ICC Digital Library Forum

I would like to have your opinions about the following discrepancy, mentioned by the confirming bank:

L/C requires a "full set of clean original Bill of Ladings, made out to the order of the issuing bank."
Confirming bank states the following discrepancy: B/L shows "if required by the carrier-Clause".

For better understanding, I will repeat the whole paragraph preprinted on the bill of lading:
"In witness whereof the number of original Bills of Lading as stated herebelow, all of this tenor and date, have been signed, one of which being accomplished, the other(s), if any, to be void. If required by the carrier, one (1) original Bill of Lading must be surrendered in exchange for the goods or delivery order."

Confirming bank's argument is, that "only" if the carrier requires, an Original Bill of Lading must be surrendered, "if not, a copy may be acceptable" (converse argument).
Are they right?

Thanks a lot for your opinions.

Hello;

I think the confirming bank's argument would be right if and only if the documentary credit clearly specifies that the surrender clauses , however worded, on B/L are not acceptable.

Regards.
Zeynep

Dear Zeynep,

thanks for your opinion.

L/C in this case is silent about such clauses.

Hello again;

Since the credit is silent regarding surrender clauses and banks are not required to examine the terms and conditions of carriage according to sub-article 20 (a)(v) of UCP 600, the B/L in question is acceptable.

Kind regards.
Zeynep

Apoligize if you have already seen this.

Where is everyone? This is a nonsensical discrepancy which should not be allowed to stand.

Am I incorrect?

It is a complete load of codswallop.

CB discrepancy is wrong
CB argument is wrong
B/L OK
Such times we live through ...
Daniel

We have asked Ms. Pamela Woon from Citibank the same case and pls. see the followings for your reference:
"+ F47A: B/L showing goods may be delivered without requiring surrender of an original B/L or similar expression is not acceptable
+ B/L presented showing "If required by the carrier, this B/L duly endorsed shall be surrendered in exchange of goods or delivery order
.
+ We: At first I thought that this B/L was a normal type of B/L, which required a presentation of original B/L in exchange for the goods. However, when I read the text in red ‘If required by the carrier’, I realized that this expression meant the same as ‘ if not required by the carrier, this B/L need not to be presented in exchange for goods’. Therefore, this is inconsistent with what required by L/C. I would like you to confirm me that, is my understanding correct?
+ Ms. Pamela Woon: Yes , it is inconsistent with LC and is therefore discrepant
+ We: Furthermore, in the case that F47A does not indicate the condition above, I think this B/L is still discrepant, is that right?
+ Ms. Pamela Woon: Not necessarily. This is similar with the issue raised to ICC earlier on BL showing that the carrier reserves its rights to release goods without presentation of BL , for which till date ICC refuses to give an opinion on its acceptability."

Dear all,

As far as I know, negotiable bills of lading bearing such a clause on its face are not accepted by many banks all over the world since based on such a clause the carrier reserves the right to release the goods against no duly endorsed bill of lading. It is clear that the clause may help the carrier eliminate their obligation towards the bona fide holder of the duly endorsed bill of lading.

I’ve checked and found no ICC official opinions on the issue so far. However, I know that this issue was ever discussed among the officers of ICC Banking Commission and they were of the opinion that the clause was unacceptable, and therefore banks should reject any bill of lading including such a clause.

Regards,
Duc N.H

Dear Duc N.H.;

Please see the first para of analysis part of Official ICC Opinion TA675rev.

Regards.