TA873rev
A credit contained a very short goods description:
47 Pipeburster Pulling Unit Ref. Packing List DAP [Place B] [+address of applicant] Incoterms 2010
The credit also stated that typing errors not affecting figures are acceptable and will not constitute a discrepancy under the LC.
It also stated "IN THE EVENT THAT DOCUMENTS ARE DETERMINED TO BE DISCREPANT, WE MAY SEEK A WAIVER OF SUCH DISCREPANCIES FROM THE APPLICANT. SHOULD SUCH A WAIVER BE OBTAINED, WE MAY RELEASE THE DOCUMENTS AND EFFECT SETTLEMENT, NOTWITHSTANDING ANY PRIOR COMMUNICATION TO THE PRESENTER THAT WE ARE HOLDING DOCUMENTS AT THE PRESENTER'S DISPOSAL, UNLESS WE HAVE BEEN INSTRUCTED OTHERWISE BY THE PRESENTER, PRIOR TO OUR RELEASE OF DOCUMENTS." It can be seen that this wording was not necessary given the text of UCP 600 sub-article 16 (c) (iii) (b).
On the presented invoice, the goods were described as "T247 Pipeburster Pulling Unit + standard accessories. Machine [number of machine]. Engine [number of engine]. The Incoterm was not stated.
The issuing bank refused the documents due to "Goods description on invoice inconsistent with LC field 45A" and "invoice missing Incoterms".
It appears that the model number was incorrect in the credit. The nominated bank asked whether the discrepancies were valid and if the refusal notice was in accordance with article 16.
For the goods description, the analysis states that the incorrect model number was a reason to refuse the documents, as was the missing Incoterm.
With regard to the refusal notice, although details of what was actually wrong with the invoice was not given, the description in the credit was short enough for a determination to be made and in this instance the lack of specific detail would not cause the discrepancy to be invalid.
See TA.873rev for the full transcript of the opinion.
TA875rev
A credit was issued in favour of a company whose legal form was NV. It covered a quantity of 459.58 M2 of glass panels.
The beneficiary presented its documents including an invoice in the name ‘Company SA-NV' instead of ‘Company NV'.
The issuing bank refused the documents due to the name of the beneficiary appearing on the documents and that the value of goods was not equal to the unit price multiplied by the quantity shipped.
The confirming bank disagreed because NV means NAAMLOZE VENNOOTSCHAP", in Dutch language and SA is the abbreviation of "SOCIETE ANONYME", in French language, which both have the same meaning and represent the legal form of the company.
With regard to the second discrepancy, the query gave one example:
1PC 2499 - 1171MM Quantity M2: 2.93
The surface calculated was 2.926329 rounded to 2.93 and this was the case on each item i.e., rounding to two digits.
The quantity was shown as 119.74 M2 and a value of EUR107,046.36 which gave a difference of EUR1.31 due to the rounding.
In answer to the name of the beneficiary, the analysis indicates that the invoice clearly appears to have been issued by the beneficiary as required by article 18. The legal form does not change the beneficiary name.
For the calculation, the analysis refers to ISBP 745 paragraph A22. Reference was also made to ICC Opinion R775 (TA754rev) that states "It would be unreasonable to expect an invoice to be calculated to three decimal places for an amount shown in EUR, when it operates to two decimal places."
The discrepancies were not valid.
See TA.875rev for the full transcript of the opinion.
TA876rev
A credit required the presentation of a beneficiary's certificate confirming that certain shipment details had been sent by email to the applicant within 3 working days after the bill of lading date.
The credit also contained the following conditions:
+ Any spelling errors in our documentation is not going to affect payment obligation of the buyer, unless they materially affect quantity or value of product shipped.
+ The number of the letter of credit to be mentioned on the invoice.
Clearly, the first condition is a repeat of text that appears in the contract between the applicant and the beneficiary. However, the Banking Commission took this to also represent the issuing bank's position regarding any spelling errors.
The credit number was stated on the invoice. However, it was stated incorrectly on the beneficiary's certificate (even though the credit did not ask for the number to be quoted on this document). The credit number was xxx0724xxx whereas the certificate indicated xxx0742xxx.
The analysis refers to a number of previous ICC opinions where the importance of credit numbers appearing on documents has been discussed and dismissed. The conclusion indicates that the documents were not discrepant.
The analysis indicates some advice where the inclusion of a credit number (or the necessity for the correct number to be shown) is required. This should only be in circumstances where it is a local Government or Customs requirement for the number to appear and, in this case, the credit should indicate this as the reason for the number to be shown on one or more documents.
See TA.876rev for the full transcript of the opinion.
TA877
A credit required shipment to be effected to Jiangyin Fujian, China. The presented bill of lading indicated:
Port of Discharge: Jiangyin - Jiangsu?Within the body of the bill of lading it indicated "Port of Discharge: Jiangyin Fujian, China".
The nominated bank decided that the documents complied and negotiated. The issuing bank refused the documents as follows:
‘IN BILL OF LADING: PORT OF DISCHARGE ‘JIANGYIN-JIANGSU' DIFFER FROM LC FIELD (44F) ‘JIANGYIN FUJIAN, CHINA'
The nominated bank referred to ISBP 745 paragraph E8 (b) in defence of its acceptance of the document, whilst the issuing bank argued that this paragraph did not apply.
The analysis refers to E8 (b) confirming the acceptability of a notation giving the name of the port of discharge, but only where "Jiangyin Fujian" had been stated in a field headed place of final destination, or words of similar effect. This was not the case in this bill of lading.
The document was discrepant.
See TA.877 for the full transcript of the opinion.
TA878rev
The credit in question contained a number of conditions that referred to the underlying contract between the applicant and the beneficiary that would require the beneficiary to produce a credit note. However, the banks would have no idea as to when an event occurred that would invoke such a requirement.
Documents had been presented for the 25th shipment under the credit. The issuing bank sent an MT799 message to the confirming bank as follows:
"FOLLOWING DISCREPANCIES HAVE BEEN FOUND WITH THE DOCUMENT ...... [THE APPLICANT] ....... HAS ADVISED THAT THERE HAS BEEN DELAY IN COMMISSIONING OF PROJECT AS PER DATE SPECIFIED IN CONTRACT AS PER ADDITIONAL CLAUSE 47 A 3. MEANWHILE WE HOLD YOUR DOCUMENT AT YOUR RISK AND RESPONSIBILITY. REGARDS".
Clearly, the refusal notice failed to indicate any discrepancy in the documents and there was no indication of refusal on the part of the issuing bank.
The analysis and conclusion agreed that the refusal notice was not valid and that the issuing bank was precluded under sub-article 16 (f) from claiming that the documents were discrepant and must honour.
See TA.878rev for the full transcript of the opinion.