DRAFT #5
Commentary for the United Nations Convention on International Independent Guarantees and
Stand-by Letters of Credit
This Commentary deals with certain differences in the language and approach between Article 5 of the Uniform Commercial Code, as set forth in the 2003 Official Text promulgated by the American Law Institute and the Uniform Law Commission, and the United States Convention on Independent Guaranties and Stand-by Letters of Credit (“Convention”) approved by the United Nations General Assembly in 195. . Notwithstanding the differing terminology, the rules in the Convention are generally consistent with those in Article 5 of the UCC. Because of this congruence between Article 5 and the Convention and because it is easy to exclude by its terms all or any part of the Convention, the adoption of the Convention by the United States will cause little change in American law.
The text of the Convention may be found on the web site for the United Nations Commission on International Trade Law (‘UNCITRAL”) at www.uncitral.org. The web site also contains a commentary (the “Secretariat’s Commentary”) by the UNCITRAL Secretariat may be found following the text of the Convention.
This Commentary has been prepared
by a Committee made up of representatives of the Uniform Law Commission, the
American Law Institute, the Uniform Law Commission of Canada and the
Since the Convention is short and
quite general, it does not deal with many topics covered in Article 5 of the
UCC or in the Uniform Customs and Practices (“UCP”) or the International
Standby Practices (“ISP”). When a standby letter of credit or an independent
guarantee (“undertaking”) incorporates one of the trade practice documents
(such as ISP or UCP 600), the trade practice
so incorporated will fill any omission that is left by the Convention if the trade
practice covers the omission, and, in other cases, the adoption of trade
practice will vary the Convention’s rules. Paragraph 5 of the Secretariat’s
Commentary to the Convention recognizes that the Convention “gives legislative
support to the autonomy of the parties to apply agreed rules of practice such
as the [UCP].” In some cases no practice will be incorporated by the
undertaking and in others the incorporated practice will have no provision
relevant to the matter at issue; when that is so, the Commentary below
generally directs one to “other law.” For
The Convention contemplates that it will be displaced or supplemented by other law as well as by express terms of undertakings and by practice rules that are incorporated in or otherwise applicable to undertakings See Paragraph 11 of the Secretariat’s Commentary. Because Article 5 of the UCC covers more types of independent undertakings than the Convention and covers a wider range of pre- and post-honor obligations, rights, and remedies of more types of affected parties, Article 5 of the UCC will often supplement the Convention. For example, the Convention does not address the rights of an issuer to be reimbursed or indemnified or the defenses or claims available to an applicant against an issuer. The issuer-applicant relationship was left to their bilateral contract and the law applicable to it. The Convention does not address the role of non-confirming nominated banks. They are much more prevalent in commercial than standby letter of credit practice, which explains why they are ignored by the Convention and not by the UCC. The UCC also addresses many questions regarding the rights of assignees of letter of credit proceeds as against all interested parties, whereas the Convention deliberately addresses only limited issues arising in that context. Except for Article 20 on provisional relief for fraud, the Convention provides no remedies.
Some of the omissions from the Convention arise from the drafters’ recognition that certain issues are inherently domestic; other omissions recognize the existence and validity of certain domestic rules. Because many of the omissions represent an intention to defer to domestic rules that vary from country to country, courts should turn to domestic law and cases to fill in the omissions, not to international law and cases. Where a court is called on to deal with an issue that is covered by the Convention, a court may, of course, consider decisions of foreign and international courts.
The following commentary is divided according to the Articles of the Convention:
Article 1.
Scope of Application
(1) This Convention applies to an
international undertaking referred to in article 2:
(a) If the place of business of the
guarantor/issuer at which the undertaking is issued is in a
(b) If the rules of private international law
lead to the application of the law of a
unless the undertaking excludes the
application of the Convention.
(2) This Convention applies also to an
international letter of credit not falling within article 2 if it expressly
states that it is subject to this Convention.
(3) The provisions of articles 21 and 22
apply to international undertakings referred to in article 2 independently of
paragraph (1) of this article.
An undertaking’s incorporation of the UCP or ISP is not the adoption of “other law” as that term is used above, but such incorporation might add terms and might otherwise change the rule that would prevail under the Convention but for the incorporation.
For consideration of the effect of various choice of law terms on the reach of the Convention and its scope, consult the commentary attached to Articles 21 and 22 and the Understandings concerning those Articles.
