1/8/2021

Legal Decisions Affecting Bankers*/Volume 13 1995-1996/GLENCORE INTERNATIONAL AG AND ANOTHER v BANK

OF CHINA - 13 LDAB 209

13 LDAB 209

GLENCORE INTERNATIONAL AG AND ANOTHER v BANK OF CHINA

Court of Appeal, Civil Division

(Sir Thomas Bingham, Saville LJ andSir John Balcolmbe)

23 October, 8 November 1995

Reported: [1996] 1 Lloyd's Rep 135

Banking – Letter of credit – Rejection of documents for discrepancy with commercial invoice – Whether commercial invoice
misdescribed goods – Whether packing list failed to describe goods – Whether certificate provided by plaintiffs not original
document – Whether bank entitled to reject documents

The plaintiffs 'Glencore' sold 1,500 tonnes of aluminium ingots under a contract of sale dated 24 May 1995, which provided
for an irrevocable letter of credit payable against presentation of various documents. The Bank of China opened two letters
of credit, one for 800 tonnes and one for 700 tonnes, but otherwise identical. The letters of credit stated: 'Origin: Any
Western Brand'. They were subject to the 1993 Revision of the Uniform Customs and Practice for Documentary Credits
('UCP 500'). One of the stipulated documents was a beneficiary's certificate. The beneficiary produced this by reprographic
means, on a high quality photocopier, and an employee signed the copy for tendering in blue ballpoint ink. The signature
was therefore original but the certificate was a photocopy. The document was in one sense an original since it was the only
one with an original handwritten signature, but the document itself was produced by reprographic means. Also, there was
no reference to or description of the goods on the packing lists, although they were fully described in the certificates of
weight and quality.

The Bank of China rejected the documents on the grounds that (1) the commercial invoices described the origin of the
goods shipped as 'Any Western Brand – Indonesia (Inalum Brand)' and there was therefore a discrepancy between the
description of origin in the letter of credit and the description in the commercial invoice; (2) copies of the packing list did not
describe or identify the goods adequately or at all; and (3) the certificate of the beneficiary presented was not an original,
nor was it marked as an original, as required by UCP 500 art 20(b).

Rix J in the Commercial Court held that Bank of China were entitled to reject the documents on grounds (1) and (3) but not
on ground (2). The plaintiffs appealed.

Held—(dismissing the appeal):

(1) There was no discrepancy between the description of origin in the letter of credit and the description in the commercial
invoice. The origin 'any Western brand' in the credit was expressed in a very broad way. The additional words on the
invoice 'Indonesia (Inalum brand)' did not indicate that the goods did not fall within the description of 'any Western brand'.
The additional information was not inconsistent with the requirement in the credit, and art 37 of UCP 500 was satisfied.

(2) The goods were properly described in the packing lists.

(3) Nevertheless, the Bank of China was entitled to reject the documents, because the beneficiary's certificate did not
comply with art 20(b) of UCP 500. A signature on a copy did not make an original. It made it an authenticated copy. Article
20 did not treat a signature as a substitute for marking a copy as 'original'. The judge was right on this issue.

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 1/12
1/8/2021

Cases referred to judgments

M Golodetz & Co Inc v Czarnikow–Rionda Co Inc [1980] 1 WLR 495.

Midland Bank Ltd v Seymour [1955] 2 Lloyd's Rep 147.

Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1993] 1 Lloyd's Rep 236.

Stephen Tomlinson QC and Dominic Kendrick (instructed by Clyde & Co) for the appellants.

R Neville Thomas QC, Ali Malek and David Quest (instructed by Pannone Pritchard Englefield) for the respondents.

SIR THOMAS BINGHAM (MR) (reading the judgment of the court).

The issue in this appeal is simply stated: was the Bank of China, as issuer of two letters of credit, entitled to refuse
payment under the credits on the ground that the documents presented did not comply with the terms of the credits?

