822 F.3d 766
5th Cir.2016Background
- WFS Singapore (seller) confirmed a bunker (fuel) order via email to Denmar (time charterer) for delivery to M/V BULK JULIANA (Panamanian-flag vessel owned by Bulk Juliana Ltd.).
- The confirmation incorporated WFS Singapore’s online "General Terms and Conditions," which included a clause selecting the "General Maritime Law of the United States" to govern maritime liens and disputes.
- Bunkers were delivered in Singapore; delivery notes were signed and stamped by the vessel’s master. WFS Singapore invoiced the vessel/owners/Denmar but was not paid.
- WFS Singapore filed suit in the Eastern District of Louisiana seeking arrest of the vessel and recovery; Bulk Juliana (owner) challenged the maritime lien’s validity, arguing Singapore law governs and does not recognize such liens.
- The district court found Singapore law governed contract formation but that the General Terms were validly incorporated; because those Terms validly chose U.S. maritime law (including the Federal Maritime Lien Act), a U.S. maritime lien under the FMLA was enforceable against the vessel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Were the General Terms (including U.S. choice-of-law) validly incorporated under Singapore law? | WFS: Confirmation email and public availability of terms suffice for incorporation; Singapore law enforces party choice. | Bulk Juliana: Vessel lacked notice/access (delivery notes omitted terms), so terms not incorporated. | Yes — court accepted Singapore expert; General Terms were validly incorporated. |
| 2. Could Denmar (charterer) bind the vessel in rem for necessaries though owner was not party? | WFS: Charterer has presumptive authority to bind vessel; choice of U.S. law allows FMLA lien. | Bulk Juliana: Owner not party; charterer cannot bind vessel to a lien it didn’t consent to. | Yes — under U.S. maritime law (and precedent) charterer could bind vessel; lien enforceable. |
| 3. Was the maritime lien created merely by contract rather than by operation of U.S. law? | WFS: Choice-of-law incorporated the FMLA; lien arises by operation of federal law. | Bulk Juliana: Parties cannot create a maritime lien by contract where law does not provide one. | Lien arises by operation of U.S. law (FMLA) once parties validly chose U.S. law. |
| 4. Does the phrase “General Maritime Law of the United States” include the FMLA (statutory lien)? | WFS: Contract references to maritime liens show intent to include statutory law; interpret clause to include FMLA. | Bulk Juliana: "General maritime law" is a term of art limited to judicial common law and excludes statutes like the FMLA. | Yes — court construed the clause to include the FMLA given contextual contract language and purpose. |
Key Cases Cited
- Trans-Tec Asia v. M/V HARMONY CONTAINER, 518 F.3d 1120 (9th Cir.) (upholding enforcement of U.S. choice-of-law clauses to validate maritime liens)
- Triton Marine Fuels, Ltd. v. M/V PACIFIC CHUKOTKA, 575 F.3d 409 (4th Cir.) (affirming that foreign supplier may assert FMLA lien where parties chose U.S. law)
- Liverpool & London S.S. Prot. & Indem. Ass’n v. QUEEN OF LEMAN M/V, 296 F.3d 350 (5th Cir.) (enforcing maritime liens against non-contracting owners when choice-of-law supports lien)
- Rainbow Line, Inc. v. M/V TEQUILA, 480 F.2d 1024 (2d Cir.) (contrasting authority holding skeptical of creating liens via contractual choice-of-law)
- Chembulk Trading LLC v. Chemex Ltd., 393 F.3d 550 (5th Cir.) (principle of interpreting contract terms to give effect to all provisions)
- Sembawang Shipyard, Ltd. v. CHARGER, INC., 955 F.2d 983 (5th Cir.) (noting Singapore law does not authorize maritime liens)
- McBride v. Estis Well Serv., L.L.C., 731 F.3d 505 (5th Cir.) (discussing scope of "general maritime law" as a term of art)