Consulta 36 – Commerzbank. Crédito confirmado o no

CONSULTA 36

Gestiones realizadas con Commerzbank y traslado del caso a la Comisión Bancaria de la CCI en París, según sigue:

Barcelona, 27th December 2002            14.17

Mr. Ron Katz

ICC Banking Commission

Sir,

 

ICC Spain Group of Experts on Documentary Credits has been divided in the following case. No opinion has got enough consensus and both opinions have got four votes. Accordingly it has been agreed to send it to ICC Banking Commission so that perhaps at a higher level, a single approach will be managed for this case. It has been the case 36 of those put forward to ICC Spain Group of Experts.

 

This one comes from a Spanish savings bank to which documents in availment of a  documentary credit issued by a bank in Argentina were presented by the beneficary. The documentary credit had been advised/confirmed straight to the beneficiary by the Madrid office of a German bank.

 

This German bank informed of a discrepancy with a MT734 swift. Later on, the Spanish savings bank phoned the German banks’s office in Madrid to discover whether they had confirmed the credit or not. According to the Spanish savings bank, the German banks’s office in Madrid answered that the credit had been confirmed  and informed that they would take their confirmation commission from the credit proceeds. Besides, the Spanish savings bank considered that this phone call was later confirmed with a

MT799 swift from the German bank’s office in Madrid with the following wording: «Please be advised that we confirm that we shall credit the amount of the documents at maturity date 04.04.2002, value date 08.04.2002, upon deduction of our commissions and charges».

 

Nevertheless, the German bank office in Madrid later informed that their confirmation was not in force, since it was subject to the payment of their notification and confirmation commissions within 14 days from the date of their communication of advice to the beneficiary. Therefore, they stated that they would pay once the issuing bank -the Argentinian one- pay to them.

 

The problem lied in the way the confirmation clause was drafted. That obtained the consensus from ICC Spain Group of Experts. A letter asking the German bank’s office in Madrid to change the wording of the confirmation clause was sent, as other cases with problems whose origin was that clause had already been found. Shortly afterwards the German bank office in Madrid agreed to change the wording of that clause in their future confirmations.

 

That original clause read in Spanish something like «following the instructions we have received, we confirm you that we assume the definite engagement («compromiso en firme») to authorise your disposals against this documentary credit up to the maximum amount mentioned, if at the expiring date we have the documents required by the credit

clauses,  that you will immediately hand to us after sending the merchandises under our reference. Please be aware that that confirmation will only be valid once we have received our commission».

 

ICC Spain group of experts was split between those that considered that this practice breached UCP 500 article 9.c.i -as the confirming bank had not informed the issuing bank without delay that its confirmation could not be added- , so there was a confirmation, and those experts that thought that there was a reserve with the documents and that there was no confirmation as they had not obtained they confirmation commission they asked for.

 

Article 14 of UCP 500 was agreed that had not been fully followed by the German bank’s office in Madrid.

 

I wonder if ICC Commission will be able to offer a solution to this case. Was there a confirmation or not? With a swift message 799 the bank can be considered to be under the obligation to pay?

 

 

• Categoría: Consultas Reglas bancos UCP 600