ART 21 & ISBP
Posted: Tue Dec 10, 2002 12:00 am
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.
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.