TA.935rev - resubmission
A credit subject to UCP 600 stated that the port of discharge was to be Cat Lai Port, HoChiMinh City Vietnam.
The presented bill of lading indicated the port of discharge as HoChiMinh City Vietnam, and the place of delivery as Cat Lai Port, HoChiMinh City Vietnam.
This was considered as a discrepancy by the issuing bank, but not agreed by the negotiating bank.
Reference was made to UCP 600 sub-article 20 (a) (iii) in respect to a bill of lading indicating shipment from the port of loading to the port of discharge stated in the credit and the qualification in ISBP 821 paragraph E8 (b) which provides for the named port of discharge to be stated in the field headed "Place of final destination" or words of similar effect.
As stated in the credit, the term "place of delivery" is to be considered the same as the term "place of final destination" as clarified by the phrase in ISBP paragraph E8 (b) "words of similar effect". In order to be compliant with the credit and to be in accordance with ISBP paragraphs E8 (a) and (b), the place of delivery field in the bill of lading should have stated "Port of discharge Cat Lai Port, HoChiMinh City". Alternatively, the Place of Delivery field should have remained blank with a notation added to the body of the bill of lading indicating "Port of Discharge: Cat Lai Port, HoChiMinh City."
As a side point, the confirming bank had mentioned that the tracking of the goods confirmed the required discharge of goods. It was emphasised that this cannot be considered as part of the examination of the bill of lading which is based on the document alone.
In conclusion, the discrepancy was considered as valid.
TA.940
A demand guarantee was issued subject to URDG 758 to support an underlying sales agreement stating that a drawing can be made should invoices fall past due in excess of 90 days from the invoice date.
The beneficiary presented a demand to the guarantor clearly stating that it was a demand under the relevant guarantee.
The demand was refused by the guarantor on the basis of three alleged discrepancies:
1. Invoice copies dated prior to the date of the guarantee
2. Invoice copies refer to a guarantee number that is different from the guarantee under which the demand is made
3. Invoice copies mention "payment terms: Standby L/C 90 days from B/L" instead of "90 days from invoice date".
With respect to the first discrepancy, URDG sub-article 15 (d) clearly states that any document other than the demand and supporting statement may be dated before the date when the beneficiary is entitled to present a demand. Unless specifically prohibited by a demand guarantee, an invoice copy can be dated earlier than the issuance date of such demand guarantee.
With regard to the second discrepancy, the assignment of a reference number for internal use by the beneficiary does not cause a conflict. Similar to an advising party assigning a reference number to any demand guarantee it receives, so can a beneficiary. In any event, it is not possible for a copy of an invoice, which is issued prior to the Guarantee issuance date, to quote the Guarantee reference number.
In respect of the third discrepancy, the fact that the copy invoice mentioned "Standby L/C" is of no relevance to the handling of this transaction and whether or not the actual demand was to be honoured. Unless otherwise stated in the guarantee, and provided the demand itself is in accordance with the terms and condition of the guarantee, then the additional information on the invoice referring to a Standby L/C does not cause a conflict.