May I kindly request your opinion on a discrepancy raised by an issuing bank. The letter of credit called for "copy/photocopy of a valid ISM certificate (safety management Cert) showing ISM code no and year of built of the vessel" Benefiary presented this document which indicated that it had expired on a date which, is the same as the shipment date on the BL. The certificate had been issued 5years earlier.
Issuing bank refused this document claiming that the ISM cert had expired.
Would this, in your esteemed opionion be a discrepancy? I thank you
Joee Malta
ISM Certificate
ISM Certificate
To me, the question is what requirement of this documentary stipulation or UCP600 (inc. any relevant banking practice) the issuing bank believes has been transgressed.
I would imagine –although I may be doing the issuing bank more credit than it deserves- it is the requirement in the credit for the certificate to be ‘valid’. If the certificate (of which a copy has been presented) is clearly (i.e. it is not a question of reading ‘small print’) stated to have expired prior to the date of presentation (not shipment) I can see an argument that it was not ‘valid’ at the time of presentation. I have to admit I find it difficult to think of a convincing common-sensical counter-argument to this.
Therefore, my unesteemed view is that the discrepancy is valid[!].
[edited 1/30/2013 3:10:55 PM]
I would imagine –although I may be doing the issuing bank more credit than it deserves- it is the requirement in the credit for the certificate to be ‘valid’. If the certificate (of which a copy has been presented) is clearly (i.e. it is not a question of reading ‘small print’) stated to have expired prior to the date of presentation (not shipment) I can see an argument that it was not ‘valid’ at the time of presentation. I have to admit I find it difficult to think of a convincing common-sensical counter-argument to this.
Therefore, my unesteemed view is that the discrepancy is valid[!].
[edited 1/30/2013 3:10:55 PM]
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GlennRansier_olsABN
- Posts: 70
- Joined: Fri Apr 05, 2019 5:18 pm
ISM Certificate
Not sure I agree that this is a discrepancy. I've no idea what "valid" means in reference to the LC requirement but it sounds as if the ISM was valid for the date of the shipment. ISM codes are meant for the shipping industry to certify that Safety Management standards are being maintained. What rule governs their refusal?
ISM Certificate
Glenn,
Like you I imagine I would have had no idea what ‘valid’ meant at the advising stage (although I recognise a nominated bank is not automatically an advising bank).
However, I do believe it is possible for a previously unclear term of a credit –that one might even have thought at the time of advising one would be entitled to ignore along the lines ‘first class’ etc- to be given a context / meaning by virtue of the contents of the document presented and this seems to me to be the case here.
The governing rule (article) could only be 14(a) (allied with the relevant Art 2 definition). However, as I imagine you can tell from my first posting, I am not brimming with confidence on this matter and am quite willing to concede I may be wrong.
Regards, Jeremy
Like you I imagine I would have had no idea what ‘valid’ meant at the advising stage (although I recognise a nominated bank is not automatically an advising bank).
However, I do believe it is possible for a previously unclear term of a credit –that one might even have thought at the time of advising one would be entitled to ignore along the lines ‘first class’ etc- to be given a context / meaning by virtue of the contents of the document presented and this seems to me to be the case here.
The governing rule (article) could only be 14(a) (allied with the relevant Art 2 definition). However, as I imagine you can tell from my first posting, I am not brimming with confidence on this matter and am quite willing to concede I may be wrong.
Regards, Jeremy