I would appreciate your opinions for the following matter.

A letter of credit authorizing partial shipments and authorizing the applicant to receive the documents directly from the beneficiary by means of ship's bag.

One presentation is made by the confirming bank for the total amount of the letter of credit.

The presentation is not complying and includes different invoices for different amounts. For each invoice, a separate transport document is presented.

Contacting the applicant to waive the discrepancies, it was found that the branch already endorsed in his favour some of the transport documents presented (obviously at his request, authorizing by the same the bank to leave all discrepancies that may be found while checking the documents).

The issue is that the aggregate amount of invoices relating to the transport documents endorsed does not correspond to the amount of the presentation.

What would the issuing bank do in case the applicant refuses to waive the discrepancies for the balance amount?

I understand the value of invoices presented through the bank, under the LC, differs from the value of the invoices the beneficiary sent directly to applicant in ship's bag.

Under the LC the documents are paid are the documents presented UNDER the LC.

Since the issuing bank (branch of) endorsed transport docs in f/o the applicant and released them to applicant based on applicant's acceptance of any discrepancy(ies) found or that will be found:

- issuing bank has to pay

- applicant cannot change his mind

The amount payable is the amount of documents presented under LC. The difference is subject to an agreement between the beneficiary and the applicant.

It is hard to give a precise answer to this case – but in general any release of the goods – and the documents presented are two separate issues.

So the fact that a bank has released goods covered by LC documents does not necessarily mean that that bank is obligated to honour if the presentations not complying.

It may however depend on the agreement between the issuing bank and the applicant. For example many (issuing) banks require that the applicant agrees to accept the documents as presented before arranging for release of the goods.

Best regards

Kim