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Skuld: Bunker contamination and the importance of timely intervention

Current contracts unable to address practical issues between shipowners, charterers and bunker suppliers.
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8 years ago

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Mudit Singh, Skuld Oslo, wrote the following article ‘Bunker contamination: The importance of timely intervention’ in the December edition of Skuld Charterer, a quarterly newsletter for charterers and traders:

The shipping industry has previously faced problems with bunker contamination due to the presence of catalytic fines and is again experiencing similar issues. The culprit this time has been identified as phenols and fatty acids.

One theory is that these contaminants originate from refineries in the US Gulf. Irrespective of the origin, the contaminants have now been found in bunkers supplied as far as Singapore. The issues are compounded by the unavailability of competent testing facilities, the high cost of bunker analysis and long waiting times.

Generally, the contractual framework for the supply of bunkers addresses liabilities and obligations between various parties involved in the voyage. These contracts, however, do not address all the practical issues that shipowners, charterers and bunker suppliers may face when contaminants are discovered and the legal environment in which these parties operate will come into play.

Time is of essence

It is worth highlighting that timely identification of any issues with the bunkers is of prime importance, not only because of very short time bar provisions in the bunker supply contracts, but also to preserve evidence.

Shipowners may find themselves facing issues, such as disposal of the contaminated bunkers, as well as cleaning of bunker tanks and pipelines. If contaminated bunkers have been consumed, owners will need to identify any damage caused to the machinery and whether it relates to the bunkers. If there is any doubt as to the quality of bunkers supplied, shipowners should contact charterers and bunker suppliers as soon as possible and retain the samples collected during bunkering for further analysis. Our members and assureds should also notify Skuld immediately if any issues with the bunkers arise to ensure that the dedicated claims teams can intervene in a timely fashion.

When collecting samples, the parties should ensure that a sufficient quantity is collected from the delivery line during bunkering. A complete log of events (including but not limited to bunkering procedures, tanks, in which bunkers were received, pipeline layout etc.) and machinery records must be preserved.

Contractual framework

It is often the time charterer who arranges for bunkers to be supplied to the vessel and enters into a supply contract with the bunker supplier. The charterer’s relationship with the shipowner is governed by the terms of the charterparty, which may include specific provisions concerning bunker quality. Usually reference is made to ISO 8217 standards (2005, 2010, 2012 or 2017 edition).

The physical supplier presents a Bunker Delivery Note to the vessel, which, amongst other things, confirms the quantity and quality of the bunkers supplied. This document usually incorporates the physical supplier’s terms, which are likely to be in their favour.

Charterers’ dilemma

Although the charterer is the contracting party ordering and usually also paying for bunkers, they have little control on the actual supply process. It is highly unlikely that they will be able to collect and retain representative samples, as this is done by the supplying barge and/or the receiving vessel. Additionally, by the time a problem with the bunkers is identified, the contractual time bar in the supply contract may have already passed.

Charterers may face claims related to costs of deviation and disposal of contaminated bunkers from the shipowners. If contaminated bunkers have been consumed, claims for damage to the machinery may follow.

All this means loss of time for the charterer and potentially loss of reputation. In extreme cases, and depending on the circumstances, the charterer may be faced with a termination of the charterparty or withdrawal of the vessel. Whether the charterer can make deductions from hire for the downtime or indeed seek other remedies will depend on the terms of the charterparty.

If the charterer is the Carrier under the bills of lading, they may face considerable cargo claims arising from the delay, especially if the cargo is of a perishable nature. They may also be exposed to commercial pressure from other contractual parties to complete the voyage as early as possible and face claims for breach of contract should they fail to do so.

Further, if the vessel suffers machinery failure and the owner decides to declare General Average, the charterer may be required to provide security for their portion of the adjustment.

As can be seen from the above, there are numerous risks charterers may be exposed to, should the bunkers supplied to the vessel turn out to be contaminated. Moreover, the issues are not limited to treating or removal of contaminated bunkers and are exacerbated by the practical difficulties of positively identifying the presence of phenols and fatty acids.

Owners’ concerns

Although the owner will have more control over the supply, sampling and testing of the bunkers, they may find it difficult to enforce rights under their charterparty due to competing jurisdictional issues. It is therefore important that owners involve experts and preserve as much evidence as possible. This will ensure that contamination issues are identified quickly and accurately. It is crucial that correct and representative samples are clearly identified and analysed.

The owner’s obligations under the bills of lading will continue whilst the parties look for a solution to handle the contaminated bunkers. At the same time, owners may face claims for unseaworthiness, as the vessel may not have sufficient bunkers to execute the intended voyage. An expert’s advice will be invaluable and Skuld can assist in this regard.

