NATIONAL INFRASTRUCTURE DEVELOPMENT CO LTD V BANCO SANTANDER SA

[2017] EWCA Civ 27, Court of Appeal (Civil Division), Lord Justice Longmore and Lord Justice Christopher Clarke, 26 January 2017

Letters of credit - Effect of allegations of fraud - Summary judgment

The claimant, NIDCO, was the beneficiary of four letters of credit issued by the defendant bank. NIDCO had entered into a contract with a Brazilian contractor for the construction of a highway in Trinidad. The contractor gave notice under the construction contract that NIDCO had defaulted on payments under the contract, whereupon NIDCO issued a termination notice on the basis that the contractor had abandoned the project. That dispute was under arbitration. This was the dispute between NIDCO and the bank under four letters of credit in the nature of performance security in NIDCO's favour, procured from the bank by the contractor. They were governed by International Standby Practices 98 (ISP 98) and English law, with English court jurisdiction. The judge at first instance had given summary judgment for NIDCO. The bank appealed.