The RES COGITANS decision is not binding on Australian Courts; however, the judgment could be highly persuasive in circumstances where the relevant parties to the contract were Australian entities.
Australia has seen an unprecedented rise in the number of arrests over the last year, which is in part a result of the collapse of OW Bunkers (OWB). ING Bank NV (which is the assignee of OWB's receivables including payments for bunker supplies) has commenced 18 proceedings in rem over the past year. There have been 34 arrests over the last year, in comparison with an average of 10 vessel arrests annually in the preceding three years.
The increase has been exacerbated as a result of the Federal Court of Australia's decision in the SAM HAWK, where the Court held that where the appropriate law of the contract recognises a maritime lien for the supply of necessaries, a vessel can be arrested in Australia to enforce that right (a large shift away from the Privy Council decision in the HALCYON ISLE).
The SAM HAWK decision has been appealed to the Full Court of the Federal court of Australia and a decision on that appeal is expected to be handed down shortly.
OW Bunker - A Global Overview: Australia
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