Whether the presentations comply should be decided by you (and any court) on the same basis - standard practice, which boils down to your consensus on standard practice as applied to this LC. (I refer to the obligation to honor, not to the right of reimbursement from the applicant, which should be different and generally broader.) US statutory law (which was written with LC bankers at all the drafting sessions) says as much.
It sounds to me that the LC bankers in this discussion think these presentations comply, but you are a bit anxious that "full consignment" might be interpreted to mean the entire transaction and not a partial shipment.
Personally, I think that is a doubtful interpretation of the word "consignment" and not a sufficient basis for refusing honor or resisting reimbursement. If I had to argue the point as a lawyer, I would say first that my view expresses standard LC practice, and then only secondarily that "full consignment" refers to a shipment and not an entire sale, or, is ambiguous allowing the beneficiary to proceed on any reasonable basis. (And, yes, there is an English case on the latter point, involving Credit Agricole, as I recall.)
Regards, Jim Barnes
Multiple B/L's and documentary conditions
Multiple B/L's and documentary conditions
I agree with Jim, that a full consignment alludes to a partial shipment and not to the entire sale. The following definition of consignment is extracted from a legal dictionary applicable to US law.
“A consignment is an arrangement resulting from a contract in which one person, the consignor, either ships or entrusts goods to another, the consignee, for sale”. According to Wikipedia encyclopedia “Consignment is the act of consigning, which is placing a person or thing in the hand of another, but retaining ownership until the goods are sold or person is transferred”. Going by these definitions I would think that shipments effected by the 3 different shippers though form part of the same deal are to be construed as separate consignments as they accrue separate ownership rights for each consignor against the consignee.
Regards Khalid
“A consignment is an arrangement resulting from a contract in which one person, the consignor, either ships or entrusts goods to another, the consignee, for sale”. According to Wikipedia encyclopedia “Consignment is the act of consigning, which is placing a person or thing in the hand of another, but retaining ownership until the goods are sold or person is transferred”. Going by these definitions I would think that shipments effected by the 3 different shippers though form part of the same deal are to be construed as separate consignments as they accrue separate ownership rights for each consignor against the consignee.
Regards Khalid
Multiple B/L's and documentary conditions
I have the following thoughts regarding (1) Jim’s and (2) Khalid’s postings:
1. I cannot see that ‘standard practice’ would be of any help in interpreting the condition in question, as it is so unusual that I would anticipate there is not any standard practice in existence. How many credits does one see that make reference to the ‘full consignment’? (I do not think the word ‘full’ can be ignored.) Very few, if any, I would imagine.
My impression is that the word ‘consignment’ (of goods) does not appear in that many credits either. Nonetheless, I would anticipate most bankers would interpret a ‘consignment’ (of goods) to mean a ‘shipment’ (of goods) and therefore that a ‘full consignment’ of goods = a ‘full shipment’ of goods = all the goods required under the credit.
The case Jim refers to is, I imagine, Credit Agricole Indosuez v Muslim Commercial Bank Limited. Sir C Staughton said (among many other things) ‘when an agent [here the nominated bank, CAI] acts upon ambiguous instructions he is not in default if he can show he adopted what was a reasonable meaning’. He also quoted the words of Lord Diplock from Commercial Banking Co. of Sydney v Jalsard Pty Ltd that ‘if the instructions given by a customer to the issuing banker as to the documents to be tendered … are ambiguous or are capable of covering more than one kind of document, the banker is not in default if he acts upon a reasonable meaning of the ambiguous expression or accepts a kind of document which fairly falls within the wide description used’.
Thus, the criterion -under English law- is: what is reasonable (or 'fair') meaning to a BANKER?
Lastly, and I mean no disrespect to you Jim, but presumably how a particular lawyer would argue a matter in court would depend on which party was paying his / her fees?
2. I am not convinced the definitions quoted do allow a BANKER to conclude that ‘shipments effected by the 3 different shippers … [that] form part of the same deal are to be construed as SEPARATE consignments …’ and even if they do I cannot see that this automatically overturns the view that ‘full consignment’ reasonably means all the goods required under the credit.
[edited 10/10/2006 4:25:58 PM]
[edited 10/10/2006 4:28:49 PM]
1. I cannot see that ‘standard practice’ would be of any help in interpreting the condition in question, as it is so unusual that I would anticipate there is not any standard practice in existence. How many credits does one see that make reference to the ‘full consignment’? (I do not think the word ‘full’ can be ignored.) Very few, if any, I would imagine.
My impression is that the word ‘consignment’ (of goods) does not appear in that many credits either. Nonetheless, I would anticipate most bankers would interpret a ‘consignment’ (of goods) to mean a ‘shipment’ (of goods) and therefore that a ‘full consignment’ of goods = a ‘full shipment’ of goods = all the goods required under the credit.
The case Jim refers to is, I imagine, Credit Agricole Indosuez v Muslim Commercial Bank Limited. Sir C Staughton said (among many other things) ‘when an agent [here the nominated bank, CAI] acts upon ambiguous instructions he is not in default if he can show he adopted what was a reasonable meaning’. He also quoted the words of Lord Diplock from Commercial Banking Co. of Sydney v Jalsard Pty Ltd that ‘if the instructions given by a customer to the issuing banker as to the documents to be tendered … are ambiguous or are capable of covering more than one kind of document, the banker is not in default if he acts upon a reasonable meaning of the ambiguous expression or accepts a kind of document which fairly falls within the wide description used’.
Thus, the criterion -under English law- is: what is reasonable (or 'fair') meaning to a BANKER?
Lastly, and I mean no disrespect to you Jim, but presumably how a particular lawyer would argue a matter in court would depend on which party was paying his / her fees?
2. I am not convinced the definitions quoted do allow a BANKER to conclude that ‘shipments effected by the 3 different shippers … [that] form part of the same deal are to be construed as SEPARATE consignments …’ and even if they do I cannot see that this automatically overturns the view that ‘full consignment’ reasonably means all the goods required under the credit.
[edited 10/10/2006 4:25:58 PM]
[edited 10/10/2006 4:28:49 PM]