China East Star Group Co Ltd, the parent company of East Star Airline, filed a lawsuit against the Zhongxiang Bureau of Land and Resources in Central China's Hubei Province over a dispute about land transfer fee, the company said at a press conference Wednesday in Beijing.

Jiang'an District People's Court in Wuhan, capital city of China's Hubei Province, told East Star that according to a document issued by the Zhongxiang Bureau of Land and Resources, East Star should pay 60 million yuan ($9.83 million) as a land transfer fee for land auctioned on October 11 by the court, Lan Jianmin, the assistant president of the company, said at the press conference.

The auction was held to cover a debt of about 50 million yuan which East Star owes to Wuhan-based Rongzhong Capital Investment Group.

"We have never seen the document," Lan said. "We only knew that from the auction result released by the court. We have tried to contact the Zhongxiang [bureau] for more information but we failed."

East Star believes it should not pay the land transfer fee because when the company signed the land development contract with Zhongxiang government in 2003, the local government promised in the contract that East Star would be allowed a fee exemption in exchange for its investment, Lan said. She also showed the contract at the conference.