ABOUT STANDBY CONFIRMATION

[ldt5205]

...(b)that the confirmation is in the form of a standby i.e., that the confirming

bank will honour if the issuing bank does not honour. In other words, to honour not

against the documents listed in the credit but against presentation of copy of the

advice from the issuing bank stating that documents are compliant and the due date,

plus an indication that the issuing bank is unable to honour on the due date for

reasons other than a court order.

.......

I wonder weather the beneficiary will accept such a standby.

[shahriar]

interesting.. i remember the very basic theory of isp98. its rule 2d reads

(ii) If the confirmation permits presentation to the issuer, then the conformer undertakes also to honor upon the issuer’s wrongful dishonor by performing as if the presentation had been made to the conformer.

the rule simply says that confirming bank is oblige to honor if the issuer dishonors regardless of whether or not the presentation was first made to the conformer

now this rule does not require a representation to confirming bank. and thus the rule supports the view stated in the original post.

[ldt5205]

It is the definition of standy confirmation from Gary Collyer.
It is from FAQ under UCP600 VOLII 8.4.

[wongvv]

Hi !

I have no idea under what circumstance the confirming bank is willing to add its confirmation not in the normal way, but opening a confirmation standby. If confirming bank likes to confine the conditions of the claims, why don't them add the conditions in their confirmation directly? (because the terms and conditions could be modified anyway)

V.V.

[shahriar]

now i remember the case. it was a issue where the credit was not available with the confirming bank. that is the confirming bank was not a nominated bank. surely very unusual. was / is very confusing to me as well as far as it is under UCP 600