Installment Drawing Or Shipment Under Article 32

[nesarul]

Dear All,
pls make comments on the following query:
A credit stipulated the following shipment schedule:
Total quantity: 3000 mt
Last date of shipment: 30th July 2008
L/C Expired: 15th August 2008
Crerdit available: at the counter of issuing bank by sight payment.
1. 1st Shipment must be made within 1st July’08 to 10th July ’08 for 1000 mt.
2. 2nd shipment must be made within 11th July ’08 to 20th July ’08 for 1000 mt
3. Final shipment must be made latest by 30th July ’08 for 1000 mt.

Additional condition: Document must be presented within 15 days from the date of shipment.

Beneficiary shipped the goods for 1st installment: 5th July, 2008 for 1500 mt.
Beneficiary shipped the goods for 2nd installment: 15th July, 2008 for 1500 mt
Document presented [1st presentation] direct to the issuing bank: 15th July, 2008
Document presented [2nd presentation] direct to the issuing bank: 25th July, 2008.

On 1st presentation, the issuing bank raises discrepancy as per sub article 16(c)

Query:
are the 1st & 2nd shipment valid as per article 32?

Thanks
nesar

[Mehdi]

The actual installments of shipments appear to be different from the condition in respect of quantities as stipulated in the credit.

By virtue of wording “any instalment not shipped within the period” under article 32, the presentation may be bounched back.I think so. However, this may be wrong; other members should add valuabe comments.

Regards............Mehdi

[shahriar]

dear nesar,

ISBP P67

If a credit calls for instalment shipments, each shipment must be in accordance with the instalment schedule.

a possible question may be whether the schedule is restricting early shipment or not. i think the language of the first two is quite clear. each 1000 mt shipment has been given a time frame. but the third one says latest 30th july without stipulating the starting date. besides a installment can be shipped in part. so it is possible for the beneficiary to ship it any time before that. but i will consider some related issues here. first it is staring with the word "Final". that means it will have Preceding shipments and no more after that one. the way the goods are shipped doesn't meet that. second its a installment drawing. general sense says that final means third shipment. third; the language of first and 2nd shipment schedule restrict shipment more than 1000 mt.

do u agree?

regd

shahriar

[nesarul]

Dear Sir,
I do agree, another query:
Beneficiary presented document for 1st installment as on 10th june 2008. for second installment 15th june, 2008. as so on.
Issuing bank raised discrepancy on 1st drawing, and after examine of documents of second drawing, the issuing bank decided that document constitute complying presentation.
query:
does the honour of second drawing is automatically ceased due to discrepant document of 1st drawing?
thanks
nesar

[shahriar]

dear nesar,

no. each presentation is separate. both the doc has same discrepancy (if any). but issuing bank can waive anyone.

regd

shahriar

[shahriar]

dear nesar,

im extremely sorry for the last post. infact i was bit astonished to see such easy questions from you. but now i got the point. 10th June!!! im such a stupid. thats let presentation and Article 32 says

if a drawing or shipment by installments within given period is stipulated in the credit and any installment is not drawn or shipped with in the period allowed for that installment, the credit ceases to be available for that and any subsequent installment.

so all the subsequent presentations, there is no credit!! and i know you know all these already. sorry once again

regds

shahriar