2011 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE
edited by Professor James E. BYRNE
Director Institute of International Banking Law & Practice, Inc. & George Mason University School of Law
and Christopher S. BYRNES
Assistant Vice President Institute of International Banking Law & Practice, Inc.
THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE, INC.
2011 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE
Copyright Š 2011 All rights reserved No reproduction of this material may be made without express written permission.
The Institute of International Banking Law & Practice, Inc. 20405 Ryecroft Court Montgomery Village, MD 20886 USA Phone: +1 301 869 9840 Fax: +1 301 926 1265 Website: www.iiblp.org E-Mail: info@iiblp.org The services and products of the Institute are described on the back pages. ISBN 978-1-888870-52-7
The Annual Review of International Banking Law & Practice volume is produced by the Institute of International Banking Law & Practice, Inc. Opinions expressed in it do not necessarily reflect the official positions of the Institute. Authors and editors of articles in the Annual Review and the institutions with which they are associated often are actively involved in the field as lawyers, advisers, parties, consultants, or expert witnesses in many of the matters and cases addressed in the Annual Review. Notwithstanding positions expressed in the Annual Review, every effort will be made to publish differing viewpoints and contributions expressing such views.
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TABLE OF CONTENTS
Table of Contents Articles Overview of International Banking Law & Practice in 2010 by Professor James E. BYRNE and Christopher BYRNES ................................................................................ 11:3 AIJAZ, M. Hasan; Unconscionability as an Exception to the Independence Principle: A Study of Singapore Caselaw ....................................................................................................................... 11:19 AVIDON, Michael Evan; A US Perspective on the New URDG758 Compared to ISP98, UCP600 and the NY UCC ................................................................................................................................ 11:39 BARNES, James G.; Reimbursement Rights under Deferred Payment Credits ................................................... 11:47 BARNES, James G.; The L/C Fraud/Abuse Exception ......................................................................................... 11:51 BARNES, James G. and James E. BYRNE; Letters of Credit ................................................................................ 11:55 BOSE, Rupnarayan; Negotiation and the Law of Contracts ................................................................................ 11:65 CALLOBRE, Anthony R.; Letters of Credit in Commercial Loans and Bankruptcy ............................................. 11:69 DELSTON, Ross S. and Stephen C. WALLS; Reaching Beyond Banks: How to Target Trade-Based Money Laundering and Terrorist Financing outside the Financial Sector ..................................................... 11:81 DOLAN, John F.; Nareerux Redux: The Ontario Court of Appeal Fashions Novel Letter of Credit Law .......... 11:107 FAYERS, Roger; Performance Guarantees: English Procedure and Construction ............................................. 11:115 FOX, Steven and Reema SHOUR; Implied Obligation under Article 16(f) of UCP 600 to Return Rejected Documents Reasonably Promptly ................................................................................ 11:119 GOODE, Professor Sir Roy; ICC Approves Revised Rules on Demand Guarantees ........................................ 11:123 HOQUE, A.T.M and Donald SMITH; Are There Ambiguities in Defining ‘Beneficiary’ in UCP 600? ................ 11:127 JIN, Saibo; Procedures to Review and Retry the Case against an Order of Injunction under Letters of Credit in Chinese Courts .................................................................................................... 11:131 KOZOLCHYK, Boris; Carewins, Straight Bills of Lading and Their Future as LC Collateral .............................. 11:139 MATTOX, Don; If We Do Not Honour or Negotiate, are We Entitled to Claim Reimbursement? ................... 11:153 NEAL, Catherine S.; The Role of the Judiciary in Advancing Public Policy to Promote Ethical Business Practices: Comparing Gray Market Tires and Tiffany Silver Jewelry ................................ 11:157 SAKCHUTCHAWAN, Sut; An Inquiry into the Strict Compliance of the International Chamber of Commerce Trade Rules in Financing Process .......................................................................... 11:189 WANG, Xuehui; Must a Description of the Goods Appear in Bills of Lading? ................................................. 11:203 ZHANG, Ningning; The Effect of Non-Documentary Conditions in Documentary Credits .............................. 11:207 ZHANG, Ningning; The Governing Law for Contractual Disputes Arising from Letter of Credit in England ... 11:215
Statutes and Government Actions Financial Crimes Enforcement Network (US FinCEN); Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Trade-Based Money Laundering .................................. 11:227 Financial Crimes Enforcement Network (US FinCEN); Application of a Section 311 Special Measure to Payments under a Standby Letter of Credit ................................................................ 11:235 Tunisian Commercial Code; Articles Related to “Documentary Credits” ......................................................... 11:239
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2011 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE
