Malaysian sawn timber

[yenfongmoo]

LC value is USD19,000. Description in credit is "About 33 M3 (About 500 pieces) of Merbau Tokobashira sawn timber". Partial shipment is allowed. Docs presented gave an invoice value of USD18,468.57 for 24.12 M3 (500 pieces)of Merbau Tokobashira sawn timber.
Is there a discrepancy?

[larryBacon]

Because "about" 33M3 is quoted in the description, there is a tolerance (Article 39a) of 10% allowed (+ or -). If we take the lower figure (29.7M3), we can see that there is a minimal shortfall of 5.58M3. On first shipment, there is no discrepancy as partial shipment is allowed AND there is a further tolerance of 10% permitted because "about" 500 pieces is quoted in the description. Therefore a maximum of 550 pieces is permitted.

Therefore we must conclude that a second shipment is possible/permissible under the L/C. If there is a second presentation, this would be limited to the value balance of the L/C and a maximum remaining quantity balance of a further 50 pieces. If the second presentation showed either 50 pieces or a full claim on the remaining value of the L/C, the volume shown would have to be a minimum of 5.58M3 and a maximum of 12.18M3 (5.58M3 + 6.6M3).
If there is a clause within the L/C that all presentations must comply with the description by volume and pieces pro-rata, then none of the above applies.

Laurence A. J. Bacon

[T.O.Lee]

Mr. Bacon has done a good job in the analysis. Since the LC allows partial shipments, for the first shipment, provided the price, volume and quantity are not inconsistent or unreasonable, the presentation should be compliant. The quantity, price and volume in the second shipment would be affected by the first shipment and the 10% plus or minus allowance as per UCP 500 Article 39 (a).

However, from common sense consideration, it is not making commercial sense to ship only 50 pieces in the balance shipment.

We are from www.tolee.com

[edited 2/2/02 7:36:24 PM]