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OIL SHIPPING B.V. v. ROYAL BANK OF SCOTLAND PLC

April 5, 1993

OIL SHIPPING (BUNKERING) B.V., ET AL.
v.
THE ROYAL BANK OF SCOTLAND plc, and BAYTUR TRADING S.A., and INTERNATIONAL MARINE FUELS OF SAN FRANCISCO, INC., v. M/V ZIYA S, her engines boilers, tackle, etc. In Rem and NORTHWEST SHIPPING CORPORATION In Personam and SONMEZ DENIZCILIK VE TICARET A/S In Personam IN ADMIRALTY



The opinion of the court was delivered by: CLARENCE C. NEWCOMER

 Newcomer, J.

 Presently before the court are three motions: Motion of Plaintiff/Intervenor Royal Bank of Scotland For Final Distribution of M/V ZIYA S and Bunker Sale Proceeds; Motion of Plaintiff/Intervenor International Marine Fuels of San Francisco Inc. For Summary Judgment; and Motion of Plaintiff/Intervenor Baytur Trading S.A. For Partial Summary Judgment. For the reasons set forth below, all three motions will be treated in this Memorandum and the motions will be GRANTED, DENIED, and DENIED, respectively.

 I. Factual Background.

 All three motions presently before the court share a common factual background that begins with the travels of the M/V ZIYA S, a bulk carrier ship which flew the Turkish flag. The M/V ZIYA S was operated by Sonmez Denizcilik ve Ticaret A.S. (hereinafter "Sonmez"). Sonmez is a Turkish company with its primary place of business in Istanbul, Turkey. The M/V ZIYA S was owned by Northwest Shipping Corporation (hereinafter "Northwest"), a Panamanian entity.

 In the shipping industry, when a ship is provided with assorted fuel products and other necessary fluids, such activity is referred to as receiving "bunker" supplies. Oil Shipping (Bunkering) B.V. (hereinafter "Oil Shipping"), a Dutch Company, supplied approximately $ 270,000 in bunkers to the M/V ZIYA S on three occasions: October 21, 1991 at Gibraltar; February 1, 1992 at Suez, Egypt; and March 3, 1992 at Gibraltar. Oil Shipping filed this suit on March 27, 1992, alleging in rem and in personam claims against the M/V ZIYA S and her operator, Sonmez, for past due charges in the amount of $ 270,000.

 On the same day as Oil Shipping filed its complaint, the court issued a warrant for arrest ordering the United States Marshals Service to seize the M/V ZIYA S upon arrival in Philadelphia, Pennsylvania pursuant to Rule C of the Supplemental Rules For Certain Admiralty And Maritime Claims. At approximately 11:15 a.m. on March 29, 1992, a United States Marshal arrested and took into custody the M/V ZIYA S at Pier 122 South Wharves, Philadelphia. The Master of the M/V ZIYA S was appointed substitute custodian by the Court. On May 12, 1992, the United States Marshals Service sold the M/V ZIYA S at public auction for 1.82 million dollars, not including the fuel aboard ship; the fuel was sold in a separate transaction to the successful bidder for $ 130,000. All proceeds from the sale of the ship and fuel have been paid into the Registry of the Court. Pursuant to a Consent Order dated October 23, 1992, plaintiff Oil Shipping and all intervening parties agreed to have the Clerk of the Court disperse funds from the Registry in the amount of $ 1,469,784.38 to pay certain undisputed in custodia legis costs, certain undisputed liens, and $ 1.35 million to Royal Bank in partial satisfaction of its first preferred mortgage lien against the M/V ZIYA S.

 In addition to Oil Shipping, other parties also have claims against the M/V ZIYA S and subsequently these parties have intervened as plaintiffs. The Royal Bank of Scotland (hereinafter "Royal Bank") has a claim against the M/V ZIYA S and Northwest arising from Royal Bank's first mortgage against the M/V ZIYA S. Royal Bank's first mortgage was in exchange for an eleven million dollar loan made on April 28, 1989. When Northwest defaulted on its mortgage payments and on April 2, 1992, Royal Bank filed an Amended Motion to Intervene Pursuant to Federal Rules of Civil Procedure 24, seeking 3.5 million dollars, unpaid interest, and attorney's fees and costs against three parties: Northwest; Sonmez in personam ; and the M/V ZIYA S in rem. Royal Bank's first mortgage on M/V ZIYA S was registered and recorded in Panama. This mortgage constituted a preferred mortgage, a term which shall be explained, infra.

 International Marine Fuels of San Francisco, Inc. (hereinafter "IMF") also has a claim against the M/V ZIYA S. On March 30, 1992, IMF delivered, via a contractor, 2,185.23 metric tons of fuel oil and 122.18 metric tons of diesel oil to the M/V ZIYA S while she lay at Pier 122 South in Philadelphia. On April 30, 1992, IMF filed a Motion to Intervene and a Complaint against: Northwest; Sonmez in personam ; and the M/V ZIYA S in rem. IMF seeks $ 200,781.73 in payment for the bunkers supplied to the M/V ZIYA S, as well as interest and attorney's fees. On May 11, 1992, IMF obtained a Writ of Attachment against the bunkers supplied to the M/V ZIYA S on March 30, 1992, causing the fuel aboard ship to be sold in a separate transaction by the Marshals Service at the public auction on May 12.

 Baytur Trading S.A. (hereinafter "Baytur") also filed an intervening complaint against Sonmez in personam and M/V ZIYA S in rem on April 13, 1992. Baytur is a business entity incorporated under the laws of Switzerland and is principally engaged in the sale of marine fuels. Baytur seeks the recovery of $ 85,525.40 plus interest, costs, and attorney fees for three fuel deliveries to the M/V ZIYA S at Iskenderun, Turkey on August 4, 1991, October 8, 1991, and October 13, 1991.

 II. Summary Judgment Standard :

 A reviewing court may enter summary judgment where there are no genuine issues as to any material fact and one party is entitled to judgment as a matter of law. Turner v. Schering-Plough Corp., 901 F.2d 335, 340-43 (3d Cir. 1990); White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988). "The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one sided that one party must, as a matter of law, ...


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