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The Shipowners’ Club: Legal costs cover and IMO 2020

Maritime insurer discusses potential commercial disputes it foresees post IMO 2020, and outlines response parameters for legal costs covers.
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Cameron Shepherd, Claims Executive of The Shipowners’ Club, on Thursday (5 March) published a news article discussing the eligibility of legal costs cover (LCC) provided vis a vis the possible disputes that could arise in the foreseeable future:

Members will be aware, that from 1 January 2020, the MARPOL permitted limits for sulphur content in vessels’ bunker fuel were reduced from 3.50% mass by mass (m/m) to 0.50% m/m for vessels operating outside designated Emission Control Areas (‘Global Sulphur Cap’).

The Club anticipates that the implementation of the Global Sulphur Cap will result in an increased number of commercial disputes between Members and associated parties, including charterers, bunker suppliers, and fitters of scrubbers and the costs associated with such disputes can be high. The Club’s Legal Costs Cover (LCC) provides cover for Members’ legal fees and other related costs, in pursuing or resisting claims which arise out of these disputes.

This article highlights some of the potential types of disputes that the Club expects to arise over the coming months and outlines how LCC can respond.

Disputes over bunker quality

With the 2020 Global Sulphur Cap now in force, the demand for low sulphur fuel has increased. Inevitably, there have been concerns about the quality of certain blends of low sulphur fuel. The blends often have increased levels of catalytic fines (cat fines), which can embed in the soft metal surfaces in engines and act as an abrasive, escalating the rate of wear of engine components.  Furthermore, there are also concerns about the stability levels of blended low sulphur fuel and the risk that asphaltene content may precipitate out of solution. This can form sludge in engines, which can block engine filters and pipes.

Typically, under most time charterparties, it is time-charterers’ “absolute” obligation to provide bunkers that are of reasonable general quality and suitable for the vessel’s engines. The charterparty may also include an express provision stipulating the grade and type of fuel to be supplied is to be in conformance with relevant ISO 8217 standards. However, charterers are not obliged to meet any special requirements of the vessel’s engines, unless those requirements have been brought to charterers’ attention and specified in the charterparty.

Given these circumstances, the Club anticipates that there will be an increased number of disputes between owners and charterers over the quality of fuel supplied to the vessel by charterers. Conversely, charterers may allege defects with (or lack of maintenance of) the vessel’s engines and other machinery after the bunkers have been stemmed.

The Club recognises that many Members engage in operations in which they bear the responsibility for obtaining suitable bunkers. As such, Members may find themselves in a situation whereby a claim is made against the bunker supplier for damage to the vessel’s engines or machinery, on the basis that the bunkers supplied were unsuitable.

Claims involving damage to the vessel’s engines or machinery may be covered by the Club’s LCC, where the amount of the claim is below the applicable deductible under the relevant Hull &Machinery (H&M) policy.

Additionally, LCC may be available where the claim is above H&M deductible, but the H&M underwriters confirm they do not wish to pursue a recovery. In such cases, LCC can respond to help Members to recover their deductible amount from the responsible bunker supplier.

The merits of a recovery action against a bunker supplier may be dependent on the bunker supplier’s terms. Bunker suppliers often seek to impose strict terms as regards the notification of claims and very short time bars. The time limit for raising a claim can sometimes be as short as 15 days from delivery. Particularly in the case of larger bunker deliveries Members should, where possible, obtain samples at the vessel’s manifold to assist with identifying and dealing with any bunker quality issues that may arise.

Such disputes would fall within LCC, which covers the legal and technical/expert costs incurred in respect of claims, disputes or proceedings brought:

  1. Under any charterparty, bill of lading, contract of affreightment or other contract;
  2. In respect of the supply of inferior, unsatisfactory or unsuitable fuel, materials or equipment, or other necessaries.

