At Exim Credit Bank (ECB), we prioritize ensuring smooth and secure trade finance operations, especially in the area of Letters of Credit (LC) and Standby Letters of Credit (SBLC). This page outlines the procedures and conditions in the event of default or claims related to these financial instruments.
A default in the context of an LC or SBLC occurs when one of the parties (Applicant, Beneficiary, Issuing Bank, or Confirming Bank) fails to meet their obligations as specified in the terms and conditions of the letter of credit.
- 1.1. Failure to present documents in accordance with the terms and conditions of the LC or SBLC.
- 1.2. Submitting non-compliant or forged documents, such as incorrect shipping documents or certificates that do not meet the agreed standards.
- 2.1. Non-payment by the applicant (buyer) for the letter of credit upon the submission of compliant documents by the beneficiary (seller).
- 2.2. If the issuing bank fails to honor the payment or refuses to extend the LC/SBLC as per the terms.
- 3.1. The applicant or beneficiary fails to use or request the issuance of the LC or SBLC before its expiration date.
- 4.1. Unauthorized changes or revocations to the LC/SBLC by the applicant or issuing bank, without the consent of the other parties.
- 1.1. ECB will initiate an investigation into the circumstances surrounding the default.
- 1.2. ECB reserves the right to recover any damages or losses incurred due to non-compliance, including the failure to honor a valid claim.
- 1.3. In case of a default by the applicant or beneficiary, ECB may seek recovery through legal proceedings or by invoking the terms of the agreement to take possession of collateral (if applicable).
A claim under an LC or SBLC typically arises when the beneficiary submits documents that comply with the terms of the LC/SBLC, but payment is refused or delayed. Claims may also occur if there are disputes regarding the validity of the documents or the circumstances under which the LC/SBLC should be honored.
- 1.1. The beneficiary or seller can file a claim if the issuing bank refuses to honor the payment after the correct documents are presented.
- 1.2. If there is a delay in making the payment despite meeting all terms and conditions, the affected party can file a claim for breach of agreement.
- 2.1. If there is a dispute over the authenticity or correctness of the documents presented under the LC or SBLC, a claim can be filed to seek resolution or compensation.
- 3.1. In some cases, the payment may be made partially or incorrectly. Claims can be filed if the beneficiary or applicant believes the payment amount is inaccurate based on the terms.
- 4.1. A claim may be filed if there is a failure to comply with the contractual terms stipulated in the LC or SBLC, such as non-delivery of goods or services.
- 1.1. To initiate a claim, the claimant (beneficiary, applicant, or their representative) must notify ECB in writing. The claim notification must include relevant documentation such as the LC/SBLC agreement, proof of non-payment, documents of non-compliance, and any communication with the involved parties.
- 2.1. Submit all required documents that support the claim. This includes the original Letter of Credit or Standby Letter of Credit, shipping and transaction-related documents, payment records, and any correspondence with the other parties (Applicant, Beneficiary, Issuing Bank, etc.).
- 3.1. Upon receiving the claim, ECB will review the documentation and evaluate whether the terms and conditions of the LC or SBLC have been met. Any discrepancies or non-compliance will be addressed during the review process.
- 4.1. If the claim is valid and substantiated, ECB will ensure prompt settlement of the claim, which may include processing payments or seeking enforcement through legal means, as appropriate.
- 4.1. If the claim is disputed or requires further investigation, ECB will engage with the involved parties to resolve the matter amicably. Arbitration or legal proceedings may be pursued if necessary.
- 5.1. Once a decision has been made, ECB will communicate the resolution to all parties involved. In case of an unfavorable outcome, the claimant will be informed of the reasons and may have the option to appeal or pursue further legal action.
• Claims must be submitted within the applicable timeframe specified in the LC or SBLC, usually before the expiration date of the instrument.
• Claims that involve fraud or misrepresentation will be treated seriously, and legal action will be taken if necessary.
• All claims will be handled with utmost confidentiality, and personal/business information will be safeguarded.
For further assistance or inquiries regarding defaults or claims related to Letters of Credit or Standby Letters of Credit, please contact our Trade Finance Department:
Email: [email protected]
Phone: +971(04)554 8909 || Phone: +1 7782449214
Address: Exim Credit Bank-(ECB), Document Processing United, Technic Building 103, Salah Aldin, Deira, Dubai, United Arab Emirates
Address: Exim Credit Bank-(ECB), 410 W Georgia Street, 3rd Floor, BC, V6B 1Z3, Vancouver, Canada.
Exim Credit Bank (ECB) Is committed to providing secure and reliable trade finance solutions, and we are dedicated to resolving any issues related to Letters of Credit and Standby Letters of Credit efficiently and fairly.