Court dismisses Zespri case

The New Zealand High Court has dismissed a claim by a Chinese importing company that Zespri should pay an $8 million fine imposed on it by the Chinese Court.

The claim was made against Zespri by Shanghai Neuhof which was fined in China for underpayment of duties on Zespri kiwifruit.

Shanghai Neuhof and fellow company Shanghai Hui Zhang are claiming a total of $NZ33.5 million from Zespri for the court fines and losses they say resulted from Zespri terminating their contracts.

On September 26, the High Court of New Zealand delivered a procedural judgment concerning Zespri's request that the court strike out the $33.5 million claim.

In its judgment, the High Court struck out the Shanghai Neuhof claim for the $8 million fine imposed by the Chinese court.

It removed the proceeding from the Commercial List, noting that there are considerable evidential obstacles for the plaintiffs to overcome to get this matter to a trial but stating that this is an issue for normal case management processes rather than a procedural motion.

The rest of the case will now proceed through normal court proceedings.

A spokesperson says Zespri is pleased the court has struck out the claim for indemnity in respect of the $8 million fine.

'Zespri will vigorously contest the remaining assertions of the plaintiff and remains of the view that the claims are unlikely to succeed.”

The case has arisen from events in 2011 when the Shanghai Anti-Smuggling Bureau raided the offices of Shanghai Neuhof as part of an investigation into underpayment of duty on imported kiwifruit.

In 2012, Shanghai Neuhof and its managing director Mr Liu were convicted of the charge of smuggling and ordered to pay the shortfall in duty of $NZ7.5 million and a fine of $8 million.

Liu was also sentenced to 13 years' imprisonment. Shanghai Hui Zhang was not convicted of any offence.

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