Much has changed in the four decades since United City Merchants v Royal Bank of Canada, in which Lord Diplock established the fraud exception in transactions financed by documentary credit. In particular, the introduction of the UCP 600, case law on nullity documents and amendment to the American fraud exception justify a reconsideration of both the policy arguments underpinning Lord Diplock's rule and the fate of documents known to be forged or null at the time of presentation. Accordingly, two arguments are made in this paper. First, a consideration of the broader exception in the US should prompt a modern Supreme Court to re-examine his Lordship's insistence that a narrow exception was required to preserve the efficiency of the credit mechanism. In addition, it further argues that banks should be entitled to reject known nullities and forgeries as non-complying. This argument would reinstate the doctrine of strict compliance, which was overlooked in United City Merchants, and is based on the clarified definitions in the UCP 600, more recent judicial consideration of nullities and the existence of the ICC's International Maritime Bureau.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2025 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.