OWB Bunkers. Arrests by physical suppliers in US.



The OWB Bunker saga has placed owners on the horns of a dilemma. Pay ING as assignee of OWB or pay the physical supplier? Owners certainly do not want to have to pay twice. Three recent arrest cases in the US by the physical suppliers indicate that they will not obtain a maritime lien for necessaries. Valero Marketing & Supply Co v M/V ALMI SUN, 2016 US Dist 2016 AMC 632 (ED La Feb 8 2016); O’Rourke Marine Servs LP, LLP v M/V COSCO HAIFA, 2016 (SDNY April 8 2016);Bunker Holdings v M/V YM SUCCESS, 2016 (WD Wash June 6 2016).

There are three elements to the maritime lien for necessaries. 1. Necessaries must be furnished (2) to a vessel (3) on the order of the owner or person authorised by the owner. In these three decisions by district courts it has been held that a person with authority to bind the vessel must have some control over the subcontractor’s selection or performance in order for the subcontractor to have a maritime lien for necessaries. Accordingly, the third requirement for a maritime lien had not been satisfied as OW Bunker selected the physical supplier without the direction or involvement of the party with authority to bind the vessels. The Fifth Circuit is expected to give its decision in the Valero appeal by the end of the year.