Correction Of Discrepancy And Resubmission

kotakuser · Post by **kotakuser** » Thu Mar 27, 2014 12:03 pm

Upon presentation, LC issuing bank has raised certain discrepancies. The beneficiary corrects the documents and resubmits through nominated bank to the issuing bank within the expiry date of the LC.

Can the issuing bank refuse to accept such corrected presentation or it has to accept it as complying presentation? If so, is it covered specifically covered by UCP, ISBP, Docdex decsion or technical committee view?

hachem · Post by **hachem** » Fri Mar 28, 2014 2:03 pm

Hi,

If the documents presented by the beneficiary are found discrepant by the issuing bank, we should apply the sub-article 16(a) of UCP 600 which stipulates tha following:

When a nominated bank, a confirming bank, if any, or the issuing bank determines that a presentation does not comply, it may refuse to honour or negotiate.

So, once the document are found discrepant by the issuing bank, it may refuse to honour.

However, the issuing bank may in its sole judgement approch the applicant for a waiver of the discrepancies as stipulated in sub-article 16(b) of UCP 600.

To sum up the issuing bank may refuse such corrected presentation whether presented to the issuing or through the nominated bank.

Regards
H Jallouli

iam90 · Post by **iam90** » Sat Mar 29, 2014 8:28 pm

Dear all,
I suppose there are two more points which should be taken into consideration:
1.Document Re-presentation should be within the presentation period of the credit at the place of issuing bank; the re-presentation will be not complying if it is presented after the last day of presentation period, even within the expiry date of credit;
2. in this case,the nominated bank only act as an advising bank to submit docs, as it did not examine docs.Pls clarify this point.

kotakuser · Post by **kotakuser** » Tue Apr 01, 2014 4:10 pm

Hi Hachem

Thanks for your response. What i am trying to understand is that when the beneficiary made the corrected presentation, will it not be construed to be a complying presentation if done before the LC expiry?

e.g. LC issued on 1st Jan 2014 to expire on 31st March 2014.

First presentation made on 15th Jan 2014 which was discrepant. The notice of refusal served by issuing bank on 18th Jan 2014. Beneficiary makes correction and makes complying presentation to issuing bank on 25th Jan 2014. Can issuing bank refuse to honour such presentation?

If so, is it covered specifically under any technical committee view or Docdex cases?

Your reply will help as we need to assist one of our clients on this.

Regards
Kotak User

iam90 · Post by **iam90** » Wed Apr 02, 2014 7:20 am

Kotak,

Regarding your specific case, I suppose the re-presentation will be non-compliant as it
was made beyond issuing banking's examination period, which is 5 banking days after the day of first-presentation. Please note all corrections should be completed within this period.

Regards,

Allan

hachem · Post by **hachem** » Wed Apr 02, 2014 7:02 pm

Hi kotakuser,

The statement of sub-article 16(a) is clear. Once the document are found discrepant, the issuing bank may refuse to honour. However, when the issuing bank determines that a presentation does not comply, it may in its sole judgement approch the applicant for a waiver of the discrepancies within the 5 banking days following the day of the presentation as per sub-article 14(b).

Regards
H Jallouli

Correction Of Discrepancy And Resubmission

Correction Of Discrepancy And Resubmission

Correction of Discrepant Docs

There are two more points

Correction of discrepancy and resubmission

re-presentation after correction

sub article 16(b)