O.W. Bunker A/S filed bankruptcy in Denmark, and put various subsidiaries into chapter 11 in Connecticut.  Vessel owners did not know whether to pay the debtor (O.W. Bunker), O.W. Bunker’s bank, or the fuel suppliers.  The vessel owners commenced 30 interpleader actions across the United States, depositing the price of the bunkers (the marine fuel) and asking the court to determine who should get the money.  Each of the four recent circuit court decisions referenced below arose this way.

46 U.S.C. § 31342(a) allows a person, including a supplier of fuel, to assert a maritime lien if it is “providing necessaries to a vessel on the order of the owner or a person authorized by the owner[.]”

The court in Bunker Holdings Ltd. v. Yang Ming Liberia Corp., 916 F.3d 843 (9th Cir. 2018) found that fuel is a necessary.  But the subcontracted fuel supplier was not entitled to a maritime lien because it had not supplied the fuel on the “order of the owner or a person authorized by the owner.”  That is, the vessel owner had not contracted directly with the fuel supplier and had not directed the general contractor to select a particular supplier.  The general contractor, not the owner, had entered into a contract with the fuel supplier, and the fuel supplier provided no evidence that the general contractor was acting as the owner’s agent when it ordered the fuel.

Three other circuit decisions arise out of the same basic fact pattern, with the same result as that in Bunker Holdings.  In the Fifth Circuit, see Valero Marketing & Supply Co. v. M/V Almi Sun, 893 F.3d 290, 294-95 (5th Cir. 2018); in the Second Circuit, see ING Bank N.V. v. M/V Temara, 892 F.3d 511, 521-22 (2nd Cir. 2018); and in the Eleventh Circuit, see Barcliff, LLC v. M/V Deep Blue, 876 F.3d 1063, 1071 (11th Cir. 2017).

So, to qualify for a maritime lien under 46 U.S.C. § 31342(a), a fuel supplier should make certain sure the fuel is ordered by either (1) the owner or (2) an entity or person that is clearly the owner’s agent for the purpose of ordering fuel from that specific subcontracting fuel supplier.