Summary of Facts

a. The parties entered into a written contract of sale/purchase dated September 18, 2008 (the “Contract”), as amended September 22, 2008, for the sale/purchase of “Prime Newly Produced Deformed Reinforcing Steel Bars for Concrete Purposes” (the “Cargo”). The price of 810 USD per metric ton was quoted on the following basis: “CFR FO CQD Duty Paid Wilmington, Delaware, USA, according to Incoterms 2000.” The goods were to be shipped from Turkey to Wilmington, Delaware.

b. The payment term of the contract specified payment by “irrevocable and confirmed documentary Letter of Credit,” which was to be issued by September 19, 2008. The respondent issued the letter of credit as required by the contract. The letter of credit contained an expiry date of October 25, 2008.

c. The letter of credit was issued by respondent’s bank, BNP Paribas, and was confirmed by claimant’s bank, Fortis Bank, A.S.

d. On October 20, 2008, claimant’s bank presented documents to BNP Paribas for payment in the above-described transaction. BNP Paribas rejected the documents, finding 5 discrepancies.

e. When claimant failed to present conforming documents by October 25, 2008, the letter of credit expired.

f. On November 4, 2008 claimant alleged that it was ready to discharge the goods in Wilmington. On November 5, 2008, respondent offered to accept the shipment despite the discrepant documents in exchange for a $300/mt discount. Claimant rejected this proposal and counter-offered a discount of $150/mt, but provided only one hour for the proposal to be accepted.

g. Claimant diverted the goods to another port and on November 8, 2008 claimant sold the goods and alleges damages of approximately $891,000 USD due to a final sale price that was lower than that initially contracted with respondent.

h. Claimant alleges that respondent had no right to withhold payment for the goods despite the discrepant documents. Claimant further alleges that respondent’s request for a price discount is evidence of improper motives by respondent.

i. Respondent’s position is that claimant breached the contract by a) failing to deliver documents in conformance with the contract, and b) by shipping goods of a quality and quantity which were inconsistent with the contract, and c) by failing to effect proper discharge of the goods into a bonded warehouse.