ICC Digital Library Forum

Laurence,

I do not regard the words ‘despatch’ or ‘shipment’ as being materially different. My answer would have been the same had I used the word ‘despatch’ in the example. My reasoning is based simply on the fact that a ‘bill of lading’ has been specified and bill of lading equals both sea transport and Article 23, unless the credit incorporates other details to indicate otherwise, e.g. it specifies despatch/shipment by two or more modes of transport (one logically being sea). In the example you gave, New York and Vancouver happen to be ports (I believe) thus as a bill of lading = sea transport it is reasonable to say the credit specifies a bill of lading covering port-to-port shipment.

Jeremy

Jeremy,

We are glad to see that this time you do not use the profound English, such as those used in the law reports, but present your views in an analytical manner in your interpretation of the Article to be used to examine the bill of lading under the DC instructions that say:

"Bill of lading consigned to order of shipper marked freight paid. Shipment from Vancouver to New York."

You determine that the DC must call for a BL under Article 23. Now this decision would expose your weakness, knowing not enough to determine this sort of complicated issue related to transport documents. Your banker world of transport is much simpler than the world of transport as seen by Laurence and us. This is the root of the problem amongst us three. And also the cause for so many DC disputes even though we have the UCP 500 and the ISBP (now being cooked in the ICC Kitchen, still medium rare before October 2002. Instead of curry powder from New Delhi, Parma hams will be added in Rome).

A MORE REASONABLE AND UNBIASED APPROACH

Let us assume that there is a document checker named T. O. (from Toronto Ontario?) who knows something about transport and let us see how he would deal with the problem. Instead of getting too excited and jump to the conclusions, as many checkers would, he would ask himself a few basic questions first as below:

(1) Shipment or despatch from where to where? From Vancouver to New York of course.

(2) But from which Vancouver? He knows that there are totally three Vancouvers, one in British Columbia in Canada, the Garden City, with a nice seaport, another one in USA between Portland and St. Helens, an inland port, not a seaport, and one named Vancouver Island with many seaports

(3) That means we have two modes of transport. The first mode is sea mode, from Vancouver Port Canada or Vancouver Island to New York by port-to-port BL. The second mode is by inland road haulage from East Coast to West Coast within USA, from Vancouver USA to New York, which is the most efficient and economical mode.

(4) Unfortunately, from the data content of the BL presented, it is subject to USA Road Transport Law similar to the European CMR Convention. The title is Road Bill of Lading (if you have never heard of this term, then please talk to some US freight forwarders. They may even show you an Air Bill of Lading that we happen to see as presented by one of the participants in one of our transport documents workshop. Laurence also sees lots of these BsL). It is too late to alarm the applicant to apply for the issue of an amendment to put it right.

(5) What to do? The show must be on. I have to determine which Article I should use. I cannot decide merely by looking at the title, as I know the ISBP regards the title means nothing and the data contents count. So I am afraid that I have to choose Article 28.

(6) I also know a bit of law learnt from my English friend “Rocky” Jeremy (pardon us for this joke. US people always like to call their friends and public figures with nicknames) that the “benefit of doubt” in an unclear and imprecise DC instruction belongs to the beneficiary. So I have no choice but to use Article 28 to examine the BL since the transport is performed in USA, and USA trade practices must be considered as I may see the beneficiary in a US court since US people like to resolve everything in the courts.

(7) So because the starting point of carriage is Vancouver, we cannot say that it must be Article 23, although we tend to agree that for most of the other situations, such as Hong Kong to Singapore, Article 23 should be applied, since there is only one Hong Kong and one Singapore in this world.

We hope we have made ourselves quite clear our lines of thoughts, from a transport plus banking approach, a broader view than only restricted to banking, which is not everything in an international transaction.

Our advice to Jeremy is that unless he agrees to acquire more basic transport knowledge and practice, we cannot continue this sort of arguments as Laurence and we are talking about apples and he is talking about oranges. We can only discuss mixed fruits juice, a popular fruit drink in North America.

www.tolee.com

[edited 7/12/02 8:35:06 PM]

T.O.,

I believe your approach above is simply not the way bankers are expected, or entitled, to examine documents (at least under English law), i.e. to me it flies in the face of sub-Article 13a. The whole object for a banker is to have a simple and straightforward, and thus cheap and low risk, process for determining documents compliance which does not involve all the rigmarole you have set out above. Otherwise documentary credits would either uneconomical for them or, given the substantial cost increase necessary to make credits economical for a banker, uneconomical for buyers & sellers.

As an apparent disciple of Charles del Busto I am surprised you are not prepared to accept his statement ‘there is a method for examination of documents under the Documentary Credit which is peculiar to bankers’. Overall, it is clear that you (and it would seem Laurence) have a far more demanding view of how a banker should check documents than me, & I believe, most bankers themselves and the law (at least in England).

In the light of your last comment I’m relieved we can bring this matter to an end.

Jeremy

Jeremy,

although I agree that it is reasonable to say that a port-to-port shipment may be indicated, this is not to the exclusion of other modes. You state that "... bill of lading equals both sea transport and Article 23...", but if one examines the first few words of Article 23, one can see that it relates ONLY to Marine/Ocean B/L and only for port-to-port shipment.

