Calgary-based Canada Malting Co. Ltd. (CMC) has launched a lawsuit against Kinder Morgan Canada Terminals Ltd. Partnership (KMCT), alleging that it has suffered losses due to a loading error at the defendant’s North Vancouver terminal.
CMC is seeking damages of US$1,339,305 in damages after a malt barley shipment was allegedly “contaminated” with canola meal pellets.
According to the suit, CMC and KMCT signed a contract in May 2010 for KMCT to receive, handle, store and load CMC malt barley to designated vessels at KMCT’s North Vancouver bulk terminal.
The statement of claim alleges that on or about July 17 2010, KMCT discharged approximately 14 or 15 railcars loaded with CMC malt at the terminal for loading to the ship Aracari Arrow.
It claims that loading began on the morning of July 19, but that in the early afternoon of that day, canola pellets were observed falling into the cargo space in question, and loading was stopped. At that time, it was determined that 2,383 MT of product had already been loaded.
The court document states that “following receipt of information of contamination of the malt barley by canola, the purchaser Cerveceria Nacional rejected the cargo and refused to accept delivery of the cargo of malt barley loaded in No.10 hold of Aracari Arrow.”
The plaintiff states that after investigating the damage, CMC discharged the 2,383MT of malt barley from Aracari Arrow to a barge for salvage sale. CMC is alleging that KMCT breached its contract with the plaintiff by mixing a cargo of canola pellets with CMC’s malt barley.
In a response to the civil claim filed April 30, Kinder Morgan opposed the granting of any of the relief that CMC is seeking. The company claims that the canola pellets eventually found on the Aracari Arrrow originated from railcars of CMC cargo.
Kinder Morgan further alleges that when the loading of the malt barley was nearly completed and canola pellets were noted on the top of the cargo, “CMC refused the offer from KMCT to remove the top layer of cargo, and…instructed or allowed the top layer of the malt barley to be leveled, spreading the canola pellets out throughout the top layer of the malt barley [and]…removed all of the cargo and sold all of that cargo for salvage.”
Kinder Morgan claims that CMC failed to make reasonable efforts to mitigate its loss by, among other things, failing to seek out the highest price possible when selling the cargo for salvage.
None of these allegations has been proven in court.