Uniform Customs and Practice

Dr. Jens Nielsen

Nicolai Nielsen
Copyright (c) 2013
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No reproduction of this material may be made without express written permission.

The Institute of International Banking Law & Practice, Inc.

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ISBN 978-1-888870-59-6

Uniform Customs and Practices is written by Dr. Jens Nielsen and Nicolai Nielsen and
is published by the Institute of International Banking Law & Practice, Inc.
Opinions expressed in it do not necessarily reflect the official positions of the Institute.

This edition is published by arrangement with:

ICC Services, Publications Department
38 Cours Albert 1er, 75008 Paris, France
www.iccbooks.com
Contents

Acronyms xvii

Introduction 1
The first to the sixth revision of the UCP . . . . . . . . . . . . . . . . . . . . . 1
Despite reduction, no material changes . . . . . . . . . . . . . . . . . . . . . . . 1
Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
New terminology, no consequences in practice . . . . . . . . . . . . . . . . . . . 2
Prepayment of credits probably invalid . . . . . . . . . . . . . . . . . . . . . . . 3
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A. General Provisions and Definitions

Article 1 - 5 7

Art. 1 Application of UCP 9

Inclusion by reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
No more adherence lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Individual articles as usance . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The UCP and standby letters of credit . . . . . . . . . . . . . . . . . . . . 10
Limited applicability of the UCP to standby letters of credit . . . . . . . . 11
Art. 1 sentence 2 - Modifications and exclusions of the UCP . . . . . . . . . . . 12
Validity of LC conditioned on acts of the beneficiary . . . . . . . . . . . . 12

Art. 2 Definitions 15
Summary of the principal terms used in the UCP . . . . . . . . . . . . . . . . . 16

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Partially new terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Advising Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Confirming Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Complying presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Honour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Nominated Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Presenter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Art. 3 Interpretations 23
Summary of relevant rules of interpretation . . . . . . . . . . . . . . . . . . . . 24
Singular equals plural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Irrevocability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legalization/Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Branches of a bank in different countries . . . . . . . . . . . . . . . . . . . 26
Irrelevance of generic descriptions regarding the issuer of a document . . . 27
Self-issuance of documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Exact designation of a third-party issuer . . . . . . . . . . . . . . . . . . . 27
Signature by issuer or agent of issuer . . . . . . . . . . . . . . . . . . . . . 28
Agent cannot sign inspection report . . . . . . . . . . . . . . . . . . . . . 28
General expressions as to dates . . . . . . . . . . . . . . . . . . . . . . . . 29

Art. 4 Credits v. Contracts 31

Art. 4 a para 1 - Independence of Credit and underlying transaction . . . . . . 31

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Art. 4 a para 1 sent. 2 - Irrelevance of defenses . . . . . . . . . . . . . . . . . . 34

Art. 4 a para 2 - Beneficiary not party to the Credit . . . . . . . . . . . . . . . 34
Art. 4 b - No reference to the underlying transaction . . . . . . . . . . . . . . . 34
Avoiding references to similar credits . . . . . . . . . . . . . . . . . . . . . 35

Art. 5 Documents v. Goods, Services or Performance 37

B Availability and Expiry of Credits/Obligations of Issuing/Confirming

Bank
Article 6 - 9 39

Art. 6 Availability, Expiry Date and Place for Presentation 41

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Expiry and availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Synchronization of availability and expiry as the typical case . . . . . . . 42
Nominated Bank and availability . . . . . . . . . . . . . . . . . . . . . . . 42
Place of performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Position of the beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Art. 6 a - Indication of availability . . . . . . . . . . . . . . . . . . . . . . . . . 44
Art. 6 b - Determining the type of credit . . . . . . . . . . . . . . . . . . . . . . 45
No mixing of types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
No draft drawn on applicant . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Art. 6 d (i) - Date of Expiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Art. 6 d (ii) - Place of expiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Art. 6 d (ii) sentence 3 - Additional place of expiry . . . . . . . . . . . . . . . . 48
Art. 6 e - Extension of the expiry date . . . . . . . . . . . . . . . . . . . . . . . 48
Determining of the expiry date when using time periods . . . . . . . . . . 48
Meeting deadlines despite force majeure . . . . . . . . . . . . . . . . . . . 48

