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Note: A US bank (Lender) located in Connecticut agreed to provide a credit facility to Construction Company on behalf of Dymm Tuanku Ja'afar Ibni Almarhum Tuanku Abdul Rahman, Yang Di Pertuan Besar Negeri Sembilan Darul Khusus (Investor) for construction of a tire plant to be located in Detroit, Michigan, U.S.A. To assure repayment of the credit facility, Investor caused the Seremban branch of Standard Chartered Bank Malaysia Bhd (Issuer) to issue a standby LC in favor of Lender for US$1,000,000. Investor provided Issuer with a letter of set-off for a deposit of RM4,180,000 to secure it.

Concerned over lack of progress in building the tire plant, Investor asked Issuer to "suspend" the LC. When Issuer informed Investor that the LC could not be revoked except with consent of Beneficiary, Investor insisted that notice of intention to rescind the LC be given to Beneficiary, and Issuer sent Beneficiary a "notice of recission."

When Construction Company utilized the credit facility, Lender/Beneficiary drew on the standby LC. Claiming that he had revoked the LC and was not liable to Issuer, Applicant/Investor sued Construction Company, Beneficiary, and Issuer in Malaysia on various claims related to the LC. Issuer challenged jurisdiction at trial.

The trial court, Ideres, J., ruled that the court had jurisdiction. Issuer appealed. The High Court (Seremban), Low, J., dismissed the appeal, finding that the trial court had already sufficiently decided jurisdictional issues, and Issuer was estopped from re-arguing them.

[JEB/ees]

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