Fifth Circuit: “Available on Request” Bunker Terms Can Incorporate a U.S. Maritime-Lien Clause, and a Brokered Bunker Purchase Can Still Support a CIMLA Lien via Apparent Authority (Ken Lucky “Middleman” Path)

1. Introduction

This dispute arises from an unpaid bunker stem in Las Palmas, Spain. The vessel M/V ARGOS M was owned by Argos Bulkers and time-chartered to Shimsupa GmbH. Because Shimsupa was credit-impaired, its UAE sister company AUM guaranteed “each and every obligation” under the time charter.

In October 2022, AUM (purportedly on Shimsupa’s behalf) engaged a bunker broker, BunkerEx, which obtained a quote from Three Fifty Markets, Ltd. Three Fifty supplied bunkers (through a physical supply chain) and invoiced AUM. No one paid. Three Fifty arrested the vessel in New Orleans and sought a maritime lien.

Two legal fault-lines framed the appeal:

• Choice-of-law and contract formation: Whether a U.S.-law maritime-lien clause in Three Fifty’s GTCS was validly incorporated by reference (and which sovereign’s law governs that incorporation question).
• Authority under CIMLA: Whether AUM had authority—especially apparent authority—to bind Shimsupa, and thereby the vessel, to a transaction that could generate a maritime lien notwithstanding no-lien clauses in the charterparty.

The majority (Judge Douglas) affirmed the lien; Judge Oldham dissented, arguing the district court and majority failed to grapple with charterparty-driven choice-of-law and “no-lien” implications before giving effect to the bunker contract’s choice-of-law clause.

2. Summary of the Opinion

The Fifth Circuit affirmed the district court’s recognition of Three Fifty’s maritime lien under the Commercial Instruments and Maritime Liens Act (CIMLA), 46 U.S.C. §§ 31341–31342. The court held:

• A preliminary maritime choice-of-law inquiry (guided by Lauritzen v. Larsen factors, augmented as in Trans-Tec Asia v. M/V HARMONY CONTAINER) did not reveal a dispositive conflict affecting incorporation; U.S., Greek, and U.K. incorporation doctrines materially aligned.
• Three Fifty’s GTCS were validly incorporated by reference (clear reference; “available on request”; no objection; sufficient notice), making the U.S. maritime-lien choice-of-law clause effective.
• Applying U.S. law, AUM had apparent authority to act for Shimsupa, satisfying CIMLA’s “order of a person authorized by the owner” requirement, and the “Ken Lucky” middleman/broker line applied rather than the restrictive general contractor/subcontractor control test.
• The invoiced price (including an asserted net ~10% profit after broker fees) was not shown to be commercially unreasonable on this record, given testimony and the fact-driven nature of reasonableness.

3. Analysis

3.1 Precedents Cited (and how they shaped the decision)

A. Choice-of-law framework and contract formation

• World Fuel Servs. Sing v. Bulk Juliana M/V: The court relied on this Fifth Circuit authority for the key methodological step: when a choice-of-law clause’s effectiveness is disputed (especially when incorporated by reference), a “preliminary choice of law” must be made to determine which law governs contract formation and incorporation.
• Lauritzen v. Larsen: Supplied the foundational multi-factor maritime choice-of-law analysis. The court used a “Lauritzen-plus” approach to evaluate contacts relevant to contract formation.
• Trans-Tec Asia v. M/V HARMONY CONTAINER: Used to explain weighting of contacts (e.g., deemphasizing the fortuity of the port of supply) and to justify the “Lauritzen-plus” set of factors for contract formation in bunker disputes.
• Gulf Trading & Transp. Co. v. The Vessel Hoegh Shield and Gulf Trading & Transp. Co. v. M/V Tento: Reinforced the view that the place of supply/performance can be fortuitous in maritime commerce, thereby reducing Spain’s weight despite supply occurring there.
• Fogleman v. ARAMCO: Cited for the “cardinal importance” of the law of the flag in traditional maritime analysis, while also noting limited weight to the place of the wrongful act in mobile maritime contexts.
• Schneider Nat'l Tansp. v. Ford Motor Co. and W.R. Grace & Co. v. Cont'l Cas. Co.: The court invoked the “no conflict, no choice” principle—if competing laws do not differ materially on the decisive issue, extensive choice-of-law analysis may be unnecessary.

