Legal issues in Bunkering (eBook)

Published Date

September 2011

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Legal issues in Bunkering (eBook)

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This book offers a wealth of information on key legal aspects of bunkering, including contracts, defaults, ship arrest and dispute resolution; there is also a section dealing with international conventions and national legislation on environmental issues relevant to bunkering. It helps the reader understand legal matters and point him or her in the right direction should professional help be required.


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The legal aspects of bunkering inevitably means different things to different people

but for the purposes of this book I am taking it to mean three things:

  • the law and practice relating to the sale, purchase and supply of bunkers

  • the law and practice relating to the supply and use of bunkers on board ships

  • the application of international conventions and other legislation to matters relating to bunkers and bunkering.


Broadly, the first two areas deal with commercial relationships between parties, usually arising from a contract, typically a bunker sale agreement in the first case and a time charter in the second. The third area deals mostly with the relationships between commercial entities, mainly physical suppliers and shipowners on the one hand and regulatory bodies, typically a sovereign state, on the other. The role of the regulatory body is usually to oversee and enforce compliance with conventions, laws and regulations and impose sanctions for breaches but, even here, the commercial element still has a part to play.


Inevitably there is overlap between the three areas outlined above and, equally, there are legal issues that do not fit comfortably into any of the three categories; we shall deal with all of these as best we can.




The banana boat and the interrupted lunch

About the author


Table of Cases

List of Tables and Figures


The legal aspects of bunkering

International business

What are bunkers?

Origin of the term

Different types of bunker fuel

Simple definition of bunkers

When does oil become bunkers?

Can oil stop being bunkers?


Some other definitions

A little more about bunkers

What goes into bunker fuel?

Other fuel sources



Chapter 1 - The basics of the law of contract

Legal systems



Intention to create legal relations







Chapter 2 - Particular features of bunker contracts

Incorporating Terms and Conditions

Course of dealing

Priority of provisions

No Terms & Conditions

The battle of the forms

Chapter 3 - The short life of an unremarkable bunker stem

Identifying the essential components of a contract

Chapter 4 - What sellers include in their Terms and Conditions


Grades and quality

Quantities and measurements





Bunker delivery note

Short delivery complaint or protest




Prohibition of set-off

Timely payment and interest

Interest rates

Liens and other rights of the seller


Quantity claims

Quality claims

The use of samples

Delay or demurrage

Indirect and consequential loss

Limitation of liability

Risk and title



Force majeure

Safety and the environment

Dispute resolution

Law and jurisdiction

Alternative dispute resolution

The BIMCO Standard Dispute Resolution Clause

Catch-all jurisdiction provisions


Chapter 5 - The role of bunker brokers and other intermediaries

Chapter 6 - Charterparty relationships

Time charters

Bunkering clauses

BIMCO Fuel Sulphur Content Clause

Bunker Quality Control Clause for Time Chartering

Raising standards

Dispute resolution

Links in the chain


Chapter 7 - The unpaid seller

Chapter 8 - Ship arrest


A simple arrest for a simple debt

A complicated arrest for a simple debt

Chapter 9 - The M/V Skyptron – an interesting US experience

Chapter 10 - Retention of title clauses

Chapter 11 - Quantity disputes

Chapter 12 - Quality disputes

Admissible evidence


Limitation of liability

Technical issues

Time limits

Chapter 13 - Charterparty disputes

Ownership of the bunkers

Bunkers on delivery and redelivery


Deductions from hire

Safe place of bunkering

Quantity disputes

Quality disputes



Implied terms

Chapter 14 - The problem of mismatch in Terms and Conditions

Chain of contracts

Time limits

Sampling procedures

Passing of risk and retaining title

Applicable law, jurisdiction and arbitration provisions

Adopting a sub-contractor’s terms


Chapter 15 - Claims in tort


Pure tort claims

Duty of care

Where claims in tort can be useful

Tort and contract

Fundamental breach

The complexity of contractual and tortious relationships

Torts involving conversion

Collision and other similar incidents

Chapter 16 - A brief review of some interesting cases

The Silia

The Span Terza

The Saetta

The Yuta Bondarovskaya

The Fesco Angara

Tramp Oil & Marine v Lomar Shipping 1991 (unreported)

Other cases

Part III - Regulations and conventions

Chapter 17 - Introduction and a note about the IMO

Oil Pollution Act of 1990 (OPA 90)


The International Maritime Organization (IMO)

