ICC Digital Library Forum

Hi,
I have two cases, and I need your
help.

Case 1
At the moment of paying presented documents, an issuing bank deducted a discrepancy fee, but didn't quote any of discrepancies.
In your opinion, are they precluded (as per art.16f of UCP 600) to deduct discrepancy fee as they didn't act in accordance with art. 16 c). I have found one official opinion (R741 / TA700rev) which in the analysis says that
'If the issuing bank does not provide such an indication, the presenter may seek, and the issuing bank must provide, such details. The actions of the issuing bank, as described in situation D, do not represent preclusion under sub-article 16 (f).'

I must say that I am confused.
when reading the art. 16 c: an issuing bank must give a single notice which should contain: that they are refusing to honour, each discrepancy, and holding instructions in respect documents
and art. 16f says that if issuing bank fails to do that it would be precluded from claiming that documents are discrepant.
I also remember (but I cannot find an opinion now) that even when presented bank quotes some discrepancies on the covering letter, issuing bank is obliged to issue advice of refusal, otherwise it is precluded as per 16f. So what am I missing?

Case 2
We returned discrepant documents to the presenting bank, asking for payment of our discrepancy fee. We received an answer that beneficiary doesn't want to pay it. Can an art. 37 apply here.

thanks and regards
Snježana

My overall perspective is that in practice right and wrong does not come into this. The amounts involved are so small that practical recovery action is not possible and many banks these days simply are not interested –it would seem- in the correct position (and acting accordingly) or are incapable of recognising what it is. Therefore, I think the deduction of unjustified charges (or the non-payment of justified charges) is something that just has to be lived with and that nominated banks at least have to operate on the basis that simply being reimbursed, even if later and a few hundred USD/ GBP / EUR etc less than expected, is of itself a great result.

Regarding your case 1, to me the position is clear under UCP600 sub-Article 16(f) (irrespective of what the ICC Banking Commission has said); if an issuing bank fails to act in accordance with the provisions of Article 16 it is precluded from claiming that the documents do not constitute a complying presentation. Thus, if the issuing bank is precluded from claiming that the documents do not constitute a complying presentation, as for instance they have not sent a sub-Article 16(c) compliant refusal notice, by definition there cannot be any discrepancies and thus any discrepancy fee. However, I have no doubt the irrefutability of this will not have any influence on the issuing bank whatsoever.

Regarding your case 2, the amount involved must be so small you simply should not be worrying about it whatever the merits of your case. However, I cannot see Article 37 is relevant for what it is worth.

[edited 8/29/2013 3:00:15 PM]