A company engaging in the manufacture and sale of telecommunications equipment entered into an agreement with the “Imperial Government of Carpathia” to install and maintain certain telecommunications equipment. As a condition of the contract and to secure the advance payment, the company was required to guarantee its performance by obtaining two irrevocable letters of credit in the amounts equal to the advance payments made by Carpathia. Subsequently, a revolution occurred in Carpathia and the company was at least temporarily prevented from finishing the contract. The company was concerned that a new government would “arbitrarily” demand payment on the letters of credit. In light of the foregoing, the company sought a preliminary injunction preventing the bank from making payment on the letters of credit without first giving the company an opportunity to prove lack of authenticity or the fraudulent nature of the demand. Should the court grant a preliminary injunction? Stromberg-

Carlson Corp. v. Bank Melli Iran, 467 F. Supp.

530 (SDNY 1979).