Practices and ADR BAFT-IFSA; Key Concerns Regarding Trade Finance and Transaction Banking ................................................. 11:243 International Chamber of Commerce (ICC); Statement from the Officers of the ICC Banking Commission: The Effect of the Icelandic Volcano Eruption on Presentations of Documents under Transactions Subject to ICC Rules ...................................................................................................... 11:247 International Chamber of Commerce (ICC); Report on Findings of ICC-ADB Register on Trade & Finance ..... 11:249 International Chamber of Commerce; ICC Global Survey: Rethinking Trade Finance 2010 ............................... 11:271 International Chamber of Commerce (ICC); Recommendations of the Banking Commission in Respect of the Requirements for an On Board Notation ......................................................................... 11:331 International Chamber of Commerce (ICC); Guidance Paper on the Use of Sanction Clauses for Trade Related Products Subject to ICC Rules .......................................................................................... 11:341 International Chamber of Commerce (ICC) Position Paper: ICC Response to the Basel Committee Consultative Document on “Strengthening the Resilience of the Banking System” .................................. 11:347 AVIDON, Michael Evan; Memo Re: Issues in Replacing an Existing Letter of Credit or Demand Guarantee with a New Letter of Credit or Demand Guarantee ................................................ 11:353 Joint Industry Communication on Proposed Increased Cost of Trade Finance ................................................. 11:357 Uniform Law Commission (ULC) Committee; Memo on Report on the Implementation of the United Nations Convention on Independent Guaranties and Standby Letters of Credit ................. 11:365 United States Council for International Business (USCIB); Letter to Endorse US Adoption of the United Nations Convention on Independent Guarantees and Standby Letters of Credit ................ 11:375
Case Summaries 915 Broadway Associates LLC v. Paul, Hastings, Janofsky & Walker, LLP .......................................................... 11:379 Able Engineering Company Limited v. Widevelop Limited ................................................................................ 11:380 Ace American Insurance Company v. Bank of the Ozarks ................................................................................... 11:381 Admanco v. 700 Stanton Drive, LLC ................................................................................................................... 11:383 Air Philippines Corp. v. KFS Aviation Co. ............................................................................................................. 11:385 Alphamate Commodity GMBH v. CHS Europe ................................................................................................... 11:387 American Import-Export Bank v. World of Colors .............................................................................................. 11:388 Andrews v. JP Morgan Chase Bank, N.A. ............................................................................................................ 11:389 *Anhui Import and Export Co. v. Oswal Chemicals & Fertilizer Ltd. .................................................................... 11:390 Arthur Schuman, Inc. v. Banco Santander Brasil ................................................................................................... 11:391 Associated Warehousing, Inc. v. Banterra Corp. ................................................................................................. 11:393 Atlas ReSources v Liberty Mutual ........................................................................................................................ 11:395 Axa Corporate Solutions SA v. National Westminster Bank Plc .......................................................................... 11:396 Barna Conshipping, S.L. v. 8,000 Metric Tons ..................................................................................................... 11:397 Bender Shipbuilding & Repair Co. v. Seacor Marine, LLC (In re Bender Shipbuilding) ...................................... 11:398 Bloomfield Institutional Opportunity Fund, L.L.C. v. Allen Investment Properties, L.L.C. ................................... 11:400 Campbell v. Hanover Insurance Co. (In re Campbell) .......................................................................................... 11:401 Canadian American Ass’n of Professional Baseball, Ltd. v. Ottawa Rapidz ....................................................... 11:402 Carey Value Added, SL v. Grupo Urvasco, SA ..................................................................................................... 11:403 Cement Masons Local 527 v. Capital Restoration and Painting Co. ................................................................... 11:407 Century Indemnity Co. v Certain Underwriters at Lloyd’s .................................................................................... 11:408 In re Champion Enterprises .................................................................................................................................. 11:409 *China Everbest Financial Co. v. Lifeng Industrial Co .......................................................................................... 11:410 China New Era International Ltd. v. Bank of China (Hong Kong) Ltd. ................................................................. 11:411
