Release of Payment after expiry date of L.C.

[nidhaan]

Expiry Date:
Letter of credit required submission of five documents, One document was Inspection Certificate by representative of Buyer.
First four documents received and got accepted from buyer. Fifth Document not received till date of payment. Bank demanded the required document from the supplier bank and Extended payment date till expiry date. Document was not received till expiry date.
Supplier requested Buyer to extend expiry date. Buyer requested issuing bank either to extend the expiry date or it shall be deemed as L.C. has expired. Issuing Bank did not extend the expiry date but released the payment of L.C to the Supplier Bank after 5 days of Expiry date. Is bank justified to release payment :
1, Without receipt of required document.
2. After the Expiry date.

[kadir]

Dear Nidhaan,
As far as i understand from yr scenario;
FOR THE FIRST DOCUMENT:ISBP para. 4 warns that a credit should not require presentation of documents that are to be issued or countersigned by the applicant. If a credit is issued including such terms, the beneficiary must either seek amendment or comply with them and bear the risk of failure to do so
.
Documents under fld 46A of the credit must be presented to constitute a complying presentation and missing any required documents would result in a non-complying presentation and since the first document isnot presented, issuing bank should reject the documents in accordance with art. 16 of UCP. if IB failed to reject the documents, it must honor the presentation.
.
Issuing bank should not execute the payment without presentation of missing documents or without consent of the applicant.
...
Rgrds

[mia vervacke]

1) Which paymentconditions have been stipulated in the letter of credit (at sight/deffered payment)

2) It's not clear from your question, when issuing bank is exactly accepting the documents. If issuing bank accepts the documents with discrepancies (inspection certificate missing) and releases the documents to the buyer than it is obliged to pay the documents (no matter if inspection certificate is presented or not after accepting the documents). When did buyer receive the 4 presented documents?

3) You also mention that issuing bank extended payment date till expiry date. Did they do this on suppliers request? Because if issuing bank has accepted the documents, they can not change paymentinstructions unilaterally.