From: Jason W Neyers
<jneyers@uwo.ca>
Sent: Thursday 11 April 2024
16:36
To: obligations
Subject: ODG: Irrevocable banking
letters of credit and the fraud exception
Dear
Colleagues:
Those
interested in irrevocable banking letters of credit and the fraud exception to
their enforceability will find the decision of the SCC in Eurobank Ergasias
S.A. v. Bombardier inc., 2024 SCC 11 (https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/20374/index.do)
interesting. The question for the court was when an issuing bank could refuse
to pay under the letters of credit because of the fraud of a third party. The
court concluded that a beneficiary under a credit ceases to be innocent when
they have knowledge of the fraud of a third party and participate in that fraud
by demanding payment anyway. In a situation when there is both knowledge and
participation, the court concluded that the third party s fraud can fairly be
attributed to the beneficiary as the beneficiary s own.
There is
also extensive discussion of the Quebec rules for enforcing foreign judgements.
Happy
Reading,
Jason Neyers
Professor of Law
Faculty of Law
Western University
Law Building Rm 26
e. jneyers@uwo.ca
t. 519.661.2111 (x88435)
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