Comments to ICC Document 470/TA.625

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31 October 2007

To: Emily O'Connor, Senior Policy Manager
and Members of Commercial Law and Practice
International Chamber of Commerce (ICC)

Dear Members of CLP,

As a consultant, and as a Member of the United Nations Multimodal Transport Association, Geneva, I see more complexity in the issue. Here are my comments:

Under the law of agency in UK, which is modelled by many countries, an entity cannot play two roles, as the principal and also as the agent.

In some countries, such as Czechoslovakia and Austria, different companies at different addresses may share the same name. So in these countries, it is impossible to ascertain whether ABC Co. Ltd. is the same company or a different company from another ABC Co. Ltd. merely on the face of the bill of lading. Under UCP 500, the document checker can only determine compliance on the face of the documents alone and he should not go beyond the face of the documents and find out the facts. This doctrine is known as documentary compliance, as stipulated in article 5 and 14 (a) of UCP 500.

Hence the document checker cannot ascertain whether the two ABC Co. Ltd. are the same entities or totally different entities.

From my involvement in international litigation as an expert witness in letter of credit, I am aware of further complexity. A company maybe the same entity under company registration legislations but is a different entity under the taxation legislations or another entity under the applicable law of substance. So a company would have three identities depending on which legislation one is referring to.

As a consultant I do not rely on the theories or books to form my opinions. I often need to go to the "kitchen" to find out the market practices, or malpractices, if you will. I can see that some so-called agents of carriers are not properly authorised. But it is not the duty of the document examiner to find out this fact.

In the same way, a lot of bills of lading are marked "freight as arranged". This implies that it is "freight to be collect" although a lot of bankers take it to mean "freight prepaid", which is not the case. The freight is not yet paid but the amount involved is deducted from the forwarder's credit limit extended by the carrier.

Hence I think ABC Co. Ltd. signing as an agent of ABC Co. Ltd. would raise doubts as whether they are the same or different entities. For any uncertainty, it would be deemed to be a discrepancy. In presentations under a letter of credit as well as the instructions of the letter of credit itself, all descriptions and instructions must be clear, complete and precise, according to UCP 500 article 5 (a). And the bills of lading signed by ABC Co. Ltd. as an agent of ABC Co. Ltd. is unclear and imprecise.

Best regards,

T. O.

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