Re: Legal Opinion on non-payment of Accepted Bill by The BANK 1, Dhaka A/C. COMPANY 1.
We refer to your letter dated 11.06.2006 on the above subject.
We understand that BANK 1, (the “Issuing Bank”), accepted Bill(s) under the BTB L/C Nos. ………… and on maturity while the BANK 2, Taipei (Obu Branch), Taiwan, requested the Issuing Bank to pay the Bill(s). The Issuing Bank refused to do so under the ground that the Court Order in connection of Title Suit No. 187 of 2006 filed by the COMPANY 2 (the “L/C. applicant”) in the 1st Court of Joint District Judge, Dhaka against the Issuing Bank was barring them from making payments. In such situation, the matter has referred to us and we are requested to go through the Court order and provide legal opinion whether the Issuing Bank can avoid payment using the Court order.
Our opinion is as follows:
Since the Bill(s) has been accepted by The Issuing Bank, they are legally obliged to make payment of the Bill(s) amount to BANK 2, Taipei (Obu Branch), Taiwan on maturity. This is the legal position in so far as the Uniform Customs and Practice for Documentary Credits.
Upon perusal of the record of the Title Suit, it has been revealed that on 23.05.2006 the L/C. applicant filed an Injunction application under Order 39 Rule 1 & 2 of the
Code of Civil Procedure for restraining the Issuing Bank from making payment to BANK 2, Taipei (Obu Branch), Taiwan relating the said L/Cs. It was also found from the record that after hearing, the learned Court was pleased to reject the application. Since, no order/direction in the said suit restraining Issuing Bank from making payment to BANK 2, Taipei (Obu Branch), Taiwan the Issuing Bank is under legal obligation to pay the Bill(s) amount to BANK 2, Taipei (Obu Branch), Taiwan. In the absence of any such order/direction of the Court, BANK 2, Taipei (Obu Branch), Taiwan is legally entitled to claim the Bill(s) amount in question from Issuing Bank. If Issuing Bank continues to refuse to make payment of the amount, the matter may be referred to Bangladesh Bank so that Bangladesh Bank can exert its influence on Issuing Bank and compel them to make payment of the amount.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”