Charter
Party the hire rate was only USD 25000. So this is humbly submitted that the Charterers
89
Refer Moot Proposition, p. 9, Internal Report dated 7th May 2008.
90
Refer Moot Proposition, p. 9, Internal Report, dated 7 th May 2008.
91
Refer Moot Proposition, p. 3, Mail dated 20th January 2008.
92
Demarest v. Hopper, 22 N.J. Law 019; Martin v. Railroad Co., 83 Me. 100, 21 Atl. 740.
93
Estoppel legal definition" Legal dictionary, thefreedictionary.com, <last visited 6th February 2015>.
17
wanted to terminate the Charter Party so that they can be benefitted from the rapid market
fluctuations. This clearly manifests their frugal bent towards the market places.
65. Originally the C/P was signed on 20th January 2008. The vessel was directly under the
supervision cum control of the Charterers for 7 long months. On 3rd March 2008, vessel
suffered from the engine breakdown and the vessel was grounded for 5 days. This directly
affected the vessel’s performance. So it is not hard to figure the substantial reduction of
speed. This clearly means that, either the speed was not a crucial element or the Charterers
just wanted a reason to terminate the charter party and avail the benefits of the market
fluctuations which amounted to 1, 25,000 USD less than the agreed hire price.
66. All these sequence of events are clearly proving that, the Charterers had enough time to point
out any such mis-description if there was any suggesting that, there was in reality no such
mis-description of speed as alleged by the Charterers. Even, if there was any inadvertent mis-
description of speed then also the conduct of the Charterers would amount to acquiescence
on part of their part thereby negating the mis-description as a ground for termination of the
contract.
[D] THE CONDUCT OF THE CHARTERERS HAS AMOUNTED TO WAIVER OF

