Port-to-Port or Multimodal? When the LC Plays Tricks

Intro

Letters of credit can sometimes read like riddles—especially when issuing banks mix up transport fields. A common source of confusion is whether an LC is asking for a straightforward port-to-port shipment or a multimodal one. The distinction matters because the rules (and risks of discrepancies) change depending on which UCP article applies. In this Q&A, Dom shares an LC with clashing instructions: fields filled as if it were multimodal, yet the document required is an ocean bill of lading. So which way should banks and beneficiaries interpret it?

 QUESTION

Dear Mr. Old Man,

I have come across the following scenario that needs your opinion:

The attached LC shows as follows:

• Field 43T – Transhipment: Not Allowed
• Field 44A – Place of Taking in Charge/Place of Receipt: Any Italy Seaport
• Field 44B – Place of Final Destination/Place of Delivery: Karachi Seaport (Pakistan)
• Field 46A – Documents Required: Full set of Ocean Bill of Lading

In your opinion, does this imply multimodal or port-to-port routing?

Personally, in order to avoid discrepancies, I would have all four fields of the BL completed by inserting the same content in the place of receipt/port. Looking forward to your opinion.

Thank you for your opinion.

Best regards,

Dom

________

ANSWER

Dear Dom.

Sorry for the delay in getting back to you – yesterday was one of those marathon days with a pile of questions waiting in my inbox.

Now, to your case. The LC you shared is a tricky one. On the face of it, the issuing bank has created inconsistencies:

• The credit requires a full set of ocean bills of lading and prohibits transshipment.
• But instead of using Field 44E (Port of Loading) and 44F (Port of Discharge), the bank wrongly filled in 44A (Place of Receipt) and 44B (Place of Final Destination) – fields normally used for multimodal transport documents.

So, what do we do with this contradiction?

According to ICC Banking Commission recommendations, examination of transport documents is not based on the form of the document alone, but on the requirements of the credit. In other words: the type of document called for + the shipment conditions in the LC determine which UCP article applies.

Here, the credit clearly demands a port-to-port ocean BL, not a multimodal document. Therefore, despite the wrong fields being used, the applicable rule is UCP 600 Article 20 (Bill of Lading), not Article 19.

Conclusion: The LC has been issued with inconsistent details, but since it expressly requires an ocean BL and prohibits transshipment, banks should examine documents under Article 20.

I hope helpful.

Best regards,

Mr. Old Man