Is the Registered Owner Liable for the Charterer’s Bunker Debt Under a Bareboat Charter?

Under a genuine bareboat (demise) charter, bunkers are for the charterer’s account. The registered owner does not become indebted to the bunker supplier by the mere fact of ownership. The owner will be liable only where it is itself a party to the bunker contract, where it has been bound by a duly authorized representative, where it has subsequently ratified an unauthorized transaction, or where it has given security for the charterer’s debt. That a bunker claim ranks as a ‘maritime claim’ means neither that the owner is the debtor nor that the vessel stands encumbered by a lien arising by operation of law. The outcome may nonetheless turn on the country in which arrest of the vessel is sought; in the ports of the United States in particular, the exposure increases markedly.

The Capacities Must First Be Kept Distinct

In practice the words ‘shipowner’, ‘operator’, and ‘owner’ are used interchangeably, and the question ‘Is the shipowner liable for the bunker debt?’ more often than not springs from that very confusion. Legal analysis requires at least four capacities to be kept apart: the registered owner; the party letting the vessel out; the charterer; and the operator trading the vessel in his own name. Where liability lies can be determined only once it is established, on the facts, to whom each of these capacities belongs.

The Turkish Commercial Code defines the bareboat charter as a contract by which the use of the vessel is made over to the charterer for an agreed period against payment of hire. The crew, too, may be placed at the charterer’s disposal, and this does not alter the character of the contract. In the classic demise structure, possession of the vessel and the organization of her employment – in other words her commercial, administrative, and technical management – pass to the charterer. BIMCO’s BARECON form is likewise drawn as a lease under which the charterers take the vessel into their possession and complete control, assume legal and financial responsibility for her, and bear every operating expense, bunkers included.

The Code deems a person who trades another’s vessel in his own name to be ‘the operator in his relations with third parties’. A genuine bareboat charterer accordingly stands as a non-owner operator – broadly, the owner pro hac vice of Anglo-American terminology. The maintenance and running costs of the vessel fall on the charterer, and bunkers are, as is well understood, an ordinary running cost. The charterer’s obligation to indemnify the party letting the vessel against claims brought by third parties by reason of her employment concerns the internal relationship and the recourse arrangements between owner and charterer; it confers no claim on the supplier against that party.

A Bareboat Charter Is Not a Time Charter

Under either form the cost of bunkers may be placed on the party employing the vessel commercially; but who pays for bunkers does not determine the nature of the contract. Under a demise, possession and operation pass to the charterer, who bears the character of operator as against third parties. Under a time charter, technical management and possession remain with the owners; the time charterers undertake the commercial management only, give the master their orders as regards employment, and pay for the bunkers. Characterization must not rest on the label at the head of the document: the crew’s employer, the seat of technical management, purchasing and payment authority, the daily chain of command, the insurance arrangements, and possession in fact are to be weighed together.

Who Is the Debtor Under the Bunker Contract?

Delivery of bunkers to the vessel does not of itself show the owner to be party to the sale. In tracing the debtor, regard is had to the following: who placed the order, and who is named as buyer in the bunker confirmation; when and by what means the seller’s standard terms found their way into the contract, and whether the definitions of ‘owner’, ‘buyer’, or ‘vessel’ in those terms were in truth accepted; for whom, and on what authority, the broker, the managers, the agent, the master, or the chief engineer acted; whether the invoice, the bunker delivery note, the ship’s stamp, and the sampling records sit consistently with the details of party and authority; the parties’ subsequent conduct, such as replies to the invoice, promises of payment, and part payments; and, running through all of these questions, which country’s law governs each of them.

The owner can be personally liable only in the following circumstances.

• Where it appears in the order confirmation, in terms, as buyer or as co-debtor.
• Where it has ratified an unauthorized transaction, whether expressly or by conduct.
• Where, the ‘bareboat’ label notwithstanding, purchasing was in fact conducted by the owner, or the owner by its own conduct entered the contractual relationship.
• Where it has given a valid suretyship, guarantee, or assumption of the charterer’s debt; in that event, the legal character of the instrument and the requirements as to its form call for separate scrutiny.
• Where a person authorized to act in its name concluded the contract within the bounds of his authority. The master’s statutory authority is exercised on behalf of the operator, and under a demise the operator is more often than not the charterer. The master may procure bunkers away from the port of registry, yet where the purchase is on credit, that authority is confined by the measure of necessity and need.

By contrast, a recital in the seller’s own standard terms that ‘the vessel and her owners are liable’, the later issue of the invoice in the owner’s name, or the master’s or chief engineer’s signature on a delivery note given merely to acknowledge quantity and receipt, does not make a debtor of the owner. An owner who is a stranger to the contract cannot be held to terms it never accepted, and notations added after delivery do not repair the want of party and authority at the outset. The proposition stands subject, as regards foreign systems which give the supplier security upon the vessel herself, to the qualifications set out under heading 6 below.

