This is a legacy page. Please click here to view the latest version.
Fri 23 Dec 2016, 12:59 GMT

Rise in bunker disputes prompts P&I club to advise members


The Shipowners' Club offers advice to members regarding collating evidence and contract terms.



Mutual insurance association The Shipowners' Club says it has recently experienced an increase in the number of bunker quality dispute claims arising from the delivery of allegedly off-specification or contaminated bunkers. The claims are said to range from variation in the parameters of the bunker supplied to the presence of contaminants, such as ash and microbes.

As a result, Mudit Singh, Claims Handler and Correspondent Manager at The Shipowners' Club, has provided some advice to members regarding collating evidence and contractual terms.

Contract terms

Singh says that bunker buyers may find a supplier's terms and conditions "onerous", particularly the liability exclusion clauses and short time periods (commonly 15 days for quantity and 30 days for quality) within which a claim has to be presented in a jurisdiction of the supplier's choice. He therefore advises members to use the 'Standard Bunker Contract', issued by the Baltic and International Maritime Council (BIMCO), as a starting point when negotiating a supply contract.

Singh also stresses that it is important that the correct grade of bunkers, based on the engine type and applicable regulations, is ordered and specified in the sale and purchase agreement.

To avoid any confusion, Singh encourages shipowners to specify the grade of fuel by making a reference to their ISO 8217 grade. Buyers are also advised against the blending of bunkers in the receiving ship's tanks or in the hoses to ensure homogenous bunkers are delivered.

Prior to delivery

Prior to taking delivery, Singh says the ship's crew should ensure that the fuel specifications included in the bunker delivery note (BDN) correspond with the stemmed specification.

"Unfortunately, there have been instances of claims where the crew failed to perform these checks and when the discrepancy was realised, it was too late to rectify the mistake," Singh explains.

Sampling

Singh stresses that "sampling is the most crucial evidence to preserve, as it will be relied upon if a dispute later arises regarding the quality of bunkers supplied."

Before the bunkering operation commences, Singh says that samples of marine fuel already in the receiving ship's tanks should be collected and the mixing of new and old bunkers should be avoided as much as possible.

Singh points out that, in most cases, the agreed sampling procedure includes presenting the ship's crew with samples taken on board the bunker barge. In this scenario, Singh says the ship's crew should attend the sampling on the barge to ensure that correct sampling procedures are followed and sufficient quantity of these samples is retained for future analysis.

The ship's crew also needs to make sure that the samples retained for analysis are in addition to the mandatory MARPOL samples, Singh stresses.

Post-delivery

Newly supplied bunkers should only be used once their samples have been analysed and they are found to be on-specification and free of contaminants, Singh says. Not doing so would expose the ship's machinery to damage from off-spec and/or contaminated bunkers and the owners of the vessel to a breach of regulations governing the specification of bunkers to be consumed by the vessel.

If the bunkers are found to be off-specification or contaminated, they should not be used and a surveyor should immediately be appointed to collect samples.

Depending on the degree to which the bunkers are found to be off-specification or contaminated, an analysis of these samples will need to be carried out. Bunker quality experts may also need to be appointed to advise on mitigation of damage to the ship and to suggest further appropriate analysis which bolsters the claim/defence.

"Timely action and notification is the key to avoid expensive claims and successful indemnity action against third parties involved in the bunker quality dispute," Singh concludes.

In September, Bunker Index reported that another P&I Club, West of England P&I, provided advice to its members on how to avoid bunker disputes and how to handle them if a claim arises.

The Loss Prevention Bulletin 'Bunker Quality Disputes Part 1: Practical and Technical Measures' deals with the actions and steps that should be considered in order to avoid off-specification bunker disputes, whilst the Claims Guide 'Bunker Quality Disputes Part 2: Legal and Claims Handling Considerations' sets out the legal and claims handling steps that should be taken in the event of an off-specification bunker claim arising.


Photograph of ship with overlaid encircled text of EU regulations. DNV to host webinar on FuelEU Maritime compliance strategies  

Classification society offers insights as first reporting period closes and verification phase begins.

Photograph of ship with overlaid text showing narrowing MGO-biodiesel price spread. Biodiesel–MGO price spread narrows to $400–500/mt in Northwest Europe  

Bunker One says tighter spread creates opportunities for shipping companies pursuing decarbonisation targets.

Graphic for webinar 'Exmar: preparing to sail using ammonia as a marine fuel'. Exmar to discuss ammonia-fuelled vessel operations in webinar  

Shipowner will explore safety measures and partnerships for new dual-fuel ammonia carriers.

Aerial view of a container vessel. Skuld reports engine damage from CNSL biofuel blends amid rising alternative fuel adoption  

Marine insurer details operational challenges with biofuels, including FAME, CNSL and UCOME across member vessels.

Graphic for Exmar webinar titled titled 'Exmar: preparing to sail using ammonia as a marine fuel'. Event date: 15 April 2026. GRM and Bunker Holding to host webinar on Middle East war's impact on energy markets  

Webinar on 9 March will examine effects on crude oil, bunker and gas markets.

GENA Clean ammonia project pipeline chart, February 2026. Clean ammonia project pipeline reaches 145 MMT by 2034, but delivery concerns mount  

GENA Solutions reports 325 tracked projects, though over 70 have been frozen in 20 months.

Peninsula logo. Peninsula highlights supply chain strength amid Strait of Hormuz closure  

Marine fuel seller emphasises reliability as geopolitical disruption reshapes global bunker markets.

European Union member state flags. World Shipping Council backs EU maritime strategies but calls for faster trade simplification  

Industry body supports port security and decarbonisation measures while urging action on customs barriers.

Luke McEwen, Technical Director at Anemoi Marine Technologies. Anemoi and Lloyd’s Register call for unified approach to wind propulsion performance verification  

Anemoi Marine Technologies and Lloyd’s Register publish paper advocating alignment of verification methodologies.

Smyril Line's methanol-ready ro-ro following launch at its Longkou construction base in China in February 2026. Smyril Line's methanol-ready ro-ro launched in China  

First of two 3,300 lane-metre vessels floated out for Faroese operator.


↑  Back to Top