Bunker Fuel

Law firm Reed Smith on UK Supreme Court: The “Polar” and Red Sea war risks

Reed Smith shares takeaways of the court’s judgement of case involving “MT Polar” which was chartered for a voyage from St Petersburg to Singapore laden with a cargo of fuel oil when it was seized by Somali pirates.

Published

2 years ago

February 1, 2024

Admin

Global law firm Reed Smith on Tuesday (30 January) shared key takeaways of the UK Supreme Court’s judgement of a case involving vessel “MT Polar” which was chartered for a voyage from St Petersburg to Singapore laden with a cargo of fuel oil when it was seized by Somali pirates in 2010 until ransom was paid. Cargo interests disputed liability for their share of the ransom payment:

Key takeaways

The UK Supreme Court recently gave judgement in The Polar, ruling that the cargo interests were liable for their share of a ransom payment claimed in general average.
Shipowners may need to consider the specific wording of their charters, including any war risks clauses, when assessing their rights and liabilities in war-affected areas.
The judgement has a limited impact on shipowners’ right to deviate in the face of potential Houthi attacks in the Red Sea, as the decision is largely based on the construction of terms.

On 17 January 2024, the UK Supreme Court handed down judgement in The Polar [2024] UKSC 2. The judgement addresses an issue of current relevance given the ongoing war risks issues in the Red Sea area.

Key facts

The vessel MT Polar was chartered for a voyage from St Petersburg to Singapore laden with a cargo of fuel oil.

The voyage charter contained a specific agreement that the voyage would take place via the Suez Canal, with the wording “All above via Suez with the Suez costs to be for Owners account”.

This necessarily required that the vessel would transit the Gulf of Aden, a known piracy risk area at the time. The charter incorporated the amended BPVOY 4 form, including a revised clause 39, “War Risks” (Clause 39) and various additional provisions, including a “Gulf of Aden” clause. Clause 39 gave the Owners considerable liberties to cancel or vary the performance of the charter if performance would expose the vessel to war risks.

On 30 October 2010, while transiting the Gulf of Aden, the vessel was seized by Somali pirates and held captive for 10 months until a ransom of US$7.7 million was paid. General average was declared by the Owners, including the ransom payment. Eventually the adjustment found that over US$5.9 million was due from cargo interests. Cargo interests disputed liability for their share of the ransom payment. The present appeal is an appeal brought by the cargo interests against the Owners.

The Supreme Court judgement addresses several issues, the most important of which (as a threshold) is whether, on the proper interpretation of the charter, there was an insurance code or insurance fund agreed between the Owners and Charterers to compensate the Owners. If there is such an insurance code or fund, it means the parties have agreed to look to the insurers (rather than to each other) for indemnification.

The Owners’ right to refuse the Charterers’ order

When dealing with this threshold issue, the court considered whether the Owners would have been entitled to refuse to transit Suez and the Gulf of Aden on the basis that this transit represented a war risk which exposed the vessel to danger.

In this regard, the court distinguished the case Kodros Shipping Corp of Monrovia v. Empresa Cubana de Fletes (The Evia (No 2)) [1983] 1 AC 736 [HL], where a complete insurance code to similar effect was held to exist under a time charter, a decision that was not without its critics. The complete code was held to exist based on four particular features of the charter identified by Lord Roskill, the first of which was that Clause 21 (A) gave the owner an unqualified right to refuse to accept orders for the ship to go or to continue to any place which would subject her to any danger arising as a result of war.

However, in The Polar, although Clause 39 was also expressed in comprehensive and unqualified terms, it had to be construed in its contractual context and against the background of the circumstances existing at the date of the charter.

The relevant background included 1) the well-known piracy risks in transiting the Gulf of Aden, 2) the agreement between the Charterers and the Owners that the contractual voyage would be “via Suez”, and 3) the detailed arrangements as to the parties’ rights and obligations when the vessel transited the Gulf of Aden. Considering these factors, the court said it was unacceptable for the Owners to refuse to take on the known piracy risk of transiting the Gulf of Aden on the terms they had agreed.

The court went on to say that the Owners may have been able to rely on the ”War Risks” clause and refuse to proceed if there had been “a change in the nature of the piracy risk, or a change in its degree sufficient to make it qualitatively different”. In this case, the court did not consider that the piracy risk changed “at any time from that known and contemplated at the time that the charter was agreed”, and the Owners were therefore not entitled to refuse a route through Suez and the Gulf of Aden.

