Continued from page 1
Despite initially tough attitude of Alimex's lawyers, we knew we could not abandon our efforts to achieve a settlement, particularly since we knew settlement made sense for all parties. We proposed a three way agreement between Daxin, Alimex and Bolshoretskoe, whereby Alimex would keep its purchase price funds and not pay any party for fish until dispute between Daxin and Bolshoretskoe had been resolved through arbitration in Canada. Alimex would then pay winner of arbitration up to purchase price of fish. Alimex would also agree not to pursue any claims against Daxin for wrongful arrest. Upon signing of this agreement, Daxin would release its arrest of cargo. Daxin secured oral agreements from both Bolshoretskoe and Alimex to go forward with such an agreement.
For fish to go out on next liner to Europe, Dan and I had to work overtime in drafting appropriate agreements. This time, multitude of languages and time zones (China, Russia, Singapore, Seattle, and Denmark) worked to slow us down, and by time Bolshoretskoe received its Russian language copy of agreement, only a few hours remained before pollock needed to be loaded on liner to Europe. But, at last minute, Bolshoretskoe changed its mind and decided it would not sign. All our hard work had been for naught. We were all exhausted.
The next liner to Europe was leaving in six days. During weekend, we stopped talking with opposing parties and communicated with only Dan and Daxin. We went back over case history and analyzed each party's positions and risks. We concluded that Bolshoretskoe was Daxin's real adversary. It was Bolshoretskoe that owed money and it was Bolshoretskoe that had avoided payment for so long. It also was Bolshoretskoe that had backed out of its oral agreement. There had been no prior conflicts between Daxin and Alimex. Though Alimex was listed as consignee of pollock on Bill of lading, it had yet to actually pay for fish. Above all else, Alimex wanted pollock sent to Europe so it could fulfill its commitments with its European buyers.
If we could persuade Alimex to provide a deposit or purchase price to Qingdao Maritime Court, we would lift our cargo arrest. If, on other hand, Alimex insisted on paying purchase price directly to Bolshoretskoe, arrest would remain in place, and Alimex would be unable to fulfill its supply contracts with its European buyers. Daxin would be left fighting a two front war against Alimex and Bolshoretskoe in Chinese courts.
We told Alimex that if it did not immediately settle, we would move court to require Alimex pay Pollock purchase price to court and seeking immediate sale of pollock at auction. Within hours, we received contact from a Chinese lawyer retained by Alimex, who would, he informed us, be going to court to have our "illegal" arrest thrown out. The court ignored him.
The next liner for Europe was coming to Qingdao next day and it finally began dawning on Alimex that if it wanted to get pollock to Europe and to its customers, it would need to settle with us. Intensive settlement talks began anew and another oral agreement was reached. Alimex would guarantee to pay up to amount of pollock purchase price to whomever prevailed between Daxin and Bolshoretskoe. Alimex also agreed not to pursue any claims against Daxin arising from Daxin's allegedly wrongful arrest of cargo. A settlement was drafted and signed and parties worked diligently to get arrest lifted in time for product to make it on that day's liner to Europe.
Daxin had a Guarantee Agreement from an established and well funded Danish company and we had achieved a smashing victory on this exciting arrest of cross-border transshipping cargo.
Somewhat smooth sailing in recovering Daxin's award. We then filed Daxin's case against Bolshoretskoe in Qingdao Maritime Court. Bolshoretskoe consistently failed to attend any court hearings and we eventually secured a default judgment against it.
Alimex then paid Daxin all but US$15,000 of amount it had guaranteed, but claimed entitlement to withhold US$15,000 for itself to help pay for costs it had incurred in China defending against Daxin's arrest. One e-mail from Dan threatening arbitration in London (pursuant to Guarantee Agreement) for $15,000, plus all fees and costs, convinced Alimex it had no case on this either. Alimex paid remaining US$15,000 to Daxin and case was over.
After six months, close cooperation and flexibility by lawyers on both sides of Pacific had given us full and total victory.
Epilogue A few months after I closed case, Dan sent me an e-mail telling me he had heard from one of his Danish clients that Alimex's Danish lawyers had told them of our great job on this case. Dan and I have since worked on a couple additional cases together, but it will be this first one that I will always remember. In thinking of this case, I know I will never forget sleepless nights I spent communicating with lawyers and parties in four times zones. But I also know that pride I feel from knowing how much we achieved, despite having to work through laws of so many countries under such tight deadlines, is what will always stand out. Our wisdom, our legal knowledge and our strenuous diligence had garnered us high praise not only from our foreign colleague and from our client, but also admiration from opposing party.
Zhao Xiaomei (Meggie) is a senior partner at the Fada law firm in Dalian, China, where she focuses on international and maritime law. http://www.fada-lawyer.com/introc_e.htm