The MARPOL Annex VI Revision

Chapter 18 - The MARPOL Convention, Annex VI and enforcement

MARPOL 73/78 – the Convention itself

Annex VI to the MARPOL Convention

Fuel oil quality

Fuel oil availability

Effectiveness of Annex VI

The European Union Directives on sulphur


The Paris MoU on Port State Control




Stepped approach


IMO guidelines for Port State Control under Annex VI


Enforcement by states

The Netherlands


Historical infringements

The non-availability provision in Annex VI Regulation 182

Chapter 19 - Oil pollution and limitation of liability



Oil tankers

Civil Liability Convention

The Fund Convention

Limit of liability

Bunkers on other ships

Compulsory insurance


The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001

The Bunkers Convention

The existing regime

A bunker specific regime

Origins of the Bunkers Convention




Protection for salvors and similar

The HNS Convention – human and other harm and other pollution damage





Excess fund1



Insuring the shipowner’s liabilities

Limitation of liability

Contractual limitation

Vessel limitation

The 1976 Limitation Convention

Financial limits



Appendix 1 - Terms implied into contracts by

the Sale of Goods Act 1979

The Sale of Goods Act implied terms

Excluding implied terms




Quality and fitness for purpose

Satisfactory quality

Reasonable fitness for a particular purpose

Other provisions in Section 14

Quality and fitness summary

Conditions and warranties

Significance of the difference

Buyer’s options

Seller’s opportunity

Implied terms in practice

Appendix 2 - The Unfair Contract Terms Act


Limitations to the scope of the UCTA

Some examples of the effects of Sections 26 and 27 on bunker contracts

What the provisions mean in practice


Appendix 3 - Examples of contract clauses excluding or modifying implied terms



Chevron Marine Products

Cockett Marine Oil

Words of caution

Appendix 4 - Remoteness of damage

Remoteness of damage in contract

Application of the principle of remoteness to bunkers and bunkering


Appendix 5 - Arrest in England

Maritime liens and statutory liens

The arrest


Appendix 6 - Arrest in the United States

Appendix 7 - Bribery and corruption

OECD Convention on Combating Bribery of Foreign Public Officials

The Bribery Act 2010


The four new offences

The adequate procedures defence

UK Government guidance

International scope



The future

Anti-competitive practices

Appendix 8 - The BIMCO Standard Bunker Contract

List of abbreviations



Table of Cases

Table of Cases

Achilleas, The, Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48

Arild v Hovrani [1923] 2KB 14

Cantieri Navali Riuniti v M/V Skyptron, (WDLa 1985) 621 F Supp 17

Cantieri Navali Riuniti v M/V Skyptron et al US Court of Appeals, Fifth Circuit – 802 F2d 160,

Oct 14, 198

Caparo Industries plc v Dickman [1990] 2 AC 60588

Donoghue v Stevenson [1932] AC 56288

Fesco Angara, The, Angara Maritime Ltd v Oceanconnect UK Ltd and OceanconnectCom Inc

[2010] EWHC 619 (QB) 94,96

GHSP Inc v AB Electronic Ltd [2010] EWHC 1828 (Comm)10

Hadley v Baxendale (1854) 9 Ex Ch 341175, 177, 178

Oricon Waren-Handels GmbH v Intergraan NV [1967] 2 Lloyd’s Rep 82, 96159

Saetta, The, Forsythe International (UK) Ltd v Silver Shipping Co Ltd and Petroglobe International

Ltd [1993] 2 Lloyd’s Rep 268 94, 97

Silia, The [1981] 2 Lloyd’s Rep 53493

Solholt, The [1983] 1 Lloyd’s Rep 605 CA at 60873

Span Terza, The [1984] 1 Lloyd’s Rep 11993, 94

Sylvia, The, Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] EWHC 542176

Tramp Oil & Marine v Lomar Shipping (1991)99

Trans-Tec Asia v M/V Harmony Container, US App (9th Cir March 11 2008)183

Wagon Mound, The, Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd, No 1

[1961] AC 38887

Yuta Bondarovskya, The [1998] 2 Lloyd’s Rep 35795


List of Tables and Figures

List of Tables and Figures

Figure 1 Distillate marine fuels

Table courtesy of BSI (wwwbsigroupcom)

Figure 2 Residual marine fuels from ISO 8217:2010

Table courtesy of BSI (wwwbsigroupcom)

Figure 3 Some contractual bunkering chains

Figure 4 The complexity of contractual and tortious relationships in bunkering

This chart was devised by and is reproduced with the permission of Alex Macinnes, a solicitor

in the London office of Norwegian law firm Wikborg Rein (wwwwrno)

About The Author
Trevor Harrison qualified as a barrister over 30 years ago and now practises as a maritime arbitrator, mediator and legal consultant with a particular expertise in bunkering. Before becoming Principal Legal Advisor to Tramp Oil & Marine in 1984, he practised at the English Bar, worked for a P&I club and a firm of marine consultants


Petrospot is a dynamic independent publishing, training and events organisation focused on the maritime, energy and transportation industries.

It delivers the highest quality strategic information in the most comprehensive and convenient formats – via magazines, websites and books, or face to face in conferences, exhibitions, seminars and training courses.

Based in Oxfordshire, England, Petrospot was established in May 2003 by Llewellyn Bankes-Hughes (Managing Director). He is supported by Lesley Bankes-Hughes (Director – Publishing), and Luci Llewellyn-Jones (Director – Events).

Title: Legal issues in Bunkering (eBook)
Subtitle: An Introduction to the Law Relating to the Sale and Use of Marine Fuels
Number of Pages: 199
Product Code: PT1008EA
ISBN: ISBN 13: 978-0-9548097-6-8 (9780954809768), ISBN 10: 0-9548097-6-9 (0954809769)
Published Date: September 2011
Author: Petrospot Limited

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