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Lawyer comments on M/V Ocean Hope oil discharge case

Owner and operator liable for crew’s wrongdoings even if they are acting for their own benefit.

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The following article is written by Matthew Johnston, an Associate at Lewis Brisbois Bisgaard & Smith LLP; he was commenting on the M/V Ocean Hope case where employers of crew involved in illegal oil discharge operations were convicted at nine U.S. counts over criminal liability.

On May 7, 2018, the Fourth Circuit in United States v. Oceanic Illsabe Limited affirmed the conviction and sentencing of a vessel owner and operator for violations of the Act to Prevent Pollution from Ships (APPS).

Appellants, the owner and operator of the M/V OCEAN HOPE (a Greek oceangoing cargo ship), were convicted of offenses related to illegal discharges of large quantities of oily pollutants from the vessel into the ocean. Appellants violated the APPS which was created to comply with MARPOL. The Act provides that foreign ships in the navigable waters of U.S. are subject to federal discharge requirements, and the Coast Guard can assert jurisdiction outside of the U.S. when a foreign ship fails to make complete and accurate entries in the Ship’s Oil Record Book, which must be updated “without delay.”

M/V OCEAN HOPE’s Engine Department was principally responsible for violating APPS, and also made false statements to the Coast Guard, obstructed justice and tampered with witnesses. The case involved pumping unprocessed bilge water into the ocean and the use of a “magic pipe” – a hose between the vessel’s sludge pump and an illegal onboard discharge valve on the storage tank, which ultimately draws the sludge into the ocean. One of the Engine Department’s crew videotaped and photographed the “magic pipe” arrangement.

The MV OCEAN HOPE’s owner and operator asserted that they were not vicariously criminally liable for any of the violations revealed by the Coast Guard, and that it was all the Engine Department crewmembers’ fault. They said that they had hired qualified crew that could reasonably be relied upon and the misconduct was unknown to owner and operator. However, the owner and operator were convicted on nine counts. The appellate court upheld the vicarious criminal liability noting that the Engine Department crew met the standard that “the employee or agent acted within the scope of the employment with the intent to benefit the corporation.” Those responsible were employed to carry out pollution prevention for the ship but consistently ordered subordinate crew to violate MARPOL and APPS along with various other criminal statutes and regulations. Further the owner and operator had knowledge of “multiple oddities” from weekly updates of the Oil Record Book.

The Court also noted that as long as “the corporate agent intends, at least in part, to benefit his employer, the entity can be criminally liable even if the agent was also acting for his own benefit.” The Court found that this standard was met when, for example, the supervisors of the Engine Department told the crew not to tell the Coast Guard investigators about illegal discharge, and in that way intended to prevent the Coast Guard from finding deficiencies onboard the M/V OCEAN HOPE which may cause the vessel to be detained or delayed.

This case underscored the serious nature of falsifying Oil Record Books and illegal discharges into the ocean. It also highlights the scope of the U.S.’s jurisdiction to protect the waters and enforce U.S. law. The full decision can be found here.

Manifold Times comment: Singapore shipping firm Hai Soon Ship Management, the sister firm of Singapore-based bunker tanker owner Hai Soon Diesel & Trading, was recently fined $1 million in regards to APPS.

Published: 16 July, 2018
 

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Winding up

Singapore: Liquidators of Nan Ho Maritime, Nan Xin Maritime issue notices of dividend

Nan Ho Maritime’s second interim dividend and Nan Xin Maritime’s second and final dividend are payable from 4 September, according to Government Gazette notices.

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Notices of dividend for Nan Ho Maritime Pte Ltd and Nan Xin Maritime Pte Ltd, which are currently in creditors’ voluntary liquidation, were published on the Government Gazette on Friday (4 September). 

