D
D. Documents (Articles 20 to 37 UCP 500)
Introduction: Structure: Section
D of the UCP (Articles 20 to 38 UCP 500) has the following structure:
Article 20 and
Article 22 UCP 500: Principles regarding form, signature and dating, applicable
to all documents
Article 23 to
Article 33 UCP 500: Details for the three groups of documents well established
for Credits:
Transport
Documents (Article 23 –33 UCP 500)
Insurance
Documents (Article 34 – 36 UCP 500)
Commercial
Invoices (Article 37 UCP 500) plus weight attestations (Article 38 UCP 500),
latter unsuitably entitled “other documents”
Article 21 UCP
500: General rule for all other documents, where content or issuer is not
specified as e.g. certificates of analysis, -inspection, origin, consular
invoices, import/export licenses, checking lists etc.
The UCP establish the requirements
for transport -, insurance documents and commercial invoices according to
ordinary trade usage. This is not the case for all other documents which the
authors label “miscellaneous documents”. Hence results: an Applicant requesting
the classical group of documents need only stipulate special requirements if
he/she intends to deviate from the UCP features. Vice versa, an applicant
requesting “miscellaneous documents” needs to specifically describe issuer and
content, since a bank will accept any miscellaneous documents as presented.
Notice: For systematic reasons the
following comments deviate from the sequence of the UCP Articles. After Article
20 the authors will discuss Article 22, since both articles apply to all
documents.
ARTICLE 20
Ambiguity as to the Issuers of
Documents
A. Terms such as "first
class", "well known", "qualified",
"independent", "official", "competent",
"local", and the like, shall not be used to describe the issuers of
any document(s) to be presented under a Credit. If such terms are incorporated
in the Credit, banks will accept the relative document(s) as presented,
provided that it appears on its face to be in compliance with the other terms
and conditions of the Credit and not to have been issued by the Beneficiary.
B. Unless otherwise stipulated
in the Credit, banks will also accept as an original document(s), a document(s)
produced or appearing to have been produced: i. by reprographic, automated or computerized
systems; ii. as carbon copies; provided that it is marked as original and,
where necessary, appears to be signed.
A document may be signed by
handwriting, by facsimile signature, by perforated signature, by stamp, by
symbol, or by any other mechanical or electronic method of authentication.
C. i. Unless otherwise
stipulated in the Credit, banks will accept as a copy(ies), a document(s)
either labeled copy or not marked as an original a copy(ies) need not be
signed.
ii. Credits that require multiple
document(s) such as "duplicate", "two fold", "two
copies" and the like, will be satisfied by the presentation of one
original and the remaining number in copies except where the document itself
indicates otherwise.
D. Unless otherwise stipulated in the Credit, a
condition under a Credit calling for a document to be authenticated, validated,
legalized, visaed, certified or indicating a similar requirement, will be
satisfied by any signature, mark, stamp or label on such document that on its
face appears to satisfy the above condition.
I. General requirements as to
form, content and dating of documents (Article 20, 22 UCP 500)
Article 20 a UCP 500 –
Irrelevance of generic terms to specify the issuer: Article 20 UCP 500
discourage the Applicant to attempt to increase the value of documents, by
unspecifically requiring a certain quality of the issuer, a quality, banks
cannot check due to the lack of specificity. For this reason requirements like
“first class”, “well known”, “qualified”, “independent”, or “official” have
been irrelevant for the classification of issuers and hence have been
disregarded by banks. The 1993 revision expanded the list of examples with
“local” and “competent”. Example: A bank may disregard a requirement that a
bill of lading be issued by a “first class carrier”. If the Applicant wants to
ensure that the bill of lading will not be issued by any carrier, he/she has to
stipulate e.g. “ship registered with Lloyds”.
Beneficiary not permitted to
issue documents: Despite the foregoing, since the 1993 revision general
terms to designate the issuer of a document are not entirely without effect,
since at least the issuance by the beneficiary is excluded (compare last
subclause in Article 20 a UCP 50: “and not to have been issued by the beneficiary”).
From a systematic point of view this limitation belongs to Article 21, since it
is only applicable to miscellaneous documents; transport documents, insurance
documents or commercial invoices, which the beneficiary cannot issue in any
case.
Article 20 b UCP 500 Creation of
original documents: Article 20 b UCP 500 provides for the acceptance of
original documents, which were created through new technologies. Similar to the
1983 revision this relates particularly to documents, which have been produced:
i.
by reprographic, automated or computerized systems,
ii.
as carbon copies.
When introducing this Rule the ICC
Banking Commission had in mind to specifically approve carbon copies, i.e.
copies mechanically produced through the use of carbon paper. These are but of
little importance today. These have been replaced by forms, [die von
vorneherein durch Selbstdurchschreibung erstellt werden]. Similarly, the use of
a photocopying system is permissible. It is however necessary, to label
documents thus created as originals, which is normally done by stamping them
“original”.
Disputed qualification of hand
signed or machine created documents: The ICC has clarified that “only
original documents which are produced by reprographic, automated or
computerized systems or carbon copies need to be marked as “original”
(footnote3)”.
“An original document may be an
originally handwritten or originally typed document. A document produced in
this manner does not need to be marked as original (footnote4). “
Despite this explanation from the
ICC, an English court decided in –“Bayerische Vereinsbank v. Glancore Bank of
China” that a computer produced document -even when signed manually- had to
bear the stamp “original” (footnote5). Another English court disagreed and
decided in “Kredietbank N.V. v. Midland Bank” that –contrary to the decision
mentioned above—a document is presentable under a Credit, even if not stamped
as “original, as long as the document can be considered an original. The ICC
seconded this opinion in a vote published in INsight Summer 1999, page 5,
according to which banks can continue to accept documents as originals when
they are manually signed.
Nevertheless, it seems advisable to
stamp documents as “original” in order to avoid disputes whether a document has
been manually signed or not.
Article 20 b paragraph 3 UCP 500
– Electronic methods of authentication and requirements of national law
regarding manual signatures: It creates a problem that the last sentence of
Article 20 b - irrespective of national laws -- permits a document to be signed
by facsimile signature, perforated signature, stamp, by symbol, or by any other
mechanical or electronic method of authentication. The attempt to advance the
recognition of electronic signatures is laudable. The same regards the
recommendation: “NCs should acknowledge that any symbol executed or adopted by
a party with the present intention to authenticate a writing should be accepted
as a valid signature (footnote7)”. However, the ICC’s broad understanding of
what constitutes a signature does not modify mandatory formal requirements in
national laws (footnote8). The authors consider Article 20 b paragraph 3 UCP
500 void as far as it disregards mandatory requirements of national laws.
According to most national laws, documents like drafts, bills of exchange, and
checks still have to be signed manually, otherwise they are void.
In this regard Wheble’s
admonishment still applies that” more often banks have to rely on their own
knowledge of legal requirements r commercial customs relating to “signature”
(footnote9).
Exceptional recognition of
facsimile bills of lading: German maritime law specifically requires that a
carrier or its agent manually sign bills of lading (footnote10). Nevertheless,
in Bremen and Hamburg (both Germany), the marketplace accepts bills of lading
with facsimile signatures. This practice some authors advocate violates the
mandatory provision of paragraph 126 BGB. The opposite opinion points out that
a usage exists in shipping according to which a big part of bills of lading
issued in liner cargo shipping is signed via facsimile signature (footnote11).
This was necessary due to the mass processing of cargo and no reason is
discernible why a captain should manually sign 4,000 documents per ship (footnote12).
Similarly, the 1993 revision of Article 23 UCP 500, now stipulating that the on
board note in a bill of lading need not be signed, is commendable, however, it
violates the formal requirements of German shipping law (footnote13).
Necessity to sign amendments: The
ICC Banking Commission intended to facilitate the issuance of documents
by accepting electronic signatures. However, these rules are not applicable for
amendments of already issued documents. Even though the UCP 500 do not
provide for this case, the ICC Banking Commission –taking transport documents
as an example-- has affirmed that amendments need to be countersigned: “It
appears that many firms feel that corrections, alterations, etc., on transport
documents, i.e. B/Ls. ABWs etc. do not require the indication by whom they were
approved, only the stamp; “correction approved” “(footnote14).
Treatment of documents requiring
written form due to agreement of contracting parties: In as far as national
laws do not mandatorily require manual signature, as e.g. for guarantees,
inspection -, quality- or analysis certificates, or certificates of origin
issued by chambers of commerce, an electronic signature in accordance with
Article 20 b (ii) UCP 500 would be acceptable. However, a failure to sign these
documents will not be in the interest of the Applicant, since he is anxious to
receive a document whose issuer is identifiable. An applicant who wants to
ensure that the documents are manually signed needs to exclude Article 20 b
(ii) last sentence by stipulating in the Credit: “certificate manually signed”.
Nevertheless, the authors believe,
that a commercial usage exists, according to which at least guarantees,
certificates of inspection, - quality, analysis, as well as certificates of
origin have to be manually signed.
Article 20 c UCP 500 – Copies and multiple
documents
Article 20 c (i) UCP 500 –
Copies = photostatic copies: The word “copy” has different meanings as e.g.
“1. a thing made just like another; imitation of an original; full reproduction
or transcription …3. any of a number of books, magazines, engravings, etc.
printed from the same plates or having the same printed matter …” (Webster’s
New World Dictionary of the American Language, Simon and Schuster, Second
College Edition 1980). In the context of Article 20 c (i) UCP 500 a photocopy
is meant. Article 20 c (i) UCP 500 clarifies, that a photocopy need not be
designated as such; the failure to mark a document as an original is sufficient
to classify it as a copy; also, a copy need not be signed.
Article 20 c (ii) UCP 500 –
Credits requiring multiple documents: A Credit requiring multiple documents
(“duplicate”, “two fold”, “two copies”) will be satisfied if the beneficiary
presents one original and the remaining number in copies. If the applicant
wants to ensure that he receives several originals of a document, e.g. a health
certificate, he has to expressly stipulate this, e.g. “health certificat/5
originals”.
Article 20 d UCP 500 – Authentication/Legalisation
This rule lists the different
possibilities to authenticate, validate, legalise, visa, certify or similar a
document. In these instances any signature, mark, stamp or label on such
document that on its face appears to satisfy the above condition is sufficient.
If the applicant wants a specific, method of legalisation, which he can verify,
he has to specifically instruct the bank. Example: The Credit provides for the
presentation of a verified copy of a shipping advice, a document issued by the
beneficiary to the applicant. It is sufficient that the beneficiary stamps the
copy with his own company stamp.
ARTICLE 22 Issuance Date of
Documents vs. Credit Date
Unless otherwise stipulated in
the Credit, banks will accept a document bearing a date of issuance prior to
that of the Credit, subject to such document being presented within the time
limits set out in the Credit and in these Articles.
Article 22 UCP 500 – Issuance
Date of Documents versus Credit Date: Article 22 UCP 500 repeats without
any editorial changes Article 24 UCP 400, i.e. the admissibility to issue and
date documents prior to the issuance and dating of the Credit (footnote16). The
reason for the rule –introduced with the 1983 revision- is that the seller
often obtains documents immediately after conclusion of the sales contract
expecting that the L/C will be issued shortly. However, it is erroneous to
assume that any prior issuance date is acceptable. Under the aspect of
fraud, a bank has to check, whether in particular documents like health
certificates and certificates of analysis have been issued such a long time
before the Credit date, that they cannot have any relation to the Credit or
that due to the length of time they have lost their capacity to evidence
certain facts. A health certicate presented for importation of meat from Argentina, which was issued 6 months prior to the Credit Date, is not acceptable.
II. Unspecified Issuers or Contents of
Documents
ARTICLE 21 Unspecified Issuers
or Contents of Documents When documents other than transport documents,
insurance documents and commercial invoices are called for, the Credit should
stipulate by whom such documents are to be issued and their wording or data
content. If the Credit does not so stipulate, banks will accept such documents
as presented, provided that their data content is not inconsistent with any
other stipulated document presented.
Introduction: The UCP only
stipulates in great detail the requirement for presentation of the classical
documents of international trade: transport documents, documents of insurance
and commercial invoice. All other documents are subject to the requirements of
Article 21 UCP 500; i.e. they will be accepted as presented unless the Credit
stipulates otherwise. Typical examples of other documents are: certificates of quality,
-inspection,- or analysis, consular invoices, certificates of origin etc. The
applicant may stipulate any kind of document as e.g. documents evidencing
import or export licenses, or, since bills of lading can be issued by anyone
independent of ownership of the vessel, the proof that the ship used is at
least registered with Lloyds.
It is obvious that the UCP cannot
stipulate a catalogue of requirements for issuers or the content of the
miscellaneous documents covered by Article 21 UCP 500. This is the reason that
banks in conformance with Article 21 UCP 500 will accept these documents as
presented on the condition that they do not contradict other documents. Hence,
it is up to the applicant to defend his own interest by stipulating precise
requirements for the person of the issuer and the contents of these
“miscellaneous” documents.
Article 21 UCP 500 – Anyone as
issuer: If the Credit does not specify or classify the issuer, any
signature is acceptable. In these cases even the beneficiary can sign documents
like guarantees, certificates of origin, proofs of export/import licenses,
registration of ships.
Restriction as to the person of
the issuer by Article 20 UCP 500: If the issuer is classified as “first
class”, “well known”, “qualified”, “independent”, “official”, “competent”,
“local” and the like, Article 20 UCP 500, introduced with the 1993 revision,
provides that the beneficiary cannot issued the documents.
Example:
Precise Designation of the
Issuer: Neither the usage of the designation “first class” or similar as
listed in Article 20 UCP 500, nor the general description of the issuer of
“miscellaneous documents” prevents the beneficiary to choose any third party to
issue the documents. Example: The requirement to have a document issued by a
“shipping company” does not designate a maritime shipping company, since the
term refers to shippers of any kind (sea, land, air). Hence the Banking
Commission has stated: “that a request for a document issued by a shipping
company shall be deemed to be a request for a document issued by a carrier or
the agent of a named carrier” (footnote18).
