The company has filed for a declaratory judgement against OW Bunker’s liquidating trustee in relation to a bunker transaction which occurred weeks before the Danish bunker giant’s collapse.
In documents submitted to a federal court in Connecticut on 6 August, Norwegian Cruise Line (NCL) claimed it had ordered bunkers from OW Bunker to be delivered to its Norwegian Spirit cruise vessel in Piraeus on 8 October, 2014.
OW Bunker, through its related entity, OW Bunker Malta Ltd., subcontracted with EKO, a local supplier in Greece, to deliver the bunkers to the vessel.
On 18 October, 2014, the bunkers were delivered to the Norwegian Spirit by EKO. On the same day, OW Bunker issued an invoice for $694,548.44 for the fuel. Notably, the terms of the invoice called for payment within 30 days of the date of supply 17 November, 2014. EKO separately invoiced OW Bunker for the bunkers supplied to the vessel.
On 13 November, 2014, OW Bunker filed for Chapter 11 Protection with all invoices remaining outstanding.
Following OW Bunker’s bankruptcy filing, EKO notified NCL that it would arrest the Norwegian Spirit to enforce a claimed maritime lien for the provision of bunkers to the vessel. To avoid the arrest and detention of the Norwegian Spirit, which NCL says was ‘fully loaded with thousands of passengers and crew’; NCL says it was compelled to pay EKO for the order. Accordingly, NCL paid EKO $729,929.09, which was represented as the value of the bunkers delivered to the vessel and the total amount set forth in the EKO invoices.
‘Despite NCL’s payment to EKO satisfying OW’s obligations to EKO, the Liquidating Trustee [Kelly Beaudin Stapleton] continues to demand that NCL pay OW the full amount invoiced by OW to NCL, $694,548.44, for the order,’ NCL claims.
‘The Liquidating Trustee has provided notice to NCL seeking to initiate arbitration proceedings in London, England, with respect to its claim for the allegedly unpaid OW Invoice, pursuant to an arbitration clause in OW Bunker Group’s Terms and Conditions of Sale for Marine Bunkers, Edition 2013, which purportedly was incorporated into the Order with NCL.’
However, NCL argues that the arbitration provision in OW Bunker’s general terms and conditions is not applicable to OW Bunker’s claim.
‘Pursuant to OW’s own contractual language, its general terms and conditions are superseded by the general terms and conditions of the local supplier, in this case, EKO.’
Citing EKO’s applicable terms and conditions, which NCL claims provide for dispute resolution in Greek courts under Greek law, the cruise company highlighted a passage which states:
‘This Agreement shall be governed by and construed in accordance with Greek law and any dispute which may arise in connection there with shall be submitted exclusively to the jurisdiction of Piraeus Courts.’
Accordingly, NCL argues that the EKO dispute resolution provision ‘replaces and takes priority’ over the arbitration provision in OW Bunker’s general terms and conditions, ‘thus rendering the attempted arbitration invalid’.
‘This request for a declaratory judgment, however, does not arise out of any agreement between O.W. and NCL, nor does it seek interpretation or application of any contract,’ says NCL. ‘It is a dispute over NCL’s satisfaction of OW’s obligations to EKO, the local fuel supplier, and whether NCL should pay twice for the same bunker order.’
NCL claims that on 20 May, 2017, Stapleton arrested the Norwegian Spirit in France seeking to obtain security for its claim, ‘despite the fact that the Liquidating Trustee previously knew and acknowledged that the arbitration provision upon which it based its arbitration notice and for which it sought security was inapplicable. In spite of this knowledge, the Liquidating Trustee vexatiously pursued the vessel arrest without prior notice to NCL and NCL was compelled to provide security to the Liquidating Trustee to obtain the release of the vessel.’
NCL argues that it satisfied OW’s contractual obligations to EKO by making payment for the order directly to EKO. As such, the company says its payment to EKO in satisfaction of OW Bunker’s obligation exceeds the amount the collapsed bunker company is claim from NCL.
‘OW seeks to hail NCL to arbitration in London to argue that, as a result of OW’s inability to satisfy its obligations to its local suppliers, NCL should pay twice for the same fuel,’ NCL says. ‘This declaratory judgment action involves the determination of whether NCL is entitled to equitable subrogation, setoff, recoupment, priority through payment under compulsion, or other recognition of the amount that it paid to EKO.’