We send this case again because we do not see it reflected in any forum as there is no specific forum for topics regarding URC522.
We sent dox to a mexican bank with instructions for deliver against payment (on collection basis) but we only wrote at the bottom of the form: Subject to Uniform Customs and Practice of ICC Paris.
The mexican bank never required any explanation on if we referred to UCP or URC but they refused payment at maturity due to absence of payment instructions from drawee. Then we asked them to return dox and when they arrived we could see that they were not the same documents we sent, so we thought the bank delivered the documents to the drawee without our permission, it dispatched the goods and then the presenting bank returned other documents to us for complying our requirement.
We wanted to know if the non explicit subjection of the remittance to URC522 (never put forward by the presenting bank) could be enough excuse for non payment, because we are going to use DOCDEX Services for this dispute and we want to be sure that no objection can be done for our incomplete instructions.
Dox remittance under URC522
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Dox remittance under URC522
It would appear that your instruction to the Mexican bank did not relate to either the UCP or URC. Therefore what grounds do you have for proceeding with DOCDEX ?
I am confused by your statement that you sent documents for payment, but the Mexican bank "refused payment at maturity". Were documents sent to Mexico against payment of a term draft ? If so, assuming the proper endorsement, can payment at maturity be enforced through the courts ?
I feel that if the Mexican bank sent the wrong documents back, your redress is through the courts, failing a negotiated settlement. It would be impossible to seek recompense under the URC, as this was not quoted in your initial instructions to the Mexican bank.
Laurence
I am confused by your statement that you sent documents for payment, but the Mexican bank "refused payment at maturity". Were documents sent to Mexico against payment of a term draft ? If so, assuming the proper endorsement, can payment at maturity be enforced through the courts ?
I feel that if the Mexican bank sent the wrong documents back, your redress is through the courts, failing a negotiated settlement. It would be impossible to seek recompense under the URC, as this was not quoted in your initial instructions to the Mexican bank.
Laurence
Dox remittance under URC522
Without any liability/responsibility my personal views are:
1. You have not given full details of exactly what was sent and what was returned and, as Laurence has identified, the details you give seem somewhat contradictory. My assumption is that a full set of bills of lading and a sight bill of exchange were sent, from what you say.
2. Logically you can only have a claim against the Mexican bank if you/your principal has suffered loss by reason of its actions.
3. I can only see that you/your principal would have suffered loss if the Mexican bank had assisted the drawer to obtain the goods without obtaining payment (or acceptance if a D/A collection).
4. Assuming that this is what happened, then I do not see whether or not it can be considered from the schedule that the URC applies is directly relevant (and if it could not I would nonetheless expect a court to look to the URC to establish standard banking practice in this field). This is because my belief is that where a presenting bank assists a drawee obtain the goods either by issuing a delivery order (where goods are consigned to it) or releasing bills of lading it becomes automatically liable to settle the collection (just as with documents presented under a documentary credit). This is not a matter covered by URC (or UCP). Also, in this particular case the fact is, as you say, you sent dox (including a full set of bills of lading I assume) to a Mexican bank with instructions to deliver the dox against payment. The Mexican bank did not do this, but released them. Therefore, it was in breach of the express instructions contained in your collection schedule, as opposed to any particular article of URC.
5. I assume the Mexican bank has agreed to abide by any Docdex decision, otherwise it would seem to be a waste of time and money.
Jeremy
[edited 10/24/03 2:31:18 PM]
[edited 10/24/03 2:32:35 PM]
1. You have not given full details of exactly what was sent and what was returned and, as Laurence has identified, the details you give seem somewhat contradictory. My assumption is that a full set of bills of lading and a sight bill of exchange were sent, from what you say.
2. Logically you can only have a claim against the Mexican bank if you/your principal has suffered loss by reason of its actions.
3. I can only see that you/your principal would have suffered loss if the Mexican bank had assisted the drawer to obtain the goods without obtaining payment (or acceptance if a D/A collection).
