Parties

Initiator: Bank A (in Europe)

Respondent: Bank B (in the Middle East)

Issue

Whether the issuing bank (Respondent) was entitled to refuse documents based on the fact that:

1. Certificate of origin does not show production and expiry date;

2. Shipping company certificate does not show production and expiry date and L/C number;

3. Shipping company certificate indicating vessel sailed on 18/4/1998 instead of 14/4/98.

Documentation

- Letter from the Initiator of 30 October 1998 to ICC International Centre for Expertise, Paris

- Initiator's summary of the dispute

- Letter from the issuing Bank (the Respondent) of 25 November 1998, to ICC declining to act under the DOCDEX Rules

- Copy of the documentary credit and 2 amendments

- Copy of Initiator's letter to issuing bank of 1 May 1998 including copies of presented documents (except beneficiary's fax message to the issuing bank, beneficiary's certificate regarding the vessel and beneficiary's certificate regarding production and expiry date)

- Copies of telecommunication between the parties disputing the refusal of documents

- UCP 500

- DOCDEX Rules

Arguments

The documentary credit does not specifically require the certificate of origin or the shipping company certificate to indicate that the production and expiry date has to be stated in the documents

The credit indicates: "Production and Expiry Date must be printed and/or labelled on each bag and must be shown on all relevant documents. Beneficiaries certificate in this respect is to be presented with the documents."

If the last sentence had not been added, it would have been a non-documentary condition. By adding the last sentence, and thereby referring to a stipulated document, the condition could be said to be fulfilled by presenting the indicated document (beneficiaries certificate) according to UCP 500, sub-Article 5(b).

If the issuing bank meant that every document should evidence the data, it should have stated "all" instead of "all relevant".

The credit stipulated that the bill of lading and beneficiary's fax or telex must show the "L/C number", but the credit did not stipulate that all documents should evidence the L/C number. Therefore the issuing bank had no reason for refusing the documents on the grounds of a missing L/C number on the shipping company certificate.

a. The question is whether there are different dates on the bill of lading and the shipping co. certificate, and

b. Whether the documents were, in reality inconsistent with each other within the meaning of sub-Article 13(a).

With regard to a., the information "SLD" 18.04.1998 is translated by the issuing bank into "sailing date", a phrase not stated in the credit nor in the bill of lading, which indicates an issuing date and a "shipped on board" date. The phrase "SLD" seems not to be commonly and unequivocally known even in the transport industry.

According to sub-Article 13(a), "Banks must examine all documents stipulated in the Credit with reasonable care, to ascertain whether or not they appear, on their face, to be in compliance with the terms and conditions of the Credit. Compliance of the stipulated documents on their face with the terms and conditions of the Credit shall be determined by international standard banking practice as reflected in these Articles. Documents which appear on their face to be inconsistent with one another will be considered as not appearing on their face to be in compliance with the terms and conditions of the Credit."

It follows that when examining documents, bankers must look at the Credit, UCP 500 and the documents, but are not expected to have a specific knowledge regarding goods or shipping and related specific abbreviations.

With regard to b., it is known to be common practice that goods are loaded on a ship over a period of several days, and that shipping companies (carriers) nevertheless issue all bills of lading on the same date of loading. The issuing and/or loaded on board date might not be the actual date of "sailing".

Decision

1. The credit did not require the certificate of origin to show production and expiry date.

2. The credit did not require the shipping company certificate to show: a. Production and expiry date and b. L/C number; and

3. There is no inconsistency between a shipping company certificate indicating "SLD 18.04.1998" and the bill of lading with regard to the date of shipment (14 April 1998).

The documents presented are conforming and the issuing bank had no reason for refusal.