Consignee Mismatch? When the Certificate of Inspection and Bill of Lading Don’t Have to Match

Intro:

A recent LC case raised a dispute over alleged “conflicting information” between the consignee stated in a Certificate of Inspection and that shown in the bill of lading. The issuing bank cited UCP 600 Article 14(d) to justify refusal, while the beneficiary argued that ISBP 821 allows such differences under specific circumstances. Here’s Mr. Old Man’s take on whether the refusal stands up to the rules.

QUESTION

Dear Mr. Old Man,

We have encountered a unique case. The issuing bank has previously accepted several presentations under various LCs without raising any discrepancies.

However, under their latest LC, they refused the presentation for the following reason:

Discrepancy: The consignee shown in the Certificate of Inspection differs from the consignee shown in the bill of lading.

Details:

• The Certificate of Inspection shows the consignee as the LC applicant (buyer).
• The bill of lading is consigned “to the order of the issuing bank” as required by the LC.

We disputed this discrepancy, but the issuing bank referred to UCP 600 Article 14(d), claiming there is a conflict of information between documents.

In your view, is this refusal valid?

Regards,

Rohini

________

ANSWER

Hi Rohini,

Thank you for your question.

First, the issuing bank’s acceptance of previous presentations — whether under the same LC or under different LCs — does not oblige it to accept subsequent presentations with the same discrepancy. Each presentation must be examined independently under UCP 600.

Regarding the consignee details: ISBP 821 paragraph Q9 (applicable to Analysis, Inspection, Health, Phytosanitary, Quantity, Quality, and other certificates) states:

“Consignee information, when shown, is not to conflict with the consignee information in the transport document. However, when a credit requires a transport document to be issued ‘to order’, ‘to the order of shipper’, ‘to order of issuing bank’, ‘to order of nominated bank (or negotiating bank)’ or ‘consigned to issuing bank’, a certificate may show the consignee as any entity named in the credit except the beneficiary…”

In your case, the BL is consigned “to the order of the issuing bank” and the Certificate of Inspection shows the applicant (buyer) as consignee. Since the applicant is named in the credit, this is expressly permitted under ISBP Q9 and does not create a conflict of data under UCP 600 Article 14(d).

Therefore, the issuing bank’s refusal on this ground is not valid.

Best regards,

Mr. Old Man