Three Concepts Commonly Run Together

The commonest error in bunker disputes is to assume that three quite different concepts lead to one and the same result.

The older authorities call for caution as well. Under the repealed Commercial Code No. 6762, claims for necessaries furnished to the master away from the port of registry, in case of need, could give rise to a maritime lien. Decisions upon claims which arose before 1 July 2012 are therefore no direct precedent under the present law; the date on which the claim arose and the transitional provisions must in every case be verified.

Can the Owner’s Vessel Be Arrested in Türkiye for the Charterer’s Debt?

The arrest of ships in Turkish law is governed by a regime of its own. A vessel may be arrested only in respect of the ‘maritime claims’ exhaustively enumerated in the Turkish Commercial Code; for a claim falling outside that list, no arrest can be laid upon the vessel. The price of bunkers appears in the list in terms (TCC art. 1352(1)(l)), so that the bunker supplier has the benefit of this special regime.

Three practical consequences flow from it. First, arrest is the sole form of interim protection available against the vessel to the holder of a maritime claim. Neither an interim injunction nor the detention of the vessel by any other route may be sought. Secondly, an arrest order is markedly easier to obtain than under the general regime. The maritime character of the claim is of itself a ground of arrest, and the claimant is not put to proof of the general conditions of precautionary attachment under the Enforcement and Bankruptcy Code. Evidence satisfying the court that the claim is a maritime claim and as to its amount will suffice. Thirdly, a foreign jurisdiction or arbitration clause in the bunker contract or a choice of foreign law will not displace the Turkish court’s power of arrest. Even where the merits are bound, say, for arbitration in London, arrest may be sought from the Turkish court, by way of security, while the vessel lies in a Turkish port or at a Turkish anchorage.

The maritime character of the claim thus hands the supplier no more than a simplified procedure; which vessel may be arrested, it does not answer. That question is resolved by the connecting factors of TCC art. 1369, and it is precisely here that the owner’s protection engages. Under that provision, the vessel may be arrested for the debt of the person who was her bareboat charterer when the maritime claim arose only if that person has become her owner by the time the arrest is levied. It follows that where the bareboat charterer which ordered the bunkers and incurred the debt is not the owner at the moment of arrest, and the claim carries no maritime lien, the vessel of the third-party registered owner cannot, as a rule, be arrested for the charterer’s debt. By contrast, other vessels in the ownership of the debtor charterer remain open to arrest.

One point, however, calls for particular attention. The International Convention on Arrest of Ships 1999, to which Türkiye has been party since 11 December 2019, allows arrest also where the debtor charterer is still the demise charterer of the vessel at the moment of arrest, whereas the Turkish Commercial Code accepts only the case in which the charterer has become her owner. Since the Convention makes the arrest of a vessel not owned by the person liable conditional upon the vessel being amenable, under the law of the country of arrest, to judicial sale for that claim, and since under Turkish law a vessel belonging to a third party cannot be sold for the charterer’s personal debt, the outcome ought in practice to remain unchanged. The point, however, is not yet settled in the courts, and the possibility that a court of first instance might grant an arrest founded upon the Convention is not to be discounted.

Arrest is an interim measure of security, not a determination that the debt exists. The arresting claimant must put up counter-security of 10,000 Special Drawing Rights. The owner may apply for that security to be increased upon proof of the vessel’s daily running costs and of the earnings lost during her detention, may procure her release against security, and may sue in damages for wrongful arrest. Yet since the lost voyage and the injury to reputation are seldom made good in full, prevention remains the better course.

In a Foreign Port the Outcome May Differ

In an international bunker supply, the contract may be made in one country, the bunkers delivered in a second, and the vessel arrested in a third. The debt arising under the bunker contract is governed by the law the parties have chosen, while the arrest and judicial sale of the vessel are governed by the law of the country where she then lies. Whether a claim carries a maritime lien in Türkiye is a matter for Turkish law alone, and a maritime lien conferred upon the bunker supplier by some foreign law gains no automatic recognition in Türkiye. The converse holds equally: a demand that cannot be brought home to the owner under Turkish law may yet expose the vessel to security of a proprietary character in a foreign port.

The United States is the clearest illustration. Under United States law the charterer is presumed to have authority to procure necessaries for the vessel, and a supplier furnishing bunkers upon an authorized order acquires a maritime lien on the vessel and may proceed against her directly in rem. A no-lien clause in the charterparty does not bind the supplier unless the supplier is shown to have had actual knowledge of the clause before delivery; a stamp applied to the delivery note after delivery is not regarded as sufficient. The case law following the collapse of O.W. Bunker, moreover, treats the lien as belonging in principle to the contractual seller. Where calls at United States ports are in prospect, local legal assistance must invariably be taken.