Although documentary credits are very widely used as a medium of payment in international sales transactions, issues of
this kind come before the courts relatively infrequently. There are a number of reasons for this. The parties to these
transactions (buyers, sellers, issuing and advising banks) are seasoned professionals, not inexperienced consumers. The
banks are not required to familiarize themselves with any of the infinitely various terms, conventions or esoteric
understandings of the sales transactions themselves: their role is limited to the demanding, but essentially clerical, task of
scrutinizing the documents tendered under the credit to establish that they conform to the terms of the credit. Banks, rightly
jealous of their reputation in the international market-place, are generally careful not to refuse payment on grounds of
nonconformity unless the non-conformity is clear. Practice is generally governed by the Uniform Customs and Practice for
Documentary Credits ('the UCP'), a code of rules settled by experienced market professionals and kept under review to
ensure that the law reflects the best practice and reasonable expectations of experienced market practitioners. When
courts, here and abroad, are asked to rule on questions such as the present they seek to give effect to the international
consequences underlying the UCP.

The facts giving rise to this appeal are very clearly summarized in the judgment handed down by Mr Justice Rix on 6
October 1995 against which this appeal is brought. We adopt his account almost verbatim.

The facts

The dispute arises from a contract of sale dated 24 May 1995 between Glencore as sellers and Shan He Trade Co Ltd (the
'buyers') as buyers of 1,500 tonnes (+/- 2 per cent) of aluminium ingots. The contract of sale contained provisions for
arbitration under the rules of the London Metal Exchange ('LME') and for English law. The sale was CIF Zhangjiagang and
contained the following terms:

'Quality Primary Unalloyed Aluminium, 99·7% Al min. Fe 0 20% max, Si 0 10% max, according to P1020
specifications – LME registered brand

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 2/12
1/8/2021

Shape Standard Ingots with piece weight between 12–26 kgs each, strapped in bundles of about 1MT
each

Shipment June, 1995 (ex Far Eastern Port)

Origin Western, excluding India/Egypt'

The payment clause provided for an irrevocable letter of credit payable against presentation of various documents
including a commercial invoice, producer's weight/packing list and a certificate of origin.

As it happened, two letters of credit were opened by the Bank of China, one for 800 tonnes (+/-2 per cent) and the other
for 700 tonnes (+/- 2 per cent), but otherwise in almost identical terms. The letters of credit, as amended, provided for
payment against the following documents:

'1. Signed commercial invoice in 3 copies indicating L/C No ...

3. Packing list in 3 copies indicating quality/ gross and net weights of each bundle issued by producer or
warehouse

4. Certificate of weight/quantity issued by producer or warehouse

5. Certificate of origin ...

7. Beneficiary's certificate with relative courier receipt certifying that one full set of non negotiable document
have been sent to the buyer within 10 working days after shipment.'

The letters of credit continued:

'Covering shipment of:

Commodity LME registered brand primary unalloyed aluminium, 99·7 pct almin. Fe 0·20 pct max. Si 0·10
pct max, according to P1020 specifications

Origin Any Western brand

Unit Price ... CIF Zhangjiagang, liner terms ...

Packing Standard ingots with piece weight between 12–26 kgs each, strapped in bundles, each bundle
weighting [sic] about one metric tonne

Shipment from Far Eastern port to Zhang Jia Gang not later than 30 June 1995'

The letters of credit were expressed to be subject to the UPC (1993 Revision), OCC Publication No 500.

On 25 June the aluminium was loaded at Kuala Tanjung in Indonesia on the vessel Cheng Yun and two bills of lading were
issued for 800·022 tonnes and 700·061 tonnes net weight respectively. Apart from the different weights (and therefore

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 3/12
1/8/2021
different numbers of bundles) of the two parcels, and apart also from the fact that the 800 tonne parcel was marked with
'One Yellow Stripe' whereas the 700 tonne parcel was marked with 'One Black Stripe', the two bills of lading were in
identical terms. The shippers were given as PT Indonesia Asahan Aluminium (INALUM) Smelter Office. Kuala Tanjung, on
behalf of Glencore, and the goods were described as follows:

'LME Registered brand Primary Unalloyed Aluminium, 99·7 pct AlMin. Fe 0·20 pct max, Si 0·10 pct max,
according to P1020 specifications

Packing: standard ingots with piece's weight between 12–26 kgs each, strapped in bundles, each bundle
weighing about one metric tonne'

On 5 July Glencore tendered their documents under the letters of credit to Bayerische Vereinsbank AG in London and on
12 July Vereinsbank, having negotiated them and agreed for their own account to discount them and credit Glencore
accordingly, tendered them to the Bank of China requesting reimbursement on 23 October in accordance with the terms of
the letters of credit. In the meantime the goods had been discharged into customs warehouse on 9 July.

