ART 21 & ISBP

[NigelHolt]

Starting with Leo, first. The problem I have with my hypothetical argument is that it that seems to me to call into question the ‘raison d’être’ of Art 21. If by describing a document one automatically stipulates its contents, why do we need Article 21, as few -if any- documents would fall within its purview?

Turning to your question, I take the view that the UCP should be written in such a way that it literally means what it says. Before ISBP, therefore, I would have read Article 21 literally and would have accepted a packing list that did not appear to contain any packing details. I would have simply regarded this as the price the issuing bank/applicant pays for failing to ‘stipulate … [the] wording or data content’ of the document concerned.

Turning to Laurence, I agree that it does appear the ICC is at liberty to set out the ‘correct’ interpretation of a UCP article, even where it contradicts the article in question, based on the views of the High Court in Credit Industriel et Commercial v China Merchant Bank.

The only line of argument that I can currently think of that ‘squares’ ISBP with Art 21 is:
1. By merely specifying -for example- a ‘packing list’ a credit does NOT stipulate by whom such document is to be issued and its wording or data content.
2. However, it is untenable for a bank to be required to ignore whether or not a document appears to contain information that would normally be expected, by a banker, to be contained in such a document.
3. Therefore the words ‘banks will accept such documents as presented’ cannot mean that banks must accept any ‘data content’ whatever its nature, but that banks must accept any ‘data content’ PROVIDED it is of a nature a banker would expect to see in a document of that description. Therefore, in the case of credit stipulating a ‘packing list’, the bank must verify the document appears to contain packing details but, provided it does, must accept the document as presented.

Finally, I just hope that with the next revision of UCP(600?) the problems created by failing to say what one means do not recur.

[larryBacon]

Jeremy,

I have a question similar to Leo's -
If a Packing List (no further information mentioned) is called for and the document presented against this requirement is obviously a copy of the B/L overtyped with the words "Original Packing List", would you accept it ?

Laurence

[NigelHolt]

I assume you mean pre-ISBP. If so, the logic of my approach means I would have been obliged to.

[edited 12/10/02 4:33:10 PM]
[edited 12/10/02 4:34:01 PM]

[LeoCullen]

Jeremy,

Thanks for the reply to my question.
I am surprised to hear that you would have accepted such a document but respect your stated view on the application of UCP -prior to ISBP- in this case.

There are a lot of value calls to be made by document checkers - should interpretation of UCP be literal or should the "common sense" (whatever that may be) approach be used.

My interpretation of this provision of UCP is founded on the premise that every document called for under a credit has a function to perform and if the document doesn't at least appear to fulfil this function it can't be in accordance to the terms of the credit/UCP.

A Certificate of Origin - has to contain something about the origin of the goods

A Certificate of Quality - has to contain something about the quality of the goods

A Packing List - has to say something about packing details

I would see this a general principle that does not negate the need for or go against Article 21 - Article 21 allows you to pick specific issuers of documents and specific data for the document to contain.

Eg. (As per R390) a certificate of quality might say that "The goods are not fit for human consumption." unless you specify in the credit (as per Article 21) that certain recognised standards of quality have to be indicated.


[edited 12/10/02 8:49:25 PM]

[PavelA]

We, ICC CR, have also been concerned re. the wording of this para 14 of ISBP and sent our comments in due time. This is one of some issues on which we are going to keep the close watch as there might be problems in determing whether the content of the document presented appears to fulfil the function of the document required. I would not dare to say that it contradicts art. 21 of UCP 500 but I feel that it goes beyond its wording.

Pavel Andrle

[larryBacon]

Whilst I would agree with the general gist of what Leo has to say, I question his meaning of each document having a function to perform and that if it fails to perform that function it is not compliant.

Banks may not always be in a position to categorically quantify the function of documents called for under a DC and therefore cannot determine whether or not it is compliant. This may be better illuminated by an example :
DC calls for a "Packing List Certificate" with no further information. I know of at least two different and distinct interpretations of the functions underlying this document. Therefore your rationale would allow rejection regardless of whichever one of the two is satisfied.
Furthermore, I would not necessarily expect banks to know these functions, as this document is subject to interpretation. I would expect them to know Health Cert., PSI Report etc.

Laurence

[NigelHolt]

What's a 'PSI report'?

[LeoCullen]

Larry,

In your reply you seem to have inadvertently changed what I was saying.

What I said was that documents have a function to fulfil and if they don't at least "appear to fulfil" that function then they can't be seen as compliant with the credit.

I would put this in a similar category to 'linkage' but rather than linking the document to the credit/presentation, it is linking the document to the documentary requirement under the credit.

[edited 12/11/02 2:59:58 PM]

[larryBacon]

Leo,

my apologies for misquoting you, however, it does not alter the thrust of my argument, i.e. how can a document appear to fulfil a function if that function is not specified or uniquely identified by title.
If a document such as invoice, packing list or B/L is called for, the title is sufficient to identify the function. However, if documents such as Test cert., Conformity cert., Packing Cert. are called for, there is insufficient information to make such a judgement.

Laurence

[larryBacon]

Jeremy,

I will resist the temptation to jump on T.O.'s training bandwagon in his temporary absence.

PSI stands for Pre-Shipment Inspection.

Laurence