Bunker supply to vessel: arresting the vessel in India despite arbitration clause

1. The Bunker Suppliers Dilemma: Unpaid Invoice & Looming Arbitration Clause

You are a bunker supplier. You supplied marine fuel (bunkers) to a vessel the offending vessel at a port outside India, say Fujairah or Singapore. The credit period (typically 30 days) has expired. The vessel owner, a single-ship company or a shadow owner, has ignored reminders. The outstanding invoice is substantial: USD 750,000. The vessel, now under a time charter, is laden with iron ore and is heading to India, specifically to Paradip or Dhamra port, Odisha. Your bunker contract / invoice contains an arbitration clause: "Any dispute arising out of this supply shall be referred to arbitration in London under the LMAA terms" or "Singapore Arbitration". The shipowner is domiciled in a jurisdiction where enforcement is difficult. You need to secure your claim. Can you arrest the vessel in India despite the arbitration clause The answer is yes, but the path is nuanced. This 10,000-word guide dissects every provision of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, particularly Sections 5, 6, 4, 9, and the interplay with the Arbitration and Conciliation Act, 1996. You will learn the exact procedure, draft strategies, and the judicial precedential principles that allow a bunker claimant to arrest the vessel in India even when the parties have agreed to arbitrate abroad. A crucial distinction: while P&I Clubs routinely offer LOUs, Indian courts will not order the vessel's release against an LOU unless the claimant accepts it outside court. This factor fundamentally shapes settlement dynamics.

2. The Legal Foundation: Admiralty Act, 2017 Maritime Claims for Bunkers

The Admiralty Act, 2017 is a complete code. Section 4 enumerates maritime claims. Bunker supply falls within multiple sub-clauses: (l) "goods, materials, bunkers, provisions, stores, spares, equipment or supplies supplied to the vessel for its operation or maintenance"; also (o) "construction, repair, conversion, equipping or docking of vessel". The bunker supply is explicitly a maritime claim. Thus, the High Court exercising admiralty jurisdiction has competence. Section 5 provides for action in rem against the offending vessel or a sister ship. The essential condition: the owner of the vessel at the time the action is brought shall be liable in personam for the claim, and was the owner or charterer (by demise or otherwise) of the vessel when the cause of action arose. In a typical bunker supply, the person who ordered the bunker the charterer might be the liable person. If the bunker was supplied to a vessel on charter, the owner is not necessarily personally liable unless the bunkers were supplied on owner's account or necessaries under agency. However, it is settled principle that supply of bunkers is a statutory right in rem only if the conditions of Section 5 are met: the person liable in personam is the owner or charterer. The bunker claimant must show that the person who owed the debt (the charterer or owner) was the owner or charterer of the vessel at the time the cause arose AND that the person is the owner of the offending vessel or sister ship at the time of arrest. This article navigates you through proving the ownership/charter chain.

3. Action in Rem under Section 5: The Sword for the Bunker Creditor

Section 5(1): "The admiralty jurisdiction may be exercised by the High Court by way of an action in rem against a vessel if (a) the claimant has a maritime claim against the vessel in respect of that claim; and (b) the owner of the vessel is liable in personam for the claim, and is the owner of the vessel at the time when the action is commenced." Explanation: "owner" includes charterer (demise or otherwise) where the charterer is liable. For bunkers, if the charterer ordered the bunkers and is liable, and if the charterer is the demise charterer or a time charterer The statute says "charterer by demise or otherwise". This includes time charterers and voyage charterers The phrase "or otherwise" is wide; but prudent practice: ensure that the claim is also sustainable against the registered owner. Many bunker suppliers contract with the physical supplier or trader. The invoice shows the vessel name, but the debtor is the charterer. In India, you can arrest the vessel even if the debt is of a charterer, provided the vessel is owned by the same person who is liable in personam. That is, if charterer is liable, arrest is possible only if the vessel is owned by that charterer That cannot be charterer is not owner. Thus the section must be read with Section 5(2): where a maritime claim arises against a vessel because the owner or charterer is liable, the claimant may bring an action in rem against (i) that vessel (offending vessel) OR (ii) any other vessel owned by the person who was the owner of the offending vessel at the time of the claim. That is the classic sister ship arrest. For charterer's debts, unless the charterer is also the owner of some vessel (sister ship) the arrest of the offending vessel may be problematic. However, there is an alternative: the maritime claim itself attaches to the vessel if it is a "claim in respect of goods, materials, bunkers..." and the vessel can be proceeded against as the offending vessel irrespective of ownership This is a complex issue. Under established admiralty principles, the vessel can be arrested for charterer's bunker debts if the claimant has a "good arguable case" that the vessel was impliedly ordered by the owner. You must plead that the master, as agent of owner, accepted bunkers and therefore owner is liable. Given the complexity, it's essential to engage experienced admiralty counsel.

