(a) If a presentation is made that appears on its face strictly to complywith the terms and conditions of the letter of credit, but a requireddocument is forged or materially fraudulent, or honor of the presentationwould facilitate a material fraud by the beneficiary on the issuer orapplicant:
(1) the issuer shall honor the presentation, if honor is demanded by (i) anominated person who has given value in good faith and without notice offorgery or material fraud, (ii) a confirmer who has honored its confirmationin good faith, (iii) a holder in due course of a draft drawn under the letterof credit which was taken after acceptance by the issuer or nominated person,or (iv) an assignee of the issuer's or nominated person's deferred obligationthat was taken for value and without notice of forgery or material fraudafter the obligation was incurred by the issuer or nominated person; and
(2) the issuer, acting in good faith, may honor or dishonor the presentationin any other case.
(b) If an applicant claims that a required document is forged or materiallyfraudulent or that honor of the presentation would facilitate a materialfraud by the beneficiary on the issuer or applicant, a court of competentjurisdiction may temporarily or permanently enjoin the issuer from honoring apresentation or grant similar relief against the issuer or other persons onlyif the court finds that:
(1) the relief is not prohibited under the law applicable to an accepteddraft or deferred obligation incurred by the issuer;
(2) a beneficiary, issuer, or nominated person who may be adversely affectedis adequately protected against loss that it may suffer because the relief isgranted;
(3) all of the conditions to entitle a person to the relief under the law ofthis Commonwealth have been met; and
(4) on the basis of the information submitted to the court, the applicant ismore likely than not to succeed under its claim of forgery or material fraudand the person demanding honor does not qualify for protection undersubsection (a) (1).
(a) If a presentation is made that appears on its face strictly to complywith the terms and conditions of the letter of credit, but a requireddocument is forged or materially fraudulent, or honor of the presentationwould facilitate a material fraud by the beneficiary on the issuer orapplicant:
(1) the issuer shall honor the presentation, if honor is demanded by (i) anominated person who has given value in good faith and without notice offorgery or material fraud, (ii) a confirmer who has honored its confirmationin good faith, (iii) a holder in due course of a draft drawn under the letterof credit which was taken after acceptance by the issuer or nominated person,or (iv) an assignee of the issuer's or nominated person's deferred obligationthat was taken for value and without notice of forgery or material fraudafter the obligation was incurred by the issuer or nominated person; and
(2) the issuer, acting in good faith, may honor or dishonor the presentationin any other case.
(b) If an applicant claims that a required document is forged or materiallyfraudulent or that honor of the presentation would facilitate a materialfraud by the beneficiary on the issuer or applicant, a court of competentjurisdiction may temporarily or permanently enjoin the issuer from honoring apresentation or grant similar relief against the issuer or other persons onlyif the court finds that:
(1) the relief is not prohibited under the law applicable to an accepteddraft or deferred obligation incurred by the issuer;
(2) a beneficiary, issuer, or nominated person who may be adversely affectedis adequately protected against loss that it may suffer because the relief isgranted;
(3) all of the conditions to entitle a person to the relief under the law ofthis Commonwealth have been met; and
(4) on the basis of the information submitted to the court, the applicant ismore likely than not to succeed under its claim of forgery or material fraudand the person demanding honor does not qualify for protection undersubsection (a) (1).
(a) If a presentation is made that appears on its face strictly to complywith the terms and conditions of the letter of credit, but a requireddocument is forged or materially fraudulent, or honor of the presentationwould facilitate a material fraud by the beneficiary on the issuer orapplicant:
(1) the issuer shall honor the presentation, if honor is demanded by (i) anominated person who has given value in good faith and without notice offorgery or material fraud, (ii) a confirmer who has honored its confirmationin good faith, (iii) a holder in due course of a draft drawn under the letterof credit which was taken after acceptance by the issuer or nominated person,or (iv) an assignee of the issuer's or nominated person's deferred obligationthat was taken for value and without notice of forgery or material fraudafter the obligation was incurred by the issuer or nominated person; and
(2) the issuer, acting in good faith, may honor or dishonor the presentationin any other case.
(b) If an applicant claims that a required document is forged or materiallyfraudulent or that honor of the presentation would facilitate a materialfraud by the beneficiary on the issuer or applicant, a court of competentjurisdiction may temporarily or permanently enjoin the issuer from honoring apresentation or grant similar relief against the issuer or other persons onlyif the court finds that:
(1) the relief is not prohibited under the law applicable to an accepteddraft or deferred obligation incurred by the issuer;
(2) a beneficiary, issuer, or nominated person who may be adversely affectedis adequately protected against loss that it may suffer because the relief isgranted;
(3) all of the conditions to entitle a person to the relief under the law ofthis Commonwealth have been met; and
(4) on the basis of the information submitted to the court, the applicant ismore likely than not to succeed under its claim of forgery or material fraudand the person demanding honor does not qualify for protection undersubsection (a) (1).
