A new bunker contract features high on the shipping sector's wishlist after the collapse of OW Bunker illustrated the risks faced by carriers in bankruptcy situations.
In the worst case scenario, if a bunker company declares insolvency, shipowners could face payment claims from the bankruptcy estate, the banks as well as the physical supplier.
This is why a working group of key industry players are now investigating how to formulate agreements so that both buyers and sellers are better protected if similar situations occur going forward.
The review has been launched by industry organization Bimco, which are behind the standard contract, Bimco Terms 2015, which currently does not take into account the special challenges which arose out of the OW Bunker bankruptcy.
We need a fast solution, as we are currently in a gray zone until a new contract comes out
This contract will now be revised by an expert panel, which includes bunker companies World Fuel Services and Dan Bunkering together with carriers J. Lauritzen and Norden.
"The current contract was made before the OW Bunker bankruptcy, and back then nobody imagined that such a large supplier could fold. Therefore we need to define some clauses so that buyers don't end up paying several times over," says Claus Kesting, general manager of J. Lauritzen and head of the working group, to ShippingWatch.
The need for a solution has only intensified after the UK Supreme Court in London ruled that Dutch Bank ING, which leads the consortium of OW Bunker's banks, can demand payment from carriers which traded with the defunct Danish company.
At the same time, several carriers have begun to bypass bunker trades and instead deal directly with the physical supplier in order to avoid a similar situation.
"We need a fast solution, as we are currently in a gray zone until a new contract comes out," he says.
In addition to World Fuel Services and Dan Bunkering, bunker industry association IBIA will also be involved in the work in order to ensure that the new contract has widespread support.