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COURT ORDER REVISITED

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Anh Duc Nam Yen

QUESTION

With reference to the refusal I have a question.
X Bank received  documents from Y Bank under LC issued by them. The documents are complied as per the terms of the Letter of credit . Before the due date the applicant brings a court order instructing the X Bank not to pay under the LC . Based on the same X Bank sends a notice to Y Bank in this regards . My question is:

  1. Is X Bank right in refusing to pay the bill?
  2. Under which clause X Bank has got the right not to pay the bill?

TV RAJESH

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ANSWER

Hi,

Court injunction or court order is a matter of local law not covered in the UCP. Local banks must comply with such a court order.

Kind regards,

Mr. Old Man

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