{"id":5694,"date":"2024-01-05T00:00:00","date_gmt":"2024-01-05T00:00:00","guid":{"rendered":"https:\/\/shooklin.com\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/"},"modified":"2024-01-05T00:00:00","modified_gmt":"2024-01-05T00:00:00","slug":"fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment","status":"publish","type":"post","link":"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/","title":{"rendered":"Fraud and Letters of Credit &#8211; When can an Issuing Bank Rely on the Beneficiary\u2019s Representations to Resist Payment"},"content":{"rendered":"<p>\n<p style=\"text-align: justify;\">When invoking the fraud exception to resist payment on a letter of credit (\u201c<strong>LC<\/strong>\u201d), banks typically argue that the beneficiary had made false representations in the documents presented to the bank. In the context of commodities trading, banks often rely on representations made by the beneficiary in the letter of indemnity (\u201cLOI\u201d), which is a document issued from a seller of cargo to a buyer (or the buyer\u2019s bank) when the seller is unable to immediately obtain the original shipping documents.<\/p>\n<p style=\"text-align: justify;\">However, to what extent can an issuing bank rely on the representations in a LOI when the LOI is addressed solely to the buyer (i.e. the LC applicant) and not to the bank? This question was recently addressed by the Singapore Court of Appeal in UniCredit Bank AG v Glencore Singapore Pte Ltd [2023] SGCA 41 (\u201c<em><strong>Unicredit v Glencore<\/strong><\/em>\u201d). The SGCA dismissed UniCredit\u2019s claim on the basis that the representations which UniCredit sought to rely on were not made to UniCredit, but to the buyer of the cargo.<\/p>\n<p>This article follows from our earlier article on the Singapore High Court\u2019s decision in Unicredit v Glencore [2022] SGHC 263, which can be accessed here:\u00a0<span style=\"color: #bd1617;\"><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/shooklin.com\/wp-content\/uploads\/2026\/03\/Further-Developments-in-the-Law-on-Letters-of-Credit.pdf\"><span style=\"color: #bd1617;\">Further Developments in the Law on Letters of Credit<\/span><\/a><\/span><\/p>\n<p>Click\u00a0<a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/shooklin.com\/wp-content\/uploads\/2026\/03\/Fraud-and-Letters-of-Credit-When-can-an-Issuing-Bank-Rely-on-the-BeneficiaryE28099s-Representations-to-Resist-Payment.pdf\"><span style=\"color: #bd1617;\">here\u00a0<\/span><\/a>to view the article.<\/p>\n","protected":false},"excerpt":{"rendered":"<p style=\"text-align: justify;\">When invoking the fraud exception to resist payment on a letter of credit (\u201c<strong>LC<\/strong>\u201d), banks typically argue that the beneficiary had made false representations in the documents presented to the bank. In the context of commodities trading, banks often rely on representations made by the beneficiary in the letter of indemnity (\u201cLOI\u201d), which is a document issued from a seller of cargo to a buyer (or the buyer\u2019s bank) when the seller is unable to immediately obtain the original shipping documents.<\/p>\n<p style=\"text-align: justify;\">However, to what extent can an issuing bank rely on the representations in a LOI when the LOI is addressed solely to the buyer (i.e. the LC applicant) and not to the bank? This question was recently addressed by the Singapore Court of Appeal in UniCredit Bank AG v Glencore Singapore Pte Ltd [2023] SGCA 41 (\u201c<em><strong>Unicredit v Glencore<\/strong><\/em>\u201d). The SGCA dismissed UniCredit\u2019s claim on the basis that the representations which UniCredit sought to rely on were not made to UniCredit, but to the buyer of the cargo.<\/p>\n<p>This article follows from our earlier article on the Singapore High Court\u2019s decision in Unicredit v Glencore [2022] SGHC 263, which can be accessed here:\u00a0<span style=\"color: #bd1617;\"><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/shooklin.com\/wp-content\/uploads\/2026\/03\/Further-Developments-in-the-Law-on-Letters-of-Credit.pdf\"><span style=\"color: #bd1617;\">Further Developments in the Law on Letters of Credit<\/span><\/a><\/span><\/p>\n<p>Click\u00a0<a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/shooklin.com\/wp-content\/uploads\/2026\/03\/Fraud-and-Letters-of-Credit-When-can-an-Issuing-Bank-Rely-on-the-BeneficiaryE28099s-Representations-to-Resist-Payment.pdf\"><span style=\"color: #bd1617;\">here\u00a0<\/span><\/a>to view the article.