Voest-Alpine Trading USA Corp. v. Bank Of China

167 F. Supp. 2d 940 (2000)

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Nature of the Case

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Facts

P entered into a contract with JFTC to sell JFTC 1,000 metric tons of styrene monomer at a total price of $ 1.2 million. JFTC applied for a letter of credit through D. The letter of credit provided for payment to P once the goods had been shipped to Zhangjiagang, China and P had presented the requisite paperwork as described in the letter of credit. The letter of credit was issued by D on July 6, 1995, and assigned the number LC9521033/95. P's name was listed as 'Voest-Alpine USA Trading Corp.' instead of 'Voest-Alpine Trading USA Corp' with the 'Trading USA' portion inverted. The destination port was also misspelled in one place as 'Zhangjiagng,' missing the third 'a'. The letter of credit did indicate, however, that the transaction would be subject to the 1993 Uniform Customs and Practice, International Chamber of Commerce Publication Number 500. By the time the product was ready to ship, the market price had dropped significantly from the original contract price. P declined a price concession and shipped the styrene monomer on July 18, 1995. All required inspection and documentation were completed. On August 1, 1995, P presented the documents specified in the letter of credit to Texas Commerce Bank, the presenting bank. Texas Commerce Bank found discrepancies between the presentation documents and the letter of credit which it related to Voest-Alpine. Because Voest-Alpine did not believe that any of the noted discrepancies would warrant refusal to pay, it instructed Texas Commerce Bank to forward the presentation documents to D. Texas Commerce Bank sent the documents via DHL courier to D on August 3, 1995. P was required to present the documents within fifteen days of the shipping date, by August 2, 1995. D received the documents on August 9, 1995. On August 11, 1995, D sent a telex to Texas Commerce Bank, stating seven alleged discrepancies between the letter of credit and the documents P presented. D claimed that 1) the beneficiary's name differed from the name listed in the letter of credit, as noted by the presenting bank; 2) P had submitted bills of lading marked 'duplicate' and 'triplicate' instead of 'original'; 3) the invoice, packing list and the certificate of origin were not marked 'original'; 4) the date of the survey report was later than that of the bill of lading; 5) the letter of credit number in the beneficiary's certified copy of the fax was incorrect, as noted by the presenting bank; and 6) the destination was not listed correctly in the certificate of origin and the beneficiary's certificate, as noted by the presenting bank. D stated, 'We are contacting the applicant of the relative discrepancy [sic]. Holding documents at your risks and disposal.' On August 15, Texas Commerce Bank faxed D, stating that the discrepancies were not an adequate basis to refuse to pay the letter of credit and requested that the bank honor the letter of credit. Eventually, D returned the documents to P and did not honor the letter of credit. P sued D.