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EXXON CORP. v. CENTRAL GULF LINES

December 18, 1991

EXXON CORPORATION, PLAINTIFF,
v.
CENTRAL GULF LINES, INC., IN PERSONAM AND THE M/V GREEN HARBOUR (EX WILLIAM HOOPER) IN REM, HER ENGINES, BOILERS, TACKLE, ETC. AND A CERTAIN LETTER OF CREDIT NO. P 621208 DATED DECEMBER 26, 1984 ISSUED BY THE CHASE MANHATTAN BANK, N.A., IN REM, DEFENDANTS.



The opinion of the court was delivered by: William C. Conner, District Judge.

OPINION AND ORDER

After a lengthy voyage to the highest court, plaintiff returns to this Court bringing this in rem action to enforce a maritime lien under the Federal Maritime Lien Act (the "Lien Act"), 46 U.S.C. § 971 (1982 Ed.)*fn1. Plaintiff alleges that it has not been paid for bunker fuel supplied to defendant's vessel in Saudi Arabia and moves for summary judgment pursuant to Rule 56, Fed.R.Civ.P.

FACTS

Familiarity with the facts of this case as presented in this Court's previous two opinions is presumed. Only a brief recitation of the facts is thus presented.

Defendant Central Gulf Lines, Inc. ("Central Gulf") is the owner of a vessel, the Green Harbour ex William Hooper (the "Hooper"). The Hooper was chartered by a bareboat charter party to the Waterman Steamship Corporation ("Waterman").

For forty years, plaintiff Exxon Corporation ("Exxon") was Waterman's exclusive worldwide supplier of gasoline and bunker fuel oil. Under annually negotiated fuel oil supply contracts between Exxon and Waterman, Exxon provided marine fuel to all Waterman ships worldwide, either itself or, in locations where Exxon did not have its own bunker stations, through local supplying companies. These fuel supply contracts provided that Exxon would have a lien on the receiving ship for fuel supplied.

Whenever Exxon procured bunker fuel for Waterman vessels at port in Jeddah, Saudi Arabia, it used a local supplier, Arabian Marine Operating Co. Ltd. ("Arabian Marine"). Exxon's relationship with Arabian Marine was governed by the terms and conditions of a brokerage agreement which provided that "Exxon shall solicit and arrange for the sale of marine fuels to international customers having bunkering requirements at the port of Jeddah. Arabian Marine shall supply marine fuels to those customers nominated by Exxon." In return for Exxon's services, including the administrative task of invoicing and collecting from Waterman, Arabian Marine paid Exxon a commission.

From January 1982 until the fall of 1983, the Jeddah brokering agreement was suspended to allow Waterman to take advantage of "bargain" prices offered by Arabian Marine. The October 26, 1983 bunkering, for which Exxon now asserts a maritime lien, took place in a transitional period during which Waterman, Exxon and Arabian Marine were reverting back to the arrangement under the Exxon-Waterman bunkering agreement. In early October 1983, Arabian Marine informed Exxon that it refused to supply bunkers directly to Waterman due to Waterman's financial condition and suggested that the previous arrangement be restored. Exxon consented, guaranteeing payment on Waterman's then current order. Subsequent to the supply, Exxon was invoiced by Arabian Marine for the Jeddah delivery and Exxon paid the invoice. Exxon then invoiced Waterman in the amount of $763,644.60 but was not paid.

On December 1, 1983, Waterman sought reorganization under Chapter 11 of the Bankruptcy Laws in which proceeding Exxon has filed a claim for the full value. To date, Exxon has received certain cash and stock dividends in partial payment of Waterman's obligations, through the Waterman bankruptcy proceedings.

PROCEDURAL HISTORY

In an opinion and order dated July 21, 1989, this Court denied Exxon's motion for reconsideration. See 717 F. Supp. 1029 (S.D.N.Y. 1989).

In a Summary Order dated April 5, 1990, the Court of Appeals affirmed the judgment of this Court. See 904 F.2d 33 (2d Cir. 1990).

The Supreme Court granted certiorari on January 14, 1991, and heard oral argument on April 15, 1991. By opinion announced on June 3, 1991, the Supreme Court overruled Minturn v. Maynard and held that admiralty jurisdiction did exist over Exxon's claim for the Jeddah delivery. See Exxon Corp. v. ...


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