The Chinese translation of "negotiation" in DC is "discuss and pay". That implies payment by the negotiating bank according to the terms and conditions agreed upon during the discussion process, recourse included.
Hence we have with or without recourse negotiation, all flexible according to the mutual agreement between the bank and its customer.
Of course everyone knows that for the confirming bank and the issuing bank, there is no choice for recourse. It must be without recourse as written clearly in the UCP.
We are wondering what the implication is in the translation of negotiation in other languages, such as Arabic, Spanish, German and French. May members share this information with us?
http://www.tolee.com
[edited 10/28/01 12:18:49 AM]
Negotiation - Liability of Banks not giving value
-
hatemshehab
- Posts: 220
- Joined: Fri Apr 05, 2019 5:19 pm
Negotiation - Liability of Banks not giving value
In Arabic language every word is derived from a stem or root word. Stem is the main part of a noun, verb etc., to which inflections are added; the part that appears unchanged throughout the cases and derivatives of a noun, persons of a tense, etc.
The stem word, from which the Arabic word “DAWALA”(negotiate), is derived, means, “to rotate, cause to succeed or follow one another”. It also means, “to confer with, discuss with”
Hence, the derivative word “TADAWOL”, indicates two processes, "keep on alternating documents, examining and checking them until an agreement is made with the beneficiary" to purchase them against value.
So “TADAWOL” (Negotiation in English) means, “PURCHASE” of documents against a value, therefore when a bank negotiates the seller’s draft, it is actually advancing funds to the seller by buying the draft for local currency. In this way, the negotiating bank becomes a holder of a negotiable instrument and relies on the promise made by the issuing bank to honour drafts in compliance with the L/C terms and conditions.
The stem word, from which the Arabic word “DAWALA”(negotiate), is derived, means, “to rotate, cause to succeed or follow one another”. It also means, “to confer with, discuss with”
Hence, the derivative word “TADAWOL”, indicates two processes, "keep on alternating documents, examining and checking them until an agreement is made with the beneficiary" to purchase them against value.
So “TADAWOL” (Negotiation in English) means, “PURCHASE” of documents against a value, therefore when a bank negotiates the seller’s draft, it is actually advancing funds to the seller by buying the draft for local currency. In this way, the negotiating bank becomes a holder of a negotiable instrument and relies on the promise made by the issuing bank to honour drafts in compliance with the L/C terms and conditions.
Negotiation - Liability of Banks not giving value
Hatem Shehab,
Sorry I’ve not responded sooner to your posting of 27 Sep. I’ve used the discussion forum as this is more convenient.
My personal thoughts, without any responsibility, are:
A. Your point 4. I regret I cannot see how negotiation involves a promise for payment ‘now’, but I accept it can involve a promise of payment in the future, per Position Paper no. 2 (PP2), provided it is given AFTER documents have been presented. While I agree an undertaking to negotiate can be communicated to the beneficiary upon advising the original credit instrument, I would not regard this as ‘consideration’ or ‘giving of value’ with respect to any negotiation itself.
B. Your point 5. I’m afraid I’m not sure what point your making here. Also, I would have thought it was the other way round: one must have consideration or value in order for negotiation to take place and for ownership of the documents to pass to the nominated bank.
C. Your point 6. Given how far receiving and checking documents, and stating that they are in order, is from effecting immediate settlement, or giving a POST-presentation undertaking to pay at a later date, I would be most reluctant to consider this as ‘value’ or ‘consideration’. It certainly seems to fall outside PP2.
D. Your point 7.
I apologise if I am showing a lack of subtlety, but I cannot see the relevance of any ‘willingness’ to negotiate to the question of ‘giving value’. For me ‘negotiation’ under credits is a concrete process that requires documents to be presented to the nominated bank, for them to be taken up by the nominated bank and for the nominated bank to ‘give value’ (if it wants to be certain of being able to claim the rights of a nominated bank per sub-Article 14ai, for example) per PP2. Anything that does not involve all these elements, to me, simply cannot be regarded -with any certainty- as ‘negotiation’.
[edited 10/5/01 5:15:54 PM]
[edited 10/5/01 5:16:52 PM]
[edited 10/5/01 5:18:06 PM]
Sorry I’ve not responded sooner to your posting of 27 Sep. I’ve used the discussion forum as this is more convenient.
My personal thoughts, without any responsibility, are:
A. Your point 4. I regret I cannot see how negotiation involves a promise for payment ‘now’, but I accept it can involve a promise of payment in the future, per Position Paper no. 2 (PP2), provided it is given AFTER documents have been presented. While I agree an undertaking to negotiate can be communicated to the beneficiary upon advising the original credit instrument, I would not regard this as ‘consideration’ or ‘giving of value’ with respect to any negotiation itself.
B. Your point 5. I’m afraid I’m not sure what point your making here. Also, I would have thought it was the other way round: one must have consideration or value in order for negotiation to take place and for ownership of the documents to pass to the nominated bank.
C. Your point 6. Given how far receiving and checking documents, and stating that they are in order, is from effecting immediate settlement, or giving a POST-presentation undertaking to pay at a later date, I would be most reluctant to consider this as ‘value’ or ‘consideration’. It certainly seems to fall outside PP2.
D. Your point 7.
I apologise if I am showing a lack of subtlety, but I cannot see the relevance of any ‘willingness’ to negotiate to the question of ‘giving value’. For me ‘negotiation’ under credits is a concrete process that requires documents to be presented to the nominated bank, for them to be taken up by the nominated bank and for the nominated bank to ‘give value’ (if it wants to be certain of being able to claim the rights of a nominated bank per sub-Article 14ai, for example) per PP2. Anything that does not involve all these elements, to me, simply cannot be regarded -with any certainty- as ‘negotiation’.
[edited 10/5/01 5:15:54 PM]
[edited 10/5/01 5:16:52 PM]
[edited 10/5/01 5:18:06 PM]