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( Source of the document: ICC Digital Library )
UCP 600 sub-articles 20 (a) (i), 19 (a) (i), 21 (a) (i), 23 (a) (i) and 24 (a) (i)
When a bill of lading clearly indicates the name of the carrier, can any of its branches, even those having a different name, issue bills of lading and sign them as a branch of the named carrier?
Query [TA 750rev]
We kindly ask for your official opinion on the following query related to documents presented under a documentary credit issued subject to UCP 600.
An ocean carrier ("carrier") has replaced its agency ("agent") in Country U by a registered branch office ("branch"). Since the branch is part of the carrier company and not an independent legal entity, as was the agency, the bills of lading issued in Country U by the branch are effectively issued by the carrier itself. Consequently, the carrier's bills of lading are no longer signed by the local agent "as agent", but by the local branch "as carrier".
Signed as the Carrier [Name of Carrier] i.e., APM-M trading as M Line as carrier [Signature of the branch] [Name of Branch] (branch) i.e., M Line Country U Branch
It should be noted that the names of the branch and the carrier are not identical.
The bank rejected the bill of lading and subsequently argued as follows:
"It [the bill of lading] needs to be signed as I have shown it below. If it is not signed this way then the sign off does not conform to UCP 600 as it does not clearly show that [the Branch] are the agents for the carrier [Carrier]. [...]
Signed as the Carrier [Carrier] Signature]
[Branch] (branch) AS AGENTS" (Emphasis added)
The ocean carrier responded: "[The new form] signature fulfils the requirements of articles 19-21 of the UCP 600 which require that:
- the bill of lading indicate the name of the carrier; and
- the capacity of the party signing must be included.
The Commentary to the UCP 600 (provided by the UCP 600 Drafting Group) explains that " ...whatever the name of the company that issued the transport document, an indication to the effect that the issuing company or another company is the carrier is required. This requirement will also be fulfilled if the party signing the document indicates that it is signing "as carrier ... ". Clearly our proposal 'Signed as Carrier ... ' satisfies this requirement as it directly names the carrier."
The Commentary goes on to state that "if the party is signing as agent, the name of that agent must be included, as well as the capacity in which it is signing." As [the Branch] is not signing as agent, this is not relevant. The UCP 600 makes no reference to branch set-ups; however, we are obliged to fulfil the requirement to state the capacity of the party signing, which is the branch. This does not alter the fact that [the carrier] is the carrier as they are the same legal entity."
Further, it would seem that the form requested by the bank is contradictory in that it states "signed as carrier" (above the signature) and "as agent" (under the signature). Clearly, the signatory cannot be both carrier and agent.
To the ocean carrier's reply, the bank responded: "We, as a bank, are not obliged to understand the legal standing and linkage of companies and are not expected to either. We still would regard this as a discrepancy as [the Branch] should be identified as agents."
Since the branch, as stated above, is a part of the carrier company, it would be legally wrong to classify it as "agent", since that requires the agent to be a legal entity that is separate from the carrier.
Indeed, the bank is correct that it should not be obliged to understand the corporate structure of the signatories or carriers. In this case, however, the bill of lading clearly states that the branch signs as carrier, and such express statement must be compliant. The fact that the branch has a different name from that of the carrier (although being part of same) should not make the signature form discrepant either.
In light of the above, you are kindly requested to assist in the interpretation of UCP 600 sub-article 20 (a) (i) as for:
- whether the ocean carrier’s new signature
form is sufficiently clear to determine the
capacity of the signatory as carrier, i.e., if it is
acceptable that a branch (however named) of
the carrier signs the bill of lading;
- whether, generally, a transport document that
specifically states “Signed as the Carrier”
followed by a signature, regardless of how the
signatory is named, complies with the
relevant provisions in articles 19 to 25.
A bill of lading must be signed in accordance with UCP 600 sub-article 20 (a) (i):
"A bill of lading, however named, must appear to:
i. indicate the name of the carrier and be signed by:
the carrier or a named agent for or on behalf of the carrier, or
the master or a named agent for or on behalf of the master.
Any signature by the carrier, master or agent must be identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent has signed for or on behalf of the carrier or for or on behalf of the master."
The bill of lading in question has been signed as follows:
Signed as the Carrier [Name of Carrier] i.e., APM-M trading as M Line as carrier
[Signature of the branch]
[Name of Branch] (branch) i.e., M Line Country U Branch
It is stated that the names of the branch and the carrier are not identical.