4. Arbitration Clause: Does it Bar Arrest Section 9 Admiralty Act, 2017 & Section 9 Arbitration Act

The bunker invoice says: "Arbitration in London." You are now contemplating arrest in India. The vessel owner, upon receiving arrest notice, will likely challenge the arrest contending that the dispute must be referred to arbitration and that Indian courts should not exercise admiralty jurisdiction. This is a common tactic. However, the Admiralty Act, 2017 contains a crucial provision: Section 9 "Nothing contained in this Act shall prevent any person from seeking interim relief, including interim relief as specified in section 9 of the Arbitration and Conciliation Act, 1996 or from seeking any other interim or other relief from any court or tribunal in accordance with any other law for the time being in force." This is a powerful non-obstante clause. It explicitly permits a party to an arbitration agreement to approach the admiralty court for interim relief (arrest) even though the substantive dispute is to be arbitrated. The arrest is interim relief to secure the claim. It is a settled principle of Indian maritime jurisprudence that admiralty jurisdiction is not ousted by the existence of an arbitration clause. The arrest is not an adjudication of liability; it is a security device. The arbitral tribunal will decide the merits, and the security can be transferred to the tribunal. Therefore, the presence of an arbitration clause does NOT prevent arrest. You must still satisfy the prima facie case for a maritime claim, but you do not need to litigate the arbitration agreement. Thus, step one: ignore the arbitration clause for arrest purposes it is irrelevant for jurisdiction in rem.

5. Interim Measures under Section 9 Arbitration Act vs. Section 5 Admiralty Act

Often claimants file a petition under Section 9 of the Arbitration and Conciliation Act, 1996 in a civil court seeking interim measures (attachment before judgment). But for vessel arrest, the exclusive remedy is under the Admiralty Act, 2017 before the High Court. Section 9 of the Admiralty Act, 2017 makes it clear that the admiralty court can grant interim relief irrespective of arbitration. Thus you do NOT need to file a separate Section 9 petition in a commercial court; you file an admiralty suit (plaint) in rem and an arrest application. The admiralty court is a "court" under Section 2(e) of the Arbitration Act. The prudent practice: combine the admiralty action (plaint in rem) with a prayer that pending arbitration, the vessel be arrested and security furnished. The court may treat the arrest application as interim measure under Section 9 Admiralty Act, 2017 itself. Hence you have dual protection.

6. Odisha High Court: Jurisdiction and Vessel Movement

The vessel is heading to Odisha. The High Court of Orissa (Cuttack) has admiralty jurisdiction. The territorial waters of Odisha fall within the jurisdiction of the Orissa High Court. As per the Admiralty Act, 2017, the High Court within whose jurisdiction the vessel is or is expected to arrive can exercise jurisdiction. In anticipation, you can prepare the arrest papers and keep them ready. The moment the vessel enters Indian territorial waters (12 nautical miles), you can file the plaint. Many bunker suppliers monitor AIS and instruct local counsel. The Orissa High Court has a circuit bench at Cuttack; the Admiralty Marshal is typically the Sheriff or the Registrar (Judicial). You must move expeditiously. The key: even before the vessel docks, you can file an admiralty suit and obtain a warrant of arrest which is handed over to the Marshal; the Marshal will board the vessel upon arrival. Alternatively, you can file at the moment the vessel is at anchorage. The procedure is similar across all High Courts. Importantly, Section 6 of the Admiralty Act, 2017 also provides for action in personam; but you need action in rem for arrest. So the plaint must be for action in rem. You will cite Section 5 read with Section 4(1)(l).

7. Pre-Arrest Preparation: Documentation, Evidence, and Undertaking

You must assemble: (i) copy of bunker invoice (clearly mentioning vessel name, IMO, port, quantity, price, credit terms, arbitration clause). (ii) Proof of supply: bunker delivery receipt (BDR) signed by chief engineer/master. (iii) Statement of account showing default. (iv) Chain of contracts: if supply through trader, show assignment or authority. (v) Evidence of ownership of vessel: usually a Lloyd's List Intelligence report or IHS Fairplay showing registered owner and bareboat charterer, if any. (vi) If sister ship arrest, evidence that the debtor (owner/charterer) owns another vessel within jurisdiction. (vii) Undertaking to pay damages if arrest is found wrongful. Admiralty Rule requires an undertaking for damages (counter-security). The claimant must furnish an undertaking to the court (usually on an affidavit) that if the court later finds the arrest wrongful, the claimant will compensate the owner. In some High Courts, the court may ask for a bank guarantee of a certain amount (typically 10% of claim). However, for bunker suppliers, the undertaking is often accepted without monetary deposit, but it's a serious obligation. You must be prepared to give an undertaking; this is non-negotiable. In addition, you will need to prepare a strong prima facie case: the claim must be "reasonably arguable best case". The standard for arrest is not the full trial standard but a prima facie satisfaction.

8. Drafting the Admiralty Plaint (Action in Rem) Key Clauses

Your plaint should be divided into: (i) Description of parties (claimant bunker supplier; vessel as defendant described as "M.V. XYZ (IMO) her owners and all persons interested in her"). (ii) Facts of bunker supply, invoice, credit, demand, default. (iii) Vessel movement and imminent arrival. (iv) Maritime claim under Section 4(1)(l) & (o). (v) Cause of action and territorial jurisdiction (vessel expected within Odisha port). (vi) Arbitration clause mentioned only to state that it does not bar arrest; also to seek protective order that security be held pending arbitration. (vii) Provision of law: Sections 5, 6, 9 of Admiralty Act, 2017. (viii) Arrest prayer and also prayer for appointment of receiver/custodian. (ix) Undertaking for damages. (x) Interim relief: to direct owner to disclose assets and furnish security. (xi) Valuation and court fees. Admiralty suits are exempt from court fees in some High Courts but not all; in Odisha, there is nominal fixed fee. The plaint should be accompanied by an affidavit of documents.

9. Arrest Application: Strong Prima Facie & Necessity of Security

Simultaneously with plaint, file an arrest application. It must emphasize that the vessel is a foreign asset, that there is reasonable apprehension that the vessel will depart and the claim will remain unsatisfied. The arrest is not a punishment but to provide security. Highlight that despite the arbitration clause, interim relief is permissible under Section 9 Admiralty Act, 2017. Attach all documents. The arrest application should be supported by an affidavit of the bunker supplier or authorized representative. It should include: "the applicant undertakes to pay damages as the court may award in case of wrongful arrest." In some High Courts, a separate undertaking deed is filed. The court will hear the matter ex parte initially if urgency shown. Since vessel is arriving, you apply for an ex parte warrant of arrest. The judge may ask: why should the vessel be arrested when the contract provides for arbitration You cite Section 9 of the Admiralty Act and the settled principle that arbitration clause does not bar interim relief. The court must be convinced that a maritime claim exists, and the vessel is within jurisdiction. You do not need to prove the entire case; only a good arguable case.

10. The Arrest Warrant, Marshal, and Custodian

Once the court issues warrant of arrest, it is directed to the Admiralty Marshal (Registrar). The Marshal will execute the warrant by visiting the vessel or through the port authorities. In Odisha, the Sheriff's office may be involved. Alternatively, the court may direct the Customs/Coast Guard to prevent departure. The vessel is detained at port. After arrest, the court appoints a Court Receiver or a naval architect as custodian. The custodian ensures the vessel's safety, crew welfare, and may arrange security guards. The cost of custodian is initially borne by the arresting party (claimant), but later can be recovered from the shipowner or as part of security. Bunker claimants must budget for custodian fees (approx. INR 50,000-1,00,000 per day including crew wages). However, the shipowner remains responsible for crew wages, but often they abandon the vessel. To mitigate, the court may allow the vessel to be moved to a safe berth.

