Bunker Claims Deadlines: Timed Out?

Post-2020, there will be fuel blending to meet the global 0.50% Sulphur content requirements. That brings the issue of fuel quality claims sharply into focus.

An estimate is that at least one out of every 140 bunker provisions causes vessel machinery damage and a central part of the disputes involves contractual time deadlines to raise quality claims.

What happens when there is a quality dispute over sulphur content where the supplier has certified on the BDN that the vessel can burn the bunkers compliantly and then the bunkers turn out to be off-spec?

Which time deadline for notice should the courts enforce?

Reputable buyers generally might want longer deadlines to accommodate their vessel operations and for suppliers and traders, to set a shorter quality claims reporting deadline may impose greater costs and risks on their customers.

First, buyers should assure they have agreed to those contractual quality time limits. Next, another question is whether the maritime contract includes U.S. General Maritime Law.

Choice of law rules vary throughout the world, however, and there is no ‘industry standard’ for the number of days to report a quality dispute. Terms range from as short as 7 days up to 30 days.

Customers should be focused on the quality reporting time in its contract with its counterparty and the only way to determine whether a fuel complies with MARPOL standards is to consume the fuel.

Customers have to decide whether to modify vessel fuel handling procedures to enable test burns soon after loading or to rely solely on lab test results or onboard testing. The quality must be measured as close to loading aboard the vessel as possible.

Suppliers and traders should re-focus on their sales terms’ quality dispute reporting deadlines to anticipate the coming disputes.

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