The signatory is apparently identified as a branch, of the stated carrier, and, as such, does not act as an agent. The fact that it is a branch in a country different from the parent company is not relevant. Neither is the fact that the name of the branch differs from the name of the carrier.
The bill of lading clearly indicates the name of the carrier. Any of its branches may issue bills of lading and sign them as a branch of the named carrier.
The bill of lading thus fulfils the requirements of sub-article 20 (a) (i) by indicating:
(a) the name of the carrier [Carrier]
(b) that the signature is that of the carrier: "Signed as the Carrier [Name of Branch], Branch".
UCP 600 sub-articles 19 (a) (i), 20 (a) (i), 21 (a) (i), 23 (a) (i) and 24 (a) (i) stipulate provisions related to the signing of transport documents by a carrier.
In accordance with these provisions, a signature by the carrier must be identified as that of the named carrier.
A transport document signed by the use of expressions such as "signed as the carrier" or "as carrier" or "carrier" will be acceptable provided it identifies the named party (i.e., the named carrier) for which the signature was given.
The signatory and the carrier must be the same entity, which will include the possibility of the signatory being a branch of the named carrier, provided it is identified as such.
The signature form as described in the enquiry complies with the requirements stated in UCP 600 sub-article 20 (a) (i) in relation to the identification of the carrier and the manner in which the bill of lading is to be signed.
A document issued in the manner described under analysis will be acceptable.
Where the credit required an insurance document to show an appointed settling agent did the document evidence the name of the settling agent?
Query [TA 746rev]
We kindly ask your official opinion on the following query related to documents presented under a documentary credit issued subject to UCP 600.
The documentary credit calls for "Insurance document covering Institute Cargo Clauses (C) showing the appointed settling agent in Country T".
Presented is a certificate of insurance. The field "Insured Goods" (in the body of the document) states: "The Appointed Settling Agent in Country T is shown below."
Below (just above the signature) the following is stated:
"In case of damage apply immediately for survey to: XX Marine Surveyors
[Address and phone number in Country T]
Att. Mr. YY"
The presentation was refused by the issuing bank, citing the following discrepancy:
"Insurance certificate does not show the appointed settling agent in Country T."
The nominated bank questioned the refusal, arguing that the reference made to "The appointed settling agent in Country T" can only be to XX Marine Surveyors, as this is the only company in Country T mentioned in the document. Further, the fact that XX Marine Surveyors are mentioned as surveyors does not mean that they are not also an appointed settling agent.
The issuing bank argues that "XX Marine Surveyors" is mentioned as surveyors only and not as appointed settling agent.
We ask you kindly to advise if the discrepancy cited by the issuing bank is correct.
The credit required an insurance document to show an appointed settling agent in Country T. The insurance certificate, in the field "Insured Goods", states: "The Appointed Settling Agent in Country T is shown below." Below this statement there is a name: "XX Marine Surveyors" and their address and phone number.
It is also indicated that they are to be applied to for survey in case of damage ("In case of damage apply immediately for survey to"), i.e., they were clearly appointed to act as the surveyor.
There is no other company with a location in Country T mentioned in the document.
Although the insurance document indicates XX Marine Surveyors as the company to apply to for a survey, it is also the only company mentioned where the document refers to "The Settling Agent in Country T is shown below". As no other company is named in the document, XX Marine Surveyors are deemed to also be the appointed settling agent. The document is compliant.
ISBP 681 paragraph 24; UCP 600 article 16, sub-articles 16 (d), 16 (c) (iii), 16 (c) (iii) (b), 18 (c) and 7 (c); URR 725 sub-article 11 (a) (i)
Whether the bank checked the total values in the invoice as required by UCP 600; whether a box on a CMR titled "Sender" completed with the details of the beneficiary met a condition in the credit for the CMR to show the Expeditor as the beneficiary; whether, absent any specific notice period in the credit for the value date to be applied to the claim for reimbursement, the issuing bank should have paid the claim that was received from the confirming bank with the value date requested if the examination of documents could not be completed by the value date; whether the issuing bank was allowed to suspend reimbursement, pending completion of the examination of the documents, without "due notice" being sent to the confirming bank, at the latest, on the value date of the claim.
Query [TA 754rev]
We would like to seek an official opinion of the ICC Banking Commission on the following matters regarding a credit issued subject to UCP 600.