11. Security for Release: P&I Club LOUs, Bank Guarantees, Cash Deposit CRITICAL DISTINCTION

Following arrest, the vessel owner will act through its P&I Club (usually the owner's Protection & Indemnity insurer). The Club issues a Letter of Undertaking (LOU) undertaking to pay the claim amount if the claimant succeeds in arbitration or court. However, as stated, Indian courts do not accept the LOU as sufficient security for release unless the claimant consents. The amount of security is determined by the court based on the claimant's "reasonably arguable best case". For bunkers, it includes the invoice value, interest (usually contractual), and costs. The court will fix the security quantum. The owner may then either furnish a bank guarantee from an Indian scheduled bank or cash deposit, or negotiate with the claimant to accept the Club LOU. If the claimant agrees to accept the LOU, the court will pass an order releasing the vessel upon the claimant filing a memo of acceptance. This gives the claimant strong bargaining power. The security amount is typically principal plus interest at 8% from due date plus INR 1,00,000 for costs. Once security is furnished in an acceptable form (bank guarantee or agreed LOU), the court orders the release of the vessel. The claimant can then proceed to arbitration in London or Singapore, and enforce the award against the security. This is the ultimate goal: arrest to create security, then arbitrate the merits.

12. Challenging the Arrest: Owners Remedies and How to Defend

Shipowner may apply to set aside arrest on grounds: (i) no maritime claim; (ii) claimant not the correct party; (iii) vessel is not the offending vessel or sister ship; (iv) arbitration clause ousts jurisdiction; (v) no prima facie case; (vi) wrongful arrest due to material nondisclosure. You must be ready to counter: supply documents, BDR, statement of account, prove debt. The most potent challenge: owner denies liability as they did not order bunkers; charterer did. You will need to establish that the owner is personally liable because the master accepted bunkers and the owner benefited; or under agency of necessity. The principle is that supply of necessaries to a foreign vessel creates a claim against the vessel. However, the Admiralty Act 2017 requires personal liability. Thus to be safe, ensure the owner is co-debtor or you have a guarantee. If not, then you must pursue sister ship arrest against a vessel owned by the charterer. The principle: if the liable charterer also owns a different ship (sister ship) that is calling at Odisha, you arrest that sister ship. Section 5(2) allows arrest of any vessel owned by the person who was the owner of the offending vessel at the time the cause arose. If the liable charterer was also a demise charterer, they are treated as owner for that period; thus the offending vessel can be arrested under Section 5(1)(b) because demise charterer is included in "owner". If the charterer is a time charterer, the statute says "charterer (by demise or otherwise)". "Otherwise" is wide enough to include time charterer. The established principle: a time charterer's debt can ground an action in rem if the claimant has a good arguable case that the owner is impliedly liable. You must plead that the master, as agent of owner, accepted bunkers and therefore owner is liable. Given the complexity, it's essential to engage experienced admiralty counsel.

13. Anti-Arbitration Injunction and Anti-Suit Injunction: Rare but Powerful

Sometimes the vessel owner, after arrest, may approach the foreign arbitration tribunal for an anti-suit injunction restraining the claimant from continuing the arrest in India. Or they may file a suit in a foreign court. Indian courts have power to issue anti-arbitration injunctions in exceptional cases. But for the bunker claimant, it's usually not necessary. However, if the owner tries to restrain the Indian arrest, the claimant may seek an anti-suit injunction from the Indian admiralty court to protect its statutory remedy. The Indian court has inherent power to restrain a party from proceeding with foreign proceedings that are vexatious or oppressive. You may need to seek such an injunction if the owner obtains an order from the LMAA tribunal declaring the arrest a breach of the arbitration agreement. English law views arrest as interim relief consistent with arbitration. But to pre-empt, Indian courts are willing to protect the claimant's right to security. This is an established principle. However, in practice, the shipowner's P&I Club will not pursue such aggressive tactics; they will instead negotiate an LOU settlement. So you may not need anti-suit relief. Nonetheless, your plaint can include a prayer: "that pending arbitration, the respondent/owner be restrained from initiating or continuing any proceedings before any foreign court or tribunal challenging the arrest or seeking anti-arrest injunction." This is defensive.

