Finansbanken ASA v. Gts Katie (The), 2001 FCT 1316

Date: 20011129

Docket: T-2009-00

Neutral citation: 2001 FCT 1316

ADMIRALTY ACTION IN REM AGAINST THE VESSEL "GTS KATIE" AND IN PERSONAM AGAINST THIRD OCEAN MARINE NAVIGATION COMPANY L.L.C.

BETWEEN:

                                                             FINANSBANKEN ASA,

                                            a body politic and corporate of Oslo, Norway

                                                                                                                                                          Plaintiff

                                                                                 and

                                                         THE VESSEL "GTS KATIE",

                                                  THE OWNERS AND ALL OTHERS

                                       INTERESTED IN THE VESSEL "GTS KATIE",

                                             THIRD OCEAN MARINE NAVIGATION

                                                  COMPANY L.L.C., a body politic and

                                                corporate of Anapolis, Maryland, U.S.A.

                                                                                                                                                    Defendants

                                                            REASONS FOR ORDER

RICHARD MORNEAU, ESQ., PROTHONOTARY:

[1]                 Pursuant to the Order of this Court dated October 3, 2001, these reasons for order deal with the claim for priority of Macoil International S.A. (Macoil).

The Facts

[2]                 Macoil is a Monrovian company, having offices in Greece. It has no offices in Egypt.

[3]                 The bunkers supplied by Macoil were ordered by Andromeda.

[4]                 It is common ground that Andromeda was the charterer of the "GTS Katie" and not its owner.

[5]                 Andromeda is based in Canada.

[6]                 The bunkers were supplied in Gibraltar; Gibraltar is not in Egypt.

[7]                 The "GTS Katie" is owned by Third Ocean Navigation Co., based in United States, and is registered in St. Vincent in the Grenadines.

[8]                 The only reason for Macoil to claim that the contract is governed by the law of Egypt is a mention in the third to last line of the terms appearing at the back of the bunker invoice, stating that the agreement is to be determined by the maritime law of Egypt.

[9]                 The bunker delivery receipt, signed by the master of the vessel, does not contain such a notation.

[10]            However, the bunker delivery receipt does clearly state that the vessel is under charter and that the charterer has no right to incur or subject the ship to maritime liens.

[11]            The bunker invoice was sent to Andromeda, the charterer, and was never sent to the owners.

[12]            There is no evidence that Andromeda purported to contract on behalf of the owners, that they had authority from the owners to act on their behalf, that Macoil had any dealings with the owners or their representatives, or that the owners were ever aware of the intention of Macoil of making the supply subject to Egyptian law, let alone of the owners authorizing same.

Analysis

[13]            I am of the view that the claim of Macoil for priority over the mortgage creditors shall be refused. In coming to this conclusion, I accepted the following written representations of the Plaintiff:

16.           The mere mention of a choice of law of a country which has absolutely no connection with the supply of bunkers, in a contract to which the Owner is not a party and to which it has not only not consented but specifically declared that it would not be bound, can not, under any circumstances, serve to create a maritime lien against the vessel.

                                Tetley, W., "Maritime Liens and Claims", 2nd edition, Blais, Canada, 1998, at p. 563 and following.

17.           As far as the Owners were concerned, they accepted to receive on board bunkers ordered by the Charterer, notifying the supplier that they would not be liable for that contract, in a port were such supply does not give rise to a lien against the vessel. The Owners are entitled to expect and rely on the fact that the proper law applying to this acceptance of the bunkers on board the ship will be that of the port where the bunkers are received, and no other.

18.           The Plaintiff submits that Canadian conflict of law rules must be applied in order to determine the proper law of the supply, as it may be opposable to the Owners. In determining whether the choice of law clause in the contract is opposable to the Owners and can serve as a guide to establishing the proper law of the supply as against the Owners, the Plaintiff submits that the law of the place where the contract was made is applicable. As the contract was made in Gibraltar, and as the law of Gibraltar has not been proven to be different to the law of Canada, it is the law of Canada that must be applied. Under Canadian law, a Charterer may not bind the Owner to any contract of supply of bunkers without the Owners' consent.

[14]            Considering the above conclusion, I do not have to evaluate whether under Egyptian law a valid maritime lien has been created in favour of Macoil in the circumstances of the case at bar.

[15]            Consequently, Macoil's claim for priority over the mortgage creditors is denied, with costs to the Plaintiff and to Lloyd Werft Bremerhaven in accordance with Tariff B, including costs of expertise in the case of the Plaintiff.

[16]            An order shall issue accordingly.

Richard Morneau      

Prothonotary

Montreal, Quebec

November 29, 2001

                          FEDERAL COURT OF CANADA

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

T-2009-00

ADMIRALTY ACTION IN REM AGAINST THE VESSEL "GTS KATIE" AND IN PERSONAM AGAINST THIRD OCEAN MARINE NAVIGATION COMPANY L.L.C.

Between:

FINANSBANKEN ASA, a body politic and corporate of Oslo, Norway

                                                                              Plaintiff

and

THE VESSEL "GTS KATIE",

THE OWNERS AND ALL OTHERS INTERESTED IN THE VESSEL "GTS KATIE",

THIRD OCEAN MARINE NAVIGATION COMPANY L.L.C., a body politic and corporate of Anapolis, Maryland, U.S.A.

                                                                        Defendants

PLACE OF HEARING:Montreal, Quebec

DATE OF HEARING:November 19, 2001

REASONS FOR ORDER OF RICHARD MORNEAU, ESQ., PROTHONOTARY

DATED:November 29, 2001

APPEARANCES:

SOLICITORS OF RECORD: