Switch to ADA Accessible Theme
Close Menu
Leesburg, Winchester & Manassas Attorneys
CALL FOR A CONSULTATION TODAY Free for Personal Injury & Criminal Defense Only

All in the Detail

In a recent article for the shipping industry magazine Bunkerspot, firm Principal J. Stephen Simms analyzes the fallout of the OW collapse and summarizes the status of current court proceedings surrounding the competing claims. Well-incorporated strategic sales terms and conditions for physical suppliers are proving themselves extremely valuable in advancing suppliers’ rights to recovery. Interestingly, the standard OW terms and conditions incorporate the physical suppliers’ terms and conditions, which has proven problematic for OW’s lender, ING Bank, in cases where the physical supplier remains unpaid. While OW’s lender, ING, has been proclaiming that the 2015 UK High Court decision in PST Energy 7 Shipping LLC, et al. v. OW Malta Ltd. is the final word on the fallout of the OW collapse, this is far from accurate. In a recent decision, the Federal Court of Canada found in favor of the physical supplier, which it held had first right of recovery to the security posted by the vessel’s charterer. See Canpotex Shipping Services Limited, et al. v. Marine Petrobulk, Ltd., et al. In that case, the physical supplier elected Canadian law to govern the terms, which provides that an intermediary is not entitled to a lien against the vessel if the physical supplier is not paid. That choice of law provision was critical for the physical supplier in obtaining a full recovery of the security funds.

Another important consideration for physical suppliers is to ensure that the terms and conditions of whatever entity is immediately downstream expressly incorporates the physical supplier’s terms and conditions in any agreements with a third party to the transaction. This will ensure that any favorable choice of law provisions for the physical supplier apply to the transaction and protect the supplier’s right to recovery. While no terms and conditions can completely guarantee full recovery for a physical supplier, strategic choices at the outset can minimize the uncertainty of expensive and time consuming litigation.

For more information on considerations for fuel suppliers in selecting favorable terms and conditions and preventing uncertainty in the recovery for unpaid provisions, a PDF version of the full article is available here.

Facebook Twitter LinkedIn
MileMark Media

© 2023 - 2024 Simms Showers, LLP. All rights reserved.
This law firm website and legal marketing are managed by MileMark Media.

x Which Newsletter are you interested in? *