ICC Digital Library Forum

We issued a credit for MYR150, 000 covering import of shrimp feed with partial shipment prohibited.

On 20 June 01, we received a set of documents, including a full set of marine BL, for an invoice amount of MYR80, 000. We treated it as a partial shipment & accordingly on the same day advised discrepancy to the applicant.

The following day i.e. 21 June 01, a second set of documents, enclosing another full set of BL reached our counters for an invoice amount of MYR70,000. Upon examination & comparison with the earlier docs, the 2 sets of BL indicated both shipments have been made on the same date using the same carrying vessel. As per Art 40 b this would not be deemed partial shipments.

But is it considered partial shipments have been effected when there are 2 separate presentations even though the presenting bank's covering schedules are dated on the same date i.e. 19 June 01?

Thank you.

We would like to deal with this query from both the practical and the theoretical approaches.

First, let us deal with the easy one, the practical approach. As an issuing bank, why not ask the applicant whether or not he would accept the two presentations. If the answer is "Yes" then the issuing bank may pay the beneficiary and debit the applicant's account for reimbursements.

If the applicant refuses, then we have to deal with the theoretical part to ascertain whether the two presentations are in fact discrepant.

We assume that there are no other discrepancies in the documents in the two presentations other than those alleged discrepancies indicated by the enquirer.

UCP 500 Sub-article 40 (b) indcates that the two shipments evidenced by the two separate paper bills of lading would not be deemed as partial shipments PROVIDED that they are presented under one presentation. Hence Sub Article 40 (b) is not applicable in this special case.

It is also an implied condition in the UCP 500 that all paper documents must be presented all at one time and partial presentation is by itself a discrepancy (due to missing some documents or documents not representing the whole shipment in an LC prohibiting partial shipments/drawings). Another discrepancy is partial drawing since the full amount is not drawn in each of the two presentations.

Waiving discrepancies in one presentation does not mean that the same discrepancies would also be waived in another presentation under the same LC. This illustrates that "each presentation is separate" - a cornerstone concept in LC operations. Hence the two presentations in this particular case cannot be merged together for the sake of achieving compliance in shipped quantity and drawing amount.

We have two discrepancies here, one for partial shipment and one for partial drawing.

Under such circumstance, the issuing bank should have acted according to UCP 500 Article 13 & 14 by giving a timely refusal notice in each of the two presentations.

If the issuing bank did not give a timely refusal notice for the first presentation, then it is liable to pay the beneficiary regardless of the discrepancies in the first presentation according to the sanction of sub Article 14 (e). This is a caution area for the enquirer.

In the eUCP (which is now under the drafting stage), where mixed presentations (electronic and paper) are allowed, partial presentation is therefore allowed.

We are from www.tolee.com

[edited 4/12/02 10:41:27 PM]

Although you have two separate drawings there is only 1 l/c. I believe that the 2nd presentation puts the first one in order. I don't think that you can adopt a 'head in the sand approach' and not take into account that both presentations put together conform with the l/c.
One of the sets must have been delayed in the post.Perhaps the issuing bank should have put the docs in the same envelope.
If, however, your l/c was available at the presenting bank's counters you will have no grounds for refusal since it is obvious that the beneficiary's presentation to this bank was in order.

No mention has been made of the instructions from the beneficiary with the presentation/s. If, for example, he had enclosed an instruction to await the second set of documents and to combine both, but this had been overlooked by the bank, there would be no discrepancy.

I differ slightly from T. O. Lee's interpretation of partial presentation. Although I always try to avoid it, there have been times when I have made presentations on or very close to the last permissible day. This sometimes involved collating all documents except B/L for presentation to the bank with a written instruction to await B/L under separate cover (usually directly from the forwarding agent). This has never been regarded as partial presentation.