First Question Of CDCS Practice 3

[hassan]

Dears,
please note the first question of CDCS practice 3 and relative suggested answer . what is the reason and justification of suggested answer? i think it is not a suitable answer becuase 60 days after shipment date can be applicable if a complying presentation take place otherwise it depends on agreement of applicant and as well as issuing bank. hence i personaly believe the correct answer is "14th december 2008" .
please let have your justification and reasoning for correct answer.

hassan

[cristiand969]

Dear Hassan,
I believe you are wrong. 'Maturity 60 days as stated by you.. in the event a complying presentation' is exclusively referring to credits available by acceptance or deffered payment AT 60 days AFTER SIGHT and not after the occurence of a determinable event like date of shipment.
The issue was previously discussed on this forum.
So the answer is correct
regards
Cristian

[hassan]

Dear cristiand969
Thank you for your soon reply.unfotunately I was not aware of relative discutions. I respect to your and others idea in this case but once more I draw your kind attention to the followings:
- what will happen if the applicant would accept docs on( for example ) 15th December 2008? Is the issuing bank then o0bliged to pay interest to benef for 16 days delay ?
- if occurance date in l/c terms is so important that even discrepancies of docs. Can not change or affect it then the beneficiary regardless discrepancies, may insist on claiming docs value from confirming or issuing bank at the time of presentation.
- what will be the role of "and agree to accept it" of sub Art. 16( c)(iii-b) of UCP 600 which means acceptance of applicants is not adiquate but the issuing bank must accept it.

[iLC]

Dear hassan,

your questions -

1. No, the issuing bank wont pay any interest. interest is due only when payment is due. for that 16 days payment was not due. however once the issuing bank waive the discrepancies, it should pay immediately. besides waiting for that waiver that late may be theoretically possible but have no real implication. besides waiting that long will cause the LC expire.

2. The LC term is of course much more important than any discrepancies. in fact you raise discrepancies based on that. LC is an undertaking and must be honored.

there is no real outcome of this discussing. you just need to realize that the undertaking is for a "complying Presentation" as Cristian pointed out. what happen when one present a discrepant document? you just waive that discrepancy. in other word for that particular presentation the related condition is no more in force. but the remaining are still in force. thats why you can waive discrepancies partially and ask the beneficiary to comply with the rest.

[jim]

dear ilc,

you said that the LC will expire for waiting that long. should the issuing bank raise another discrepancy "LC expired" if the LC expires mean while?

Thanks!

Jim

[cristiand969]

NO WAY JIM
Firstly presentation has been made in time even if other discrepancy exists
Secondly, each bank is allowed to send one advice of discrepancy unless a representation of docs is made
Regards
Cristian

[iLC]

i agree but i dont agree dear cristain

a discrepant presentation is as good as no presentation. so even if it was made in time, there is no use of it unless the discrepancies are waived. and for this same reason the issuing bank need not to give a new refusal advice since no presentation has been made. i think the issuing bank can at best issue an expiry notice.

dear cristain, today is a very bad day for me. im going for a bargain on almost all the issues with you :lol:

[cristiand969]

Go for it
This is how the progress has come in the world.
.
As far as I am concerned I will keep my position.
:mrgreen:

This is how the DOCDEX come into being..... :lol: