separate presentation

[loankim]

Dear all,

if a credit followed by several separate presentations, each presentation will be examined separately in order to determine if presentation is complying, and… Now:
L/C stating:

“ 1. 90% of the invoiec value will be paid against …A, B, C docs

2. The balance payment will be paid against : D, E, F docs ….”

If the presentation for 90% is discrepant , does the issuing bank have to pay for the balance if it is complying ?
I think he must honour but I am not sure because there is always a relation between 2 presentations, not absolutely separate . How about u ?
.
ur comments will be appreciated !

rgds,

[picant]

Hi Pal,

IMHO, presentation are not separate, but one for its particular chracteristic it is postponed. e.g. the presentation is relative to supply of a machinery, 90% payable at sight, 10% when the machinery is working, at a destination site. Documents presented are relative to the whole supply, bill of lading refers to the complete machinery, than under contractual conditions the seller has to set up the machinery than test it and educate local technicien. After this lapse of time , the seller gets a certification that all is in order and can cash the balance 10%. If document presented are discrepant, no payment will occurr. The seller could cash 90%, than presenting a discrepant final certificate not pay for the balance.

Hoping to have been clear.

Further comments acceptable

Ciao

[loankim]

Hi Pal,
" Documents presented are relative to the whole supply " , yes i see...
the paticular case is : exporting wood and the moisture is an important factor to detemine the quantity shipped then the invoice amount.
+ 90% of invoice value will be paid against some docs including B/L.
+ The balance payment will be paid against seller's invoice and draft for the balance and the applicant's instruction for payment for the remaining balance basing on the moisture surveyed by independent co., at final destination. So the remaining balance can be more or less than 10% invoice amount.
The beneficiary receives the applicant's instruction for payment and he prepares docs for the second presenting, and at that time, he also receives the refusual notice for the first presenting due to discrepancy on presentedB/L
.
The payment of the 90% and the balance are subject to the presentation of different documents, and L/C doesnt say that settlement of one is not conditional on settlement of the other. So maybe the issuing banks have to honour for the 2nd presenting docs if its complying.
But.....if the 1st presenting is disc, it means the title of goods isnt transfered to bank/ applicant so its cant image that he will pay for the 2nd presenting.
.
Other issue, if LC requires ben's draft for the balance payment at 90days after B/L date . How should i understand the "B/L date " here ?
its understood the B/L date on the 1st presented or can be any date if we consider they're two separate presentations.
.
your comments will be appreciated !

rgds,

[shahriar]

Apart from the presentation under the credit, the two post certainly much different! Based on your 2nd post, in my opinion the "balance" be drawn as it depends on the invoice of the first presentation.
Your thought on two seperate presentation will be true if the credit says 10 percent of the value is payable on presentation of inspection certificate

[akomolpa]

If the balance 10% to be made at sight against Draft, invoices and Acceptance certificate issued by applicant or 90 days after shipment date whicherver came first. I think it is dangerous for the applicant, the Issuing Bank must pay when the Beneficiary present only draft and invoice after 90 days after shipment date whether Beneficiary has finished the job or not.

[loankim]

Dear all,
Thanks for ur comments ! .
Could you tell me more for the following issue?
As LC stated: "The balance payment will be paid ..." and by this stating, we can see the dependence of the 2nd drawn on the 1st drawn.
However, does" the balance" always mean 10% invoice value ?
Can the word '" balance " be understood in the other ways ?
Can it be less or more than 10% invoice value ?
In fact, basing on the applicant's instruction for payment, the beneficiary presented their invoices and there were three cases occured:
+ the balance is less than 10%invoice value
+ the balance is more than 10% invoice value
( because the moisture increases/decreases then actual shipped quantity decreases will increases at the destination ),and especially,
+ the balance is a minus amount. This means the total value of goods is smaller than 90% of 1st invoice drawn, so the beneficiary has to pay back for the applicant this balance.
humm...i doubt whether if they can be done ?
Assume, we wont mention about tight monetary reguations.
Just basing on LC, UCP, ISBP and except beneficiary's risks as ISBP/Para.4, then Is there any risks for the negotiating bank ???
What are problems which prevent him from concluding the valid presentation?
.
your comments will be appreciated !
RGDS,