Home Mr Old Man SEEKING TO LIFT A COURT ORDER

SEEKING TO LIFT A COURT ORDER

4 min read
0
0
2,219
Yellow sandy beach

QUESTION

Dear Nguyen,

We had negotiated documents for USD 100,000 under an LC issued by a bank in Vietnam. It was a usance LC and documents were accepted and maturity date notified to us.

A few days before the maturity date, we were informed that the local court had attached USD 30,000 of the above proceeds and thus only USD 70,000 were paid to us.

The court attachment came to the issuing bank after the acceptance of the documents and the proceeds were also the property not of the beneficiary but the negotiating bank.

Thus the attachment based on debt of the beneficiary held by the applicant did not apply to the proceeds of the LC payment which was the property of the negotiating bank.

Can the court attachment which had been applied by the issuing bank be lifted through legal proceedings by our lawyers in Vietnam?

With warmest regards,

Thomas
————————–

ANSWER

Dear Thomas,

You did not tell me whether the L/C was available by acceptance (of time draft) or by deferred payment.

From your description I guess the L/C was available with the issuing bank by deferred payment and the issuing bank incurred its deferred payment undertaking and advised the same to the beneficiary through your bank (the presenter on behalf of the beneficiary). And your bank discounted the deferred payment undertaking incurred by the issuing bank.

If this is the case, I am afraid that your bank is not protected by either UCP 600 or the common law unless it was authorized by the issuing bank to negotiate/discount such a deferred payment undertaking before the court order was given.

Even if when the L/C was available with the issuing bank by acceptance, your bank is not protected either unless it was authorized by the issuing bank to negotiate/discount the draft based on the issuing bank’s confirmation that it accepted the draft and pay at maturity or unless it received the physical draft accepted by the issuing bank before the court order was given.

In short, your bank can request the court to lift the order only when it can evidence that it was authorized by the issuing bank to discount the issuing bank’s deferred payment undertaking.

You may agree with me that court order or injunction is a matter of local law and the court decision may be contrary to the UCP.

Try. Why not?

Kind regards,
Mr. Old Man

Load More Related Articles
Load More By Mr Old Man
Load More In Mr Old Man

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

INVOICE NOT CERTIFYING WHAT HAS NOT BEEN SHIPPED

QUESTION Dear Sir, LC allows both AIR and SEA shipment. Amount: USD 100,000 Shipment by AI…