Trade Finance Lawyer in Dubai
A letter of credit is only as reliable as the paperwork behind it — a single discrepancy can be enough for a bank to refuse payment on a shipment that has already left port.
Letters of credit and documentary collections are governed by internationally recognized rules — principally UCP 600 for letters of credit — which UAE banks and courts apply alongside domestic law. Payment under a letter of credit depends on strict compliance: documents presented must match the credit's terms exactly, and even minor discrepancies give the bank grounds to refuse payment.
Disputes typically arise at the point of presentation, when a bank rejects documents for discrepancies the beneficiary considers immaterial, or later, when a buyer alleges fraud in the underlying transaction and seeks to block payment despite compliant documents. The firm advises both beneficiaries seeking payment and applicants or banks resisting or contesting it.
Because trade finance instruments move quickly and payment deadlines are short, disputes over discrepancies, wrongful dishonour, or fraud need to be assessed and acted on within days, not weeks, to preserve the available remedies.
How Trade Finance Disputes Are Handled
- Instrument & Document ReviewThe letter of credit, documentary collection instructions, and the presented shipping and commercial documents are reviewed against the applicable rules to assess compliance.
- Discrepancy AssessmentWhere a bank has rejected documents for discrepancies, the rejection is tested against UCP 600 and the credit's actual terms to determine whether it is properly grounded.
- Wrongful Dishonour ClaimsWhere documents were compliant and payment was wrongly refused, a claim is pursued against the issuing or confirming bank to compel payment.
- Fraud Exception ApplicationsWhere an applicant alleges fraud in the underlying transaction, the narrow fraud exception to the independence of the credit is assessed, including any urgent application to restrain or compel payment.
- Bills of Lading & Shipping Document DisputesDisputes over bills of lading, certificates of origin, and other trade documents are handled where they affect payment or title to goods.
- Recovery Under Confirmed & Unconfirmed CreditsRecovery routes are pursued against the relevant bank depending on whether the credit is confirmed, unconfirmed, or transferable.
When You Need a Trade Finance Lawyer
- A bank has rejected your export documents for alleged discrepancies and refused payment under a letter of credit.
- You are an issuing or confirming bank facing a claim over a disputed letter of credit.
- A buyer is alleging fraud to try to block payment under a letter of credit despite compliant documents.
- You need a letter of credit or documentary collection reviewed before goods are shipped.
- There is a dispute over a bill of lading or other shipping document affecting payment or delivery.
- You need to recover payment wrongfully withheld under a confirmed or unconfirmed letter of credit.
Services We Provide
- Review of letters of credit and documentary collection instructions before shipment
- Discrepancy disputes and document compliance assessments under UCP 600
- Wrongful dishonour claims against issuing and confirming banks
- Fraud exception applications and defences in letter of credit disputes
- Bills of lading and shipping document disputes
- Advice on confirmed, unconfirmed, and transferable letters of credit
- Advice on trade finance structures including forfaiting and receivables discounting
Frequently Asked Questions
What happens if a bank finds a discrepancy in my export documents?
The bank can refuse payment and must notify the presenter of the specific discrepancies within a set timeframe — whether the rejection is valid depends on whether the discrepancies genuinely deviate from the credit's terms.
Can a bank refuse payment just because the buyer disputes the goods?
Generally no — a letter of credit is independent of the underlying sale contract, and a bank must pay against compliant documents regardless of disputes over the goods themselves, subject only to the narrow fraud exception.
What is the fraud exception to a letter of credit?
It allows a court to restrain payment where there is clear evidence of fraud in the underlying transaction or the documents themselves — it is applied narrowly and is not a route to reopen ordinary commercial disputes.
What's the difference between a confirmed and unconfirmed letter of credit?
A confirmed credit carries an additional independent payment undertaking from a second bank, typically in the beneficiary's country, giving the beneficiary recourse against that bank as well as the issuing bank.
How quickly do I need to act if my documents are rejected?
Very quickly — presentation and rejection are governed by strict time limits under UCP 600, and delay can affect both your ability to correct discrepancies and any later claim.