Unclear is the interpretation of a
request for a “certificate of origin duly attested by Govt. authorities”. In Germany the chamber of commerce (Handelskammer) issues certificates of origins; according
to German law chambers of commerce are public-law corporation but not government
agencies.
Personal issuance/ issuance by
agent: If the applicant intends to have an additional document signed by
the issuer and not an agent of the issuer, he needs to stipulate this
requirement in the Credit. If the applicant fails to stipulate this requirement
a bank will accept documents –even of personal character—issued by an agent
(footnote20). Hence, in the following case the ICC Banking Commission
considered it permissible that the document was signed by an agent:
“A certificate
issued by the shipping company to the effect that the ship is not of Israeli
nationality, that she is not blacklisted by the Israeli Boycott Committee and
shall not call during her present voyage at any Israeli port and that the ship
is over 15 years of age”
“The Commission
agreed that if a credit call for a certificate issued by a shipping company,
banks will accept a certificate issued by the shipping company, or, unless
expressly stipulated to the contrary in the credit, by the shipping company’s
agent and that in the particular case presented the documents was acceptable as
an agent has the power to bind his principal”.
Interpretation of the clause
“for the master”: If an L/C requires the presentation of a “phytosanitary
certificate signed by ship master”, according to a new DOCDEX decision, a
certificate, signed by a third party with the stamp “for the master of “Vessel
V”” is not admissible. The decision is questionable since the signature can be
interpreted as the statement of an agency relationship. The DOCDEX decision
however references a identical 1998 decision of the ICC Banking Commission
(footnote21).
Inadmissible to have an agent
sign an “Emissionsbericht”: If an LC contains a requirement for an
“Inspection Report by Lloyd’s Agent”, an certificate of a third party is not
presentable even if it is entitled “Certificate of Appointment of Surveyor(s)
by Lloyd’s Agent(s)” (footnote 22). Also here, the refusal to recognize an
agency relationship seems problematic, since Lloyd’s had expressly authorized
the signing inspector’s. Nevertheless, the decision of the Banking Commission
may be justified, since Lloyd’s had declined any responsibility for the
correctness of the report as follows: “Whilst we believe the surveyor(s) are
competent, neither we nor the Corporation of Lloyds can accept any
responsibility or liability in respect to the attached certificate(s)”.
Consistency check: Even
without specific instructions Article 21 UCP 500 does not give the bank a carte
blanche when accepting documents subject to this article. Article 21 UCP 500
contains the limitation that banks will accept such documents as presented,
provided that their data is not inconsistent with any other stipulated
documents presented.
Example: Report versus
certificate (ICC Publication No. 565 (E), R 167)
The ICC Banking Commission has
decided that a requirement for presentation of a “certificate duly signed by
captain’s vessel stating the Ceannes of the tanks steamer” is complied with by
presentation of a document entitled “Ship’s Tanks Inspection Report”.
Analysis: “Since a report
instead of a certificate was presented, there is justification for claiming a
discrepancy under the doctrine of strict compliance. Whether courts will follow
such a conclusion is not predictable”.
Example: Irrelevant that
bill of lading and other documents evidence different weight of goods (ICC
Publication No. 565 (E), R 218): Rounding off the gross weight in this case
(bill of lading showing gross weight 44,595 and other documents showing
44,595.2) cannot be considered as an inconsistency amongst the documents.
Irrelevant that number of container
differ in packing list and bill of lading (ICC Publication No. 565 (E), R 218):
B/L shows goods packed in one container, P/L shows goods packed in three
containers.
Analysis: The bill of lading
presented showed three separate container numbers but the shipping company
placed the combined weight against only one of them. The fact that three
container numbers were shown on the bill of lading provides conformity with the
container numbers shown on the packing list.
No check whether documents are
customary in trade: The presentability of other documents is not affected
by the fact that they are not customary in trade. “If the Applicant or the
Issuing Bank seeks to have such a document issued by a specified party or seeks
to have it contain precise language, it is incumbent on them to include
explicitly this desired condition in the Credit (footnote23).” Hence, banks
will accept documents, even when the bank recognizes that the documents are not
customary in trade (footnote24).
Equal type of document: Even
absent specific instructions, other documents when presented have to be of the same
kind as required in the Credit. Hence the authors advocate the following:
Absent specific instructions, a quality certificate has to attest the
condition of the goods in an approving way. However, standardized minimum
requirements do not exist; as e.g. confirmation of use of unobjectionable
components, warrantee that defective and spare parts have been purchased or
will be delivered in conformance with the requirements of the contract).
Nevertheless, the quality certificate has to evidence that the goods correspond
to the Credit requirements.
Often, a certificate of inspection
comprises statements in regards to quality and quantity of the goods:
“A thorough visual
inspection was preformed. The commodity was found to be brand new, free of
visible damage and defects and of good workmanship. On the basis of the
inspection performed and our certificate issued we hereby confirm that quality
and quantity were found to be in conformity with the technical specification of
the contract and relevant contractor’s technical specification” (footnote25)
Certificate of Analysis
(certificat d’analyse, Analysenzertifikat): An analysis is the examination
concerning the composition of the goods (e.g. percentage of protein in cereals,
amount of sulfur in ore). Absent instructions in the Credit, any confirmation
seems acceptable that the goods have been examined for their composition. In
distinction to the quality certificate, a statement, that the analysis lead to
a positive conclusion, is not required.
Certificate of Inspection
(certificat d’inspection, Inspektionszertifikat): Absent specific
instructions in the Credit, a certificate of inspection only needs to evidence
the visual inspection of the goods. Similar to the certificate of analysis, the
certificate of inspection need not state any positive findings. However, it is
not acceptable that the certificate contains restrictive assertions. Certain
criteria of the inspection, e.g. amount of humidity in cereals, only need to be
examined if specifically requested in the Credit.
Inspections and quality checks are
administered by a couple of renowned international companies like Bureau
Veritas of Controll-Co. Latter is an organization independent of any buyer or
purchaser, which issues neutral statements regarding quantity, quality and
price of goods in international sales contractsControll-Co. is a member of the
SGS Group (Société Générale de Surveillance, Geneva, Switzerland).
III. Transport Documents:
Introduction
1. Systematic Overview of the
1993 revision
Prior revisions of the UCP, i.e.
the UCP 400 applicable until 1993, only recognized the on board bill of lading
(Article 16 UCP 400) and all other transport documents (train, truck, air
carriage including combined transport documents (Article 25 UCP 500). (The
foregoing however is a simplification which does not take into account the
postal documents (Article 30 UCP 400) which are irrelevant in practice).
The 1993 revision scrapped this
approach, and stated complete sets of requirements for the most important
transport documents:
·
Marine/Ocean Bill of Lading (Article 23 UCP 500)
·
Non-Negotiable Sea Waybill (Article 24 UCP 500)
·
Charter party of lading (Article 25 UCP 500)
·
Multimodal Transport Document (Article 23 UCP 500)
·
Air Transport Document (Article 27 UCP 500)
·
Road, Rail or Inland Waterway Transport (Article 28 UCP 500)
·
Courier and Post Receipts (Article 29 UCP 500)
The introduction of specific rules
for the different transport documents does not change the fact, that the
substantial requirements are the same for all transport documents and hence
have to be repeated in the respective articles. This applies in particular to
the following criteria:
·
Absent specific instruction, issuance only by carrier (compare
Article 30 UCP 500)
·
Irrelevance of designation of documents (compare introduction of
individual articles)
·
Compliance with travel route prescribed in the Credit
·
Observation of prohibitions to transship , unless they are
considered immaterial for container transport in ocean shipping (Article 23 d
UCP 500) or generally for air transportation (Article 27 d UCP 500).
Repeating the requirements common
to all transport documents unnecessarily inflates the size and furthermore
makes it more difficult to differentiate between the specific requirement for a
specific transport document and the general requirements applicable to all
transport documents. For this reason, the authors present an overview over the
general requirements applicable to all transport documents.
2. Requirement to have transport
documents signed by carrier
Independent of their legal
classification the UCP 500 require that a transport document be issued by a
carrier. The language of Article 23 UCP 500
“a document …
which appears on its face to indicate the name of the carrier and to have been
signed or otherwise authenticated by the carrier or a named agent for on behalf
of the carrier”
is repeated nearly word by word in
the articles mentioned above. The only modification is that the Charter Party
Bill of Lading (Article 25 UCP 500) demand the owner and that for Courier and
Post Receipts (Article 29 UCP 500) stamping of the documents is sufficient.
3. Documents of freight
forwarders not acceptable
The distinction between a freight
forwarder and a carrier is that latter obliges him/herself to carry the goods.
A freight forwarder is only obligated to “organize the transport” (see e.g. § 454
paragraph 1 HGB). The consequence of the requirement to have all documents
issued by a carrier is that documents issued by freight forwarder are not
acceptable. According to Article 30 UCP 500, banks will only accept a transport
document issued by a freight forwarder if it appears on its face to indicate:
i. the
name of the freight forwarder as a carrier of multimodal transport operator
and to have been signed or otherwise authenticated by the freight fowarder as
carrier or multimodal transport operator
or
ii. the name of
the carrier or multimodal transport operator and o have been signed or
otherwise authenticated by the freight forwarder as a named agent for or on
behalf of the carrier or multimodal transport operator.
Consequence: The freight forwarder
has to incur the obligation of a carrier or act as the agent of a carrier. In
both cases he/she does not act as a freight forwarder.
4. Carrier
The UCP 500 – as its predecessors-
advocates the modern carrier concept, i.e. to become a carrier nothing more is
required than to incur the obligation to carry the goods. This concept is also
reflected in the Incoterms (revision 2000, ICC Publication No. 560 ED) which
defines FCA as follows:
“definition of FCA
“
Since the only requirement is to
incur the shipping obligation, anyone (regardless whether merchant, legal
entity, shipowner or not) can be carrier. Maritime law for a long time has
recognized that anyone can be carrier. After it was established that a shipper
need not be owner of the vessel, it became irrelevant whether the issuer of a
bill of lading acted as shipowner, fitter, shipper or charterer. Consequently
the ICC Banking Commission has recognized that banks can accept bills of
ladings issued by non vessel owning common carrier (footnote32).
5. Irrelevance of
designation/relevance of content
Contrary to the law on bills of
exchange and promissory notes, the law concerning the carriage of goods does
not require issuers of transport documents to follow a certain format. Even an
ocean bill of lading need not be labeled as bill of lading (footnote33). To
stipulate in a Credit the presentation of a “bill of lading” is insufficient,
since this is a generic term to designate shipping documents of all kinds:
“A bank will
interpret “bill of lading” as relation to transport by water, i.e. it could be
an ocean waybill, it could be an ocean bill or lading, or a combined transport
bill of lading, or even an inland waterway bill of lading. The term is also
used to a certain extent for other modes of transport; Article 24 UCP 1974
mentioned the railway or inland waybill of lading and the truck company bill of
lading.” (footnote34)
Normally the applicant, if he
requires an “ocean bill of lading”/”marine bill of lading”, stipulates this
requirement in the Credit. This language only specifies the bill of lading.
However, the bill of lading itself need not carry in its title the word “ocean”
or “marine”.
“The normal use of
the word “ocean” in connection with a bill of lading is to distinguish it from
the “inland waterway” bill of lading. It is not customary for the shipping
company to put the word “ocean” on its document.” (footnote35)
For the acceptability of an
ocean bill of lading not its designation is relevant, but its content.
Hence the Banking Commission did not object that a document entitled “Bill of
Lading for Combined Transport or Port-to-Port Shipment” was accepted since it
complied with the requirements of Article 26 UCP 400. The Commission correctly
reasoned:
“The bill of
lading meets the requirement of the credit of “ocean bill of lading”. It shows
the name of the ocean vessel, the port of loading and the port of discharge and
has the on board notation. “ (footnote36)
Multipurpose Forms: The
irrelevance of the designation of transport documents resurfaces in the common
use of “multipurpose forms”, which are suitable as well for port-to-port
shipments as for multimodal transport. The quality of such a document is only
determined according to its content. Already according to article 25 b (i) and
26 b (i) UCP 400 banks accepted ocean bills of lading and other transport
documents independent of headings like “combined transport bill of lading”,
“combined transport document”, “combined transport bill of lading or
port-to-port bill of lading” or similar designation or any combination thereof.
The UCP state the same, only much shorter. In the introduction of the
individual articles the pertinent language reads that “banks will, unless
otherwise stipulated in the Credit, accept a document, however named” (footnote37).
Since the designation of a document
is irrelevant for its classification, an applicant who desires a specific
transport document (air transport document, FBL, or ocean bill of lading),
needs to describe the document on the basis of substantive, content driven,
requirements like designation of a travel route or the mode of transportation.
6. Types of receipt
Receipt for shipment, on-board notation, goods en
route: Transport documents can be
distinguished as follows:
·
The document evidences that the
goods have been received for shipment.
Absent specific notations all UCP
transport documents only evidence receipt, except for the marine bill of
lading, which mandatorily requires an on board notation (Article 23 a (ii) UCP
500).
For the recipient
of the goods documents only evidencing receipt are of comparatively little
value, since it is unclear when the carrier actually will begin the carriage.
An improvement over this situation are documents evidencing loading on board a
named vessel, since in this case the begin of the voyage can be considered
imminent. Documents evidencing not only the receipt and the loading on board of
the goods, but also the begin of the voyage, represent the highest degree of
security for a recipient.
On board notation in documents covering land or
air transportation: It is possible to require
an on board notation in shipping documents not covering maritime transports.
The ICC Banking Commission however believes that the term “loading on board” is
not sufficient in these instances, since this term is considered to convey only
a loading on board of a ship.
