A DC has 3 (SWIFT) amendments issued on separate dates. Bene makes no comment about acceptance or otherwise of amendments and submits 1st presentation and eventually is paid despite discrepancies by obtaining a waiver from applicant.
2nd presentation is made which is again discrepant. Bene claims at this point not to have received 1st amendment. Advising bank copies amendment to bene who then refuses amendment.
QUESTIONS
Does Article 9 d iii apply to 1st presentation causing acceptance by default and thereby apply to subsequent presentations ?
What are the implications if the advising bank received the 1st amendment, but failed to advise it to bene for several weeks (advising bank is also confirming bank) ?
What if the 1st amendment was genuinely lost in the post from advising bank to Bene ?
I have my own views, but would appreciate others.
Laurence
Missing amendment
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Missing amendment
Laurence,
To ensue that we can answer the query in a way it is intended, would your please provide the following additional information:
(1) Are the discrepancies in the two presentations related to the 1st Amendment?
(2) What are the impacts of the other two Amendments to the discrepancies in the two presentations?
(3) Are the discrepancies in the two presentations the same?
(4) Did the Beneficiary sign for receipt of the 3 Amendments?
(5) What did SWIFT say for the alleged lost of the Amendment(s)?
www.tolee.com
[edited 4/18/02 3:07:58 PM]
To ensue that we can answer the query in a way it is intended, would your please provide the following additional information:
(1) Are the discrepancies in the two presentations related to the 1st Amendment?
(2) What are the impacts of the other two Amendments to the discrepancies in the two presentations?
(3) Are the discrepancies in the two presentations the same?
(4) Did the Beneficiary sign for receipt of the 3 Amendments?
(5) What did SWIFT say for the alleged lost of the Amendment(s)?
www.tolee.com
[edited 4/18/02 3:07:58 PM]
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Missing amendment
T. O.
You may appreciate that I can only provide limited information for reasons of confidentiality.
There were numerous discrepancies on 1st presentation. Some of these could have been due to a lack of understanding of the amendment or failure to take account of it.
All amendments were numbered. It was evident from documents included in the first presentation that amendment #2 had been taken account of, but no reference was made to acceptance or otherwise of either amendment. For information, 3rd amendment sent the day after 1st presentation.
It is impossible to tell if discrepancies are the same for the 2nd presentation. The confirming bank failed to find discrepancies on 1st presentation. The issuing bank, upon receipt of 1st set of docs from confirming bank advised appplicant of 3 discrepancies and faxed copies for information. This led the applicant to point out to the issuing bank that there were a further 5 discrepancies. The bene corrected some of these and a waiver was obtained for the rest.
The confirming bank again failed to find discrepancies on the second presentation. The issuing bank upon receipt of these again found discrepancies, but this time refused to send copies to the applicant, leaving the applicant no option but to reject.
For the purposes of this Forum, there are no impacts of the 2nd or 3rd amendments.
Because of the time difference involved, no information has yet been received on whether the bene signed for discrepancies, but it is presumed that these were sent in the mail to him. For the same reason I cannot answer the question about SWIFT yet, but it is doubtful if SWIFT were at fault.
When one takes note of the failure of the confirming bank to identify obvious discrepancies and fails to learn from its first mistakes when checking the second presentation, one is led to believe that other faults may also lie at their door.
Laurence
You may appreciate that I can only provide limited information for reasons of confidentiality.
There were numerous discrepancies on 1st presentation. Some of these could have been due to a lack of understanding of the amendment or failure to take account of it.
All amendments were numbered. It was evident from documents included in the first presentation that amendment #2 had been taken account of, but no reference was made to acceptance or otherwise of either amendment. For information, 3rd amendment sent the day after 1st presentation.
It is impossible to tell if discrepancies are the same for the 2nd presentation. The confirming bank failed to find discrepancies on 1st presentation. The issuing bank, upon receipt of 1st set of docs from confirming bank advised appplicant of 3 discrepancies and faxed copies for information. This led the applicant to point out to the issuing bank that there were a further 5 discrepancies. The bene corrected some of these and a waiver was obtained for the rest.
The confirming bank again failed to find discrepancies on the second presentation. The issuing bank upon receipt of these again found discrepancies, but this time refused to send copies to the applicant, leaving the applicant no option but to reject.
For the purposes of this Forum, there are no impacts of the 2nd or 3rd amendments.
