The opinion of the court was delivered by: DUFFY
KEVIN THOMAS DUFFY, D.J.:
Voest-Alpine International Corp. ("Voest") brings this action to recover amounts allegedly due under two letters of credit issued by Bank of Baroda and confirmed by defendant Chase Manhattan Bank, N.A. ("Chase"). The gravamen of the complaint is that Chase improperly refused payment under the letters of credit when Voest presented its bills of lading and other required documentation. Chase filed a third-party complaint against Bank of Baroda alleging that if Chase is liable to Voest for wrongfully dishonoring the drafts, then Bank of Baroda should be liable to Chase. Chase now moves for summary judgment against Voest asserting that the documents presented to Chase were fraudulent and did not comply with the terms and conditions of the letters of credit. Bank of Baroda also moves for summary judgment on the third-party complaint asserting that Chase did not wrongfully dishonor plaintiff's drafts and that therefore the third-party complaint must fail.
Certain facts relevant to this case are not in dispute. In November and December, 1980, Bank of Baroda, at the request of Metal Scrap Trading Corp., Ltd. ("MSTC"), an Indian corporation, issued two irrevocable letters of credit in favor of the plaintiff Voest, a New York corporation and a subsidiary of a company controlled by the Austrian Government. These letters of credit (Number 40695 in an amount not to exceed $810,600.00 and Number 40750 in an amount not to exceed $604,950.00) were issued to finance a Voest transaction with MSTC to deliver scrap metal to India. Chase originally advised the letters of credit but later confirmed them to Voest, thereby assuming an independent obligation to pay Voest upon proper presentment of the requisite drafts and documents.
The letters of credit as issued and amended required that the drafts submitted by Voest be accompanied by (i) on board bills of lading evidencing current shipment dated no later than January 31, 1981; (ii) certificates of inspection indicating the date of shipment, and (iii) weight certificates issued by an independent inspector.
Between February 2 and February 6, 1981, the goods to be shipped to India were loaded aboard the ill-fated M.V. ATRA. On February 13, 1981, Voest presented to Chase three drafts drawn under the letters of credit along with the required documents. The last day for presentment of these documents was February 15. The documents presented to Chase contained irreconcilable inconsistencies. The bills of lading, signed by the captain of the M.V. ATRA, were dated January 31, 1981 and stated that the goods were on board the ship on that date; however, the weight certificates and certificates of inspection stated that the goods had been loaded aboard the vessel between February 2 and February 6, 1981.
In late February, Chase informed Bank of Baroda that it believed that the drafts and documents presented to it by Voest conformed with the letters of credit. Chase requested that Bank of Baroda advise as to acceptance of the documents. Chase provided Voest with a copy of the advice it sent to Bank of Baroda and, at Voest's request, added the following language:
Payment of the above mentioned draft . . . will be made at maturity on July 30, 1981 to [Voest].
On March 23, 1981, after inspecting the documents, Bank of Baroda informed Chase that the documents presented by Voest did not conform to the terms and conditions of the letters of credit. On July 30, 1981, Chase refused payment on the drafts submitted by Voest.
On August 21, 1981, Voest filed a complaint against Chase asserting three claims: (1) wrongful dishonor by Chase; (2) liability of Chase arising from its acceptance of the drafts and documents whether or not they were conforming, and (3) conspiracy among Chase, Bank of Baroda and MSTC to find technical defects in the presented documents. On September 28, 1981, Chase served a third-party complaint on Bank of Baroda alleging that if Chase is liable for wrongfully dishonoring the drafts then Bank of Baroda should be liable to Chase in the same amount.
On its motion for summary judgment Chase argues that it properly refused Voest's drafts because the bill of lading fraudulently stated that the goods were placed on board on January 31, 1981 when, in fact, on that date, the vessel was at sea. It is asserted that this misrepresentation is confirmed by other documents which show that the goods were not placed on board the vessel until February 2. Voest does not dispute that the goods were not placed on board the M.V. ATRA until after January 31 but insists that there was no fraud since other documents presented by Voest clearly disclosed that the scrap steel was loaded by February 6, 1981. Furthermore, Voest urges that any fraud resulting from discrepancies in the documents were waived by Chase when it accepted the documents and guaranteed payment.
The letters of credit issued by Bank of Baroda in this case state that they are to be governed by the Uniform Customs and Practice for Documentary Credits (International Chamber of Commerce 1974 Revision) ("UCP"). As a result, this case is not governed by the New York ...