MISCELLANEOUS QUESTIONS 3

MR. OLD MAN’S ANSWERS IN RED COLOUR

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From: Ngoc Duong Minh
Sent: Wed 9/1/2010 6:00 PM
To: Nguyen Huu Duc (DNG)
Subject: FOR YOUR OPINIONS

Dear Mr Old man,

Thank you so much for your quick replies as well as comments from international experts which you referred to. It really helps me much in making up my mind regarding the case.

By the way, there are some cases I would like to ask for your consultancy. Pls find attached file for your reference.

I am looking forward to hearing from you soon.

P/S: You seem to stay up so late and get up so early. Take care of your health and Nice Independence Holidays!!!

FOLLOWING CASES:
1. Cert of quality and quantity presented under LC not showing certification of goods quantity but referring to Commercial invoice forming part of the same presentation which indicate quantity of goods. Can we consider this doc fulfill its function?
Some cite that information of quantity of goods on Quantity and quality cert, as same as information of date may be satisfied by reference in quantity and quality cert to that of commercial invoice. So, it ensures that the doc fulfill its function.

Ceritficate of quantity is deemed to fulfil it function if it shows the quantity in numbers , e.g., 5000MT. Invoice and certificate of quantity are two separate documents, hence, that the certificate of quantity indicates the quantity of goods by referring to that in the invoice, e.g., quantity as per Invoice No. 123, is not acceptable.

2. Two On board date on a B/L: one received B/L presented to us with content as follow:
+ Port of loading: port A
+ Port of discharge: port B
+ Vessel: XYZ
+ B/L issuance date: 25/11/2009
B/L includes 02 seperately pre-printed notations, one show on board date 25/11/2009 and the other show on board date 26/11/2010

Query:
+ Which date will be used for calculating the presentation period, the earliest or the latest of the on board dates?

I do not think a b/l has two pre-printed on board notation boxes which are inserted with two differrent on board dates. I assume there are two separate on board notations and only one POL is indicated. This situation does not appear to be within the UCP or the guidance of ISBP. So it’s hard to give a correct answer.
If based on ISBP para.105 “…In the event that more than one set of bills of lading are presented and incorporate different dates of shipment, the latest of these dates of shipment will be taken for the calculation of any presentation period and must fall on or before the latest shipment date specified in the credit”, the latest on board date, i.e., 26/11/2010, will be taken to calculate the presentation period.

+ Insurance policy showed 26/11/2009 as the issuance date. Is it a discrepancy?

So insurance policy indicating 26/11/2009 as the issuance date is OK.

3. Insurance policy as per attach file (BH LISEMCO).
Pls be noted that:
– Ben: SANDFIRDEN TECHNICS B.V.
– Applicant: HAIPHONG EQUIPMENT MANUFACTURE AND SHIPBUILDING COMPANY LTD (LISEMCO)
– INSURANCE POLICY ENDORSED BY BEN – SANDFIRDEN TECHNICS B.V.

As our knowledge, we can not identify who is assured: SANDFIRDEN TECHNICS B.V. or HAIPHONG EQUIPMENT MANUFACTURE AND SHIPBUILDING COMPANY LTD (LISEMCO) and whether the right to receive payment under the document is moved to bearer or not?

The insurance policy is issued in assignable form. The assured is the beneficiary, SANDFIRDEN TECHNICS B.V, that has endorsed the insurance policy. If an endorsement is made on the reverse of the insurance policy so the applicant can become the holder in due course that can receive payment if any damage occurs to the goods insured.

4. L/C required: “FULL SET OF ORIGINAL INSURANCE POLICY ENDORSED IN BLANK FOR AT LEAST 110PCT OF INVOICE VALUE IN THE CURRENCY OF THE CREDIT, STIPULATING CLAIMS PAYABLE IN HANOI, VIETNAM COVERING INSTITUTE CARGO CLAUSES (ALL RISKS) 1.1.1963 AND SHOWING NUMBER OF ORIGINALS ISSUED”

Query 1:
Presented insurance policy showing that it is subjected to Institute cargo clauses (WA) 1.1.1963.
Negotiating bank accepts the a/m I/P and explains that:
– Difference between ICC (WA) 1.1.1963 and ICC (All risks) 1.1.1963 is franchise or excess (deductible). Otherwise, UCP600 Art. 28 also state that “An insurance document may indicate that the cover is subject to a franchise or excess (deductible)”. An insurance document subjecting to ICC (WA) 1.1.1963 equals to one subjecting to ICC (All risks) 1.1.1963 and franchise or deductible”.
>>> Whether negotiating bank’s opinion is correct or not?

There may be differrent views. Mine is that the negotiating bank’s opinion is correct, but documents checkers determine the compliance of documents based on their face and are not responsible to find out the truth that ICC (WA) 1.1.1963 is the same as ICC (All risks) 1.1.1963 and franchise or deductible. Hence, the discrepancy can be raised and valid.

Query 2: In case that I/P showing that it is subject to ICC (FPA) 1.1.1963 instead of ICC (All risks) 1.1.1933, it is acceptable or not?

Accordingly, no. The checkers do not know whether or not ICC (FPA) 1.1.1963 is the same as ICC (All risks) 1.1.1933.

