[1] The method of determining whether shipping documents comply with the terms and conditions of the letter of credit in a case where several shipments have been made on the same cargo within the effective period of the letter of credit and shipping documents have been separately prepared for each shipment

[2] The reference point for examining whether the issuing bank complies with the credit-related documents and the conditions of the credit

[3] Where a freely purchased letter of credit has been issued, the status of the bank that received shipping documents from the beneficiary, and the bank seeks payment of the letter of credit to the issuing bank without negotiating documents, whether the 5th amended Uniform Customs and Practice for Documentary Credits applies (affirmative with qualification)

[4] In a case where shipping documents were presented within the effective period for presentation of documents, but the shipping documents were sent by the bank to the issuing bank after the expiry of the effective period, whether the bank, upon presentation of shipping documents, indicates that the "documents were presented within the effective period or the documents are consistent with the terms and conditions of the letter of credit," if the bank, upon presentation of the shipping documents, provides that the shipping documents of the letter of credit were presented within the effective period for presentation of documents of the letter of credit (affirmative)

[1] The issue of whether shipping documents conform to the terms and conditions of the letter of credit should be determined for each shipment and shipping documents, as long as shipping documents have been separately prepared for each shipment within the effective period of the letter of credit.

[2] Article 42(a) of the Uniform Customs and Practice for Documentary Credits (193 amended in 5th), provides that "any credit shall specify the effective period and place for presentation of documents for payment, acceptance, or for presentation of documents except in the case of an ordinary negotiating credit. The effective period specified for payment, acceptance, or negotiation shall be deemed the effective period for presentation of documents." Article 43(a) of the same Rule provides that "In addition to the provisions on the effective period for presentation of documents, all the credit requesting presentation of documents shall specify a specific period for presentation of documents, counting from the date of shipment. If this period is not specified, banks shall not accept documents presented to banks after 21 days from the date of shipment: Provided, That in any case, banks shall present documents within the effective period of the credit." Since Article 43(a) of the Uniform Customs and Practice for Documentary Credits provides that "for presentation of documents and the date of presentation of documents for presentation of the credit and the date of presentation of the documents shall be the effective period for presentation of the credit and the date of presentation of the documents."

[3] According to Article 10(b)(i) of the Uniform Customs and Practice for Documentary Credits (UCP 5, 1993 amended), all banks are entitled to receive documents in the case of a freely purchased credit, and Article 10(c) of the Uniform Customs and Practice for Documentary Credits (UCP 5, 1993 amended) does not require the bank to pay, pay, pay, accept bills of exchange, or negotiate bills, unless the nominated bank explicitly agrees and notifies the beneficiary. In light of these provisions, the bank, upon receipt of documents related to the credit from the beneficiary, may directly purchase them, seek reimbursement from the issuing bank as the negotiating bank, and directly send them to the issuing bank for the payment of the L/C on behalf of the beneficiary. In the latter case, the Uniform Customs and Practice for Documentary Credits shall apply to the case of electronic documents unless the applicant explicitly expresses his/her intent to receive the payment only when the designated bank makes a settlement.

[4] The Uniform Customs and Practice for Documentary Credits (UCP 5, 1993 amended) does not stipulate any demand in the case where shipping documents were presented within the effective period for presentation of documents, but the shipping documents were sent by the bank to the issuing bank after the expiry of the effective date, and the bank does not stipulate any demand in regard to when the confirming bank, the nominated bank, received the documents, or purchased the documents. Therefore, in a case where the bank, upon which shipping documents were presented, indicates that "documents were presented within the effective date," or "documents are in compliance with the terms and conditions of the letter of credit," the shipping documents of the letter of credit shall be deemed to have been presented within the effective period for presentation of documents of the letter of credit, unless

[1] Article 13 (a) of the Uniform Customs and Practice for Documentary Credits (1993 5th Revision) / [2] Article 42 (a), Article 43 (a), and Article 10 of the Uniform Customs and Practice for Documentary Credits (1993 / [3] Article 10 of the Uniform Customs and Practice for Documentary Credits (193 5th Revision) / [4] Article 42 (a) and Article 43 (a) of the Uniform Customs and Practice for Documentary Credits (193 5th Revision)

[2] [3] Supreme Court Decision 2001Da58269 decided Jul. 22, 2004 (Gong2004Ha, 1411) / [2] Supreme Court Decision 2000Da60296 decided Oct. 11, 2002 (Gong2002Ha, 2663) Supreme Court Decision 2001Da49302 decided Nov. 28, 2003 (Gong2004Sang, 28)

Mantercom (Law Firm Squa, Attorneys Park Si-hwan et al., Counsel for the plaintiff-appellant)

Industrial Bank of Korea (Attorney Lee Jung-won, Counsel for defendant-appellant)

Seoul High Court Decision 2001Na25926 delivered on November 23, 2001

The judgment below is reversed, and the case is remanded to Seoul High Court.