THEIR RIGHTS TO TERMINATE THE CHARTER PARTY/CLAIM DAMAGES.
67. Waiver can be defined as a "consent to dispense with a right" and "as an intentional
relinquishment of a known right”.94 Any conduct by a party may amount to a waiver
provided there must be a clear, unequivocal and decisive act showing a purpose to waive
one’s rights.95
68. It is submitted that in the present the matter the Charterers have waived their contractual
rights i.e. the ‘Right to Claim Damages’ and the ‘Right to Terminate the Charter party’ by
their act their act of acquiescence which have resulted in the waiver of the rights. Also, the
termination carried out by the Charterers in the present matter is based upon invalid grounds
therefore it won’t amount to termination and the charter party would be deemed to be in
continuation.
94
Selwyn v. Garfit, L. R. 38 Ch. D. 273, 284; Hoxie v. Home Ins. Co., 32 Conn. 21, 40; Kent v. Warner, 12 Allen
561, 563 (1866).
95
Ross v. Swan, 7 Lea (Tenn.) 463, at 467.
18
[D.1] THE CHARTERERS CANNOT TERMINATE THE CHARTER PARTY ON THE BASIS OF MIS-
DESCRIPTION OF SPEED
69. It is submitted that in the present matter there has been no mis-description of speed as being
contemplated by the Charterers. This is because the second charter party under which the
claim for mis-description of the speed was brought is merely a continuation of the first
charter party,96 on certain modified terms and conditions for the same vessel97.
70. Further, if the possession of the vessel is concerned, then throughout the first charter party
and even during the signing of the second charter party the possession of the vessel was with
the charterers and not with the Owners. Thus, the allegation of mis-description being made
here would without any basis because the Owners cannot reasonably expect to be aware
about the any latent change in the speed levels of the vessel if they never had the vessel in
their possession since 1st February 2008.98
[D.1.1] The Charterers by continuing the Charter Party during the mis-description
have deemed to have waived their ‘Right to Terminate’
71. It is submitted that in the present matter the Charterers have acquiesced the alleged ‘mis-
description’ by not raising the same with the ‘Owners’.
[D.1.1.a] The Charterers have also waived through the principle “waiver by
estoppel”
72. An acceptance is a final and unqualified expression of assent to the terms of an offer.99 The
mere acknowledgement of offer in the sense of an acknowledgement would not amount to
acceptance. The ‘acceptance’ should either expressly or in any implied manner should
contain a statement suggesting the assent of the offeree towards the acceptance of the
offer.100 In the present matter the silence of the ‘Charterers’ regarding the informing of the
96
Refer Moot Proposition, p. 9, Internal Report dated 7 th May 2008.
97
98
Refer Moot Proposition, p. 3, Mail dated 20th January 2008.
99
Inland Revenue Commission v. Fry, [2001] S.T.C. 1715 at 6, 7; University of Edinburgh v. Onifade, 2005 SLT
(Sh CT) 63.
100
Harvey v. Facey, [1893] A.C. 552; Clifton v. Palumbo, [1944] 2 All E.R. 497; Scancarriers A/S v. Aotearoa
International Ltd., [1985] 2 Lloyd’s Rep. 419, Philip & Co. v. Knoblauch, 1907 S.C. 994.
19
Owners about the mis-description would amount to acceptance and acquiescence of the
default on part of the ‘Owners’.
73. Also, the conduct of the ‘Charterers’ would estop them from using their ‘right to terminate’.
‘Estoppel is a legal principle which precludes a man from alleging or from denying a certain
admission’.101 From legal perspective, estoppel is a set of doctrines in which a court prevents
a litigant from taking an action the litigant normally would have the right to take, in order to
prevent an inequitable result. Estoppel occurs when a party "reasonably relies on the promise
of another party, and because of the reliance is injured or damaged".102
74. The Charterers are said to have been estopped from alleging the mis-description of speed
because the time period of 4 months that has passed between the entering into the charter
party and date of making of the allegations. This surpasses the reasonable time period that is
usually required to ascertain such technical aspects of a vessel. Also, the vessel was required
to proceed to another port immediately after the second charter party was signed.103
75. All these sequence of events are clearly proving that the Charterers had enough time to point
out any such mis-description if there would have been any suggesting that there was in
reality no such mis-description of speed as being alleged by the Charterers. Even, if there
was any inadvertent mis-description of speed then also the conduct of the Charterers would
amount to acquiescence on part of their part thereby negating the mis-description as a ground
for termination of the contract.
76. Also, in addition to this going by the definition of Waiver that can be defined as a "Consent
to dispense with a right" and "as an intentional relinquishment of a known right”.104 Any
conduct by a party may amount to a waiver provided there must be a clear, unequivocal and
decisive act showing a purpose to waive one’s rights.105 It can be validly inferred that the ‘act
of silence’ of the Charterers would amount to acquiescence on part of the ‘Charterers’ and
