Dear colleagues:
could you please help me with the advice and references to applicable opinions (if any) regarding following subject:
that the applicant may not make use of documents prior acceptance of the discrepancies under LC. Anything concerning that would be very valuable as at the moment one client is forcing us to give him copies of the documents even before checking of the documents, for his purposes and claims us to give to court today for refusing.
Thank you in advance!
Release of copy documents to the applicant prior acceptance
-
IreneSiitam
- Posts: 5
- Joined: Fri Apr 05, 2019 5:13 pm
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Release of copy documents to the applicant prior acceptance
Dear Irene,
I am not a lawyer – and it sounds like you should talk to one here – and below is my personal view.
In any case – I take it that you mean that the applicant is filing for an injunction against you in order to stop your payment under the LC.
Your obligation is to pay when documents comply with credit terms – so first of all, I would check the documents fast but careful in order to find out whether or not they do.
In general issuing banks should not help applicants in injunction cases – but your obligations are based on the documents presented under the LC – and I do not see why you should not share copies of the documents with the applicant. I mean if documents are discrepant the purpose would be to illustrate the discrepancies – and if documents are credit compliant it would not matter as they should be paid and forwarded to the applicant anyway.
There are a few opinions that I have been able to find – not sure if they would help you – as they all refer to “local law”:
R.256
TA.169
TA.517
.. and not least the article “Fraud and Injunctions” by K.T. Fung – available in the “Expert view” section.
In any case – if you are approached by a judge on this one and documents do comply, please do not hesitate to mention the independent nature of the LC – mentioning (at least) article 3, 4 and 9 of the UCP 500 !
Hope you will manage to settle your case.
Best regards
Kim
I am not a lawyer – and it sounds like you should talk to one here – and below is my personal view.
In any case – I take it that you mean that the applicant is filing for an injunction against you in order to stop your payment under the LC.
Your obligation is to pay when documents comply with credit terms – so first of all, I would check the documents fast but careful in order to find out whether or not they do.
In general issuing banks should not help applicants in injunction cases – but your obligations are based on the documents presented under the LC – and I do not see why you should not share copies of the documents with the applicant. I mean if documents are discrepant the purpose would be to illustrate the discrepancies – and if documents are credit compliant it would not matter as they should be paid and forwarded to the applicant anyway.
There are a few opinions that I have been able to find – not sure if they would help you – as they all refer to “local law”:
R.256
TA.169
TA.517
.. and not least the article “Fraud and Injunctions” by K.T. Fung – available in the “Expert view” section.
In any case – if you are approached by a judge on this one and documents do comply, please do not hesitate to mention the independent nature of the LC – mentioning (at least) article 3, 4 and 9 of the UCP 500 !
Hope you will manage to settle your case.
Best regards
Kim
-
RolandLeupi
- Posts: 115
- Joined: Fri Apr 05, 2019 5:26 pm
Release of copy documents to the applicant prior acceptance
I would not mind giving copies of discrepant documents to orderers before acceptance. It is sometimes much easier to evaluate if discrepancy may create problem or not having in view the document itselfs.
Now as far as the request to send copy of document even before having checked them probably signify that there is presumption of fraud. In this case however I do not understand why the customer needs a copy of the documents. If the presumption is established a "stop payment" may be imposed by the competent local authority only, i.e. a prosecutor for ex. However this can happen even if documents have not been presented yet.
In your description I have much more the feeling that your customer wants to check the documents because he does not trust your bank, or he tries to find eventual insignificant discrepancies to make payment latter
Roland
Now as far as the request to send copy of document even before having checked them probably signify that there is presumption of fraud. In this case however I do not understand why the customer needs a copy of the documents. If the presumption is established a "stop payment" may be imposed by the competent local authority only, i.e. a prosecutor for ex. However this can happen even if documents have not been presented yet.
In your description I have much more the feeling that your customer wants to check the documents because he does not trust your bank, or he tries to find eventual insignificant discrepancies to make payment latter
Roland
-
IreneSiitam
- Posts: 5
- Joined: Fri Apr 05, 2019 5:13 pm
Release of copy documents to the applicant prior acceptance
Thank you for your comments, folks!
As this is the case of suspected fraud, we would co-operate with the applicant as long as it does not conflict with our obligations under UCP 500. But we will not release the copy documents to the applicant before checking them.
We made this decision together with our lawyer as it also concerned local law.
As this is the case of suspected fraud, we would co-operate with the applicant as long as it does not conflict with our obligations under UCP 500. But we will not release the copy documents to the applicant before checking them.
We made this decision together with our lawyer as it also concerned local law.
Release of copy documents to the applicant prior acceptance
Perhaps a bit late in the day, but I cannot see any UCP500 based objection to giving an applicant photo/scanned etc. copies of documents presented whether prior to or after their examination for compliance.