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Claremont Realty LLC v. River Oaks Capital Management, Inc. .......................................................................... 11:416 In re Commercial Money Center, Inc. ................................................................................................................... 11:418 Compass Bank v. Eager Road Associates ........................................................................................................... 11:420 Consolidated Edison Co. of New York, Inc. v. United States ............................................................................... 11:421 Container Corporation v. Commissioner of Internal Revenue ............................................................................. 11:422 CRM Collateral II, Inc. v. Tri-County Metropolitan Transportation District of Oregon ......................................... 11:423 Crooked Creek Corp. v. Primebank (In re: Crooked Creek Corp.) ....................................................................... 11:426 Deutsche Bank Trust Co. Americas v. Soffer ........................................................................................................ 11:428 Dexia Credit Local v. Frederick Cuppy ................................................................................................................. 11:431 DP Concrete Prods., LLC v. Am. Spring Wire Corp. ............................................................................................. 11:432 Dubai Court Decision ........................................................................................................................................... 11:433 Dunn v. AAH Ltd. .................................................................................................................................................. 11:435 EAM Land Services, Inc. v. Ideal Mortgage Bankers, Ltd. ................................................................................... 11:436 *Electrotherm (India) Ltd. v. Shenyang Mining Machinery Import & Export Corp. ............................................. 11:438 In re Elemco Testing Company, Inc. ..................................................................................................................... 11:440 Enka Insaat Ve Sanayi v. Banca Popolare Dell’alto Adige SPA ............................................................................ 11:441 Export-Import Bank of U.S. v. United California Discount Corp .......................................................................... 11:444 Express Blower Inc. v. Earthcare ........................................................................................................................... 11:448 FDIC v. Yacoobian ................................................................................................................................................ 11:450 Fortis Bank v. Indian Overseas Bank .................................................................................................................... 11:453 Fortis v. ADIB ........................................................................................................................................................ 11:457 Foster Poultry Farms, Inc. v. SunTrust Bank .......................................................................................................... 11:461 Fresnius Medical Care Holdings v. Baxter International ...................................................................................... 11:462 Friedman v. Riffin (In re Riffin) ............................................................................................................................... 11:464 Gasparini v. Pordomingo ..................................................................................................................................... 11:465 *Guilin South Rubber (Group) Co. v. China Everbright Bank (Xinhu Branch) ...................................................... 11:464 In re GWLS Holdings, Inc., .................................................................................................................................... 11:465 Hansen v. Native American Refinery Co. .............................................................................................................. 11:466 Hansen v. PT Bank Negara Indonesia (Persero), TBK .......................................................................................... 11:467 Harman Investments, Ltd. v. Shah Safari Inc. ........................................................................................................ 11:469 Highland Produce Ltd. v. Egg Farmers of Canada .............................................................................................. 11:471 HKSAR v. Ho Wing-Cheong ................................................................................................................................. 11:472 HSBC Bank Malaysia Bhd v. Dharani Sugars [Davidson] .................................................................................... 11:473 *Hunan Machinery Import & Export Co. v. Ningbo Oriental Investment Ltd ...................................................... 11:478 Industrial Bank of Korea v. US Bank ..................................................................................................................... 11:480 *ING, Shanghai v. SIP Shell Gas Co. ..................................................................................................................... 11:481 Inskeep v. Griffin (In re Griffin Trading Co., Inc.) ................................................................................................... 11:483 International-Matex Tank Terminals-Illinois v. Chemical Bank (29 April 2010) ..................................................... 11:484 IPSCO Tubulars v. AJAX Tocco Magnathermic Corp. .......................................................................................... 11:486 Jaffe v. Bank of America ....................................................................................................................................... 11:487 Johor Land Bhd v. Malaysian Assurance Alliance Bhd ....................................................................................... 