DC No. not mentioned on invoice
Hi Experts,
In additinal conditions, my LC calls for the LC no. to be mentioned on all the documents presented but, i missed out to mention it on invoice.
LC is subject to UCP 600. Is it a discrepancy under Article no. 18.
Plz guide
Manish
Not a discreapncy - pls refer ICC Opinion TA658
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Whether the misquoting of the credit number on a bill of
lading created a reason for refusal; when a refusal is sent to a nominated bank
or a beneficiary and it provides a replacement or corrected document does this,
in itself, signify the nominated bank's acceptance of the discrepancy?
Official
Opinion TA658 - Unpublished UCP 600 From UCP600 - UCP 600 article
16; miscellaneous
QUERY
Issue: whether a mistype of the L/C no. in a bill of lading is a discrepancy
justifying refusal of payment by an issuing bank and whether the action by the
negotiating bank in sending a revised document to the issuing bank after
receiving the discrepancy notice is deemed as having accepted the discrepancy
notice on the part of the negotiating bank.
We received the following discrepancy notice from the issuing bank. The
discrepancy notice states: "B/L marked L/C No.7XXXX1/0165/AN instead of
7XXXX1/0165/4A." [The correct L/C no. in the credit was stated as
7XXXX1/0165/4N]. The L/C no. in the B/L was mistyped as AN instead of the
correct 4N stated in the credit.
The issuing bank alsomistyped the L/C no. as 4A instead of 4N in its
discrepancy notice to the negotiating bank. This shows the issuing bankhow easy
it is to mistype one letter in a long L/C no.
All other documents are in order in terms of the L/C number. Is this is a
discrepancy which would justify the issuing bank from refusing payment? When a
nominated bank sends a revised document after receiving a discrepancy notice,
is this action considered as having accepted the discrepancy notice as valid?
Analysis
As referred to in ICC Opinion R 289, a requirement for the insertion of a
credit number on a document is only to assist in tracing documents should they
go astray. Since the documents were received by the issuing bank and the
issuing bank is applying the presented bill of lading under the correct credit
number, it would seem to be an irrelevance and not valid grounds for refusal.
The fact that the issuing bank misquoted the credit number would not detract
from the intent of the discrepancy they were intending to highlight.
Conclusion
The misquoting of the credit number on the bill of lading does not create a
reason for refusal.
The fact that a refusal is sent to a nominated bank or a beneficiary and
that it provides a replacement or corrected document does not, in itself,
signify the nominated bank's or beneficiary's acceptance of the discrepancy.
Regards!!!!
Mujeeb :-)
TA658 concerns the situation where an LC number was mistyped on a document and whether such discrepancy is valid on the basis of inconsistency. ICC opines, by referring to a previous opinion R 289, that since the essential purpose is to trace documents and the fact that these documents can clearly be seen to be related to the LC, even by the issuing bank, it is an irrelevant discrepancy.
However, the original question related to an LC which required the LC no. to be shown on all documents, and the circumstance whereby the LC no. was ommitted on a particular document. The above opinion cannot be applied to this case. The discrepancy is valid.
On a wider note, I do not agree with either the analysis in TA658 nor the generalisation expressed in R 289. In my view it is not for the ICC to opine on why an issuing bank may require the LC no. to be shown on all documents. The documents under the LC may hav a wider significance outside the LC sphere, and such requirements may have been imposed in respect of central bank mandates, customs authority requirements, and the like.
Abrar, my question is when the LC number is wrongly quoted that means you accept the docs.
Abrar .7XXXX1/0165/AN instead of
7XXXX1/0165/4A." [The correct L/C no. in the credit was stated as 7XXXX1/0165/4N].
Lemme put in this way, LC .7XXXX1/0165/AN, could be a different LC, but B/L is missing to write the real LC number.
But when the LC number is missing why dont u accept the docs.
Regards!!!!
Mujeeb :-)
Hi Mujeeb
Just to confirm: the quoted opinion (aspects of which, I don't agree with) related to a different scenario, i.e a case where the LC no. was mistyped. It is not clear whether the LC in the case required the LC number to be quoted on all documents. If it had, the opinion might well have been different.
I still mantain that a specific requirement under the LC must be obeyed to receive payment, even if the requirement may be at variance with UCP provisions. Last sentence of UCP600 Art 1 refers. The discrepancy is valid.
I can only reiterate that it is not for the ICC to decide, or give an opinion as to why an LC no. is required to be stated on all document. My earlier comment refers.
Abrar is right , ICC opinion applies to mis type LC no. and not for missing DC No.
If an LC requires that all documents must state the LC no. Any document presented without it will be considered Discrepant.
However, LC no. in documents that are most of the times required to be indicated in the documents by the beneficiary is for monitoring/tracking puposes of all the users of any particular document. Example a beneficiary with lots of customers may supply their products to different clients and therefore will receive different LCs from different applicant and from different banks bearing different LC Nos. If a document does not bear any LC No. Beneficiary may not be able to differentiate which goods or document pertains to a particular LC. At the same time negotiating/presenting bank or the issuing bank will not know in which LC the beneficiary is presenting the related documents. The practice of indicating the Documentary Credit No. in all documents that are presented under an LC is to avoid confusion that another document under a different LC may be presented to another LC and vice versa.
Dear
It is a clear discrepancy because of inconsistency and no need to refer UCP
Regards
Tulsi/ Dubai
Art 18 prescribes the minimum requirement, for a commercial invoice to be acceptable under UCP600. These requirements prevail unless expressly opted out on or varied. Any additional requirement such as the LC no to be shown on documents must be adhered to for the presentation to be acceptable under LC terms. Such requirement does not run against the grain of Art 18, or indeed, any other UCP article
Manish,
Yes, it's a discrepancy.
Yes it is a discrepancy. But on another note, comparing L/Cs from different banks in the same country you will find all kinds of variations,
1. no requirement for L/C number on any docs
2. L/C number on invoice and B/L
3. L/C number on all docs
4. L/C number and date and name of issuing bank on all docs
5. L/C number, issue date, number and date of invoice to appear on all docs (yes really!)
I therefore put it to everyone that in the vast majority of cases this requirement in any form is a nonsense, put on the L/C by the ignorance of the banker who was taught his/her job by the previous person etc who once upon a long time ago thought it might be a good idea. It adds absolutely nothing to the value of any document unless the clumsy banker drops several sets of loose documents on the floor and then hasn't the intelligence to match them all up without the L/C number. If only UCP600 had outlawed this dopey practice!
Regards,
Bob
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