Two super-rich businessmen are slugging it out through the Singaporean courts after one of them allowed the other to use his letter of credit (L/C) facilities.

Pankaj Dhirajlal says he allowed his former friend and business associate Vinod Kumar Didwania to use his L/C facilities.

Under their agreement Didwania should have repaid L/C proceeds to Dhirajlal, who says he has not been repaid.

Counter claims

Dhirajlal claims this is a case of fraud. Didwania counters that it was a case of illegal money lending.

Didwania has fought to have the suit thrown out, all the way to the Court of Appeal but he has lost the battle and the case will be heard.

Business arrangements

Dhirajlal said that in 1997 he allowed his former friend to use his L/C facilities after Didwania approached him with a business proposal.

Didwania had said his L/C facilities were fully utilised and in this respect he needed Dhirajlal's assistance.

Repayments

Under their agreement, Didwania said he would promptly repay Dhirajlal the value of L/Cs he used, plus interest and fees.

Didwania was also supposed to pay Dhirajlal a 1.5 per cent commission on the L/C amounts at an interest rate of 12 per cent per annum.

Reminders ignored

The arrangement apparently worked for a while, but Didwania allegedly stopped repaying Dhirajlal after April 2003.

This led Dhirajlal to sue his former friend for around US$550,000, after Didwania allegedly ignored reminders to pay up.

The case will be heard at a date to be decided later.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.