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

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


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

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