Miami suit would block ports takeover

WASHINGTON — A company at the Port of Miami has sued to block the takeover of shipping operations there by a state-owned business in the United Arab Emirates.

It is the first U.S. courtroom effort to capsize a $6.8 billion sale embroiled in a national debate over security risks at six major U.S. ports affected by the deal.

The Miami company, a subsidiary of Eller & Co., is a business partner with London-based Peninsular and Oriental Steam Navigation, which Dubai Ports World purchased last week. In a lawsuit in Florida circuit court, the Miami subsidiary said that under the sale it will become an "involuntary partner" with Dubai's government and it may seek more than $10 million in damages.

The Miami subsidiary, Continental Stevedoring & Terminals, said the sale to Dubai was prohibited under its partnership agreement with the British firm and "may endanger the national security of the United States."

It asked a judge to block the takeover and said it does not think the company, Florida or the U.S. government can ensure Dubai Ports World's compliance with U.S. security rules.

A spokesman for Peninsular and Oriental declined to comment.

The lawsuit represents the earliest skirmish over lucrative contracts involving the six major U.S. ports where Peninsular and Oriental runs major commercial operations: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The lawsuit was filed Friday and disclosed late Saturday by people working on the case.

The sale, approved by the Bush administration, has drawn escalating criticism from lawmakers in Washington who maintain the United Arab Emirates is not consistent in its support of U.S. terrorism-fighting efforts. At least one Senate oversight hearing is planned.

A New Jersey lawmaker, U.S. Rep. Frank LoBiondo, said Saturday he wants to require that U.S. port-security officials be U.S. citizens, to prevent overseas companies operating domestic shipping facilities from hiring foreigners in such sensitive positions.

LoBiondo, chairman of the Coast Guard and Maritime Transportation Subcommittee, cited "significant" security worries over the sale to Dubai Ports World.

Caught by surprise over the concerns expressed in the United States, Dubai is cautiously organizing its response. The company quietly sent advisers to reassure port officials along the East Coast, and its chief operating officer — U.S. shipping executive Edward Bilkey — is expected to travel to Washington this week for meetings on Capitol Hill and elsewhere.

The Bush administration in recent days defended its approval of the sale and resisted demands by Congress to reconsider.

State Department spokesman Sean McCormack described the United Arab Emirates on Friday as a "long-standing friend and ally" and said the United States and UAE had a good relationship.