Canadian Supreme Court Confirms Bank Must Refuse LC Payment Due to Fraud

In Eurobank Ergasias S.A. v. Bombardier Inc., the Supreme Court of Canada takes up the fraud exception and whether it applies regarding a demand for payment under a Counter Guarantee. 

Canadian Supreme Court Confirms Bank Must Refuse LC Payment Due to Fraud

In Eurobank Ergasias S.A. v. Bombardier Inc. (2024 S.C.C. 11 [Canada]) decided on 5 April 2024, the Supreme Court of Canada addressed the issue of whether a Canadian bank was required to refuse payment to the beneficiary of a letter of credit because of a third party’s fraudulent behaviour, which was attributable to the beneficiary. 

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