# WHERE THE REIMBURSING BANK REFUSES TO HONOUR A REIMBURSEMENT CLAIM # WHERE THE EXPRESSIONs “C/O” and “ON BEHALF OF” ARE USED ON BILLS OF LADING

QUESTION

Dear Mr. Old Man,

Thanks for your guidance regarding my previous query of late presentation pointed out by confirming bank i.e. ICICI Bank SG.

Need your expertise advice for following queries:

1) We, ABC Bank SG has checked a set of LC documents and certify clean and sent to IB in India. LC indicated upon receipt of compliance documents will instruct us to claim reimbursement from the SBINUS33. LC indicated is subject to UCPURR latest version.

Customer presented chartered party BL. Internal documents screening had been cleared and IB has given green light to lodge claim on RB. We have done so via mail claim as we do not have RMA.

RB has sent mt999 to us informed that the vessel (CS WU HAN) name on CBL i.e. the vessel  group owner China xxx is an entity linked under OFAC Sanction N unable to go ahead with the transaction.

Can we swift IB to demand payment or it is really a genuine case whereby we can’t do anything ?

2) If the BL shown shipper as ABC on behalf of XYZ and consign to order and blank endorsed. Blank endorsement can be by either party. (Covered under ISBP). What if the shipper is AAA c/o BBB? Can either party endorse the BL? Any difference in showing on behalf and c/o?

3) LC stated beneficiary’s name must appear on BL as a consignor/shipper. Customer presented BL shown shipper as ABC, Vietnam on behalf of ABC, SG. LC does not prohibit third party shipper.  We rec’d officially mt734 quoted shipper do not show ABC, SG as shipper. IB insisted it’s valid disp.

Your opinion, please.

Thank you so much.

Best Regards
Miss Woo

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ANSWER

Dear Miss Woo,

It would be appreciated if next time you could send only one question at a time.

I would like to answer your questions as follows:

1/ Unless it has issued a reimbursement undertaking, the reimbursing bank is not obliged to honour a reimbursement claim. If the reimbursing bank determines not to reimburse, it shall give notice to that effect to the claiming bank and the issuing bank, in case of a reimbursement undertaking, it must state the reason for non-payment of the claim.

I see that the reimbursing bank is not bound to reimburse your bank as it has not issued its reimbursement undertaking. However, the reason for non-payment/reimbursement is unreasonable as the reimbursing bank is not concerned with or bound by the LC terms and conditions.

Anyway, if the reimbursing bank fails to honour the reimbursement claim, the claiming bank is entitled to reimbursement by the issuing bank. So, your bank can claim payment/reimbursement from the issuing bank.

2/ It is noted that the expression “c/o” (e.g., AAA c/o BBB) stands for “care of”, which is commonly used for addressing correspondence through an intermediary. It would mean that BBB acts on behalf of AAA to receive and pass on correspondence. However, now and then the express “c/o” appears in the shipper box or in the consignee box of bills of lading, e.g., Shipper: AAA c/o BBB. Regarding endorsement of a “to order” bill of lading, this obscure expression may cause argument as to who is eligible to endorse the bill of lading. It is advisable that this expression should not be used to avoid argument or dispute but when it is used, in my own opinion, the bill of lading endorsed either AAA or BBB should be acceptable.

3/ It is understood that ABC, SG is the beneficiary, in my opinion, the bill of lading that indicates shipper as ABC, Vietnam on behalf of ABC, SG satisfies the LC requirement. It should be acceptable.

Best regards,

Mr. Old Man