Parties

Initiator: Bank B (hereafter "issuing bank" or the "Initiator")

Respondent: Company U (hereafter "beneficiary" or the "Respondent")

Note: The Respondent has not filed an answer

Issues

Questions raised by the Initiator

1. Was the Initiator entitled to refuse the Respondent's claim under the standby letter of credit (SBLC) on grounds of discrepant documents?;

2. Following presentation of a revised document, was the Initiator again entitled to refuse the Respondent's claim on the grounds of discrepant documents?; and

3. Was the Initiator therefore entitled to refuse payment under the SLBC?

Background and transaction

1. Summary of representations: the SBLC was subject to UCP 600 and sent by the Initiator by SWIFT. The standby required presentation of three documents:

• "copy of an unpaid commercial invoice stating B/L date;

• beneficiary's signed statement; and

• either a copy of a notice of readiness and completion of discharge OR a copy of the beneficiary's Warranty of Title in the following format ... ".

2. In the SBLC SWIFT message, Field 77C stated (in addition to other information not in question): "COVERING: THE SHIPMENT OF 425'000 BARRELS +/- 5 PCT OF QARUN CRUDE OIL DELIVERED DES TRIESTE BY VESSEL 'TBN' OR SUB LOADING DURING THE PERIOD FROM 18TH - 22ND DECEMBER 2011 (BOTH DATES INCLUDED)."

3. The commercial invoice for the first presentation of documents gave the following information (in addition to other information not in question):

VESSEL NAME: XXX

B/L DATE: 23 DECEMBER 2011

LOADING PORT: XXX

DISCHARGE PORT: XXX

TERMS OF DELIVERY: XXX

COMMODITY: XXX

QUANTITY: XXX

UNIT PRICE: XXX

4. The Initiator timely dishonoured the first presentation, stating the following discrepancy and indicated it was holding the documents: "B/L DATE STATED ON THE INVOICE IS 23 DECEMBER 2011 WHEREAS LOADING DURING THE PERIOD FROM 18TH TO 22ND DECEMBER 2011(LATE SHIPMENT)"

5. The Respondent disagreed with the discrepancy and presented arguments to the Initiator. The Initiator disagreed with Respondent's position and continued to dishonour the first presentation.

6. Respondent timely submitted a new invoice [the "Second Presentation"] showing the same information as above AND adding new information i.e., Loading Date (line 2 below):

VESSEL NAME: XXX

LOADING DATE: 22 DECEMBER 2011

B/L DATE: 23 DECEMBER 2011

LOADING PORT: XXX

DISCHARGE PORT: XXX

TERMS OF DELIVERY: XXX

COMMODITY: XXX

QUANTITY: XXX

UNIT PRICE: XXX

7. Initiator timely dishonoured the second presentation, stating the following discrepancy and indicated it was holding the documents: "THE INVOICE SHOWS CONFLICTING DATA. LOADING DATE IS INDICATED AS 22 DECEMBER 2011 WHEREAS B/L DATE IS INDICATED AS 23 DECEMBER 2011. (ARTICLE 14D OF THE UCP 600 APPLIES)."

Documents submitted by the Initiator

1. SWIFT message sent by the Initiator setting out the terms of the SBLC;

2. SWIFT message from the Respondent acknowledging receipt;

3. Documents of Presentation number 1 by the Respondent;

4. SWIFT message sent by the Initiator notifying dishonour of Presentation number 1;

5. SWIFT message sent by the Respondent disagreeing with discrepancy;

6. SWIFT message sent by the Initiator explaining its position on Presentation number 1;

7. SWIFT message sent by the Respondent stating beneficiary is re-submitting a new invoice and continuing to disagree with discrepancy in Presentation number 1 and requesting payment with interest;

8. Remittance letter and Presentation number 2 invoice;

9. SWIFT message sent by the Respondent requesting payment status;

10. SWIFT message sent by the Initiator notifying dishonour of Presentation number 2.

Analysis

1. No transport document was required by the credit. The credit stipulated the requirement for the invoice to be: "copy of unpaid commercial invoice stating B/L date". The credit does not explicitly require that it state the loading period.

2. The only place a loading period was stipulated was under the heading "covering".

3. Presentation number 1: if one converts "covering" to the "goods description required to appear on the invoice", then the loading period is not stated in the goods description (emphasis added). However, the "discrepancy" raised by the Initiator does not refer to this; it simply states "B/L date stated on invoice is 23 December 2011 whereas loading during the period from 18th to 22nd December (late shipment)."

4. In ICC Banking Commission Opinion R 678, the issue is similar (inspection certificate stating loading 27-28 Jan. whilst B/L is dated 29 Jan.). Even though the bill of lading is dated one day after the last day of the loading period, this is not in conflict with the requirements of the credit.

5. Because no transport document is required for presentation, the transport articles of UCP 600 do not apply. The single issue is whether the data on the commercial invoice complies with the requirement of the credit. It complies. The Initiator should honour the presentation.

6. Presentation number 2: The single issue in the second presentation is whether the data on the commercial invoice is in conflict. Even if the credit required the invoice to state the loading date(s) between 18 - 22 December and also to state the bill of lading date, the second invoice does state "loading date 22 December 2011" and "B/L date 23 December 2011". The credit did not require the shipment date on the bill of lading to be within the period for the loading dates.

7. The loading of goods on a vessel is evidenced by proof of an on board date on the bill of lading. For this credit, there is no bill of lading, hence there is no document other than the invoice to state a loading date. There is nothing unusual in a dated on board notation pre-dating the issuance date of the bill of lading. The date on which the goods have been loaded on board may be advised to the bill of lading issuing office, and an intervening weekend or pressure of work might cause the bill of lading to be issued and dated some days later, though also showing the actual, and earlier, date on which the goods have been loaded on board.

8. This is consistent with ICC Opinions R 678 and R 568, both of which addressed the issue of dates on a bill of lading, as follows:

1) R 678 addressed a query regarding possible inconsistency in bill of lading dates. Conclusion: Using the dates mentioned in the query, a charter party bill of lading that bears a pre-printed wording to the effect that the goods are on board the vessel on 29 January 2007, or bears an on board notation that is dated 29 January 2007, is not inconsistent with an inspection certificate stating that the loading period was 27-28 January 2007.

2) R 568 addressed a bill of lading with an on board date and a later date of issue date. Conclusion: For the purpose of fixing the maturity date of a draft to be drawn under a credit which stipulates such draft to be drawn "X days after B/L date", the date of the on board notation, if any, should be considered the "B/L date" irrespective of whether the date of the on board notation is later or earlier than the date of issuance of the bill of lading.

3) The 2nd presentation was not discrepant. The Initiator should honour the presentation.

Conclusion

1. Was the Initiator entitled to refuse the Respondent's claim under the SBLC on grounds of discrepant documents?

Decision: No.

2. Following presentation of a revised copy of unpaid commercial invoice, was the Initiator again entitled to refuse the Respondent's claim on grounds of discrepant documents?

Decision: No.

3. Was the Initiator therefore entitled to refuse payment under the Standby Letter of Credit?

Decision: No.

The Initiator should honour the presentation.

This Decision is unanimous.