pending right

[loankim]

Dear all,

I have a case that i doubt whether it can be done, your comments appreciated .
+ There is a presentation to the issuing bank enclosing a schedule.
+ Before checking details of docs, the issuing bank count the quantity of actual received docs to compare with the quantity of docs shown on schedule.
They determine that there is a difference, in particular, the issuing bank receive the quantity of some kind of doc less than description in schedule:
invoice: 3 originals - 5 originals; C/Origin: 1 original - 2 originals.
However, the number of docs received by the issuing bank is complied with LC terms.
+The issuing bank send a msg to the presenter with the content as follows:
" Due to the difference between the number of docs received and shown on schedule, such as.... Pls confirm the number of actual sending docs. The docs will be pending untill we obtain the confirm msg and the date that we receive this msg will be treated as a new presentation date in the process of payment"
.
The issuing bank base on conclusion R214-1995/96 "The practice of banks when returning documents where discrepancies are found is to return the documents presented in the same manner as they were received."
to do these action.
.
Are the issuing bank's actions correct ?
Is this right if saying that : counting the received docs to compare with credit's terms ( and schedule )constitutes checking docs, so the presented date cant be backward in determination if a presentation is complying after 5 banking days .Therefore , asking for confirmation from the presenter is necessary but the issuing bank dont have the right in pending the docs and recalculate the presented date unless they obtain the confirm msg beyond 5 banking days .
.
regards,

[iLC]

this is too much from the part of the issuing bank. first of all a schedule is not a part of documents and banks are required to check the documents and this examinartion must be within 5 days. so there is no option to delay the honor just becuase there is a mismatch beween the number of document presented. sometimes the schedule does become important; i.e no of presented documents are less than the no. of documents required while the schedule shows no. as per LC / the schedule claim less amount than the invoice or bill of exchange. in your case the no. of documents was as per LC. even if the presenting bank was wrong or some documents are lost in transit, what significance difference does it going to create? the presentation is complying and issuing bank must pay.

there is expert's opinion (sorry i cant recall exact reference now), when the issuing bank has ambiguity over a presentation, the issuing bank may defer payment till the issue is settled but there is no option to defer the presentation date. that is presentation date start ticking from the very first day.

[loankim]

Dear iLC,

While i admit that its a totally incorrect practice, i also assume that the reason for the issuing bank do that is: in the case discrepancies are found, when returning documents is to return all in the same manner as they received. what will happend if the presenting bank always insists that they sent 2 original cert. of Origin. According to sub-14g reads, "a document presented but not required by the credit will be disregarded and maybe return to the presenter" i.e the issuing bank only may return or are agreeable to forward without responsibility. So if they dont release docs to the applicant they will have to return docs whilst they didnt receive no. of docs as schedule shown. They need the confimation before start the processing of the docs, all just is protecting themselves because its so hard to determine who isnt honest in that case.
i wonder whether or not the relationship between defer payment and defer the presentation date...seems 2 issues but can interace.
.
, thanks for your opinion and pls comment on my thought again !

regards,