| The rail transport document was required for the credit. Upon receiving the documents, it allowed Transship from country A. But the debtor's company rejected the payment declaring there is no on board indication in the rail transport documents and that it was Transshipped. The seller company insisted that since it is rail transport, on board indication is not necessary and that it allowed Transshipment, which created dispute.
Case study
1. The character of rail transport receipt
As per U.C.P., 'ˇ®Products are received for shipping, or courier and that such intention must be indicated and there should be a indication of receipt for the shipper's signature, authentication and receipt stamp'. Accordingly, the rail transport receipt is just a receipt in principle, not the shipping documents that proves of products on board.
2. On board indication with rail transport receipt
According to the interpretation of U.C.P. "on board" indication is referring to only the loading for the marine vessel. (The Sub-Article 23(a-jj) and Sub-Article 45(a) of U.C.P 500)
The interpretation of the I.C.C also depicts that for the land transport or air transport, the meaning of on board shouldn't be over extended not more than taking in charge or dispatching products. (I.C.C pub 459 case No.102).
3. Transshipment with rail transport receipt
For the rail transport, even the credit term prohibits Transship method, if all the transport section is one transportation method and one transportation document is issued, "Transship is probable" or " Transship is doable" should be accepted. (The Sub-Article 28(d) of U.C.P 500)
Conclusion
For this case, it is irrelevant action by a the debtor if rejecting the payment because of on board indication is not indicated and that Transship is done.
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