11:490 JSC BTA Bank v. Granton Trade Ltd. .................................................................................................................... 11:493 Kaiser Group Int’l, Inc. v. Nova Hut (In re Kaiser Group Int’l, Inc.) ......................................................................... 11:494 Kaliner v. Willow Grove Bank (In re ATS Products Corporation) .......................................................................... 11:495 Kam Hing Trading LTD v. People’s Insurance Co of China .................................................................................. 11:496 Kell & Rigby Holdings v. Lindsay Bennelong ....................................................................................................... 11:497 Cole Taylor Bank v. The Kirk Corporation (In re The Kirk Corporation) ................................................................ 11:500 Kolmar Group AG v. Traxpo Enterprises PVT Ltd. ............................................................................................... 11:502 Kotonou v. National Westminster Bank Plc ......................................................................................................... 11:503 Kwikspace Modular Buildings v. Sabodala Mining Company ............................................................................ 11:504 L-3 Communications Corp v. OSI Systems .......................................................................................................... 11:508
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2011 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE
Lai Tak Enterprises Limited v. Daily Fine Industrial Limited ................................................................................. 11:509 Lakeside Vist Apartments v. Federal National Mortgage Association ............................................................... 11:510 *The People’s Government of Luoshe Town, Xishan, Jiangsu Province v. Bank of China .................................. 11:512 Macomb County Board of Commissioners v. StellarOne Bank .......................................................................... 11:514 Mainas Farms, Inc. v. Vukasovich Trust (In re VEC Farms, LLC) ........................................................................... 11:516 Man Fai Tai Congo Holdings Ltd. Sari v. Innovest Berhad .................................................................................. 11:517 Man Industries (India) Ltd. v. Bank of Tokyo-Mitsubishi UFJ, Ltd. ....................................................................... 11:518 Map Marine Ltd. v. China Construction Bank Corp. ............................................................................................ 11:519 Mashreqbank ....................................................................................................................................................... 11:521 Matutrading Co. v. North Africa Int’l Bank ........................................................................................................... 11:522 MBF Insurance Sdn Bhd v. Lembaga Penyatuan & Pemulihan Tanah Persekutuan (FEL-CRA) .......................... 11:526 Melewar Leisure Sdn Bhd v. Danaharta Managers Sdn Bhd .............................................................................. 11:528 Meritz Fire and Marine Insurance Company LTD ................................................................................................ 11:529 Momentous.ca Corp v. Canadian American Ass’n of Professional Baseball, Ltd. ............................................. 11:531 Morgan Stanley v. Trafigura .................................................................................................................................. 11:532 MW Mapleleaf Partners LLC v. Fifth Third Bank .................................................................................................. 11:533 NAVALGALAXY Shipping Ltd v. China Metallurgy Import & Export Shandong Co. .......................................... 11:534 Networks USA, LLC v. HSBC Bank USA, N.A. ...................................................................................................... 11:535 Osowski v. AMEC Construction Management, Inc. ............................................................................................. 11:538 Parker v. United States .......................................................................................................................................... 11:539 Patton Homes, LLC v. Bellows ............................................................................................................................. 11:540 QBE Insurance v. Westpoint Realty ...................................................................................................................... 11:541 Rafool v. Evans (In re Central Illinois Energy, LLC) ............................................................................................... 11:534 Rec Wafer Norway AS v. Moser Baer Photo Voltaic Ltd ...................................................................................... 11:544 Rika Global Impex Ltd. v. Oriental Bank of Commerce ....................................................................................... 11:545 RJM2, Ltd. v. Gordon & Ferguson, Inc. ................................................................................................................ 11:547 Rogers International, Inc. v. Branch Banking and Trust Company ....................................................................... 11:548 Rossa v. D.L. Falk Construction, Inc. ..................................................................................................................... 11:549 Rushoe Enter. Sdn. Bhd. v. M. 10 Builders Sdn. Bhd. .......................................................................................... 