Letter of Credit Fraud

September 02, 2001 | BY

clpstaff &clp articles

Dispute ResolutionYi Wen Law FirmLetter of Credit FraudIn Zhongbao Commodity Import and Export Co., Ltd. v Billiongold Int'l. Ltd, Winwick Shipping Lt.…

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Dispute Resolution

Yi Wen Law Firm

Letter of Credit Fraud

In Zhongbao Commodity Import and Export Co., Ltd. v Billiongold Int'l. Ltd, Winwick Shipping Lt. and Rishelle Navigation Inc., the Xiamen Maritime Court sought to protect the defrauded PRC purchaser, but in the process reached a decision that threatens to undermine faith in letter of credit (LC) transactions in China.

Facts

On March 4 1996, the plaintiff, Zhongbao, signed a sales contract with Billiongold, pursuant to which Zhongbao opened an