acceptable to applicant

[GerhardH]

Dear all,

a requirement in an L/C of a document to be "acceptable to applicant", does this mean, that the document must be countersigned by the applicant?

Requirement in said L/C was: Presentation of a Retention Bond acceptable to applicant.
We have presented a Document called "Retention Bond acceptable to applicant".
Confirming bank has refused the document because of missing countersignature of applicant.

Is their statement correct? Or can we argue with article 14 f of UCP 600, that the function of the document is fulfilled?

Thanks in advance for your comments.

[GlennRansier_olsABN]

This can be read a number of ways. I read it as a "retention Bond" needed to be posted and the applicant needed to review/accept it. It is a poorly worded LC. The confirmer is trying to indicate that they are seeking some sort of proof that the buyer accepted it. The applicant's signature is not a requirement.

[AndyHunt]

I agree with the previous respondent in that the wording of the credit leaves much to be desired. Indeed I am surprised that a bank was prepared to add its confirmation to such a credit without first clarifying the expectations of the issuing bank in respect of this requirement and then making its confirmation conditional upon the document reflecting said clarification.
In the absence of the above, it is difficult to draw a definitive conclusion other than to say that I would not consider a document merely entitled ‘Retention Bond acceptable to applicant’ would suffice. Furthermore, mere countersignature of that document alone by the applicant does not expressly signify their acceptance of that document albeit I do accept that it lends greater credence to such an argument.
To comply with the credit terms as stated I would expect the Retention Bond to be either bear a statement thereon that it has been issued in a form that is acceptable to the applicant or be countersigned by the applicant with a clear statement from them that they accepted its terms.

[GerhardH]

Thanks for your comments.
Andy, I have one more question on your comment. Does this mean, for the first option (Retention Bond to bear a statement thereon that it has been issued in a form that is acceptable to the applicant) no countersignature of the applicant is needed?
Thanks again for your reply.

[AndyHunt]

Hi Gerhard
Yes, in that particular circumstance I would see no need for any (counter)signature from the applicant on the document in question.

[JimBarnes]

Anybody want to reconsider this question in light of the rules on non-documenary conditions?

Jim Barnes

[Shahed]

I would prefer applicant's counter signature on the statement.