Partial Acceptance Of Amendments Vs. Original L/C Terms.

General questions regarding UCP 500
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hatemshehab
Posts: 220
Joined: Fri Apr 05, 2019 5:19 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by hatemshehab » Sat Nov 24, 2001 12:00 am

Bank “I” located in Jordan issued a L/C subject to UCP 500; among other documents the following were required (exactly as drafted herein):

1. Inspection Certificate.
2. Truck Waybill.

Later on, Bank “I” issued an amendment as follows:

1. Inspection Certificate to be issued by “ABC”
2. Truck Waybill to be issued by “XYZ” as carrier.

The beneficiary formally communicated its rejection of the amendment to the nominated/advising bank, which in turn intimated the same to the issuing bank.

The beneficiary submitted documents of which:
- Inspection Certificate issued by the beneficiary
- Truck Waybill issued by “XYZ” as carrier.

The issuing bank refused to take up the documents, advised the nominated bank of its rejection stating the following discrepancy:
1. Inspection Certificate not issued by “ABC” – “partial acceptance of amendments contained in one & the same advice of amendment not allowed as per article 9d iv” holding docs at the your disposal.”

The nominated bank rejected the reasoning of the issuing bank’s application of article 9d iv & replied that beneficiary did not partially accept the amendment, rather it rejected the whole amendment, therefore the documents must have been examined against the terms & conditions of the original D/C, which did not prohibit presentation of the truck waybill if indicating issuer of as “XYZ as carrier”

Would appreciate to have your views on this matter, in order to gives insights to the parties involved.
AbdulkaderBazara
Posts: 256
Joined: Fri Apr 05, 2019 5:15 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by AbdulkaderBazara » Sat Nov 24, 2001 12:00 am

I agree with the nominated bank. Rejection of the amendment makes the amendment non-existence and non-binding. This doesn’t mean that XYZ is totally eliminated.

Based on the original LC and by applying article 21 of UCP 500, the beneficiary has the option to either utilize or not utilize the service of XYZ.
hatemshehab
Posts: 220
Joined: Fri Apr 05, 2019 5:19 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by hatemshehab » Mon Nov 26, 2001 12:00 am

Thank you Abdulkader for your response. In fact, when I came across this dispute, I thought this query is no more than an educational one since it is a basic principle that when a beneficiary rejects the amendment the bank will examine the documents against the original L/C, however it seems that even this basic principle, some banks fail to understand as to what extent they should go. The very fact that the query did not attract so much of responses proves that it’s educational in nature although the issuing bank insisted on the discrepancy for quite some time. Needless to mention that it was not a valid discrepancy.

We hope that the attention of the issuing bank is drawn to this query to serve as a guideline for them when examining documents under L/Cs.
larryBacon
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Joined: Fri Apr 05, 2019 5:26 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by larryBacon » Mon Nov 26, 2001 12:00 am

The rejection of the amendment is irrevocable. Therefore, the bank cannot reconstitute the amendment. Therefore none of the parties have any option to "partially accept" the amendment, as it is no longer valid.
T.O.Lee
Posts: 743
Joined: Fri Apr 05, 2019 5:28 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by T.O.Lee » Mon Nov 26, 2001 12:00 am

Hatem,

You sure know our position very well indeed, although we met for only once so far. As a self-employed DC consultant/trainer, we could not afford the luxury of responding to educational queries or adding anything more on otherwise well answered queries. However, we do envy those who could.

http://www.tolee.com

[edited 11/26/01 8:29:33 PM]
hatemshehab
Posts: 220
Joined: Fri Apr 05, 2019 5:19 pm

Partial Acceptance Of Amendments Vs. Original L/C Terms.

Post by hatemshehab » Mon Nov 26, 2001 12:00 am

Of course dear friend Mr. Lee. We keep you for the hot stuff, and not for trivial things however as you said earlier "anything may happen these days" this dispute is an illustration of that.

“A MOSQUITO BLEEDS THE LIONS EYE” a famous Arabic verse which fits this illustration. Sometimes we have to address educational queries if some parties are so obstinate to listen to a verbal advice.

I have called upon you in different query on restrictive B/L. that s hot subject for which you fit.

Best regards
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