I would like to hear fr the members on this issue. We have received a credit with the condition that all documents must indicate the indent number.
Beneficiary's documents were in order except for the drafts which did not include the indent number. Hence my enquiry as to whether drafts form part of the documents.
Going further if the answer is in the affirmative, what about drafts drawn by the negotiating bank on the reimbursing bank.
I think it would not be necessary to include the indent details in the latter.
Thank you.
Are drafts part of the documents?
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matthewchin
- Posts: 2
- Joined: Fri Apr 05, 2019 5:16 pm
Are drafts part of the documents?
MISSING INDENT NUMBER IN DRAFTS IS NOT A DISCREPANCY
According to the latest decisions of the ICC Banking Commission in some queries, in a DC asking for an indent number to be quoted on all documents, drafts missing the indent number should not be deemed to be a discrepancy that may trigger on payment dishour, PROVIDED that drafts have LINKAGE to other documents.
The underlying reasons are:
(1) Drafts are normally required by the issuing bank, not by the applicant.
(2) Missing the indent number does not invalidate the drafts, from Bills of Exchange Act point of view.
(3) Quoting the indent number in all documents serves the purpose of identification of the shipment or linkage to other documents. There are other means to create the linkage, such as the DC number, invoice number, contract number and the like. If the drafts bear linkage to other documents, they are not discrepant, even if no indent number is quoted.
From the precedent case front, in a Hong Kong DC dispute case adjudicated in 2000, in which we are retained as court expert, where the DC states drafts drawn on "us", drafts missing the name of the branch of the drawee bank (issuing bank) is not deemed to be a discrepancy. Full details of this case can be viewed in our website under the heading of "A Branch of Bank as the Drawee in Drafts".
The enquirer may search for the DC Pro to get the ICC Opinions he needs.
We are from http://www.tolee.com
[edited 10/16/02 9:14:39 PM]
According to the latest decisions of the ICC Banking Commission in some queries, in a DC asking for an indent number to be quoted on all documents, drafts missing the indent number should not be deemed to be a discrepancy that may trigger on payment dishour, PROVIDED that drafts have LINKAGE to other documents.
The underlying reasons are:
(1) Drafts are normally required by the issuing bank, not by the applicant.
(2) Missing the indent number does not invalidate the drafts, from Bills of Exchange Act point of view.
(3) Quoting the indent number in all documents serves the purpose of identification of the shipment or linkage to other documents. There are other means to create the linkage, such as the DC number, invoice number, contract number and the like. If the drafts bear linkage to other documents, they are not discrepant, even if no indent number is quoted.
From the precedent case front, in a Hong Kong DC dispute case adjudicated in 2000, in which we are retained as court expert, where the DC states drafts drawn on "us", drafts missing the name of the branch of the drawee bank (issuing bank) is not deemed to be a discrepancy. Full details of this case can be viewed in our website under the heading of "A Branch of Bank as the Drawee in Drafts".
The enquirer may search for the DC Pro to get the ICC Opinions he needs.
We are from http://www.tolee.com
[edited 10/16/02 9:14:39 PM]
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Are drafts part of the documents?
I agree with T.O. Lee's comments on drafts. The prime function of a draft is as a mechanism for payment, which in the context of UCP, is invariably between banks. Therefore where there are other means of identifying/linking the draft to the relevant L/C, the absence of an indent no. should not be regarded as discrepant.