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.

No, I would not raise a discrepancy on this basis.

There are two separate issues to consider: who may issue the certificate and how the signature on the letterhead is to be regarded.

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.

Accordingly, the credit does not require both the freight forwarder and the beneficiary to sign the certificate.

2. The letterhead does not create a discrepancy

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.”

Therefore, a signature appearing on the beneficiary’s letterhead is considered to be the beneficiary’s signature unless the document otherwise states.

In the present case, however, even if the signature or stamp identifies the freight forwarder as the signatory, the freight forwarder is itself one of the permitted issuers under the credit.

Conclusion

There is no discrepancy merely because the certificate is printed on the beneficiary’s letterhead but signed and stamped by the freight forwarder.

The freight forwarder is an expressly permitted issuer under the credit, and the use of the beneficiary’s letterhead does not, by itself, invalidate the certificate.

No discrepancy.

Best regards,

Mr. Old Man