342 F. Supp. 3d 558
S.D. Ill.2018Background
- ING Bank brought Rule C arrest actions to enforce maritime liens for marine fuel deliveries sold by O.W. Bunker entities under standard "Terms & Conditions" that expressly created maritime liens and stated U.S. maritime law governs lien existence.
- O.W. Bunker had entered English-governed Security Agreements with ING Bank assigning "all of its rights, title and interest in respect of the ... Supply Receivables" to ING as security for a revolving credit facility.
- The Security Agreements did not expressly name "maritime liens," but assigned rights "in respect of" receivables and permitted ING to exercise the chargors' rights in relation to Security Assets.
- After O.W. Bunker's insolvency, ING, as assignee, sought to enforce maritime liens against the Vessels under CIMLA; motions for partial summary judgment were filed on the validity of the assignments.
- Judge Forrest initially held O.W. Bunker could not assert maritime liens; the Second Circuit reversed, holding O.W. Denmark could assert liens and treating ING as the purported assignee; the case was remanded to decide whether the Security Agreements validly assigned maritime liens to ING.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the English-governed Security Agreements assigned O.W. Bunker's maritime liens to ING | The clause assigning "all rights, title and interest in respect of the ... Supply Receivables" includes maritime liens as rights connected to the receivables | The Security Agreements address payment rights only, are governed by English law where maritime liens are generally nonassignable, and do not mention liens | Assigned: Court holds the assignment language conveys O.W. Bunker's maritime liens to ING under contract construction principles |
| Whether assignment must expressly name maritime liens to be effective | Assignment of broader "rights in respect of" receivables covers ancillary rights, including statutory liens | Absent explicit mention, liens were not assigned | Rejected: explicit naming unnecessary; ordinary meaning includes security rights |
| Whether English law precludes assignment here | English principles of construction permit interpreting "rights in respect of" to include liens; expert opinions support assignment | Reliance on general rule that English maritime liens are not assignable | Assigned: court accepts expert analysis that the agreement, read as a whole, validly assigned liens under English law |
| Whether U.S. law affects enforceability of assigned maritime liens in U.S. proceedings | U.S. law treats maritime liens as assignable and requires writing and notice; assignment will be respected for enforcement | Vessel argued forum principles and text mean liens not conveyed | Assigned: U.S. courts will enforce the assignment; ING may enforce liens in CIMLA actions |
Key Cases Cited
- The President Arthur, 25 F.2d 999 (S.D.N.Y. 1928) (assignment of claim carries maritime lien to assignee)
- The Poznan, 9 F.2d 838 (2d Cir. 1925) (maritime lien gives creditor special property in ship)
- New York Dock Co. v. Steamship Poznan, 274 U.S. 117 (Supreme Court 1927) (related treatment of maritime liens and rights)
- L & L Oil Co., Inc. v. M/V Rebel, 96 F.3d 1445 (5th Cir. 1996) (assignments of U.S. maritime liens must be in writing and notice given)
- ING Bank N.V. v. M/V Temara, 892 F.3d 511 (2d Cir. 2018) (O.W. Denmark entitled to assert maritime lien; appellate remand on assignment question)