GTR News Brief: Coal trader wins appeal in trade sanctions clash

Host Felix Thompson is joined by reporter Jacob Atkins to discuss a recent Singapore court case involving JP Morgan and a coal trader, Kuvera Resources.

Last year JP Morgan successfully fended off a lawsuit brought by Singapore’s Kuvera Resources, with a judge finding that the lender was entitled to decline payment for a US$2.4mn shipment of coal because the vessel involved may have been Syrian-owned and subject to far-reaching US sanctions on the country.

But Singapore’s Court of Appeal on September 28 decided in Kuvera’s favour, ruling that JP Morgan did not prove to an acceptable standard of proof that the vessel was in fact under Syrian ownership at the time of the trade.

Instead, the court found the bank’s decision to reject payment was based on its own risk management calculations due to the presence of “red flags” that suggested a connection with Syrian entities.

In this episode, we delve into the reasons behind the judges’ decision, and why the proceedings have been described as a “test case” for the use of sanctions clauses in letter of credit transactions. All the facts of the case described by Jacob in this episode are taken from the written judgement.

 

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