Americas News
US Court Deals Another Blow to Bunker Suppliers Looking to Recover Unpaid Bunker Bills
Another judge in the U.S. has ruled against a bunker supplier looking to recover unpaid bunker bills, dismissing its claim for a maritime lien because it did not deal directly with the ship owner in question but rather with an intermediary, court documents filed Monday show.
This is the third such case in the U.S. this year, following similar earlier rulings against O'Rourke Marine Services (O'Rourke) and Valero Marketing & Supply Co. (Valero).
In all three cases, the court dismissed the application for a maritime lien because under the U.S. Commercial Instruments and Maritime Lien Act (CIMLA), one of the criteria for the lien to hold is that the bunkers must be supplied "on the order of the owner or a person authorised by the owner."
In all three cases the supplier instead dealt with the now defunct OW Bunker, who in turn dealt with the ultimate end user of the bunkers.
This latest case, heard in the United States District Court Western District of Washington at Tacoma, involved Bunker Holdings Ltd (Bunker Holdings) and the Yang Ming box ship M/V YM Success.
Yang Ming contracted OW Bunker Far East to arrange for bunkers to be delivered in Nakhodka, Russia, around the time of the 2014 collapse of the OW Bunker Group.
OW Bunker Far East then engaged Bunker Holdings to supply the bunkers, who in turn used Baltic Tanker Co., Ltd. (Baltic Tanker), its partner in Russia, for the actual delivery.
Following the collapse of OW Bunker, Bunker Holding pursued Yang Ming for some $1.89 million in unpaid bunkers, and after Yang Ming declined to pay, in December 2014 the vessel was briefly arrested over the matter but released shortly after a substitute security was approved in the form of a Letter of Undertaking.
Matters came to a head earlier this year when Yang Ming moved for summary judgment, and Bunker Holdings responded and cross-moved for summary judgment.
Bunker Holdings reasoned it was entitled to the lien, not least because it had dealt with Yang Ming for supply in Russia on a number of previous occasions, and therefore Yang Ming would have known OW Bunker Far East would have passed on the stems in question to it.
Yang Ming argued that Bunker Holdings was not entitled to a maritime lien against the YM Success because it failed to meet the requirements of CIMLA on the same grounds as argued in O'Rourke and Valero - and indeed U.S. District Judge Benjamin H. Settle referenced the O'Rourke case in his judgement discussion.
"Even assuming Yang Ming knew about Bunker Holdings' involvement in the prior deliveries, Yang Ming's knowledge that Bunker Holdings would likely provide fuel to the YM Success in Nakhodka, without more, is not enough to bind the YM Success," Judge Settle wrote.
"Ultimately, Bunker Holdings has not demonstrated that it provided fuel to the YM Success 'on the order of the vessel's owner or a person authorized by the owner.'
"Because Bunker Holdings has failed to show it is entitled to a maritime lien under CIMLA, the Court grants Yang Ming's summary judgment motion and denies Bunker Holdings' cross-motion."
Follow the results of the previous two cases, Bruce G. Paulsen, a partner at law firm Seward & Kissel LLP acting on behalf of OW Bunker assignee ING Bank in the U.S., told Ship & Bunker that suppliers should not be surprised at the recent court decisions against them because "the requirements of CIMLA are clear."
