[2] Exceptions to the principle of strict conformity with the terms and conditions of the letter of credit, and standard for determining inconsistency with the terms and conditions of the letter of credit and shipping documents

[3] The case holding that in a case where the description of the beneficiary's name and address under the letter of credit transfer notification and the description of the remaining shipping documents, such as commercial invoice, are different, it shall be deemed that there is a disagreement between the terms and conditions of the letter of credit and the description of shipping documents, where there is an important change in the meaning

[4] The case holding that the above insurance policy cannot be deemed an effective insurance policy required under the credit, in case where the place of destination indicated in the insurance policy covering the risks of the goods in all carriage sections from the place of departure to the place of destination and the place of destination as required by the credit clearly differ

1. On the first ground for appeal

According to Article 13(a) of the Uniform Customs and Practice for Documentary Credits, a bank examining a credit and its related documents is obligated to examine whether all the documents stipulated in the credit comply with the terms and conditions of the credit on its face with due care. According to Article 37(c) of the Uniform Customs and Practice for Documentary Credits, the entry of the product description of a commercial invoice in the commercial invoice must be strictly identical with that of the credit, unlike the product description of other documents (see Supreme Court Decisions 84Meu696, May 28, 1985; 84Meu697, May 28, 1985; 2001Da49302, Nov. 28, 2003).

In the same purport, the court below determined that the packaging condition stated in the column for product description of the letter of credit of this case must be stated in the commercial invoice as a restrictive description specifying the product itself. The product description stated in the commercial invoice is omitted, and thus, it cannot be deemed that the product description conforms to the letter of credit of this case. Although the packaging description stated the same matters as the letter of credit of this case, which is not the commercial invoice, is stated in the separate document attached thereto, the defect in the commercial invoice cannot be supplemented by any other document than the commercial invoice, and thus there is a disagreement between the description of the letter of this case and the commercial invoice. There is no error of law by misunderstanding the legal principles as to whether the conditions of the letter of credit of this case are identical

2. On the second ground for appeal

The requirement that the documents attached to a letter of credit must strictly comply with the terms and conditions of the letter of credit does not mean that the wording should be completely identical. Even if there is a little difference in the wording, if the bank pays considerable attention to it, it shall be deemed that the difference is insignificant and the meaning of the letter of credit does not change, nor does it entirely harm the terms and conditions of the letter of credit, and if the discrepancy in the letter of credit is recognized as a simple and obvious number of statements, which occurred in the course of preparing the letter of credit and the relevant document, it shall be deemed that it is consistent with the terms and conditions of the letter of credit. However, if the bank examining the document is not clear that it is an error, or if there is a significant change in the meaning due to the difference in the description, it shall be deemed that the discrepancy in the terms and conditions of the letter of credit and the shipping documents is an omission (see, e.g., Supreme Court Decisions 2002Da770, Nov. 14, 2003; 2003Da638383, Jun. 111, 2004).

According to the reasoning of the judgment below and the record, the name of Dobong Unemployment differs between the notice of transfer and the other shipping documents, such as commercial invoice, from “BONNNN” and “BONCHEN.” In light of the fact that the address is different from “1450-14” and “1450-1,” the beneficiary and the issuer of the remaining shipping documents, such as commercial invoice, under the notice of transfer of the letter of credit in this case, may be mistaken for other companies. Therefore, the difference in the description is likely to cause significant change in the meaning, and thus, there is a discrepancy between the conditions of the letter of credit and the description of the remaining shipping documents, such as commercial invoice.

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to the consistency of the terms of the credit and shipping documents or the interpretation of the exemption clause.

3. On the third ground for appeal

According to the reasoning of the judgment below and the record, the instant insurance policy covers the risks of goods in all carriage sections from the place of departure to the place of arrival. The “XINGG”, which is the place of destination under the instant credit, refers to the Chinese New Port, and the “XING”, which is the place of destination under the insurance policy, refers to the Chinese New Port, and the place of destination is an English indication that indicates the Chinese New GING, which is the place of destination under the instant insurance policy, is a place clearly different from the place of destination as required under the instant credit. Thus, the instant insurance policy cannot be deemed an effective insurance policy required under the instant credit.

The judgment of the court below to the same purport is just, and there is no error of law by misapprehending the legal principles as to whether the credit conditions and the insurance policy are in accord.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the plaintiff. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Hong-hoon (Presiding Justice)