203 F.Supp.3d 355
S.D.N.Y.2016Background
- CEPSA International B.V. (CEPSA) physically supplied 400 MT of bunkers to the M/V TEMARA on Oct. 9, 2014; CEPSA invoiced OW Bunker USA (OW USA) and was never paid.
- Copenship (time charterer) contracted with O.W. Bunker & Trading A/S (OW Bunker) for the same bunkers; OW Bunker issued an invoice to the vessel/charterer and stated rights under the invoice were assigned to ING Bank N.V. (ING).
- OW Bunker used OW USA as an intermediary; CEPSA’s contractual documents list OW USA as the Buyer and CEPSA as the Seller and incorporate CEPSA’s terms, which contemplate payment by the Buyer and require signatures by ship officers on delivery receipts.
- CEPSA intervened in ING’s in rem action against the TEMARA seeking a maritime lien, unjust enrichment, trespass, and breach of contract against ING; funds were deposited in court registry and competing summary judgment motions were filed.
- Key legal question: whether CEPSA obtained a maritime lien (or equitable in rem relief) for necessaries under 46 U.S.C. § 31342(a) by supplying bunkers absent evidence that the supply was made “on the order of the owner or a person authorized by the owner.”
Issues
| Issue | Plaintiff's Argument (CEPSA) | Defendant's Argument (ING) | Held |
|---|---|---|---|
| Existence of maritime lien for necessaries | CEPSA: supplied fuel to the vessel and was unpaid → statutory lien; alternatively, receipt signed by the chief engineer authorized the supply | ING: CEPSA contracted only with OW USA (a subcontractor); no order by owner/authorized person; therefore no lien under CIMLA | No maritime lien: CEPSA supplied on OW USA's order (a sub‑subcontractor) and signed bunker receipt did not establish authority to bind the owner/charterer |
| Agency / authorization through contract chain | CEPSA: OW Bunker Terms (§ L.4) incorporate third‑party supplier terms, creating direct rights/authorization against vessel | ING: OW Bunker/OW USA documents and CEPSA paperwork show separate two‑party contracts; no evidence owner selected or authorized supplier | No agency/apparent authority shown; § L.4 does not establish that CEPSA became authorized by or contracted directly with the owner/charterer |
| Equitable in rem relief (unjust enrichment) | CEPSA: equity should allow in rem recovery because vessel unjustly benefited from bunkers while CEPSA retained title until paid | ING: maritime liens are statutory and disfavored; unjust enrichment is an in personam remedy and cannot create a lien | Denied: unjust enrichment cannot be converted into a maritime lien; CEPSA has no in rem unjust enrichment remedy against the vessel |
| Breach of contract claim against ING | CEPSA: ING (assignee of OW Bunker rights) breached contract obligations to CEPSA | ING: CEPSA contracted with OW USA only; ING had no contract with CEPSA and cannot be liable for breach | Dismissed: no contract between CEPSA and ING (or OW Bunker) in the record; breach claim fails |
Key Cases Cited
- Itel Containers Int’l Corp. v. Atlanttrafik Express Serv. Ltd., 982 F.2d 765 (2d Cir.) (maritime liens disfavored and construed strictly)
- Piedmont & Georges Creek Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1 (U.S.) (statutory maritime liens must be strictly applied)
- Lake Charles Stevedores, Inc. v. PROFESSOR VLADIMIR POPOV MV, 199 F.3d 220 (5th Cir.) (subcontractors generally cannot assert maritime liens absent owner authorization)
- Triton Marine Fuels Ltd. v. M/V PACIFIC CHUKOTKA, 575 F.3d 409 (4th Cir.) (contracts cannot create maritime liens but may evidence agency)
- Integral Control Sys. Corp. v. Consolidated Edison Co. of New York, 990 F. Supp. 295 (S.D.N.Y.) (subcontractors not entitled to maritime liens where services were contracted to a prime contractor)
- Cianbro Corp. v. George H. Dean, Inc., 596 F.3d 10 (1st Cir.) (maritime liens construed stricti juris)
- Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky, 869 F.2d 473 (9th Cir.) (officers may bind vessel only where they had authority or acted with master’s approval)
- Wardley Int’l Bank, Inc. v. Nasipit Bay Vessel, 841 F.2d 259 (9th Cir.) (equitable reordering of lien priorities in cases of contrived schemes)