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- CML Working Paper: Should There Be a Negligence Exception to the Autonomy Principle for Letters of Credit? by Leung Liwen
CML Working Paper: Should There Be a Negligence Exception to the Autonomy Principle for Letters of Credit? by Leung Liwen
Abstract
Fraud is the only widely accepted exception to the autonomy principle applicable to letters of
credit. However, a recent decision of the Singapore High Court, Bank of China Ltd, Singapore
Branch v BP Singapore Pte Ltd [2021] SGHC 120, [2021] 5 SLR 738, appears to support the
possibility of a further exception: the negligence exception. Other lawsuits pending before
the Singaporean courts also implicitly refer to (and plead) such a possibility. This paper argues
that the negligence exception should be rejected.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4375292
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Keywords: Trade finance law, letters of credit, documentary credits, autonomy principle, negligence, duty of care, foreseeability, proximity, public policy