the further continuation with the Charter Party for 4 months have resulted in the waiver of
their to rights to terminate the Charter Party.
101
Demarest v. Hopper, 22 N.J. Law 019; Martin v. Railroad Co. 83 Me. 100, 21 Atl. 740.
102
Estoppel legal definition" Legal dictionary, thefreedictionary.com, Retrieved August 20, 2014, <last visited
06/02/2014>.
103
104
Selwyn v. Garfit, L. R. 38 Ch. D. 273, 284; Hoxie v. Home Ins. Co., 32 Conn. 21, 40; Kent v. Warner, 12 Allen
561, 563 (1866).
105
Ross v. Swan, 7 Lea (Tenn.) 463, at 467.
20
[E] REPUDIATION GIVES THE RIGHT TO ELECT TO THE OWNERS
77. A repudiation is a statement by the obligor to the obligee indicating that the obligor will
commit a breach that would of itself give the obligee a claim for damages for total breach.106
Repudiation generally connotes a refusal to perform.107 Repudiation describes a repudiation
of obligation, that is, a clear absence of readiness or willingness to perform satisfying the
requirement of seriousness.108
78. Repudiation is used generally, to describe any breach of contract or conduct which entitles a
promisee to terminate the performance of the contract, that is, to treat the contract as
discharged. When used in this way, even a breach of condition may be repudiation.109
Repudiation, at least in the form of an express refusal to perform, is in effect an offer 110 to
terminate a contract which the promise may choose to accept or reject.111
79. In the present case, Owners (non-repudiating party) are entitled to exercise their right to elect
following the repudiation by the Charterers. In Afovos Shipping CO SA v Pagnan112 , the
other party may elect to treat the statement as a repudiation if the threatened non-
performance has an effect of depriving the other party substantially of the whole benefit
which he should have obtained from the primary obligations of the parties as already been
proved, Charterers repudiated the contract .
[E.1] THE OWNERS INDEED HAD THE RIGHT TO ELECT TO CONTINUE WITH THE CHARTER
PARTY
80. If the conduct of one party amounts to repudiation, and the other party does not accept it as
such but goes on performing his part of the contract and affirms the contract, the alleged act
of repudiation is wholly nugatory and ineffective in law.113 Choice is between terminating the
contract and continuing with the performance of the contract. The owners here chose the
106
Bryan A. Garner, 10thedi, Black’s law dictionary, Thomson Reuters.
107
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 at 64.
108
J.W. CARTER, CARTER’S BREACH OF CONTRACT, p. 298, 1st ed., Lexis Nexis Butterworths, Australia, (2011).
109
Geogas SA v Trammo Gas Ltd (The Beleares) [1993] 1 Llyod’s Rep 215 at 225.
110
Lumbermens Mutual Casualty Co v Klotz, 281 F 2d 499 at 504.
111
Bradley v H Newsom Sons & Co [1919] AC 16 at 52.
112
Afovos Shipping CO SA v Pagnan, [1983] 1 WLR 195.
113
Howard v. Pickford Tool Co Ltd [1951] 1 KB 417 at 420-422.
21
former and went on with the performance of the C/P. The rule that an election once made is
final.114
81. It is always open to A, who has refused to accept B’s repudiation of the contract, and thereby
kept the contract alive, to contend in relation to a particular right or obligation under the
contract, B is estopped from contenting that B is entitled to exercise that right or that he, A,
has remained bound by that obligation.115 When an obligation has been performed by one
party, the other party becomes subject to the outstanding obligation.116
82. Owners in the present case, delivered the vessel to the Charterers for a period of 24 months
under the 2nd Charter Party, where the Charterers were under an obligation to keep the vessel
for 24 months.117 Owners by providing the vessel at the anchorage and leaving her under the
disposal of the Charterers had performed their part of the contract but the Charterers
repudiated the contract by not giving any instructions as to where the vessel should head to or
what the vessel should do. Hence it can be safely held that, the owners were entitled to
continue with the contract.
In Arguendo, The Charterer themselves failed to order for the re-delivery
The Charterers were explicitly informed about the rights which they held over the vessel and
were given specific information about the vessel still being at their disposal by making them
aware of the fact that, the vessel was waiting for them at the anchorage for their instruction.118.
This means that, the Charterers were well-aware about the vessel waiting at the harbor. So if the
Charterers actually wanted to terminate the C/P, they should have re-delivered the vessel which
they did not. Now, it can be argued that, the Owners themselves refused to accept the re-delivery.
The email119 might resemble that the owners had no intention of taking the delivery back but that
is not true as those were merely business conversations and negotiation which reflected owners’
will to continue the C/P. If the Charterers were actually adamant about terminating the legally
binding relationship, they instead of keeping the vessel at their disposal should have re-delivered
it back as it was their responsibility and like payment of hire, it is an absolute obligation.
114
J.W. CARTER, CARTER’S BREACH OF CONTRACT, p. 439, 1st ed., Lexis Nexis Butterworths (Australia), (2011).
115
