2015 ANNUAL REVIEW LAW & PRACTICE
2015 Annual Review of International Banking Law & Practice edited by Professor James E. BYRNE Director Institute of International Banking Law & Practice, Inc. & George Mason University School of Law Christopher S. BYRNES Assistant Vice President Institute of International Banking Law & Practice, Inc. Matthew J. BROWN Associate Counsel Institute of International Banking Law & Practice, Inc. Justin B. BERGER Associate Counsel Institute of International Banking Law & Practice, Inc. The Institute of International Banking Law & Practice, Inc. & The George Mason Journal of International Commercial Law 2015 Annual Review of International Banking Law & Practice Copyright © 2015 All rights reserved No reproduction of this material may be made without express written permission. The Institute of International Banking Law & Practice, Inc. 20405 Ryecroft Court Montgomery Village, MD 20886 USA Phone: +1 301 869 9840 Fax: +1 301 926 1265 Website: www.iiblp.org E-Mail: [email protected] The services and products of the Institute are described on the back pages. ISBN 978-1-888870-65-7 The Annual Review of International Banking Law & Practice volume is produced by the Institute of International Banking Law & Practice, Inc. Opinions expressed in it do not necessarily reflect the official positions of the Institute. Authors and editors of articles in the Annual Review and the institutions with which they are associated often are actively involved in the field as lawyers, advisers, parties, consultants, or expert witnesses in many of the matters and cases addressed in the Annual Review. Notwithstanding positions expressed in the Annual Review, every effort will be made to publish differing viewpoints and contributions expressing such views. ii Introductory Pages Articles Table of Contents Overview of International Banking Law & Practice in 2014 ....................................................................................... 3 BARNES, James G.; and James E. BYRNE; Letters of Credit.................................................................................. 21 BERGER, Justin B.; Discrepancy Fees: An Inside Look at How (and How Much) Banks Charge.......................... 29 BYRNE, James E.; Going Beyond the Four Corners: Reflections on Teaching Letters of Credit as A Subset of International Banking Law.............................................................................. 33 BYRNE, James E.; UCP or ISP? Before Asking Which Rules, Primary Question is: Which Instrument?............... 53 COLLYER, Gary; Opinions That were Approved at the ICC Banking Commission Meeting Held in Dubai on 29-30 April.......................................................................................... 59 DOBÁŠ, Radek; Andreu VILÀ; & Kim SINDBERG; What’s Behind a Name, or Why Documentary Credits are so Modern......................................................................................................... 63 DU TOIT, SF; Reflections on Bills of Lading and Negotiable Instruments.............................................................. 65 HOQUE, ATM Nesarul; Is There Any Need for Expansion of Scope of Documentary Condition under UCP?................................................................................................................. 73 HOQUE, ATM Nesarul; The ISBP Standards – Are They Going Too Far?............................................................... 77 HUGO, Charl; Construction Guarantees and the Supreme Court of Appeal (2010–2013)................................... 81 HUGO, Charl; Protecting the Lifeblood of Commerce: A Critical Assessment of Recent Judgments of the South African Supreme Court of Appeal Relating to Demand Guarantees......................................... 95 IRESON, Audrey; Can a Nominated Negotiating Bank Negotiate for Less Than 100% of a Complying Presentation under UCP600?...................................................................................................... 109 JUEZ, Fabrizio; Electronic Presentation Conditions in Standby LCs: Problematic Provisions in US Federal, State, and Municipal Formats ................................................................................ 111 KELLY-LOUW, Michelle; Limiting Exceptions to the Autonomy Principle of Demand Guarantees and Letters of Credit...................................................................................................... 115 KOZOLCHYK, Boris; Drafting Commercial Practices and the Growth of Commercial Contract Law................ 135 MAULELLA, Vincent; Revisiting the Origins and Reasons for Discrepancy Fees ................................................ 173 NIELSEN, Dr. Jens & Nicolai NIELSEN; The German Bank Guarantee: Lessons to be Drawn for China.......... 175 SMITH, Damien G.; Sanctions Disclaimers in Letters of Credit............................................................................. 201 SONG Chang-Soon Thomas; Sectoral Dispute Resolution in International Banking (Documentary Credit Dispute Expertise: Docdex).......................................................................................... 215 SPROSTON, Peter; Why Discriminate against Use of Charter Party Bills of Lading? ........................................ 235 VOLET, Thomas; Problematic Provisions in Standby Auto-Extension Clauses.................................................... 239 WARREN, MARK; A Standby LC Battleground: Place of Presentation................................................................. 243 ZIMMERMAN, Kent; ISBP 745 One Year Later: LC Specialists Surveyed.............................................................. 245 Practices Committee on the Global Financial System CGFS Paper No. 50 Trade Finance: Developments and Issues.................................................................................................................................. 253 Guidance Paper on the Use of Sanctions Clauses in Trade Finance..................................................................... 261 ICC Global Trade and Finance Survey 2014 (Selected Pages)............................................................................... 269 Summary of the November 2014 ICC Banking Commission Meeting “Trade Finance: Growth Engine for SMEs” 5-6 November 2014 • Istanbul, Turkey................................................................. 311 vii 2015 Annual Review of International Banking Law & Practice Statutes & Government Actions Bangladesh Bank Circular 10.................................................................................................................................... 321 Federal Acquisition Regulation; FAR Case 2011-023, Irrevocable Letters of Credit............................................ 325 Reserve Bank of India Master Circular..................................................................................................................... 331 Case Summaries Abani Trading Pte Ltd v. BNP Paribas...................................................................................................................... 347 Access Communication Services v. I.B.E.W., Local Union No. 351........................................................................ 