FRAUD EXCEPTION IN DOCUMENTARY CREDITS UNDER EGYPTIAN AND JORDANIAN LAW
DOI:
https://doi.org/10.18623/rvd.v23.n2.4401Keywords:
Documentary Credits, Egyptian Law, Fraud Exception, Jordanian Law, Comparative LawAbstract
This study examines the fraud exception in documentary credits under Egyptian and Jordanian law, focusing on its role as a limitation to the principle of autonomy that governs letters of credit. Documentary credits are designed to ensure certainty and efficiency in international trade by obligating banks to deal exclusively with documents rather than the underlying transaction. However, allegations of fraud challenge this principle and raise complex legal and procedural questions. The research aims to analyze the legal foundations, scope, and practical application of the fraud exception in both jurisdictions, highlighting similarities and differences in statutory provisions, judicial approaches, and available remedies. Adopting a qualitative doctrinal methodology supported by comparative legal analysis, the study examines relevant commercial and civil legislation, judicial decisions, and international banking rules, particularly the Uniform Customs and Practice for Documentary Credits (UCP 600). The findings reveal that neither Egyptian nor Jordanian law expressly regulates fraud in documentary credits, leading courts to rely on general principles of fraud, civil law doctrines, and international commercial customs. The study concludes that while both legal systems recognize the necessity of the fraud exception to prevent abuse, the absence of clear statutory regulation results in legal uncertainty. Accordingly, the research proposes interpretive guidelines to enhance legal predictability and balance commercial certainty with fraud prevention.
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