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Adams and Reese LLP: Fifth Circuit Limits Bunker Suppliers’ Maritime Lien Rights

Bunker suppliers should consider how to contractually secure maritime liens against bunker tanker and the receiving vessel which the bunkers are ultimately bound.
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International legal firm Adams and Reese LLP Maritime Team Leader and Partner Matthew C.Guy on Wednesday (24 June) published an article cautioning bunker suppliers to be aware of their maritime lien rights when drafting supply contracts to avoid tricky situations whereby the party to whom it supplies bunkers is carrying the fuel as cargo to another supplier and defaults on payment:

In Martin Energy Services, LLC v. M/V Bourbon Petrel et al., the Fifth Circuit recently held that when a supplier of bunkers provides fuel to a supply vessel that will be transporting the fuel to another vessel for its use, the bunker supplier does not have a maritime lien against the supply vessel.

The ruling should be of concern to bunker suppliers as this means they may not have the protection of a maritime lien against a vessel when the fuel purchaser defaults on payment. Bunker suppliers should consider revising the terms and conditions of their supply contracts to make sure that their maritime lien rights are protected as far as possible in light of this ruling.

Lien on Me

Martin Energy Services, LLC (Martin Energy) delivered fuel to three support vessels owned by CGG Services, US, Inc. (CGG) that carried the fuel in their cargo tanks to three vessels performing seismic surveys off the coast of Louisiana.

CGG had originally purchased fuel directly from Martin Energy, but due to credit problems had begun to buy through a trader, O.W. Bunker USA, Inc. (OW Bunker), although Martin Energy, still supplied the fuel. Each vessel had a cargo tank that carried the fuel bound for the seismic vessels and a day tank for the supply vessels themselves. OW Bunker filed for bankruptcy. CGG had not paid its invoices for the fuel supplied by Martin Energy. CGG settled with OW Bunker but did not forward payment to Martin Energy, who commenced suit.

Lien on Me, When You’re Not Strong

The district court held that Martin Energy had a maritime lien on the CGG vessels because it had provided “necessaries” to those vessels within the meaning of the Commercial Instruments and Maritime Liens Act, 46 USC. 31301-31343 (CIMLA). The district court reasoned that the supply vessels were “floating gas stations” and that the fuel was “necessary” to perform their mission.

The Fifth Circuit reversed the district court and held that the fuel was merely cargo carried to support other vessels. Cargo could not be said to be necessaries to create a maritime lien. Fuel would qualify as a necessary under CIMLA if it was supplied to refuel a vessel and may have qualified as such with regard to the seismic vessel, but that was not the case with the supply vessels that were just carrying it. The Fifth Circuit agreed with CGG that to hold that fuel supplied as cargo was a necessary would represent an unprecedented expansion of CIMLA.

We All Need Somebody to Lien On

The ruling potentially leaves bunker suppliers without a maritime lien when the party to whom it supplies bunkers is carrying the fuel as cargo to another supplier and defaults on payment. The Fifth Circuit acknowledged that the bunker supplier may have a maritime lien against the vessel that is ultimately being supplied but rejected Martin Energy’s claim that the situation needed to be viewed “from the vendor’s perspective.” This increases the risk being assumed by the bunker supplier because the vessel that is ultimately being supplied may have left the jurisdiction or be encumbered by preferential lien rights. Bunker suppliers should consider what steps they can take contractually to secure maritime liens against both the supply vessel and the vessel to which the bunkers are ultimately bound. 

Our Maritime Team will continue to share the latest developments and provide insights as we continue to monitor the ever-changing, ever-shifting legal landscape in the maritime industry.

Guy Matt hs


Source: Adams and Reese LLP
Photo credit: CA5 U.S. Courts
Published: 30 June, 2020

 

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Legal

Singapore withdraws remaining 127 charges against Hin Leong founder OK Lim

Lim Oon Kuin, also known as OK Lim, was issued a stern warning and a district court granted him a discharge amounting to an acquittal for these charges on 17 July.

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Founder of collapsed oil trader Hin Leong Trading, Lim Oon Kuin, also known as OK Lim, has had the remaining 127 charges against him withdrawn, according to The Straits Times on Monday (20 July). 

