Hi
In a demand Guarantee if the claim is made by the beneficiary in currency other than the currency mentioned in the Guarantee due to local currency regulations in the country of beneficiary what should the Guarantor do? Please advise
Claim Is Made By In Currency Not Mentioned In Guarantee
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Arun
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Westley
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Claim made in a currency other than that of the guarantee
Though the guarantee is independent of the underlying transaction, it is also true that an underlying transaction is what the guarantee is based on. The applicant and the beneficiary have agreed to the terms nd conditions including the tenor of the guarantee.
Besides the beneficiary, has a further option to reject the guarantee when received or ask the applicant to have the same replaced to their satisfaction.
To demand in a currency other than that of the guarantee would be a discrepancy. I feel the issuing bank will refuse to honour.
Besides the beneficiary, has a further option to reject the guarantee when received or ask the applicant to have the same replaced to their satisfaction.
To demand in a currency other than that of the guarantee would be a discrepancy. I feel the issuing bank will refuse to honour.
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IJTUDU
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URDG 758 article 21.a
Agreed with Westley. It is a discrepancy since as per URDG 758article 21.a,the guarantor shall pay a complying demand in the currency specified in the guarantee.
Regards,
Isaac
Regards,
Isaac