What is negotiation of documents under LC under reserve?

The documents presented under a documentary credit are scrutinized as per the International standards of scrutiny and negotiated if they strictly comply with the LC terms. This is called a clean negotiation.

On the other hand if the documents do not comply with the LC terms and discrepancies are found, the negotiating bank may still opt to give value under the LC by paying or incurring a deferred payment obligation as per LC provided the beneficiary undertakes to indemnify the negotiating bank in the event of rejection by the LC opening Bank. This is technically called a payment under reserve. The Reserve will be lifted on acceptance of discrepancies by the LC opening Bank.