ICC Digital Library Forum

This is my first post on the site so I am still finding my way around.

We have access via the internet to the various web sites of the shipping companies our clients use. It is quite easy to check the details of the bill of Lading with the voyage details from the shipping company.
We had a case recently where a B/L showed a s.o.b. date as the last day for shipment as permitted by the L/C. The shipping company website indicated that the vessel did not dock until a week later.
A check of a second shipping companys website concurred.
So the implication was that someone ,probably the shippers agent was falsifying the documents to make them fit the L/c. Apart from this the documents were in order.
What is the best course of action? Documents appear on their face to be OK, but there is an element of fraud involved.
.
Comments please

Peter,

welcome to the Forum !

There are several possibilities here.
1. The website info. is wrong (these usually have disclaimers warning you that they are not responsible for errors).
2. Assuming that this is a liner vessel, you may be comparing sailings of the same ship in different weeks.
3. Shipment may in practice have been made using a feeder vessel, but without that vessel details being included in the B/L (especially if owned by the same carrier as the ocean vessel).
4. The on board date may not be accurate.

However
don't jump to conclusions if you think that no. 4 above applies here. I distinctly remember a UK court case of about twenty years ago involving very similar circumstances to this situation (B/L backdated by a few days), but the judge held that the document checker was only required to check docs at face value and the case went in favour of the beneficiary.

Perhaps those with better memory than I can fill in the gaps.

Laurence

Dear Peter,

First of all: I am in line with Laurence here. It is dangerous to act on this information towards the L/C presentation. First of all you would be absolutely sure that your information is correct; that you have the “full picture”, and that an element of fraud is involved. On the other hand there is the issue of “good faith”.

Second; I would strongly advise you NOT to check the shipping dates as a rule. Although it is done with a “good intention”, it will put you in situations like this one: You get some information that you really do not want, and do not know how to react upon; and that either way might get you into trouble.

Therefore my advise would be only to check shipment dates (or other information reflected in the documents presented under a L/C) if you have good reason to do so.

Best regards
Kim

Peter,

The case to which Laurence alludes is, I expect, United City Merchants (Investments) Ltd v Royal Bank of Canada [1983]1 A.C. 168 (the HoL gave judgement in 1982) which, I believe, is considered the seminal ‘fraud exception’ case in English law and, I agree, highly relevant to your query. Nonetheless, why one would verify shipping dates, other than in exceptional circumstances, I cannot imagine.

Jeremy

[edited 1/22/2005 10:01:28 AM]

My grateful thanks to Jeremy who, as I suspected, was able to provide verse and chapter to fill in the gaps to which I alluded.

Laurence

I don't make it a habit of checking every Bill of Lading for correct SOB dates, but after attending Captain Mukundan's excellent presentation on Fraud at the ICC Transport Documents seminar last May I am a little more cautious than I used to be when I check documents.
However in this particular case the B/L was issued by a NVOCC and dated on the last date for shipment as permitted by the L/C.
I checked two separate shipping company web sites and both indicated that on the date in question the ship was in China and didnt arrive in Korea until a week later. Apart from that the documents were in order. We sent a carefully worded SWIFT to the presenting bank asking them to explain. We did not receive a reply .
The documents were eventually paid a week or so later.
My issue is that given the information is in the public domain, and the shipping agent was obviously trying to pull a fast one, can we continue to rely on 'examine documents at face value'. Do we not have a duty of care to our customers to at least make them aware of the situation before paying their funds away. Is pre dating B/L's fraud or is it not.
United City Merchants v Royal Bank of Canada (1982) indicates that it is. What actions should we take to protect the Banks and the clients interests.