Article

Underlying Transaction; Effect of Wrongful Dishonor.

Note:

The New York Supreme Court, Saxe, J., denied summary judgment with respect to most counts in an action by an applicant against a beneficiary related to a contract to distribute televisions and video-cassette recorders and players for a total of US$ 20,491,729 in Yugoslavia. Payments were to be via LC. Restrictions were subsequently imposed on the issuance of LCs although some were issued.

The distributor argued that, as to the LCs which were opened, the seller had failed to provide necessary documentation including allegedly stale documents. The court denied summary judgment because it could not determine from the record why the LCs were not honored. There were suggestions that the reasons were fluctuations in the currency rate or the imposition of an additional document requirement which required a full trial on the issue.

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