Facts
In this case, it concerned a documentary letter of credit with deferred payment, which the plaintiffs A, B and C (applicants) had opened with Bank X (defendant 1) in favor of Overseas Buying Corp. Ltd. Hong Kong (beneficiary). The plaintiffs claimed that the letter of credit was invalid because Bank X had paid the letter of credit amount to the beneficiary before the expiry of the 90-day payment period. The Commercial Court dismissed the claim, as it was of the opinion that the letter of credit with deferred payment was intended to provide the applicant with credit and to release him from the obligation of concurrent performance. Therefore, the bank could make the payment before the expiry of the deadline without violating the order.Considerations
The Federal Supreme Court confirmed the interpretation of the Commercial Court. It stated that the letter of credit with deferred payment is intended to grant the buyer credit and to release him from immediate payment. Therefore, the bank can…