ERJ staff report (DS)
Singapore -- A Chinese tyre maker is being sued over two defaults on rubber contracts in 2008. The Asian Rubber Business Council and a subsidiary of Lee Rubber has issued lawsuits against Zhaoyuan Leo Rubber Co Ltd over two separate contracts, totalling 2016 tonnes of rubber.
The Chinese company allegedly failed to honour the price agreed with rubber trader Regional Rubber Trading Co Ltd. following rapid changes in the price of rubber. Reuters says the lawsuit is for $2 million
In October 2008, ARBC issued a statement saying, "The sharp price fall has given rise to market talks of contract defaults by buyers. THis has accelerated the price fall. ABRC has agreed to address the issue on defaulting buyers and expressed the urgent need to uphold the principle of contract sanctity."
The organisation said It would act to stop further defaults. One of the measures announced at the time was the use of legal redress against defaulting parties.
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Announcement of court proceedings from ABRC
Press release (2008) from ABRC
Business Times (Malaysia)
Straits Times (Singapore)