EMEA News
OW Bunker: Another Blow for Physical Suppliers as Court Rules in Favour of Ship Owner in Double Payment Claim
Physical suppliers caught up in so-called OW Bunker double payment disputes have been dealt another blow, this time in a recent ruling by a Greek court that found the vessel owner was not liable to pay the physical supplier, a decision that Karmela Mavrochi, a partner at law firm Costas Georgopoulos & Partners who handled the claim, believes to be a first.
The claim was made by physical supplier SEKA against the owners of CE Breeze and Panagia Armata, who in October 2014 contracted with OW Bunker Malta (OWBM) to provide the two ships with bunkers.
Following OW Bunker's bankruptcy, SEKA requested direct payment from the owners, although in this particular case, the owners had already paid OW Bunker.
SEKA argued that the bunkers were supplied under a contract entered into through the vessel owners' authorised agent, OWBM, a fact it said was supported by its invoices being addressed both to OWBM and the owners, and that SEKA's standard terms identify both parties as being jointly liable for payment.
Even if OWBM was not considered an authorised agent, SEKA argued that both the vessel port agents who contacted SEKA for the supply arrangements, and the chief engineer who signed the Bunker Delivery Note (BDN), acted as agents for the purchase, binding the owners.
In its defence, the owners argued that it was not liable for payment on the basis that there was never a contract between them and SEKA directly.
The owners also noted that OWBM contracted with a variety of local physical suppliers, and at the time the agreement was made they would not have been aware of who the physical supplier would actually be.
The court ultimately found in favour of the owner, ruling the contract between them and OWBM, and the one between OWBM and SEKA were two separate and distinct agreements.
"This decision is in line with the longstanding recognition of privity of contract by Greek case law and protects Owners from unexpected exposures to physical suppliers' demands for payment, especially in cases where they have already paid off the price either to OW or ING," explained Mavrochi.
"In arriving at its decision, the court appears to have taken into consideration that these two contracts include different terms as to the purchase price, credit period, jurisdiction and applicable law and the mere sending of the invoice to the Owners or the signing of the BDR by the chief engineer does not establish liability of the Owners.
"The court also held that OW did not act as agent of the Owners and had no authority to enter into an agreement on their behalf, but as a separate entity acting in its own name."
This is not the first bad news for physical suppliers caught with double payment claims.
Last month Ship & Bunker reported a U.S. court held that a physical supplier did not establish a maritime lien as part of its efforts to recover unpaid bunker costs as part of the OW Bunker bankruptcy fallout.
Meanwhile, the UK Supreme Court is mulling its final decision in the so-called "UK test case" on such matters.
