In brief, the case centred on the claimant owner of the “Fesco Angara” (Angara Maritime Ltd) seeking a declaration of non-liability in respect of bunkers supplied by the defendant to the owners’ time charterer, Britannia Bulkers A/S, which had entered into administration. The defendant bunker supplier Oceanconnect counterclaimed for damages in amount of the supplied bunkers on the ground of conversion.
The relevant charterparty required Angara Maritime as owners to take over and pay Britannia for the quantity of bunkers left on board. Furthermore, Oceanconnect had supplied the bunkers to Britannia on the basis that they would retain title (namely, legal ownership) to those bunkers. In these circumstances, the bunker suppliers sought to argue that they were entitled to be paid for the bunkers by owners on the basis that the owners had consumed the bunkers and because after the charterparty had been terminated the bunkers had been returned to the owners.
In contrast, owners claimed that there had been a bona fide sale of the bunkers to them by time charterers on redelivery of the vessel, that they had acted in good faith throughout and had no prior knowledge of the bunker supplier's standard terms which included the retention of title clause.
His Honour Judge Mackie Q.C., giving judgment, concluded that the bunker supplier’s claim was in essence dependant on the application of Section 25(1) of the Sale of Goods Act 1979, namely:
1. Did the time charterers obtain possession of the goods with the consent of the seller?
2. Was there delivery of the bunkers by the charterers to the owners?
3. Did the owners receive the bunkers in good faith without notice of any lien or right retained by the bunker supplier?
4. Is it the case that charterers were only ever mercantile agents in possession of the bunkers? If yes, then this would not have enabled owners to take good title to the bunkers.
As to question 1, it was self-evident on the facts of the case that the time charterers had obtained possession of the bunkers and did so with the consent of the bunker suppliers. It would be difficult to envisage a situation where this would be otherwise.
As to question 2, the court preferred owners’ argument that it had purchased the bunkers (on redelivery) from charterers as a buyer in possession, in good faith and without notice of the bunker supplier’s rights and that, as a result, it had acquired good title to the bunkers. In these circumstances, it was clear that there had been a voluntary act by the time charterers which amounted to a delivery by the charterers to the owners.
As to question 3, there was simply no evidence to be had that the owners were in some way aware or that they should have been aware of the bunker supplier’s rights.
Given that owners succeeded on the first three points the court determined that question 4 would not and could not be an obstacle for owners.
Clearly, this judgment places bunker suppliers in a difficult position vis-à-vis a non-paying buyer/charterer but it also leaves open the question of what action a bunker supplier might take in the future to place an owner on notice of its rights such that the owner is on risk to settle a buyer’s/charterer’s debt.
Angara Maritime Ltd v Oceanconnect UK
Article by Nooshin Moafi
Update - March 2011
See the Court of Appeal decision on the anti-suit aspect of this case in Anti-Suit Injunctions
