Application of URDG 758 in terms of bank guarantee letters

Bank guarantee letters are used extensively to meet the parties' assurance needs in international commercial relations. In an effort to facilitate international commercial practice, ICC has published URDG 758, a set of model rules for the application of demand guarantees. The application of URDG 758 in terms of bank guarantee letters consisting of foreign element, may arise in different contingencies. Determining the legal nature of URDG 758 is of particular importance for determining the circumstances in which these rules may be applied in state courts and in international commercial arbitration. URDG 758 recognizes that these rules will be binding if they are decided by the parties to be turned into a contractual provision by way of incorporation. However, it should also be examined whether these rules are applicable in cases where there is no incorporation. This study examines the possibilities of the application of URDG 758 in disputes arising out of bank guarantee letters.