B. Incorporation by reference (including comparative-law support)

• One Beacon Ins. Co. v. Crowley Marine Servs., Inc.: Provided the Fifth Circuit’s doctrinal test for incorporation by reference in maritime contracts (clear reference; ascertainable identity; knowledge and assent).
• Coastal Iron Works, Inc. v. Petty Ray Geophysical: Supplied the notice standard: incorporation is valid where a reasonably prudent person “should have seen” the terms under the facts.
• World Fuel Services Trading, DMCC v. Hebei Prince Shipping Co., Ltd. and World Fuel Servs. Trading, DMCC v. M/V HEBEI SHIJIAZHUANG: Used as persuasive comparative-law authority that Greek contract law on incorporation by reference is not materially different from U.S. law, supporting the majority’s “no meaningful conflict” conclusion.
• Rooney and Another v. CSE Bournemouth Ltd.: Supported the proposition that U.K. courts focus on what a reasonable person with the relevant background would understand, and that “terms and conditions available upon request” can suffice for incorporation—paralleling U.S. “reasonably prudent person” notice.

C. CIMLA lien standards, authority, and “stricti juris”

• Valero Mktg. & Supply v. M/V ALMI SUN and Atl. & Gulf Stevedores, Inc. v. M/V Grand Loyalty: Grounded the principle that maritime liens are construed stricti juris and should not be lightly extended.
• Cent. Boat Rentals, Inc. v. M/V Nor Goliath: Cited for de novo review of the grant of a maritime lien (with underlying factual findings reviewed for clear error).
• Lake Charles Stevedores, Inc. v. Professor Vladimir Popov MV: Central to the intermediary framework: the “nature of the relationship” between entities controls whether the general contractor/subcontractor line applies; also cited for clear-error deference on agency findings.
• Belcher Co. of Ala. v. M/V Maratha Mariner: Provided the four-element test the supplier must satisfy (necessaries; to a vessel; ordered by authorized person; reasonable charges).
• Gulf Oil Trading Co. v. M/V CARIBE MAR: Confirmed that actual knowledge of a no-lien clause can defeat the lien (rebutting CIMLA’s presumptions).
• Cactus Pipe & Supply Co., Inc. v. M/V Montmartre and Karavos Compania Naviera S.A. v. Atlantica Exp. Corp.: Anchored the apparent-authority doctrine: principal’s manifestations to the third party control; agents cannot self-create apparent authority.
• Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky: The majority treated this Ninth Circuit decision as controlling in substance for the “middleman/broker” scenario where the supplier’s transaction is directly with the statutorily authorized ordering entity even if a broker intermediated communications.
• Sing Fuels Pte Ltd. v. M/V Lila Shanghai: Distinguished as credibility- and record-dependent, illustrating how apparent authority determinations can be fact-sensitive and insulated by clear-error review.
• Anderson v. City of Bessemer City: Supported the deference standard that sustains plausible district-court fact accounts even if the appellate court might have weighed evidence differently.

D. Evidentiary rulings relevant to authority

• United States v. O'Keefe: Provided abuse-of-discretion review for admissibility decisions.
• United States v. Reed: Supported admitting statements for effect on the listener (non-hearsay purpose) in evaluating reasonable reliance.

E. “Reasonable price” / quantum of lien

• Ex Parte Easton: Established the “customary charges” benchmark in maritime necessaries disputes.
• Sweet Pea Marine, Ltd. v. APJ Marine, Inc. and Shelly Tractor & Equip. Co. v. The Boots: Clarified that reasonableness can be proven by testimony comparing charges to prevailing industry standards; the court treated this inquiry as fact-driven.
• Martin Energy Servs., L.L.C. v. Bourbon Petrel M/V: Reinforced the standard of review (law de novo; fact findings for clear error).
• The court also discussed but did not treat as controlling several district court decisions offered by Argos to suggest typical markups: Aegean Bunkering (USA) LLC v. Amazon, Hampton Bermuda Ltd. v. M/V STAR SIRANGER, Bunkers Int'l Corp. v. M/V Wuchow, and O'Rourke Marine Servs. L.P., L.L.P. v. M/V COSCO Haifa.

