Institute Frozen Food Clause And All Risk Insurance

[thuyvan]

I am writting to seek your help for the case that I am facing:

An irrevocable letter of credit stipulates:

F45A: Frozen raw HLSO Vanamei, IQF, Frozen count. Vietnam origin.

F46A: Full set of Insurance Certificate/Policy issued for 110 percent of invoice value covering all risks

The insurance policy presented cover “Institute frozen food clauses (A) (1.1.1986) (Excluding frozen meat)

Issuing bank refuse the documents citing the discrepancy “All risks missing in insurance docs”

I don’t agree with the issuing bank. As per ISBP745 paragraph K18, an insurance document covering Institute Cargo Clauses (A) satisfies a condition in a credit calling for an “all risks” clause or notation. In the insurance doc presented, the clauses “Institute frozen food clauses A” have similar meaning with “Institute Cargo Clause A”. Therefore, there is no discrepancy.
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Could you please share your opinion?

Thuyvan

[vmduc]

Actually as I understand, Clause A for Frozen Food and Clause A for Cargo (ICC Clause A) have some (small) difference in the risks they cover, the effected duration and so on. ICC Clause A seems to cover wider range of risk and also has longer duration of the insurance (pls refer to the detail documents, I am not really sure!). Therefore I do not think Institute Frozen Food Clause A can replace for 'All risk' (or ICC Clause A as stated in ISBP745) and the issuing bank was right when raising a discrepancy. In fact, insurance companies may not apply ICC Clause A for Frozen Food because this type of goods has specific insurance clause and the requirement of credit is somehow not practical. However, banks only work on the documents and the beneficiary should have requested an amendment to avoid such trouble.