Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
On 12 November 2021, as part of the breach of contract action Zions Bancorporation N.A. v. JPMorgan Chase N.A., the United States District Court for the Southern District of California, Burkhardt, J., granted a joint motion for entry of a stipulated protective order following a previous judgment (abstracted at Oct 2021 DCW 10) regarding a motion to dismiss. As its underlying claim, Zions Bancorporation, N.A. (d/b/a California Bank & Trust) (Plaintiff/Discounting Bank/Presenting Bank) alleged breach of contract by JPMorgan Chase Bank, N.A. (Defendant/ Advising Bank/Confirming Bank) concerning an assignment of LC proceeds from a confirmed letter of credit for which Plaintiff/Discounting Bank/Presenting Bank had tendered a discounted value to the underlying beneficiary.
Good cause for the protective order was based on Plaintiff/Discounting Bank/Presenting Bank’s claims as “discovery is sought and documents are anticipated to be produced consisting of account records relating to the letter of credit, letter of credit confirmation, and letter of credit discount agreement, among other things. Those records are anticipated to include and reflect the private financial information of consumers”, particularly those of the litigating parties, but also third parties, such as the underlying Seller/Beneficiary and Buyer/Applicant. Furthermore, “discovery is sought and documents are anticipated to be produced that may reflect the proprietary and confidential business practices of [Plaintiff/Discounting Bank/Presenting Bank] and [Defendant/Advising Bank/ Confirming Bank].”
Additionally, the parties acknowledged that the lawsuit would likely involve “trade secrets, proprietary information, and other valuable commercial, financial and technical information for which special protection from public disclosure and from use for any purpose other than prosecution of this action is warranted.” The protective order makes clear in its section 4.19 that any material related to applicable US law and regulations concerning Suspicious Activity Reports “is not permitted to be produced” and Section 6 of the order provides for the processes of designating discovery material as either “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL”.
As the joint protective order has been granted, the discovery process is likely underway or will begin soon. If an ultimate decision on the underlying merits is reached, that opinion will be covered in DCW.
Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
On 15 Feb 2023, DCSA members pledged to issue 50% of bills of lading (B/Ls) electronically by 2028 and 100% by 2030, aiming to cut costs and boost global trade.