What Non-Lien Clauses Do, and Do Not, Achieve

The non-lien, indemnity, security, information, and termination provisions of BARECON strengthen the allocation of risk and the recourse arrangements as between owner and charterer; yet they do not of their own force bind, in every country, a supplier who is a stranger to the contract. BIMCO’s Bunker Non-Lien Clause 2014, drawn for time charters, requires the charterers to notify the seller in writing, before the order is placed, that the bunkers are bought for the charterers’ sole account and that neither the vessel nor her owners nor her master is a party to the contract, and to pass the seller’s particulars and proof of payment to the owners. In a bareboat charter the mechanism should not be copied out wholesale. A notice-and-monitoring arrangement should be put in place, adapted to the BARECON text in use and to the law of the country concerned. The notice must reach the correct seller before the order, be carried down to the sub-suppliers where possible, and stand consistent with the recorded authorities of the ship’s personnel; a single stamp at the moment of delivery will in most cases come too late.

Recommendations for the Owner

1. For ports where the risk of maritime liens or of arrest runs high, local advice should be taken before bunkering, and the chain from contractual seller to physical supplier should be documented.
2. The current licensed BARECON text should be adapted to the vessel and to the finance documents, together with its non-lien, indemnity, security, proof-of-payment, audit, and termination provisions.
3. Despatch of the non-lien notice to the seller before the order and its transmission to sub-suppliers should be made a contractual obligation; no reliance should be placed on a stamp applied after delivery.
4. A deposit, bank guarantee, or parent company guarantee should be taken in proportion to the charterer’s credit standing and trading pattern, and the instrument of security should be vetted for form and for governing law.
5. The charterer’s full corporate name, registration number, address, and character as buyer should be visible in every order and confirmation; that neither the owner nor the vessel is the buyer should be stated in terms.
6. The seller’s particulars, the invoice, and the due date should be reported to the owner; proof of payment should be produced; and upon default a mechanism of warning and of the topping-up of security, should be set in motion.
7. The demise structure, the capacities of the assureds, and the costs of arrest should be checked under the P&I, FD&D, hull and machinery, and liability covers, and the charterer’s compliance with its obligations to insure and to name the owner in the policy, should be kept under watch.
8. The purchasing and signing authorities of the master, the technical managers, the agent, and the broker should be reduced to writing; and since internal limitations avail only against third parties with knowledge of them, they should be brought home to suppliers by outward notice.

Recommendations for the Bunker Supplier

The supplier, for its part, should not rest on the vessel’s name, her IMO number, or a delivery stamp. Before credit is extended, the following should be verified: the buyer’s full style, registration particulars, and legal connection with the vessel; whom the person placing the order represents, and the reach of his authority; the valid incorporation of the standard terms before the order; whether prepayment, a letter of credit, or a guarantee is called for; the governing law, the jurisdiction or arbitration clause, and the rules obtaining at the likely places of arrest; the consistency of the party details across the bunker confirmation, the invoice, the delivery receipt, and the correspondence; and the chain from contractual seller to physical supplier, together with the prospect of an assignment of the claim. In the case of a foreign-flag vessel, it should be remembered that suit and execution against her owner or her charterer may be directed to the master as well.

Conclusion

Under a genuine demise the charterer pays for the bunkers and, as against third parties, most often stands as an operator who is not the owner. The registered owner is not made the bunker seller’s debtor by the bare fact of ownership. Since under Turkish law the ordinary bunker claim carries no maritime lien, and since the vessel cannot be arrested for the debt of a charterer who is not her owner, the owner’s vessel cannot, as a rule, be arrested in Türkiye for the charterer’s bunker debt. To reach the right answer, four matters must be examined side by side: the bareboat charter and the operating arrangements in fact; the chain of order, confirmation and standard terms; the instruments of agency and of security; and the law of the place where arrest is sought. In countries which, like the United States, give the supplier of necessaries security upon the vessel herself, preventive contractual and operational measures are indispensable.

Esenyel Partners advises on the drafting of bareboat charters and bunker supply contracts, on the analysis of party and authority, on the conduct of arrest and security proceedings, and on the coordination of foreign-port disputes with local correspondents.

This note has been prepared for general information on the basis of the legislation in force as at 22 August 2026; it is no substitute for legal advice or for the services of counsel, given upon examination of the contracts, the vessel’s flag, the places of delivery and arrest, and the parties and dates of the particular case.

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