IRREVOCABLE DOCUMENTARY CREDIT APPLICATION TERMS AND CONDITIONS (T & C)
Please take a moment to read through the Terms and Conditions.
In consideration of you, DBS Bank Ltd (“the Bank”), whether acting through your head office or your overseas branches or subsidiaries, issuing a documentary credit (“the Credit”) for our account and/or at our application, we agree to the following terms and conditions:-
We authorize you to accept, prepay and/or pay on our account against all documents purporting to be presented under this Credit and, if applicable, all drafts purporting to be drawn under and in accordance with the terms of the Credit. We confirm that the Bank may, if it so wishes, prepay the deferred payment undertaking incurred by the Bank or the drafts accepted by the Bank to the beneficiary prior to maturity of the Credit.
(a) We shall pay and/or indemnify you in full for all sums paid by you under or in connection with the Credit (including any prepayment of the Credit) and/or any draft called for in the Credit and without prejudice to the generality of the foregoing, you shall be entitled to charge us interest at the prevailing rate from the time payment is made by you in connection with or under the Credit and/or any draft called for in the Credit to the time we repay you in full all such payment or we fully discharge all outstanding obligations owing to you under this T&C, whichever is later; (b) We agree to and shall pay on demand all charges and expenses paid or incurred by you, your branch, subsidiary or correspondent bank in connection with and/or arising out of advising or confirming or reimbursing or not utilising or amending the terms of the Credit and/or the relative drawings under the Credit and/or relative goods or otherwise, howsoever incurred, in relation to this transaction, together with commissions with respect to the Credit at your prevailing rate; (c) We agree to and shall indemnify you and keep you fully indemnified against all demands claims liabilities losses, payments (including any payment under the Credit), costs and expenses whatsoever arising in relation to the Credit (including legal costs on a full indemnity basis which you may incur in enforcing or attempting to enforce your rights hereunder). We shall indemnify you on demand, together with interest, calculated from the date when you first incurred the loss and expenses until payment by us in full at the prevailing rate. Such payment and reimbursement (including interest) shall either be in the currency in which each sum was disbursed by you or at your option, its equivalent in Singapore Dollars at your exchange rate prevailing on the date of such disbursement.
We agree that if the Credit specifies shipments in instalments or drawings within stated periods, and the shipper fails to ship or drawings on the Credit are not made in such stated period, subsequent instalment shipments or drawings may nevertheless be made in their respective designated periods and you may honour such drafts/payment obligations at your own discretion without reference to us. We agree that (a) in the event that sight drafts required and presented under the Credit will be for your use only, and will not be checked for discrepancies nor be the basis for rejection of the presentation, (b) you, your branches or subsidiaries will in your respective sole discretion determine on the basis of the documents presented whether inconsistencies in documents constitute discrepancies warranting rejection or are merely typographical errors and we shall be bound by such determination which we undertake not to challenge. We further agree that where discrepancies are noted by the Bank or us and documents accordingly refused by the Bank, we will reimburse / indemnify the Bank in the event that the rejection of documents is subsequently held by a court of law or a tribunal to be invalid whether on account the documents being conforming or time taken to reject the documents.
Without prejudice to any security credited herein and by general law, we agree to pledge and do hereby pledge to you as security for the payment obligations and/or liabilities arising under or in connection with the Credit as well as any other actual or contingent liabilities that may be owing by us to you, any and all documents (including but not limited to, bills of lading, air waybills, any other carriage documents, warehouse receipt, cargo receipts, insurance policies and certificates and any other documents) received by you or your correspondents under the Credit (hereafter, “the received documents”) and the goods shipped under, pursuant to or in connection with the Credit (hereafter, “the underlying goods”) as well as any other goods owned by us now or at any time hereafter in your possession or control, or that of any third party acting in your behalf, including such documents and goods as may be in transit by whatever mode to or from you. We irrevocably acknowledge that you shall have the right of possession over the underlying goods and the received documents and/or that the goods have been duly attorned to you. We further authorise you, if in your opinion the received documents and underlying goods then held by you as security hereunder is deemed by you to be inadequate for all our outstanding liabilities to you (including but limited to those arising under or in connection with the Credit), to appropriate set-off and/or apply upon any and all of such liabilities, any and all moneys now or hereafter with you on deposit or otherwise standing to our credit or belonging to us and/or, in your discretion, to hold any such moneys as security for any such obligations or liabilities. Your rights hereunder shall not be prejudiced notwithstanding the release or substitution of any goods which may be held as security hereunder at any time.