To understand the relationship
between Article 1 and Articles 21 and 22 consider the following example. Assume
that
Article 2. Undertaking
(1) For the purposes of this Convention, an
undertaking is an independent commitment, known in international practice as an
independent guarantee or as a stand-by letter of credit, given by a bank or
other institution or person ("guarantor/issuer") to pay to the
beneficiary a certain or determinable amount upon simple demand or upon demand
accompanied by other documents, in conformity with the terms and any
documentary conditions of the undertaking, indicating, or from which it is to
be inferred, that payment is due because of a default in the performance of an
obligation, or because of another contingency, or for money borrowed or
advanced, or on account of any mature indebtedness undertaken by the
principal/applicant or another person.
(2) The undertaking may be given:
(a) At the request or on the instruction of the
customer ("principal/applicant") of the guarantor/issuer;
(b) On the instruction of another bank,
institution or person ("instructing party") that acts at the request
of the customer ("principal/applicant") of that instructing party; or
(c) On behalf of the guarantor/issuer itself.
(3) Payment may be stipulated in the
undertaking to be made in any form, including:
(a) Payment in a specified currency or unit of
account;
(b) Acceptance of a bill of exchange (draft);
(c) Payment on a deferred basis;
(d) Supply of a specified item of value.
(4) The undertaking may stipulate that the
guarantor/issuer itself is the beneficiary when acting in favour of another
person.
Undertakings brought within the Convention include 1) standby letters that require the presentation of only a demand (“clean” letters of credit) and 2) letters of credit known as “direct pay” letters, see paragraph 8 of the Secretariat’s commentary, but do not include commercial letters of credit, except for commercial letters that expressly state that they are covered.
The limitation in Article 2 to undertakings that require payment upon presentation of a “demand,” possibly accompanied with “documents,” is the same as the limitation imposed in Article 5 of the UCC by Sections 5-102(a) (10) and 5-103(d). That an issuer not be burdened with the duty of a conventional guarantor – to make an independent investigation of default – is a critical distinction between letters of credit and independent guarantees on the one hand and dependent or conventional guarantees on the other. Paragraph 9 of the Secretariat’s Commentary similarly states that the “guarantor/issuer is not called on to investigate the underlying transaction, but is merely to determine whether the documentary demand for payment conforms on its face to the terms of the guarantee or stand-by letter of credit.”
Article 3.
(1) For the purposes
of this Convention, an undertaking is independent where the guarantor/issuer’s
obligation to the beneficiary is not:
(a) Dependent
upon the existence or validity of any underlying transaction, or upon any other
undertaking (including stand-by letters of credit or independent guarantees to
which confirmations or counter-guarantees relate); or
(b) Subject to any term or condition not appearing in the undertaking, or to any future, uncertain act or event except presentation of documents or another such act or event within a guarantor/issuer’s sphere of operations.
Certain fundamental nondocumentary conditions in a writing purporting to be a letter of credit or an independent guarantee would deprive the document of that status and so remove it from the coverage of the Convention. If, for example, a document required the issuer to pay upon issuer’s determination that a person had defaulted (not on a documentary certification of default), the document would be a contract but not a letter of credit or independent guarantee subject to the Convention. On the other hand, the presence of a less fundamental nondocumentary condition (e.g. issuer shall pay on a decision from a “duly appointed arbitrator”) would not deprive the document of its status as a letter of credit. In the latter case the issuer should disregard the nondocumentary condition, see, Section 5-108(g) of the UCC, ISP Rule 4.11, and UCP 600 Art. 14 h.
Article 6. Definitions
For the purposes of this Convention and
unless otherwise indicated in a provision of this Convention or required by the
context:
(a) "Undertaking" includes
"counter-guarantee" and "confirmation of an undertaking";
(b) "Guarantor/issuer" includes
"counter-guarantor" and "confirmer";
(c) "Counter-guarantee" means an
undertaking given to the guarantor/issuer of another undertaking by its
instructing party and providing for payment upon simple demand or upon demand
accompanied by other documents, in conformity with the terms and any
documentary conditions of the undertaking, indicating, or from which it is to
be inferred, that payment under that other undertaking has been demanded from,
or made by, the person issuing that other undertaking;
(d) "Counter-guarantor" means the
person issuing a counter-guarantee;
(e) "Confirmation" of an undertaking
means an undertaking added to that of the guarantor/issuer, and authorized by
the guarantor/issuer, providing the beneficiary with the option of demanding
payment from the confirmer instead of from the guarantor/issuer, upon simple
demand or upon demand accompanied by other documents, in conformity with the
terms and any documentary conditions of the confirmed undertaking, without
prejudice to the beneficiary's right to demand payment from the
guarantor/issuer;
(f) "Confirmer" means the person
adding a confirmation to an undertaking;
(g)
"Document"
means a communication made in a form that provides a complete record thereof.
