An LC issued subject to UCP 600, calls for¨

“Freight invoice in 1 original and 2 copies”

Documents were presented to the nominated bank, and were negotiated and forwarded to the issuing bank.

The issuing bank refused to honour the documents stating that:

"Freight Invoice not issued by the issuer of the Transport Documents".

Note the following:

1. The LC is silent about third party documents.

2. There is no stipulation that the freight invoice must be issued by the issuer of the transport documents.

3. The bill of lading was issued by “ABC Co.” as agents for the named carrier.

4. The Bill of lading is marked Freight Prepaid.

5. The Freight Invoice is issued by “XYZ Co.” and it complies with all other terms and conditions of the credit.

Is the issuing bank refusal correct?

Here is my opinion:

Article 14(f) states that if a credit requires presentation of a document other than transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the document as presented if its content appears to fulfil the function of the required doc. and otherwise complies with sub-art.14d.

As per article14(d), “Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit”

Consequently, I think that unless “XYZ Co.” certify on the freight invoice that it acts as agent of the carrier nominated on the B/L, the freight invoice is discrepant (in which case I may say issuing bank did not make a proper rejection as it is not mandatory for the freight invoice to be issued by the B/L signing party).

Regards,

Bogdan

Best regards

Kim