International Settlement Case Study

Teaching Team of International settlement

Case 1 signature of bill of lading On a bill of lading, the words "Signed as agent for the Carrier" are pre-printed and there is added text "AS AGENT FOR T E CARR!ER" A#C CO$ %T&" and then a sta'p showing "For and on behalf of A#C CO$ %T& and an a(thori)ed signat(re"$ %i*e the following" Signed as agent for the Carrier +,RE-,R!NTE&AS AGENT FOR T E CARR!ER" + A&&E& TE.TA#C CO %T&$ For and on behalf of +STA/, 0!T S!GNAT1REA#C CO$ %T&$ +S!GNAT1RE-----------------------------A(thori)ed Signat(re 22222222222222222222222222222222222222222222222222222222222222222 A(thori)ed Signat(re +,RE-,R!NTE&Referring to 3(er4 R567+5- of !CC ,(bli8ation 95: pertaining to a bill of lading indi8ating that the agent was signing ;for the 'aster< and ;for the 8arrier<, it was 8on8l(ded that the 8apa8it4 in whi8h the agent was signing was (n8lear$ The agent signing the bill of lading sho(ld ha=e deleted either ;for the 'aster< or ;for the 8arrier<$ The #ill of %ading in >(estion shows ;AS AGENT FOR T E CARR!ER" A#C CO$ %T&$< indi8ating that A#C Co$ %td$ is the 8arrier$ On that basis and appl4ing the logi8 in !CC Opinion R$ 567+5-, the signing wo(ld be b4 another 8o'pan4 as agent or b4 A#C Co$ %td$ as 8arrier and not as an agent for the'sel=es$ QUESTION ?$0hether the o8ean bill of lading signed b4 a part4, A#C Co %td$ a8ting both as agent and also as 8arrier 8an satisf4 the re>(ire'ents (nder Arti8le :5 of 1C,6@@ and whether the iss(ing ban* 8an ref(se the do8('ents based on the sole dis8repan84, ;#A% showing two different 8apa8it4 of signing part4 +as agent and as 8arrier-<B ANAL SIS !t sho(ld be noted that the 8ontent of !CC ,osition ,aper No$ 7 has been s(perseded b4 the =ario(s opinions gi=en b4 the !CC in respe8t of na'ing the 8arrier and signing of transport do8('ents$ S(b-arti8le :5 +a- +i- in8l(des" ;appears on its fa8e to indi8ate the na'e of the 8arrier and to ha=e been signed or
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otherwise a(thenti8ated b4" - the 8arrier or a na'ed agent for or on behalf of the 8arrier, or - the 'aster or na'ed agent for or on behalf of the 'aster$ An4 signat(re or a(thenti8ation of the 8arrier or 'aster '(st be identified as 8arrier or 'aster, as the 8ase 'a4 be$ An agent signing or a(thenti8ating for the 8arrier or 'aster '(st also indi8ate the na'e and the 8apa8it4 of the part4, i$e$ 8arrier or 'aster, on whose behalf that agent is a8ting, and< #ased on the re>(ire'ents of s(b-arti8le :5 +a- +i-, the bill of lading '(st identif4 the part4 that is signing and the signing part4 '(st be identified as 8arrier or 'aster or, in the e=ent of an agent signing for the 8arrier or 'aster indi8ate the 8apa8it4 in whi8h the4 are signing i$e$, on whose behalf +8arrier or 'aster- the4 are signing$ &(e to the fa8t that this >(estion goes be4ond the general appli8ation and interpretation of signing re>(ire'ents for a bill of lading, as expressed in the 1C, i$e$, it extends to the right of a part4 to sign in its own na'e as agent for a 8arrier of the sa'e na'eC opinions ha=e been soli8ited fro' the !CCDs Transport and Co''er8ial %aw E ,ra8ti8e Co''issions$ Fiew of the !CC Transport Co''ission" ;,aragraph 7 of the >(er4 states ;The #ill of %ading in >(estion shows GAS AGENT FOR T E CARR!ER" A#C CO$ %T&$D indi8ating that A#C Co$ %td is the 8arrier$<$ owe=er, we interpret this part of the bill of lading to indi8ate that A#C Co$ %td is the AGENT$ !n 'ost 8ases, 8arriers t4pi8all4 iss(e bills of lading thro(gh agents, and the bill of lading for's are printed in anti8ipation of the do8('ent being signed b4 the agent +hen8e the pre-printed text HSigned as agent for the CarrierH-, and therefore 8ontain a blan* spa8e in whi8h the agent 8an pla8e its na'e$ !n o(r =iew, this se8tion of the #ill of %ading, where text has been added, is the blan* for the agent to fill in, and is not (s(all4 there to indi8ate the na'e of the 8arrier$ The na'e of the 8arrier is indi8ated (nder the se8tion HFor and on behalf ofH$ This 'eans that on the #ill of %ading in >(estion the agent and the 8arrier both appear to ha=e the sa'e na'e, and there appear to be a n('ber of possible explanations as to wh4 this 'ight be the 8ase$ One possible explanation wo(ld be that the 8arrier and the agent operate (nder the sa'e na'e$ Altho(gh the agent is nor'all4 a different entit4 to the 8arrier, it appears that it is not (n(s(al for large 8ontainer lines to own the lo8al agen84 offi8es, whi8h will operate as part of the 'ain global brand$ So, for exa'ple, the 8ontainer line A#C Co$ %td 'ight own the agents A#C Co$ + ong Iong-, who will be part of the 'ain A#C Co$ brand$ !n this 8ase, if the agent sees the'sel=es as being part of A#C Co$ %td, rather than as a separate entit4, then the4 'ight J(st identif4 the'sel=es as A#C Co$ %td, witho(t seeing the need to spe8if4 the'sel=es as A#C Co$ + ong Iong-$ !t 8o(ld also be the 8ase that a depart'ent of the 8arrier 8o'pan4 a8ts as the agent$ !n this 8ase, the depart'ent that is a8ting as the agent 'a4 sign the #ill of %ading as
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the agent, to denote its operational role in relation to the ship'ent, notwithstanding the fa8t that there is no legal distin8tion between itself and the depart'ent perfor'ing the operational role of the 8arrier$ Another explanation is that, in the li'ited n('ber of 8ases where the 8arrier signs the bill of lading itself, it 'a4 opt to 8o'plete the blan* spa8e for the HagentH rather than re=ise the for' or lea=e the agent spa8e e'pt4$ !n this 8ase, the signat(re wo(ld be ai'ed at binding the 8arrier as the 8arrier$ The abo=e points refle8t >(ite a88(ratel4 the 8(rrent 8ontainer shipping pra8ti8e$ #ased on the pra8ti8es o(tlined abo=e, there is little gro(nd to 8onsider the do8('ent in8onsistent$< Fiew of the Co''er8ial %aw E ,ra8ti8e Co''ission" ;The C%, Co''ission regards letters of 8redit as instr('ents of pa4'ent and wo(ld fa=o(r interpretations of the 1C, whi8h fa8ilitate rather than hinder pa4'ent$ !t is 8lear that shipping pra8ti8e =aries in the 'anner in whi8h bills of lading are signed$ Arti8le :5 of 1C, 6@@ - and now arti8le :@ of 1C, 9@@ - inJe8ted a wel8o'e dose of pre8ision and 8larit4 into this area, a 8larit4 whi8h ad=an8ed the interests both of shippers and re8ei=ers and of ban*ers holding bills of lading (nder letters of 8redit b4 'a*ing s(re that these three parties *new the identit4 of the 8arrier$ !t is i'portant that the re>(ire'ents of arti8le :5 of 1C, 6@@ are not interpreted too restri8ti=el4 lest the gain in 8larit4 brings with the pain of (nne8essar4 reJe8tions$ !t wo(ld appear that the bill of lading sa4s not on8e b(t twi8e who the 8arrier is" there 8an be no a'big(it4 abo(t the fa8t that A#C Co %td is ta*ing responsibilit4 for the 8arriage of the goods$ !n these 8ir8('stan8es, reJe8tion of s(8h a bill of lading wo(ld appear to be (nne8essar4 and (nwel8o'e fro' the benefi8iar4Hs and possibl4 fro' the appli8antHs point of =iewC it 'a4 also expose the reJe8ting ban* to the possibilit4 of a8tion for wrongf(l reJe8tion$< CONCLUSION 0e 8an find no reason for ref(sal of a bill of lading that is signed in the 'anner shown (nder ;31OTE<$ owe=er, fro' the infor'ation pro=ided, it is not 8lear whether the bill of lading indi8ated the na'e of the 8arrier$ This 'a4 onl4 be deter'ined fro' the transport do8('ent itself$

Case ! contents of goods recei"t Co'pan4 A was the benefi8iar4 to a do8('entar4 8redit ad=ised b4 ;#an* #<$ The do8('entar4 8redit was a=ailable with ;#an* #< b4 pa4'ent K s(bJe8t to 1C, 9@@$ The do8('entar4 8redit has been 8onfir'ed b4 ;#an* #< ,art of the re>(ire'ents to the 8redit were as follows" &o8('ents re>(ired" ;,a8*age of 8onsign'ent notes +originals-, or set of bills of lading +originals- or forwarding agentDs Ggoods re8eiptD K ? original< Swift field 77A" ,la8e of Re8eipt "Gd4nia, Gdans*a or Swino(Js8ie Swift field 77#" ,la8e of deli=er4 "R(ssia Co'pan4 A presented a do8('ent iss(ed and signed b4 ;C Shipping< titled ;Goods Re8eipt<$ The ;Goods re8eipt< in8l(ded the following 8ontents" 3(ote 0e ;C Shipping<, a8ting as forwarding agentDs in the port of Gd4nia, do hereb4 8ertif4 the re8eipt of" Goods des8ription in a88ordan8e with the do8('entar4 8redit As spe8ified in atta8hed pa8*ing spe8ifi8ation$ 0e are instr(8ted b4 the owner of the goods ;Co'pan4 A< to hold the goods at the disposal of" Co'pan4 & +The appli8ant to the do8('entar4 8redit1n>(ote After exa'ination of the presentation the no'inated ban* ref(sed the do8('ents K stating the following dis8repan84" ;Goods re8eipt does not e=iden8e ship'ent to R(ssia<$ Co'pan4 A disagree with ;#an* #< d(e to the following reasons" A88ording to !S#, +:@@L- paragraph ?M, a ;goods re8eipt< is not a transport do8('ent as refle8ted in 1C, 9@@ arti8les ?M-:6$ en8e the exa'ination of a ;goods re8eipt< is s(bJe8t to e$g$, 1C, 9@@ arti8le ?7$ Spe8ifi8all4" S(b-arti8le ?7 +f-$ !n this 8ase it see's 8lear that the do8('ent f(lfils the ;re>(ired f(n8tion< K as it shows that goods are ;re8ei=ed<$ S(b-arti8le ?7 +h-$ This do8('entar4 8redit offers a 8hoi8e between ;8onsign'ent note<, ;bill of
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lading< and ;goods re8eipt<$ The first two are des8ribed in the 1C, 9@@ respe8ti=el4 arti8le :7 and arti8le :@$ !n these 8ases ;ship'ent to R(ssia< wo(ld be rele=ant$ owe=er not when a ;goods re8eipt< is presented$ Therefore it 8an be des8ribed as a 8ondition witho(t stip(lating the do8('ent to indi8ate 8o'plian8e with the 8ondition$ A88ording to s(b- arti8le ?7 +h- s(8h 8onditions will be disregarded$ QUESTION ?$!s the dis8repan84 'entioned abo=e =alidB ANAL SIS A forwarding agents Ggoods re8eiptD is not a transport do8('ent 8o=ered b4 the 8ontent of 1C, 9@@ arti8les ?M-:6$ As i'plied b4 its title, s(8h a do8('ent is a re8eipt for goods and is not a do8('ent intended to e=iden8e ship'ent ha=ing o88(rred between two pla8es, ports or airports$ The presented do8('ent e=iden8ed that the forwarding agent had re8ei=ed the goods, as des8ribed in the 8redit, at the port of Gd4nia at the disposal of the appli8ant$ !n the 8ontext of a forwarding agents goods re8eipt, there is no re>(ire'ent for the do8('ent to e=iden8e a pla8e of deli=er4 'erel4 the re8eipt of goods$ The in8l(sion of a pla8e of deli=er4 +or port of dis8harge- is onl4 rele=ant in the 8ontext of the iss(an8e of 8onsign'ent notes or bills of lading$ CONCLUSION There is no dis8repan84$ !t sho(ld be noted that the 8redit, in allowing for different for's of deli=er4, sho(ld ha=e pro=ided for the indi=id(al re>(ire'ents where 8onsign'ent notes, bills of lading or a goods re8eipt were to be presented$

Case # freight notation on $%L A 8onfir'ing ban* negotiated do8('ents for their 8(sto'ers and sent the do8('ents to the iss(ing ban*$ The 8redit re>(ired s(b'ission of a #A% 'ar*ed freight prepaid$ !ss(ing ban* ref(sed the do8('ents d(e to a n('ber of dis8repan8ies$ One of the' being ;&ata within #A% 8onfli8ting with regards to freight prepaid< #ill of lading is 'ar*ed with notation "FRE!G T ,RE,A!&" and also states as one of the standard ter's E 8onditions printed on the fa8e of the #A% "FOR FRE!G T ,RE,A!& #!%% OF %A&!NG, &E%!FERN OF CARGO !S S1#OECT TO REA%!SAT!ON OF C E31E"$ The 8onfir'ing ban*Ds opinion was that as ban*ers the4 sho(ld be g(ided b4 what is there as a notation on the #A% regarding pa4'ent of freight and not ens(re whether a8t(al pa4'ent has been 'ade or is s(bJe8t to reali)ation$ Se8ond, e=en in 8ases where the 8he>(e for freight is dishono(red, it is a 'atter between the shipper and the shipping 8o'pan4, whi8h is o(tside the p(r=iew of 1C,$ QUESTION ?$!s the iss(ing ban* J(stified in ref(sing the do8('ents with the abo=e dis8repan84B ANAL SIS The 8redit re>(ired presentation of a bill of lading 'ar*ed Gfreight prepaidD$ The bill of lading was so 'ar*ed, b(t 8ontained pre-printed wording that pro=ided >(alifi8ation of an4 notation of Gfreight prepaidD$ !t sho(ld be noted that ban*s are not re>(ired to exa'ine the ter's and 8onditions of a bill of lading to deter'ine 8o'plian8e +s(b-arti8le :@ +a- +=--$ CONCLUSION
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The bill of lading is not dis8repant, so it is (nreasonable for the iss(ing ban* to ref(se the do8('ents$

Case & the signature of insurance certificate A %AC re>(ired presentation of an ins(ran8e 8ertifi8ate$ The presented ins(ran8e 8ertifi8ate 8ontained the following wording$ 3(ote This 8ertifi8ate not =alid (nless the &e8laration be signed b4 Co'pan4 F, %OG!ST!CS COR,ORAT!ON andAor Asso8iates andAor S(bsidiaries or Co'pan4 A, %!/!TE& for and on behalf of T E 1N&ER0R!TERS AT %%ON&DS OF %ON&ON AN& !NS1RANCE CO/,AN!ES 1n>(ote The 8ertifi8ate was signed b4 ;Co'pan4 F Tr(8* Corporation, Cit4 G< with a signat(re$ QUESTION ?$0hether the ins(ran8e 8ertifi8ate was d(l4 and8orre8tl4 signedB ANAL SIS The text of the 8ase pro=ides wording whi8h is 8o''on to a %lo4ds 1nderwriter !ns(ran8e 8ertifi8ate i$e$, that the ins(ran8e 8ertifi8ate '(st be signed b4 Co'pan4 F %ogisti8s Corporation or their asso8iates or s(bsidiaries or Co'pan4 A$ An ins(ran8e 8ertifi8ate signed b4 Co'pan4 F Tr(8* Corporation wo(ld be a88eptable pro=ided that s(8h 8o'pan4 e=iden8ed that the4 were an asso8iate or s(bsidiar4 of Co'pan4 F %ogisti8s Corporation$

CONCLUSION !n its present for', the ins(ran8e 8ertifi8ate is dis8repant$

Case ' change of beneficiary(s name A Spanish 8o'pan4, who is the benefi8iar4 of h(ndreds -if not tho(sands- of standb4s, has s(ffered a 'odifi8ation of its na'e fro' ;A#C, S$%$ +so8iedad (nipersonal-< to ;A#C, S$%$< !n fa8t ;A#C< wo(ld be the na'e of the so8iet4 +whi8h has not 8hanged-, and ;S$%$< +'eaning So8iedad %i'itada- the legal for' of that 8o'pan4 +whi8h has not 8hanged either-$ As to ;+so8iedad (nipersonal-<, it is infor'ation, additional to the legal for' and re>(ired b4 Spanish law, whene=er a so8iet4 happens to be for'ed b4 onl4 one shareholder +(nipersonal so8iet4-$ The thing is that the holding 8o'pan4 of A#C +the sole shareholder- has (ndergone a restr(8t(ring and as a 8onse>(en8e A#C is no longer a ;so8iedad (nipersonal<$ !t is 'erel4 a for'al 8hange sin8e final ownership re'ains the sa'eC therefore the new deno'ination is not a s(88essor of the old deno'ination +and !S,MP, r(le 9$?: wo(ld not f(ll4 fit-$ QUESTION ?$&oes this 8o'pan4 need iss(ing ban*s to a'end their S#%CB And, if not a'ended, 8o(ld an iss(ing ban* ref(se a 8lai' on the gro(nds that an +(npaidin=oi8e does not in8l(de ;+so8iedad (nipersonal-< next to ;A#C, S$%$<B ANAL SIS
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This 8ase fo8(ses on the effe8t of a 8hange in expression of title of the benefi8iar4 as opposed to an a8t(al 8hange of na'e of the benefi8iar4, for the p(rposes of 1C, 6@@, 1C, 9@@ and !S,MP and an4 8lai' (nder a standb4 letter of 8redit s(bJe8t to those r(les$ The in8l(sion of referen8e to the shareholding stat(s of a 8o'pan4 is not a reg(lar feat(re for 8o'panies aro(nd the world and does not, s(bJe8t to an4 lo8al law re>(ire'ents, detra8t fro' the na'e of the benefi8iar4$ 1nder r(les 1C, and !S,MP, the no'inated ban* andAor iss(ing ban* isAare re>(ired to as8ertain fro' the presentation that the do8('ents iss(ed b4 the benefi8iar4 appear to ha=e been iss(ed b4 that benefi8iar4 and that settle'ent is being 'ade to the benefi8iar4 na'ed in the 8redit$ CONCLUSION The re'o=al of ;so8iedad (nipersonal< fro' the letterhead of the benefi8iar4 sho(ld not detra8t fro' the fa8t that it is the sa'e benefi8iar4 that is 'a*ing a 8lai' (nder the standb4 letter of 8redit$ owe=er, and to a=oid an4 possible 8onf(sion, where there are 8op4 in=oi8es presented and one or 'ore of these indi8ate differing st4les of letterhead of the benefi8iar4, it sho(ld be s(ggested to the benefi8iar4 that the4 pro=ide a state'ent on their noti8e of defa(lt +or 8lai'- that with effe8t fro' ddA''A4444 the shareholding stat(s of the 8o'pan4 denoted b4 ;so8ieded (nipersonal< has 8hanged b(t the na'e of the 8o'pan4 re'ains as that of the benefi8iar4 (nder the standb4 letter of 8redit$ !t sho(ld be noted that with regard to !S,MP, the 8ontent of r(le 9$?: +Additional &o8('ent in E=ent of &rawing in S(88essorDs na'e- 'a4 also be appli8able$

Case ) documents re*uired to be issued in English Ad=ising #an* C, ha=e re8ei=ed %AC, (nder a 1C,9@@, iss(ed b4 #an* A and 8onfir'ed b4 #an* # >(oting as additional 8ondition" HAll do8('ents sho(ld be iss(ed in EnglishH$ A C/R is re>(ired a'ong other do8('ents$ After presenting do8('ents to #an* #, an ad=i8e of ref(sal was re8ei=ed b4 Ad=ising #an* C stating onl4 one dis8repan84" ;C/R-not preprinted in English<$ Ad=ising #an* C arg(ed that presented C/R 8o'plies with %AC re>(ire'ents sin8e all data was 8o'pleted in English lang(age on a for'al standardi)ed for' of international 8onsign'ent note whi8h is s(bJe8t to H8on=ention on the 8ontra8t for the international 8arriage of goods b4 road +C/R-H$ ,resented C/R had on its fa8e fields des8ribed in Croatian and Fren8h lang(age and on the re=erse the C/R fields were des8ribed b4 field n('bers in Ger'an, !talian and English lang(age$ A88ording to pra8ti8e ea8h standardi)ed field on a C/R is (s(all4 defined on its fa8e in Fren8h and the do'esti8 lang(age of the exporting 8o(ntr4 +whi8h is not 1I
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in this 8ase- and has translation in three other lang(ages on the re=erse, a'ong the' English$ Therefore, in Ad=ising #an* CDs opinion a C/R 8an onl4 be 8onsidered as a preprinted '(ltiling(al do8('ent$ QUESTION ?$0hether the re>(ire'ent HAll do8('ents sho(ld be iss(ed in EnglishH applies to the lang(age in whi8h data on a do8('ent is 8o'pleted, or also to the preprinted for' of a C/R +whi8h fro' pra8ti8e 8annot be in English (nless the4 are preprinted in 1I-B ANAL SIS The C/R is pre-printed in d(al lang(age with Fren8h being one of those lang(ages$ Altho(gh the other lang(age in this 8ase was Croatian, the do8('ent did pro=ide the des8ription of the fields in English on the re=erse$ A pre=io(s !CC opinion, R$697, addressed this sa'e iss(e i$e$, the effe8t of a 8ondition stating ;all re>(ired do8('ents '(st be iss(ed in English< and altho(gh iss(ed in respe8t of a 8redit s(bJe8t to 1C, 6@@, it has e>(al effe8t (nder 1C, 9@@$ The 8on8l(sion to that opinion stated ;The stip(lation in the 8redit that ;all re>(ired do8('ents '(st be iss(ed in English< relates to the data thereon that wo(ld e=iden8e 8o'plian8e with the ter's of the 8redit and the rele=ant pro=ision+s- of the 1C,$< CONCLUSION The data inserted in the respe8ti=e fields of the C/R do8('ent was in English, there is no dis8repan84$

Case + the issuer of certificate of origin The &o8('entar4 Credit is s(bJe8t to 1C, 6@@$ %AC do8('entar4 re>(ire'ent is gi=en below" ;Certifi8ate of origin appro=ed b4 the Arab %eag(e Cha'ber of Co''er8e< 1nder additional 8onditions" !n 8ase of do8('ents not in 8o'plian8e with 8redit ter's 4o( are held to 8o''(ni8ate to (s exha(sti=e list of dis8repan8ies$ +A 8o''ission for E1R Qwill be ded(8ted fro' (sed a'o(nt in 8ase do8('ents presented with dis8repan8ies-$ :@@L-@9-?@" &o8('ents in8l(ding a 8ertifi8ate of origin iss(ed b4 the Swedish
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Cha'ber of Co''er8e and legali)ed b4 the /oro88an 8ons(late were negotiated and sent to the iss(ing ban*$ :@@L-@L-?@" Ad=i8e of ref(sal" &o8('ents ref(sed d(e to dis8repan84" ;Certifi8ate of origin not appro=ed b4 Arab %eag(e Cha'ber of Co''er8e$ 0e *eep the do8('ents at 4o(r disposal in 8onfor'it4 with Arti8le ?5 and ?7 of 1C,6@@$< :@@L-@L-?9" The dis8repan84 was ref(ted b4 the 8onfir'ing ban* as /oro88o is a 'e'ber of the Arab %eag(e$ As the 8onfir'ing ban*Ds 8lai' was not hono(red, it tra8ed the o(tstanding a'o(nt and re-iterated that the ref(sal was sent too late b4 the iss(ing ban*$ The 8onfir'ing ban* stated that the iss(ing ban* is pre8l(ded fro' 8lai'ing that the do8('ents are dis8repant as the ref(sal was not sent within the ti'e stip(lated in 1C, 6@@ arti8le ?7$ :@@L-@M-:7" The iss(ing ban* arg(ed that the 8onfir'ing ban* had not listed the dis8repan8ies and s(ggested presentation of a 8ertifi8ate of origin appro=ed b4 Arab %eag(e Cha'ber of Co''er8e$ The 8onfir'ing ban* arg(ed" %isting of dis8repan8ies was not appli8able as the 8onfir'ing ban* 8onsidered the do8('ents 8o'pliant$ The 8ertifi8ate of origin was legali)ed b4 the /oro88an 8ons(late$ /oro88o is a 'e'ber of the Arab %eag(e$ The 8onfir'ing ban* re-iterated that the ref(sal was sent too late and therefore the iss(ing ban* is obliged to pa4 irrespe8ti=e of the do8('ents being dis8repant or not$ The iss(ing ban* has still not paid$ QUESTION !s the iss(ing ban* J(stified in ref(se the pa4'ent (nder the do8('entar4 8reditB ANAL SIS The Arab %eag(e 8(rrentl4 8onsists of :: 'e'ber states, of whi8h /oro88o is one$ The letter of 8redit re>(ired presentation of a 8ertifi8ate of origin appro=ed b4 the Arab %eag(e Cha'ber of Co''er8e$ !n fa8t there is no ;Arab %eag(e Cha'ber of Co''er8e< b(t there are Cha'bers of Co''er8e able to iss(e 8ertifi8ates of origin for exports to the :: 'e'ber states$ !n 'ost 8o(ntries, the organi)ation is prefixed b4 ;Arab-R8o(ntr4 of exportS Cha'ber of Co''er8e<$ For exa'ple, the Arab#ritish Cha'ber of Co''er8e iss(es 8ertifi8ates of origin in relation to 1I exports to 8o(ntries in the Arab %eag(e$ !n letter of 8redit ter'inolog4, legali)ation b4 the /oro88an Cons(late is an a8t separate to a 8ertifi8ation +or appro=al K as stated in the 8redit- b4 an Arab %eag(e Cha'ber of Co''er8e$ For exa'ple, 8ertifi8ate of origin 8ertified b4 a 8ha'ber of 8o''er8e and legali)ed b4 . 8o(ntr4 8ons(lateAe'bass4$ The 8ondition in the 8redit stip(lating that where dis8repan8ies exist the
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8onfir'ing ban* '(st pro=ide the iss(ing ban* with an exha(sti=e list is fairl4 s(bJe8ti=e in that it is dependent (pon the =iews of the respe8ti=e ban*sC ex8ept where (n>(estionable dis8repan8ies exist s(8h as late ship'ent et8$ !f the 8onfir'ing ban* finds the do8('ents to be in 8o'plian8e +e=en if the iss(ing ban* 'a4 s(bse>(entl4 find one or 'ore dis8repan8ies that are pro=ed to be =alid- the 8la(se has no effe8t based on their own exa'ination and deter'ination of 8o'plian8e$ 1C, 6@@ s(b-arti8les ?7 +d- +i- and +ii- read" +i- !f the !ss(ing #an* andAor Confir'ing #an*, if an4, or a No'inated #an* a8ting on their behalf, de8ides to ref(se the do8('ents, it '(st gi=e noti8e to that effe8t b4 tele8o''(ni8ation or, if that is not possible, b4 other expeditio(s 'eans, witho(t dela4 b(t no later than the 8lose of the se=enth ban*ing da4 following the da4 of re8eipt of the do8('ents$ S(8h noti8e shall be gi=en to the ban* fro' whi8h it re8ei=ed the do8('ents, or to the #enefi8iar4, if it re8ei=ed the do8('ents dire8tl4 fro' hi'$ +ii- S(8h noti8e '(st state all dis8repan8ies in respe8t of whi8h the ban* ref(ses the do8('ents and '(st also state whether it is holding the do8('ents at the disposal of, or is ret(rning the' to, the presenter$ 1C, 6@@ s(b-arti8le ?7 +e- reads" !f the !ss(ing #an* andAor Confir'ing #an*, if an4, fails to a8t in a88ordan8e with the pro=isions of this Arti8le andAor fails to hold the do8('ents at the disposal of, or ret(rn the' to the presenter, the !ss(ing #an* andAor Confir'ing #an*, if an4, shall be pre8l(ded fro' 8lai'ing that the do8('ents are not in 8o'plian8e with the ter's and 8onditions of the Credit$ Gi=en the ti'eline in the 8ase and absent an4 other infor'ation pertaining to the deli=er4 of the do8('ents, it '(st be pres('ed that the iss(ing ban* did not pro=ide a ref(sal b4 the 8lose of the L ban*ing da4 following the da4 of re8eipt of the do8('ents$ CONCLUSION A 8ertifi8ate of origin iss(ed b4 the Swedish Cha'ber of Co''er8e and legali)ed b4 the /oro88an E'bass4 was presented whereas a 8ertifi8ate of origin appro=ed b4 the Arab %eag(e Cha'ber of Co''er8e was re>(ired b4 the 8redit$ !t is not 8lear what was intended b4 the (se of the word ;appro=ed< and as 'entioned (nder ;Anal4sis< the Arab %eag(e is 'ade (p of :: 'e'ber states ea8h of who' 'a4 iss(e, 8ertif4 or legali)e do8('ents$ !t therefore follows that a do8('ent iss(ed b4 the ;Arab %eag(e< wo(ld not be possible$ The benefi8iar4 sho(ld ha=e so(ght an a'end'ent to refle8t the for' of do8('ent that the4 8o(ld present$ !n an4 e=ent, the re>(ire'ents of s(b-arti8les ?7 +d- +i- and +ii- are >(ite spe8ifi8 and it is 8lear fro' the ti'eline shown in the >(er4 that the iss(ing ban* did not pro=ide a noti8e of ref(sal b4 the 8lose of the se=enth ban*ing da4 following the da4 of re8eipt of the do8('ents$ A88ording to s(b-arti8le ?7 +e-, the iss(ing ban* is
?5

