Bomin Bunker v. DryLog Bulkcarriers

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 19-30418

ING BANK N.V.,
Plaintiff–Appellee,
versus
BOMIN BUNKER OIL CORPORATION,
Plaintiff–Appellant,
versus
BULK FINLAND M/V, No. 9691577,
her engines, tackle, equipment, furniture, appurtenances, etc., in rem,
Defendant.

******************************************

BOMIN BUNKER OIL CORPORATION,
Plaintiff–Appellant,
versus
DRYLOG BULKCARRIERS LIMITED,
on behalf of the in rem defendant, Bulk Finland MV,
Defendant–Appellee.

Appeal from the United States District Court
for the Eastern District of Louisiana

United States Court of Appeals
Fifth Circuit
FILED
March 24, 2020

Lyle W. Cayce
Clerk
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Before SMITH, HO, and OLDHAM, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Bomin Bunker Oil Corporation (“Bomin”) asserted an in rem claim for a
maritime lien against the Bulk Finland M/V (“the Vessel”), a ship to which it
supplied fuel bunkers under a contract with one of the affiliates of O.W. Bunker
& Trading A/S’s (“OW Bunker”). The district court granted summary judg-
ment, holding that Bomin wasn’t entitled to a maritime lien because it hadn’t
supplied the bunkers on the order of someone with authority to procure nec-
essaries on behalf of the Vessel. We affirm.
I.
“This lawsuit is the latest round in the maritime litigation spawned by
the collapse of OW Bunker, formerly the world’s largest supplier of fuel for
ships.” NuStar Energy Servs., Inc. v. M/V COSCO Auckland, 760 F. App’x
245, 246 (5th Cir.), cert. dismissed, 140 S. Ct. 339 (2019). In those other cases,
OW Bunker’s fuel suppliers asserted in rem claims for maritime liens on the
relevant ships, which, if successful, would allow them to recover the full costs
of the fuel as opposed to “the pennies on the dollar they would likely receive in
bankruptcy court.” Id. We confront essentially that situation here.
A.
To ensure that the Vessel could refuel while at port in Balboa, Panama,
three separate contracts were executed. First, Tatsuo Consulting Limited
(“Tatsuo”), a charterer of the Vessel,
1
contracted with O.W. Bunker Malta Ltd.
(“OW Malta”) to arrange for a supply of fuel. As part of the contract, Tatsuo

1
ING alleges that Tatsuo was acting as a charterer, which DryLog repeatedly
disputes. Because whether Tatsuo was a charterer doesn’t affect the outcome, we assume
arguendo that it was.
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agreed to incorporate “OW Bunker Group’s Terms and Conditions of sale(s) for
Marine Bunkers.” Neither the contract nor its incorporated terms designated
OW Malta as Tatsuo’s agent. Nor did the contract direct OW Malta to use
Bomin to supply the bunkers. The contract did, however, identify
“BOMINFLOT” as the fuel supplier.
Next, OW Malta subcontracted with O.W. Bunker U.S.A. Inc.
(“OW USA”) to supply the bunkers that the Vessel required. Like the Tatsuo–
OW Malta contract, the OW Malta–OW USA contract didn’t direct OW USA to
use Bomin to supply the fuel and didn’t designate OW USA as an agent of
either OW Malta or Tatsuo.
Finally, OW USA further subcontracted with Bomin to deliver the fuel.
The OW USA–Bomin contract was addressed to OW USA, but it listed the
account name as “Master a/o Owner a/o Charterer a/o Operator a/o Manager
a/o M/V ‘Bulk Finland’ a/s ‘O.W. Bunker USA Inc.’” That contract also specified
that it would “be governed by [Bomin’s] General Conditions of Sale and Deliv-
ery,” which Bomin viewed as “an integral part” of the contract. Neither Tatsuo
nor OW Malta was a party to that contract.
After Bomin physically delivered the fuel, it issued a Bunker Delivery
Receipt. That receipt confirmed the types and quantities of fuel delivered, and
it contained fine print stating that “[t]he vessel [was] ultimately responsible
for the debt incurred through this transaction.” The Vessel’s chief engineer
accepted delivery and signed the receipt.
Following delivery, OW Malta, OW USA, and Bomin each issued an
invoice to its respective contractual counterparty. Before those invoices came
due, OW Bunker—OW Malta and OW USA’s corporate parent—went belly up.
As a result, OW Malta and OW USA filed for bankruptcy. To date, none of the
parties has been paid for its performance under the contracts.
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B.
After OW Bunker collapsed, ING Bank N.V. (“ING”)—one of OW
Bunker’s secured creditors—filed an in rem action against the Vessel under
the Commercial Instruments and Maritime Liens Act (“CIMLA”), 46 U.S.C.
§§ 31341 et seq. ING averred that it was entitled to a maritime lien because
Tatsuo hadn’t paid OW Malta for the full cost of the bunkers.
2
The Vessel was
served with an arrest warrant the same day.
Bomin filed a separate complaint against the Vessel, also in rem, assert-
ing its right to a maritime lien related to the same fuel bunkers. Bomin didn’t
assert any other claims, whether in personam or in rem, against any other
party. The district court consolidated ING’s and Bomin’s cases.
DryLog Bulkcarriers Limited (“DryLog”), the Vessel’s long-term char-
terer, made a restrictive appearance to defend the in rem actions. To avoid
arrest of the Vessel, DryLog agreed to post a $1.08 million bond to serve as a
substitute res. DryLog then answered ING’s and Bomin’s complaints. After
realizing that both liens related to the same fuel bunkers, DryLog moved to
amend its pleadings to assert an interpleader.
Before the district court held a hearing on DryLog’s motion to amend,
ING and DryLog moved for summary judgment on Bomin’s complaint. Bomin
moved shortly thereafter to stay resolution of those motions, asserting that our
resolution of NuStar would be “issue-determinative,” because that case “pre-
sent[ed] a fact pattern that [wa]s in all relevant aspects identical to the fact
pattern in the instant action.” The district court granted the stay and denied

