China sues Ukraine for breach of US$3b loan-for-grain agreement

China is seeking compensation of US$3 billion from Ukraine for the breach of a loans-for-grain contract signed in 2012, Russian media reported yesterday.

Under the deal, the Export-Import Bank of China provided the loan to Kiev in exchange for supplies of grain.

Citing a Ukrainian parliament official, the ITAR-TASS news agency reported that the State Food and Grain Corporation of Ukraine has used part of the US$3 billion Chinese loan to instead provide crops for other countries and parties, including Ethiopia, Iran, Kenya and Syrian opposition groups.

So far, Chinese importers have only received US$153 million worth of Ukrainian grain, or 180,000 tonnes, the report said.

The report was carried by the Chinese-language service of The Voice of Russia radio. There has been no official comment from China Exim Bank on the report.

The Ukrainian parliamentary official said China has already lodged a case against Ukraine at the London Court of International Arbitration. The report did not mention the date or any further details on the case.