Source: All England Reporter
Publisher Citation: [2012] All ER (D) 56 (Dec)
Neutral Citation: [2012] EWCA Civ 1629
Court: Court of Appeal, Civil Division
Judge:

Longmore, Rimer and Tomlinson LJJ

Representation Jonathan Hirst QC and Sara Cockerill QC (instructed by Reed Smith LLP) for the claimants.
  Nigel Tozzi QC and James Leabeater (instructed by Ince & Co LLP) for the bank.
Judgment Dates: 7 December 2012

Catchwords

Guarantee - Construction - Refund guarantees - Guarantee securing refund of advance payment under shipbuilding contract - Claimants jointly operating shipyard in China - Claimants entering into shipbuilding contracts with buyer for construction of two bulk carriers - Defendant bank providing finance to buyer for purchase of vessel - Bank purporting to issue guarantee (payment guarantee) in respect of second instalment of price of the vessel under shipbuilding contract - Claimants making demand for payment under payment guarantee - Claimants submitting payment guarantee amounting to on demand bond - Judge finding payment guarantee being 'guarantee' rather than 'demand bond' - Whether judge erring.

The Case

Guarantee Construction. The Court of Appeal, Civil Division, allowing the appeal of the seller under a shipbuilding contract, held that a document provided by the defendant bank had been an on demand bond rather than a traditional guarantee.

Practice Areas

If you are a LexisLibrary subscriber you can read more about this case here.