“According to UCP
wording, the expression “loading on board” is to be understood as meaning on
board a vessel” (footnote38)
This interpretation does not seem
obligatory, since the term “loading on board” is also used for planes and
trucks. Nevertheless, an applicant or an issuing bank, who desires evidence of
loading on board of a means of transport other than a ship, should expressly
emphasize this by stipulating “loading on train”, “loading on aircraft”, or
“loading on truck”.
Notation concerning begin of
voyage (goods en route, actual dispatch date in air waybill, sailing date): An
applicant may require proof not only that the goods have been loaded on board,
but that the voyage was started. The UCP only provide for this kind of
stipulation in connection with air transport documents (compare Article 27 a
(iii) UCP 500) “where the credit calls of an actual date of dispatch”).
However, also for other modes of
transportation a date of actual dispatch may be stipulated. In contracts of
carriage by land this is done with a “goods en route” notation. The ICC Banking
Commission holds, that Article 27 b UCP 500 is not applicable to these
notations, i.e. it is not necessary that the carrier specifically dates and
signs this notation. However, if the “goods en route” notation is added to the
document after signature, this modification/amendment need to be authenticated:
“… if the words
“goods en route” are added to the document, then it is an amendment to a
document in respect of which the Commission decided on 28th April
1987 (see R. 174) on the need for authentication.” (Footnote39)
Also for maritime transport it is
possible to stipulate a sailing date. This has to be stipulated explicitly,
since the Banking Commission believes that this is in contradiction to the UCP
“…that there was a
conflict between UCP conditions relating to loading or shipment on board and a
show a shipping or sailing date. The letter was not recognized in UCP”.
(footnote40)
This perceived contradiction does
not change the validity of such a Credit requirement, since the UCP always can
be modified by contractual agreement of the parties. However, the general
requirement of a “sailing date” is not sufficient. In as far as ocean bills of
ladings contain information regarding the begin of the voyage, this information
is to be understood as a scheduled or contractually agreed upon sailing date.
According to Schinnerer/Avancini (footnote41) the expression “sailing” in the
context of a Credit, can only be read as “scheduled to sail”. Hence an
unambiguously worded stipulation like “bill of lading evidencing actual sailing
date per …” is required.
Article 23 UCP 500 Ocean bill of lading
ARTICLE 23 Marine/Ocean Bill of
Lading
A. If a Credit calls for a bill
of lading covering a port to port shipment, banks will, unless otherwise
stipulated in the Credit, accept a document, however named, which:
i. appears on its face to
indicate the name of the carrier and to have been signed or otherwise
authenticated by:
• the carrier or a named agent
for or on behalf of the carrier, or
• the master or a named agent
for or on behalf of the master.
Any signature or authentication
of the carrier or the master must be identified as carrier or master, as the
case may be. An agent signing or authenticating for the carrier or master must
also indicate the name and the capacity of the party, i.e. carrier or master,
on whose behalf that agent is acting,
and
ii. indicates that the goods
have been loaded on board, or shipped on a named vessel.
Loading on board or shipment on
a named vessel may be indicated by pre printed wording on the bill of lading
that the goods have been loaded on board a named vessel or shipped on a named
vessel, in which case the date of issuance of the bill of lading will be deemed
to be the date of loading on board and the date of shipment.
In all other cases loading on
board a named vessel must be evidenced by a notation on the bill of lading
which gives the date on which the goods have been loaded on board, in which
case the date of the board notation will be deemed to be the date of shipment.
If the bill of lading contains
the indication "intended vessel", or similar qualification in
relation to the vessel, loading on board a named vessel must be evidenced by an
on board notation on the bill of lading which, in addition to the date on which
the goods have been loaded on board, also includes the name of the vessel on
which the goods have been loaded, even if they have been loaded on the vessel
named as the "intended vessel".
If the bill of lading indicates
a place of receipt or taking in charge different from the port of loading, the
on board notation must also include the port of loading stipulated in the
Credit and the name of the vessel on which the goods have been loaded, even if
they have been loaded on the vessel named in the bill of lading. This provision
also applies whenever loading on board the vessel is indicated by pre printed
wording on the bill of lading,
and
iii. indicates the port of
loading and the port of discharge stipulated in the Credit, notwithstanding
that it:
a. indicates a place of taking
in charge different from the port of loading, and/or a place of final
destination different from the port of discharge, and/or
b. contains the indication
"intended" or similar qualification in relation to the port of
loading and/or port of discharge, as long as the document also states the ports
of loading and/or discharge stipulated in the Credit,
and
iv. consists of a sole original
bill of lading or, if issued in more than one original, the full set as so
issued, and
v. appears to contain all of the
terms and conditions of carriage, or some of such terms and conditions by
reference to a source or document other than the bill of lading (short
form/blank back bill of lading); banks will not examine the contents of such
terms and conditions,
and
vi. contains no indication that
it is subject to a charter party and/or no indication that the carrying vessel
is propelled by sail only, and
vii. in all other respects meets
the stipulations of the Credit.
B. For the purpose of this
Article, transshipment means unloading and reloading from one vessel to another
vessel during the course of ocean carriage from the port of loading to the port
of discharge stipulated in the Credit.
C. Unless transshipment is prohibited
by the terms of the Credit, banks will accept a bill of lading which indicates
that the goods will be transshipped, provided that the entire ocean carriage is
covered by one and the same bill of lading.
D. Even if the Credit prohibits
transshipment, banks will accept a bill of lading which:
i. indicates that the
transshipment will take place as long as the relevant cargo is shipped in
Container(s), Trailer(s) and/or "LASH" barge(s) as evidenced by the
bill of lading, provided that the entire ocean carriage is covered by one and
the same bill of lading,
and/or
ii. incorporates clauses stating
that the carrier reserves the right to transship.
Article 23 a UCP 500 – Scope of
Application: Article 23 UCP regulates only the marine/ocean bill of lading
covering a port-to-port shipment and evidencing the loading on board in the
port of loading. However, it is without detrimental effect if the shipping
document shows a place of taking in charge different from the port of loading,
and/or a place of final destination different from the port of discharge.
For the application of Article 23
UCP 500 it is not sufficient to require a “bill of lading”. As mentioned above,
the designation of the transport document is irrelevant and the term “bill of
lading” is a generic term for shipping documents of all kinds. The decisive
criterion for the applicability of Article 23 UCP 500 is that it covers a
port-to-port shipment from the port of loading to the port of dispatch combined
with the specific requirement for an ocean/marine bill of lading which even
more clearly can be labeled “on board ocean bill of lading” (footnote42).
Article 23 a (i) UCP 500 –
Signature and note of agency: As mentioned in the introduction, a bill of
lading has to clearly evidence who is the carrier or acts on behalf of the
carrier as master or agent. Carrier and master need to sign with their names
and functions; i.e. before the signature of the carrier the signatory needs to
add “as carrier” or similar (if necessary referencing the company name as
displayed in the upper part of the form). The captain of the vessel needs to
add “master” to his signature. An agent needs to sign his name with the
addition “agent” and furthermore the function of the person/entity he or she
represents, i.e. master or carrier.
Keeping this in mind, the following
exemplifies how a bill of lading can be signed:
Requirement Compliant
signature
Carrier: Hapag Lloyd Letterhead:
Hapag Lloyd
Signatory: Hapag Lloyd Dotted
Line: Hapag Lloyd
(as carrier)
signature
Carrier: Hapag Lloyd Letterhead:
Hapag Lloyd
Signatory: Agent Miller Dotted
Line: For Hapag Lloyd
(or
for above named carrier)
Miller
(as agent)
signature
Carrier: Hapag Lloyd Letterhead:
Hapag Lloyd
Signatory: Master Stöbbe Dotted
Line: For Stöbbe
(as
master)
signature
Carrier: Hapag Lloyd Letterhead:
Hapag Lloyd
Signatory: Agent Miller for Dotted
Line: For Master Stöbbe
Master
Stöbbe Miller (as Agent)
Signature
Article 23 a (ii) UCP 500 – On board notation
The loading on board of the goods
is evidenced by the following two ways:
The confirmation of the loading on
board is the proof of an actual event. Hence, the on board notation cannot be
issued upon receipt of the goods. Particularly non vessel owning common carrier
(NVOCC), who do not own ships and need to subcontract with actual carriers to
perform the service they are obligated to, need to observe this requirement.
Hence, a NVOCC is only permitted to issue an on-board bill of lading, once he
himself has received an on-board bill of lading from the actual carrier.
On-Board notation when port of
lading different from place of taking in charge: If the B/L evidences a
place of taking in charge different from the port of loading, the on-board
notation needs to show the date when the goods where loaded on board, the port
of loading as stipulated in the Credit, and the name of the vessel where the
goods where loaded. Even if the name of the ship was mentioned in the B/L, it
needs to be repeated with the on-board notation. As Article 23 a (ii)
emphasizes , that
“ … the on-board
notation must also include the port of loading stipulated in the Credit and the
name of the vessel on which the goods have been loaded on the vessel named in
the bill of lading. This provision also applies whenever loading on board
the vessel is indicated by pre-printed wording on the bill of lading
[italic by author]”
Example: A Credit requires
an ocean B/L evidencing shipment from Rotterdam to Singapore. If the carrier
receives the goods already in Helsinki (place of receipt Helsinki), to ship
them with a feeder vessel to Rotterdam, he has to repeat the name of the vessel
(e.g. Sally Maersk) as well as the port of loading (Rotterdam) in the on-board
notation, even though the B/L has already mentioned the port of loading under
the heading “ocean vessel”.
Dispensable to sign on-board
notation: The ICC Banking Commission explains the reason why it is no
longer necessary that the carrier or his/her agent verify the on-board notation
by signature or initial as follows:
“As for the
“non-signing or initialing” aspect of the board notation, the WG considered:
(a) the present
difficulties of interpretation concerning whether such notations are properly
signed or initalled and
(b) that other
notations on the bills of lading are not signed or initialed, for example, a
freight-prepaid notation.” (footnote46)
The issuance of on-board notations
without signature as well as the issuance of B/Ls by facsimile signature
violates German maritime law. The invocation of consuetudinary law is not
without problems, however, has gained acceptance in practice.
Inadmissible reservation
regarding selection of vessel: Article 23 a (ii)
UCP 500 stipulates that the indication of the intention to use a certain vessel
is not sufficient for a B/L:
“If the bill of lading contains the indication “intended
vessel”, or similar qualification in relation to the vessel, loading on-board a
named vessel must be evidenced by an on board notation on the bill of lading
which, in addition to the date on which the goods have been loaded on board,
also included the name of he vessel on which the goods have been loaded, even
if they have been loaded on the vessel named as the “intended vessel””.
Recently the ICC Banking Commission
once again dealt with the question, whether the expression “substitute vessel”
is inadmissible because it is the indication of an “intended vessel” as this
term is used in Article 23 a (ii) UCP 500.
The point of contention was a B\L
worded as follows:
“Received from the
shipper in apparent good order and conditions unless otherwise indicated herein
the foods of the container(s) or package(s) said to contain the cargo herein
mentioned to be carried subject to all the terms and conditions provided for on
the face and back of this bill of lading, by the vessel named herein or by
any additional or substitute vessel or means of transport chosen at the …”
The ICC Commission on Maritime
Transport instructed the ICC Banking Commission that the above mentioned clause
–contrary to an “intended vessel” note – does not grant the carrier the free
choice which vessel to use. Rather, the objective of the clause is, that the
owner of a chartered ship may –in case of loss/destruction—use another ship to
effectuate the carriage (“there has been a long-standing practice given owners
the right to substitute the vessel named in liner bill of lading with another
vessel”). Thus instructed, the ICC Banking Commission has concluded that the
substitute clause is not harmful.
Article 23 a (iii) UCP 500 –
Observation of the itinerary (port-to-port shipment): A B/L presented under
an L/C mandatorily has to evidence the itinerary from the port of loading to
the port of discharge as stipulated in the Credit. The indication of a place of
receipt different from the port of loading, or a place of final destination
different from the port of discharge can be considered as additional
information, which is not required. Even though this information is optional,
the place of final destination cannot contradict the place of discharge.
Article 23 a (iii) a. 1st alternative
UCP 500 – Admissible if port of loading differs from place of taking in charge: In its first alternative Article 23 a (iii) a UCP
500 permits that the “place of taking in charge [is] different from the port of
loading”. The rule thus takes into account that a shipowner using trucks or
trains often also provides for the carriage of the goods to his ship.
Example:
If the Credit
requires a “marine bill of lading/shipment from Hamburg to New York” it is
irrelevant, whether the place of taking in charge is Hamburg or not, and how
the goods were transported from the place of taking in charge to Hamburg. It would be admissible to show Copenhagen as place of receipt and the carriage to Hamburg as place of loading via truck, railway or feeder ship.
If place of receipt and port of loading are not
identical, the begin of the ocean voyage cannot be shown under the heading
“place of receipt” but has to be shown under the heading “port of loading”.
Example 1:
A place of receipt (even if it is a port)
mentioned in a bill of lading is not conducive to evidencing the begin of an
ocean voyage. According to the ICC Banking Commission, whose opinion the
authors share, a requirement in a Credit for a
“on board ocean bills of lading and
shipment from any port of Ireland to Huangpu, Guangzhou, China, with transshipment being allowed”
is not met when a document is presented that evidences Dublin as “place of receipt” and Tilbury for “loading on board a named vessel”. Such a
document is not acceptable since it does not show how the goods were shipped
from Dublin to Tilbury/England, whether with feeder vessel, ferry, or plane.
The reasoning of the ICC Banking Commission in the answer to Case 238 reads as
follows:
“Shipment (…) means loading on
board when used in connection with a bill of lading. Therefore, it was
necessary for the ocean bill of lading, to evidence an Irish port as port of
loading in order to be in compliance with the terms of the credit. This was not
the case; therefore, the bill of lading was not compliant” (footnote50).
