Piercing the Autonomy in Payment Undertakings: Fraud and Others?

Abstract

This article reviews and challenges the position taken in the current English law in documentary payment undertakings that autonomy stands as a cardinal rule and fraud as the only exception. While admitting that the autonomy principle which secures a smooth, speedy and dependable documentary payment remains the backbone of the international financing system, it submits that it would adversely affect the integrity of law in a broader sense if such justifiable grounds of exception as illegality, nullity and unconscionability are entirely disregarded. It is necessarily beneficial to the international trade and the instrumental payment system as a whole if a principled and incremental approach would be adopted by courts when weighing the strength of justification for each individual new ground, rather than shutting a blind eye to their potential merits.