12/05/2016

Bunker Supply Contracts – Supreme Court Rules In The Anxiously Awaited OW Bunker Decision – 'Res Cogitans'

This is the second UK Supreme Court decision involving advocates from 20 Essex Street this week.

Julian Kenny QC appeared for the Appellants in the Supreme Court who handed down judgment 11 May, a much anticipated ruling by shipowners and subsidiary companies affected by the OW Bunker collapse. 

The judgment affirms the rulings of the Court of Appeal and of first instance Judge, Males J, that a contract for the supply of bunkers that a shipowner had entered into with a subsidiary of the now insolvent OW Bunker company was not one to which the Sale of Goods Act 1979 applies.

The Supreme Court further ruled that it was not an implied condition of the contract that OW Bunker Malta Limited would perform its payment obligations promptly.

The practical effect of this ruling confirms that as far as English law is concerned, that OW Bunker subsidiaries are entitled to sue for contract debt and that shipowners may be liable to pay twice for the bunkers that they procured.

It is understood that ING and physical suppliers have identified a number of potential claims as a result of these rulings and may well seek to arrest vessels as security for their claims

 A detailed analysis of the back ground to this case can be found here.