That “document” is defined broadly enough to include digital documents does not by itself authorize one who is making presentation under the Convention to present documents in digital or other non-paper form. Thus where there is no authority in the undertaking or in the practice applicable to the undertaking to authorize the use of a digital document, the presentation of a digital document would render the presentation non complying both under the Convention and under Article 5 of the UCC
.
According to the United States
Understanding concerning Article 6, terms used but not defined in the
Convention have that same meaning as that stated for the same or substantially
similar terms in the UCC. See
Article 8. Amendment
(1) An undertaking may not be amended except
in the form stipulated in the undertaking or, failing such stipulation, in a
form referred to in paragraph (2) of article 7.
(2) Unless otherwise stipulated in the
undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, an
undertaking is amended upon issuance of the amendment if the amendment has
previously been authorized by the beneficiary.
(3) Unless otherwise stipulated in the
undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary,
where any amendment has not previously been authorized by the beneficiary, the
undertaking is amended only when the guarantor/issuer receives a notice of
acceptance of the amendment by the beneficiary in a form referred to in
paragraph (2) of article 7.
(4) An amendment of an undertaking has no
effect on the rights and obligations of the principal/ applicant (or an
instructing party) or of a confirmer of the undertaking unless such person
consents to the amendment.
Both the UCC and rules of practice would find that a beneficiary’s presentation under an amended undertaking that invokes the amended terms of the undertaking constitutes the beneficiary’s agreement to the amendment. See Section 5-106, comment 2, UCP Article 10c and ISP section 2.06c.ii. Article 8, operating in conjunction with Article 13, is not different.
Article 10. Assignment of Proceeds
(1) Unless otherwise stipulated in the
undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary,
the beneficiary may assign to another person any proceeds to which it may be,
or may become, entitled under the undertaking.
(2) If the guarantor/issuer or another
person obliged to effect payment has received a notice originating from the
beneficiary, in a form referred to in paragraph (2) of article 7, of the
beneficiary's irrevocable assignment, payment to the assignee discharges the
obligor, to the extent of its payment, from its liability under the
undertaking.
The statement in paragraph (2) that an issuer’s payment to an assignee would, in the circumstances there stated, lead to the discharge of its obligation to pay, does not determine whether the issuer would have an obligation to pay nor does it determine whether payment to the assignor in similar circumstances would discharge any obligation that the issuer might have under the undertaking. Those matters are left to domestic letter of credit law and to rules such as ISP Rule 6.06 ff.
Article 11. Cessation of Right to Demand Payment
(1) The right of the beneficiary to demand
payment under the undertaking ceases when:
(a) The guarantor/issuer has received a
statement by the beneficiary of release from liability in a form referred to in
paragraph (2) of article 7;
(b) The beneficiary and the guarantor/issuer
have agreed on the termination of the undertaking in the form stipulated in the
undertaking or, failing such stipulation, in a form referred to in paragraph
(2) of article 7;
(c) The amount available under the undertaking
has been paid, unless the undertaking provides for the automatic renewal or for
an automatic increase of the amount available or otherwise provides for
continuation of the undertaking;
(d) The validity period of the undertaking
expires in accordance with the provisions of article 12.
(2) The undertaking may stipulate, or the
guarantor/issuer and the beneficiary may agree elsewhere, that return of the
document embodying the undertaking to the guarantor/issuer, or a procedure
functionally equivalent to the return of the document in the case of the
issuance of the undertaking in non-paper form, is required for the cessation of
the right to demand payment, either alone or in conjunction with one of the
events referred to in subparagraphs (a) and (b) of paragraph (1) of this
article. However, in no case shall retention of any such document by the
beneficiary after the right to demand payment ceases in accordance with
subparagraph (c) or (d) of paragraph (1) of this article preserve any rights of
the beneficiary under the undertaking.
The last sentence is consistent with Article 5 of the UCC, as stated in Paragraph 34 of the Secretariat’s Commentary.
