The vessel is alongside, the buyer sends a PDF of an MT103 and writes "payment effected, please commence discharge". The difficulty is that sending a payment instruction and discharging a payment obligation are not the same thing.
An MT103 is not money. It is a message confirming that the payer's bank accepted the instruction and passed it on.
One or more correspondent banks may sit between the buyer's bank and the seller's account. At each stage the payment can stall on compliance, sanctions screening, document requests or incorrect details.
A SWIFT copy proves one thing: the process has started. It says nothing about the outcome.
The leading cases arose from charterparty disputes, but the principle applies to payment obligations generally.
In The Effy the funds reached the correspondent account of the owner's bank but were never credited to the owner's own account, so the owner could not use them. The court held that payment had not been made.
The argument that the money is already with your bank, so go and ask them, does not amount to performance.
The opposite situation also arises: the amount appears on the account, yet payment is still not treated as made.
In The Chikuma the sum was credited to the owner's account in time, but the value date fell four days later. Until then the funds could only be used on credit from the bank and with interest accruing. The House of Lords held that timely payment had not been made.
The question in both cases is the same: can the recipient use the whole amount immediately, without conditions or restrictions.
Open the Payment clause and establish what the parties treat as the moment of payment: debit of the buyer's account, arrival of funds at the seller's bank, or credit to the seller's account in cleared and immediately available funds.
Do not confuse remittance with receipt. A SWIFT copy may be a condition for releasing documents or commencing discharge, but by itself it does not discharge the payment obligation. If the parties do intend a SWIFT copy to count as payment, the contract must say so expressly, and a seller should think carefully before agreeing.
For certainty, wording along these lines helps:
Payment shall be deemed effected only upon receipt of the full amount in cleared and immediately available funds in the Seller's nominated bank account, free of any deduction or bank charges.
The closing words on deductions and bank charges are aimed at attempts to pass correspondent bank fees to the seller.
Unless the contract provides otherwise and the delay was not caused by the seller, the risk of the banking chain generally stays with the payer, whose obligation is not merely to send the transfer but to ensure the funds reach the creditor.
A SWIFT confirms that a transfer was sent, not that an obligation was discharged. Money sitting with a correspondent bank is not yet the seller's money, and even a credited balance is not received if it cannot be used immediately and unconditionally.