Transferrable L/C

[Shahed]

A transferable L/C issued by Bank A with a confirmation clause covering shipment of 4 unit of X for $100 which has transferred by Bank B for $70 with same terms with its confirmation. L/C prohibit partial shipment. Nothing about partial drawing.

Complying presentation made by the second beneficiary for $ 70 covering shipment of 4 unit of X, and claimed funds from the transferring bank who has confirmed the L/C.

First beneficiary failed to replace it invoice after notification of the transferring bank to them. The transferring bank has no other alternative but to remit the documents to the issuing bank, and claimed $ 70 based on the invoice of the second beneficiary.

My concern is can the issuing bank refuse the documents given there is a partial/short drawing?

Your thoughts, please.

Shahed
Toronto
[edited 10/7/2015 4:42:59 PM]
[edited 10/7/2015 4:44:55 PM]

[asamaha]

UCP 500 and 600 allow the transfer for reduced price and give the right to transferring bank to forward the documents without substitution of invoices in case of failure of 1st benef to remit his own invoice for L/C price on first demand. Therefore, IB cannot refuse the presentation for reason of partial drawing which is due to non presentation on first demand of 1st benef invoice for LC price.
Regards
Antoine Samaha