Example 2: A Credit requires an ocean bill of lading
evidencing shipment from Copenhagen to Sidney. The B/L presented showed Copenhagen as “place of receipt” and Bremen, Germany, as “port of loading”. The B/L is
not acceptable, since it leaves open whether the goods were shipped with a
truck from Copenhagen to Bremen. However, the B/L remains unacceptable, even if
it evidences, that the transport from Copenhagen to Bremen was effectuated with
a feeder vessel.
Article 23 a (iii) a. 2nd alternative UCP 500
– Limited admissibility if place of destination different from port of discharge:
In its second alternative article 23 a (iii) a. UCP 500 permits that the
place of destination is different from the port of discharge. However, the
authors believe that this rule needs to be interpreted narrowly: The holder of
a ocean B/L has a claim for delivery of the goods at the port of discharge; it
is not permissible to ask the holder to claim the goods somewhere else.
Example: If a Credit requires a B/L evidencing a
maritime shipment from Sidney to Hamburg, a B/L showing Hanover as place of final
destination is not acceptable.
An exception can only be made if the place of final
destination is the container yard of the port of discharge. Article 29 c (ii)
UCP 400 still applies analogously. This article provides that a container
freight station (“C.F.S.”) or a container yard (“C.Y.”) belong to the port of
loading. C.Y. and C.F.S. are often geographically close to ports of loading or
ports of discharge (e.g. Bremerhaven as container yard for Bremen). However,
the transport from a container yard or container freight station to a port is
not considered transshipment [does transshipment really
cover selbständiger Landtransport and gesonderter Streckenabschnitt](footnote
51).
Article 23 UCP 500 – “Intended” indication not
permissible:
Article 23 a (ii) UCP 500: Inadmissible reservation
regarding selection of vessel: Since an ocean/marine bill of lading
needs to evidence the “loading on board a named vessel”, a reservation
regarding the selection of the vessel is harmful. In case the B/L contains an
“intended” indication, it can only be cured by an “on-board notation, which in
addition to the date on which the goods have been loaded on board, also
includes the name of the vessel on which the goods have been loaded, even if
they have been loaded on the vessel named as the “inended vessel””.
Article 23 a (iii) b. UCP 500 – Reservation regarding
port of loading or port of discharge not permissible: If the B/L contains
the indication “intended” regarding the port of loading and/or port of
discharge, according to Article 23 a(iii) b. UCP 500 the B/L also needs to
state the actual ports of loading and/or discharge stipulated in the Credit. In
previous revisions of the UCP is was permissible that a B/L indicated an
intended port of discharge if the port of final destination was different from
the intended port of discharge. However, this rule has been abrogated. In as
far Article 23 a (iii) b. UCP 500 uses the wording
“as long as the document also
states the port of loading and/or discharge stipulated in the Credit”
it has to be interpreted as an exclusion of all “intended”
indications.
Article 23 a (iv) UCP 500 – Sole original or full set of:
When a B/L is issued, its full set has to be presented. If only one
original has been issued, the presentation of this original is sufficient.
Only copies and originals, every now and then issued for shipowners and
carriers, which are stamped non-negotiable will not be considered. The ICC
Banking Commission justified the revision with the problems of interpretation
regarding the previous version of the UCP (footnote52).
Article 23 a (v) UCP 500 – B/L has to contain all terms
and conditions of carriage: The bill of lading has to appear to contain all
of the terms and conditions of carriage. It is admissible however, for some of
the terms and conditions to reference other documents than the B/L. Short form
bills of lading are transport documents, which --instead of printing the terms
and conditions of carriage in verso-- refer to a form available upon demand
from the issuer. The ICC Banking Commission correctly disapproves of the
practice of certain banks to include in the Credit language like “short form
bills of lading not acceptable”. This practice countervails the efforts of the
ICC Banking Commission to admit so called “short form/blank back transport
documents”. (footnote53)
Article 23 a (vi) UCP 500 – Inadmissibility of charter party and sailing
ship B/Ls: The reason that charter party B/Ls
are not admissible is that charter party bills of lading often refer to a charter
agreement which the consignee does not know and which contains provisions
which deviate from standard B/L terms. That sailing ship B/Ls are not
admissible need not be elaborated upon. The exception concerning B/Ls issued by
sailing ships, which can be propelled by wind and engines, is the ICC’s
contribution to the environment.
Article 23 b and c UCP 500 – Definition and admissibility
of transshipment: The 1993 revision did away with the uniform definition of
transshipment. The new definition applies only to ocean carriage and reads
“unloading and reloading from one vessel to another vessel during the course of
ocean carriage”. Transshipment is permissible unless explicitly prohibited.
Hence, banks absent specific instructions will accept B/Ls which evidence
transshipments as long as the whole ocean carriage is covered by one and the
same B/L.
Article 23 d UCP 500 – Banks may disregard prohibitions
to transship when cargo is shipped in containers etc.: Provided that one
and the same B/L covers the entire ocean carriage, prohibitions to transship
are irrelevant as long as the cargo is shipped in container(s), trailer(s), and
/or “LASH” barge(s). This provision, intended to advance container shipments,
is broad compared e.g. to Article 29 c (iii) UCP 400. Article 29 c (iii) UCP
400 stipulated that the fact that the goods were in containers, trailers,
“LASH” barges was unobjectionable, however, a transshipment explicitly
stipulated in the B/L was objectionable (footnote55). Conversely, the UCP 500
permit transshipment despite a prohibition in the Credit from one container
ship to another.
It does not seem appropriate to disregard a prohibition to
transship, if the Applicant intends to avoid the delays inherent to a
transshipment. In order to enforce an ocean shipment port to port without
transshipment, the Applicant can only exclude entirely the application of
Article 23 d (i) UCP 500.
Article 23 d (ii) UCP 500 – Reservation to transship in
case of emergency: IN cases of distress at sea or similar captain needs
to have the right to unload or transship the cargo. An appropriate reservation
in the B/L covering these instances is unobjectionable.
Article 24 Non-Negotiable Sea Waybill
ARTICLE 24 Non Negotiable Sea
Waybill
A. If a Credit calls for a non
negotiable sea waybill covering a port to port shipment, banks will, unless
otherwise stipulated in the Credit, accept a document, however named, which:
i. appears on its face to
indicate the name of the carrier and to have been signed or otherwise
authenticated by:
• the carrier or a named agent
for or on behalf of the carrier, or
• the master or a named agent
for or on behalf of the master,
Any signature or authentication
of the carrier or master must be identified as carrier or master, as the case
may be. An agent signing or authenticating for the carrier or master must also
indicate the name and the capacity of the party, i.e. carrier or master, on
whose behalf that agent is acting,
and
ii. indicates that the goods
have been loaded on board, or shipped on a named vessel.
Loading on board or shipment on
a named vessel may be indicated by pre printed wording on the nonnegotiable sea
waybill that the goods have been loaded on board a named vessel or shipped on a
named vessel, in which case the date of issuance of the non negotiable sea
waybill will be deemed to be the date of loading on board and the date of
shipment.
In all other cases loading on
board a named vessel must be evidenced by a notation on the non negotiable sea
waybill which gives the date on which the goods have been loaded on board, in
which case the date of the on board notation will be deemed to be the date of
shipment.
If the non negotiable sea
waybill contains the indication "intended vessel", or similar
qualification in relation to the vessel, loading on board a named vessel must
be evidenced by an on board notation on the non negotiable sea waybill which,
in addition to the date on which the goods have been loaded on board, includes
the name of the vessel on which the goods have been loaded, even if they have
been loaded on the vessel named as the "intended vessel".
If the non negotiable sea
waybill indicates a place of receipt or taking in charge different from the
port of loading, the on board notation must also include the port of loading
stipulated in the Credit and the name of the vessel on which the goods have
been loaded, even if they have been loaded on a vessel named in the
nonnegotiable sea waybill. This provision also applies whenever loading on
board the vessel is indicated by pre printed wording on the non negotiable sea
waybill,
and
iii. indicates the port of
loading and the port of discharge stipulated in the Credit, notwithstanding
that it:
a. indicates a place of taking
in charge different from the port of loading, and/or a place of final
destination different from the port of discharge,
and/or
b. contains the indication
"intended" or similar qualification in relation to the port of
loading and/or port of discharge, as long as the document also states the ports
of loading and/or discharge stipulated in the Credit,
and
iv. consists of a sole original
non negotiable sea waybill, or if issued in more than one original, the full
set as so issued,
and
v. appears to contain all of the
terms and conditions of carriage, or some of such terms and conditions by
reference to a source or document other than the nonnegotiable sea waybill
(short form/blank back nonnegotiable sea waybill); banks will not examine the
contents of such terms and conditions,
and
vi. contains no indication that
it is subject to a charter party and/or no indication that the carrying vessel
is propelled by sail only,
and
vii. in all other respects meets
the stipulations of the Credit.
B. For the purpose of this
Article, transshipment means unloading and reloading from one vessel to another
vessel during the course of ocean carriage from the port of loading to the port
of discharge stipulated in the Credit.
C. Unless transshipment is
prohibited by the terms of the Credit, banks will accept a non negotiable sea
waybill which indicates that the goods will be transshipped, provided that the
entire ocean carriage is covered by one and the same non negotiable sea
waybill.
D. Even if the Credit prohibits
transshipment, banks will accept a non negotiable sea waybill which:
i. indicates that transshipment
will take place as long as the relevant cargo is shipped in Container(s),
Trailer(s) and/or "LASH" barge(s) as evidenced by the nonnegotiable
sea waybill, provided that the entire ocean carriage is covered by one and the
same non negotiable sea waybill,
and/or
ii. incorporates clauses stating
that the carrier reserves the right to transship.
Concept: The German legislator did not provide for
the non-negotiable sea waybill, since he assumed that the parties would utilize
bills of ladings. Nevertheless, non-negotiable sea waybills are used if the
parties do not care for a document of title or consider the issuance too
cumbersome. The shipping trade knows a multitude of forms which, if issued by
the shipper, are labeled “Express Cargo Bill”, “Short turn Bill of Lading” or
similar. It is common to all types of Sea Waybill that they, contrary to a bill
of lading, do not document a claim for possession(footnote57).
Sea Waybill are used, e.g.
-if the shipping time is so short,
that B/Ls cannot be presented in time when the vessel reaches its port of
destination.
-if the parties do not need a
document of title, since purchases/sales are transacted within a concern
(footnote58).
From a legal standpoint the Sea Waybill only evidences
receipt of the goods (BEWEISURKUNDE ???).
Article 24 a through d UCP 500: The provisions of
article 24 a through d UCP 500 are identical with Article 23 UCP 500, so that
we refer the reader to our comments there.
Article 25 UCP 500 Charter party Bill of Lading
ARTICLE 25 Charter Party Bill of
Lading
A. If a Credit calls for or
permits a charter party bill of lading, banks will, unless otherwise stipulated
in the Credit, accept a document, however named, which:
i. contains any indication that
it is subject to a charter party,
and
ii. appears on its face to have
been signed or otherwise authenticated by:
• the master or a named agent
for or on behalf of the master, or
• the owner or a named agent for
or on behalf of the owner.
Any signature or authentication
of the master or owner must be identified as master or owner as the case may
be. An agent signing or authenticating for the master or owner must also
indicate the name and the capacity of the party, i.e. master or owner, on whose
behalf that agent is acting, and
iii. does or does not indicate
the name of the carrier,
and
iv. indicates that the goods
have been loaded on board or shipped on a named vessel.
Loading on board or shipment on
a named vessel may be indicated by pre printed wording on the bill of lading
that the goods have been loaded on board a named vessel or shipped on a named
vessel, in which case the date of issuance of the bill of lading will be deemed
to be the date of loading on board and the date of shipment.
In all other cases loading on
board a named vessel must be evidenced by a notation on the bill of lading
which gives the date on which the goods have been loaded on board, in which
case the date of the on board notation will be deemed to be the date of
shipment, and
v. indicates the port of loading
and the port of discharge stipulated in the Credit,
and
vi. consists of a sole original
bill of lading or, if issued in more than one original, the full set as so
issued,
and
vii. contains no indication that
the carrying vessel is propelled by sail only,
and
viii. in all other respects
meets the stipulations of the Credit.
B. Even if the Credit requires
the presentation of a charter party contract in connection with a charter party
bill of lading, banks will not examine such charter party contract, but will
pass it on without responsibility on their part.
Concept: A Charter party Bill of Lading only
evidences the conclusion of a charter agreement. The charter contract can cover
parts, either a specific space or a proportional part of all space available,
or the entirety of the ship (footnote59). Charter contracts differ considerably
and their content is incorporated by reference into the bill of lading. The
provisions of the charter contract, as long as they are properly incorporated
by reference, are a valid defense even against a B/L’s holder in due course
(footnote60).
Since the reference of unusual stipulations is problematic,
a charter party bill of lading -- as already commented for article 23 a (iv)
UCP 500—is only acceptable if the Credit specifically provides for or allows
its presentation.
Article 25 a (ii) UCP 500 – Issuance of a charter party
bill of lading and agency: Except for article 25 a (ii) and article 25 a
(iii) which provide for the issuance of a charter party B/L and the proof of
the authority to act as an agent, the provisions for charter party bills of
lading correspond to the rules for bills of lading (see article 23 UCP seq.)
Different from a bill of lading or a sea waybill, who are to
be issued by a carrier or its agent, a charter party bill of lading has to be
issued:
The master or a named agent for or on behalf of
the master, or
The owner or a named agent for or on behalf of
the owner.
