With litigation spanning the globe, Swiss-based ship charterer ADM International Ltd failed in its Fair Trading Act claim it was misled as to the value of forestry rights in New Zealand offered up as security for two ship charters. New Zealand litigation failed because ADM never checked wording of publicly available documents.
ADM International is suing to recover unpaid hire charges totalling USD 1.2 million after British Virgin Islands charterparty Golden Shine Management Ltd defaulted on two ship charters in late 2022.
The High Court in New Zealand was told this dispute is currently subject to both litigation and an arbitration in the United Kingdom.
ADM negotiates up to three thousand ship charters every year. A sister company undertakes due diligence on proposed charterers, with a quick 24 hour turnaround usually required on the credit-worthiness of potential customers.
Golden Shine did not get quick tick. ADM needed more information. After getting some extra information it required extra security.
ADM accepted as further security, New Zealand forestry rights registered in the name of Golden Shine NZ Ltd, itself ultimately owned by British Virgin Island interests.
When it came to the crunch, ADM found these forestry rights were of little value.
It sued Kiwi Forests Investment Ltd, who granted the forestry rights, claiming status of the security had been misrepresented. ADM alleges there is a common ownership buried within all three companies: Kiwi Forests, Golden Shine and Golden Shine (NZ).
In the High Court, Justice Blanchard stated full due diligence would have identified what the forestry right amounted to.
These rights were created after Kiwi Forests 2015 purchase of 2,300 hectares of Wairarapa forestry.
It partnered with Golden Shine (NZ) to manage carbon credits associated with the forest.
Terms of their agreement were set out in 2017 contract.
It is not mandatory to register forestry agreements on title to land. But Climate Change Response Act requires registration where there is an agreement to manage carbon credits.
Golden Shine (NZ)’s forestry right was registered. As is the norm, title registration consisted of a short notation on the land register maintained by Land Information, with a reference number identifying the transaction.
Again, as is the norm, the 2017 contract setting out terms of this registered forestry right was filed with Land Information, available for public inspection.
Kiwi Forests could not be considered acting in a misleading and deceptive manner when full details of the supposed security were available for public inspection, Justice Blanchard ruled.
Those undertaking land title searches are aware short notations on a title are not a full description of rights granted; underlying documents often need inspection.
ADM International SARL v. Kiwi Forests Investment Ltd – High Court (9.05.25)
25.114