We received, advised and later (after an amendment was issued) confirmed a credit with the following conditions:
Currency Code, Amount: EUR 51003.00
Tolerance (+/-) 2/2
Beneficiary: ABC ADDRESS (street, post code, city)
Description of Goods and/or Services: ABC SPRAY 100ML AS PER PROFORMA INVOICE NO. 123 TOTAL DAP [PLACE OF DELIVERY] EUR 51003.00
Documents required included:
- SIGNED COMMERCIAL INVOICE IN TRIPLICATE
ISSUED TO (name and address of applicant);
- CMR EVIDENCING GOODS CONSIGNED TO
(name and address of applicant) MARKED
FREIGHT PREPAID AND NOTIFY (name and
address of applicant), SHOWING EXPEDITOR AS
The credit, as amended, provided for reimbursement against credit-conforming documents by means of a SWIFT message sent directly to the issuing bank, without any condition as to the form, content or timing of the claim. Documents with discrepancies were subject to a deduction of a discrepancy fee that was indicated in the credit as a flat amount.
On 21 July 2011, we received documents that we considered to be complying. Hence, we paid the beneficiary and claimed reimbursement by SWIFT value 26 July 2011 (being the third banking day following the date of our claim).
The presentation included:
- An invoice with the following goods
description: ABC spray 100ml as per proforma
invoice No. 123 quantity 27,181 pcs, price/pcs
1.874 EUR, total price 50,937 EUR Total DAP
[Place of delivery] 50,937 EUR; and
- CMR issued on a Country C/English form with
field 1 expressly headed in English as “Sender
(name, address, country)”, containing
beneficiary’s rubber stamp (showing its name,
street, post code and city same as those stated
in field “Beneficiary” of the credit) and with
field 22 expressly headed in English as
“Signature and stamp of the sender”,
containing the same rubber stamp as field 1
and a signature.
According to the tracking tool of the courier company, the issuing bank received the documents before noon on 25 July 2011.
No reimbursement was received on the value date of the claim. Only two days later, i.e., on 28 July 2011, we received a SWIFT message from the issuing bank stating the following (exact quotation of the relevant part):
"Document value: EUR 50937,00
We refuse the above document for the following discrepancies: 1. Invoice evidences multiplication of quantity 27181 pcs x 1,874 = 50937 instead of 50937.194 2. CMR does not evidence 'expeditor' as beneficiary as required by the credit. We hold documents pending receipt either applicant's waiver or your prior instructions."
We replied on the next day, stating that we considered both alleged discrepancies to be invalid. We considered the difference as mere rounding, which was not disallowed by the credit (credit contained no applicable provisions regarding rounding), UCP 600 or international standard banking practice. Moreover, we turned the issuing bank's attention to ICC Publication No. 681, paragraph 24, which considered the referred multiplication as a detailed mathematical calculation and, therefore, subject to this paragraph.
We also stated that even if such multiplication were not to be considered "detailed", we saw no indication in the credit or UCP and no such existing international standard banking practice that a formula of "number of units x unit price equals total amount" represents the only standard, and turned the issuing bank's attention to the fact that 50937 (total amount) divided by 27181 (number of units) makes 1,87399286, which can be rounded off to 1,874 (unit price shown on the invoice).
With respect to the CMR, we presume that the words "shipper", "sender", "consignor" or "expeditor" represent equivalent expressions of the same, and the CMR showed the beneficiary's stamp in the field headed as "Sender". We saw no conflict with the term "showing expeditor as beneficiary".
We received no reply from the issuing bank. However, on value date 3 August 2011 we received proceeds subject to the deduction of a discrepancy fee (a slightly higher amount than that stated in the credit).
We kindly seek your opinion on the following matters:
1. Is there any basis for refusal of the documents for the reasons stated in the issuing bank's refusal advice? In the analysis, please take into consideration our reasoning as outlined above.
2. Notwithstanding the fact that the refusal advice was sent on the third banking day after the issuing bank's receipt of documents, i.e., within the time limit as required by UCP 600 sub-article 16 (d), and regardless of whether the refusal was valid or not, was the issuing bank allowed under UCP 600 to suspend reimbursement pending completion of its examination of documents without due notice sent to us latest on the value date of our claim?
(N.B. if we face such a situation, in the role of issuing bank, and are unable to receive or accept a waiver in due time, we always send a refusal notice on the value date of the claim at the latest.)
3. Does the disposal information stated in the refusal advice meet the requirements of UCP 600 sub-article 16 (c) (iii)?
1) Discrepancy: "Invoice evidences multiplication of quantity 27181 pcs x 1,874 = 50937 instead of 50937.194"
UCP 600 sub-article 18 (c) states: "The description of the goods, services or performance in a commercial invoice must correspond with that appearing in the credit."
