Part I Legal and Practical Challenges to Traditional Trade Finance, 4 Perspectives on the Role of the Nominated Bank in a Letter of Credit »
Toh Kian Sing, Chen ZhidaFrom: Trade Finance: Technology, Innovation and Documentary Credits
Edited By: Christopher Hare, Dora Neo
This chapter considers the role of the nominated bank in a letter of credit against the backdrop of the Singapore Court of Appeal decision of Grains and Industrial Products Trading Pte Ltd v Bank of India which addresses the situation where a nominated bank declines to act on its nomination. This situation is not covered by the UCP 600 and questions arise as to what, if any, obligations the nominated bank owes towards the issuing bank or the beneficiary. The chapter also examines the extent to which principles of agency law can operate effectively in the relationship between the issuing bank and the nominated bank.