X Factory Ltd. -Versus- M/s. Y & Co. and others

IN THE COURT OF ASSISTANT JUDGE, 4TH COURT, DHAKA

TITLE SUIT NO. _________OF ____

X Factory Ltd.

PLAINTIFF

-Versus-

M/s. Y & Co. and others

DEFENDANTS

WRITTEN STATEMENT ON BEHALF OF DEFENDANT NOS. 4:

1. That the suit filed by the plaintiff is not maintainable in its present form and nature.

2. That there is no cause of action to file the suit and as such the suit should be dismissed with costs for want of cause of action.

3. That the suit has been filed in malafide intention to make illegal gain as such the suit is liable to be dismissed.

4. That the suit is barred by the principles of waiver, estoppel and acquiescence and as such the same is not sustainable in law.

5. That the plaintiff filed the instant suit by suppressing and misreading of facts and as such by considering the facts the suit is liable to be dismissed with cost.

6. That the plaintiff did not come before the learned Court with clean hand and as such the plaintiff is not entitled to get any relief from the learned Court hence this suit is liable to be dismissed.

7. That the statements made in the plaint which are not specifically admitted hereinafter shall be deemed to have been denied by the defendant Nos. 4.

8. That the statements made in paragraph Nos. 1 to 5 of the plaint are mostly matters of record, the burden of proving which lies strictly on the plaintiff. This defendant No. 4 therefore refrains from making any comments.

9. That the statements made in paragraph No. 6 are matters with which the defendant No. 4 is not concerned at all and hence no comments are offered.

10. That the statements made in paragraph No. 7 of the plaint relates to matters that the burden of proving which lies strictly on the plaintiff, with which this defendant No. 4 is not at all concerned and as such no comments are offered.

11. That with regard to the statements made in paragraph Nos. 8 and 9 of the plaint it is stated that at the request of Bangladesh Chemical Industries (the “BCIC”) on account of the plaintiff, this defendant no. 4 opened the L/C for US$ 10,900/- in favour of the Beneficiary. Subsequently, the defendant No. 4 received discrepant documents from the Beneficiary’s bank, which were referred to the Beneficiary’s Bank and to the plaintiff. The plaintiff accepted the discrepancies vide their letter dated 08.12.2003 against which this defendant No. 4 endorsed/ delivered the shipping documents to the plaintiff and the plaintiff released the goods with the same. Subsequently the defendant no. 4 received several letters from the plaintiff requesting not to make payment as the defendant Nos. 1 & 2 allegedly supplied goods not in conformity with the purchase order. By SWIFT message dated 26.012004 and 12.08.2004, the defendant No. 4 informed the Beneficiary’s Bank about the contentions raised by the plaintiff and requested the Beneficiary to settle the issue with the plaintiff. In reply, the defendant No. 4 received SWIFT message dated 18.08.2004 & 09.09.2004 from the Beneficiary’s bank requesting to make payment as per the provisions of UCPDC. It is necessary to mention here that as per the terms of UCPDC, Banks in credit transaction deal with documents only. They are not concerned with goods. Since the defendant no. 4 endorsed and released the shipping documents to the plaintiff upon its acceptance of the discrepancies in the documents, the defendant no. 4 being legally obliged made payment of L/C amount to the Beneficiary’s bank on 24.12.2004.

12. That the statements made in paragraph No. 10 of the plaint are matters the burden of proving which lies strictly on the plaintiff. This defendant no. 4 is not concerned with the said matters and as such offers no comments.

13. That regarding the statements made in paragraph No. 11 of the plaint as to serving legal notice to the defendant No. 4 by plaintiff, it is stated that as per provisions of UCPDC, as soon as the documents tendered by the beneficiary of the letter of credit are in conformity with the mandate of the letter of credit, the issuing bank (in this case defendant No. 4) is under an absolute obligation to reimburse the bank that has negotiated and/or made payment against such documents. The defendant No. 4 is only concerned with the shipping documents of the L/C, which has been accepted by the plaintiff. As stated earlier, since the shipping documents has been accepted by the plaintiff and goods have been released by the plaintiff against the said documents, the defendant no. 4 in accordance with its obligation under UCPDC, has legally and rightfully made payment of the L/C amount to the Beneficiary’s bank on 24.12.2004.

14. That regarding the statements made in paragraph No. 12 are mostly not applicable upon this defendant no. 4. It is submitted that, as stated earlier, there is no cause of action arisen to file any suit against this defendant No. 4.

14. That with the statements made in paragraph No. 13 and 14 of the plaint, the defendant no. 4 is not concerned and as such offers no comments.

