JUDGMENT

Harmindar Singh Dhaliwal FCJ:

[1] This appeal concerns an issue of some importance to the banking industry. The primary question for our consideration is this: under what circumstances can a bank issuing a letter of credit avoid its obligation to reimburse the negotiating bank. A further inquiry which must follow is the nature and extent of the duty of the negotiating bank in examining the documents produced under a letter of credit. In a nutshell, therefore, this appeal turns on issues concerning letter of credit transactions and the rights and obligations of the parties involved.

[2] In the present case, the appellant ("Maybank") commenced an action against the respondent ("Punjab Bank") for reimbursement of the sum paid under a letter of credit issued by Punjab Bank. After a full trial, the High Court on 13 August 2018 entered judgment against Punjab Bank for the sum of USD1,983,765.65 together with interest at 5% per annum until date of full payment. On 18 June 2020, the Court of Appeal allowed Punjab Bank's appeal and set aside the High Court judgment.

[3] Maybank was, however, successful in obtaining leave of this Court to file an appeal on the following questions of law