5. LC requires “Mill’s test cert issued by the manufacturer in 02 copies (L/C does not mention the name of the manufacturer)
02 photo copies of Mill’s test cert presented with appearance as follow:
These docs, with red-ink signature and stamp of Ben (XYZ company), were copied of an original Mill test cert issued under the letter header of ABC company and signed by the only ABC company.
>>> Whether or not we consider presentation of the a/m mill’s test certs meet L/C requirement of Mill’s test cert in 02 copies. Who will be the manufacturer of the cargo on the doc?

ABC Company must indicate its capacity as manufacturer or must be identified as manufacturer somewhere on the Mill Test Certificate.

6. If the insurance policy/cert presented show the phrase “countersigned by” only and a space for signature beside, who must signed at this place, the assured or any entity?

It depends on the requirement of the insurance documents, e.g., if the insurance documents states “Not valid until countersigned by the assured or an authorized representative of the company” then it should be signed by the assured or an authorized representative of the company. Similarly, if the insurance documents states “Not valid until countersigned by an authorized representative of the insurance company” then it should be signed by an authorized representative of the insurance company. There is a case where an insurance certificate contains the statement “Not valid until countersigned by…” without indicating by whom. The question here is whose countersignature is acceptable. I do not think signature of any third party which is not designated is acceptable.

7. LC required Insurance cert
Docs presented to issuing bank:
– I/C dated on 10/5/2009 (on board date on B/L)
– 01 amendment of I/C (replacing descriptions, quantity of goods on the initial I/C) signed by the issuer of the I/C and dated on 20/5/2010 (later than on board date)
Some raised discrepancy “effective date of I/C later than on board date” because they consider date of the amendment as the effective date of the a/m I/C
Some contested the above overview: an amendment of the I/C not change t
he fact that an insurance agreement between insurer and assured have effected at the time the I/C was issued. The amendment only correct some information.

We highly appreciate your official opinion.

UCP 600 Article 28 (e): The date of the insurance document must be no later than the date of shipment, unless it appears from the insurance document that the cover is effective from a date not later than the date of shipment.
Please check whether there is any statement stating that the date of commencement of cover is effective from the shipment date.

8. An export LC stipulated:
– F32B: USD100000.00
– F39A: percentage credit amount: 5/5
– F42P: differed payment detail: 60 days after shipment date
– F43P: Partial shipment: Not allowed
– F45A: Description of goods:
Heather fences as per Proforma INV no. 300608 PI/INS dd 30.06.08
Partida estadistica 46.01.20
– F46A: Document required
+ INV in 03 originals
+ Full set of B/L made out to order of applicant, mark Freight Collect

Ben presented docs as following:
– INV showing description of goods: Heather fences as per Proforma INV no. 300608 PI/INS dd 30.06.08. Partida estadistica 46.01.20
Total quantity: 1,044 rolls and total amount: USD80,000.00.
– Full set of Bill of lading showing Gross weight: 12,771.00kgs; measurement: 70CBM and 1,044 rolls

Issuing bank raises following discrepancies: – Short drawn
– Short shipment
Our Opinion:
– LC stipulate no information of quantity of goods, so there is no underlying data to compare with total quantity shown on INV. Hence, “short shipment” is unacceptable

Agree.

– UCP600 Art 31a stipulate: “partial drawings or shipments are allowed”. It means that unless the credit expressly modify or exclude the above term, partial drawing are acceptable. In case another set of docs drawing for the rest amount presented, LC amount will be completely drawn.

How about your opinion?

Not agree. LC does not allow partial shipment. A presentation consisting of more than one set of transport documents evidencing shipment commencing on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering a partial shipment. However, shipment on more than one means of conveyance is a partial shipment, even if such means of conveyance leave on the same day for the same destination. I’m afraid the presentation of another set of transport documents will constitute a partial shipment, and hence, not complying with LC terms.

9. Capacity of signing party on B/L
We want to seek your opinion of three following cases relating to capacity of signing party on B/L
– Case 1: Pls see file BL008a. Whether or not the signature on the B/L meet UCP600’s requirement of signature?
There are two different opinions of this case:
Some people think that basing on the text of the stamp on B/L, we can indetify "HAINAN PO SHIPPING AGENCY CO., LTD, NINGBO BRANCH" is the only agent for the master. It is impossible that HAINAN PO SHIPPING AGENCY CO., LTD, NINGBO BRANCH is a master because it is a company, not a person.
Others argue oppositely: it can not sure that Master is an organization or an individual . So, HAINAN PO SHIPPING AGENCY CO., LTD, NINGBO BRANCH is unable to be expressly identified as Master or Agent for Master.

If an agent signs the bill of lading on behalf of the master (captain), the agent must be identified as agent. In this event, the name of the master (captain) need not be stated. Signing in the attached bL is ok.

– Case 2: Pls see file BL008.
HAINAN PO SHIPPING AGENCY CO., LTD, NINGBO BRANCH, besides being definited “on behalf of the master”, also being identified “AS AGENT FOR THE CARRIER”. The fact that one company with 02 roles is accepted referring to ICC’s Official Opinion R674. According to our opinion, this B/L is acceptable. Is that right?

In this case HAINAN PO SHIPPING AGENCY CO., LTD, NINGBO BRANCH signed on behalf of the master. It overrides the pre-printed box “signed for the carrier….”. You’re correct.

Please not this is my own view without any liability on my part.

Best regards,
Mr. Old Man
P/s: Don’t ask more than one question at a time and more than two questions in a week. The answers will be not in time and could be of low quality