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US lawyers: ‘Serious question’ arises from M/V Temara verdict

Second Circuit decision questions if OW Bunker provided the fuel in ‘bad faith’ while insolvent.
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The following article is written by James Harold Power and Marie E Larsen of global legal firm Holland & Knight:

HIGHLIGHTS:

  • In the legal battle of competing maritime lien claims against vessels whose charterers contracted with O.W. Bunker & Trading A/S or its affiliates in October-November 2014, an important decision was issued recently by the U.S. Court of Appeals for the Second Circuit.
  • Under the Commercial Instruments and Maritime Lien Act (CIMLA), a provider of necessaries may obtain a maritime lien against the supplied vessel under certain circumstances, if such provision was made on the order of the vessel or a person authorized by the owner (i.e., a charterer).
  • The Second Circuit ruled that the physical suppliers do not have liens against the vessels, but the issue of whether the security agent may assert a lien claim against any vessel remains a serious question.

In the legal battle of competing maritime lien claims against vessels whose charterers contracted with O.W. Bunker & Trading A/S or its affiliates in October-November 2014, an important decision was issued on June 13, 2018, by the U.S. Court of Appeals for the Second Circuit. The Second Circuit ruled that the physical suppliers do not have liens against the vessels. The issue of whether O.W Bunker's lending bank (the Bank) may assert a lien claim against any vessel remains a serious question. Several factors indicate that the Bank may not have secured an assignment of a U.S. maritime lien, and that O.W. Bunker's insolvency status and alleged reckless behavior at O.W. Bunker that induced charterers to purchase fuel during the critical time period preceding O.W. Bunker's ultimate bankruptcy filing may preclude it from being a "good faith" provider of necessaries.

Under the Commercial Instruments and Maritime Lien Act (CIMLA), a provider of necessaries may obtain a maritime lien against the supplied vessel under certain circumstances, if such provision was made on the order of the vessel or a person authorized by the owner (i.e., a charterer). 46 U.S.C. §31341, et seq.

Case Background
Following the global collapse and bankruptcy of O.W. Bunker & Trading A/S and its global subsidiaries (collectively, O.W. Bunker) in November 2014, O.W. Bunker failed to make payment to its subcontracting physical suppliers. Despite O.W. Bunker expecting to make only a small commission on each fuel delivery, as O.W. Bunker's security agent, the Bank sought to recover on outstanding invoices due against vessel owners by means of arrest around the world, pursuant to Fed. R. Civ. P., Supplemental Admiralty Rule C, on grounds that the Bank received an assignment of a U.S. maritime line claim from O.W. Bunker. Many of these vessel owners were not the contractual counterparties and, therefore, had no notice that funds were even owed by the respective charterers.

Despite the Bank's demand for payment pursuant to a Security Agreement and purported assignment of claim executed by O.W. Bunker (the validity of which has not yet been established in the U.S. Court for the Southern District of New York or the Second Circuit), the physical suppliers who remained unpaid by O.W. Bunker and the Bank also filed arrest claims against the vessels, demanding payment pursuant to CIMLA based on their delivery of fuel to the vessels under their contracts with O.W. Bunker.

In ING Bank N.V. v. M/V Temara, 2016 WL 6156320 (S.D.N.Y. Oct. 21, 2016) (Temara II), Judge Katherine B. Forrest held that the physical supplier CEPSA International B.V. was not entitled to a maritime lien, because it failed to meet the requirements of CIMLA. In addition, the District Court noted that it is possible that neither entity possesses a lien where neither meets the statutory requirements. The District Court held that O.W. Bunker (and therefore the Bank) was also not entitled to a maritime lien against the vessel because, at the time of the vessel arrest, it did not plan to make payment to the underlying physical supplier, it failed to take on any monetary risk in connection with the fuel delivery and its payments obligations were illusory. The District Court held that without such a risk, O.W. Bunker did not have an interest that the lien statute was meant to protect. Judge Forrest also suggested, based on clear legislative history behind the adoption of CIMLA, that there may be some good faith requirement on the part of the lien claimant, based on the legislative history of the statute. The Bank and the physical supplier filed cross-appeals.

Second Circuit Decision
The Second Circuit issued an opinion reversing in part, affirming in part and remanding the case back to the District Court to determine further issues. ING Bank N.V. v. M/V Temara, No. 16-3923, (2d Cir. June 13, 2018). In a victory for vessel owners and charterers, the Court of Appeals agreed with the District Court that CEPSA as physical supplier did not meet the requirements of CIMLA because it provided bunkers at the direction of O.W. Bunker, rather than on the authority of the vessel or charterer.1 The Court also rejected that clause L.4 of the O.W. Bunker General Terms and Conditions, which purports to substitute the physical supplier's terms in the contract between O.W. Bunker and the customer, served to create a contract or agency relationship between CEPSA and the customer that gives rise to a maritime lien.

The Court of Appeals did find that O.W. Bunker met the requirements of CIMLA and disagreed with Judge Forrest that some "financial risk" at the time of arrest or contracting was required in order to obtain a maritime lien. However, the Second Circuit left wide open the issue of whether a factual finding that O.W. Bunker provided the fuel in bad faith (i.e., contracting while insolvent on the eve of bankruptcy, knowing that it could not and would not pay the physical supplier) would negate any such lien. The issues of alleged bad faith and fraud of O.W. Bunker was not before the Second Circuit and will be fully ligated on remand provided that the Bank can overcome the threshold issue of whether it was assigned a U.S. maritime lien claim from O.W. Bunker. The Second Circuit also found that the District Court erred in its initial grant of summary judgment in favor of the vessels without providing O.W. Bunker an opportunity to submit additional evidence that O.W. Bunker had paid its downstream affiliate in the contract chain with the ultimate physical supplier.

The Second Circuit has remanded the case back to the District Court for further proceedings after full discovery into the alleged bad faith and fraud of O.W. Bunker. As such, the renewed District Court proceedings will likely address any additional defenses or exceptions to the lien, such as "bad faith" or fraud, as significant developments and disclosures concerning O.W. Bunker's activities have come to light since Judge Forrest's original decision. Additionally, the Court of Appeals' finding that O.W. Bunker meets the requirements of CIMLA still leaves open the question of whether a maritime lien was validly assigned by O.W. Bunker to the Bank (the assignment being governed by English law, which does not give rise to a U.S. maritime lien).    

 Notes
1 The Second Circuit has since been joined by the U.S. Court of Appeals for the Fifth Circuit in finding against the physical suppliers. Valero Marketing & Supply Co. v. M/V Almi Sun, No. 16-30194 (5th Cir. June 19, 2018). The Eleventh Circuit has also so ruled in Barcliff, LLC v. M/V Deep Blue, 867 F.3d 1063 (11th Cir. 2017).

Source: Second Circuit Confirms Physical Suppliers Don't Have Maritime Liens
Published: 25 June, 2018
 

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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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2 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

3 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

5 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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