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.
The silent confirmation market is still active and prevalent for LCs in Asian countries as silent confirmation is one of the means for a beneficiary to mitigate issuing bank and country risk when it does not want other banks to confirm its credit.
After months of depleting US dollar reserves and denial of importers’ LCs amid the country’s dire foreign currency crisis, some Sri Lankan banks have managed to honour LCs.
Honour, negotiation, and reimbursement – individually and collectively – are perhaps some of the least understood (or most misunderstood) terms in letter
