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Reconsidering the Law on Maritime Liens for Bunker Suppliers’ Claims

Year of Publication: 2022
Month of Publication: 1
Author(s): Víctor Hugo Chacon
Research Area(s): Admiralty/Maritime Law
Name of Working Paper Series:

NUS Law Working Paper No 2022/003
NUS Centre for Maritime Law Working Paper 22/01

WPS Paper Number: LAW-WPS-2203
Abstract:

This paper discusses the legal position of bunker suppliers in the wake of the OW Bunker collapse and the Hin Leong scandal. It provides a comparative analysis of recent case law on the issue from the United Kingdom, Singapore, and the United States.

The paper argues that the reasons for the historical abolition of the maritime lien for necessaries in the United Kingdom, and its restriction in the United States, are no longer compelling in the 21st century. Current circumstances, industry practice, and recent case law suggest that maintaining the 19th-century approach to enforcement of ship suppliers’ maritime claims has become impractical. A more balanced approach is required.

The restoration of the maritime lien for necessaries is a practical solution to the current problem. Granting a maritime lien to the party which bears the highest exposure in the transaction and suffers the actual loss should promote the prompt payment of bunkers, prevent suppliers’ insolvencies, and help restore banks’ confidence in financing the shipping industry. For decades, courts have expressed ‘sympathy’ for supplier claims, but the situation is reaching a point that requires more than sympathy.

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