LC that is available with any bank in the beneficiary's country calls for original bills of lading and does not stipulate a period for presentation. Documents were received by the issuing bank within the validity but almost two months after the shipment date. It appears that either (a) the documents were presented late by the beneficiary to the nominated bank (exceeding 21 days after shipment date), or (b) the nominated bank had not dispatched the documents to the issuing bank within a reasonable time. Because the issuing bank is not able to determine whether the beneficiary had presented documents late, the issuing bank is not in a position to raise 'late presentation' as a discrepancy. Would you agree with me?
[edited 10/3/2013 8:28:06 AM]
Whether it is late presentation
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
Whether it is late presentation
Hi,
In my opinion the issuing bank may raise the discrepancy “late presentation” in this case. If the negotiating bank rejects the discrepancy it may be requested to provide evidence that the documents were presented to its counter in due time and that it dispatched the documents to the issuing bank within the reasonable time. Courier receipt showing pick up date is required. If the pick up date indicated on the courier receipt is reasonable the discrepancy can be lifted as the delay is due to the fault of the courier service.
Kind regards,
N.H.Duc
[edited 10/3/2013 11:47:39 AM]
In my opinion the issuing bank may raise the discrepancy “late presentation” in this case. If the negotiating bank rejects the discrepancy it may be requested to provide evidence that the documents were presented to its counter in due time and that it dispatched the documents to the issuing bank within the reasonable time. Courier receipt showing pick up date is required. If the pick up date indicated on the courier receipt is reasonable the discrepancy can be lifted as the delay is due to the fault of the courier service.
Kind regards,
N.H.Duc
[edited 10/3/2013 11:47:39 AM]
Whether it is late presentation
Hi, N.H.Duc. Thanks for your comments. If the nominated bank certified that the beneficiary's documents were presented within the 21-day presentation period but then there was delay in dispatch of the documents by the nominated bank to the issuing bank probably due to oversight, would the issuing bank be able to reject the documents for 'late presentation'? In my opinion, the issuing bank would have to honour since the beneficiary had made a complying presentation.
Best regards,
Gabriel
Best regards,
Gabriel
Whether it is late presentation
All
Crucial to this debate is surely the date of the nominated bank’s schedule. If the schedule is dated on or prior to the latest date for presentation (21 days after shipment) then the issuing bank is obliged to honour as the documents, provided that they otherwise comply, will conform with the credit terms. That said, if the documents had been received well after the date of the schedule, the issuing bank could argue that it is justified in first making reasonable enquiries with the nominated bank as to the reason for late receipt of the documents but that is surely academic if the applicant is willing to issue a waiver for any ‘discrepancies’ and the issuing bank is willing to accept said waiver.
If the nominated bank’s schedule is dated after the latest date for presentation, then the nominated bank is obliged to make a statement in accordance with UCP600 sub-article 29b that the documents were presented within the presentation period. In the absence of such a statement the issuing bank is then within its rights to refuse the documents, always bearing in mind that if the nominated bank then consequently confirmed that they had been presented within the presentation period, then that discrepancy would have to be withdrawn.
Crucial to this debate is surely the date of the nominated bank’s schedule. If the schedule is dated on or prior to the latest date for presentation (21 days after shipment) then the issuing bank is obliged to honour as the documents, provided that they otherwise comply, will conform with the credit terms. That said, if the documents had been received well after the date of the schedule, the issuing bank could argue that it is justified in first making reasonable enquiries with the nominated bank as to the reason for late receipt of the documents but that is surely academic if the applicant is willing to issue a waiver for any ‘discrepancies’ and the issuing bank is willing to accept said waiver.
If the nominated bank’s schedule is dated after the latest date for presentation, then the nominated bank is obliged to make a statement in accordance with UCP600 sub-article 29b that the documents were presented within the presentation period. In the absence of such a statement the issuing bank is then within its rights to refuse the documents, always bearing in mind that if the nominated bank then consequently confirmed that they had been presented within the presentation period, then that discrepancy would have to be withdrawn.
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
Whether it is late presentation
Hi,
It is agreed that the issuing bank must honour if the documents are complying. However, the nominated bank may be responsible for its negligence including a duty to indemnify the applicant for the loss (if any) caused by its negligence. In some cases, especially where the nominated bank/confirming bank has negotiated the documents without recourse, the applicant (who suffers loss) may seek a court injunction to prevent the issuing bank from effecting reimbursement to the negotiating bank pending the indemnity.
Anyway, the situation is just hypothetical. In most cases where the documents arrive later than the cargoes the applicant would request the issuing bank to issue a shipping guarantee to enable him to take delivery of the cargoes to avoid demurrage charges and other related costs. So, in reality, no legal action would occur.
Kind regards,
N.H.Duc
It is agreed that the issuing bank must honour if the documents are complying. However, the nominated bank may be responsible for its negligence including a duty to indemnify the applicant for the loss (if any) caused by its negligence. In some cases, especially where the nominated bank/confirming bank has negotiated the documents without recourse, the applicant (who suffers loss) may seek a court injunction to prevent the issuing bank from effecting reimbursement to the negotiating bank pending the indemnity.
Anyway, the situation is just hypothetical. In most cases where the documents arrive later than the cargoes the applicant would request the issuing bank to issue a shipping guarantee to enable him to take delivery of the cargoes to avoid demurrage charges and other related costs. So, in reality, no legal action would occur.
Kind regards,
N.H.Duc
Whether it is late presentation
Andy,
Sub-article 29a pertains to a situation where the expiry date or latest presentation date falls on a non-banking day (e.g., a public holiday in the place for presentation), in which case the expiry date or latest presentation date, as the case may be, is extended to the first following banking day. When documents are presented on the extended expiry date, sub-article 29b requires the nominated bank to provide a statement on the covering schedule accordingly. There is no requirement otherwise in the UCP that requires a nominated bank to certify or indicate the date of presentation of the documents. Neither is there a rule that the date of the nominated bank's covering schedule is to be taken as the date of presentation.
In cases where the place for presentation is other than the obligor bank (issuing bank or confirming bank), it would help to have a rule requiring a nominated bank to always certify the date of presentation on its covering schedule, as the obligor bank would not know whether there was a timely presentation. There is no such rule yet.
N.H. Duc,
A court injunction should NOT be granted for such reason.
Best regards,
Gabriel
Sub-article 29a pertains to a situation where the expiry date or latest presentation date falls on a non-banking day (e.g., a public holiday in the place for presentation), in which case the expiry date or latest presentation date, as the case may be, is extended to the first following banking day. When documents are presented on the extended expiry date, sub-article 29b requires the nominated bank to provide a statement on the covering schedule accordingly. There is no requirement otherwise in the UCP that requires a nominated bank to certify or indicate the date of presentation of the documents. Neither is there a rule that the date of the nominated bank's covering schedule is to be taken as the date of presentation.
In cases where the place for presentation is other than the obligor bank (issuing bank or confirming bank), it would help to have a rule requiring a nominated bank to always certify the date of presentation on its covering schedule, as the obligor bank would not know whether there was a timely presentation. There is no such rule yet.
N.H. Duc,
A court injunction should NOT be granted for such reason.
Best regards,
Gabriel
Whether it is late presentation
Hi Gabriel
Apologies you are quite right here re article 29. I think we all agree though that this should be best practice when sending documents out after the last stated date for presentation.
Apologies you are quite right here re article 29. I think we all agree though that this should be best practice when sending documents out after the last stated date for presentation.