Zoe Diepstraten

Interpreting ICC standardised rules in trade finance disputes: courts take an international perspective

Banking practice in areas of trade finance such as demand guarantees and letters of credit is standardised by a collection of contractual rules published by the International Chamber of Commerce (ICC). The application of domestic contractual interpretation principles may risk inconsistency in the way such rules are construed between jurisdictions. However, in relation to the most commonly used rules (the UCP 600, which apply to letters of credit), several courts (including the English courts) have tried to ensure that the rules are interpreted consistently with reference to their international consequences, as opposed to strictly in accordance with the governing law of the contract. Two decisions of the English High Court and the Qatari Appellate Court demonstrate a trend towards construing other sets of ICC standardised rules in the same way as the UCP 600.