Case 1
A company "D" received a credit through a Telex and it had following clauses. "Advice our irrevocable credit...all other details are followed as soon as possible)." Thereafter, the "D" company urged the advising bank about the Telex but fail to receive any reply from the opening bank. As of a result, the "D" company gave up to receive the Telex, completed the shipping and requested the payment in collection method through one's bank. Because of this, the shipping documents arrived later than the products, emurrage charge and additional charge for import tax have occurred therefore, the beneficiary demanded the compensation for the expenses. However, the opening bank insisted on sending the Telex and tried to buck pass which eventually created a dispute.
Case study
1. A credit without a tele-transmission
According to the Sub-Article 10(a-jj) of U.C.P., "if there is a clause declaring that it doesn't consider a operative credit instrument or a operative changes validates a telex dispatch or post confirmation, the credit is not regarded as a valid changes or valid credit". If a credit is issued containing such informity, the opening bank should forward a telegram notification requiring a valid credit certificate.
2. When a telex was dispatched
If there is a telex dispatching arrival following a short cable credit, only the telex dispatching becomes the valid credit.
3. Responsibility with a telex dispatching not delivered
According to the 16 of U.C.P., there is an exemption clauses for a bank if there is a problem while delivering declaring that a bank holds absolutely no responsibility. Therefore, this particular case is not applicable to request responsibility on the opening bank according to the U.C.P. regulation. As of a result, both the seller and the debtor should request damage based on the sales contract. (Reference: I.C.C. pub 489 case No.197).
Case 2
After drawing a contract, Y trading company received a preliminary notification of the credit opened. Thereafter, the company urged for opening a credit but since there was no notification, the seller had to warehoused the products, delaying for one month which caused him a monetary damage. The seller requested the compensation of the damage to the debtor and to the opening bank but there was no response. The case requires for an answer to I.C.C.
Case study
1. Preliminary notification in opening a credit
A preliminary notification in opening a credit is a pre-notification by a opening bank notifying a seller about the key information about the credit amount, credit number and the product information. Such notification is only a mere pre-notification notifying the bank is further opening a credit based on the information therefore, it shouldn't be consider as a operative credit instrument. The purpose of this pre-notification is for a seller to be confident about further to prepare products, manufacturing and to secure a intended vessel.
2. Preliminary notification - Responsibility of a opening bank
According to the Sub-Article 11( c) of U.C.P., it regulates that the opening bank is allowed to send a preliminary notification only when there is an intention to open a operative credit instrument or to change the operative credit, and once the preliminary notification is produced, the opening bank is responsible to immediately send a operative credit which wouldn't contradict with the preliminary notification. For this case, the opening bank seems to be reasonably responsible to make compensation against the damage that occurred from not opening a credit. Except, if the sending bank of the preliminary notification wants to be exempt from not opening a operative credit, the exemption clauses must be indicated in the preliminary notification.(I.C.C. pub 459 case No.39).
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