Article 25 a (iii) UCP 500: Since only the master,
the ship owner or their agents can sign a charter party bill of lading, article
25 a (iii) UCP 500 clarifies, that the charter party bill of lading need not
indicate the name of the carrier. The ICC banking commission supported the
decision not to have the carrier named as follows:
“The NC’s agreed with the opinion expressed by
the ICC Banking Commission and considered the identification of the carrier to
be unnecessary when the contract of carriage is concluded under a charter party
contract. For this reason, sub-Article 25 (a) (iii.) states that unless
otherwise stipulated in the Credit, banks will accept the charter party bill of
lading whether it does or does not indicate the name of the carrier.”
(footnote61). Hence, a charter party bill of lading has to be signed as
follows:
Stipulated signature Complying
Document
Carrier: identification not required Letterhead:
no carrier
Signatory: Master Stöbbe Subheading:
Stöbbe (as master)
signature
Carrier: identification not required Letterhead:
no carrier
Signatory: Agent Miller Subheading:
For Master Stöbbe
Miller
(as Agent)
signature
Carrier: identification not required Letterhead:
no carrier
Signatory: Owner Nielsen Subheading:
Nielsen (as owner)
signature
Carrier: identification not required Letterhead:
no carrier
Signatory: Agent Miller for owner Nielsen Subheading:
For Owner Nielsen
Miller
(as agent)
signature
Article 26 UCP 500 – Multimodal Transport Document
Article 26 Multimodal Transport
Document
A. If a Credit calls for a
transport document covering at least two different modes of transport
(multimodal transport), banks will, unless otherwise stipulated in the Credit,
accept a document, however named, which:
i. appears on its face to
indicate the name of the carrier or multimodal transport operator and to have
been signed or otherwise authenticated by:
• the carrier or multimodal
transport operator or a named agent for or on behalf of the carrier or
multimodal transport operator, or
• the master or a named agent
for or on behalf of the master.
Any signature or authentication
of the carrier, multimodal transport operator or master must be identified as
carrier, multimodal transport operator or master, as the case may be. An agent
signing or authenticating for the carrier, multimodal transport operator or
master must also indicate the name and the capacity of the party, i.e. carrier,
multimodal transport operator or master, on whose behalf that the agent is acting,
and
ii. indicates that the goods
have been dispatched, taken in charge or loaded on board.
Dispatch, taking in charge or
loading on board may be indicated by wording to that effect on the multimodal
transport document and the date of issuance will be deemed to be the date of
dispatch, taking in charge or loading on board and the date of shipment.
However, if the document indicates, by stamp or otherwise, a date of dispatch,
taking in charge or loading on board, such date will be deemed to be the date of
shipment,
and
iii. a. indicates the place of
taking in charge stipulated in the Credit which may be different from the port,
airport or place of loading, and the place of final destination stipulated in
the Credit which may be different from the port, airport or place of discharge,
and/or
b. contains the indication
"intended" or similar qualification in relation to the vessel and/or
port of loading and/or port of discharge,
and
iv. consists of a sole original
multimodal transport document or, if issued in more than one original, the full
set as so issued,
and
v. appears to contain all of the
terms and conditions of carriage, or some of such terms and conditions by
reference to a source or document other than the multimodal transport document
(short form/blank back multimodal transport document); banks will not examine
the contents of such terms and conditions,
and
vi. contains no indication that
it is subject to a charter party and/or no indication that the carrying vessel
is propelled by sail only, and
vii. in all other respects meets
the stipulations of the Credit.
B. Even if the Credit prohibits transshipment, banks will accept a
multimodal transport document which indicates that transshipment will or may
take place, provided that the entire carriage is covered by one and the same
multimodal transport document.
Introduction: Combined transport means that a
multimodal transport operator (MTO) obligates himself to carry the cargo from a
place of receipt to a place of delivery, reserving however the right to select
the means of transportation, the itinerary, and the sub-carriers (footnote63).
So far international conventions to regulate the combined transport have
failed. Instead, the ICC Banking Commission has issued Publication 481
“UNCTAT/ICC Rules for Multimodal Transport Documents”, which are based on the
“UNCTAD convention”. Rule 2.1 of the ICC rules defines multimodal transport as
a contract for the carriage of goods by at least two different modes of
transport. Contrary to Article 26 UCP 500, the ICC multimodal transport rules
even apply, …”irrespective of whether there is a unimodal or a multimodal
contract involving one or several modes of transport or whether the document
has been issued or not” (see rule 1). Hence, the ICC/UNCTAD rules’ scope of
application of is greater than Article 26 UCP 500’s. Since July 1, 1998, the German legislator has provided for the multimodal carriage in paragraphs 452 – 452
b HGB, stipulating that, even if the multimodal carriage covers maritime
shipment, paragraphs 407 seq. HGB apply (footnote64).
Article 26 a UCP 500 – Scope of Application: The
special regulation for multimodal transport only applies, if a Credit calls for
a transport document covering at least two different modes of transport. With
this wording, Article 26 UCP 500 excludes all instances of through freight
shipment between identical modes of transportation (e.g. truck/truck;
plane/plane etc.), even though these are combined transports as well.
The true limitation of Article 26 UCP 500 results from the
fact that Credits rarely explicitly call for documents, which cover at least
two different modes of transport as this term is used in Article 26 UCP 500.
Additionally, if the combined transport covers maritime shipment, the parties
provide for the presentation of an on-board ocean bill of lading (footnote66).
Interpretation: Unless a Credit specifically calls
for a transport document covering at least two different modes of transport as
Article 26 a UCP 500 uses this term, it seems questionable to deduct this
requirement solely from the description of the itinerary in the bill of lading.
This is what the ICC Banking Commission has done in a singular case, where the
Credit required “shipment form Hong Kong to Manchester, “transshipment prohibited”
and the beneficiary presented a bill of lading whose Leitwegspalte evidenced:
Port of loading: Hong Kong
Port of discharge: Southampton
Final destination: Manchester”
The experts of the ICC Banking Commission considered that
the violation of the prohibition to transship was unobjectionable and reasoned
as follows:
“Under a credit prohibiting transshipment, calling
for a maritime bill of lading and stipulating shipment from Hong Kong to
Manchester, a bill of lading indicating Hong Kong as the port of loading,
Southampton as the port of discharge, and Manchester as the final destination
would be acceptable. Since Manchester is not a port, the credit obviously
indicates a multi-modal transport, so that the provisions of Article 29 (c)
(ii) UCP 400 apply.”
The fact that the experts of the ICC Banking Commission
limited the decision to the case at hand, indicates, that they would have
decided differently, if Manchester had been a port (footnote68). Hence it
remains risky, to deduce from the itinerary as described in the Credit, that
the parties intended a multimodal transport document. For instance for the
itinerary Heidelberg-Rotterdam-Singapore, the route between Heidelberg and Rotterdam could be effectuated by ship.
Article 26 a (i) UCP 500 – Signature and agency: For
the signature of a multimodal document by carriers, masters, or agents the
general provisions apply. The author references insofar the explanation
regarding the signature of ocean bill of ladings (see Article 23 UCP 500). As
far as Article 26 a (i) UCP 500 additionally mentions a multimodal transport
operator (MTO), it uses a second label for a shipping party already known.
Carrier and MTO are identical, since both oblige themselves to effectuate the
carriage.
Article 26 a (ii) UCP 500 – Mode of transportation:
Corresponding to the flexible character of the multimodal document, a specific
means of transportation is not provided for. It is irrelevant, whether the
document evidences dispatch, receipt, or loading on board of the cargo.
Dispatch of the goods means actual begin of the carriage (compare Article 27 a
(iii) UCP 500 “the date of dispatch so indicated on the air transport document
will be deemed to be the date of shipment”).
Article 26 a (ii) UCP 500 – Date of issuance/loading on
board: The date of issuance of a multimodal document is considered the date
of loading, which is authoritative for the calculation of the last date of
presentation of a transport document according to Article 43 a UCP 500.
However, if the transport document evidences, in addition to the date of
issuance, loadin on board, receipt, an additional date, then this additional
date is considered the date of loading. This interpretation is relevant, when
for a multimodal transport originally a received bill of lading is issued which
subsequently receives a loading on board.
On board note for transport documents in air and land
carriage: For a transport by land or air the Credit can stipulate loading
on board, a requirement which is identical with an on board requirement for an
ocean carriage. Examples are requirements like “Loading on train”, “loading on
aircraft”, or “loading on truck” (footnote70). Furthermore, it is possible to
stipulate, that these documents in compliance with Article 27 a (iii) UCP 500,
contain the “actual date of dispatch”. For land carriages this requirement is
met by a confirmation “goods en route”. These notes need not be signed unless
they are added to the transport document after issuance. Such a subsequent
modification needs to be authenticated:
“… if the words “goods en route”
are added to the document, then it is an amendment to a document in respect of
which the commission decided on April 28, 1987 (see R. 174) on the need for authentication.”
Article 26 a (iii) a UCP 500 – Compliance with the
itinerary:
In multi-modal transport the carrier should be permitted to
select the most favorable itinerary. Hence, the transport document need only
indicate the place of taking in charge and the place of final destination. Therefore
it is not detrimental if a multimodal transport document evidences a port of
loading different from the place of taking in charge or a port of discharge
different from the place of final destination. This provision, which is quasi
mandatory for multimodal transport, is applied by analogy to other modes of
transportation, even if the application is not always suitable (compare
explanation to Article 23 a (ii) or Article 27 c UCP 500).
Article 26 a (iii) b. UCP 500 -- intended notations:
Reservations concerning the vessel/port of loading/port of
discharge are admissible due to the flexibility intended for multimodal
transport.
Article 26 a (iv) UCP 500 – Presentation of a sole
original or a full set:
See explanation at Article 23 a (iv) UCP 500.
Article 26 a (v) UCP 500 – Admissibility of references to
terms and conditions
See explanation at Article 23 a (v) UCP 500
Article 26 a (vi) UCP 500 – Inadmissibility of
charterparty bills of lading of sailing ships:
The provision is identical with Article 23 (vi) UCP 500.
Article 26 b UCP 500: Admissibility of transshipment:
Transshipment is the central nature of a combined transport
document. Hence, in conformance with the UCP 400, provisions prohibiting
transshipment can be disregarded as absurd provided that the whole itinerary is
covered by one single multimodal shipping document.
Article 27 UCP 500 – Air Waybill
ARTICLE 27 Air Transport
Document
A. If a Credit calls for an air
transport document, banks will, unless otherwise stipulated in the Credit,
accept a document, however named, which:
i. appears on its face to
indicate the name of the carrier and to have been signed or otherwise
authenticated by:
• the carrier, or
• a named agent for or on behalf
of the carrier.
Any signature or authentication
of the carrier must be identified as carrier. An agent signing or
authenticating for the carrier must also indicate the name and the capacity of
the party, i.e. carrier, on whose behalf that agent is acting,
and
ii. indicates that the goods
have been accepted for carriage,
and
iii. where the Credit calls for
an actual date of dispatch, indicates a specific notation of such date, the
date of dispatch so indicated on the air transport document will be deemed to
be the date of shipment.
For the purpose of this Article,
the information appearing in the box on the air transport document (marked
"For Carrier Use Only" or similar expression) relative to the flight
number and date will not be considered as a specific notation of such date of
dispatch.
In all other cases, the date of
issuance of the air transport document will be deemed to be the date of
shipment,
and
iv. indicates the airport of
departure and the airport of destination stipulated in the Credit,
and
v. appears to be the original
for consignor/shipper even if the Credit stipulates a full set of originals, or
similar expressions,
and
vi. appears to contain all of
the terms and conditions of carriage, or some of such terms and conditions, by
reference to a source or document other than the air transport document; banks
will not examine the contents of such terms and conditions,
and
vii. in all other respects meets
the stipulations of the Credit.
B. For the purpose of this
Article, transshipment means unloading and reloading from one aircraft to
another aircraft during the course of carriage from the airport of departure to
the airport of destination stipulated in the Credit.
C. Even if the Credit prohibits
transshipment, banks will accept an air transport document which indicates that
transshipment will or may take place, provided that the entire carriage is
covered by one and the same air transport document.
Terminology: An air waybill is only presentable, if the
issuer obligates him/herself as carrier to undertake the air transport. In this
case, as confirmed by Article 27 UCP 500, it is irrelevant whether the air
waybill is entitled “airway bill” or “house airway bill”(footnote 71).
Article 27 a (i) UCP 500 – Issuance by carrier or named agent of carrier
An airway bill is only presentable –like any other transport
document—if it appears on its face to indicate the name of the carrier and to
have been signed by the carrier or a named agent or have been authenticated by
other means. Furthermore, due to the requirement of transparency applicable to
all transport document, signature or authentication of the carrier have to
conspicuously label his/her function. An agent need not only indicate his
position as agent, but also name and qualification of the carrier on whose
behalf he acts.
Example:
Requirement of the Credit
Correct Presentation
Carrier: Lufthansa
Signatory: Lufthansa
Letterhead: Lufthansa
Sub category: Lufthansa (as Carrier)
Signature
Carrier: Lufthansa
Signatory: Lufthansa
Letterhead: Lufthansa
Sub category: For Lufthansa (Carrier)
(or : For above named Carrier)
Miller (as Agent)
Signature
The addition “Carrier” on the front page of an airway bill
hence is necessary, need however not be repeated in the signature box if
already printed in the letterhead.
Article 27 a (i) UCP 500 – Delimitation of carrier and
forwarder:
Like any other transport document a freight forwarder can
issue an airway bill, provided he acts as a carrier or as the agent of a
carrier. The ICC Banking Commission has clarified this fact as follows:
“Unless the credit stipulates otherwise, the
bank may accept an airway bill issued by a forwarder provided it appears on the
face of the document that the freight forwarder is acting as a carrier or agent
of a named carrier.”
The issuer of an airway bill has to clarify, whether
he/she acts as carrier or agent of a carrier. If he/she intends to act as
agent of a carrier it is not sufficient, it is not sufficient that he/she sign
as an IATA agent, since an IATA agent need not necessarily act as the agent of
an airline.
