HDRB&B WINS JUDGMENT IN FAVOR OF LHB AG

New York, NY. On August 4, 2015, the United States District Court for the Southern District of New York (Hon. Colleen McMahon, USDJ) granted summary judgment in favor of HDRBB’s client, LHB AG, a European financial institution, which was sued for failure to make payment under an irrevocable letter of credit issued to a New York-based export company, Mago International, LLC . The letter of credit had been issued to guarantee payment on a large maritime shipment of food goods from New York to a company based in Kosovo, which ultimately failed to make payment for the goods. Adopting HDRBB’s arguments on behalf of LHB, Judge McMahon held that LHB had rightfully refused payment under the letter of credit because the beneficiary of the letter of credit (Mago) had failed to submit documentation in compliance with the strict terms of the letter of credit, which required submission of documentation “evidencing shipment of the goods,” as interpreted under the International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits. Specifically, the Court held that Mago’s repeated submission of photocopies of non-negotiable copies of bills of lading, which did not evidence shipment of the goods, failed to satisfy the strict terms of the letter of credit. The case is captioned Mago International, LLC v. LHB AG et al., 13-civ-3370 (SDNY). Mark A. Berman and Jeremy B. Stein appeared in the case on behalf of the firm and LHB.