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Case law No.13/2017/AL regarding validity of payment of the letter of credit (L/C) since the international sale & purchase agreement, which is the legal basis of said L/C, has been cancelled

October 15, 2020 Case Law

This case law was approved by the Judicial Council of the Supreme People’s Court on December 14, 2017 and promulgated under Decision No.299/QD-CA of the Chief Justice, the Supreme People’s Court dated December 28, 2017.

Source of this case law: Cassasion Decision No. 17/2016/KDTM-GDT dated November 10, 2016 issued by the Judicial Council, the Supreme People’s Court regarding the business, commercial case of “Dispute over the sale & purchase agreement” in Ho Chi Minh City between the A Company Limited (Mr. Nguyen Duy T as the authorized representative) as the plaintiff and B Company as the defendant; people with related rights and obligations are E Joint Stock Commercial Bank (Mr. Hua Anh K as the authorized representative) and N Bank (Ms. Nguyen Thi V as the authorized representative).

In this case law, the international sale & purchase agreement stipulated a payment method, i.e., the letter of credit (L/C) and the implementation of said L/C, i.e., applying international trade practices (Uniform Customs and Practice for Documentary Credits 2007 (UCP 600) of the International Chamber of Commerce) plus complying with the Vietnamese laws.  In addition, the international sale & purchase agreement, which is the legal basis of said L/C, has been cancelled.  In the case, the Court shall determine that said L/C keeps its full force in payment, even since the international sale & purchase agreement, which is the legal basis of said L/C, has been cancelled.

For Vietnamese: Please click Precedent No.13/2017/AL on payment validity of the letter of credit (L/C) in case the international trading contract being the basis for the L/C is abandoned
For English version: Please contact us via info@letranlaw.com
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