Letters of credit have achieved their status as a universally recognized means of assurance of payment because their documentary character lends itself to summary payment or, in the event of a dispute, summary resolution. Because letter of credit law and practice is highly specialized and often counter-intuitive to the general commercial lawyer, the judicial process has not generally afforded the speedy, final, certain and sound relief desired by parties to a letter of credit dispute. For similar reasons, this observation also applies to independent guarantees, documentary collections, funds transfers and other mechanisms for the assurance of payment in trade and commerce.
It is the goal of these Rules and the arbitration system with which they are linked to provide an expedited, principled, and final resolution of disputes involving trade finance by recognized experts in law and practice in a cost efficient manner.
These Rules are modeled upon the highly successful and time-tested UNCITRAL Arbitration Rules with modifications necessitated by the use of expert arbitrators, the frequent possibility of summary disposition, and the use of an administrative center. LC arbitrations can be conducted under the ICLOCA Rules on an ad hoc basis or under the auspices of the Center.
The International Center for Letter of Credit Arbitration (the “Center”) was founded as a result of an initiative from within the letter of credit community. The Center has been created after extensive consultation with corporate, legal and banking representatives throughout the United States and the world. The Center was formally established in September of 1996 and is located in metropolitan Washington, D.C. It has affiliates in London and China.
The Center has two main purposes, namely, to act as an administrative authority and a resource center for information, training, and research for letter of credit related disputes.
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