CTBC Bank Co. v. Industrial Commercial Bank of China Ltd. [2024]
Issuer ICBC applied to stay action alleging forum non conveniens.
[2024] HKCFI 2820 [Hong Kong]
Type of Lawsuit: Issuer applied to stay action alleging forum non conveniens.
Topics: Bills of Exchange; Discrepancies; Forum non conveniens; Fraud; Good Faith; Negotiation; Parallel Proceedings; UCP600 Article 7(c)
Parties:
• Plaintiff/Negotiating Bank – CTBC Bank Co., Ltd., a Taiwanese bank
• Defendant/Issuer – Industrial Commercial Bank of China, Ltd., incorporated in PRC.
• Seller/Beneficiary – VLSA Enterprise Ltd., a Seychelles company.
• Buyer/Applicant – Guizhou New Era Union Import and Export Co. Ltd.
• Third Party – Oppten International Ltd.
• Shipper – China Ocean Shipping Agency Qinzhou
Underlying Transaction: Sale and purchase of green petroleum coke.
Instrument: UCP600 LC for CNY 63,204,011.73. No express choice of law, Chinese law applied.
Decision: The High Court of Hong Kong, Court First of Instance, Chan, J., denied the requested summons.
Rationale: Application to stay action on basis of forum non conveniens rejected where issuing bank failed to make good arguable case that jurisdiction holding parallel proceedings was clearly more appropriate forum; negotiating bank entitled to have its claim on UCP600 undertaking heard in instant court.
Factual Summary:
To support its purchase of 61,066 MT of green petroleum coke, Guizhou New Era Union Import and Export Co. Ltd. (Buyer/Applicant) applied for and caused Industrial Commercial Bank of China, Ltd., Guizhou branch, (Issuer) to issue a CNY 63,204,011.73 UCP600 letter of credit in favour of VLSA Enterprise Ltd. (Seller/Beneficiary). CTBC Bank Co., Ltd. (Negotiating Bank), was nominated by Issuer; late May 2023, Seller/Beneficiary tendered Negotiating Bank with an application and complying bills of exchange requesting that they be discounted (90-days sight). The next day, Negotiating Bank forwarded the documents to Issuer. Seller/Beneficiary later presented a revised commercial invoice to Negotiating Bank which was passed on to Issuer.
• CTBC Bank Co. v. Industrial Commercial Bank of China Ltd., [2024] HKCFI 3525 [Hong Kong] (dismissing application for leave to appeal denial of forum non conveniens application)
Read next
Singapore Paper Reveals Banks Pass Inspection, but have Room for Improvement
Four years after the Association of Banks in Singapore (ABS) roll out of a “Code of Best Practices – Commodity Financing”
Hong Kong Police Arrest Five Suspects on Charges of Using False LCs
Five individuals attempting to convert letters of credit into USD 10 billion at a bank in Hong Kong on 10
Ee Hup Construction Pte Ltd. v. China Jingye Engineering Corp. [2025]
Applicant appealed Singapore trial court decision granting partial injunction on performance bond.
ERA Capital L.P. v. Soleil Chartered Bank [2024]
Bench trial for negligent misrepresentation claim by beneficiary against advising bank.