[1] In a case where the applicant of a letter of credit signed an import transaction agreement with the issuing bank and agreed to provide shipping documents and imported cargo as a collateral for the performance of payment obligations to the issuing bank, the time when the issuing bank acquires the right of transfer (=the time when the bill of lading is acquired)

[2] Whether the issuing bank may refuse to deliver shipping documents on account of the decline in the credit or lack of security of the applicant in case where the applicant for the letter of credit and the issuing bank have concluded a transfer contract for the shipping documents and the import cargo under the import transaction agreement concluded between the applicant for the letter of credit and the

[1] In a case where the applicant of the letter of credit at the time of the import transaction agreement with the issuing bank agrees to the effect that he/she will transfer the shipping documents and the imported cargo to the issuing bank as a security for the repayment of the principal and interest of the imported bill of exchange or shipping documents or its payment, expenses related to the revenue, compensation for delay, and other payment obligations to the issuing bank, the issuing bank only has the meaning of acquiring the security right at the time of acquiring the bill of lading at the time of acquiring it, and concluding the contract to establish the security for transfer to the said goods, and then specifically confirming the security contract under the above import transaction agreement

[2] In a case where the applicant of the L/C concludes an import transaction agreement with the L/C issuing bank and agrees to provide the transport documents and the imported cargo as a collateral for the performance of the payment obligation to the issuing bank, such as the bill of exchange, the issuing bank which acquired the right of collateral pursuant to the above agreement may not deliver the transport documents to the applicant in order to ensure the effectiveness of the right of collateral security in the event the other collateral of the L/C applicant is insufficient. The L/C between the issuing bank and the applicant gives the issuing bank a payment deadline for the L/C payment, and the delivery date of the transport documents between the opening bank and the applicant does not be stipulated by the L/C itself or by the Uniform Customs and Practice for Documentary Credits. Thus, the issuing bank may refuse to deliver the transport documents on account of the decline of the L/C applicant, or demand payment of the L/C price by sight in lieu

[1] Articles 133 and 820 of the Commercial Act, Articles 190 and 372 of the Civil Act / [2] Articles 131, 133, and 820 of the Commercial Act, Articles 190 and 372 of the Civil Act / [2] Articles 190 and 372 of the Commercial Act

[1] Supreme Court Decision 97Da19656 delivered on July 25, 1997 (Gong1997Ha, 2717) Supreme Court Decision 98Do2526 delivered on November 10, 1998 (Gong1998Ha, 2903)

Korea Exchange Bank (Attorney Jeong Young-hoon, Counsel for defendant-appellee)

Mawre Steel Co., Ltd. and five others

Busan District Court Decision 97Na15446 delivered on November 13, 1998

The judgment of the court below is reversed and the case is remanded to Busan District Court Panel Division.

The grounds of appeal No. 1 are examined.

According to the court below's decision, the court below held that (1) the issuing bank of the above letter of credit is liable to compensate the defendant company for damages incurred by the defendant company due to the non-performance of the obligation to deliver the letter of credit in lieu of the letter of credit, and since the importer can dispose of the imported freight within the payment period and pay the revenue amount on the due date in accordance with the terms of the letter of credit. In light of the nature of the above-mentioned letter of credit, the issuing bank of the letter of credit can be deemed to have been able to pay the revenue amount on the due date. In light of the above nature of the above-mentioned letter of credit, the issuing bank of the letter of credit shall, upon the arrival of the bill of exchange and shipping documents, immediately notify the applicant of the arrival of the shipping documents and provide the revenue financing for a certain period of time, and it cannot be said that the applicant's refusal of the delivery of the shipping documents or demand the plaintiff company to pay the additional shipping documents to the defendant company or the defendant company for the non-performance of the obligation to deliver them in lieu of the letter of credit.

However, according to the letter of credit applicant agreement with the issuing bank at the time of import transaction agreement with the issuing bank, if the opening bank agrees to the effect that the transport documents and the imported cargo will be transferred to the issuing bank as a security for the repayment of the principal and interest of the imported bill of exchange or the shipping documents for payment thereof, expenses related to the revenue, compensation for delay, and other payment to the issuing bank, the issuing bank shall obtain the right to collateral transfer at the time of acquiring the bill of lading, and thereafter, the contract establishing the security transfer contract with the issuing bank is only meaningful for the specific confirmation of the above import transaction agreement (see Supreme Court Decision 97Da19656 delivered on July 25, 197). The issuing bank which acquired the right to collateral transfer pursuant to the above agreement does not require the issuing bank to pay the transport documents to the issuing bank at the time of the issuing bank at the time of issuing bank's rejection of the bill of credit applicant's receipt or delivery of the transport documents by the issuing bank's own account of the lack of the issuing bank's credit applicant's credit or delivery contract.

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles as to the term credit and the import cargo transfer contract, which affected the conclusion of the judgment, and the ground of appeal No. 1 pointing this out

Therefore, without examining the remaining grounds of appeal on the premise that the first ground of appeal is groundless, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)