A·S·R Adjudicated Settlement Record · Worked examples
Trade finance · documentary credit under UCP 600 · worked example on a published judgment, restated at T0
ASR: Not yet shown to meet — heldHow they compare. Different from the court, on purpose. The article requires the notice to say the documents are being returned, but it sets no time for returning them. The ASR does not add a rule the contract does not contain. It holds the point and refers it for a human decision.
Assessed as at 16 February 2009, when the documents came back to the presenter. Nothing later is included: not the court's judgments of 2010 and 2011, and not the 'reasonable promptness' rule the court went on to imply.
This claim is made on 16 February 2009. I failed to act in accordance with Article 16: having given notice that it was returning the documents, it did not return them until about three months later. I is therefore precluded under Article 16(f) from claiming that the documents do not constitute a complying presentation, and must honour the presentation.
Documentary credit issued by I in favour of S, expressly subject to UCP 600. The issuing bank must honour a complying presentation. Uniform Customs and Practice for Documentary Credits, 2007 Revision (UCP 600), Article 16, incorporated in the credit. The paragraphs below are summarised in our own words; they are not the ICC text: 16(c), in summary: an issuing bank that decides to refuse to honour must send the presenter one notice saying so. The notice must say three things. First, that the bank refuses to honour. Second, every discrepancy on which it refuses. Third, what it is doing with the documents, which must be one of these: (a) keeping them until the presenter gives further instructions; (b) keeping them until the applicant waives the discrepancies and the bank agrees to accept the waiver, or until the presenter gives further instructions before the bank agrees to accept a waiver; (c) sending them back to the presenter; or (d) acting on instructions the presenter gave earlier. 16(f), in summary: an issuing bank that does not act in line with this article loses the right to say that the documents are not a complying presentation.
Between 4 and 19 November 2008, I gave notices refusing to honour. The notices listed the discrepancies I relied on and stated that it was returning the documents. The documents were returned to the presenter on 16 February 2009.
Not yet shown to meet the contract terms assessed in this report: referred for resolution. Run 3 times with fresh readings; 3 of 3 reached this finding (1 of them referred for review because the separate readings differed).
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Source: Fortis Bank SA/NV & Stemcor UK Ltd v Indian Overseas Bank [2010] EWHC 84 (Comm); Fortis Bank SA/NV & Stemcor UK Ltd v Indian Overseas Bank [2011] EWCA Civ 58. Parties anonymised (S = beneficiary/seller, I = issuing bank, C = negotiating bank). UCP 600 is ICC copyright. Its articles are not quoted here; they are summarised in our own words, adding nothing the article does not say. Check them against your own copy of ICC Publication No. 600.