Best Trade Solution

Dear All,

Being as a buyer I have a LC for one of my suppliers allowing for five shipments as follows:

1- USD XXXX (not exceed) payable against docs 1-4 not earlier than XXXX
2- USD XXXX (not exceed) payable against docs 1-4 not earlier than XXXX
3- USD XXXX (not exceed) payable against docs 1-4 not earlier than XXXX
4- USD XXXX (not exceed) payable against docs 1-4 not earlier than XXXX
5- USD XXXX (not exceed) payable against docs 1-4 not earlier than XXXX

Also partial shipment allowed.

However, during the execution of shipment no #4 my supplier due to non availability of suitable space in one vessel he compelled to ship goods in two vessels and requests an amendment to LC to avoid discrepancy.
On the other hand I'm very keen to avoid an amendment to the LC.

Is there any possible way to saticfy both of us without runing any risk on either party?.

Awaiting your comments.

Rgds,

Ghubshawi

dear, if drawing is possible within stipulated timeframe then no amendment is required otherwise required however in order to satisfy supplier requirement.... buyer approached the issuing bank to waive the said descripency for 4th and 5th shipment prior to shipment or presentation of document.........can it be possible nesar

dear friends,

im bit confused. the clauses appears to be related to drawing and not shipment. since the partial shipment is allowed, i see no scope for a discrepancy. besides the clause says "not earlier than...". to me the entire credit can be drawn just before the expiry with 5 sets of document at a time. by the way, what is "1-4" here?

Dear Nesar/Shahriar,

Thanks for your comments.

Docs 1-4 representing;

1- B/L.
2- Invoice.
3- Packing List.
4- Certificate of Origin.

Rgds,

Ghubshawi

Dear Shahriar,

As I mentioned among the documents required for each drawing there is a B/L.

Do not you think that this can be construed as a single B/L relating to each drawing and consequently any more than one B/L under one drawing can constitute a discrepancy?.

Thanks & regards,

Ghubshawi

dear ghubshawi,

its bit tough to answer this question now without knowing the details of the LC. if the LC lists only the required documents without qualifying "one bl for each drawing/shipment", i would say that there is no reason to consider two or more BL a discrepancy.

Hi all,

From yr case, The first forth drawings are within given periods and represent instalment drawings.
So that the spirit of Article 32 UCP 600 will be applied to given the discrepancy. i agree fully with Shahriar.

rgds,

Dear All,

Great comments really appreciated!!

Rgds,

Ghubshawi

Agree with Shariar – there is no discrepancy as partial shipment is allowed.

With regards to comment from Loankim:

loankim wrote:From yr case, The first forth drawings are within given periods and represent instalment drawings.

I do not think that this is an instalment credit. An instalment credit is one that compartmentalises shipments / drawings.

In the shipping schedule described, there is no distinct shipping / drawing periods, there is only a “not earlier than” date provided. The beneficiary is free to ship / draw up to the expiry of the credit.

Any comments on this?

Hi Judith,
thanks for yr response to my comments, it's really interesting topic !!!
you wrote:"An instalment credit is one that compartmentalises shipments / drawings". YES, it's the spirit of article 32, but in practice, what is your conclusion for this cases:
"1st shipment for 400T-shirt to the value of USD 20.000 must be effected latest on 31 May. 2nd shipment for 100T-shirt to the value of USD 6.000 must be effected latest on 30 June"
I can combine 2 a/m shipment so it's not a form of instalment wording that is envisaged by article 32. However, if T-shirt under 1st shipment are not shipped in full by 31 May, the credit would cease to be available for 2nd shipment i/e article 32 will apply.
But in the content of matter we are discussing. i agree with you after checking it carefully and talking to some colleagues. There is a start date but no end date. The beneficiary could draw all amounts after the 5th in any order that they wish.But here are payment against docs, so don't forget the expiry date.We need to give start and end dates for each segment, and article 32 will apply for the structure we have.
yr comments are welcome.

rgds,

Hi Loankin,

loankim wrote:"1st shipment for 400T-shirt to the value of USD 20.000 must be effected latest on 31 May. 2nd shipment for 100T-shirt to the value of USD 6.000 must be effected latest on 30 June"

Your analysis for this case is spot-on.

As a general rule, the instalments should be “compartmentalised”. However, if the LC has only the latest shipment date for the various instalments, I would still apply article 32 if any instalment has not been shipped on time.

The beneficiary of course still has the right to combine shipments as no “earliest date” has been specified.