A US federal appeals court has shut down NuStar’s attempt to collect part of a $2.99m fuel bill owed in the aftermath of the OW Bunker collapse.
The Fifth Circuit Court of Appeals reaffirmed that NuStar Energy Services did not hold liens against Cosco. It said the San Antonio company was relying on a “too speculative chain of possibilities” in arguing that it would receive any of the money.
After OW Bunker fell apart in 2014, NuStar was owed $2.69m for four fuel sales to Cosco ships that the Chinese giant had subcontracted, through a slew of intermediaries, to OW USA.
Both NuStar and OW could have filed arrest claims against Cosco, plus ING Bank, which had lent OW $700m secured by the rights to its accounts receivable.
Cosco deposited the $2.69m in escrow and filed a third-party interpleading claim asking Houston federal court to determine who was owed the money.
The OW companies did not appear in the litigation due to liquidation.
The appeals court rejected NuStar’s claims that it had a lien because Cosco knew of the fuel subcontracting arrangement, which constituted authorisation.
It also rejected arguments from NuStar that said overturning the decision would fold the $2.99m into OW’s liquidation, as NuStar would probably recover only a “tiny fraction” of that money.
“[An] appellate ruling that ING was not assigned the liens would not result in judgment being entered in NuStar’s favour for the $2.99m or any other sum,” Monday’s decision read.
Attorneys for NuStar, Cosco and ING did not return requests for comment. It is not known whether NuStar will appeal further against the decision.
