Charging the debt from the Buyer in relation to non-payment under CAD terms and under the issued Bill of Exchange
28 февраля 2017 г.: ru 45 en 327 февраля 2017 г.: ru 7 en 523 февраля 2017 г.: ru 7 en 1 всего: 106 21.02.17
The Client – foreign trader concluded commercial contract on grain product supply in containers under CFR terms, the Turkish port.
The Parties agreed that the Seller shall pay for the goods not later than 3 days after receiving the arranged set of original documents by the Buyer’s Bank (cash against documents – CAD).
In course of performance of his assumed obligations, the Seller supplied the goods in Turkey and submitted the documents on goods by banking channels to the Buyer’s bank. The transfer of the documents was made with Collection of Payment issued under ICC URC 522.
But payment was not made within the term set forth in the Contract. Moreover, due to financial problems and the risk of container idle stay at the port of destination. The Buyer applied to the Seller asking to provide with instructions on issuing the full set of documents without payment but against Bill of Exchange. In accordance with Bill of Exchange, the Buyer guaranteed payment for goods within 15 days after submission of this document.
The Seller accepted the Buyer’s concessions. The Collection of Payment was modified. The Buyer’s Bank issued original documents against the signed Bill of Exchange. The goods were accepted at the port of destination, cleared for import and resold.
The Seller required the Buyer to pay for accepted and resold goods on the grounds of Bill of Exchange. But payment was not made within the prescribed 15 days. The Bill of Exchange was also submitted by SWIFT banking channels.
For several months neither the Buyer nor the Buyer’s Bank replied to the Seller’s numerous letters.
The Seller filed a request for the defense of their interests to Interlegal.
Having proceeded the case, Interlegal experts found out that the Seller made several mistakes while modifying payment procedure and terms. Moreover, the Bill of Exchange signed by the Parties was issued out of the scope of ICC URC 522. Banks were conventionally engaged in payment guarantees. The terms for initiation of arbitration proceedings were omitted.
Settlement of the problem required for the complex approach.
Due to the prepared plan of actions and legal opinion, Interlegal lawyers managed: to initiate GAFTA arbitration proceedings; to involve the engaged Banks into negotiations both between each other and with the Parties to the Contract; to initiate direct negotiations with the Buyer by reference of the Interlegal Turkish lawyers;
Another problem was that neither the Buyer nor the Buyer’s Bank provided any written comments or rejections. But despite such principal position, Interlegal lawyers fixed mandatory agreements between the Parties upon debt recovery by installments within the fixed terms by means of SWIFT system.
Such complex and competent actions resulted in payment for the goods supplied under the Contract.