acceptance / refusal of docs by buyer/L C Issuing Party

[gtraders2010]

If the negotiating bank found the documents are in order and credit compliant and discounted the bill after scrutinizing the export documents then Can Buyer L C issuing bank refuse to accept the documents / payment? After the shipment effected the buyer is saying that they do not need the goods now as it is much delayed. Whereas the goods are shipped within the prescribed time as per L/C. The negotiating bank is an international first class Bank who confirmed the L/C also in clauses available with…by and drawee is the same bank. In this case can the issuing bank / buyer refuse to accept the docs / payment by showing any small discrepancy?

[picant]

Hi Pal,

in good substance you say:
-l/c available by netotiation with advising bank and confirmed by this bank,
-compliant documents have been presented to the nominated/confirming bank ,
-confirmimg bank has negotiated the documents and credited you without recourse.
-It will be hard for the issuing bank to contest the negotiating bank, only if the latter has, effectively, omit to check carefully documents, and some discrepancies are found ,
the negotiating bank will have problems, but the fact that you have been credited without recourse , will save you to be debited.
Naturally you could be sue by the buyer, the issuing bank etc, but outside the l/c and UCP 600.
L/c is a mean of payment, but fraudolent behaviour could be always sanctioned by a Court.
Other comments appreciated
Ciao


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[gtraders2010]

Hi Ciao,

I am bit confused with your statement that the beneficiary naturally could be sue by the buyer, the issuing bank etc. Do you mean if the negotiating bank did a mistake in discounting the bill presented found as credit compliant. The buyer is trying to avoid receiving the goods by simply quoting that it is too late and whereas the goods are dispatched within the time as specified in L/C. That is the only reason the confirming bank discounted. Could you please address this? Thank you.

[picant]

Hi Pal,

in the first part of my sentence I stated that it is very difficult for the issuing bank to lift discrepancy to the nominated/confirming bank.
But, assuming that the nominated/confirming bank has, effectively, made a mistake, not considering a discrepant document, the issuing bank has the right to recover the amount paid, but this amount has been already credited to beneficiary"without recourse". Applicant found the document discrepant too and stpped the issuing bank to debit its account... We can enter in a Catch 22 situation ...that only a Court could settled.
Confirmation will save beneficiary by third party' faults, but not from its own fault.
Remember, we are speaking about true discrepancies.
Other comments appreciated
Ciao

[halafarrag]

Hi Pal/Ciao,

Think that if the issuing bank found discrepancies in documents presented under confirmed LC; the problem will be for the confirming bank with no any problem on the benf. (and as per the case we're discussing; ben. collected their cash already), and neither confirm nor issuing bank can come back on the benf.

But the benf. can help in getting amneded documents that have discrepancies to help confirming bank (to replace old discrepant documents) and/or push applicant to accept discrepant documents as is

Dear sender, Pls advise
But i just dont understand what are the discrepancies appeared in issuing bank??

Reg.
Hala