Certificate on Beneficiary’s Letterhead but Signed by Freight Forwarder — Discrepancy or No Discrepancy?

Introduction

A question sometimes arises when a documentary credit requires a certificate to be issued by one of several parties, expressed using slash marks, but the presented certificate appears on the beneficiary’s letterhead while being signed and stamped by a freight forwarder.

The question is whether the difference between the letterhead and the signatory constitutes a discrepancy.

Question

Dear Mr. Old Man,

A documentary credit requires:

“Certificate issued by freight forwarder/beneficiary/shipping line.”

The beneficiary presents a certificate printed on the beneficiary’s letterhead. However, the certificate is signed and stamped by the freight forwarder. The beneficiary itself does not separately sign the certificate.

Is this a discrepancy because the letterhead belongs to the beneficiary while the certificate is signed by the freight forwarder?

Thank you.

Obidur Rashid Chanchal

________

Answer

Dear Obidur,

Thank you for your question.

The answer depends on the capacity in which the freight forwarder signed the certificate.

There are two separate issues to consider: who may issue the certificate and who actually issued the certificate.

1. The slash marks allow alternatives

ISBP 821 A2(a) provides that where a virgule (slash mark “/”) is used in a documentary credit and no context indicates otherwise, it allows one or more of the stated options. Thus, wording such as:

“freight forwarder/beneficiary/shipping line”

allows the certificate to be issued by the freight forwarder, the beneficiary, the shipping line, or any combination of the stated options, as applicable.

Therefore, both the freight forwarder and the beneficiary are permitted issuers.

2. Who actually issued the certificate?

This is the more important question.

ISBP 821 A36(a) states:

“A signature on the letterhead paper of a named person or entity is considered to be the signature of that named person or entity unless otherwise stated. The named person or entity need not be repeated next to the signature.”

Accordingly, the beneficiary’s letterhead has evidential significance. However, if the certificate identifies the freight forwarder as the signatory, we need to determine in what capacity the freight forwarder signed.

• If the freight forwarder signed in its own capacity, the certificate may be regarded as issued by the freight forwarder, which is an expressly permitted issuer under the credit.
• If the freight forwarder signed for and on behalf of the beneficiary, the certificate may be regarded as issued by the beneficiary, which is also an expressly permitted issuer.

Therefore, the mere fact that the certificate is printed on the beneficiary’s letterhead but signed/stamped by the freight forwarder is not, by itself, sufficient to determine whether there is a discrepancy.

The actual wording, signature and capacity shown on the certificate need to be examined to establish who issued the certificate.

Conclusion

I would not raise a discrepancy merely because the beneficiary’s letterhead is used and the freight forwarder signs the certificate. However, the document should be examined to determine whether the freight forwarder signed in its own capacity or on behalf of the beneficiary.

The key question is not simply who is permitted to issue the certificate, but who actually issued it.

Best regards,

Mr. Old Man