{"id":3260,"date":"2026-03-04T00:00:00","date_gmt":"2026-03-04T00:00:00","guid":{"rendered":"https:\/\/shooklin.com\/client-update-moeve-trading-sau-v-mael-trading-fz-llc-2026-ewhc17-comm\/"},"modified":"2026-05-19T20:36:31","modified_gmt":"2026-05-19T20:36:31","slug":"client-update-moeve-trading-sau-v-mael-trading-fz-llc-2026-ewhc17-comm","status":"publish","type":"post","link":"https:\/\/shooklin.com\/zh-hans\/client-update-moeve-trading-sau-v-mael-trading-fz-llc-2026-ewhc17-comm\/","title":{"rendered":"Moeve Trading SAU v Mael Trading FZ LLC [2026] EWHC17 (Comm)"},"content":{"rendered":"

\"Client<\/p>\n

In international trade contracts for the sale and purchase of commodities, parties often agree that payment for the commodities is to be made by way of an irrevocable documentary letter of credit. The question may then arise as to whether the Buyer\u2019s obligation to pay is satisfied completely by procuring the opening of the documentary letter of credit, such that the Seller has no recourse to the Buyer if, for whatever reason, the Seller is unable to obtain payment on the documentary letter of credit from the issuing bank.<\/p>\n

In Moeve Trading SAU v Mael Trading FZ LLC [2026] EWHC 17 (Comm), the English High Court (Commercial Court) clarified that the Buyer\u2019s procurement of the documentary letter of credit will usually operate as conditional payment only, unless the sale contract expressly or impliedly provides that the procurement of the documentary letter of credit operates as absolute payment.<\/p>\n

Background Facts<\/span><\/strong><\/p>\n

<\/span><\/strong>Moeve Trading S. A. U. (the \u201cSeller\u201d) and Mael Trading FZ LLC (the \u201cBuyer\u201d) entered into contract for the sale and purchase of gasoline and gas oil (the \u201cCargo\u201d). The terms of the contract provided for, among other things, the Buyer\u2019s obligation to open an irrevocable letter of credit based on the Seller\u2019s wording \u201cto cover the total cargo amount\u201d. The Buyer duly procured the issue of 2 letters of credit (the \u201cLetters of Credit\u201d) in favour of the Seller from the issuing bank (the \u201cIssuing Bank\u201d).<\/p>\n

The Cargo was subsequently shipped. Pursuant to the terms of the contract, title to the Cargo passed to the Buyer upon shipment. The Cargo was also duly discharged into the possession of the Buyer\u2019s sub-buyer.<\/p>\n

Payment fell due 60 days after shipment. The Seller duly presented documents, but the Issuing Bank did not pay the purchase price to the Seller. The reasons for the Issuing Bank\u2019s non-payment were not disclosed to the court, however, and it remained possible that the Seller had not presented all of the documents required under the Letters of Credit.<\/p>\n

The Seller thereafter tendered the documents to the Buyer and demanded payment of the purchase price. The Buyer refused to make payment, arguing inter alia that the Buyer\u2019s procurement of the Letters of Credit constituted absolute payment and discharged its obligations under the contract. The Seller sued and applied for summary judgment against the Buyer.<\/p>\n

Decision<\/strong><\/span><\/p>\n

The English High Court granted the Seller\u2019s application for summary judgment, holding that properly construed, the terms of the sale contract provided that the procurement of the Letters of Credit operated only as conditional payment and not absolute payment. The English High Court found that the terms of the sale contract indicated that parties had intended that the Buyer be primarily responsible for the payment of the purchase price, although the Buyer was obliged to arrange for the issue of letters of credit to \u201ccover\u201d this payment.<\/p>\n

In arriving at its decision, the English High Court elucidated the following principles:<\/p>\n