Principle of autonomy in letter of credit: Malaysian practice
The term letter of credit (LC) is not uncommon in international trade as it is the most frequently used method of payment by seller and buyer in their sales contract. LC serves its significant role by facilitating payment between buyer and seller from different countries, who are always prejudi...
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International Islamic University Malaysia
2011
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| Online Access: | http://irep.iium.edu.my/38349/ http://irep.iium.edu.my/38349/ http://irep.iium.edu.my/38349/1/9-36-1-PB_drazam.pdf |
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iium-383492014-09-19T03:52:07Z http://irep.iium.edu.my/38349/ Principle of autonomy in letter of credit: Malaysian practice Othman, Ahmad Azam K Law (General) The term letter of credit (LC) is not uncommon in international trade as it is the most frequently used method of payment by seller and buyer in their sales contract. LC serves its significant role by facilitating payment between buyer and seller from different countries, who are always prejudiced towards each other on the issue of payment, especially when the deal involves a huge amount of money. By using LC, the seller and buyer will be represented by their own bankers whose function, among others is to issue an LC for the buyer and pay on presentation of seller’s documents which strictly comply to LC requirements. It is well-known that LC is governed by the principle of autonomy or also referred to as the principle of independence1 which indicates LC, being a contractof payment is totally separate from the underlying sales contract. Banks are concerned with documents only and not with the goods. LC transaction can be governed by the Uniform Custom and Practice for Documentary Credit, known as the UCP through express incorporation which provides the rules relating to LC matters and is adopted in almost all LC transactions. This paper discusses the nature, background and significance of principle of autonomy in LC transaction. In elaborating the provisions on the principle of autonomy in the UCP 600, comparisons between relevant articles in the UCP 500 are highlighted. The discussion also focuses on relevant case law and on the application of the autonomy principle in conventional and Islamic LC. The paper concludes with the finding that Malaysian bankers fully subscribe to the principle of autonomy as outlined by the UCP 600 International Islamic University Malaysia 2011 Article PeerReviewed application/pdf en http://irep.iium.edu.my/38349/1/9-36-1-PB_drazam.pdf Othman, Ahmad Azam (2011) Principle of autonomy in letter of credit: Malaysian practice. IIUM Law Journal, 19 (2). pp. 201-242. ISSN 0128-2530 http://journals.iium.edu.my/iiumlj/index.php/iiumlj/article/view/9/9 |
| repository_type |
Digital Repository |
| institution_category |
Local University |
| institution |
International Islamic University Malaysia |
| building |
IIUM Repository |
| collection |
Online Access |
| language |
English |
| topic |
K Law (General) |
| spellingShingle |
K Law (General) Othman, Ahmad Azam Principle of autonomy in letter of credit: Malaysian practice |
| description |
The term letter of credit (LC) is not uncommon in
international trade as it is the most frequently used
method of payment by seller and buyer in their sales
contract. LC serves its significant role by facilitating
payment between buyer and seller from different
countries, who are always prejudiced towards each
other on the issue of payment, especially when the
deal involves a huge amount of money. By using LC,
the seller and buyer will be represented by their own
bankers whose function, among others is to issue an
LC for the buyer and pay on presentation of seller’s
documents which strictly comply to LC requirements.
It is well-known that LC is governed by the principle
of autonomy or also referred to as the principle of
independence1
which indicates LC, being a contractof payment is totally separate from the underlying
sales contract. Banks are concerned with documents
only and not with the goods. LC transaction can be
governed by the Uniform Custom and Practice for
Documentary Credit, known as the UCP through
express incorporation which provides the rules
relating to LC matters and is adopted in almost all
LC transactions. This paper discusses the nature,
background and significance of principle of
autonomy in LC transaction. In elaborating the
provisions on the principle of autonomy in the UCP
600, comparisons between relevant articles in the
UCP 500 are highlighted. The discussion also focuses
on relevant case law and on the application of the
autonomy principle in conventional and Islamic LC.
The paper concludes with the finding that Malaysian
bankers fully subscribe to the principle of autonomy
as outlined by the UCP 600 |
| format |
Article |
| author |
Othman, Ahmad Azam |
| author_facet |
Othman, Ahmad Azam |
| author_sort |
Othman, Ahmad Azam |
| title |
Principle of autonomy in letter of credit: Malaysian practice |
| title_short |
Principle of autonomy in letter of credit: Malaysian practice |
| title_full |
Principle of autonomy in letter of credit: Malaysian practice |
| title_fullStr |
Principle of autonomy in letter of credit: Malaysian practice |
| title_full_unstemmed |
Principle of autonomy in letter of credit: Malaysian practice |
| title_sort |
principle of autonomy in letter of credit: malaysian practice |
| publisher |
International Islamic University Malaysia |
| publishDate |
2011 |
| url |
http://irep.iium.edu.my/38349/ http://irep.iium.edu.my/38349/ http://irep.iium.edu.my/38349/1/9-36-1-PB_drazam.pdf |
| first_indexed |
2023-09-18T20:55:05Z |
| last_indexed |
2023-09-18T20:55:05Z |
| _version_ |
1777410250480025600 |