US legal wrangle over abandoned boxes on China's docks

NORTH China Cargo Services Inc, a California company, has appealed an judgment of the US District Court of California, after it ruled in favour of Shanghai's Sinotrans Container Lines Co Ltd that it was not responsible for containers abandoned on the Qingdao docks.

The four-year back-and-forth litigation is over which party - shipper or carrier - is responsible for abandoned cargo, the absent shipper who paid to get it there or the carrier who put it there. As far as Qingdao authorities were concerned, it was the carrier's liability.

The tale begins with North China Cargo Services contracting Sinotrans to move 60 containers of waste paper by sea from Long Beach to Qingdao in 2006. Once the cargo arrived, North China Cargo Services simply did not remove them, and it did not clear customs and held by Chinese authorities until the rapidly accumulating charges were paid, according the summary of the case by US legal newssite Leagle.com.

In December 2006, Sinotrans sued North China in California for demurrage/detention charges, storage and other costs accumulating in China. In response, North China filed a motion to dismiss on jurisdictional grounds, but the US District court denied the motion.

After the legal discovery process, Sinotrans filed a motion for summary judgment, which the district court granted in February 2009. But North China appealed the ruling a month later.

The dispute has since moved on with a failed attempt for an out-of-court settlement, and the case now centres on North China's alleged breach of the bills of lading and service contracts.

Sinotrans said it offered North China a "big discount" if it agreed to retrieve the cargo, but North China refused. Sinotrans also applied to Chinese customs to have the cargo destroyed or auctioned, but China Customs refused. Sinotrans then hired a customs clearance company to retrieve the boxes, but this did not work either.

Sinotrans then pleaded before Qingdao Maritime Court to order a sale of the cargo so that the containers could be recovered. This resulted in customs selling the contents, but the proceeds did not to cover unpaid charges and the costs of the sale itself.

(Source: www.schednet.com)