2
ING asserted its lien “based on a $700 million revolving credit facility that a group
of lenders provided OW Bunker and its affiliates almost a year before they went under.”
NuStar, 760 F. App’x at 246. To secure the credit, OW Bunker “assigned all of its rights, title
and interests as of December 19, 2013, in certain assets, including customer accounts receiva-
ble for bunker deliveries, to ING.”
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ING’s and DryLog’s motions without prejudice.
Once the opinion in NuStar was issued, the district court ordered ING to
file a joint supplemental brief in support of its summary judgment motion.
ING did so, raising two principal positions: (1) Bomin didn’t have a “maritime
lien . . . because Bomin supplied the bunkers ordered by OW USA, a sub-
contractor of OW Malta”; and (2) Bomin didn’t have a “breach of contract claim
. . . because OW USA was not an agent of the BULK FINLAND.”
Bomin opposed ING’s motion on three grounds: (1) Bomin should be
allowed to take discovery before the court ruled; (2) the court should hold a
hearing on DryLog’s motion to amend; and (3) three other decisions
3
supported
that Bomin had a maritime lien on the Vessel. Bomin didn’t address NuStar.
The district court granted summary judgment to ING and DryLog, decid-
ing that Bomin didn’t have a maritime lien because it didn’t “furnish the fuel
bunkers to BULK FINLAND on the order of the owner of the vessel or a person
authorized by the owner . . . .” Bomin appeals.
II.
Bomin raises a single issue on appeal: whether the district court erred
when it dismissed Bomin’s in rem maritime lien claim against the Vessel.
4

