Citi and Mercuria have reached a settlement over the metals financing fraud in Qingdao which took place in 2014.

The amount is undisclosed, but Citi confirmed the news in a statement that read: “Citi and Mercuria are pleased to confirm that they have reached a commercial resolution in respect of all issues between them relating to the historic base metal transactions in Qingdao and Penglai. This brings to an end the legal dispute between them.”

Commodity trading house Mercuria confirmed the arrangement, publishing the same statement over social media.

The pair had been embroiled in a legal battle over a repurchasing agreement (repo) worth US$270mn, which saw them slug it out over months in London’s high court.

In the Chinese port of Qingdao, Citi purchased metal from Mercuria and sold it back with an interest rate. After a fraud case involved the Chinese trading company Decheng allegedly using fake warehouse receipts in Qingdao to borrow multiple times against a single instance of metals, Citi demanded early repayment, which Mercuria rejected.

In relation to a separate transaction, the judge also held that Citi was liable to pay Mercuria damages for failing to deliver metal, but is not liable to reimburse the price because Mercuria has not terminated the transaction. Citi is also not liable for damages for non-delivery in respect of the other transactions because it was not under an obligation to make delivery.

In May 2015, a judge in London found that Citi was not entitled to recoup the US$270mn from Mercuria.

The case sent shockwaves through the warehouse management and collateral financing industries. The initial ruling was hotly anticipated, with most commentators agreeing that the judge’s ruling appeared to uphold the validity of the repo as a transaction.

It also sparked fears over the veracity of China’s warehouse networks. Many traders moved stocks out of China to nearby South Korea, Singapore and other trade hubs amid fears that fraud was more widespread than had been acknowledged previously.

The settlement will draw a line under one of the most controversial cases in trade finance of recent years.