On 19 July the Bank of China rejected the documents. It is said on behalf of the plaintiffs that the price of aluminium had
fallen in the meantime since the making of the sale contract; but that is agreed to be irrelevant to the question of the
validity of the rejection. The Bank of China justified its rejection in a single telexed notice of discrepancies dated 19 July,
dealing with both letters of credit. Six discrepancies were mentioned, of which only three have survived for the purpose of
these proceedings. They are, in the terms of the telex:

'1. Invoice showing “Origin: Indonesia (Inalum Brand) not belong to Western branch [sic, sc brand]”

2. P/L not showing description of goods ...

5. Beneficiary's cert not showing “Original”.'

It is common ground that this notice binds the Bank of China and limits it to the discrepancies stated within it: see art 14
and in particular sub-art 14(d)(ii) of UCP 500.

These three discrepancies have been pleaded in the Bank of China's points of defence in the following terms. Discrepancy
1 has been limited to the letter of credit for the 800 tonne parcel, thus.

'Copies of the commercial invoices ... described the origin of the goods shipped as “Any Western brand –
Indonesia (Inalum Brand)” [whereas the letter of credit described the goods as “Any Western brand”].'

Discrepancy 2 is pleaded as:

'Copies of the packing lists did not describe or identify the goods shipped adequately or at all.'

Discrepancy 5 is pleaded thus:

'The beneficiary's certificates ... were neither original documents nor, as required by UCP 500 Article 20(b),
marked as original.'

Following the Bank of China's rejection of the documents the two banks entered into correspondence concerning the
merits of the rejection, but we need not record those communications.

On 25 July the buyers themselves rejected the goods alleging that they were not in conformity with their contract:

'The ctr clearly stipulated that the origin should be western country. But what you shipped is produced in
Indonesia.'

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 4/12
1/8/2021

That dispute is now the subject of an arbitration between Glencore and the buyers in London.

It is only necessary to add that these proceedings were originally issued on behalf of Glencore (the sellers) alone. The
Bank of China having pleaded that Glencore had no title to sue since the letters of credit had been negotiated by
Vereinsbank, the proceedings were amended to add Vereinsbank as a second plaintiff.

Of the three discrepancies relied on by the Bank of China as justifying its rejection of the documents under the letters of
credit, the Judge upheld two of the grounds but not the third. He held that the bank had been entitled to reject the
documents relating to the 800 tonne shipment on the ground of a discrepancy in the origin shown in the commercial
invoice, and to reject the documents relating to both shipments because the beneficiary's certificates were not marked as
original. Glencore and Vereinsbank appeal against those rulings. He held that the Bank of China had not been entitled to
reject the documents because of the alleged discrepancy in the packing lists. That ruling is challenged by the Bank of
China.

There was, and in the light of authority extending over many years could be, no argument about the overriding legal
principle. The duty of the issuing bank is, and is only, to make payment against documents which comply strictly with the
terms of the credit. A recent statement of the governing principle is to be found in the judgment of Lord Justice Lloyd in
Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1993] 1 Lloyd's Rep 236 at p 239:

'There is no dispute between the parties as to the doctrine of strict compliance, and the reasons for it. They
are to be found in the speech of Viscount Sumner in Equitable Trust Company of New York v Dawson
Partners Ltd (1926) 27 Ll L Rep 49, and the judgments of Mr Justice Parker and Sir John Donaldson MR in
Banque de L'Indochine et de Suez SA v J H Rayner (Mincing Lane) Ltd [1983] 1 Lloyd's Rep 228; [1983]
QB 711. It is no good asking why the credit required the letter of credit number and the buyer's name to
appear on each of the documents. As Lord Diplock said in Commercial Banking Company of Sydney Ltd v
Jalsard PM Ltd [1973] AC 279 at p 286:

“The banker is not concerned as to whether the documents for which the buyer has stipulated serve any
useful commercial purpose or as to why the customer called for tender of document of a particular
description. Both the issuing banker and his correspondent bank have to make decisions as to whether a
document which has been tendered by the seller complies with the requirements of a credit ...”

