I would like to seek your advice on accountee name.Should accountee name on draft be an applicant in L/C. Normalily I think accountee name on draft sould be an applicant. But In case applicant in L/C is a bank, draft is showing notify party(maybe real buyer) in L/C as an accountee name. Is this draft discrepant?. If answer is no, Could any party other than applicant be an accountee on draft?
[edited 8/24/2006 8:31:25 AM]
accountee name on draft
accountee name on draft
I am sorry but I do not understand your question. In what capacity does the name of the ‘accountee’ appear on the draft? Drawer, payee, drawee, endorser, endorsee etc.? Or is there merely a reference to the ‘accountee’ in the draft without the ‘accountee’ being a party to the draft, e.g. to identify the transaction to which the draft relates?
I can only observe that the only parties that I would anticipate appear on a draft is:
1. the beneficiary, as drawer, payee and, depending on the circumstances, endorser.
2. the bank designated in the credit, as drawee (i.e. issuing bank, nominated bank or reimbursing bank as appropriate).
However, that is not to say that I would automatically regard a draft as discrepant because another party, whether or not named in the credit, was mentioned in -or a party to- the draft. It would depend on the circumstances.
I can only observe that the only parties that I would anticipate appear on a draft is:
1. the beneficiary, as drawer, payee and, depending on the circumstances, endorser.
2. the bank designated in the credit, as drawee (i.e. issuing bank, nominated bank or reimbursing bank as appropriate).
However, that is not to say that I would automatically regard a draft as discrepant because another party, whether or not named in the credit, was mentioned in -or a party to- the draft. It would depend on the circumstances.
accountee name on draft
I'm sorry for confusing you. In LC, applicant : A bank, notify party :B company(real buyer). beneficiary present a draft as below:
at sight of this original bills of exchange .......order sum of value received and charge the same to account of B drawn under......
This draft is showing B company as an accountee(not applicant name) on draft. In our country we think this part of accountee should name applicant in L/C even though this accountee is not esssntial field of consusting the draft. In this case, is this draft discrepant?
at sight of this original bills of exchange .......order sum of value received and charge the same to account of B drawn under......
This draft is showing B company as an accountee(not applicant name) on draft. In our country we think this part of accountee should name applicant in L/C even though this accountee is not esssntial field of consusting the draft. In this case, is this draft discrepant?
accountee name on draft
I am afraid the words ‘and charge the same to account of …’ is not a construction with which I am familiar. That is to say I have not seen drafts with such words. Therefore, I do not know what is their purpose (although I can speculate).
If confronted with a draft worded like this, I think I would take the view that the words ‘and charge the same to account of …’ are otiose (of no legal affect). This, reinforced by the fact that ‘B’ is mentioned in the credit -albeit as notify party- would lead me to take the view that the draft was not discrepant. Furthermore, I believe one has to be very wary of refusing a draft drawn (correctly) at sight, unless it is for the wrong amount. This is because there is a widely held view that:
‘A draft drawn on a bank must be considered an instrument solely requested by the issuing bank … i.e. an instrument that has not been called for by the applicant and that is therefore of no concern to it’.
See Docdex Decision 260 for example and the English court case of Credit Industriel et Commercial -v- China Merchants Bank.
If confronted with a draft worded like this, I think I would take the view that the words ‘and charge the same to account of …’ are otiose (of no legal affect). This, reinforced by the fact that ‘B’ is mentioned in the credit -albeit as notify party- would lead me to take the view that the draft was not discrepant. Furthermore, I believe one has to be very wary of refusing a draft drawn (correctly) at sight, unless it is for the wrong amount. This is because there is a widely held view that:
‘A draft drawn on a bank must be considered an instrument solely requested by the issuing bank … i.e. an instrument that has not been called for by the applicant and that is therefore of no concern to it’.
See Docdex Decision 260 for example and the English court case of Credit Industriel et Commercial -v- China Merchants Bank.
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PradeepT_old
- Posts: 39
- Joined: Fri Apr 05, 2019 5:25 pm
accountee name on draft
Dear Jin,
We have indeed come across drafts drawn on Issuing Bank containing a clause stating “please charge to the account of… applicant or accountee”. Normally such drafts are presented from some of the Asian countries especially the Indian sub-continent. Although I have always wondered as to why should the drawer (beneficiary) dictate the Issuing Bank to “charge” an accountee, applicant or whosoever, we have not rejected or questioned veracity of such a drawing as long as the draft is drawn on us, being the Issuing Bank.
The problem in this case could arise when the issuing bank is applicant and the LC calls for draft drawn on the issuing bank whereas as per UCP 500, the draft “should not” be drawn on the applicant, a sure contradiction. Taking a practical approach we accept such drafts but I believe that there is a need for at least one ICC Banking Commission opinion accepting draft drawn on an issuing bank which also happens to be applicant. But what about drafts called under LCs issued by non-banks ?
Regards,
Pradeep Taneja,
Bahrain
We have indeed come across drafts drawn on Issuing Bank containing a clause stating “please charge to the account of… applicant or accountee”. Normally such drafts are presented from some of the Asian countries especially the Indian sub-continent. Although I have always wondered as to why should the drawer (beneficiary) dictate the Issuing Bank to “charge” an accountee, applicant or whosoever, we have not rejected or questioned veracity of such a drawing as long as the draft is drawn on us, being the Issuing Bank.
The problem in this case could arise when the issuing bank is applicant and the LC calls for draft drawn on the issuing bank whereas as per UCP 500, the draft “should not” be drawn on the applicant, a sure contradiction. Taking a practical approach we accept such drafts but I believe that there is a need for at least one ICC Banking Commission opinion accepting draft drawn on an issuing bank which also happens to be applicant. But what about drafts called under LCs issued by non-banks ?
Regards,
Pradeep Taneja,
Bahrain
accountee name on draft
Thank for your advice