Arbitration Case: Letter of Credit Dispute Between a Quanzhou Stone Exporter and an Italian Buyer

A stone trading company in Quanzhou exported marble slabs to an Italian construction firm under a contract settled via an irrevocable sight letter of credit for a total amount of 58万欧元。The buyer opened the L/C through UniCredit Bank Italy. However, after document submission, the issuing bank refused payment citing "discrepancies." Investigation revealed that these discrepancies were intentionally raised at the buyer's instruction; the goods had already arrived at the Port of Genoa and been taken into use by the buyer. After repeated unsuccessful demands for payment, the Quanzhou company initiated arbitration with the ICC International Court of Arbitration pursuant to the contract's arbitration clause.

1. Authenticity of "discrepancy between documents and credit" under letters of credit and applicability of UCP600 rules; 2. Whether the buyer's act of taking delivery constitutes acceptance of the goods and confirmation of payment obligations; 3. Composition of the ICC arbitration tribunal, selection of arbitration language, and governing law; 4. Enforceability of cross-border arbitral awards in Italy.

1. Engage an international letter of credit expert to issue a UCP600 compliance analysis report, systematically refuting each discrepancy raised by the issuing bank; 2. Retain our Italian partner law firm to obtain Genoa port delivery records, customs clearance documents, and the buyer's warehouse receipt, proving the buyer has taken physical possession and utilized the goods; 3. Select arbitrators with expertise in international trade and letters of credit to secure favorable procedural arrangements; 4. Simultaneously file for interim arbitral measures to freeze the buyer's bank accounts in Italy, ensuring enforceability of the award.

The ICC arbitral tribunal found that the discrepancies raised by the issuing bank did not constitute valid grounds for refusal of payment under UCP600. The buyer's act of taking delivery constituted unconditional acceptance of the goods, and its payment obligation remained unaffected by the credit refusal. The tribunal awarded the Italian buyer to pay the Quanzhou enterprise the outstanding balance of EUR 58 million (after deducting the advance deposit paid), plus overdue interest of EUR 3.2 million and a share of arbitration costs. Within 30 days of the award, the buyer voluntarily fulfilled all payment obligations without the need to initiate enforcement proceedings in Italian courts.