Letters of credit payable overseas and third party debt orders

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Abstract

- An English court does not have jurisdiction to make a third party debt order in respect of a letter of credit issued by a bank in England where the credit is payable in a foreign country and the law of that country (being the lex situs of the debt arising under the credit) would not recognise compliance with an English third party debt order as discharging the issuing bank’s liability under the credit.
- The beneficiary of a letter of credit is not necessarily the creditor of the debt created by the letter of credit where the credit specifies that it is payable only to the bank account of another party.
- Does the principle of independence of letters of credit require that a letter of credit should be construed independently in accordance with its terms only, without taking into account background facts known to the parties at the time the credit was issued?

Details

Original languageEnglish
Pages (from-to)674-677
JournalInternational Banking and Financial Law
Volume30
Issue number11
Publication statusPublished - Dec 2015