Two Chinese companies are demanding that a Yonkers dietary supplements company pay nearly $500,000 for shipments of ginkgo biloba powder.
China Export and Credit Insurance Corp., also known as Sinosure, and Hefei Reachever Import and Export Ltd. petitioned U.S. District Court, White Plains on June 28 to enforce an arbitration ruling against API International Group for breach of a 2019 supply agreement.
Sharif Omar, the president of API, did not reply to an email asking for his side of the story.
API imports ingredients, according to the petition, then resells the substances to an affiliated company that makes dietary supplements for sale outside of the United States.
API’s address at the Highridge Plaza on Central Park Avenue, as shown on a state corporation record, appears to be a UPS store that has a mailbox service.
Sinosure had paid an insurance claim to Hefei, the company that exported powdered ginkgo extract to API.
Ginkgo biloba advocates believe that the herbal supplement confers a wide variety of health benefits, such as enhanced cognitive performance and better blood circulation.
Importers must demonstrate the purity, strength and composition of ingredients used in dietary supplements, according to the arbitration ruling, and substances that fail to conform with U.S. Food and Drug Administration criteria are considered misbranded and adulterated.
The FDA samples imports at U.S. ports to determine if they comply with its standards, the arbitration ruling states, but FDA-registered exporters have fewer inspections.
In 2017, the FDA issued a tougher standard for powdered ginkgo extract.
Hefei got its ginkgo from Dongling Health Food Co. But Dongling was unable to comply with the tougher FDA standard and Hefei was unable to find another Chinese producer.
API decided to proceed with the imports, according to the arbitration ruling, and instructed Hefei to insert the name of another exporter that was registered with the FDA, “to lessen the risk of a spot inspection.”
API accepted several shipments, according to the arbitration report, but failed to pay for two.
API initiated the arbitration case with the International Centre for Dispute Resolution.
The Yonkers company contended that it had not authorized Dongling to make the ginkgo biloba powder and claimed that the products it received were adulterated and unusable. It demanded $1,375,251 for lost profits and various costs.
API also claimed it was blacklisted by Sinosure, leaving it unable to do business with Chinese manufacturers insured by Sinosure.
Hefei contended that the products were not adulterated and API got what it bargained for.
The arbitrator dismissed API’s claims against Hefei and Sinosure and ruled that API must pay Hefei $473,855 for unpaid shipments, legal fees and other expenses.
API has refused to honor the arbitration ruling, according to Sinosure and Hefei, and they are asking the federal court to confirm the award.
