Baldwin Haspel Burke & Mayer LLC

Maritime Update: Another 5th Circuit Case Denying Lien for Bunker Fuel in OW Bunker Aftermath

Bill Schwartz - 

In its decision rendered January 14, 2019 in the case of NUSTAR ENERGY SERVICES, INCORPORATED v. M/V COSCO AUCKLAND, IMO NO. 9484261, the Fifth Circuit again concluded a creditor did not have a lien against a vessel since the “facts showed no more than that the vessel’s agents were aware of the physical (bunker) supplier’s identity—not that the physical supplier acted “on the order of” the vessel’s agents.”

“This lawsuit is the latest round in the maritime litigation spawned by the collapse of OW Bunker, formerly the world’s largest supplier of fuel for ships. In federal courts across the country, OW’s subcontractors have asserted maritime liens on the ships to which they physically delivered fuel. If successful, these claims would allow them a full recovery rather than the pennies on the dollar they would likely receive in bankruptcy court. But the subcontractors are not alone in their pursuit of maritime liens—OW’s largest secured creditor has also staked a claim. Our ruling in an earlier OW Bunker case means that the subcontractor here does not possess liens on the vessels it supplied because it was not acting on the orders of the vessels or their agents. And because it does not have liens, we conclude that it is not able to appeal a ruling that the secured creditor does hold liens.”

The case can be found here.

If you have any questions regarding this maritime matter, please contact Bill Schwartz at (504) 569-2900 or wschwartz@bhbmlaw.com.


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