Chinese iron ore importer Liu Qingwu is under legal attack from a US shipowner for allegedly failing to pay up on a London arbitration award after a chartering deal collapsed.
Rhode Island-based Phoenix Bulk Carriers joins a queue of disappointed creditors as Liu is the subject of a Chinese manhunt. But they hope to secure some of a $2.8m claim by attaching assets that may be in the hands of California-based companies that have had dealings with Liu's Tianjin Binhai Group.
Lawyers for the Ed Coll-controlled bulker owner and operator told the Central District of California federal court in Los Angeles that Liu and his Tianjin Binhai Group and affiliated companies owe $2.8m, including interest and costs.
Dissipating assests
They cite a history of dissipating assets, not least the mines and transshipment yards controlled by Liu's Manzanillo-based Desarrollo Minero Unificado De Mexico.
The Phoenix lawsuit is based on a March 2016 London arbitration award that followed the collapse of a six-voyage contract of affreightment (COA) in 2013. That COA was, in turn, part of the settlement agreement from a previous suspended arbitration on a collapsed COA from 2011.
Phoenix lawyers indicated the company entered into a contract with Liu in the belief that his businesses were substantial, with more than 70 mines producing a range of minerals in Mexico and shipping exclusively to China.
"Tianjin Binhai Group was held out to plaintiff as a serious company, with serious investment, with significant operations and business, all of which turned out to be largely a fantasy," lawyers said in a legal complaint.
They told the court that they believe the Chinese and Mexican entities controlled by Liu "effectively went into hiding" at the time Mexican federal authorities began an investigation of alleged iron ore smuggling at the company's Lazaro Cardenas facility.
Reward
Efforts to reach Liu were unsuccessful. Legal filings by Phoenix indicate that Chinese courts have offered a reward of up to CNY 500,000 ($72,300) for information on Liu's whereabouts in connection with a CNY 11m claim against his Tianjin Binhai Harbor Port Group Co.
However, the Tianjin Second Intermediate People's Court website indicates that this reward offer expired in September after being in effect for a year.
Websites operated by that company and related Binhai Harbor Group HK Co have been closed down by service providers and telephone numbers connected with Liu's companies are not working.
