Letters of Credit in UK Law

Leading Cases
  • Intraco Ltd v Notis Shipping Corporation (Bhoja Trader)
    • Court of Appeal (Civil Division)
    • 19 Junio 1981

    Irrevocable letters of credit and bank guarantees given in circumstances such that they are the equivalent of an irrevocable letter of credit have been said to be the life blood of commerce. Thrombosis will occur if, unless fraud is involved, the Courts intervene and thereby disturb the mercantile practice of treating rights thereunder as being the equivalent of cash in hand.

  • Owen (Edward) Engineering Ltd v Barclays Bank International Ltd
    • Court of Appeal (Civil Division)
    • 20 Julio 1977

    A bank which gives a performance guarantee must honour that guarantee according to its terms. It is not concerned in the least with the relations between the supplier and the customer; nor with the question whether the supplier has performed his contracts obligation or not; nor with the questionwhether the supplier is in default or not. The bank must pay according to its guarantee, on demand, if so stipulated, without proof or conditions.

  • Bolivinter Oil S.A. v Chase Manhattan Bank N.A. (Practice Note)
    • Court of Appeal (Civil Division)
    • 09 Diciembre 1983

    The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear, both as to the fact of fraud and as to the bank's knowledge.

  • Taurus Petroleum Ltd (Claimant/Appellant) v State Oil Company of the Ministry of Oil, Republic of Iraq
    • Court of Appeal (Civil Division)
    • 28 Julio 2015

    He pointed out that the assignment by way of charge between Wills and the second and third creditors was binding as between them and that the equitable doctrine of notice was concerned only to determine priority between competing incumbrancers. To allow the garnishee order to override the charges would enable the judgment debtor to obtain not the property of the judgment debtor, but that of someone else.

  • Power Curber International Ltd v National Bank of Kuwait S.A.K.
    • Court of Appeal (Civil Division)
    • 03 Julio 1981

    If the court of any of the countries should interfere with the obligations of one of its banks (by ordering it not to pay under a letter of credit) it would strike at the very heart of that country's international trade. No foreign seller would supply goods to that country on letters of credit—because he could no longer be confident of being paid. No trader would accept a letter of credit issued by a bank of that country if it might be ordered by its courts not to pay.

    A debt is generally to be looked upon as situate in the country where it is properly recoverable or can be enforced and it is noteworthy that the sellers here submitted voluntarily to the dismissal of their earlier proceedings against the bank in North Carolina.

  • Group Josi RE (formerly Groupe Josi Réassurance S.A.) v Walbrook Insurance Company Ltd
    • Court of Appeal (Civil Division)
    • 02 Octubre 1995

    "Have the plaintiffs established that it is seriously arguable that, on the material available, the only realistic inference is that [the beneficiary] could not honestly have believed in the validity of its demands on the [letter of credit].

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Legislation
  • Sanctions and Anti-Money Laundering Act 2018
    • UK Non-devolved
    • 1 de Enero de 2018
    ...... (e) (e) credit, rights of set-off, guarantees, performance bonds and other financial itments; . (f) (f) letters of credit, bills of lading and bills of sale; . (g) (g) documents ......
  • Joint Stock Companies Act 1856
    • UK Non-devolved
    • 1 de Enero de 1856
    ......Private Act of Parliament or by Royal Charter or Letters Patent, or are engaged in working Mines. within and subject to the ..., and in all Bills of Parcels, Invoices, Receipts, and Letters of Credit of the Company. S-XXXI . Penalties on Non-publication of Name. XXXI ......
  • The Contracts for Difference (Electricity Supplier Obligations) Regulations 2014
    • UK Non-devolved
    • 1 de Enero de 2014
    ...... “letter of credit” means a letter from a person which contains an irrevocable and ... (a) (a) cash; . (b) (b) appropriate letters of credit; or . (c) (c) a combination of the two. . (8) For the purposes ......
  • The Burma and Somalia (Sanctions) (Overseas Territories) (Amendment) Order 2018
    • UK Non-devolved
    • 1 de Enero de 2018
    ...... (e) credit, rights of set-off, guarantees, performance bonds or other financial tments, . (f) letters of credit, bills of lading and bills of sale, . (g) documents showing ......
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Books & Journal Articles
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Law Firm Commentaries
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Forms
  • Chapter MLR3C2084
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ......’ in this context refers to banking industry products such as letters of credit and undrawn lending commitments. Some commercial finance ......
  • Chapter OT28615
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ...... settlement, whether money or alternative provision such as standby letters of credit was, prior to FA2013, settled property for Inheritance Tax ......
  • Chapter OT28601
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ......letters of credit. Where adopted the DSA provides for implementation of security ......
  • Chapter IEIM400740
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ...... entities regulated in the UK as a savings or commercial bank, a credit union, industrial and provident societies and building societies.  In ... Issues letters of credit and negotiates drafts drawn thereunder;. Provides trust or ......
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