A contract clause requiring that a physical supplier of bunkers « insist » on the application of its own standard terms and conditions (GTC’s) in order to bind not only the company ordering the bunkers but also the ultimate party purchasing the bunkers did not require that the physical supplier do more than assert the application of its GTC’s, where there were prior dealings on the same basis and no objection was made to the GTC’s. An issue of contractual or maritime lien could not be considered.
In another go-round of Canpotex v. Marine Petrobulk, a case arising out of the OW bankruptcy, the trial judge has reconsidered the case in light of the Federal Court of Appeal judgment in March of 2017.
In short, the trial judge had decided in September 2015 that Canpotex, which ordered the bunkers through one of the OW companies, was liable for their cost directly to Marine Petrobulk, the physical supplier. Payment to MP would discharge any obligation toward OW (in reality ING as assignee/receiver). ING had claimed exclusive entitlement to the funds, which had in effect been paid into Court by Canpotex, which interpleaded MP and ING to determine entitlement. The judge had also decided, somewhat indirectly, that MP was entitled to a lien.
The Federal Court of Appeal had reversed in part, holding that the question of any lien which MP might have could not be decided on interpleader since the ships/shipowners were not party to the proceedings. The FCA also said that the trial judge should have considered the effect, if any, of the GTC wording between Canpotex and OW, which provided that the physical supplier’s GTC’s would apply if the physical supplier « insisted » that the ultimate buyer also be bound by its GTC’s. The FCA returned the case to the trial judge for reconsideration.
On remand, the trial judge held that a pattern of prior dealings together with the dealings in the subject case indicated clearly that the physical supplier MP had « insisted » so far as could be done. It had advised in confirming the bunker supply that the sale was subject to its own GTC’s and that acceptance of that would be deemed final unless objected to within three business days. There had been no such objection, whether in the prior or subject dealings. In the circumstances, ING’s contention that there should have been something more in way of insistence was untenable.
The end result was the same as before: Canpotex was liable directly to the physical supplier for the cost of the bunkers; ING would only receive OW’s mark-up.
The exception was that no declaration in relation to lien rights could be made, which leaves still undecided the question whether or not a lien under section 139 of the Marine Liability Act (lien on foreign vessel in favour of person carrying on business in Canada) requires a personal liability on the part of the shipowner.