Bunker Fuel Compliance, Scrubber Technology & Maritime Risk in Bangladesh

A Practical Legal and Commercial Guide for Shipowners, Charterers and Operators

For most people outside the shipping industry, the word “bunkers” sounds technical and distant. For those operating vessels every day, however, bunkers are one of the largest cost centres, one of the most regulated areas of compliance, and increasingly one of the most litigated subjects in maritime law.

Fuel is no longer just fuel.

Today, bunker decisions affect charterparty allocation, insurance exposure, environmental liability, port access, financing arrangements, and even criminal risk. A simple decision about what grade of fuel to load or whether to install a scrubber system can carry legal and commercial consequences that follow a vessel for years.

Since the introduction of the IMO 2020 global sulphur cap, the industry has experienced a steady increase in disputes relating to:

• fuel quality
• off-spec bunkers
• scrubber compatibility
• charterparty obligations
• refusal of port entry
• regulatory fines
• vessel detentions
• environmental investigations

In our experience, many of these disputes do not arise because of bad faith or negligence. They arise because the allocation of risk between owners and charterers is often unclear, technical, or poorly documented.

At Tahmidur Remura Wahid (TRW) Law Firm, we have been advising shipowners, charterers, bunker traders, financiers, insurers, and operators across Bangladesh and internationally on exactly these issues. Our bunker and admiralty practice sits at the intersection of law, engineering, and commercial shipping realities.

This article expands on the themes outlined in our Bunker Pack and explains, in practical terms, how bunker compliance, scrubber technology, and fuel strategy affect maritime legal exposure — and how proper legal planning can prevent costly disputes.

For more on our broader admiralty and maritime capabilities, please see:
https://booking.tahmidurrahman.com

Why Bunkers Have Become a Legal Issue — Bunker Fuel Compliance

Historically, bunker disputes were relatively straightforward. Owners or charterers simply purchased fuel, and disagreements usually related to quantity or contamination.

That has changed dramatically.

With environmental regulation tightening worldwide, bunkers are now regulated at multiple levels:

• international conventions
• flag state rules
• port state control inspections
• charterparty obligations
• local environmental laws

The result is that fuel decisions now determine whether a vessel can legally trade.

If a ship carries non-compliant fuel, it may face:

• detention
• fines
• refusal of entry
• forced de-bunkering
• loss of hire
• contractual claims

From a legal perspective, bunkers are no longer merely a supply issue. They are a compliance issue.

The IMO 2020 Sulphur Cap: A Structural Shift in Risk

The introduction of the 0.50% global sulphur cap marked one of the most significant regulatory shifts in modern shipping.

On paper, the rule appears simple: vessels must either burn low sulphur fuel oil (LSFO) or install exhaust gas cleaning systems, commonly known as scrubbers.

In practice, this change created a new matrix of risk.

Owners suddenly had to decide:

• whether to retrofit scrubbers
• whether to rely on LSFO
• how to finance upgrades
• how to allocate compliance responsibilities in charterparties
• how to deal with ports that restrict certain scrubber types

Each of these decisions carries legal consequences.

For example, if a charterparty requires the owner to provide a “compliant vessel,” does that mean the owner must install scrubbers? Or is burning LSFO sufficient? If scrubbers are installed but a port bans open-loop systems, who bears the cost of delay?

These are not theoretical questions. They regularly appear in disputes.

Charterparty Allocation: Where Most Disputes Begin

In bunker matters, many problems arise not from the technology itself, but from contract drafting.

Charterparties often include clauses that were written before IMO 2020. As a result, they may not clearly allocate responsibility for:

• fuel quality
• sulphur compliance
• scrubber installation
• fuel switching
• delay costs
• port restrictions

When disputes arise, parties look to the wording — and small phrases can determine millions of dollars in liability.

For example:

If the charterer is responsible for providing bunkers, but the vessel must remain compliant, what happens if compliant fuel is unavailable at a port?

If the owner installs scrubbers and expects to burn high sulphur fuel oil (HSFO), but charterers insist on LSFO, who pays the price differential?

Courts and tribunals have treated these issues differently depending on wording.

This is precisely where early legal review saves significant cost.

At TRW, we routinely assist clients in reviewing and updating:

• BIMCO sulphur clauses
• scrubber clauses
• off-hire provisions
• fuel quality warranties
• indemnity structures

Clear drafting prevents most litigation.

Scrubber Technology: Legal and Commercial Implications

Many owners opted to install scrubbers to continue using HSFO, which is generally cheaper than LSFO. While commercially attractive, scrubbers introduce their own risks.

There are three main types:

Open Loop Systems

Use seawater to neutralise sulphur and discharge washwater back into the sea.