ISBP, Publication No. 681, paragraph 24 states:
"Detailed mathematical calculations in documents will not be checked by banks. Banks are only obliged to check total values against the credit and other required documents."
The notice of refusal implies that EUR50,937.194 should have been the correct invoice amount. It would be unreasonable to expect an invoice to be calculated to three decimal places for an amount shown in EUR, when it operates to two decimal places. The rounding down from EUR50,937.19 to an invoice value of EUR50,937.00 would be acceptable.
As indicated above, it should also be noted that multiplying the quantity by the unit price is not the only means of concluding a mathematical calculation to ensure that the data are correct. In this particular case, dividing the total amount by the quantity would give you a unit price that can be checked against that stated in the credit. The result of this is 1.87399286 which, when rounded up, would be 1.874 - the unit price stated in the invoice.
2) Discrepancy: "CMR does not evidence 'expeditor' as beneficiary as required by the credit"
The credit required the CMR to show "EXPEDITOR AS BENEFICIARY". The confirming bank interpreted this term as a requirement for the CMR to show the beneficiary of the credit as the Sender, and the applicant bears any consequences of ambiguity in the interpretation of its instructions. Box 1 on a CMR, which can be generically described as the field containing the shipper's details, can contain varying pre-printed field labels, and these include "Sender" and "Expediteur". In the context of the credit, Box 1 was to be completed with the details of the beneficiary, and the CMR need not specifically mention the word "Expeditor".
UCP 600 sub-article 7 (c) includes: "An issuing bank undertakes to reimburse a nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the issuing bank."
By effecting payment upon receipt of such SWIFT reimbursement claim, the issuing bank would have fulfilled its obligation under sub-article 7 (c).
According to the information contained in the query, the confirming bank sent its SWIFT reimbursement claim on 21 July 2011, determining 26 July 2011 as the value date, Saturday and Sunday being non-working days in the country of the issuing bank. The documents were received by the issuing bank on 25 July 2011, and its notice of refusal was sent on 28 July 2011.
Details as to reimbursement arrangements between a nominated bank and the issuing bank under a credit available at sight are not regulated by the UCP, as they are basically a matter of process. It is the responsibility of the issuing bank to ensure that any required notice period is clearly stated in the credit. Otherwise, a bank, as in this case, that claims reimbursement from the issuing bank, by a SWIFT message, with a value date that follows the standard processing time of a maximum of three banking days as mentioned in URR 725 sub-article 11 (a) (i) (where a reimbursing bank is involved) can reasonably expect to be reimbursed on that date absent any indication of refusal of the documents.
Issue 2 of the query refers to whether the issuing bank was allowed to suspend reimbursement, pending completion of the examination of the documents, without "due notice" being sent to the confirming bank, at the latest, on the value date of the claim. A "due notice" implies a refusal notice issued subject to UCP 600 article 16, and pre-supposes that the examination of documents and the decision to take up or refuse the presentation could be completed within a period commencing on 25 July and ending on 26 July. If the examination was not completed by 26 July, no refusal message could be sent at that time, and the bank should have honoured the claim in the interim.
3) The refusal notice states:
- refusal of documents;
- the discrepancies on which the refusal is
- that documents are held until receipt of either
the applicant’s waiver or prior instructions
from the presenter.
The requirements of sub-article 16 (c) are met. The refusal message applies option (c) (iii) (b), albeit with language slightly different to that used in UCP.
The wording used in the refusal is acceptable, as the essential requirements of sub-article 16 (c) have been met, i.e., the issuing bank is holding documents, and there is information that the applicant has been approached for a waiver but instructions of the presenter received prior to agreeing to accept the applicant's waiver will be respected.
1) The invoice is acceptable.
2) CMR - Based on the information given under Analysis, there is no discrepancy.
3) Yes. The issuing bank was allowed to send its single notice of refusal after completion of the examination of the documents, but absent any specific notice period in the credit for the value date to be applied to the claim for reimbursement, the issuing bank should have paid the claim that was received from the confirming bank with the value date requested if the examination of documents could not be completed by the value date.
If payment had been made, based on the SWIFT claim, the issuing bank would still be at liberty to seek a refund in the event that the documents were subsequently found to be discrepant for valid reasons.
4) Yes. The status that is given in the refusal notice meets the requirements of sub-article 16 (c) (iii).