Issuing Bank Deliberately Took 5 Banking Days To Examine Doc

[dholat]

pals!!

UCP600 14 says

b. A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank shall each have a maximum of five banking days following the day of presentation to determine if a presentation is complying. This period is not curtailed or otherwise affected by the occurrence on or after the date of presentation of any expiry date or last day for presentation.

that means, its also possible to examine the document before that. i want to know can a nominated bank refuse a refusal advice based on the proven fact that issuing bank has deliberately consumed the five banking days thought that was not necessary. i know its difficult to prove so. but please take it theoretically

[picant]

hi pal

I dont understand your post!

nominated bank has five banking days after presentation to refuse documents to the presentor(beneficiary or other), then issuing bank when received the documents from nominated bank has its own period of time, % banking days after receipt, to refuse documents, that naturally are not complied with and the nominated bank sent, on presentor instructions. If the nominated bank has considere documents not discrepant and issuing bank consider them discrepant, when this happens, problems arising.

Ciao

[dholat]

dear ciao,

i will try again.

in UCP 500 we had reasonable time to examine a document; not exceeding seven days. in UCP 600 we have "maximum 5 banking days".
now whats the meaning of maximum five days? can we still apply the reasonable time theory to "maximum five working days".

say a letter of credit expires on 15th and the issuing bank received the document on 10th of that month. now, if the issuing bank deliberately use all five days to issue a discrepancy notice, the beneficiary is loosing the chance to correct the document. so can the nominated bank or beneficiary raise a claim against the issuing bank in that case?

[cristiand969]

NO! The reason of removal of ' reasonable time' was that many courts interpreted contrary to any expectation and that a presentation consisting of few docs lets say only invoice and packing list was not within reasonable time when giving refusal advice on the 7th day.
Under UCP 600, issuing bank is 'untouchable' within 5 working days.

[nesarul]

Dear,
Replacing the contentious word "REASONABLE TIME" by a pharse "A MAXIMUM OF " is still ambigious to me. Moreover this word is yet to fall before court. So making a general statement on it is really.............................
.
What will happen, if issuing bank detected the discrepancy on the very first day of examination tenor, but provide discrepancy notice on the close of 5th banking day.[at the same time credit is expired]
.
one question to be considered is whether alleged discrepancy could have been cured had there been promt notice"
.
I would like to think "A MAXIMUM OF" as a HIDDEN REASONABLE TIME" and reluctant to play with it WITH AN OBJECTIVE TO AVOID FUTURE NEGATIVE CONSEQUENT..
regards
nesar

[shahriar]

dear nesar,

in response to your question
What will happen, if issuing bank detected the discrepancy on the very first day of examination tenor, but provide discrepancy notice on the close of 5th banking day?

in that case i will certainly hold the issuing bank responsible. actually the case includes two articles of UCP 600

article 14

b. A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank shall each have a maximum of five banking days following the day of presentation to determine if a presentation is complying. This period is not curtailed or otherwise affected by the occurrence on or after the date of presentation of any expiry date or last day for presentation.

by this article, the issuing bank is getting 5 days for examination. but i believe you will agree that examination and putting discrepancy notice is not the same thing.

article 16 says

a. When a nominated bank acting on its nomination, a confirming bank, if any or the issuing bank determines that a presentation does not comply, it may refuse to honor or negotiate.

though here the term when does not necessarily mean 'immediately', it does not mean five days either.

regd
shahriar