Issue on B/L

[MOHAMMEDMUJEEB]

Hello Experts....

Today we have received 3 presentations under 3 different LC's.

For eg: LC15632, LC23568 and LC365486

Applicant is same and beneficiary is same.

Bene presented the B/L's on which it referred the B/L number of all the 3 above LC's and mentioned goods will be release upon surrender of all the 3 originals.

My question is as we received all the 3 presentations on the same day and will release documents to applicant on the same day, and applicant can surrender all the 3 original B/Ls to carrier in order to take the delivery of goods.

My question is do we need to pick it up as a discrepancy stating LC15632 refer so and so B/L number not presented under this presentation and so on to all the presentations.

Looking ahead to hear your comments.

Regards!

Mujeeb:-)

[LeoCullen]

ISBP para 114 covers this issue:

Goods Covered by more than One Bill of Lading

"114. If a bill of lading states that the goods in a container
are covered by that bill of lading plus one or more other bills
of lading, and the bill of lading states that all bills of lading
must be surrendered, or words of similar effect, this means that
all bills of lading related to that container must be presented
in order for the container to be released. Such a bill of lading
is not acceptable unless all the bills of lading form part of the
same presentation under the same credit."

(Although calling a discrepancy seems tough on the bene seeing as all B/Ls will be available to the applicant ... assuming no other discrepancies)

[GlennRansier_]

In the strictest sense the documents are discrepant. All three full sets of BL's are needed to obtain the cargo and each LC presumably requires a full set of BL's that if honoured will allow the applicant to obtain the paid for cargo. The common practice that Leo referred to was meant to cover instances where commingled shipments and or multiple BL's issued are presented under the same LC. Each LC is a separate and distinct undertaking.
Like all the rules, each case is different and any decision to reject should be carefully weighed.

[JudithAutié]

Please let's always keep in mind that L/Cs are supposed to be used to PAY and not to avoid paying.

In this particular case, if the a/m opinion is strictly applied, there is, strictly speaking, a discrepancy.

However, the problem which could arise would be if one set of documents under one of the credits were to be rejected for any (valid) reason. Then, and only then, would the applicant not be able to take possession of the goods under the other two L/Cs.

So let's try to facilitate international trade, and not make it more difficult.

Best regards
Judith

P.S. I know that the advocates of "strict compliance" will howl, but guys, lets get practical in solving such questions and look at the big picutre, or otherwise documentary credits as such will suffer.

[DanielD]

They are already suffering...Trouble is: if for instance CB uses the substancial compliance because it suits it and IB uses strict compliance because it suits it (or the opposite) there could be a problem somewhere. Something like "operating dual standards" as M. Bacon put it a while ago. So whatever standard you use (both have their merits and flaws) it would be nice if all parties would use the same (who will decide ?) otherwise Dcs will suffer even more.
Daniel

[NigelHolt]

Judith,

I have a great deal of time for you. However, I have to say I find the argument that credits are supposed to be used to pay and not to avoid paying -or that bankers involved in credits should try to facilitate international trade- is at best irrelevant and at worst wholly wrong and misleading.

All that matters -or should matter- to a bank is if the documents meet the credit terms. If they do, the bank can safely honour or negotiate as appropriate. If they do not, but a bank honours or negotiates (as appropriate) it could quite easily find itself either not being reimbursed or having to refund any reimbursement. Therefore, whether or not banks’ decisions regarding the compliance or non-compliance of documents might make the credit unattractive, and lead to a reduction in credit business, is in my opinion wholly academic.

Regards, Jeremy

[edited 8/21/2009 9:22:06 AM]
[edited 6/21/2011 10:42:25 AM]

[HOANGTHIANHTHU_invalid]

Hi all,

Interesting in deed.

What if one of the three presentations contains other discrepancies and the issuing bank decides to reject and return the discrepant presentation to the presenter (without approaching the applicant for a waiver of the discrepancies)? It is obvious that the applicant is unable to take delivery of the goods with the two bills of lading.

I use the above assumption to support my view that such a bill of lading is not acceptable. That is also the reason why ISBP para. 114 says such a bill of lading is not acceptable unless all the bills of lading form part of the same presentation under the same credit.

Looking forward to your further comments .

Best regards,
N.H. Duc

[edited 8/22/2009 6:46:12 AM]

[DonSmith]

IF the documents in each set are otherwise correct - i.e. no discrepancies - I would not call this a discrepancy.

The ISBP paragraph came from the original SBPED published in the US by the International Financial Services Association. I chaired the committee that wrote it.

The purpose of the paragraph is to ensure the applicant can receive the goods with the document(s) presented. In this case, since all 3 originals are present for the same applicant I would not cite this as a discrepancy.

Courts have little or no patience for the argument of stupidity.

[GSham]

As highlighted in the introduction section of ISBP, the incorporation of this publication (ie ISBP) into the terms of a documentary credit should be discouraged. Thus when a bank decides to reject a presentation for such reason as given in para. 114 of ISBP 681, on which UCP article can such decision be based?

[NigelHolt]

Gabriel,

You seem to be ploughing through all past discussions. Out of curiosity, why is this?

Regards, Jeremy