negotiate with recourse and the right to claim reimbursement

[HOANGTHIANHTHU_invalid]

Issuing Bank: Bank A in country X
Beneficiary's Bank: Bank B in country Y
L/C No. 123, amount USD100.000,00; subject to UCP 500.

On 03/01/2008: Bank B presented shipping docs to Bank A
On 10/01/2008: Docs reached bank A.
On 13/01/2008: Bank A released Docs and prepared for payment
On 14/01/2008: Bank A received official document from Applicant and local Authorities - Chamber of Commerce and Industry, requiring Bank A to temporarily stop payment as the shipment was fraud.
On 17/01/2008: Bank A received Court Order, stoping bank A to pay Bank B temporarily.

On 30/01/2008: Bank A received final judgement from Court, stating that "Applicant have to pay only USD 20,000.00 to Beneficiary. (equivalent to the real amount of goods received as per L/C No.123), payment must be made through Issuing Bank".

Bank B continuously claimed bank A to pay full amount as the Beneficiary had gone bankcrupt and bank B had negotiated the docs. When required, Bank B provided bank A with account statement and credit advice.

Upon investigating the credit advice, Bank A discovered that the negotiation was with recourse, and the maturity date of the negotiation was 08/01/2008 (before the date when Bank A received docs).

Questions:
1/ As Bank B had negotiated the docs with recourse and negotiation agreement between Bank B and Ben. hađ expired when the docs reached Bank A, then Does Bank B have the right to claim reimbursement the negotiated amount from Bank A?

2/ Could Bank A follow the Local Court decision and pay only USD20,000.00?

3/ In case Bank B brings the case to International Court/ICC, which Bank will be in strong position to win the case?

[JudithAutié]

How was the credit available, and where?

Without such information, it is impossible to even give an educated guess.

Regards
Judith

[HOANGTHIANHTHU_invalid]

The credit was available with any bank by negotiation.
Date and place of expiry was in Beneficiary's country.

[edited 1/18/2010 1:22:16 AM]

[NigelHolt]

Assuming Bank B negotiated, in accordance with UCP500, a complying presentation made to it on or before expiry:
1. the fact that Bank B negotiated with recourse ought not to affect its reimbursement rights under UCP500 (sub-) Articles 9(a)(iv), 10(d) & 14(a). Nor should the fact that the credit expired before receipt of documents by Bank A but prior to their presentation to Bank B.
2. Bank A is obliged to abide by the order of a competent court. However, provided it knew, it should have explained to the court that Bank B had negotiated, and thus the beneficiary had already been paid, and that Bank A was obliged to reimburse Bank B and that not to reimburse Bank B could affect its reputation.
3. What ‘international court’? And why bother with the ICC? The ICC has absolutely no power in such matters. What Bank B needs to do is to get the court to alter its order to Bank A in the light of the facts (best option by far) or sue Bank A for reimbursement in a different jurisdiction where Bank A has assets.