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OW Bunker, founded in 1980, was a marine fuel (bunker) company based at
Nørresundby Nørresundby () is a city in Aalborg Municipality, north of Limfjorden, in Vendsyssel, in Denmark. The urban area has a population of 24,436 (1 January 2025). It is located just north of Aalborg, which lies south of Limfjorden. Statistically it ...
in northern
Denmark Denmark is a Nordic countries, Nordic country in Northern Europe. It is the metropole and most populous constituent of the Kingdom of Denmark,, . also known as the Danish Realm, a constitutionally unitary state that includes the Autonomous a ...
. It was the world's largest bunker supplier until its collapse on 7 November 2014. It went from
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
(IPO) to
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...
in less than a year. The dramatic collapse of the company led to expedited litigation in the English courts (as all the contracts had been declared to be "subject to English Law").


OW Bunker test case: the ''Res Cogitans''

The case was given priority, progressing from an
arbitration Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitrati ...
through the Commercial Court and the
Court of Appeal An appellate court, commonly called a court of appeal(s), appeal court, court of second instance or second instance court, is any court of law that is empowered to Hearing (law), hear a Legal case, case upon appeal from a trial court or other ...
to the
Supreme Court In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. Broadly speaking, the decisions of ...
in the record time of only ten months. UCL Commercial Maritime Law Conference paper: "The Res Cogitans" by Stephen Cogley QC The particular factors of this extraordinary case were these: OW Bunker (OWB) was an intermediary supplier of bunkers to ships. In many cases, it subcontracted this to other wholesale suppliers, obtaining fuel from them on credit. OWB did not require its customers to make immediate payment for bunker, but instead allowed the ships to pay for bunker after it was consumed. After the bankruptcy, the ship ''Res Cogitans'' had consumed unpaid fuel, and no money had traded hands. Both OWB's assignee, and the subcontractor which had physically delivered the bunker were pressing the ship's owners for payment. To whom, if anyone, was payment due? Payment was due to OWB by contract, but the subcontractor claimed that the supply of bunker was ''not'' a sale of goods, the bunkers were still their property, and they were entitled to be paid by the ship if OWB was not able to pay on the ship's behalf. The legal question was: "was the agreement to supply bunkers a 'contract of sale of goods' within the meaning of s.2(1) of the
Sale of Goods Act 1979 The Sale of Goods Act 1979 (c. 54) is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act ...
(as amended)?"; to which the answer was "No!". Instead, it was a special one-off arrangement to permit to consumption of bunkers without transferring property (i.e. ownership) in the goods to the consumer. Thus, although it seemed that the ship had "bought" the bunkers from the seller, nevertheless because of the " Romalpa clause" (a retained right of title provision), the "transaction" was not a "sale" but instead a
bailment Bailment is a legal relationship in common law, where the owner of personal property ("chattel") transfers physical possession of that property to another, who holds the property for a certain purpose, but retains ownership. The owner who sur ...
whereby the "seller" (actually, bailor) granted lawful possession to the "buyer" (actually, bailee), with the right ONLY to use the bunkers for ship propulsion. The bunkers could not be sold, mixed, pledged or trans-shipped. It was noted that, despite being a bailment, the bunkers could be consumed, since bailment requires the goods to be cared for and returned, and that consuming the bunkers destroyed the goods and was thus a
tort A tort is a civil wrong, other than breach of contract, that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with cri ...
ious act. The effect of this was that although the ships which had consumed the fuel may have paid for them, after OWB's insolvency, such ships were then liable to pay a second time to the original supplier, since property in the goods had not passed to the "buyer". The result was that hundreds of shipowners who were impacted by the bankruptcy were declared doubly liable for the fuel cost. This resulted in considerable rewriting of bunker supply contracts, in case another a similar insolvency occurred.Steamship Mutual report
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References

{{Reflist Defunct companies of Denmark