“It appears that although the forwarder might be
an approved agent for IATA purposes, he does not necessarily always act as
agent of the airline when issuing an airway bill, and certainly not when he
issues a house airway bill.” (footnote 74)
No dual function as carrier and agent: In the past
issuers of airway bills, probably due to inadvertence, made the mistake to sign
at the same time as carriers and agents. The ICC Banking Commission correctly
denied the acceptability of an airway bill, which showed the issuer’s name
“Nippon Express Belgium” as carrier and as issuing carrier’s agent. Since one
cannot be one’s agent, these airway bills are not acceptable under a Credit.
Inadmissible limitation of position as carrier: The
carrier cannot limit his responsibilities emanating from his position as
carrier in another part of the airway bill. This is one of the reasons the
experts of the ICC Banking Commission have found unacceptable that an airway
bill referenced a house airway bill:
House Airway bill number
Master Airway bill number
Flight/Day
XYZ- 12345
217-33695756
TG607
The reference was not the only reason for the ICC Banking
Commission to deny the acceptability of the airway bill. The author believes
that the mere reference to a House Airway Bill cannot justify refusal of an
airway bill.
Article 27 a (ii) UCP 500 – Evidence of Acceptance for Carriage:
(???) The airway bill is not a document of title but merely
evidences that the carrier has accepted the goods for carriage. Special
instructions requiring an on board notice are neither common nor expedient. The
actual take off of the plane can be proven if the actual date of dispatch is
indicated in the airway bill.
Evidence of the date of taking in charge/dispatch:
Generally the date of issuance of an airway bill is
considered to be the date of dispatch. If the Credit calls for an actual date
of dispatch, a specific notation of such date has to be noted on the airway
bill. Not sufficient in this context are remarks under the heading “For Carrier
Use only”, since this only indicates the scheduled date of dispatch.
Article 27 a (iv) UCP 500 –Itinerary:
Indication of the airport of departure and the airport of
destination.
Article 27 a (v) – Original/Full set of documents:
The presentation of the original for consignor/shipper is sufficient, even if
the Credit calls for a full set of originals or similar expressions. The
requirement to present a full set of documents of an airway bill is erroneous,
since the shipper only receives one copy. Hence the ICC Banking Commission
decided:
“The only original airway bill
issued to the shipper is original no. 3, and this is signed either by the
carrier of his agent.” (footnote77).
[this sentence how the third original is called in German,
does not make any sense in an English translation]
Article 27 a (vi) Reference to terms and conditions of carriage
Compare explanation to Article 23 a (v) UCP 500.
Article 27 b and c – Transshipment:
Any transport document is subject to specific rules only
applicable to its mode of transportation. Hence, transshipment as used in this
context, only means the “unloading and reloading from one aircraft to another
aircraft during the course of carriage from the airport of departure to the
airport of destination”. If the air transport is part of a combined transport,
then the acceptability of documents is governed by Article 26 UCP 500.
Article 27 c UCP 500 – Prohibitions of transshipment can be disregarded
Contrary to previous revisions, the 1993 revision of the UCP
stipulates that prohibitions of transshipment can be disregarded. This
provision is only appropriate for feeder flights; in its generality it goes
beyond its objective. Correctly the ICC Banking Commission finds that
transatlantic flights mostly start and end at specific airports and that feeder
flights to these airports are not considered transshipment.
“For instance, a flight from Madrid, Spain to Houston, Texas, USA would more likely require Iberia Airlines to
transport goods from Madrid to New York and to transship to Houston via another
carrier. Similarly, a flight from the United States to Middle East may require
flight from New York to Frankfurt, Germany and further transport to the Middle
East destination, perhaps by Lufthansa Airlines but with transfer to another
airplane at Frankfurt.” (footnote 79)
Unfortunately the UCP 500 did not limit Article 27 c to
feeder services in, but extended its applicability to any kind of transshipment
in air transportation.
Exclusion of Article 27 c UCP 500 to enforce prohibitions
of transshipment:
It is accurate that for an air transport from Frankfurt to New York one does not consider the feeder flight from Hanover as transshipment. This might
be different e.g. for a flight from Frankfurt to Tokyo. In such a case the
parties may want to refrain from a transshipment in India to avoid delays and
changes in temperature. One could consider the prohibition to transship as an
individual agreement which takes precedence over the UCP. On the other hand,
the Applicant can avail himself of the possibility to exclude the applicability
of Article 27 c UCP 500.
“As similarly state in UCP 500 Article 23, the
issue of transshipment has been addressed to reflect the practice in the air
transport industry involving international air cargo transport. If the
Applicant wishes to prohibit any type of transshipment under this mode of
transport, then the Applicant may override the provision of sub-Article 27 9c)
by explicitly excluding it from the Credit.” (footnote 80)
Article 28 UCP 500 – Collective provisions for transport
by road, rail and Inland Waterway
ARTICLE 28 Road, Rail or inland
Waterway l~port Documents
A. If a Credit calls for a road,
rail, or inland waterway transport document, banks will, unless otherwise
stipulated in the Credit, accept a document of the type called for, however
named, which:
i. appears on its face to
indicate the name of the carrier and to have been signed or otherwise
authenticated by the carrier or a named agent for or on behalf of the carrier
and/or to bear a reception stamp or other indication of receipt by the carrier
or a named agent for or on behalf of the carrier.
Any signature, authentication,
reception stamp or other indication of receipt of the carrier, must be
identified on its face as that of the carrier. An agent signing or
authenticating for the carrier must also indicate the name and the capacity of
the party, i.e. carrier, on whose behalf that agent is acting,
and
ii. indicates that the goods
have been received for shipment, dispatch or carriage or wording to this
effect. The date of issuance will be deemed to be the date of shipment unless
the transport document contains a reception stamp, in which case the date of
the reception stamp will be deemed to be the date of shipment, and
iii. indicates the place of
shipment and the place of destination stipulated in the Credit,
and
iv. in all other respects meets
the stipulations of the Credit.
B. In the absence of any indication
on the transport document as to the numbers issued, banks will accept the
transport document(s) presented as constituting a full set. Banks will accept
as original(s) the transport document(s) whether marked as original(s) or not.
C. For the purpose of this
Article, transshipment means unloading and reloading from one means of
conveyance to another means of conveyance, in different modes of transport,
during the course of carriage from the place of shipment to the place of
destination stipulated in the Credit.
D. Even if the Credit prohibits
transshipment, banks will accept a road, rail, or inland waterway transport
document which indicates that transshipment will or may take place, provided
that the entire carriage is covered by one and the same transport document and
within the same mode of transport.
This provision, introduced by the 1993 revision, comprises
transport documents of very different legal quality. If German law is
applicable the provisions of §§ 407 – 452 d HGB (new law concerning carriage of
goods) and §§ 453 – 466 HGB (law of freight forwarding) apply. With entry into
force of the new provisions, various special laws including the documents
regulated in them became void;
Article 28 UCP 500 – Effect of the reform of German law
of transportation on documents to be presented under a Credit
Article 28 a (i) UCP 500 – Signature/Stamp of
carrier/agent:
Regarding the form and signature of inland waterway
transport documents, if issued as inland waterway bill of lading, the
explanation to Article 23 a (i) UCP apply. When issuing simple waybills –which
are customary in transport by road and rail, but can also be used for inland
waterway transportation—the new German law of carriage permits mechanical or
automated signatures or their reproduction by print or stamp (§ 408 II 3 HGB).
The German Commercial Code in the section quoted above requires “the
reproduction of an original signature”; hence digital waybills, which are
created for electronic processing among participating businesses, are not
acceptable. [comment: US law on electronic
signatures ???]
Consequently, international waybills have to meet the
following formal requirements in regards to their signature:
Signature of CMR- waybill
Carrier: Schenker & Co.
Signatory: Schenker & Co.
Field 16: Schenker & Co.
Field 23: Schenker & Co.
(Stamp)
Signature
Signature by Agent
Not provided for, but possible
Signature of CIM waybills
Carrier: Bundesbahn
Proof of receipt: Bundesbahn
Field 9: Emblem of Bundesbahn
Field 79 [79 does not
correspond with specimen in Hopt]: Mechanical imprint of forwarding
station
Signature by Agent
Not provided for, but possible
Article 28 a (ii) UCP 500 – Evidence that goods have been
received for shipment, dispatch or carriage: Documents of transport via
road, rail or inland waterways by their nature only prove receipt of the goods
and need not specifically indicate a loading on board of the designated vessel.
The terms used in Article 28 UCP 500 – receipt of goods for shipment, dispatch
or carriage—can be considered as synonymous. Only the domestic waybill of § 408
HGB contains an explicit indication; however the international waybills of CIM
or CMR do not include a confirmation of receipt of the cargo. Nevertheless,
these waybills are acceptable according to the ICC Banking Commission (footnote
89).
Article 28 a (ii) UCP 500 – Date of Loading:
Generally the date of issuance is
considered the date of shipment, unless the transport document contains a
reception stamp. In this case the reception stamp will be deemed to be the date
of shipment. This provision creates a legal fiction, since neither the date of
issuance nor the reception stamp reflect
when the cargo was loaded on board.
Article 28 a (iii) UCP 500 – Place of shipment/place of destination:
The transport document has to indicate the place of shipment
and the place of destination stipulated in the Credit. Contrary to the
provisions for ocean bills of lading (see Article 23 a (iii) a UCP 500)
deviations from this requirement by indicating a different port of loading/port
of discharge are not permissible.
Article 28 b UCP 500 – Full set/presentation of originals:
According to this provision, which is primarily intended for
transportation by rail and air, banks will accept the presented documents as a
full set, unless the transport document indicates how many copies have been
issued. This should be the normal case, since the contract of carriage by road
or air is documented is evidenced by a set of multiple copies, only one of
which remains with the shipper.
Incidentally, Article 28 b UCP 500 deals with the
completeness of documents, i.e. “full set of originals”. This stipulation
should not be confused with Article 20 b UCP 500, which provides for the
marking of documents as originals when a document has been produced by
reprographic etc. systems.
Article 28 c and d UCP 500 – transshipment/prohibitions to
transshipment:
Transshipment in this context means the unloading and
reloading to a different means of conveyance.
Hence a prohibition to transship can be disregarded as long
as
Consequently despite a prohibition to transship, the
unloading and reloading from one truck to another is permissible, however the
unloading and reloading from a truck to a railroad car is not.
ARTICLE 29 Courier and Post
Receipts
A. If a Credit calls for a post
receipt or certificate of posting, banks will, unless otherwise stipulated in
the Credit, accept a post receipt or certificate of posting which:
i. appears on its face to have
been stamped or otherwise authenticated and dated in the place from which the
Credit stipulates the goods are to be shipped or dispatched and such date will
be deemed to be the date of shipment or dispatch,
and
ii. in all other respects meets
the stipulations of the Credit.
B. If a Credit calls for a
document issued by a courier or expedited delivery service evidencing receipt
of the goods for delivery, banks will, unless otherwise stipulated in the
Credit, accept a document, however named, which:
i. appears on its face to
indicate the name of the courier/ service, and to have been stamped, signed or
otherwise authenticated by such named courier/service (unless the Credit
specifically calls for a document issued by a named Courier/Service, banks will
accept a document issued by any Courier/Service),
and
ii. indicates a date of pick up
or of receipt or wording to this effect, such date being deemed to be the date
of shipment or dispatch,
and
iii. in all other respects meets
the stipulations of the Credit.
Article 29 a UCP 500 – Post receipt or certificate of
posting:
It is not necessary to sign a post receipt or certificate of
posting. Rather, it is sufficient, if the before mentioned documents appear on
their face to have been stamped or otherwise authenticated at the prescribed
shipping point. Hence it is not required that the same post office stamps all
documents. Consequently, even if partial shipments are prohibited, post
receipts or certificates issued by different post offices at the same location
are acceptable (compare Article 40 c UCP 500).
Article 29 a (i) UCP 500 – No issuance of postal documents by shipper
Whereas the issuance of postal documents was permitted
before the 1983 revision of the UCP (footnote 90), this option has been
abolished with the 1993 revision. Article 21 UCP 500, which allows the
auto-issuance of documents, does not apply to transport documents.
Article 29 b UCP 500 – Courier or expedited delivery Service
The recognition of documents issued by courier or expedited
delivery services is new:
“The NCs expressed the opinion that UCP 400,
Article 30, needed expansion to incorporate the possibility of shipment by courier
in addition to shipment by post.”
Article 29 b (i) UCP 500 – Means of authentication
It is sufficient if the document issued by a courier or
expedited delivery service was stamped, signed or otherwise authenticated by
any courier or expedited delivery service. If the Applicant desires carriage by
a specific Courier/Service, he has to explicitly indicate this.
Courier charges: It needs to be mentioned that the 1993
revision introduced a specific provision for courier charges (see Article 33 b
UCP 500). If the Credit requires courier charges to be paid or prepaid, banks
will accept documents even if a third party –except the recipient—is obligated
to pay the charges.
Article 29 b (ii) UCP 500 – date of shipment
The date of pick-up or receipt is deemed to be the date of
shipment or dispatch. Similarly to Article 28 UCP 500 which deals with
documents for carriage on inland waterways, rail, or road, this provision
establishes a legal construction, since pick-up or receipt by couriers are not
indicative of the date and time of shipment.
Article 30 Transport
ARTICLE 30 Transport Documents
issued by Freight Forwarders
Unless otherwise authorized in
the Credit, banks will only accept a transport document issued by a freight
forwarder if it appears on its face to indicate:
i. the name of the freight
forwarder as a carrier or multimodal transport operator and to have been signed
or otherwise authenticated by the freight forwarder as carrier or multimodal
transport operator,
or
ii. the name of the carrier or
multimodal transport operator and to have been signed or otherwise
authenticated by the freight forwarder as a named agent for or on behalf of the
carrier or multimodal transport operator.
