A Thanks to Jim Barnes for His Contributions to the LC Community

Let's hear from some of the LC community as they share memories and stories of their time working with Jim Barnes.

I’ve known Jim Barnes for many years, starting with the Barristers League 16” softball games in Grant Park, Chicago and from playing tennis with and against him for decades in a local tennis league. Most importantly, I’ve known Jim based on his many years of achievement and leadership in the letter of credit community.

Jim has played an important role in developing and maintaining the letter of credit as a reliable and acceptable product for bank issuers to provide for their customers’ and beneficiaries’ needs and uses.

Jim carefully and usually successfully guided his LC bank clients through transactions and disputes to avoid or prevail in LC-related litigation for almost five decades. His achievements for the LC community include his major role in drafting the 1995 revisions to U.S. Uniform Commercial Code (UCC), Article 5 (Letters of Credit), drafting a model form of reimbursement agreement for the USCIB (predecessor organization to today’s BAFT), working with Professor Jim Byrne and others to draft and finalize industry rules for standby LCs, including the ISP98, drafting the ISP98 Model Forms, editing The OFFICIAL COMMENTARY ON THE INTERNATIONAL STANDBY PRACTICES, and his many years of co-authoring with Jim Byrne the annual UCC “Letter of Credit” survey article published in the ABA’s THE BUSINESS LAWYER.

I regard Jim as a mentor. Jim is not only one of the most knowledgeable and experienced LC attorneys to practice, but one of the most intelligent attorneys I have met. He uses his Yale-trained mind and knowledge in a constructive way – to preserve and advance the LC as a bank product that is governed by clear and sensible rules for banks to follow based on his experience and knowledge of how banks actually operate in handling LCs and risk assess their LC operations. Jim’s comments and influence in drafting Revised Article 5 of the UCC and the ISP98 has reined in decisions and practices that are incorrect, tend to create unnecessary risk for bank issuers or injure the image of the banks that issue, confirm, advise, pay, and otherwise process LCs.

Jim attended and commented on LC cases, issues, developments and practice for over 30 years at IIBLP programs. His experiences with and comments about LC law and bank practice at these programs have proven to me educational and enlightening. Prof. Byrne frequently referred to Jim as “His Lordship,” recognizing Jim’s pre-eminence in his field. Additionally, while Prof. Byrne’s comments at these programs were colorful, Jim Barnes’ ties were more colorful than anybody else’s (except Dennis Noah’s). Jim Barnes’ presence, voice, and ability to speak ex cathedra on LC matters at IIBLP events will be sorely missed.

I know from the last two years of co-authoring THE BUSINESS LAWYER’s LC Annual Survey article with Jim, that one of his habits is reading LC cases almost as soon as they are decided and published in Google Scholar, sending them to me late at night and insightfully commenting on them and sometimes even agreeing with my views on them.

Jim has fully retired from the practice of law so that he can enjoy his family and friends, the Michigan Wolverines, travels and concentrate on his and his wife Lucy’s staying healthy. He deserves to do whatever he wants at this point in his life. (He’s even older than I am.) But hopefully he will still comment on LC cases and developments, even if late at night.

— Carter Klein
Of Counsel, Jenner & Block LLP

When you think about the respected authorities in the letter of credit field, it is impossible to have a conversation without mentioning “The Jims” – that is, Jim Barnes and Jim Byrne. Their combined efforts to improve LC practice and shape LC law to reflect actual practice (versus reflecting contract law applied to a bank product) helped make LCs the finance tools they are today. Banks can now mostly count on outcomes should there be a dispute and that is due in large part to “The Jims”. I first met Jim Barnes as a 14 or 15-year-old, joining my father at various events or meetings. Jim would stay with us every few months and that is when I learned that Jim was much more than just “one of those LC people”: He was also an expert billiards player and darts thrower! One evening, “the Jims” and my brother and I held what seemed like an all-night pool and darts “tournament” in our game room. I know “Team Barnes” beat us in darts, but I think my team won in pool!

