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Further OW Bunker litigation in prospect, Clyde & Co confirms

Further OW Bunker litigation in prospect, Clyde & Co confirms

Posted on: 12 May 2016

Source: Lloyd’s List by David Osler

A SECOND helping of shipowner litigation over the OW Bunker fallout is in prospect, despite Wednesday’s unanimous UK Supreme Court ruling that Dutch investment bank ING as assignee is entitled to payment of invoices issued by the collapsed bunker giant, a leading shipping law firm has confirmed.

Even the Supreme Court decision in Res Cogitans — as the case is known, after the name of the ship involved — may not be final.

The determination that ING is entitled to payment does not necessarily exclude the possibility that physical suppliers might also be entitled to payment, leaving shipowners millions of dollars out of pocket if they have to shell out twice for the same stem.

Further action could potentially be brought on the basis of other defences, Clyde & Co senior associate James Kennedy argued, if clients are so minded.

Mr Kennedy added that his firm is involved in some pending cases, although he declined to specify on behalf of which clients it is acting, or when the cases are likely to be heard.

Responding to the immediate decision, he commented: “It is not surprising. It follows the previous decisions. But in terms of does it finish things off, the answer is no.

“The key for our clients is, who pays and who gets paid? This decision does not answer that question.”

Although the cumulative weight of the Supreme Court ruling and two decisions in the US courts that physical suppliers do not have maritime lien do seem to show that ING is playing a strong hand, other legal avenues are still not closed, he maintained.

“In terms of the next steps for this case, the ruling doesn’t even answer the questions in the Res Cogitans matter. This was on assumed facts and preliminary issues. Owners will still have other defences and claims to run.

“The next thing to keep an eye out for is what steps owners take next. Do they go all guns blazing back in the arbitration, or do they say, enough is enough?”

As a result, Res Cogitans may be referred back to the tribunal stage, as it was heard on assumed facts, and there still needs to be determination of the facts. The parties may decide that there are other arguments to advance.

“This was very much owners’ best foot forward first, so they have still got other cards to play.”


Click here for the Supreme Court’s judgment in PDF format

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