Multiple B/L's and documentary conditions

[KhalidI]

Hi All,

We have recd documents under a Confirmed LC , one of the conditions of which is as under:

Quote
Quantity of each Bill of Lading must not exceed more than 1000MT but other documents should be prepared for the full consignment.
Unquote

Beneficiary has submitted 8 sets of B/L ( 3 shippers - 2B/L’s of Shipper A , 3 B/L’s of Shipper B and 3 B/L’sof Shipper C) which meets the above requirement.

However beneficiary has presented 3 sets of Certificate of Origin , Health Certificate and Radioactivity Certificate ( One for each shipper ).

LC allows Charter Party B/L and Port of Loading , Shipped on Board Date is same for all the 8 Sets of B/L’s.

Is this in order , considering that LC calls for other documents for full consignment ? Also , if there are 3 different shippers does each lot become a separate consignment in itself?

Your views and responses are highly appreciated .

Regards
Srinivas

[NigelHolt]

Does the credit prohibit, or have anything else to say on the question of, partial shipments?
[edited 10/4/2006 1:24:56 PM]

[KhalidI]

Hi Jeremy,

1. Credit does not prohibit partial shipment.
2. Beneficiary has submitted Charter Party B/L's
3.LC allows for shipment from Any port in Country XXXX , shipment has been done from Port YYYYY in Country XXXX for all cases on same vessel.

regards
Srinivas

[KimChristensen]

Dear Srinivas,

Hmm tough one. I will give it a go. Must say I am really unsure here. One may of course wonder what is behind such condition – and I have hard time figuring that out. One explanation could of course be that the buyer wants the possibility to transfer owner ship to other parties in max 1000 mt per lot.

I see this clause as mainly referring to how the B/Ls should be issued, and the requirement regarding the “other documents” are mainly to stress that they need not follow the same pattern. You may say that I am speculating here, but I simply can not see the point in
1) to require multiple sets of B/L, AND
2) to require only one set of all the other documents

Since there are 3 shippers it does not seem unreasonable to expect the mentioned documents to “follow” the shipper.

So my very personal view is that one should not refuse based on this … so I would (in this case) interpret the “full consignment” to follow each shipper.

I would not dare guess what would be the Opinion of the ICC BC on this one

Best regards
Kim

[NigelHolt]

Srinivas,

I am not able to respond to your query with any confidence whatsoever. The meaning of the condition is not at all evident -at least to me- from a single reading.

I think it all depends -under English law at least, if I understand it correctly- on what is a reasonable interpretation of the condition. It must logically have a purpose otherwise it would not be there. What is it? I can only arrive at a tentative answer ‘negatively’, on the assumption that ‘full consignment’ can logically only mean all the goods required by the credit.

If its purpose is not:
1. to allow partial shipments (by specifying multiple sets of bills of lading) but exclude partial drawings (through use of the term ‘full consignment’) and:
2. to require all the other types of stipulated document to be issued each as a single document (or ‘set’) that covers all the goods covered by all the multiple sets of bills of lading presented,
I cannot see what its purpose could otherwise be. Therefore, I am forced to draw the conclusion that 3 sets of Certificate of Origin , Health Certificate and Radioactivity Certificate breach this condition.

However, I repeat I am not confident I have got it right.

Jeremy

P.S. I have yet to read Kim’s response and will do so only after posting this.

[edited 10/5/2006 2:30:35 PM]

[NigelHolt]

The only comment I would make, Kim, about your posting -and I would stress I am not saying it is wrong- is that under English law at least ‘It is a bank’s duty to construe its instructions … and to consider the documents presented to it, WITHOUT speculating on what may have been in the customer’s mind’ [my emphasis] (‘Documentary Credits’ 3rd edition by Jack Malek & Quest). Therefore, the 'point' -as in the applicant's reason for including the condition- would not seem relevant, at least if the applicable law were English.

Hope you don’t mind my saying. ;- )



[edited 10/5/2006 4:20:51 PM]

[POLTERD.]

Dear all,
as long as b/ls cover shipment on different vessels and different journeys,it means there are 3 partial shipments (see art.89 of ISBP).i presume that are 3 different vessels and 3 different journeys ,one per each shipper.
consequently,each partial shipment is to be understood as a consignment.
therefore,i consider that docs are ok (from this point of view).
Regards,
Bogdan.

[KhalidI]

Dear Kim and Jeremy,

Thanks for your comments. Considering the High Value of transaction and the ambiguity in LC condition, we have pointed these as discrepancies to the beneficiary .We have also contacted the Issuing Bank for clarification of the stated LC condition.

Bogdan as stated in my second posting shipment has been done on same vessel from same port for all the B/L's.

Regards
Srinivas

[POLTERD.]

Dear Khalid,
was my mistake not to read your 2nd mssg.with proper attn.
in this case, according to ISBP-art.89,there is no partial shipment and bnf should have been presented one set of docs for all b/ls presented.
it is a discrepancy,indeed.
regards,
bogdan

[KimChristensen]

Dear Jeremy,

I accept your comment – and know in fact that this is the case under English law – so no problem. I would think (not being a lawyer) that the position under other legislations may be different; e.g. to emphasize the intention (of which I can only guess).
I accept that if read literally then there most likely is a problem – but I (still) do not think that it would be a reasonable reason for refusal.

So in any case I would think that Khalid’s approach is quite ok: ask the issuer to state the intention here.

Best regards
Kim