A Protective Method for the Vessel Owners Following the Collapse of O.W. Bunker: The Second Circuit Approval of Interpleader Actions in Hapag-Lloyd Aktiengesellschaft V.U.S. Oil Trading LLC

Abstract

The collapse of O.W. Bunker has led to a frenzy of actual and threatened vessel arrests and delays, and vessel owners have faced demands for double payment. The split decisions made by the court across the world illustrate the difficulties arising from a bankruptcy in which contractual claims and maritime lien claims interact. The United States Court of Appeals for the Second Circuit affirmed the Southern District of New York’s decision and held that the in person am claims against the vessel owners and the in rem claims against the vessels were merely alternative procedural devices to obtain the same relief and therefore the court has subject matter jurisdiction over the Interpleader Actions. This was the first time the Second Circuit have encountered the issue of whether jurisdictions lies interpleader involving in rem actions. The courts addressed the apparent conflicts among bankruptcy law, maritime law, and interpleader relief. For vessel owners, the decisions in all such cases are notable because it means that vessel owners can utilize interpleader actions to protect themselves from multiple payments and from the risk of ship arrest arising from the O.W. Bunker collapse. Also, this development is important because the court equitably applied the personification doctrine, a choice that remains consistent with precedent and honors the purpose of interpleader actions.