The following are the details of the notice for Nan Ho Maritime:

Name of Company : Nan Ho Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 200814315C
Address of Former Registered Office : 21 Bukit Batok Crescent, #22-70 WCEGA Tower, Singapore 658065
Amount per centum : 2.305 per centum of all admitted ordinary claims
First and Final or otherwise : Second interim dividend
When Payable : 4 September 2026 onwards
Where Payable : c/o AAG Corporate Advisory Pte. Ltd., 11 Collyer Quay, #07-02 The Arcade, Singapore 049317

The following are the details of the notice for Nan Xin Maritime:

Name of Company : Nan Xin Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 201701966W
Address of Former Registered Office : 21 Bukit Batok Crescent, #22-70 WCEGA Tower, Singapore 658065
Amount per centum : 3.980 per centum of all admitted ordinary claims
First and Final or otherwise : Second and final dividend
When Payable : 4th day of September 2026 onwards
Where Payable : c/o AAG Corporate Advisory Pte. Ltd., 11 Collyer Quay, #07-02 The Arcade, Singapore 049317

 

Photo credit: Benjamin Child
Published: 7 September, 2026

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Vessel Arrest

Malaysia: MMEA detains two vessels over suspected illegal ship-to-ship transfer off Johor

Other than the vessels, MMEA also seized a cargo of oil, bringing the total value of the seizure to MYR 260 million (USD 61.9 million).

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Malaysia: MMEA detains two vessels over suspected illegal ship-to-ship transfer off Johor

The Malaysian Maritime Enforcement Agency (MMEA) detained tugboat and dredger suspected of conducting an unauthorised ship-to-ship (STS) transfer in Malaysian waters.

The two Malaysian-registered vessels were detained at around 3.20am on Wednesday by an MMEA patrol boat after the agency received public information about two suspicious vessels seen operating alongside each other about 1.4 nautical miles northwest of Tanjung Buai.

MMEA Tanjung Sedili Zone Acting Director Maritime Commander Mohd Najib Sam said further inspection found that the tugboat was operated by five crew members, including its skipper, comprising Malaysian and Indonesian nationals aged between 26 and 58.

The dredger was operated by 13 crew members, including its skipper, all Malaysian nationals aged between 22 and 51.

“Further inspection also found a quantity of oil cargo believed to be without any documents relating to ownership and delivery,” Najib said.

Both vessels and the oil cargo have been seized for further investigation. The total value of the seizure, including the two vessels and the oil cargo, is estimated at MYR 260 million (USD 64 million).

The case is being investigated under Section 491B(1)(K) of the Merchant Shipping Ordinance (MSO) 1952 for allegedly conducting ship-to-ship activities without authorisation from the Malaysian Director of Marine.

The vessels are also being investigated under Section 491B(1)(L) of the MSO 1952 for allegedly anchoring without permission, as well as under the Customs Act 1967 in connection with the oil cargo suspected of lacking the required documentation.

 

Photo credit: Malaysian Maritime Enforcement Agency
Published: 3 September, 2026

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Bunker Claim

Rajah & Tann: Bunker disputes are won in the first 48 hours

Partner V Bala says bunker disputes depend heavily on evidence gathered in the first 48 hours, making disciplined preservation, accurate reporting and early expert involvement critical to protecting a claim or defence.

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Rajah & Tann: Bunker disputes are won in the first 48 hours

V Bala, a partner in Rajah & Tann Singapore’s Shipping & International Trade practice group, has highlighted the critical importance of preserving evidence in the first 48 hours of a bunker incident, outlining best practices for ship managers to protect potential claims and defences:

A vessel somewhere in the Indian Ocean reports abnormal fuel behaviour. Sludge is forming. Filters are clogging. Consumption looks wrong. Within hours, owners, charterers, managers, suppliers and insurers are exchanging messages. Everyone asks the same question: is there a claim? It is reasonable. It is also often premature. The better question is: what evidence will still exist in 48 hours to explain what happened?

For all the technical sophistication around modern bunker disputes, many are decided less by expert reports than by the first two days after trouble appears. The tribunal may sit years later. The factual foundation is usually laid before the vessel reaches its next port.

Bunker claims are commonly treated as technical contests about fuel specifications, ISO standards and competing laboratory results. They are that. But experienced litigators quickly notice a simpler pattern: the strongest cases are rarely built by the cleverest lawyers. They are built by the best recordkeepers.

The Vanishing Evidence Problem 

Unlike a collision, fire or grounding, bad bunkers leave few obvious visual traces. The evidence is scattered across tanks, samples, engine records, maintenance logs, performance data and electronic communications. Much of it can deteriorate, disappear or become contaminated with surprising speed.

