INTERNATIONAL BUSINESS TRANSACTIONS AND THE LAW ; Buy-Style was a German retail that contracted with Sale-items in Hong Kong to buy a quantity of clothing. The German company, Buy-Style asked its UK parent company Every-Style Pty Ltd to provide finance for the purchase. Every-Style applied to a UK bank for the opening of a letter of credit in favour of Sale-items. The letter of credit contained, inter alia, the following terms: – Presentation of an air waybill showing the flight number, the date and the German company being the recipient of the consignment; and – The latest date of the shipment was 30 June 2017. Sale-items negotiated the letter of credit with a Hong Kong bank. The Hong Kong bank claimed reimbursement from the issuing bank. The day after the claim for reimbursement was sent to the issuing bank, and before any reimbursement was made, the German retailer went into liquidation, and the UK parent approached the issuing bank with a request for it to refuse payment under the credit. The UK firm, Every-Style, has discovered that the copy of the air waybill sent to the German retailer was dated 2 July 2017 but the copy of the air waybill presented to the banks for negotiating the letter of credit was dated 30 June 2017. There is also evidence that the negotiating bank was probably aware of this discrepancy, and suspected that the Hong Kong beneficiary may have altered the date on the air waybill presented for the purposes of negotiation. However, the negotiating bank decided not to look too closely, and in effect turned a blind eye to the possibility of fraud. Is the seller entitled to be paid?
