from today, we shall return the docs. to you with our complete
discharge." See Shaikh Aff., Ex. C, H, K (same quoted language
regarding demand letters # 1, # 2, and # 3, respectively).
C. Plaintiffs' Complaint
On December 31, 1997, plaintiffs brought this action alleging
that defendant's refusals of the payment demands amounted to
breach of contract, fraud, and (only by MashreqBank and Platinum
against Imagen under ILC # 2) conspiracy to commit this
misconduct. The case arises under diversity jurisdiction because
plaintiffs are foreign corporations organized under Mexican law
and defendant is a registered commercial bank established under
United Arab Emirates law. New York law applies because the
transactions occurred in defendant's New York office.
In their complaint, plaintiffs claim that the discrepancies
regarded mere "collateral matters" and therefore did not relieve
defendant of its obligation to make the payments. See Pls.'
Mem. at 16-18. Even if such discrepancies might relieve a bank of
its obligation to pay a letter of credit beneficiary, plaintiffs
argue, defendant is not relieved for several reasons here:
defendant's refusal did not accord with governing UCP procedures
for refusals based on document discrepancies, see id. at 3-9;
plaintiffs' completed deliveries of the goods rendered any
document discrepancies moot, see id. at 9-12; and defendant's
practice of not objecting to such discrepancies precludes it from
objecting here under principles of waiver and estoppel, see id.
at 13-15. On February 3, 1998, defendant filed the pre-answer
motion to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), that is
presently before the Court.
A. Standards for 12(b)(6) Motions to Dismiss
A court should grant a Rule 12(b)(6) motion to dismiss for
failure to state a claim upon which relief can be granted only if
it "appears beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to relief."
Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80
(1957). See also Mills v. Polar Molecular Corp., 12 F.3d 1170,
1174 (2d Cir. 1993); Goldman v. Belden, 754 F.2d 1059, 1065 (2d
Cir. 1985). "The issue is not whether a plaintiff is likely to
prevail ultimately, `but whether the claimant is entitled to
offer evidence to support the claims. Indeed it may appear on the
face of the pleading that a recovery is very remote and unlikely
but that is not the test.'" Gant, et al. v. Wallingford Bd. of
Educ., et al., 69 F.3d 669, 673 (2d Cir. 1995) (quoting Weisman
v. LeLandais, 532 F.2d 308, 311 (2d Cir. 1976) (per curiam)
(quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683,
1686, 40 L.Ed.2d 90 (1974))). The Court "is not to weigh the
evidence that might be presented at a trial but merely to
determine whether the complaint itself is legally sufficient,"
Goldman, 754 F.2d at 1067, and therefore "must `accept the
factual allegations of the complaint as true and must draw all
reasonable inferences in favor of the plaintiff.'" Brown v.
Coach Stores, Inc., 163 F.3d 706, 709 (2d Cir. 1998) (quoting
Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996)).
B. UCP Article 14 Provisions Regarding Submissions of
Because both ILCs adopt UCP Article 14, which explicitly
addresses the relevant issues, it is unnecessary to look to
otherwise applicable Uniform Commercial Code (hereinafter, "UCC")
provisions. See Mennen, et al. v. J.P. Morgan & Co., 91 N.Y.2d 13,
22, 689 N.E.2d 869, 666 N.Y.S.2d 975 (1997) ("UCC article 5
does not apply to a letter of credit when by its terms or
agreement the letter of credit is subject in whole or in part to
the UCP" (citing UCC § 5-102)); Bouzo v. Citibank N.A.,
96 F.3d 51, 57 n. 3 (2d Cir. 1996) (holding the same under New York
law). While adoption of the UCP "`would not, in the absence of a
conflict, abrogate the precode case law now codified in [UCC §]
5-114,'" Mennen, 91 N.Y.2d at 22, 689 N.E.2d 869, 666 N.Y.S.2d 975
(quoting United Bank v. Cambridge Sporting Goods Corp.,
41 N.Y.2d 254, 258 n. 2, 360 N.E.2d 943, 947, 392 N.Y.S.2d 265, 269
(1976)), here the direct applicability of UCP Article 14 renders
any contrary UCC rule conflicting and therefore inapplicable.
1. Standard of Strict Compliance by Beneficiary