Article

Procedural History: The court granted the plaintiff a preliminary injunction of L/G against the defendant.

Facts: The plaintiff applied for a preliminary injunction to stop the third party, Bank of China Liaoning Branch, from paying the defendant (beneficiary) the sum of Eur. 2,106,910 under No.GC0486114000577 L/G because of the fraud in the L/G. And the plaintiff gave security for the preliminary injunction.

Legal Analysis:

Legal Issue(s): Whether the court could grant a preliminary injunction, concerned with the fraud under the L/G, when the plaintiff gave security for this preliminary injunction?

Legal Rule(s): Art. 12 (5), Provisions on Several Issues in the Trial of Independent Letter of Guarantee Case: the court shall affirm that a fraud in L/G occurs when: …… (5) under the other circumstances, the beneficiary knew it had no rights on claiming a payment, but it still abused it’s right……

Disposition – for each legal issue:

  1. The court seized up the security that the plaintiff offered;
  2. The court granted the plaintiff a preliminary injunction of L/G against the defendant.

Holding & Reasoning for each issue: According to Art. 12 (5), Provisions on Several Issues in the Trial of Independent Letter of Guarantee Case, the court thought it reasonable to grant a preliminary injunction of the L/G.

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