With regard to the tide of righteous indignation that appears to have gripped much of the documentary world, which bolstered by our Viking heritage we are valiantly trying to hold back*, a thought (thanks to Prof. Debatista) occurs to me.
If the <Banking> Commission is to say all or some of the bills of lading covered by the erstwhile Policy Statement are non-compliant, it seems to me they would need to have reconciled this -in the replacement document- with Article 15, among other things. Article 15 states that banks assume no liability or responsibility for:
1. the legal effect of any document, or:
2. for the general and/or particular conditions stipulated in a document or superimposed on a document.
My impression is that the central element of the whole brouhaha is particular conditions stipulated in a document and their legal affect, something for which Article 15 says banks assume no liability or responsibility. Of course, if anyone thinks differently -or can reconcile refusing the bills of lading at issue with Article 15- I would be most interested to hear.
* Although to be fair to the often mis-represented Canute, he set-out demonstrate to ultra-obsequious courtiers he could not, rather than he could, hold back the tide. Also, I believe it is debatable if he was a <Brit>; he was the ruler of an empire which, at its height, included England, Denmark, Norway and part of Sweden and was known as Knud in Denmark and Knut in Norway _ _ _ I could go on but have been overcome with an overwhelming tirednesszzzzzzzzzz
[edited 5/18/2004 4:10:48 PM]
Maersk b/l's
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Maersk b/l's
Given the opportunity, Bankers, like most people, would like to have their cake and eat it. Thus, when Article 15 suits them, they take no responsibility for the legal effect or otherwise of documents presented to them. On the other hand they usually insist on B/L consigned to order of the issuing bank, such that, in case of need, they can rely on easily obtaining the goods, or pass title to an alternate buyer, by use of the same document (of title).
In the same way that it is prudent of an issuing bank to insist on B/L consigned to their order, it is prudent to insist that documents tendered to them under a DC be valid documents of title. Clauses which remove this vital function negate the validity of the document as a B/L. Thus the very nature of the document is in question, not whether or not the clauses represent terms and conditions.
Laurence
In the same way that it is prudent of an issuing bank to insist on B/L consigned to their order, it is prudent to insist that documents tendered to them under a DC be valid documents of title. Clauses which remove this vital function negate the validity of the document as a B/L. Thus the very nature of the document is in question, not whether or not the clauses represent terms and conditions.
Laurence
Maersk b/l's
Just seen the draft ‘Commission on Banking Technique and Practice Policy Statement Clauses on bills of lading’ and draft ‘Commission on Banking Technique and Practice Note to members, observers, national committees and groups Clauses on bills of lading – Accompanying letter’. Looks personally to me as if one very big nail -given the resultant confusion that will inevitably arise if these documents are agreed- is poised over the coffin of the doc credit.
[edited 6/7/2004 4:42:00 PM]
[edited 6/7/2004 4:42:00 PM]
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Maersk b/l's
Jeremy,
Ref the proposed Policy Statement.
The Banking Comm. has at last taken a stand on clause 1, but this after the major culprit (Maersk) has bowed to the inevitable and removed it.
The Banking Comm. have fudged the issues regarding clauses 2 & 3 and if adopted will leave the LC community as confused as before.
Laurence
Ref the proposed Policy Statement.
The Banking Comm. has at last taken a stand on clause 1, but this after the major culprit (Maersk) has bowed to the inevitable and removed it.
The Banking Comm. have fudged the issues regarding clauses 2 & 3 and if adopted will leave the LC community as confused as before.
Laurence
Maersk b/l's
Laurence, you say the Banking Commission has at last taken a stand on clause 1. However, no where in the draft Policy Statement does it say B/Ls containing clause 1 are non-compliant. Also, no distinction is drawn between order bills and straight bills; one could well find a clause 1 provision in a straight bill which –for example- in the US is not a document of title. Finally, I cannot see that clause 2, or 3 in those jurisdictions where the B/L is a document of title (which seems include much of Europe and the ex-British colonies in the Far East), undermine any less the ‘essence’ of a B/L than clause 1. To me personally, both documents seem very much in line with the general calibre of the Banking Commission membership.
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Maersk b/l's
Jeremy,
while it is true that the draft Policy Statement does not say that clause 1 is non-compliant, it does call for such clauses to be removed.
Where U.S. or any other law demotes the functionality of a B/L to that of a SWB, that "B/L" in effect is a SWB. Where a LC under UCP calls for a B/L, it does so, not by title, but by function. When the UCP calls for a "Full set of B/L" by default, it is obvious that this applies to documents of title. Otherwise there would be no need for such stipulation. Therefore the fact that there should be no distinction between straight and to order B/L in relation to clause 1, is correct, in my opinion.
When the Banking Comm. say that the use of clauses 2 & 3 should be discouraged, it is clear that this is the wording of a diplomat, which satisfies neither side of the argument, but allows both sides to claim that their viewpoint is vindicated.
The draft Policy Statement, in addressing clause 2, fails to take account of the two forms of non-negotiable B/L, and treats them erroneously as one.
One must consider that the UCP exists to support international trade, not vice versa. This is another reason why we should focus on the functionality of the B/L as part of the functionality of the UCP, which, in turn, is part of the broader environment of international trade.
Laurence
while it is true that the draft Policy Statement does not say that clause 1 is non-compliant, it does call for such clauses to be removed.
Where U.S. or any other law demotes the functionality of a B/L to that of a SWB, that "B/L" in effect is a SWB. Where a LC under UCP calls for a B/L, it does so, not by title, but by function. When the UCP calls for a "Full set of B/L" by default, it is obvious that this applies to documents of title. Otherwise there would be no need for such stipulation. Therefore the fact that there should be no distinction between straight and to order B/L in relation to clause 1, is correct, in my opinion.
When the Banking Comm. say that the use of clauses 2 & 3 should be discouraged, it is clear that this is the wording of a diplomat, which satisfies neither side of the argument, but allows both sides to claim that their viewpoint is vindicated.
The draft Policy Statement, in addressing clause 2, fails to take account of the two forms of non-negotiable B/L, and treats them erroneously as one.
One must consider that the UCP exists to support international trade, not vice versa. This is another reason why we should focus on the functionality of the B/L as part of the functionality of the UCP, which, in turn, is part of the broader environment of international trade.
Laurence
Maersk b/l's
Lawrence, I 'like' your comment(!) about the implications of specifying a 'full set' of bills of lading. I certainly agree it supports the argument that 'documents of title' are required.
However, I still think both draft documents are absolutely disastrous. I really do not see why the NCs cannot be offered two draft policy statements, one containing a coherent argument as to why all the bills are compliant and the other containing a coherent argument as to why they are all not compliant (I have no doubt coherent arguments can be made either way), and then allowed to vote on which one they want.
However, I still think both draft documents are absolutely disastrous. I really do not see why the NCs cannot be offered two draft policy statements, one containing a coherent argument as to why all the bills are compliant and the other containing a coherent argument as to why they are all not compliant (I have no doubt coherent arguments can be made either way), and then allowed to vote on which one they want.
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Maersk b/l's
Geremy,
I agree that a choice should be offered, but that choice should be acceptability or otherwise of each of the three clauses.
If one were to choose between the two drafts, what about those of us who are not satisfied with either ?
Laurence
I agree that a choice should be offered, but that choice should be acceptability or otherwise of each of the three clauses.
If one were to choose between the two drafts, what about those of us who are not satisfied with either ?
Laurence