Documents issued by Freight Forwarders
Article 30 UCP 500 – Lack of acceptability of documents
issued by freight forwarders
As already mentioned in the preface, all trading based on
the UCP or the Incoterms2000, still dominated by the distinction between
a) Freight
forwarder issued transport documents which absent specific instructions are not
acceptable; and
b) Carrier
issued transport documents, which are acceptable.
The revision of the German law of carriage has not changed
this conceptual understanding. The distinction between the two remains as
follows:
Deutsche webseite
Standard-form contracts of freight forwarders:
Standard-form contracts issued in the past by individual
freight forwarders were ambiguous as to the issue whether he freight forwarder
acted as freight forwarder or as carrier. The FIATA however has harmonized and
clarified the documentation of freight forwarders by issuing four standard form
contracts. The booklet “The FIATA Documents and Forms” published by FIATA
International Federation of Freight Forwarders Associations lists the FWR
(FIATA Warehouse receipt) which is a warehouse document similar to a warehouse
receipt. FIATA-FCR (Forwarders Certificate of Receipt) and FIATA-FCT
(Forwarders Certificate of Transport) are typical freight forwarder documents,
where the forwarder limits his responsibility to arrange for the shipment. In
contrast, the FBL (Negotiable FIATA Combined Transport Bill of Lading) is only
by name a forwarder document, in fact it evidences that the issuer has incurred
the liability of a carrier (footnote92).
FIATA-BL: Since the 1993 revision the FIATA-BL is no
longer explicitly mentioned as an acceptable transport document, however this
revision was prompted by reasons of competition, since documents of other
organizations are acceptable as long as the issuer is a carrier. The ICC
intended to avoid the impression that the FIATA had a monopoly:
“This Article allows a bank to
accept transport documents issued by any individual freight forwarding company
or by any company member of a freight forwarder’s association (such as FIATA, NVO or similar entities, associations) always provided that the document indicates that the
freight forwarder is acting as a carrier or a multimodal transport operator.”
(footnote 93)
Treatment of non-acceptable documents as other documents
according to Article 21 UCP 500
Documents issued by forwarders as e.g. the FIATA-FCR or the
FIATA-FCT, which are not acceptable since they do not evidence the obligations
of a carrier, are to be accepted as presented in conformance with Article 21
UCP 500. The same is true, if the issuer only obligates himself to cover the
first of multiple fare stages acting as a forwarder hence after (footnote95).
Article 31 UCP 500 – On Deck, Shipper’s Load and count,
Name of Consignor
ARTICLE 31 "On Deck",
"Shipper's Load and Count", Name of Consignor
Unless otherwise stipulated in
the Credit, banks will accept a transport document which:
i. does not indicate, in the
case of carriage by sea or by more than one means of conveyance including
carriage by sea, that the goods are or will be loaded on deck. Nevertheless,
banks will accept a transport document which contains a provision that the
goods may be carried on deck, provided that it does not specifically state that
they are or will be loaded on deck,
and/or
ii. bears a clause on the face
thereof such as "shipper's load and count" or "said by shipper
to contain" or words of similar effect,
and/or
iii. indicates as the consignor
of the goods a party other than the Beneficiary of the Credit.
Article 31 (i) UCP 500 – Prohibition only to explicitly
indicate loading on deck:
The prohibition to indicate the loading on deck applies to
maritime transports and to combined transports comprising maritime
transportation. Conceptually the general prohibition does not seem justified,
since particularly in combined transport the loading of containers on deck is
typical. In real life, the prohibition does not cause any problems, since
Article 31 UCP 500 is only violated, when the documents indicate that the
transport document does not specifically state that the goods are or will be
loaded on deck, i.e. it is essential that the document explicitly evidences
loading on deck. Hence, any kind of transport document is acceptable, which
contain generalized clauses, which only allow the loading on deck. Only if the
Credit specially requires, that the goods be loaded on deck, then the transport
document needs to contain an appropriate note to this effect.
Article 31 (ii) UCP 500 Limitation of liability/”Unknown” clauses
The provisions regarding the limitation of liability are
innocuous for all shipping documents. This provision, first introduced with the
1974 revision, recognizes in particular for container shipments that the
carrier cannot know neither the number/volume of items shipped nor the content
of a container. (zwingende Unbekanntklausel)
Article 31 (iii) UCP 500—Admissible to indicate third party consignor
The provision reflects standard practice, according to which
the Beneficiary often uses a freight forwarder (Vortransport) which is
mentioned as shipper (Absender or Ablader).
Article 31 (iii) UCP 500 only applies to transport
documents. Dekker is still correct when stating:
“Consequently, documents such as certificates of
origin, export licenses, from a certificates do not fall under the term
‘transport documents’. It is clear that documents of this nature are covered by
Article 23 UCP 400 [now Article 21 UCP 500], which refers to documents ‘other
than transport documents’. (footnote97)
Article 32 UCP 500 Clean Transport Documents
ARTICLE 32 Clean Transport
Documents
A. A clean transport document is
one which bears no clause or notation which expressly declares a defective
condition of the goods and/or the packaging.
B. Banks will not accept
transport documents bearing such clauses or notations unless the Credit
expressly stipulates the clauses or notations which may be accepted.
C. Banks will regard a
requirement in a Credit for a transport document to bear the clause "clean
on board" as complied with if such transport document meets the
requirements of this Article and of Articles 23, 24, 25, 26, 27, 28 or 30.
Purity Commandment for transport documents: Traditionally
only transport documents are presentable under a Credit. The Purity commandment
applies to all transport documents, i.e. not only for ocean carriage, but also
for documents of road or air. The purity commandment does not require a
positive statement, rather a document complies with this demand unless it
expressly declares a defective condition of the goods and/or packaging. Since
only express statements are detrimental, general stereotypical declarations
regarding a carrier’s lack of knowledge of content, liquidity, weight, are of
no consequence (footnote98).
A defective condition is stated expressly even if it is not
emphasized by stamps or other additions. The language of previous revisions
“superimposed clauses” has been abolished in 1993, since modern printing
technology does not allow to distinguish between original and superimposed
clauses.
[Kommentar: der Begriff superimposed clauses ist nicht ganz
klar, siehe auch leicht verkuerzende uebersetzung]
List of detrimental clauses, ICC publication No. 473:
The question when a clause added to a bill of lading is
detrimental can only be answered on a case by case basis. The attempt made in
Article 18 paragraph 3 UCP , revision 1951 to specifically provide for doubtful
cases has been given up, since an exhaustive listing of admissible clauses is
futile in face of the multitude of provisions used. Instead the ICC has
published a booklet (Publication No. 473) which limit the statement “shipping
in apparent good order and condition”, without directly labeling the goods as
defective (footnote99). [unterschied “erschoepfende Aufstellung zulaessiger
Grenzfaelle und ICC Broschuere nicht klar].
Opinions of the ICC Banking Commission: The ICC
Banking Commission has decided a couple of cases. Hence the “non-segregation”
clause is of no concern.
“This shipment was loaded onboard the vessel as
part of one original lot of (…) M/T with no segregation as to parcels. Neither
the vessel nor the owner assume any responsibilities for the consequences of
such commingling nor the separation thereof at the time of delivery”
(footnote100)
Also admissible is the “paper bag clause”, since it does not
evidence damage to the goods or packing:
“Packing having been effected in paper and/or
plastic bags. All the carrier’s rights and immunities in the event of loss of
or damage to the goods arising by reason of that packing are hereby expressly
reserved.” (footnote101)
Inadmissible however is the following wording, which was
customary for the carriage of cement being effectuated in paper or plastic
bags:
“Attention is drawn to the packing of these
goods which in the opinion of the carrier is insufficient. All the carrier’s
rights and immunities in the event of loss of or damage to the goods arising by
reason of the nature of that packing are hereby expressly reserved. “
(footnote102).
An addition to the description of the goods in a bill of lading
like “corrosive liquid nos” is not a statement of a defective condition but
rather a reference to the hazardousness of the goods. (footnote103).
Article 32 b UCP 500 –Refusal of unclean documents:
Consequence of the purity commandment is that shipping
documents, which contain unacceptable statements regarding the defective
condition of goods, can only be accepted under a Credit if the Bank has been
specifically instructed in the Credit.
Article 32 c UCP 500 – No explicit evidence:
Only remarks evidencing limitations of a cargo’s quality are
detrimental. The bill of lading however need not expressly state its compliance
with the purity commandment. The ICC Banking Commission has always opposed the
practice to require clean-on-board bills of ladings in a Credit.
“Sub-Article 32 (c ) reads exactly as in UCP 400
Sub Article 34 (c ) to counter the continuing bad practice which has developed
in certain areas where Credits are issued stipulating a condition that the
transport document contain a clear notation of ‘clean on board’.” (footnote104)
Article 32 c UCP 500 clarifies that such a requirement, if superfluously
contained in the Credit language, is complied with absent notations of
defective conditions of the cargo. The word “clean” need not be repeated. It
even is unobjectionable if an issuer deletes the word “clean” from a preprinted
notation “clean on board” (footnote105).
Limitations of claims for possession:
Not only clauses, which state the defective condition of
cargo, but also language limiting the claim fro possession of a holder of a
bill of lading are detrimental. Such a limitation can be worded as follows:
“This B/L is not valid for clearance before
validated by the shipper’s agent”.
The intention of this clause is probably only to clarify
that before delivery of the cargo, the transport document will be voided by
stamping it, however, formally this clause constitutes an illicit limitation of
the claim for possession.
A carrier is allowed however to limit his liability with
“multiple bill of lading clauses” when B/Ls are issued for partial shipments
within a container.
[Beispiel !!!]
Also unobjectionable are so called “Caspiana-clauses”, which
allows the captain to unload the cargo in the next port if a discharge in the
port of destination was not possible due to force majeure. (footnote107).
Article 33 UCP 500 Freight Payable/Prepaid Transport Documents
ARTICLE 33 Freight
Payable/Prepaid Transport Documents
A. Unless otherwise stipulated
in the Credit, or inconsistent with any of the documents presented under the
Credit, banks will accept transport documents stating that freight or
transportation charges (hereafter referred to as "freight") have
still to be paid.
B. If a Credit stipulates that
the transport document has to indicate that freight has been paid or prepaid,
banks will accept a transport document on which words clearly indicating
payment or prepayment of freight appear by stamp or otherwise, or on which
payment or prepayment of freight is indicated by other means. If the Credit
requires courier charges to be paid or prepaid banks will also accept a
transport document issued by a courier or expedited delivery service evidencing
that the courier charges are for the account of a party other than the
consignee.
C. The words "freight
prepayable" or "freight to be prepaid" or words of similar
effect, if appearing on transport documents, will not be accepted as
constituting evidence of the payment of freight.
D. Banks will accept transport
documents bearing reference by stamp or otherwise to costs additional to the
freight, such as costs of, or disbursements incurred in connection with,
loading, unloading or similar operations, unless the conditions of the Credit
specifically prohibit such reference.
Article 33 (a) UCP 500 –Acceptance of transport documents
absent specific instructions:
Article 33 UCP 500 defines freight as comprising “freight
and transportation charges”. The objective when revising Article 31 a UCP 400
in 1993 was “to cover the practice with some combined transport operators of
splitting total their charges into ‘sea freight’ and ‘land carriage’”
(footnote108). Absent specific instructions banks will accept transport
documents containing a notation, that freight and transportation charges still
need to be paid.
Article 33 b and c UCP 500: Evidence of freight payment:
In case the Credit requires evidence that the freight was
paid or prepaid, the transport document has to either
·
Contain wording, stamps, or otherwise indicating payment or
prepayment, or
·
Indicate payment or prepayment in other ways.
In either case, an explicit statemtent regarding the payment
of freight is required. Notations like “freight prepayable” or “freight to be
prepaid” are not sufficient.
Article 33 d UCP 500 – Costs additional to freight
An exporter who is required to prepay freight need not pay
additional costs, which hence are to be borne by the recipient of the cargo.
The statement of the ICC Banking Commissions in this regard still applies:
“It is considered normal custom and practice for
the exporter to pay only the sea freight and to be issued a ‘freight prepaid’
bill of lading, leaving the consignee to pick up the additional charges. These
could be enumerated on the B/L and, as such, would be covered by UCP 1974
Article 16 (d).” footnote109
Free in/Free out-clauses – no contradiction to CIF/FOB: In regards to freight costs a transport document has to comply with the shipping
provisions of the Credit (CIF, FOB, far & f etc. (cf. Incoterms 2000)). The
ICC Banking Commission has recognized that free our clauses are admissible:
“that a ‘free in’ provision in a
transport document did not exclude acceptance of such document in the case of
an FOB credit, and that a ‘free out’ provision in a transport document did not
exclude acceptance of such docuemtn in the case of a cif (or c&f) credit”
(footnote110)
Demurrage not contained in freight: Demurrage, a fee
being charged if a ship is not immediately discharged in its port of
destination, has --absent specific instructions in the Credit -- to be paid by
the recipient of the cargo. In this regard the ICC Banking Commission held as
follows:
Article 34 Insurance Documents:
ARTICLE 34 Insurance Documents
A. Insurance documents must
appear on their face to be issued and signed by insurance companies or
underwriters or their agents.
B. If the insurance document
indicates that it has been issued in more than one original, all the originals
must be presented unless otherwise authorized in the Credit.
C. Cover notes issued by brokers
will not be accepted, unless specifically authorized in the Credit.
D. Unless otherwise stipulated
in the Credit, banks will accept an insurance certificate or a declaration
under an open cover pre signed by insurance companies or underwriters or their
agents. If a Credit specifically calls for an insurance certificate or a
declaration under an open cover, banks will accept, in lieu thereof, an
insurance policy.
E. Unless otherwise stipulated
in the Credit, or unless it appears from the insurance document that the cover
is effective at the latest from the date of loading on board or dispatch or
taking in charge of the goods, banks will not accept an insurance document
which bears a date of issuance later than the date of loading on board or
dispatch or taking in charge as indicated in such transport document.