F. Dissent’s third-party and charterparty focus (framing future litigation)

• Great Lakes Ins. SE v. Raiders Retreat Realty Co.: Cited in dissent for the strong federal presumption favoring choice-of-law clauses, while emphasizing that such clauses bind only the contracting parties.
• Rainbow Line, Inc. v. M/V Tequila: Cited in dissent for the principle that “rights of third persons cannot be affected by the intent of the parties to the contract,” challenging the majority’s approach as insufficiently attentive to the owner–charterer charterparty.
• DeNicola v. Cunard Line, Ltd.: Used rhetorically in dissent to criticize putting “the barge before the tug” by resolving bunker-contract choice-of-law while, in the dissent’s view, ignoring antecedent charterparty constraints.

3.2 Legal Reasoning (how the majority reached its result)

A. Step 1 — Identify the law governing incorporation of the choice-of-law clause

The opinion follows World Fuel Servs. Sing v. Bulk Juliana M/V: when a choice-of-law clause is not facially present but incorporated, the court must determine which law governs contract formation and incorporation. Using a “Lauritzen-plus” contact analysis, the majority acknowledged multiple sovereign contacts (Liberia, Greece, U.K., Spain, UAE, U.S.) and then pivoted to a practical resolution: even if Greece or the U.K. governed formation, incorporation-by-reference doctrine is materially aligned with U.S. law, so no conflict defeats incorporation.

B. Step 2 — Find the GTCS (including maritime-lien and U.S.-law provisions) incorporated by reference

Applying One Beacon Ins. Co. v. Crowley Marine Servs., Inc. and Coastal Iron Works, Inc. v. Petty Ray Geophysical, the court held incorporation satisfied because:

• The order confirmation made a clear reference to the “General Terms and Conditions of Sale (GTCS)” by name, signaling intent to incorporate.
• They were “available on request,” and there was evidence the GTCS were attached to the email; either way, a reasonably prudent party had sufficient notice.
• No timely objection was made by AUM or Shimsupa after receipt of the confirmation/terms.

C. Step 3 — Apply CIMLA: apparent authority created presumptive authority to bind the vessel

CIMLA allows a maritime lien for necessaries supplied on the order of the owner or a person authorized by the owner (46 U.S.C. § 31342), and presumes authority for agents appointed by a charterer (46 U.S.C. § 31341(a)). The decisive factual issue was whether AUM was acting as Shimsupa’s agent with apparent authority.

The majority affirmed the district court’s apparent-authority finding under clear-error review by emphasizing:

• Market/industry practice: suppliers often deal through brokers; verbal assurances and reliance on brokers are commonplace.
• Course of dealing and “market knowledge”: testimony that AUM “always” bought bunkers when Shimsupa was charterer; sister-company relationship and common beneficial ownership were known/communicated.
• Principal manifestations and ratification-like facts: the vessel manager received order details showing AUM as buyer before delivery; no one objected; post-transaction communications treated the debt as Shimsupa’s outstanding obligation.
• Reasonableness of reliance: under Restatement (Second) of Agency § 34 and § 94 principles cited by the court, the circumstances supported Three Fifty’s reliance even absent a direct verification call to Shimsupa.

D. Step 4 — Choose the correct “intermediary” framework: Ken Lucky rather than contractor/subcontractor

Argos argued the Fifth Circuit’s general contractor/subcontractor line should apply, which (in typical bunker chains) often blocks a lien absent proof the authorized entity controlled selection/performance of the subcontractor (see Lake Charles Stevedores, Inc. v. Professor Vladimir Popov MV; ING Bank N.V. v. Bomin Bunker Oil Corp.). The majority rejected this framing because Three Fifty’s contract was treated as directly with AUM (authorized ordering party), while BunkerEx functioned as a broker “middleman.” That configuration—authorized party orders; supplier sells to authorized party; broker intermediates communications—was aligned with Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky.

