RBRG TRADING (UK) LTD V SINOCORE INTERNATIONAL CO LTD

[2018] EWCA Civ 838, Court of Appeal, Lord Justice Lewison, Lord Justice Hamblen and Lord Justice Irwin, 23 April 2018

Arbitration - Enforcement of award - Public policy - New York Convention 1958 - Arbitration Act 1996, section 103(3)

Sinocore agreed to sell rolled steel coils to RBRG under a contract governed by Chinese law with disputes to be resolved by arbitration held by the China International Economic and Trade Arbitration Commission (CIETAC). The goods were to be shipped from China to Mexico by July 2010 and payment was to be made by irrevocable letter of credit. In April 2010 Rabobank in the Netherlands on the instructions of RBRG opened an irrevocable letter of credit in favour of Sinocore. In June 2010, under instruction from RBRG, Rabobank – without the consent of Sinocore – amended the letter of credit, so that the stated required shipment period was changed to "20 to 30 July 2010". The goods were loaded on 5 and 6 July 2010, bills of lading were issued, and a shipping notice was sent by Sinocore to RBRG on 6 July 2010. On 22 July 2010 Sinocore's collecting bank requested payment from Rabobank under the letter of credit, and presented bills of lading dated 20 and 21 July 2010. Those bills were forgeries. On 26 July 2010 RBRG obtained a temporary injunction from a court in Amsterdam preventing Rabobank from making payment under the letter of credit against the false bills, in August 2010 Sinocore terminated the sale contract for repudiatory breach, and in June 2013 a Chinese court dismissed a claim by Sinocore against Rabobank for non-payment, because the bills of lading were forged. Sinocore commenced arbitration in April 2012. The tribunal ruled in favour of Sinocore: Sinocore was not in breach of an obligation to have the goods inspected because no request for inspection had been made; RBRG had broken the Sale Contract by instructing Rabobank to issue an amendment to the letter of credit which had not been agreed to by Sinocore; and while Sinocore had acted illegally, the cause of the loss was RBRG's own breach.