therefore pre8l(ded fro' 8lai'ing that the do8('ents are not in 8o'plian8e and '(st effe8t settle'ent a88ording to the ter's and 8onditions of the 8redit$

Case , on board notation A letter of 8redit 8alled for" ;Clean On #oard /(lti'odal Transport &o8('ent 8onsigned to the order of shipper, blan* endorsed, notif4 appli8ant, 'ar*ed freight prepaid$< 0hen the /(lti'odal Transport &o8('ent was presented for exa'ination, the do8('ent 'et all the 8onditions of the letter of 8redit$ owe=er, the on board notation on the transport do8('ent, whi8h was added separatel4, did not in8l(de a date as part of the notation$ The %AC re>(ired ship'ent fro' 1SA /ain ,ort to (ang ,(, China The /(lti'odal Transport &o8('ent showed" ,la8e of Re8eipt" /e'phis ,ort of %oading" %ong #ea8h ,ort of &is8harge" Chiwan, China ,la8e of &eli=er4" (ang ,(, China The ban* 8he8*ing the do8('ents felt that based on 1C, 9@@ s(b-arti8le ?M +a+ii-, whi8h in8l(des" ii$ indi8ate that the goods ha=e been dispat8hed, ta*en in 8harge or shipped on board at the pla8e stated in the 8redit b4" a sta'p or notation indi8ating the date on whi8h the goods ha=e been dispat8hed, ta*en in 8harge or shipped on board, the do8('ent did not 8o'pl4 witho(t a date in8l(ded within the on board notation$ QUESTION ?$ !s the intent of s(b-arti8le ?M +a- +ii- that if an on board notation is added to the do8('ent that the notation re>(ires a dateB :$ !f a date is not re>(ired sho(ld the ban* 8onsider the goods on board as of the date of the transport do8('entB 5$ 0o(ld the opinion 8hange b4 the fa8t that the letter of 8redit spe8ifi8all4 8alled for an on board notation =s$ a letter of 8redit re>(ire'ent whi8h stri8tl4 8alled for a /(lti'odal Transport &o8('ent witho(t 8alling for an on board notationB ANAL SIS !n addition to that stated abo=e, s(b-arti8le ?M +a- +ii- also states ;The date of iss(an8e of the transport do8('ent will be dee'ed to be the date of dispat8h, ta*ing
?7

in 8harge or shipped on board, and the date of ship'ent$ owe=er, if the transport do8('ent indi8ates, b4 sta'p or notation, a date of dispat8h, ta*ing in 8harge or shipped on board, this date will be dee'ed to be the date of ship'ent$< S(b-arti8le ?M +a- +iii- in8l(des ;indi8ate the pla8e of dispat8h, ta*ing in 8harge or ship'ent, and the pla8e of final destination stated in the 8redit, e=en if" a- the transport do8('ent states, in addition, a different pla8e of dispat8h, ta*ing in 8harge or ship'ent or pla8e of final destination, or< The 8redit in >(estion re>(ired ship'ent to be effe8ted fro' a 1SA 'ain port and the presentation of a ;8lean on board '(lti'odal transport do8('ent Q$<$ The wording in arti8le ?M 8aters for the =ario(s for's of transport that 'a4 be in=ol=ed in a '(lti'odal t4pe transport b4 referen8e to ;dispat8h<, ;ta*ing in 8harge< and ;shipped on board<$ CONCLUSION ?$ A dated on board notation is 8learl4 re>(ired when the 8redit so re>(ests$ !t is also re>(ired when the do8('ent e=iden8es the first leg of the 8arriage as a sea ship'ent fro' the pla8e stated in the 8redit$ :$ 0here a transport do8('ent is pre-printed shipped on board then the date of iss(an8e wo(ld be dee'ed to be the date of ship'ent$ 0hen the do8('ent e=iden8es the first leg of the 8arriage as a sea ship'ent fro' the pla8e stated in the 8redit, there is a need for e=iden8e of the date the goods were shipped on board i$e$, pre-printed or b4 notation$ 5$ No$ See 8o''ents (nder ? and : abo=e$

?6

Case - in.oice under transferable credit !sraeli exporters sell goods fre>(entl4, thro(gh an agent, to Nigerian i'porters (nder transferable %ACs iss(ed b4 Nigerian #an*s$ As per s(b-arti8le 5P +h- "The first benefi8iar4 has the right to s(bstit(te its own in=oi8e and draftQ$"$ owe=er, the Nigerian #an*s %ACs re>(ire instead of an in=oi8e a CCFO +Co'bined Certifi8ate of Fal(e and of Origin and !n=oi8e of goods for exportation to Nigeria-$ QUESTION ?$0hether a CCFO 8an be 8onsidered as a 8o''er8ial in=oi8e and as s(8h to be repla8ed b4 the first benefi8iar4$ ANAL SIS As the heading s(ggests, the 8o'bined 8ertifi8ate of =al(e and of origin ser=es a '(ltiple p(rpose$ !n8l(ded within the 8ontent of the do8('ent are details that are s4non4'o(s with the str(8t(re of an in=oi8e$ For exa'ple, the benefi8iar4 is re>(ired to pro=ide data regarding the ship'ent in8l(ding goods des8ription, a'o(nt, 8(rren84, 8o(ntr4 of origin, b(4er, seller et8$ Therefore, to all intents and p(rposes, the 8o'bined 8ertifi8ate of =al(e and of origin ser=es the p(rpose, a'ongst others, of an in=oi8e as des8ribed within the 1C,$ S(b-arti8le 5P +h- refers to the fa8t that the ;first benefi8iar4 has the right to s(bstit(te its own in=oi8e and draft, if an4, for those of a se8ond benefi8iar4 for an a'o(nt not in ex8ess of that stip(lated in the 8redit, and (pon s(8h s(bstit(tion the first benefi8iar4 8an draw (nder the 8redit for the differen8e, if an4, between its in=oi8e and the in=oi8e of a se8ond benefi8iar4$< CONCLUSION For the p(rposes of s(b-arti8le 5P +h- a first benefi8iar4 'a4 s(bstit(te their
?9

8o'bined 8ertifi8ate of =al(e and of origin for that of a se8ond benefi8iar4$

Case 1/ "atial shi"ment A 8redit s(bJe8t to 1C, 9@@ &es8ription of goods" ?@@@ 'eters fabri8 as per pro-for'a in=oi8es no$ :@@PA? dated @?$@?$:@@P and no$ :@@PA: dated @?$@?$:@@P ,artial ship'ent is allowed$ Re>(ired do8('ents" ?$ Co''er8ial in=oi8e :$ !nternational Consign'ent note C/R showing goods 8onsigned to the appli8ant 'ar*ed freight prepaid and notif4 appli8ant$ 5$ ,a8*ing list 7$ #enefi8iar4Ds 8ertifi8ate along with rele=ant originalA8op4Aphoto8op4 of 8o(rier re8eipt 8ertif4ing that one set of non-negotiable do8('ents ha=e been sent to the appli8ant within 5 wor*ing da4s after ship'ent date$ #enefi8iar4 'ade a partial ship'ent and presented do8('ents thro(gh the ad=ising ban*, to the iss(ing ban*, whi8h raised the following dis8repan8ies" ?$ Co''er8ial in=oi8e shows two pro-for'a in=oi8e n('bers and dates whereas other do8('ents show n('ber and date of one pro-for'a in=oi8e onl4$ :$ C/R shows onl4 the na'e of the appli8ant in the notif4 part4 field and o'its to show its address as 'entioned in field 6@ of /TL@@$ 5$ & % re8eipt does not bear the date of pi8*-(p and the initialAsignat(re of the 8o(rier 8o'pan4$
?L

QUESTION ?$Are the abo=e-'entioned dis8repan8ies J(stifiedB ANAL SIS &is8repan84 ?$ S(b-arti8le ?P +8- re>(ires that the 8o''er8ial in=oi8e 8ontain a des8ription of the goods that 8orresponds with that appearing in the 8redit$ S(b-arti8le ?7 +d- states ;&ata in a do8('ent, when read in 8ontext with the 8redit, the do8('ent itself and international standard ban*ing pra8ti8e, need not be identi8al to, b(t '(st not 8onfli8t with, data in that do8('ent, an4 other stip(lated do8('ent or the 8redit$< The in=oi8e refle8ted the des8ription of goods as re>(ired b4 s(b-arti8le ?P +8-$ The other stip(lated do8('ents referen8ed onl4 one of the pro-for'a in=oi8e n('bers refle8ting the partial ship'ent that had been 'ade$ The data was not identi8al in the other stip(lated do8('ents, b(t in the 8ontext of the re>(ire'ent of s(b-arti8le ?P +8- and the fa8t that the goods des8ription i$e$, ;fabri8< was identi8al on the two pro-for'a in=oi8es there is no 8onfli8t with onl4 one pro-for'a in=oi8e n('ber being >(oted on do8('ents other than the 8o''er8ial in=oi8e$ Fro' a benefi8iar4 perspe8ti=e, it wo(ld ha=e been 'ore appropriate for the' to ha=e 'ade 8lear in the in=oi8e that the ship'ent in >(estion related to onl4 one of the profor'a in=oi8es, th(s a=oiding sit(ations as en8o(ntered here$ &is8repan84 :$ !t '(st be pres('ed that the 8onsignee field on the C/R was 8o'pleted with the na'e and address of the appli8ant$ The 8o'pletion of the notif4 part4 field with J(st the na'e of the appli8ant does not 8reate a dis8repan84$ There is a 8lear relationship between the na'e of the appli8ant shown in the notif4 part4 field and the na'e and address shown in the 8onsignee field$ &is8repan84 5$ The 8redit re>(ired one set of non-negotiable 8opies of the do8('ents to be sent to the appli8ant within 5 da4s after the date of ship'ent$ 0hilst this infor'ation was to be inserted onto the benefi8iar4 8ertifi8ate, proof of 8o'plian8e wo(ld be e=iden8ed b4 the date of pi8* (p shown on the 8o(rier re8eipt$ The date of pi8* (p was not e=iden8ed$ The 8redit re>(ired the presentation of a 8o(rier re8eipt +original, 8op4 or photo8op4-$ !f the 8o(rier re8eipt in8l(ded a spa8e for signat(re of the 8o(rier 8o'pan4, then this sho(ld ha=e been signed$ The 8o''ents in relation to signing of the 8o(rier re8eipt appl4 on the basis that the presented re8eipt was an original and not a 8op4$ !f a 8op4 8o(rier re8eipt is re>(ired or allowed, it need not be signed$

