Sing Fuels Pte. Ltd. v. M/V Lila Shanghai (IMO 9541318)

Decision Date19 April 2021
Docket NumberCIVIL ACTION NO. 4:20-cv-58
Citation534 F.Supp.3d 551
Parties SING FUELS PTE. LTD., Plaintiff, v. M/V LILA SHANGHAI (IMO 9541318) her engines, freights, apparel, appurtenances, tackle, etc., in rem, Defendant.
CourtU.S. District Court — Eastern District of Virginia

Counsel for Plaintiff: Briton Paul Sparkman, Esquire, George Michael Chalos, Esquire, (Chalos & Co., P.C.), Ann Burke Brogan, Esquire, (Davey & Brogan PC).

Counsel for Defendant: Dustin Mitchell Paul, Esquire, Edward James Powers, Esquire, (Vandeventer Black LLP – Norfolk).

MEMORANDUM OPINION AND ORDER

Raymond A. Jackson, UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiff Sing Fuels Pte. Ltd.’s ("Sing Fuels" or "Plaintiff") claim alleging a maritime lien against the Defendant. M/V LILA SHANGHAI, in rem, ("the Vessel" or "Defendant"), and for an entry of judgment in its favor in the amount of $532,312.48, plus arrest costs in the amount of $6,790.44, pre and post judgment interest, and taxable costs. ECF No. 1. On February 23, 2021, the Court held a one-day bench trial. The Court, having heard the arguments, read the submissions of counsel, considered the evidence including court-room testimony and exhibits, and based on the following findings of fact and conclusions of law enters judgement for the Defendant.

I. PROCEDURAL HISTORY

On April 22, 2020, Plaintiff filed a Complaint seeking to arrest the M/V LILA SHANGHAI (the "Vessel"), pursuant to Supplemental Admiralty Rule C to enforce a maritime lien for the supply of necessaries in accordance with the Commercial Instrument and Maritime Lien Act ("CIMLA"), 46 U.S.C. § 31301, et seq. ECF Nos. 1, 3, 6. On April 28, 2020, the Owner of the Vessel. Autumn Harvest Maritime Co. ("Autumn Harvest"), through its Protection & Indemnity Club, posted a Letter of Undertaking to serve as substitute security and stand in the place of the arrested Vessel, ECF Nos. 11, 12. On February 5, 2021, the parties agreed to certain stipulated facts and agreed trial exhibits in advance of trial. ECF No. 31. After the one-day trial held on February 23, 2021, the Court ordered parties to submit post trial briefs within thirty (30) days. ECF No. 41.

II. JURISDICTION AND STANDING

The Court has subject matter jurisdiction based upon admiralty and maritime jurisdiction pursuant to 28 U.S.C. § 1333. An in-rem action against a vessel for assessment of a fine or penalty is within admiralty jurisdiction, as is a proceeding for forfeiture of property seized on the high seas or navigable waters for violation of federal law. 28 U.S.C.A. § 1333 ; 23 Fed. Proc., L. Ed. § 53:8. This case is an admiralty and maritime claim within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure in that it involves a claim for breach of a maritime contract. Defining the admiralty jurisdiction of the United States is a matter of federal law. See United States v. Utah , 283 U.S. 64, at 75, 51 S.Ct. 438, 75 L.Ed. 844 (1931) ; United States v. Holt State Bank , 270 U.S. 49, at 55-56, 46 S.Ct. 197, 70 L.Ed. 465, (1926) ; see also, United States v. White's Ferry Inc., Ferryboat Gen. Jubal Early , 382 F. Supp. 162, at 165 (D. Md. 1974). The Supreme Court long ago held that "[j]urisdiction ..., [a]s applied to a suit in rem for the breach of a maritime contract, it presupposes-First that the contract sued upon is a maritime contract; and second, that the property proceeded against is within the lawful custody of the court. These are the only requirements necessary to give jurisdiction. Proper cognizance of the parties and subject-matter being conceded, all other matters belong to the merits.... [T]he question of lien or no lien is not one of jurisdiction, but of merits." World Fuel Servs. Trading, DMCC v. Hebei Prince Shipping Co. , 783 F.3d 507, 512 (4th Cir. 2015) (citing The Resolute , 168 U.S. 437, at 439-440, 18 S.Ct. 112, 42 L.Ed. 533 (1897) ).

Here, Plaintiff is suing Defendant for an alleged breach in a maritime contract for the bunker fuel. See ECF No. 1; see also, Norfolk S. Ry. Co. v. Kirby , 543 U.S. 14, 24, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004) (stating that whether a contract is a "maritime contract," "depends upon the nature and character of the contract, and the true criterion is whether it has reference to maritime service or maritime transactions" (internal quotation marks and alteration omitted)). According to the Complaint, Plaintiff was and still is a foreign corporation registered in Singapore. ECF No. 1 at ¶ 4. Moreover, at the time the complaint was filed, Defendant, a 43692 gross tonnage bulk carrier, was or was soon be within the Eastern District of Virginia. See In re Millenium Seacarriers, Inc. , 419 F.3d 83, 94 (2d Cir. 2005) ("[S]ubject matter jurisdiction lies in the district court where the vessel or other res is located, but that jurisdiction does not attach until the vessel is arrested within the jurisdiction."). Thus, Defendant is subject to the jurisdiction and venue of the Court. Id. at ¶ 5.

III. STIPULATED FACTS

On February 5, 2021, the parties agreed to the following stipulated facts. ECF No. 31.

1. Plaintiff is a foreign corporation registered in Singapore with an address of 10 Anson Road, #16-09 International Plaza, Singapore 079903. Sing Fuels is, among other things, in the business of buying and selling marine fuel and gas oil, commonly known as "bunkers."