Art. 7 Issuing Bank Undertaking 51

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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The concept of ”primary liability” . . . . . . . . . . . . . . . . . . . . . . 53

Art. 7 a (i) - Credit available with issuing bank . . . . . . . . . . . . . . . . . . 53
Obligations of the issuing bank . . . . . . . . . . . . . . . . . . . . . . . . 54
Negotiation credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Acceptance credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Liability of the drawee bank . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Art. 7 b - Time the credit obligation becomes effective . . . . . . . . . . . . . . 56
Art. 7 c - reimbursement obligation . . . . . . . . . . . . . . . . . . . . . . . . . 57
Direct or indirect reimbursement . . . . . . . . . . . . . . . . . . . . . . . 57
Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Art. 8 Confirming Bank Undertaking 59

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Joint and several liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Art. 8 a - Different applicable laws . . . . . . . . . . . . . . . . . . . . . . . . . 60
Duties of confirming bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Confirming Bank’s obligation to honour . . . . . . . . . . . . . . . . . . . 61
Art. 8 a (ii) - Negotiation without recourse . . . . . . . . . . . . . . . . . . . . 62
Art. 8 b - Time of effectiveness of confirmation . . . . . . . . . . . . . . . . . . 63
Art. 8 c - Reimbursement obligation . . . . . . . . . . . . . . . . . . . . . . . . 63
Art. 8 d - Requests for confirmation/Advise without confirmation . . . . . . . . 64
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Art. 8 d - Rejection of requests/authorizations to confirm a credit . . . . . . . 64
Expedient treatment of requests/authorizations to confirm . . . . . . . . . 65

Art. 9 Advising of Credits and Amendments 69

Mandate to advise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Art. 9 a - Advise without undertaking to honour/negotiate . . . . . . . . . . . 70
Art. 9 b - Advise after examination of apparent authenticity . . . . . . . . . . . 70
Art. 9 c - Second advising bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Art. 9 d - Once advising bank - always advising bank . . . . . . . . . . . . . . 71

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Art. 9 e - Notification of rejection of mandate . . . . . . . . . . . . . . . . . . . 71

Advise without examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

C. Amendments, Telecommunication, Pre-advise, Reimbursement

Article 10 - 13 73

Art. 10 Amendments 75
Art. 10 a - Amendments only with beneficiary’s consent . . . . . . . . . . . . . 76
Art. 10 b - Amendments valid with issuance (mailbox theory) . . . . . . . . . . 76
Art. 10 c - Beneficiary needs to expressly accept amendments . . . . . . . . . . 77
Art. 10 d - Amendments will not be deemed to be accepted . . . . . . . . . . . 77
Partial Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Art. 10 f - Deadlines for acceptance are invalid . . . . . . . . . . . . . . . . . . 78

Art. 11 Teletransmitted and Pre-Advised Credits and Amendments 79

Art. 11 a - Validity of teletransmitted credits . . . . . . . . . . . . . . . . . . . 79
Irrelevance of subsequent mail confirmation . . . . . . . . . . . . . . . . . 80
Art. 11 b - Preliminary advise . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Art. 12 Nomination 83
Art. 12 a - Without confirmation no obligation of nominated bank . . . . . . . 83
Art. 12 c - No obligation because of examination/forwarding of documents . . . 84
Art. 12 b - Problem of prepayment in deferred payment/accept credits . . . . . 84

Art. 13 Bank-to-Bank Reimbursement Arrangements 85

Introductory remark
Choice between direct and indirect reimbursement . . . . . . . . . . . . . . 86
Art. 13 a - Option to apply URR, ICC Publ. No. 725 . . . . . . . . . . . . . . . 86
Art. 13 b - Reimbursement not subject to URR . . . . . . . . . . . . . . . . . . 87
Art. 13 b (i) - No date of expiry . . . . . . . . . . . . . . . . . . . . . . . 87
Art. 13 b (ii) - Proof of payment . . . . . . . . . . . . . . . . . . . . . . . 87
Art. 13 b (iii) - Liability of Issuing Bank for loss of interest and expenses 87

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Art. 13 b (iv) - Provision for charges . . . . . . . . . . . . . . . . . . . . . 87

Art. 13 c - Liability of Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . 87
Loss of documents en route to reimbursing bank . . . . . . . . . . . . . . 88