1. Facts acknowledged by the court below

The court below found the following facts based on the evidence duly admitted.

A. The cybercom Ballast Co., Ltd., a domestic law (hereinafter referred to as the "cybercom") imported the computer hard disks from the Plaintiff, a U.S. corporation, to pay the price by means of the letter of credit, and upon the foreign exchange transaction agreement entered into with the Defendant, requested the Defendant to issue the letter of credit on April 1, 200 according to the foreign exchange transaction agreement entered into with the Defendant, and the Defendant issued a non-refusable general letter of credit with the Defendant on April 30, 200 of the issue date; USD 396,045; USD 396,045; USD 396,045; within the expiry date of the letter of credit, within 10 days after the shipment; the necessary commercial invoice; the air waybill to which the consignee was the Defendant; and the package specifications.

B. The goods stipulated in the above letter of credit (hereinafter referred to as the "goods of this case") were shipped to the Republic of Korea from the United States on April 4, 2000 through the A.S. and transported from the United States on the A.S. after being shipped to the A.S. for the Asia and the aviation by the A.S., the transportation agent at the request of the plaintiff. On the 5th of that month, cybercom requested the U.S. to deliver the goods of this case to the U.S. S. S. S. S. S. S. S. S., the transportation agent at the destination, but was rejected on the ground that there was no delivery order of the consignee on the air waybill. After that, the freight of this case was returned to the United States on the 9th of that month on the 10th of that month, the freight of this case was returned to the U.S. on the 12th of that month, and cybercom was delivered the goods of this case from the Han Construction Co., Ltd., the destination on the 13th of that month.

C. On April 6, 200, the plaintiff presented shipping documents, such as the commercial invoice, the air waybill that the consignee was the defendant (the date of issuance), the package specifications, etc. (hereinafter referred to as "the first shipping documents"). On April 6, 200, the plaintiff sent the bill of exchange from the issuing bank without negotiating the shipping documents, and the bank sent the letter of credit to the defendant for the payment of the letter of credit amount. On the 7th of the same month, the shipping documents, etc. were arrived at the defendant on the 10th of the same month. However, on the 18th of the same month, the defendant refused the payment of the letter of credit amount to the above bank on the grounds that the shipping documents were defective, and on the 20th of the same month, the Bank of America sent the full text of the letter of credit amount to the defendant by asserting that the shipping documents, etc. sent to the above rejection notice comply with the terms and conditions of the letter of credit.

D. Meanwhile, on April 24, 2000, the Bank of America received from the Plaintiff the commercial invoice, air waybills (the date of issuance on April 10, 200), packing specifications (hereinafter referred to as the "second shipping documents"), and notified the Defendant of the expertise in sending the second shipping documents on April 24, 200, and the second shipping documents arrive at the Defendant on May 28 of the same year. On May 6 of the same year, the Defendant again rejected the payment of the letter of credit on the ground that ① the second shipping documents was not presented within the date of presentment, ② the shipping date was changed to April 3, 200, and ③ the shipping port (the date of shipment) was different from the port of shipment in the commercial invoice and the port of shipment (the airport in the United States).

2. The measure of the court below

Based on the above factual basis, the lower court rejected the Plaintiff’s claim against the Defendant for a letter of credit for the following reasons.

A. According to Article 27(a)(ii) of the Uniform Customs and Practice for Documentary Credits, an air waybill must indicate that the goods have been accepted for carriage. However, since the air waybill dated April 3, 200, which was presented as one of the first shipping documents, states that the goods have been accepted for carriage, the Defendant’s refusal to pay for the letter of credit on the presentation of the first shipping documents is justifiable.

B. Regarding the presentation of the second shipping documents by the Plaintiff through the Bank of America, the freight of this case was shipped on April 3, 200 by the Plaintiff, and thereafter returned to the United States, which was returned to the Republic of Korea, but this is merely the issue between the carriers, and the Plaintiff, the actual exporter, was loaded only once. Thus, even in the presentation of the second shipping documents, it is reasonable to view that the shipping date, which is the basis for 10 days after the shipment, is April 3, 200.

C. Even if there is room to regard April 10, 200 newly prepared air waybill as the shipping date stipulated by the letter of credit of this case as the date of the presentation of the second shipping documents on April 10, 200 when the instant cargo was returned to the United States and returned again, the Bank of America is not the negotiating bank of the letter of credit of this case, but merely received the collection request from the plaintiff, and is not an independent party under the Uniform Customs and Practice for Documentary Credits, and therefore, the presentation of documents under the letter of credit must be based on the defendant, which is the issuing bank, and therefore, it is reasonable to see that the second shipping documents were presented on April 28, 200 when the second shipping documents were received from the defendant bank. Thus, it is clear that the shipping date was set as the shipping date on April 3, 200, or all between them were presented (10 days from

D. On April 10, 200, the date of domestic shipment was considered to be April 10, 200, and the time when the plaintiff presented shipping documents at the Bank of America, even though the above presentation period and the date should be based on the date when the plaintiff presented shipping documents, in the case of this case, ① although the Bank of America stated that there is no defect in the marking document sent to the defendant on April 24, 2000, the document as modified at the bottom of the document, ② only asserts that there is no defect in the previous document and that the second document was received, ③ The Bank of America did not present the second document within 10 days from April 10, 200, in light of the following facts:

E. Thus, the plaintiff's presentation of the second shipping documents was not made within 10 days from the shipping date demanded by the letter of credit of this case, and therefore, the defendant's refusal to pay the letter of credit is justified.