A.
CIMLA “governs the circumstances under which a party is entitled to a

3
Bomin cited (1) Martin Energy Services, LLC v. M/V Bourbon Petrel, No. CV 14-
2986, 2018 WL 6104718 (E.D. La. Nov. 21, 2018), (2) NCL (Bahamas) Ltd. v. O.W. Bunker
USA, Inc., 745 F. App’x 416 (2d Cir. 2018) (per curiam), and (3) Canpotex Shipping Services
Limited v. Marine Petrobulk Ltd., 2018 F.C. 957 (Fed. Ct. of Canada 2018).
4
Bomin has abandoned its contentions related to discovery and to DryLog’s motion to
amend. See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (“An appellant abandons all
issues not raised and argued in its initial brief on appeal.”).
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maritime lien.” Valero Mktg. & Supply Co. v. M/V Almi Sun, 893 F.3d 290,
292 (5th Cir. 2018). Under CIMLA, a party supplying goods or services can
assert a maritime lien if (1) the goods or services provided were “necessaries,”
(2) the party “provid[ed] [the] necessaries to a vessel,” and (3) it did so “on the
order of the owner or a person authorized by the owner.”
5
“We apply the pro-
visions of CIMLA stricti juris to ensure that maritime liens are not lightly
extended by construction, analogy, or inference.” Id. (quotation marks omit-
ted). The parties don’t dispute that the bunkers qualify as “necessaries” or
that Bomin provided them to the Vessel. Instead, just as in Valero and NuStar,
this case turns on the third element.
It’s normal “for an entity supplying necessaries to a vessel to lack privity
of contract with the owner of that vessel, and to instead contract with an inter-
mediary.” Id. at 293. The caselaw has branched into two competing lines to
address those realities: (1) “the general/subcontractor line of cases” and (2) “the
principal/agent, or ‘middle-man,’ line of cases.” Id. When confronted with con-
tractual chains similar to the one in this case, we have treated physical fuel
suppliers (e.g., Bomin) as subcontractors and fuel traders (e.g., OW Malta) as
general contractors.
6
As best we can tell, every other circuit has too.
7

5
46 U.S.C. § 31342(a); see also Valero, 893 F.3d at 292; ING Bank N.V. v. M/V
Temara, 892 F.3d 511, 519 (2d Cir. 2018). CIMLA identifies the following parties who “are
presumed to have authority to procure necessaries for a vessel: (1) the owner; (2) the master;
(3) a person entrusted with the management of the vessel at the port of supply; or (4) an
officer or agent appointed by–(A) the owner; (B) a charterer; (C) an owner pro hac vice; or
(D) an agreed buyer in possession of the vessel.” 46 U.S.C. § 31341(a).
6
See Valero, 893 F.3d at 294 (“These facts are more akin to those in which general
contractors have been engaged to supply a service and have called upon other firms to assist
them in meeting their contractual obligations.” (quotation marks omitted)); NuStar,
760 F. App’x at 248 (“As NuStar’s counsel acknowledged at oral argument, our recent deci-
sion in [Valero] controls the first half of this one.”). In Valero, 893 F.3d at 295, we considered
applying the middleman line of cases—specifically, Marine Fuel Supply & Towing, Inc. v.
M/V Ken Lucky, 869 F.2d 473 (9th Cir. 1988)—but declined to do so.
7
See, e.g., Bunker Holdings Ltd. v. Yang Ming Liber. Corp., 906 F.3d 843, 846 (9th
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That distinction between subcontractor and general contractor is crucial.
“[G]eneral contractor[s] supplying necessaries on the order of an entity with
authority to bind the vessel ha[ve] a maritime lien.” Lake Charles Stevedores,
Inc. v. Professor Vladimir Popov MV, 199 F.3d 220, 229 (5th Cir. 1999). But
“subcontractors hired by those general contractors” aren’t entitled to one
unless they can show “that an entity authorized to bind the ship controlled the
selection of the subcontractor and/or its performance.” Id.
B.
Bomin provided the bunkers to the Vessel under a contract with
OW USA into which OW USA entered so as to satisfy its obligations under its
contract with OW Malta. And OW Malta contracted with OW USA so that it
could fulfill its contract with Tatsuo. That places Bomin at the end of a three-
linked chain: contractor-subcontractor-subcontractor. Accordingly, to be enti-
tled to a maritime lien, Bomin must show “that an entity authorized to bind
the ship controlled” its selection or its performance. Id. Bomin establishes
neither.
1.
First, Bomin suggests that the OW USA–Bomin and Tatsuo–OW Malta
contracts establish the requisite authority, quoting extensively from those