?P

CONCLUSION &is8repan84 ?$ There is no dis8repan84$ &is8repan84 :$ There is no dis8repan84$ &is8repan84 5$ The dis8repan84 is =alid$

Case 11 obligation of nominated ban0 A 8redit s(bJe8t to 1C, 9@@ The 8redit is a=ailable with a no'inated ban* lo8ated in Co(ntr4 . whi8h trans'its its /T L?@ to an ad=ising ban* in Co(ntr4 T witho(t adding its 8onfir'ation$ 1pon re8eipt of do8('ents the no'inated ban* sends a 'essage to the ad=ising ban* reading" ;,lease be infor'ed that the do8('ents are a88epted b4 (s for 'at(rit4 date O(ne @6, :@@P +O(n @7, :@@P is a holida4 in o(r 8o(ntr4-$ At 'at(rit4 date we will re=ert to the 'atter of pa4'ent of pro8eeds$< 0hen as*ed for a 8larifi8ation of the last senten8e, (pon benefi8iar4Ds re>(est see*ing a 8learer indi8ation of pa4'ent at 'at(rit4, the no'inated ban* replied" ;As the 8redit was not 8onfir'ed b4 (s, we are not in a position to g(arantee pa4'ent at the 'at(rit4 date$< QUESTION
?M

?1whether the no'inated ban* is dee'ed to ha=e in8(rred its deferred pa4'ent (nderta*ing, within the 8ontext of s(b-arti8le ?:+b-, as a res(lt of ha=ing sent its first 'essage whi8h stated that the do8('ents were a88epted b4 the' also gi=ing the 'at(rit4 dateB ANAL SIS The fa8t that the no'inated ban* states that the do8('ents are ;a88epted b4 (s< 'erel4 i'plies that the4 8ontend that the do8('ents represent a 8o'pl4ing presentation$ CONCLUSION The wording (sed in the first 'essage of the no'inated ban* does not refle8t that the4 ha=e in8(rred their deferred pa4'ent (nderta*ing$ !t sho(ld be noted fro' s(barti8le ?: +8- that the re8eipt or exa'ination and forwarding of do8('ents b4 a no'inated ban* that is not a 8onfir'ing ban* does not 'a*e that no'inated ban* liable to hono(r or negotiate, nor does it 8onstit(te hono(r or negotiation$ #an*s are ad=ised to 8onsider 8aref(ll4 the 8hoi8e of words that are (sed to 8on=e4 their position regarding do8('ents and their role in the settle'ent thereof, so as to a=oid sit(ations s(8h as that o(tlined in this >(er4$

Case 1! obligation of confirming ban0 On :9$?@$:@@@ iss(ing ban* +!#- ad=ised a 8redit thro(gh the first ad=ising ban*, whi8h 8onfir'ed the 8redit +C#- and ad=ised thro(gh a se8ond ad=ising ban* +no'inated ban* +N#--$The 8redit is a=ailable at the 8o(nters of N# b4 deferred pa4'ent in three parts" ?@T of in=oi8e =al(e against presentation of do8('ents,7@T of in=oi8e =al(e after ?P@ da4s fro' iss(e date of the 8redit, i$e$ :7$@7$:@@?,6@T of in=oi8e =al(e after 59@ da4s fro' iss(e date of the 8redit, i$e$ ::$?@$:@@?$The 8redit f(rther stip(lates (nder "!nstr(8tions to pa4ing ban*", "1pon re8eipt of do8('ents f(ll4 8o'pl4ing with letter of 8redit ter's we will rei'b(rse 4o( with ?@ per8ent of in=oi8e =al(e as per 4o(r instr(8tions in the 8o=ering
:@

s8hed(le a88o'pan4ing the do8('ents$ S(bJe8t to presentation of do8('ents f(ll4 8o'pl4ing with 8redit ter's and pa4'ent of the first part pa4'ent of ?@ per8ent we C#, hereb4 (nderta*e to effe8t pa4'ent of 7@ and 6@ per8ent as stated abo=e$"The expir4 date was :9$?@$:@@? and latest ship'ent date :P$@:$@?$Nine presentations of do8('ents were 'ade (nder the 8redit, a'o(nting to the =al(e of the 8redit$ All presentations 8ontained dis8repant do8('ents and were, as instr(8ted b4 the benefi8iar4, sent b4 N# to C# for pa4'ent$ C# pro=ided noti8es of ref(sal in a88ordan8e with Arti8le ?7 of 1C,$Sin8e the first presentation was handled differentl4 to the other eight, we s(b'it hereafter two different s(b-8ases" S(b-8ase ?" On ??$?:$:@@@ a first set of do8('ents was sent to C# for pa4'ent$On :?$?:$:@@@ do8('ents were ref(sed b4 C# in a88ordan8e with Arti8le ?7$1pon a(thorit4 of the benefi8iar4 and re>(est of C#, the latter was a(thori)ed to 8onta8t !#$ N# s(bse>(entl4 sent so'e re'inders to C#, whi8h responded to the effe8t of "ha=ing 8onta8ted !# and shall re=ert"$- On ?6$@?$:@@? C# sent a S0!FT pa4'ent ad=i8e to N# for ?@T of the =al(e of the do8('ents less 8onfir'ation fee d(e for the first >(arter$ Ad=i8e stated "pro8eeds re'itted as per 4o(r instr(8tions"$ There was no 'ention 'ade abo(t the fate of the do8('ents$- On :@$@7$:@@? a se8ond S0!FT pa4'ent ad=i8e for 7@T of the =al(e of the do8('ents was sent b4 C# to N# in the sa'e for'at as the foregoing, less 8onfir'ation fee for the se8ond >(arter$ There were still no re'ar*s on the fate of the do8('ents$- On :9$?@$:@@? N# infor'ed C# that the balan8e of 6@T re'ained (npaid on d(e date ::$?@$:@@?$ C# responded i''ediatel4, stating the4 ha=e infor'ed the iss(ing ban* and will effe8t pa4'ent (pon a=ailabilit4 of f(nds$ Afterwards an ex8hange of S0!FT 'essages followed with the following 8ontents" N# arg(ed that C# re'ains liable as 8onfir'ing ban* a88ording to s(b-Arti8le M+b- sin8e pa4'ent for ?@ and 7@T was 'ade witho(t an4 re'ar*, whi8h i'plies that the do8('ents ha=e been a88epted$ #4 appli8ation of s(b-Arti8le ?7+8-, effe8ting pa4'ent wo(ld indeed i'pl4 that wai=er of appli8ant was a88epted$ N# also stated that C# was in 8ontradi8tion with s(b-Arti8les ?7+d-+ii- and ?7+e- b4 'a*ing the first two pa4'ents witho(t 'entioning that do8('ents were still (npaid and that do8('ents were still at their disposal$ C# responded that s(b-Arti8le M+b- applies in so far those ter's and 8onditions of the 8redit ha=e been 8o'plied with$ F(rther'ore the first two pa4'ents were onl4 effe8ted (nder a(thorit4 of and re8eipt of pro8eeds fro' !#$ QUESTION ?$ &oes the fa8t of effe8ting +two- partial pa4'ents i'pl4 that C# a88epted the do8('ents and as a 8onse>(en8e re'ains liable for the last partial pa4'entB S(b-8ase :" The re'aining eight presentations were sent to C# between @:$@?$:@@? and :@$@5$:@@?$ The4 were all reJe8ted in a88ordan8e with Arti8le ?7$On ?L$@7$:@@?, when responding to one of the se=eral re'inders of N#, C#
:?

infor'ed that dis8repan8ies were not 4et a88epted and that do8('ents were held at disposal, also stating "0e shall release do8('ents against a88eptan8e of dis8repan8ies pro=ided 4o( do not ad=ise (s to the 8ontrar4 prior to o(r release of do8('ents$"- On @5 and @7$@L$:@@? C# sent eight pa4'ent ad=i8es to N#, whi8h re8ei=ed the' on @7$@L$:@@?, for 6@T of the =al(e of the do8('ents, representing the first +?@T- and se8ond +7@T- part of the pa4'ent$ ,a4'ents were ad=ised (nder =al(e @6$@L$:@@?$- On @6$@L$:@@?, C# sent eight new S0!FT 'essages referring to the eight ad=i8es of pa4'ent stating "Iindl4 be infor'ed that do8('ents are still held at o(r 8o(nters and will onl4 be released against f(ll pa4'ent$ !n the 8ir8('stan8es re'aining 6@ per8ent pa4'ent will be effe8ted (pon a=ailabilit4 of f(nds"$ N# onl4 re8ei=ed these 'essages on @9$@L$:@@?, th(s after foreseen pa4'ent date$- On d(e date +::$?@$:@@?- for the last pa4'ent of the re'aining 6@T, no pa4'ent was effe8ted b4 C#$ ere again, an ex8hange of S0!FT 'essages followed between C# and N#$ N# stated that C# re'ained liable as 8onfir'ing ban* as per s(b-Arti8le M+b- arg(ing that the 'essage infor'ing the withholding of the do8('ents was sent after effe8ting pa4'ent for the two first partial pa4'ents$ As per appli8ation of s(b-Arti8le ?7+8- effe8ting pa4'ent wo(ld i'pl4 that appli8antHs wai=er has been a88epted$ C# responded that s(b-Arti8le M+b- did not appl4 as the do8('ents did not 8o'pl4 with the ter's and 8onditions of the 8redit$ ,a4'ent of ?@T and 7@T was onl4 'ade s(bJe8t to a=ailabilit4 of f(nds$ QUESTION ?$!s N# right to state that effe8ting pa4'ent 8an be 8onsidered as an a88eptan8e of the dis8repant do8('entsB :$ as the C# the right to withdraw its liabilit4 as 8onfir'ing ban*, on8e two partial pa4'ents ha=e alread4 been effe8ted (nder the sa'e do8('entar4 re'ittan8eB ANAL SIS !n both s(b-8ases, the 8onfir'ing ban* has reJe8ted do8('ents and these see' to ha=e been a88epted b4 the no'inated ban*$ The iss(es raised in the two s(b-8ases are si'ilar and the response below wo(ld appl4 to both s8enarios$ a=ing reJe8ted the do8('ents and so(ght appro=al fro' the iss(ing ban*, the 8onfir'ing ban*, in its ad=i8e of ref(sal to the no'inated ban*, sho(ld ha=e 8on=e4ed its position regarding settle'ent sho(ld the iss(ing ban* agree to ta*e (p the do8('ents$ Effe8ting the first of the two-stage pa4'ents witho(t 8o''ent that s(8h pa4'ents were s(bJe8t to their re8eipt of f(nds indi8ates the 8onfir'ing ban*Hs agree'ent to hono(r on the stip(lated d(e date+s-$ !n the absen8e of an4 prior notifi8ation, a no'inated ban*, ha=ing re8ei=ed pa4'ent ad=i8es for the first two pa4'ents, wo(ld be entitled to belie=e that the 8onfir'ing ban* is willing to 8ontin(e with its 8onfir'ation despite the fa8t that dis8repant do8('ents were presented$ 0here a 8redit has not expired, it is in8('bent (pon a 8onfir'ing ban* to ad=ise a presenter
::

when it is not willing to hono(r do8('ents that ha=e been a88epted b4 an iss(ing ban*$ CONCLUSION a=ing settled the first of the two-stage pa4'ents, witho(t 8o''ent as to the stat(s of the 8redit, the 8onfir'ing ban* 8annot arbitraril4 withdraw its 8onfir'ation$ The 8onfir'ing ban* sho(ld hono(r the final drawing$!t is interesting to note that the 8onfir'ing ban* later ad=ised that it was still holding do8('ents, despite ha=ing re8ei=ed f(nds fro' the iss(ing ban* and effe8ting settle'ent for the first of the two-stage pa4'ents$ This wo(ld indi8ate an agree'ent with the iss(ing ban* regarding the retention of do8('ents (ntil f(nds for the final drawing were re8ei=ed$ This agree'ent wo(ld, again, see' not to ha=e been 'ade p(bli8 at the ti'e the first of the two-stage pa4'ents was 'ade$

:5

Case 1# trans"ort document issued by freight for2arder A do8('entar4 8redit 8alled for 8lean on board bills of lading and stip(lated separatel4, "Transport do8('ent iss(ed b4 Freight Forwarder not a88eptable"$ The transport do8('ent s(bse>(entl4 presented was titled "F#% #!FA Negotiable F!ATA /(lti'odal Transport #ill of %ading" and signed b4 the iss(er, "as 8arrier"$ The transport do8('ent was ref(sed for the reason that the express 8ondition of the 8redit "Transport &o8('ent iss(ed b4 freight forwarder not a88eptable" o=errode 1C, Arti8le 5@ +whi8h itself en=isages o=erriding pro=isions in a 8redit b4 8o''en8ing "1nless otherwise a(thorised in the Credit"-$ Therefore the iss(ing of the transport do8('ent apparentl4 b4 a freight forwarder, albeit in the 8apa8it4 of 8arrier, 8ontra=ened the express 8ondition of the 8redit$ QUESTION ?10as the ban* 8orre8t to ref(se the transport do8('ent for the reason gi=en and as a general prin8iple, where=er there appears to be 8onfli8t between an express ter' of a 8redit and a pro=ision of 1C,, the express ter' of the 8redit shall pre=ailB ANAL SIS The ter'inolog4 "Transport do8('ent iss(ed b4 Freight Forwarder not a88eptable" is an a'big(o(s ter' that does not 8learl4 define the t4pe of do8('ent that wo(ld be a88eptable$ For exa'ple, it is not 8lear whether the 8redit is see*ing to re'o=e the abilit4 for a freight forwarder to iss(e a bill of lading that wo(ld be a88eptable (nder 1C, 6@@ Arti8le 5@ or whether it extends to the 'anner in whi8h the bill of lading wo(ld be signed$ CONCLUSION !n regard to this en>(ir4, the ban* wo(ld be obliged to a88ept a bill of lading that was signed "as 8arrier" irrespe8ti=e of an4 *nowledge the4 'a4 ha=e as to the 8apa8it4 of the iss(er$