3. Judgment on the grounds of appeal

A. As long as several shipping documents were actually loaded with respect to the same cargo within the effective period of the letter of credit and the shipping documents were separately prepared for each shipment, the issue of whether the shipping documents conform to the terms and conditions of the letter of credit shall be determined for each shipment and shipping documents. Accordingly, in the instant case, as long as shipping documents were actually loaded twice as the shipping documents were separately prepared for the instant cargo, the issue of whether the pertinent shipping documents were presented within the presentation period stipulated in the letter of credit shall be determined separately on the basis of each shipment date, and it shall

On the other hand, the judgment of the court below that the period for presentation of the second shipping documents of this case should be calculated as of April 3, 200, when the first shipment was made, shall be deemed to have committed a misunderstanding of legal principles as to the shipping date which is the basis for presentation of the shipping documents of the letter of credit. Thus, the appeal pointing this out has merit.

(b)Article 42(a) of the Uniform Customs and Practice for Documentary Credits (193 amended) provides that "any credit must be effective at the time of presentation of documents for payment, acceptance, or for negotiation except in the case of an ex ciryd rate and the place for presentation of documents." Article 42(2) of the Uniform Customs and Practice for Documentary Credits (193 amended) provides that "the term of validity specified for payment, acceptance or negotiation shall be deemed the term of validity for presentation of documents," and Article 43(a) of the above Rule provides that "in addition to the provisions on the term of validity for presentation of documents, all the credit requested for presentation of documents shall specify a specific period for presentation of documents, consistent with the terms and conditions of the credit. If this period is not specified, banks shall not receive the documents presented to the bank after the lapse of 21 days from the date of shipment, provided that in any case, banks shall present the documents within 20 days from the date of presentation of the credit and the term of validity for presentation of the documents to the beneficiary."

In light of the records, the presentation place of the shipping documents of this case is stipulated as "the country of the beneficiary", i.e., the "U.S.", and the actual documentary credit documents were presented at the point of the Bank of America located in the United States. According to the above provisions of the Uniform Customs and Practice for Documentary Credits, as long as the documentary credit of this case is a freely purchased documentary credit, the above bank is in a position to send it to the issuing bank for the beneficiary without directly negotiating the above documents as a designated bank and seek payment for the beneficiary. Thus, whether the presentation of the shipping documents of the letter of credit was within the lawful period (in this case, within 10 days from the shipping date) shall be determined on the basis of the date presented to the Bank of America, the above designated

On the other hand, the court below held that the above Amera Bank is merely to receive a collection request from the plaintiff rather than the negotiating bank of the L/C documents, and that the presentation of documents under the L/C should be based on the date on which the documents arrive at the defendant, who is the issuing bank, because it is not an independent party under the Uniform Customs and Practice for Documentary Credits. The court below erred in the misapprehension of legal principles as to the period for presentation of shipping documents and the place for presentation of documents

C. In the Uniform Customs and Practice for Documentary Credits, where shipping documents were presented within the effective period for presentation of documents and the shipping documents were sent by the bank to the issuing bank after the expiry of the effective date, no demand is stipulated in the Uniform Customs and Practice for Documentary Credits, as to when the confirming bank, the nominated bank, or the bank, which received shipping documents, indicates that “documents were presented within the effective date,” or “documents are consistent with the terms and conditions of the letter of credit,” barring any special circumstance, it is reasonable to regard the shipping documents of the letter of credit as presented within the effective period for presentation of documents of the letter of credit.

As recognized by the court below, in the case of this case, the second shipping documents sent by the Bank of America on April 24, 2000 stated "We prove that shipping documents have been presented according to the terms and conditions of the letter of credit and the effective date of the letter of credit," and barring any special circumstance, it is reasonable to view that the second shipping documents were presented within the lawful period as stipulated in the terms and conditions of the letter of credit, and it is extremely insufficient to reverse them only with the series of circumstances presented by the court below.

In this respect, the court below also held that the period for presentation of shipping documents on the letter of credit has been erroneous or misunderstanding the legal principles due to the violation of the rules of evidence, and there is a ground for appeal pointing this out

4. Conclusion

Therefore, the judgment below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Hong-hoon (Presiding Justice)