The opinion of the court was delivered by: MIRIAM GOLDMAN CEDARBAUM
Plaintiff was the beneficiary of an irrevocable letter of credit which defendant refused to honor. Both sides move for summary judgment under Fed. R. Civ. P. 56. For the reasons discussed below, defendant's motion is granted and plaintiff's motion is denied.
The following facts are undisputed. In 1993, plaintiff Western International Forest Products, Inc. contracted to sell lumber to Nam Moon Co., a Korean company. The logs were shipped from Alaska to Korea. To pay for the timber, Nam Moon arranged for a Korean bank, defendant Shinhan Bank ("Shinhan Bank Korea"), to issue an irrevocable letter of credit in favor of Western. The drawee on the letter of credit was Shinhan Bank's branch office in the City of New York. ("Shinhan Bank New York"). The letter of credit provides that it is subject to the 1983 revision of the Uniform Customs and Practices for Documentary Credits (the "UCP").
The letter of credit described one of the documents required for payment as follows: "Inspection certificate must be issued by Mr. Sam Tae Shin (passport No. DG0101712) of Nam Moon Lumber Co., In Korea." Shin is the president of Nam Moon. On July 9, 1993 Shin inspected the logs in Alaska. He then visited Western's offices in Portland, Oregon, and returned to Korea. Back in Korea, Shin executed the inspection certificate required by the letter of credit and faxed it to Western. The inspection certificate is dated July 26, 1993, but Western did not receive the facsimile until July 28, 1993.
After receiving the facsimile inspection certificate, Western shipped the logs to Nam Moon in Korea. Someone at Western stamped the facsimile inspection certificate "original" and sent it to A.C. Wilson Co., Western's freight forwarder. On August 19, 1993, A.C. Wilson's senior partner, Arlene Wilson, presented documents and a payment draft to Shinhan Bank New York and requested payment under the letter of credit for Western. A Shinhan Bank New York employee, Diane Masone, examined the documents presented and noted that the inspection certificate was a facsimile and did not bear an original signature. On August 20, 1993, Masone telephoned Wilson, advised her of the problem, and told her that Shinhan Bank New York would refuse payment. Wilson asked Masone to cable Shinhan Bank Korea and request authorization to pay on the letter of credit. Masone did.
Masone's cable to Shinhan Bank Korea reads in part:
DOCUMENTS RECEIVED UNDER THE ABOVE MENTIONED L/C WITH THE FOLLOWING DISCREPANCIES: . . . 1) FAX COPY OF INSPECTION CERT. WAS PRESENTED (NO ORIGINAL) PLEASE URGENTLY ADVISE IF WE MAY PAY.
On August 25, 1993 Shinhan Bank Korea cabled back:
PLS BE INFORMED THAT OUR CUSTOMER REFUSED TO ACCEPT MENTIONED DISCREPANCIES.
Masone then told Wilson that Shinhan Bank New York refused to pay and returned the documents that had been presented the week before.
Shinhan Bank argues that it is entitled to summary judgment because Western never presented an original inspection certificate and therefore violated the strict compliance rule. Western argues that Shinhan Bank is precluded from asserting a strict compliance defense because Shinhan Bank Korea consulted Nam Moon and did not decide ...