Mr Clarke relies on the observation of Mr Justice Parker in the Banque l'Indochine case [1982] 2 Lloyd's Rep 476 at P 482:

“I accept that Lord Sumner's statement cannot be taken as requiring rigid meticulous fulfilment of precise
wording in all cases. Some margin must and can be allowed ...”

He argues that the absence of the letter of credit number and the buyer's name was an entirely trivial feature of the
document. I do not agree. I cannot regard as trivial something which, whatever may be the reason, the credit specifically
requires. It would not, I think, help to attempt to define the sort of discrepancy which can properly be regarded as trivial.
But one might take, by way of example. Bankers Trust Co v State Bank of India [1991] 2 Lloyd's Rep 443 where one of the
documents gave the buyer's telex number as 931310 instead of 981310. The discrepancy in the present case is not of that
order.'

Of the discrepancies relied on by the Bank of China as grounds for rejection the most far reaching and fundamental is the
third of those listed above: the failure to mark as original the beneficiary's certificates. It is convenient to consider that
alleged discrepancy first.

The beneficiary's certificates

The requirement of the letters of credit and the grounds of rejection have already been recorded. The objection was that
the certificates were not marked as original.

The manner in which these certificates came into existence was described in a statement by Mr Marcel Strickler, who
works as a manager in Glencore's aluminium traffic department and was responsible for creating documents required for
tender under letters of credit. He said:

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 5/12
1/8/2021
'2. In the case of Glencore's invoices or other documents to be created by Glencore for the purposes of a
letter of credit, I check very carefully the details to be entered. My secretary then enters the details into our
computerised system, and all the necessary items are created in one set. Because for this purpose the
invoice is the master document, all other documents created at the same time will bear exactly the same
details, for example, goods description, as the invoice. All these items are printed on a laser printer on blank
A4 paper – there is no headed or embossed Glencore notepaper. I again check the invoice and other
documents created against the requirements of the relevant letter of credit, and decide how many of each
are needed, that is to say taking into account the requirements of the letter of credit itself, any non-
negotiable documents to be provided outside the terms of the letter of credit, and documents required for
Glencore's internal purposes. The print-out is then photocopied and I use the total number of photocopies,
including the print-out, in the appropriate way. I do not at this stage draw any distinction between the print-
out and the photocopies, which from my point of view are indistinguishable, both in appearance and
function. The paper used in the photocopies and the printer is identical and so is the quality of reproduction.

3. In the case of the Shan He Trade contract, I was responsible for preparing the relevant documents, which
were created in the way described above. It follows from the preceding paragraph that when the
beneficiary's certificates were first created, they bore the name and address of the buyer (because this
information appeared on the invoice). I then noted the condition in the letters of credit that there was to be
no indication of buyer's name on any of the documents except invoice and draft, so it was necessary to
delete reference to the buyer on the beneficiary's certificates. This was done by blanking out the name and
address and photocopying the print-out. There is no other way of achieving the necessary result. It is not
possible to create a complete fresh set of documents, including invoice, without the buyer's name and
address because the computer is programmed to enter the buyer's name and address, and will not issue
documents without these details. The stipulation that the buyer's name shall not appear on the documents is
by no means exceptional. I would say that about one in ten are subject to this condition. I invariably prepare
the necessary certificates in the way outlined above, namely by blanking-out the buyers name and address
and taking photocopies.

4. In the case of the Shan He letters of credit, having then prepared a photocopy certificate for each letter of
credit without the buyer's name and address. I signed one photocopy for tender under each of the letters of
credit, and made the necessary number of copies for internal and external purposes, as described above. It
follows that the beneficiary's certificates in the original sets of documents tendered under both letters of
credit in question must in this particular case be signed photocopies. It is however probable that they would
have been photocopies in any event and that the invoices are also photocopies, because as indicated
above, there are invariably several photocopies of each item, but only one print-out, and I never make any
attempt to distinguish between them. The only distinction is my original ball-point pen signature on the
certificates tendered under the letters of credit. In my experience, no bank has ever objected to Glencore
documents tendered in this form. I have been involved in two recent transactions in which the documents
have been tendered under Bank of China letters of credit. As can be seen from the copies which are
attached to this Statement, the documents included beneficiary's certificates similar to those created in the
case of the Shan He contract. I confirm that the attached certificates were produced in exactly the same
way, and that they were accepted by Bank of China.'