4. Assuming that this is what happened, then I do not see whether or not it can be considered from the schedule that the URC applies is directly relevant (and if it could not I would nonetheless expect a court to look to the URC to establish standard banking practice in this field). This is because my belief is that where a presenting bank assists a drawee obtain the goods either by issuing a delivery order (where goods are consigned to it) or releasing bills of lading it becomes automatically liable to settle the collection (just as with documents presented under a documentary credit). This is not a matter covered by URC (or UCP). Also, in this particular case the fact is, as you say, you sent dox (including a full set of bills of lading I assume) to a Mexican bank with instructions to deliver the dox against payment. The Mexican bank did not do this, but released them. Therefore, it was in breach of the express instructions contained in your collection schedule, as opposed to any particular article of URC.
5. I assume the Mexican bank has agreed to abide by any Docdex decision, otherwise it would seem to be a waste of time and money.
Jeremy
[edited 10/24/03 2:31:18 PM]
[edited 10/24/03 2:32:35 PM]
Dox remittance under URC522
Thank Laurence and Jeremy very much for your answers.
I have asked for more information from the Collections Dept. and they inform me the following:
The schedule states COLLECTION AGAINST ACCEPTANCE/PAYMENT.
Documents: 1 term draft for acceptance, 2 invoices, 1 packing list, 1 EUR1 Certificate, 2/3+3nn copies of B/L (1/3 original B/L was directly sent to drawee).
Instructions: Do not deliver documents without you bank guarantee, Keep accepted draft until maturity, Protest in case of non-acceptance/payment, Inform us acceptance of the draft and your bank guarantee.
At the bottom: SUBJECT TO UNIFORM RULES AND PRACTICE (ICC).
-------
Drawee bank informed they were unable to add their guarantee to the draft and keep documents at our disposal.
We instructed them to return all dox if their guarantee was not added.
After several swift mesgs we informed that as per drawer's information drawee had accepted the draft and received the dox.
Drawee's bank informed they were returning dox by courier.
Courier enveloped was open in presence of a Notary as per drawer instructions.
Draft showed drawee's signature as accepted and superimpossed a stamp of 'CANCELLED'.
The originals B/L returned showed identical events.
Invoices, Packing list and EUR-1 Certificate were different from the ones remitted.
This seem to us that the collection was delivered to drawee failing to fulfil our instructions.
Despite our several msgs none answer from drawee's bank has been received.
Neither drawee nor drawee's bank have paid the collection and drawer has lost disposal of goods.
The main question is: Are there any possibility to discuss that the collection was subject to URC522 with the a/m clause: SUBJECT TO UNIFORM CUSTOMS AND PRACTICE (ICC)?
We want to use DOCDEX to try avoiding a trial. We feel that a positive sentence from ICC will avoid it.
[edited 10/27/03 12:44:58 PM: New data available]
Correction of mistakes:
I beg your pardon but when I wrote "...(1/3 original B/L was directly sent to drawee)"; I meant (1/3 B/L was retained by the drawer).
I apologise for inconvenience caused.
[edited 10/27/03 1:39:32 PM: Correction of mistakes.]
I have asked for more information from the Collections Dept. and they inform me the following:
The schedule states COLLECTION AGAINST ACCEPTANCE/PAYMENT.
Documents: 1 term draft for acceptance, 2 invoices, 1 packing list, 1 EUR1 Certificate, 2/3+3nn copies of B/L (1/3 original B/L was directly sent to drawee).
Instructions: Do not deliver documents without you bank guarantee, Keep accepted draft until maturity, Protest in case of non-acceptance/payment, Inform us acceptance of the draft and your bank guarantee.
At the bottom: SUBJECT TO UNIFORM RULES AND PRACTICE (ICC).
-------
Drawee bank informed they were unable to add their guarantee to the draft and keep documents at our disposal.
We instructed them to return all dox if their guarantee was not added.
After several swift mesgs we informed that as per drawer's information drawee had accepted the draft and received the dox.
Drawee's bank informed they were returning dox by courier.
Courier enveloped was open in presence of a Notary as per drawer instructions.
Draft showed drawee's signature as accepted and superimpossed a stamp of 'CANCELLED'.
The originals B/L returned showed identical events.
Invoices, Packing list and EUR-1 Certificate were different from the ones remitted.
This seem to us that the collection was delivered to drawee failing to fulfil our instructions.
Despite our several msgs none answer from drawee's bank has been received.
Neither drawee nor drawee's bank have paid the collection and drawer has lost disposal of goods.
