Withholding payment in documentary credit: discrepancies, fraud and nullity

Aladwan, Zaid Mahmoud (2020) Withholding payment in documentary credit: discrepancies, fraud and nullity. Doctoral thesis (PhD), University of Sussex.

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The two fundamental principles of documentary credit, namely the doctrine of compliance and the principle of autonomy, are unclear and vague, which has led to confusion in their application. The doctrine of compliance deals with a bank’s primary duty to examine the documents in order to determine that they are compliant with the terms of the letter of credit. Where there are discrepancies, an analysis of the case law in different jurisdictions reveals that judgments often conflict with previous rulings. This is due in part to the vague and confusing language used in the legal instruments that govern the use of documentary credit. This point indicates that it is necessary to re-evaluate the UCP 600 rules in order to determine more clearly when a discrepancy will be viewed as a genuine ground for withholding payment. In turn, the principle of autonomy is concerned with the mechanism of securing payment in a letter of credit transaction and thereby protecting the rights of the parties. This principle isolates the documentary credit from the underlying contract of sale. However, there are issues with this cornerstone principle as the case law reveals that in certain circumstances payment may be postponed because of some dispute in the underlying contract. This is the case where there exists either fraud or a nullity. This thesis critically evaluates the three controversial grounds for withholding payment: discrepancies, fraud and nullity.

Item Type: Thesis (Doctoral)
Schools and Departments: School of Law, Politics and Sociology > Law
Subjects: H Social Sciences > HG Finance > HG3691 Credit. Debt. Loans
K Law
Depositing User: Library Cataloguing
Date Deposited: 10 Feb 2020 09:59
Last Modified: 29 Mar 2022 07:58
URI: http://sro.sussex.ac.uk/id/eprint/89802

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