E-commerce giant Amazon has filed papers asking a US judge to end $96.4m litigation filed by China United Lines.
The Chinese liner operator, also known as CU Lines, filed a complaint with the Federal Maritime Commission (FMC) in January, alleging that Amazon violated the US Shipping Act when it terminated a contract between the two companies.
Amazon’s motion asking administrative law judge Erin Wirth to dismiss the case is not publicly available, as the company’s lawyers at K&L Gates have also requested that the commission keep the document confidential.
But in a filing in support of the motion, the lawyers argue that CU Lines has no legal basis to turn a contract fight into a claim under the Shipping Act that would give the FMC jurisdiction.
And they wrote that CU Lines failed to show that there was any fraud that could bring the case under the Shipping Act.
“The amended complaint should be dismissed in its entirety,” the lawyers wrote in a 29 April filing.
CU Lines’ complaint, filed by Holland & Knight lawyer Vincent Foley, included Amazon Logistics and non-vessel operating common carrier Beijing Century as defendants.
Amazon struck a deal with CU Lines in April 2022 to move “a significant volume of goods” at fixed rates. The deal was to last for two years.
Termination spat
The Jeff Bezos-led e-commerce company used the contract to ship containers from China to the US West Coast until March 2023.
Then, Amazon terminated the contract on 1 April that year, effective on 30 May, according to CU Lines’ complaint.
The Chinese liner operator alleged that Amazon at first agreed to pay the $31.6m liquidated damages under the contract and later changed its mind.
According to the complaint, the tech giant sought to amend its termination to tear up the contract “for cause” because a CU Lines post on the social media platform WeChat allegedly broke confidentiality by revealing the contract with Amazon.
CU Lines alleged that Amazon’s moves violated the US Shipping Act by unlawfully obtaining ocean transportation services below applicable rates.
Foley wrote in the complaint that CU Lines is entitled to $96.4m in reparations.
Pushing back
The lawyer has filed papers pushing back against Amazon’s effort to throw out the case.
“After agreeing to a cargo shortfall payment to close out the service contract, respondents reneged and issued a pre-textual second ‘for cause’ termination notice attempting to escape their obligation to pay for a massive unfulfilled minimum quantity commitment (MQC),” he wrote.
“The effect of respondents’ duplicitous actions was to render illusory the MQC obligation in the service contract.
“This unreasonable practice was contrary to the fundamental requirements of the Shipping Act regarding service contracts, and the commission’s service contract regulations.”
Read more
- MSC and FedEx agree to end bitter legal fight over rubber gloves held by US officials
- Matson warns that tariffs could fuel ‘meaningfully lower’ earnings after profit growth
- US maritime agency’s former top lawyer joins law firm at ‘exciting and unprecedented time’
- Fairfax confident as Seaspan Corp parent adds to profits
- New Black Sea port plans in flux after US pressure over Chinese role
