Mediation of a cross-border letter-of-credit dispute at the Canton Fair
Anonymised case · Professional reference
Background and challenges
A Chinese hardware company concluded a transaction with a UAE importer at the Canton Fair. A local bank refused payment under the letter of credit because of documentary discrepancies, placing USD 1.8 million in receivables at risk.
Approach and implementation
A team member intervened as an expert mediator at the Canton Fair complaint station. The mediator brought the parties together to check the credit terms and documentary requirements, helped the Chinese company supplement and correct commercial invoices and other documents, and facilitated communication between the bank, buyer and seller to secure acceptance and payment.
Outcomes
The bank accepted the documents and payment proceeded, recovering the USD 1.8 million. The resolution avoided lengthy, costly cross-border litigation and preserved the commercial relationship.
Lessons for international cooperation and governance
Letters of credit are an important means of settling international trade, but documentary discrepancies can readily lead to refusal of payment. This case illustrates the value of professional mediation in resolving cross-border settlement disputes.