Parties to the query

Claimant: Issuing Bank

Respondent: Beneficiary

Detailed description

The Claimant issued a credit via SWIFT MT700 subject to the UCP 600 which, in field 44E, required presentation of a charter party bill of lading indicating the port of loading as "Sumatra, Indonesia".

Documents were presented by the Respondent including a charter party bill of lading which indicated the port of loading as "Sumatra, Indonesia".

The documents were considered as discrepant by the Claimant on the basis that the charter party bill of lading did not specify the actual name of the port in Sumatra, Indonesia, as per the ISBP 745 paragraph G5 (g)".

The discrepancy was contested by the Respondent and a decision was sought on whether or not the stated discrepancy was valid.

Analysis

The UCP 600 sub-article 22 (a) (iii) states that a charter party bill of lading must appear to indicate shipment from the port of loading to the port of discharge stated in the credit.

The ISBP 745 paragraph G5 (f) states that a charter party bill of lading is to indicate the port of loading stated in the credit and that when a credit indicates the port of loading by also stating the country in which the port is located, the name of the country need not be stated.

The ISBP 745 paragraph G5 (g) states that when a credit indicates a geographical area or range of ports of loading, a charter party bill of lading is to indicate the actual port or ports of loading, which are to be within that geographical area or range of ports. It is further stated that the charter party bill of lading need not indicate the geographical area.

The text in Field 44E of the SWIFT MT700 was considered as ambiguous as it may have meant “Sumatra port in Indonesia” or “Any port in Sumatra Indonesia”. It was noted that the fact that Sumatra is an island does not detract from the possibility that a port named Sumatra is in that island.

In any event, the port of loading stated in the charter party bill of lading did not satisfy either interpretation.

Decision

Both the UCP 600 sub-article 22 (a) (iii) and the ISBP 745 paragraph G5 (f) require that a charter party bill of lading must indicate shipment from the port of loading to the port of discharge stated in the credit.

The indication in field 44E of "Sumatra Indonesia" could mean either "Sumatra port in Indonesia" or "Any port in Sumatra Indonesia".

No "Sumatra port" exists in Sumatra or Indonesia. ISBP 745 paragraph G5 (g) requires such verification when a geographical area is mentioned.

As such, the discrepancy was considered as valid.