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46 U.S.C. 31301, et seq and Arresting a Vessel for Unpaid Bunker Fuel

When a ship fails to pay for fuel oil and marine gas oil, the supplier typically has a maritime lien against the ship. That is, instead of chasing the company that made the purchase, the ship itself offers a remedy and can be arrested and seized to foreclose the maritime lien. This was just such the result in a recent U.S. maritime law decision captioned World. Fuel Servs. Trading v. m/v HEBEI SHIJIAZHUANG.

The decision concerned the chartering of a vessel under a time charter arrangement. Fuel bunkers were ultimately purchased in the United Arab Emirates. The terms of the bunker fuel sale included language stating that the buyer is presumed to have purchasing authority and specifically rejecting the impact of any disclaimer stamps placed by the vessel on bunker receipts. When the bunker fuel wasn't paid for and the vessel was destined to arrive in Virginia, admiralty attorneys got hopping and filed the lawsuit and the vessel was arrested and seized in early April, 2013. As is relatively common, a bond was posted allowing the vessel to continue on its voyage while the dispute played out.

The vessel interests contested the arrest and seizure arguing that there was no maritime lien. Among other things, and this is sort of a curious argument, the vessel interests contended that the applicable terms and conditions referred to the governing law as the "General Maritime law of the United States" which, they argued, does not include the United States maritime statutes. After unraveling that argument in decent detail, the U.S. District Court disagreed finding that the "General Maritime law of the United States" includes the Federal Maritime Lien Act.

All told, it looks like the bunker fuel will get paid for in full and potentially with recovery of additional costs. Ship owners should never forget the ease and availability of these types of maritime remedies in the United States. If you have a questions about foreclosing a maritime lien, speak to experienced maritime attorney John K. Fulweiler, Esq.

By John Fulweiler

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