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Note: Thai Long Investments Ltd. (Applicant), a Hong Kong Company obtained an ex parte injunction to prevent The Hongkong and Shanghai Banking Corp. (Issuer) from making a payment on an LC. In a motion by Applicant for continuation, High Court, Chung J granted a limited further extension.

Applicant had alleged that a Korean company, Kei Two Co. Ltd (Beneficiary) presented forged documents under the LC in an attempt to obtain payment. Chung, J. noted similarities between this case and cases in which no legal actions had been taken against the perpetrator of the fraud. The judge quoted with approval Kerr, J.'s opinion from R.D. Harbottle Ltd. v. Nat'l Westminster Bank Ltd., "A claim for a declaration against A and B that C is not entitled to do something, without claiming any declaratory relief against A or B themselves, is most unusual. [The plaintiffs] said that other causes of action would or might be added at a later stage... I find all the claims and potential claims highly unconvincing. They merely provide a contrived basis for seeking to obtain interlocutory relief against the bank..."

Following this logic, the court ordered Applicant to provide the summons judge with a statement as to what has been or will be done to resolve the dispute surrounding the circumstances of the forged documents through either agreement or legal process.

[JEB/tjb]

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