As I grew older and was more involved in the LC field, I worked more closely with Jim Barnes and saw just how brilliant he really is. He could take a lengthy paragraph and re-write it as one sentence that was more correct and made the point better than the original paragraph. This was made quite obvious to me as I helped my father prepare their annual ABA Journal review of the letter of credit cases for the prior year. As we inched closer to the final product, I asked if we should be sending the draft to Jim Barnes for review. My dad laughed and replied that their writing styles were just different enough that they agreed to alternately producing the article each year, because resolving conflicts in their respective writing styles was just not worth it. It turns out they saved those “discussions” for when it really mattered, like writing ISP98.

With a front row seat at many of those drafting sessions, watching those two amazing friends work through their writing styles was quite amusing. Barnes wanted each rule to be 2-3 sentences, whereas Byrne wanted them multiple paragraphs. And they worked together to combine their approaches to craft what most people in the field believe to represent the best set of rules for an LC product ever developed. And the banks, lawyers, and ultimately the courts have agreed.

Jim and Jim were close friends for many, many years and when my father passed away in 2018, Jim and his wife Lucy were the first to hear about it beyond family and booked flights for the funeral immediately. Jim Barnes’ tribute note about my father was second to none in capturing their contribution, and a reminder that we all have just one life to do all the good we can.

I know that Jim will continue to do good work in his well-deserved retirement and we wish him the best as he begins this next phase of his life.

— Michael P. Byrne
CEO
Institute of International Banking Law & Practice

Professor Hessel E. Yntema at the Michigan Law School taught me the importance of being able to distinguish between the scientific and predictive aspects of the law and its artistic and persuasive features. As former US Supreme Court Justice Oliver Wendell Holmes Jr. used to say when referring to the scientific components of law: “What I mean by the law,” is nothing more than “the prophecies of what the courts will do in fact.” In my more than sixty years of teaching, researching and drafting and helping to litigate commercial law, including quite a bit of LC law, I have never met anyone as capable of providing materials with which to predict what common law courts will in fact do when deciding LC cases than does James G. Barnes.

Aristotle, one of the ancient world’s first practitioners of natural science, taught us what to do when scientifically describing animals and predicting some of their behavior. He said that to identify their “essence” as living beings we need first to classify them into the largest possible groups, such as those animals with blood and those without it (a distinction that present-day scientists ascribe to vertebrates and invertebrates) and then sub-classify them into families (genera) and species. This classification and sub-classification process reveals the uniqueness or essences as living beings and enable us to predict their behavior as unlike that of other living beings.

I encourage DCW readers to peruse, as I did, Barnes’ 2018 BUSINESS LAWYER’s Survey of judicial developments in letter of credit (LC) law, published shortly after Jim Byrne’s death. As did Aristotle, Barnes divides LC disputes into two large groups: Pre-honor and post-honor cases. The Pre-Honor group of cases is divided into families , such as (1) LCs before a demand of payment by their beneficiary or presenting bank is made. These families of LCs, in turn, are subdivided into species of LCs such as (1) those LCs in which the issuing or confirming bank gave timely and sufficient notice of dishonor and those whose LCs did not do so and (2) those LCs with discrepancies that provided notice of and justified the dishonor of the LC, and (3) those that state the reasons requiring or permitting dishonor, such as forgery or material fraud, injunction or governmental order of insolvency. Finally, the Post-Honor of LCs group of cases where the courts deciding them focused on whether their issuer is entitled to reimbursement, indemnification, subrogation or other recovery from the applicant.

Please note that this classification and sub-classification of the two main types of documentary letter of credit judicial disputes in common law countries, and especially under United States law, allows future litigators in common law stare decisis countries to reliably formulate their actions, defenses and proof for each of the species of LCs. Further, Barnes’ precise and terse summary of the facts and legal issues peculiar to each judicial decision, becomes the normative material that enables the ratio decidendi of Holmes-like prophecies.

In conclusion, I can confidently say that Article 5 of the US UCC, UCP600 and United Nations treaties on Standby LCs and Independent Guarantees, among other sources, have benefitted much from Barnes’ wisdom and version of LC’s legal science.

— Boris Kozolchyk
Founder & Board Member
Kozolchyk National Law Center

I have known Jim Barnes since 1986, when we served together on the American Bar Association / U.S. Council on International Banking Task Force whose report led to the 1990s revision of UCC Article 5. Not only did Jim have a great deal of experience with letters of credit, more importantly he was always eager to share, explore, learn, and teach. He was dedicated to improving letter of credit practice, rules, and laws, both in the U.S. and internationally. His enormous contributions to the field have enabled letters of credit to evolve as a useful and fair payment and security device.

