News / Forwarders in US legal battle over $2.6m claim for damages

Photo: © Homiel | Dreamstime.com

Forwarder-on-forwarder action is under way at the US Federal Maritime Commission (FMC), as a Vietnamese firm seeks some $2.6m in damages over its US counterpart’s alleged failure to meet capacity obligations.

Ho Chi Minh City-based Southern International Co (SIC) has accused Fairfax’s Daynamez Group of “falsely claiming” strong ties to a Dutch logistics operator, through which it could offer the “most competitive market prices for container shipping”.

SIC claims: “Daynamez assured us that their partner’s strength would enable them to secure the best rates, which fostered our trust in the partnership. These claims were a deliberate strategy to persuade us to enter a long-term commitment.”

Entering the agreement on the basis that Daynamez would secure “preferential booking rates”, despite Daynamez’s claims that several third parties were handling agents for its Dutch partner, it transpired the parties were carrying out bookings for SIC shipments.

“We diligently collected funds from customers and promptly transferred the agreed-upon sea freight amounts to Daynamez for all shipments, in some cases advancing substantial sums to Daynamez when customers had not yet paid, ensuring adherence to terms,” says SIC’s filing.

“Despite having received full payment for all shipments that arrived at US ports, Daynamez frequently delayed its own payments to its partners, adversely affecting delivery schedules and damaging SIC’s reputation.”

The filing also alleges Daynamez shifted responsibility for facilitating cargo release to SIC, forcing the Vietnamese forwarder to “advance numerous sea freight payments on Daynamez’s behalf” to ensure goods were cleared for customers.

Last October, having received more than $2.4m from SIC, the Fairfax-based firm informed SIC it was ceasing all payments to booking parties citing a depletion of funds, adding that it had directed payment responsibilities to SIC.

“As a result, numerous shipments to the US and Europe were detained, causing significant costs from shipping lines and severely damaging the reputation and credibility SIC has built over 21 years of operation,” the filing says.

“This unforeseen event plunged us into severe financial distress. Having already paid a substantial sum to Daynamez, funds that were clearly misappropriated, we were unable to help customers make a second payment to resolve cargo holds imposed.”

One of those agents, Super Cargo, was paid $149,990 by SIC for the release of 43 containers, however, Super Cargo had bypassed SIC and gone directly to the cargo owners to demand a far higher fee for their release.

While stating that “it had no freight service transaction with SIC,” Super Cargo has yet to refund the $149,990, claims SIC, “even after the customers agreed to pay the inflated rate it demanded to retrieve their 43 containers from the US”.

SIC concluded: “In summary, this series of events has resulted in severe and direct financial damages. The total amount ‘misappropriated’ by Daynamez or withheld by its partners is $2,615,640.87.”