LaBarge Pipe & Steel Co. v. First Bank
United States Court of Appeals for the Fifth Circuit
550 F.3d 442 (2008)
PVF USA had First Bank (defendant) issue a letter of credit in favor of LaBarge Pipe & Steel Company (plaintiff) to secure payment for industrial pipe, requiring LaBarge to present a draft request, the original letter of credit, and a certification of PVF's nonpayment; the letter was governed by the UCP (International Chamber of Commerce Brochure No. 400). After PVF defaulted and went bankrupt, LaBarge tried to collect by presenting a faxed copy of the letter of credit rather than the original, along with an explanation. First Bank received LaBarge's draft request on February 17, decided the same day to dishonor it because of the missing original, but didn't call LaBarge with notice until February 20 and its mailed notice (also sent February 17) wasn't received until February 21. LaBarge sued after First Bank refused payment; the district court ruled for First Bank, and LaBarge appealed.
Whether an issuing bank that gives insufficient notice of dishonor to a letter-of-credit beneficiary may still assert the beneficiary's nonconforming presentment as a defense to payment.