Developing a Documentary Credit Dispute Resolution System: An ICC Perspective

Spurred by the expansion of world trade and the increasing number of disputes involving documentary credits – a global market now estimated at a staggering US$500 billion in letters of credit outstanding – the International Chamber of Commerce’s (“ICC”) is currently developing rules for the resolution of disputes arising from letters of credit issued under the Uniform Customs and Practices for Documentary Credits (“UCP”). The ICC’s ongoing work in this area raises a host of issues related to the sufficiency of existing dispute resolving mechanisms. The ICC’s initiative also provides a useful platform for evaluating the benefits and problems of taking an “industrybased” approach to the resolution of a specific class of disputes. This Essay will describe some of the issues raised by the ICC’s work in this area, including: (1) the ICC’s motivation in undertaking this effort; (2) its role and interest in harmonization of commercial practices as embodied by the UCP; (3) the various options the ICC considered in determining the most appropriate form of dispute resolution for documentary credits; and (4) certain issues raised in the current arbitration rules-drafting process.