Connect with us

Legal

Lawyer: Is a bunker delivery note a binding contract under Maltese law?

Fenech & Fenech Advocates explains why the bunkering community must continue to watch this space.

Admin

Published

on

5b2b194c07fa0 1529551180

The following legal article is written by Adrian Attard at Fenech & Fenech Advocates. Interested parties can contact him by telephone (+356 2124 1232) or email ([email protected]). The Fenech & Fenech website can be accessed at www.fenechlaw.com.

Following the collapse of OW Bunkers, physical bunker suppliers worldwide have had to rethink their business model with respect to the potential debt exposures that they face when conducting business through bunker traders. The matter is further complicated due to the fact that in many cases, there is not just one bunker trader involved, but rather a series of intermediaries, brokers and intermediary traders.

Overview
When faced with non-payment, many physical suppliers attempt to arrest or commence litigation against the vessels that they supplied or their owners, in hopes of recovering payment directly from said owners. Whether this is permissible heavily depends on the contractual relationships at play, as well as the domestic legislation of the jurisdiction in question.

The aftermath of the OW Bunkers saga has, if nothing else, shown the bunkering community that there is a dire need to ensure that the legal landscape within which physical suppliers ply their trade is well defined, either through regulation or jurisprudence. A number of landmark judgments in certain jurisdictions have helped to give the shipping community this degree of certainty in those countries.

Over the past four or five years, a wave of bunker claims have also been instituted before the Maltese courts by out-of-pocket suppliers. Analysis of these pending claims suggests that most suppliers justify the legal basis of their claims against supplied vessels and their owners (irrespective of the involvement of any intermediary traders) by including stipulations in the bunker delivery note (BDN) incorporating suppliers' terms and conditions. Suppliers contend that a vessel's acceptance of the BDN is tantamount to the acceptance of the suppliers' terms and conditions, which generally tend to hold the shipowner liable in solidum in cases of non-payment.

Until recently, the Maltese courts had not yet had the chance to pronounce a judicial decision on this specific point. However, in the past couple of months, the Maltese courts have delivered two judgments on precisely this matter.

Recent case law
Both actions were incidentally instituted by the same physical supplier with respect to unpaid bunker supplies furnished to vessels within Maltese territorial waters. In both cases, the purchases were not made directly by the shipowner or charterer but ordered through bunker brokers or traders. Following non-payment of its pending invoices, the physical supplier proceeded to arrest the vessels and commenced the relevant proceedings in rem against the respective vessels.

Under Maltese law, and unless a claim is considered privileged, one of the cardinal requirements for the Maltese courts to enjoy jurisdiction in rem is the fulfilment of the 'relevant person test' found under Article 742D of the Code of Organisation and Civil Procedure. In order to satisfy this two-tier test, a creditor must first prove that the person liable for the claim was the owner or charterer, or in possession or control, of the ship or vessel when the cause of action arose. Second, that same person must be the owner, beneficial owner or bareboat charterer of the ship when the action was brought.

Given that the shipowners of the respective vessels had not directly contracted the physical supplier for the consignments of bunkers, in both cases, the latter argued that the shipowner was jointly and severally liable as a result of the crew's acceptance of the BDNs. In both cases, the vessel had accepted and signed the bunkers delivery notes without issue. These notes declared that all deliveries were being made to the physical supplier's general terms and conditions, which in turn had specific clauses holding the vessel and its owners jointly and severally liable in case of non-payment.

BDN does not create juridical relationship
The first judgment concluded that the signing of a BDN does not render the vessel as a participant in the contract of sale. In the presiding judge's view, such a 'delivery note' serves only as evidence of receipt of the agreed quantities of fuels. The court held that the signing of a BDN creates no juridical relationship between the physical supplier and the owners of that vessel. In light of the above, the court ruled against the supplier. This first judgment was naturally applauded by shipowners.

