Bill Of Lading Contain On CFR Basis In Containers

[Hwibisono]

Helo,

My name is Hilly, I have some question about statement in Bill of Lading which it stated In the Letter of Credit field no. 46A (documents required) mention : Full Set of clean ship on board ocean Bill of Lading issue to the order of Bank xxxxx , mark applicant as notify party, and indicating freight prepaid on CFR basis in Container in 3 original and 3 non negotiable.

We present Bill of Lading to Negotiating Bank and send to Issung Bank , Consignee to the order of bank xxxx, and Notify Party Applicant name and address. in the Bill of Lading mentioned "freight prepaid" and "21x40" GP containers "said to contain" and mentioned detail of Container number.

Issuing Bank reject the documents and said that the Bill Lading was discrepancies " The Phrase On CFR Basis in Container " and they refuse to pay the documents.

So we your advise on the above mentioned case.
Thank you

[cristiand969]

Well, it seems either the issuing bank employed a new checker (poorly prepared) or acts in bad faith.
What would be the difference in practice if CFR basis is included or not along with freight prepaid ? Would be a freight collect clause or "freight unprepaid" ? Obviously not ! When B.L stated that freight is prepaid, at least CFR terms was accomplished as CFR means cost and freight paid, right?
The doctrine of strict compliance was put into the grave by UCP 600!
The issuing bank has not basis to reject documents !

[SANUSILAMIN]

DEAR HILLY

I THINK THE MAIN REASON FOR THIS DISCREPANY IS DESCRIPTION OF GOODS WHICH SHOWN ON BILL OF LOADING NOT ACCORDING TO WHAT MENTIONED ON LC UNDER ARTICLE 45A ON LC THAT OPENED FOR YOU BY THE APPLICANT.

SO I WOULD ADVICE YOU TO SEND A COPY OF DOCS TO THE APPLICANT TO CHECK AND TELL HIM INSTRUCT THE OPENING BANK TO ACCEPT THE MENTIONED DISCREPANCIES.

I HOPE THAT BE USEFUL
I AM WAITING YOUR SOON REPLY
REGARDS

[cristiand969]

Dear SANUSILAMIN
Straight for the beginning you are leaving from the assumption that document are discrepant and advice the way how the issue is to be solved, but the question was whether the documents was discrepant or not. The field 45A is not relevant to this question as is not about the description of goods in field 45 A but rather on how BL to be marked ;freight prepaid on CFR basis. Can be a "freight prepaid" made on inferior delivery terms as CFR giving the fact that CFR means COST and FREIGHT PAID/PREPAID ?

[SANUSILAMIN]

Dear Cristiand
I want to say thank you for your explanation your comments has been very useful to me.

[Fajar]

Dear Cristiand

Thank you for your explanation, im totally agree with you

[saikumar1208]

Freight prepaid will be marked if Incoterm choosen is either CFR or CIF. As LC is clearly stating that BL to mention freight prepaid on CFR basis. So as Bl doesnt capture the incoterm think issuing bank is raising the discrepancy. However if incoterm is mentioned in any other document as CFR then it would not be a discrepancy.