79603 International Business Transactions and the Law
Task:
Where relevant, your answers should clearly state any assumptions you are making, and/or any additional information that would change the advice provided to your hypothetical clients
For the questions below, assume that countries referred to are members of the World Trade Organisation (WTO) and have ratified all relevant WTO agreements.
Furthermore, please assume that the following conventions have also been ratified by all countries referred to:
• the Amended Hague-Visby Rules;
• The Vienna Convention on Contracts for the International Sale of Goods (CISG)
• the UNCITRAL Model Law on International Commercial Arbitration; and
• the UN Conference on International Commercial Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards;
Question 1
The Bill of Lading was a claused bill of lading, noting that the machinery did not appear to be in good condition. All other information provided in the documents was correct and conformed to the agreement between the parties. On receipt of the documents the confirming bank telephoned the purchaser asking whether they would waive the requirement for a clean bill of lading, the purchased advised that they would not do this.
The bank officer after speaking to the seller of the equipment and on the recommendation of the the seller made arrangements to have the machinery inspected to see whether it was in good condition. The bank officer was of the view that if the inspector advised that the machinery was in good order and condition, he could make the payment. The bank officer advises his instructing officer at the Young International Bank of his proposed course of action.
Advise: The Young International Bank on what are the banks duties under a documentary letter of credit; is it appropriate for the bank to arrange for the inspection of the the equipment and make a decision whether to make payment based on the outcome of the inspection?
Question 2
Adjungbilly Honey Pty Ltd (“Adjungbilly”) is an exporter of Australian Premium Honey to the Canadian market, the Canadian Wholesaler is Honey Canada Pty Ltd (“Canada”).
Adjungbilly and Canada entered into a contract for Adjungbilly to supply Canada with 10 tons of premium grade honey. The parties agreed that the honey would be supplied between February and November 2020 in equal instalments, that is one ton a month for ten months.
Other relevant terms of the contract are:
a. The law of New South Wales will apply to the contract.
b. In the event of a dispute between the parties the matter is to be referred to arbitration, the arbitration to be conducted at the Singapore International Arbitration Centre.
c. Each party will pay their own costs of any arbitration.
d. The decision of the arbitration panel is final and binding on the parties.
