LC REQUIRING PRESENTATION OF 3/3 ORIGINAL NON-NEGOTIABLE BILL OF LADING

QUESTION

Dear Mr. Old Man,

Happy Lunar New Year!

We have a question related to the bill of lading as follows, I hope to receive your advice:

Field 46A (Documents required) stipulates:

FULL SET OF CLEAN ON-BOARD OCEAN BILL OF LADING IN 3/3 ORIGINAL NON-NEGOTIABLE, MADE OUT TO THE ORDER OF PT. BANK MANDIRI (PERSERO) TBK., MARKED FREIGHT PREPAID, NOTIFY PARTY: APPLICANT

In my opinion, the original bill of lading would only indicate “ORIGINAL”, not “NEGOTIABLE”.

Is it a discrepancy if 3/3 original bills of lading plus 3 copy non-negotiable bills of lading are presented? Or should an amendment to the LC be requested?

I look forward to receiving your feedback, thank you.

Best regards,

NKL

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ANSWER

Hi,

The situation in question shows that the LC is inconsistent in requiring presentation of 3/3 original non-negotiable bills of lading made out to the order of PT. Bank Mandiri because this requirement only applies and is appropriate to a straight bill of lading, i.e. a bill of lading consigned to a named consignee, not “to order” or “to the order of a named party”. Please note that a straight bill of lading is a non-negotiable bill of lading.

I guess that the issuing bank means to require presentation of a full set 3/3 of original bills of lading made to the order of PT. Bank Mandiri plus 3 copies of non-negotiable bills of lading. In my opinion, there is no discrepancy if the beneficiary presents 3/3 original bills of lading plus 3 copies of non-negotiable bill of lading. However, be careful to avoid disputes, the beneficiary should request the issuing bank to amend the LC accordingly or clarify the original requirement.

Please bear in mind that never accept the request to send 3/3 of the original bill of lading directly to the applicant.

Thank you for your lunar new year wishes. Wishing you a wonderful year ahead!

Mr. Old Man