Two key principles What is an LC? A bit of history


The Above Picture is Related Image of Another Journal


Two key principles What is an LC? A bit of history

Cumberland University, US has reference to this Academic Journal, Letters of Credit ? Reconciling Legal Rules alongside Commercial Realities Prof Jason Chuah City University London A bit of history * Origins not very clear ? Ancient Babylonian (a clay promissory note dating back so that 3000 BC) in addition to Egyptian (248 BC); Ancient Greece ? banks were issuing documentary letters ? ?on correspondents alongside the view so that obviating the actual transport of specie in payment of accounts?. * 13th century Marco Polo reported that the negotiable letter was a ?way. the Great Chan can have in addition to indeed does have more treasures than all the kings in the world? * 14th century ? Medici banks in Bruges in addition to Italy * 19th century ? virtual monopoly by British banks What is an LC? Method of trade finance Sale contract (usually cross border ? reason: trust) Buyer (applicant) Seller (beneficiary) Issuing Bank (payer) In order so that paid, seller must tender conforming documents evidencing its performance of the sale contract.

 Ross, Michael Cumberland University


Related University That Contributed for this Journal are Acknowledged in the above Image


Two key principles Principle of Autonomy Sztejb v Henry Schroeder Banking Corp Fraud Exception ? narrowly construed (The American Accord (1983)) Principle of Strict Compliance A means so that control fraud in addition to forgery? A matter of construction? No non-documentary conditions can be required by the LC Trends in addition to developments Use of LC in decline in intra-EU trade High rate of rejection; fear of fraud Protection from credit crunch? More creative use of the LC As a guarantee in consideration of conventional (high risk) lending As a no-questions asked payment instrument Legal status of the LC Not a negotiable instrument, not a promissory note, not a bill of exchange Is is a contract? Requirement in consideration of consideration? Definition of consideration ? act in consideration of an act, a promise in consideration of a promise, a promise in consideration of an act, an act in consideration of a promise What consideration has been provided by the beneficiary?

Does it matter? To enforce a bare promise ? issues How so that construe the promise ? presumed intention test in this context Legal intent from form Status or position of the promisor becomes crucial? Marubeni v Mongolia Creative use ? legal response? Sirius v FAI [2003] EWCA Civ 470 Use non-documentary conditions admitted Mahonia v Morgan Chase Bank [2003] EWHC 1927 Illegality as a justification in consideration of not paying Marubeni v Mongolia [2005] EWCA Civ 395; also Meritz Fire in addition to Marine Insurance Co Ltd v Jan De Nul Nv [2011] EWCA Civ 827 Construction of the documentary requirements ? seems so that depend on the status of the issuer Fear of fraud Limits of the research ? empirical work needed Much work concentrates on the problem of fraud in addition to abusive calls (in the context of demand guarantees) in addition to makes the following criticisms Banks do not police fraud Misplaced belief that documentary conformity means absence of fraud Forgery easy so that commit Large value deals constitute an irresistible temptation so that fraudsters All or nothing approach ? only fraud by the beneficiary will suffice (bad faith will not)


Commercial Realities Any alternatives?Trust in international trade ? thrombosis will occur? (Donaldson LJ) Why the arm’s length approach by banks Should liability be attached so that the act of giving money? A payment instrument not a method of trading Blame not the LC but the system? Time is essential Commercial certainty A new unified code so that limit LC law so that trade in physical goods? Thank you very much. Questions are very welcome: Jason.Chuah.1@city

Ross, Michael Meteorologist

Ross, Michael is from United States and they belong to Meteorologist and work for 2 News at 10 PM – KNAZ-TV in the AZ state United States got related to this Particular Article.

Journal Ratings by Cumberland University

This Particular Journal got reviewed and rated by and short form of this particular Institution is US and gave this Journal an Excellent Rating.