Discrepancy Notification Article 14 d ii

NidiaCunha · Post by **NidiaCunha** » Wed Feb 21, 2001 12:00 am

WOULD ANYONE KNOW IF THERE IS AN ICC OPINION REGARDING DISCREPANCY NOTIFICATION FROM ISSUING BANKS THAT DO NOT SPECIFICALLY OUTLINE DISCREPANCIES.

WOULD YOU CONSIDER A REFUSAL NOTIFICATION FROM THE ISSUING BANK LISTING DISCREPANCIES AS:
1. DOCUMENTS INCONSISITENT WITH EACH OTHER
2. ABSENCE OF DOCUMENTS CALLED IN THE LETTER OF CREDIT.

AS COMPLYING TO ARTICLE 14 D II?

I WOULD APPRECIATE YOUR COMMENTS.

milindparab · Post by **milindparab** » Sun Feb 25, 2001 12:00 am

If issuing bank has just stated the disrepancies in general terms, without specifying correctly and if they have failed to mentioned whether they are holding the docs at the disposal of or is returning them to the presenter then this discrepancy notice is not valid.

Till date there is no such ICC position on this topic as UCP articles are very clear and precise. The best solution would be to seek detailed clarification of the discrepancies from the bank without any delay.

larryBacon · Post by **larryBacon** » Mon Feb 26, 2001 12:00 am

It is common practice for banks to advise discrepancies under the general headings such as you have suggested. Otherwise banks would get bogged down in unnecessary detail. However, it is also common practice that such detail will be provided if asked by 'phone. In this way a clearer understanding of the discrepancy/ies should be forthcoming.

Laurence A. J. Bacon
laurence_aj@hotmail.com

PGauntlett · Post by **PGauntlett** » Wed Feb 28, 2001 12:00 am

I think that a bank would be taking a risk in sending such a message. It is similar to saying 'Docs rejected due to various discrepancies'. Art 14 dii requires a bank to be specific. If it is not, it runs the risk of having the rejection notice challenged through the courts.

AbdulkaderBazara · Post by **AbdulkaderBazara** » Mon Mar 05, 2001 12:00 am

I have gone through the search features available under the ICC Opinion related to discrepancies. Found 130 opinions but none of them refers to the issue you have raised. As per article 14d ii bank must state all discrepancies; however, it is common practice that bank describe the discrepancies in genral terms and could argue that they have stated all discrepancies. Example, description of invoice is not exactly as per LC terms, documents are inconsistent to each other etc. Although this might not be the ideal way of advising the discrepancies, it would not preclude the bank from claiming the documents received are discrepant and that the bank has act in accordance with article 14 d ii. The beneficiary or the beneficiary bank may challenge any discrepancies whether stated in general terms or in details. We should not forget that a discrepancy is a discrepancy whether stated in general terms or otherwise. I don't believe that a court would go against a bank that stated the discrepancy in general terms if the documents presented are actually discrepant. Nonetheless, as a service to its client, I believe the bank should provide the applicant with details of the discrepancies so that the applicant could decide on whether to accept the discrepancies or not. The applicant could visit the bank and check the documents or the bank gives the details in writing.

T.O.Lee · Post by **T.O.Lee** » Thu May 03, 2001 1:00 am

Many recent legal cases from the USA would tell you that the refusal notice must have specificity, sufficiency, being unconditional, clear and unequivocal.

(1) It must say clearly without any doubt that the documents are rejected or payment is to be dishonoured.

Then why dishonoured? based on what?

(2) It has to list out clearly the specific discrepancies and the reasons for such determination. Otherwise the beneficiary is not clear as what is needed to be amended to comply.

(3) It should state clearly whether the documents are to be returned to presenter or to be held at the disposal of the presenter.

All these three messages must be included in a single refusal notice. This cannot be done by instalments.

I am from www.tolee.com

[edited 5/22/01 3:13:03 PM]

PavelA · Post by **PavelA** » Wed Aug 29, 2001 1:00 am

I agree with the reasoning above, and especially with AbdulkaderB. Description of discrepancies should not be vague, on the other hand not necessarily detailed. I would not consider the above example as non-valid if also states clearly whether the documents are being returned to the presenter or are being held at the disposal of the presenter.

Pavel Andrle

BenCoole · Post by **BenCoole** » Thu Aug 30, 2001 1:00 am

Aside from that, some bankers think that if they send the Notice by SWIFT (template, I think MT 734), it is not required to state that documents are rejected. I dont agree with them. Irrespective of the means of communication, the message should indicate rejection.
[edited 8/30/01 1:28:28 PM]

hatemshehab · Post by **hatemshehab** » Thu Aug 30, 2001 1:00 am

Just a note to Mr. BenCoole

In swift the MT 734 is entitled advice of refusal. In my opinion this is enough indication that the documents are rejected provided of course that the bank has
- Stated all discrepancies
- Stated that it is holding documents at the disposal of the presenter or returning them to it.

If, in case of a telex advice I think that there should be a mention of rejection.