MSC could face default penalty in MCS’ FMC complaint

MSC is facing a default judgement from the US Federal Maritime Commission (FMC) in the complaint brought by US furniture maker MCS Industries, after the Swiss-Italian liner giant failed to submit documents that the FMC had ordered to be turned over as part of the proceedings.

In July 2021, US furniture maker MCS filed complaints with the FMC, alleging that MSC and COSCO Shipping Lines reneged on their contractual obligations to supply shipping slots for exports to Asia. MCS resolved its dispute with COSCO two months later.

In January 2022, MSC released a press statement, calling MCS’ allegation“baseless”, adding that MCS had retracted its accusation that the liner giant had colluded with its peers to deprive the furniture maker of shipping space and forcing it to pay more for slots purchased on the spot market.

MSC had said then, “We believe that the difficulties MCS Industries experienced with its 2021 cargo bookings under its service contract with MSC arose from errors and communication issues between MCS Industries and third-party intermediaries, and not from any wrongdoing by MSC.”

However, on 8 September, FMC judge Erin Wirth said there was no reason why she should not issue a default judgement against MSC when the world’s largest liner operator had not complied with a 29 August deadline to submit documents pertaining to its purported contract with MCS. Wirth had issued the deadline in July, but MSC claimed that it could be liable to prosecutions under Swiss law if it turned over the documents.

Wirth said, “The question of whether Swiss assistance with discovery is required has been answered by the undersigned administrative law judge and by the Court of First Instance in Geneva. [MSC’s] position did not prevail, and now it must produce discovery or face procedural consequences. Relitigation of the same issue will not be permitted and has only delayed this proceeding.”

MSC said it wanted to consult the US Federal Office of Justice, and sought more time to hand over the documents, but Wirth shot down this response.

The liner operator said, “MSC regrets that it is required to ask for further delay, but respectfully submits that the current situation places MSC in an impossible position.”

MSC had not replied to Container News’ request for comment.

Martina Li
Asia Correspondent