A Bangladeshi apparel company has filed a civil money suit and a criminal case against a Hong Kong-based apparel buying agent as the exporter has not got export proceeds as per contract.
The buying agent, Newtimes Development Ltd, however, sought an initiative from the Bangladesh government to resolve the dispute.
Last year, local garment maker Croydon Kowloon Designs Ltd located in the Savar Export Processing Zone on the outskirts of Dhaka shipped products worth $1.15 million to US brand Coldwater as per a sales contract mediated by Newtimes Development Ltd.
After the shipment, the brand paid $4,54,000 to CKDL and the payment of $6,98,000 remains pending.
When CKDL communicated for the rest amount, Coldwater suggested that the supplier follow the US law to claim its money as the brand filed an application for bankruptcy and liquidation in the US and court directed for sales of assets of the company through auction, according to sources.
Under the circumstances, CKDL pursued legal action against Newtimes Development after the buying agent said that they had no liability for payment, the sources said.
Newstime Development Bangladesh liaison office on November 16 in a letter requested commerce minister Tipu Munshi for an amicable solution to the issue, saying that it was an utmost importance for the apparel export business and trade relationship between Bangladesh and the US.
The buying agent alleged that CKDL has adopted a wrongful approach and methods of police harassment and intimidation against the company instead of international trade negotiation.
Newtimes claimed that it was purely an international issue being a cross-border transaction wherein the Newtimes was merely a buying agent with no responsibility of paying sales value to supplier on behalf of buyer.
The dispute was purely between CKDL (supplier) and Coldwater (buyer) as the letter of undertaking signed by the two parties had accepted telegraphic transactions with consigned goods directly to the buyer, the letter said.
‘Hence it is a very clear case that the transaction was between CKDL and Coldwater and the claim of money by CKDL to Newtimes is wrongful and not as per the legal trade laws,’ it said.
According to the letter, due to adverse effects of COVID-19 pandemic, Coldwater decided to file for bankruptcy and liquidation in the US and court directed for sales of assets of the company through an auction.
Mishal Ali, managing director of CKDL, told New Age on Saturday that they were taking legal moves as buying agent Newtimes should not avoid its responsibility for payment.
He said that they were not harassing the buying agent rather Newtimes had acquired Coldwater, hiding information and creating confusion.
‘Newtimes pursued me several times asking me to give them power of attorney and assignment to pursue the buyer. But I did not provide it and while they were pursuing me for assignment they never told me that they were planning to buy Coldwater,’ Mishal said.
Newtimes established its office in Bangladesh more than a decade ago and works as a buying agent for many global brands like Polo Ralf Lauren and American Eagle.
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