:7

Case 1& $%L date A draft drawn at M@ da4s after "#A% date"$ Conf(sion has arisen be8a(se there were two dates on the #A% presented$ One date is Feb$ ?P, ?MM9, written J(st below the "%oaded on-board" notation, and the other date is Feb$ :?, ?MM9, written in the box for date of iss(e$ QUESTION ?$whi8h of the two dates is the #A% dateB ANAL SIS As a 'atter of fa8t, (nder 8ertain 8ir8('stan8es the expression "#A% date" 'a4 pro=e to be an (n8lear ter'$ This is the 8ase where a bill of lading bears, in addition to the date of its iss(an8e, an on board notation whi8h gi=es the date on whi8h the goods ha=e been loaded on board, both dates being different fro' ea8h other$ That s(8h a sit(ation will arise is (s(all4 not *nown beforehand when the 8redit is iss(ed$ !n a sit(ation as des8ribed abo=e, the date of the on board notation is 'ostl4 later than the date of iss(an8e$ owe=er, nothing is (n(s(al in an on board notation pre-dating the iss(an8e date of the bill of lading$ The date on whi8h the goods ha=e been loaded on board 'a4 be ad=ised to the #A% iss(ing offi8e and an inter=ening wee*-end, or press(re of wor*, 'ight 8a(se the bill of lading to be iss(ed and dated so'e da4s later, tho(gh also showing the a8t(al, and earlier, date on whi8h the goods ha=e been loaded on board$ !n this 8ontext, it has also to be reali)ed that in pra8ti8e for stip(lating the tenor of a draft >(ite often the expression ". da4s after ship'ent date" instead of ". da4s after #A% date" is (sed, and that (nder 1C, 6@@ s(b-Arti8le :5 +a-+ii- the date of iss(an8e of the bill of lading will be dee'ed to be the date of ship'ent, (nless the bill of lading re>(ires an on board notation, in whi8h 8ase the date of the on board notation will be dee'ed to be the date of ship'ent$ 1nder these 8ir8('stan8es there is J(stifi8ation for sa4ing that in a sit(ation where the bill of lading bears an on board notation, the date of the on board notation is to be 8onsidered the "#A% date"$
:6

CONCLUSION For the p(rpose of fixing the 'at(rit4 date of a draft to be drawn (nder a 8redit whi8h stip(lates s(8h draft to be drawn ". da4s after #A% date" the date of the on board notation, if an4, sho(ld be 8onsidered the "#A% date" irrespe8ti=e of whether the date of the on board notation is later or earlier than the date of iss(an8e of the bill of lading$

Case 1' understanding of L%C clauses A %AC was iss(ed to a ban* in Co(ntr4 I with a 8o'pan4 in Co(ntr4 I as the benefi8iar4$ The %AC 8alled for a series of do8('ents, one of whi8h was as follows" G#enefi8iar4Ds 8ertified 8op4 of faxAtelex dispat8hed to the a88o(ntees within :7 ho(rs after ship'ent ad=ising na'e of the =essel, date, >(antit4, weight and =al(e of ship'ent$$D$ 0hen presentation of do8('ents b4 the negotiating ban* was 'ade to the iss(ing ban*, a benefi8iar4Ds 8ertifi8ate was presented, stating as follows" G0e hereb4 8ertif4 that we ha=e sent f(ll set of non-negotiable shipping do8('ents dire8tl4 to +appli8antDs na'e- b4 8o(rier ser=i8e and fax within :7 ho(rs after ship'ent$D As it was onl4 a si'ple state'ent instead of a separate do8('ent re>(ested b4 the %AC, the iss(ing ban* ref(sed to 'a*e pa4'ent$ owe=er, the negotiating ban* insisted that the benefi8iar4Ds 8ertifi8ate was in 8o'plian8e with the %AC ter's$ QUESTION ?$!s the do8('ent in 8o'plian8e with the re>(ire'ent of the %ACB ANAL SIS S(b-Arti8le M+a- states that ;an irre=o8able Credit 8onstit(tes a definite (nderta*ing of the !ss(ing #an*, pro=ided that the stip(lated do8('ents are presented to the No'inated #an*, or to the !ss(ing #an*, and that the ter's and 8onditions of the Credit are 8o'plied with +$$$-< S(b-Arti8le ?@+d- states that ;b4 no'inating another ban* $$$ , the !ss(ing #an* a(thorises s(8h ban* to $$$ negotiate against do8('ents whi8h appear on their fa8e to be in 8o'plian8e with the ter's and 8onditions of the Credit and (nderta*es to
:9

rei'b(rse s(8h ban* in a88ordan8e with the pro=isions of these Arti8les$< The do8('ent presented was not the do8('ent against whi8h the iss(ing ban* a(thorised negotiation$ !t was not in 8o'plian8e with the ter's and 8onditions of the letter of 8redit$ The 8redit stip(lated ;#enefi8iar4Ds 8ertified 8op4 of faxAtelex despat8hed to the a88o(ntees within :7 ho(rs after ship'ent ad=ising na'e of the =essel, date, >(antit4, weight and =al(e of ship'ent $$$<$ The do8('ent that was presented was a benefi8iar4Ds 8ertifi8ate stating ;0e hereb4 8ertif4 that we ha=e sent f(ll set of nonnegotiable shipping do8('ents dire8tl4 to +appli8antDs na'e- b4 8o(rier ser=i8e and fax within :7 ho(rs after ship'ent$< This do8('ent was not the do8('ent against whi8h the iss(ing ban* a(thorised negotiation and, therefore, it was not in 8o'plian8e with the ter's and 8onditions of the 8redit$ CONCLUSION The iss(ing ban* was 8orre8t in reJe8ting the do8('ent presented$

Case 1) instalment sti"ulation 1C, 6@@ Arti8le 7? instal'ent ship'entsAdrawings is appli8able if drawings andAor ship'ents b4 instal'ent within gi=en periods are stip(lated in the 8redit$ The following are the ship'ent s8hed(les on a 8redit$ Total >(antit4 of ship'ent re>(ired (nder the 8redit is 5@,@@@ *gs Exa'ple ?" Ship'ent s8hed(le ?@ @@@ *gs latest on 5? O8t$ :@@: ?@ @@@ *gs latest on 5@ No=$ :@@: ?@ @@@ *gs latest on 5? &e8$ :@@: Exa'ple :" Ship'ent s8hed(le ?@ @@@ *gs #etween ? O8t$ :@@: to 5? O8t$ :@@: ?@ @@@ *gs #etween ? No=$ :@@: to 5@ No=$ :@@: ?@ @@@ *gs #etween ? &e8$ :@@: to 5? &e8$ :@@: Exa'ple 5" Ship'ent s8hed(le 6 @@@ *gs %atest 5@ Sep$ :@@: 6 @@@ *gs #etween ? O8t$ :@@: to 5? O8t$ :@@: ?@ @@@ *gs %atest 5@ No=$ :@@: ?@ @@@ *gs #etween ? &e8$ :@@: to 5? &e8$ :@@: QUESTION
:L

?$ whi8h of the abo=e exa'ples sho(ld be 8onsidered as within gi=en periods :$ 0hether the word Ginstal'entsD '(st be indi8ated in the 8redit to 'a*e Arti8le 7? appli8able$ ANAL SIS Exa'ple No$ ? gi=es three ;latest< ship'ent dates for whi8h 5 x ?@,@@@*gs 'a4 be shipped$ !n realit4, 5@,@@@*gs 8o(ld be shipped b4 5? O8tober, OR, one ship'ent of ?@,@@@*gs 'ade b4 5? O8tober and the balan8e of :@,@@@*gs either shipped as one ship'ent b4 5@ No=e'ber, OR, otherwise split to ship at least an additional ?@,@@@*gs b4 5@ No=e'ber$ 0hile this is not the re>(ested wording that was intended b4 Arti8le 7?, ne=ertheless if at least ?@,@@@*gs is not shipped b4 5? O8tober the 8redit wo(ld 8ease to be a=ailable for all f(rther ship'ents$ %i*ewise, if at least ?@,@@@*gs is shipped b4 5? O8tober b(t a total of :@,@@@*gs are not shipped b4 5@ No=e'ber, the 8redit wo(ld 8ease to be a=ailable for an4 re'aining 'er8handise$ Exa'ple No$ : shows 5 distin8t periods in whi8h ?@,@@@*gs are to be shipped$ !t is not possible to 8o'bine an4 ship'ents$ This t4pe of s8hed(le is s(bJe8t to the pro=isions of Arti8le 7? Exa'ple No$ 5 is a 'ix of Nos ? and :$ The first ship'ent ter' 8o(ld in8l(de all or part of the goods relati=e to the third ship'ent ter'$ owe=er, the 8redit wo(ld 8ease to be a=ailable for f(rther drawings p(rs(ant to Arti8le 7? in an4 of the following 8ases" ?- at least 6,@@@ *gs not shipped b4 5@ Septe'ber, or :- at least 6,@@@ *gs shipped b4 5@ Septe'ber b(t at least an additional 6,@@@ *gs not shipped between ? O8tober and 5? O8tober, or 5- at least 6,@@@ *gs shipped b4 5@ Septe'ber and at least an additional 6,@@@ *gs shipped d(ring O8tober b(t a total of :@,@@@ *gs not shipped b4 5@ No=e'ber$ CONCLUSION Exa'ple No$ : is the pop(lar wa4 to spe8if4 the gi=en period of instal'ent ship'ent$ As 8an be seen fro' the abo=e, the 8redit does not ne8essaril4 need to state the words ;instal'ent ship'ent<$

:P

Case 1+ descri"tion of goods in the documents #an* A iss(ed its irre=o8able 8redit fa=o(ring Co'pan4 ., a=ailable with #an* # b4 negotiation at sight$ !n the 8redit, the des8ription of goods and 8ertain do8('entar4 re>(ire'ents were stip(lated as follows" ?- &es8ription of Goods" 3(antit4" ?,@@@ /ATs /aterial" ot Rolled Steel ,lates Si)e" :@$@@// x :@@@ // x ?@@@ // - 6@@ /ATDs :6$@@// x :@@@ // x ??@@ // - 6@@ /ATDs 1nit pri8e" 1S& $$$$$$$ per /AT CEF $$$$$$$$$
:M

:- &o8('entar4 re>(ire'ents in8l(ded" ,a8*ing list in : 8opies showing si)e and weight per si)e and in total and also showing the a8t(al 8olo(r 'ar* of ea8h si)eC Cop4 of >(alit4 8ertifi8ate iss(ed b4 'an(fa8t(rer showing si)e, heat nos$, 8he'i8al 8o'position and 'e8hani8al properties for ea8h heat, and 8ertif4ing that the 'aterial prod(8ed is in a88ordan8e with A59$ #an* # 8he8*ed and 8onsidered the do8('ents to 8onfor' to the 8redit ter's and negotiated the benefi8iar4Ds draft$ #an* A reJe8ted the do8('ents and pro=ided a dishono(r noti8e >(oting the following dis8repan8ies" ,a8*ing list not showing des8ription of goods 3(alit4 8ertifi8ate not showing des8ription of goods #an* # reJe8ted the ref(sal, 8iting" The 8redit did not re>(ire both the pa8*ing list and >(alit4 8ertifi8ate to show the des8ription of the goods$ ,a8*ing list was presented showing si)e and weight per si)e and in total, and also showing the a8t(al 8olo(r 'ar* of ea8h si)e$ 3(alit4 8ertifi8ate was presented showing si)e, heat nos$, 8he'i8al 8o'position and 'e8hani8al properties for ea8h heat, and 8ertif4ing that the 'aterial prod(8ed is in a88ordan8e with A59$ &espite the absen8e of des8ription of goods, the abo=e two do8('ents 8o(ld be lin*ed to and were 8onsistent with the other do8('ents b4 the si)e of the goods, the =essel na'e and the state'ent that the 'aterial prod(8ed is in a88ordan8e with A59$ S(b-Arti8le 5L+8- of 1C, 6@@ was appli8able$ #an* A 8onsidered that the do8('ents re'ained dis8repant d(e to " #oth pa8*ing list and >(alit4 8ertifi8ate '(st show des8ription of goods +either in f(ll des8ription as per the 8redit or in general ter's as per s(b-Arti8le 5L+8- of 1C, 6@@-$ !n 8onne8tion with point ? 'entioned abo=e, 8ertain do8('ents, e$g$ 8ertifi8ate of origin, inspe8tion 8ertifi8ate, ins(ran8e and transport do8('ents, et8$ are re>(ired to show des8ription of the goods e=en if the 8redit does not stip(late s(8h a re>(ire'ent$ The do8('ents in >(estion, showing data 8ontents +=essel na'e, si)e of goods and state'ent- 8onsistent with other do8('ents does not in an4 wa4 i'pl4 that the4 are 8o=ering the sa'e 'er8handise as per the 8redit ter's$ This arg('ent 8an be s(pported b4 the following fa8t(al 8ases" a- the s(pplier 8an ship different or sa'e t4pe of goods to one b(4er or different b(4er+s- b4 the sa'e =essel (nder the sa'e =o4ageC b- e=en if the si)e and spe8ifi8ation shown on the pa8*ing list and >(alit4
5@

