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UN Draft Convention on Independent Guarantees and Stand-by Letters of Credit

INTRODUCTION

CHAPTER I. - SCOPE OF APPLICATION

Article 1. - Scope of application

Article 2. - Undertaking

Article 3. - Independence of undertaking

Article 4. Internationality of undertaking

CHAPTER II. - INTERPRETATION

Article 5. - Principles of interpretation

Article 6. - Definitions

CHAPTER III. - EFFECTIVENESS OF UNDERTAKING

Article 7. - [Issuance] [Establishment] of undertaking

Article 8. - Amendment

Article 9. - Transfer of beneficiary's right to demand payment

Article 9 bis. - Assignment of proceeds

Article 10. - Cessation of effectiveness of undertaking

Article 11. - Expiry

CHAPTER IV. - RIGHTS, OBLIGATIONS AND DEFENCES

Article 12. - Determination of rights and obligations

Article 13. - [Standard of conduct and] liability of guarantor/issuer

Article 14. Demand

Article 16. Examination of demand and accompanying documents

Article 17. - Payment or rejection of demand

Variant B

Variant C

Variant D

Article 18. - [get]

Article 19. - Improper demand

Article 20. - Set-off

CHAPTER V. - [PROVISIONAL COURT MEASURES]

Article 21. Provisional court measures

CHAPTER VI. - JURISDICTION

Article 24. - Choice of court or arbitration

Article 24 bis. - Jurisdiction of other courts

Article 25. - Determination of court jurisdiction

Article 25 bis. - Relationship to other treaty arrangements

CHAPTER VII. - CONFLICT OF LAWS

Article 26. - Choice of applicable law

Article 27. - Determination of applicable law

Metadata

SiSU Metadata, document information

Manifest

SiSU Manifest, alternative outputs etc.

UN Draft Convention on Independent Guarantees and Stand-by Letters of Credit

United Nations (UN)

copy @ Lex Mercatoria

UN Draft Convention on Independent Guarantees and Stand-by Letters of Credit

CHAPTER I. - SCOPE OF APPLICATION

Article 2. - Undertaking

(1) (a) For the purposes of this Convention, an undertaking is an independent commitment 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 presentation of other documents, in conformity with the terms and any documentary conditions of the undertaking, indicating 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.

(b) The undertaking may be designated as a demand guarantee or stand-by letter of credit or an equivalent undertaking, excluding insurance contracts, negotiable instruments and [ , subject to paragraph (2) of article 1,] commercial letters of credit.

(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)] for a specified amount;

(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, or that one of its branches is the beneficiary, provided that in the latter case the undertaking expressly states that the Convention is to apply.


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