The Hanoi People’s Court this month required troubled shipping giant Vinalines to pay a South Korean partner some US$3 million for a shipment of steel it rejected.
On October 3, the court upheld a decision by the Vietnam International Arbitration Center which asked Vinalines to pay VND65 billion (US$3.057 million) to Seoul-based SK Engineering and Construction, local media reported Monday.
Last January, the Vietnam International Arbitration Center ordered Vinalines to pay for 544 steel poles it imported to build the Van Phong international transshipment port in central Vietnam.
But Vinalines sent a complaint to the Hanoi People’s Court soon afterward, saying it did not accept the quality or price of the steel after having paid a VND70 billion advance on the order.
Nguyen Truong Son, a former Vinalines executive, said the poles did not look new or as though they had been exclusively produced for the project.
They were built to the wrong specifications and the company failed to produce their certificates of origin, he said.
Son directed a maritime project management board between 2007 and in 2010 was put in charge of Van Phong port in Khanh Hoa Province. Construction was suspended last year after several delays since the cash-strapped Vinalines did not have the wherewithal to continue.
The Hanoi court said Vinalines failed to produce evidence that the poles were not built as they had agreed with SK E&C. The court asked the parties involved not to file further appeals.
A Vinalines executive approached by news website VnExpress refused to comment on the court’s decision or discuss the company’s next move.
Experts familiar with such disputes said that if Vinalines fails to pay up, the Korean company could take steps to force it to do so.
SK E&C early this year also asked their government to seize a Vinalines’ bulk carrier after the arbitration ruler’s decision.
Vinalines has remained in local headlines since the middle of 2012 when its former chairman, Duong Chi Dung, fled the country during an investigation into a $17 million graft case.
Dung and other executives were accused of taking kickbacks from a Russian shipyard to buy an old used dock which cost the state $10.5 million to repair.
Earlier last month, the Supreme People’s Court upheld death sentences handed to Dung and the former general director Mai Van Phuc after convicting them of embezzling VND10 billion ($474,000) each in the case.
Eight other defendants from the company received up to 22 years in jail.
Vinalines has had to absorb the debt-laden subsidiaries of former shipbuilder Vinashin and reported $117 million in losses in 2012.