8ertifi8ate are sa'e as the 8redit, it 'a4 refer to other t4pes of goods +e$g$ shirts with >(alit4 L6T 8otton and :6T pol4ester and si)e :6-:6 8an be 'enDs shirts or wo'enDs shirts- if no des8ription of goods is shown therein$ QUESTION ?$Fro' the =iewpoint of do8('ent 8he8*ing and proper presentation, are the two do8('ents in >(estion 8onsidered as in8o'plete do8('ents d(e to absen8e of the goods des8riptionB ANAL SIS The >(estion re=ol=es aro(nd s(b-Arti8le ?5+a-, whi8h states do8('ents '(st GGappear on their fa8e to be in 8o'plian8e $$$DD and whi8h do not GGappear on their fa8e to be in8onsistent with one anotherDDC s(b-Arti8le 5L+8-, whi8h states that in all do8('ents other than 8o''er8ial in=oi8es the goods 'a4 be GGdes8ribed in general ter's not in8onsistent with the des8ription of the goods in the 8reditDDC and Arti8le :?, whi8h states that in the 8redit, for do8('ents other than transport do8('ents, ins(ran8e do8('ents and 8o''er8ial in=oi8es, ban*s '(st stip(late GGtheir wording or data 8ontent$ !f the 8redit does not so stip(late, ban*s will a88ept s(8h do8('ents as presented, pro=ided their data 8ontent is not in8onsistent with an4 other do8('ents presentedDD$ The iss(ing ban* does not appear to be arg(ing that there is in8onsistent dataC in other words, it does not see' to 8ontend that the infor'ation as shown +in so far as it is shown- is in8orre8t, b(t that it is ins(ffi8ient$ The iss(ing ban* appears to 8ontend that the re>(ire'ents of s(b-Arti8le 5L+8- s(persede, or at worst 'a4 be 8onsidered as an addition to, those of Arti8le :?$ The negotiating ban* 8ontends that the opposite applies$ CONCLUSION #4 gi=ing details of what the do8('ents in >(estion sho(ld in8l(de, the iss(ing ban* is in=o*ing Arti8le :? at the expense of s(b-Arti8le 5L+8-, and has, in this instan8e, re8ei=ed exa8tl4 what it as*ed for$ !t wo(ld 8reate an in=idio(s sit(ation, b(t one we 8an =is(ali)e happening in =iew of this 8ase, where the ob=erse sit(ation 8o(ld also in=ite a reJe8tion fro' an iss(ing ban* if the benefi8iar4 had >(oted the goods des8ription to 8o'pl4 with s(b-Arti8le 5L+8-, b(t an iss(ing ban* 8ontended that this was at =arian8e with Arti8le :?$ !n the 8ir8('stan8es of this 8ase, there are no gro(nds for reJe8tion$

5?

Case 1, document re*uired or not An iss(ing ban* in Co(ntr4 I opened an irre=o8able %AC stip(lating, as a spe8ial 8ondition GState'ent of Origin iss(ed b4 exporter sho(ld ha=e the 8ontent as follows" All goods bear the 8o(ntr4 of origin on the s(rfa8e of the goods$D #(t the negotiating ban* in Co(ntr4 ! whi8h had been rei'b(rsed b4 the rei'b(rsing ban* o'itted to re8ei=e and send the abo=e do8('ent$ The iss(ing ban* ad=ised this fa8t to the negotiating ban* within se=en ban*ing da4s fro' the date of re8eipt of the do8('ents and as*ed for a ref(nd for this reason$ %ater, the negotiating ban* sent this do8('ent b4 fax, after the expir4 date of the %AC$ The iss(ing ban* re>(ested the negotiating ban* again to ref(nd the a'o(nt paid d(e to the expir4 date ha=ing passed$ owe=er, the negotiating ban* has ref(sed$ !t insists that the do8('ent, i$e$ the state'ent of origin whi8h was forwarded to the iss(ing ban* an4wa4, was not listed a'ong the do8('ents re>(ired on the fa8e of the %AC, so it was not a dis8repan84 for the negotiating ban* to o'it that do8('ent$ QUESTION ?$!s the negotiating ban*Ds assertion a88eptable, e=en tho(gh the spe8ial 8ondition was not satisfiedB :$Can the iss(ing ban* as* the negotiating ban* to ref(nd the a'o(nt paidB ANAL SIS The re>(est for a ;State'ent of Origin $$$ <, whilst not spe8ifi8all4 listed in the area designated for re>(ired do8('ents, was still a do8('entar4 8ondition whi8h was to be 8o'plied with b4 the benefi8iar4 and negotiating ban*$ The fa8t that the re>(est for the do8('ent was (nder a heading ;spe8ial 8ondition< or si'ilar, does not detra8t fro' the fa8t that it was to be presented with the other stip(lated do8('ents$ CONCLUSION The iss(ing ban* was 8orre8t in identif4ing this as a dis8repan84, and the negotiating ban* wo(ld be re>(ired to ref(nd the a'o(nt paid, and settle an4 interest that 'a4 be d(e$

5:

Case 1- goods consigned to a""licant under documentary credit A do8('entar4 8redit inter alia 8ontained a 8ondition GF(ll set on board #ills of %ading indi8ating goods 8onsigned to the Appli8antD$ Goods were 8onsigned in a88ordan8e with the 8redit$ The negotiating ban* negotiated the do8('ents at its ris* and forwarded the' to the iss(ing ban*, whi8h on re8eipt identified so'e dis8repan8ies and infor'ed that the do8('ents were being held at the negotiating ban*Ds ris* and disposal$ The netioating ban*, whilst initiall4 not in agree'ent with the dis8repan8ies, (lti'atel4 agreed The negotiating banl re>(ested that the iss(ing ban* effe8t settle'ent, ignoring the dis8repan8ies, on the gro(nds that the p(rpose for whi8h the s(bJe8t %AC was established had been a88o'plished, i$e$ p(rpose was to pa4 against presentation of do8('ents 8o=ering the goods$ The iss(ing ban* did not agree and ref(sed to pa4 on the gro(nds that the do8('ents were dis8repant and the appli8ant was not read4 to a88ept the dis8repan8ies$ QUEATION ?$Tho(gh ban*s Gdeal with do8('ents and not with goodsD as per 1C,, when goods are 8onsigned to the appli8ant dire8tl4 at the instr(8tion of the iss(ing ban*, 8an the ban* ref(se pa4'ent on the gro(nd of dis8repan84 e=en tho(gh the goods ha=e been d(l4 8leared b4 the appli8antB :$!f the goods had been 8onsigned to the iss(ing ban*, notwithstanding the instr(8tion in the %AC, whether s(8h a8tion wo(ld be tanta'o(nt to a =iolation of the %AC and the relati=e transport do8('ent will be 8onsidered as dis8repan84B ANAL SIS S(b-Arti8les ?5+a- and +b- state, inter alia" ;#an*s '(st exa'ine all do8('ents stip(lated in the Credit with reasonable 8are, to as8ertain whether or not the4 appear, on their fa8e, to be in 8o'plian8e with the ter's and 8onditions of the Credit$ Co'plian8e of the stip(lated do8('ents on their fa8e with the ter's and 8onditions of the Credit, shall be deter'ined b4 international standard ban*ing pra8ti8e as refle8ted in these Arti8les<, and ;The !ss(ing #an*, the Confir'ing #an*, if an4, or a No'inated #an* a8ting on their behalf, shall ea8h ha=e a reasonable ti'e, not to ex8eed se=en ban*ing da4s following the da4 of re8eipt of the do8('ents, to exa'ine the do8('ents and deter'ine whether to ta*e (p or ref(se the do8('ents and to infor' the part4 fro' whi8h it re8ei=ed the do8('ents
55

a88ordingl4$< CONCLUSION Fro' the abo=e 4o( will note that the role of the iss(ing ban* is to deter'ine 8o'plian8e of the do8('ents on their fa8e$ The ban* has no 8on8ern with the goods$ !f a benefi8iar4 ele8ts to ship goods (nder a 8redit where the goods are to be 8onsigned to the appli8ant, it '(st ta*e 8ogni)an8e of the fa8t that sho(ld the presented do8('ents be fo(nd to be dis8repant, the no'inated andAor iss(ing ban* has no obligation to hono(r, e=en tho(gh the goods 'a4 be, or ha=e been, deli=ered to the appli8ant$ !f the benefi8iar4 8hose to ignore the ter's of the 8redit and 8onsigned the goods to the iss(ing ban*, the do8('ents wo(ld be reJe8ted for this point$ Case !/ discre"ancy or not A ban* in Co(ntr4 / iss(ed a letter of 8redit for 1S&56@$:@@+UA-5T-$ &o8('ents were negotiated for 1S&P5,:@@ whi8h were fo(nd to be in 8o'plian8e with the 8redit ter's and sent to the iss(ing ban*$ After re8eipt, the iss(ing ban* sent the following noti8e of dis8repan84 " #enefi8iar4 8ertifi8ate shows the 8arrier as SE%-%AN& End(ran8e ?P@E instead of SEA-%AN& End(ran8e ?P@E$ On the other hand please be infor'ed that (nit pri8e is in8orre8t b4 appli8antDs instr(8tions$ A ban* belie=e that the benefi8iar4 8ertifi8ate itself was not a 'aterial do8('ent in this transa8tion sin8e the 8ontents of it were ;0e hereb4 8ertif4 that one set of do8('ents and ?A5 original bill of lading were sent dire8tl4 to the appli8ant< $ The other do8('ents s(8h as 8o''er8ial in=oi8e, pa8*ing list and bill of lading 8learl4 state the na'e of the =essel as SEA-%AN& instead of SE%-%AN& and no (nit pri8e was 'entioned in the 8redit$ QUESTION ?$!s the dis8repan84 indi8ated b4 the iss(ing ban* a88eptable or not in ter's of international standard ban*ing pra8ti8e B ANAL SIS The benefi8iar4Ds 8ertifi8ate a8ts as proof that it had 8arried o(t the ne8essar4 instr(8tions 8on=e4ed in the letter of 8redit$ !n this 8ase, 8onfir'ation that one 8o'plete set of do8('ents in8l(ding one original bill of lading had been sent to the appli8ant$ The re>(ire'ents for the 8o'pletion of this do8('ent wo(ld ha=e been to repeat the ter's of the state'ent appearing in the 8redit$ !nfor'ation s(8h as the na'e of the =essel wo(ld ha=e been additional infor'ation o=er and abo=e that re>(ired b4 the 8redit$ The 'isspelling of the =essel ;SE%-%AN& End(ran8e ?P@E< instead of ;SEA-%AN& End(ran8e ?P@E< is an ob=io(s t4ping error and wo(ld not 8onstit(te =alid gro(nds for ref(sal$
57

CONCLUSION The dis8repan84 is not a88eptable$

Case !1 relationshi" bet2een dates of .arious documents T4pe of 8redit K irre=o8able Appli8ation K 1C, 6@@ !ss(ing ban* K #an* ! Ad=ising ban* K #an* A Confir'ing ban* K silentl4 8onfir'ed b4 #an* C A=ailabilit4 K at sight with an4 ban* b4 negotiation Expir4 K ong Iong Cir8('stan8es !ss(ing ban* K #an* ! iss(ed its irre=o8able 8redit and ad=ised it to (s thro(gh #an* A Ad=ising ban* K #an* A ad=ised the 8redit to the benefi8iar4 Confir'ing ban* K do8('ents were presented to #an* C for negotiation Credit" a'ong the ter's and 8onditions, the 8redit as*ed for" 8ertifi8ate of >(alit4 ph4tosanitar4 8ertifi8ate Confir'ing ban* 8he8*ed the do8('ents and reJe8ted with the following dis8repan84" GCertifi8ate of 3(alit4 and ,h4tosanitar4 Certifi8ate iss(ed on &e8$ ?? ?MM9, b(t ship'ent date on &e8$ P, ?MM9D$ #an* C referred to 8ase st(d4 No$ :? of !CC ,(bli8ation No$ 656 in s(pport of its de8ision$ QUESTION ?$!s it a '(st that both do8('ents be dated latest b4 ship'ent date, or, in the e=ent that the iss(an8e date is later than ship'ent date, do the do8('ent+s- ha=e to indi8ate date of inspe8tionB

