RE: Legal Opinion regarding claim received from Bank 1 for payment of 02 (two) for US $ 72,380.27 and US$ 62,195.14 outstanding since 1997 against …………………dated 04.06.97 on account of Company 1.
We refer to your letter no. ……………… dated March 16, 2008 on the above subject.
On perusal of your letter, it appears that, upon the request of Company 1 (“Company 1”), a BTB L/C no. 973/48/37/97 dated 04.06.97 was opened for US$ 2,95,118.00 against which Bank 2 (“Bank 2”) received 2 bills for US $ 72,380.27 and US$ 62,195.14 from Seoul Bank and 2 bills for US $ 70,552.00 and US$ 89,991.03 from Commercial Bank of Korea and Bank 3 respectively (the “Four Bills”). The maturity date of the bills was 12.10.97. Due to dispute regarding discounting of the bills, the bills were not paid by Bank 2.
Assuming that the negotiating banks of the Four Bills may not come forward with their claim, Bank 2 applied the funds towards the payment of bill(s) against other L/C(s) in the year 2000 by taking an undertaking from Wills Fashion, whereby Wills Fashion undertook to arrange fund for making payment of the Four Bills from its own source if any claim is made by the negotiating bank in future.
All of a sudden, Bank 2 has received a claim through SWIFT dated 22.02.08 from Bank 1 regarding payment of two bills for US $ 72,380.27 and US$ 62,195.14 (the “Two Bills”) asking to make payment of the bills. Bank 2 forwarded the matter to Wills Fashion through their letter dated 04.03.2008 and Wills Fashion has replied that as the matter is barred by the law of the land no question arises as to arranging to deposit the required money with Bank 2.
In the circumstances stated above, you require our legal opinion as to what should be the course of action taken by the bank in order to protect their interest.
According to Regulation 69 of the First Schedule of the Limitation Act 1908, the limitation period for filing a suit regarding payment of a bill of exchange, payable at a fixed time after date, is 3 (three) years from the date the bill falls due. In the present situation the Two Bills were payable on 12.10.97. Provided that Bank 2 has not acknowledged their liability in relation to the Two Bills in the last preceding 3 (three) years, we are of the opinion that, since more than 10 (ten) years have passed since the date on which the Two Bills were due, the limitation period for commencing suit against Bank 2 in the present case has passed according to the laws of Bangladesh.
Moreover, according to Section 11 (1) of the Limitation Act 1908, even if a suit is instituted in Bangladesh, on contracts entered into in a foreign country, the said suit shall be subject to the rules of limitation contained in the Limitation Act of Bangladesh.
Therefore, if a suit is commenced now by Bank 1 in Bangladesh, the same in our opinion is likely to be dismissed in accordance with Section 3 of the Limitation Act 1908 as it is now barred by limitation.
Bank 2 may inform Bank 2 about our above observation.
Should you have any further query, do not hesitate to revert to us.
For: “The Lawyers & Jurists”