MOGADISHU, Jan. 30 (Xinhua) -- A Cambodian-flagged cargo ship that was reported to have been seized by Somali pirates is held by a local court in northwestern Somalia, an official statement said Saturday.

It was widely reported in local and international media that the Cambodian ship was hijacked by Somali pirates after offloading commercial goods in Berbera, a port town in the breakaway state of Somaliland.

However, the statement from the Berbera Port Authority said the local court in Berbera ordered the detention of MV Layla-S after a local businesses man filled a law suit against the company owning the ship, following the destruction of the businessman's goods in a fire on another ship of the company, MV Mairiam Star.

"On Sep. 15, 2009, the MV Layla-S was detained by Local Court of Berbera after it was accused by the merchant for goods of estimated cost of 250,000 U.S. dollars," said the statement.

The statement expressed dismay that the incident was misreported in the media and said owner of the ship was notified of the case.

Earlier on Saturday, Andrew Mwangura, a regional maritime official in Kenya, also confirmed that the hijacked Cambodian cargo ship is being held off Berbera port by businessmen owing to a deal which has gone sour and not pirate attack.

Mwangura, East Africa's Coordinator of Seafarers Assistance Program, said the MV Layla-S which was seized on Wednesday has 14 crew members on board from Pakistan, India, Sri Lanka, Somalia and Syria.

Piracy is rampant in the southern part of the war-torn Somalia where dozens of ships and hundreds of crew are being held for ransom by local pirate gangs.

The breakaway state of Somaliland which proclaimed its independence from the rest of Somalia 1991 enjoys relative peace and has its separate government, parliament, security forces, flag and currency although it has not received international recognition since.