Question: Contract terms stipulate "Net Cash Against a Customary Set of Shipping Documents for 98%. Balance 2% to be payable to XYZ towards commission."Documents drawn as follows :
• Invoice & Bill of Exchange drawn for 100% with separate instructions to remit 98% and pay 2% to XYZ A/C
• Invoice prepared for 100% less 2% commission to XYZ net 98%. Bill of Exchange drawn for net 98%.
Which of the above two are correct?
Answer: If the term of L/C is to make payment of 98% of the proceed against shipping documents and balance 2% to be payable to XYZ towards commission, then the best course will be to prepare invoice for 100% assign 2% of the proceed in favour of XYZ and draw B/E for the balance 100%.
Question: We had negotiated some export bills under various DCs issued by the Standard Chartered Bank, Hong Kong calling for "Clean Shipped on Board Marine Bills of Lading". Documents drawn as per L/C terms were sent to the issuing bank after negotiation.
The B/Ls issued by M/s Maersk India Ltd have the following clause therein :
"Received in apparent good order and condition, unless otherwise stated herein, for transportation on board the ocean vessel mentioned herein or any substituted vessel or on board the feeder vessel or other means of transportation (rail or truck) if place of receipt is named in this Bill of Lading the goods or packages or containers said to contain goods, hereinafter called "the Goods", specified herein for carriage from the port of loading named herein or place of receipt if mentioned herein, on a voyage as described and part of discharge named herein or deliver at the place of delivery if mentioned herein, such carriage, discharge or delivery being always subject to the exceptions, limitations, conditions and liberties hereinafter agreed in like order and condition at the port of discharge or place of delivery if named as the case may be, for delivery unto the Consignee mentioned herein or to his or their assigns where the Carrier’s responsibilities shall in all cases and in all circumstances whatsoever finally cease. It is further agreed that Containers may be stowed on deck without notice pursuant to Clause 16 on the reverse side of this Bill of Lading. In witness whereof the number of original Bills of Lading stated on this side have been signed one of which being accomplished the other(s) to be void".
The Standard Chartered Bank refused the documents under article 23 a(ii) of UCP 500 on the ground that the on Board notation on the B/L does not show actual vessel’s name.
We believe that the discrepancy pointed out does not hold good as the printed clause mentioned on the front side of our B/L is neither a "substitution clause" nor does it represent the indication "intended vessel or similar qualification".
We would like to seek opinion of the group as to the validity of the stand taken by our bank.
Answer: This case is similar to the Query TA.18 handled by Banking Commission bearing a similar clause stating inter-alia "by the vessel named herein or any substitute at the carriers option and/or other means of transport" where the Banking Commission has held that if the B/L contains the indication ‘intended vessel or similar qualifications in relation to the vessel, loaded on board or named vessel must be evidenced by the on board notation on B/L to the date on which the goods have been loaded.
Even if they have been loaded on the vessel named as the ‘intended vessel’. The Banking Commission had further added that where the pre-printed statement ‘loaded on board the vessel’ appears this should also incorporate the name of the actual vessel even if this is the same vessel which appears under the heading ‘ocean vessel’.
The same logic as in the case of Banking query TA.18 will apply to this case. Since no finality could be reached in regard to this particular query even at the Banking Commission it will be pre-mature to express any opinion. We may possibly have to wait till a unanimous opinion crystallizes in the Banking Commission on this subject. (Since handing out of this opinion the Banking Commission has decided that in the circumstances of this particular case, name of the actual vessel need not be given in the on board notation).
Question: We are manufacturer exporter of Home furnishings and Bags . Nowadays a lot of buyers are asking for FCR (forwarders cargo receipt, for sea shipment) and House Airway Bill for Air Shipment.
These are normally issued by shipping/forwarding agents nominated by the buyer who have their counterparts/business partners at the other end. When they take in charge goods from the exporter they issue House Airway Bill/FCR which shows bank as the consignee but the master B/L or the Airway Bill shows their counterpart as the consignee.
The nominated shipping agents handover only House Airway Bill/FCR copy to exporter. When the goods reach the port of destination, their counterpart releases the goods immediately and handover to the applicant. The importer after taking delivery of the goods if he wishes to avoid payment, simply asks his banker to engineer, and discrepancies return the documents making the exporter suffer.
Is the release of goods by these shipping agents to the buyer justified? Whether or not it is justified, what are the precautions that need to be taken for getting paid for?
Answer: This is not a UCP issue. If a House Airway Bill/FCR shows bank as the consignee and the shipping agents deliver the goods to the applicant without the House Airway Bill/FCR as presented through Bank, they are liable to recompense the beneficiary. They need to be dragged to the courts of law or to an arbitration depending upon the terms of contract of particular case between the beneficiary and the shipping agents.
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