Expired Date Of Letter Of Credit

[eftapasixos]

Hello to everyone!

Please , if possible help me with the following,

My company that I work at, made an export on September of 2015 using letter of credit. This letter of credit in paricular, set two parts of payment.

The first one, which was the for the 70% of the total value was payable with the presentation of the usual documents such as Bill of lading, Invoice, packing list, some cerificates etc.

The second one, which was for the remain 30%, was to be paid with the presentation of the invoice and a certificate signed by both two companies that declares that the machines have been installed (by my company) and are in excellent operation.

Of course, the 70% was paid as the terms of the LC were fullfilled within the deadlines.

But my issue is that because of our customer's delays (as they did not have their facilities where our macines would be installed ready), the installation of the machines could not be done within the deadlines of the LC (date of expire), but only after a year of it.

More specifically the installation was finished one year after the expiration date of the letter of credit. Of course, our customer recognizes that the delay is because of him and has absolutely no problem to sign the certificate in order for our company to be able to collect the 30% of the total amount.

My question is that will the issuing bank accept the documents that our company will present after one year of the LC's expiration? In this point , I have to underline that the LC does not mention a thing about the date that the beneficiary is obliged to present the second set of the documents in order to collect the remain 30% of the total amount.

Thank you in advance,

[abrar]

1.In order to make a compliant presentation the LC would need to be extended.

2. Or, the LC is not extended and the applicant grants a waiver and authorises payment relating to discrepancy of LC Expired.

3. Or, payment is authorised outside the terms of the LC by the applicant to the bank as a third party payment.

[abrar]

If the beneficiary expects irrevocable payment from the issuing bank (or confirming bank) without contestation it is a given that a compliant presentation is required to be made within LC expiry, even if such presention can only be made well after actual shipment.

[eftapasixos]

Thank you for your prompt answers! I think that the only way to procced is to present the documents knowing the fact that the date of lc was expired 1 year ago.. My question is that, will the applicants bank accept the documents (of course after asking the applicant)? OR will reject them despite the fact that the applicant accept them?

[gegeeee]

As stated in sub-article (b) of 16 iii, the issuing bank may seek a waiver from the applicant; however, it has no obligation to do so. Likewise, if it does, it has no obligation to accept a waiver it receives from the applicant.