2. Plaintiff Sing Fuels also maintains offices at locations around the world, including an office in Athens, Greece.

3. Defendant in rem, M/V LILA SHANGHAI (hereinafter the "Vessel"), is a 43692 gross tonnage bulk carrier, built in 2011, with IMO No. 9541318 and International Call Sign of A8WC5.

4. Claimant Autumn Harvest is the owner of the Vessel.

5. The Vessel was chartered by Autumn Harvest to Bostomar Bulk Shipping Pte. Ltd. for the period of April 25, 2019 to December 31, 2019.

6. On July 10, 2019, 595.888 metric tons of 380 centistokes (cst) bunker fuel was delivered to the Vessel at or near Port Elizabeth, South Africa.

7. On July 12, 2019, 459.038 metric tons of 380 cst bunker fuel was delivered to the Vessel at or near Port Elizabeth, South Africa.

8. In total, 1049.29 metric tons of 380 cst bunker fuel (the "Bunker Fuel") was delivered to and accepted by the Vessel while at anchorage at or near Port Elizabeth, South Africa.

9. The Vessel was redelivered to Bostomar Bulk Shipping Pte. Ltd. on August 12, 2019.

10. The Vessel consumed the Bunker Fuel.

IV. THE COURT'S FINDINGS OF FACT

1. Autumn Harvest time chartered the vessel to Bostomar Bulk Shipping, PTE from April 25, 2019 to December 31, 2019. A time charter is controlled by the terms of a contract known as a charter party.

2. Bostomar Bulk Shipping subchartered the Vessel to Medmar Inc. Providenciales Turks & Caicos Islands, BWI ("MedMar Inc.").

3. The Charter Party contract contained several provisions. Line 16 of the charter party stated that "Charterers to have liberty to sublet the vessel for all or any part of the time covered by this Charter, but Charterers remaining responsible for the fulfillment of this Charter Party." Ex. 13 at 1. Line 39 provides "that whilst on hire the Charterers shall provide and pay for all the fuel except as otherwise agreed ..." Id. at 2. Line 77 provides that the Vessel's "Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers ..." Id. at 3. Moreover, line 86 provides that Charterers will "furnish the Captain from time to time with all requisite instructions and sailing directions." Id. at 4. Clause 9 provides "In no event shall Charterers procure, or permit to be procured, for the Vessel, any supplies/services on the credit of the Vessel or her Owners." Id. at p. 32. The Charter Party provides that "Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the owners in the vessel." Id. at Ln. 111, p. 5. The Charter Party also calls for arbitration of any dispute between the Owner (Autumn Harvest) and the Charterer (Bostomar) in Singapore. Id. at Ln. 107, pg. 5

4. Sing Fuels never reviewed the Charter Party agreement to verify the Owner and Charter entities and verify it was dealing with the actual subcharterer rather than an affiliate. Rasmussen 30(b)(6) Depo. at 34:14-23. The Sales Confirmation issued by Sing Fuels only states "MedMar Inc." without any other identifying details. Ex. 2 at 1.

5. Sing Fuels was contacted by Mr. Costas Mylonakis to order fuel for the Vessel. Rasmussen 30(b)(6) Depo. at 26:10-14. Mr. Mylonakis is an employee or agent of a company called Windrose Marine. Id. at 25:19-26:1. Sing Fuels dealt exclusively with Mr. Mylonakis for this transaction. Id. at 26:10-14. Sing Fuels never saw or reviewed any documentation establishing any agency relationship between Windrose and MedMar Inc. Id. at 26:15-17. Sing Fuels never communicated with MedMar Inc. directly. Id. at 26:5-9. Sing Fuels later learned that Mr. Mylonakis was also not communicating directly with MedMar, but, rather, was exclusively communicating with an entity called M.A.C. Shipping. Id. at 27:14-19.

6. After the bunker fuel order, a Sales Order Confirmation was sent electronically to Mr. Mylonakis. Ex. 2 at 1. The Sales Confirmation twice states that it is pursuant to "General Terms and Conditions of Bunker Fuel." Ex. 2 at 2 ¶ 6. No document entitled "General Terms and Conditions of Sale of Bunker Fuel" has ever been produced or identified in this case. Instead a document entitled "Terms and Conditions of Sale for Marine Fuels 2017" has been put forward by Sing Fuels. See Ex. 3 at 1. The Sales Confirmation also claimed the right for Sing Fuels to "amend the terms and conditions at any time without prior notice to buyer." Id. The Sales Confirmation further provided that it was "for charterer's account unless such particular knowledge is specifically brought to our attention and our written consent...

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3 cases
  • Sing Fuels Pte Ltd. v. M/V Lila Shanghai (IMO 9541318)
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • 1 d5 Julho d5 2022
    ...See J.A. 446 (Rasmussen's testimony); J.A. 502 (Lykouri's testimony); see also Witness List, Sing Fuels Pte. Ltd. v. M/V Lila Shanghai , 534 F. Supp. 3d 551 (E.D. Va. 2021) (No. 4:20-cv-00058-RAJ-LRL), ECF No. 41-1. Sing Fuels never called Mylonakis to testify, nor did it call anyone associ......
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    • United States
    • U.S. District Court — Eastern District of Virginia
    • 17 d3 Maio d3 2023
    ...was not an agent for the charterers, MedMar Inc., “and, thus, could not establish the maritime line on behalf of Plaintiff.” 534 F.Supp.3d 551 (E.D. VA 2021). The Court further found Defendant “demonstrated that there [was] no privity of contract between plaintiff and defendant which holds ......
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