Legal showdown underway as Cotemar moves to freeze almost $60M in American Bureau of Shipping subsidiary’s assets

The long-running financial standoff between Mexico’s offshore services company Cotemar and ABSG Consulting, a subsidiary of American Bureau of Shipping (ABS), has intensified, with the Mexican firm now turning to the New York State Supreme Court to restrict the U.S. government contractor’s access to nearly $60 million in assets.

A new development in Cotemar’s legal action to recover $59.4 million from ABSG Consulting for unpaid work saw the firm submit a new filing, asking a New York court to suspend nearly $60 million in assets belonging to ABS’ subsidiary due to the Mexican player’s concern that ABSG will be unable to satisfy the judgment against it at the end of this process.

After years of litigation in Mexico, Cotemar took legal action last month to recover $59.4 million from ABSG. The move aims to secure a final foreign judgment before ABS’ subsidiary can potentially dissipate or restructure its holdings.

The controversy traces back to late 2017, when ABSG subcontracted Cotemar to deliver extensive logistical support for an offshore drilling installation project in the Gulf of Mexico.

By March 2018, the Mexican firm had fully executed its obligations, and ABSG even issued official signed certificates confirming the work met all contractual criteria and was completed.

However, despite pocketing its payouts from the primary project contractor, ABSG reportedly withheld payment from Cotemar, forcing it to initiate legal action in Mexico City.

After a thorough trial, a Mexican court ruled decisively in Cotemar’s favor in March 2022, followed by an appellate tribunal, which subsequently upheld the decision in June 2023, dismissing ABSG’s challenges as legally groundless.

Since ABS’ subsidiary repeatedly bypassed deadlines to pay or post required security bonds under Mexican jurisdiction over eight years, Cotemar is now asking the court to freeze ABSG’s assets while its action to recover the $59.4 million it is owed remains pending.

Aside from this order of attachment, which empowers local authorities to secure up to $59.4 million, covering the principal debt plus accrued interest, from ABSG’s accounts and properties, the Mexican company’s legal team is asking the New York court for two more critical interventions.

These entail a temporary restraining order (TRO) to block any third-party garnishees from transferring or hiding ABSG assets, while the court weighs the attachment and post-attachment disclosure, directing ABSG to explicitly detail its assets and debts, so that the full judgment can be successfully executed.

ABS’ subsidiary is no stranger to New York attachment remedies, since it petitioned a federal court in New York in 2018 for an attachment order of nearly $39 million against the primary contractor on the same project.

Cotemar argues that ABSG cannot embrace these legal tools as a claimant while rejecting them as a judgment debtor and emphasizes that an asset freeze will not unfairly prejudice the U.S. contractor.

Under New York law, the company can lift the restraint at any moment simply by posting a standard financial undertaking. As the legal battle unfolds, the outcome could set a precedent on the way foreign corporate judgments are safeguarded and enforced across state lines.

While this fight continues, Cotemar is busy with work, as demonstrated by its recent deployment of two offshore vessels in the Campeche Sound, supporting strategic offshore construction, maintenance, and engineering projects in the Gulf of Mexico.