Article 23, 25 or 26?

[KimChristensen]

I have an documentary credit with the following requirements:

2/3+1 NNC B/L TO THE ORDER OF APPLICANT, MARKED: FREIGHT PREPAID

It further requires transportation as follows:

From
Aalborg Denmark (Swift field 44A)
To
Szczecin, Poland (Swift field 44B)

Based on which article in the UCP 500 should this be examined?

What was in fact presented, was a “Charter Party bill of lading” – fully complying with article 25, but of course not with 23 or 26 (i.e. sub-article 23,a,vi)

Thanks in advance
Kim

[NigelHolt]

Kim,

I believe these two towns are ‘ports’. If so:
A. It appears to me that the ‘Credit calls for a bill of lading covering a port-to-port shipment’ per Article 23.
B. I cannot see any grounds for considering that the ‘Credit calls for or permits a charter party bill of lading’ per Article 25 or that the ‘Credit calls for a transport document covering at least two different modes of transport’ per Article 26.

Good weekend, Jeremy

[LeoCullen]

Hi Kim,

I also think that article 23 should be applied. There seems to be no reason for the application of any one of the other transport articles.

The credit calls for a B/L - a B/L should be presented and checked according to article 23.

[KimChristensen]

Dear Jeremy and Leo,

Thanks for your replies.

I landed at article 23 myself. I have a bad feeling about it however. It seems easy to rule out article 25 and 26, and the best argument for article 23, is the one that you, Jeremy, mention: that the shipment is between 2 ports (or more correct: between to cities that both have ports). Besides, since 26 and 26 are ruled out – only 23 is left

I do not believe that the fact that the requirement is “bill of lading” automatically leads to article 23. What if the credit requires transportation from one inland place to another inland destination?
You may of course argue that a bill of lading by definition and history covers transport by sea; this also reflected by UCP 500; where only 2 articles are named “bill of lading”; namely 23 and 25; and 25 requires the addition “charter party”. I think however that the term “bill of lading” is generally used about a negotiable transport document, and these days shipping lines and forwarders offer door-to-door service; reflected in the bill of lading.

Then the 2 port argument: since the word “ports” are not mentioned in the credit, these ports are also cities (containing numerous places), so is it fair to say, that the credit actually “calls for a bill of lading covering a port-to-port shipment” ??

Anyway; article 23 is the “safe” choice, but I would surely feel better to use article 12, and ask the issuing bank – simply because this requirement, strictly speaking, does not clearly point at any of the transport articles.
I should add, that this was of course not done in the specific case – what is almost never is!

Best regards
Kim

[edited 1/16/2005 6:53:31 AM]

[larryBacon]

Dear Kim,

since Art. 25 states that the LC must permit C/P B/L, this rules out acceptability of C/P B/L in this LC.
This may lead you to believe that Art. 23 is appropriate and it probably is what was intended, but I see nothing to prevent acceptability of a truck B/L also.

Laurence

[LeoCullen]

Thank you for elaborating above Kim.

I think that we can read into things too much sometimes
and make them more complicated than they need be
- but there is definitely a grey area here....

There are 2 other discussions on the forum that you may
be interested in reading because I believe they brush
on similar issues:


Isn't the truck consignment note a transport document?

http://focus.dcprofessional.com/view_topic.asp?tid=392

However named

http://focus.dcprofessional.com/view_topic.asp?tid=79

[NigelHolt]

Kim,

I can now see the source of your doubt; the absence of the word ‘port’. While I do not see that it would concern me, I can now at least see the grounds for a bank reverting to an issuing bank for ‘clarification’ -prior to advising a credit- regarding this matter.

Jeremy

[KimChristensen]

Dear Leo,

Point taken

Thanks for the "links". Much appreciated.

Best regards
Kim