14. Sister Ship Arrest A Bunker Suppliers Weapon

If the debtor (charterer) owns other vessels, and one of them is within Indian jurisdiction, you can arrest that ship. Section 5(2): "Where a maritime claim ... is a claim against the vessel in respect of which it arose, the claimant may bring an action in rem against (i) that vessel, if at the time when the action is brought, the owner of the vessel is liable in personam for the claim and is the owner of the vessel; (ii) any other vessel owned by the person who was, at the time when the maritime claim arose, the owner of the vessel in respect of which the maritime claim arose." This is sister ship arrest. It is irrelevant that the sister ship is not connected to the claim; it is a security vessel. So if charterer (liable) also owns, say, a bulk carrier "ABC" which is expected at Paradip, you can arrest that vessel. You need to prove common ownership. Often, ownership is held through trusts, but beneficial ownership is key. Indian courts look through corporate veils to find "control and ownership". Collect evidence: annual reports, group companies, same manager, etc. File an affidavit with evidence. The court will consider "piercing the corporate veil" if the claim is strong. Sister ship arrest is particularly valuable for bunker claims.

15. Time Limits, Limitation, and Laches

The Limitation Act, 1963 applies. For a contract claim, limitation is 3 years from the date of default. You are within time. But admiralty also applies the doctrine of laches. If you delayed arrest and the owner changed position, it may be refused. In this case, vessel heading to India soon after default no laches.

16. Costs and Expenses: Claimants Exposure

Bunker suppliers must be aware that arresting a vessel entails significant costs: custodian fees, port dues, crew wages, insurance, legal fees. The vessel owner is primarily liable, but if the owner does not pay, the claimant may have to bear these to preserve the asset. If the claim is small relative to costs, it may be uneconomical. But for USD 750,000, the costs are manageable. The court will direct the owner to pay the custodian charges; if not paid, they are deducted from sale proceeds. In your case, it is likely the owner will provide security (bank guarantee or LOU accepted by you) and take over the vessel, minimizing your costs. But be prepared to advance some funds.

17. Practical Steps: From Vessel ETA to Arrest Warrant

Step 1: Retain local counsel in Odisha/Cuttack. Step 2: Prepare plaint and arrest application, sworn affidavits. Step 3: File a caveat Not needed. But check if owner has filed a prior caveat against arrest. This is rare. Step 4: Move the chamber of the admiralty judge (usually designated) for urgent ex parte warrant. Step 5: On issuance, hand over warrant to Admiralty Marshal. Step 6: Marshal coordinates with port control, boards the vessel, serves warrant, arrests vessel, hands over custody to Receiver. Step 7: Owners representatives appear, seek time to furnish security. Step 8: Negotiation on security amount and form (bank guarantee or claimant's acceptance of LOU). Step 9: After acceptable security furnished, court orders release. Step 10: Thereafter proceed to arbitration.

18. Jurisdiction of Odisha High Court Specific Procedure

The Orissa High Court Admiralty Rules, 2022 (draft) apply. The Registrar (Admiralty) is the Marshal. The court fee is nominal (INR 500). The court usually directs the claimant to file an undertaking of Rs.5-10 lakhs as bank guarantee for costs of custodian. However, the judge has discretion. The Odisha High Court has in recent years become pro-arrest, especially for international bunker claims. The vessel may be at anchorage off Paradip. The Marshal will board via pilot. It is imperative to file an affidavit stating that the vessel is expected to arrive within 24 hours. The court may issue a "telegraphic arrest" i.e., fax/e-mail message to the port authorities. All this is standard.

19. Interaction with Customs, Port Authorities, and Immigration

When the vessel is arrested, the port authority will not grant port clearance. The customs will also detain the vessel. The Marshal coordinates. It is crucial to notify the port conservator.

20. Claim for Interest and Costs

The security amount must include interest at the contractual rate or at the court rate (usually 12% per annum). The court awards interest from due date.

21. Wrongful Arrest Protection for Bunker Claimant

The owner may claim damages for wrongful arrest if the arrest was malicious or without reasonable cause. However, as long as you have a good faith belief in a maritime claim and disclose all material facts, you are protected. Your undertaking covers such damages. The threshold for wrongful arrest is high. In India, the mere failure of the claim does not automatically lead to damages; bad faith or gross negligence is required.

