OW Bunkers: Hong Kong

This is a series of pieces based on Shipowners’ Club recent set of articles on the global legal impact of the collapse of OW Bunkers last year, and the subsequent

debate on whether owners owed money to the liquidator or to the physical supplier of goods. Law firm Holman Fenwick Willan provided much of the technical detail.

The leading case in Hong Kong is NewOcean Petroleum Co Ltd v. OW Bunker China Ltd and Cosco Petroleum Ltd (11 July 2016, Court of Appeal).

In relation to an application to challenge jurisdiction brought by Cosco, the Court of Appeal held that NewOcean, as the physical bunker supplier, made out an arguable case of a claim in conversion.

This case is distinguished from the Res Cogitans because, under NewOcean’s terms, NewOcean retained title in the bunkers until it was paid the price in full and it did not grant permission for anyone to consume the bunkers prior to payment.

In permitting the Owner of the vessels to consume the bunkers immediately prior to payment, and by impliedly undertaking that it had a right to grant such permission, Cosco asserted a right inconsistent with the NewOcean’s rights as the owner of the bunkers, which gives rise to a claim for conversion by NewOcean.