PITTSBURGH A European Metal Recycling Ltd. subsidiary and its insurance company are suing a broker in an effort to recover losses incurred in importing scrap metal containers that arrived in Dallas filled with debris.
Southern Recycling LLC (SoRec) filed the lawsuit in U.S. District Court in South Carolina against Gibbs International Inc., Spartanburg, S.C., which acted as broker to procure copper scrap from Regent Phoenix Imports & Exports, which was storing the material at a warehouse near the Port of Manila in the Philippines. SoRec claims it paid for 500,000 pounds of No. 1 copper wire but received containers filled with cement blocks and slag.
SoRec, which arranged for the deal in November 2012, said that 11 of the 13 containers held no copper. It paid $1.7 million for the containers and released the money once each pair of containers reached the port.
An investigation by CNA Insurance Co. Ltd., the marine cargo insurer, found that the containers were tampered with to allow the doors to be opened without breaking the seals. It is suspected that copper was initially placed in the containers, which arrived in pairs, and then swapped for debris after inspection, the lawsuit says. The switch likely took place before the material left the Philippines, it added.
A Gibbs spokesman said the company wouldnt discuss litigation matters, but plans to vigorously defend itself.