PORTUGAL : $ MILLION DOLLAR PAPER DEAL GOES BAD …….

[Anonymous]

PORTUGAL : $ MILLION DOLLAR PAPER DEAL GOES BAD

Importer Sues NIB over Portuguese Paper Trail
Amdehun claims 1.6m Br from bank for allowing delivery of less paper than it had paid for
Amdehun General Trading has sued Nib International Bank (NIB) to recover 1.6 million Br it paid a Portuguese paper supplier that allegedly created a discrepancy on the letter of credit (LC), bill of lading, and packing list.The dispute arose when Amdehun General Trading, an importer, ordered 9,360 cardboard boxes of A4 and P5 Navigator photocopier paper from Cromasel Papel Hygiene E Emballance. It opened an LC at NIB worth 97,812 dollars in December 2010 to pay for the purchase.However, there were inconsistencies between the LC, which indicated 9,360 boxes, and the bill of lading and packing list, on which the order was put down as “9,360 volume,” significantly reducing the weight of the paper from 120tn to 19.5tn, according to the plaintiff.The LC amounting to a 70pc down payment was opened at NIB’s Tana Branch in the heart of Merkato on behalf of the importer with Portugal Citi Bank, the charge read.

The packing list NIB received from the supplier, Cromasel Papel, does not specify every item being imported or the weight of the goods, showing that the list does not meet bill of lading requirements, Marshal Fikremarkos, lawyer of the plaintiff, alleged.“NIB was responsible to demand a correction from the supplier but failed to do so, leading the plaintiff to incur losses,” read the charge.Amdehun filed the charge at the Federal High Court, Ninth Civil Bench, on May 3, 2011, to reclaim 1.4 million Br from NIB with nine per cent interest.

The charge did not concern NIB, since the disagreement was between the supplier and Amdehun, argued Getahun Worku, the lawyer of the defendant, at the preliminary objection. Amdehun waived its rights to sue when it signed an agreement with the bank not to raise any claim, the defendant argued. The Civil Code stipulates that such a document governs both signatories, he alleged.The bank had amended the packing list as required by Amdehun on May 3, 2011, Getahun claimed. The bank was verbally informed by the company that it had been tricked by the supplier in Portugal after the five-day disaster notification period had lapsed, the defence argued.As a result, the payment had already been made by Citi Bank by the time NIB contacted it to stop the payment, the defence claimed before requesting that the charges be dropped.

The discrepancy between the different documents does not matter as the supplier would provide the paper in boxes anyway, according to Getahun. He claimed that the LC does not specify the measurement.He also contested the compensation claim, saying Amdehun did not prove that it had sustained damages.Bisrat Teheleku, the presiding judge, ordered NIB to bring forward its international banking manual before adjourning the hearing to Wednesday, June 29, 2011.

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June 29, 2011 at 9:40 AM