The main question is: Are there any possibility to discuss that the collection was subject to URC522 with the a/m clause: SUBJECT TO UNIFORM CUSTOMS AND PRACTICE (ICC)?
We want to use DOCDEX to try avoiding a trial. We feel that a positive sentence from ICC will avoid it.
[edited 10/27/03 12:44:58 PM: New data available]
Correction of mistakes:
I beg your pardon but when I wrote "...(1/3 original B/L was directly sent to drawee)"; I meant (1/3 B/L was retained by the drawer).
I apologise for inconvenience caused.
[edited 10/27/03 1:39:32 PM: Correction of mistakes.]
Dox remittance under URC522
Without liability/responsibility, personally I cannot see how you/the drawer can have a claim against the Mexican bank if you/the drawer has not suffered any loss as a result of its actions. The return of the original bills of lading, with the drawer having retained the other original blading, would seem to suggest that the Mexican bank did not facilitate release of the goods to the drawer. I would have thought you should speak to the carrier to establish how it was the goods were apparently released and, if it was without an original blading, pursue action against it. Overall, I cannot see the URC are of any direct relevance to this matter.
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Dox remittance under URC522
I agree with Jeremy that if you have all original B/L, your course of action is clear - present original to carrier to obtain the goods. If the carrier fails to deliver, he is in breach of his own contract of carriage and can be sued accordingly.
The only thing that I can see as outstanding with the Mexican bank is return of the correct EUR1. Without this, you would have to pay duty on import into the EU. If the Mexican bank fails to return the correct EUR1, you should pursue them for the cost of the duty. However, as Jeremy suggests, this is not an issue for DOCDEX, as there is no clear indication in the documentation if the UCP or URC or any other system controlled the manner in which this should have been processed.
Laurence
The only thing that I can see as outstanding with the Mexican bank is return of the correct EUR1. Without this, you would have to pay duty on import into the EU. If the Mexican bank fails to return the correct EUR1, you should pursue them for the cost of the duty. However, as Jeremy suggests, this is not an issue for DOCDEX, as there is no clear indication in the documentation if the UCP or URC or any other system controlled the manner in which this should have been processed.
Laurence
Dox remittance under URC522
Thanks a lot Laurence and Jeremy. I am afraid my yesterday answer was not posted in DC PRO as I do not see it attached to our several messages.
I tried to explain you that the spanish exporter does not want to get the goods back because of the enormous costs of customs stockage (the amount of the collection is eur340,000) so the exporter has abandon the goods and broken the relationship with the importer.
The only way to solve this problem he accepts is to go the presenting bank to a trial, so it is very important to him to get a positive sentence from DOCDEX to the negligent managing of the documents by the presenting bank.
he thinks this sentence could not be ignored by a court, thereby the importance of knowing if the not exact writing of the clause regarding URC522, could be used by the presenting bank as excuse for non payment.
I tried to explain you that the spanish exporter does not want to get the goods back because of the enormous costs of customs stockage (the amount of the collection is eur340,000) so the exporter has abandon the goods and broken the relationship with the importer.
The only way to solve this problem he accepts is to go the presenting bank to a trial, so it is very important to him to get a positive sentence from DOCDEX to the negligent managing of the documents by the presenting bank.
he thinks this sentence could not be ignored by a court, thereby the importance of knowing if the not exact writing of the clause regarding URC522, could be used by the presenting bank as excuse for non payment.
Dox remittance under URC522
I am sorry but I cannot add anything further.
Dox remittance under URC522
Thank Jeremy for your assistance anyway.
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
Dox remittance under URC522
The computing acronym GIGO (garbage in, garbage out) is appropriate here. If a bank fails to correctly instruct an other bank (garbage in), that bank should not be surprised at the (garbage out) result.
The only other reliance you may have is on the professional conduct of the bank, but this is not controlled by ICC rules, nor resolved by DOCDEX. In other words, documents you sent in trust to the Mexican bank should have been returned in good order, but your recourse of action is litigation or possibly ADR.
Laurence
The only other reliance you may have is on the professional conduct of the bank, but this is not controlled by ICC rules, nor resolved by DOCDEX. In other words, documents you sent in trust to the Mexican bank should have been returned in good order, but your recourse of action is litigation or possibly ADR.
Laurence