Independent Bank Guarantee Law In International Economic And Trade Issues

In international business transaction, it has been a fact that bank-guarantees are more and more applied. However, no definite provision for this guarantee form appears in the law of majority of countries in the world including our country. So far, only two international usuages, ICC Uniform Rules for Contract Guarantees and ICC Uniform for Demand Guarantees, and one international convention, United Nations Convention on Independent Guarantees and Stand-by Letters of Credit, are files that specially regulate such guarantees. So, existing controversies in many theoretical questions for such guarantee form in judicial precedents and theory of law in different country are inevitable. This article chooses four of these questions to study.This article consists of four parts.Part I discusses four questions, definition, classification, form, history, origin and use of independent guarantee. The emphasis is to study the definition of independent guarantee. There are two characters in traditional warranty. The first is that the warrantor can invoke demur of obligor in primary contract to resist obligee. The second is that the condition that warrantor takes liabilities is that the obligee can prove that the obligor has broken the contract actually. Because of two characters, obligor can realize his claim only by action. However, the period of action procedure is lengthy, especially in international civil action procedure, so, the obligor can not acquire his fund in time. Consequently, such guarantee form can not attract obligee. The bank is not willing to undertake such guarantee business because this guarantee means that it would have to take part in action in each business and there is no time left to deal with other business. In order to eliminate shortcomings of traditional warranty, independent guarantee appears, and such guarantee includes two basically characters: first, the only condition of the guarantor exercising his obligation of payment is that the documents presented by beneficiary conform to the provision of contract of independent guarantee. Second, the guarantor can not invoke demur ofobligor in primary contract to resist the obligee.Part II studies the independence principle of bank guarantee. Independence principle means that the validity and performance of guarantee contract can not be affected by the validity and performance of primary contract between beneficiary and applicant and mandate between applicant and bank. This principle is applied to two relations between contract of guarantee and mandate and primary contract, and that is scope of independent principle. The content of this principle mainly consists of three aspects: first, primary contract or mandate becomes invalid. However, contract of guarantee is valid; second, condition of bank payment is only provided by contract of guarantee, the transaction between beneficiary and bank is documentary transaction; third, bank can not invoke demur of obligor of primary contract or mandate to resist beneficiary.Part III studies condition of payment of bank-guarantee. Three sorts of conditions of payment exist in international usuage and convention. They are payment on first demand and on submission of third-party documents and on submission of on arbitral or court decision.Part IV studies a principle of fraud exception. First, the article studies the determination of fraud. Then the article introduces two kind of remedial measure--injunction orders and conservatory attachment orders.At the end, the article simply appraised legislation of independent guarantee of China, The legitimacy of independent guarantee can not be evidently accepted by Guarantee Law of People's Republic of China. In practice, the case of supreme people's court has denied the application of independent guarantee in home of China.