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Assignment 1 – International Shipping Law

Assignment title: Memorandum of Advice
Word limit: 2500 words
Your client, Far Horizon Pty Ltd (‘Far Horizon’), time-chartered a vessel, The Mystic Spirit, from Deep Blue Pty Ltd (’Deep Blue’). Far Horizon then contracted with several companies to carry and deliver cargo. Global Minerals Pty Ltd (‘Global’) entered a contract of affreightment with Far Horizon to transport a substance with the trade name Lavanax. Assume that Lavanax has a pure chemical composition which means that in that pure chemical form it is listed in Appendix 3 of MARPOL (‘an appendix 3 substance’). Assume also that all the relevant documents relating to the carriage of Lavanax provided by Global to Far Horizon, including documents provided to the Master of the Mystic Spirit, describes the cargo as Lavanax in its pure chemical form.
After loading, The Mystic Spirit commenced its charter voyage. The voyage proceeded without incident until it entered the port where the cargo of Lavanax was to be delivered. There the vessel encountered very heavy seas and sever storm conditions. The Mystic Spirit was in waters where pilotage was compulsory because of the geophysical characteristics of the port, certain features of the seabed including submerged hazards, and the presence of certain infrastructure. A port pilot was therefore engaged to navigate the vessel.
Under pilotage the vessel undertook several precautionary manoeuvres but was unable to make progress. Conditions were such that the vessel was unable to continue. Under instruction from the port authority the master was ordered to drop anchor and halt. Under all the circumstances the vessel sustained some damage to the tank containing Lavanax, and it was considered prudent to discharge the contents of this tank. It was subsequently revealed that the reason the vessel was unable to progress was that its anchor had caught a submerged oil rig lying on the seabed, which was a known hazard marked on the port charts.
The weather abated, the anchor was raised, and the vessel eventually berthed and underwent repairs and refurbishment before returning to its home port. Several weeks after the vessel left territorial waters a thick, sticky, foul smelling substance was found on the beaches near the port where the Lavanax was to be delivered. Forensic analysis identified the substance as a mineral oil and as having ‘most probably’ originated from The Mystic Spirit.
Unknown to Far Horizon or the Master of The Mystic Spirit, Lavanax, although an Appendix 3 substance in its pure chemical form, is normally carried as cargo as a suspension mixed with mineral oil. However, as advised, no mention is made of this in any documentation provided to either Far Horizon or the Master.
The vessel’s owner and Master were charged under the criminal offence provisions of various Acts dealing with environmental pollution, both of which carry strict liability for occurrences of this kind. The owners and Master of the vessel pleaded guilty and were ordered to pay penalties amounting to $950 000. Far Horizon are not able to raise a civil defence under those statutes, however they seek your advice about the liability of Global under the circumstances, and whether they can recover the monies paid in penalties.

Advise Far Horizon.

Assignment instructions
The word limit for your memorandum is 2,500. Your memorandum should be professional in its content and presentation and should be produced so that it is presentable to the partner of a major law firm, and the Board of Directors of a major corporation. Accordingly it should display the following features:

• Header fields appropriate to a professional memorandum of advice – including ‘To’, ‘From’, ‘Re’, ‘Date’ and ‘Ref’ fields)
• A structure appropriate to a professional Memorandum of Advice – including an introduction, a precise delineation and definition of the terms of reference of the advice, a body with constituent parts matching the requirements of the task, and conclusion separated appropriately with headings
• Language must be appropriate for the audience for which the memorandum is intended
Most organisations have their own in house style to deal with referencing in professional memoranda. For this assessment you are required to reference all sources consulted in the process of preparing and drafting your memorandum in accordance with the citation guidelines of the Australian Guide to Legal Citation (available at the Melbourne University Law Review website at

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