DOCDEX 352
A documentary credit was issued subject to UCP 600 and URR 725. The applicant obtained a Court Injunction Order citing quality concerns, and prohibiting the issuing bank from effecting payment on maturity and, as a result, the issuing bank did not pay. Due to the fact it had negotiated, the negotiating bank asserted that the Respondent must reimburse them, and that the obligation to reimburse the beneficiary is independent of the obligation to reimburse the nominated bank. The issuing bank argued that it was not in a position to violate a court order. Unanimous decision rendered by the experts stated that while under provisions of UCP 600, the issuing bank has an obligation to reimburse, its obligation to honour will be suspended until the injunction is lifted or a judgment is issued in favour of the defendants.
DOCDEX 353
An issue whether the guarantor was entitled to reject a demand made by the beneficiary of a demand guarantee, subject to URDG 758, covering the applicant's payment obligations. The guarantee identified the underlying relationship by an order reference number and date. The beneficiary presented a demand enclosing copies of unpaid invoices and a default notice as required by the guarantee. The beneficiary separately presented a copy of a contract between the beneficiary and the applicant, which was not required by the guarantee. The guarantor rejected the demand on the grounds that the order reference number and date in the copies of the unpaid invoices and default notice did not match the order reference number and date stated in the guarantee. The decision was rendered that the discrepancy was valid; the guarantor had no obligation to examine the contract, and the rejection of the demand was justified.
DOCDEX 354
The applicant of a credit issued subject to UCP 600 obtained a preliminary injunction from a court preventing the issuing bank from paying. The issuing bank rejected documents presented under the credit. Subsequently, the court decided that the injunction had to be released and the issuing bank effected the payment to the nominated bank. The decision highlighted that the issuing bank had an obligation to pay according to UCP 600 Article 7 and that an issuing bank's undertaking to reimburse a nominated bank is independent of the issuing bank's undertaking to the beneficiary.
DOCDEX 355
Withdrawn