Final Arbitral Award rendered in 2003 in SCC case 71/2002 - SAR 2004 - 2
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(1) Letter of credit ― whether the paying bank is entitled to refuse to
release the money when the documents presented by the seller
contain some discrepancies with the conditions in the letter of
(2) Letter of credit ― in case the issuing bank does ask for a waiver of
discrepancies from the buyer, whether the buyer is obliged to give
(3) Buyer’s obligation to take delivery and make payment ― after the
expiry of the letter of credit.
(4) Evidence ― whether Claimant can submit new evidence during
the final hearing on the ground that it is a resident outside Europe
and there are sometimes difficulties with the communications.
(1) According to Articles 13 and 14 of the UCP 500 and the doctrine
of strict compliance, the paying bank is only required to examine
the presented documents on their face, and therefore the paying
bank is entitled to refuse payment even when the discrepancies
between the documents presented and the conditions in the letter
of credit are non-material.
(2) If the issuing bank does in fact ask for a waiver from the buyer,
according to the principle of good faith as supported by Article
7(1) of the CISG, the buyer is obliged to examine the
discrepancies in so far as it is possible within the validity period,
and to give a waiver in case the discrepancies are clearly
(3) The buyer’s obligations to pay the price and take delivery do not
disappear with the expiry of the letter of credit. In the absence of
an agreement to the contrary, there exists a subsidiary obligation
to pay the price and take delivery should the letter of credit expire.
CISG 75(1)b and 58(1).
(4) The evidence was refused because it was introduced too late and
there were no excusable reasons for the lateness.
Claimant: Seller of raw material (Nigeria)
Respondent: Buyer (Estonia)