Dai Thien Loc Lost a Lawsuit to Blue Steel

November 30, 2016 Arbitration

Le & Tran represented Blue Steel at arbitration and court

According to Blue Steel’s statements to the Vietnam International Arbitration Centre (VIAC), on March 26, 2013, Blue Steel entered into a contract to buy 6,400 tonnes of steel sheet and aluminium-zinc alloy-coasted rolls from Dai Thien Loc at the price of $5,689,750.

The deposit was $568,975 and the deadline of final shipment was the end of May 2013. Blue Steel claimed that Dai Thien Loc was late on the final shipment, and on May 23, 2013, Dai Thien Loc only delivered to Blue Steel goods amounting to 33.26 per cent of the contract’s total value and could not deliver the remaining 66.74 per cent on time.

Therefore, Blue Steel filed a lawsuit to request VIAC to force Dai Thien Loc to return the remaining deposit, the interest, and many other compensations.

The Arbitral Tribunal of VIAC concluded that in the fourth shipment, Dai Thien Loc sent the Proforma Invoice for 1,517.04 tonnes of goods on May 23, 2013, which meant that there were only seven days remaining until the shipment deadline under the contract.

At that time, the parties did still need to proceed with many works to complete the final shipment. This indicated that even if Blue Steel had confirmed and made a full payment for this quantity of goods, Dai Thien Loc would have been able to supply only 1,517.04 tonnes, not the whole remaining quantity of 4,277.565 tonnes. In its Statement of Defence, Dai Thien Loc admitted that it was only able to supply 1,517.04 tonnes.

Dai Thien Loc failed to prove its capacity for delivering the whole remaining quantity of goods, i.e. 4,277.565 tonnes. This capacity would be proven if Dai Thien Loc had sent the Packing List to offer the whole remaining quantity of goods, i.e. 4,277.565 tonnes, instead of only 1,517.04 tonnes.

As such, Blue Steel had grounds to claim that even if they had accepted the Packing List with 1,517.04 tonnes, until May 31, 2013 (i.e. the final shipment deadline under the contract), Dai Thien Loc would have delivered the maximum of only 3,639.475 tonnes (including 1,517.04 tonnes of the fourth shipment and 2,122.435 tonnes of the three previous shipments), accounting for only 56.87 per cent of the total value of the contract.

The Arbitral Tribunal forced Dai Thien Loc to return the remaining deposit, the interest, and a part of the arbitration fee – amounting to a total sum of $340,844.

After that, Dai Thien Loc requested the People’s Court of Ho Chi Minh City to cancel the Arbitral Award. However, the court rejected this request, because at the dispute settlement meeting on March 21, 2015 at VIAC, both Blue Steel and Dai Thien Loc had signed the agreement to fully consent to all procedures at VIAC. The decision of the court was final and took effect from the date of signing.

The representative of Blue Steel, attorney Stephen Le Hoang Chuong, managing partner of Le & Tran Attorneys at Law, said that after having received the court’s final decision, they had contacted Dai Thien Loc many times to request an active implementation of the Arbitral Award, but Dai Thien Loc remained silent and failed to implement it.

“The dispute has already seen the final judgement, and cannot be appealed in any higher court. The amount of money which Dai Thien Loc must return to Blue Steel was only the deposit, which they had previously transferred to Dai Thien Loc. Dai Thien Loc’s refusal to co-operate is very unprofessional, and jeopardises their reputation and standing in future business transactions with other companies,” Stephen noted.

By Ai Phuong