It has been nearly six years since Danish marine-fuels giant OW Bunker collapsed into liquidation, and some arbitration battles over unpaid fuel bills have barely begun.
And at least one arbitration fight has yet to be filed, despite a looming time limit.
ING, the main secured lender to the bunker supplier, is now gearing up to take steps to move forward London proceedings against shipowners and operators before a deadline to commence arbitration closes, court records show.
The move, although intended as a limited step, is a testament to the tangled weave of disputes left in the wake OW’s tumultuous collapse in November 2014. For about 70 months, shipping companies have been fighting competing claims for fuel bills left owing at the time of OW’s litigation.
This is because ING, physical suppliers and OW’s orphaned subsidiaries all asserted the right to the cash, even though the Danish bunker giant’s role as middleman would have given it a small margin on each transaction. Many cases, however, have been resolved.
In four of the remaining cases in the US, where shipowners and operators all sought the federal courts help to avoid double or triple payment, ING is asking judges to shelve injunctions that put a freeze on legal and arbitration proceedings so its lawyers can start the London proceedings.
Limited effort
And the bank’s lawyers are requesting they be allowed to take similar steps to move forward already started arbitration proceedings that have been mothballed for years.
The attorneys told US District Judge Valerie Caproni that the bank just wants to take limited moves in the arbitration proceedings — to lift freezing injunctions just enough to keep them alive.
6 November 2014: OW Bunker files for bankruptcy in Denmark after allegations that fraudulent deals may have cost it $125m.
13 November 2014: TradeWinds reports that ING, which had provided OW with a $700m credit facility, tells shipping companies that they should pay the bank. Vessel arrests begin amid confusion over whom to pay.
28 November 2014: Shipowners begin filing "interpleader" lawsuits in the US to avoid double or triple payment as ING, OW entities and physical suppliers chase unpaid bunker bills.
June 2018: ING scores a key appeals court win, as a US appeals panel rules that it can assert a maritime lien over the bunkers provided to a vessel by OW.
December 2018: A US appeals court in New York issues a landmark decision in OW cases, allowing physical supplier US Oil Trading (USOT) to also assert a maritime lien.
October 2019: A rare opportunity for the US Supreme Court to hear a shipping case falls through when NuStar Energy Service withdraws its appeal of a decision in an OW Bunker case.
“To be clear, ING does not seek to prosecute its arbitral claims in any way that would conflict with the purpose of those injunctions,” ING’s Seward & Kissel lawyers, led by partner Bruce Paulsen, wrote.
In one case, focused on a $143,000 bill for delivery to Minerva Marine’s 158,000-dwt tanker Minerva Vera (built 2009), ING is aiming to begin arbitration against the Greek shipowner before a UK legal deadline forbids it.
“The limitation period for the Minerva claim is close to expiry,” Peter Watson, the bank’s solicitor at UK law firm Allen & Overy, said. “Once the limitation period has passed, ING will lose its right to the Minerva claim.”
London arbitration cases filed against Greece’s Modion Maritime Management, Norway’s Western Bulk and China’s Fujian Ocean Shipping and the NYK Trading subsidiary of Japanese shipping giant NYK Line have been on hiatus for years, long enough that ING fears English law would allow the cases to be dismissed if they remain dormant.
All five cases remain the subject of litigation in a federal court in New York, where the shipowners and operators filed so-called "interpleader" lawsuits to stave off the threat of double or triple payment.
ING has been waiting for its long-standing request for the US cases to be dismissed, allowing it to pursue arbitration in earnest.
Lawyers for the shipping companies have told the US court they are preparing a joint response to ING’s effort to unfreeze legal proceedings outside New York.
In the mean time, Caproni has rejected ING’s request to expedite the request, noting that the clock has been ticking for years on the deadline on starting arbitration.
“Nothing precluded defendant ING from filing its motion earlier, without the need to request expedited briefing,” she wrote.
