ICC Digital Library Forum

Recently we encoutered a situation where we refused the document and the negotiating bank, who reimbursed themselves for the value of documents, keeps on refusing all our arguments.

In Dc Pro - ICC Opinion I found their ruling No. R352 which is exactly the same case on which ground we refused the document. The Problem was that :
* LC REQUIRED OCEAN SHIPPED ON BOARD BILLS OF LADING
* TRANSHIPMENT WAS PROHIBITED.
* SHIPMENT FROM FUZHOU CHINA TO PORT RASHID DUBAI
* BILLS OF LADING PRESENTED CONTAIN NAME OF THE PRE-CARRIAGE AS VESSEL "X" WITH PLACE OF RECEIPT AS "FUZHOU CHINA" BUT THE NAME OF OCEAN VESSEL BOX WAS "BLANK" PORT OF LOADING WAS MENTIONED AS "FUZHOU CHINA" AND PORT OF DISCHARGE AS "PORT RASHID DUBAI".
ON BOARD DATE = 14OCT1999 (WITHOUT ANY VESSEL OR PORT OF LOADING NAME)
WHILE REFUSING THE DOCUMENT WE WERE NOT AWARE OF ANY SUCH ICC RULING.
WE REFUSED THE DOCUMENT QUOTING THE DISCREPANCY " NAME OF OCEAN VESSEL (MOTHER VESSEL) MISSING ON BILLS OF LADING".
THE NEGOTIATING BANK KEEPS ON ARGUING THE THE VESSEL "X" IS FEEDER VESSEL AND TRANSHIPMENT HAS BEEN TAKEN PLACE AT SINGAPORE. HOWEVER THERE WAS NO MENTIONED OF TRANSHIPMENT ON BILLS OF LADING.
WOULD APPRECIATE IF SOME ONE COULD PROVIDE THEIR CONSENT AND ENDORSE OUR REFUSAL OF DOCUMENT IN THE LIGHT OF ICC OPINION R352 (SEE EXAMPLE 2 WHICH IS 100% SIMILAR TO OUR CASE)AND KEEPING IN MIND THAT ART. 23 IS APPLICABLE IN THIS CASE WHICH REQUIRES EVIDENCE OF ON BOARD ON A "NAMED VESSEL". COULD PRE-CARRIAGE IS "NAMED VESSEL".

LOOKING FORWARD TO EXPERTS VIEW IN THIS CONTEXT.

Transhipment
It is unclear whether this shipment falls within the "exception" category of Article 23 d i. If it does, then the issue of transhipment not being allowed becomes irrelevant. If transhipment is effectively allowed, the B/L can be issued once the goods have been shipped on board the first vessel. UCP 500 makes no distinction between pre-carriage vessel, first vessel, mother vessel or ocean vessel. If the B/L is issued after the sailing of the first vessel, it may not be known what the second vessel will be called. Even if there is a second vessel on which the cargo is booked, the second will remain an intended vessel (even if indicated as ocean vessel or mother vessel on B/L) until such time as the second vessel has sailed with the goods on board. Thus it is perfectly reasonable for such a B/L to be issued without completion of the box for "ocean vessel", as these details may not be known at time of sailing of the first vessel. In some similar cases the ocean vessel box may show "T.B.A." (to be advised).

On Board Date
If the on board date is based on a "Shipped" B/L (as opposed to a "Received for Shipment" B/L), then this may be acceptable. The B/L must also comply with all other conditions of Article 23 a ii. As the place of receipt was also the port of loading, this obviates the automatic requirement for a vessel and port of loading name notation..

ICC Opinion 352
I must point out that my above opinion disagrees with that of the ICC Opinion. However, the ICC Opinion fails to take account of current practice in the issue of Bills of Lading. Take for example goods shipped on a vessel sailing from Singapore to Rotterdam. The goods are then transferred to a vessel sailing to Dublin. It could be argued that, as the B/L only contains boxes for pre-carriage vessel and ocean vessel, the sailing from Rotterdam was the ocean vessel and the earlier sailing from Singapore must be pre-carriage.
Likewise, at the time of sailing of the vessel from Singapore, the name of the vessel sailing from Rotterdam to Dublin could not have been known. ICC opinion 352 seems to suggest that the issue of Bills of Lading should be delayed pending sailing of the "Ocean Vessel". This is flawed on three counts :
1. It is in the interests of all that there be no delay in the issue of Bills of Lading.
2. The designation of "Ocean Vessel" is entirely in the hands of those issuing the Bills of Lading. In other words, the same vessel can have bills of lading showing this vessel as pre-carriage or ocean vessel for the same voyage.
3. It may be argued that if the first part of the ocean voyage is short, this can be shown as pre-carriage. However, this does not answer the case where the first part of the ocean voyage is 90% or 50% of the total voyage. Therefore it will not be possible to determine what should or should not be regarded as pre-carriage.


Laurence A. J. Bacon
laurence_aj@hotmail.com

The issue is not what is pre-carriage or not. The issues is compliance with UCP as reflected by the opinions of the ICC Banking Commission.

In respect of your query it is best to apply ICC official opinions instead of personal opinions which conflict with the ICC official opinions.

If the Bill of Lading bears an on board notation indicating loading on board a named vessel at the port of loading stipulated in the credit then this will comply with the Credit per UCP. Furthermore, the date of the on board notation will be deemed to be the date of shipment.

When we rely on ICC opinions, we must realise one fact. Those opinions are made by bankers, who may not know the latest changes in marine transport. As a result, some opinions may not have reflected the updated practices in marine transport, as already pointed out by Mr. Larry Bacon above. Marine carriers often complain to me when they come to my UCP 500 workshops that bankers should not try to mow the lawns of their neighbours.

The most effective solution to such problems is that the ICC Banking and Transport Commissions should sit down together and solve these problems, as recommended by Ms Maria Livanos Cattaui, the Secretary General of ICC, when she wrote to me in response to my article in Autumn 2000 issue of DCI, about inconsistency between terms used by various ICC Rules. Before that is done, the most effective way, from my experience, is that we should not waste our time and energy debating on "intended vessel", "pre-carriage", "transhipment port", and the like.

The most straightforward approach is to ask the applicant to discuss with the beneficiary as to the routing of the sea voyage, and this information can be easily obtained from the carriers. Then the applicant can fill in the right port of loading and the right port of discharge, according to the information given by the carriers (which is what to be written in the B/L), in the LC application form. Then there should not be any mis-filled B/L. Otherwise, before the two Commissions sit down together to change the ICC opinions, many more problems would come.

Some beneficiaries-to-be have already seen this problem and approached us to draft the LC application forms for the applicants and put this into their sales contracts that if the sellers would sell only if the application forms drafted by us are to be followed by the applicants. Otherwise there is no deal. This may be also one solution. However, only Fortune 500 corporations use such services at this moment.

We are from www.tolee.com

[edited 6/20/01 6:36:03 PM]
[edited 10/26/01 3:05:09 AM]