BDN does create juridical relationship
However, a second subsequent judgment delivered less than two months later took a completely different approach when determining precisely the same matter. The second court opined that the clause in the BDN did in fact create a juridical relationship between the owners of the vessel and the physical supplier. The judge held that by accepting and signing the BDN, the owner's representative had recognised that the delivery was being made subject to the physical supplier's terms and conditions. The court went on to explain that the juridical relationship between the shipowner and supplier was created the moment that the bunker traders involved had failed to pay the same physical supplier. The court therefore held in favour of the physical supplier and ordered the vessel in rem to pay the invoice amount for the fuel supplied. Malta does not follow the doctrine of precedent; accordingly, this second judgment was greatly welcomed by local physical bunker suppliers.

Comment
These two judgments are diametrically opposing decisions which effectively leave the question unaddressed. There are a handful of similar proceedings currently pending before the Maltese courts and it would have therefore been convenient if the courts had reached a similar conclusion on the matter, as this would have at least offered a degree of certainty. That said, by the end 2018, there will likely be a spate of similar judgments. Hopefully, the collective body of these judgments will put an end to this conundrum. Until then, the bunkering community must continue to watch this space.

Photo credit: Fenech & Fenech Advocates
Published: 20 June, 2018

 

Continue Reading

Winding up

Singapore: Annual meeting of members and creditors set for Ocean Bunkering Services

Meeting for Ocean Bunkering Services, the marine fuels business arm of troubled Hin Leong Trading, will be held at 2pm on 25 February, according to Government Gazette notice.

Admin

Published

on

By

RESIZED Ocean Bunkering Services

An annual meeting of members and creditors for Ocean Bunkering Services (OBS), the marine fuels business arm of troubled Hin Leong Trading, will be held 25 February, according to a Government Gazette notice on Friday (14 February). 

The meeting will be held at 2pm at 600 North Bridge Road, #23-01 Parkview Square Singapore 188778.

The meeting will be held for the purposes of having an account laid before the meeting showing the acts and dealings of the Liquidators and the conduct of the winding-up in the preceding year.

The details of the liquidators are as follow:

LEOW QUEK SHIONG
GARY LOH WENG FATT
LIQUIDATORS
c/o 600 North Bridge Road
#23-01 Parkview Square
Singapore 188778

In 2020, Manifold Times previously reported the Maritime and Port Authority of Singapore (MPA) stating OBS’ bunkering licences were suspended until further development at the time. 

“Given that OBS has stopped its bunkering operations since April this year and has not been able to fulfil its licensing commitment to date, MPA has suspended their bunkering licences until further notice,” MPA was quoted as saying at the time.

Later, an Extraordinary General Meeting concluded with the decision to voluntarily wind up Ocean Bunkering Services due to its current liabilities.

Related: Notices of dividend issued for Ocean Bunkering Services, Hin Leong Marine
Related: OBS to wind up operations; creditor list alleges estimated USD 42 million debt
Related: MPA: Ocean Bunkering Services licenses suspended ‘until further notice’ and not revoked, it clarifies
Related: PwC publishes ‘investment opportunity’ for Singapore independent bunker fuel supplier
Related: Singapore: Ocean Bunkering Services bunker claims against ASL Marine & Offshore heads to arbitration
Related: Singapore: Ocean Bunkering Services license suspended until further notice
Related: Singapore: Ocean Bunkering Services to discontinue marine fuel deliveries

 

Photo credit: Manifold Times
Published: 17 February, 2025

Continue Reading

Winding up

Singapore: Final meetings scheduled for Gagarmayang Maritime and related companies

Other companies involved are Pramoni Maritime Pte Ltd, Wulansari Maritime Pte Ltd, Anjasmoro Maritime Pte Ltd and Indradi Maritime Pte Ltd.

Admin

Published

on

By

Resized benjamin child

The final meetings of members of Gagarmayang Maritime Pte Ltd and related companies, has been scheduled to take place on 12 March, according to the company’s liquidators on a notice posted on Wednesday (12 February) on the Government Gazette.

