“Growing Consensus” Over Who Should Be Paid Disputed OW Bunker Bills
January 25, 2017
Ship and Bunker
Types : In the News
An order and opinion by United States District Judge Valerie E. Caproni earlier this month has added to a “growing consensus” that ING Bank (ING), and not the physical suppliers, should be paid any disputed bunker bills following the 2014 collapse of OW Bunker, writes Robert E. O’Connor, a member of Montgomery McCracken Walker & Rhoads LLP’s Maritime and Transportation practice group.
“On a full evidentiary record, however, Judge Caproni concluded that O.W. Bunker did have a real risk of financial loss on the transaction, providing O.W. Bunker with maritime liens in the ‘test’ cases, consistent with Judge Forest’s decision. Judge Caproni recognized that a party may ‘provide’ necessaries to a vessel indirectly through a subcontractor,” writes O’Connor.
“Judge Caproni further recognized that all of O.W. Bunker’s back-to-back contractual arrangements imposed significant financial risk on O.W. Bunker – the risk of providing bunkers to vessels even if the physical suppliers failed to deliver and the risk of paying the physical suppliers even if the vessels failed to pay. As such, Judge Caproni held that O.W. Bunker ‘provided’ bunkers to vessels and, therefore, had maritime liens.”
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