Perfecting The L/C Injunction System On Xianglin Muye Case

Letter of credit (L/C), as the most important payment tool in international trade, can provide a better way to guarantee the gathering of the sellers, as it replaced the honor of merchant by the credit standing of bank. Thus, it takes advantageous ground in international balance. However, just as the proverb goes, every coin has two sides, the inherent defect in the credit transaction also leads to the up-rising fraud cases in the L/C, which will bring great damages to both parties of the trade and the system of L/C itself."Uniform Customs and Practice for Documentary Credits"(UCP600), issued by ICC, does not make any provision for L/C fraud or judicial relief. To compensate for the loss as a result of the defect, an exception to the independence principle---the judicial injunction against fraud has been developed by most countries to secure payment.Up till now, we still have no systematic law on L/C fraud or judicial relief in China, except for the Provisions of the Supreme People’s Court on Some Issues in the Adjudication of Letter-of-Credit-related Cases. As a result, the party concerned has no way to seek judicial relief once fraud takes place, and the court would tend to put on too much judicial interference, which has incurred a lot of criticism and damaged the fame of the court and the bank seriously.By comparing the injunction systems in our country with that of other countries on the basis of case analysis, the thesis points out the existing problems in our country, and aims at learning experience from other countries, eventually gives opinions on how to improve the injunction system in our country through the method of comparison and positivism.