Article 12. Expiry
The validity period of the undertaking
expires:
(a) At the expiry date, which may be a specified
calendar date or the last day of a fixed period of time stipulated in the
undertaking, provided that, if the expiry date is not a business day at the
place of business of the guarantor/issuer at which the undertaking is issued,
or of another person or at another place stipulated in the undertaking for
presentation of the demand for payment, expiry occurs on the first business day
which follows;
(b) If expiry depends according to the
undertaking on the occurrence of an act or event not within the
guarantor/issuer's sphere of operations, when the guarantor/issuer is advised
that the act or event has occurred by presentation of the document specified
for that purpose in the undertaking or, if no such document is specified, of a
certification by the beneficiary of the occurrence of the act or event;
(c) If the undertaking does not state an expiry
date, or if the act or event on which expiry is stated to depend has not yet
been established by presentation of the required document and an expiry date
has not been stated in addition, when six years have elapsed from the date of
issuance of the undertaking.
Neither the Convention nor UCC Section 5-106 permits an undertaking to operate in perpetuity, but the time periods differ. Under Section 5-106 undertakings that claim to be perpetual expire after 5 years and those without an expiration date expire after 1 year; under the Convention all undertakings without fixed expiration dates expire in 6 years.
The rule on undertakings without expiration dates does not affect undertakings that contain automatic extension clauses even though such undertakings may state no final expiration date. In those cases the undertaking is to be terminated by payment or by the issuer’s giving notice that it will not extend the undertaking.
Article 14. Standard of Conduct and Liability of Guarantor/issuer
(1) In discharging its obligations under the
undertaking and this Convention, the guarantor/issuer shall act in good faith
and exercise reasonable care having due regard to generally accepted standards
of international practice of independent guarantees or stand-by letters of
credit.
(2) A guarantor/issuer may not be exempted
from liability for its failure to act in good faith or for any grossly
negligent conduct.
Despite the explicit reference to good faith and to reasonable care, the standard of conduct stated in this Article is consistent with the standard stated in Section 5-108. Note that Article 1 of the UCC imposes a duty of good faith on the issuer’s responsibilities in Section 5-108 but that any duty under Article 5 of the UCC or under the Convention would be measured by the restricted definition of good faith in UCC 5-108. See the United States Understanding concerning Article 6.
Exercise of “reasonable care” would not be a defense under Article 14, 15 and 17 for an issuer who dishonored a presentation that strictly complied (absent the circumstances stated in Article 19).
Observance of the relevant standard practice constitutes the exercise of reasonable care. Paragraph 38 of the Secretariat’s Commentary similarly states that the standard of conduct “is to be defined by reference to generally accepted standards of international practice.” However, it also explains that Article 14(2) “prohibits any exemption of the guarantor from liability for a lack of good faith or gross negligence.”
Article 15. Demand
(1) Any demand for payment under the
undertaking shall be made in a form referred to in paragraph (2) of article 7
and in conformity with the terms and conditions of the undertaking.
(2) Unless otherwise stipulated in the
undertaking, the demand and any certification or other document required by the
undertaking shall be presented, within the time that a demand for payment may
be made, to the guarantor/issuer at the place where the undertaking was issued.
(3) The beneficiary, when demanding payment,
is deemed to certify that the demand is not in bad faith and that none of the
elements referred to in subparagraphs (a), (b) and (c) of paragraph (1) of
article 19 are present.
Consistent with Section 5-110, a false or inaccurate certification under paragraph 3 does not justify dishonor. (Of course, the beneficiary’s fraudulent behavior might give the issuer a right to dishonor under Article 19.) Whether the beneficiary’s giving of a false or inaccurate certification gives a claim for damages or other remedy, and to whom, is left to other law such as Section 5-110, cf. Paragraph 40 of the Secretariat’s Commentary
Paragraph 2’s requirement that one present to the “guarantor/issuer” does not apply to undertakings that allow presentation to a nominee or confirmer and does not override normal letter of credit practice that might allow for presentation to a nominated bank or to a confirmer See e.g., UCP600 and ISP.
Article 16. Examination of Demand and Accompanying Documents
(1) The guarantor/issuer shall examine the
demand and any accompanying documents in accordance with the standard of
conduct referred to in paragraph (1) of article 14. In determining whether
documents are in facial conformity with the terms and conditions of the
undertaking, and are consistent with one another, the guarantor/issuer shall have
due regard to the applicable international standard of independent guarantee or
stand-by letter of credit practice.
(2) Unless otherwise stipulated in the
undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary,
the guarantor/issuer shall have reasonable time, but not more than seven
business days following the day of receipt of the demand and any accompanying
documents, in which to:
(a) Examine the demand and any accompanying
documents;
(b) Decide whether or not to pay;
(c) If the decision is not to pay, issue notice
thereof to the beneficiary.
