[1] The purport of Article 43(a) of the Uniform Customs and Practice for Documentary Credits (UCP 500), and whether a bill of exchange is also included in the documents to be presented within the time limit for presentation of documents, if the letter of credit requires presentation of a bill of exchange (affirmative)

[2] Whether a beneficiary of a letter of credit must comply with both the time limit for presentation of documents and the validity period of the letter of credit in cases where a beneficiary of the letter of credit presents the necessary documents stated in the letter of credit once again upon the bank's notification (affirmative)

[1] Article 43(a) of the Uniform Customs and Practice for Documentary Credits (UCP 500) provides that "a letter of credit demanding presentation of transport documents shall specify the effective period for presentation of documents, other than that for the date of shipment. The letter of credit requiring presentation of transport documents must be presented within the time limit for presentation of documents, and banks shall not accept the documents, if the documents are presented 21 days after the date of shipment unless the time limit for presentation of documents is specified: Provided, That any document must be presented within the effective period of the letter of credit; however, in any case, the document must be presented within the time limit of the letter of credit." Since the beneficiary of the letter of credit (export) demanded presentation of transport documents after shipment and continued to keep them without presenting them, the document must be presented within the limit period for presentation of the bill of exchange, and therefore, the document must be presented within the limit period for presentation of the bill of exchange, and if the document is not presented within the limit period for presentation of the bill of exchange.

[2] All necessary documents stipulated in the credit must be presented within the period for presentation of documents and also within the period for validity of the credit. Thus, if presented after any one of the period for presentation of documents and the period for validity of the credit, it cannot be accepted if presented after the lapse of the period for presentation of documents. On the other hand, the beneficiary should comply with the period for presentation of documents and the period for validity even if the documents were presented after supplementation of any inconsistency with the conditions of the credit in accordance with

[1] Article 43 (a) of the Uniform Customs and Practice for Documentary Credits (UCPS) (UCPS) / [2] Article 42 (a) and Article 43 (a) of the Uniform Customs and Practice for Documentary Credits (UCPS) / [3] Article 43 (2) of the Uniform Customs and Practice for Documentary Credits (UCPS) / [3] Article 42 (a) and Article 43 (a) of the ICC

Plaintiff (Law Firm Sejong, Attorneys Kang Shin-soo et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Won, Attorneys Kang Jong-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Na61481 decided February 14, 2008

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. On the first ground for appeal

A. A bill of exchange issued under the terms and conditions of a letter of credit is a bill of exchange issued by a person designated as the beneficiary of the letter of credit, which is secured by a bill of exchange representing the rights of the bill of credit and goods during the carriage. If the letter of credit specifies the time of payment of the bill of exchange and the terms and conditions of the bill of exchange, the payer, etc., and if the bill of exchange is required as a document attached to the bill of exchange, the bill of exchange and its attached documents are all subject to examination of the documents of the letter of credit. The beneficiary of the letter of credit must pay due attention to whether all the documents specified in the letter of credit are strictly consistent with the terms and conditions of the letter of credit.

B. The court below held that the payment date of the bill of exchange in the letter of credit in this case is "DDAFS AT 90 DIFS AFT B/LDE," and on the premise that the payer is "DRAWE-ND ADDS RES REE YGE YGE YOE YIONCH" and that the bill of exchange in this case is subject to examination of the documents of the letter of credit, and on the first bill of exchange in this case, the payment date of the bill of exchange in this case is not in compliance with the above terms and conditions of the letter of credit in this case 90 DYBE B/LOE 90, DIFOE ACTOE 200, 2000, 2000, 2000, 2000, 200, 300,000, 300,000, 30,000.

In addition, even if the Defendant, prior to the transaction of the letter of credit of this case, stated the same date as the bill of exchange of this case before the transaction of this case, and paid the letter of credit without examining whether or not it complies with the terms and conditions of the letter of credit of this case, it cannot be deemed that the Defendant is liable to pay the letter of credit in the transaction of this case, or that the refusal to pay the letter of credit of this case is contrary to the principle of trust and good faith (see Supreme Court Decision 97Da54017, Mar. 13, 1998). Ultimately,

2. On the second ground for appeal

A. Article 43(a) of the Uniform Customs and Practice for Documentary Credits provides that "the credit demanding the presentation of transport documents must specify the period for presentation of documents, other than the effective period. The presentation of documents, consistent with the conditions of the credit, shall be conducted within the period for presentation of the documents, and banks shall not accept the documents, even if the period for presentation of documents is not specified, if the documents are presented 21 days after the date of shipment, provided that in any case, the documents must be presented within the effective period of the credit."

As such, the purport of the Credit is to prevent the beneficiary (export) of the Credit from causing disadvantage to the late receipt of the goods by continuing to keep the transport documents, etc. after shipment without presenting them. Since the documents to be presented within the time limit for presentation of documents are not limited to only a part of the necessary documents, all necessary documents stipulated in the Credit must be presented within the time limit for presentation of documents, and therefore, if the Credit requires the presentation of the bill of exchange by specifying the conditions on the bill of exchange, the bill of exchange shall also be included in the documents stipulated in the above provision.

In addition, all necessary documents stipulated in the credit must be presented within the period of presentation of documents and also within the period of validity of the credit. As such, if presented after the lapse of any one of the period of presentation of documents and the period of validity, it cannot be accepted, and once the beneficiary presents documents, it should be viewed that both the period of presentation of documents and the period of validity should be complied with even if the documents are presented again by supplementing any inconsistency with the conditions of the credit upon the notice of the issuing bank.

B. According to the reasoning of the judgment of the court of first instance as cited by the court below, the letter of credit of this case is required to be attached to the bill of exchange with three copies of commercial invoice conclusion, three copies of package, and three full set of bill of lading. On August 22, 2005, the plaintiff, the negotiating bank of the letter of credit of this case, purchased the first bill of exchange of this case and its attached documents at the same face value as the amount of the letter of credit of this case from ○○ Tra○ Tra Tra Tra tra, the beneficiary of this case, and presented them to the defendant, the issuing bank on August 25, 2005. The defendant, on September 2, 2005, within seven business days under the Uniform Customs and Practice for Documentary Credits, notified the plaintiff on September 2, 2005 that the bill of this case was defective, such as the due date of the bill of exchange of this case and the due date of the payer on September 20, 2005.

In light of the above legal principles, the letter of credit of this case requires the presentation of a bill of exchange by specifying the terms of the bill of exchange, and since the bill of exchange of this case was presented after the expiration of the time limit for presentation of documents stipulated in the letter of credit of this case, all documents meeting the conditions of the letter of credit of this case cannot be deemed to have been presented within the time limit for presentation of documents, and there cannot be any difference between the second bill of exchange of this case and the first bill of exchange of this case presented within the time limit for presentation of documents.

In the same purport, the judgment of the court below that the defendant did not have an obligation to pay the letter of credit amount to the plaintiff is just, and there is no error in the misapprehension of legal principles as to the interpretation and application of Article 43 (a) of the 5th Uniform Customs and Practice for Documentary Credits. This part

3. Conclusion

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

Justices Yang Sung-tae (Presiding Justice)