Lloyd's Maritime and Commercial Law Quarterly
Original sins under the UCP
Howard N.Bennett *
In an era of hand written or typed documents, little difficulty was generated by the requirement that documents presented to banks under documentary credits had to be original unless the credit stated to the contrary.
1
The advent, however, of documents generated through word processors led the International Chamber of Commerce (ICC) to address the issue of original documents and modern technology in the Uniform Customs and Practice for Documentary Credits (UCP), initially in Art. 22(c) of the 1983 revision (UCP 400) and subsequently in Art. 20(b) of the 1993 revision (UCP 500). The latter provision has now received consideration twice by the Court of Appeal and is the subject of an extensive decision of the ICC Commission on Banking Technique and Practice (ICC Banking Commission). This article considers the different approaches that have evolved to the UCP’s provisions relating to original documents and the relationship between English law and the current approach of the ICC Banking Commission.
Background
Under a documentary credit, the applicant has the reassurance that the banks will pay the beneficiary only against documents that conform with the terms and conditions of the credit. The function of the documents is to transfer certain rights to the applicant and/or provide documentary evidence that the beneficiary has performed its obligations on the underlying contract so that payment should be made.
As vehicles for the transfer of rights and the communication of information, it has always been understood, although rarely explicitly articulated, that, subject to the terms of the credit, the documents required to be presented under a documentary credit must be originals rather than copies, and there is no doubt that such is indeed the law.2
Prima facie,
this strengthens the reassurance for the applicant. Only an original bill of lading is a negotiable instrument that dispenses with the requirement of attornment and transfers to its bona fide holder the benefit of the carrier’s delivery obligation. A copy of a bill of lading is merely a copy of the document that has this capability.3
* Senior Lecturer in Law, University of Nottingham.
1. Carbon copies generated some disputes: B.Wheble, UCP 1974/1983 Revisions Compared and Explained,
41.
2. Glencore International AG
v. Bank of China
[1996] 1 Lloyd’s Rep. 135, 151; Kredietbank Antwerp
v. Midland Bank Plc
[1999] Lloyd’s Rep. Bank. 219, 221.
3. Similarly, the Marine Insurance Act 1906, s. 50 facilitates assignment of rights under a marine insurance contract by means of assignment of a marine policy, not by the handing over of a copy of the policy. See Kredietbank Antwerp v. Midland Bank Plc
[1999] Lloyd’s Rep. Bank. 219, 226–227.
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