The ICC Banking Commission conducted its final meeting of 2024 virtually via Teams on 20-21 November. Four separate portions of the event open to Banking Commission members and ICC National Committee representatives took place.
Parson and O’Brien Spar over Practical and Legal Aspects of Bills of Lading & LCs
I was pleased to be a ringside spectator at a re- match between two trade finance stalwarts at Dubai Chamber on 14 March 2023. Previous bouts were held in 2018 and 2022. This was an anxiously- awaited contest between Robert Parson, a heavy puncher as a commodity trade finance lawyer, and Vincent O’Brien, known for his verbal agility and explosive vocabulary striking power. The venue was packed with a standing room only crowd.
When the opening bell sounded, Parson set the pace by punching hard about the important role of bills of lading in securing global maritime trade. With great clarity and forceful rhetoric, he delivered a series of jabs on the purpose of a bill of lading as a receipt for goods shipped, evidence of contract of carriage, and acting as a document of title.
O’Brien took the fight to Parson and upped the tempo during the second round. With incredible vocal speed and precision, he persisted in the contention that a bill of lading is an overrated form of collateral. “Document of Title” in itself means no more than “entitlement to take delivery” and alone does not bestow any possessory or ownership rights to the cargo.
This drove Parson into a corner, but not for long. With a stout sequence of legal arguments, he rebuffed the onslaught of O’Brien, elaborating that by proper legal mechanisms, such as taking an effective pledge, banks can upgrade their security position in terms of finance commodity cargoes.
This had O’Brien reeling but he bounced back by counter punching with practical examples of recent cases in Singapore. In his view, the cases showed that banks looked to the bill of lading as collateral too late in the game and, in most if not all instances, long after “cargoes of oil” had already “gone up in smoke”.
The clash ended when time expired and was declared a stalemate. It was a high energy event to witness: Two formidable adversaries squaring off in battle . The differences of opinion were obvious, but something was to be taken away from each point of view. Use of a bill of lading within the letter of credit context needs to be effectively understood.
All boxing analogies aside, the technical, legal, and practical lessons on display for those in attendance were of the highest level. It was also clear that the “combatants” have a great deal of respect for each other and underneath the banter and bluster are clearly good friends in their professional and personal lives.
— K. Nizardeen Vice Chair, ICC Banking Commission, United Arab Emirates
