Skuld highlights the difficulties and complexities of “bad” bunkers

Marine insurer Skuld has written on the complex problem of “bad” bunkers and the implication of any spreading of the “infection”.

The insurer said that members and customers would be aware of the widely reported problems with fuel supplied at ports in the US Gulf region, Caribbean and Far East.

Certain compounds – phenols and fatty acids, amongst others – have been identified in fuel, and were subsequently reported as leading to engine problems. The operational issues generally involved an excessive formation of sludge or sediments, linked to the blocking of filters and fuel pumps and eventually damage to engine components.

Skuld noted that as yet there was no clear explanation as to how these compounds would cause these reported problems.

As such, Skuld said that identifying and retaining the relevant samples for analysis was critical. The bunker supply contract, for example, might provide that the sample retained by the bunker barge is binding for the purposes of determining quality.

Such contracts also typically have a short deadline for notification of quality disputes failing which the claim may be time barred. The charterparty might contain its own provisions regarding the samples which would be determinative in terms of quality.

Given the range of tests that might be necessary (covered at length by Skuld in the full article), parties stemming bunkers at affected ports should endeavour to ensure that the samples taken during bunkering were sufficient (using one litre bottles as a minimum). Skuld recommended that the crew closely monitor the sampling procedure and check that the samples from the delivering barge are properly collected. In cases where problems have already occurred, consideration should be given to taking further samples on board the vessel, including of any sludge or sediment which may have developed.

Specifications under various ISO 8217 standards all provide for routine testing of certain parameters such as density, water and ash content (known as “Table 2” tests). However, these standard tests do not identify the presence of the compounds referred to in the current “bad bunker” scenarios. Indeed there was no general test for the presence of these compounds, but various methods have been used which can identify unusual chemicals.

Fourier Transform Infra Red (FTIR); Direct injection gas chromatography-mass spectrometry (GC-MS); Headspace GC-MS; SPE polar extraction followed by derivatisation and GC-MS.

Skuld noted that it was often a combination of these tests that provided the best chance of identifying any “unusual” materials in the fuel.

The insurer went on to say that, while determining the precise quantity of any unusual compounds was challenging and there was no common expert guidance on what amount (if any) of a given compound was safe, Clause 5 provided a greater degree of protection for the purchaser in this context than the Table 2 tests.

However, Skuld said that it was starting to hear that suppliers were in some instances revising supply contracts to eliminate Clause 5. Given the broader requirements of Clause 5 over the particular specifications identified by the Table 2 tests, this would have the effect of significantly reducing a purchaser’s recourse against the supplier because, in simple terms, under the supply contract the supplied fuel would be within the contractual specification – assuming it met the Table 2 tests – even if it failed the wider Clause 5 requirements.

It was also easy to imagine a situation where a time charter party included the Clause 5 requirements as part of the bunker specification clause, but where the time charterer, perhaps unwittingly, purchased fuel where Clause 5 was omitted from the bunker supply contract. In such a situation, and assuming the bunkers were ‘off-spec’ under the broad Clause 5 requirements, the time charterer could under the charterparty be held liable for any losses suffered by the owners, but the charterparty would not have any recourse to the supplier.

Skuld therefore recommended that the purchasers of such bunkers, be they owners or time charterers, check carefully that Clause 5 was included in the supply contract before purchase.

As Skuld observed, there were “myriad legal and technical issues arising out of the above”, which would vary depending on the terms of the relevant charterparty and bunker sale contract, and the jurisdiction regulating any possible tort claims between the physical supplier and the receiving vessel.

Skuld said that it was involved on behalf of its members and customers in a significant number of disputes in various jurisdictions.