Fercomental SARL v Mediterranean Shipping Co SA (The Simona) [1989] AC 788 at 805.
116
Moschi v Lep Air Services Ltd [1973] AC 331.
117
Refer Moot Proposition Email Dated 10th May, 2008.
118
Refer Moot Proposition Email Dated 11th September, 2008.
119
Supra Note 125.
22
[F] THE CHARTERERS ARE LIABLE TO PAY THE OWNERS THE WITHHELD
HIRE AMOUNT AND THE AMOUNT PAYABLE FOR PERIOD OF 4 MONTHS
83. Charterers had wrongfully withheld the hire amount of 475000 as already been proved in the
above contention. In addition to that, wrongful termination of the Charter Party led to the
loss of 1,680,000/- USD120 to the Owners.
[F.1] THE CHARTERERS ARE LIABLE TO PAY THE MONEY WITHHELD BY THEM ON THE
MONTH OF MAY
84. Where two parties have made a contract which one of them has broken, the damages which
the other party ought to receive in respect of such breach of contract should be such as may
fairly and reasonably be considered as arising naturally.121 It is further submitted that, as if
any claim of withholding the amount with respect to off-hire clause is maintainable, then the
same should be entertained through a legitimate recourse of dispute resolution as agreed
upon by both the parties. Hence, instead of randomly deducting the amount, the same should
be contemplated by the tribunal and the Charterers should be asked to pay the same. In the
instant case, the Charterers withheld the amount of 4, 75,000/-USD in the month of May. The
arbitral tribunal may award simple or compound interest from such rates and with such rates
as it considers meets the ends of justice.122 2nd Charter Party was signed and came into
existence on 10th May, wherein it was clearly mentioned that, “without prejudice to our
respective rights and remedies”.123 So it is humbly submitted that the Charterers are liable to
pay the money withheld and the interest therein as per the prevailing market price.
[F.2] THE CHARTERERS HAVE BREACHED OBLIGATION BY NOT PROVIDING ANY
INSTRUCTIONS TO THE VESSEL
Second Charter Party was signed by both parties and came into existence on 10 th May 2008
for a period of 24 months at 1,50, 000/day USD. The second Charter Party was wrongfully
terminated by the Charterers on 10th September, 2008 paying the hire of only 4 months (from
10th May to 10th September). In the absence of special circumstances requiring actual
120
112*150000 = 1680000 (112 days= 11th September 2008-31st December 2008).
121
Hadley v. Baxendale (1854) 9 Ex. 341, pp. 354-355.
122
§. 49, ARBITRATION ACT, 1996 (UK).
123
Refer Moot Proposition, Mail Dated 7th May 2008.
23
knowledge124, volatile market conditions125 and when the loss is so predictable and
quantifiable126, mere knowledge of the “probable and natural” losses is sufficient127. In this
present case, the market conditions were clearly manifested, the losses were easily
comprehendible, predictable and quantifiable hence the charters should be made liable to the
hire amount starting from the period of 10th September 2008 till 1st January 2009
Hire/day under second Charter Party USD 1,50,000
Hire payable for 112 days (10th September 2008-1st January 2009)
Total amount to be paid by Charterers – USD 1,68,00,000 (1,50,000*112)
85. It is humbly submitted that, the Owners are entitled to the amount of 17275000 (1680000 +
475000) exclusive of the interest accrued therein and to any other amount which the tribunal
in the nature of compensation arising out of the breach/repudiation of C/P. Unless otherwise
agreed by the parties, the tribunal may make more than one award at different times on
different aspects of the matters to be determined.128
124
Hadley v. Baxendale (1854) 9 Ex. 341, pp. 354-355.
125
Supershield Ltd. v. Siemens Building Technologies FE Ltd. [2010] EWCA Civ 7; Adam Kramer, “The New
Test of Remoteness in Contract”, 125 LAW QUARTERLY REVIEW 408, 409 (2009).
126
Transfield Shipping Inc. v. Mercator Shipping Inc. [2008] 3 WLR 345(“The Achilleas”); Hamblen J. in Sylvia
Shipping Co. Ltd. v. Progress Bulk Carriers Ltd. [2010] EWHC 542 (Comm).
127
Monarch SS Co Ltd v. Karlshamns Oliefabriker (A/B) [1949] AC 196, 224; Balfour Breatty Construction
(Scotland) Ltd v. Scottish Power Plc (1994) SLR 807; Bank of Nova Scotia v. Hellenic Mutual War Risks
Association (Bermuda) Ltd [1992] 1 AC 233, 267.
128
§ 47, ARBITRATION ACT, 1996.
24
PRAYER FOR RELIEF
In light of the above submissions, the Claimant/Owners requests this Arbitral Tribunal to:
DECLARE that, this Tribunal has jurisdiction to hear the dispute.
ADJUDGE that, the Respondent/Charterers are liable:
a) To make an adjustment hire and for withholding USD 475000 wrongfully.
b) For non-payment of hire amounted to breach of the Charter Party.
c) And had waived their right to terminate the Charter Party and claim any damages;
d) To the Claimants/Owners for the default in the payment of the 112 days until the Charter
Party was terminated by the Owners
ADJUDGE that, the Claimants/Owners:
e) Didn’t commit repudiatory breach of the Charter by withdrawing the vessel.
f) Made no mis-description regarding the speed of the vessel M.V. Anku.
And therefore, AWARD the Claimants/Owners:-
g) For the default in the payment of USD 1,68,00,000 by the Charterers and the USD 475000
which was withheld by the Charterers.
Any interest or compound Interest pursuant to Section 49 of Arbitration Act, 1996 (UK)
25

