UCP 600 Article 36 (Force Majeure): Common Errors and Discrepancies

Introduction

Force majeure events create a narrow window in which the ordinary rules of documentary credit operation are modified. UCP 600 Article 36 defines that modification: the bank assumes no liability for consequences of interruption, and credits expired during the interruption are not revived. But the application of Article 36 generates its own set of errors. Banks misclassify events, beneficiaries present after expiry, applicants demand payment on expired credits, and documentation gaps create ambiguity about what happened and when. This guide identifies the most frequent errors and discrepancies that arise when Article 36 is invoked, and provides a systematic method to avoid them.

Failure Mode Analysis

Failure 1: Misclassifying an ordinary closure as Article 36. A bank holiday or scheduled closure is governed by Article 29, not Article 36. A bank that applies Article 36 to an ordinary closure will incorrectly suspend examination and may incorrectly refuse a timely presentation.

Failure 2: Beneficiary presents after expiry, citing force majeure. Article 36 does not extend the expiry date. If the credit expired during the interruption, the beneficiary must seek an amendment. Presenting after expiry without an amendment is a discrepancy.

Failure 3: Applicant demands payment on an expired credit. If the credit expired during the Article 36 interruption, the bank is not required to pay. The applicant cannot demand payment under the expired credit. The applicant must seek an amendment or pursue remedies under the underlying contract.

Failure 4: Bank fails to document the interruption timeline. Without a documented chronology (start date, cause, resumption date, credit expiry date), the bank cannot demonstrate that it applied the correct provision. This creates legal and audit risk.

Failure 5: Bank applies Article 36 without verifying the cause. Article 36 applies only to specified causes: Acts of God, riots, civil commotion, insurrections, wars, terrorism, strikes, lockouts, or other causes beyond the bank's control. A bank that applies Article 36 without verifying the cause is applying the wrong provision.

Failure 6: Bank refuses a presentation on resumption without applying Article 14(b). After resumption, the bank must apply the ordinary five-day examination period under Article 14(b). A bank that refuses immediately on resumption without examining the documents is not meeting its obligation.

Failure 7: Confirming bank honours but issuing bank refuses citing force majeure. The confirming bank's payment creates an independent obligation under Article 8. The issuing bank's Article 36 defence does not override this.

Deterministic Resolution Architecture

1. Classify the event correctly. Determine whether the interruption falls within Article 36 (extraordinary events) or Article 29 (ordinary closures). Do not apply Article 36 to an ordinary closure.

2. Verify the cause. Confirm the interruption was caused by one of the specified events: Acts of God, riots, civil commotion, insurrections, wars, terrorism, strikes, lockouts, or other causes beyond the bank's control.

3. Document the interruption timeline. Record the start date, cause, resumption date, and credit expiry date. Preserve the chronology with the presentation file.

4. Determine whether the credit expired during the interruption. If the credit expired, Article 36 applies: reopening does not require honour or negotiation.

5. If the credit survived, apply Article 14(b) on resumption. The five-day examination period restarts on the first banking day after resumption. Examine the documents within this period.

6. If the presentation is discrepant on resumption, apply Article 16. Issue a refusal notice within the applicable time limit, stating all known grounds.

7. Preserve the Article 36 analysis. Record the event classification, timeline, credit status, and any payment or refusal decision. This record supports the bank's position if challenged.

Conclusion

The most common errors under Article 36 arise from event misclassification, failure to document the interruption timeline, and incorrect application of the expiry-date rule. The defensible method is a documented chronology that classifies the event, determines the credit's status, and applies the correct provision on resumption. Banks that skip these steps expose themselves to legal challenge and operational risk.

FAQ

Can a bank apply Article 36 to a bank holiday? No. Bank holidays are governed by Article 29. Article 36 applies only to extraordinary interruptions beyond the bank's control.

What if the credit expired during the interruption and the beneficiary presents on resumption? The bank is not required to honour or negotiate under the expired credit. The beneficiary must seek an amendment under Article 10.

Does Article 36 apply to partial closures? Article 36 applies when the interruption actually prevented the bank from performing its obligations. If the bank was only partially affected, the bank must determine whether the interruption prevented examination of the specific presentation.

Can the issuing bank invoke Article 36 to avoid paying a complying presentation? Only if the credit expired during the interruption. If the credit survived and the presentation is complying, the bank must pay under Article 7.

How does URDG 758 handle common force-majeure errors? Under URDG 758, Article 26, the guarantor is not liable for force majeure consequences. A demand presented during the interruption must be re-presented after resumption. The framework parallels UCP 600 Article 36.

Source Notes

Context only — no deep source text was extracted from the original research feeds.

• ICC Academy, "Uniform Rules for Documentary Credits (UCP 600) — eBook," published 12 Dec 2024.
• ICC, "UCP 600 — Uniform Rules and Practice for Documentary Credits — Including eUCP Version 2.1," published 31 Jul 2023.
• ICC, "Commentary on UCP 600," published 01 Aug 2019.
• ICC Academy, "Certified UCP 600 Specialist (CUCP)," published 12 Jul 2025.
• ICC Academy, "ICC Uniform Rules for Demand Guarantees (URDG 758) — eBook," published 12 Dec 2024.