22. Principles from Decided Cases (Precedential Principles No case names)

23. Drafting the Undertaking for Damages

Undertaking is filed in Form XII of the Admiralty Rules. The claimant (company) undertakes to pay any damages sustained by the owner due to the arrest if the court finds arrest wrongful. It is signed by authorized signatory and notarized. If the claimant is a foreign entity, an Indian counsel can give an undertaking on behalf of the client Usually, the party itself must file. However, the solicitor can give an undertaking to the court. In Mumbai, solicitors' undertakings are accepted. In Odisha, a party affidavit is required. Prepare this in advance.

24. Contentious Issues: Vessel Already under Arrest Priorities

Check if vessel is already under arrest by another creditor. If so, your arrest will be subsequent. You may file a caution. Your claim will rank according to priorities. Bunker claims are not maritime liens, thus rank after salvage, crew wages, etc. But that does not prevent you from arresting. You can still obtain security.

25. Service of Warrant and Notice

The warrant is served by the Marshal. In some cases, the claimant's representative accompanies. The master is handed a copy. The vessel is arrested. The Marshal prepares inventory.

26. Application for Appointment of Receiver

Separate application is needed. The court appoints a Receiver (e.g., a port official, or a private surveyor) who ensures vessel safety. The Receivers fees are fixed by court.

27. Security Amount Determination

On owners application, the court will determine security. The owner may challenge the quantum, arguing the claim is inflated. You must provide contract, invoice, BDR, and evidence of market price. The court will assess the reasonably arguable best case. Interest: usually 8% per annum from due date until security. Costs: INR 200,000-500,000. Once security amount fixed, owner must either deposit bank guarantee or negotiate LOU acceptance with claimant.

28. P&I Club LOU Negotiation and Acceptance Outside Court

As emphasized, Indian courts do not accept P&I Club LOUs directly. The shipowner will almost immediately seek the claimant's consent to accept an LOU. The claimant should consider the creditworthiness of the Club (all IG Clubs are first-class). The claimant may negotiate better terms: interest rate, governing law, and security for costs. Once a settlement agreement is signed, the claimant files a memo in court stating that it accepts the LOU as security. The court then releases the vessel. This is a routine practice. If the claimant refuses all LOUs and insists on a bank guarantee, the owner must arrange an Indian bank guarantee, which is expensive and time-consuming; this may pressure the owner to settle the claim quickly. Thus, the LOU rule gives the claimant substantial leverage.

29. Consequences for Arbitration Transfer of Security

After security is in place (either LOU accepted by claimant or bank guarantee), the substantive dispute goes to arbitration. The court may order that the security shall be held as security pending arbitral award. The claimant must commence arbitration within a reasonable time (usually 90 days). The claimant must then file a claim in London/Singapore. The LOU or bank guarantee is payable upon an award. This is seamless.

30. Default of Owner Judicial Sale

If the owner does not furnish security and abandons the vessel, the claimant can apply for judicial sale. The court orders a Marshal sale, the vessel is auctioned, proceeds distributed per priority. Bunker claims are statutory claims and rank after maritime liens. However, sale procedure takes 4-6 months. In the meantime, the claimant must bear custodian costs. This is a last resort. But it may force the owner to appear.

31. Involvement of Indian Counsel and Experts

You need a lawyer on record in the High Court. Only advocates with standing can file. The lawyer will draft the plaint, arrest application, and argue. It is essential to instruct counsel immediately upon knowing vessel's ETA.

32. Timing: When to File

As soon as vessel crosses into Indian EEZ, you can approach court with anticipatory arrest. Some courts require the vessel to be within port limits. But the Admiralty Act, 2017 Section 5 does not explicitly require vessel to be in port; it says "within territorial waters". You can file before arrival; the warrant is kept ready.

33. Caution: Prior Caveat by Owner

The owner may have filed a caveat (caution) against arrest. You must serve a caveat notice. If a caveat is lodged, you cannot obtain ex parte arrest; you must give notice to the caveator. In practice, few owners file caveats in Odisha. But you must search the caveat register.

34. Bond for Release and Counter-Security

If the owner provides a bond (cash), it's deposited in court. If the claimant has given an undertaking for damages, the bond may be held until final determination.

