Over the past several months physical suppliers have lost appeals against rejection of claims against vessels supplied with fuel on the instructions of OW Bunker.
The most recent was Valero Marketing v MV Almi Sun, http://www.ca5.uscourts.gov/opinions/pub/16/16-30194-CV0.pdf, , heard by the US Court of Appeals for the Fifth Circuit in June. The court ruled that a bunker supplier who was contracted by OW Bunker and not directly with the vessel or its did not have a maritime lien against the vessel.
The judgment noted: :The record shows that Verna, through its agent Almi Tankers, contacted OW Malta because it was a “reputable bunker trader”;that during negotiations, Almi Tankers asked who would be the bunker fuel supplier, and it did not object to Valero’s selection; that the sales order confirmation listed Valero as the supplier; that Valero provided the entire bunkering service that Almi Tankers contracted for, with no assistance from OW or its affiliates; that the Vessel’s agents monitored and tested Valero’s performance; and that Almi Tankers expressed concern about OW’s ability to pay Valero. These facts do not demonstrate that Valero provided the bunkers to the Vessel “on the order of the owner or a person authorized by the owner.”
It concluded that Valero provided the bunkers at OW ‘s request, and OW is not a “person presumed to have authority to procure necessaries. These facts are “more akin to those in which general contractors have been engaged to supply a service and have called upon other firms to assist them in meeting their contractual obligations.”19 Thus, Valero must show that an entity authorized to bind the ship “controlled [its] selection . . . and/or its performance.”20 The record, however, proves no more than the Vessel’s awareness of Valero, not that the Vessel “controlled” the selection or performance of Valero. The court found that “mere awareness does not constitute authorisation” under the US Commercial Instruments and Maritime Liens Act.
In another OW Bunker-related case in June the US Court of Appeals for the Second Circuit held that that a maritime lien for a bunker supply belongs to the bunker trader, not the physical supplier of the bunkers.
The assignee of a maritime fuel contract supplier, ING, and the physical supplier Cepsa made competing maritime lien claims arising from the delivery of fuel to a vessel. To effect actual delivery of the fuel, the contract supplier, OW Bunker, subcontracted with an intermediary, an OW Bunker group company, which re-subcontracted with the physical supplier. After delivery of the fuel but before any party received payment, the contract supplier and the intermediary declared bankruptcy. The appeal court affirmed ruling of the lower court that the physical supplier did not have the lien, essentially because the physical supplier did not deal with the charterer who ordered the bunkers.
These two case followed one in November last year. The US Court of Appeals for the Eleventh Circuit confirmed the denial of a maritime lien in an in rem action brought by bunker provider, Barliiff, against the vessel to which the bunkers had been delivered. The vessel owner had contracted with OW UK to purchase bunkers for the vessel to be delivered in the Port of Mobile. OW UK purchased the fuel from an affiliate, which in turn subcontracted with Barliff to actually supply the several hundred tonnes of fuel on the credit of OW UK. After the fuel was provided but before any money changed hands, O.W. UK went bankrupt. As with the Cepsa case a bank intervened. The court held that the maritime lien for the bunkers had arisen in favour of OW UK and had been assigned to the bank.
Contact one of the World Bunkering team.