Industrial and Commercial Bank of China (ICBC) and Taiwan's CTBC Bank have filed competing legal claims over a US$8.8 million financing for a shipment of Venezuelan petroleum coke that is mired in allegations of fraud.

CTBC has asked a court in Hong Kong to order ICBC to pay the sum under a negotiated letter of credit (L/C).

Dispute details

The dispute between ICBC and CTBC Bank revolves around an US$8.8 million financing for Venezuelan petroleum coke, which has been embroiled in fraud allegations.

CTBC Bank is seeking judicial intervention in Hong Kong, urging the court to compel ICBC to honour an L/C tied to the shipment.

The legal battle is a high-stakes dispute over responsibilities under trade financing and L/C structures.

Broader challenges

This case exemplifies the broader challenges in international trade finance, where fraud risk, geopolitical sensitivities, and jurisdictional issues intersect.

Both ICBC and CTBC are sizable institutions with significant international operations, and this case could impact their future dealings in politically sensitive or risk-laden markets like Venezuela.

Additionally, the case highlights potential risks associated with financing commodities from volatile regions, with both banks keen to limit financial and reputational damage while they await court rulings on payment obligations and possible recourse mechanisms.

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