US 2nd Circuit: bunker arrests clarified

Bunkers are supplied through a complex chain of suppliers. If you order a stem the outfit you order from will almost certainly not deliver them. Instead it will arrange directly or at one or more removes for a third party to do so, the bunkers being bought in down the line.

Arrest for bunkers is big business in the US, since there you can arrest the ship for the debts of the time-charterer who bunkers her (which you can’t in England unless the owner is also personally liable, which is unlikely). But who can arrest? The person the bunkers were ordered from or the person who pumped them on board? It turns on who “supplied” the bunkers under the relevant section of CIMLA, the maritime lien legislation. In a decision a couple of days ago arising from the OW debacle, ING Bank v The MV Temara 16-3923(L), the Second Circuit Court of Appeals has straightened out who this is: it’s the entity the charterer or shipowner contracted with, not the physical supplier.

And quite right too. The physical supplier here had voluntarily given credit to the uncreditworthy (OW) and supplied the bunkers to its order; it deserved no proprietary claim against the ship. Whereas the person who contracted with the ship had supplied the bunkers to the orders of the charterer. The fact that it had done so through a third party was beside the point.

Thanks to our friends at the Maritime Advocate for the heads-up.

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