T.O. has already indicated that Road B/L is in common use in the U.S.A., but many of the U.S. road B/L I have seen are actually titled "Bill of Lading". This is the very reason why I cited the example of goods crossing the USA. In other words, a presentation under the example given which includes a document titled B/L would be equally valid if it indicated a sea voyage or road transport.

Laurence

Laurence,

I agree Article 23 relates to ‘marine/ocean’ bills of lading. However, unless a credit gives a clear (to a banker) indication to the contrary, I cannot see that a banker can take the term ‘bill of lading’ to mean anything other than ‘marine/ocean’ or, in UCP500 jargon, ‘port-to-port’ bill of lading given, among other things, UCP500 only uses the term ‘bill of lading’ (Articles 23 & 25) in the context of shipment by (‘ocean’) vessel.

Jeremy

Jeremy,

if it was the case that a B/L could only refer to a Marine/Ocean B/L, then the words "Marine/Ocean" would be superfluous in Article 23, but the contributors to UCP obviously felt it necessary to make this distinction. They also make provision for other forms of B/L, either directly (Article 25) or by inference as in Articles 26,27 and 28 which accepts transport documents "however named".

Please also see the new topic I open on Air Charter Party.

Laurence

Laurence,

As I’m not blessed with psychic powers I’ve no idea why ‘marine/ocean’ appears in the heading of Article 23 (as opposed to the Article itself). However, unlike you, I do not see it as material to this discussion.

Articles 23 – 29 merely make provision for a document to be presented that does not bear the designation of the document called for in the credit.

All in all, the fact remains that -in my opinion- in a properly opened credit the single transport article to be applied is determinable from the credit terms alone. Also, where a credit is inadvertently issued/advised that is ambiguous as to its terms, the banker (at least in England) has to give the most reasonable interpretation, using their banking knowledge, with reference to the credit terms alone.

As this discussion has gone on more than long enough I suggest we call a halt to it.

Jeremy

Jeremy,

We agree that we should stop right after exchange of views so many times.

BANKERS SHOULD GROW WITH THEIR CUSTOMERS IN A MORE AND MORE COMPLEX TRADE ENVIRONMENT THAT WE ARE FACING TODAY

With international trade getting more and more complicated, bankers have to step outside their comfortable nests and learn new things. Otherwise banking services cannot cope with the fast advancements in transport and cargo insurance. If bankers are left behind, who pay for the costs? The beneficiaries of course who are not paid for their DCs.

Since banking is now growing more and more competitive, one day we would not be surprised to find out one niche bank that has specially trained DC pros to handle commodity trades and charter parties. Then those bankers who refuse to grow with their customers would be left behind and have to take an early retirement.

Now in the ISBP draft ICC Document 470/951rev3, maritime chartering terms like "FI", "FO", "FIO", "FIOS" are used. This is a silent message from the ICC Banking Commission to tell the bankers to learn more non-banking knowledge and grow with their customers and the sophisticated market place.

COMPETITION SHOULD BE ON SERVICE QUALITY AND NOT CHEAP PRICE

Some consultants are expensive and yet they have good business. Why? Because they know something other people don’t know. And those customers who want the best would not mind to pay a little more.

When you pay peanuts you get monkeys.

Jeremy, cheep service is not an attraction in this “knowledge is power” world that we are living in. Competition should be on quality services, which would cost money to the banks. But this is the right way to compete, other then offering cheap services. So you should not use high cost as a reason to refuse learning non-banking knowledge.

Training workshops are not very expensive. We make little money out of training. Our main income comes from court expert services.

PLEASE DON’T QUOTE CHARLES DEL BUSTO ONLY WHEN IT IS CONVINIENT

About the opinions of Charles del Busto, we still remember that in your previous postings, you disagree with some of his interpretations on certain UCP 500 Articles. Now when one of his statements is helpful to you and you claim to be his disciple. Are you practising “bifurcated standard”?

Shall we move to other “battlefields” after this?

www.tolee.com

[edited 7/15/02 5:41:00 PM]

I understand that the participants of this debate do not wish to continue the disscussions re. this issue any more. I just wish to express my agreement with the opinions of Jeremy above. I also believe that which transport article is to be applied must be determinable from the Credit alone.

Pavel Andrle

Andrle,

IMPORTANT TO KNOW WHERE WE ARE IN THE HEATED ARGUMENTS

We do not object, and it should be done this way too, that the determination of the Article used for examination of documents should be based on the DC terms and conditions.

What we are trying to say is that the SCOPE of knowledge of a seasoned banker about non-banking things, that may make a great difference. Using the DC terms and conditions as a platform and supported by the perspectives of non-banking knowledge, would be a more fair, reasonable and professional determination.

Why so many legal cases are being overthrown in the appeals? Because the judges do not take into consideration of other perspectives. The same would happen to banking.

WHERE OUR AGREEMENT AND DIFFERENCES LIE?

Our difference is not whether the DC terms and conditions should be used or not but rather the WIDTH OF THE SCOPE of a banker’s knowledge on non-banking things, such as transport and insurance basics and trade practices.

Hope this is clear to everybody. We should keep a cool head and not to be carried away by the heated arguments.

www.tolee.com

[edited 7/17/02 4:14:02 PM]