AGA Partners successfully represented the Client, an agricultural trading company, in a dispute with a Bangladesh company (buyer or respondent) in London arbitration. The dispute arose out of respondent’s failure to open the letter of credit under the contract worth nearly USD 1 million.
Our Client fully complied with the Contract and provided all necessary instructions and documents, but the respondent failed to open the letter of credit in time. During prolonged period of correspondence the respondent was alleging various obstacles for opening the letter of credit. As a result, the contract was not performed and the Client suffered significant losses.
The arbitral tribunal in full satisfied our Client’s claim for damages and further awarded the arbitration and legal fees to be covered by the respondent.
Partner Ivan Kasynyuk commented the case:
“In commodities trading time of opening the letter of credit is a condition of a contract. The buyer is expected to open the letter of credit within the prescribed period, but in any case before commencement of the delivery period. Thus, opening the letter of credit by the buyer is a pre-condition for seller’s delivery obligation.
The present case included analysis of a plethora of correspondence between the parties. The arbitral tribunal found that the contract was not performed due to the respondent’s fault and awarded full amount of losses suffered by the Client together with interest and costs.”