SCC rules ‘fraud exception’ bars Canadian bank from making payment demanded under letter of credit

By Cristin Schmitz ( April 5, 2024, 5:16 PM EDT) -- Elaborating on the “fraud exception” to a bank’s obligation to pay on demand under a letter of credit, the Supreme Court of Canada has affirmed 7-2 that a Canadian bank was required to refuse payment to a letter of credit beneficiary due to a third party’s fraudulent behaviour, which was also attributable to the beneficiary....