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Grounds for withholding payment in documentary credits

Low, Hang Yen (2010)
Ph.D. thesis, University of Birmingham.

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The documentary credit has for a long time served as a very reliable form of financial instrument in the trading of international goods. The certainty of payment guaranteed under the documentary system is attributed to the autonomous nature of the credit contract, which is that it is independent of and unaffected by the contract of sale which it supports. So long as the documents which are presented strictly comply with the terms of the credit, the paying bank will be under an obligation to pay. However, documents which are non-compliant are also frequently presented in practice. The autonomous characteristic of the instrument also gives rise to problems because there are circumstances where, even though compliant documents are tendered, payment made under the credit would be unfair. This thesis attempts to investigate the various grounds which could provide a basis for withholding payment under a documentary credit. From the perspective of all the main parties involved in a documentary credit transaction, issues relating to payment are of utmost importance. Discrepant documents and fraud, which are well established as valid grounds, will be examined. The thesis will also explore other possible grounds to withhold payment such as illegality, nullity, unconscionability and breach of negative stipulations which exist in the underlying contract connected to the credit. The parameters of these grounds will be identified and where appropriate, recommendations will be made.

Type of Work:Ph.D. thesis.
Supervisor(s):Uff, Keith
School/Faculty:Colleges (2008 onwards) > College of Arts & Law
Department:School of Law
Subjects:HB Economic Theory
K Law (General)
HJ Public Finance
Institution:University of Birmingham
ID Code:1373
This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder.
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