Disputes in respect of scrubbers

Notwithstanding the Global Sulphur Cap, ships fitted with exhaust gas cleaning systems (scrubbers) can continue to carry and burn fuel with a sulphur content of more than 0.50%, subject to local port regulations or additional requirements relating to the use of open loop scrubbers and dealing with wash water.  With speculation that the shift to 0.50% sulphur content in fuel could result in an oversupply of high sulphur content fuel on the market (and associated price drops), some owners have elected to invest in retrofitting their vessels with scrubbers.

Whilst the vast majority of scrubbers will likely be installed with no issues, there is the possibility of scrubbers malfunctioning after installation, as can be seen in this video example.

Disputes or proceedings in respect of the supply of inferior, unsatisfactory or unsuitable scrubbers (or the negligent or unsatisfactory installation of a scrubber system) would fall within LCC offered by the Club.

Please contact the Club for further information regarding IMO 2020, and how LCC can assist in certain disputes that may arise.


Source: The Shipowners’ Club
Photo credit: Helloquence on Unsplash
Published: 6 March, 2020

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Winding up

Singapore: High Court to hear Norvic Shipping Asia winding up application on 31 July

Application for the winding up of Norvic Shipping Asia Pte Ltd was filed by Netherlands-registered Mur Shipping BV on 8 April, according to Government Gazette notice.
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July 22, 2026

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An application for the winding up of Norvic Shipping Asia Pte Ltd was filed by Netherlands-registered Mur Shipping BV on 8 April, according to a Tuesday (21 July) notice on the Government Gazette.

It noted the winding up application is directed to be heard before the Judge sitting in the General Division of the High Court at 10am on 31 July.

Any creditor or contributory of the company desiring to support or oppose the making of an order on the winding up application may appear at the time of hearing by himself or his counsel for that purpose.

A copy of the winding up application will be furnished to any creditor or contributory of the company requiring the copy of the winding up application by the solicitors of the applicant’s, Oon & Bazul LLC, on payment of the regulated charge for the same.

The Applicant’s address is Hiridostraat 5, Gebouw Prismatrium, 1101CW Amsterdam, The Netherlands.

The Applicant’s solicitors are Oon & Bazul LLC of 103 Penang Rd, #04-04/05/06 Singapore 238467. 

Queries on the winding up application may be directed to the following email addresses: [email protected] and [email protected].

 

Photo credit: Manifold Times
Published: 22 July, 2026

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Methanol

World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Operation involved the delivery of approximately 2,800 MT of green methanol to “Arctic Tern” via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel “M/V Hai Gang Zhi Yuan”.
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July 22, 2026

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World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Marine fuel provider World Fuel on Tuesday (21 July) said it successfully completed the first green methanol bunkering of M/V Arctic Tern, with EUKOR Car Carriers and SIPG Energy at the Port of Shanghai. 

Arctic Tern is the first vessel in the new Shaper Class series of car carriers. 

The operation involved the delivery of approximately 2,800 MT of green methanol to Arctic Tern via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel M/V Hai Gang Zhi Yuan, the largest vessel of its kind in operation. 

The bunkering operation was carried out at Haitong Terminal, Waigaoqiao Port Area, Shanghai Port, with cargo handling operations conducted simultaneously during bunkering.

This marks EUKOR Car Carriers’ first green methanol operation and the first time Arctic Tern has bunkered methanol since its delivery on 9 July. The operation marked the first bunkering at Shanghai Port of green methanol produced locally in Shanghai for an international PCTC operator. 

It also demonstrated the city’s integrated green methanol value chain, spanning local production, storage and bunkering, and established a replicable “Shanghai Model” for green methanol supply.

World Fuel arranged the supply and delivery of the fuel on behalf of EUKOR Car Carriers, working with SIPG Energy as the physical supplier at the Port of Shanghai.

The green methanol supplied was produced from municipal solid waste, ISCC-EU certified, and had a carbon intensity value below 25 gCO₂e/MJ.

