World Fuel Services Subsidiary Takes Legal Action Against Bomin in Alleged Bad Bunker Incident

Complaint revolves around bunkers lifted in Panama. File Image / Pixabay.

A World Fuel Services subsidiary has taken legal action against Bomin Bunker Oil Corporation (Bomin) and Singapore's TKK Shipping (PTE) LTD (TKK) in another alleged "bad bunker" claim originating from Panama.

The suit, filed by WFS' wholly owned Costa Rican subsidiary Trans-Tec International S.R.L. (Trans-Tec) in the United States District Court Southern District of Florida Miami Division, revolves around 680 metric tonnes (mt) of bunkers supplied to TKK vessel Thorco Lineage that, it is claimed, caused an engine failure and subsequent grounding of the vessel.

The complaint does not detail any specifics of the alleged bunker quality problems, but news of such bunker quality issues have been making headlines for a number of months.

Indeed, only last week Ship & Bunker reported two bulk players had also launched legal action in the US following main engine failures allegedly caused by bad bunkers lifted in Panama.

The Trans-Tec Complaint

Trans-Tec says TKK placed an order for the fuel on June 1, which Trans-Tec then ordered form Bomin that same day and delivered to the Thorco Lineage on June 7, 2018 at the Port of Cristobal, Panama.

"No complaints about the quality of the supplied fuel were made while the fuel was being stemmed onto the vessel or after delivery was complete," Trans-Tec notes in its complaint.

However, on June 24, 2018, the vessel ran aground in French Polynesia after suffering an engine failure allegedly within 24 hours of switching over to the fuel supplied by Trans-Tec.

"The same day, on June 24, 2018, the charterers of the Thorco Lineage, through TKK, notified TRANS-TEC of the vessel grounding and engine failure, asserting a claim allegedly due to improper marine fuel supplied by TRANS-TEC in Cristobal, Panama that was of poor quality and/or of the wrong fuel specifications agreed to by the parties," the complaint reads, adding that Trans-Tec also notified Bomin of the matter that same day.

Bomin is then said to have claimed that, as per its General Conditions of Sale and Delivery, the claim was time barred - an assessment Trans-Tec says it disagrees with.

Furthering its frustration with the matter, Trans-Tec says it sent a surveyor to the Thorco Lineage to investigate the loss and alleged damages but alleges TKK failed to cooperate, restricting its surveyor's access to the vessel, its crew, its records, and bunker samples.

Among other complaints, Trans-Tec says Bomin owed it a legal duty to provide marine fuel that could safely be consumed by vessels and believes Bomin should be liable for all costs arising from the fuel sale and vessel grounding.

Trans-Tec has asked the court for a declaration on how to proceed as, even though it says litigation between the parties is unavoidable, they disagree "regarding which contractual terms and conditions, including but not limited to the choice of law provision, forum selection clause, and limitations on recoverable damages."

Last month, The North of England P&I Association Limited (North P&I Club) advised any buyers with concerns over their bunkers to consider starting a claims process early due to the "notoriously short time-bar clauses in bunker supply contracts."