In the first of his series of DCW articles on major issues surrounding potential revision of UCP, ICC Banking Commission Senior Technical Advisor Dave Meynell examines the concept of negotiation.
Letter of credit cases can reveal a great deal about how the industry's practice rules and standards are viewed and interpreted by the courts.
In addition to treatment of two ICC Draft Opinions, highlighting the first day of the next ICC Banking Commission Meeting
Beneficiary Bayport Polymers appealed temporary injunction restraining presentation of LC documents.
To support its engineering and construction work on a high-density polyethylene plant in Bayport, Texas, CB&I, LLC (Contractor/Applicant) applied for and caused an unspecified issuing bank to issue a standby letter of credit in favor of Bayport Polymers, LLC (Beneficiary). A key metric in Contractor/Applicant’s progress was “RFHI Completion” whereby Beneficiary would be able to introduce hydrocarbons into the plant. This completion date was originally expected for about one-thousand days after the effective contract date of October 8, 2021. Each week past planned completion would result in liquidated damages owed by Contractor/Applicant (capped at 6% of contract value). Beneficiary could pursue such damages in three ways: (1) invoice Contractor/Applicant for damages with a 30-day due date; (2) withhold amounts already due and payable to Contractor/Applicant; or (3) “collect on either letter of credit”.
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