Andy Marine, Inc., a California Corporation v. Zidell, Inc., an Oregon Corporation v. The Commercial Bank of Korea, Ltd., a Korean Corporation

On January 31, 1983, Andy Marine, Inc. (“Andy Marine”) chartered a barge from Zidell, Inc. (“Zidell”) under a bareboat charter party. Pursuant to the charter party, Andy Marine provided Zidell with a $250,-000 irrevocable standby letter of credit from the Commercial Bank of Korea, Ltd. (“Bank”). The letter of credit guaranteed payments due under the charter party from April 25, 1984 to April 24, 1985. The charter party in turn provided that in the event of breach by the charterer, Andy Marine, Zidell had the right to terminate the agreement, repossess the vessel and recover costs and expenses incurred in restoring the vessel to its original condition. A breach occurred, and Zidell repossessed. On April 23, 1985, Zidell presented an invoice for $129,336.98 to the Bank and sought to draw down the letter of credit in that amount. The Bank claims, and Zidell does not dispute, that the invoice was an estimate of costs that Zidell expected to incur in the future to restore the vessel, rather than an itemized list of actual expenditures.

Andy Marine sued to enjoin the Bank from honoring Zidell’s draft, and Zidell now appeals the district court’s declaratory judgment and permanent…