Because of the time difference involved, no information has yet been received on whether the bene signed for discrepancies, but it is presumed that these were sent in the mail to him. For the same reason I cannot answer the question about SWIFT yet, but it is doubtful if SWIFT were at fault.
When one takes note of the failure of the confirming bank to identify obvious discrepancies and fails to learn from its first mistakes when checking the second presentation, one is led to believe that other faults may also lie at their door.
Laurence
Missing amendment
Laurence,
My personal response to your 3 questions, without responsibility, are:
1. The implied acceptance of amendments allowed for in 9diii are stated to be conditional on “the tender of documents to the Nominated Bank or Issuing Bank, THAT CONFORM TO THE CREDIT and to not yet accepted amendment(s)” [my emphasis]. This would not appear to have happened here and thus 9diii would not seem to be of any relevance.
2. I think this will depend on the specific facts. Depending on these, I could see the advising or confirming bank might have some liability to its principal, the issuing bank, for a failure to exercise care or for negligence. I believe it would be more difficult for the beneficiary to prove any liability on the part of the confirming bank, there being no contractual relationship other than the confirmation, unless this directly resulted in the documents being rejected.
3. I cannot see how the advising/confirming bank could be held liable for this.
Jeremy
My personal response to your 3 questions, without responsibility, are:
1. The implied acceptance of amendments allowed for in 9diii are stated to be conditional on “the tender of documents to the Nominated Bank or Issuing Bank, THAT CONFORM TO THE CREDIT and to not yet accepted amendment(s)” [my emphasis]. This would not appear to have happened here and thus 9diii would not seem to be of any relevance.
2. I think this will depend on the specific facts. Depending on these, I could see the advising or confirming bank might have some liability to its principal, the issuing bank, for a failure to exercise care or for negligence. I believe it would be more difficult for the beneficiary to prove any liability on the part of the confirming bank, there being no contractual relationship other than the confirmation, unless this directly resulted in the documents being rejected.
3. I cannot see how the advising/confirming bank could be held liable for this.
Jeremy
Missing amendment
Laurence,
BETTER NO TO COMMENT WHEN MATERIAL FACTS ARE UNCLEAR
We cannot provide any concrete comment here since the material facts are either unknown or you are unable to share them with us for confidential duty to your clients.
In that case, there is not much that we can comment, particularly Jeremy has already commented on some of the points.
OVER RELIANCE ON UCP 500 ARTICLES IS DANGEROUS
The more we deal with such DC disputes, the more we are held on the conservative side in giving opinions, when the material facts are not yet clear. Let us illustrate this by taking an example that if we had stated that "Since the first presentation complies with the second amendment, then according to the UCP sub-Article 9 (d) (iii), the Beneficiary is giving his acceptance of this amendment by presentation".
This is great in the Discussion Forum but would bring disaster in the courtroom as an expert witness. The barrister from the opposing side would ask the question:
“Mr. Court Witness, how can you be so sure and consider that the Beneficiary has already accepted the second amendment? Would it be possible that he actually did not receive the second amendment due to lost in transit, or even if he did receive it, he had refused it?
I would like to remind you of a third possibility. Those parts in his documents that comply with the second amendment (but not with the original terms and conditions in the L/C) may be a pure coincidence and they may be in fact discrepancies made by his shipping clerks. As an impartial and independent court witness, you have the duty to point out this possibility to the court as well. Otherwise you may mis-guide all of us sitting in this room, unintentionally, I hope”.
That is why we cannot comment anything more. And it is dangerous to assume and to over rely on the UCP 500 Articles.
It is however safe to say that when a bank misses a discrepancy, the document checkers are not using reasonable care under UCP sub-Article 13 (a), particularly when the applicant, a layman, can find them out later.
We know some non-bankers have already got the CDCS. So document checkers have to work harder now.
www.tolee.com
[edited 4/20/02 5:49:08 PM]
BETTER NO TO COMMENT WHEN MATERIAL FACTS ARE UNCLEAR
We cannot provide any concrete comment here since the material facts are either unknown or you are unable to share them with us for confidential duty to your clients.
In that case, there is not much that we can comment, particularly Jeremy has already commented on some of the points.