A discarded sample cannot be recreated. A cleaned filter may tell a different story from one preserved immediately after failure. Electronic records overwritten in routine operations may never be recovered usefully. Crew change. Memories fade. The difficulty is that bunker incidents rarely feel like casualties when they first arise. They look like operational nuisances.

The Pressure to Move On 

A ship manager’s first duty is to keep the vessel trading. Engineers solve the immediate problem. Technical managers assess options. Owners watch delay. Charterers want assurance. The commercial pressure to restore normality is intense. It is also the moment when evidential mistakes are most easily made.

Fuel is blended before investigations are complete. Samples are mishandled. Machinery is repaired before it is properly photographed. Internal messages fill with theories. By the time experts arrive, the most useful evidence may already have changed.

The Danger of Instant Certainty 

Modern communication has made this harder. A concern raised in the engine room can reach executives across continents within minutes. The advantages are obvious. So are the risks.

The earliest explanations are often the least reliable. When machinery problems arise shortly after bunkering, the fuel is naturally blamed because it is the most visible recent change. Sometimes that is right. Sometimes it is not.

Yet once a theory enters circulation, it acquires momentum. Months later, early WhatsApp messages or emails written under pressure may be attached to witness statements, analysed by experts and scrutinised by lawyers. A passing operational remark can begin to look like a settled conclusion.

The Documentary Ship 

Shipping remains a documentary business. Despite digitalisation, disputes still turn on engine logs, maintenance reports, fuel transfer records, sounding measurements and superintendent correspondence.

What matters is not merely whether those records exist, but what story they tell together. Tribunals value contemporaneous documents because they were created before positions hardened. They are the closest thing to a real-time account.

Ship Managers at the Centre 

Ship managers sit at the centre of the network: owners, financiers, charterers, bunker suppliers, insurers and regulators. In bunker matters, their role now goes beyond technical operation. It includes preserving enough information to understand what happened if the matter becomes a claim.

What the Best Operators Do Differently 

If bunker disputes are won in the first 48 hours, what do the best operators do differently? They treat fuel incidents as evidential events as well as operational ones. While engineers restore function, someone asks: if this becomes a dispute, what will we wish we had preserved today?

They resist instant certainty. Communications distinguish facts from theories. There is a difference between recording that power loss followed consumption from a particular tank and declaring that the supplier delivered bad fuel.

They know samples are useful only if identity, seals, labels and custody can be proved. They keep samples alongside the full operational record: delivery documents, tank soundings, transfer history, engine logs, alarms, purifier settings, maintenance data and ship-to-shore messages.

They preserve physical evidence before routine work alters it. Filters, residues and affected components may contain information that disappears once cleaned or discarded. Photographs should capture the condition found, not just the condition after repair.

Finally, they bring the right expertise to the problem early. They also involve the right people early: surveyors, laboratories, technical experts, insurers and lawyers. A surveyor or technical expert can help identify what should be sampled, photographed, retained and recorded before the evidence changes. Lawyers and insurers can help ensure that notifications are made, communications remain measured and contractual deadlines are not overlooked. The point is not to turn every operational problem into litigation. It is to avoid discovering, months later, that the ingredients of a sound claim or defence were lost during the first voyage after the incident.

The first 48-hour discipline 

PRESERVE Segregate the suspect fuel where practicable. Secure representative samples, seals, labels and a documented chain of custody. Retain affected filters, residues and components before cleaning or disposal.
RECORD Capture tank soundings, transfer history, consumption sequence, engine parameters, alarms, purifier settings, maintenance data and photographs. Preserve original electronic records and contemporaneous logs.
COMMUNICATE Report observed facts, not untested conclusions. Keep a disciplined chronology of what happened, when it happened, who was informed and what action was taken.
NOTIFY Check contractual notice provisions and inform the relevant owner, charterer, supplier, manager, insurer or P&I club promptly. Delay can damage both evidence and rights.
DEPLOY Involve the appropriate surveyor, laboratory, technical expert and legal team before the condition of the evidence changes, not after positions have hardened.

The lesson is simple. In bunker disputes, the law often comes late. The evidence comes early. The party that preserves it calmly, completely and without premature blame gives itself the best chance of winning the argument when the dispute finally arrives.

 

Photo credit: Rajah & Tann Singapore
Published: 2 September, 2026

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