Earlier this month, we reported on a breaking Australian
judgment in the "
Sam Hawk" which, for the first time in Australia, upheld
an arrest on the basis of a foreign maritime lien for the supply of
bunkers. The decision was significant as it represented the first
time that a foreign maritime lien had been recognised in Australia
where Australian law did not otherwise also independently provide
for a similar lien.
Following the decision, we have seen a small surge in arrest
actions relating to outstanding OW Bunker claims. The arrests
appear to be based on two main arguments:
the bunker supply contract was made with Owners or Owners
ratified the contract at the time of supply
the bunker supply contract provided for a foreign maritime
lien, which, following the "Sam Hawk", will now be
recognised under Australian law.
In Australia, an arrest and demand for security will be upheld
where there is at least a reasonably arguable case. When facing an
arrest, it is important to consider whether there are grounds to
apply to set aside the arrest for failing to disclose a reasonably
arguable cause of action.
In the above example, it would therefore be necessary to
consider whether there is any support for the argument that Owners
are party to the bunker supply contract. This is a well-worn
argument, both in Australia and internationally, and the answer
will depend on the facts of the case. If there is little or nothing
to establish this argument, then the arrest may be able to be set
In the above example, it would also be necessary to consider as
a threshold question whether it is reasonably arguable that any
purported foreign maritime lien actually exists. If, according to
the law which governs the foreign maritime lien, no such lien would
arise in the particular circumstances of the bunker supply, then
there would be no foreign maritime lien to be recognised in
Australia. As a result, it may be possible to apply to have the
arrest set aside.
If there are arguable grounds for the arrest action, then vessel
interests must still take care in providing security, in order to
ensure that they preserve:
any rights to seek substitute and/or cross-security from other
parties in the charter chain – which may require (disponent)
Owners to demand Charterers to provide security first
any rights in respect of claims arising as a result of any
delay by the party responsible to provide security
jurisdictional rights relating to any claim for indemnity
– e.g. if at all possible, it is preferable if the question
of liability under the bunker supply contract is determined in the
same jurisdiction as any question of ultimate liability under the
Our Transport team are experienced in assisting in relation to
arrests Australia-wide and are available to assist vessel interests
in relation to any arrest based on OW Bunker claims, foreign
maritime liens or generally.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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This decision will be significant to aviation industry participants in assessing whether claimants in the context of international or domestic carriage by air have commenced claims in an appropriate forum in Australia.
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