Notice Timing
Whether the refusal notice was given within the permitted period, which frequently decides the case on its own.
Letter of credit disputes are fought on paper. Whether the presentation complied, whether the refusal notice was valid, and whether it was given within the permitted period are the three questions that decide almost every case.
Dubai Legal Expert acts for beneficiaries, applicants and banks in documentary credit and guarantee disputes across the UAE, including wrongful dishonour claims and applications concerning fraudulent calls.
Under the applicable documentary credit rules, an issuing bank refusing a presentation must give a single notice within a defined period, stating each discrepancy relied on and the disposition of the documents. A notice that is late, incomplete or inconsistent can preclude the bank from relying on the discrepancies at all.
The independence principle means banks deal in documents and not in the underlying transaction. The recognised exception is fraud, and applications to restrain payment on that basis require clear evidence rather than a commercial dispute dressed up as fraud.
Contact UsClaims where a compliant presentation was refused or where the refusal notice was defective.
Detailed examination of alleged discrepancies against the credit terms and applicable rules.
Disputes over calls on demand guarantees and standby credits, including unfair call arguments.
Urgent applications concerning payment where there is clear evidence of documentary fraud.
Advice and representation for issuing, confirming and nominated banks on presentation questions.
Whether the refusal notice was given within the permitted period, which frequently decides the case on its own.
Whether every discrepancy relied on was stated, since a bank is generally confined to the discrepancies it notified.
Each alleged discrepancy tested against the credit terms and the applicable interpretation rules.
Rapid action where a guarantee call or payment requires immediate court intervention.
Clear documentary evidence assembled, since the fraud exception requires more than a commercial dispute.
Coordination with counsel in other jurisdictions where banks or beneficiaries sit abroad.
Before assessing whether documents were actually discrepant, we examine the refusal notice. It must be issued within the permitted time, in a single communication, stating each discrepancy and the disposition of the documents.
Notices that are late, that add discrepancies later, or that fail to state the disposition of the documents are common. Where the notice is defective, the bank may be precluded from relying on the discrepancies at all, which resolves the dispute without ever reaching the merits.
Test the notice, then test the discrepancies.
The credit, presentation, refusal notice and all bank correspondence are obtained in full.
Timing, single communication requirement, content and disposition statement are examined.
Each alleged discrepancy is tested against the credit terms and applicable interpretation rules.
A written response is submitted to the bank setting out the position and any defects in the refusal.
Where a guarantee call or payment requires immediate intervention, an urgent application is made.
Where the matter is not resolved, a wrongful dishonour or related claim is pursued.
The refusal notice added a discrepancy that had not been in the original notification. That point ended the dispute.
Two of the four discrepancies did not exist on any reading of the credit. Setting that out produced payment.
The bank must give notice within the permitted period stating each discrepancy and the disposition of the documents. A defective notice can preclude reliance on the discrepancies.
Banks deal in documents rather than in the underlying transaction, so a compliant presentation must be paid regardless of disputes about the goods.
The recognised exception to the independence principle, allowing intervention where there is clear evidence of fraud rather than a commercial dispute.
Only in limited circumstances, generally requiring clear evidence rather than an assertion that the call is unjustified.
Within the period specified by the applicable rules, and a late notice can prevent the bank relying on the discrepancies.
Yes, where a compliant presentation was refused or the refusal notice was defective, a claim against the bank is available.
Send us the credit, the presentation and the refusal notice. The first consultation is free.
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