Gulftainer Says Buckeye Exploiting Pandemic for ‘Fake Emergency’

A Gulftainer Co. Ltd. affiliate fired back at claims in Delaware court that it’s using the coronavirus pandemic to extort $1 million in extra port fees from Buckeye Partners LP, calling the lawsuit “a last-ditch effort to create a false emergency” over a months-old dispute.

It’s “an improper, indeed offensive and dangerous, exploitation of the current pandemic for Buckeye’s personal self-serving commercial purposes, not any public interest,” Gulftainer says in court papers filed Thursday.

Gulftainer, which operates 40% of major container ports in the Middle East, is a subsidiary of Crescent Enterprises, a diversified Emirati multinational owned by the family-run Crescent Group. Buckeye, a major pipeline operator, filed the suit Monday in the Chancery Court.

It targets GT USA Wilmington LLC, the Gulftainer unit that runs the Port of Wilmington, Delaware. The complaint accuses GT of using the Covid-19 pandemic as “a proverbial gun at Buckeye’s head” to hold hostage fuel tanks that are bound for 200 Wawa gas stations operating as “essential infrastructure.”

Vice Chancellor J. Travis Laster issued a temporary restraining order Tuesday barring GT from blocking access to Buckeye’s Wilmington storage facility.

According to the complaint, GT is “attempting to unilaterally impose” additional “dock-usage fees” not found in the terms of Buckeye’s shipping dock lease, which includes pipeline easements.

Buckeye was “blindsided” when, 13 days after it took over the lease from another pipeline operator, GT threatened to block access to its tanks unless it paid the extra fees, the suit says. GT allegedly sent the same message to Buckeye customers like nonparty Wawa, which is now threatening to sue Buckeye.

There’s nothing extra about the disputed fees, which reflect a tariff owed by all shippers, GT says in the answer it filed Thursday.

Both Buckeye and the company it took over the lease from concocted “a self-serving contrived misinterpretation” to argue that their rent payments “already covered and paid for the same services as the tariff,” according to GT. Buckeye never mentioned any easement until it sued, the filing says.

Moreover, the dispute has nothing to do with the pandemic, and isn’t urgent enough to justify a TRO, given that there’s no fuel shortage, GT says.

The 106-page filing also hits Buckeye with a counterclaim for breach of contract.

GT is represented by Elliott Greenleaf PC. Buckeye is represented by Morgan, Lewis & Bockius LLP.

The case is Buckeye Partners LP v. GT USA Wilmington LLC, Del. Ch., No. 2020-0255, answer and counterclaims filed 4/9/20.