Arctic Tern is the first of fourteen Shaper Class vessels ordered by Wallenius Wilhelmsen. With a capacity of 9,300 car equivalent units and methanol dual-fuel capability, the vessel will be operated by EUKOR Car Carriers, jointly owned by Wallenius Wilhelmsen and Hyundai Motor Group. Following her first green methanol bunkering, Arctic Tern will continue her maiden voyage from Asia to Europe.

Xavier Leroi, COO Shipping Services at Wallenius Wilhelmsen and CEO of EUKOR Car Carriers, said: “Completing Arctic Tern’s first green methanol bunkering shortly after delivery is a significant milestone towards our decarbonisation ambition for both EUKOR Car Carriers and Wallenius Wilhelmsen. It demonstrates how investments in next-generation vessel technology and fuel flexibility are being translated into real-world operations. 

“This achievement reflects the strong collaboration between all parties involved. Together, we have shown how partnerships across the maritime value chain can help make lower-emission fuels available and operationally viable at scale.”

Mark Tamsitt, SVP Global Marine Sales at World Fuel, said, “The first bunkering event with a new fuel is a significant moment for any shipowner, and our role is to make it as seamless as possible. By connecting EUKOR Car Carriers with SIPG Energy’s proven green methanol capability at the Port of Shanghai, we were able to deliver on reliable supply, fuel quality, and safe processes. As more of our customers bring methanol dual-fuel tonnage into service, we are committed to being the partner that makes these kinds of operations routine.”

Mr. Zhang Da, General Manager of SIPG Energy, said, “Welcoming Arctic Tern to the Port of Shanghai for her first green methanol bunkering demonstrates the strength and maturity of our supply capability. Building on our well-established methanol ship-to-ship bunkering services for container vessels, we have already extended such services to pure car and truck carriers (PCTCs). This bunkering sets a new record for the largest single SIMOPs green methanol bunkering for PCTCs in China, marking another step in building Shanghai’s position as a global green energy hub for international shipping.”

This operation follows Wallenius Wilhelmsen’s announcement on 9 July that Arctic Tern would complete her first methanol bunkering shortly after delivery. The vessel entered service on routes between Asia and Europe immediately following handover from China Merchants Jinling Shipyard in Nanjing.

 

Photo credit: World Fuel
Published: 22 July, 2026

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Ammonia

HPA and MB Energy develop safety concept for STS ammonia bunkering

HPA says the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.
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July 22, 2026

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HPA and MB Energy develop safety concept for STS ammonia bunkering

The Hamburg Port Authority (HPA) and integrated energy company MB Energy on Tuesday (21 July) said they have completed a comprehensive risk analysis and developed a dedicated safety concept for ship-to-ship ammonia bunkering.

MB Energy said the analysis lays the groundwork for the safe introduction of ammonia as a future marine fuel.

“With our planned ammonia import terminal in Hamburg-Blumensand, MB Energy intends to provide the reliable land side supply infrastructure needed to support this transition across northern German ports,” it said in a social media post. 

Mabanaft Group was renamed to MB Energy last year and merged over 50 existing brands under one identity. 

Separately, HPA said the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.

“The focus is in particular on container ships, cruise ships as well as RoRo and ConRo (Container/RoRo) ships,” it said. 

“We expect ammonia to establish itself as an alternative marine marine fuel in the coming years. With our preparatory work, we are already creating the conditions to welcome the first ammonia-powered ships in Hamburg and to bunker them safely.:

HPA added that the import terminal for ammonia planned by MB Energy from 2029 will make a decisive contribution to ensuring the reliable availability of ammonia as a bunker fuel in northern German ports in the long term. 

“The use of an ammonia bunker barge is considered a possible addition to the landside infrastructure to enable ship bunkering in the port and beyond in the future,” it said.

Related: Mabanaft Group renames as MB Energy, merging over 50 brands under one identity

 

Photo credit: Hamburg Port Authority
Published: 22 July, 2026

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