Hong Kong Container Line Denies Allegations by US Firm, Says It Acted in 'Bad Faith'

Hong Kong-based Sterling Container Line denied allegations by U.S. logistics company SeaFair that it refused to pay for certain shipping services, saying SeaFair at times submitted inaccurate invoices and couldn’t prove they were correct. In a Dec. 26 response to the Federal Maritime Commission, Sterling said the FMC should dismiss SeaFair’s complaint for a range of reasons, including that the commission lacks the authority to award damages for a breach of contract claim.

“SeaFair has acted in bad faith and deceit, knowingly and intentionally engaging in deliberately misleading actions and omissions,” Sterling told the FMC.

In the complaint earlier this month, SeaFair said Sterling owed it more than $400,000 in unpaid “document turnover” services for shipments carried under Sterling’s house bills of lading (see 2212190008). SeaFair said it negotiated with Sterling for months but couldn’t reach a settlement.

But Sterling said SeaFair omitted certain key facts in its complaint, including that the U.S. company couldn’t provide proof the charges were correct. SeaFair “failed to provide basic accurate, consistent, and correct documentation and records related to such payments,” Sterling said.

The company specifically pointed to a March 1 claim by SeaFair for $138,422.00, which Sterling said contained “numerous factual and accounting discrepancies and inaccuracies.” Sterling said it paid $115,417.05 of the claim but disputed the remaining amount, saying the charges were “inconsistent, and at times incorrect," and some of the invoices in the claim had already been paid.

In other cases, when Sterling tried to submit payments to SeaFair for portions of a claim, Sterling said SeaFair declined to receive the money. In one instance in September, SeaFair “refused to provide payment transmission details” for an $8,920 invoice and said it didn’t want Atlantic Forwarding, Sterling’s parent company, “to make the proposed payment at this time,” the complaint said.

Sterling also said it disputed $321,533.52 worth of “destination charges” submitted by SeaFair in August. Sterling said it denies “that any such destination charges are valid, accurate, or owed,” and said it demanded "strict proof thereof." SeaFair has repeatedly "failed to provide basic accurate, consistent, and correct documentation and records related to such payments, or Respondents’ alleged liability for the same.”

Sterling also told the FMC that “any oral agreement alleged to have been in place” with SeaFair regarding the payments “is unenforceable because it would have been required to be in writing or otherwise satisfy the statute of frauds or equivalent.” It also said any “alleged damages sustained” by SeaFair “were proximately, directly, and solely caused by the acts of third persons over whom” Sterling has no control.

“SeaFair has unclean hands and is therefore barred from recovering on any claim against Respondents,” Sterling said. SeaFair didn’t comment.