Executive Summary
Litasco S.A. seeks summary judgment against Banque El Amana S.A. (BEA) for non-payment under a USD 1.8 million standby letter of credit (SBLC) issued in 2019 as security for a loan to Socit Kerkoub pour l'Investissement SA (SKI). BEA resists payment citing Mauritanian court orders suspending enforcement of the SBLC, including a stay of execution and a seizure order, which under Mauritanian law prohibit BEA from paying without risking civil and criminal penalties. The SBLC’s governing law is contested due to a SWIFT message amendment with a typographical error, but Litasco argues it effectively changed the law to English law, subjecting disputes to English courts. The case raises complex cross-jurisdictional enforcement and sanctions compliance issues.
Sanctions Highlights
- The case implicates sanctions compliance risks, as BEA’s refusal to pay is linked to Mauritanian court orders potentially influenced by local regulatory or political pressures.
- No direct mention of OFAC or specific sanctions lists, but the involvement of multiple jurisdictions (Mauritania, Switzerland, England) and hydrocarbon financing suggests heightened scrutiny under international sanctions regimes.
- The SBLC’s enforcement suspension may reflect indirect sanctions or regulatory risk, especially given the criminal proceedings against Litasco’s agent, which were later discontinued.
Emerging Risks
- Cross-border enforcement risk due to conflicting court orders between Mauritania and England, complicating payment obligations under the SBLC.
- Potential criminal liability for BEA if it pays contrary to Mauritanian seizure orders, exposing the bank to fines and imprisonment risks.
- Legal uncertainty over the governing law of the SBLC due to SWIFT message errors, risking protracted litigation and enforcement delays.
- Political and judicial unpredictability in Mauritania affecting contract performance and dispute resolution.
Geopolitical Impact
- The case highlights tensions between Mauritanian judicial orders and English commercial law, reflecting broader challenges in international trade finance involving African jurisdictions.
- The involvement of European (Switzerland, England) and African (Mauritania) actors underscores the geopolitical complexity of hydrocarbon financing in West Africa.
- The dispute may affect investor confidence in Mauritania’s legal environment, with potential ripple effects on regional energy projects and EU-African trade relations.
- No direct involvement of flagged countries (EU, Iraq, Kuwait, Turkey, US, Venezuela) beyond indirect relevance through international banking and sanctions frameworks.
Economic Intelligence
- The SBLC secures a USD 1.8 million loan for LPG distribution infrastructure in Guinea, a strategic energy sector in West Africa.
- Delays or non-payment risk disrupting LPG supply chains and financing for energy projects critical to regional economic development.
- The case illustrates risks to international petroleum marketing firms operating in emerging markets with unstable legal frameworks.
- Enforcement uncertainty may increase transaction costs and reduce access to credit for hydrocarbon sector investments in Mauritania and neighboring countries.
Strategic Recommendations
- Monitor Mauritanian legal developments closely, including any Supreme Court rulings affecting the SBLC enforcement and seizure orders.
- Advise clients to seek clear contractual provisions on governing law and dispute resolution to mitigate risks from ambiguous SWIFT communications.
- Conduct enhanced due diligence on counterparties operating in jurisdictions with complex or unpredictable judicial environments.
- Prepare for potential sanctions compliance reviews given the cross-border nature of the transaction and involvement of hydrocarbon financing.
- Consider alternative dispute resolution mechanisms or political risk insurance to manage enforcement risks in Mauritania and similar jurisdictions.
---
**Source Notes:** Sanctions Intelligence Digest, https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/312.html