As security by way of pledge for any and all our obligations and/or liabilities arising under or in connection with the Credit, and also for any other otherwise unrelated obligations and/or liabilities, actual or contingent, due or to become due which are now, or may at any time hereafter be owing by us to you, we hereby recognise and admit your special property in and unqualified right to the possession and disposal of the received documents and in and to the underlying goods. (Such security shall not be affected even if the presented documents or goods are released to or upon our order on trust receipt). You are entitled to sell, transfer or otherwise dispose of the received documents and/or all or part of the underlying goods in the event of default of any payment by us pursuant to any liability arising hereunder or any other breach of this T&C, in any manner (whether by public auction, private treaty or otherwise) you deem appropriate without notice to us, and in and to the proceeds of each and all of the foregoing, until such time as all our obligations and/or liabilities to you at any time existing under or pursuant to this T&C, or the Credit herein referred to, or any other unrelated obligation or liabilities incurred by us to you, now existing or hereafter arising, have been fully paid and discharged, pending which, all such presented documents, goods and proceeds of sale thereof shall, without prejudice to the foregoing security interest, be held on trust for your benefit.
We also undertake to keep the underlying goods satisfactorily insured and in full protection of your interests thereto, by first class insurers acceptable to you, and to assign the policies or certificates of insurance to you, or to name you as the loss payee in the insurance policy, at your option. Where we have requested you to arrange for such insurance, we agree that you may (but are not obliged) to pay the premiums and expenses of such insurance on our behalf and to add such premiums and expenses to the amount chargeable to us. In the event that any monies arising under such insurance are paid to us, we shall forthwith pay them to you without deduction or detention and until so paid to hold such monies to your order and on your behalf. We authorise you to retain all monies arising under such insurance whether paid directly to you by the insurers or by us and in your absolute discretion to retain such monies until all the sums payable in respect of any documentary credit have been paid or to set off such monies against any monies from time to time owing under such documentary credits whether then due and owing or not.
We further agree to the following conditions :-
We undertake, where necessary, to procure and obtain the necessary blank or special endorsement of bills of lading presented under or in connection with the Credit and written attornments or receipts from any third party, including warehouse keepers, in your favour.
We warrant that we are, or will following shipment of the underlying goods be the sole owner of such goods and will take all necessary steps to assert our rights of ownership vis-à-vis the Carrier and any other third party on your behalf.
On arrival of the underlying goods you shall be at liberty to have them warehoused in your name and insured against fire, theft and pilferage at our cost and expense but without obligation on you to so warehouse and insure and you will be in no way responsible for any loss or damage entailed through your omission to so warehouse and insure.
We shall not without your prior written consent create encumbrance of any kind over or dispose of any or all of the underlying goods.
We irrevocably appoint you and such of your officers as may from time to time be in charge of our accounts to be our agent and in our name to execute and deliver all documents and do all acts as you or such officer deems desirable for perfecting your security over the goods or for the purpose of exercising any rights hereunder including transferring goods in the goods to the purchase thereof.
We shall on demand fully indemnify you against all liability and expenses of whatsoever nature (including legal costs) incurred by you in perfecting or exercising any rights hereunder and in respect of any action or omission relating to the underlying goods including any claim against you by reason of any defect in our title to the underlying goods.
Save for wilful default, you shall not be liable for any loss which you may arise in any exercise of your rights, nor shall be liable by reason of your taking possession of the underlying goods to account for any moneys except actual receipts.
We undertake that we will at our costs at your instructions commence (in our name, if necessary) and continue any court or arbitration proceedings in any jurisdiction in respect of any claim arising under the Credit or any insurance policy issued in connection with the underlying goods. Without prejudice to the foregoing, we agree to extend to you all necessary co-operation in such proceedings, or in any proceedings which may be commenced by you in your name, including the attendance of witnesses and discovery of documents.
