Newtimes Development Ltd, a Hong Kong-based apparel buying agent, has sought Bangladesh government’s intervention to resolve trade dispute between a local garment factory and a US buyer arisen over the latter’s non-payment and bankruptcy, sources said. The US brand-Coldwater-last year placed a work order worth US$1.15 million to local garment factory Croydon Kowloon Designs Ltd (CKDL) located in Savar EPZ, they said. The brand paid only US$454,000 to CKDL against shipments, but $698,000 remained pending. Newtimes, an agent of Coldwater, also works for other brands like Polo Ralf Lauren and American Eagle. The buying agent has a local office in Bangladesh for more than a decade. Due to adverse effects of the Covid-19 pandemic, Coldwater decided to file plea for bankruptcy and liquidation in USA and court directed for sale of assets of the company through auction, they added. CKDL communicated with the brand for the remaining amount as per purchase orders, but Coldwater responded that they have no fund and advised them to follow the US law to claim their money. CKDL then pursued legal action via a civil money suit and criminal case against Newtimes Development Ltd through the Bangladesh court, they said. Newtimes liaison office in Bangladesh on November 16 in a letter to commerce minister Tipu Munshi alleged that CKDL has adopted a wrongful approach and methods of police harassment and intimidation against the company instead of international trade negotiations. “These kinds of wrongful actions would set a bad precedence for future where such genuine cases of bankruptcy and liquidation would be dealt with in such unfair manner where the agent is held liable for payment rather than the actual buyer to whom goods were directly sold to,” the letter, signed by Newtimes Bangladesh country manager Kaizad Mistry, reads. Due to the Covid-19 pandemic globally, such cases have become frequent and these kinds of issues need to be dealt with in accordance with the US law, he added. The dispute is purely between CKDL and Coldwater derived from sales of garments under specific purchase order, the letter said, terming it an ‘international trade issue’ being a cross-border transaction wherein Newtimes is merely a buying agent ‘with no responsibility of paying sales value to the supplier (CKDL) on behalf of buyer-Coldwater’. Citing the purchase order, the buying agency agreement (between Coldwater and Newtimes) and the LoU (Letter of Undertaking) signed by CKDL, the letter said CKDL has accepted TT 60 days open payment terms with Coldwater and has invoiced and consigned goods directly to Coldwater. “It is 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 added. Talking to the FE, Mr Mistry said even after several reminders and communication, CKDL refused to file their legal claim for the money which is binding by US trade law. Newtimes, however, sent legal notice to Coldwater in US demanding payments of all outstanding dues, and all legal fees on behalf of all the factories, he said in the letter. Rather, CKDL decided to pursue legal action via a civil money suit and criminal case against Newtimes Development Ltd through the Bangladesh court, it reads. “This does not fall in line with the way the due process works in such cases of international trade law.” As a means of harassment by CKDL, a PBI (police bureau of investigation) was sent to Newtimes Bangladesh office and contained all the names of several of its managers and employees, it added.
The buying agent requested the commerce minister to intervene and amicably close this matter urgently saying, “This is an utmost importance for the apparel export business and trade relationships between the two countries and for the local apparel industry as well.” When asked, Mishal Ali, managing director of CKDL, said the allegation of harassment is not true rather they are being cheated and taking legal moves. Newtimes did not give any assurance of remaining payment though they asked for money for claiming CKDL’s pending amount, he said. He further claimed that though the company has acquired Coldwater, they are not taking responsibility for payment and created confusion hiding this information. Responding to the acquisition, Mr Mistry said they have provided all related information to PBI.
