Are The Words "However Named" A Source of Confusion?

By Shahriar Masum
[Republished from DC Insight with the kind consent of the author.]

What's in a name? In Romeo and Juliet, Shakespeare wrote: "A rose by any other name would smell as sweet." Had Shakespeare been a trade expert, he might have said: "What's in a name? A transport document, however named, should serve its purpose."

The term "however named" first appeared in UCP 222 (1962) in relation to the definition of credit. UCP 222 General Provisions and Definitions B provides that the terms "credit" and "documentary credit" mean "any arrangement, however named or described, whereby a bank ... ".

Use of this phrase in the context of the definition of credit waives the requirement for formally naming a credit. Any arrangement, whether or not called a credit, is a credit as long as it states that it is subject to UCP. The reason behind the introduction of this phrase was to pin down confusion over the differences in the name of the credit (e.g., "letter of credit", "documentary credit", "guarantee", "documentary contract", etc.).

In the early 1960s, while ICC was busy introducing "however named" to stabilize letter of credit practice, something revolutionary was taking place in the transport industry, viz: containerization. In late 1960s, ISO (International Organization for Standardization) recommended standardized containerization features globally for the first time. This nourished the growth of freight forwarders, NVOCCs and multimodal transportation.

However, in the absence of any global standard for a transport document, small carriers and forwarders started to create documents on their own without realizing that these documents did not always fit the underlying principles that transport documents are based on. Even the name of the documents became so diverse that they could hardly be unified: e.g., liner, port-to-port, negotiable, straight, shipped, direct, combined transport, through transport, master B/L, house B/L, charter party B/L, option, memo bill, switched, FIATA Multimodal Transport Bill of Lading, etc.

UCP 400, 500 and 600
Letter of credit practitioners were not content with this diversification and, in most cases, failed to understand it. The number of discrepancies related to transport documents sharply increased, many of which were related to the title of the document. During the revision of UCP 400, it was decided to deploy a weapon to address the chaos, viz: "however named". Consequently, UCP 500 article 23 (and also the other transport articles with slight variations) provided: "If a credit calls for a bill of lading covering a port-to-port shipment, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which...". UCP 600 also followed this footprint. It was (and is) expected that the term "however named" would eliminate the discrepancies related to the title of transport documents. This was explained on different occasions by ICC, for example in Banking Commission Opinion R 230, which reads: "The words 'however named' make it clear that the title of the document is immaterial. What matters is the contents of the document. Therefore, the title of the FBL as such gives no ground for non-acceptance of the FBL as a Marine Bill of Lading." A similar explanation to the one appearing in Opinion R 230 and be found in Opinions TA 629 and TA 637.

Notwithstanding the fact that "however named" worked well in reducing unexpected discrepancies, it may be questionable whether the use of these words was necessary, especially in UCP 600, and whether there are serious consequences arising from them.

It is interesting that none of the UCP 600 articles requires a document to be titled, leaving room for any document to be untitled. The general rule applied to any document (other than a UCP 600 transport document, a commercial invoice and an insurance document) is stated in UCP 600 sub-article 14 (f): " ... banks will accept the document as presented if its content appears to fulfil the function of the required document and otherwise complies with sub-article 14 (d)." The idea, which was taken from ISBP 645, is further explained in ISBP 681 paragraph 41: "Documents may be titled as called for in the credit, bear a similar title or be untitled ... The content of a document must appear to fulfil the function of the required document."

Interestingly the idea of a "conflicting title" has been carefully excluded from this paragraph. Consider UCP 600 sub-article 14 (d), which reads: "Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit [emphasis added]." This implies that a title of a document is subject to examination. Indeed, ISBP 681 suggests that, in certain cases, the title of a document could lead to its acceptance or refusal. ISBP paragraph 14 reads: "However, if a credit requires a document evidencing a pre-shipment event (e.g., pre-shipment inspection certificate), the document must, either by its title or content, indicate that the event (e.g., inspection) took place prior to or on the date of shipment [emphasis added]."

In his book UCP 600: An Analytical Commentary, Professor James E Byrne writes: "The rule (article 14f) also operates with respect to the title of the document. The title itself does not per se constitute compliance ... the document would comply provided that it does not indicate a document of the opposite effect ... ". In my view, this means that means where a credit calls for a pre-shipment inspection certificate, a document titled "post-shipment inspection certificate" would not comply even if its data content fulfils the function of the former.

The problem is that the phrase "however named" offers wide latitude to distort the purpose of a transport document. In the strict sense, "however named" would allow for any title to be placed on a transport document even if it goes against the fundamentals of that document. One possible extreme example is a "To order" bill of lading titled as "Non-Negotiable Sea Waybill". If that were to be the case, it would be acceptable by virtue of "however named", despite the fact that the title is in breach of UCP 600 sub-article 14 (d).

If the intention of the UCP drafters were to allow this liberty, it would not seem to make any sense to examine the title at all. It would, in fact, be easier to say that "The title of a transport document need not be examined." But this is not the case. UCP 600 refutes this idea when a charter party is concerned. If the bill of lading is titled "Charter Party Bill of Lading", it is not acceptable as per article 20, which says that it must "contain no indication that it is subject to a charter party".

Banking Commission Opinion TA 641 emphasized the title of the document to determine that it was not a transport document. The relevant parts of the text are as follows:

"Documents required: 'Package of consignment notes (originals), or set of bills of lading (originals) or forwarding agent's 'goods receipt' - 1 original ... We presented a document issued and signed by 'C Shipping' entitled 'Goods Receipt.'

Analysis - A forwarding agent's 'goods receipt' is not a transport document covered by the content of UCP 600 articles 19-25. As implied by its title, such a document is a receipt for goods and is not a document intended to evidence shipment having occurred between two places, ports or airports [emphasis added]."

If there is litigation, the interpretation of the phrase "however named" could go either way. When "however named" was introduced in UCP 500, there was no ISBP. But now, when there is a well-accepted ISBP and sub-article 14 (f) of UCP 600, I wonder whether it was necessary to incorporate this phrase in UCP 600? The conclusion in the ICC opinions relating to the title of transport documents could still be reached if ISBP paragraph 41 were applied to transport documents. To avoid future confusion, it would be helpful if a revised ISBP could clarify "however named".

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