Case 1
The documents have already passed through confirming bank before sent to opening bank. When the confirming bank decided the invoice excess amount as discrepancy and discharge its confirmation's liability, the following opening bank's decision become ineffective.
Case 2
The documents were sent to opening bank directly and by-passed the confirming bank. Provided the confirmation is still valid, the opening bank's decision to accept the excess amount invoice may bind the confirming bank.
Case 1: If confirming Bank (CB) accepts or rejects such invoice as per 18 b.. its decison is binding on all parties including Issuing Bank ( IB). Hence IB cannot take contrary stand in the sense that its stand will not be binding on NB /CB or any other parties.
Hence, the question -
whether a waiver by issuing bank will bind the confirming bank in this case- does not arise at all. Any decision by IB in this case is not binding on CB if CB has already accepted or rejected such invoice...
(This is different from IB's right to accept any discrepancy under any LC issued by it provided it is willing to pay under the LC... Its decision to accept discrepancies is not an overrule of any valid discrepancy pointed out by another bank. It is not binding on any other party including NB/CB.. i.e if IB accepts and then is unable to pay under LC ... CB does not beacome liable to pay under its confirmation)
Case 2: Depends on how the 'confirmation advise' to bene was worded.
a) If it says docs must be presented directly to CB or words to that effect CB has no libaility pay under its confirmation , due to any waiver by IB or any other bank which takes up docs for that matter.
b) if confirmation advise does not prevent direct presentation to IB then if docs are presented directly to IB and IB accepts such commercial invoice... under 18 b , CB will be bound by this acceptance and liable to pay.
CBs typically restrict LCs to themselves and word their confirmation advises to avoid such situations.
Your comments welcome..
Ajoy
