CDCS EXAMINATION EXERCISES 2.docVIP

Note: ? This exercise were updated on 2 August 2007 to reflect UCP 600 provisions. Question 42 was revised on 4 August 2007. ? A DC subject to UCP 600 has the following stipulation: Purchase Contract No. 123456 dated 24 July 2007 attached herewith forms an integral part of this documentary credit. Is this stipulation acceptable and what are the risks? Case Study A documentary credit subject to UCP 600 called for Full set of 3/3 clean on board original marine/ocean bills of lading evidencing shipment from Houston to Shanghai made out to order and blank endorsed, marked freight prepaid, notifying applicant. The presented bill of lading, bearing a title of Mermaid Shipping Company S.A., Geneva, was manually signed with a signature chop reading Carrier - Mermaid Shipping Company S.A., Geneva. The Place and Date of Issue box contained a statement: New Orleans - Mermaid Shipping Company (USA) Inc., 17 July 2007 12:12:22 pm. Is this bill of lading acceptable? Please state your reasons. Case Study Upon request by the applicant, the issuing bank finally waived the previously advised valid discrepancy for the first instalment shipment made after the latest shipment date in a DC subject to UCP 600 that clearly stated the shipping period of three instalment shipments. However, the issuing bank did not clarify whether or not the DC was still valid for subsequent instalment shipments. After a period of time, the beneficiary presented compliant documents for the second instalment shipment made according to the shipping schedule stated in the DC. The issuing bank denied payment according to UCP 600 article 32. The beneficiary sued the issuing bank for payment dishonour and negligence. The experts report from the beneficiary states that the confusion is created by the issuing bank that should have clarified in its waiver notice whether or not the DC is still valid for the second and the third instalment shipments. So the issuing bank should bear the serious consequen