Letters of Credit in UK Law

Leading Cases
  • Sirius International Insurance Company (Publ) v FAI General Insurance Ltd and Others
    • Court of Appeal (Civil Division)
    • 04 Abr 2003

    Sirius accept that the second condition of the 3 rd September 1999 agreement was not fulfilled when the letter of credit was drawn down and that it is not now fulfilled. The case proceeded before the judge on the basis that it could never have been fulfilled once the terms of the Funding Agreement disabled Agnew from proceeding against Sirius. The cross-appeal arises on a finding by this court that the first condition was not fulfilled either.

    By means of it, banks are protected and the cash nature of letters of credit is maintained. There is no authority extending this autonomy for the benefit of the beneficiary of a letter of credit so as to entitle him as against the seller to draw the letter of credit when he is expressly not entitled to do so.

    This analysis accords with the judgment of Phillips J in the Deutsche Ruckverischerung case at page 10He was concerned that the commercial effectiveness of letters of credit would be eroded if a claimant could prevent a beneficiary from drawing on the letter of credit by doing no more than to persuade the court that there was a seriously arguable case that the claim under the underlying contract was invalid.

  • Intraco Ltd v Notis Shipping Corporation (Bhoja Trader)
    • Court of Appeal (Civil Division)
    • 19 Jun 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.

  • Bank Mellat v HM Treasury (No 2)
    • Supreme Court
    • 19 Jun 2013

    The object of the direction, as the Treasury acknowledges, was to shut the Bank out of the UK financial sector, and that has been its effect. Before the direction, the Bank had a substantial international business, much of it international trade finance transacted through London.

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

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Legislation
  • 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 ......
  • 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 ......
  • 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) cash; . (b) appropriate letters of credit; or . (c) a combination of the two. . (8) For the purposes of ......
  • The Andrey Lugovoy and Dmitri Kovtun Freezing 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, bills of sale; and . (g) documents providing ......
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Books & Journal Articles
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Law Firm Commentaries
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