Cir. 2018) (“The general rule stated in Port of Portland and Farwest Steel governs this case
because OWB Far East occupied a position no different from that of a general contractor.”);
Temara, 892 F.3d at 515 (“We agree with the District Court that the subcontractor physical
supplier was not entitled to a maritime lien because it did not provide the bunkers on the
order of an entity specified in CIMLA.”); Barcliff, LLC v. M/V Deep Blue, 876 F.3d 1063, 1071
(11th Cir. 2017) (“Where the owner directs a general contractor to provide necessaries to its
vessel, a subcontractor retained by the general contractor to perform the work or provide the
supplies is generally not entitled to a maritime lien.”). The decision in Bunker Holdings,
906 F.3d at 846, is particularly important because it distinguished Ken Lucky, which was
binding precedent, in favor of applying the general/subcontractor framework.
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contracts and their corresponding terms. Bomin also repeatedly posits that it
can enforce the terms governing the OW USA–Bomin contract up the contrac-
tual chain against OW Malta and Tatsuo.
Bomin’s theory boils down to two steps. First, under Article 7.14 of the
OW USA–Bomin contract’s terms, Bomin reserved the right to assert a mari-
time lien.
8
And second, under Clause L.4 of the Tatsuo–OW Malta contract’s
conditions,
9
the terms of that contract were “varied” to comport with the terms
that Bomin insisted upon in its contract with OW USA.
But that contention misses the point. It doesn’t matter whether Arti-
cle 7.14, or any contractual provision for that matter, states that Bomin has a
right to a maritime lien. Maritime liens can’t be created as a matter of con-
tract; CIMLA provides the only means to obtain one.
10
The contractual terms

8
Article 7.14 provides that “Products and Services delivered under a Contract shall
be made not only on the account of Buyer but also on the account of the receiving Vessel.”
Article 7.14 also indicates that OW USA, as “Buyer,” warranted that (1) the Vessel’s owner
gave OW USA permission to purchase the bunkers, (2) Bomin had “the right to assert and
enforce a lien” against the Vessel, and (3) the Vessel was “ultimately responsible for the debt
incurred through the Contract.”
For the first time on appeal, Bomin contends that Article 17 of those terms—in which
Bomin purports to retain title to the bunkers until paid in full—also entitles it to a maritime
lien. But because Bomin never raised that position before the district court, it can’t assert it
“for the first time on appeal.” Greenberg v. Crossroads Sys., Inc., 364 F.3d 657, 669 (5th Cir.
2004).
9
Clause L.4 states,
These Terms and Conditions are subject to variation in circumstances where
the physical supply of the Bunkers is being undertaken by a third party which
insists that the Buyer is also bound by its own terms and conditions. In such
circumstances, these Terms and Conditions shall be varied accordingly, and
the Buyer shall be deemed to have read and accepted the terms and conditions
imposed by the said third party.
10
See, e.g., Valero, 893 F.3d at 292 (“We apply the provisions of CIMLA stricti
juris . . . .”); Temara, 892 F.3d at 519 (“Maritime liens arise only by operation of law and not
by contract.”); Bominflot, Inc. v. The M/V Henrich S, 465 F.3d 144, 146 (4th Cir. 2006)
(“[M]aritime liens are stricti juris and cannot be created by agreement between the parties.”).
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are relevant only to the extent that they show authorization by the Vessel’s
owners or their agents, i.e., that Tatsuo controlled Bomin’s selection as the fuel
supplier or Bomin’s performance under its contract with OW USA.
The provisions on which Bomin relies don’t support any agency theory.
11

Nothing in the language that Bomin quotes establishes that Tatsuo required
or instructed OW Malta or OW USA to contract with Bomin to supply the bun-
kers. Moreover, neither the Tatsuo–OW Malta contract nor the OW Malta–
OW USA contract charged the OW Bunker entities with procuring necessaries
for the Vessel on Tatsuo’s behalf.
12
Those contracts are merely “a series of
counterparty transactions,” Temara, 892 F.3d at 522, and OW Malta and OW
USA were free to complete performance by subcontracting with anyone or no
one at all.
13
Bomin can’t reverse-engineer CIMLA’s required authorization by
contractually reserving a right to a maritime lien or by insisting that OW USA
warrant that it had vessel-owner permission to purchase the bunkers.
2.
Bomin alternatively avers that Tatsuo “controlled Bomin’s performance”
through “its contract with Bomin facilitated through OW’s Terms.” Bomin con-
tends that it “would have never been able to perform” if the Vessel hadn’t
accepted its services. It points out that Tatsuo, not OW Bunker, “selected the

