Is The Bunker Supplier The Owner Of Maritime Liens In The US?

Is The Bunker Supplier The Owner Of Maritime Liens In The US?


Date Posted: 2018-06-15 12:18:03

The U.S. Court of Appeals for the Second Circuit became the latest U.S. court to hold that a maritime lien for a bunker supply belongs to the bunker trader, not the physical supplier of the bunkers. This was another case featuring a supply by the O.W. Bunker group shortly before their collapse. The vessels charterer ordered the bunkers from O.W. Denmark, who subcontracted with O.W. USA, who subcontracted with the physical supplier, CEPSA. ING bank became the assignee of O.W. Denmarks rights by way of a financing agreement. The Second Circuit affirmed the lower court (the U.S. District Court for the Southern District of New York), agreeing with the U.S. Court of Appeals for the Eleventh Circuit that the physical supplier does not have the lien, essentially because the physical supplier did not deal with the charterer who ordered the bunkers. In rejecting the physical suppliers claim to a maritime lien, the Second Circuit court made clear that liens can be created only by law, not by contract.

Therefore, the physical suppliers argument that O.W.s bunkering supply terms and conditions confer a lien on the physical supplier failed. The court also rejected, as unsupported in the record, the claim by the physical supplier that the O.W. entities acted as agents of the physical supplier. Further, the Second Circuit court rejected the physical suppliers argument that it had a maritime lien on equitable grounds, holding that a claim based on equity or unjust enrichment does not give rise to a maritime lien and can be asserted only in an in personam action, the case before the lower court being solely in rem. As for the assertion by ING (as assignee of O.W. Denmark) of a maritime lien, the lower court held that there was no lien because O.W. Denmark did not have a financial risk in the transaction.

The Second Circuit reversed that holding, finding that the consideration of risk is irrelevant where it was clear that O.W. Denmark contracted with the charterer to supply bunkers to the vessel. The Second Circuit said that, in any event, there was evidence in the record that O.W. Denmark was exposed to risk.

2 Comments

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    Date: 2018-07-10 17:14:01

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