These systems are cheaper but increasingly restricted by ports.

Closed Loop Systems

Retain waste onboard and discharge ashore.

More expensive but widely accepted.

Hybrid Systems

Offer operational flexibility between open and closed modes.

Each option affects:

• capital expenditure
• operating costs
• port acceptance
• maintenance
• compliance burden

From a legal perspective, scrubber installation can affect charter obligations. If installation requires off-hire time or retrofit periods, contractual arrangements must account for it.

Additionally, some ports prohibit open-loop discharges. If a vessel equipped only with open-loop systems cannot trade there, this may create disputes over trading warranties.

We frequently advise clients on:

• retrofit contracts
• financing structures
• yard agreements
• compliance documentation
• port restrictions
• risk allocation

Financing Scrubbers and Commercial Strategy

Scrubbers are not inexpensive. Retrofitting costs may run into millions of dollars per vessel.

This raises further legal considerations:

• lender security
• shipyard contracts
• performance guarantees
• insurance cover
• warranty claims

Owners must consider whether projected fuel savings justify capital expenditure. When fuel spreads narrow, financial assumptions may collapse.

We have seen cases where owners financed scrubbers expecting long-term savings, only to face:

• regulatory changes
• port bans
• fuel price volatility

Legal and financial structuring at the outset is critical.

Fuel Quality and Supply Chain Risk

Another recurring issue relates to fuel quality.

Low sulphur fuels are often blends, which increases risk of:

• instability
• incompatibility
• contamination
• engine damage

When machinery fails, disputes arise quickly.

Common questions include:

• Was the fuel off-spec?
• Was testing conducted properly?
• Who selected the supplier?
• Who bears loss of hire?

These matters require technical and legal coordination. Early sampling, preservation of evidence, and correct notice procedures often determine success.

TRW regularly works alongside surveyors and laboratories to protect clients’ positions from day one.

Port State Control and Enforcement

Compliance is not only contractual. It is regulatory.

Authorities increasingly conduct inspections and may detain vessels for:

• improper fuel carriage
• non-compliant sulphur content
• documentation failures
• scrubber discharge violations

Detention creates immediate financial loss.

Our team assists with:

• regulatory representation
• negotiation with authorities
• documentation review
• emergency court proceedings
• insurance coordination

Speed is critical. Delays compound losses.

The United States Perspective

The United States has historically taken a strict approach to environmental compliance. Enforcement often includes:

• criminal investigations
• corporate liability
• heavy fines
• personal exposure for masters

Operators trading to US ports must therefore exercise particular caution.

Even record-keeping issues can lead to serious consequences.

For international shipowners, this highlights the importance of proactive compliance and coordinated legal advice.

Practical Risk Management Steps

From our experience, most bunker disputes are avoidable with proper planning.

We advise clients to:

• update charterparty wording
• conduct supplier due diligence
• document fuel testing
• review scrubber strategy
• train crews on compliance
• maintain clear records
• engage legal counsel early

Preventive advice is significantly cheaper than reactive litigation.

TRW’s Role in the Maritime Ecosystem

Our bunker and admiralty work does not happen in isolation. It sits within a broader maritime practice that includes:

• vessel arrests
• collisions
• marine insurance
• pollution liability
• port disputes
• offshore matters

Clients appreciate that we combine technical understanding with commercial awareness.

We do not offer theoretical memos. We provide practical solutions.

Shipping will continue to evolve. Environmental regulation will tighten. Fuel technology will change. Scrubber systems will improve.

What will not change is the need for clear legal strategy.

Bunker decisions are no longer operational details. They are legal decisions with financial consequences.

At Tahmidur Remura Wahid (TRW) Law Firm, we help maritime clients navigate these complexities calmly, practically, and efficiently.

Whether the issue is drafting charterparty clauses, handling port detentions, resolving fuel disputes, or structuring long-term compliance strategy, our focus remains the same: protect the client’s commercial position while managing legal risk.

Summary Table

Area	Key Legal Risk	How TRW Assists
IMO Compliance	Detention / fines	Regulatory defence
Charterparties	Allocation disputes	Clause drafting
Scrubbers	Port bans / retrofit risk	Contract & financing advice
Fuel Quality	Machinery damage	Claims & recovery
Port State Control	Trading delays	Emergency response
US Enforcement	Criminal exposure	Compliance strategy

Contact Tahmidur Remura Wahid (TRW) Law Firm

Phone
+8801708000660
+8801847220062
+8801708080817

Email
[email protected]
[email protected]
[email protected]

Offices
Dhaka – House 410, Road 29, Mohakhali DOHS
Dubai – Rolex Building, L-12 Sheikh Zayed Road
London – 330 High Holborn, London WC1V 7QH, United Kingdom