OK Lim was issued a stern warning and a district court granted him a discharge amounting to an acquittal for these charges, including those for cheating, on 17 July. The discharge means Lim cannot be prosecuted again for the same offences.

Lim, 84, is currently serving a 13½-year prison sentence after the High Court reduced his original 17½-year jail term in March 2026. He was convicted in 2024 on two cheating charges and one count of abetting forgery in a case prosecutors described as one of Singapore’s most serious trade finance frauds.

Lim was convicted in May 2024 of two charges of cheating the Hongkong and Shanghai Banking Corporation (HSBC) and one count of abetting forgery that proceeded to trial out of a total of 130 criminal charges.

He was first charged in court on 14 August 2020, and was subsequently handed further charges in court on 25 September 2020, 30 April 2021 and 24 June 2021 for his role in perpetuating fraud on various financial institutions. 

A total of 130 charges were eventually brought against him for cheating and forgery-related offences.

Related: Singapore: Hin Leong Founder OK Lim gets jail term slashed to 13.5 years

 

Photo credit: Sora Shimazaki
Published: 21 July, 2026

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Winding up

Singapore: Coastal Logistics Pte Ltd to be wound up voluntarily

Coastal Logistics was reportedly affiliated with troubled Singapore bunker player Coastal Oil (Singapore) Pte Ltd.

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July 21, 2026

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RESIZED Drew Beamer

Several resolutions for Coastal Logistics Pte Ltd were made during an extraordinary general meeting held on 14 July, according to a notice in the Government Gazette on Friday (4 July).

The following resolutions were duly passed during the meeting:

As Special Resolution

  • That it has been proved to the satisfaction of the meeting that the Company cannot by reason of its liabilities continue its business and accordingly the Company be wound up voluntarily pursuant to Section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018);

As Ordinary Resolutions

  • that Mr. Wong Pheng Cheong Martin and Ms. Koay May Yee, both care of FTI Consulting (Singapore) Pte Ltd, One Raffles Quay, #27-10 South Tower, Singapore 048583 be appointed as the joint and several Liquidators of the Company for the purpose of such winding up; and
  • that the Liquidators be at liberty to open, maintain and operate any bank account(s) or account(s) for monies received by them as Liquidators with such bank(s) as they deem fit; and
  • that a Committee of Inspection will not be formed.

Manifold Times previously reported Nicholas James Gronow, director of Heng Tong Fuels & Shipping and Coastal Logistics, filed statutory declarations for both companies stating the firms cannot continue their businesses due to liabilities.

Both companies were reportedly affiliated with troubled Singapore bunker player Coastal Oil (Singapore) Pte Ltd. 

In 2019, several vessels owned by both firms entered the sale & purchase (S&P) market in Singapore.

Related: Singapore: Director declares Heng Tong Fuels & Shipping’s inability to continue business
Related: Heng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
Related: Singapore: Bunker tanker “Coastal Neptune” arrested
Related: Heng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market

 

Photo credit: Drew Beamer
Published: 21 July, 2026

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LNG Bunkering

PIL’s LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on LNG and low-sulphur fuel oil that helps reduce our greenhouse gas emissions.

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July 21, 2026

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PIL's LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

Singapore-based Pacific International Lines Pte Ltd on Monday (20 July) said its first 13,000 TEU LNG dual-fuel container vessel, Kota Elok, recently made her maiden call to Singapore on 15 July.

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on liquefied natural gas (LNG) and low-sulphur fuel oil that helps reduce our greenhouse gas emissions. 

The vessel also incorporated energy-saving features and digital technologies to reduce fuel consumption and enhance operational performance, as well as a bow windshield to improve aerodynamics, contributing to improved fuel efficiency and lower emissions over the course of long-haul voyages.

“Following Singapore, Kota Elok will continue her voyage on our East Coast Service 1 (ES1) route to South America, calling at ports in Brazil, Uruguay, and Argentina before returning to Asia,” the company said in a social media post. 

Kota Elok also became PIL’s first vessel to receive Lloyd’s Register certification for compliance with the IACS UR E26 and UR E27 cyber security requirements.

Developed by the International Association of Classification Societies (IACS), UR E26 and UR E27 are mandatory cyber resilience requirements for newbuild vessels contracted from 1 July 2024. 

 

Photo credit: Pacific International Lines
Published: 21 July, 2026

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