France: Legal position of jurisdiction following the collapse of OW Bunkers
This information is part of a wider article which offers a broad overview of the legal position across jurisdictions following the collapse of OW Bunkers. View the complete article or alternative jurisdictions.
In the context of ship arrests, the French Courts of Appeal have rendered conflicting decisions (relating to OW Bunkers/other bunker suppliers). The Supreme Court is yet to rule.
Summary of legal position
The two main issues are:
(i) whether both the physical suppliers and OW Bunkers/ING bank can arrest a vessel.
(ii) whether a ship can be arrested to secure a maritime claim against a former charterer/sub charterer, when the claimant has no lien on the vessel.
Both issues were answered both positively1 and negatively2 by the different courts seized.
Some French jurisdictions/Courts have protected Owners’ interests whereas others have proved favourable to bunker suppliers.
Some Courts held that, to have the arrest lifted, Owners had to provide the claimant with a guarantee payable against presentation of a Court decision ordering the former charterer to pay the claimant, or even against a mere declaration of the claimant’s claim in the former charterer’s insolvency procedure.
This can result in Owners paying the debts of a former charterer (or sub charterer), without any possible recourse against the real debtor (if the charterer is insolvent, or if Owners’ claim under the charter party is time barred, e.g. under a charter governed by French law, subject to a one year time bar).
Mona Dejean, HFW Paris