Because standbys and demand guarantees often contain automatic extension clauses, ICC Opinion TA954 offers important lessons for practice and the need for sound drafting of such clauses.
Practice rules for independent undertakings do not address "pay and walk" clauses that are being used in some regions and shunned by others. Here, David Williams puts forth an alternative option for consideration.
The auto-extension clause used in a UCP 600 standby that gave rise to ICC Opinion TA954 illustrates the serious concerns that can emerge when ambiguous wording is inserted in a credit. Li Huang identifies and examines issues to consider.
The recent case of Illinois DNR v. Regions Bank illustrates the importance of clear wording of automatic extension clauses and issuing banks including a final expiration date in their standbys.
The maturation of UCP has included attempts to address incorrect practice regarding expiry date and presentation period of a credit. Is it time for UCP600 Article 6(d)(i) to be revisited?
A deceptive LC transfer leads a confirming bank to pay twice. Explore this trade finance fraud case from Abdurrahman Özalp’s book on international trade.
UCP600 interpretation challenges arise as banks often misconstrue article purposes. Beneficiaries risk losing payment guarantees due to misinterpretation during credit-complying presentations
