LC refusal by issuing Bank to honour
girish parmar
(Querist) 20 May 2011
This query is : Open
LC was presented by the seller to the advising Bank within the valaidity of LC. However the advising Bank delayed for one month in presentation of documents to the issuing Bank by which time the LC had expired. The advising Bank refused to honour LC citing the presentation as non complying. Payment was finally made by the buyer after removing discrepancy. However the seller has now claimed interest charges for late payment from the Issuing Bank. Place of presentation of documents is not mentioned in LC. My questions are as follows:
1. What is the role of the Advising Bank? Whether it only remains as an advising Bank or assumes its responsibility as nominated or Negotiating Bank? Whether the advising Bank's responsibility is lesser than nominated or Negotiating Bank?
2. Whether issuing Bank has the right to refuse to honour LC since since advbising Bank delayed in presentation of documents to the issuing Bank by which time the LC had expired?
3. Whi should pay the interest for delayed period?
