Dear sirs,
I hesitate over exclusions paragraph in the article 28. I need experts comments which would be appreciated.
my view is that evef if a credit require an insurance documents cover a specific risks, i.e.war, strike etc. however a presented insurance document may contain an exclusion clause refer to this risks such as war, strike etc. as long as credit itself does not contain a condition prohibit any exclusions or exclusions may affect the covered risks on the document.
Is my understanding Ok?
Explanation regarding this issue in the UCP600UPHILL is as following;
The remainder of sub-article 28 (f)(ii) establishes the basis for calculating the value of the insurance where the CIF or CPT value cannot be determined from the documents.
UCP 600 sub-article 28(i) creates a rule that even where the credit may specify the insurance clauses that are to be covered and the insurance document covers those clauses it may evidence exclusions thereto. Should an applicant or bank require certain clauses to be covered without exclusions, then the credit will need to be worded to this effect.
Regards,
abdurrahman Ozalp, Istanbul,TR
Article 28 and exclusions
-
ABDURRAHMANO
- Posts: 10
- Joined: Fri Apr 05, 2019 5:15 pm
Article 28 and exclusions
Dear Abdurrahman ,
Seeing you here is rare honour indeed ,
The acceptance of exclusion clauses on insurance docs under UCP600 is quite different from UCP500.
At least , I can say the viewpoint of ICC has been changed with respect to the exclusions. This could be arisen by the need or requirement of the insurance industry.
You have to accept any kind of exlusion on insurance document under UCP600 unless the credit expressly states otherweise
whereas under UCP500 you couldn't accept them where they were clearly linked to one of the stated insurance clause required by the credit.
An example ;
A credit requires the cover of Cargo Clause A
Provided the presented insurance doc bears the cover of Cargo Clause A , it may also show any exlusion irrespective of whether or not the exclusion is being clearly linked to the required clause.
This is what I've interpreted from art 28 i
Regards,
Yahya
Seeing you here is rare honour indeed ,
The acceptance of exclusion clauses on insurance docs under UCP600 is quite different from UCP500.
At least , I can say the viewpoint of ICC has been changed with respect to the exclusions. This could be arisen by the need or requirement of the insurance industry.
You have to accept any kind of exlusion on insurance document under UCP600 unless the credit expressly states otherweise
whereas under UCP500 you couldn't accept them where they were clearly linked to one of the stated insurance clause required by the credit.
An example ;
A credit requires the cover of Cargo Clause A
Provided the presented insurance doc bears the cover of Cargo Clause A , it may also show any exlusion irrespective of whether or not the exclusion is being clearly linked to the required clause.
This is what I've interpreted from art 28 i
Regards,
Yahya
Article 28 and exclusions
Yahya,
I find art. 28 a bit difficult.
See 28g. I understand that if the credit does NOT use imprecise terms such as "usual risks", "customary risks", the document will not be accepted without regard to any risks that are not covered. In other words, if the document excludes some risks, it will be discrepant. but in that case, what about 28i ?
Daniel
I find art. 28 a bit difficult.
See 28g. I understand that if the credit does NOT use imprecise terms such as "usual risks", "customary risks", the document will not be accepted without regard to any risks that are not covered. In other words, if the document excludes some risks, it will be discrepant. but in that case, what about 28i ?
Daniel
Article 28 and exclusions
Daniel ,
Sorry but I do not agree with you
Actually , one may conclude that the converse of the wording of this Article also applies if a credit does not require the type of insurance and the additional risks to be covered , the insurance doc shouldn't contain any exclusion (as you say)
But in my view this is not a right conclusion or interpretation.The content of the art is very obvious to me and it particularly allows reference to ANY exclusion clause on the insurance document
unless the credit specifically states otherweise.
Such situations were also discussed last Paris meeting and it was said that some banks are deleting reference to Sub Arts 28 h and i.And as far as I remember the conclusion was that this deletions create an unworkable credit as it is almost impossible that an insurance document does not contain any exclusion.It would be better for banks to include within the credit the acceptable or unacceptable exclusions.
