More than two years after Maersk Sealand left the Port of Long Beach, taking what was then a quarter of its container traffic, the vessel line is stuck in a rental dispute with the port that could result in a civil trial this June.
Tensions have lingered since October 2003 when Maersk Sealand alleged in a lawsuit that its former landlord still owed parent company A.P. Moller-Maersk A/S $1 million in rent credits over infrastructure problems at the terminal during its tenure.
The port countersued, claiming that the vessel line's terminal operation, APM Terminals Pacific Ltd., owed $4.5 million in the final year of its 10-year leasing agreement.
The two sides have been using a private mediator to reach a settlement before a scheduled June 7 trial in L.A. County Superior Court.
"They had a general contractual obligation to maintain the facility and our allegation is that they didn't do that," said Dominic Holzhaus, principal deputy Long Beach city attorney handling the case for the port.
Mark Haddad, a partner with Sidley Austin Brown & Wood LLP, which is representing APM Terminals, refused to comment.
Maersk operated the 107-acre Pier J terminal while a competitor, Sealand, had the 92-acre Pier G site. The two companies merged in the late 1990s and amid a boom in imported goods the consolidated company outgrew both parcels.
The port tried to keep the company by offering other sites, but Maersk Sealand decided in 2000 to move to the Port of Los Angeles, which promised a new 484-acre facility.
Maersk Sealand left Long Beach in 2003 and refused to pay the last of its lease payments, claiming that the docking facility was substandard, according to the suit. The port agreed the facility needed improvement but claimed it was the vessel lines' responsibility, Holzhaus said.
Maersk Sealand also maintains that Long Beach owes rent credits because the space it had been leasing was no longer large enough to meet its needs, the lawsuit states.
In addition, Maersk Sealand alleged that until the port constructed a breakwater wall, waves crashing into the docks rocked its vessels, delaying the time it took to load and unload cargo.
The two sides failed to resolve the dispute during a mediation session March 24 and a scheduled meeting the following day was postponed. A new mediation session has not yet been scheduled.
Should the two sides fail to reach an agreement, Los Angeles Superior Court Judge Conrad Aragon is scheduled to hear arguments later this month or early May over who was responsible for maintenance of the facility, among other issues.
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