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Bomin Greece S.A. v. M/V Genco Success (IMO 9121730)

United States District Court, N.D. New York

May 30, 2017

BOMIN GREECE S.A., Plaintiff,
M/V GENCO SUCCESS (IMO 9121730), her engines, freights, apparel, appurtenances, tackle, etc., in rem, Defendant.

          CHALOS & CO., P.C. Counsel for Plaintiff

          HOLLAND & KNIGHT Counsel for Defendant and Claimant


          JAMES H. POWER, ESQ.


          GLENN T. SUDDABY, Chief United States District Judge.

         Currently before the Court, in this maritime action by Bomin Greece S.A. (“Plaintiff”) against M/V Genco Success (“Defendant” or the “Vessel”), is a motion by Genco Success Ltd. (“Claimant” or “Genco”) to vacate the Court's Order for the Maritime Arrest of the Vessel. (Dkt. No. 19.) For the reasons set forth below, Claimant's motion to vacate is granted.


         Because the parties have (in their motion papers) demonstrated an adequate understanding of the action's procedural history, the facts giving rise to the action, and the parties' arguments on the current motion, the Court will not recite that information in this Decision and Order, which is intended primarily for the review of the parties, but will respectfully refer the reader to the Court's Decision and Order of March 31, 2017. (Dkt. No. 32.)


         Supplemental Admiralty Rule E(4)(f) provides that, "[w]henever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated or other relief granted consistent with these rules." Fed.R.Civ.P. Adm. Supp. R. E(4)(f). To avoid vacatur of arrest, it is the plaintiff's burden to affirmatively demonstrate its entitlement to a maritime lien. Bay Casino, LLC. v. M. V. Royal Empress, 20 F.Supp.2d 440, 448 (E.D.N.Y. 1988); Equatorial Marine Fuel Mgmt. Servs. Pte Ltd. v. MISC Berhad, 591 F.3d 1208, 1210 (9th Cir. 2010).

         The Commercial Instruments and Maritime Lien Act ("CIMLA"), 46 U.S.C. § 31301 et seq., provides for a statutory maritime lien for the supply of necessaries where the plaintiff has provided necessaries to a vessel on the order of the owner or “a person authorized by the owner.” 46 U.S.C. § 31341(a). Among persons presumed to be “a person authorized by the owner” are “the master, ” “a person entrusted with the management of the vessel at the port of supply, ” or “an officer or agent appointed by . . . a charterer . . . .” 46 U.S.C. § 31341(a); see also Galehead, Inc. v. M/V Anglia, 183 F.3d 1242, 1245 (11th Cir. 1999) (“A charterer is authorized under the statute to bind a vessel for necessaries.”); Trans-Tec Asia v. M/V HARMONY CONTAINER, 518 F.3d 1120, 1127-28 (9th Cir. 2008) (“Charterers and their agents are presumed to have authority to bind the vessel by the ordering of necessaries.”); Ceres Marine Terminals, Inc. v. M/V Harmen Oldendorff, 913 F.Supp. 919, 922 (D. Md. 1995) (“A time charterers ordinarily holds sufficient legal authority over the management of a chartered vessel to subject the vessel to maritime liens.”).

         "Although a charterer is presumed to have authority to bind the vessel, the lien does not vest absolutely as a matter of law." Belcher Oil Co. v. M/V Gardenia, 766 F.2d 1508, 1512 (11th Cir. 1985). A maritime lien does not arise "when necessaries are ordered by one without authority to bind the vessel where the vessel owner can show that the supplier of necessaries had actual knowledge of the existence of any lack of authority relied upon as a defense." World Fuel Serv. Trading, DMCC v. M/V HEBEI SHIJAZHUANG, 12 F.Supp.3d 792, 808 (E.D. Va. 2014); see also See also Belcher Oil Co., 766 F.2d at 1512 ("If the person who order the services is not authorized by the owner to create liens and if the furnisher of the services has notice of the lack of authority, it is entirely clear that no lien will arise.") (citing Gilmore & Black, The Law of Admiralty, 2d Ed. at 685); Gulf Oil Trading Co. v. M/V CARIBE MAR, 757 F.2d 743');">757 F.2d 743, 749 (5th Cir. 1985) (noting that the legislative history of CIMLA supports the policy that a physical supplier does not have a lien "when a physical supplier has actual knowledge of a prohibition of lien clause" contained in a charter party). In other words, the presumption that a charterer has authority to bind a vessel to a maritime lien is “rebutted” or “overcome” where a defendant has shown that a supplier of necessaries has actual knowledge of the charterer's lack of authority to bind a vessel. Belcher Oil Co., 766 F.2d at 1509; Lake Union Drydock Co. v. M/V POLAR VIKING, 446 F.Supp. 1286, 1291 (W.D. Wash. 1978).

         Granted, the addition of a “no-lien stamp” or “disclaimer stamp” affixed to a bunker delivery note is insufficient to provide such notice. Am. Oil Trading, Inc. v. M/V SAVA, 47 F.Supp.2d 348, 352 (E.D.N.Y. 1999); O.W. Bunker Malta Ltd. v. M/V TROGIR, 602 F. App'x 673, 679 (9th Cir. 2015); Empire Scott Stevedoring, Inc. v. M/V STEVNS PEARL, 98-CV-1818, 1998 U.S. Dist. LEXIS 14607, at *9 (E.D. La. Sept. 10, 1998); Gulf Oil Trading Co. v. M/V FREEDOM, 84-CV-0425, 1985 U.S. Dist. LEXIS 23790, at *3, 7-8 (D. Ore. July 25, 1985). However, an “affirmative communication” to the supplier may provide such notice. Cal Dive Offshore Contractors, Inc. v. M/V Sampson, 15-CV-2788, 2017 WL 1157125, at *6 (S.D.N.Y. March 27, 2017); O.W. Bunker Malta Ltd. v. M/V Trogir, 12-CV-5657, 2013 U.S. Dist. LEXIS 19026, at *7-8 (C.D. Cal. Jan. 29, 2013), aff'd, O.W. Bunker Malta Ltd. v. M/V Trogir, 602 F. App'x 673 (9th Cir. 2015).

         The “supplier” does not include merely the contract supplier but may include the physical supplier if the vessel owner had no knowledge of any other fuel supplier involved in the transaction. See Hampton Bermuda Ltd. v. M/V STAR SIRANGER, 05-H-3074, 2008 A.M.C. 1352, at 1359 (S.D. Tex. Aug. 18, 2008) (“[A]ctual notice must be given to the supplier of the necessary, or to another entity in the supply chain known to the vessel owner. . . . On the facts presented to the Court at trial, the vessel provided actual notice of the ‘no-lien clause' to Colonial Oil, the physical supplier of the bunkers. Although Colonial Oil served as an independent contractor to Hampton Bermuda, it is undisputed that the vessel had no knowledgeof any other fuel supplier involved in the transaction, including any Hampton entity.”) (emphasis added) (citing Gulf Oil Trading, 757 F.2d at 750-51). However, such a supplier is distinguishable from a mere “intermediary” (used to deliver the necessaries in question) who had no “effect on the relationship” between the ...

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