D. Examination of Documents
Article 14 - 18 89

Art. 14 Standard for Examination of Documents 91

Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Strict compliance of documents with provisions of the credit . . . . . . . . 92
Business consideration or practicality irrelevant . . . . . . . . . . . . . . . 93
Deviations not acceptable . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Admissibility and limits of interpretation . . . . . . . . . . . . . . . . . . 94
Strict Compliance/Substantial Compliance . . . . . . . . . . . . . . . . . 94
US courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Could not possibly mislead . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Decisions of the ICC/courts . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Immaterial discrepancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Typographical/clerical errors . . . . . . . . . . . . . . . . . . . . . . . . . 98
Usage of standard Abbreviations harmless . . . . . . . . . . . . . . . . . . 99
Exact indication of corporate form . . . . . . . . . . . . . . . . . . . . . . 99
Obvious substantive errors . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Art. 14 a - Complying Presentation . . . . . . . . . . . . . . . . . . . . . . . . . 100
Discontinuation of four position papers . . . . . . . . . . . . . . . . . . . . 101
On their face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Art. 14 b UCP 600 Time for examination 5 days . . . . . . . . . . . . . . . . . 102
No cumulation of the five day period . . . . . . . . . . . . . . . . . . . . . 102
Consequences of missing the five day deadline (Article 16 f UCP 600) . . 103
The five-day deadline when processing takes place at the head office . . . 103
Five-day period and second presentation . . . . . . . . . . . . . . . . . . . 104
Shortening of the expiry date when issuing shipping documents . . . . . . 104

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Art. 14 d - Examination for conflicts among documents . . . . . . . . . . . . . 105

Previous legal status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Defenses against unwarranted rejection based on inconsistency . . . . . . 105
Art. 14 e - Description of goods/services in other documents . . . . . . . . . . . 106
Art. 14 f - Documents other than a transport document . . . . . . . . . . . . . 106
When can beneficiary issue documents . . . . . . . . . . . . . . . . . . . . 107
Exact designation of a third party issuer . . . . . . . . . . . . . . . . . . . 107
Issuance of certificates of origin . . . . . . . . . . . . . . . . . . . . . . . . 107
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Inadmissible signature by an agent . . . . . . . . . . . . . . . . . . . . . . 109
Art. 14 f - New criterion of examination of other documents according to ”func-
tion” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Distinction between function and business practice . . . . . . . . . . . . . 110
Art. 14 g - Not required document: disregarded and returned . . . . . . . . . . 113
Art. 14 g - Non-documentary payment conditions to be disregarded . . . . . . . 113
Typical non-documentary payment conditions . . . . . . . . . . . . . . . . 115
Art. 14 i - Issuance of documents before issuance of the credit . . . . . . . . . . 115
Art. 14 j UCP 600 - No identity of addresses . . . . . . . . . . . . . . . . . . . 116
Art. 14 k - Beneficiary need not be shipper/consignor . . . . . . . . . . . . . . 117
Art. 14 l - Freight forwarder documents not acceptable . . . . . . . . . . . . . . 117

Art. 15 Complying Presentation 119

Art. 15 a to c - Invitation to expeditious processing . . . . . . . . . . . . . . . . 119

Art. 16 Discrepant Documents, Waiver and Notice 121

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Art. 16 a - Rejection of non-complying documents . . . . . . . . . . . . . . . . 122
Art. 16 b - Unchanged option to contact the applicant . . . . . . . . . . . . . . 122
Art. 16 c - Requirement for a valid notice for rejection . . . . . . . . . . . . . . 123
Art. 16 c - the four options to treat non-compliant documents . . . . . . . . . . 123
Art. 16 d - Timeliness of notice of rejection . . . . . . . . . . . . . . . . . . . . 125

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Art. 16 e - Return of the documents to the presenter . . . . . . . . . . . . . . . 126

Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Art. 16 f - Consequences of belated notice of rejection . . . . . . . . . . . . . . 126
Acceptance of non-compliant documents . . . . . . . . . . . . . . . . . . . 126
Removal of Article 14 f UCP 500 regarding payments under reserve . . . . 127
Choice between internal and external reservation . . . . . . . . . . . . . . 127
Agreement regarding payment under reserve . . . . . . . . . . . . . . . . . 128
Payment against guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Art. 17 Original Documents and Copies 131