E. Step 5 — Uphold reasonableness of charges based on testimony and context

On price reasonableness, the court relied on testimony describing how traders price (index plus risk, broker fees, credit extension, turnaround) and treated Argos’s cited markup cases as distinguishable and non-dispositive. The result turned on the absence of contrary evidence and the district court’s acceptance of “industry standard” testimony.

3.3 Impact (what this opinion is likely to change)

• Contracting practice—incorporation: The opinion strengthens the enforceability, in the Fifth Circuit, of “GTCS apply; available on request” language in bunker confirmations—especially where the counterparty does not object. Suppliers will treat this as validation of low-friction term incorporation for lien and choice-of-law provisions.
• Agency proofs in bunker chains: The court signaled that apparent authority can be built from market practice, repeated dealings, and contemporaneous communications—even without direct supplier–charterer contact—so long as the evidence supports reasonable reliance and is credited by the factfinder.
• Intermediary framework clarification: By embracing Ken Lucky as the better conceptual fit when a broker stands between an authorized buyer and a supplier who contracts “directly” with that buyer, the court reduces the leverage of vessel owners attempting to recharacterize brokered deals as contractor/subcontractor chains requiring “control of selection/performance.”
• Owner risk notwithstanding no-lien charter clauses: Although the majority did not make the charterparty/no-lien issue dispositive, the practical consequence is increased lien exposure where suppliers lack actual knowledge of no-lien clauses and can prove apparent authority.
• Litigation roadmap from the dissent: Judge Oldham’s dissent offers a blueprint for future defendants: press third-party/charterparty choice-of-law and no-lien constraints earlier and more aggressively, framed through Rainbow Line, Inc. v. M/V Tequila and the limits of enforcing B–C choice-of-law clauses against A’s property interests.

4. Complex Concepts Simplified

• Maritime lien (CIMLA): A powerful security interest that “attaches” to the vessel itself for certain debts (like fuel/necessaries). It allows arrest of the vessel, often regardless of who personally failed to pay.
• “Necessaries”: Goods/services needed for the vessel’s operation (fuel bunkers are the classic example).
• Time charter: The owner provides the vessel; the charterer controls commercial employment (routes/cargo) and often pays operating costs like fuel. The charterer is not the owner, but CIMLA can treat charterer-appointed agents as authorized to procure necessaries.
• No-lien clause: A charterparty term stating the charterer may not incur liens against the vessel. Under U.S. law, such clauses typically defeat liens only if the supplier has actual knowledge (as reflected in the majority’s discussion of Gulf Oil Trading Co. v. M/V CARIBE MAR).
• Apparent authority: Authority that exists because the principal’s manifestations reasonably cause a third party to believe an agent can act for the principal. It turns on what the third party reasonably understood, not what the agent claimed.
• Incorporation by reference: Making a separate document (GTCS) part of a contract (order confirmation) by clearly referring to it such that a reasonable counterparty would understand it is part of the deal.
• “Stricti juris”: A rule of strict construction: maritime liens are not extended by loose inference. The majority nonetheless found the evidentiary record met CIMLA’s requirements.

5. Conclusion

Three Fifty Markets v. Argos M M/V confirms a supplier-friendly path to CIMLA liens in brokered bunker transactions: (i) “available on request” GTCS can be incorporated by reference, carrying U.S.-law maritime-lien clauses, and (ii) a sister-company guarantor can bind a charterer (and thus presumptively the vessel) through apparent authority proven by trade practice, course of dealing, and credited communications. The decision’s most durable contribution is its functional alignment of these facts with the Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky middleman/broker framework, limiting owners’ ability to reframe brokered deals as subcontracting chains that would otherwise defeat lien claims.

The dissent, however, highlights an unresolved tension likely to reappear: how far a bunker contract’s choice-of-law and lien machinery can operate when the underlying owner–charterer charterparty contains aggressive no-lien provisions and potentially different governing law. Future litigation may sharpen this boundary.