Regards,
Yahya
Sorry but I do not agree with you
Actually , one may conclude that the converse of the wording of this Article also applies if a credit does not require the type of insurance and the additional risks to be covered , the insurance doc shouldn't contain any exclusion (as you say)
But in my view this is not a right conclusion or interpretation.The content of the art is very obvious to me and it particularly allows reference to ANY exclusion clause on the insurance document
unless the credit specifically states otherweise.
Such situations were also discussed last Paris meeting and it was said that some banks are deleting reference to Sub Arts 28 h and i.And as far as I remember the conclusion was that this deletions create an unworkable credit as it is almost impossible that an insurance document does not contain any exclusion.It would be better for banks to include within the credit the acceptable or unacceptable exclusions.
Regards,
Yahya
Article 28 and exclusions
Yahya,
I am sorry for pushing this matter but I still have doubts despite a previous posting. What's more, the Commentary does not help.
I will try to make myself clear: I have a few cert. of insurance in front of me.
One states: "All risks - ICC "A" but excluding rust unless caused by actual contact by sea water".
For me it is not an exclusion clause, it is a risk which is excluded.
Another states:"This insurance is subject to the Institute Radioactive Contamination... Exclusion Clause". For me, it is an exclusion clause. So again I wonder if there is a difference between a risk which is excluded and an exclusion clause. If there is no difference, in my opinion, art. 28 g second sentence and 28h: "the document will accepted without regard to any risk stated to be excluded" are useless since it is settled by 28 j.
But if there is a difference, an insurance document (not covering all risks) but being specific as to the risks would be discrepant if it shows the exclusion of some risks even containing exclusion clauses.
In other words in the UCP and the ISBP, I wonder if there is or not a confusion between a risk which is excluded and an exclusion clause.
I hope I made my point.
Daniel
I am sorry for pushing this matter but I still have doubts despite a previous posting. What's more, the Commentary does not help.
I will try to make myself clear: I have a few cert. of insurance in front of me.
One states: "All risks - ICC "A" but excluding rust unless caused by actual contact by sea water".
For me it is not an exclusion clause, it is a risk which is excluded.
Another states:"This insurance is subject to the Institute Radioactive Contamination... Exclusion Clause". For me, it is an exclusion clause. So again I wonder if there is a difference between a risk which is excluded and an exclusion clause. If there is no difference, in my opinion, art. 28 g second sentence and 28h: "the document will accepted without regard to any risk stated to be excluded" are useless since it is settled by 28 j.
But if there is a difference, an insurance document (not covering all risks) but being specific as to the risks would be discrepant if it shows the exclusion of some risks even containing exclusion clauses.
In other words in the UCP and the ISBP, I wonder if there is or not a confusion between a risk which is excluded and an exclusion clause.
I hope I made my point.
Daniel
Article 28 and exclusions
Daniel ,
My view , there is no such difference between "excluded risk and exclusion" Both of them serve for the same purpose,
As I said in my previous posting that exclusions on insurance docs within the presentations under UCP500 used to be dealt with differently within the ICC Opinions I mean that If you had an exclusion (or an excluded risk) that linked to one of the insurance clause that stated in the credit , it was considered that was making the document discrepant. But UCP 600 has recognised new concept which is stated in Art 28i "An insurance doc may contain reference to ANY exclusion clause"
Regards,
Yahya
My view , there is no such difference between "excluded risk and exclusion" Both of them serve for the same purpose,
As I said in my previous posting that exclusions on insurance docs within the presentations under UCP500 used to be dealt with differently within the ICC Opinions I mean that If you had an exclusion (or an excluded risk) that linked to one of the insurance clause that stated in the credit , it was considered that was making the document discrepant. But UCP 600 has recognised new concept which is stated in Art 28i "An insurance doc may contain reference to ANY exclusion clause"
Regards,
Yahya
Article 28 and exclusions
Daniel,
I can only say that to me, as a doc. credit banker and therefore someone not required to have anything other than a most elementary knowledge of insurance matters, that if an insurance document states "All risks - ICC "A" but excluding rust unless caused by actual contact by sea water" the insurance document appears to bear a ‘clause’ stating that the risk of rust (unless caused by actual contact with seawater) is excluded and thus it falls within 28(i). My opinion is that it would be wholly unreasonable to expect someone that is not an insurance professional to have to try to distinguish whether or not an ‘exclusion’ is a ‘clause’ or not a ‘clause’ (if indeed it were possible to do so). Therefore, I can only hope that the courts see it the same way.
