High Court upholds indemnity claim

28/10/26

On 27 October 2026, Adrian Willamson KC (sitting as a Deputy High Court Judge) upheld a £3.5 million claim under an indemnity, rejecting the Defendant’s case that it had been entered into without authority.

The Claimants (“ION”) had provided an on-demand bond in relation to a large construction project in Axe Street, Barking.  In order to provide the bond, ION required an indemnity from the contractor’s parent company, Shapoorji Pallonji Mideast LLC (“SPME”).  After paying out on the bond, ION made a demand on the indemnity.  SPME sought to resist payment inter alia on the basis that the indemnity had been signed without actual or apparent authority.

The Court found the absence of evidence from SPME in support of its “extraordinary” case to be “striking”.  Applying the Supreme Court decision in Royal Mail Group Ltd v Efobi [2021] 1 WLR 3863, the Court held that it could “properly draw an inference from the complete failure of SPME to call any evidence to explain what has happened here”.

The Court held that even if there had not been actual authority, there was apparent authority.  The Court noted the difficulty in assessing whether a party is “put on inquiry” for this purpose.  However, the Court found that ION “proceeded carefully and prudently throughout” and “did not fail to make the inquiries that a reasonable person would have made”.   

The judgment of the High Court is here.