Dr Fahad Ali Al Zumai
Associate Professor of Private Law
College of Law, Kuwait University

Abstract:

Letters of guarantee have gained increasing importance recently due to the significant developments in trade in general and to ensure confidence in international and domestic transactions. With the proliferation of letters of guarantee, it has become increasingly important to establish a legal and regulatory framework for these letters at the international level. This prompted the International Chamber of Commerce in Paris (ICC) to issue a number of uniform rules for demand guarantees with the aim of unifying the various international rules, the most recent of which was Bulletin No. 758 in 2010.
These rules will be discussed in detail in this study through analysis and comparison with the rest of the international and local rules regulating demand guarantees. The importance of the study comes in light of the growing importance of the ICC Uniform Rules for Demand Guarantees of 2010, in light of the divergence of legislative policies among countries regarding these rules. Therefore, the study aims to shed light on the most important aspects of these uniform international rules, compared to other national rules and legislation.
The study addresses the development of the concept of rules regulating letters of guarantee, the specific legal nature of these rules, and the scope of their application. It also sheds light on the bank’s legal responsibility within the framework of the principle of independence of obligations and the impact of fraud and abuse on this principle. The study also addresses cases of expiry of letters of guarantee, whether by liquidation or extension.
Keywords: Letter of Guarantee, International Chamber of Commerce, Uniform Rules for Demand Guarantees, Standby Letters of Credit, ICC Rules No. 758.

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