TA923: Is the B/L correctly signed?
At the Global Banking Commission Annual Meeting 20 April 2022, the ICC approved Opinion TA923: Is the B/L correctly signed? Last week the final version of the Opinion was circulated to National Committees.
The Opinion did not attract as much discussion as TA924rev (“Insurance certificate and the System Database” discussed in the previous blog post: http://lcviews.com/index.php?page_id=814). However, there are some interesting elements that could cater for a deeper analysis.
As such the question is trivial: Is the presented bill of lading signed correctly? Here are the details of the query:
The LC required the presentation of:
“3/3 ORIGINAL SHIPPED ON BOARD OCEAN BILL OF LADING PLUS 2 NON-NEGOTIABLE COPIES CONSIGNED TO THE ORDER OF xxxxxx MARKED FREIGHT PREPAID AND NOTIFY APPLICANT.”
As part of the letterhead, the presented bill of lading indicates XYZ shipping company as the carrier.
The bill of lading was signed as follows:
AS AGENT FOR THE CARRIER:
XYZ shipping company
for and on behalf of
ABC Ltd
Signature
[Authorized Signature(s)]
(Of course) the confirming bank refused the presentation on the grounds that it was not signed in accordance with UCP 600 article 20(a)(i). The core question is if the refusal is correct.
The answer from the ICC is that the bill of lading was signed according to UCP 600 article 20, and that the refusal was not valid.
As mentioned, the Draft Opinion did not attract much discussion. This can be seen by the hard numbers: 37 National Committees agreeed with the conclusion. 5 with added comments). 1 disagreed.
The main argument against the conclusion is that "for and on behalf of" indicated below XYZ shipping company may cause confusion whether XYZ shipping company acting for or on behalf of ABC Ltd or ABC Ltd acting as agent for the carrier (XYZ shipping company). For that reason, it was argued that the bill of lading was not clearly signed as per UCP 600 article 20(a)(i). For that reason, the confirming bank was correct in refusing the bill of lading.
However, as mentioned the ICC did not agree with that, and the main arguments for approving the bill of lading was:
UCP 600 article 20(a)(i) which reads:
“A bill of lading, however named, must appear to:
i. indicate the name of the carrier and be signed by:
* the carrier or a named agent for or on behalf of the carrier, or
* the master or a named agent for or on behalf of the master.
Any signature by the carrier, master or agent must be identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent has signed for or on behalf of the carrier or for or on behalf of the master.”
As well as ISBP 745 paragraph E5(c), which includes the following wording:
“When an agent signs a bill of lading for [or on behalf of] the carrier, the agent is to be named and, in addition, to indicate that it is signing as “agent for (name), the carrier” or as “agent on behalf of (name), the carrier” or words of similar effect.”
At its core, when a bill of lading is signed by an agent, it must be possible to determine the following:
* the name of the carrier;
* the name of the agent; and
* the capacity of the agent (i.e. that it is signing for [or on behalf of] the carrier).
For this query, it may at first glance be a bit confusing, as in fact is indicated by the National Committee that did not agree with the conclusion. I would agree with the National Committee that it is the wording “for and on behalf of” that is causing the confusion. That confusion is however explained – or should one say – “dismantled” by the conclusion in the Opinion. Here the following is stated:
“The term “for and on behalf of” denotes that the bill of lading has apparently been signed by an authorised signatory of ABC Ltd, as agent for the carrier XYZ shipping company”.
I think that when reading the signing field in this context, it all makes perfect sense [the wording in brackets are my comments]:
AS AGENT FOR THE CARRIER:
XYZ shipping company [who is also stated as carrier elsewhere in the bill of lading]
for and on behalf of [reference to the person at ABC Ltd who is signing the bill of lading]
ABC Ltd [who is the agent – for the carrier]
Signature
[Authorized Signature(s)]
Or in other words, the bill of lading is spot on in respect of the requirements in UCP 600 article 20(a)(i).
Again, at very good and relevant query that enlighten and help the documentary credit examiners to better understand the ups and downs of UCP 600.
So, thank you for that, and thanks again to the ICC for taking care of the LC.
Kind regards
Kim