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This study intends to review the rules of the Supreme People’s Court on Some IssuesConcerning the Trial on the Disputed Cases over the Letter of Credit of China.
The background for the rules is that the international reputation of letters of credit issuedby domestic banks of China was severely harmed due to the inadequacy of the criteria anddiscretion of Chinese local courts in their trial of the L/C dispute cases arising out of lackof understanding of the international ‘Rules of Game’ in the L/C area.
The rules consist of 18 articles and cover seven main fields. They include the scope ofapplication and governing law, the independence principle of L/C, the examination ofdocuments and inconsistency, the recognition of L/C fraud, the application of fraud exceptionrule, the legal process for the application and cancellation of injunction, the warranty issuedin connection with the application of L/C etc.
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