OVER RELIANCE ON UCP 500 ARTICLES IS DANGEROUS
The more we deal with such DC disputes, the more we are held on the conservative side in giving opinions, when the material facts are not yet clear. Let us illustrate this by taking an example that if we had stated that "Since the first presentation complies with the second amendment, then according to the UCP sub-Article 9 (d) (iii), the Beneficiary is giving his acceptance of this amendment by presentation".
This is great in the Discussion Forum but would bring disaster in the courtroom as an expert witness. The barrister from the opposing side would ask the question:
“Mr. Court Witness, how can you be so sure and consider that the Beneficiary has already accepted the second amendment? Would it be possible that he actually did not receive the second amendment due to lost in transit, or even if he did receive it, he had refused it?
I would like to remind you of a third possibility. Those parts in his documents that comply with the second amendment (but not with the original terms and conditions in the L/C) may be a pure coincidence and they may be in fact discrepancies made by his shipping clerks. As an impartial and independent court witness, you have the duty to point out this possibility to the court as well. Otherwise you may mis-guide all of us sitting in this room, unintentionally, I hope”.
That is why we cannot comment anything more. And it is dangerous to assume and to over rely on the UCP 500 Articles.
It is however safe to say that when a bank misses a discrepancy, the document checkers are not using reasonable care under UCP sub-Article 13 (a), particularly when the applicant, a layman, can find them out later.
We know some non-bankers have already got the CDCS. So document checkers have to work harder now.
www.tolee.com
[edited 4/20/02 5:49:08 PM]
Missing amendment
T.O.,
I’m off home in a minute so I’ll keep this short. (I'll read your other comments on insurance etc on Monday.)
I’m afraid you’ve misunderstood me. I did not say “since the first presentation complies with the second amendment, then according to the UCP sub-Article 9 (d) (iii), the Beneficiary is giving his acceptance of this amendment by presentation.” On the contrary, I said 9diii had no application as the documents -on the first presentation- were not compliant, a pre-condition for 9diii to apply.
Hope you have a good weekend.
Jeremy
[edited 4/19/02 5:12:48 PM]
I’m off home in a minute so I’ll keep this short. (I'll read your other comments on insurance etc on Monday.)
I’m afraid you’ve misunderstood me. I did not say “since the first presentation complies with the second amendment, then according to the UCP sub-Article 9 (d) (iii), the Beneficiary is giving his acceptance of this amendment by presentation.” On the contrary, I said 9diii had no application as the documents -on the first presentation- were not compliant, a pre-condition for 9diii to apply.
Hope you have a good weekend.
Jeremy
[edited 4/19/02 5:12:48 PM]
Missing amendment
Jeremy,
Your points understood. We will take the Jeremy label out of our last statement to do justice to you. And we are sorry for that misunderstanding. Hope you like the new version, to switch our position.
However, when you come to the office on Monday, you have a few postings from Hatem and us waiting for you on the "exclusion clauses" issue. You have to scratch your head how to respond to them. And good luck to you. By then I should be in Paris for the ICC meeings.
There is no fun if everybody says yes to the same issue and we like you as a Dr. No man. Only then we all can gain and the truth be uncovered, if there is such a thing called absolute truth. It all depends on how one looks at it but majority rules in this democratic world.
www.tolee.com
[edited 4/21/02 3:18:19 PM]
Your points understood. We will take the Jeremy label out of our last statement to do justice to you. And we are sorry for that misunderstanding. Hope you like the new version, to switch our position.
However, when you come to the office on Monday, you have a few postings from Hatem and us waiting for you on the "exclusion clauses" issue. You have to scratch your head how to respond to them. And good luck to you. By then I should be in Paris for the ICC meeings.
There is no fun if everybody says yes to the same issue and we like you as a Dr. No man. Only then we all can gain and the truth be uncovered, if there is such a thing called absolute truth. It all depends on how one looks at it but majority rules in this democratic world.
www.tolee.com
[edited 4/21/02 3:18:19 PM]
Missing amendment
Hi Everybody,
I am now in Air France lounge in Paris and about to board. Will join you soon. I have troubles with the French keyboard, where the alphabets are not in the usually positions. I have to look at the keyboard to type this message.
T. O.
[edited 4/29/02 8:37:39 PM]
I am now in Air France lounge in Paris and about to board. Will join you soon. I have troubles with the French keyboard, where the alphabets are not in the usually positions. I have to look at the keyboard to type this message.
T. O.
[edited 4/29/02 8:37:39 PM]