Mago International v. LBH AG, 833 F.3d 270

Background

Mago (NY) sold meat to Genita (Kosovo); Genita obtained a standby letter of credit (SLOC) issued by Bank for Business and confirmed by LHB to secure payment.
The SLOC allowed Mago to demand payment upon presentation of specified documents if Genita defaulted; Item 46A required a “photocopy of B/L evidencing shipment of the goods to the applicant.”
Mago shipped 12 containers under four invoice groups (199(1–5), 199(6–7), 208(1–2), 208(3–5)). Genita defaulted on all invoices.
Mago’s initial and second presentations contained unsigned photocopies of the bills of lading (B/Ls) for the 199 invoices; LHB rejected them for nonconformity.
On the final timely day Mago submitted signed B/Ls for the 208 invoices but substituted telexes from the carrier for the 199 invoices (stating originals retained and shipments released); LHB again rejected. Mago later submitted signed B/Ls for all invoices but after the deadline; LHB rejected as untimely.
District Court granted summary judgment for LHB; Second Circuit affirmed, holding Mago failed to strictly comply because the unsigned B/L copies (and telexes) did not “evidence shipment” as required.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether unsigned photocopies of bills of lading satisfy SLOC requirement of a “photocopy of B/L evidencing shipment to the applicant.”	Copies need not be signed under UCP/ISBP practice; unsigned copies suffice.	The SLOC required documentation that "evidenc[ed] shipment," and these copies lacked the carrier's signature necessary to evidence shipment.	Held for LHB: unsigned copies did not evidence shipment and thus failed strict compliance.
Whether UCP/ISBP incorporation permits unsigned copies despite SLOC language	UCP/ISBP allow acceptance of copies of transport documents without signatures in general.	Even if UCP applies, the specific credit required evidence of shipment in the B/L; where the B/L itself required a carrier signature to evidence shipment, unsigned copies do not conform.	Held for LHB: specific SLOC language controls; UCP does not excuse lack of signature when function of the document is unmet.
Whether telexes from carrier could substitute for signed B/Ls	Telexes from MSC announcing release/retention of originals evidenced shipment and should satisfy the credit.	The SLOC required the evidence to be in a bill of lading; telexes cannot substitute for the required B/L content.	Held for LHB: telexes did not satisfy the SLOC’s explicit requirement.
Whether judgment should be limited to nonconforming invoices (199) and permit payment on conforming 208 invoices	Mago argued it presented conforming documents for the 208 invoices and should receive at least partial payment.	LHB and court noted Mago never requested partial payment below; Mago did not present invoice-specific claims in district court.	Held for LHB: appellate court will not entertain new relief not raised below; Mago forfeited any claim for partial payment.

Key Cases Cited

Voest-Alpine Int’l Corp. v. Chase Manhattan Bank, N.A., 707 F.2d 680 (2d Cir. 1983) (letters of credit require literal compliance; banks deal only in documents).
Beyene v. Irving Tr. Co., 762 F.2d 4 (2d Cir. 1985) (issuing/confirming bank’s duty to pay arises only upon strict compliance).
Marino Indus. Corp. v. Chase Manhattan Bank, N.A., 686 F.2d 112 (2d Cir. 1982) (bank examines only the letter and presented documents to determine conformity).
Mario v. P&C Food Mkts., Inc., 313 F.3d 758 (2d Cir. 2002) (standard of review for summary judgment and contractual interpretation).
Bouzo v. Citibank, N.A., 96 F.3d 51 (2d Cir. 1996) (ambiguities at summary judgment construed against movant).
Kraebel v. N.Y.C. Dep’t of Hous. Pres. & Dev., 959 F.2d 395 (2d Cir. 1992) (appellate court will not consider arguments not raised in district court).
Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215 (2d Cir. 2006) (permitting new arguments only when in support of propositions presented below).