Source: Ship & Bunker
January 12th 2017
A U.S. court decision Monday dealt another blow to physical suppliers‘ efforts to recover unpaid bunker bills as part of the ongoing fallout from the 2014 collapse of OW Bunker.
Following several similar decisions made last year, Judge Valerie E. Caproni Monday in the New York Southern District Court denied motions for summary judgment by US Oil Trading and NuStar Energy in three test cases as part of a larger interpleader action.
As with previous cases, Caproni found that the suppliers were not entitled to a maritime lien as they did not provide the bunkers to the vessel on the order of the vessel owner.
Under the U.S. Commercial Instruments and Maritime Lien Act (CIMLA), there are three requirements for a valid maritime lien:
It is unfortunate that it may be that the Physical Suppliers, the only parties who are out of pocket, will suffer from O.W.‘s bankruptcy.
“While the Court sympathizes with the Physical Suppliers, which apparently believed that they held maritime liens and may be financially harmed by this Court‘s holding that they do not, the contractual relationships between the parties in this case are clear, and those relationships must be respected,” Caproni wrote in the 30-page ruling.
“The Physical Suppliers delivered the bunkers to the vessels at the direction of O.W. None of the Physical Suppliers entered into a contract with the Vessel Interests or their agents, and the undisputed evidence is that the Vessel Interests did not require O.W. to use the Physical Suppliers.”
“It is unfortunate that it may be that the Physical Suppliers, the only parties who are out of pocket, will suffer from O.W.‘s bankruptcy (although ING is also likely to be out millions of dollars as a result of O.W.‘s bankruptcy). Ultimately, however, that is not a reason for the Court to depart from the Second Circuit‘s strict approach to maritime liens.”
While the ruling is important as part of the overall OW Bunker proceedings, it also has much wider implications.