Switch to ADA Accessible Theme
Close Menu
Leesburg, Winchester & Manassas Attorneys
CALL FOR A CONSULTATION TODAY Free for Personal Injury & Criminal Defense Only
+
Loudoun County Attorneys > Blog > Admiralty & Maritime > OW, Lions, and Last-ING Appetite

OW, Lions, and Last-ING Appetite

Firm Principal Steve Simms recently explained the latest challenge facing ship owners and charterers in the wake of the OW insolvency. By jumping on the ING bandwagon and attempting to avoid having to pay physical suppliers for their bunker supply, many owners and charterers have made a regrettable decision for which they just may have to pay twice. In attempting to argue that physical suppliers had no arrest or maritime lien rights after ING demanded payment for various OW transactions around the world, owners and charterers left physical suppliers and intermediaries hungry for payment. As a result, all parties to the bunker supply transaction are now searching for favorable places around the world to arrest and claim their share. The UK Supreme Court’s May, 2016 RES COGITANS decision has given ING an opening to continue its arrest claims around the world, however, it has also created a situation in which owners and charterers may have to pay multiple times for the same bunker supply. Another hurdle for owners and charterers to address is a provision in the OW terms and conditions in paragraph “L.4” which passes through the third party physical supplier terms to the vessel owners and charterers against whom physical suppliers are now claiming payment for their supply.

The most important question to ask as a bunker trader now is whether the physical supplier has been paid. Ship owners and charterers can no longer ignore the issue of paying the physical supplier because they will be subject to multiple arrest claims around the world and will indeed be forced to pay multiple times. The most logical way to address this situation is for all parties to the original bunker supply transaction to be paid exactly what they originally intended. This means that the bunker supplier and the intermediary to the OW entity should each receive the original, agreed payment without multiple payments from ship owners or charterers. To this end, the OW L.4 clause provides a solution in that owners and charterers must insist that traders and financers are only able to recover after having paid the physical supplier. In the post OW world, this is the safest way for ship owners and charterers to guard against multiple claims for payment.

If you are interested in reading more about how the bunker supply industry is changing in the wake of the post OW-insolvency, a full version of the article is available here. For information and advice on how your business can develop a strategy for dealing with bunker supply payments in the post-OW landscape, contact Steve Simms.

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? *