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-5694","post","type-post","status-publish","format-standard","hentry","category-publications"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Fraud and Letters of Credit - When can an Issuing Bank Rely on the Beneficiary\u2019s Representations to Resist Payment - Shook Lin &amp; Bok LLP | Leading Singapore Law Firm<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/\" \/>\n<meta property=\"og:locale\" content=\"zh_CN\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fraud and Letters of Credit - When can an Issuing Bank Rely on the Beneficiary\u2019s Representations to Resist Payment - Shook Lin &amp; Bok LLP | Leading Singapore Law Firm\" \/>\n<meta property=\"og:description\" content=\"When invoking the fraud exception to resist payment on a letter of credit (\u201cLC\u201d), banks typically argue that the beneficiary had made false representations in the documents presented to the bank. In the context of commodities trading, banks often rely on representations made by the beneficiary in the letter of indemnity (\u201cLOI\u201d), which is a document issued from a seller of cargo to a buyer (or the buyer\u2019s bank) when the seller is unable to immediately obtain the original shipping documents. However, to what extent can an issuing bank rely on the representations in a LOI when the LOI is addressed solely to the buyer (i.e. the LC applicant) and not to the bank? This question was recently addressed by the Singapore Court of Appeal in UniCredit Bank AG v Glencore Singapore Pte Ltd [2023] SGCA 41 (\u201cUnicredit v Glencore\u201d). The SGCA dismissed UniCredit\u2019s claim on the basis that the representations which UniCredit sought to rely on were not made to UniCredit, but to the buyer of the cargo. This article follows from our earlier article on the Singapore High Court\u2019s decision in Unicredit v Glencore [2022] SGHC 263, which can be accessed here:\u00a0Further Developments in the Law on Letters of Credit Click\u00a0here\u00a0to view the article.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/\" \/>\n<meta property=\"og:site_name\" content=\"Shook Lin &amp; Bok LLP | Leading Singapore Law Firm\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-05T00:00:00+00:00\" \/>\n<meta name=\"author\" content=\"shooklin_bok\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"\u4f5c\u8005\" \/>\n\t<meta name=\"twitter:data1\" content=\"shooklin_bok\" \/>\n\t<meta name=\"twitter:label2\" content=\"\u9884\u8ba1\u9605\u8bfb\u65f6\u95f4\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 \u5206\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/shooklin.com\\\/zh-hans\\\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/shooklin.com\\\/zh-hans\\\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\\\/\"},\"author\":{\"name\":\"shooklin_bok\",\"@id\":\"https:\\\/\\\/shooklin.com\\\/#\\\/schema\\\/person\\\/204cfdbec448c27754d0255d35508e07\"},\"headline\":\"Fraud and Letters of Credit &#8211; 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This article follows from our earlier article on the Singapore High Court\u2019s decision in Unicredit v Glencore [2022] SGHC 263, which can be accessed here:\u00a0Further Developments in the Law on Letters of Credit Click\u00a0here\u00a0to view the article.","og_url":"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/","og_site_name":"Shook Lin &amp; Bok LLP | Leading Singapore Law Firm","article_published_time":"2024-01-05T00:00:00+00:00","author":"shooklin_bok","twitter_card":"summary_large_image","twitter_misc":{"\u4f5c\u8005":"shooklin_bok","\u9884\u8ba1\u9605\u8bfb\u65f6\u95f4":"1 \u5206"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/#article","isPartOf":{"@id":"https:\/\/shooklin.com\/zh-hans\/fraud-and-letters-of-credit-when-can-an-issuing-bank-rely-on-the-beneficiary-s-representations-to-resist-payment\/"},"author":{"name":"shooklin_bok","@id":"https:\/\/shooklin.com\/#\/schema\/person\/204cfdbec448c27754d0255d35508e07"},"headline":"Fraud and Letters of Credit &#8211; 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