Kendell Seafood Imports will have to pay more than USD 575,000 (EUR 528,000) to Chilean Sea Bass Inc. after the adjudication of a lawsuit over a pricing dispute stemming from the Covid-19 pandemic.
U.S. District Court Judge John J. McConnell Jr. ruled on 22 May that North Kingstown, Rhode Island, U.S.A.-based Kendell Seafood must repay Chilean Sea Bass (CSB) for a shipment of Antarctic toothfish received in 2020, just as the U.S. foodservice sector was shutting down at the beginning of the pandemic.
According to the decision, Kendell Seafood Owner Mike DellaGrotta agreed to pay USD 21.00 (EUR 19.29) per kilogram for the entire catch of Antarctic toothfish in March 2020, amounting to 329,042 kilograms worth USD 6.05 million (EUR 5.56 million). However, DellaGrotta, after paying USD 1.325 million (EUR 1.217 million), claimed Covid had triggered force majeure, negating the contract.
DellaGrotta entered negotiations with Pedro Grimaldi, who presented himself as a CSB owner but who actually had lost control of the company to the Neptuno Fishing Company, owned by Carlos Celle, Alexander Celle, and Dmitri Marichev, in 2013.
Grimaldi allegedly reached an oral agreement to lower the March 2020 shipment’s per-kilo cost by USD 6.00 (EUR 5.51), for a discounted total of USD 4.075 million (EUR 3.742 million), but that rate was not approved by CSB ownership. CSB never informed DellaGrotta Grimaldi lacked authority to enter contracts or negotiate the price of fish but accepted the remainder of the payment for the shipment at the discounted rate, according to court documents.
Few written records exist to corroborate the extent of negotiations between the two parties, but in one email, DellaGrotta proposed a USD 500,000 (EUR 459,000) payment upon delivery of the toothfish. Carlos Celle responded by email agreeing “to settle the outstanding balance,” and DellaGrotta paid that amount soon after, bringing his total payments to CSB to USD 3.5 million (EUR 3.2 million).
In March 2021, Grimaldi told DellaGrotta over the phone that CSB ownership had agreed to forgive the outstanding amount owed by Kendell Seafood. However, by that time, Celle had informed DellaGrotta that the Celles were the owners of the vessels – the Calipso, Koreiz, and Simeiz – and that Grimaldi did not have authority to negotiate on behalf of the company.
In his ruling, McConnell dismissed CSB’s demand for USD 2.55 million (EUR 2.3 million), representing the difference in the two pricing tiers plus interest, but ordered Kendell Seafood to pay USD 575,496 (EUR 528,567), representing the difference between the discounted rate and the amount Kendell Seafood has already paid CSB, plus interest. McConnell also dismissed CSB’s claim of unjust enrichment against Kendell Seafood.
“The court finds that Kendell and CSB entered a valid modification in March 2020 to reduce the price by USD 6 per kilo but did not enter a second modification writing off the remaining debt,” McConnell Jr. wrote. “Because Kendell did not pay the amount owed under the first modification, the court finds it is in breach.”
DellaGrotta could not immediately be reached by SeafoodSource for comment on the decision on 6 June.
