In the bunker industry, it is common practice to issue invoices to the "master and/or owners and/or operators and/or managers and/or charterers c/o" (or similar wording), followed by the name of the person or company actually ordering the bunkers. So does this mean that, if unpaid, a claim for the bunkers can be made against the master, the owners or the vessel?
Under the Arrest Convention 1952, an arrest may be made on the vessel in respect of which the maritime claim arose if the owner is liable for the claim or if, under the applicable law, recovery against the vessel following such arrest is possible. Under Dutch (international private) law, a claim is recoverable against a vessel when this is the case:
- under the law which applies to the claim; and
- under the law of the flag of the vessel.
Under Dutch substantive law, recovery of a bunker claim for which the owner is not liable is not possible. The owner is liable if:
- it ordered the bunkers itself;
- they were ordered on its behalf (eg, by a manager); or
- they were ordered by the bareboat charterer.
When the claim is against the bareboat charterer, a claim should be instituted against the bareboat charterer and the registered owner, stating that the latter allows the claim to be enforced against the vessel.
When a vessel is time-chartered and the time-charterer orders the bunkers, the time-charterer is liable, not the owner. Almost all time-charter contracts contain 'no lien' clauses and provisions forbidding the time-charterer from binding the owner to a third party. Therefore, it cannot easily be alleged that the time-charterer has bound the owner or has ordered on behalf of the owner. Meanwhile, provisions in the Dutch general sales conditions stating that the bunkers were supplied for account of the vessel do not help because the general conditions apply between the contracting parties (ie, the seller (supplier) and the buyer (time-charterer)). The signing of a bunker receipt by the master or chief engineer does not change this. This has been consistently confirmed in Dutch case law – for example, in Pagola (Court of Rotterdam, January 18 2012). In such cases no recovery against the vessel is possible under Dutch substantive law, and thus no arrest can be made on the vessel.
NOVE (the Dutch organisation for the energy industry) has tried to tackle this in the general supply conditions that it drafted for its members by using depéçage (a conflict of laws where different issues within a case may be governed by the laws of different states). Dutch law applies to the supply, but the question of whether a lien exists is governed by US federal law, which recognises a maritime lien against the vessel for the supply of bunkers. This clause has not yet been tested but may work, even for an arrest within the Netherlands.
Celine (Court of Rotterdam, February 24 2012) dealt with a ship arrest for a claim for bunkers supplied under Turkish law to a Turkish-flagged vessel. Under that law, a claim for bunkers against a time-charterer was recoverable against the vessel where:
- the invoices were sent to the owner ("master and owners");
- the owner was involved (eg, the signing of the bunker receipt by the master or chief engineer); and
- the claim concerned "necessities".
In that case, the arrest in the Netherlands was allowed. This shows that although, under Dutch substantive law, a claim for the payment of bunkers supplied to the time-charterer cannot be enforced against the vessel, it may still be possible to arrest the vessel in the Netherlands. Invoicing to the "master and owners" can be an element under the law applicable to the claim for deciding whether an arrest may be made.
In other countries, the method of invoicing may also be an important element. Therefore, invoicing to the "master and owners" and including all sorts of clauses in general trading conditions as mentioned make sense, at least from the supplier's point of view.