56

ANAL SIS The >(estion in=ol=es whether or not 8ertain do8('ents inherentl4 in=alidate the'sel=es if dated after the date of ship'ent$ !n this respe8t, the benefi8iar4 was referred b4 the +silent- 8onfir'ing ban* to two pre=io(s 8ase st(dies p(blished in !CC ,(bli8ation No$ 656" No$ :? in=ol=ing a post-dated +pre-ship'ent- inspe8tion 8ertifi8ate, and No$ :: in=ol=ing a post-dated 8ertifi8ate of origin and the benefi8iar4Ds 8ontention that the sa'e 8on8l(sions 8annot be applied to the parti8(lar +differentl4 titled- do8('ents presented b4 hi'$ !n the 8ase of an GGinspe8tion 8ertifi8ateDD, if post-dated and not otherwise stating a date of inspe8tion on or before the date of ship'ent, was not a88eptable$ The title of the do8('ent in itself pre-s(pposed a ph4si8al a8t +an GGinspe8tionDD- whi8h sho(ld ha=e o88(rred on or before the date of ship'ent$ !t is re8ogni)ed that there will be o88asions when an inspe8tion 8ertifi8ate will be iss(ed after the date of ship'ent$ CONCLUSION !n the 8ase of do8('ents 8alled GG>(alit4 8ertifi8ateDD and GGph4tosanitar4 8ertifi8ateDD, there is an ele'ent of an i'plied ph4si8al e=ent ha=ing had to ta*e pla8e, whi8h wo(ld s(ggest appli8ation of 8ase st(d4 :? reasoning +i$e$ do8('ents not a88eptable-$ owe=er, the do8('ents in >(estion both refer +8orre8tl4- to the #A% details and the a8t(al goods$ GG#an* CDD sho(ld ha=e a88epted the do8('ents as presented$ Case !! discre"ancies acce"ted by a""licant T4pe of 8redit K irre=o8able Appli8ation K 1C, 6@@ !ss(ing ban* K #an* ! Ad=ising ban* K #an* ! A=ailabilit4 K b4 sight pa4'ent with #an* ! The benefi8iar4 presented do8('ents dire8tl4 to #an* ! for pa4'ent$ #an* ! 8he8*ed the do8('ents and fo(nd two dis8repan8iesC the4 then ad=ised the appli8ant (nder ad=i8e to the benefi8iar4$ The benefi8iar4 8onta8ted the appli8ant in this respe8t and obtained his 8onsent to a88ept the dis8repan8ies$ The benefi8iar4 8onta8ted #an* !, whi8h infor'ed that the appli8ant had a88epted the dis8repan8ies and ret(rned the signed agree'ent$ The benefi8iar4 re>(ested i''ediate pa4'ent$ #an* ! infor'ed that it was not able and liable to effe8t pa4'ent$ QUESTION ?$!s #an* ! 8orre8t in this 8ase not to hono(r the pa4'ent, e=en tho(gh the dis8repan8ies were a88epted b4 the appli8antB ANAL SIS The 8ase 8on8erns whether or not an iss(ing ban*, ha=ing reJe8ted do8('ents
59

+(ndisp(ted- and ha=ing 8onta8ted the appli8ants for a wai=er, is obliged to pa4 the benefi8iar4 (pon re8eipt of s(8h wai=er$ !n 1C, 6@@, the obligations of the iss(ing ban* +as defined in Arti8le M- are enfor8eable onl4 when do8('ents are GGin 8o'plian8e with the ter's and 8onditions of the 8reditDD$ !f do8('ents 8ontain +=alid- dis8repan8ies, the iss(ing ban* is relie=ed of its obligation to pa4 b4 a8ting in a88ordan8e with s(b-Arti8le ?7+d-$ CONCLUSION The iss(ing ban* in this 'atter is a8ting within its rights, and the on(s to 'a*e pa4'ent rests with the appli8ant$ The onl4 alternati=e 8ir8('stan8e wo(ld be if the iss(ing ban* had released do8('ents to the appli8ant witho(t 'a*ing pa4'ent, in whi8h 8ase it wo(ld be liable$ !t is not 8lear fro' the details pro=ided as to the whereabo(ts of the do8('ents$

Case !# restricted negotiation The banefi8iar4 had re8ei=ed an %AC fro' #an* C in Co(ntr4 S whi8h restri8ted negotiation to #an* A in Co(ntr4 !$ #an* A was to rei'b(rse dire8tl4 fro' its offi8e in Co(ntr4 G$ As #an* A is approxi'atel4 ?@@@ I' fro' the lo8ation of the benefi8iar4, the benefi8air4 ga=e the do8('ents to his ban*ers, who negotiated and forwarded the do8('ents to the iss(ing ban*$ The negotiating ban* had re8ei=ed a telex fro' the iss(ing ban* stating that the opener has reJe8ted the shipping do8('ents (nder the %AC$ The telex did not spe8if4 an4 dis8repan8ies, other than the referen8e to the opener ha=ing reJe8ted$ QUESTION ?$As the iss(ing ban* has not 'entioned an4 dis8repan84, 8an it stop the pa4'ent to the benefi8iar4 b4 ref(sing to rei'b(rse the negotiating ban*B :$!s the fa8t that do8('ents were not ro(ted thro(gh #an* A a =alid reason to reJe8t the do8('entsB ANAL SIS
5L

!t is solel4 for the iss(ing ban* to deter'ine, on the fa8e of the do8('ents, whether the4 8onfor' to the ter's and 8onditions of the 8redit$ The appli8ant has no role in this deter'ination$ To e'phasi)e this point, S(b-Arti8le ?7+d- states" ;!f the !ss(ing #an* andAor the Confir'ing #an*, if an4, or a No'inated #an* a8ting on their behalf, de8ides to ref(se the do8('ents, it '(st gi=e noti8e to that effe8t b4 tele8o''(ni8ation or, if that is not possible, b4 other expeditio(s 'eans, witho(t dela4 b(t no later than the 8lose of the se=enth ban*ing da4 following the da4 of re8eipt of the do8('ents$ S(8h noti8e shall be gi=en to the ban* fro' whi8h it re8ei=ed the do8('ents, or to the #enefi8iar4, if it re8ei=ed the do8('ents dire8tl4 fro' hi'$< CONCLUSION !f an iss(ing ban* fails to 8onfor' to the re>(ire'ents of s(b-Arti8le ?7+d-, it is bo(nd to hono(r the do8('ents as presented, e=en tho(gh =alid dis8repan8ies 'a4 exist$ The iss(ing ban*, in this 8ase, has 8learl4 failed to pro=ide a noti8e of reJe8tion whi8h 8ontains a listing of the dis8repan84+ies- obser=ed and has therefore, failed to 8o'pl4 with this s(b-Arti8le$

Case !& discre"ancies "re.iously acce"ted &o8('ents that the benefi8iar4 had pre=io(sl4 presented to an o=erseas ban* were reJe8ted d(e to the fa8t that an ins(ran8e 8ertifi8ate was presented in lie( of an ins(ran8e poli84$ This dis8repan84 was a88epted b4 the appli8ant for the first two ship'ents$ e then presented a third set of do8('ents whi8h 8ontained the sa'e dis8repan84$ The o=erseas ban* has notified (s that the appli8ant ref(ses to a88ept the do8('ents on the basis of a 8ertifi8ate instead of a poli84 of ins(ran8e being presented$ Therefore, the do8('ents were ref(sed b4 the ban*$ QUESTION ?$Can the iss(ing ban* ref(se the do8('ents with the sa'e dis8repan8ies as those
5P

in=ol=ed in the do8('ents pre=io(sl4 a88epted b4 the'B ANAL SIS The fa8t that a ban* 'a4 ha=e pre=io(sl4 a88epted dis8repant do8('ents, with or witho(t an appli8ant wai=er, does not bind that ban* to a88epting a si'ilar dis8repan84+ies- on an4 f(t(re drawing+s- (nless lo8al law states otherwise$ CONC%1S!ON The iss(ing ban* has the right to ref(se the third set of do8('ents presented with the sa'e dis8repan8ies$

Case !' .alid "eriod of sending the ad.ice of discre"ancy A ban* negotiated shipping do8('ents (nder a 8ertain letter of 8redit, whi8h stip(lated that the negotiating ban* sho(ld present the do8('ents in two 8onse8(ti=e lots$ A ban*Therefore sent ea8h lot of do8('ents on separate da4s p(rs(ant to the instr(8tion of the %AC$ The iss(ing ban* re8ei=ed one lot of do8('ents on a 8ertain date and again re8ei=ed the other do8('ents on another da4$ The iss(ing ban* sent an ad=i8e of dis8repan84 on the eighth b(siness da4 following the date of re8eipt of the first lot of do8('ents$ A ban* ref(sed to a88ept the ad=i8e of dis8repan84 sa4ing that the iss(ing ban*
5M

sho(ld ha=e sent the ad=i8e of dis8repan84 one da4 earlier in order to 'a*e that ad=i8e effe8ti=e$ 0hereas the iss(ing ban* insists that the 8o(nting of the se=enth da4 sho(ld start on the date it re8ei=ed the se8ond lot of do8('entsC therefore it 8ontends that it has 8o'pletel4 adhered to the 8ontent of Arti8le ?7 of the 1C,$ QUESTION ?$!s the iss(ing ban* J(stified in ref(sing the do8('ents in this 8aseB ANAL SIS 0hen an iss(ing ban* re>(ests that do8('ents be sent in two 'ailings, the first 'ailing sho(ld 8onsist of at least one original of all of the re>(ired do8('ents$ The se8ond 'ailing will 8onsist of one 8op4 of the do8('ents presented, where this is possible K i$e$ (nder the 8redit ter's a do8('ent 'a4 onl4 be prod(8ed in the sing(lar and therefore wo(ld be in8l(ded within the first 'ailing K and, if appli8able, an original bill of lading$ This first 'ailing sho(ld pro=ide the iss(ing ban* with the abilit4 to re=iew the do8('ents on the basis that the se8ond 'ailing will onl4 8ontain 8opies +or f(rther original+s-- of do8('ents alread4 re8ei=ed$ !f an iss(ing ban* has 8hosen this 'ethod for the deli=er4 of do8('ents, it '(st be prepared to pro=ide a reJe8tion noti8e in a88ordan8e with Arti8le ?7 of the 1C, 6@@ based (pon the 8ontent of the first 'ailing$ To do otherwise 8o(ld gi=e rise to an inordinate dela4 in re=iewing the do8('ents sho(ld the se8ond 'ailing be dela4ed or lost in transit$ CONCLUSION The iss(ing ban* is not J(stified in ref(sing the do8('ents be8a(se the ad=i8e of dis8repan84 is not sent within the =alid period$

Case !) inconsistent consighees on t2o documents !t is re8entl4 noted that 8ertain iss(ing ban*s +notabl4 in Co(ntr4 A- reJe8t do8('ents presented within the fra'ewor* of o8('entar4 8redits for the following irreg(larit4" GThe 8onsignee on the 8ertifi8ate of origin +box No$: on the CERFA for'- is different fro' the one on the bill of lading$D
7@

!t is the fa8t that the transportation papers, in order to be in a88ordan8e with the ter's and 8onditions of the 8redits, are (s(all4 'ade o(t as follows" either to order and blan* endorsed, or to order of the iss(ing ban*$ 0hile the 8ertifi8ates of origin show the a8t(al 8onsignee of the goods, 'entioned either in the 8redit as the Gappli8antD or (nder Gnotif4D on the bill of lading +the 8redits did not stip(late spe8ifi8all4 how to draw (p these 8ertifi8ates-$ Considering that there is a di=ergen8e between the do8('ents, this see's in this 8ase 8ontrar4 to the spirit of s(b-Arti8le ?5+a- and Arti8le :? of 1C, 6@@$ QUESTION ?$ ow 8an this sit(ation be dealt with in pra8ti8eB ANAL SIS !t is pres('ed that the 8redit 'erel4 8alled for a 8ertifi8ate of origin witho(t 8o''ent as to an4 additionalAre>(ired infor'ation to appear therein$ Arti8le :? of 1C, 6@@ states that in the absen8e of an4 stip(lated 8onditions s(8h a do8('ent will be a88eptable, pro=ided that the data 8ontent is not in8onsistent with an4 other stip(lated do8('ent+s- presented$ A 8ertifi8ate of origin re>(ires the insertion of a 8onsignee within the bod4 of the do8('ent$ !n 8ir8('stan8es where the 8redit re>(ires a bill of lading to be iss(ed to order and blan* endorsed, it is not (nreasonable to expe8t that the 8onsignee wo(ld be shown as the appli8ant of the letter of 8redit, or an4 other na'e shown in the 8redit as the (lti'ate re8ei=er of the goods$ 0here a 8redit re>(ires the bill of lading to be iss(ed to order of the iss(ing ban*, it wo(ld not, on8e again, be (nreasonable to expe8t the 8ertifi8ate of origin to show the (lti'ate re8ei=er of the goods as the 8onsignee$ CONCLUSION 1nless the 8redit stated otherwise, 8ertifi8ates of origin iss(ed as des8ribed abo=e wo(ld be a88eptable$

7?

