We have the following situation:
Our customer presented documents at the counters of nominated bank A. We failed to receive payment or advice of refusal in time (7 banking days after the date of documents'receipt). Only on 9th day we received advice of refusal stating that due to the technical problems the nominated bank failed to inform us in time. They refer to the article 16 of UCP 500.
But, article 14 states that nominated bank should give notice '..by other expeditious means..'
Hwo is right in this situation? Should we claim payment?
I would like to know my colleauges' opinion on that matter. Many thanks for your help.
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SaltanatIztleuova
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hatemshehab
- Posts: 220
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1. Article 16 states that the banks “assume no liability or responsibility for the consequences arising out of delay and / or loss in transit of any message(s), letter(s) or document(s), or for the delay of any communication." The key word here is “consequences” that is to say that the bank in the first place must have tried something, must have acted in accordance with article 14 of UCP and not just use article 16 as a pretext for malpractice.
Ask yourself a question, what if the bank has a total system failure, what if the SWIFT system is down? Can’t the bank make the extra step and send the refusal advice by courier or even by mail?
Therefore the wording of article 14d gives much tolerance for these situations when we have systems failures. The article state “it must give notice to that effect by telecommunication or, if that is not possible, by other expeditious means, without delay, but not later than the close of the seventh banking day following the day of receipt of the documents.”
It is obvious that the article did not confine the mode of transmission to SWIFT or telex for example, therefore if the bank did not prove that he has taken all possible measures to intimate you of the rejection decision, then they should be deemed to have taken up the documents as presented, a situation for which they deserve sympathy.
Ask yourself a question, what if the bank has a total system failure, what if the SWIFT system is down? Can’t the bank make the extra step and send the refusal advice by courier or even by mail?
Therefore the wording of article 14d gives much tolerance for these situations when we have systems failures. The article state “it must give notice to that effect by telecommunication or, if that is not possible, by other expeditious means, without delay, but not later than the close of the seventh banking day following the day of receipt of the documents.”
It is obvious that the article did not confine the mode of transmission to SWIFT or telex for example, therefore if the bank did not prove that he has taken all possible measures to intimate you of the rejection decision, then they should be deemed to have taken up the documents as presented, a situation for which they deserve sympathy.
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larryBacon
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I presume that you are the issuing bank in this case. The notice of refusal by the nominated (negotiating) bank must go to the presenter, which in this case is the beneficiary.
The description of the problem in communicating the refusal as being technical is insufficient to make any kind of judgement. It reminds me of the infamous British Rail technical problem which was quoted by them as being the wrong kind of leaves on the track.
However, the requirement of Article 14 d i is not at odds with Article 16, since the alternative means of communication is invoked if the first (telecommunication) is not possible.
The description of the problem in communicating the refusal as being technical is insufficient to make any kind of judgement. It reminds me of the infamous British Rail technical problem which was quoted by them as being the wrong kind of leaves on the track.
However, the requirement of Article 14 d i is not at odds with Article 16, since the alternative means of communication is invoked if the first (telecommunication) is not possible.