Forgery and collection instructions defeated consumer claim where bank had no duty to secure co-acceptance

A forged covering letter dated 26 August 1991 was found to have been the foundation of the respondent's claim, and once that fabrication was exposed, the consumer commission's orders could not survive because fraud vitiated the basis of the decision. On the collection instructions proved on record, the ICC Uniform Rules did not require the appellant bank to secure co-acceptance from the foreign bank, as the collection order contained no clear instruction to do so and the presenting bank's limited role was misread by the commission. The bank was therefore not liable for deficiency in service, and the complaint was rejected with costs.

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Issues: (i) Whether the respondent's claim was founded on a forged covering letter dated 26 August 1991 and, if so, whether fraud vitiated the consumer commission's orders; (ii) whether, on the Uniform Rules for Collection of the International Chamber of Commerce, the appellant bank was liable for not securing co-acceptance by the foreign bank and whether there was any deficiency in service.

Issue (i): Whether the respondent's claim was founded on a forged covering letter dated 26 August 1991 and, if so, whether fraud vitiated the consumer commission's orders.

Analysis: The record showed two different letters of 26 August 1991, one bearing the instruction for co-acceptance and another without it. The surrounding circumstances, including the absence of any contemporaneous reference to substitution, the late assertion of substitution only in review, and the intrinsic inconsistency in the respondent's case, led to the conclusion that the disputed letter was fabricated. Once that document was excluded, the foundation of the commission's earlier findings disappeared. Fraud was treated as destroying the validity of the order obtained on its basis.

Conclusion: The disputed letter was forged and the commission's orders could not stand once that fraud was exposed.

Issue (ii): Whether, on the Uniform Rules for Collection of the International Chamber of Commerce, the appellant bank was liable for not securing co-acceptance by the foreign bank and whether there was any deficiency in service.

Analysis: The ICC Rules distinguished between the remitting bank, collecting bank and presenting bank, and imposed different responsibilities on each. The collection order had to contain complete and precise instructions from the principal, while the presenting bank was responsible only for seeing that the form of acceptance appeared complete and correct. On the proved letter actually sent, no instruction to obtain co-acceptance was given. The commission had misread the ICC Rules by treating the remitting bank as though it bore the presenting bank's responsibility. In the absence of a clear instruction to obtain co-acceptance, the appellant could not be fixed with negligence or deficiency in service.

Conclusion: The appellant bank was not liable for deficiency in service and was not bound to obtain co-acceptance on the facts proved.

Final Conclusion: The appeals succeeded, the consumer commission's decisions were set aside, and the complaint was rejected with costs.

Ratio Decidendi: A collecting/remitting bank is liable only within the scope of the principal's clear and precise collection instructions under the governing collection rules, and an order founded on forged material cannot be sustained.

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