THE ABSENCE OF AN LC NUMBER OR MISTYPING THAT NUMBER ON A DOCUMENT DOES NOT CONSTITUTE A REASON FOR REFUSAL

QUESTION

Top urgent

Mr. Old Man,

Bank S in UAE has stopped our payment by pointing out a single discrepancy that charter party bill of lading evidences LC issue date 24.6.24 instead of 21.6.14. However, LC not demands LC number or issue date nowhere in 46a or 47a.

Moreover, Field 47A of LC says “obvious typography, spelling errors are not to be considered as discrepancies except for cargo quantity in BL and USD value in invoice”.

I contest to Bank S by say that LC not demanding LC number or issue date it is an additional information and if additional information conflict in any way with the LC then it will be not considered as discrepancy. So revisit your MT 734 and remit or proceeds urgently.

Then Bank S sent msg stating UCP 600 article 14.d

I contest again and share ISBP 821 and opinion 876rev stating that the absent of credit number or mistyping of a credit number on a document is not a valid reason for refusal.

Bank S now not responding and waiting for waiver form applicant.

Pls note Bank S is confirming bank and Bank I Amsterdam is issuing bank.

LC field 78 says payment will be made within 3 working days from your authentic swift msg stating complaint presentation.

Mr. Old Man, now what should I do?

Is this a valid discrepancy if yes than what is next and if no then how should I respond to Bank S with articles and ISBP Or should I go to Bank I?

Your guidance is requested

Regards

Faisal Zaheer

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ANSWER

Hi,

I agreed that the discrepancy is not valid as per ISBP 821 para. viii and ICC Opinion TA856rev. The confirming bank (Bank S) cannot refuse the documents based on sub-article 14(d).

You can refer Bank S to ISBP 821 paragraph viii and numerous ICC Opinions such as

R289, R578 (TA567rev), R635 (TA658), R811(TA823rev) (see below) to reject the discrepancy and request the confirming bank (Bank S) to effect the payment. Bank I must honour if Bank S fails to pay.

Best regards,

Mr. Old Man

P/S: Mr. Old Man changed the real names of the confirming bank and the issuing bank to maintain confidentiality.

• ISBP 821 para. viii): A request to insert the credit number on a document is usually at the instigation of the issuing bank in order to facilitate the collation of documents should one or more documents become detached from the presentation. Provided all the stipulated documents are received by the issuing bank, the absence of a credit number or the mistyping of that number on a document does not constitute  a reason for refusal. The exception to this position is where  it is a requirement of the importing country that the credit number be stated on one or more documents. In such circumstances, the credit must clearly indicate that this is the reason for the number to be shown on that or those documents.
• R289 states, “Regarding the question of the L/C number missing from the rail waybill, it has been the previous opinion of the ICC that the requirement is only to assist in tracing documents should they go astray. Since the documents were received by the issuing bank, the absence of the reference number, which in itself neither adds nor detracts from the purpose of the document, would seem to be an irrelevance and not valid grounds for rejection.”
• R578 (TA567rev) states: “It should be pointed out that the request for insertion of L/C numbers is usually at the  instigation of the issuing bank to facilitate the collation of documents when one or more go astray. The ICC has commented in the past that a refusal based on the absence of a L/C number on a document, where requested in the L/C, is not grounds for refusal.”
• R635 (TA658) states: “The misquoting of the credit number on the bill of lading does not create a reason or refusal.”
• R811(TA823rev) states: “It has been the previous opinion of the ICC that the request for insertion of L/C numbers is usually at the instigation of the issuing bank, to facilitate the collation of documents when one or more go astray.”

It is clear that the mistyping of the credit number on this type of document does not render such document discrepant as the figure and other information for the insurance coverage can still be ascertained.

Based on the above, the justification of the issuing bank, that UCP 600 sub-article 14 (d) supported its position, is erroneous.