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Hanoi court orders Vinalines to pay $3m to South Korean supplier

Hanoi court orders Vinalines to pay $3m to South Korean supplier
There is more trouble for Vietnam shipping giant Vinalines as the Hanoi People’s Court ruled that the state-owned shipping line will have to pay $3m  to a South Korean partner for a shipment of steel it rejected.

The Court upheld a decision by the Vietnam International Arbitration Centre which asked Vinalines to pay VND65bn ($3.05m) to Seoul-based SK Engineering and Construction, Vietnamese media reported.

In January 2014, the Vietnam International Arbitration Centre ordered Vinalines to pay for 544 steel poles it imported to build the Van Phong international transhipment port in central Vietnam.  But Vinalines said it did not accept the ruling and sent a complaint to the Hanoi People’s Court. Vinalines argued that it did not accept the quality or price of the steel after having paid a VND70bn in advance on the order. According to a former Vinalines executive, Nguyen Truong Son, the steel poles did not look new when they should have been exclusively made for the project and the company failed to produce their certificates of origin.

Son was put in charge of Van Phong port in Khanh Hoa Province; the construction was suspended in 2013 after several delays because Vinalines did not have the resources to continue.The Hanoi court said Vinalines failed to produce evidence that the poles were not made as they had agreed with the Korean SK E&C. The court asked the parties involved not to file further appeals.

Vietnamese media said that Vinalines refused to comment on the court’s decision or discuss the company’s next move. If Vinalines fails to pay up, the Korean company could take steps to force it to do so. In April this year, SK E&C asked their government to seize the bulk carrier Vinalines  Sky, after the arbitration ruler’s decision.

Vinalines has had to absorb the debt-laden subsidiaries of former shipbuilder Vinashin in 2012. The company has remained in the headlines since the middle of 2012 when its former chairman, Duong Chi Dung, fled the country during an investigation into a $17m embezzlement case. 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 VND10bn ($474,000) each in the case. Eight other defendants from the company received up to 22 years in jail.