On 17 March 2019 Mr Huang Minyi along with other 20 Chinese crewmen were contacted by a crew agent company in China, Maritime Silk Road Limited (“Maritime”), to work on board the ship, the OBOR, a Chinese-flagged ship owned by One Belt One Road Shipping Limited (“One Belt One Road”). The OBOR is a twin-engined ship. On 10 September 2019, while the OBOR was conducting her regular trade from a port in Shenzhen to Australia via Singapore, one of her engines failed. The Master decided to put the OBOR into port for repair. In order not to delay the scheduled voyage, to accelerate the movement of the OBOR, with the permission of the owner of the ship, One Belt One Road, the Master decided to engage Fast & Furious Limited (“Fast & Furious”) to use the tug Dom Toretto to tow the OBOR. On the way to the nearest port, the OBOR under tow faced severe weather conditions. The tow line broke and she drifted. In an attempt to re-connect her with the Dom Toretto, while Mr Huang Minyi, who held the position of the Chief Engineer, tried to throw the remaining tow line to the Dom Toretto, the OBOR suddenly turned to the port side. Mr Huang Minyi lost his control and he fell into the sea. Crew members of the Dom Toretto took time to assist Mr Huang Minyi and put him back on board the OBOR. At the same time, they were successful in re-connecting the tow line. The OBOR was successfully towed to the nearest port and, after the repair, she continued her scheduled voyage.
Under the contract signed between the Master of the OBOR and Fast & Furious, Fast & Furious expected to receive US$50,000 from its engagement to tow the OBOR. However, viewing all services the Dom Toretto did, Fast & Furious considered its services to be in the nature of salvage and it believed it is entitled to the higher remuneration in the region of US$500,000. Fast & Furious demanded the payment in this amount from One Belt One Road.
However, One Belt One Road was under great financial pressure. It did not expect that engaging a mere towage service could cost it US$500,000. Apart from this amount, One Belt One Road was also having pressure from crewmen under their employment who had not been paid for their wages. Their combined unpaid wages were in the region of US$420,000. Fearing of possible negative impacts to its reputation, Maritime decided to advance funds for crew wages. In the settlement agreement between Maritime and each crewman contained the following clause:
“In consideration of the payment by you to me for US$20,000 in respect of wages and other amounts due for my employment on board the ship OBOR, I hereby assign to you all my rights against the Owners of the Vessel or the Vessel itself”.
The value of the OBOR today is estimated to be in the region of US$400,000 only as it is an old vessel with a bad condition. This vessel is the only asset of One Belt One Road. Hearing that the OBOR will be discharging cargoes in Australia in January 2020, Fast & Furious was considering arresting it in Australia to recover the amount of US$500,000. However, its in-house legal advisor, Mr Jim, strongly told it not to do so. Mr Jim gave the following reason. First, the nature of the jobs done by the Dom Toretto at the relevant time was in any event the towage service and Fast & Furious could get at most US$50,000 as per its original contract. To believe that it could get US$500,000 was a pure illusion. Secondly, this claim for US$50,000 will be ranked below that of Maritime whose claim of US$420,000 was in the nature of maritime lien for wages. Hence, at the end, Fast & Furious will get nothing once the OBOR was sold by judicial sale in Australia.
Fast & Furious was not sure whether the advice it received from Mr Jim was correct so it is now seeking your advice knowing that you are studying maritime law.
Advise Fast & Furious whether it should proceed to arrest the OBOR in Australia.
The Task is Mainly on general average and salvage and maritime liens and admiralty jurisdictions.
Reference to: Davies, M & Dickey, A 2016, Shipping law, 4th edn, Lawbook Co., New South Wales.
The discussion must:
(a) Be framed in terms of likely legal consequences if the matter is preceded to trial and discuss all potential arguments raised by the factual matrix;
(b) Propose its contentions by reference to relevant decided case law(s) or relevant statute(s);
(c) Be written in the third person. Accordingly, sentences should read like: “It is a legal principle…”, “The courts have stated that…”. Likewise, you should also impersonate yourself in writing. Hence, sentences should read: “In the writer’s opinion…” or “From the writer’s point of view”.
Use the IRAC approach, and divide the work into parts as follows:
Identify the problem: what has gone wrong? Identify each party and briefly describe their individual issue(s), work out what area of law may govern the resolution of the problem, identify any conflicting or troublesome facts. Note that the task may relate to one area of law but it will usually raise a number of issues with that area of law.
- Rules or Relevant Laws
Set out the legal principles that will be used to address the problem; source legal principles from cases and legislations, bearing in mind that law can be different from country to country (and, as far as Australia is concerned, the law may be different from State to State) and hence locating the law of correct country / territory to apply to the scenario is crucial.
This is perhaps the most important part where you demonstrated your understanding of the rules or laws. While the explanation of the rules or laws in the earlier part may be taken out from textbooks or relevant statutes, this application part is where you elaborate on your knowledge. In this part, you should explain in detail why the claim is or is justified, based on the body of law pertaining to the case; use relevant precedent cases or legal principles laid down in the earlier part to support each answer; you may choose to use legislations, where applicable.
Stand back and play “the judge”, choose the argument you think is the strongest and articulate what you believe to be the appropriate answer; state who is liable for what and to what extent.
Provide all the references (Both in text and end text)
Word Count: 2,500
Note: Reference all legislations e.g
A valid contract is an agreement verbal or written that contained promise made between two people or more parties with the intention of creating legal right and obligation that the law will enforce (Gilbson and Fraser 2016).