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Canada’s maritime lien for necessary suppliers: The case of the OW Bunker group bankruptcy... By Peter Swanson A Partner with the Law Firm of Bernard LLP - Subscriber Access Only

By BCShippingNews 31 January 2016

The OW Bunker group of companies was one of the largest bunker suppliers in the world. Their bankruptcy in November 2014 created a great deal of uncertainty in the bunker supply market and the shipping industry generally. Accountants, lawyers and the courts have been busy dealing with the aftermath.

The OW Bunker group often acted as the actual supplier of marine fuels in some cases but frequently acted as an intermediary that contracted with local suppliers to supply bunkers to vessels chartered or owned by OW customers. As a result of the OW bankruptcy, litigation has been commenced in multiple jurisdictions for unpaid bunkers. Local bunker suppliers that actually delivered bunkers to vessels sought, in many instances, to obtain payment or security for payment by way of ship arrest, as they recognized that pursuing payment from the OW group would likely be pointless. Charterers who contracted with an OW company to supply bunkers to vessels prior to the bankruptcy, but before payment was made, sought in some instances to interplead money into court fearing that if they paid the OW receiver, they would also be required to eventually pay the actual bunker supplier too. In other words, they wanted to avoid the risk of having to pay twice.

The effects of the OW bankruptcy are many and varied, depending on the place of bunker supply, the terms of sale and other unique factors to each of the transactions involved. One such series of transactions occurred in Vancouver and is the subject of a Federal Court judgment (currently under appeal) in the case of Canpotex Shipping Services Limited, et. al v. Marine Petrobulk Ltd., OW Supply &Trading A/S et al., 2015 FC 1108.