Societe Generale SA v Saad Trading & Anor [2011] EWHC 2424 (Comm) (05 October 2011)

Societe Generale SA v Saad Trading & Anor [2011] EWHC 2424 (Comm) (05 October 2011)

The First Defendant is liable to indemnify the Claimant for payments made to NAB under the Facility, as the Facility terms govern the relationship and require indemnity for liabilities incurred under letters of credit. The Second Defendant is liable under the Guarantee for the First Defendant's obligations. The non-forwarding of drafts by NAB did not absolve the First Defendant of liability, as the documents presented to NAB were compliant and the Claimant acted in good faith. UCP 600 distinguishes between presentation and forwarding, but the Facility's indemnity clause prevails.

Citation
[2011] EWHC 2424 (Comm)
Parties
Claimant: Societe Generale SA; First Defendant: Saad Trading, Contracting and Financial Services Company; Second Defendant: Maan Abdulwahid Abduljmajeed Al-Sanea
Jurisdiction
England and Wales
Judgment Date
05 October 2011
Procedural Posture
Commercial Claim / Final Judgment
Outcome
Judgment for Claimant against First Defendant under Facility and against Second Defendant under Guarantee
Legal Topics
Letters of Credit, Guarantees, Indemnity, Strict Compliance, International Banking Practice
Banking and Finance Contract Law Commercial Law Letters of Credit Guarantees Indemnity Strict Compliance International Banking Practice

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Parties

Societe Generale SA

Claimant

Saad Trading, Contracting and Financial Services Company

First Defendant

Maan Abdulwahid Abduljmajeed Al-Sanea

Second Defendant

Procedural Posture

Commercial Claim / Final Judgment

Legal Issues

  1. 1 Whether First Defendant is liable to indemnify Claimant under Facility for payments made to NAB under letters of credit
  2. 2 Whether Second Defendant is liable under Guarantee for First Defendant's obligations
  3. 3 Effect of non-forwarding of drafts by confirming bank under UCP 600

Ratio Decidendi

The First Defendant is liable to indemnify the Claimant for payments made to NAB under the Facility, as the Facility terms govern the relationship and require indemnity for liabilities incurred under letters of credit. The Second Defendant is liable under the Guarantee for the First Defendant's obligations. The non-forwarding of drafts by NAB did not absolve the First Defendant of liability, as the documents presented to NAB were compliant and the Claimant acted in good faith. UCP 600 distinguishes between presentation and forwarding, but the Facility's indemnity clause prevails.

Court Disposition

Judgment for Claimant against First Defendant under Facility and against Second Defendant under Guarantee

Orders

  • Claimant entitled to agreed sums under Facility and Guarantee
  • Claimant entitled to commission and interest under Senior Courts Act 1983 section 37