Web Alert: OW Bunker cases in the US - Three new cases hold that physical suppliers of bunkers arranged through OW Bunker do not have maritime liens against the ships supplied

In our August 2016 Defence Bulletin, we provided an update on OW Bunker cases in the US and noted that decisions were expected in various pending matters.

On 24 August, Judge Katherine Forest of the United States District Court for the Southern District of New York issued decsions in three cases in which she held that the physical suppliers did not have a maritime lien against the ships involved in those cases.  Under US law, a person who supplies bunkers to a ship is entitled a lien if the person supplied the ships "upon the order of the owner of the vessel or a person presumed authorized by the owner."   The statute goes on to list persons who are "presumed" to have such authority.  

In each case, OW Bunker contracted with the ship owner or its time charterer, and OW Bunker then contracted with the physical supplier.  In each case, Judge Forest held that the physical suppliers supplied the bunkers on the order of a subcontractor, not a party with presumed authority under the lien statute or one with actual authority by contract or law. Appeals are expected.  If upheld on appeal, the holdings mean that ship owners and time charterers may pay the OW Bunker entity with whom they contracted without fear, at least in the US, that they will have to pay the physical supplier as well.  

For copies of the decisons, contact LeRoy Lambert, leroy.lambert@ctplc.com.