If two separate documents namely, CERTIFICATE OF QUALITY and

RUDYALBERS · Post by **RUDYALBERS** » Thu Jan 17, 2002 12:00 am

The letter of credit required presentation of
+ CERTIFICATE OF QUALITY AND QUANTITY ISSUED BY AN INDEPENDENT SURVEYOR
COMPANY.
If two separate documents under different titles issued by the independent
surveyor company, namely, CERTIFICATE OF QUALITY and CERTIFICATE QUANTITY
presented, should a discrepancy be called since the document is not entitled
as required in the credit or two separate documents with different titles
presented instead of one single document named CERTIFICATE OF QUALITY and QUANTITY.
RUDY ALBERS
AMSTERDAM

CSchneiderbauer · Post by **CSchneiderbauer** » Thu Jan 17, 2002 12:00 am

Dear Mr. Albers,
from my point of view I would consider this as discrepant since the l/c definitely asks for presentation of ONE document only titled "Certificate of QUALITY AND QUANTITY issued ...".
If the credit had asked for "CERTIFICATE OF QUALITY AND CERTIFICATE OF QUANTITY issued by ..." it would be easier to argue that two different documents are meant to be presented. I'm looking forward to reading other opinions.
Greetings Christa Schneiderbauer

NigelHolt · Post by **NigelHolt** » Thu Jan 17, 2002 12:00 am

Firstly, good to see two new participants (I think) in the Forum. Welcome to you both.

Secondly, my personal views, without responsibility/liability are:

In the absence of an ICC opinion suggesting to the contrary (and I have not looked for such an opinion), I would feel obliged –most reluctantly- to treat the two separate certificates as discrepant as, on the face of it, the credit reqires one document. Therefore, to me the discrepancy would simply be 'Certificate of Quality and Quantity not presented'. However, should the beneficiary/presenter sue me as issuing/confirming bank, I would not be brimming with confidence that the court decision would be in my favour.

[edited 1/17/02 3:01:39 PM]

LeoCullen · Post by **LeoCullen** » Thu Jan 17, 2002 12:00 am

Article 9

"An irrevocable Credit constitutes a definite undertaking of the Issuing Bank, provided that the STIPULATED DOCUMENTS are presented......"

In this case the stipulated documents were not presented.

This is a discrepancy (very strict compliance!).

[edited 1/18/02 5:15:37 PM]

PavelA · Post by **PavelA** » Fri Jan 18, 2002 12:00 am

I agree with and share concerns expressed by Jeremy. I have been looking for ICC opinion re. the matter but I could not find any. There is an interesting DOCDEX decision re. Whether the issuing bank is required to accept combination in one document, but it is a rather different issue.

Pavel Andrle

AbdulkaderBazara · Post by **AbdulkaderBazara** » Fri Jan 18, 2002 12:00 am

I would also share Jeremy's concern. Looking at it from risk point of view, I could not see what could go wrong if two documents were issued instead of one.

Alternatively, if the requirement was two separate documents and only one document presented as a combined certificate, I could see the risk. The buyer might not want other parties who might have interest or involved in the goods see certain documents/information.

larryBacon · Post by **larryBacon** » Fri Jan 18, 2002 12:00 am

This is indeed a difficult issue. There may be other aspects concerning this which would not be apparent without full disclosure of all documents. It is assumed that the benefit of the documents in question lies in the direct use of the applicant. In this case, I cannot see any material difference in issuing 2 certificates instead of one.
However, the intended use may be directed at a government authority (Dept. of Health etc). In that case, the requirement may be more stringent. Although it goes against the grain for me to say so, the doctrine of strict compliance would appear to apply here, as an L/C checker should not be expected to be able to tell the difference between the two examples I have cited.

This is similar to a L/C I handled recently where the wording was similar, but the document/s presented was on two separate pages with two separate headings, but numbered pages 1 & 2. Would anyone care to opine whether this was acceptable ?

Laurence
[edited 1/21/02 10:30:30 AM]

PGauntlett · Post by **PGauntlett** » Sun Jan 20, 2002 12:00 am

This is the sort of thing that gives banks a bad name. Whatever happened to common sense? On what basis can a document checker sit there and say that this is a discrepancy? In my view the requirement of the l/c is met.
It's always easy to say you'd reject but there are some sophisticated beneficiaries around who, I'm sure, would sue for wrongful disonhour if docs were rejected on this issue alone.

KarenHan_disabled · Post by **KarenHan_disabled** » Mon Jan 21, 2002 12:00 am

Would like to apply substantial compliance rather than strict compliance in subject matter. In substance, the beneficiary has met the LC requirement to have an independent surveyor to issue Certificate of Quality and Certificate of Quantity. Why bother one certificate or two certificates?

Regards,

larryBacon · Post by **larryBacon** » Mon Jan 21, 2002 12:00 am

I take Phillip Gauntlet's point that there are some sophisticated beneficiaries out there who are prepared to sue in such cases, but speaking as one who has had to take such decisions, in my opinion, this is only taken as a last resort. Mitigating factors against litigation include bad p.r. for both bank and beneficiary, costs can take on a life of their own and there are many examples where judges display a paucity of common sense or lack of intimate knowledge of the UCP, resulting in dubious judgements being awarded. In addition, the beneficiary may be forced to drag the applicant into the fray, which may also have a bad p.r. affect on the applicant and affect their future business relationship with the beneficiary.

Laurence