Parties

Initiator: Bank C

Respondent 1: Bank A Branch S

Respondent 2: Bank A Branch B

Issue

Whether the issuing bank was entitled to refuse documents tendered by the advising bank on the basis of the following alleged two discrepancies:

1. The amount of the bill of exchange (draft) in words "USD four hundred forty seventy thousand one hundred sixty 59/100" instead of "USD four hundred forty seven thousand one hundred sixty 59/100";

2. The manual signature on the certificate of origin is different from other documents produced by the beneficiary.

Documentation

- Request by Bank C (the "Initiator") dated 20 December 2002 to ICC International Centre for Expertise, Paris, requesting a DOCDEX Decision;

- Answer by Bank A (the "Respondent"), undated, addressed to ICC International Centre for Expertise, Paris, received by the Centre on 20 January 2003, also requesting a DOCDEX Decision;

- Copy of the documentary credit No. ABC1234 issued by the Respondent upon the instruction of Company H in Country C in favour of Company N (Country S) for an amount of USD 900,000, available by negotiation, and its amendment (the "documentary credit");

- Copy of the letter dated 29 October 2002 sent by the Initiator to the Respondent accompanying the remitted documents and claiming payment under the documentary credit;

- Copies of presented documents;

- Copies of SWIFT messages between the parties arguing the rejection of the documents.

The Appointed Experts came to a unanimous Decision.

Analysis

1. The draft amount in words "USD four hundred forty seventy thousand one hundred sixty 59/100" instead of "USD four hundred forty seven thousand one hundred sixty 59/100"

The draft presented by the beneficiary, and taken up by the Initiator, indicates the following amount in figures: "USD 447,160.59" and indicates the following amount in letters: " USD four hundred forty seventy thousand one hundred sixty 59/100". The Respondent pointed out the difference between the amount in figures and the amount in letters and accordingly rejected the draft as non-conforming.

The experts are of the unanimous opinion that, while as a matter of principle a difference in the draft between the amount in figures and the amount in letters is a discrepancy that justifies the rejection of the document, in the case at hand the discrepancy identified by the Respondent is an obvious typographical error that does not justify the rejection of the documents. Indeed, because the amount " four hundred forty seventy" [emphasis added] does not exist, it should be considered as meaning "four hundred forty seven", which conforms to the amount in figures and to the amount indicated on the remaining documents presented under the documentary credit.

2. The manual signature on the certificate of origin is different from other documents produced by the beneficiary

The documentary credit required, among other documents, a "certificate of origin in duplicate issued by the beneficiary". In particular, the documentary credit does not require the certificate of origin to be signed, let alone that it be signed by the same officer who signed the other documents also issued on behalf of the beneficiary. In clarification of the above, it is recognised that under international standard banking practice that a certificate, by its nature, should be signed even if a credit does not specifically require it to be so.

In the application of UCP Article 21, the experts are of the unanimous opinion that the fact that the manual signature on the certificate of origin might be different from the manual signature appearing on other documents produced by the beneficiary does not justify the rejection of the certificate of origin. Contrary to the contention of the Respondent, the difference between signatures is not an inconsistency that would justify the rejection of the documents in accordance with UCP sub-Article 13(a).

Decision

1. The draft should be considered as conforming to the terms of the documentary credit;

2. The certificate of origin should be considered as conforming to the terms of the documentary credit.

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