| The independence of independent guarantee breaks through the traditional restrictions of a subordinate guarantee,and allows the issuer to review only the documents provided by the beneficiary in conjunction with the agreement of the independent letter of guarantee,without considering the fact of default under the underlying transaction,a feature that makes independent letter of guarantee fraud common in international commercial transactions.In a dispute between JX Bank of Turkey and Shenyang YD Company,LS Company and CCB LN Branch over independent bond fraud,the four parties disputed whether the main bond claim and the corresponding counter-guarantee claim constituted independent bond fraud and whether CCB LN Branch,as the counter-guarantor,should terminate its liability to pay under the counter-guarantee.As this case has foreign elements,on the basis of the analysis to determine the applicable law of this case as Chinese law,the circumstances of independent bond fraud,the exception rules of fraud and the relevant provisions of the guarantor’s termination of payment in the Judicial Interpretation of Independent Bond in China were sorted out,and the case was analysed in conjunction with the gist of the existing judicial cases,and it was concluded that the delivery and claims of LS Company,JX Bank of Turkey were in line with the delivery and claims of the independent bond.Both of them did not constitute independent guarantee fraud,and CCB LN Branch should not terminate the payment obligation under the counter guarantee letter.Fraud and stop payment of independent letters of guarantee have been covered by the Judicial Interpretation of Independent Letters of Guarantee in China,but there are still shortcomings.The criteria for determining the fraud of an independent counter-guarantee letter and the bona fide payment of the guarantor under Article 14(3)of the Judicial Interpretation are not covered.It is recommended to improve the determination of fraud in independent counter-guarantees and to establish the standard of "double abuse of rights".It is recommended to improve the standard of determination of payment in good faith by the guarantor,based on the principle of good faith and the principle of non-abuse of rights,and to examine whether the guarantor has exercised reasonable care before making payment according to the specific circumstances of the case.It is recommended that our courts strictly enforce the relevant legal provisions on the issuance of stop payment orders to prevent the frequent issuance of stop payment orders from compromising the independence of the bond. |
