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but to exert pressure on the shipping agent to predate the bill of lading thus ensuring that his documents comply with the terms of the credit.”
111
Indeed, so concerned are sellers to ensure that bills of lading are issued with an acceptable shipment date that they sometimes make it a condition of the charter party that owners provide bill of lading with an on-board notation before a specified date. Such arrangements often go wrong and cannot be relied upon.”
112
In Merchants Corp. of America v Chase Manhattan Bank,
113
a US. bank issued a letter of credit undertaking to pay against shipping documents showing that the goods were placed on board a ship in Korea no later than January 31, 1968. The applicants alleged that the documents were fraudulent since the ship had apparently docked for loading in the Korean port only on February 13, 1968. The court was satisfied that the dispute did not amount to a breach of contract between the buyer and the seller, but amounted to a dispute as to the terms of the letter of credit. The court regarded the case at hand to be similar to Sztejn and granted an injunction In another similar case, Siderius Inc. v Wallace Co,
Inc,
115
the jury found that the seller knowingly and intentionally
110
Goods that are insured under a marine policy usually cover the risk to a cargo from ship’s rail to ship rail, i.e. when the goods are at sea when a loss occurred. Predating is done when the cargo was not at sea when the loss occurred, the underwriters are unlikely to payout. Therefore, it raises question as to the prospect of the buyer bringing a lawsuit against the carrier for issuing a predated bill of lading for recovering the purchase price from the sellers. If goods never existed in the first place, the insurance policy will not come into effect - Trade
Finance Fraud - Understanding the Threats and Reducing the Risk, op.cit., at 14.
111
Ibid, at 13.
112
Ibid.
113
Merchants Corp. of America v Chase Manhattan Bank, 5 UCC Rep. Serv. 196 (NT. Supp. Ct. 1968).
114
Ibid.
115 583 SW. d Tax. Cir. App.

represented a false date when a pipe was loaded on board the ship. The issuer refused the seller’s payment demand under the credit. It has been pointed out by at least one eminent scholar that an issuer of a bill of lading which deliberately backdates it in order to bring it within the shipping time in the credit acts fraudulently.
116
Consequently, as far as the issuer of the bill is concerned, there is no difference between a forged bill and a deliberately backdated bill. Bills of lading presented often show alterations not correctly approved by the carrier or his agent, but simply made by the beneficiary or his bank or another unauthorised person. According to Kozolchyk, banks will not accept documents on which insertions and/or corrections appear to have been made unless such insertions and/or corrections are duly signed by a person who has introduced such an alteration.
117
In Merchants Corp. of America v. Chase Manhattan Bank, NA i.,118the courts granted a temporary injunction on the claim of the applicant that the on-board bills of lading were falsely dated January 31, 1968, when the specified vessel was not in port until February 13, 1968. It was considered that in the United States, such a beneficiary would have breached the warranties of the UCC
(‘62).
116
L. D’Arcy, C. Murray, and B. Cleave, Schmitthoff’s Export Trade The Law and Practice of
International Trade, 10th Ed, Sweet and Maxwell London 2000, at 206.
117
Kozolchyk, op. cit, at 228.
118
Merchants Corp. of America v. Chase Manhattan Bank, NA i,
5 UCC Rep.
Serv.(Callaghan) 196 (NY Sup. Ct. 1968).

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