OW Bunker USA is appealing a US federal court judge's decision to halt London arbitration against Norwegian Cruise Line (NCL) over an allegedly unpaid bill for bunker fuel.
In late November, US District Judge Charles Haight ruled that OW Bunker USA and its liquidating trustee have "no contractual right" to demand that NCL arbitrate the case in London amid an ongoing court fight.
That came after the Miami-based cruise giant lodged a motion to halt the arbitration.
Haight's decision is being challenged in the US Court of Appeals for the Second Circuit.
OW Bunker USA is a Connecticut-based subsidiary of Danish marine fuel company OW Bunker, which collapsed three years ago, leaving behind a battle over bills that were still unpaid at the time of the liquidation filing.
In October 2014, NCL ordered bunker fuel for the 2,018-berth Norwegian Spirit (built 1998) in Piraeus from OW Bunker USA.
The order was passed on to OW Bunker Malta, which then ordered the fuel from Greek supplier EKO.
Soon after OW Bunker collapsed, EKO requested payment from NCL and said the ship would be arrested if the cruiseship company did not pay in full.
NCL paid EKO $729,000 to settle all invoices but OW Bunker USA and liquidating trustee Beaudin Stapleton said NCL must also pay $733,000 to OW Bunker USA for its invoice of the same bunkers, according to court documents.
The OW liquidating trust told British counsel to begin arbitration proceedings against NCL in the UK, based on a London arbitration clause in the underlying NCL-OW Bunker USA contract.
Haight, who presides over a US district court in Connecticut, said OW Bunker USA and Stapleton have "no contractual right" to demand that NCL arbitrate the case in London because the relevant circumstances supersede the arbitration clause, according to court documents.
Haight issued a preliminary injunction order to prevent OW Bunker USA from proceeding with the London action.
Essentially, the judge agreed with NCL's position that the bunker contract is subject to EKO's terms and conditions, instead of OW USA's, because EKO was the bunker's "physical supplier".
He also reasoned that OW Malta was aware of EKO's terms and conditions when it placed the order with EKO.
In late December, Haight granted an NCL motion to delay the court proceedings on the basis that the arbitration issue should be resolved before the merits of the underlying dispute are addressed.
Calls to lawyers for NCL and OW Bunker USA were not immediately returned.