Parties to the query

Claimant: Beneficiary

Respondent: Issuing Bank

Detailed description

The Respondent issued a standby credit, in favour of the beneficiary. Whilst the credit was not originally made subject to the UCP 600, this was subsequently amended to be so.

At a later date, documents were submitted by the advising bank to an address other than the one mentioned in the credit.

The courier package including the submitted documents was sent to the address stated in the “sender” field of the SWIFT issuance message rather than to the address stated in the credit.

However, the documents did reach the correct office of the Respondent a few days later.

The Respondent sent a SWIFT MT799 to the advising bank stating eight discrepancies (five were apparently valid) within five banking days following the day of receipt of the documents by the correct branch.

This message, however, did not include any notice of refusal, nor any information on the status of the documents.

It was queried whether a valid notice of refusal was made and whether subsequent presentations of corrected documents were discrepant.

Analysis

The initial SWIFT MT799 sent by the Respondent to the advising bank was sent within the required time period as allowed by the UCP 600 sub-article 16 (d).

However, this message did not include any notice refusing the presentation and therefore failed to comply with the UCP 600 sub-article 16 (c) (i). Nor did it state any of the options required by sub-article 16 (c) (iii).

As a matter of note, the message was sent by SWIFT MT 799 rather than the correct message for refusals, i.e. SWIFT MT734.

With respect to the alleged discrepancies, the analysis concluded that only five of the eight were actually valid. Various UCP articles were referenced including sub-article 14 (g), sub-article 16 (c) (ii), and sub-article 18 (a) (iii).

The ISBP 745 paragraphs A22 and A35 (b) were also cited.

Subsequently, there were several presentations of revised documents.

Once again, none of the SWIFT MT799 messages sent by the Respondent to the advising bank complied with the UCP 600 sub-articles 16 (c) (i) and 16 (c) (iii).

Decision

The initial notice of refusal from the Respondent to the advising bank failed to comply with the UCP 600 sub-articles 16 (c) (i) and 16 (c) (iii).

Accordingly, the Respondent was precluded from claiming that the documents did not constitute a complying presentation.

In respect of the later revised presentations, none of the messages sent by the respondent complied with the requirements of the UCP 600 article 16 in order to qualify as valid notices of refusal.

As a result, it was concluded that the Respondent was obligated to pay the Claimant.