The OW Bunker group collapse occurred in late 2014 and continues to affect the wider shipowning community.
A considerable number of physical bunker suppliers around the world have not received payment of their invoices from the relevant OW Bunker entities with which they concluded contracts. As a result, shipowners and charterers face a number of issues, such as threats of arrest and the question of to whom payment should be made.
In particular, many shipowners are facing claims for payment addressed against them by physical suppliers that have not been paid by OW Bunker entities. These claims are usually filed on the grounds that the owners are directly liable because of the signing of the bunker delivery receipt or on the basis of a retention of title provision or lien clause contained in the physical supplier's terms and conditions.
The Tribunal of Venice recently addressed the problematic issue of whether a physical bunker supplier was entitled to arrest the vessel to which it supplied fuel where it had received no payment from the insolvent contractual bunker supplier.
In September 2014 the owners of a vessel flying the Danish flag placed an order for bunker with OW Bunker Germany Gmbh (OWBG). OWBG in turn asked the Danish company OW Bunker & Trading A/S (OWBT) to arrange for the supply of the bunker and OWBT finally ordered the fuel for the vessel from a Cyprus physical supplier. At the end of the supply operation, the Cyprus physical supplier issued two bunker delivery receipts incorporating its contractual terms and conditions, both of which were signed by the vessel's chief engineer.
On October 10 2014 an invoice was issued by the physical bunker supplier addressed to OWBT "as well as vessel &/or master &/or Owners &/or charterers &/or managers".
In late 2014 the OW Bunker group collapsed and – given the poor prospects of recovery against OW Bunker in any liquidation proceedings – the physical bunker supplier demanded payment of the above invoice by the vessel's owners.
Having received a negative reply from the owners, the physical bunker supplier applied for the arrest of the vessel in Venice on March 14 2015.
By filing his application for arrest before the Tribunal of Venice, the physical bunker supplier argued that he was entitled to arrest the vessel to obtain security for its credit against the owners on the following grounds:
- The terms and conditions incorporated in the bunker delivery receipts had been accepted by the owners through the signature of their chief engineer;
- Clause 2(3) of the physical supplier's terms and conditions provided that the owners of the vessel were jointly liable with OWBT for payment of the bunker;
- Clause 10 of the physical bunker supplier's terms and conditions provided for a maritime lien over the vessel for the price of the bunker supplied.
- Such terms and conditions contained a retention of title clauses (8(7)), whereby the physical bunker supplier retained ownership over all bunkers until the buyer had paid the price in full; and
- The owners were liable to the physical supplier under the principle of unjustified enrichment (as codified by Article 2041 of the Civil Code) for having consumed the bunker without having paid for it.
Having examined the application filed by the Cyprus bunker supplier – together with the documentation supporting the claim – the judge ordered the interim arrest of the vessel and scheduled a hearing for March 24 2015.
On March 17 2015 the owners obtained the release of the vessel by putting up security of €430,000 in the form of a cash deposit. The owners subsequently submitted their defence to the court, disputing the right of the Cyprus bunker supplier to obtain the arrest of the vessel. In particular, the owners argued as follows:
- The claimants had no contractual relationship with the owners, since the contract for the supply of the fuel was concluded between the owners and OWBG. This was clear from:
- the bunker purchase order addressed by the owners to OWBG;
- the sales order confirmation subsequently issued by OWBG; and
- the invoice issued by OWBG and addressed to the owners.
- The general terms and conditions indicated by the claimants in their application for arrest (including the lien clause and the retention of title clause) were not binding for the owners, who never accepted them. In particular, the chief engineer's signature of the two bunker receipts did not amount to an acceptance of the terms and conditions incorporated therein by the owners, since the chief engineer had no power to bind the owners by concluding contracts on their behalf.
- A claim for unjust enrichment is not a maritime claim under Article 1(1) of the Brussels Convention 1952; consequently, such a claim cannot be enforced by means of the ship's arrest.
In upholding the defence raised by the owners, the Tribunal of Venice held that the Cyprus bunker supplier had no title to claim against the owners for payment of the bunkers.
The judge made the following statements:
- The owners ordered the bunker not from the claimants, but rather from OWBG, as evidenced by the bunker purchase order issued by the owners and the sales order confirmation indicating OWBG as the seller of the bunker.
- The claimants received the order for bunkering the vessel from OWBT, as evidenced by the stem bunker confirmation that the claimant had sent to OWBT and the two bunker delivery receipts that indicated OWBT as the subject instructing the claimant to supply the bunker.
- Although the invoice was generically addressed to the "vessel &/or master &/or Owners &/or charterers &/or managers", the claimants had addressed their invoice solely to OWBT.
- The general terms and conditions issued by the claimants and incorporated into the bunker delivery receipts were not binding for the owners, as no contract had been concluded with the claimants and the claimants' terms and conditions had never been accepted by the owners. In this respect, the judge noted that, according to Article 137 of the Danish Merchant Shipping Act (ie, the law of the flag) and Articles 6, 7, 8 and 10 of the Preliminary Disposition of the Italian Code of Navigation, only the master of the vessel – not the chief engineer – had the power to enter into agreements on behalf of the owners in respect of preserving the ship, performing the voyage or receiving goods during the voyage.
- Italian law does not permit the arrest of a ship for claims other that those mentioned in the exhaustive list set out in Article 1(1) of the Brussels Convention. Therefore, considering that the claim for unjust enrichment filed by the claimants as per Article 2041 of the Civil Code was not one of the maritime claims foreseen by the convention, the claimant had no title to enforce it by means of the ship's arrest.
In light of the above, the judge revoked the arrest that had previously been granted by ordering restitution to the owners of the sum deposited in court as security.
For further information on this topic please contact Luca Di Marco at Dardani Studio Legale by telephone (+39 010 576 1816) or email (firstname.lastname@example.org). The Dardani Studio Legale website can be accessed at www.dardani.it.
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