Dismissal of the Appeal against the Rejection of the Claim of Bank Kreiss AG against the Swiss Credit Institution

Facts

The Swiss Credit Institution instructed the Bank Kreiss AG domiciled in Hamburg to advise the company Borak Eléments de Construction SA in Geneva of the opening of a documentary letter of credit in the amount of US$ 7,650,000.-- (+0/-5%), without confirming it to the beneficiary. On the last delivery, the Swiss Credit Institution refused payments from the letter of credit. Nevertheless, Bank Kreiss AG credited the beneficiary of the letter of credit with an amount of US$ 3,049,289.78. Bank Kreiss AG then filed a lawsuit with the Commercial Court of the Canton of Zurich against the Swiss Credit Institution for payment of this sum plus interest. The claim was dismissed.

Bank Kreiss AG filed an appeal and requested the Federal Court to set aside the contested judgment and uphold the claim. Alternatively, the matter should be remanded to the lower instance for a new decision.

Considerations

The Federal Court dismissed the appeal. It concluded that the Commercial Court had rightly declared German law to be applicable. A choice of law in favor of Swiss law could not be assumed, as the…