ICC Digital Library Forum

We were presented some export L/C docs and found them compliant and sent to the issuing bank.
Issuing bank refused the docs on the ground that there is an inconsistency between the docs
B/L and insurance policy.

The inconsistency : --Insurance doc.shows the shipment date as 12.05.2004 whereas the B/L's on board date is 13.05.2004 --

Latest date of shipment for the Cedit : 20.05.2004
Ins.policy issue date:07.05.2004

Thanks in advance,
Yahya ,

Yahya,

Why you think that the two documents are not inconsistent? I’d be happy to give you my views once I know the answer to this question.

Jeremy

Jeremy,
An insurance event/issuance of insurance doc.should (may)be before the shipment event.
So,the date of shipment is shown on insurance doc.could be just an estimated date.
Why do some ins.docs include such indications for shipment dates as ...on/or about... ?

The issuing bank is a well known UK bank ))
Yahya,

Yahaya,

Without liability/responsibility in a purely personal capacity:

I quite agree that an insurance document may be dated before the date of shipment. However, this is not what is at issue. What is at issue is that the insurance document actually contains the simple statement that the date of shipment of the goods is 12 May 04. This is clearly contradicted by the on board date of the b/l. Therefore, there is a clear inconsistency between the information in the insurance document and the b/l. Thus there is a non-compliance with the credit terms per sub-Article 13a. The fact that this date <could just be an estimated date> can have no bearing on the matter.

Of course, had the insurance document actually stated: “Estimated date of shipment: 12 May 2004” (or words of similar effect) there would not have been an inconsistency.

Might the Unpublished Opinion (from December's Banking Commission Meeting) entitled -

"Where one figure was not correct in a container number shown on the invoice; where some seal numbers in the packing list were not complete" -

have an impact on this issue?


Part of the conclusion to this opinion reads:


"The requirement of Article 21 of UCP 500 is not that the data content be identical, merely that the documents not be nconsistent. The key is that the data that is being portrayed is not inconsistent between documents. The credit did not require the invoice to quote the container number. Nevertheless, the invoice quoted the number but misqouted one of the figures, which was clearly a typographical error. Other key data was consistent."

There would appear to be an argument that if the credit did not require the insurance document to specifically indicate the shipment date that a similar rationale to above could apply
as the key data in relation to the insurance document(and dates) is the commencement of the insurance cover.

Even though the above Opinion does indicate that there was "clearly a typographical error" involved in that instance, the thrust of the conclusion would appear to indicate that some information on a document
is key data and other information of lesser importance.

This could make the work of a doc checker a lot trickier and possibly open the way for some inconsistencies between documents - possibly even a misqouted shipment date similar to the above.

Leo,

I perceive that the apparent presence of a typographical error is central to this opinion being applicable.

If this were not so, as you correctly identify, it would make the task of a document examiner much more diffcult.

Jeremy

What would be the meaning of 'estimated shipment date /on or about 12 may 04' on ins.doc ?
Can you apply Sub Art 46 c of UCP 500 ? I don't think so.
So,the insurance doc.may not be accepted.Because there may be still an inconsistency!

Article 46c is about the terms contained in a credit, not the terms contained in a document. Therefore, it does not have any relevance.

Yahya,

I would like to share with you the experience of handling almost the same situation happened to me while handling an export negotiation.

While scrutinizing documents I found out that there is inconsistency of shipment date on Insurance document with that of transport document and at that stage I was certain that if I forward these documents like this the issuing bank is going to raise this discrepancy.
In order to safeguard the situation of receiving discrepancy (particularly the one you already know and can rectify) I called my customer and asked him to rectify the date of shipment on the Insurance document.
My customer took the insurance document and returned with corrected shipment date (authenticated by a correction stamp) as mentioned on the transport document. Later I was paid by the issuing bank without any discrepancy.

In your case I agree with the Jeremy that documents are inconsistent with each other and if the insurance document gets corrected at your end or the wording on the insurance document used a little different than that of Date of Shipment: 12 May 2004, the discrepancy could have been avoided.

Best
Umar

I usually do not respond to questions in chat rooms as it conflicts with my consultancy. However, I find this question re inconsistency interesting and in my opinion, representative of the next crisis issue for the UCP, following “original” and “notice of refusal.” “Inconsistency” is the new and most threatening discrepancy to challenge the integrity and utility of the L/C; it is also the least understood.
I do not believe that the cited discrepancy is valid. First, UCP does not require that documents be consistent; but rather, that they not be inconsistent. This is more than a play on words and more than mere semantics. It requires discretion and common sense, attributes not normally associated with document examiners.
The only reason for a bank document examiner to consider the bill of lading date vis-à-vis the insurance document is to insure that the insurance covers the shipment. To do this, they determine if the insurance document was issued prior to the date of shipment, or, if issued after the date of shipment to determine that the coverage was effective as of the shipment date. Document examiners do not look to the insurance document to check or determine the shipment date; nor do they look to the bill of lading to determine the effective date of insurance.
There is no UCP requirement that the shipment date be stated on the insurance document and if there is no L/C requirement for such data to appear on the insurance document, then in my opinion, there is no reason for the document examiner to check these two documents for that data. The shipment date on the insurance document is superfluous. The insurance document was issued May 5 and shipment took place May 12 or 13. I do not find that inconsistent. As long as the documents, in their entirety, relate to the same transaction, I would not find them discrepant for this reason. Not to be rude, but do not expect an ongoing dialog from this respondent.