X Service Limited & Another -Versus- One Bank Limited & Others

IN THE COURT OF ASSISTANT JUDGE, 2ND COURT, DHAKA

TITLE SUIT NO. 163 OF 2003

X Service Limited & Another

PLAINTIFFS

-Versus-

One Bank Limited & Others

DEFENDANTS

WRITTEN STATEMENT ON BEHALF OF DEFENDANT NO. 1 & 2:

1. That the suit filed by the plaintiff is not maintainable in its present form and nature.

2. That there is no cause of action to file the suit against the defendant no. 1& 2 and as such the
suit should be dismissed with costs.

3. That the suit has been filed in malafide intention to make illegal gain from the defendants. Since
the suit has been filed with malafide motive, the suit is liable to be dismissed.

4. That the suit is barred by the principles of waiver, acquiescence and estoppel.

5. That the suit is framed on wrong conception of law and facts.

6. That the suit is bad for non-joinder and mis-joinder of parties.

7. That the suit is not maintainable as it did not comply with the legal formalities preceding the
filing of a suit. The suit is liable to be dismissed summarily on the face of the plaint as the
plaintiff filed the said suit without any cause of action.

8. That the statements made in the suit which are not specifically admitted hereinafter shall be
deemed to have been denied by the defendants.

9. That the statements made in paragraphs 1 to 8 of the plaint are mostly matters of record. The
burden of proving the statements lies strictly upon the petitioner and therefore, these
defendants refrains from making any comments.

10. That the statements made in paragraph 9 of the plaint are matters not related to these
defendants and hence refrained from making comment.

11. That the statements made in paragraph No. 10 of the plaint are matters of record and not
related to these defendants which lies strictly on the plaintiffs/petitioner to prove and as such
require no comments.

12. That the statements made in paragraph No. 11 of the plaint are matters not related to these
defendants the proof of which lies strictly on the plaintiffs and as such require no comments.
 13. That the statements made in paragraph No. 12 of the plaint are matters of record and the
plaintiffs are under obligation to prove the same. It may be mentioned in this regard that since
“Add Confirmation” was given to the letter of credit by the defendant No. 5, it had a duty to pay
to the supplier if the documents were in order. It is necessary to mention here that as per terms
of UCPDC Banks in credit transaction deal with documents only. They are not concerned with the
goods. Since the documents were found in order, the said defendant made payment to the
supplier. After making payment by the defendant No. 5 to the supplier, the defendant No. 5 got
reimbursement of the L/C amount on 07.07.2003 by way of debiting these defendants Nostro
Account maintained with Citibank N.A. New York.

14. That the statements made in paragraph No. 13 of the plaint are incorrect, misleading and
misconstrued. It is submitted that as per terms and conditions of the L/C, these defendants are
bound to make payment the L/C amount upon receipt of the documents.

15. That it is submitted that the Letter of Credit incorporated the terms and conditions of the
Uniform Customs and Practice for Documentary Credits (1993 Revision, ICC Publication No. 500)
(hereafter “UCPDC”). According to the provisions contained in UCPDC, the Letter of Credit
transaction creates a contract between the Opening or Issuing Bank (in this instance the
defendant No. 2) and the Advising or Negotiating Bank which is completely autonomous and
separate from the underlying contract of supply of goods and also from the terms and conditions
of the Master Letter of Credit under which the Letter of Credit is opened. The Issuing Bank of a
Letter of Credit, whether back to back or otherwise, is completely unconcerned with the
performance of the underlying contract. As soon as the documents tendered by the Beneficiary
of the Letter of Credit are in conformity with the mandate of the Letter of Credit, the Issuing
Bank is under an absolute obligation to reimburse the Bank that has negotiated and/or made
payment against such documents. Therefore, no injunction can lie in law to restrain the Issuing
Bank from making payment insuch circumstances where the relevant allegation lies solely with
regard to inferior quality of the goods. There is no law which states that because of inferior
quality of the goods, payment under Letter of Credit can be cancelled. As such, the application of
the plaintiffs is not maintainable in law.

1. That Article 3(a) of the UCPDC 500 reads as follows:

“Credits, by their nature, are separate transactions from the sales or other contract(s) on which they may
be based and banks are in no way concerned with or bound by such contract(s), even if any reference
whatsoever to such contract(s) is included in the credit”.

Article 4 of UCPDC 500 provides as follows:

“In Credit operations all parties concerned deal with documents, and not in goods, services and or other
performances to which the documents may relate.”

Therefore, at all stages of the relevant transaction, the defendant Nos. 1 and 2 (hereinafter referred to as
“these defendants) were concerned only with documents and can in no way be held responsible for the
goods for which the back to back L/C was opened. There was no contract between these defendants and
the plaintiffs stipulating that if goods delivered under L/C would appears to inferior quality, these
defendants would not make payment of the L/C amount. These defendants were unable to stopped
payment under the L/C as the defendant No. 5 has debited the L/C amount from the Nostro Account of
these defendants maintained with them. Therefore, the plaintiffs is under the obligation to reimburse
these defendants for the L/C amount which has already been paid to the defendant No. 5. Instead of
paying the L/C amount, the plaintiff has filed this suit and application to harass these defendants and to
make illegal gain from it.

1. That it is submitted that as the issuing bank of a letter of credit governed by the provisions of the
Uniform Customs and Practice for Documentary Credit (UCPDC), these defendants are only
concerned with documents and are not involved in any way with the underlying contract or L/C
to supply the goods and its performance. The defendant No. 5 debited the L/C amount from the
Nostro Account of these defendants and therefore the plaintiff are under the obligation to
reimburse these defendants. So the suit filed by the plaintiffs is liable to be rejected.

Wherefore, it is humbly prayed that your honour would graciously be pleased to dismiss the suit filed by
the plaintiffs with compensatory costs in favour of the defendants Nos. 1 & 2. And for this act of
kindness the defendant as in duty bound shall ever pray.

VERIFICATION

That the statements made above are true to our knowledge and matters of records whereof we put our
signature on this the____ day of ___________, _______________.