Peter T. Leach | Aug 10, 2011 10:13AM EDT
A dry bulk ship under long-term charter to China Cosco Holdings was arrested in Louisiana last week, making this the maritime company’s second vessel to be detained because of overdue payments in about a month.
The Jia Li Hai, was attached after its owner, Classic Maritime, sought $2.7 million in fees and costs from Cosco unit Cosco Bulk Carrier, according to filings at the U.S. District Court in the Eastern District of Louisiana. Judge Lance M. Africk issued the warrant on Aug. 3, according to Bloomberg.
A Cosco ship was also held last month in Singapore in a case brought by Arlen Maritime. The shipowner was among companies in arbitration with the state-controlled Chinese line, seeking $8.58 million, according to Singapore court documents.
Both cases concern ships chartered by China's largest maritime company on long-term contracts before a plunge in rates caused by slowing demand and rising capacity. In the Singapore case, Tianjin, China-based Cosco was paying $87,000 a day for a capesize vessel, or about eight times current rates. Cosco was operating 222 chartered dry-bulk ships as of Dec. 31, according to its annual results.
The Classic Maritime case centers on the Bulk Denmark, which Cosco hired around Aug. 1, 2008, according to a court document. The shipping line failed to pay fees due on July 1 and Aug. 1, the filing said. Classic Maritime is controlled by Dryships CEO George Economou.
The issue is “pure business behavior,” China Cosco told Bloomberg. It said it wasn’t facing any business difficulties and that it was engaging in usual commercial activities with lessors.
-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.