Introductory remark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Art. 17 a UCP 600 - Requirement to present at least one original . . . . . . . . 133
Bank guarantee as substitute for missing documents . . . . . . . . . . . . 133
Art. 17 b - Acceptance of marks, stamps, or labels as signature . . . . . . . . . 134
Acceptance of facsimile or electronic signatures . . . . . . . . . . . . . . . 134
Facsimile Bills of lading . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Document which are not subject to formal legal requirements . . . . . . . 135
Identifying modifications to documents . . . . . . . . . . . . . . . . . . . . 135
Art. 17 c - Extended Recognition of originals . . . . . . . . . . . . . . . . . . . 136
Art. 17 c (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Art. 17 c (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Art. 17 c (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Art. 17 d - Originals as substitutes for copies . . . . . . . . . . . . . . . . . . . 137
Art. 17 e - Multiple documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

Art. 18 Commercial Invoice 139

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Art. 18 a - Signature by beneficiary not necessary/no issuance by third party . 140
Art. 18 b - Commercial invoice amount higher than Credit amount . . . . . . . 140
Art. 18 c - Verbatim compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 141

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Application also to services and other performance . . . . . . . . . . . . . 141

Repetition even of standard features as beneficiary’s own statement . . . . 141
Foreign language descriptions . . . . . . . . . . . . . . . . . . . . . . . . . 142
Art. 18 a - Faulty description of the goods . . . . . . . . . . . . . . . . . . . . . 143
Missing/harmful additions . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Delivery term as part of the description of goods . . . . . . . . . . . . . . 144
Minimum percentage rates/errors in calculation . . . . . . . . . . . . . . . 144
Contradictory indications . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

E. Shipping Documents
Article 19 - 25 147

Overview 149
Individual regulation for each shipping document . . . . . . . . . . . . . . . . . 149
Immaterial change of ranking or sequence . . . . . . . . . . . . . . . . . . . . . 149
”Anyone” as carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Formalities of signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Naming of shipping document irrelevant . . . . . . . . . . . . . . . . . . . . . . 152
New Terminology, focus on characteristics of required documents . . . . . . . . 153

Art. 19 Transport Document Covering at Least Two Different Modes of Transport155

Concept and economic importance . . . . . . . . . . . . . . . . . . . . . . . . . 156
Meaningless placement in front . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Distinction B/L and MT-document . . . . . . . . . . . . . . . . . . . . . . 158
Limited applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Problematic interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Art. 19 a (i) - Formalities of signature . . . . . . . . . . . . . . . . . . . . . . . 160
Indication of the carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Signatures by agents and masters . . . . . . . . . . . . . . . . . . . . . . . 161
Art. 19 a (ii) - Indication of the place of dispatch, taking in charge, or shipped 161
Art. 19 a (iii) - Indication of beginning and end of the carriage . . . . . . . . . 162

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Art. 19 a (iv) - Presentation of a sole original or full set . . . . . . . . . . . . . 162

Art. 19 a (v) - Admissibility of short form or blank back transport documents . 162
Art. 19 b - Transshipment defined . . . . . . . . . . . . . . . . . . . . . . . . . 163
Art. 19 c - Irrelevance of prohibitions to transship . . . . . . . . . . . . . . . . 163