The other companies involved in the matter are Pramoni Maritime Pte Ltd, Wulansari Maritime Pte Ltd, Anjasmoro Maritime Pte Ltd and Indradi Maritime Pte Ltd.

The meetings will be held by way of electronic means at 11am for the purpose of having an account laid before the members showing the manner in which the winding up has been conducted and the property of the company disposed of and of hearing any explanation that may be given by the liquidators.

The details of the liquidators are as follows:

Hamish Alexander Christie
c/o H.A. Christie & Co
20 Collyer Quay, #11-05
Singapore 049319

Related: Singapore: Wulansari Maritime Pte Ltd and related companies to be wound up voluntarily
Related: Creditors meeting for Anjasmoro Maritime and affiliated sister firms to be held in Oct

 

Photo credit: Benjamin-child
Published: 14 February, 2025

Continue Reading

Business

Solomon Islands government joins landowners in compensation claim over 2019 oil spill disaster

Considered the biggest environmental disaster in Solomon Islands’ history, grounding of “MV Solomon Trader” and subsequent oil spill caused environmental devastation at Rennell Island, says government.

Admin

Published

on

By

Solomon Islands government joins landowners in compensation claim over 2019 oil spill disaster

The Solomon Islands government last month stated its support to the landowners of Kangava Bay, East Rennell by joining a compensation claim against international companies responsible for a monumental oil spill in February 2019.

Considered the biggest environmental disaster in Solomon Islands’ history, the grounding of Hong-Kong flagged bulk carrier MV Solomon Trader and the subsequent oil spill caused environmental devastation at Rennell Island. 

The vessel reportedly ran aground on 4 February and spilled more than 300 metric tonnes (mt) of heavy fuel oil into the ocean. 

“A first-of-its-kind claim in both collaboration and magnitude, the government and landowners have joined as co-claimants to pursue a group of international companies for environmental and other damages,” the government said in a statement. 

The compensation claim was filed in the High Court in Honiara on 31 January by the landowners of the Kangava Bay Community East Rennell Island and the Attorney General on behalf of the Solomon Islands government.

Acting jointly with the landowners in the matter, the Attorney-General Mr John Muria Jnr will lead the Solomon Islands government in the claim.

“We wish to ensure that companies act within local and international maritime and environmental laws and those that don’t need to be held to account,” said Attorney-General John Muria Jnr.

Solomon Islands Minister of Environment Climate Change, Disaster Management & Meteorology Trevor Mahaga, points out that “while East Rennell is a remote area, its environmental importance cannot be overstated and significant damage was done to this important part of our country and despite the generous clean-up assistance from Australia and New Zealand at the time, the residents continue to be impacted.”

“Neither the Kangava Community nor the Solomon Islands Government have received any assistance or compensation from the parties that are allegedly responsible,” the government added. 

Related: Bunker spill at Solomon Islands continue, more help sent
Related: Bunker spill: “Solomon Trader” beached at Solomon Islands
Related: “Solomon Trader” disaster shows nowhere safe from HFO spills

 

Photo credit: Solomon Islands government
Published: 14 February, 2025

Continue Reading
Advertisement
  • Zhoushan Bunker
  • Sea Trader & Sea Splendor
  • v4Helmsman Gif Banner 01
  • EMF banner 400x330 slogan
  • SBF2
  • Consort advertisement v2
  • RE 05 Lighthouse GIF
  • Aderco Manifold Website Advert EN

OUR INDUSTRY PARTNERS

  • E MARINE LOGO
  • SEAOIL 3+5 GIF
  • HL 2022 adv v1
  • Singfar advertisement final
  • Triton Bunkering advertisement v2


  • Mokara Final
  • Auramarine 01
  • CNC Logo Rev Manifold Times
  • pro liquid
  • MFA logo v2
  • PSP Marine logo
  • Synergy Asia Bunkering logo MT
  • metcore
  • Innospec logo v6
  • 300 300
  • 400x330 v2 copy
  • LabTechnic
  • Advert Shipping Manifold resized1
  • VPS 2021 advertisement
  • Headway Manifold

Trending