On October 15, COSCO SHIPPING Specialised Carriers Co., Ltd. announced the progress of a major lawsuit. The company, acting as the defendant, was ordered to pay US$147 million (approximately CNY 1.05 billion) in damages following a first-instance judgment concerning a vessel collision at an Indonesian dock.
The incident, which occurred over two years ago at a port in Palembang, Indonesia, resulted in the collapse of part of the trestle structure.
The announcement revealed that on August 7, 2023, COSCO SHIPPING Specialised Carriers received the lawsuit materials from the People’s Court of Guangzhou Tianhe District. The documents indicated that PT OKI Pulp & Paper Mills (OKI), the indicter, filed a lawsuit against COSCO SHIPPING Specialised Carriers at the KAYUAGUNG District Court in Indonesia for collision damages.
By the end of August 2024, the KAYUAGUNG District Court had completed evidence submission, court hearings, and final statements, transferring all case files to the PALEMBANG High Court. On October 7, 2024, the High Court of PALEMBANG, Indonesia issued a judgment of first instance, ordering COSCO SHIPPING Specialised Carriers to pay OKI US$147 million (or 2.14 trillion rupiah) in damages and 150,000 rupiah in litigation costs.
However, the first-instance judgment rejected the indicter’s other claims, including the request for interest payment. At the same time, after the Indonesian Palembang High Court made the judgment, COSCO SHIPPING Specialised Carriers will appeal to the Indonesian Supreme Court within 14 days. The appeal period ends on October 21, 2024. COSCO SHIPPING Specialised Carriers is actively coordinating with the West of England P&I Club and lawyers to prepare the appeal application materials. As the lawsuit is still at the first-instance judgment stage, the outcome of the lawsuit is uncertain.
COSCO SHIPPING Specialised Carriers said that according to the insurance contract, this lawsuit was insured by the West of England P&I Club and the deductible was US$20,000, that is, the part of the compensation amount that exceeds the deductible of US$20,000 will be borne by the England P&I Club. The company is actively cooperating with the West of England P&I Club and lawyers to prepare the appeal application materials.
It is understood that on May 31, 2022, the 178th voyage of COSCO SHIPPING Specialised Carriers “Leli” set sail after loading in Palembang, Indonesia. During the process of the pilot leading the ship to leave the berth, the ship ran aground and touched the dock, causing part of the pier to collapse. The accident did not cause casualties or environmental pollution.
After the accident, OKI proposed a huge compensation of US$269 million. The company sued, saying that the US$269 million included the cost of repairing the dock pier, the loss of production and operation interrupted during the repair of the dock pier, as well as potential profit loss and additional expenses; COSCO SHIPPING Specialised Carriers also needs to pay 6% deferred interest per year from the date of registration of the lawsuit, and OKI requested the right to confiscate COSCO SHIPPING Specialised Carriers’s property.