ICC Digital Library Forum

A Multimodal Transport Document (Bill of Lading) was consigned to a Bank. The notify Party was the Importer. The Agents at the delivery point delivered the consignment to the clearing agent of the Importer even though the Consignee Bank had not endorsed the B/L in favour of the Importer or its Clearing agent. The Importer has refused to make payments as they are already in possession of the goods. The Bank is Washing its hands off by saying that the Shipping Agents are at fault by delivering the Cargo to the Importers without its endorsement.
The documents in this case were sent through the concerned bank under URC 522 who somehow delivered the same to the importer without getting any signatures on the Sola of Exchange or wihout any acceptance letter from the Importer. They Bank fortunately did not endorse the B/L in favour of the Importer who is the Notify Party.
It is a very costly process for us to go for legal proceedings against the Importers/Bank or Shipping Agents.
What other options do we have to recover our money. In case we have to sue. Who should we sue for actual amount+Interest and damages.

Provided that what you have described is true, and the collecting bank is at fault by not following the URC 522 precisely (such as negligence in some procedures, without sending a timely notice concerning the fate of the collection, so on and so forth), it appears that you have a strong case and an expert's report sent to the collecting bank should be adequate for an amicable resolution, from our experience in resolving URC 522 collections disputes.

A bank would not waste its money on a sure lose case. So, litigation should not be necessary in your case. This opinion is made on the assumption that the collecting bank is really at fault.

However, our opinions above are made without seeing the documents.

Disclaimer: Please consult an expert on URC 522 and do no rely on or act upon our opinions. We are not responsible for your damages or losses resulting from or related to our opinions expressed here.

We are from www.tolee.com

[edited 4/18/02 8:16:34 PM]

Rather than considering what action to take against the importer or shipping agent, Mr Barry should be considering what defence he can show if the shipper or presenting bank asks for return of the documents of title in lieu of payment. I suggest that there is none.

Mr. Barry, in stating that Bills of Lading were not endorsed, suggests that they should have been negotiable, but he states that they were consigned to the bank, i.e. straight consigned, instead of to order of the bank. In either case the goods should not have been surrendered to the importer on foot of an unendorsed B/L, but if the importer obtained an unendorsed negotiable B/L, the potential for fraudulent endorsement exists, which may preclude a successful action against the carrier/agent. This case then depends on what basis the importer obtained the negotiable document. This information has not been provided.

Mr. Barry has not stated clearly the collection procedures done by the collecting bank in order for us to ascertain whether the collecting bank is really at fault.

If the collecting bank has done its part by approaching the importer in an attempt to accept the drafts but fails, the bank should have sent a timely notice to this effect to the remitting bank who should pass it on to the principal/exporter. If it has not done so, it is at fault.

If such notice has been sent timely, and there is no negligence on the part of the collecting bank in following the URC 522 requirements, the collecting bank should have no fault in its collection work.

If the collecting bank is not at fault, then the claim target should be, depending on the real situation (which is not known):

1 The shipping agent that has released the goods [assuming without any shipping guarantee or LOI (letter of indemnity)].

2 The bank that has countersigned the LOI.

3 The importer taking the goods without payment.

4 The carrier as a principal held responsible for the fault of its nominated shipping agent.

5 The shipowners, in certain occasions, depending on the underlying charter parties arranged amongst the parties, if any.

From our experience, it is very difficult to make claims on the shipping companies as they have professionals working for them and are skillful in playing delay tactics. The most efffective approach is "Arrest of Ships", that needs to be done by an expert in this service category.

Our disclaimer appearing above is still applicable here.

We are from www.tolee.com

[edited 4/18/02 8:13:12 PM]