lcviews CoronAdvice #10: ICC Opinion TA902
The new blogpost in the segment “lcviews CoronAdvice” aims to address a new ICC Opinion that deal with a new breed of clause in a bill of lading; i.e. a “covid-19 clause”.
4 June 2020 the ICC Banking Commission circulated the new Final ICC Opinions. For more information, please refer to lcviews blog: “The NON-Dubai ICC Opinions are out”. Link: http://www.lcviews.com/index.php?page_id=794
One of the new ICC Opinions is relevant from a covid-19 perspective; namely TA902. This ICC Opinion deals with a bill of lading presented under an LC subject to UCP 600 which include the following “COVID-19 clause”:
Quote
“Following the exceptional measures adopted by various governments in relation to the outbreak of COVID-19 virus and the operational constraints resulting thereof, the Merchants are hereby notified that the carriage of cargo may be disrupted or delayed. Cargo may not be loaded on the intended vessel and may be on forwarded to the port of destination on any alternative vessel at Carrier’s sole discretion.
Furthermore in case of disruption of ports’ operations, the cargo may be discharged in an alternative port without notice and – subject to availability – be on forwarded to the original intended port of destination. Carrier reserve its rights to accomplish the bill of lading in any alternative port. All additional costs, including but not limited to storage, demurrage, plugging, monitoring at the alternative discharge port or extra on forwarding costs, shall be on Merchant’s account and payable before delivery and the carrier shall have no liability whatsoever for any loss or damage resulting thereof.”
Unquote
In the query, 6 questions are asked.
The first 4 questions basically test if it is a discrepancy (from the perspective of document examination subject to the UCP 600) if this clause appears in different locations and formats in the bill of lading. I.e. 1) as part of the terms and conditions of carriage (on the reverse of the bill of lading) whether incorporated or added, or 2) as part of the pre-printed wording on the face of the bill of lading (in the same format as the other text or a different format (meaning that it was added subsequently)).
The view of the ICC is that (according to UCP 600 article 20(a)(v) the bank is not to examine the terms and conditions of carriage. This regardless if it appears on the face or on the reverse of the bill of lading. In other words, this clause does not in itself render the bill of lading discrepant.
The next question is if it would make a difference whether the words “may be” or “will be” is used in the clause. In the quoted clause, the words “may be” is used.
For this question the view of the ICC is neither “may be” nor “will be” makes a difference in determining if the bill of lading is compliant.
Last, but not least it is asked if a bill of lading is presented without the clause but showing a different transport route than that in the LC would render the bill of lading discrepant.
To this the view from the ICC is that (according to UCP 600 article 20(a)(iii)) the presented bill of lading must indicate shipment from the port of loading to the port of discharge stated in the LC. Failing to do that, the bill of lading would be discrepant.
Takeaways:
* The covid-19 clause in the bill of lading is considered terms and conditions of carriage, and those are not to examined by the bank.
* Neither “may be” nor “will be” makes a difference in determining if the bill of lading is compliant.
* A bill of lading presented under an LC must indicate shipment from the port of loading to the port of discharge stated in the LC. Failing to do that, the bill of lading would be discrepant.
Look out; more “lcviews CoronAdvice” to come.
And ps … reviews of the new “bundle” of the ICC Opinions are of course available in lcviews premium – duly linked to relevant articles, paragraphs and topics.
Meanwhile – as always, take care of the LC – but take special care of each other during these difficult times.
Kind regards
Kim