DC Insight

The big event during the last three months was the approval of ICC's revised Uniform Rules for Demand Guarantees (URDG), adopted on a virtually unanimous vote by the ICC Banking Commission. The revision, two and a half years in the making, contains some fundamental changes to the rules, described in detail by Professor Sir Roy Goode in our feature story on page 3. One noteworthy point: a number of the URDG 758 provisions use a similar style and structure as UCP 600, which will also be the case with the upcoming revision of Incoterms 2000, due out this year. Clearly, there is a concerted effort afoot to create a certain uniformity among different sets of ICC rules - a welcome development for practitioners.

This issue's "Expert commentary" by Jim Barnes contains a long analysis of one of UCP 600's most contentious issues, reimbursement rights under deferred payment credits. The language in UCP 600 sub-articles 7 (c), 8 (c) and 12 (c) has long been the subject of animated debate, and Jim, who had a hand in creating this language, is well placed to explain it.

One of our regular writers, King-Tak Fung, zeroes in on two issues fundamental to UCP 600: five banking days and negotiation. With regard to the former, he takes us through several different scenarios - from paying immediately after finding that documents comply to withholding payment until the fifth banking day. For each scenario, he sets out the likely reaction of courts in the event a dispute arises.

And in our "Right of response", Haluk Erdemol takes issue with two Chinese writers in the previous issue of Insight, who addressed the question of whether, under UCP 600, it's clear that the issuing bank is responsible for reimbursing the confirming bank.