Coastline newsletter / 2009 edition

ISSUE 25 Apr2009

Overview of the DOCDEX issues and Opinions discussed at the ICC Banking Commission in March '09 (Part 2)

By Gary Collyer

This newsletter completes the roundup of Opinions that were discussed at the ICC Banking Commission meeting held in Dubai on 11 and 12 March. In the previous newsletter we covered Opinions 673-679. Here we cover Opinions 680-687.

The first Opinion carried on where we left off in the last newsletter with a query concerning the wording in a bill of lading. Within the pre-printed wording, appearing on the face of the bill of lading, (beneath the reference to 'Received for Shipment') it is stated "one original bill of lading should be surrendered, except clause 22 paragraph 6, in exchange for delivery of the shipment. Signed by the consignee or duly endorsed by the holder in due course".

Clause 22 paragraph 6 appeared nowhere on the bill of lading. The initiator requested confirmation that even if the wording appeared on the face of the bill of lading, banks were not required to examine the terms and conditions of such clauses, provided they appeared on the terms and conditions page.

The conclusion referred to the fact that the clause would have appeared within the area determined to be terms and conditions and banks are not required to examine them (sub-article 20 (a) (v)). The opinion also re-affirmed that previous ICC opinion R575 would also apply to this query.

See opinion TA680 (rev) for the full transcript of the above opinion.

Another question relating to wording appearing on bills of lading! This time, the wording included (in relation to the goods description) "which description the carrier had no reasonable means of checking and is not part of the B/L".

The initiator requested confirmation as to whether this wording would be acceptable if there was no description shown or if there was a description, it was in conflict with that shown on other stipulated documents.

The conclusion referred to the text and drew comparisons with the wording in UCP 600 article 26 "shipper's load and count" and "said by shipper to contain". Reference was also drawn to other wording that is used including "particulars furnished by shipper, carrier not responsible". The wording was seen as removing the liability of the carrier for the stated goods description and not that a description would not appear.

Sub-article 14 (e) does not require a goods description to appear on any document other than the invoice. However, it is transport industry practice for a description to appear. Any description of goods that appears on the bill of lading must not conflict with that shown in the credit.

See opinion TA.681 (rev) for the full transcript of the above opinion.

In the last newsletter it was mentioned that a query was withdrawn at the meeting. This was query TA682. This query sought answers to various scenarios on the topic of requirements for an on board notation. Given that this was one of a number that had been received under UCP 600 and UCP 500, it was decided that the ICC would issue a guidance paper (not a position paper!!) explaining when, and under what circumstances, an on board notation will be required and what form that notation should take. This document will be presented to the ICC Banking Commission for approval at its next meeting in Brussels in November 2009.

The next query also focussed on bills of lading, but this time charter party bills of lading. The credit required presentation of the "respective" charter party contract. The initiator sought confirmation that this changed the stance in UCP 600 sub-article 22 (b) and that banks would be required to examine the document to ensure that it related to the charter party bills of lading that had been presented.

After a lengthy debate, in which there were two schools of thought, it was decided that the wording did not change anything and that banks would not examine the charter party contract.

The wording in sub-article 22 (b) is designed to stop banks requesting the presentation of the charter party contract and emphasises that the document will not be examined.

Questions were raised as to how you establish linkage of the documents, but the UCP 600 does not require nor seek any form of linkage to be established.

See opinion TA.683 (rev) for the full transcript of the above opinion.

Continuing the theme of questions relating to bills of lading, the next opinion sought clarification where the bill of lading contains pre-printed wording regarding the signing of the document and the addition of a superimposed statement of signing that contradicts the pre-printed wording.

For example, the pre-printed wording stated "Signed for the Master" and the superimposed notation shows that it has been signed by a named agent on behalf of a named carrier. The conclusion makes it clear that the superimposed text will override the pre-printed. Provided the superimposed signing meets the requirements of the respective transport article the document will be acceptable.

See opinion TA.684 for the full transcript of the above opinion.

A change of topic for the next Opinion. This time the issue is whether the Health Certificate was required to contain the grade of the goods and whether the absence of this data on that document would create a conflict with the data shown on the other documents (which included reference to the grade).

The credit provided no information as to the requirements of the content of the Health Certificate in relation to the goods description.

The examination of this document would be subject to sub-article 14 (f). There cannot be a conflict of data unless the Health Certificate showed a grade of the goods and that grade was different to that stated in the credit or any other stipulated document. There is no discrepancy.

See opinion TA.685 (rev) for the full transcript of the above opinion.

The credit required a copy of a label printed in English and Chinese. English was a language understood by the nominated bank. Chinese was not. The issuing bank refused the documents due to the fact that the Chinese and English text differed. The initiator requested the opinion of the Banking Commission as to whether the refusal was justified.

The conclusion stated that by requiring the label to be in two languages, the nominated bank was entitled to examine the English version and accept the Chinese version "as presented".

It was also pointed out that the nominated bank would have been wise to advise the issuing bank of their inability to examine in Chinese and that they would determine compliance based on the English version only.

See opinion TA.686 (rev) for the full transcript of the above opinion.

And finally, opinion TA.687 referred to another bizarre form of refusal. This time banks refusing due to the fact that the insurance coverage had not been calculated to three decimal places to accommodate the requirement for 110% of the invoice value. The conclusion made it clear that the international standard banking practice for the establishment of insurance coverage is two decimal places.

See opinion TA.687 (rev) for the full transcript of the above opinion.

The next Newsletter will focus on the results of the recent ICC Survey "Rethinking Trade Finance 2009".

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