15. That the facts are as follows:

a) That the plaintiffs have sought decree inter alia to declare that the defendant No. 1 and 2 are bound to replace 10,000 sets Steel Pin (Short Shank) to the plaintiff in due time as per the purchase order or deed of purchase and drawing. The plaintiff also filed an application seeking temporary injunction restraining the defendant No. 4 from making payment against letter of credit no. 043203010455 dated 22.09.2003 (the “L/C”) to the defendant Nos. 1 & 2. That it is submitted that by a series of decisions (reported in 33 DLR (AD)298, 55 DLR (AD)56 and 2 MLR (AD)396), the Appellate Division of the Y Court of Bangladesh has decided that no injunction can be granted on a bank prohibiting it to make payment under an Irrevocable Letter of Credit.

b) That is submitted that the L/C in question incorporated under the terms and conditions of the Uniform Customs and Practice for Documentary Credits (1993 Revision, ICC Publication No. 500) (the “UCPDC”). According to the provisions of UCPDC, a Letter of Credit of credit transaction creates a contract between the Opening or Issuing Bank and the Advising or Negotiating Bank, which is completely autonomous and separate from the underlying contract of supply of goods. The issuing bank of a letter of credit is completely unconcerned with the performance of the underlying contract. As soon as the documents tendered by the beneficiary of the letter of credit are in conformity with the mandate of the letter of credit, the issuing bank (in this case defendant No. 4) is under an absolute obligation to reimburse the bank that has negotiated and/or made payment against such documents.

In the instant suit, at the request of BCIC on account of the plaintiff, the defendant No. 4 opened the L/C in favour of the defendant no. 1 (the “Beneficiary”). Subsequently, the defendant No. 4 received shipping documents from the beneficiary’s bank. The shipping documents contained some discrepancies, which were referred by the defendant No. 4 to beneficiary’s bank and to the plaintiff. The plaintiff accepted the discrepancies vide their letter dated 08.12.2003 against which the defendant No. 4 endorsed/delivered the shipping documents to the plaintiff and the plaintiff released the goods with the same. Since the defendant No. 4 endorsed and released the shipping documents to the plaintiff upon their acceptance of the discrepancies in the documents, the defendant no. 4 was legally obliged under UCPDC to make payment of the L/C amount to the Beneficiary’s bank and has accordingly made payment of the said amount to the Beneficiary’s bank on 24.12.2004.

c) That the allegations raised by the plaintiff in the plaint relates solely to the quality of goods supplied by the Beneficiary, with which the defendant No. 4 is not concerned at all. The defendant No. 4 is only concerned with the shipping documents of the L/C, which has been accepted by the plaintiff. As stated earlier, since the shipping documents has been accepted by the plaintiff and goods have been released by the plaintiff against the said documents, the defendant no. 4 in accordance with its obligation under UCPDC, has legally and rightfully made payment of the L/C amount to the Beneficiary’s bank.

d) That it is stated that Article 3 (a) of the UCPDC reads as follows:

“Credits, by their nature, are separate transaction from the sales or other contract(s) on which thsy may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the credit”.

Furthermore, Article 4 of UCPDC provides as follows:

“In credit operations all parties concerned deal with documents, and not in goods, services and/or other performances to which the documents may relate”.

Therefore, at all stages of the relevant transaction, the defendant No. 4 was concerned only with documents and can in no way be held responsible for the goods for which the L/C was opened. The plaintiff is thus under obligation to reimburse the defendant no. 4 for the L/C amount, which it has paid to the Beneficiary’s bank. The plaintiff has filed the instant suit and application to harass this defendant and to avoid its obligation to make payment to the defendant no. 4.

13. That the prayers made in the plaint are not tenable in law and hence the plaintiff company is not entitled to get any relief in the above mentioned suit and as such the suit is liable to be dismissed with cost.

14. That in the circumstances above the aforesaid suit is not sustainable in law and the plaintiff is not entitled to get any relief and as such the above mentioned suit is liable to be dismissed with cost for ends of justice, rather the defendant No. 1-3 will suffer irreparable loss and injury.

Wherefore, it is humbly prayed that your Honour would graciously be pleased to dismiss the suit filed by the plaintiff with compensatory costs in favour of the defendant No. 4.

And for this act of kindness the defendant no. 1-3 as in duty bound shall ever pray.

A F F I D A V I T

I, ______________________________ son of __________________________ of Uttara Bank Limited, Local Office, Foreign Exchange Department, having address at 129-130, Motijheel Commercial Area, P.S. Motijheel, Dhaka-1000, aged about _______ years, by faith Muslim, Nationality Bangladeshi by birth, profession service, do hereby solemnly affirm and declare as follows:

1. That I am the officer of the defendant No. 4 and well conversant with the facts of the case and competent to swear this Affidavit.

2. That the statements of facts made in this written statement are true to the best of my knowledge and belief and rests are submissions before this Hon’ble Court and in witness whereof I swear this affidavit and signed below on this the ___ day of ________________ at _________ a.m. before the Commissioner of affidavit.

DEPONENT
The deponent is known to me and identified by me.
ADVOCATE

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