Shippers Pay Over $10M to Avoid OW Bunker-led Arrests

Cosco is setting aside almost $1 million to avoid arrest of Cosco Piraeus

Shipowners and operators have agreed to pay more than $10 million into U.S. trust accounts to avoid arrest of their vessels as a result of court actions filed by OW Bunker's U.S. subsidiary, Reuters reports.

According to the report, court documents show that 11 shipping firms, including Hapag-Lloyd and Exmar, have agreed to pay a combined $10.3 million into U.S. court accounts and a law firm's trust account.

A bond of $180,000 was also reported to have been paid into a court account on behalf of Hapag-Lloyd to cover disputed bunker bills.

A New Jersey judge last week ruled that COSCO Container Lines could avoid the arrest of its 49,997 deadweight tonne box ship, Cosco Piraeus, by paying $938,607 into trust.

One maritime lawyer said that 13 cases involving bunker bills totalling around $12 million had been filed at New York's southern district court.

"Ship owners and operators lose thousands of dollars a day in revenue if a ship is detained or arrested," said Chris Howse, a Hong Kong lawyer said to be involved in several OW Bunker related cases.

In addition, charterers may be able to sue for damages resulting from delays caused by vessel arrests.

The collapse in November 2014 of the OW Bunker group has sparked a mass of global litigation between OW Bunker entities, bankruptcy estates for the group and subsidiaries, and third party investors, suppliers, and customers.

In some cases bunker buyers have been left unsure of who to pay, while XO Shipping founder Christian Levin noted that in some cases buyers would actually have to pay twice.

Earlier this week OW Bunker's Norwegian subsidiary Bergen Bunkers was reported to have received a $567 million claim from a consortium of 13 banks.