An issuing bank refused a demand under a standby credit on the basis of three discrepancies: goods description differed; incorrect AWB number shown on documents; and AWB showed incorrect airports of departure.
The beneficiary argued that the discrepancies were invalid and that, furthermore, they presented no obstacle to the successful performance and delivery of the goods by the beneficiary.
On the second point, it was stated that delivery of goods by the beneficiary had no bearing on the issuing bank's decision to refuse the presentation: if documents do not comply, the issuing bank may refuse to honour. The obligation of the issuing bank relies on the documents presented.
The description of goods clearly included goods not called for by the credit and this was considered to be a valid reason for refusal. Although the AWB number was not identical, it was not considered to be a conflict. The airports of departure were in conflict and this was stated as a valid reason for refusal.
Accordingly, two discrepancies were viewed as valid reasons for refusal and it was concluded that the issuing bank was right to refuse the presentation.