FIATA Multimodal Transport Bill of Lading

[MaximPankratov]

FIATA Multimodal Transport Bill of
Lading was required under doc. credit,
which indicated that goods must be
dispatch from Russia for transportation
to Tehran.

FIATA Multimodal Transport Bill of
Lading was presented to the Issuing
Bank where in 'Port of loading' was
the port in Russia/Russia and in 'Port
of discharge' was Tehran. 'Place of
receipt' and 'Place of delivery' was
empty.

Issuing Bank refused the docs due to
the following: 'Place of receipt and
place of delivery not stated on Bill
of Lading'.

Is the Issuing Bank right?

[AbdulkaderBazara]

Usually contract of carriage for such mode of transport covers the entire journey, from place of initial receipt to the place of final delivery. However, the terms and conditions of the letter of credit will dictate what should appear on the transport document. Does the letter of credit cover at least two modes of transport? Does the letter of credit indicate place of taking in charge and place of final destination different from port of loading and port of discharge? If the answer is yes, then the document should comply with it. If the answer is no, meaning the letter of credit is silent in this regard, then, the multimodal may or may not show the place of taking in charge and place of final delivery different from port of loading and port of discharge. In this case, the document maybe considered to be functioning as a port-to-port bill of lading and in my opinion, would not be treated as discrepant if it does not show the place of taking in charge and place of final destination in addition to the port of loading and port of discharge.

[PGauntlett]

Presumably l/c called for multimodal doc because the actual journey requires more than one mode of transport. This would make sense since Tehran is inland. The b/l appears to be factually incorrect showing 'Port of Discharge' as Tehran since the 'vessel' cannot possibly get there.

It's possible, but unlikely, that the credit could be vague enough to allow acceptance of the document as presented but my initial view is that the document should be rejected for 2 reasons:
1. l/c calls for multimodal transport doc but b/l evidences only 1 mode of transport (evidenced by POR and POD being blank)
2. Tehran cannot be a PORT of discharge in the accepted sense

Furthermore, the US Council on International Banking Inc., Standard Banking Practice for the Examination of L/C Docs states:
'If a credit which clearly calls for a multimodal transport document

a) is issued via SWIFT, and indicates a place in Field 44a as well as a place in Field 44b

or

b) is issued via another medium and only indicates a 'shipment from' or 'from' place and/or a 'shipment to' or 'to' place

then the named place(s) will be deemed to be the stipulated place of taking in charge and place of final destination respectively'

[AbdulkaderBazara]

I have two comments to make here:

1) Knowing that Tehran is inland and not a seaport, I would tend to agree with PGauntlett that the document presented, although the data content on the front of it may satisfy the requirement of the credit and covers the journey inteded in the credit, could be considered discrepant because it has wrongly been filled. I assume here that the transport document did not show port of transhipment. I also assume that the first leg of the transport is by ship and the difference in opinion lies only on the final destination.

2) I would, however, tend to disagree that mutlimodal transport document could not be used to cover port to port shipment or one mode of transport for two reasons:

a) UNCTAD/ICC Rules for Multimodal Transport documents under Rule 1.1 states that the rule applies, when they are incorporated, irrespective of whether there is a unimodal or multimodal transport contract involving one or more several mode of transport.

b) Article 23(a) of UCP uses the expression “however named” to imply that the name of the document is immaterial. Therefore a document with a title "Multimodal Transport Document" may function as a port to port transport port document and article 23 of UCP could be applied in checking it.

[PGauntlett]

The 'however named' part of the transport docs articles is to allow, for example, a b/l titled 'for combined transport' to be used as an ocean b/l provided it meets terms of art 23. However if l/c actually calls for 'multimodal transport doc' then Art 26 applies and the document, regardless of what it might call itself, must show more than one mode of transport.

[AbdulkaderBazara]

To satisfy myself on this issue I have looked at several FBL’s (NEGOTIABLE FIATA MULTIMODAL TRANSPORT BILL OF LADING) and noted the following:

1) The contract is subject to UNCTAD/ICC Rules for Mutimidal Transport Documents (ICC Publication 481).
2) A standard clause on the face of the document states, “taken in charge in apparent order and condition, unless otherwise noted herein, at the place of receipt for transport and delivery as mention above”. This shows that the issuer of the B/L confirms its responsibility for the goods until it is delivered to the place indicated in the bill of lading, which, in this case is Tehran. Thus fulfilling the contractual obligation of the beneficiary towards the applicant.

3) To support the fact that a multimodal transport document could be used for a unimodal mode of transport, the following clause appears on the Standard Conditions printed overleaf:
“ 1. Applicability
Notwithstanding the heading-FIATA Multimodal Transport Bill of Lading (FBL)- this conditions shall also apply if only one mode of transport is used.”

To conclude, I have the following points to state:

1) Notwithstanding the technical error in filling up the Bill of lading that gave that issuing bank the excuse to reject it, the document reflects the places required under the LC.
2) The contractual obligation of the shipping company and the beneficiary in this regard has been met.
3) The standard document that FIATA issues as Negotiable Bill of Lading is the FBL (Negotiable FIATA Multimodal Transport Bill of lading) and could be used to cover transport contract for one or more mode of transport.

[T.O.Lee]

As a columnist of Lloyd's Maritime magazine "Maritime Asia/Intermodal Asia" (1993-95) and a member of the United Nations International Multimodal Transport Association, as well as an LC expert, I have something to comment on this query.

The FIATA MT BL complies with the LC requirements on following key points:

(1) A FIATA MT BL was asked for and so presented;

(2) Transport from Russia to Tehran meets the LC requirements.

(3) One mode is ALSO MT according to UNCTAD/ICC RMTD as quoted by Mr. AbdultaderB above. Although article 26 of UCP 500 says MT must have two modes. That is only a banker's view. It is not the view of the MT community. If the dispute goes to a court of law, I am sure that "MT may be one mode" will win. I also indicated that there are lots of inconsistencies in ICC Rules from various ICC Commissions in my article published in Autumn 2000 issue of the DCI. This article was appraised by the ICC Secretary General, Ms Maria Livanos Cattaui, on 1 December 2000 and she said that the various ICC Commissions should talk to one another more to avoid such inconsistencies. So article 26 is not to hold.

Sorry for being so straightforward. I have no intentiion to blow my own trumpet. But I need to convince you that I have strong support for what I am saying here. That is all.

The only "non compliance" is:

(1) Tehran is only a PLACE (of final destination) and not a PORT (of discharge). This is an obvious typo error on its face due to careless box filling.

(2) The carrier has no fraudulent intentions as everybody knows that Tehran is not a port.

(3) This typo should not have caused any harm to the parties. The consignee should have no problem claiming the goods on arrival and the holder can further endorse if the BL is negotiable.

(4) The carrier tells the truth.

Based on above considerations, I would consider the FIATA MT BL acceptable.

The late Bernard "S." Wheble (If you know what "S" stands for you are more than a CDCS and my Congratulations! Tips? an English name of course) once said " Document checkers should examine documents with simple common sense." and "LC is a payment mechanism and should be treated as such".

If Tehran in the wrong box solely can dishonour an LC, sooner or later we will all lose our jobs, because nobody would accept it any more.

I am from www.tolee.com


[edited 5/22/01 3:49:56 PM]
[edited 10/28/01 12:12:05 AM]