The Judge referred to this evidence in his judgment and said:

'It is impossible by the ordinary eye to distinguish the printed and the photocopied versions. One document
is then signed in ball-point pen by Mr Strickler for the purpose of submission under the relevant letter of
credit. By chance it might be the printed version but, given the number of photocopies, the probability is that
the signed document is one of the photocopies. The plaintiffs are prepared to assume, for the purposes of
this argument, that the tendered version is one of the photocopies. It follows that, although the document
tendered is in one sense copy, for it was produced by reprographic means, in another sense it is an original,
for it is the only version of the document to bear an original handwritten signature. I would add that the
handwriting in the present case at any rate is obvious, for the document is in black on white, but the
signature is in blue ink.'

As observed by Judge Raymond Jack QC in his valuable book Documentary Credits (2nd edn, 1993) at para 8.40, p 161:

'The basic rule is and always has been that original documents are required ...'

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 6/12
1/8/2021

There is of course an exception where the letter of credit calls for copies. But even where it does not the rule has not, in
recent years, been absolute. Article 22(c) was introduced into the 1983 Revision of the UCP (ICC Publication Number
400):

'(c) Unless otherwise stipulated in the credit, banks will accept as originals documents produced or
appearing to have been produced:

(i) by reprographic systems;

(ii) by, or as the result of, automated or computerised systems;

(iii) as carbon copies

if marked as originals, always provided that, where necessary, such documents appear to have been
authenticated.'

In the 1993 Revision, incorporated into these letters of credit, the article was amended. It is now art 20(b) and reads:

'(b) Unless otherwise stipulated in the Credit, banks will also accept as an original document(s) a
document(s) produced or appearing to have been produced:

(i) by reprographic, automated or computerized systems;

(ii) as carbon copies;

provided that it is marked as original and, where necessary, appears to be signed.'

A document may be signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol or by any
other mechanical or electronic method of authentication.

The Judge had the benefit of two expert opinions from very experienced professionals on the effect of this sub-article. Mr
Croggon, whose evidence was adduced by the plaintiffs, opined:

'8. Thirdly, it is claimed that the beneficiary's certificates were neither original nor marked as original. It is my
understanding that the certificates were initially produced by a printer in conjunction with a word-processor.
They were then altered (to remove the Buyer's address), photocopied and then signed. That is perfectly
acceptable.

9. Article 20(b) refers to a document being marked as original. If the words of the UCP here were taken to
mean that the word “original” must be on every original document, then, clearly, most sets of documents
would be unacceptable because documents which are clearly original are often not marked as such. In
practice, banks expect to see original documents signed or otherwise clearly bearing the characteristics of
originals, such as Parcel Post Receipts, but documents are not rejected in practice merely because the
word “original” is omitted.'

Mr Mifsud, for the Bank of China, took the opposite view:

'27. I have not seen the certificates of beneficiary tendered in respect of each Letter of Credit, but have
been given to understand that there is doubt as to whether the documents are indeed originals. Should they
not be originals, or should they have been produced by reprographic, automated or computerised systems,

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 7/12
1/8/2021

they should have been marked as “original”, whether or not also signed. Failure so to mark them constitutes
sufficient grounds for refusal in the light of the provisions of sub-article 20b.'

We were referred to Case Study Number 20 under UCP Revision 500. The status of this document is not clear, and the
passage most strongly relied on by the Bank of China may not carry the authority of the experts to whom Judge Jack
referred in his book (2nd edn, para 1.23, p 10). The passage in the Case Study reads:

'An original document may be an originally handwritten or an originally typed document. A document
produced in this manner does not need to be marked as “original”.'

However, UCP 500 sub-art 20(b) states that banks will also accept as an original document, a document produced or
appearing to have been produced by reprographic, automated or computerised systems or as a carbon copy, always
provided that the document produced in this manner is marked as 'original' and, where necessary, appears to be signed.

Only original documents which are produced by reprographic, automated or computerized systems or as carbon copies
need to be marked as 'original'.

Whatever its authority, the first paragraph quoted must in our view be correct. An originally handwritten or originally typed
document must, on any test, be an original and there is no reason why it should be marked as an original unless the letter
of credit so stipulates. The second paragraph accurately reproduces the effect of art 20(b), adding inverted commas to
'original'. The third paragraph accepts that documents produced by reprographic, automated or computerized systems may
be original but states that they need to be marked as 'original'.

