Get USGC Bad Bunker Claims in Early: North P&I

Quality disputes typically need to be notified to the seller within 30 days of delivery. File Image / Pixabay

Following recent widespread bunker quality issues in the Houston and wider USGC region, The North of England P&I Association Limited (North P&I Club) has advised any buyers with concerns over their bunkers to consider starting a claims process early.

"Notoriously short time-bar clauses in bunker supply contracts are problematic, particularly in circumstances where there may be a delay between stemming the bunkers in question and starting to burn them, with problems not becoming apparent until that time," the P&I Club said.

Quality disputes typically need to be notified to the seller within 30 days of delivery, after which the claim is deemed waived and time-barred. Liability caps stipulated in the contracts give rise to further issues, the Club adds.

"Naturally, the bunker supply contracts which concern stems made in the US Gulf tend to be governed by US law, which will likely recognise and give effect to contractual time bars and liability caps. However, there may be an alternative route available to buyers which circumvents problematic contractual clauses where claims are brought in tort."

The Club says any buyers with quality concerns over bunkers yet to be burned should consider placing the seller on notice of potential claims.

"Whilst this may be of assistance in protecting the buyer's position in relation to the time-bar, so far as we are aware the argument has not yet been tested in the US Courts," the Club notes.

While it is unclear exactly how many vessels have been impacted by the recent USGC "bad bunker" problems, Ship & Bunker understands over 100 vessels have seen problems ranging from clogging of filters to fuel pump seizures.