EMEA News
Risk of OW Bunker-Related Vessel Arrests in Germany for Unpaid Bunkers is Limited, Says Lawyer
German law firm, Dabelstein & Passehl, says that the risk that a vessel will be arrested in Germany for unpaid bunkers as a result of the collapse of OW Bunker is "limited."
In its analysis, Dabelstein & Passehl explore the contractual relationships around bunker supply under time charterparties, as well as the relevance of maritime liens in Germany and arrest risks that may arise in the country due to unpaid bunker bills.
"The insolvency of the Danish-based and other OW Bunker entities has affected vessel owners, charterers, banks and other bunker suppliers worldwide," said the firm.
"In particular, vessel owners fear that their vessels will be arrested due to unpaid bunker supplies."
While the firm explains that a risk of vessel arrest may be present if there are "direct contractual relations" between the vessel owner and bunker supplier, or if the physical bunker supplier holds a maritime lien for the vessel, it notes that under German or English law this is not the case.
Further, the firm explains that if a vessel is wrongfully arrested, under German law, a vessel owner may be eligible for compensation.
"If the vessel arrest turns out to be unlawful, the vessel owner may claim damages from the arresting party," says Dabelstein & Passehl.
"Under German law, there is strict liability for wrongful arrest. In case of time-chartered vessels, the vessel owner may also claim damages from the time charterer due to breach of contract in case of unpaid bunker invoices.
"In this respect, the owner may in certain cases also have a lien on cargo, bunker, freight and sub-freight."
Even before a vessel is arrested, Dabelstein & Passehl explains that German law permits a vessel owner to file a caveat against a potential arrest at the court with jurisdiction over the port where the vessel intends to call.
The caveat allows a vessel owner to argue against the potential arrest claim, request a hearing into the arrest claim merits, and to "apply for the arresting party to put up counter-security before the arrest."
In July, Ship & Bunker reported that John Kissane, Partner at Watson Farley & Williams LLP, argued that legal disputes resulting from the fallout from last year's OW Bunker bankruptcy could help clarify whether it is the bunker broker or the physical supplier who has the maritime lien under U.S. law.
