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CLEAN or UNCLEAN ?

By Mr Old Man
Posted on January 20, 2011
1 min read
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QUESTION FROM THAO
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Dear Mr Old Man,

I’m facing a difficult case which I would like to ask for your opinion.

We issued an L/C for goods ‘Low carbon steel wire rod’.

B/L presented showed “Ship’s remark: All cargo atmospheric rusty”

Can I raise the discrepancy: B/L showing defective condition of the goods as per Art27/UCP 600

I look forward to hearing from you soon.

Thanks for your support in advance

Regards,
Thao
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COMMENT
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Dear Thao,

Notwithstanding that for metal shipments, e.g., steel wire rods or steel coils, the carrier would normally insist the bills of lading be claused “rusty” or “atmospheric rusty”, the answer is YES (i.e., it's a discrepancy) unless the L/C allows the bills of lading to bear such clauses or notations.

Best regards,
Mr. Old Man

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8 Comments

8 Comments

  1. anonymous

    January 24, 2011 at 10:01 pm

    Anonymous writes:Dear Mr Old man,I have a problem involve in Bill of Lading. Please help me .Our form of Bill have this sentences:" If required by the Carrier, this Bill of Lading duly endorsed must be surrendered in exchange for the goods or delivery"The Bank in Korea said that this sentence is discripancy. So they require us delete this sentences. But UCP said that the Bank don't check the term and condition of carrier.Pls help me.Thanks,Trang

    Reply

  2. mroldmanvcb

    January 24, 2011 at 11:01 pm

    The statement "If required by the Carrier, this Bill of Lading duly endorsed must be surrendered in exchange for the goods or delivery order" that appears on the bill of lading is quite common. Try googling it and you will see. I don't believe this is a discrepancy.

    Reply

  3. anonymous

    January 26, 2011 at 10:01 am

    Yuki writes:im getting the same problem, but i don't clearly understand about this clause "If required by the Carrier, this Bill of Lading duly endorsed must be surrendered in exchange for the goods or delivery order"pls help me explain this clause. Thank you…YuKi

    Reply

  4. mroldmanvcb

    January 26, 2011 at 10:01 pm

    This clause would be a normal requirement which may appear either on the face ỏ on the reverse of the bill of lading. Notwithstanding this clause, the carrier prepares the way for possible release of the goods against a shipping guarantee.

    Reply

  5. abrar2

    January 26, 2011 at 10:01 pm

    Hi YukiThere has been much debate about this issue between the major Carriers and the ICC. The clause is usually inserted by the Carrier to absolve it of any responsibility in handing over the goods (where necessary) without the presentation of an original bill of lading. The rationale is that this provision will only take effect provided the B/L has been issued in a non-negotiable format, i.e. where the consignee is not shown as "To order", or "To order" of a named party. In these cases,(unlike negotiable B/Ls, e.g "to order", or "to order" of named party")there is no doubt as to the identity of the consignee. In lieu of presenatation of an original B/L, the carrier may therefore reserve the right to release the cargo on production of suitable authentication of the consignee's identity (e.g passport. etc). However, in all cases, the carrier would need to be absolutely sure that they are relasing to the rightful consignee, so it is liklely that such incidents will be the exception rather than the norm, and the carrier would need to conduct stringent checks to ensure that goods are released to a rightful consigneee. The argument therefore follows, that the safest option for the carrier and absolve it of liability for mis-delivery would be to always ensure that release is made against presentation of an original B/L.Of course, where B/Ls are issued in negotiable form, the original B/L must in all cases be presented, and the clause is not suggesting otherwise.My view is that for a bank to raise a discrepancy on the presence of such clauses (in any case, usually on the reverse of a B/L) is incorrect, and has no basis of support under UCP.

    Reply

  6. anonymous

    December 20, 2013 at 7:12 am

    KM writes:Hi Sir,Need to seek ur advise.We are the advising bank and issue a LC available with us by payment. Presenting bank presented docswith discrepancies to us and we have since rejected with MT734 and returned docs as our client does nt accept it..major disc. listed included invoices showing a bigger amt and BL not endorsed to Appl as per LC terms. as this is an oil LC, it is usual for us not including the clause regarding discrepancies fee..pls advise if we have the right to charge the discrepancies fee as it was not indicated during the issuance of the LC..Thanks in advance

    Reply

  7. anonymous

    December 20, 2013 at 7:12 am

    KM writes:Hi Sir,Need to seek ur advise.We are the advising bank and issue a LC available with us by payment. Presenting bank presented docswith discrepancies to us and we have since rejected with MT734 and returned docs as our client does nt accept it..major disc. listed included invoices showing a bigger amt and BL not endorsed to Appl as per LC terms. as this is an oil LC, it is usual for us not including the clause regarding discrepancies fee..pls advise if we have the right to charge the discrepancies fee as it was not indicated during the issuance of the LC..Thanks in advance

    Reply

  8. mroldmanvcb

    December 20, 2013 at 1:12 pm

    I think you can charge discrepancy fee in accordance with your banking tariff.

    Reply

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