Compliance of Multi-Endorsed BL with LC Terms

QUESTION

Dear Mr. Old Man,

I have a question that needs your help.

An LC issued by AGRIBANK requires the bill of lading to be “made out to order of AGRIBANK.”

However, the presented bill of lading is made out to the order of BNP Paribas (Suisse) SA, and is endorsed in succession as follows:

• BNP Paribas (Suisse) SA → to the order of ABN AMRO Bank,

• ABN AMRO Bank → to the order of OTTO STANDTLANDER GmbH,

• OTTO STANDTLANDER GmbH → to the order of AGRIBANK.

Questions:

1. Is the BL acceptable under the LC?

2. Can AGRIBANK endorse the BL to the order of the applicant to enable cargo release?

3. Will the applicant face any difficulty in taking delivery?

Thank you very much.

T.

——

ANSWER

Hi,

Yes, the bill of lading in question is acceptable.

Although the BL was originally made out to the order of BNP Paribas (Suisse) SA, it has been duly endorsed through a clean chain of endorsements, ultimately ending in favor of AGRIBANK, as required by the LC. Therefore, it complies with the credit’s terms.

AGRIBANK, as the current holder of the BL, may endorse it to the applicant or to the order of the applicant. The applicant, as endorsee, should not face any difficulty in taking delivery of the cargo at the port of discharge, provided local port or customs procedures do not impose additional documentary or legal requirements.

As far as I remember, the ICC had an opinion on this issue something like this:

The credit requested that bills of lading be issued to the order of the issuing bank or endorsed to its order. The fact that the bill of lading may show, on its face, a different order party is not considered a different consignee if the bill of lading is duly endorsed by that party to the issuing bank. On this basis, there is no discrepancy.

Kind regards,

Mr. Old Man