Art. 20 Bill of Lading 165

Port-to-port shipment/port of loading different from place of taking in charge . 166
Multimodal Transport documents still the exception in credit transactions 167
Pre-carriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Art. 20 a - Correctly specifying an on board bill of lading in a credit . . . . . . 168
Art. 20 a (i) - Indication of the function as carrier, master or agent . . . . . . . 169
Identification of carriers: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Art. 20 a (i) - Signature and indication of agency . . . . . . . . . . . . . . . . . 170
Art. 20 a (ii) - On board notation . . . . . . . . . . . . . . . . . . . . . . . . . 171
Multi-purpose forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
On-board notation by NVOCC . . . . . . . . . . . . . . . . . . . . . . . . 173
Art. 20 a (ii) para 3 - ”Intended vessel” or similar qualifications . . . . . . . . . 173
Art. 20 a (iii) - Correct indication of itinerary . . . . . . . . . . . . . . . . . . . 173
Place of Receipt/Place of Delivery . . . . . . . . . . . . . . . . . . . . . . 174
No recognition of place of receipt as port of loading . . . . . . . . . . . . . 174
Exceptional use of ”Place of Receipt/Final Destination” to describe ocean
voyage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Determining port of loading/discharge . . . . . . . . . . . . . . . . . . . . 178
Art. 20 a (iv) - Presentation of sole original or full set . . . . . . . . . . . . . . 179
Art. 20 a (v) - Acceptability of short form or blank back bills of lading . . . . . 179
Art. 20 a (vi) - Charter Party bills of lading not acceptable . . . . . . . . . . . 180
Art. 20 b - Transshipment defined . . . . . . . . . . . . . . . . . . . . . . . . . 180
Art. 20 c - Prohibitions to transship and acceptable reservations . . . . . . . . 181
Art. 20 c (ii) - Irrelevance of prohibitions to transship when shipping containers 181
Art. 20 d - Transshipment in emergencies . . . . . . . . . . . . . . . . . . . . . 181

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Art. 21 Non-Negotiable Sea Waybill 183

Concept and economic importance . . . . . . . . . . . . . . . . . . . . . . . . . 184
Art. 21 a (i) UCP 600 - Correct requirement . . . . . . . . . . . . . . . . . . . 185
Signature by carrier, agent or master . . . . . . . . . . . . . . . . . . . . . 185
Art. 21 a (ii) - on board notation . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Art. 21 a (iii) - Port of loading different from place of taking in charge . . . . . 186
Art. 21 a (iv) - Presentation of an original or complete set . . . . . . . . . . . . 186
Art. 21 a (v) - Short form of blank back non-negotiable sea waybill . . . . . . . 186
Art. 21 a (vi) - Charter party documents not acceptable . . . . . . . . . . . . . 186
Art. 21 b - Transshipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Art. 21 c - Admissibility of Transshipment . . . . . . . . . . . . . . . . . . . . . 187
Art. 21 d - Emergency clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Art. 22 Charter Party Bill of Lading 189

Term and economic importance . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Article 22 a - Correctly requiring a charter party B/L . . . . . . . . . . . . . . 190
Article 22 a (i) - Signature by owner, charterer, master or agent . . . . . . 191
Article 22 a (ii) - On board notation . . . . . . . . . . . . . . . . . . . . . 191
Article 22 a (iii) Indication of itinerary . . . . . . . . . . . . . . . . . . . 192
Article 22 a (iv) - Presentation of one original or complete set . . . . . . . . . . 192
Article 22 b - Irrelevance of charterparty contracts when presented . . . . . . . 192

Art. 23 Air Transport Document 195

Introductory remark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Form design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Art. 23 a (i) - Formal requirements of issuance . . . . . . . . . . . . . . . . . . 197
Indication of the name of the carrier . . . . . . . . . . . . . . . . . . . . . 197
Art. 23 a (i) - Signature of carrier or carrier’s agent . . . . . . . . . . . . . . . 197
No double role as agent and carrier . . . . . . . . . . . . . . . . . . . . . . 198

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Inadmissible limitation of the position as carrier . . . . . . . . . . . . . . 198

Art. 23 a (ii) - Indication of acceptance for carriage/actual time of departure . 198
Art. 23 a (iii) - Time of issuance as proof of time of shipment . . . . . . . . . . 198
Art. 23 a (iv) - Indication of itinerary . . . . . . . . . . . . . . . . . . . . . . . 199
Art. 23 a (v) - Presentation of originals . . . . . . . . . . . . . . . . . . . . . . 199
Art. 23 a (vi) - Reference to to terms and conditions . . . . . . . . . . . . . . . 200
Art. 23 b - Transshipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Art. 23 c (i) - Admissible reservation to transship . . . . . . . . . . . . . . . . . 200
Art. 23 c (ii) - Irrelevance of prohibitions to transship . . . . . . . . . . . . . . 200

