VietNamNet Bridge – The Vietnam International Arbitration Center (VIAC) has decided that Vinalines, the largest shipping corporation in the country, must pay VND65.2 billion in compensation to its South Korean partner for breaking a contract signed between the two parties.

Vinalines was the defendant in a case brought before VIAC by SK E&C, a South Korean group, which accused Vinalines of breaking a contract on the construction of a harbor at Van Phong transit port in Khanh Hoa province.

The government asked that construction on the project cease in September 2012.

Vinalines said it advanced VND87 billion on the contract value, saying that the sum of money was even higher than the value of the work the contractor had implemented.

Nevertheless, SK E&C, a member of the SK E&C – Vinawaco joint venture, the contractor of the project, claimed that Vinalines must pay for a batch of steel stakes the contractor had brought to the construction site before the project was closed down.

VIAC earlier this year issued a decision, saying that Vinalines broke the contract for which it had to pay VND65.2 billion.

Vinalines, which did accept the verdict, petitioned to the Hanoi People’s Court, asking the court to annul the verdict.

The court has announced it will handle the case. However, the case has not come to trial yet.

While the court has not made a final judgement, the decision by VIAC became valid immediately.

As Vinalines did not pay compensation as ordered by VIAC, and the case has not been tried at court, the South Korean partner has requested the Korean court to seize Vinalines’ ships in South Korea.

In March 2014, Vinalines Sky ship was seized in South Korea. Vinalines then had to pay a deposit of $3.1 million to ransom the ship. Later, another ship, Vinalines Trader, was seized in June and Vinalines had to pay $296,000 to get the ship back.

As such, Vinalines has to pay VND72.4 billion so far due to troubles with the package deal.

Under current law, the court must gather involved parties for trial within 90 days since the day it decided to handle the case. Meanwhile, Vinalines has already waited more than 90 days.

The shipping firm has lodged a complaint to the government, the National Assembly’s Justice Committee, the Ministry of Transport and the Chief Judge of the Supreme People’s Court, asking for support to put the case to trial soon.

If the court continues to delay the trial, more Vinalines’ ships would be seized when going through the South Korean territorial waters and ports, which would badly affect Vinalines’ business performance.

The Ministry of Transport has officially requested the Hanoi Court to try the case soon.

If the court abrogates the VIAC’s judgment, VIAC will handle the case again from the beginning with another arbitrators’ council.

Vinalines believes that VIAC did not follow necessary procedures when trying the case, when it referred to counterfeit documents provided by the plaintiff without checking original documents.

Also, the involved parties in the case, including Vinawaco, TEDI and the Van Phong Economic Zone’s Management Board, were not summoned by VIAC to the trial.

TBKTSG