A Stanby Letter of Credit is issued subject to the Intarnational Standby Practices ICC Publication No.590 (ISP98).
It is not mentioned in the Standby L/C that it is governed by any specific law.
Question: Can we assume that the law applicable in the above Stanby L/C is the law at the place of issuance as per Rule 1.08(d)?
Law applicable under ISP98
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IacovosLouca
- Posts: 5
- Joined: Fri Apr 05, 2019 5:19 pm
Law applicable under ISP98
My personal thoughts, without liability/responsibility, are:
1. Rule 1.08(d) is not intended to have any bearing on the governing law of the instrument. Rule 1.08 simply exonerates an issuer from responsibility for certain things.
2. Based on English law, into which was incorporated in 1991 the (EU) 1980 Rome Convention on the Law Applicable to Contractual Obligations, I would anticipate that -in the absence of an express provision to the contrary- the jurisdiction of the place of issue of the standby credit would be considered the governing law. This is provided that the standby credit is not available by payment with another bank. If it were, I would anticipate that the jurisdiction of the location of the nominated paying bank would be the governing law, in the absence of an express provision to the contrary.
3. To put the matter beyond dispute one can incorporate in the instrument an express provision as to its governing law. However, as a nominated paying bank, I would refuse to perform this role were the governing law expressed to be any other than the jurisdiction in which I were located.
[edited 4/12/02 10:00:28 AM]
1. Rule 1.08(d) is not intended to have any bearing on the governing law of the instrument. Rule 1.08 simply exonerates an issuer from responsibility for certain things.
2. Based on English law, into which was incorporated in 1991 the (EU) 1980 Rome Convention on the Law Applicable to Contractual Obligations, I would anticipate that -in the absence of an express provision to the contrary- the jurisdiction of the place of issue of the standby credit would be considered the governing law. This is provided that the standby credit is not available by payment with another bank. If it were, I would anticipate that the jurisdiction of the location of the nominated paying bank would be the governing law, in the absence of an express provision to the contrary.
3. To put the matter beyond dispute one can incorporate in the instrument an express provision as to its governing law. However, as a nominated paying bank, I would refuse to perform this role were the governing law expressed to be any other than the jurisdiction in which I were located.
[edited 4/12/02 10:00:28 AM]
Law applicable under ISP98
Although we are not lawyers, we did study some laws. And we would like to say a few words here.
Basically what Jeremy has said is true in principle but there are a lot of complexities in the real life world. Before the parties go to the courts of law to fight for their interests, they must have the rules of the ball game ascertained and fixed. From our involvement in DC litigations as a DC court expert, sometimes it would take two or three learned barristers specialized in this particular field to make rigorous researches for the applicable law. And the honourable thing is that the barristers may not agree amongst themselves at the end of the day!
Therefore this is not a topic suitable for discussion in the Discussion Forum as most of the members are bankers although some like Jeremy is more familiar with the local law of the place where his own bank operates.
For such issues, a banker should consult his own in house lawyers or the legal counsel retained by his bank.
www.tolee.com
Basically what Jeremy has said is true in principle but there are a lot of complexities in the real life world. Before the parties go to the courts of law to fight for their interests, they must have the rules of the ball game ascertained and fixed. From our involvement in DC litigations as a DC court expert, sometimes it would take two or three learned barristers specialized in this particular field to make rigorous researches for the applicable law. And the honourable thing is that the barristers may not agree amongst themselves at the end of the day!
Therefore this is not a topic suitable for discussion in the Discussion Forum as most of the members are bankers although some like Jeremy is more familiar with the local law of the place where his own bank operates.
For such issues, a banker should consult his own in house lawyers or the legal counsel retained by his bank.
www.tolee.com