5109 - Fraud and forgery.

     § 5109.  Fraud and forgery.        (a)  Fraud and forgery generally.--If a presentation is made     that appears on its face strictly to comply with the terms and     conditions of the letter of credit, but a required document is     forged or materially fraudulent, or honor of the presentation     would facilitate a material fraud by the beneficiary on the     issuer or applicant:            (1)  the issuer shall honor the presentation if honor is        demanded by:                (i)  a nominated person who has given value in good            faith and without notice of forgery or material fraud;                (ii)  a confirmer who has honored its confirmation in            good faith;                (iii)  a holder in due course of a draft drawn under            the letter of credit which was taken after acceptance by            the issuer or nominated person; or                (iv)  an assignee of the issuer's or nominated            person's deferred obligation that was taken for value and            without notice of forgery or material fraud after the            obligation was incurred by the issuer or nominated            person; and            (2)  the issuer, acting in good faith, may honor or        dishonor the presentation in any other case.        (b)  Conditions for injunction.--If an applicant claims that     a required document is forged or materially fraudulent or that     honor of the presentation would facilitate a material fraud by     the beneficiary on the issuer or applicant, a court of competent     jurisdiction may temporarily or permanently enjoin the issuer     from honoring a presentation or grant similar relief against the     issuer or other persons only if the court finds that:            (1)  the relief is not prohibited under the law        applicable to an accepted draft or deferred obligation        incurred by the issuer;            (2)  a beneficiary, issuer or nominated person who may be        adversely affected is adequately protected against loss that        it may suffer because the relief is granted;            (3)  all of the conditions to entitle a person to the        relief under the law of this Commonwealth have been met; and            (4)  on the basis of the information submitted to the        court, the applicant is more likely than not to succeed under        its claim of forgery or material fraud and the person        demanding honor does not qualify for protection under        subsection (a)(1).        Special Provisions in Appendix.  See section 28 of Act 18 of     2001 in the appendix to this title for special provisions     relating to applicability of transitional provisions.        Cross References.  Section 5109 is referred to in sections     2512, 5108, 5110, 5113, 9700 of this title.