## Facts

- Bulgrains & Co Ltd. (Bulgrains) was a Bulgarian company trading wheat and related foodstuffs.
- Heungsung Fee Company Limited (Heungsung) contacted Bulgrains to purchase about 3,000 metric tons of wheat-bran pellets.
- To pay for the purchase, Heungsung asked Shinhan Bank (the Bank) to issue a letter of credit (LC).
- The Bank issued an LC for US$825,000 in connection with the proposed shipment.
- The LC identified the beneficiary as “Bulgrains Co Limited” (without an ampersand).
- The LC required Bulgrains to present specified documents to the Bank’s main office as the condition for payment.
- Bulgrains presented the required documents, and the Bank received them, but the Bank treated the presentation as discrepant.
- The key discrepancy relied on by the Bank was that the documents presented by Bulgrains referred to the beneficiary as “Bulgrains & Co Limited,” not “Bulgrains Co Limited” as stated in the LC.
- The Bank refused to pay under the LC on the basis that the documents did not conform to the LC’s terms.
- Bulgrains sued the Bank, alleging wrongful dishonor and seeking to enforce payment under the LC.

## Issues

1. Whether the Bank was entitled to refuse payment under the LC because Bulgrains’ presentation identified the beneficiary as “Bulgrains & Co Limited” rather than “Bulgrains Co Limited,” as stated in the LC.

## Decision

- Judgment for Shinhan Bank.
- The court held that the presentation did not comply with the LC because the beneficiary name in the presented documents differed from the beneficiary name stated in the LC.
- Because the Bank’s obligation to pay depended on a conforming documentary presentation, the Bank was entitled to dishonor the LC.

## Legal Principles

- A letter of credit is autonomous from the underlying sale contract: the issuing bank’s duty is triggered by compliant documents, not by proof of shipment or performance.
- Banks and courts apply a strict documentary-compliance standard: the beneficiary must present documents that match the LC’s requirements.
- A difference in the stated identity of the beneficiary between the LC and the presented documents can be a documentary discrepancy that permits dishonor.

## Conclusion

Bulgrains failed to obtain payment under the letter of credit because the documents it presented named the beneficiary as “Bulgrains & Co Limited,” while the credit named the beneficiary as “Bulgrains Co Limited.” Applying strict documentary compliance, the court held that this mismatch meant the presentation did not conform to the credit, so Shinhan Bank was entitled to refuse payment.


Bulgrains & Co. Ltd. v. Shinhan Bank, [2013] EWHC 2498 (QB), Case No: TLQ/13/0593, 24 July 2013 (2013)