The opinion of the court was delivered by: CANNELLA
Plaintiff's motion for summary judgment is denied. Fed. R. Civ. P. 56(a).
Defendant's motion for summary judgment is granted. Fed. R. Civ. P. 56(b).
Bank of Cochin Limited ["Cochin"], an Indian corporation and the insurer of letter of credit BB/VN/41/80, commenced this diversity action against Manufacturers Hanover Trust Company ["MHT"], an New York corporation that acted as the confirming bank on the letter. Cochin seeks recovery of the amount paid by MHT, thereafter debited to Cochin's account at MHT, on drawings negotiated in New York between MHT and St. Lucia Enterprises, Ltd. ["St. Lucia"]. Codefendant St. Lucia, a purported New York corporation and the letter of credit beneficiary, has perpetrated a large fraud on both banks and nonparty customer Vishwa Niryat (Pvt.) Ltd. ["Vishwa"]. Unfortunately, St. Lucia has vanished and the Court must decide whose shoulders will bear the scam.
The parties agree on the salient events and have presented essentially identical and uncontroverted statements of fact pursuant to Rule 3(g) of the Civil Rules for the Southern District of New York. See San Filippo v. U.S. Trust Co., 737 F.2d 246, 248 (2d Cir. 1984), cert. denied, 470 U.S. 1035, 105 S. Ct. 1408, 84 L. Ed. 2d 797 (1985). On February 8, 1980, in Bombay, India, Vishwa requested Cochin to issue an irrevocable letter of credit covering up to $798,000 for the benefit of St. Lucia. The letter was to have expired on April 15, 1980 and covered the anticipated shipment and purchase of 1,000 metric tons of aluminum melting scrap consisting of aluminum beverage cans.
On February 14, 1980, Cochin requested MHT to supply financial information on St. Lucia. MHT responded by telex the following day that St. Lucia did not maintain an MHT account and that thorough check of normal credit sources did not reveal any "pertinent" information. On February 22, Cochin conveyed the terms and conditions of the letter of credit to MHT by telex and requested MHT to advise "St Lucia Enterprises Ltd" of the establishment of the letter and to add MHT's confirmation.
The letter of credit was issued subject to the Uniform Customs and Practice for Documentary Credits (1974 Revision), Int'l Chamber of Commerce, Pub. No. 290 ["UCP"].
On February 25, MHT mailed its written advice of the letter of credit establishment to St. Lucia and confirmed the amended letter on February 29.
Cochin amended certain terms of the letter on four occasions in March and April 1980. MHT mailed its advices of these amendments to St. Lucia from March to May and set copies to Cochin, which were received without comments.
The final amended letter of credit contained the following relevant terms and conditions:
a. Sight drafts of the invoice values;
b. Six copies of the signed invoices;
c. One set of clean shipped on board bills of lading.
d. A west European certificate of origin;
e. A certificate of analysis of the aluminum scrap from Lloyd's of London ["Lloyd's"]or another international testings agency;
f. Shipment from a west European port to Bombay;
g. A maritime insurance policy, cover note 429711, to be confirmed by St. Lucia's cable to Oriental Fire and ...