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Bunker suppliers arresting ship because charterer did not settle invoices

To recover the sums due for bunkers supplied on request of time charterers, suppliers may try to claim against the vessel by having her arrested. Ship arrest is a drastic remedy and should it be allowed in such cases? The Silvia Glory [2020] sheds some light on India’s approach to this issue under the new Admiralty Act.

Dan Bunkering’s T&Cs of the supply contract with the charterer stated that all orders are considered emanating from the vessel and obliged the owner to provide notice to suppliers before the supply to exclude vessel's liability. Did this unilaterally bind the owners? Supplier contended that there was a contractual lien as per the bunker supply contract, and that bunkers were supplied to the faith & credit of the vessel.

For a ship to be arrested, there should either exist a maritime lien or there should be in personam liability of the owner. As for maritime lien for non-payment of bunkers by charterer - it does not exist (The Nikolaos S [2017]). What about personal liability of the owner?

The court said that too doesn't exist. There was email correspondence showing that suppliers were privy to the existence of a bunkers non-lien clause in the C/P. Moreover on the BDN it was mentioned by the vessel that bunkers were for the account of charterers.

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