A L/C requires
Quote
A certificate issued and signed by Company A (credit applicant) confirming goods have been sighted at Company B (beneficiary) warehouse.
Unquote
The document presented reads
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We the undersigned certify and confirm that goods have been sighted at Company B warehouse
Unquote
This statement is printed on Company B's letterhead and is signed by both Company A and Company B.
The issuing bank has refused this document. Would you agree?
Thanks
Carmel
issuer of a certificate
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CarmelBorg
- Posts: 21
- Joined: Fri Apr 05, 2019 5:13 pm
issuer of a certificate
I am afraid I would. Par. 22
Rgds
Daniel
Rgds
Daniel
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CarmelBorg
- Posts: 21
- Joined: Fri Apr 05, 2019 5:13 pm
issuer of a certificate
Daniel
Apologies for not mentioning that documents were refused as "the document is not issued by Company A" I assume that is what you understood.
I would argue that Para 22 is the reason why the document should not be considered discrepant, namely:
there is no requirement that the certificate must be made on issuer's letterhead
and
the document appears to have been signed by or on behalf the named entity.
The document would have been discrepant if it had been worded "I the undersigned .........." as that would have rendered the certificate as having been countersigned rather than issued by Company A. The wording "We the undersigned ........." makes this document a joint certification, which is additional data not prohibited by the credit or UCP.
May I have your views?
Best regards
Carmel
Apologies for not mentioning that documents were refused as "the document is not issued by Company A" I assume that is what you understood.
I would argue that Para 22 is the reason why the document should not be considered discrepant, namely:
there is no requirement that the certificate must be made on issuer's letterhead
and
the document appears to have been signed by or on behalf the named entity.
The document would have been discrepant if it had been worded "I the undersigned .........." as that would have rendered the certificate as having been countersigned rather than issued by Company A. The wording "We the undersigned ........." makes this document a joint certification, which is additional data not prohibited by the credit or UCP.
May I have your views?
Best regards
Carmel
issuer of a certificate
Carmel,
I agree the credit did not require that the cert. should be issued on the issuer's letterhead or even did not require that the document should bear a letterhead. But the document was issued with a letterhead and it was the B's one. According to par. 22 it should have been the A's one.
Regards
Daniel
I agree the credit did not require that the cert. should be issued on the issuer's letterhead or even did not require that the document should bear a letterhead. But the document was issued with a letterhead and it was the B's one. According to par. 22 it should have been the A's one.
Regards
Daniel
issuer of a certificate
I have, since its inception, regarded para 22 as defective by reason of it being too restrictive in its interpretation of ‘issuer’. It does not recognise, for example, that a document could be signed on behalf of the stipulated issuer (the principal) by an agent on the agent’s letterheaded paper. Such a document, in law, would have been ‘issued’ by the principal and not the agent and would, I have no doubt, be regarded by a court as meeting the terms of the credit notwithstanding para 22.
In this particular example, based on the facts presented, I incline to the view that the document in question has been ‘issued’ by Company A (as well as company B) and therefore is compliant, notwithstanding that it does not accord with the isbp documented in ISBP681.
In this particular example, based on the facts presented, I incline to the view that the document in question has been ‘issued’ by Company A (as well as company B) and therefore is compliant, notwithstanding that it does not accord with the isbp documented in ISBP681.