Can Corrections to a Bill of Lading Be Authenticated by a Separate Statement?

Transport documents continue to generate some of the most sensitive discrepancies under letters of credit. When time pressure meets documentary precision, practical solutions are sometimes tested against strict examination standards.

The following question raises an issue that many practitioners may encounter in real transactions. As always in documentary credit practice, interpretation may differ among banks and jurisdictions. Readers are welcome to reflect on the issue as they go through the discussion below.

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QUESTION

Dear Mr. Old Man,

We presented documents under six separate L/Cs covering a commingled shipment carried on the same vessel.

Each bill of lading contained the usual commingling clause stating:

“This shipment was loaded aboard the vessel as part of one original lot of 4000.153 kilos with no segregation…”

However, the total quantity stated in the commingling clause was clearly incorrect. It should have read 4000.153 mts, not kilos. As a result, the total mentioned in the clause was inconsistent with the actual bill of lading quantity.

Due to time constraints, we were unable to have each original bill of lading physically corrected. Instead, we presented a separate statement issued and signed by the Master’s agent — the same agent who signed the original bills of lading — confirming that the commingling clause was incorrect and that “4000.153 kilos” should read “4000.153 mts.”

The issuing bank rejected the documents, stating that the correction must appear on the face of each bill of lading and could not be effected by a separate document.

In our view, the agent’s signed statement — issued in the same capacity as the original bills of lading — constitutes proper authentication of the correction.

May we have your comments?

Kind regards,

John

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ANSWER

Dear John,

Thank you for your question. It raises an interesting point concerning the authentication of corrections on transport documents.

Under UCP 600 Article 14, banks examine documents on their face. Further, under ISBP 821, corrections to a bill of lading must be authenticated by the carrier, the master (captain), or a named agent of either.

From a strict documentary examination perspective, corrections are expected to appear on the transport document itself and be properly authenticated. On that basis, the issuing bank’s rejection is understandable, since the bills of lading as presented still contained incorrect data on their face.

That said, the matter is not entirely free from interpretation.

If a separate statement is:

• issued and signed by the carrier, master, or their named agent,
• signed in the same capacity as the original bills of lading, and
• clearly identifies and links itself to the specific bills of lading being corrected,

there is a reasonable argument that such a statement serves as authentication of the correction.

In commercial practice, time constraints may make re-issuance or physical amendment of original transport documents impractical. A formally issued and properly authenticated correction statement may, in substance, clarify what is evidently a clerical error — even one as significant as the difference between kilos and metric tons.

In my opinion, while the safest practice remains to correct the original bill of lading itself, a properly authenticated and clearly cross-referenced correction statement should not be dismissed outright. In the circumstances you describe, I tend to agree with your position.

Kind regards,

Mr. Old Man