YUCHAI DONGTE SPECIAL PURPOSE AUTOMOBILE CO LTD V SUISSE CREDIT CAPITAL (2009) LTD

[2018] EWHC 2580 (Comm), Queen's Bench Division, Commercial Court, Deputy Judge Christopher Hancock QC, 9 October 2018

Contracts - Letter of credit - Use of extrinsic evidence - Role of SWIFT message types – Principle of autonomy - Estoppel by convention

The claimant sought payment pursuant to a letter of credit it said had been issued by the defendant on 10 March 2014. The defendant denied being the issuer of the letter of credit and contended that even if it was, it was not responsible for payment because its messages had been caveated by a disclaimer. It also argued that the claimant was estopped by convention from claiming that the defendant had issued the letter of credit. The claimant was a manufacturer based in China and had sold some goods under a previous letter of credit which was replaced by the present one. The defendant provided financial services and was a member of the SWIFT network, but was not a bank. The bank involved in the first letter of credit, SBOL, agreed with the defendant to send a message in respect of the second letter of credit, which it did on a MT700 form, adding the disclaimer "no our responsibility for payment". Extrinsic evidence of the transaction as a whole showed, the defendant argued, that it was never intended to be the issuer and that the claimant knew this. The claimant argued inter alia that since the message was sent on a SWIFT MT700 form, the defendant was the issuer of the letter of credit.