TYPING ERROR

QUERY FROM V.A

Dear anh Duc,

Pls give me your advice about this matter:

Situation:

1. Date of L/C opening: 13 April, 2011.
2. Shipment date: 19 September, 2011.
3. Date of Certificate of Quality:16 September, 2010.
(All data in Certificate of Quality do not conflict with data in other documents or the credit)

Whether or not, it is discrepant?

Thanks so much for your help.

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COMMENT

Dear V.A,

I can say that it is obviously a typing error and would not constitute valid grounds for refusal.

What’s more. Unless the credit says otherwise, a document may be dated prior to the issuance date of the the credit (Please refer to UCP 600 sub-article 14(i)).

If you decide to reject the document you must show which article of UCP that supports your decision.

I hope mine and ICC Case Study 231 (attached hereunder) are helpful.

Good luck!

Best regards,
Mr. Old man

ATTACHMENT:

DOCUMENTS WITH AN ISSUANCE DATE AFTER EXPIRY OF CREDIT – CASE – 231
UCP 400 – Article 4

Events

On 15 September 1989, an Italian bank issued a documentary credit in favour of an English exporter to be confirmed by an English bank. It was available by deferred payment 30 days after the date of issuance of the transport document, and the confirming bank was authorised to reimburse itself to the debit of the issuing bank's account on its books.

The latest date for shipment of the goods was 22 September 1989 and the credit expiry date was 2 October 1989. On 28 September 1989, the confirming bank sent the documents to the issuing bank stating their conformity to the credit terms and conditions and its own engagement to pay the beneficiary 30 days after the date of issuance of the transport document.

Problem

The issuing bank rejected the documents because the invoice showed the date 22 October 1989. The confirming bank gave the following reason: "We note that the invoice was dated 22 October 1989, but clearly this is a typing error and does not materially affect the documents. We feel this is not sufficient reason to reject the documents.

On 21 October, the confirming bank paid the beneficiary and debited the account of the issuing bank. Since the issuing bank did not provide the relevant cover (the account still being overdrawn), the confirming bank claimed debit interest.

Query

It would be appreciated if the ICC could clarify whether an invoice dated after the expiry date of the credit makes the documents, on their face, not in accordance with the terms and conditions of the credit.

Answer

While UCP Article 24 allows banks to accept, unless the credit says otherwise, a document whose issuance date is prior to that of the credit, there is no article allowing banks to accept a document issued after and presented on or before the credit's expiry date. However, in the case described, it is apparent from the fact that the documents were sent forward on 28 September 1989 that the dating of 22 October 1989 on the invoice was a typing error.

Case Study 231, Article 4