ABSTRACT
Documents were presented to the bank with payment instructions to the effect that the funds should be paid by transmission to the beneficiary’s account at the Midland Bank in London.28 The documents were rejected. The beneficiary issued proceedings in England on the basis that the place of performance of the bank’s obligation to make payment was London in accordance with the beneficiary’s instructions. The Court of Appeal rejected the bank’s challenge to the
24 Where the obligation is to meet an unpaid draft drawn on another bank, it might be argued that the bank’s obligation is in the nature of a guarantee and that as such the obligation was to “see to it” that the draft is paid-see Domicrest Ltd v Swiss Bank Corporation [1999] QB 548 at 557. If that is so, the obligation could be said to be performable where the bank or the person whose primary obligation it was to pay had its place of business. However, under the terms of articles 9(a)(iii)(b) and 9(b)(iii)(b) the obligations of the issuing and confirming bank are framed as primary obligations and not guarantee obligations. Cf Bank of Baroda v Vysya Bank Ltd [1994] 2 Lloyd’s Rep 87 at 92. 25 Industrie Tessili Italiana Como v Dunlop AG [1976] ECR 1473 at para 13, Custom Made Commercial Ltd v Stawa Metalbau GmbH [1994] ECR 1-2913 at para 26 and Leathertex Divisions Sinetici v Bodetex BVBA [1999] CLC 1976 at para 33. See also Domicrest Ltd v Swiss Bank Corporation [1999] 1 Lloyd’s Rep 80 at 86 and Chailease Finance Corporation v Credit Agricole Indosuez [2000] 1 Lloyd’s Rep 348 at 356. 26 See Midland Bank Ltd v Seymour [1955] 2 Lloyd’s Rep 147 (discussed at paragraph 4-14 above) and Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1999] 1 Lloyd’s Rep 36 at 37. See also paragraph 6-04 above. 27 [2000]1 Lloyd’s Rep 348. 28 This was the third presentation. The previous presentations had been accompanied by requests to make payment to the beneficiary’s account in Taipei. It was common ground that the beneficiary was entitled to change its payment instructions.
