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 loans to Société Kerkoub pour l'Investissement SA (SKI) in Mauritania.
- BEA resists payment citing Mauritanian court orders suspending SBLC performance, including a stay of execution and a seizure order linked to criminal proceedings against a Litasco representative.
- The governing law of the SBLC is contested; a 2019 SWIFT message purportedly amended it to English law, but contains a typographical error complicating interpretation.
- The case raises complex issues of cross-jurisdictional enforcement, recognition of foreign court orders, and compliance with international trade finance standards (UCP 600).
Sanctions Highlights
- No direct sanctions against parties are cited, but the case implicates compliance risks under international sanctions regimes due to:
- The involvement of Mauritania and West African entities in hydrocarbon trade.
- Potential exposure to US OFAC and EU sanctions frameworks given Litasco’s Swiss base and US dollar transactions.
- BEA’s refusal to pay under the SBLC, citing Mauritanian court orders, may reflect indirect sanctions or regulatory pressures affecting cross-border financial flows.
- The case underscores the importance of sanction screening in trade finance involving multiple jurisdictions, including the US and EU.
Emerging Risks
- Enforcement risk: Conflicting legal orders between English courts and Mauritanian courts create uncertainty over SBLC payment obligations.
- Legal risk: Ambiguity in the governing law amendment via SWIFT message may delay resolution and increase litigation costs.
- Reputational risk: Criminal proceedings against Litasco’s agent (though discontinued) and seizure orders may affect counterparty confidence.
- Regulatory risk: Banks face potential penalties if they violate foreign court orders or sanctions by releasing funds prematurely.
Geopolitical Impact
- The dispute highlights tensions in cross-border commercial enforcement involving Mauritania, a key West African hydrocarbon producer.
- The involvement of multiple jurisdictions (UK, Switzerland, Mauritania) and references to US and EU legal frameworks reflect the complex geopolitical overlay in energy finance.
- The case may influence how European and US financial institutions approach transactions linked to African energy projects amid evolving sanctions and regulatory scrutiny.
- It underscores Mauritania’s judicial assertiveness in commercial disputes, potentially impacting foreign investment perceptions.
Economic Intelligence
- The case centers on LPG infrastructure financing in Guinea via SKI, reflecting ongoing investment in West African energy markets.
- Delays or non-payment under the SBLC could disrupt project financing and delay energy distribution network development.
- The USD 1.8 million SBLC amount is modest but indicative of broader liquidity and credit risks in regional energy trade.
- The dispute may affect Litasco’s operational cash flow and risk appetite for African market exposure.
Strategic Recommendations
- For financial institutions: Enhance due diligence on foreign court orders and sanctions compliance before releasing funds under SBLCs involving multiple jurisdictions.
- For litigants: Clarify governing law amendments explicitly in trade finance instruments to avoid ambiguity and costly disputes.
- For investors: Monitor Mauritanian legal developments closely as they may affect enforceability of commercial contracts and risk profiles.
- For policymakers: Consider harmonizing recognition of foreign insolvency and enforcement orders to reduce cross-border legal conflicts.
- For risk managers: Incorporate geopolitical and sanction screening in trade finance involving West African hydrocarbon sectors.
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**Source Notes:**
Sanctions Intelligence Digest — [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/312.txt](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/312.txt)