What is the doctrine of strict compliance?

The documents tendered by the seller/beneficiary must strictly conform to the terms of the letter
of credit. The tender of documents must include all documents required by the letter. Thus, a
correspondent bank which departs from what has been stipulated under the LC acts on its own
risk and may not thereafter be able to recover from the buyer or the issuing bank, as the case may
be, the money thus paid to the beneficiary. (Feati Bank and Trust Company v. CA,  G.R. No.
940209, Apr. 30, 1991)  

What is the exception to the independence principle?

The “Fraud exception rule.” It provides that the untruthfulness of a certificate accompanying a demand
for payment under a standby letter of credit may qualify as fraud sufficient to support an injunction
against payment. (Transfield v. Luzon Hydro, G.R. No. 146717, Nov. 22, 2004)

What is the independence principle?

The relationship of the buyer and the bank is separate and distinct from the relationship of the buyer
and seller in the main contract; the bank is not required to investigate if the contract underlying the LC
has been fulfilled or not because in transactions involving LC, banks deal only with documents and not
goods (BPI v. De Reny Fabric Industries, Inc., L-‐2481, Oct. 16, 1970). In effect, the buyer has no course of
action against the issuing bank.