Law · International Trade Law
Under the UNCITRAL Model Law on International Credit Transfers, if an intermediary bank (M-bank) causes a delay of three business days in transferring funds from the sender's bank (L-bank) to the beneficiary's bank (N-bank), which of the following best describes the liability and resulting remedy?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1No bank is held liable as long as the transfer is completed within a 'reasonable time' defined as ten business days.
- 2The bank causing the delay (M-bank) is liable to pay interest only to the beneficiary for the period of the delay.✓
- 3The bank causing the delay (M-bank) is liable to pay interest and consequential damages for any lost business the beneficiary suffered.
- 4The entire transfer is cancelled, and the originator must restart the process from the beginning.
Correct answer
The bank causing the delay (M-bank) is liable to pay interest only to the beneficiary for the period of the delay.
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