Concerns Raised Over Further Singapore Bunker Tanker Arrests

Some operators have compared Hin Leong Trading's actions to bullying tactics.

The arrest of a bunker tanker last week that was caught in the fallout of the recent OW Bunker bankruptcy has raised fears among tanker operators that their delivery vessels, and not the vessels being supplied, will be targeted for unpaid fuel, Tradewinds reports. 

The bunker tanker Laguna, which was owned by Singapore-based Norr Systems, was arrested after action by a law firm acting on behalf of Hin Leong, who is looking to recover $1.3 million worth of unpaid bunker fuel from OW Bunker Far East.

As a result, other operators now fear that if their delivery vessels have unpaid cargo for OW Bunker, they may also be targeted for arrest.

"They are running scared," one bunker broker told Tradewinds.

"If suppliers chase the vessels delivering the bunkers, we could potentially face a situation where half the Singaporean bunker tanker fleet is sitting under arrest."

The report noted that it was, however, unlikely that OW Bunker was utilising such a high portion of the bunker tankers in Singapore, and the Maritime and Port Authority of Singapore (MPA) has also noted that OW Bunker "accounted for less than three percent of the 42.6 million metric tonnes supplied in Singapore in 2013."

Nevertheless, unnamed sources warned that such actions set a "dangerous precedent," hinting at their unhappiness at being punished for a client's unpaid bills.

OW Bunker and its subsidiaries have filed for bankruptcy in Denmark and in the U.S., mere days after announcing an alleged $125-million fraud at its Singaporean unit Dynamic Oil Trading plus a $150 million loss associated with its risk management strategy.

Over 100 companies around the world are rumoured to be preparing legal actions against OW Bunker, who before last week said it was one of the largest fuel suppliers in the world with an approximate 7 percent share of the global bunker market.