The notice referred to in subparagraph (c)
above shall, unless otherwise stipulated in the undertaking or elsewhere agreed
by the guarantor/issuer and the beneficiary, be made by teletransmission or, if
that is not possible, by other expeditious means and indicate the reason for
the decision not to pay.
Whether documents are consistent with one another has to be judged by the applicable international practice. For example UCP500 Article 13a required that documents not be “inconsistent” with one another; UCP600 Article 14d requires that they not “conflict,” ISP Rule 4.03 provides that one must “examine” for “inconsistency” only to the extent that the undertaking requires, and Article 5 of the UCC has no analogous requirement.
Article 16 does not specify the consequences of an issuer’s failure to give notice or to give its reasons for dishonor in the notice. Where an undertaking under the Convention is not subject to law or rules of practice that provide for timely and adequate notice of refusal and where such law or practice does not spell out the consequence of failure to give such notice, a court may apply UCC Section 5-108(c) or rules of practice such as UCP600 Article 16 or ISP Rule 5.03 and so preclude the issuer from using any unstated reasons to justify its dishonor.
Article 17. Payment
(1) Subject to article 19, the
guarantor/issuer shall pay against a demand made in accordance with the
provisions of article 15. Following a determination that a demand for payment
so conforms, payment shall be made promptly, unless the undertaking stipulates
payment on a deferred basis, in which case payment shall be made at the
stipulated time.
(2) Any payment against a demand that is not
in accordance with the provisions of article 15 does not prejudice the rights
of the principal/applicant.
Article 17(2) does not establish or address any rights that the principal or applicant may have after a payment that may violate Article 15. Those rights must be found in the agreements of the parties or in the rules of practice.
Article 19. Exception to Payment Obligation
(1) If it is manifest and clear that:
(a) Any document is not genuine or has been
falsified;
(b) No payment is due on the basis asserted in
the demand and the supporting documents; or
(c) Judging by the type and purpose of the
undertaking, the demand has no conceivable basis, the guarantor/issuer, acting
in good faith, has a right, as against the beneficiary, to withhold payment.
(2) For the purposes of subparagraph (c) of
paragraph (1) of this article, the following are types of situations in which a
demand has no conceivable basis:
(a) The contingency or risk against which the
undertaking was designed to secure the beneficiary has undoubtedly not
materialized;
(b) The underlying obligation of the
principal/applicant has been declared invalid by a court or arbitral tribunal,
unless the undertaking indicates that such contingency falls within the risk to
be covered by the undertaking;
(c) The underlying obligation has undoubtedly
been fulfilled to the satisfaction of the beneficiary;
(d) Fulfillment of the underlying obligation has
clearly been prevented by willful misconduct of the beneficiary;
(e) In the case of a demand under a
counter-guarantee, the beneficiary of the counter-guarantee has made payment in
bad faith as guarantor/issuer of the undertaking to which the counter-guarantee
relates.
(3) In the circumstances set out in
subparagraphs (a), (b) and (c) of paragraph (1) of this article, the
principal/applicant is entitled to provisional court measures in accordance
with article 20.
The effect of Article 19 against the beneficiary is substantially the same as the fraud rule stated in Section 5-109(a). Paragraph 46 of the Secretariat’s Commentary states that the purpose of Article 19 is to provide an “internationally agreed general definition of the types of situations in which an exception to the obligation to pay against a facially compliant demand would be justified,” and that the “definition encompasses fact patterns covered in different legal systems by notions such as ‘fraud’ or ‘abuse of right.’”
Since Article 19 is silent as to the rights of the issuer against other parties, such as holders in due course, a court may choose to apply Section 5-109 where there are claims by or against such persons.
Article 20. Provisional Court
Measures
(1) Where, on an
application by the principal/applicant or the instructing party, it is shown
that there is a high probability that, with regard to a demand made, or
expected to be made, by the beneficiary, one of the circumstances referred to
in subparagraphs (a), (b), (c) or paragraph (1) of article 19 is present, the
court, on the basis of immediately available strong evidence, may:
(a) Issue
a provisional order to the effect that the beneficiary does not receive
payment, including an order that the guarantor/issuer hold the amount of the
undertaking, or
(b) Issue
a provisional order to the effect that the proceeds of the undertaking paid to
the beneficiary are blocked, taking into account whether in the absence of such
an order the principal/applicant would be likely to suffer serious harm.
