Dear Experts
Our bank examin our documents and negotiate the documents without any descrapancy and forward the documents to L/c opening bank. L/c opening bank raised a descrapancy that "Bill of Exchange not endorsed" Our bank says that it is your (Benficiary's) responsibility to endorse the Bill of Exchange. The bank argue that Bill of Exchange says that "pay to the order of PAP PVT LTD" and not says that "pay to the order of abc bank Ltd." Hence the endoresemnt of Bill of Exchange is responsibility of Beneficiary.
The Question is that Who is responsibile to endorse the bill of exchange???
Regards
Amjad
PAP Pvt Ltd has to endorsed.....
In this case PAP Pvt ltd has to endorse the Bills of exchange...
Further clarification
Dear Peter M,
please bear in mind that BL issued 'to order' is actually a BL issued 'to order of shipper'. In this case you might consider PAP as shipper/beneficiary under this LC hence BE has been drawn correctly (i.e. shows that BE amount is payable to the order of PAP)
Very good point Igor
I didn't think of that, well said. However, the fact remains that a sight bill of exchange actually performs no function and is not usually a document that is subject to the documentary checking process. This scenario looks like the issuing bank is trying to find ways not to pay.
It is going to be an unfortunate result of the global liquidity shortage that some less than solid traders are going to try and get out of previously agreed transactions and will use dubious ways to do it.
L/C requirement ?
just to add a cople of remarks
Does the L/C specifically call for a sight draft, and if so, who is it drawn on ?
In addition, could it not be argued that is the draft be drawn on the Issuing Bank, then technically it's of no concern to the applicant as strictly speaking the draft is not a shipping document and therefore can't be rejected as such by the applicant.
Yor would therefore have to question the integrity of the bank should they consider this discrepancy alone as being a valid reason for refusal.
AlCo
In case of a BE issued 'to
In case of a BE issued 'to the order of PAP PVT LTD' it would be PAP's obligation to endorse BE on the reverse side
Reply--- pay to the order of
I need more clarification to answer this.
What is the address of consignee on your Original BL.
Is this LC confirmed
Reason for making the Bill of exchange “pay to the order of PAP PVT LTD” Regards
Tulsi, dubai
Endoresement of Bill of exchange
Dear
Consignee on B/L is TO THE ORDER OF
PAP PVT LTD
LC IS UNCONFIRMED
AND WORDING OF B/E ARE
EXCHANGE FOR: USD 121,657.95 AT SIGHT PAY AGAINST THIS SOLE BILL OF EXCHANGE TO THE ORDER OF PAP PVT LTD THE SUM OF (US DOLLARS ONE HUNDRED TWENTY ONE THOUSAND SIX HUNDRED FIFTY SEVEN AND CENTS NINETY FIVE ONLY) VALUE IN GOODS WHICH PLACE TO ACCOUNT AS ADVISED
This does not make sense
You are saying that the Bill of Lading is consigned to PAP PVT LTD, I therefore assume that they are the buyer (applicant). However, your Bill of Exchange shows "pay to the order of PAP PVT LTD" - why is it payable to the order of the buyer? It should be payable to the order of the Seller (beneficiary)
Couple of points here
1. The consignee on the Bill of Lading has no relation to who the bill of exchange is drawn on - they are totally seperate documents
2. This is a sight bill of exchange - it is effectively an unneccessary document (it performs no function). If the issuing bank is trying to get out of paying for this "discrepancy" only your bank should be demanding settlement from them immediately.
Be endorsement
I think you made mistake on the preparation of bill of Exchange and Bill of lading. You need to mention Bank name(lc issuing bank) as the consignee, If you are expecting the involvement of Bank in your dealing. The BE need prepare “to the order of ---- bank(negotiating bank name, in your case ). This particular case (Pay to the order of PAP PVT LTD" ) PAP PVT need to endorse the back side of the BE. But this type of BE is not at all recommended. RegardsTulsi, Dubai