Having considered the above factors and various other aspects, the court concluded that there was no insurance code or fund between the parties. Since the existence of the insurance code or fund was the foundation of the cargo interests’ appeal, the court dismissed the appeal.

Implications for Red Sea issues

This decision of the Supreme Court is relevant to charterparties for passage via the Gulf of Aden and Red Sea, because it affects shipowners’ rights to deviate to avoid potential Houthi attacks. However, the application of this judgement to current Red Sea issues is arguably limited because:

Many charterparties will not contain an express obligation to proceed via Suez and the Red Sea, giving shipowners greater freedom to navigate by a usual or customary route.
Most charterparties for ships presently in the area may pre-date the outbreak of the current hostilities, meaning that a shipowner can usually rely on a change in the nature of the risk since the charter was concluded.

Of course, every charter will need to be considered on its own terms, taking into account the specific wording and context of the relevant clauses. Reed Smith is advising on a range of issues related to war risks and Red Sea transit.

Photo credit: CHUTTERSNAP from Unsplash
Published: 1 February, 2024

Mass Flowmeter

MFM-equipped CPN barge first listed under Hong Kong quality bunker scheme

Chimbusco Pan Nation’s bunker barge “Zhong Ran 23” has become the first vessel in Hong Kong listed on Marine Department’s official List of Quality Bunker Vessels, under a newly-launched scheme.

Published

3 hours ago

June 17, 2026

Admin

MFM-equipped CPN barge first listed under Hong Kong quality bunker scheme

Hong Kong-based marine fuel supplier Chimbusco Pan Nation (CPN) on Tuesday (16 June) announced that its bunker barge Zhong Ran 23 has become the first vessel in Hong Kong listed on the Marine Department’s official List of Quality Bunker Vessels.

The list under the Quality Bunker Operator Scheme launched on 3 June.

“The Scheme is a voluntary initiative designed to raise the standard of bunkering accuracy, transparency, and service quality in Hong Kong,” CPN said in a social media post.

“To be listed, a bunker vessel must have its Mass Flow Meter (MFM) system independently certified under ISO 22192, the international benchmark for mass flow metering in bunkering operations.”

CPN added it has operated the MFM system across our fleet of fuel oil barges since 2015.

Manifold Times previously reported Hong Kong’s Marine Department (MD) launching the Quality Bunker Operator Scheme to encourage bunker operators to install and use mass flow meter systems (MFM systems) on their bunker vessels.

MD said the scheme aims to enhance Hong Kong’s bunkering service quality and the competitiveness of Hong Kong ports, thereby further consolidating Hong Kong’s position as an international maritime centre and a major bunkering port.

Under the Scheme, bunker operators of traditional maritime fuel and biodiesel that install and use MFM systems on their bunker vessels, with the MFM systems inspected and certified by an accredited body in accordance with the International Organization for Standardization’s ISO 22192 Standard or equivalent requirements, can apply to the MD for inclusion in the scheme’s “List of Quality Bunker Vessels”, provided they meet the relevant technical and operational requirements.

Photo credit: Chimbusco Pan Nation
Published: 17 June, 2026

Financial Result

Bunker Holding exceeds FY2025/26 forecast despite geopolitical headwinds

Bunker Holding delivered a gross profit of USD 424 million and a profit before tax of USD 73 million, exceeding the Group’s expectations for the year.

Published

3 hours ago

June 17, 2026

Admin

Bunker Holding on Tuesday (16 June) said it delivered a strong performance in the financial year 2025/2026 despite continued uncertainty across global markets.

The year was shaped by geopolitical developments, evolving trade flows, periods of heightened market volatility, and strong competition.

These conditions were further amplified by developments in the Middle East, which added complexity across global energy markets and shipping routes.

In response, Bunker Holding focused on getting closer to customers and understanding the different challenges faced across shipping segments. This enabled faster decision-making, greater agility under pressure, and allowed the Group to respond effectively while continuing to support customers reliably.

Against this backdrop, Bunker Holding delivered a gross profit of USD 424 million and a profit before tax of USD 73 million, exceeding the Group’s expectations for the year. Equity increased to USD 342 million.

Revenue amounted to USD 13.1 billion, a decrease of 4% compared to the previous year. The decline primarily reflected lower average oil prices during the financial year, despite periods of heightened market volatility and stronger pricing towards the end of the period.

