ICC Digital Library Forum

We would like to have your comment on the following case:
L/C conditions:

1. Partial shipments: permitted
2. Shipment periods (F44D):
- 1st shipment for 20MT merchandise A and 40MT merchandise B must be shipped latest 10OCt2012
- 2nd shipment for 20MT merchandise A and 40MT merchandise B must be shipped latest 5NoV2012
- 3rd shipment for 20MT merchandise A and 40MT merchandise B must be shipped latest 10Dec2012
3. Descriptions of goods in field 46

Merchandise A: 60MT
Merchandise B: 120MT

On 20Oct2012, Issuing bank received 2 separated lots of docs of which:

+ 1st lot proved shipment for 20MTof merchandise A
+ 2nd lot proved shipment for 40 MT of merchandise B
+ 2 B/L showing 2 A/M shipments are in the same journey, the same means of conveyance and the same destination stipulated in the L/C

After checking these 2 sets of docs IB consider the presentation as being complied

On 15Nov2012, Issuing bank received 2 separated lots of docs

+ 1st lot proved shipment for 20MTof merchandise A
+ 2nd lot proved shipment for 40 MT of merchandise B
+ 2 B/L showing 2 A/M shipments are in different means of conveyance and the same destination stipulated in the L/C


After checking these 2 sets of docs, Issuing bank consider 2 presentations with discrepancies

+ for 1st lot of docs: Short shipment for the 2nd shipment
+ for 2nd lot of docs: Short shipment for 3rd shipment.

Are these discrepancies acceptable in the case that L/C stp. partial shipments are allowed?

I am looking forward to receiving your reply soon.

Pls urgently comment on our above situation.
Tks all

Given that the IB did not raise discrepancies with regards to late shipment I am assuming that goods were shipped within the time limits imposed by the credit.

I do not agree with the IB that these are discrepancies as partial shipments are allowed and there does not appear to be a condition in the credit stating that goods may not be shipped on different means of conveyance.

Furthermore, I do not understand the reference to the 3rd shipment. Since the first two shipments were made in time, in accordance with Art 32 the credit is still available for drawing of the 3rd shipment. My opinion is that the discrepancy "short shipment" can never be raised under a credit allowing partial shipments.
Best regards
Carmel.

Not sure I understand the question. The send presentation had two shipments that needed to be shipped by the latest shipping date for that second period. If accomplished then no discrepancies as partial shipments were allowed.
Also, an issuer having already accepted a presentation cannot change its mind.

If I understand the discrepancy the bank tried to raise, they considered that there were only three shipments to be made, each shipment having the required quantities of both A and B. Therefore they consider that the 2nd shipment contained only A (and that B was missing) and that the 3rd shipment contained only B (and that A was missing). This, however, is not clearly what the credit indicated, and since in addition partial shipments are allowed, there can be no discrepancy. Of course, the first presentation cannot later be re-qualified as discrepant afterwards.