The first lecture of the Year of the Snake marks a fresh start for new achievements. On January 17, the Fourth Civil Division of the Supreme People’s Court successfully held the first “Foreign-Related Adjudication Forum” of 2025, demonstrating commitment to  implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and Xi Jinping Thought on the Rule of Law. The forum aims to bridge practice and theory in foreign-related adjudication while leveraging the intellectual advantages of the International Commercial Court’s Expert Committee. Professor Gao Xiang, a member of the Supreme People’s Court’s International Commercial Expert Committee and a doctoral supervisor at China University of Political Science and Law, was invited to deliver the first lecture on “Critical Issues in the Adjudication of Letters of Credit and Guarantee Cases”. Liu Huizhuo, Deputy Chief Judge of the Fourth Civil Division presided over the event. Over 300 participants attended the forum online and offline, including judges from the Fourth Civil Division of the Supreme People’s Court, judges from foreign-related commercial adjudication divisions of courts at all levels in China, and judges from 15 local international commercial tribunals.

The cases involving letters of credit and independent guarantees issues have long been challenging in foreign-related commercial adjudication. Professor Gao Xiang addressed several core topics in the lecture, including the sources of issues, the application of laws, the recognition of independent guarantees, the fraud exception, and issues related to enforcement assistance notifications. By analyzing data from Chinese courts on cases involving letters of credit and guarantees, he presented an overview of case types, judicial levels, and regional patterns. He further examined specific cases to elaborate on terminology nuances regulatory conflicts, and the complexities of legal application in such cases. Through a comparative analysis of financial instruments such as guarantee insurance and independent guarantees, as well as indemnity letters and surety bonds, Professor Gao clarified the unique legal attributes and recognition standards of independent guarantees. On the hot topic of fraud exception, he traced its evolution through landmark cases such as Sztejn v. J Henry Schroder Banking Corp, and examined key elements including standards for fraud determination, remedies, and the protection of bona fide third parties. Combining these insights with judicial interpretations, he provided an in-depth explanation of the scope and conditions for applying the fraud exception. Additionally, Professor Gao elaborated on the use of enforcement assistance notifications in cases involving letters of credit and guarantees, and put forward his insights and suggestions.

The presentation resonated strongly with attendees, who praised its practical value and comprehensive scope. “This lecture has significantly improved our understanding of the legal nature, transaction processes, scope of application, basic legal characteristics, and international rules related to letters of credit and guarantees. It is highly enlightening!” “The lecture is closely tied to adjudication practices, and I find it extremely beneficial! It has given us a deeper understanding of the legislative developments and trends concerning letters of credit and guarantees internationally, as well as the perspectives and reasoning in adjudication practices in common law jurisdiction.” “Today’s lecture is very timely. It has provided us with a comprehensive understanding of the background and potential future developments of judicial interpretations regarding letters of credit and guarantees. This will greatly assist us in accurately interpreting and applying relevant provisions and in properly adjudicating related cases.”

The forum generated enthusiastic feedback from judges across Beijing, Shanghai, Hubei, Suzhou, Qingdao, Changchun, Nanjing, Wuxi, Nanning, and Xiamen. Participants unanimously praised Professor Gao’s systematic, case-based approach and its practical value for future adjudication, noting its significance in protecting the rights of both domestic and international parties while improving the efficiency of foreign-related judicial proceedings.

(Wang Yifei, Wang Hanwei)