‘Bad bunkers’ legal case pointed out the importance of transparency in the fuel supply chain


A legal case filed from the Singapore based Centurion Bulk Pte Ltd against NuStar Energy Services for alleged contaminated bunkers has identified, once again, the problems which might arise due to the lack of transparency in the supply chain.

In this case, Centurion blames NuStar Energy that the 540.86 tons of fuels lifted by its chartered vessel M/V San Antonio in March 2018 was contaminated and not fit for use according to clause 5 of the ISO 8217. Specifically, according to Centurion, in the fuel analysis conducted by FOBAS, fatty acids and several other oxygenated compounds were found which should not be part of marine bunker fuels. As a result, the vessel experienced severe engine problems, after part of the relevant fuels were consumed.

However, NuStar Energy, responding to this claim, said that the company is just an intermediary and does not manufacture, blend or process fuels and the relevant fuel was delivered to NuStar by Glencore in the same condition as the fuel delivered to Centurion by NuStar.

Therefore, according to NuStar, if Centurion succeeds to prove that the fuel was contaminated or off-spec then the actual fault should fall solely on Glencore’s arms since in this case it is obvious to NuStar that the fuel was also contaminated or off-spec when same was delivered to NuStar by Glencore. As a result, NuStar has requested the company to be released from the legal proceedings and the case to be resolved directly between Centurion and Glencore.

Situation is complicated since Glencore might decline, from its side, NuStar’s statements unless specific evidence is also provided to the court that the intermediate was not able to alter the characteristics of the fuel supplied.

This claim highlights the industry concerns about the lack of transparency in the movements of fuel oil on an end-to-end basis from its origin to consumption as well as the lack of transparency about the parties involved in the overall supply chain and their specific role. Situation might be completely different if Centurion was aware of the complete information in a timely manner and the claim would not be so complicated, if it existed in the first place. Given the circumstances and the lack of transparency, the courts will now undertake to clear the clouds of another legal case related with contaminated bunkers.


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