Facts
Decision
Comment


The US Court of Appeals for the Ninth Circuit has affirmed a district court decision vacating a maritime attachment where the plaintiff, a bunker supplier, failed to show a contractual relationship with the defendant shipowner.(1)

Facts

The plaintiff, through a third party, supplied bunker fuel to vessels owned and operated by the defendant. The defendant never paid the plaintiff directly, but instead paid the bunker trader, which became insolvent and never forwarded payment to the plaintiff.

The plaintiff brought a maritime claim for breach of contract against the defendant, claiming that the defendant had a contractual relationship with the plaintiff because it agreed to purchase bunkers that were ultimately used to power the defendant's vessels.(2) The plaintiff also filed an ex parte application for a Rule B maritime attachment under the Supplemental Rules for Admiralty, attaching one of the defendant's vessels.

The defendant filed a motion to vacate the attachment. It argued that the plaintiff did not have a valid prima facie breach of contract claim because it never entered into a contract directly with the plaintiff. Instead, the defendant argued that its contract for bunkers was solely with the bunker trader.

Decision

The US Court of Appeals for the Ninth Circuit affirmed the district court decision vacating the maritime attachment. The appellate court agreed with the district court, holding that the plaintiff failed to show that it had a valid prima facie breach of contract claim directly against the defendant.(3)

The court found that the documents presented by the plaintiff:

  • were never sent to the defendant;
  • did not show that the defendant knew that the plaintiff was the bunker supplier; and
  • did not show that the defendant entered into a contract directly with the plaintiff.(4)

The court also reasoned that, while the documents showed at most that the plaintiff thought that it was contracting with the defendant, "contracting, like dancing the tango, takes two; one party's belief that there was an agreement isn't enough".(5)

The appellate court held that because there was no direct contract between the plaintiff bunker supplier and the defendant shipowner, the plaintiff did not and could not show that the defendant had breached a contract even under the prima facie standard as required. Therefore, the appellate court held that the district court's decision vacating the attachment was proper.

Comment

A lack of contractual relationship between a shipowner and a bunker supplier is fatal to a maritime attachment. In general, bunker suppliers supply fuel to vessels through third parties. However, in order for those bunker suppliers to recover damages in an in personam claim by attaching the shipowner's property, they must prove a prima facie breach of contract admiralty claim. Under this requirement the bunker supplier must prove that it had a contractual relationship directly with the shipowner or, at minimum, that the shipowner knew that it was receiving fuel from the bunker supplier and not merely the bunker trader. Failure to meet this burden will result in the vacation of the maritime attachment.

For further information please contact Antonio J Rodriguez, Christian Sauce or Shelley Miller at Fowler Rodriguez Valdes-Fauli by telephone (+1 504 523 2600) or by fax (+1 504 523 2705) or by email (ajr@frvf-law.com, csauce@frvf-law.com or smiller@frvf-law.com).

Endnotes

(1) Equatorial Marine Fuel Mgmt Servs PTE v MISC Berhad, 2010 US App LEXIS 627 (9th Cir Cal Jan 11 2010).

(2) The plaintiff also filed an unjust enrichment claim.

(3) Under Rule B of the Supplemental Admiralty Rules, a plaintiff may attach the defendant's property if four conditions are met:

  • The plaintiff has a valid prima facie admiralty claim against the defendant;
  • The defendant cannot be found within the district;
  • Property of the defendant can be found within the district; and
  • There is no statutory or maritime law bar to the attachment.

(4) The plaintiff presented:

  • letters between the plaintiff's bunker broker and the defendant's bunker trader listing the defendant as 'the buyer' and the plaintiff as 'the seller';
  • invoices issued by the plaintiff's bunker broker to the plaintiff addressing the defendant as 'the buyer' and the plaintiff as 'the seller';
  • delivery notes from a third party stating that it delivered bunkers to the defendant; and
  • tax invoices from the plaintiff to the plaintiff's bunker broker listing the defendant as the buyer.

(5) Equatorial Marine at paragraph 5.

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