Maurice Thompson and Joel Cockerell of Clyde & Co LLP (Clyde & Co) say that Australian maritime law has been "radically" altered after a recent decision on maritime lien enforcement in relation to bunker supply contracts was handed down in an Australian court. The net result is that Australia is now an even more arrest and enforcement- friendly jurisdiction, according to the law firm
The comments come in relation to a September 2105 case involving a vessel known as Sam Hawk, which was chartered to Egyptian Bulk Carriers (EBC), and a claim for a foreign maritime lien following the lack of payment for the supply of bunkers to the vessel.
EBC is said to have entered into a bunker supply contract with Canada-based Reiter Petroleum Inc (Reiter) to provide the vessel bunkers in Turkey.With a claim that they had not been paid for the bunkers supplied in Istanbul, Reiters had the Sam Hawk arrested in Albany, Western Australia.
"It was a bold decision to arrest the vessel on this basis in the Australian courts in the face of the prevailing law," said Thompson and Cockerell. The bunker supply contract is said to have been subject to Canadian law, and provided for a contractual maritime lien over the vessel, stating that U.S. law would apply in determining the existence of any maritime lien for the supply.
"The decision has radically changed maritime law in Australia and set it off down a path that directly conflicts with that of current predominant Anglo-Common law jurisprudence," added Thompson and Cockerell.
Reiter's in rem proceedings are said to have invoked section 15 of the Admiralty Act 1988, and the vessel owner is said to have put up a security and commenced proceedings in Australian courts with the intent of having the arrest struck out.The court is reported to have held that Australian courts should recognise and enforce a maritime lien according to the lex causae, which in this case is the law of the U.S
"The practical effect of the decision is that the circumstances in which a vessel can now be arrested for a maritime lien in Australia has expanded, meaning that Australia is an even more arrest and enforcement-friendly jurisdiction," said Thompson and Cockerell."The judgment has already had a profound practical impact, as there has been a surge in arrest actions in Australia relating to OW Bunker claims."
At the end of December, Ship & Bunker reported there has been an"unprecedented" rise in ship arrests at Australian ports in relation to disputes over unpaid bunkers, mostly in relation to unpaid bills stemming from the collapse of OW Bunker.
Source : Ship & Bunker News Team
