Maersk sued by UK retailer

Wednesday, 01 September 2010

Maersk Line is being sued by a UK retailer for allegedly reneging on a contract to ship 5,000 40ft containers from Asia to the UK and unilaterally imposing price increases, writes Mike King.

UK newspaper – The Independent – claimed that Argos had applied to the UK High Court for US$13.9m (£8.9m) in compensation for the alleged contract breach, which was said to cover 2010 and 2011.

The legal documents filed by Argos claimed Maersk “wrongfully repudiated and/or renounced the contract. [Argos] had to find another shipping line in order to ship containers from the Far East to the UK. [Argos] duly obtained alternative space protection for a period of two years from Kuehne & Nagel. Accordingly, aggregate losses are $13,877,660."

Argos would not comment on the exact nature of the alleged losses. Simon Bibby, media relations officer at Home Retail Group, which owns Argos, said he was aware of the case but “it would be inappropriate to comment while it remains ongoing”.

Maersk has implemented a series of rate restoration programmes on the Asia-Europe trade this year but neither the carrier nor parent company AP Moller-Maersk would clarify the nature of the dispute when contacted by Lloyd's Loading List.

The legal documents filed by Argos and reproduced in The Independent added: "On 15 January 2010, [Maersk said it] would no longer provide any space protection for [Argos] at the agreed rate [$930 per container] and was instead unilaterally imposing an increased rate of $2,730 per container."

If the case goes to court it is likely to be watched closely by shippers, many of which had contracts torn up earlier in the year when space on vessels was tight and shipping lines were finding some shippers were willing to pay above contract rates in order to guarantee shipping.