(2) The court, when
issuing a provisional order referred to in paragraph (1) of this article, may
require the person applying therefor to furnish such form of security as the
court deems appropriate.
(3) The court may not
issue a provisional order of the kind referred to in paragraph (1)of this
article based on any objection to payment other than those referred to in subparagraphs
(a), (b), (c) of paragraph (1) of article 19, or use of the undertaking for a
criminal purpose.
Because the Convention does not include a full range of procedural rules, courts that deal with extraordinary remedies should use local procedural rules and may invoke local rights and remedies to supplement those in Article 20.
The United States Understanding
concerning Article 20 concludes that the phrase “use…for a criminal purpose”
applies only to acts that are violations of criminal law, not to acts that
might be loosely characterized as “illegal.” See
Article 21 Choice of Applicable Law
The
undertaking is governed by the law the choice of which is:
(a)Stipulated
in the undertaking or demonstrated by the terms and conditions of the
undertaking; or
(b)
Agreed elsewhere by the guarantor/issuer and the beneficiary.
Both UCC 5-116 and Article 21 give full effect to any choice of law clause in the undertaking and are consistent with one another. Normally undertakings are issued without bargaining between the issuer and any other party over terms such as the choice of law clause; accordingly in interpreting such clauses, it is inappropriate to consider any party’s intention except for that of the issuer.
A choice of law clause such as “This undertaking is
subject to ISP98 and is governed by the New York UCC and, as to matters outside
the scope of ISP98 and the UCC by New York State and United States federal
laws,” or a simpler clause that merely stated that “this undertaking is governed
by New York law,” would limit application of the Convention's substantive
provisions to those not displaced by the chosen UCC. Because the UCC is more
comprehensive than the Convention in its codification of the law of independent
undertakings, the practical effect of choosing the UCC is to exclude all of the
Convention except Articles 21 and 22 and, perhaps, Article 11 on cessation of
the beneficiary's rights and Article 18 limiting setoff. Incorporation of
ISP98 alone has the practical effect, under Article 13 of the Convention, of
displacing much if not most of the Convention. Since the Convention, the
UCC, and ISP98 were all drafted in the 1990s with a view to harmonizing the law
and practice applicable to independent undertakings, each yields nearly the
same result in most disputes. See the
[At least Jim Barnes and I
are uncertain of the committee’s collective opinion on the substance of the
commentary on Article 21. Presumably there is agreement that a term adopting
the “UCC” would cause Article 5 of the UCC to trump the Convention where there
is a UCC rule, but what about a term adopting “the law of
Article 22. Determination of Applicable Law
Failing a
choice of law in accordance with article 21, the undertaking is governed by the
law of the State where the guarantor/issuer has that place of business at which
the undertaking was issued.
Article 22 of the Convention and UCC 5-116(b) state
equivalent conflict-of-law rules. Both focus on the obligor’s location. Because UCC 5-116(b) deals with advising and
nominated banks as well as issuing and confirming banks, it is more elaborate. See the
Article 6.
Definitions
The United States
understands as follows: Terms used but not defined in the Convention a) have
the same meanings as the same or substantially similar terms defined in Article
5 of the UCC (e.g., "good
faith" as defined in UCC 5-102) or b) if there is no definition in Article
5, have the meaning in definitions found elsewhere in the UCC or c) if there is
no definition in the UCC, have meanings equivalent to the same or substantially similar terms
used in Article 5 of the UCC (e.g., "documentary" and
"non-documentary" as used in the Convention or the UCC to describe a
type of undertaking, condition, or presentation).
Article 20.
Provisional court measures
(3) The court may not issue a provisional order…based on any
objection other than those referred to in…article 19, or use of the undertaking
for a criminal purpose.
The
Article 21. Choice
of applicable law
The undertaking is governed by the law
the choice of which is: (a) Stipulated in the undertaking or demonstrated by
the terms and conditions of the undertaking; or (b) Agreed elsewhere by the
guarantor/issuer and the beneficiary.
The
Article 22.
Determination of applicable law
Failing a choice of law in accordance with Article 21, the
undertaking is governed by the law of the State where the guarantor/issuer has
that place of business at which the undertaking was issued.
The
An international
undertaking issued from the
The term "where the guarantor/issuer has
that place of business at which the undertaking was issued" has a meaning
equivalent to the term” jurisdiction in which the [issuer] is located” as that
term is used in UCC 5-116(b).
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