Singapore based Winson Group is demanding 30.4 million Singaporean dollars (SG$30.4 million - US$21.5 million) from Oversea-Chinese Banking Corporation (OCBC) for dishonouring a letter of credit (L/C) the bank issued in respect of a trade with Hin Leong Trading.

Several L/C transactions have been jeopardised by the spectacular collapse of Hin Leong (DC World News, 3 June 2020) and claims in respect of L/Cs tied to the Singaporean oil trading giant's assets have already been lodged, including one by ABN Amro Bank (DC World News, 21 April 2020).

Dishonoured L/C

The irrevocable L/C issued by OCBC on 6 April in favour of Winson for Hin Leong specified a payment deadline of 18 May and was due to expire on 2 June.

Winson, a major regional energy company with overseas operations in Hong Kong, Taiwan and mainland China, claims that OCBC, one of Singapore's largest banks, failed to honour the L/C that was issued to finance a diesel trade with Hin Leong.

Document discrepancies

In its defence OCBC says it told Winson on 23 April that it would not honour the L/C because it had found serious document discrepancies.

"There are serious doubts over the authenticity of the documents presented to us, and/or the transaction contemplated therein, and/or the existence of the cargo that is to be pledged to the bank," according to documents submitted to the court.

Hin Leong reportedly now owes as many as 23 banks a total sum of around US$4 billion.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.