CSBC to sue Zim

Officials of Taiwan’s leading shipbuilder, the state-run CSBC Corp., said recently that, despite a last-minute decision by the Israeli shipping company ZIM to cancel an order for six container ships worth $220.4 million, CSBC’s order books are full until 2012.

CSBC said that the preliminary income losses from the cancelled order were estimated to reach NT$1 billion ($29.5 million) this year. “We are in the midst of soliciting new contract orders from international customers, as well as participating in government projects to even out our revenue stream,” said Lee Shu-ling, chief secretary of the board of directors at CSBC. Furthermore, CSBC is working on the Taiwanese navy?s coastal defence ships, Lee said.

CSBC plans to sue Zim for breach of contract under the penalty clause whereby the Israeli company could be forfeiting the 10% deposit it made on the six 1,700-TEU container vessels as well as any associated raw material costs CSBC has incurred so far in the production of the vessels. Lee said the company had yet to begin work on the vessels which was expected to begin at its Keelung production site in November. As a result of the cancelation, CSBC now has 52 orders on its books.