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Maersk is seeking to recover $6 million plus costs from the commodity trader following the supply of alleged contaminated fuel oil in Panama as part of a fuel swap in early 2018.

The case against Glencore, which has been lodged in a US District Court in the Southern District of New Year, has been brought by Maersk Oil Trading and Maersk Line AS (now known as Maersk AS).

The claim for damages centres on a fuel swap of 24,000 barrels of RMK 700 bunker fuel between MOT and Glencore at Balboa, Panama. The fuel was delivered to MOT Panama by Glencore from the PATSA tank terminal and the Maersk chartered bunker barge, Kollum, subsequently supplied the fuel to the Sofie Maersk and the Maersk Aras.

The court documents note that: ‘The parties engaged in no discussions during the negotiation of either the Swap Deal or the Email Recap with respect to the issue of whether Glencore (or Maersk) would ultimately be liable for any consequential damages suffered by Maersk in the event of a breach.

‘Specifically, it was never agreed that Glencore would not be liable for any consequential damages suffered by Maersk nor that Maersk would not be liable for any consequential damages suffered by Glencore as part of the “swap’.’

The Maersk Aras began burning the fuel on 15 February 2018, and suffered a complete engine failure two days later on 17 February. The ship had to divert to
Manzanillo, Mexico, where she was required to take on an additional 1,100 barrels of replacement fuel in order to continue to trade.

The Sofie Maersk began burning the fuel on 1 March and is said to have almost immediately experienced fuel pump issues on 2 March followed by main engine failure on 4 March while underway in the middle of the Pacific Ocean.

As a result of the main engine failure, the Sofie Maersk had to be towed as a dead ship to Honolulu, Hawaii, for repair and the provision of 2,100 mt of replacement fuel oil.

Analysis of the fuel supplied to both ships, undertaken by VPS in Houston, Singapore and in the UK, is said to have shown it was off-spec, containing ‘numerous contaminants such as plastic, fibres, black gum, paraffins, fatty acids, and other components that are impermissible for marine fuels and in violation of the agreed RMK 700 quality standard set by the ISO,’ noted the court papers.

A large number of vessels experienced operational problems in 2018 after taking on HSFO in US Gulf ports. The problems subsequently extended to fuel supply in other ports, such as Panama and Singapore.

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