Cal HC blocks Philippines bank’s exit in B’desh deal

Kolkata: An export shipment to Bangladesh has led to a four-country payment dispute, with the Calcutta High Court declining to remove a Philippines-based bank from a commercial suit concerning alleged non-payment under a letter of credit.

The bench of Justice Aniruddha Roy held that the bank’s involvement in the transaction must be examined at trial after two versions of a key communication emerged, each naming a different sender.

The dispute relates to the supply of about 196.02 metric tonnes of goods by the plaintiff to a buyer in Bangladesh. Payment was arranged through an irrevocable and unconditional letter of credit for USD 177,000 issued in August 2023.

Banks in the Philippines, Malaysia, Bangladesh and India were involved in handling the issuance, transmission and negotiation of the documents. Part of the sale consideration was released, but the plaintiff claims that the remaining amount has not been paid.

The plaintiff alleges that the buyer and several banks acted in collusion and conspiracy, and that original negotiable documents were released in a manner that allowed the buyer to take delivery of the goods without paying the full amount.

One version of the document placed by the plaintiff shows the Philippines-based bank as the “Swift Output Sender,” while another version produced by that bank identifies a Malaysian institution as the sender.