DOCDEX Decision no. 259

ISBP 645, paragraphs 28 and 92; UCP 500 article 32 and sub-article 14(d)

Date on a draft; on board date on a B/L; invoice number in commercial invoice v. number on the B/L; "clean on board" on a B/L; description of goods and benefificiary's address


Initiator (confirming bank): Bank F

Respondent (issuing bank): Bank T

Background and documents

The Experts have studied a Request for a DOCDEX decision received from the Initiator regarding a dispute over a presentation of documents made by the Initiator under a letter of credit, subject to UCP 500, issued by the Respondent on 10 June 2005.

We have been informed that the Respondent has not filed an Answer in accordance with article 3 of the DOCDEX Rules.

The Experts have made their decision based on the Request and the following documents submitted by the Initiator: 1) a copy of the letter of credit in question; 2) copies of amendments to the letter of credit; 3) copies of the documents in dispute and copies of the correspondence between Initiator and Respondent regarding the case.

The Respondent's refusal of the documents dated 1 August 2005

After having received the Initiator's presentation, the Respondent sent a SWIFT MT799 to the Initiator on 1 August stating the following six points as discrepancies:

- The date of draft did not show on the draft.

- The "on board date" cannot be identified on bill of lading.

- The "invoice no." in the commercial invoice and the insurance policy are inconsistent.

- The "clean on board"' notation did not show on the bill of lading.

- The description of goods in invoice i/o L/C terms.

- The beneficiary's address in invoice i/o L/C term.


Item 1: The credit is available by negotiation and there is a requirement for a draft drawn on the Respondent, but there is no requirement in the credit for this draft to be dated. It is, however, a requirement of bills of exchange laws in most countries that even sight drafts, as in this case, be dated, so it is not unreasonable that the Respondent considers the lack of a date a problem even if, strictly speaking, it is not a discrepancy.

To solve the problem, the Initiator asked the Respondent to put the missing date on the draft. That was done on the same day the Initiator received the refusal notice, 1 August. On 4 August, the Initiator repeated its request for the Respondent to put a date on the draft and, at the same time, conveyed the beneficiary's authorization for the Respondent to do so.

As the Experts cannot imagine that any bank would refuse to act on a request like the one received from another bank, we consider the discrepancy, if there was one, as settled.

Item 2: The bill of lading, which is dated "7 LUG. 2005", is one with pre-printed wording stating that the goods have been shipped on board and, in addition to this, there is a notation on the bill of lading stating "GOODS ON BOARD - 7 LUG. 2005". There is no discrepancy.

Item 3: The presentation includes two different invoices, and the number of one of these invoices is written as "EP/950099" on the invoice itself but has been stated on the insurance document as "EP/950/099".

The Experts do not consider this a discrepancy that would warrant a refusal of the documents for the following reasons: we consider the insertion of a virgule before the last three digits of the invoice number a typing error that could not lead anyone to believe that the number refers to a different invoice, especially as there is plenty of data on the document to evidence that it exactly covers the goods mentioned on the two invoices, EP/950099 and EP/950100, included in the presentation. See paragraph 28 of ICC Publication 645, the ISBP.

Item 4: Considering that there is only one clause on the bill of lading which could be interpreted to be a clause that declares a defective condition of the goods, and the exact wording of that clause is stated in the credit as one that is acceptable, the Experts fail to see how the bill of lading could not be acceptable. It is not a requirement of the credit that the bill of lading must be furnished with a notation that it is clean. And even if it were, Article 32 of UCP 500 states that banks will regard a requirement in a credit for a transport document to bear the clause "clean on board" as complied with if such transport document bears no clause or notation which expressly declares a defective condition of the goods and/or the packaging.

The bill of lading bears the notation CLEAN ON BOARD, but the notation has been deleted/stroked out. In this connection, we draw the attention to paragraph 92 of the ISBP, which states: "If the word 'clean' appears on a bill of lading and has been deleted, the bill of lading will not be deemed to be claused or unclean unless it specifically bears a clause or notation declaring that the goods or packaging are defective."

Item 5: We are not sure we understand the abbreviation "i/o" as used in the Respondent's description of this alleged discrepancy: "The description of goods in invoice i/o L/C terms", but take it to mean that "The description of the goods in the invoice (or perhaps in both invoices) does not correspond to that in the credit."

In the credit there is a very simple description of the goods, which is: CONTINUOUS CAST STEEL BILLETS, SIZE: 140 X 140 MM, LENGTH: 11,800MM (+/-200MM), and as both invoices presented describe the goods exactly in that way, there is no discrepancy. Information such as the exact quantity in weight and number of billets has been added to the required information, but such additional information in no way makes the invoices discrepant.

Item 6: The alleged discrepancy has been described as: "The beneficiary's address in invoice i/o L/C term". We take that to mean that the beneficiary's address as stated in the invoice (or perhaps in both invoices) is different from that stated in the credit.

The only difference the Experts have been able to find is in the spelling of the name of the country, Country I, which in the credit is written in English and in the beneficiary's invoices in the language of Country I. That is not a discrepancy by any standard.

In a SWIFT message dated 16 September 2005, the Respondent repeated the alleged discrepancies mentioned in its advice of refusal of 1 August 2005, with, however, the following changes: alleged discrepancies nos. 1 and 4 from August are not included in this new list of discrepancies, but a new one has been added: "THE CLAIM AGENT IN COUNTRY T DO [sic] NOT SHOW THE NAME AND ADDRESS IN INSURANCE POLICY."

This new allegation of a discrepancy does not have any effect, for three reasons: 1) There is no requirement in the credit for the name and address of a claim agent to be stated on the insurance document; 2) According to sub-Article 14(d) of UCP 500, the issuing bank must give such notice of discrepancy "without delay but no later than the close of the seventh banking day following the day of receipt of the documents"; and 3) According to same article, all discrepancies found in one set of documents must be included in one and the same advice of refusal. In its SWIFT-message of 5 October 2005, the Respondent then explained that the Initiator's claim was unpaid due to:


With regard to no. 1, the Experts are not sure what the Respondent means by saying that the on board date is in conflict "with other documents of issuing date". The Experts see no conflict.

With regard to nos. 2 and 3, these allegations have been dealt with in our comments to point 5 and point 3 respectively of the Respondent's original advice of refusal.


Based on the above, the Experts have unanimously decided that the presentation made by the Initiator is acceptable.

The Experts would like to mention that they do not agree with the Initiator's view that the credit must be made payable with the Initiator with a draft drawn on the Initiator as a consequence of the Initiator's confirmation of the credit. The Initiator adds its confirmation to a credit under which the Initiator is nominated as a negotiating bank - a credit which calls for a draft drawn on the Respondent and which offers payment by the Respondent against the Respondent's receipt of drafts and documents - and the confirmation does not necessitate any change of that status.