WS Tankship II BV v The Kwangju Bank Ltd & Anor

WS Tankship II BV v The Kwangju Bank Ltd & Anor

The guarantees in question are demand guarantees imposing primary liability on the issuers, covering all advance payments made under the shipbuilding contracts. The claimants are entitled to payment in full under the guarantees upon compliant demand. Defences based on secondary liability, limitation to specific instalments, rectification, estoppel, non-disclosure, and the Statute of Frauds all fail. The defendants' counterclaims for restitution are dismissed.

Parties
Claimant: WS Tankship II B. V.; Claimant: WS Tankship III B. V.; Claimant: WS Tankship IV B. V.; First Defendant: The Kwangju Bank Ltd; Second Defendant: Seoul Guarantee Insurance Company
Jurisdiction
England and Wales
Judgment Date
25 November 2011
Procedural Posture
Commercial Claim (refund/advance Payment Guarantees) / Judgment After Full Trial
Outcome
Claims allowed; counterclaims dismissed.
Legal Topics
Demand Guarantees, Suretyship, Rectification, Estoppel, Non Disclosure, Statute of Frauds, Construction of Contracts
Commercial Law Banking Law Contract Law Demand Guarantees Suretyship Rectification Estoppel Non Disclosure +2 more

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Parties

WS Tankship II B. V.

Claimant

WS Tankship III B. V.

Claimant

WS Tankship IV B. V.

Claimant

The Kwangju Bank Ltd

First Defendant

Seoul Guarantee Insurance Company

Second Defendant

Procedural Posture

Commercial Claim (refund/advance Payment Guarantees) / Judgment After Full Trial

Legal Issues

  1. 1 Whether the refund guarantees are demand guarantees or secondary suretyship guarantees
  2. 2 Whether the guarantees cover all advance payments or only specific instalments
  3. 3 Whether the guarantees should be rectified or limited by estoppel

Ratio Decidendi

The guarantees in question are demand guarantees imposing primary liability on the issuers, covering all advance payments made under the shipbuilding contracts. The claimants are entitled to payment in full under the guarantees upon compliant demand. Defences based on secondary liability, limitation to specific instalments, rectification, estoppel, non-disclosure, and the Statute of Frauds all fail. The defendants' counterclaims for restitution are dismissed.

Court Disposition

Claims allowed; counterclaims dismissed.

Orders

  • Defendants to pay claimants the sums due under the guarantees: US$3,142,000 plus interest in GMS-103; US$3,142,000 plus interest in GMS-104; US$3,112,000 plus interest in GMS-105.
  • Counterclaims for restitution dismissed.