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What if bunker contract is subject to English law but expressly allows the supplier to assert lien?

Under English law there is no maritime lien for bunkers supplied whereas under US law it is the opposite. What if the bunker contract is subject to English law but expressly allows the supplier to assert lien by making reference to Maritime Lien Act of US? Question arose in In London Arbitration 28/22, where the new owner of the vessel found itself defending a claim by the supplier for non-payment of bunkers.

The new owner was the bareboat charterer at the time bunkers were ordered by the time charterer. Both the bareboat charterparty and the time charterparty contained a ‘no lien’ clause. The time charterer however did not inform the bunker supplier of the existence of the 'no lien' provision when contracting for bunkers. The bunker contract (a) named the owner, charterer and the vessel as the ‘buyer’; (b) allowed for a maritime lien in accordance with article 46 US Code § 31342 of the US Maritime Lien Act.; and (c) was subject to English law. In short, the contract was a concoction of two legal regimes. Bunkers were supplied in April and the then bareboat charterer bought the vessel in November. Bunker supplier’s invoice for US$249,648 remained unpaid until this time and they were now looking to assert lien over the vessel.


As per the Tribunal, even though there was a 'no lien' for bunkers in English law, they “saw no reason why the lien should not extend to bunkers supplied outside the United States if that was what the parties provided for in their contract of supply”. Also, in their view the time charterers had apparent or ostensible authority to bind the bareboat charterers and owners to being liable under the bunker contract’s T&Cs. The maritime lien therefore transferred to the bareboat charterers when they became the owners of the vessel. Supplier’s T&Cs therefore allowed them to assert maritime lien against the new owners.


In more ways than one this seems to go against the precedent set in English law. As IISTL (www.iistl.blog) put it, “the award may cause some alarm amongst owners and demise charterers”.




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