U.S. FMC BOE ARGUES AGAINST DISMISSING CARGO ONE-COSCO DISPUTE
The U.S. Federal Maritime Commission’s Bureau of Enforcement has argued against dismissing a complaint by a non-vessel-operating common carrier against China’s state-owned COSCO Container Lines.
Cargo One charges that COSCO refused repeated requests to book agreed-upon volumes of cargo under a service contract covering freight moving from Hong Kong to U.S. West Coast ports. The NVO said it succeeded in moving only 6.5 TEUs under the 250-TEU contract. Cargo One said that COSCO claimed the reason it was unable to book the NVO’s cargo because it had to allocate space to other larger shippers. The NVO also claimed that COSCO attempted to offer Cargo One space at tariff rates during the contract period.
The bureau of enforcement also said that the commission’s policy considerations lean toward the FMC exercising jurisdiction over the complaint.
COSCO sought to have the complaint dismissed, claiming that the FMC could not decide breach of service contract proceedings and that the 1984 Shipping Act provides that the exclusive remedy for such a case is in an appropriate court. The carrier said the appropriate venue would be Beijing, under terms of the contract.
The BOE said that COSCO incorrectly contends that all of Cargo One’s allegations fall under breach of contract issues and remedies are available under contract law. The bureau contends that the allegations address possible violations of the 1984 Act, including issues which have no parallel in contract law. COSCO’s motion, the BOE contends, shows “a misunderstanding of the filed rate doctrine and the nature of an allegation of violations of section 10(b)(1) of the 1984 Act.