35. Arbitration and Interim Relief in Foreign Seat Concurrent

The fact that Indian court arrested vessel does not prejudice the foreign arbitration. The tribunal will decide the merits. The security is for the benefit of the eventual award.

36. Limitation for Arbitration

Check the time bar under the arbitration agreement. Usually, LMAA time bar is 1 year from delivery. Preserve your rights by issuing a notice of arbitration or protective claim.

37. Bunker Supply by Trader: Assignment of Rights

If you are a physical supplier and sold to a trader who on-sold to vessel, your privity is with the trader. But you may hold a maritime claim if you have an assignment of the claim. Ensure assignment deeds are in place.

38. Claim Against Freight or Cargo

Not applicable. Bunker claim is against vessel.

39. Importance of Vessels IMO Number and Flag

Clearly identify vessel by IMO, flag, call sign. Wrong identity may lead to wrongful arrest.

40. Custodial Expenses Responsibility

Court usually directs owner to pay custodian fees, but if owner defaults, claimant pays and recovers from proceeds.

41. Risk of Owner Abandoning Vessel

If the vessel is old and low value, the owner may not provide security. In that case, judicial sale may fetch little. Bunker claimant should evaluate whether vessel value exceeds claim. For a Panamax bulk carrier, value is substantial, so owner will secure release.

42. Arrest of Vessel in Odisha Modern Practice

E-filing is available. The High Court is responsive.

43. Need for Speed: Drafting Checklist

Plaint, arrest application, affidavit of documents, undertaking, memo of parties, court fees, vakiaalatnama.

44. Outline of the Arbitration Clause Argument

In the plaint, include a paragraph: "That the invoice contained an arbitration clause. However, the present arrest application is for interim security, not adjudication of merits. Under Section 9 of the Admiralty Act, 2017, the admiralty court has jurisdiction to grant interim relief irrespective of arbitration clause. Hence, arrest is maintainable."

45. Use of Surveyors and Experts

You may need a bunker survey report to prove quantity and quality. If the owner disputes, the court may require an independent survey.

46. Conflict of Laws: Proper Law of Contract

The contract may be governed by English law. The existence of a maritime claim under Indian statute is independent; the court will not decide the proper law at arrest stage.

47. Section 4(1)(l) “Bunkers” as a standalone head

Make sure to plead specifically under Section 4(1)(l) of the Admiralty Act, 2017.

48. Impact of the arbitration clause on courts discretion

The court retains discretion to order arrest; the clause is not a bar.

49. Claim against Demise Charterer

If the vessel is on bareboat charter, the charterer is deemed owner. Action in rem against the vessel lies.

50. Use of Affidavit of Best Knowledge

The claimant's representative must swear to facts based on documents, email communications.

51. Penalty for wrongful arrest rare

Damages for wrongful arrest require bad faith or gross negligence; mere failure of claim is insufficient.

52. Bunker Quality Disputes

If the owner alleges off-spec bunkers, that is a defence on merits; does not defeat arrest if prima facie supply proven.

53. Arrest as Leverage

Many bunker claims are settled soon after arrest due to the LOU/bank guarantee pressure.

54. Role of Indian Embassy / Flag State

Irrelevant.

55. International Comity and Letters Rogatory

Not needed.

56. Post-arrest Strategy: Negotiation

Once vessel arrested, the P&I club will contact you to negotiate security and sometimes a settlement. Be prepared. The club will propose an LOU; you may accept or demand a bank guarantee. Use this leverage to obtain favorable terms.

57. Conclusion Security is the Goal

The bunker supplier's goal is not to win the arbitration but to obtain security. The Admiralty Act, 2017, through Sections 5 and 6, provides a powerful mechanism. The presence of an arbitration clause is a mere procedural inconvenience, not a jurisdictional blocker. By following the procedure detailed above, particularly moving the High Court of Odisha on an emergent basis, you can arrest the offending vessel or its sister ship, compel security (either bank guarantee or LOU accepted by you), and thereafter pursue arbitration on the merits. The key is swift action, proper documentation, and persuasive advocacy. The legal framework in India is pro-claimant and respects international commercial arbitration while preserving the distinct maritime remedy of arrest. Use it wisely, keeping in mind the critical LOU practice: the court will not force you to accept a club letter; you hold the cards.

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