Recovering Over $10 Million in a Cross-Border Manufacturing Dispute: U.S. Importer vs. Japanese Supplier

Our client, an American importer and entrepreneur, entered a long-term agreement with a well-established Japanese manufacturer to produce custom-designed consumer goods. The contract called for multiple shipments, with 50% of the total amount prepaid. The remainder was secured through letters of credit issued by a U.S. bank.

Upon receiving the first shipment, the client discovered that the products did not meet the agreed specifications. The materials, design, and overall functionality were not what had been promised or approved. The client immediately requested to cancel the remaining orders and sought a refund for the amounts already paid.

The Japanese company refused to issue a refund or cancel the agreement. Instead, they insisted on completing the full production run per the original contract and had already drawn the full amount through the letters of credit. The client was left with unusable product and over $10 million in payments effectively gone.

After reaching out to multiple U.S. and international law firms, the client was told the only option was an extended legal battle in Japan’s business courts with little guarantee of recovery.

When Rose Garden Advisors was brought in, we launched a rapid and coordinated multi-jurisdictional response.

We began by taking a firm stance with the issuing U.S. banks. Our legal and financial team challenged the drawdown of the letters of credit, citing discrepancies in the goods delivered and violations under U.S. commercial code (UCC Article 5) and international trade finance standards (UCP 600). This created immediate leverage and brought the banks to the table for review.

Simultaneously, we worked with respected legal counsel in Japan to initiate proceedings in the Japanese business courts. We demonstrated the breach of contract, deviations from the original specifications, and the client’s right to halt performance based on defective delivery.

As the case developed, the combination of U.S. banking pressure and a structured legal case in Japan compelled the supplier to enter settlement negotiations. After nine months of coordinated legal, commercial, and diplomatic strategy, the client reached a final resolution:

    -   Returned the original defective shipment
-   Received a full refund of all payments made - over $10 million in total
-   Did not recover shipping costs for either leg, but these were minor compared to the total win

What had once been dismissed as a lost cause became a full recovery. Our team not only neutralized an unfavorable international contract but reversed the financial harm by successfully coordinating action across both U.S. and Japanese legal systems.

Over $10 million recovered. No drawn-out litigation. Business saved.