For the plaintiffs it was urged that the beneficiary's certificates were originals; that since they were indistinguishable from
originals produced by word-processor and laser-printer bankers were entitled to treat them as such; and that the effect of
signature was to make them original if they were not already. A decision in favour of the Bank of China on this point would,
we were told, upset the world-wide basis on which credits are negotiated and jeopardize many millions, even billions, of
dollars.

The letter of credit, as already noted, was issued subject to UCP Revision 500. Article 13(a) of that code provides:

'(a) Banks must examine all documents stipulated in the Credit with reasonable care, to ascertain whether
or not they appear, on their face, to be in compliance with the terms and conditions of the Credit,
Compliance of the stipulated documents on their face with the terms and conditions of the Credit, shall be
determined by international standard banking practice as reflected in these Articles ...'

Thus it would seem plain that international banking practice cannot override the express effect of the code.

As argument before us amply demonstrated, there is abundant room to debate what, in the context of modern technology,
is an original. A handwritten or typed document plainly is, but other documents can also be plausibly said to be so. Article
20(b) is, as it seems to us, designed to circumvent this argument by providing a clear rule to apply in the case of
documents produced by reprographic, automated or computerized systems. The sub-article requires documents produced
in a certain way (whether 'original' or not) to be treated in a certain way. It is understandable that those framing these rules
should have wished to relieve issuing bankers of the need to make difficult and fallible judgments on the technical means
by which documents were produced. The beneficiary's certificates in this case may, in one sense, have been originals; but
it is plain on the evidence that they were produced by one or other of the listed means and so were subject to the rule.

Even if it is true that the certificates did not appear to have been produced by one or other of these means (which must, we
think, be very doubtful) that makes no difference if in fact they were: the sub-article is clear in its reference to 'document(s)
produced or appearing to have been produced ...'. The original signature was of course a means of authenticating the
certificates, and they were not required to be signed. But a signature on a copy does not make an original, it makes an
authenticated copy; and art 20(b) does not treat a signature as a substitute for a marking as 'original', merely as an
additional requirement in some cases.

The Judge described the Bank of China's argument as 'very technical' and observed that it might appear to lack merit.
Both comments are apt. But rule of strict compliance gives little scope for recognizing the merits. To have marked the
certificates 'original', as other of the tendered documents were marked, would have been simple and without cost. We can
see no escape from what seems to us the plain language of the sub-article. We agree with the Judge on this point.

The commercial invoice and the description of origin

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 8/12
1/8/2021

This issue concerns only the letter of credit in respect of the 800 tonne parcel. The commercial invoice read, so far as
material, as follows:

'Quality Kuala Tanjung (Far Eastern port)

Commodity LME registered brand primary unalloyed aluminium, 99·7pct Al min. FE 0·20pct max. Si
0·10pct max, according to P1020 specifications

Origin Any Western brand CIF Zhangjiagang, liner terms

Packing Standard Ingots with piece weight between 12–26 kgs each, strapped in bundles, each bundle
weighting about 1 metric ton

Delivery Basis CIF Zhangjiagang. Liner terms ...

Origin Any Western brand – Indonesia (Inalum brand)'

It is to be observed that there are two references to the origin of the goods in the commercial invoice. The first reference is
simply to 'Any Western brand'. In the second reference these words are followed by reference to 'Indonesia (Inalum
brand)'. The letter of credit called for a certificate of origin as one of the documents to be tendered, and it included as part
of the description of the goods 'ORIGIN: Any Western brand'.

Among the documents actually tendered was certificate of origin. This certified that the material 'is of Indonesian origin
(Inalum brand)'. When, in the body of the certificate, reference is made to origin, the reference simply is 'Any Western
brand'.

The objection taken by the Bank of China and upheld by the Judge was based on the addition of the words 'Indonesia
(Inalum brand)' in the commercial invoice. These additional words, it was pointed out, did not appear in the letter of credit.
Accordingly, the commercial invoice failed to correspond with the credit. Reliance was placed on art 37(c) of UCP 500
which provides:

'(c) The description of the goods in the commercial invoice must correspond with the description in the
Credit. In all other documents, the goods may be described in general terms not inconsistent with the
description of the goods in the Credit.'

