ICC Digital Library Forum

TO BE OR NOT TO BE (TRANSHIPMENT?)

We notice that the Discussion Forum is quite quiet recently. Here is a good exercise for members to create some excitement here.

The UCP 500 is written mostly if not exclusively by bankers, without thorough consultation from the carriers. Hence we may find some Articles there that are not consistent with the transport practice.

The real issue is: Whether we should stick to the UCP 500 and/or ISBP alone or should we also consider simple common sense as reflected by the intention of the Article 23 (b).

This is one example of case studies given in our DC workshops.

Easy exercise on its face? Well, please hold your comments until you have looked at the additional information appearing below.

ADDITIONAL INFORMATION (to make it more difficult to answer and also for the purpose of creating arguments):

Unfortunately the same carrying vessel had changed hands during her voyage, from one shipowners Laurence & Co. to another Jeremy & Co., and according to the maritime transport practice, with the name of the vessel also changed from M/V “Lord of the Sea” (not “Dance” from Ireland - Michael Flatley) to M/V “Sea Lord No. 1”.

Enjoy!

www.tolee.com

T.O. has sufficiently muddied the waters to try to make us forget first principles - payment under UCP is made on the basis of documents in order.

If the b/l is issued upon shipment, what happens to the goods, the ship or its owners afterwards is irrelevant to the document checking process.

Laurence

Laurence,

Yes and No. That means your statement is partially correct.

If the things in this world were all so straight forward, you and us should be (if not must be or may be) out of business.

TWO PRESENTATIONS AND A LATER ONE TELLS THE TALE

Let us assume that the original presentation (made before the ship had changed ownership) was from Beneficiary A.

What about if the same document checker found out this fact (transhipment) such as from a presentation from another Beneficiary B?

After change of ownership, the ship continued to complete the contemplated voyage to fulfill a carrier’s obligations. But since the holds of the ship were still not full, the new shipowners agreed to accept some additional cargoes headed for the same destination from the freight forwarders at the port of transhipment.

The BL from Beneficiary B expressly stated the change of ownership (to protect the new shipowners as suggested by the maritime lawyers) and the on board date was behind the on board date of the BL from Beneficiary A. So the smart document checker could infer what had actually happened to the goods from Beneficiary A – shipped on the same ship for the same destination and on the same voyage, but with the ship changing its status and ownership during the voyage.

ACTUAL ISSUES MAY BE MORE COMPLICATED

As this query is focused on UCP alone, we do not wish to “mud the waters” further by bring in issues like change of registration from Liberia to Panama, change in crew members, including the two masters who signed the two BsL from Beneficiary A and B. But in real life cases, we have to deal with all these issues whether we like them or not.

LET US NARROW DOWN THE ISSUES TO UCP ALONE

To narrow down the argument points only from UCP perspectives, the issues confronting us are:

(1) Should the document checker determine discrepancies only with the presented documents by Beneficiary A, or also based on those from Beneficiary B?

(2) If the answer is “only from Beneficiary A”, then is this answer also holding good in frauds situation?

(3) And is this reflecting ISBP?

(4) If the answer is “also based on those from Beneficiary B”, then according to what Articles of UCP 500, ISBP or other basis?

In our consultancy career, we met all these interesting situations. That is why we can still survive. These are the case studies we used in our transport workshops for bankers and/or carriers.

WHO MUDS THE WATERS?

So Laurence, we do not intend to bring all these related issues on the surface in order not to scare members away. But since you raise queries on it, we have to respond. So please do not raise furhter queries and do the exercise as it Is presented. It is good for you!

Let us all deal only with the water in the muddy waters, at least in the Discussion Forum.

www.tolee.com

[edited 11/13/02 6:04:54 PM]