F. i. Unless otherwise
stipulated in the Credit, the insurance document must be expressed in the same
currency as the Credit.
ii. Unless otherwise stipulated
in the Credit, the minimum amount for which the insurance document must
indicate the insurance cover to have been effected is the CIF (cost, insurance
and freight (..."named port of destination")) or CIP (carriage and
insurance paid to (..."named place of destination")) value of the
goods, as the case may be, plus 10%, but only when the CIF or CIP value can be
determined from the documents on their face. Otherwise, banks will accept as
such minimum amount 110% of the amount for which payment, acceptance or
negotiation is requested under the Credit, or 110% of the gross amount of the
invoice, whichever is the greater.
Article 34 a UCP 500 –Authorized issuers:
All insurance documents have to be issued and signed by
insurance companies, their agents or underwriters. A distinction between
issuance and signature made in previous revisions of the UCP has been abolished
in 1993. In its simplest form the insurer or the insurance company [unterschied
versicherer versicherungsgesellschaft ?] will sign as e.g.
XY insurance Company Inc.
Signature
Consortium: When a group of insurers (consortium)
provides insurance coverage, signature by one member of the consortium is
sufficient, it is not necessary that the other insurers be named. This is true
even if an insurance documents shows that the members of the consortium are
only liable for their proportional share, since in case of emergency the names
and the proportional share of the co-insurers will be tracked down through the
consortium leader (footnote112). Example:
XY insurance company Inc.
Also for and on behalf of
co-insurers.
Signature by agents: To indicate an agency
relationship, agents normally add “as agent” to their signature; reference to
powers of attorney or special powers of attorney are admissible. However, in
all cases at least one insurer must be named as risk bearer in the insurance
document. Also admissible is an insurance certificate, signed by a broker
who is authorized by the insurer. Example:
Company XXX Ltd. (insurance brokers)
Authorised by the Underwriters of Lloyds to
issue the certificate on their behalf (footnote113)
Article 34 b UCP 500 – Presentation of all originals: If
an insurance document noticeably has been issued in several copies, all
originals have to be presented. If the insurance document shows, that only one
original exists, only this one original needs to be presented. This provision
corresponds to Article 23 a (iv) UCP 500 regarding bills of lading; here as
there a full set has to be presented if more than one original exists.
Article 34 c UCP 500—Cover Notes not presentable:
Cover notes, issued by brokers are not presentable. A broker
can however, as already mentioned supra Article 34 a UCP 500, issue insurance
documents as agent or referencing a special power of attorney. Example:
X-insurance Limited
Y Broker with special authority
It is unobjectionable if the name of the broker’s company is
shown in the letterhead as long as the signature clearly evidences the agency
relationship with the insurer.
Article 34 d UCP 500 – Equal value of insurance
certificate and insurance police:
Absent specific instructions banks will accept insurance
certificates as well as declarations under an open cover. Even though some
legal systems and some practitioners consider a police to have a higher value
than an insurance certificate, the UCP nevertheless attributes both documents
equal value. Consequently, absent a stipulation in the Credit, insurance
certificates are presentable as long as they are consistent with other
documents presented, indicate sufficient insurance coverage and evidence the
main points of the police (footnote114). This does not hold true if the Credit
calls for a police. On the other hand, a police is presentable even if the
Credit calls for an insurance certificate or a “declaration under open cover”.
This is due to the general attitude which considers a police to be of higher
value than an insurance certificate.
Article 34 e UCP 500 – Effective Date of Insurance
coverage:
Unless the insurance
documents indicate that coverage begins with date of loading on board or
dispatch or taking in charge of the goods, banks will refuse documents which
bear an issuance date later than the date of loading on board or dispatch or
taking in charge. According to the prevalent opinion the clause “warehouse to
warehouse” is sufficient evidence of timely begin of insurance coverage and not
only the indication of local begin of transportation.footnote 115
Setting a time limit for insurance coverage: The ICC Banking Commission did not consider
objectionable the reference in an insurance certificate to an Institute Cargo
Clause A (CL.252 1/1/82) which limited the insurance coverage from 3/13/1995 to 3/26/1995; only relevant is the date of the taking charge of risks that
should be considered.
Article 34 f (i) UCP 500: The
currency in the insurance document has to be identical to the currency in the
Credit.
Article 34 f (ii) UCP 500 Minimum Coverage: Similar to the provision in the Incoterms, the
minimum coverage of insurance documents, in cases where the documents presented
do not indicate the CIF or CIP value, has to be 110 % of the higher of the
Credit amount or the gross amount of the invoice. The corresponding provision
in the incoterms 2000 remains unchanged (cf. CIF …[buy INCOTERMS)
Article 35: Type of Insurance Cover
ARTICLE 35 Type of Insurance
Cover
A. Credits should stipulate the
type of insurance required and, if any, the additional risks which are to be
covered. Imprecise terms such as "usual risks" or "customary
risks" shall not be used; if they are used, banks will accept insurance
documents as presented, without responsibility for any risks not being covered.
B. Failing specific stipulations
in the Credit, banks will accept insurance documents as presented, without
responsibility for any risks not being covered.
C. Unless otherwise stipulated
in the Credit, banks will accept an insurance document which indicates that the
cover is subject to a franchise or an excess (deductible).
Article 35 a UCP 500 – Imprecise terms do not specify
risks
Absent specific instructions regarding the type of insurance
required or the risks covered, banks will accept documents as presented.
Imprecise terms as “customary risks” or “usual risks” cannot be interpreted to
be specific instructions and hence should not be used at all.
Article 35 b UCP 500 – No examination of content:
Absent specific instructions insurance documents will be
accepted as presented; however, it has to be possible to link the insurance
cover to the goods described in the invoice.
(cf. presentability of insurance documents with 30 %
franchise and imposing time limits ICC Publication No. 565 (E), R 234)
Article 35 c UCP 500 – Franchise:
Absent specific instructions, Banks always have accepted
insurance documents which indicated that the cover is subject to a deductible.
Specific instructions can be expedient as is shown by a decision of the ICC
Banking Commission regarding the acceptability of an insurance document with 30
% deductible. The objection of the bank asking for the expert’s advise that the
“maximum acceptable franchise is 10 percent of the total CIF amount” was
rebutted (footnote117).
Article 36 UCP All Risks Insurance Cover
ARTICLE 36 All Risks Insurance
Cover
Where a Credit stipulates
"insurance against all risks", banks will accept an insurance
document which contains any "all risks" notation or clause, whether
or not bearing the heading "all risks", even if the insurance document
indicates that certain risks are excluded, without responsibility for any
risk(s) not being covered.
Article 36 a UCP 500 –Limitation of insurance cover
The stipulation in a Credit for “insurance against all
risks” does not protect the beneficiary from certain risks being excluded in
the insurance document.
“This Article emphasizes that the
traditional ‘all risk’ insurance cover does not cover what some parties may
consider to be extension to all types of risks. The ‘all risk’ cover is not
what it appears to be since not all risks are covered” (footnote 118)
Since the 1993 revision Article 36 UCP 500 clarifies that
the exclusion of certain risks is not only acceptable if effected in the “all
risk clause” but also, if the exclusion appears somewhere else in the document.
In the past this was disputed regarding the additional clause “Institute [?]
Radioactive Contamination Exclusion Clause”.
Furthermore, if a Credit stipulates ”insurance against all
risks”, it is sufficient if the all risk clause appears somewhere in the
document; i.e. the language need not be shown already in the heading of the
document.
Exemption of specific goods from cover:
It seems unobjectionable if certain goods are exempted from
insurance cover, provided the exemption is stipulated in general terms and
conditions and not in an additional clause. (If the Document does not “on its
face” stipulate any exemptions for certain goods, it should be considered to be
issued without any exemption.) (footnote119)
Article 37 Commercial Invoices
ARTICLE 37 Commercial Invoices
A. Unless otherwise stipulated
in the Credit, commercial invoices;
i. must appear on their face to
be issued by the Beneficiary named in the Credit (except as provided in Article
48),
and
u. must be made out in the name
of the Applicant (except as provided in sub Article 48 (H)),
and
iii. need not be signed.
B. Unless otherwise stipulated
in the Credit, banks may refuse commercial invoices issued for amounts in
excess of the amount permitted by the Credit. Nevertheless, if a bank
authorized to pay, incur a deferred payment undertaking, accept Draft(s), or
negotiate under a Credit accepts such invoices, its decision will be binding
upon all parties, provided that such bank has not paid, incurred a deferred
payment undertaking, accepted Draft(s) or negotiated for an amount in excess of
that permitted by the Credit.
C. The description of the goods
in the commercial invoice must correspond with the description in the Credit.
In all other documents, the goods may be described in general terms not
inconsistent with the description of the goods in the Credit.
Article 37 a (i) UCP 500 – No issuance by third parties
Since an invoice confirms proper delivery, only the
supplier, i.e. the beneficiary of the Credit, can issue it. Except for the
provisions for transferable Credits (see Article 48 UCP 500), an invoice has to
be addressed to the Applicant.
Article 37 a (iii) UCP 500 -- No need for signature: Already
in 1976 Schinnerer/Avancini observed that facsimile signatures where used to
such an extent, that it had to be assumed that this reflects commercial custom
and practice.(Footnote120). Since the revision in 1993 an invoice no longer
needs to be signed. The beneficiary cannot however use plain preprinted
forms; at least
Article 37 b UCP 500 – Amount of invoice higher than
Credit:
If the amount shown in a commercial invoice exceeds the
amounts permitted by the Credit, banks may refuse the invoice according to
Article 37 b UCP 500. This is the only remaining provision of the UCP allowing
a discretionary decision, which should be taken according to the following
criteria:
Article 37 c UCP 500 – Goods need to be identically
described in Credit and invoice:
Even if an invoice only evidences the confirmation of the
beneficiary that he duly delivered the goods, an invoice is subject to the principle
of documentary compliance in its strictest form. The description of the
goods has to punctiliously conform between invoice and Credit, while in all
documents it is sufficient if the goods are described in general terms which do
not contradict the Credit. Even though the beneficiary should not have any
difficulty to confirm orderly delivery of the goods, in real life a multitude
of cases exist, where the invoice and Credit are discrepant.
The opinion of Schinnerer/Avancinni (footnote122), according
to which the description of goods required in the Credit like “healthy,
compliant with the contract, or customary” need not be repeated in the invoice,
since no seller would confirm anything to the contrary, has to be rejected. If
stipulated in a Credit, even truisms in a description of goods have to be
repeated in the invoice. The beneficiary has to repeat the description without reservation
as his own statement. Invoices repeating the features stipulated in the Credit
in parentheses or quotation marks have to be rejected (hence wrong: machines
“in new condition”) footnote 123.
Notice: A shipping clause (FOB Shanghai) can according to
the provisions of the Credit be part of the description of the goods and hence
has to be repeated under the heading “Goods Description” footnote123a.
Designations in foreign languages: The requirement to punctiliously reproduce the description of goods
also applies to descriptions in a foreign language. It is not the task of a
bank to translate foreign language descriptions. This applies in particular to
translations of intricate technical terms. Only when unequivocal foreign
language terms can be acceptable. This can be the case when a Credit issued in
English requires as description of goods “steel” and the invoice reflects the
French translation “acier”. (footnote 125)
Faulty description of goods: Even though the beneficiary should not have any difficulty reproducing
the description of the goods as stipulated in the Credit, in real life a
multitude of mistakes are made. The following is a small sample of the infinite
list of errors:
Credit Stipulation
Faulty Reproduction in invoice
new
in new condition
(footnote126)
cotton piece goods
cotton piece goods, 70
% cotton, 30 % rayon (footnote127)
carne
lingua bovina
(footnote128)
Java White Sugar
Java White, Granulated
Sugar (footnote129)
Black packages type
55/18 of old light Sammelschrot
Type 18 Eisenschrott
No. 6335 (footnote129)
Missing/unobjectionable additions:
It is objectionable if stipulations in the Credit regarding
supplementary packing, as e.g. customary for cement trade, are missing in the
invoice:”3 % 3 ply kraft empty spare bags free of charge”.
Even a delivery term (FOB) can be part of the description
of goods and has to be reproduced in the invoice (footnote130).
Inversely, superfluous additions can be detrimental.
If the Credit requires
“100 percent cotton, Grey Carded Sheeting, Woven
on Automatic Looms with ¼ or 3/8 inch tape selvage, plain 1 * 1 weave first
quality, 63 inch wide, 60 * 60, yarns 20/20. Export packing in seaworthy
bales”,
an invoice which adds to this description
“Warp: 24, Werft: 24”
will be refused, since the addition describes the number of
threads per square centimeter which might indicate an impairment of the quality
(footnote131).
Contradictions: If the Credit stipulates a
description of goods:
“pakistanese blue poppyseed”
the ICC Banking Commission held, if the beneficiary presents
a weight certificate which contains the addition:
“pakistanese blue (coloured) poppyseed”
(footnote132)
It can be problematic to expand Incoterms, even though the
ICC Banking Commission has held in one particular case that a Credit
stipulating “ex-works” the beneficiary’s invoice evidencing “ex-ware house mersin free zone” was acceptable (footnote133).
Article 38 UCP 500 – Other Documents
ARTICLE 38 Other Documents
If a Credit calls for an
attestation or certification of weight in the case of transport other than by
sea, banks will accept a weight stamp or declaration of weight which appears to
have been superimposed on the transport document by the carrier or his agent
unless the Credit specifically stipulates that the attestation or certification
of weight must be by means of a separate document.
This provision applies to all but maritime shipments.
Generally it is sufficient if a carrier or his agent use a weighing stamp or
certify the weight on the transport documents. A separate declaration of weight
need only be produced if so required in the Credit.
Links:
[1] http://letterofcreditforum.com/user?destination=print%2F17