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| TITLE | Supreme Court Decision 2017Da216776 Decided November 14, 2017 【L/C Payment Claim】 [full Text] |
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| Summary | |
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[1] Meaning and method of “negotiation” under Article 2 of the Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600 (“UCP 600”) In cases where a merchant trader’s bank, in issuing a so-called back-to-back letter of credit (L/C), enters into an agreement on the negotiation of a master letter of credit (L/C), whether it constitutes “definite undertaking of an unconditional obligation to pay funds in lieu of a real payment of funds,” which is one of the ways to negotiate a letter of credit (negative) [2] Point at which the negotiating bank of a sight irrevocable documentary credit must pay the L/C negotiating funds to the beneficiary (held: on or before five banking days following the date on which the documents reached the issuing bank) [3] In cases where a bank’s L/C negotiation was unlawful, whether the issuing bank may refuse to pay the presenting bank upon L/C maturity on the ground that the beneficiary’s fraud was revealed in a documentary credit transaction (affirmative) |
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