ICC Digital Library Forum

The Credit calls for the presentation of a marine B/L (Charter party B/L is also acceptable)
It has following conditions ;
- Shipment will be effected by conference line and/or regular line vessel (Cert. required)
- Shipment on tramp vessel not permitted.
Tramp vessel ; a vessel not operating under a regular schedule

Is this Credit workable ?
Which data can be applied on a B/L to determine whether the shipment has been effected on a tramp vessel ?
Can that condition regarding the'tramp vessel'be considered non-doc?


[edited 7/16/2004 3:44:33 PM: typing error ]
[edited 7/16/2004 3:45:41 PM: More correction on same word ]

Without liability/responsibility and personally:

Frankly I would not like to say unequivocally whether or not <<Shipment on tramp vessel not permitted>> is a non-documentary condition (<<NDC>>). I can see arguments both ways as to if this condition <<can be clearly linked to a document stipulated in that documentary credit>> (PP3). Given that it is a <<negative>> condition –something must not happen/not be the case- rather than a <<positive>> condition –something must happen/be the case- I would err on the side of caution and treat it as not being a NDC. However, I believe I would only consider the condition breached if any document presented actually stated the vessel was a ‘tramp’ vessel i.e. not concern myself with the meaning of ‘tramp’ vessel and take ‘silence’ as being compliant.

Having said that, I would strongly resist issuing or advising –where nominated bank- a credit with this condition worded this way given the scope for dispute. It would be very easy to amend it to read, for instance, << Documents must not indicate shipment has been by <tramp> vessel.>>

Incidentally, might it be contradictory to specify shipment may not be by a vessel that does not operate a regular schedule and allow charter party bills of lading? (I’m no shipping expert.)

Finally, I think this an illustration of the problems that can surround (possible) NDCs. I would much prefer the UCP was silent on the matter, thus forcing banks to refuse to issue/advise any credit in which the conditions were not clearly ‘documentary’. However, no doubt I’m in a minority.

[edited 7/16/2004 4:53:26 PM]

The requirement is shipment by conference or regular line vessel. Once this condition is met by presentation of the required certificate, then, by default the other condition of "Shipment by tramp vessel not allowed" is met.

The second condition is just a reconfirmation of the requirement for a shipment by conference and/or regular line vessel. If we only have the second condition without the requirement for a proof that the shipment was made on a conference or regular line then we may consider the condition as non-documentary and require an explanation from the LC issuing bank.

I concur with the reply from Saudi Arabia dated July 22.

As Jeremy pointed out ,The Credit also allows the presentation of charter party B/L.
Might it be there a contradiction with the requirement of ''Tramp vessel'' ?

Yahya,
[edited 7/22/2004 3:03:46 PM]

Abdulkader,

According to my ‘search’ on DC-PRO this is your first posting for over 12 months. Welcome back!

A similar line of reasoning to your first paragraph occurred to me (it really did, honestly!). However, I had the following concerns regarding the credit requirement that shipment has to be effected by <conference line and/OR regular line vessel>:
1. The description of a <conference (liner)> in ICC Pub 623 makes no reference to the vessel operating a regular schedule.
2. Even if the generally accepted definitition in the SHIPPING world of a conference line vessel is, in fact, one that operates a regular schedule, should a banker be expected to know this? I certainly do not.

Regarding your second para, I am inclined to agree with you that the tramp steamer requirement is probably a NDC per sub-Art 13c and PP3. However, I notice you would apparently revert to the issuing bank rather than rely on the UCP/PP3. I would too, as I would not be surprised to find there are bankers and applicants who would argue that the requirement can be <clearly linked> to the bills of lading.

Best regards, Jeremy

[edited 7/22/2004 4:56:00 PM]

Any LC issued in this way is bound to cause trouble, as it contains contradictory clauses - Tramp vessel not allowed, but Charter party B/L allowed.

"Cert. required" is inadequate as it does not indicate the issuer nor content. One may assume that it refers to shipment, as it follows a non-documentary requirement relating to shipment, but documents presented based on assumptions are likely to be discrepant.

Laurence

Jeremy,

Thank you very much. I had very few postings in 2004; however, from time to time, I log on to the discussion forum to read comments from the vivid and constantly dedicated contributors.