384 A Claimant Memo

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384 A

2ND NATIONAL LAW UNIVERSITY ODISHA MARITIME LAW MOOT COURT

HAPPY TURDS GROUP

MEMORANDUM ON BEHALF OF THE CLAIMANT

ON BEHALF OF: AGAINST:

AMDSC HAPPY TURDS GROUP

LIST OF ABBREVIATIONS ..................................................................................................... iii

[C.2.1] The ‘Hire Payment’ would be considered as a ‘Condition Precedent’ and a

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

AB QB Alberta Court of Queen’s Bench (Canada)

TREATIES AND CONVENTIONS

1. The English Arbitration Act, 1996 1, 2

1. A/S Tankexpress v. Campagnie Financiere Belge des Petroles, [1949] AC 76 ..................... 15

13. Brinkibon Ltd. V. Stahag Stahl und Stahlwarenhandelsgessellschaft mbH, [1983] 2 AC 34 15

37. Habas Sinai VeTibbiGazlarIsthisalEndustri A.S. v. Sometal S.A.L [2010] EWHC 29

1. ALAN REDFERN, J. MARTIN HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL

2. ALAN REDFERN, J. MARTIN HUNTER, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION,

DEALS, CONTRACTS, AGREEMENTS & PROMISES, Kogan Page Publishers, (1999) 9

1st CHARTER PARTY-

2nd TIME CHARTER PARTY-

D. Charterers cannot terminate the charter-party on the grounds of mis-description of

G. Charterers are liable to pay the damages suffered by the owners

[A.1] THE ARBITRATION TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTES

[A.1.2] The Owners has commenced these arbitration proceedings in accordance

CHARTER PARTY INTO THE SECOND CHARTER PARTY

21. An Arbitration clause may be incorporated in a contract by reference or by course of dealing

PART II: MERITS

[B] CHARTERERS ARE NOT ENTITLED TO MAKE AN ADJUSTMENT HIRE

b) Exemption nature of off hire

a). Breach of speed warranty

b). failure to load full cargo57.

40. A breach of contract66 can be defined as a situation where,

42. Repudiation can be described as a repudiation of obligation that is a clear absence of

b) The absence of readiness or willingness should satisfy the requirement of seriousness70

[C.1.1.b] The allegation lacks the essential ground of ‘Requirement of Seriousness’

[C.1.2] The Notice of Withdrawal served by the Owners is in nature of a novation of

Hence, the Owners had no choice but to withdraw the vessel.

THE CHARTER PARTY

55. A breach of contract81 can be defined as a situation where,

[C.2.1] The ‘Hire Payment’ would be considered as a ‘Condition Precedent’ and a

[C.3] MIS-DESCRIPTION OF SPEED WOULD NOT AMOUNT TO THE BREACH OF CHARTER

[D] THE CONDUCT OF THE CHARTERERS HAS AMOUNTED TO WAIVER OF

[E] REPUDIATION GIVES THE RIGHT TO ELECT TO THE OWNERS

In Arguendo, The Charterer themselves failed to order for the re-delivery

[F.2] THE CHARTERERS HAVE BREACHED OBLIGATION BY NOT PROVIDING ANY

INSTRUCTIONS TO THE VESSEL

Hire/day under second Charter Party USD 1,50,000

PRAYER FOR RELIEF

a) To make an adjustment hire and for withholding USD 475000 wrongfully.

b) For non-payment of hire amounted to breach of the Charter Party.

ADJUDGE that, the Claimants/Owners:

e) Didn’t commit repudiatory breach of the Charter by withdrawing the vessel.

f) Made no mis-description regarding the speed of the vessel M.V. Anku.

And therefore, AWARD the Claimants/Owners:-

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