We agree that upon the non-performance of any payment obligation herein, all payment obligations shall fall due and we shall furnish satisfactory additional security (if demanded by you) or to make payments on account as agreed, or to perform or comply with any other term of this T&C. In addition, in the event of presentation of any winding-up or bankruptcy petition, judicial management, administration, receivership, restructuring and/or appointment of receiver, execution or attachment of any of the underlying goods by Order of Court or legal process, all obligations (including payment obligations) shall become immediately due hereunder. Apart from any lien right of set-off or other right which you may have you shall be entitled at any time and without notice to us to combine or consolidate all or any of our accounts and liabilities with you anywhere whether in or outside Singapore whether such liabilities be actual or contingent, primary or collateral, several or joint notwithstanding that the credit balances on such accounts and the liabilities on any other accounts may not be expressed in the same currency and you are hereby authorised to effect any necessary conversions at your own exchange rate then prevailing.
Neither you nor any of your correspondents shall be responsible for : (a) the correctness of the description, existence, character, quality, quantity, condition, packing, value or delivery of the underlying goods; (b) any difference in character, quality, quantity, condition or value of the underlying goods from that expressed in documents; (c) the genuineness of received documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; (d) failure of any draft to bear any reference or adequate reference to the Credit, or failure of documents to accompany any draft at negotiation; or failure of any person to surrender or to take up the Credit or to send forward documents as required by the terms of Credit; (e) from any ambiguity in any instructions given to you whether by us or another party; or (f) errors, omissions, interruptions or delays in transmission or delivery of any messages, mail, cable, telegraph, wireless or otherwise whether or not they may be in cipher. You shall also not be responsible for any act, error, neglect or default, omission, insolvency or failure in business of any of your correspondents, and that the happening of any one or more of the contingencies referred to in the preceding sentence shall not affect, impair or prevent the vesting of any of your rights or powers hereunder. It is hereby further agreed that any acts or omission taken or suffered by you, or by any of your correspondents, under or in connection with the Credit or the received documents, or the underlying goods shall be binding upon us and shall not place you or any of your correspondents under any liability to us.
Any discrepancy or non-conformity in the documents wrongly advised by you to us would not be considered a discrepancy or non-conformity entitling us to reject the documents provided that you confirm in writing within three banking days of the initial advice that the discrepancy or non-conformity originally advised does not amount to a discrepancy or non-conformity. We agree that you shall not in any way be liable to us for any loss or damage suffered by us directly or indirectly arising from or in connection with your initial advice of discrepancy or non-conformity.
In consideration of your agreeing to act on our telephone and/or fax instructions pertaining to or in connection with this Application as well as the Credit itself without counter-checking with us or our original instructions being sent to you subsequently or our written confirmation of such instructions, we hereby undertake to indemnify you from and against all liabilities, claims, demands, actions, proceedings, losses, payment (including payment under the Credit), expenses and all other liabilities of whatsoever nature or description which may be suffered by you in relation to your acting on such authorization. We hereby waive any rights, claims, actions or proceedings we may have against you for any losses or liabilities we may suffer as a consequence of your acting on such instructions including any loss or damage rising from you having acted on instructions from parties purporting to be us, our agents or servants.
You shall be at liberty to restrict the availability for negotiation of any letter of credit issued hereunder to any correspondent bank (including any overseas branches or subsidiaries of yours) of your choice, even if our instructions are to issue freely negotiable credit.
We irrevocably consent to the disclosure by you, your officers, agents and your overseas branches, in any manner howsoever, of any account information relating to us including but not limited to details of our facilities, the securities taken, our credit balances and deposit with you to (i) your head office, any of your representative, documents checking and processing centres and branch offices in any jurisdiction, related corporations (as defined in the Singapore Companies Act Cap 50), (ii) any regulatory or supervisory authority including fiscal authority in any jurisdiction, (iii) any potential assignee of you or any other participant in any of your rights and/or obligations in relation to our facilities, (iv) any guarantors, third party pledgors or security providers and your agents and independent contractors, and (v) any insurers with whom insurance cover is taken out in connection with this application.
If there occurs in relation to the Credit an Extraordinary Event (as defined below), you shall have the sole discretion to effect payment under the Credit in any alternative currency at such exchange rate as you may determine in your discretion. Provided you undertake such action in good faith, any such action shall be binding on us and we shall be liable for any additional loss damages costs charges and/ or expenses incurred by you. An “Extraordinary Event” shall mean any event which you believe to have a material adverse effect, including any form of exchange control restriction or requirement of whatsoever nature affecting the availability, convertibility, credit or transfers of currencies or funds, any form of debt or other moratorium on jurisdictions, individuals or entities, any devaluation, redenomination or demonetisation and/or any form of restriction or requirement which in your good faith opinion adversely alters or changes the rights or obligations which you undertook upon establishment of the Credit.
