Introduction In late June of 2003, I received an e-mail from Daniel Harris, who introduced himself as maritime lawyer from Seattle. He had found me through internet and was asking me whether I was interested in helping arrest transshipped cargo in Dalian. I was excited about task and I surfed Dan's website and learned Dan owns a small international law firm in Seattle, called Harris & Moure (http://www.harrismoure.com). I replied to him immediately and sent him some relevant provisions concerning cargo arrests under China legal system. He was very happy with my prompt and helpful reply and we soon were working together on case. He later told me he was so impressed with my responses that he had picked me over numerous other lawyers throughout China.
Brief of case OOO Bolshoretskoe is a Russian fishing company that sold 400 Tons of pollock worth around US$700,000 to Alimex Seafood A/S, a Danish company. The pollock was scheduled to be transshipped from Dalian to Europe. Alimex had not yet paid Bolshoretskoe for product. Bolshoretskoe owed Daxin Petroleum Pte, Ltd., a Singapore fuel supply company, around US$400,000 for fuel. M/V IVAN POLZUNOV, vessel carrying pollock, was scheduled to call on Dalian on 4 July, 2003. Our task was to seize pollock for Daxin to get Bolshoretskoe to pay its debt.
Bolshoretskoe's debt to Daxin arose in July and December, 2002, when Daxin supplied bunker products for two Russian fishing vessels, TOSNO and PHOENIX. To secure these fuelings, Bolshoretskoe signed a guarantee letter to Daxin in which "Bolshoretskoe assigns all receivables resulting from production, deliveries and selling of Salmon or Pollock on/from board of F/T PHOENIX in favor of Daxin for amount of bunker supply. In addition, Bolshoretskoe agrees that property title to salmon or pollock products covering amount of bunker shall pass to Daxin immediately upon processing and/or storage of products on board of PHOENIX.
Daxin was not paid on its two fuel deliveries, and Bolshoretskoe was refusing to pay. It is estimated TOSNO and PHOENIX owed a combined total of around $20 million in unpaid debt to various creditors.
Intensive and orderly preparation for cargo arrest After studying relevant documents and analyzing entire history of case, we determined that either Bolshoretskoe or Alimex would pay Daxin if we arrested cargo in China. So we set about to do just that.
First, we prepared all necessary legal documents pursuant to Chinese law. Due to various different legal systems and languages involved (China, Russia, Singapore and United States), our preparations were extremely time consuming. As we were preparing our documentation and firming up our strategies, Dan was also preparing to come to Dalian.
However, day before Dan was to leave United States, he learned that pollock's transport vessel, IVAN POLZUNOV, had secretly changed its plans in an effort to avoid arrest. It would not be calling Dalian on July 4, 2003; it would be calling Qingdao on July 8, 2003. Because all legal documents had been prepared for Dalian Maritime Court, Bolshoretskoe's change in plans necessitated we completely change our plans also. With time so much of essence, we asked Sunfanlong, who works in Qingdao Wincon law firm, to work with us and we transferred all legal documents to him.
Successful Arrest of cargo On July 7, 2003, Dan arrived in Qingdao. The IVAN POLZUNOV arrived in Qingdao next day and began to discharge 15 containers of pollock for transshipment to Europe. When judge, Wincon's lawyer and Dan saw that containers were being offloaded on trailers for transport to container terminal, they went straight to terminal to deliver arrest papers on all 15 containers. However, after waiting nearly five hours at terminal and waiting well into night, only three containers had arrived and been arrested. Nobody seemed to know what had happened to other twelve containers. We were concerned Bolshoretskoe and/or Alimex had learned of our arrest warrant and had hidden other twelve containers. Adding to our worries was that we had by now learned that Alimex was to ship all 15 containers to Europe very next day. We checked everywhere for missing twelve containers. We checked with various trucking companies. We checked all around terminal. Nothing. Eventually, we learned that twelve containers had been in terminal all along, but had been issued separate bills of lading from first three and placed in a somewhat separate area. We had succeeded in arresting all fifteen containers.
After our having engaged in twelve days of intensive e-mail and telephone communication together, Dan showed up at Dalian's airport. His high praise of our work conveyed his satisfaction of our efficient job. Dalian and Qingdao's picturesque scenery and modern city construction impressed Dan deeply and changed his previous imagination regarding this part of China. He loved food and our culture and talked about returning some day with his family on holiday.
Hard success to acquire guaranty and lift arrest Now that we had pollock under arrest, we would need to maintain it in its frozen condition at terminal. Pollock is a valuable fish and costs and risks during arrest period were high. The sooner we could resolve dispute, sooner fish would be on its way, and better it would be for all parties.
The day after we arrested cargo, we received a letter from Alimex's lawyers in Denmark, claiming Alimex owned arrested cargo, not Bolshoretskoe, and threatening Daxin with criminal action. Alimex's lawyers copied this letter to court and to Daxin. Though confident that it was in right, this threat of criminal action did not sit well with Daxin. We replied to Alimex's lawyers by lecturing them on Chinese and international law and by declaring that Alimex would suffer even more losses if it insisted on pursuing litigation in China instead of cooperation. The reaction from Alimex's lawyers was overwhelming. They wrote me a letter filled with furious and derogatory words and stated they would never communicate directly with us again. The case had fallen into deadlock.