WHERE LC CONTAINS THE CLAUSE “NO THIRD PARTY DOCUMENTS WILL BE ACCEPTED”

A ride to Yellow Sand Beach

QUESTION

Mr. Old Man,

It will be helpful if you could help me out regarding Transferable LC.

I have got Transferable LC with Clause that ” No Third Party Documents will be accepted” and Buyer’ s bank has refused to amend this detail.

But the B/L and Certificate of Origin and all will have third party as exporter.

Please can you help me out as I am new to this and time is running out for LC Shipping time period.

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ANSWER

Hi,
ISBP 746 paragraph 19 (d) says that “third party documents not acceptable” – has no meaning and is to be disregarded.

So, in my opinion, the clause “no third party documents will be accepted” should be treated the same as the expression “third party documents not acceptable”, that is to say, it has no meaning, either and is to be disregarded.

What’s more? The clause “no third party documents will be accepted” is ambiguous, hence, the applicant/issuing bank bears the risk of any ambiguity as per ISBP 745 paragraph (v).

Kind regards,

Mr. Old Man