Nigeria's Keystone Bank has been ordered by a Nigerian court to pay China's Hexing Electrical damages of US$778,118 over a breach of contract.

The judgment followed a suit filed before the court against the bank that said the sum of the damages represented the total outstanding sum of the money due and payable under the irrevocable letter of credit (L/C) issued by the bank in September 2015 to the Chinese company.

L/C history

In September 2016, Keystone was said to have issued an L/C in favour of Hexing of US$1,134,545.

The bank paid Hexing a total of US$336,421 in several payments but despite demands for payment of a balance of US$798,108 the bank was said to have refused and only paid an additional US$20,000.

Faulty advice

Keystone claimed that it had been advised not to make the payments because Hexing had not been meeting the terms of its contract to produce, supply and install electricity meters.

Lawyers for the bank nevertheless told the court that Keystone would abide by whatever decision the court took.

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