It was not, so the Bank of China argued, for the issuing bank to ponder whether the additional words qualified or in any
way varied the plain language of the original term. It was enough that they departed from the language of the credit and
raised possible questions, the more so since Indonesia was not an obvious part of what would ordinarily be regarded as
the Western world.

For the plaintiffs it was submitted that no reasonable banker reading the commercial invoice could doubt that the goods
there referred to were of 'Any Western brand', as required by the letter of credit; still less would there be room for doubt if
attention were paid to the certificate of origin, which made the position entirely clear. Mr Stephen Tomlinson, QC also
advanced a submission which echoed an observation of Sir Thomas Browne, made in different context and somewhat
earlier:

'... the same country is sometimes East and sometimes West; and Persia though East unto Greece, yet it is
West unto China.'

It is, we think, plain that the original specified in the credit ('Any Western brand') is expressed in very broad generic way. A
banker would require no knowledge of the aluminium trade to appreciate that there could be more than one brand falling
within the genus. That broad generic description appeared twice in the commercial invoice and once in the certificate of
origin. We cannot for our part accept that the additional words 'Indonesia (Inalum brand)' were such as, in the words of Mr

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%25… 9/12
1/8/2021

Justice Donaldson in M Golodetz & Co Inc v Czarnikow–Rionda Co Inc [1979] 2 Lloyd's Rep 450 at 451; [1980] 1 WLR 495
at p 510H, to:

'... call for further inquiry or are such as to invite litigation.'

It seems to us quite plain on the face of the document that the additional words were to indicate the precise brand of the
goods, it being implicit that that brand fell within the broad generic description which was all that was required. The
additional words could not, on any possible reading of the documents, have been intended to indicate that the goods did
not or might not fall within the description 'Any Western brand'.

On this point we respectfully disagree with the Judge. The description of the goods in the commercial invoice did in our
view correspond with the description in the credit so as to satisfy art 37(c) of UCP 500. We are fortified in that conclusion
by a published comparison of UCP 400 and 500 which includes the following:

'Description of the Merchandise – Certain NCs [National Committees] recommended that the word
“correspond” be replaced with “identical” in respect to the description of the goods appearing in the
commercial invoice versus that of the Credit. The WG [Working Group] felt that the word “identical” was too
restrictive and would place an undue burden on all the parties to the Documentary Credit and increase the
number of discrepant invoices presented. At times additional information is supplied in the description of the
merchandise appearing in the commercial invoice. This additional information may not be considered
detrimental or inconsistent with the requirements in the Credit and therefore it is acceptable.'

In the present case we do not consider the additional information in the commercial invoice to be detrimental to or in any
way inconsistent with the requirement in the credit and in our view it is acceptable.

This conclusion makes it unnecessary for us to consider an argument of Mr Tomlinson specifically directed to the position
of Vereinsbank.

Packing lists: failure to describe the goods

The letters of credit required the packing lists to be in three copies:

'... indicating quantity/gross and net weights of each bundle issued by producer or warehouse.'

The packing lists in fact tendered were issued by the producer, as was obvious on their face, and stated the quantity and
the net weight and gross weight of the goods. So the information specifically required by the credit was given, and the
contrary has not been suggested.

The discrepancy alleged by the Bank of China is that, although the name of the shipper and the name of Glencore as
customer appear on the packing lists, there is no specific reference to or description of the goods themselves. This
objection loses any force it might otherwise have if it is permissible to look at the packing lists alongside the certificates of
weight and quantity, in which the commodity is identified as aluminium ingots and the name of the vessel on which the
cargo was shipped is given. The correspondence between the packing lists and certificates of weight and quantity are, as
the Judge demonstrated in his judgment, comprehensive and exact. There is, furthermore, a close correspondence
between the packing lists and the certificates of weight and quantity and the bills of lading. The Bank of China's objection
is accordingly one that can in my view prevail only if law or practice requires a document, in the absence of any stipulation
to that effect, to be read and considered in isolation from other documents tendered with it at the same time.