350 ACE American Insurance Company v. Bank of the Ozarks.................................................................................... 352 Alternative Power Solution Ltd. v. Central Electricity Board.................................................................................. 355 Amfinance Bhd v. Ultimate Eight Sdn Bhd & Ors................................................................................................... 359 Anhui Technology Import and Export Co., Ltd. v. Oswal Chemieals & Fertilizers Limited................................. 360 ANZ Bank Co. v. Ningbo Haitian International Trade Co....................................................................................... 362 Aria Inc. v. Credit Agricole Corporate & Investment Bank.................................................................................... 364 Avanti Medical Group, LLC. v. BMO Harris Bank.................................................................................................... 366 BasicNet S.p.A. v. CFP Services. Ltd........................................................................................................................ 367 Beach Community Bank v. City of Freeport............................................................................................................ 371 Beyfield Pty Ltd v. Northbuild Construction Sunshine Coast Pty Ltd.................................................................... 372 Bina Jaya Mantap Sdn Bhd v. Institute of Technology Petronas Sdn Bhd............................................................ 374 Bluebonnet Hotel Ventures, L.L.C. v. Wells Fargo Bank, N.A................................................................................ 376 Bowden v. Agnew...................................................................................................................................................... 378 Cangzhou Jianfa Protein Amino Acid Co. v. Bank of China Cangzhou Branch................................................... 379 Castle Aero Florida International Inc. v. Marking & Financial Services, Inc. ........................................................ 381 CEP Ltd. v. Wuxi Jiacheng Solar Tech. Co............................................................................................................... 382 China Everbright Bank Changshang Huashun Sub-Branch. v. .............................................................................. 386 Hunan Jiarui New Material Group Co., Ltd............................................................................................................. 386 China Machinery Engineering Corporation v. China Construction Bank Corporation, Hangzhou Baoshi Branch................................................................................................................................... 388 Chiyoda Steel Co. Ltd. v. Bank of China (Hong Kong) Ltd..................................................................................... 390 CKR Contract Services Pte. Ltd. v. Asplenium Land Pte. Ltd................................................................................. 392 Complex Systems, Inc. v. ABN Amro Bank N.V....................................................................................................... 394 Cruise Connections Charter Management 1 v. Ag of Can..................................................................................... 395 CVD Equip. Corp. v. Taiwan Indus. Glass Corp....................................................................................................... 396 Darby Group Cos. v. Wulforst Acquisition, LLC...................................................................................................... 399 DCD Factors Plc, DCD Trade Services v. Ramada Trading ltd, Khan, Khawaja.................................................... 400 Den Danske Bank A/S v. Surinam Shipping Ltd...................................................................................................... 401 Dependable Component Supply v. Carrefour Informatique Tremblant............................................................... 403 Dorchester Financial Holdings Corporation v. Banco BRJ, S.A............................................................................. 404 Eagle Fuels, LLC v. Perrin.......................................................................................................................................... 406 Edwards v. United States........................................................................................................................................... 407 Frenkel v. Baker.......................................................................................................................................................... 408 Global Marine Drillships Ltd. v. La Bella.................................................................................................................. 409 Good Luck Product Co. v. Crystal Cove Seafood Corp.......................................................................................... 410 Grains and Industrial Products Trading Pte Ltd. v. Bank of India........................................................................... 412 Greenstar, LLC v. Heller............................................................................................................................................. 414 Hagen v. Siouxland Obstetrics & Gynecology........................................................................................................ 415 Heji Huangpu Real Estate (Chengdu) Wenjiang Ltd. v. China State Construction Engineering Bureau V........ 416 HKSAR v. Cheng Kelly Kit Yin................................................................................................................................... 417 viii Introductory Pages Huntington National Bank v. Daniel J. Aronoff Living Trust................................................................................... 418 Ingram v. United States............................................................................................................................................. 420 Ixmation, Inc. v. Switch Bulb Co............................................................................................................................... 421 Jennings v. Bodrick (In re Bodrick)........................................................................................................................... 422 Jiangsu Taihu Boiler Co. Ltd. v. Pt. Kraktau Engineering ...................................................................................... 423 Joyspeed Global Cargo (China) Ltd v Mulitex Ltd................................................................................................. 429 JTG Management Services Ltd. v. Bank of Nanjing Co......................................................................................... 430 Kaysville City v. FDIC................................................................................................................................................. 432 Kingsley Capital Management v. Sly........................................................................................................................ 433 Legendary Investors Group No. 1 v. Niemann........................................................................................................ 