Bulgrains & Co Ltd v Shinhan Bank [2013] EWHC 2498 (QB) (24 July 2013)

Bulgrains & Co Ltd v Shinhan Bank [2013] EWHC 2498 (QB) (24 July 2013)

The documents presented by the claimant contained material discrepancies in both the beneficiary's name and the description of goods, which were not merely typographical or immaterial. Under the strict compliance rule, the defendant bank was entitled to reject the documents. The defendant's notice of rejection, via SWIFT message, was compliant with UCP 600 Article 16 as interpreted in industry practice. These findings disposed of the claim without need to decide the title to sue or fraud issues.

Citation
[2013] EWHC 2498 (QB)
Parties
Claimant/respondent: Bulgrains & Co Limited; Defendant/appellant: Shinhan Bank
Jurisdiction
England and Wales
Judgment Date
24 July 2013
Procedural Posture
Commercial Claim (expedited Trial) / First Instance Judgment
Outcome
Claim dismissed
Legal Topics
Letters of Credit, Documentary Compliance, UCP 600, Strict Compliance Rule, Fraud Exception, Costs Orders
Commercial Law Banking Law International Trade Letters of Credit Documentary Compliance UCP 600 Strict Compliance Rule Fraud Exception +1 more

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Parties

Bulgrains & Co Limited

Claimant/respondent

Shinhan Bank

Defendant/appellant

Procedural Posture

Commercial Claim (expedited Trial) / First Instance Judgment

Legal Issues

  1. 1 Whether the documents presented under the letter of credit strictly complied with its terms
  2. 2 Whether the defendant's notice of rejection was compliant with UCP 600 Article 16
  3. 3 Whether the claimant had title to sue under the letter of credit

Ratio Decidendi

The documents presented by the claimant contained material discrepancies in both the beneficiary's name and the description of goods, which were not merely typographical or immaterial. Under the strict compliance rule, the defendant bank was entitled to reject the documents. The defendant's notice of rejection, via SWIFT message, was compliant with UCP 600 Article 16 as interpreted in industry practice. These findings disposed of the claim without need to decide the title to sue or fraud issues.

Court Disposition

Claim dismissed

Orders

  • Claimant to pay two-thirds of the defendant's costs of the action, subject to detailed assessment and set-off against any interlocutory costs orders in claimant's favour.
  • Claimant to pay over to the defendant's solicitors by 1.00pm the next day, together with interest, the sum of US$825,000 held in the claimant's solicitors' client account.