I had the pleasure of working with Jim on many other endeavors, including the Article 5 revision process, the drafting of ISP98, the preparation of model form letters of credit and reimbursement agreements, and innumerable conferences and committee meetings. Throughout, Jim was always a leader, bringing together disparate people, bridging differences, and contributing useful ideas. He is truly a giant in the letter of credit field (and not because of his great height). His professionalism, generosity, and wisdom will always be remembered and cherished by all of us who had the pleasure of working with him during the course of his illustrious career.

I will greatly miss working with Jim and I wish him all the best in retirement.

— Michael Evan Avidon
Partner, Co-Chair – Banking & Finance Practice Group
Moses Singer

I believe I probably met Jim Barnes at one of the first conferences put together by the IIBLP. That would be approaching 40 years ago. It was quite eye-opening for me, as a letter of credit practitioner, to be able to exchange questions and ideas with lawyers who had an interest in letters of credit, and I understand the lawyers in attendance also found it enlightening as these two constituencies had never really interacted before – the bankers had their committees and the lawyers had theirs. Of course, the IIBLP has facilitated much such cross-communication in the years since.

Subsequently, Jim and I saw one other rather frequently at meetings of the committee assembled by the National Conference of Commissioners on Uniform State Laws to revise Article 5 of the Uniform Commercial Code (UCC). Jim did a huge amount of work behind the scenes to provide that committee with the language that now appears in UCC Article 5. And then he and Jim Byrne did most of the work to create the International Standby Practices with much of Jim Barnes’ work, again, being behind the scenes. If I’ve ever needed to ask anyone a question about UCC Article 5 or ISP98, particularly from a legal perspective, I’ve certainly known where to go. Indeed, I’ve incorporated quite a few of the comments Jim has made at the many conferences we have both attended into the procedures and documents used by the banks I’ve worked for.

Although Jim has been scaling back on the workload, I doubt he will ever be able to get letters of credit out of his blood. Hopefully, he will continue to make his presence known, and to enlighten us practitioners, at IIBLP conferences and in the pages of Documentary Credit World for years to come.

— Buddy Baker
Vice President, Investment Banking Division
Goldman Sachs Bank USA

We all can certainly agree about and recognize Jim Barnes’ gigantic contributions to our industry. However, I wish to share my thoughts about him as my close friend. I learned much from Jim about the law of letters of credit. Over the decades, we were involved in many passionate disagreements with lawyers, bankers, and government officials in pursuit of improved practice and law. Jim was always the calming influence to my more animated personality.

When I was Chair of the U.S. Council on International Banking (merged into BAFT), he provided counsel to us during the successful revision of UCC Article 5. He bridged the gap between we bankers and the attorney participants. His instructive guidance resulted in an excellent team effort with all points of view considered. During this effort we worked with the “Two Jims”, Barnes and Byrne. One evening during this revision process, Professor Jim and I bestowed Jim Barnes the nom de plume of “Doctor”. He is able to rewrite a lengthy paragraph into one short but incredibly meaningful sentence like a surgeon in a delicate operation. He remains a “legal word surgeon” of incomparable expertise. I also must comment on our necktie competition which entailed seeing who could wear the flashiest tie. He won with his classy vibrant ties to my more gaudy choices.

I humbly honor and recognize Jim “Doctor” Barnes’ enormous contributions to the international banking industry and legal environment by this well-deserved Institute’s recognition. Jim’s achievements are too innumerable to list here. Without his contributions to our industry, both in standard practice and law, we would be much diminished. I would be remiss if I failed to honor our decades-long friendship and what we have uniquely shared in our lives. Many cherished memories!

— Dennis Noah

Jim has been a front-runner and leading jurist in the developing legal practice of international trade finance law. What is especially important is Jim’s contribution not just to the theoretical and academic underpinnings of this area of practice, but his ability to address the various complex issues that arise for banks and traders on the front line. As a result of Jim’s active participation in IIBLP events, among others, he’s acted as an informal mentor to many lawyers internationally and we’ve all benefited immensely from his willingness to share his expertise whenever we might have an novel issue in front of us.

— Lorna K. Strong
Managing Director & Deputy General Counsel
HSBC Global Trade & Receivables Finance