Commercial Court rules on construction of a payment guarantee provided by a bank in connection with a shipbuilding contract

26/06/12

[2012] EWHC 1715 (Comm)

The issue in this case was whether a payment guarantee issued by Emporiki Bank of Greece SA in favour of the shipbuilders was to be treated as a guarantee properly so called, or a demand bond. Christopher Clarke J. held that, despite the strength of the points made by the builders, the guarantee was not to be regarded as a demand bond (i.e. payable without the need to prove liability on the part of the buyer)

The judgment is here.