Article

DOCDEX Decision No. 285

Miscellaneous

Whether alleged discrepancies noting commercial invoices are not based on theoretical weight basis; packing lists: theoretical weight in total missing; beneficiary's certificate: mentioning insurance policy or certificate I/O one of them only; and Mill's test certificate: values of tensile missing were valid.

Parties

Initiator: Company L

Respondent: Bank B

Summary of the representations relevant to the issues determined

Respondent issued an irrevocable letter of credit subject to UCP 600. The Initiator (beneficiary) presented documents. The Respondent (issuing bank) alleged five discrepancies and dishonoured. The Initiator challenged the discrepancies. The Respondent relented on discrepancy #3 but remained firm on 1, 2, 4 and 5, returning documents to the presenter. The Initiator believes the documents conform to the credit.

The Initiator inquired if the following discrepancies (cited by the issuing bank) are valid:

1. Commercial invoices are not based on theoretical weight basis;

2. Packing lists: theoretical weight in total missing;

4. Document no. 7 beneficiary's certificate: mentioning insurance policy or certificate I/O one of them only; and

5. Mill's test certificate: values of tensile missing.

NOTE: The numbering above and below is consistent with the Initiator's inquiry, as alleged discrepancy number 3 was withdrawn by the issuing bank.

Respondent did not submit a response to DOCDEX.

Determination of issues and decisions taken:

1. Discrepancy - Commercial invoices are not based on theoretical weight basis. The letter of credit requirement is:

BENEFICIARY'S SIGNED COMMERCIAL INVOICE IN 1 ORIGINAL AND 2 COPIES BASED ON THEORETICAL WEIGHT AND SHOWING NUMBER OF PLATES PER EACH SIZE AND IN TOTAL.

The copies of the invoice submitted for DOCDEX review are identified as:

INVOICE No.: 12345

INVOICE No.: 6789

Each invoice contains a column entitled "THEORETICAL WEIGHT OF EACH SIZE" and contains data which calculates to the weight, unit price, and total amount of each invoice.

This is not a discrepancy.

2. Discrepancy - Packing lists: theoretical weight in total missing

The letter of credit requirement is:

DETAILED PACKING LIST IN 1 ORIGINAL AND 2 COPIES ISSUED PER EACH LOT, SHOWING STEEL GRADE, SIZE, NUMBER OF PLATES, THEORETICAL WEIGHT PER EACH SIZE AND IN TOTAL.

The requirement is not specific as to which item the words "in total" refer. Therefore, from the wording of the condition it is not clear whether the total of theoretical weights is intended or the total theoretical weight after calculation is intended.

Moreover, while the theoretical weight of each size serves the purpose of reaching the weight in MT of each size, hence reaching the total weight of MT shipped, the total theoretical weight has no meaningful purpose, since when such total is multiplied by the total number of plates (467) no result would be obtained. Because each plate size has a theoretical weight of its own different from the others, it would be similar to trying to reach a total by adding the weight of apples to that of pears on a theoretical weight basis.

The copies of the two packing lists submitted for DOCDEX review are consistent with the relative commercial invoices and each contain a "total" weight based on the theoretical weight after calculation, and are consistent with the commercial invoice.

This is not a discrepancy.

3. Discrepancy - Document no. 7 beneficiary's certificate: mentioning insurance policy or certificate I/O one of them only.

The letter of credit requirement is:

BENEFICIARY'S CERTIFICATE, CERTIFYING THAT THE FOLLOWING DOCUMENTS HAVE BEEN SENT BY FAX TO XXXXXX (NOTE: information removed by DOCDEX panel as the name of the recipient and fax number are irrelevant to the dispute and not a party to the dispute)

WITHIN FIVE (5) WORKING DAYS AFTER BILL OF LADING DATE: COMMERCIAL INVOICE, BILLS OF LADING, PACKING LIST, CERTIFICATE OF ORIGIN FORM A, MILL'S TEST CERTIFICATES, PRODUCTION CERTIFICATE AND INSURANCE POLICY OR CERTIFICATE.

The beneficiary's certificate submitted for DOCDEX review contains all of the above information precisely as required by the credit. It appears the alleged discrepancy cited by the issuing bank results from the final document requirement "insurance policy or certificate". The issuing bank believes that only one should be mentioned. The credit did not require the beneficiary to specify which form of document it had sent.

This is not a discrepancy.

4. Discrepancy - Mill's test certificate: values of tensile missing.

The letter of credit requirement is: SET OF MILL'S TEST CERTIFICATES IN 1 ORIGINAL AND 3 COPIES ISSUED BY THE MANUFACTURER OF EACH LOT, ACCORDING TO EN 101112 INCL. CE-SIGN, ADDITIONALLY 14 ELEMENTS AND VALUES OF TENSILE AND IMPACT TEST AT MINUS 20 DEGREE C TO BE STATED IN THE MTC.

The tensile strength of a material is the value at which the material fails when subjected to a tensile force. The Mill's Test Certificate submitted for DOCDEX review, consisting of three pages, is identified as NO: 2468/A. The certificate contains a column entitled "T.S.", which is completed with data. The 3rd page of the certificate contains the explanation: "T.S. = Tensile Strength".

This is not a discrepancy.

Decision

In accordance with the terms and conditions of the credit, UCP 600 and international standard banking practice, the discrepancies alleged by the Respondent are not valid. The presentation is complying and the Respondent had no reason for refusal. Accordingly, the Respondent is obliged to honour its payment obligation under the credit.

The Decision is unanimous.