ICC Digital Library Forum

I want to understand more about this Article.

LC amount is $20,000- No quantity of goods and unit price specified. Isssuing bank received invoice for $25,000 and draft for $20,000. Should it be treated as discrepancy or apply Art 18b and honour the draft amount $20,000?

If we treat it as discrepancy, then in what case could we apply this article?

Regards

Usually I say that lawyer interpretations of UCP should be superseded by practice based readings. But I suppose I shouldn't wait to see what isbp is established for this UCP600 language. I would say that 18b and also 14d permit this, but I am hoping that 14d will be narrowly interpreted and applied and fearful that it will not be. Regards, Jim Barnes

Raymond,

Whether you raise a discrepancy or not, you will invoke art. 18b which give you a choice.
Daniel

And that's why there are still many unanswered questions after reading the 600 and may lead to the publish of further Opinions after July.

Sorry, the question was about debiting the account of the applicant rather than the account of the nominated bank. My initial response addressed the latter.

As to the former, I agree that this is a matter governed by the agreements and laws governing the relationship between the applicant and the issuing bank. Their agreement governing LC issuance might give the issuing bank a right to reimbursement or indemnification or both in this circumstance. UCP500 Art. 18a and UCP600 Art. 37a provide skeltal agreements to indemnify. If there is a such a right, then debit under their LC agreements or their account agreement or applicable setoff law is likely provided as well.

Regards, Jim Barnes