Art. 24 Road, Rail or Inland Waterway Transport Documents 203

General provisions for domestic and international shipping documents . . . . . 204
Art. 24 a (i) - Indication of the name of the carrier/stamping . . . . . . . . . . 206
Art. 24 a (i) - Signature or stamping by carrier or agent . . . . . . . . . . . . . 206
Art. 24 a (i) - Indication of receipt of cargo sufficient . . . . . . . . . . . . . . . 206
Art. 24 a (ii) - Indication of date of shipment/date of receipt . . . . . . . . . . 207
Art. 24 a (iii) - Indication of place of shipment and place of destination . . . . 207
Art. 24 b - Lowered requirements for recognition of original documents . . . . . 207
Art. 24 c - Full set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Art. 24 d - Transshipment redefined . . . . . . . . . . . . . . . . . . . . . . . . 208
Art. 24 e (i) - Admissible reservation of transshipment . . . . . . . . . . . . . . 208
Art. 24 e (ii) - Irrelevance of prohibitions of transshipment . . . . . . . . . . . . 208

Art. 25 Courier Receipt, Post Receipt or Certificate of Posting 211

Art. 25 a (i) - Courier Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Art. 25 a (ii) - Signature, date of shipment . . . . . . . . . . . . . . . . . . . . 212
Art. 25 b - Courier charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Art. 25 c - Post documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

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E. General Requirements for Shipping Documents

Article 26 - 27 213

Art. 26 On Deck”, ”Shipper’s Load and Count”, ”Said by Shipper to Contain”

and Charges Additional to Freight 215
Introductory remark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Art. 26 a - Prohibition only of express indication of loading ”on-board” . . . . 216
Art. 26 b - Admissibility of disclaimers . . . . . . . . . . . . . . . . . . . . . . 216
Art. 26 c - Freight charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Charges additional to the freight . . . . . . . . . . . . . . . . . . . . . . . 217
Free in/free out clause - no contradiction to CIF/FOB . . . . . . . . . . . 217
Demurrage not part of freight . . . . . . . . . . . . . . . . . . . . . . . . . 218

Art. 27 Clean Transport Document 219

Positive assertion not necessary . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
”Clean” as an immaterial LC condition . . . . . . . . . . . . . . . . . . . . . . 220
The black list of ICC Publication 473 . . . . . . . . . . . . . . . . . . . . . . . 220
Limitation of the claim for possession . . . . . . . . . . . . . . . . . . . . . . . 220
Consolidated (groupage) Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . 221

G. Insurance Documents
Article 28 223

Art. 28 Insurance Document and Coverage 225

Introductory remark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Art. 28 a - Form and signature . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Authority to issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Consortium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
”as agent” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Art. 28 b - Presentation of all originals . . . . . . . . . . . . . . . . . . . . . . . 228

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Art. 28 c - Cover notes not acceptable . . . . . . . . . . . . . . . . . . . . . . . 229

Art. 28 d - Insurance policy and insurance certificate equivalent . . . . . . . . . 229
Art. 28 e - Period of insurance coverage . . . . . . . . . . . . . . . . . . . . . . 229
Art. 28 f (i)- Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Art. 28 f (ii)- Minimum amount of coverage . . . . . . . . . . . . . . . . . . . . 230
Art. 28 f (iii) - Coverage of itinerary . . . . . . . . . . . . . . . . . . . . . . . . 231
Art. 28 g - Type of insurance/Disregard for vague terms . . . . . . . . . . . . . 232
Art. 28 h - Exclusions in ”all risk” coverage . . . . . . . . . . . . . . . . . . . . 232
Art. 28 i - Any exclusion clause permissible . . . . . . . . . . . . . . . . . . . . 233
Art. 28 j - Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234

H. Extensions, Tolerances, Partial Shipments, Partial Drawings

Article 29 - 33 235

Art. 29 Extension of Expiry Date or Last Day for Presentation 237

Art. 29 a - Extension of Expiry Date/Problem of individual opening hours . . . 237
Art. 29 b - Confirmation of extension . . . . . . . . . . . . . . . . . . . . . . . 239
Art. 29 c - No extension for shipping date . . . . . . . . . . . . . . . . . . . . . 239

Art. 30 Tolerance in Credit Amount, Quantity and Unit Prices 241

Art. 30 a - Interpretation of ”about”, ”approximately” . . . . . . . . . . . . . . 241
Art. 30 b - Tolerance regarding quantity absent instructions in the credit . . . 242
Art. 30 c - Tolerances and partial shipments . . . . . . . . . . . . . . . . . . . . 242
Exceeding the credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Art. 31 Partial Drawings or Shipments 245