Incidentally, I notice that para 186 of ISBP645 refers to ‘exclusions’. Presumably exactly the same thing is being talked about in 600 28(i) and para 173 of ISBP681, even though the word ‘clause(s)’ has been added.
Lastly, on a general note, I do not know what is ‘UCP600UPHILL’, but it sounds a most apposite description for anything connected with understanding UCP600!
Regards, Jeremy
[edited 11/29/2007 3:29:30 PM]
I can only say that to me, as a doc. credit banker and therefore someone not required to have anything other than a most elementary knowledge of insurance matters, that if an insurance document states "All risks - ICC "A" but excluding rust unless caused by actual contact by sea water" the insurance document appears to bear a ‘clause’ stating that the risk of rust (unless caused by actual contact with seawater) is excluded and thus it falls within 28(i). My opinion is that it would be wholly unreasonable to expect someone that is not an insurance professional to have to try to distinguish whether or not an ‘exclusion’ is a ‘clause’ or not a ‘clause’ (if indeed it were possible to do so). Therefore, I can only hope that the courts see it the same way.
Incidentally, I notice that para 186 of ISBP645 refers to ‘exclusions’. Presumably exactly the same thing is being talked about in 600 28(i) and para 173 of ISBP681, even though the word ‘clause(s)’ has been added.
Lastly, on a general note, I do not know what is ‘UCP600UPHILL’, but it sounds a most apposite description for anything connected with understanding UCP600!
Regards, Jeremy
[edited 11/29/2007 3:29:30 PM]
Article 28 and exclusions
Yahya, Jeremy,
Thank you for your answers.
You might be right. Affaire à suivre ...
Jeremy,
It is UCP600Upskill. But maybe you can find it uphill.
It is where it is explained that "the B/L must indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit" to overcome issues related to "intended port of loading".
You will note that there is nothing about the place of receipt different from etc...
Things have changed...
Daniel
Thank you for your answers.
You might be right. Affaire à suivre ...
Jeremy,
It is UCP600Upskill. But maybe you can find it uphill.
It is where it is explained that "the B/L must indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit" to overcome issues related to "intended port of loading".
You will note that there is nothing about the place of receipt different from etc...
Things have changed...
Daniel
-
KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Article 28 and exclusions
Dear Daniel,
Just wanted to add a short comment to this one.
I would also find it unrealistic that an LC banker would be able to distinguish between “exclusion clauses” and “risks being excluded” – so my view would be much in line with Jeremy – that it is acceptable that it appears from the insurance document that there are “exclusions”.
The October ICC meeting in Paris was mentioned in this string; on this meeting an “interesting” example was given – namely where the LC would mention a list of specific risks to be covered. The presented insurance document would in one place state those as covered – while in another exclude the exact same.
To me such would clearly not be acceptable (and I am not sure I find the example realistic) – but in any case it illustrates the complexity of this.
Best regards
Kim
Just wanted to add a short comment to this one.
I would also find it unrealistic that an LC banker would be able to distinguish between “exclusion clauses” and “risks being excluded” – so my view would be much in line with Jeremy – that it is acceptable that it appears from the insurance document that there are “exclusions”.
The October ICC meeting in Paris was mentioned in this string; on this meeting an “interesting” example was given – namely where the LC would mention a list of specific risks to be covered. The presented insurance document would in one place state those as covered – while in another exclude the exact same.
To me such would clearly not be acceptable (and I am not sure I find the example realistic) – but in any case it illustrates the complexity of this.
Best regards
Kim
Article 28 and exclusions
Kim,
Yes it is not easy. Again because if risks excluded and exclusion clauses mean the same, I do not see the point of having 28 g second sentence and 28h.
Daniel
Yes it is not easy. Again because if risks excluded and exclusion clauses mean the same, I do not see the point of having 28 g second sentence and 28h.
Daniel