These two motions, heard together on account of common questions of law, were brought by the defendants in two admiralty suits for vacating the arrests of their respective vessels. Both cases arose in the context of the global collapse of the OW Bunker group, and concerned the right of physical bunker suppliers to arrest vessels when their contractual counterparty was an intermediary non-physical supplier that had become insolvent, rather than the vessel owner directly.

In the first matter, the Valor had been on time charter to Bryggen Shipping International AS (Bryggen), which had ordered bunkers through a chain of non-physical suppliers culminating in OW Bunker Middle East DMCC (OW Bunker), which in turn contracted with a Singapore group company of the plaintiff, Gulf Petrochem Energy Pvt Ltd (Gulf Petrochem), as physical supplier. Gulf Petrochem sought to enforce its unpaid claim of USD 67,458.87 against the vessel by arrest, relying on a clause in its standard terms purporting to create a maritime lien on the receiving vessel. The owners contested the arrest on the ground of lack of privity between Gulf Petrochem and the vessel owners.

In the second matter, the Tradewind was not on time charter at the relevant time, and bunkers had been ordered directly by the vessel's managers, Pendulum Ship Management Inc (Pendulum), from OW Bunker Malta Ltd, which in turn contracted with the plaintiff, Drop Energy Services Ltd (Drop Energy). The physical supply was made by a further party, Fos Petroleum SA (FOS), paid by Drop Energy. Drop Energy claimed as assignee of FOS's right to payment. The owners again contested the arrest for lack of privity.

The Court identified two common questions: first, whether underlying liability in personam against the shipowner is a prerequisite to arrest for a maritime claim that does not give rise to a maritime lien, and whether privity of contract is therefore required; and second, what the correct standard of prima facie inquiry is on an application for arrest or for vacating arrest, whether it is limited to the plaint alone (as under O 7 r 11 of the Code of Civil Procedure 1908) or whether the Court may also look to the defence.

Held: The motion in respect of the Valor is made absolute, arrest vacated and security to be returned. The motion in respect of the Tradewind is dismissed, arrest upheld, with the defendant permitted to provide cash security.

On the requirement of underlying liability in personam, the Court confirmed that, except in cases of maritime liens, an action in rem is in substance an action against the shipowner, and there must be a link between the person liable in personam and the ship at two critical times: when the cause of action arose (the person liable must then have been the owner or demise charterer of the relevant ship) and when the action is brought (that person must then be in possession or control as beneficial owner or demise charterer). A time charterer is neither the servant nor agent of the shipowner, and in the absence of holding out, orders placed by a time charterer do not bind the owner's personal credit. The physical supply of bunkers does not, of itself, create privity with the owner.

On the standard of inquiry, the Court held that the plaintiff must have a reasonably arguable best case. This standard is not to be assessed on the basis of the plaintiff's pleadings and material alone. There is no logical necessity for excluding material produced by the defendant. The Court is not required to analyse the rival material to determine whether the plaintiff has a probable case, as it would at trial, but neither is it restricted to the plaintiff's material only. An arrest is justified if, on the totality of the material before the Court, the plaintiff can be said to have a case with which to go to trial.

Applying these principles to the Valor, the Court found that there was no arguable case of privity: the supply was ordered by the time charterer, the contract chain ran from Bryggen through Bergen Bunkers AS to OW Bunker to Gulf Petrochem's group company. Gulf Petrochem invoiced and looked to OW Bunker for payment, and there was no allegation that OW Bunker or the time charterer had authority to bind the vessel or pledge its credit. The presumption that necessaries are supplied on the credit of the ship was rebutted on uncontested documentary evidence at the interlocutory stage.

In the case of the Tradewind, however, the owners or their managers had themselves requisitioned the bunkers from OW Bunker Malta Ltd, whose sales confirmation was addressed to the account of the vessel and its owners, and Drop Energy's bunker nomination expressly acknowledged supply on the faith and credit of the vessel. Although Drop Energy had no direct privity with the owners, the presumption of supply on the ship's credit was not displaced at the interlocutory stage, and the vessel managers' indication of willingness to pay gave rise to an arguable estoppel. This case was fit for trial.