For avoidance of doubt and subject to the proviso appearing below, it is the intention of the parties that any terms, interests, rights, benefits, defences, exemptions or limitations in this T&C shall not be enforceable by a third party (save and except for a third party as defined below) pursuant to the Contracts (Rights of Third Parties) Act of Singapore (“the Act”), provided always that nothing herein operates to prevent or limit your right to assign, novate, otherwise confer any benefit or interest in favour of any other party, apart from the Act. The terms, interests, rights and benefits referred to above shall include but are not confined to any banking facilities, advances, loans, financing or any other form of financial accommodation that you provide or may provide under this T&C. Provided always that it shall be the intention of the parties that all defences and limitations in this T&C shall be enforceable by all of your subsidiaries (whether wholly or partly owned), parents, branches, any other bank within the DBS Group Holdings Ltd, whether carrying on business in Singapore or not, successors in title or assigns of the Bank, entities into or with which the Bank may merge or consolidate, any entities formed as a result of acquisition, by or of the Bank as well as your employees, sub-contractors and agents, all of whom or which shall be deemed as third parties for the purposes of the Contracts (Rights of Third Parties) Act of Singapore. For the purposes of this Act, consent of any of these third parties is not required for any variation, rescission or termination of this T&C.
We agree that in the event that the Credit permits the presentation of a letter of indemnity in lieu of a bill of lading, we will procure the full set of the bills of lading with blank or special endorsement in your favour, in the event that any one or more of our obligations are not fulfilled.
We authorise you to debit or earmark any or all of our accounts with you by way of payment in advance of all costs, charges, commissions, expenses and liabilities which you, your agents or your correspondents may incur in relation to or in respect of the Credit including but not limited to the amount of any and all sums which you, your agents or your correspondents may make to the beneficiary, negotiating bank, confirming bank or assignee of the Credit as well as all charges, commission and interest which you are or may become entitled in relation to or in respect of the issuance of the Credit (collectively, “advance payment”). The advance payment is an absolute and unconditional payment and you shall not be obliged, under any circumstances whatsoever, to refund the same to us. You shall be at liberty to utilize or otherwise deal with the advance payment in any manner as you deem fit and we confirm that we have no further title, interests, rights or benefits to the moneys comprising the advance payment. If the Credit expires in accordance with the terms therein without you having made any payment under the Credit to the beneficiary, negotiating bank, confirming bank or assignee of the Credit, you may pay to us a sum equivalent to such proportion of the advance payment relating to such part of the amount of the Credit which is unpaid, less all your applicable charges, commission and fees or such other sum at such other time as you may in your sole discretion determine. The advance payment shall not discharge or otherwise affect any other claims for reimbursement, repayment, interest, expenses and/or costs that you have or will have against us in respect of any instrument which you have issued or will issue at our request, or in respect of any credit or banking facilities or other accommodation which you have granted or will grant to us. Without prejudice to the foregoing, any cash advance by us to you for issuance of the Credit shall be retained by you for eventual settlement of the Credit and we irrevocably agree to waive all our rights to such advance save that you shall return us the advance less any interest, costs, expenses, commissions and charges) if you in your sole discretion are satisfied that there will be no further claim arising under or in connection with the Credit.
In the event of any inconsistency between the terms & conditions herein and the provisions of UCP600, the latter shall be deemed to be expressly excluded to the extent of such inconsistency.
This T&C shall be governed by and construed in accordance with the laws of Singapore. In the event of any proceedings or suits commenced against us arising out of or in connection with the Credit, we agree to submit to the non-exclusive jurisdiction of the Courts in Hong Kong and Singapore, at your option, in respect of any disputes arising out of or in connection with the Credit. Without prejudice to the foregoing, we undertake not to commence proceedings or suits against you in the courts of any other jurisdiction. In the event of any proceedings or suits commenced by us against you, we agree that Singapore Courts shall have exclusive jurisdiction in respect of any disputes arising out of or in connection with the Credit.
By ticking on this box and by printing and submitting to you the Irrevocable Documentary Credit Application Form which follows, we have read, understood and acknowledged the Terms and Conditions for Application for Irrevocable Documentary Credit and fully authorize the Bank to proceed with the provision of the service. We also understand and agree that the Bank may modify the Terms and Conditions for the Irrevocable Documentary Credit Application without prior notice to us at any time.