Meritz Fire and Marine Insurance Co Ltd v Jan De Nul NV (Rev 1) [2010] EWHC 3362 (Comm) (21 December 2010)

Meritz Fire and Marine Insurance Co Ltd v Jan De Nul NV (Rev 1) [2010] EWHC 3362 (Comm) (21 December 2010)

The APGs are construed as performance bonds or demand guarantees, not classic contracts of suretyship. The guarantees are payable on demand upon certification of default, and the corporate succession from HWS to Buyoung and then Asia Heavy did not discharge Meritz from liability. The contractual mechanisms for demand remained operative, and no material variation or change in the shipbuilder's identity released Meritz from its obligations under the APGs.

Citation
[2010] EWHC 3362 (Comm)
Parties
Claimant: Meritz Fire and Marine Insurance Co Ltd; 1st Defendant: Jan de Nul NV; 2nd Defendant: Codralux SA
Jurisdiction
England and Wales
Judgment Date
21 December 2010
Procedural Posture
Commercial Claim / High Court Judgment
Outcome
Claim dismissed
Legal Topics
Advance Payment Guarantees, Performance Bonds, Suretyship, Shipbuilding Contracts, Corporate Succession, Material Variation, Demand Guarantees
Commercial Law Insurance Law Contract Law Advance Payment Guarantees Performance Bonds Suretyship Shipbuilding Contracts Corporate Succession +2 more

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Parties

Meritz Fire and Marine Insurance Co Ltd

Claimant

Jan de Nul NV

1st Defendant

Codralux SA

2nd Defendant

Procedural Posture

Commercial Claim / High Court Judgment

Legal Issues

  1. 1 Are the Advance Payment Guarantees (APGs) performance bonds or classic contracts of suretyship?
  2. 2 If APGs are suretyship, has Meritz been discharged from liability due to material variations in the shipbuilding contracts and changes in the shipbuilder's corporate identity?
  3. 3 Whether, as a result of the corporate changes, the defendants were unable to make a contractual demand triggering liability under the APGs?

Ratio Decidendi

The APGs are construed as performance bonds or demand guarantees, not classic contracts of suretyship. The guarantees are payable on demand upon certification of default, and the corporate succession from HWS to Buyoung and then Asia Heavy did not discharge Meritz from liability. The contractual mechanisms for demand remained operative, and no material variation or change in the shipbuilder's identity released Meritz from its obligations under the APGs.

Court Disposition

Claim dismissed

Orders

  • Meritz is not discharged from liability under the APGs.
  • Meritz remains liable to pay the sums guaranteed and contractually specified interest to the defendants.