Barcliff, LLC v. M/V Deep Blue, IMO NO. 9215359

876 F.3d 1063
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 30, 2017
Docket16-17755
StatusPublished
Cited by23 cases

This text of 876 F.3d 1063 (Barcliff, LLC v. M/V Deep Blue, IMO NO. 9215359) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barcliff, LLC v. M/V Deep Blue, IMO NO. 9215359, 876 F.3d 1063 (11th Cir. 2017).

Opinion

BLACK, Circuit Judge:

The M/V Deep Blue is a pipe-laying vessel deployed in the Gulf of Mexico. In late 2014, the Deep Blue required a routine refueling. Its owner contacted a global marine fuel supplier. The supplier agreed to sell the fuel and deliver it to the Deep Blue at the Port of Mobile, Alabama. Rather than fulfill the order out of its own stocks, the supplier purchased the fuel from an affiliate. The affiliate, in turn, subcontracted with Plaintiff-Appellant Barcliff, LLC, d/b/a Radcliff/Economy Marine Services (Radcliff), a Mobile-based maritime fuel provider, to supply and deliver the fuel. Radcliff rendered performance and fueled the Deep Blue in November 2014.

This otherwise ordinary transaction ultimately became a problem for Rádcliff because, before any money changed hands, the global marine fuel conglomerate collapsed into bankruptcy. Radcliff found itself in the position of having supplied several hundred metric tons of fuel on the credit 'of' a now-insolvent counterparty. Radcliff asserted a maritime lien on the Deep Blue in a bid to recover directly from the ship, giving rise to this litigation.

After a bench trial, the district court determined Radcliff did not have a hen on the Deep Blue. Instead, a lien had arisen in favor of the global fuel supplier, and was duly assigned to ING Bank N.V. (ING), an intervenor in the suit. Radcliff appeals, and we affirm.

I. BACKGROUND

The significance of the contractual structure of the sale outlined above will become clear in the course of our analysis. Accordingly, we begin by introducing the parties to the transaction in relation to their contractual counterparties.

A. The Sequence of Contracts

1. Technip purchases bunkers from O.W. UK

Technip UK Limited (Technip) is a U.K.-based company and the owner of the Deep Blue. Since 2001, Technip has used the Deep Blue to lay pipe for oil rigs in the Gulf. The Deep Blue requires periodic refueling. Each time, Technip’s Scotland-based procurement team solicits bids from a handful of international fuel suppliers. The suppliers respond with price quotes, and Technip selects the most appropriate proposal.

O.W. Bunkers (UK) Limited (O.W. UK), also a U.K. entity, is a member of the O.W. Bunker Group, a global fuel supply conglomerate. On October 22, 2014, Technip sent out a request for quotations to O.W. UK and two other suppliers, seeking bunker fuel 1 for the Deep Blue in the Port of Mobile, Alabama. After reviewing the bids, Technip awarded the supply contract to O.W. UK, whose offer, at $824 per metric ton, was the least expensive. 2 Payment was to.be due within thirty days of delivery.

2. O.W. . UK purchases bunkers from O.W. USA

Now obligated to supply the Deep Blue in the Gulf of Mexico, O.W. UK entered into a second purchase and sale contract in order to procure the 850 metric, tons of bunkers it had agreed to sell to Technip. This time, O.W. UK was the buyer of the fuel and O.W. Bunker USA, Inc. (O.W. USA) was the seller. O.W. USA, a Houston-based sibling company of O.W. UK, agreed to sell 850 metric tons of bunker fuel to O.W. UK for $823.30 per tori, with delivery to be made to the Deep Blue in Mobile.

S. O.W. USA purchases bunkers from Radcliff

O.W. USA had agreed to sell O.W. UK 850 tons of fuel, but the fuel would not come from its own stocks. Rather, O.W. USA added a final link to the chain of contracts by retaining -Radcliff to supply the bunkers. Radcliff agreed to sell the fuel' to O.W. USA and deliver it to the Deep Blue at a price of $823 per ton, payment due within thirty days.

B. The Fueling

After the contractual arrangements were worked out, O.W. USA emailed Rad-cliff and put Radcliff in touch with the Chief Engineer of the Deep Blue, Ian La-dyka, to coordinate delivery. Radcliff communicated with Ladyka, rather than O.W. USA, from thatipoint on with respect to the logistics of the fueling.

Radcliff fueled' the Deep Blue outside the Port of Mobile on November 1, 2014. When the fueling was complete, Ladyka signed a bunker delivery certificate acknowledging that the 850 tons of fuel had been conveyed. Each seller sent an invoice to its respective buyer at their agreed prices: Radcliff to O.W. USA for the fuel sold to it and delivered to the Deep Blue; O.W. USA to O.W. UK; and O.W. UK to Technip.

C. ING Bank and the Collapse of the O.W. Bunker Group

The ship now fueled and having recommenced its operations, all that remained was settlement. Had everything gone according to plan, Technip would have paid O.W. UK $700,400 for 850 tons of fuel at $824 per ton; O.W. UK would have paid O.W. USA $699,805; and O.W. USA would have paid Radcliff $699,550. But none of these sums was remitted because the O.W. Bunker Group, the global marine fuel conglomerate of which O.W. UK and OW. USA were members, imploded. The Group’s parent company filed for bankruptcy in its native Denmark on November 7, 2014, one week after the Deep .Blue was fueled, and. concurrent bankruptcy cases were opened for its subsidiaries, including O.W. UK and O.W. USA, in jurisdictions around the world. Relevant here, O.W. USA’s proceeding commenced on November 13, 2014, in the District of Connecticut. See Chapter 11 Voluntary Petition, In re O.W. Bunker USA Inc., No. 14-51722 (Bankt*. D. Conn. Nov. 13, 2014). Thus, Radcliff remained unpaid.

An overview of the O.W. Bunker Group explains the involvement of ING in this case. The O.W. Bunker Group was founded in Denmark in 1980 and grew to be one of the world’s largest maritime fuel providers. The Group’s operations consisted of a physical supply division, which provided bunkers directly from the Group’s onshore stocks using its own fleet of ships, and a trading and reselling division, which bought fuel from third parties and sold it at a markup.

In December 2013, eleven months before the transaction at issue in this case, members of the O.W. Bunker Group, including O.W. UK and O.W. USA, entered into a $700 million revolving credit agreement with ING and a syndicate of other lenders to supply working capital. The credit was secured by O.W. Bunker Group’s receivables due from customers around the world pursuant to a security agreement governed by English law (the Security Agreement).

Over the course of 2014, the Group drew down nearly the entire facility, which empowered ING to take its security, namely, payments that third parties owed to members of the Group. ING began to do so pursuant to a cooperation agreement between ING and the bankruptcy estate of O.W. UK, by which ING became entitled to collect on O.W. UK’s outstanding receivables, with all recoveries to be paid into ING accounts. Among them was Teehnip’s unpaid invoice for the fuel supplied to the Deep Blue.

D. This Suit

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876 F.3d 1063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barcliff-llc-v-mv-deep-blue-imo-no-9215359-ca11-2017.