Copyright 2016 by Stanford University B&R Cases TM 一带一路案例 TM Jiangsu Taihu Boiler Co., Ltd. v. PT. Krakatau Engineering Corporation and the Wuxi Branch of Bank of China Limited, A Dispute over Fraud with a Guarantee Letter B&R Typical Case 7 (Released by the Supreme People’s Court on July 7, 2015) CHINA GUIDING CASES PROJECT November 16, 2016 Edition * * The citation of this translation of the Typical Case is:《江苏太湖锅炉股份有限公司与卡拉卡托工程有 限公司、中国银行股份有限公司无锡分行保函欺诈纠纷案》(Jiangsu Taihu Boiler Co., Ltd. v. PT. Krakatau Engineering Corporation and the Wuxi Branch of Bank of China Limited, A Dispute over Fraud with a Guarantee Letter), STANFORD LAW SCHOOL CHINA GUIDING CASES PROJECT, B&R Cases TM , Typical Case 7 (TC7), Nov. 16, 2016 Edition, http://cgc.law.stanford.edu/belt-and-road/b-and-r-cases/typical-case-7. For the original version of this case, see 人民法院为“一带一路”建设提供司法服务和保障的典型案例 (Typical Cases Concerning Judicial Services and Safeguards Provided by the People’s Courts for the “Belt and Road” Construction),《最高人民法院 网》(WWW.COURT.GOV.CN), July 7, 2015, http://www.court.gov.cn/zixun-xiangqing-14897.html. This document was primarily prepared by Sean Webb and Dr. Mei Gechlik; it was finalized by Dimitri Phillips and Dr. Mei Gechlik. We thank Wenjie Ou and YING Yun for their research assistance. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings, was done to make the piece more comprehensible to readers; all footnotes, unless otherwise noted, have been added by the China Guiding Cases Project. The following text is otherwise a direct translation of the original text released by the Supreme People’s Court. B&R Cases TM is a serial publication of the China Guiding Cases Project that provides full-text versions and high-quality English translations of court cases in China that are related to the country’s Belt and Road Initiative.
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Copyright 2016 by Stanford University
B&R CasesTM
一带一路案例TM
Jiangsu Taihu Boiler Co., Ltd.
v.
PT. Krakatau Engineering Corporation and the
Wuxi Branch of Bank of China Limited,
A Dispute over Fraud with a Guarantee Letter
B&R Typical Case 7
(Released by the Supreme People’s Court on July 7, 2015)
CHINA GUIDING CASES PROJECT
November 16, 2016 Edition∗
∗
The citation of this translation of the Typical Case is:《江苏太湖锅炉股份有限公司与卡拉卡托工程有
限公司、中国银行股份有限公司无锡分行保函欺诈纠纷案》(Jiangsu Taihu Boiler Co., Ltd. v. PT. Krakatau
Engineering Corporation and the Wuxi Branch of Bank of China Limited, A Dispute over Fraud with a Guarantee
Letter), STANFORD LAW SCHOOL CHINA GUIDING CASES PROJECT, B&R CasesTM
, Typical Case 7 (TC7), Nov. 16,
2016 Edition, http://cgc.law.stanford.edu/belt-and-road/b-and-r-cases/typical-case-7. For the original version of this
case, see 人民法院为“一带一路”建设提供司法服务和保障的典型案例 (Typical Cases Concerning Judicial
Services and Safeguards Provided by the People’s Courts for the “Belt and Road” Construction),《最高人民法院
网》(WWW.COURT.GOV.CN), July 7, 2015, http://www.court.gov.cn/zixun-xiangqing-14897.html.
This document was primarily prepared by Sean Webb and Dr. Mei Gechlik; it was finalized by Dimitri
Phillips and Dr. Mei Gechlik. We thank Wenjie Ou and YING Yun for their research assistance. Minor editing,
such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings, was
done to make the piece more comprehensible to readers; all footnotes, unless otherwise noted, have been added by
the China Guiding Cases Project. The following text is otherwise a direct translation of the original text released by
the Supreme People’s Court.
B&R CasesTM
is a serial publication of the China Guiding Cases Project that provides full-text versions and
high-quality English translations of court cases in China that are related to the country’s Belt and Road Initiative.
2016.11.16 Edition
Copyright 2016 by Stanford University
2
Strictly Grasping the Standards on
Guarantee Letter Fraud
Maintaining the International
Financial Order
I. Basic Facts of the Case
Taihu Company1 and Krakatau Company
2 agreed to complete a construction project
concerning generators. The two parties’ contract clearly stipulated that if the contract was to be
revised, [the revision] had to be adopted in the form of amendments to the contract; meeting
minutes, faxes, etc. could not produce the effect of altering the contract. If Taihu Company
breached the contract, Krakatau Company could demand payment [in accordance with] a
demand guarantee.
Thereafter, [on the grounds that] Taihu Company breached the contract, Krakatau
Company demanded the Wuxi Branch of Bank of China Limited,3 the issuing party of the
guarantee letter, to make payment in accordance with the guarantee letter. Taihu Company
initiated litigation, claiming that the two parties had, through meeting minutes, revised the
contract and that Krakatau Company’s act of demanding payment [in accordance with] the
guarantee letter did not conform to the stipulations in the contract and [thus] constituted fraud.
[Taihu Company] requested that the payment [based on] the guarantee letter be stopped. The
Intermediate People’s Court of Wuxi Municipality, Jiangsu Province, [rendered] the first-
instance judgment, rejecting Taihu Company’s litigation requests.4 Taihui Company appealed.
II. Results of the Adjudication
The Higher People’s Court of Jiangsu Province handled the case and opined:5 A court’s
review of an underlying contract is limited to [reviewing] whether the beneficiary, knowing the 1 The original text reads “太湖公司” and is translated here as “Taihu Company”. In the case name, this
party is referred to as “江苏太湖锅炉股份有限公司”, which is translated here as “Jiangsu Taihu Boiler Co., Ltd.”
in accordance with the name found on the company’s website, at http://www.taihuboiler.com. 2 The original text reads “卡拉卡托公司” and is translated here as “Krakatau Company”. In the case name,
this party is referred to as “卡拉卡托工程有限公司”, which is translated here as “PT. Krakatau Engineering
Corporation” in accordance with the name found on the company’s website, at
http://www.krakataueng.co.id/v4/content/3/history. 3 The original text reads “中国银行股份有限公司无锡分行” and is translated here as “the Wuxi Branch of
Bank of China Limited”, with “Bank of China Limited” in accordance with the name found on the company’s
website, at http://www.boc.cn/en/index.html. 4 This judgment is(2011)锡商外初字第 0023号民事判决 (“(2011) Xi Shang Wai Chu Zi No. 0023 Civil
Judgment”), rendered on November 8, 2012, full text available on the China Guiding Cases Project’s website, at