11
Bomin bears the burden to show that OW Malta and OW USA were Tatsuo’s agents.
See Karl Rove & Co. v. Thornburgh, 39 F.3d 1273, 1296 (5th Cir. 1994).
12
And because OW Malta and OW USA aren’t the Vessel’s owners, masters, man-
agers, officers, or agents, neither is an entity “presumed to have authority to procure nec-
essaries” on the Vessel’s behalf. 46 U.S.C. § 31341(a).
13
Moreover, “[i]t is a settled principle of contract law that a contract requiring A to
supply X to C is satisfied if B, hired by A, provides X to C.” Lake Charles, 199 F.3d at 232.
As a result, Bomin physically delivering the fuel constituted both OW USA’s performance
under the OW Malta–OW USA contract and OW Malta’s performance under the Tatsuo–OW
Malta contract. It didn’t somehow create a de facto contract between Tatsuo and Bomin.
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bunkers Bomin provided,” and the Vessel’s crew made all the necessary con-
nections to permit delivery of the fuel. Furthermore, the Tatsuo–OW Malta
contract specified that “BOMINFLOT” would supply the fuel; Bomin’s invoice
was addressed to “MASTER AND/OR OWNER AND/OR CHARTERER
AND/OR OPERATOR AND/OR MANAGER OF MV BULK FINLAND”; and
the Vessel’s chief engineer signed the Bunker Delivery Receipt.
But the most that those facts can show is that Tatsuo and the Vessel’s
chief engineer were aware that Bomin was the physical supplier and that nei-
ther objected to its performance. That isn’t enough. A vessel owner or char-
terer’s “[m]ere awareness” of a subcontractor’s involvement “does not consti-
tute authorization under CIMLA.” Valero, 893 F.3d at 295. Nor could it.
“[H]olding that awareness that necessaries are being supplied [i]s sufficient,
even though those necessaries were procured by an entity without authority to
bind the vessel, would render [CIMLA’s] authority requirement meaningless.”
Lake Charles, 199 F.3d at 232.
Valero is instructive. There, Almi Tankers (the vessel owner’s author-
ized agent) contracted with OW Malta, who subcontracted with OW USA, who
further subcontracted with Valero. Valero, 893 F.3d at 291. The record showed
that (1) Almi Tankers knew that Valero was “the bunker fuel supplier” and
“did not object to Valero’s selection,” (2) “the sales order confirmation listed
Valero as the supplier,” (3) “Valero provided the entire bunkering service . . .
with no assistance from O.W. or its affiliates,” and (4) “the Vessel’s agents
monitored and tested Valero’s performance.” Id. at 294. We held that those
facts “prove[d] no more than the Vessel’s awareness of Valero, not that the
Vessel ‘controlled’ the selection or performance of Valero.” Id. at 295. The
panel in NuStar, 760 F. App’x at 248, confronted almost identical facts and
reached the same conclusion. There is no reason the result here should be
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different. Bomin’s reliance on Martin, NCL, and Canpotex is misplaced.
14

* * * * *
Because Bomin wasn’t acting on the orders of either the Vessel’s owners
or their authorized agent when it supplied the fuel, Bomin doesn’t have a mari-
time lien. The summary judgments are AFFIRMED.

14
Martin’s facts are distinct from the ones we confront. There, the relevant vessel’s
charterer (CGG) contracted with OW USA for fuel, and OW USA then solicited bids from fuel
suppliers like Martin and Stone Oil. See Martin, 2018 WL 6104718, at *1. OW USA then
presented those bids to CGG, which always told OW USA “to choose Martin Energy’s lower
bid.” Id. at *6. In other words, “unlike Valero [or NuStar or this case], an entity authorized
to bind the vessel controlled the selection of Martin Energy as physical supplier.” Id. Bomin
relies on an inapposite section of Martin discussing whether Martin had waived its right to
a maritime lien by refusing to extend credit to the vessel’s charterer. See id. at *4–5.
NCL and Canpotex similarly provide no safe harbor. In NCL, 745 F. App’x at 420,
though the court remanded “for the district court to consider whether EKO [(the fuel sup-
plier)] insisted that its terms and conditions appl[ied] to NCL [(the vessel’s charterer)],” it
did so only as it related to a contract dispute between NCL and OW Bunker. The court didn’t
evaluate whether EKO—the party occupying the same relative position as Bomin—was
entitled to a maritime lien. And in Canpotex, 2018 F.C. 957, at 15 ¶ 37, the court didn’t
consider whether a maritime lien existed under either CIMLA or Canadian law.
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