China’s state-run shipping and logistices giant Sinotrans & CSC has filed a court case against Tianjin Shunhang Shipping and Guangzhou Wenhua Furui due to disputes related to the failed restructuring deal of CSC Phoenix.
Sinotrans & CSC sold its entire controlling stake in CSC Phoenix, which was suffering deep financial trouble, to Tianjin Shunhang Shipping in 2015 and as part of the deal Tianjin Shunhang promised to transfer all the shipping assets and employees of CSC Phoenix to Sinotrans & CSC for free after the company completes a restructuring.
However, Tianjin Shunhang failed in an attempt to restructure CSC Phoenix into a dredging company in 2016 and couldn’t conclude a deal to transfer its shares in CSC Phoenix to Guangdong Wenhua Furui last year.
Sinotrans & CSC filed the lawsuit against Tianjin Shunhang as the latter’s inability to fufil the agreement and Guangdong Wenhua Furui for its joint liability.
Tianjin Supreme People’s Court has ruled Tianjin Shunhang and Guangdong Wenhua Frui to pay RMB265.8m ($39.5m) plus relevant interest to Sinotrans & CSC as compensation.
Sinotrans & CSC recently refused to extend charter contracts of 13 bulkers with CSC Phoenix, leading to the company’s capacity shortage issue and last month 42 out of 49 employees from CSC Phoenix’s shipping operations team submitted letters of resignation. Sources tell Splash that all 42 have moved back to Sinotrans & CSC.
Additionally, Sinotrans & CSC also requested CSC Phoenix to remove the “CSC” trademark from its name.