Intellectual Property Law

How can I stop the banking from paying a letter of credit?

By IBLS Editor

My company, a bicycle taxi service, contracted with an overseas exporter in another country to purchase 50 boxes of bicycle taxi or rickshaw parts of various types. The exporter secured an irrevocable letter of credit from a bank here that named the exporter as the beneficiary. The credit required the exporter to produce a bill of lading naming the bank as the consignee (plus other appropriate documents) in order for it to collect payment on the credit. When the exporter placed the boxes aboard the carrier for shipment, it received the required bill of lading and other documents. We then learned that the exporters had filled the crates with garbage and broken items not working rickshaw parts. So we promptly notified the bank of this and asked the bank not to pay the exporter on the letter of credit. The bank refused. We have now brought suit to enjoin the bank from making payment. Do you think the court will grant our request? Can you explain how the letter of credit payment system works because we can't seem to get our lawyer on the phone to answer questions. Also, what do we have to prove in order to stop the payment to the exporter under the letter of credit?

Derrick

Full post as published by IBLS Internet Law Blog on March 23, 2009 (boomark / email).