434 Lend Lease Services Proprietary Ltd. v. Sugar Australia Proprietary Ltd.............................................................. 435 Lennane v. American Zurich Insurance Co. ............................................................................................................ 437 Mackt Logistics (M) Sdn Bhd v. Malaysian Airlines System Bhd............................................................................ 438 Mago International LLC v. LHB................................................................................................................................. 440 Metso Paper Technology (Shanghai) Co.,Ltd. v. Zhengda Qingke Hi-Tech Machinery Co., Ltd. & China Construction Bank, Tianxin Changsha Branch........................................................................... 441 Montano v. Morales-Ramirez.................................................................................................................................... 443 In re Newpage Corporation...................................................................................................................................... 444 NVK Spinning Co., LTD. v. Nichols........................................................................................................................... 445 Pacific Bank Bhd v. Kerajaan Negeri Sarawak......................................................................................................... 446 Porter v. Chetal, individually and d/b/a/ Advantage Real Estate Pro................................................................... 448 Proud Veterans, LLC v. Ben-Menashe...................................................................................................................... 449 Riverside Warehouse Partners, LLC v. Principal Global Inv., LLC........................................................................... 450 Saipan Air, Inc. v. Stukes............................................................................................................................................ 451 Schwartzman v. Morningstar, Inc.............................................................................................................................. 452 SEC v. Stanford Int’l Bank, Ltd.................................................................................................................................. 453 Seele Middle East FZE v. Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Bank................................. 454 Sentry Insurance A Mutual Co. v. B & H Health Care Services.............................................................................. 457 Shagang Shipping Co. Ltd. v. Ship ‘Bulk Peace’..................................................................................................... 458 Shanghai Mei Te Curtain Wall Ltd. v. China Construction Bank Shanghai Branch............................................... 459 Shanghai Zhenhua Port Machinery. vs Indian Overseas Bank............................................................................... 461 Siemens Ltd. v. Forge Group Power Party Limited (in liquidation) (Receivers and Managers Appointed)............................................................................................................... 468 Sinoma Technology & Equipment Group co., LTD. v. Gharibwal Cement Limited............................................. 470 Slade Gorton & Co. v. HSBC Bank Canada............................................................................................................. 472 Speedway Motorsports Int’l, Ltd. v. Bronwen Energy Trading, Ltd....................................................................... 475 Squires Landing, LLC v. City of Rochelle................................................................................................................. 476 Standard Chartered Bank v. Dorchester LNG (2) Ltd.............................................................................................. 477 State Bank of India v Denel SOC Limited ............................................................................................................... 480 State of Utah v. Kelson.............................................................................................................................................. 487 Sulzer Pumps (South Africa) (Proprietary) Limited v Covec-MC Joint Venture .................................................... 488 Swiss Singapore Overseas Enterprises Pte Ltd. v. China Citic Bank Corp............................................................ 493 Taurus Petroleum Ltd. v. State Oil Mktg. Co. of the Ministry of Oil, Rep. of Iraq................................................ 497 Tokyo Boeki Steel & Materials Ltd. v. Bank of Communications Co. Ltd.............................................................. 499 Tongfang Environment Co., Ltd v. Sino Capital Guaranty Trust Co., Ltd.............................................................. 505 Toyota Tsusho Sugar Trading Ltd v. Prolat S.R.L..................................................................................................... 507 TransAsia Commodities Ltd. v. NewLead JMEG, LLC............................................................................................ 508 Travelers Casualty & Surety Co. of America v. Samson Investment Co................................................................ 509 United States v. Jensen............................................................................................................................................. 511 United States v. Musgrave........................................................................................................................................ 512 Universal Publishers Pty Ltd. v. Australian Executor Trustees Ltd.......................................................................... 513 ix 2015 Annual Review of International Banking Law & Practice UPS Capital Business Credit v. Adams/Park Investment........................................................................................ 516 Velocity Press v. Key Bank, NA.................................................................................................................................. 517 Walton Construction Pty Ltd. v. Pines Living Pty Ltd.............................................................................................. 518 Wang v. Farkas (No. 2)............................................................................................................................................... 521 WCW Int’l Inc. v. Broussard....................................................................................................................................... 522 Yakima Co. v. Lincoln General Ins.Co....................................................................................................................... 523 x
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