$7 million sought from Clearlake Shipping from boat charter company in fraud suit

By Charmaine Little | Jun 22, 2018

SAN FRANCISCO – The owner and charterer of ocean-going vessels is seeking more than $7 million after one of its ships was arrested in Singapore.

shipping   ICS Media Database

SAN FRANCISCO – The owner and charterer of ocean-going vessels is seeking more than $7 million after one of its ships was arrested in Singapore.

South Korean company Pan Ocean LTD accused Clearlake Shipping PTE of Singapore of fraud and breach of contract in a suit filed June 13 in the U.S. District Court for the Northern District of California.

Pan Ocean alleged it initially leased its M/V Grand Ace 12 to Clearlake Shipping so it could transfer cargo to a particular area in 2016. Clearlake allegedly later asked Pan Ocean to modify the order and billing, which Pan Ocean concurred to after Clearlake gave it a letter of indemnity (LOI).  That document released Pan Ocean from any liability should anything go wrong because of the modifications, the suit states.

Before the vessel made it to its destination, Clearlake asked Pan Ocean to “discharge the cargo without presentation of the original bills of lading,” the claim stated, adding that Pan Ocean “complied with this request.”

Pan Ocean later filed the lawsuit after Grand Ace 12 was taken into custody in Singapore from parties that said they were supposed to receive the cargo. The suit states these parties allege Pan Ocean is liable for negligent and fraudulent misstatements, which the plaintiff denies.

"By reason of Clearlake Shipping’s breach of the Charter and the LOI, in failing to provide security for the Singapore entities’ claims, defend the action in Singapore, and indemnify Pan Ocean for all consequences of following Clearlake Shipping’s instructions, Pan Ocean has sustained damages in the principal sum of $5,652,052.71," the suit states. 

Pan Ocean alleges it was required to pay $5.6 million to secure the vessel's release. 

The plaintiff alleges Clearlake has also not kept its end of the deal concerning the terms of the LOI.

The plaintiff seeks $7.2 million to obtain security for its claim, plus interest, costs and attorney’s fees. It is represented by Lewis Brisbois Bisgaard & Smith in San Francisco.

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