Great Ocean Shipping Line (GO) is trying to overturn a US judge's decision to throw out a legal case brought against Cosco for work done at its Shanghai shipyard.
In June 2017, the Seattle shipowner alleged that a seven-day, $61,000 repair job at China Shipping Industry's Shanghai Changxing Shipyard ended up holding the vessel for more than a year at a cost of almost $11.1m.
HY Chen-controlled GO filed a US lawsuit against China Cosco Shipping for the work done at the yard to the 5,500-dwt, multipurpose ship GO America (ex-Meratus Padang, built 1999) under a March 2016 contract. The facility was owned by China Shipping before it merged with Cosco Shipping Group.
Plaintiff: Great Ocean Shipping Line (GO Shipping)
Defendant: China Cosco Shipping, Cosco Atlantic Shipping, Cosco Shipping Lines, China Shipping Industry, Cosco Shipping Heavy Industry
Court: US District Court for the Western District of Washington
Claim: $11.1m
Law firms: Chung, Malhas & Mantel; Keesal, Young & Logan
GO also seized shipowning affiliate Cosco Atlantic Shipping's 10,000-teu Cosco Taicang (built 2009) through a US court order that was later dismissed by a federal judge.
In early December, US District Judge Marsha Pechman dismissed the entire case, reasoning that Cosco Atlantic was not involved in the case and thus GO could not establish liability under "alter ego" prosecution. She therefore ruled that GO "has no case to prosecute".
GO later asked the court to reconsider the dismissal, claiming that it "regretfully misapplies" the law regarding its decision to reverse the ship seizure.
It also neglects facts and evidence, requiring Pechman's "flawed and erroneous" ruling to be reconsidered, GO said in court documents.
"Number one, a US cargo ship, the GO America, innocently seeking repairs over foreign waters, has been held hostage in Shanghai, China, due to internal corporate fraud and embezzlement of funds," wrote Edward Chung, GO's lawyer.
Cosco denies the allegation, saying the repeated delays were caused by changes continually added by GO's attending representative.
Chung also wrote that Cosco Atlantic's motion to get back the Cosco Taicang had been denied in June 2017 and the court ordered Cosco to post a $6m bond to retrieve it.
He said a motion to dismiss is given only when the defendant can show that the plaintiff cannot prove any facts supporting his claim entitling him to relief.
Chung asserted that the plaintiff need only allege fraud for the case to stand.
"Many district courts do not require proof of actual fraud as a prerequisite for piercing the corporate veil," he wrote.
Chung added that admiralty and maritime claims may be made against a party by attaching nearby property belonging to the defendant when the defendant is not within the area.
Calls to Chung and Cosco lawyer Philip Lempriere were not returned.
