PARTIAL SHIPMENTS; PARTIAL DRAWINGS

Picture taken on March 23, 2014 when I was cycling up Monkey Mountain in Da Nang, Vietnam.

QUESTION

LC  states:

– LC amount: USD100,000.00

– Partial shipments not allowed.

Two separate sets of documents, each for USD50,000.00,  were presented to the issuing bank in the same day. Each set of documents contained among other required documents 3/3 original bills of lading showing shipped on board the same vessel at the same port of loading on the same date, the same journey and the same port of discharge.

The issuing bank refused both sets of documents stating the same discrepancy “partial shipments”. However, the presenter rejected the discrepancy arguing that the two sets of documents were received by the issuing bank on the same day and bills of lading in the two sets of documents show the same journey, the same vessel, the same port of loading, the same on board date and the same port of discharge, and therefore, in accordance with sub-article 31(b) UCP 600, there was no discrepancy.

The issuing bank did not agree with the presenter’s rejection reasoning that the documents were presented in two separate presentations; hence, they were examined separately.

Which bank is correct?

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ANSWER

Hi,

Notwithstanding that the two separate bills of lading show the same journey, same journey, same port of loading, same on board date (even different on board date) and  same port of discharge and that  and total quantity of goods shipped and total drawings are within the quantity and amount permitted by the LC, they are presented in two separate presentations, hence, they will be examined as separate presentations. The discrepancy raised by the issuing bank is valid. It can even raise one more discrepancy “partial drawings”.

It is speculated that the applicant may have wished to receive two separate sets of bills of lading in order to be conveniently endorsed to two different end-buyers, and the beneficiary (who is not experienced) did so at the request and for the convenience of the applicant.

If the two sets of documents had been presented in a single presentation under one covering schedule, then it would have been acceptable in accordance with sub-article 31 (b) UCP 600.

Kind regards,

Mr. Old Man

P/s: I forwarded the same question to CDCS Group on www.linkedin.com and received the same views as mine. However, SachinParkar’s comment is worth considering. I like it. For your reference, below is his comment:

QUOTE

1. When first documents are presented to issuing bank, two different checkers would have checked the documents ( and considering many bank’s offshoring model, two different locations as well) so obviously without any indication on covering letter from presenting bank, issuing bank has pointed out the discrepancy. In ideal scenario, presenting bank should have specified on both covering letter – Remaining shipment is covered against our documents no xxxxxx dated xxxx covered with B/L number xxxx on same vessel with port of discharge xxxx.

2. Nevertheless, once presenting bank has clarified on same, issuing bank need to withdraw the discrepancy.

UNQUOTE