We do not understand that to be the law. In Midland Bank Ltd v Seymour [1955] 2 Lloyd's Rep 147 Mr Justice Devlin
accepted that a document must contain enough particulars to make it valid document of its kind but rejected the
suggestion that, in the absence of express stipulation, every document should contain all the particulars called for. At p 152
he said:

'Having to choose between those two constructions, in my judgment the one that construes the letter of
credit as requiring merely that the set should contain all the particulars is the preferable one and the right
one, and I arrive at that conclusion mainly on two grounds. The first is that that is the construction which, in
my judgment, best fits the language that is used in the letter of credit. The letter of credit quite plainly treats
the documents as a set and not as an individual document. It is “against delivery of the following
documents”, then they are set out, and then it goes on, “evidencing shipment”. Strictly speaking, of course,

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%2… 10/12
1/8/2021

the only document that evidences it is the bill of lading. Quite plainly what the defendants in their letter of
credit have in mind is that the documents that they there specify are, as a set of documents, the ordinary
shipping documents the invoice, the bill of lading and the insurance certificate – which are ordinarily and
collectively treated as evidencing shipment. That seems to me to point to the view that they are considering
the shipping documents as a set of documents; and dealing with them, therefore, as a set of documents
they say that the set must contain the particulars under the heading “Description Quantity and Price”.
Nothing would have been simpler than to have provided for a particular document containing a special part
of those particulars if that had been thought necessary. I think, therefore, that the construction which I am
adopting fits in better with the language of the document.'

That was a case decided under the common law and not on construction of the UCP. But we find nothing in UCP 500
which contradicts it, and it is relevant that the credit did specify the particulars which the packing lists were to contain. We
do not accept the submission made by Mr Neville Thomas QC on behalf of the Bank of China that each of the specified
documents listed in the credit had to contain all the details which were specified in the credit after the words 'covering
shipment of'.

In this case, the linkage between the documents was clear, exact and devoid of discrepancy. We are in full agreement with
the Judge's rejection of the argument advanced by the Bank of China under this head.

Of the three grounds relied upon by the Bank of China we reject two of them (agreeing with the Judge on one of those, and
differing on the other). But we agree with him in upholding the objection based on the beneficiary's certificates. Since this
objection applies to the documents tendered under both letters of credit it follows that the appeal must in our judgment be
dismissed.

Appeal dismissed with costs (not to include costs of respondent's notice).

Leave to appeal to the House of Lords.

Catherine Gibaud Barrister

Editorial note

The basic rule is and has always been that, unless a credit stipulates otherwise, original documents are required. However,
there has been debate as to what counts as 'original' in the context of modern technology. Article 22C of UCP 400 stated
that

'Unless otherwise stipulated in the credit, banks will accept as originals documents produced or appearing
to have been produced

(i) by reprographic systems

(ii) by or as a result of automated or computerised systems

(iii) as carbon copies

if marked as originals, always provided that, where necessary, such documents appear to have been
authenticated.'

In UCP 500, the corresponding art 20(b) states

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%2… 11/12
1/8/2021
'Unless otherwise stipulated in the credit, banks will also accept as an original document(s) a document(s)
produced:

(i) by reprographic, automated or computerised systems;

(ii) as carbon copies;

provided that it is marked as original and, where necessary appears to be signed. A document may be
signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol or by any other
mechanical or electronic method of authentication.'

In Glencore, the Court of Appeal emphasised that art 20(b) was designed to afford certainty, and to provide a clear rule to
apply in the case of documents produced by reprographic or computerised systems. Documents produced by these means
– whether 'original' or not – must be treated in the way set out in art 20(b) to qualify as deemed 'original' documents under
the UCP. This avoids the need for issuing bankers to make difficult judgments on whether or not a document is truly
'original'.

In this case, although the certificate was produced by reprographic means (and thus was subject to the rule in art 20(b)) it
was not 'marked as original', and so did not conform. A signature on a copy does not make an original – it only makes it an
authenticated copy.

Note, however, that in the recent case of Kredietbank Antwerp v Midland Bank plc1 the Court of Appeal held that UCP 500
art 20(b) did not require an insurance policy produced by word processor to be expressly marked 'original' unless it was, or
might be, a copy of another document, eg a photocopy or a carbon copy.

1 [1999] 1 All ER (Comm) 801.

https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23LDAB%23vol%2513%25page%25209%25sel2%2513%2… 12/12