LEE NGAI TAK t/a CO TRADING CO AND ANOTHER v. AMORN SUPPLIES LTD AND ANOTHER

LEE NGAI TAK t/a CO TRADING CO AND ANOTHER v. AMORN SUPPLIES LTD AND ANOTHER

Plaintiffs failed to establish an arguable or prima facie case to continue the injunction because the forgeries and falsehoods were not manifest on the face of the documents, the issuing bank had no reasonable means to detect the fraud, the negotiating bank was likely a bona fide holder entitled to reimbursement, and the balance of convenience precluded interfering with an irrevocable credit; accordingly the injunction was discharged and costs awarded to the defendant.

Citation
LEE NGAI TAK t/a CO TRADING CO AND ANOTHER v. AMORN SUPPLIES LTD AND ANOTHER
Parties
1st Plaintiff: Lee Ngai Tak trading as Camery Trading Company; 2nd Plaintiff: Burfield National Finance (H.K.) Limited; 1st Defendant: Amorn Supplies Limited; 2nd Defendant: The China State Bank Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 June 1982
Case Number
HCA4756/1982
Procedural Posture
Application to Continue Injunction Arising From Letter of Credit Dispute / Inter Partes Summons to Continue Earlier Ex Parte Injunction
Legal Topics
Letters of Credit, Forgery, Issuing Bank Liability, Paying Bank Obligations, Injunctions, Uniform Customs and Practice for Documentary Credits
Source Language
EN
Banking Law Contract Law Equity Commercial Law Letters of Credit Forgery Issuing Bank Liability Paying Bank Obligations +2 more

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Parties

Lee Ngai Tak trading as Camery Trading Company

1st Plaintiff

Burfield National Finance (H.K.) Limited

2nd Plaintiff

Amorn Supplies Limited

1st Defendant

The China State Bank Limited

2nd Defendant

Procedural Posture

Application to Continue Injunction Arising From Letter of Credit Dispute / Inter Partes Summons to Continue Earlier Ex Parte Injunction

Legal Issues

  1. 1 Whether plaintiffs established an arguable or prima facie case to continue an injunction restraining payment under an irrevocable letter of credit
  2. 2 Whether forged or false documents deprived the beneficiary and negotiating bank of rights under the credit
  3. 3 Whether the issuing bank had notice of fraud or irregularity such that it could be restrained from paying

Ratio Decidendi

Plaintiffs failed to establish an arguable or prima facie case to continue the injunction because the forgeries and falsehoods were not manifest on the face of the documents, the issuing bank had no reasonable means to detect the fraud, the negotiating bank was likely a bona fide holder entitled to reimbursement, and the balance of convenience precluded interfering with an irrevocable credit; accordingly the injunction was discharged and costs awarded to the defendant.