Art. 31 a Admissibility of last minute shipments . . . . . . . . . . . . . . . . . 245
Art. 31 b Exceptions from the prohibition of partial shipments/drawings . . . . 246
Same means of conveyance . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
Partial shipments when mailing/shipping by courier service . . . . . . . . . . . 247

Art. 32 Instalment Drawings or Shipments 249

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Art. 33 Hours of Presentation 251

I. Disclaimers of liability, clarification of performance obligation

Article 34 - 37 UCP 600 253

Art. 34 Disclaimer on Effectiveness of Documents 255

Introductory remark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
Waiver of liability/description of performance . . . . . . . . . . . . . . . . . . . 255
Limitations for obvious defects . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

Art. 35 Disclaimer on Transmission and Translation 259

Limitation of liability for errors in transmission . . . . . . . . . . . . . . . . . . 259
Limitation of liability for documents lost in transit . . . . . . . . . . . . . . . . 260
Art. 35 para 3 UCP 600 errors in translation of technical terms . . . . . . . . . 260

Art. 36 Force Majeure 263

Art. 37 Disclaimer for Acts of an Instructed Party 265

Problem of an all-encompassing limitation of liability . . . . . . . . . . . . . . . 265
Art. 37 b UCP 600 Limitation of liability for failure to follow instructions . . . 266
Advising bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Nominated Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Confirming Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Art. 37 b: Partially void limitation of liability for erroneous selection . . . . . . 267
Art. 37 c: Liability of the instructing bank for charges . . . . . . . . . . . . . . 267
Art. 37 d: Risk of foreign law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

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J. Transferable Credits, Assignments

Article 38 - 39 269

Art. 38 Transferable Credits 271

Differentiation between transfer of a credit (Art. 38) and assignment of proceeds
(Art. 39) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
Art. 48 UCP 500/Art. 38 UCP 600 . . . . . . . . . . . . . . . . . . . . . . 273
Art. 38 a – Disputed consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
Art. 38 b – Clarification of Definitions . . . . . . . . . . . . . . . . . . . . . . . 274
Art. 38 c – Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
Art. 38 d – Transfer to several second beneficiaries . . . . . . . . . . . . . . . . 275
Art. 38 e – Permissible reservation regarding forwarding of amendments . . . . 276
Art. 38 f – No joint acceptance/rejection . . . . . . . . . . . . . . . . . . . . . . 276
Art. 38 g – Transfer of original conditions of the credit . . . . . . . . . . . . . . 276
Art. 38 h – Substitution of invoices and drafts . . . . . . . . . . . . . . . . . . . 277
Art. 38 i – Failure to substitute invoices/drafts; correction of discrepant invoices 277
Art. 38 j – Right to have place of honor/negotiation transferred . . . . . . . . . 278
Transfer to another country: . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Art. 38 k – Presentation of documents at the transferring bank . . . . . . . . . 278

Art. 39 Assignment of Proceeds 281

Genesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Recipient of notice of assignment . . . . . . . . . . . . . . . . . . . . . . . 282
Partial Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Bibliography 283
General index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292
Index of country specific laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

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Acronyms

BGH Bundesgerichtshof (German Federal Supreme Court)

BGHZ Official collection of decisions of the BGH in civil matters
B/L bill of lading
HGB Handelsgesetzbuch (German Commercial Code)
ISBP International Standard Banking Practice for the examination of
documents under documentary credits
MT Multimodal Transport
MTO Multi Transport Operator
NJW Neue Juristische Wochenschrift (German legal magazine)
NVOCC Non Vessel Operating Common Carrier
Rome I Regulation (EC) No 593/2008 of the European Parliament and of
the Council of 17 June 2008 on the law applicable to contractual
obligations
SBLC Standby Letter(s) of Credit
UCC Uniform Commercial Code
URR Uniform Rules for Bank-to-Bank Reimbursements under Docu-
mentary Credits
Warsaw Convention Convention for the Unification of Certain Rules Relating to Inter-
national Carriage by Air, Signed at Warsaw on 12 October 1929 -
Warsaw Convention 1929
WM Wertpapier-Mitteilungen (German legal magazine, specializing on
commercial and banking law)
ZIP Zeitschrift fr Wirtschaftsrecht

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