UCP 600: Confirming Banks And Nominated Banks

Fortis Bank S.A./N.V. and Stemcor UK Limited v Indian Overseas Bank¹ is one of the first cases to consider the language of the current edition of the Uniform Customs and Practice for Documentary Credits² ("UCP 600") relating to the right of reimbursement owed by an Issuing Bank to a Nominated Bank or Confirming Bank in respect of a negotiated or honoured credit.

UCP 600 is the latest set of contractual rules published by the International Chamber of Commerce which, although without the force of law, parties may agree to incorporate into a credit (at which point the rules will become contractually binding upon them).

This case provides comfort to Confirming Banks and Nominated Banks in respect of their right to reimbursement from the Issuing Bank.