Tire makers take action against rubber trader CGTC

Chongqing, China – Chinese tire maker Aeolus Tyre has filed for arbitration by the China International Economic and Trade Arbitration Commission over the failure of Chinese rubber trader Chongqing General Trading Chemical (CGTC) to deliver purchased goods on 21 Oct.
 
CGTC’s related company PMB International Trading (HK) is also a respondent of the arbitration. The application was accepted on 31 Oct, said an Aeolus announcement.
 
CGTC, one of China’s largest rubber commodity traders, has suspended operation since 27 Sept with its chairman Pang Qingjun missing. It announced it was to “stop executing all contacts that have not been executed” on the same day.
 
Aeolus claimed that CGTC and PMB should deliver the products purchased under five contacts, or pay an equivalent of $3.3 million. It also demanded $1.7 million in damages from the breach of contract, among other costs. 
 
The arbitration involves a total amount of $4.9 million, said Aeolus.
 
China’s Guizhou Tyre also brought a lawsuit, via its trading subsidiary, against CGTC and PMB. The case was accepted by Chongqing No.1 Intermediate People's Court on 6 November, said the company’s announcement on 9 Nov.
 
Guizhou Tyre claimed that the respondents return its $7.4 million payment on account of failure to deliver the purchased goods in five contracts, and requested additional interests for the delayed refund.
 
Other Chinese firms such as Shandong Mirage Tire and Shandong Jingrui Trading have brought lawsuits against CGTC over breach of contact as well. In October the court ruled against CGTC in both cases.