“This year, we have taken important steps to strengthen Bunker Holding for the future. We have simplified parts of the organisation, brought teams closer together, and made the changes needed to make us more focused and efficient. Our markets remained challenging and unpredictable, but I am pleased with both the result we have delivered and the progress we have made,” said Peder Møller, CEO of Bunker Holding.

Looking ahead to 2026/27, Bunker Holding anticipates intense market competition alongside continued investments in low- and zero-carbon fuel projects and partnerships.

Changes to the Board of Directors

Bunker Holding said the company is strengthening its Board of Directors with the appointment of several new members and a new Chairman of the Board.

Nina Østergaard, CEO and co-owner of USTC, will assume the role of Chairman of the Board, while Henrik Andersen, Group President and CEO of Vestas Wind Systems A/S, will join as Vice Chairman. Tina Revsbech, CEO of Maersk Tankers, and Kenneth Steengaard, Chairman of the Board of Global Risk Management, will join the Board as new members.

At the same time, current Chairman Klaus Nyborg and Board member Peter Frederiksen will step down from the Board.

Nina Østergaard, incoming Chairman of the Board, said: “I am excited to take on the role as Chairman of Bunker Holding at an important time in the company’s development. Bunker Holding has a strong market position, a clear strategic direction, and significant opportunities ahead. I am also pleased to welcome Henrik Andersen, Tina Revsbech, and Kenneth Steengaard to the Board. They each bring valuable experience and perspectives, and I am particularly pleased that we have attracted such strong international profiles as Henrik and Tina, whose leadership experience from Vestas and Maersk Tankers will further strengthen the Board and support the company’s continued development.”

The addition of Kenneth Steengaard moves Bunker Holding closer to its sister-company Global Risk Management and adds important insight into risk management.

Bunker Holding founder and co-owner Torben Østergaard-Nielsen thanked the departing Board members for their contributions to the company.

Photo credit: Bunker Holding
Published: 17 June, 2026

Alternative Fuels

Wah Kwong subsidiary appoints Nordic Green Biotrading as European distributor

Nordic Green will have the exclusive right to market, promote, and distribute Venture Energy’s supply of RED Advanced bio-methanol and RFNBO-methanol across the EEA, UK, and Switzerland.

Published

3 hours ago

June 17, 2026

Admin

Wah Kwong subsidiary appoints Nordic Green Biotrading as European distributor

Venture Energy, a sustainable fuels supplier headquartered in Hong Kong, recently announced the signing of a Distribution Agreement with Nordic Green Biotrading ApS (Nordic Green), appointing the Danish company as its exclusive distributor of renewable methanol across the EEA, the United Kingdom, and Switzerland.

The move marked a key step in expanding Venture Energy’s next-generation marine fuels platform into the European market.

Venture Energy is a subsidiary of Hong Kong shipowner Wah Kwong Maritime Transport, focusing on the procurement and trading of clean fuels.

Under the agreement, Nordic Green will have the exclusive right to market, promote, and distribute Venture Energy’s supply of RED Advanced bio-methanol (bio-methanol) and RFNBO-methanol (e-methanol) throughout the Territory.

“We are delighted to formalise our longstanding collaboration with Nordic Green as our strategic distribution partner in Europe, extending the breadth and quality of our downstream coverage for our supplier network and developing the profile of high-quality renewable methanol producers in the European market.” said Gregor McMillan, Executive Director of Venture Energy.

Deepak Devendrappa, General Manager of Venture Energy, said: “Nordic Green’s track record in local distribution, deep market knowledge, and strong customer relationships across the region’s core bio-blending and chemical sectors make them the ideal partner to bring our ISCC-certified renewable methanol to our customers in the territory.

“This agreement is another step in the road for Venture Energy as we act on Wah Kwong’s commitment to supporting the energy transition with reliable, sustainable fuel solutions.”

The distribution agreement covers sales within the dutiable area of the EEA, the United Kingdom, and Switzerland. Venture Energy will continue to market directly into the marine bunkering segment.

Bo Gleerup, representing Nordic Green, added: “This exclusive partnership represents a significant milestone for Nordic Green. Being able to sell Venture Energy’s high-quality, certified, renewable methanol volumes from a range of bio-methanol and e-methanol producers, complement our existing supply network for European road-fuel and chemical producers. This fresh focus allows us to offer some of the most competitive products coming into the market today. We look forward to working closely

with our colleagues at Venture Energy to develop this collaboration and deliver value to our shared customers across the territory.”

Photo credit: Venture Energy
Published: 17 June, 2026