China is suing Ukraine for breach of a 2012 loan agreement where the latter was supposed to supply China with grains in payment for a US$ 3 billion loan that it granted.

Instead, Ukraine shipped most of its grains to other countries while China only received 180,000 tons of the product worth US$ 153 million.

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Now China is seeking a compensation of US$ 3 billion in a complaint that it filed before the London Court of International Arbitration.

In a report by Voice of Russia on February 26, the first deputy director of the Ukrainian Anti-Organized Crime and Corruption Commission confirmed that the loan-for-grain contract was breached.

Under the deal, the Export-Import Bank of China granted Ukraine's State Food and Grain Company a US$ 3 billion loan from China in exchange for a 15-year supply of grains.

But contrary to agreement, Ukraine's State Food and Grain Company used the funds to provide US$ 28 million worth of grains for Ethiopia, US$ 14 million for Monaco, US$ 7 million for Saudi Arabia, US$ 24 million for Iran, US$ 11 million for Kenya, US$ 1.5 million for the Philippines, US$ 61.9 million for Switzerland, US$ 26.3 million for Egypt, US$ 325 thousand for Syria, and only US$ 153 million worth of grains for China, the report said.

The first tranche of the loan amounting to US$ 1.5 billion (91.9 billion RMB) was received by the Company in March 2013. The remaining US$ 1.5 billion was to be used by Ukraine to purchase Chinese products.

China's Exim Bank has yet to issue a statement on the matter.