It is in the common interest of the parties involved that a solution to the contaminated bunkers is executed as soon as possible – whether it be onboard treatment with additives, offloading or any other solution agreed between the owner, charterer and supplier. Co-operation between all parties is crucial to mitigate damages and avoid disputes about title to the bunkers and associated costs.

How Skuld can assist

In bunker contamination cases, it is critical to establish whether the bunkers are in fact off specification (on ISO 8217 or other parameters) and deal with time constraints and a raft of costs and claims that may arise.

Skuld offers a wide range of insurance products including owners’ and charterers’ P&I and FD&D cover, which allows us to assist charterers and owners in dealing with the fallout of contaminated bunkers being supplied to the vessel.

Our underwriting team will provide tailormade solutions, and Skuld’s claims handlers and technical managers are well placed to respond to such incidents.

We encourage our members to contact us as soon as they experience problems with contaminated bunkers. Timely intervention can save valuable time and costs.

Should you have any comments or questions, then please do not hesitate to contact us at any time.

On behalf of your Skuld team of underwriters and claims handlers who serve our charterers and traders 24/7/365.

Source: Skuld
Published: 2 January, 2019
 

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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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4 days ago

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September 3, 2026

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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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Published

5 days ago

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September 2, 2026

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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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Winding up

Singapore: Notices of intended dividend issued for Hua An Shipping and related firms

Creditors will need to produce proofs of debt to liquidators of Hua An Shipping, Hua Guang Shipping, Nan Hai Maritime, Nan Sia Maritime and Nan Zhou Maritime by 11 September.
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Published

7 days ago

on

August 31, 2026

By

RESIZED Drew Beamer

Notices of intended dividend for Hua An Shipping Pte Ltd, Hua Guang Shipping Pte Ltd, Nan Hai Maritime Pte Ltd, Nan Sia Maritime Pte Ltd and Nan Zhou Maritime Pte Ltd were published on the Government Gazette on Friday (28 August). 

The following are the details of the notice of Hua An Shipping Pte. Ltd:

Name of Company : Hua An Shipping Pte. Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 200610919Z
Address of Registered Office : c/o Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960
Last Day for Receiving Proofs : 11 September 2026 at 5:00 pm by email to [email protected]
Name of Liquidators : Paresh Tribhovan Jotangia and Ho May Kee
Address : c/o Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960

Details of the notice of intended dividend for Hua Guang Shipping Pte. Ltd are as follows:

Name of Company : Hua Guang Shipping Pte. Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / : 200610922R Registration No.
Address of Registered Office : c/o Grant Thornton Singapore Private Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960
Last Day for Receiving Proofs : 11 September 2026 at 5:00 pm by email to [email protected]
Name of Liquidators : Paresh Tribhovan Jotangia and Ho May Kee
Address : c/o Grant Thornton Singapore Private Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960

Details of the notice of intended dividend for Nan Hai Maritime Pte Ltd are as follows:

Name of Company : Nan Hai Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. /Registration No. : 200814299M
Address of Registered Office : c/o Grant Thornton Singapore Private Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960
Last Day for Receiving Proofs : 11 September 2026 at 5:00 pm by email to [email protected]
Name of Liquidators : Paresh Tribhovan Jotangia and Ho May Kee
Address : c/o Grant Thornton Singapore Private, Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960

Details of the notice of intended dividend for Nan Sia Maritime Pte Ltd are as follows:

Name of Company : Nan Sia Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No.  / Registration No.  : 200814320Z
Address of Registered Office : c/o Grant Thornton Singapore Private Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960
Last Day for Receiving Proofs : 11 September 2026 at 5:00 pm by email to [email protected]
Name of Liquidators : Paresh Tribhovan Jotangia and Ho May Kee
Address : c/o Grant Thornton Singapore Private Limited 8 Marina View #40-04/05 Asia Square Tower 1 Singapore 018960

Details of the notice of intended dividend for Nan Zhou Maritime Pte Ltd are as follows:

Name of Company : Nan Zhou Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No.: 200814295H
Address of Registered Office : c/o Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960
Last Day for Receiving Proofs : 11 September 2026 at 5:00 pm by email to [email protected]
Name of Liquidators : Paresh Tribhovan Jotangia and Ho May Kee
Address : c/o Grant Thornton Singapore Private Limited, 8 Marina View, #40-04/05 Asia Square Tower 1, Singapore 018960

 

Photo credit: Drew Beamer

Published: 31 August, 2026

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