贸易融资洞察-2025年9月

Issue 11|September 2025 Trade Finance Insight Contents Welcome to the latest edition of Trade Finance Insight. We are pleased to present acurated selection of articles and resources on all things trade finance, designed toinform and engage our readership. The continuing inviolabilityof standby letters of credit03 Our lead article delves into one of the key instruments of international trade finance- the standby letter of credit - and examines whether the prioritisation of inviolabilityhas led to outcomes perceived to be unduly kind to beneficiaries. Changes to the UK Arbitration Act –Governing law of arbitration clauses07 We follow with two feature articles that look at important changes to UK law relevantto trade finance; the first is a recent change of law in the field of arbitration and thesecond is an interesting proposal to bring the near-150-year-old bills of exchange lawsinto the future. A problem with the bill? Law CommissionConsultation Paper on digital assets and(electronic) trade documents in privateinternational law(including Section 72 of theBills of Exchange Act 1882)08 In our final article, we explore recent changes to the Bankers Association for Financeand Trade Master Trade Loan Agreement. As always, do not miss our regular Sanctions and Export Controls update page,featuring a selection of intriguing reads, including the latest developments in the USand EU’s approaches to Iran and Syria. We are also pleased to connect you with somegreat resources focussed on sustainability including A Practical Guide to Greenwashingfor Financial Institutions, the Sustainability Risk Radar for Financial Institutions and anin-depth article looking at the EU Omnibus Simplification Package. Lastly, we are proud to share our fantastic news on recent awards won by theBaker Mckenzie team. We hope that you enjoy this 11th edition of Trade Finance Insight. Additional Insights and Resources15 The continuing inviolability of standbyletters of credit Editor Highlights Standby letters of credit (SBLCs) continue tobe one of the key instruments ofinternational finance. Whereas a documentary letter of credit is chieflydesigned to be a paymentmethodin internationalcommerce (and accordingly the parties to itanticipate and intend that a demandwillbe madeunder it), an SBLC is a form of credit support underwhich demands are only made in the event of adefault or dispute. Accordingly, the demandmechanism is usually uncomplicated, often simplyrequiring the Beneficiary to deliver a written demandto the Issuing Bank certifying that a sum is owing toit by the Applicant. In this article the authors consider whether theEnglish courts’ recent prioritisation of theinviolability of standby letters of credit has led tooutcomes that can be perceived to be unduly kindto beneficiaries. ii.an Applicant may seek an injunction to restrain anIssuing Bank from paying out under an SBLC onthe grounds of fraud by the Beneficiary. Their role as the “lifeblood of internationalcommerce” (a term used frequently by theEnglish courts) means that the Englishcourts have taken a hostile view toattempts by Issuing Banks to avoid theirobligation to pay out under an SBLC andaccordingly the circumstances in whichpayment can legitimately be avoidedare limited. In each case, the fraud typically relied upon is thatthe Beneficiary has no honest belief in the validity ofthe demand that it is making. However, the legal testto be applied in each case is slightly different. A brief introduction to SBLCs An SBLC is an instrument typically issued by a bank(Issuing Bank) following a request from (usually) itsclient (Applicant) in favour of (and often as requiredby) the commercial counterparty of that client(Beneficiary) to cover the risk to the Beneficiary ofthe Applicant not fulfilling its obligations under anunderlying commercial contract. SBLCs are commonlyissued subject to industry standard governing rules,usually those of UCP 600 or ISP 98. In the first, the Issuing Bank would succeed indefending any application for summary judgmentagainst it where it can establish that it has a “realprospect” of establishing at trial that the Beneficiarydid not have the requisite honest belief whenmaking the demand. This reflects the test forsummary judgment under CPR r 24. However, English court decisions in recentyears have dismissed arguments of IssuingBanks based on the fraud exception orillegality of performance. Those decisionshave raised some questions as to whetherthe courts’ prioritisation of the inviolabilityof SBLCs has led to some outcomes thatcan be perceived to be unduly kindto beneficiaries. Wriggling off the hook: when can paymentunder an SBLC be avoided? English courts have taken a hostile view to attemptsby Issuing Banks to avoid their obligation to pay outunder an SBLC and accordingly the circumstances inwhich payment can legitimately be avoided arelimited to two circumstances: In the second, where an Applicant applies for aninjunction