The United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) recently recommended that the United States District Court for the Southern District of New York (the “District Court”) grant summary judgment in favor of shippers where the carrier discontinued the services for which the shippers had agreed to minimum quantity commitments (“MQC”) in exchange for reduced freight rates in a shipping service contract.

The fallout from Industrial Carriers Inc.'s ("ICI") unsuccessful application for the granting of a petition for bankruptcy in Greece in 2008 continued to play out in the United States District Court for the Eastern District of Virginia recently. In Flame S.A. v. Indus. Carriers, Inc., 39 F.Supp.3d 769 (E.D. Va.

As most astute manufacturers know, there is a statutory right under Bankruptcy Code section 503(b)(9) to assert an administrative priority claim (one with the highest priority in payment after secured creditors) for goods delivered to a debtor within 20 days before the debtor commences a bankruptcy case. There are, however, other laws that should be considered when dealing with foreign commercial transactions as illustrated in a recent decision by the Bankruptcy Court in the Eastern District of Pennsylvania in the case of In re World Imports, Ltd. (No. 13-15929 SR).

As has been widely publicized, the United States Supreme Court recently provided guidance on a bankruptcy court's  jurisdiction to address certain types of claims, but left open issues of whether parties may consent to bankruptcy court jurisdiction (or waive a lack of jurisdiction argument if not raised early enough) to enter final judgments on certain types of matters.  See Executive Benefits Agency v. Arkison (In re Bellingham Ins. Agency, Inc.), 573 U.S. ___ (June 9, 2014).

In our previous update concerning OW Bunker litigation in the United States, we discussed orders issued by the United States District Court for the Eastern District of Louisiana in which the court held that a physical supplier of bunkers did not have an enforceable maritime lien against a vessel.  Valero Marketing and Supply Co. v. M/V ALMI SUN, No. 14 Civ. 2712 (NJB) (E.D. La. decided Dec. 28, 2015 and Feb.

Physical Supplier Denied Maritime Lien

A federal court in the United States recently held that a physical supplier of bunkers was not entitled to a maritime lien against a vessel.  Valero Marketing and Supply Co. v. M/V ALMI SUN, No. 14 Civ. 2712 (NJB) (E.D. La. decided Dec. 28, 2015 and Feb. 8, 2016).  The Order was the first to apply United States law and directly address the issue in the context of O.W. Bunker's bankruptcies.