Documents sent by 2nd beneficiary directly to issuing bank

[Sazzad]

Dear all

We are the first beneficiary of an LC and we transferred the LC to a 2nd beneficiary. 41D indicates the C is available with any bank by Negotiation. It also states third party documents are acceptable.

2nd beneficiary has mistakenly sent the documents to the issuing bank with their price in their invoice but the invoice was raised to the applicant.

Now, the issuing bank has accepted the documents. What can be done at this moment.

Regards

Sazzad

[Navi]

Hi,

Very hard case.

Firstly, is it clearly indicated in the LC which bank is authorized to transfer? Second beneficiary seemed to have violated UCP600, item 38k, presentation by second beneficiary must be made to the transferring bank.
I have not found any opinion similar to this case. But issuing bank, before accepting presentation, must contact the transferring bank. At the moment, if I were the transfering bank, I would send an urgent message to issuing bank and request invoice substitution. (I assume that LC not expired).

[cristiand969]

Has the second beneficiary really 'mistakenly' sent the docs to issuing bank?
He has presumably indicated in the invoice the buyer as first beneficiary and the issuing bank handled /accepted documents in a way that prejudiced the right of first beneficiary to substitute its own invoice. Since the issuing bank has given undertaking to pay to the first beneficiary, I am wondering how will handle this issue when effecting payment to the second beneficiary.

[picant]

Hi Pal,

it may happen when l/c transferred totally and the transferring bank authorize other bank to act so.
Invoice may be issued to applicant directly, first beneficiary will receive its compansation outside l/c,
probably being an applicant's agent.
Other comments appreciated.
Ciao

[Sazzad]

Dear All

Thanks for your opinions. 2nd beneficiary bank sent a message to issuing bank stating their mistake and also stating that the replacement invoice will be sent via 1st beneficiary bank. The documents were routed accordingly and all issues solved.

Now my question is, what can we do to ensure that if this happens again, issuing bank will not be able to accept the documents?

[Amiloyal]

Your bank ( advising / transferring) must immediately communicate with the issuing bank as there's breach to UCP and do I dont think that issuing bank will accept them .
Si dont worry about it it will be fixed automatically