Two months ago Monash Computer Supplies entered into a contract to purchase 20 LPT 1000 printers from Fubai Pty Ltd, a newly established computer manufacturing company in Taiwan. The contract of sale arranged for payment to be made under letter of credit, to be issued by CBA Sydney, and advised by the Bank of Taiwan. The letter of credit, which was duly issued 6 days ago is expressly stated to be subject to the UCP600 Rules.

The Bank of Taiwan advised Fubai of the credit the day after its issue. The following day, a senior employee of Fubai presented the shipping documents to the Bank of Taiwan. All the documents presented appeared to be in order, as listed and described in the letter of credit and the Bank of Taiwan is inclined to accept and release payment under the credit.

Later that same day, a junior employee of Fubai telephoned Monash Computer Supplies to inform the company that the documents presented to the Bank of Taiwan are forged and that Fubai has in fact fraudulently shipped a container of scrap metal instead of printers. The young employee states that she watched the scrap metal being packed into the container, and is prepared to give evidence to that effect in court under oath.

Monash Computer Supplies now seeks to prevent CBA Sydney from realising the credit. CBA has just received the documents, and so far has not issued instructions to Taiwan to authorise release of the funds. The action launched by Monash Computer Supplies seeks a restraining order, to restrain CBA Sydney from accepting the documents or honouring the Letter of Credit. Advise Monash Computer Supplies. Has Fubai made a complying presentation or can CBA / Bank of Taiwan refuse payment? Do you thinkMonash Computer Supplies'legal action will be successful?