ICC Digital Library Forum

Can I please have your views on the following:

Under a credit calling for
FULL SET NON-NEGOTIABLE SEA WAYBILLS

Would the presentation of 3 sea waybills
(No. of originals 3) that appear to be photocopied but are manually signed be accepatable.

The documents comply with the credit (& UCP)in all "other" respects.

Would the view taken be the same if the document called for was a bill of lading.

The key point here is determination of "original documents", regardless of whether SWB, B/L etc. Your description would appear to fall within the permissible category specified in the ICC Decision on "original documents" which can be viewed on DC-PRO under the link "ICC Policy Statements".

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Laurence A. J. Bacon

Regardless of ICC's view on original docs a bank could be taking a big risk in accepting manually signed photocopies for this type of document unless there was good reason to do so. If the SWB (or B/L) turns out to be fraudulent jumping up and down and pointing to the ICC Decision won't get a bank very far in its defence.
It's all a matter of common sense and experience which, these days, is in short supply.

Despite the ICC Decision, I would not accept a manually signed photocopy of a non-negotiable sea waybill unless I can in one way or the other ascertain from the shipping agent that the document is genuine and the reasons behind issuing the document in this manner.
[edited 5/25/01 5:55:10 PM]

"Non-negotiable" used in connection with sea waybill (SWB) here is misleading. Does it mean that "real" originals (not signed copies also deemed as originals by ICC Decision on Originals) are required or it simply describes the nature of all sea waybills being non-negotaible by definition?

The issuing bank should have used more precise or accurate wording in its LC. Any confusion should be interpreted against the issuing bank, as evidenced in many court cases on LC disputes.

If the issuing bank actually means that the sea waybills are not negotiable, then "non-negotiable" is a totally excessive description because all SWBs are without exception non-negotiable.

In other words, the issuing bank has violated sub-Articles 5 (a) (to give complete and precise instructions in LC)& 5 (a) (i) (to avoid excessive details in LC).

As far as SWBs are concerned, provided they are not fraudulent, signed copies and "real" originals have no material impact on the underlying transaction because the consignee named in the SWB can claim delivery from the carrier against its identity and there is no need to produce any original or copy (this is exactly the purpose for introducing SWB when we have already got BL). For bill of lading, original(s) must be presented in exchange of the goods.

So we should not treat SWB and BL as the same or simply by applying what we know about BL to SWB. This does not make sense.

We do provide one day workshop on what bankers should know about SWB.

I mam from www.tolee.com

[edited 12/15/01 8:48:27 PM]

Agreed - all sea waybills by their nature are non-negotiable.

However, Article 24 of UCP 500 has the title "Non-Negotiable Sea Waybill" - I don't think that there is any confusion here.

"Complete and precise instruction" (according to UCP) has been given and "excessive detail" has been avoided.

How does one determine whether the signed copy presented is a photocopy ? The quality of copiers to-day is such that a colour copy of a B/L may be very difficult to distinguish from the printed version. Hence the reliance on the signature for a document of title and proof of originality.

Laurence A. J. Bacon

UCP 500 Article 24 says "non-negotiable sea waybill", then it is giving excessive details, if you agree that all sea waybills must be non-negotiable. In fact this is the law, according to the Carriage of Goods by Sea Act 1992 of U.K.

I understand that when ICC drafts the UCP 500, there is no response from the transport community to comment on the drafts. So that is why we have "non-negotiable sea waybill (SWB)" in Article 24 but we do not have "non-negotiable air waybill (AWB)" in Article 27. AWB is same as SWB by nature, as far as negotiability is concerned.

I am from www.tolee.com.


[edited 5/29/01 3:10:16 PM]

Thank you very much for your well thought out and informative replies to my initial posting.

Two conflicting schools of thought seem to have arisen:
"compliance"
V.
"good business sense" (for banks).


However, banks must determine on the face of the documents alone whether or not they appear on their face to be in compliance with the terms of the credit.

This now begs the question, what reason/discrepancy would be indicated for refusal of documents in such a case?

Again, I welcome your views on this matter.

Mr. Cullen, in his latest message, has not specified to whom he addresses his query on compliance vs. business sense.

When we talk about determination of discrepancies on the face of the documents alone, we mean that the banker is familiar with the trade his bank is dealing with. For example, if one's bank and one has never done any oil trade, then it is difficult for one to determine discrepancies on charter parties, C/P BL and other oil documents which have a specialised trade practice and jargons of their own. The answer is that if one doesn't know, either don't do it or one learns more before one starts to examine the documents on their face. Unless one's brain (CPU) is loaded with the proper software (knowledge of a special trade), one cannot determine the documents on their face. Another approach is to look for retainer services from a consultant who knows these trades.

"To determine documents on their face" is to be made by an understanding brain not a novice.

Compliacne vs. common sense. Common sense is a thing very difficult to define. Street smart may not be equal to common sense. In business, common sense means sound commercial sense.

I am from www.tolee.com


[edited 5/31/01 5:31:41 PM]