11:550 Satriadesa Corporation Sdn Bhd v. Tenaga Nasional Bhd ................................................................................. 11:551 Seattle Iron & Metals Corp. v. Lin Xie ................................................................................................................... 11:553 SEC v. W. Anthony Huff ......................................................................................................................................... 11:555 Seng Seng Construction v. Southern Bank ........................................................................................................... 11:556 Shanghai Electric Group Co. Ltd. v. PT Merak Energi Indonesia ......................................................................... 11:557 *Shenzhen Shuguang Info. Tech. Co. v. Export-Import Bank of China ................................................................ 11:559 Shields v. RLI Insurance Company (In re Williams) ............................................................................................... 11:561 *Siemens International Trade Co., Ltd (Shanghai) v. Shanghai Gold Real Estate Co., ........................................ 11:563 Sim Ah Hee v. Affin Bank Berhad ......................................................................................................................... 11:564 Smith v. Slack Alost Development Services of Alabama, LLC ............................................................................. 11:565 Snow v. Jim Rathman Chevrolet, Inc. .................................................................................................................... 11:566 Southern Homes, AL, Inc. v. Bermuda Lakes, LLC ............................................................................................... 11:567 *Spain Rick Leepusa Co. v. China Ningbo International Corp. ........................................................................... 11:568 Spiral Aviation Training Co., LLC v. Canada (Attorney General) .......................................................................... 11:570 Standard Chartered v. AWB (USA) ....................................................................................................................... 11:571 Swiss Singapore Overseas v. China Citic Bank .................................................................................................... 11:573 Tambakis v. Ferluga .............................................................................................................................................. 11:576 Electric Reliability Council of Texas, Inc. v. May (In re Texas Commercial Energy) .............................................. 11:578 Tourneau, LLC v. 53rd and Madison Tower Development LLC .......................................................................... 11:579 Town of Poland v. T & M Mortgage Solutions, Inc. .............................................................................................. 11:580 Trans Pacific National Bank v. UBS AG ................................................................................................................ 11:581 U.S. Bank National Ass’n v. BankPlus ................................................................................................................... 11:582
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U.S. Bank National Ass’n v. Turquoise Properties Gulf, Inc. ................................................................................. 11:584 United Demolition & Reclamation v. Altchem Environmental Services Inc ......................................................... 11:585 United Overseas Bank Ltd. v. Tru-line Beauty Consultants .................................................................................. 11:586 United States v. Brown ......................................................................................................................................... 11:588 Uwaydah v. General Electric Medical Systems Europe, Inc. (In re Uwaydah) ...................................................... 11:589 Van Zeeland Oil Co. v. Lawrence Agency, Inc. ...................................................................................................... 11:590 Vossloh Aktiengesellschaft v. Alpha Trains UK .................................................................................................... 11:593 Wachovia Bank National Ass’n v. Encap Golf Holdings, LLC ............................................................................. 11:604 Walker Properties of Woodbury II v. City of Woodbury ....................................................................................... 11:605 Water Works Board of the city of Birmingham v. Ambac .................................................................................... 11:607 Wells Fargo & Company and Subsidiaries v. United States ................................................................................ 11:609 Williams v. Moore Medical Center, L.L.C. ............................................................................................................ 11:610
Cases: Text Air Philippines Corp. v. KFS Aviation Co. ........................................................................................................... 11:613 Cargill Financial Services v. First Ukrainian Int’l Bank (Excerpt from) ................................................................... 11:635 Dubai Court Decision .......................................................................................................................................... 11:637
Index 1996 - 2011 Cumulative Index .............................................................................................................................. 11:645
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