Precious Shipping Asks Court for Fuel Payment Ruling
Thai-listed shipowner Precious Shipping has turned to the Singapore court for a decision on which company it should pay for fuel it bought, which is unclear after the bankruptcy of the world's largest bunker supplier.
The collapse of OW Bunker, which had a market share of less than 3 percent in Singapore, has disrupted not only supply chains and credit lines but also payment orders, leaving buyers unsure who should get payment for fuel that can go through many hands.
"When (OW Bunker) raised the invoice, we asked them for the 'No Objections Certificate' (NOC). At that time their financial troubles starting hitting the headlines," Precious Shipping's managing director, Khalid Hashim, said in an emailed statement on Friday.
The NOC is a document produced by the contract party, in this case OW Bunker, demonstrating consent from other supply chain parties that any outstanding payment be made to it.
Hashim said legal action was taken as there had been no response nor agreement among OW Bunker and physical suppliers on payment terms. "We approached the courts to get their guidance/order whom to pay to avoid making any incorrect payments."
In a filing dated Nov. 14, the first of its kind by a debtor in this affair, Precious refers to Singapore-based OW Bunker Far East, Uni Petroleum, Shell Eastern Trading, Transocean Oil and Dutch-based ING Bank.
To date, seven barges have been arrested and claims totaling $38.8 million have been filed against OW Bunker Far East and Dynamic Oil Trading, the two Singapore subsidiaries of the Danish company.
Copyright Reuters 2014.