An LC's independence from the underlying transaction it supports is one of the core tenets that distinguishes this instrument type from other promises. When disputes arise, courts at times have given uneven treatment to independent undertakings with regard to the independence principle.
With regard to how fraud may disturb a bank's obligation to honour under an independent undertaking, courts have used various qualifiers to describe the level necessary. In his expansive article, Dr. Alan Davidson explores the concept of "Letter of Credit Fraud" under law and in the courts.
In Eurobank Ergasias S.A. v. Bombardier Inc., the Supreme Court of Canada takes up the fraud exception and whether it applies regarding a demand for payment under a Counter Guarantee.
Following his writing in the January 2025 edition of DCW, Robert Parson continues his look at high profile cases by revisiting decisions surfacing from Singapore commodity defaults of recent years.
In the first of a two-part article, Robert Parson looks back at major LC court cases of 2024 and their impact on an increasingly complex environment for trade finance.