Case !+ ins"ection certificate issued by s"ecified "ersons An iss(ing ban* in Co(ntr4 reJe8ted do8('ents presented b4 a Co(ntr4 I negotiating ban* (nder an irre=o8able 8redit d(e to an (na(thori)ed signat(re on an inspe8tion 8ertifi8ate$ A88ording to the 8redit, an inspe8tion 8ertifi8ate iss(ed and signed b4 two persons no'inated b4 the appli8ant was to be presented$ The iss(ing ban* ad=ised that the spe8i'en signat(res of the indi=id(als who were a(thori)ed to sign the do8('ent were being *ept b4 it +for =erifi8ation p(rposes (pon re8eipt of the do8('ents-$ No details were pro=ided within the ad=i8e of the 8redit either b4 wa4 of identifi8ation of the na'es of the indi=id(als or 8op4 of their spe8i'en signat(res$ The reJe8tion of the do8('ents was 'ade on the basis that the signatories that appeared on the inspe8tion 8ertifi8ate were not in 8onfor'it4 with those appearing in the re8ords of the iss(ing ban*$ Following the reJe8tion, the iss(ing ban* still refrained fro' pro=iding e=iden8e of the signatories for =erifi8ation p(rposes$ A few 'onths after the reJe8tion, the iss(ing ban* sent a 'essage to the negotiating ban* stating that the appli8ant had not iss(ed an inspe8tion 8ertifi8ate and that the do8('ent had been forged$ QUESTION ?$!n these 8ir8('stan8es, does the negotiating ban* ha=e an4 responsibilit4 for =erif4ing the gen(ineness of the signat(resB As we *now, ban*s onl4 exa'ine do8('ents presented and do not 8on8ern the'sel=es be4ond that$ E=en if the do8('ents are in 8o'plian8e with the original signatories, the iss(ing ban* and appli8ant 8o(ld 8hange the na'es witho(t referen8e to the ad=isingAnegotiating ban*$ ANAL SIS A letter of 8redit sho(ld spe8if4 the do8('ent+s- to be presented b4 the benefi8iar4 and their 8ontent$ Those do8('ents sho(ld be 8learl4 arti8(lated with infor'ation as to iss(ers, 8ontent and, where ne8essar4, the signing part4$ Otherwise the 8he8*ing of a do8('ent whi8h is not an in=oi8e, transport do8('ent or ins(ran8e do8('ent wo(ld be s(bJe8t to the 8onditions laid down in Arti8le :?$ !n a sit(ation where a 8redit states that it is a=ailable b4 negotiation with a no'inated ban* and re>(ires the presentation of an inspe8tion 8ertifi8ate signed b4 two persons who are neither identified b4 spe8ifi8 na'e nor b4 the pro=ision of spe8i'en signat(res +for retention b4 the ad=isingAno'inated ban*- the no'inated ban* '(st be 8ertain as to the integrit4 of the benefi8iar4 before negotiating$ 0itho(t the ne8essar4 infor'ation being 8ontained within the 8redit, it wo(ld be feasible that a ;=alid< inspe8tion 8ertifi8ate 'a4 be presented and then be s(bJe8t to reJe8tion b4 the iss(ing ban* d(e to the wrong signator4+ies- appearing thereon$ CONCLUSION
7:

Gi=en the ter's of the 8redit, the iss(ing ban* wo(ld ha=e been J(stified in reJe8ting the do8('ents if the inspe8tion 8ertifi8ate had not been signed a88ording to the 'andate held in its files$ The 8redit had been >(ite 8lear that the signat(res wo(ld be s(bJe8t to a 8he8* against those held b4 the iss(ing ban*$ owe=er, the iss(an8e of 8redits whi8h do not, at the =er4 least, identif4 b4 na'e the indi=id(al+swho are to 8o'plete the do8('ent is not in line with international standard ban*ing pra8ti8e and is dis8o(raged b4 !CC$ #an*s who, nonetheless, 8hoose to negotiate s(8h 8redits wo(ld do so at their ris* (nless re8o(rse was held to the benefi8iar4 in the e=ent of the do8('ent being in8orre8tl4 signed$

75

Case !, on board date %AC iss(ed with the following re>(ire'ents" On boardAdispat8hAta*ing in 8harge" An4 E(ropean ,ort For transportation to /o'basa ,ort %atest date of ship'ent" 5@ April :@@? Tranship'ent allowed &o8('ents re>(ired" F(ll set 8lean on board o8ean bills of lading Q #ill of lading presented as follows" ,la8e of re8eipt" &(blin ,re-8arriage b4" Fessel A ,ort of loading" Antwerp ,ort of dis8harge" /o'basa, Ien4a Fessel and Fo4$ No$" Fessel F?:5 On board notations appear on #A% as follows" GShipped on board Fessel A ex &(blin on :9$@7$@? arri=ed Antwerp 5@A@7A@?DC GShipped on board per o8ean =essel F?:5 at Antwerp on @: /a4 :@@?D$ +Note" The first notation appears in the text box of the bill of lading in the sa'e print as all the other text$ owe=er, the date on the se8ond notation is added b4 'eans of a sta'p-$ &o8('ents ref(sed d(e to dis8repan84" late ship'ent$ Arg('ent presented b4 iss(ing ban*" G;!n this 8ase the shipped on board notation has been shown as pre-printed wording and the shipped on board date has been indi8ated @: /a4 :@@?$ !t is therefore, 8lear that the wording ;Fessel A ex &(blin on :9$@7$:@@? arri=ed Antwerp 5@$@7$@?< has been s(perseded b4 the wording ;shipped on board per o8ean =essel F?:5 on @: /a4 :@@?<, whi8h is the a8t(al shipped on board date$ As the %AC re>(ires f(ll set of shipped on board #A% and the shipped on board date is /a4 @:, :@@? the dis8repan84 of late ship'ent is =alid$ D QUESTION ?$0hi8h date sho(ld be deter'ined as the on board date B ANAL SIS S(b-Arti8le :5+a-+iii- re>(ires that the bill of lading indi8ate the port of loading and the port of dis8harge stip(lated in the 8redit$
77

For this transa8tion, the port of loading was stated to be ;An4 E(ropean ,ort<$ !n a pre=io(s opinion, R$ 59P of !CC ,(bli8ation No$ 9?5, it has been stated that in a 'arine or o8ean bill of lading sit(ation the port of loading box '(st state the a8t(al na'e of the port of loading$ !n this parti8(lar 8ase, both &(blin +the pla8e of re8eipt- and Antwerp +the stated port of loading- are ports within E(rope$ As has been stated, in pre=io(s 4et-to-be-p(blished opinions, the in8l(sion of an on board notation within the bod4 of a bill of lading whi8h states ;Shipped on board Fessel A ex &(blin on :9$@7$@? arri=ed Antwerp 5@A@7A@?< wo(ld satisf4 the re>(ire'ent of a letter of 8redit re>(esting ship'ent fro' ;An4 E(ropean ,ort< e=en tho(gh &(blin was not stated in the box designated as ;,ort of %oading<$ CONCLUSION The date, :9$@7$@?, wo(ld be ta*en as the date of ship'ent$ 1nder the ter's of this 8redit, late ship'ent wo(ld not ha=e o88(rred$ The se8ond on board notation relating to the ship'ent on the =essel F?:5 wo(ld be 8onsidered additional infor'ation and ha=e no bearing on deter'ining the a88eptabilit4 fro' a =iewpoint of whether or not late ship'ent had o88(rred$ The fa8t that these details were added b4 a sta'p after the 8o'pletion of the other infor'ation does not 8hange this opinion$

76

Case !- effecti.e date of issurance co.er An irre=o8able letter of 8redit has been opened as*ing for the following ins(ran8e do8('ent" G!ns(ran8e poli84 or 8ertifi8ate iss(ed in negotiable for' for the f(ll =al(e C!F pl(s ?@p8t to o(r order stating 8lai's pa4able at destination in %AC 8(rren84, with extended 8o=er to bond store at destination, 8o=ering the following" !nstit(te Cargo Cla(se +A- in8l$ loading and (nloading !nstit(te 0ar Cla(se +Cargo!nstit(te Stri*es Cla(ses +Cargo!nstit(te Radioa8ti=e Conta'ination Ex8l(sion Cla(se ReJe8tion Ris*s as per //! 0ordingD &o8('ent presented" ship'ent too* pla8e on April 7, ?MML whi8h is in 8onfor'it4 with the 8redit ter's$ The ins(ran8e do8('ent presented is dated April :5, ?MML$ 3(estion" is the ins(ran8e do8('ent a88eptable, notwithstanding the fa8t that it is dated April :5, ?MML, b(t also states GsailingAdispat8h date" 7A7AMLD$ Altho(gh the do8('ent does not in8l(de in wording the fa8t that 8o=er is effe8ti=e at the latest fro' the date of loading on board, one 8o(ld interpret the fa8t that the do8('ent shows" the sailing date, =esselDs na'e, port of loading and port of dis8harge +all as per #A%-, and that the 8ondition of ins(ran8e in8l(des loading and (nloading, a 'atter of proof of the fa8t that the 8o=er appears to be effe8ti=e as fro' 7A7AML +as per s(b-Arti8le 57+e- of 1C, 6@@-$ QUESTION ?$ 0hi8h is the effe8ti=e date of the abo=e ins(ran8e 8o=er, April 7,?MML or April :5, ?MML B :$!s this ins(ran8e do8('ent a88eptable as the 8o'plied do8('ent B ANAL SIS
79

The re>(ire'ent of s(b-Arti8le 57+e- is that GG1nless otherwise stip(lated in the 8redit, or (nless it appears fro' the ins(ran8e do8('ent that the 8o=er is effe8ti=e at the latest fro' the date of loading on board or dispat8h or ta*ing in 8harge of the goods, ban*s will not a88ept an ins(ran8e do8('ent whi8h bears a date of iss(an8e later than the date of loading on board or dispat8h or ta*ing in 8harge as indi8ated in s(8h transport do8('ent$DD The ins(ran8e 8ertifi8ate was dated :5 April ?MML and showed details of the Jo(rne4 in8l(ding GGsailingAdispat8h date 7A7AMLDD$ The in8l(sion of details of the Jo(rne4 for whi8h the 8o=er has been effe8ted is a 8o''on feat(re of ins(ran8e do8('ents$ The in8l(sion of a GGsailing dateDD does not pro=ide ade>(ate e=iden8e that the ins(ran8e was effe8ti=e as of that date$ CONCLUSION The ins(ran8e 8o=er is effe8ti=e on April :5, ?MML$ The do8('ent is not be a88eptable as 8o'plied do8('ent$ $ Case #/ inconsistent amounts on .arious documents under transferable L%C 1nder a transferred %AC, the first benefi8iar4 has the right to s(bstit(te his own in=oi8e+s- +and draft+s-- for those of the se8ond benefi8iar4+ies- +s(b-Arti8le 7P+irefers-$ owe=er, we obser=e that so'e of the re'aining do8('ent+s- of the se8ond benefi8iar4 'a4 also show the =al(e of goods$ These do8('ents 'a4 in8l(de, b(t are not li'ited to Export li8en8e +showing FO# =al(e in lo8al 8(rren84Certifi8ate of origin !nspe8tion 8ertifi8ate ,a8*ing list Transport do8('ents Cargo re8eipt, et8$ 1nless the original %AC has expli8itl4 prohibited the other do8('ents to show the =al(e of drawingAgoods, the presentation 'ade b4 the se8ond benefi8iar4 is perfe8tl4 8lean$ 1nfort(natel4, after s(bstit(tion of do8('ents, do8('ents will appear on their fa8e to be in8onsistent with one another +other do8('ents showing =al(e whi8h differs fro' first benefi8iar4Ds in=oi8e-$ Stri8tl4 spea*ing, it appears to be a dis8repan84$ Ne=ertheless, one 'a4 belie=e that (nder a transferable %AC, the %AC opening ban* sho(ld be well aware that so'e of the do8('ents 'a4 be prepared b4 the se8ond benefi8iar4 who is ignorant of the original =al(e$ Therefore, it sho(ld be pra8ti8all4 reasonable and a88eptable$ This is parti8(larl4 reasonable for the 8ase of the export li8en8e$ An export
7L

li8en8e often shows the FO# =al(e in lo8al 8(rren84 whi8h will be in8onsistent with the in=oi8e =al(e of the first benefi8iar4 after s(bstit(tion of the in=oi8e o88(rs$ QUESTION ?$!s it the dis8repan84 when the a'o(nt showing on the in=oi8e presented b4 the first benefi8iar4 is different with the a'o(nts showing on the other do8('ents presented b4 the se8ond benefi8iar4B ANAL SIS S(b-Arti8le 7P+i- in8l(des the following" ;The First #enefi8iar4 has the right to s(bstit(te his own in=oi8e+s- +and &raft+s-- for those of the Se8ond #enefi8iar4+ies-, for a'o(nts not in ex8ess of the original a'o(nt stip(lated in the Credit and for the original (nit pri8es if stip(lated in the Credit, and (pon s(8h s(bstit(tion of in=oi8e+s- +and &raft+s-- the First #enefi8iar4 8an draw (nder the Credit for the differen8e, if an4, between his in=oi8e+s- and the Se8ond #enefi8iar4+iesin=oi8e+s-$< 0hen an iss(ing ban* agrees to iss(e a transferable 8redit it '(st appre8iate that so'e of the infor'ation that 'a4 appear on 8ertain do8('ents 'a4 not agree with that shown on the in=oi8es d(e to the s(bstit(tion of the in=oi8es$ For instan8e, the in=oi8e n('ber of the first benefi8iar4 'a4 be different fro' an in=oi8e n('ber +that of the se8ond benefi8iar4- whi8h 'a4 appear on sa4, a 8ertifi8ate of origin$ !f a'o(nts are shown on do8('ents other than the in=oi8e +and draft+s- if an4- and these differ fro' that on the s(bstit(ted in=oi8e, the iss(ing ban* will still be bo(nd to effe8t settle'ent if the do8('ents are otherwise in 8onfor'it4 with the 8redit ter's and 8onditions$ The iss(e of a'o(nts being shown on do8('ents other than the in=oi8e, is an iss(e 'ore for the first benefi8iar4 who 'a4 not wish the original p(r8hase pri8e to be 'ade *nown to the appli8ant$ CONCLUSION There wo(ld be no dis8repan84 for the reasons o(tlined abo=e$ The negotiating ban* wo(ld not be re>(ired to prod(8e an4 proof of =al(es that 'a4 ha=e appeared in the se8ond benefi8iar4+ies- in=oi8e+s-$

7P