Societe Generale SA v Saad Trading & Anor

Societe Generale SA v Saad Trading & Anor

The First Defendant is liable to indemnify the Claimant under the Facility for payments made to NAB under the letters of credit, as the obligation arises from the Facility and the Claimant acted in good faith. The failure of NAB to forward the drafts did not preclude the Claimant’s liability to indemnify NAB, nor the First Defendant’s liability to indemnify the Claimant. The Second Defendant is liable under the Guarantee as primary obligor for the same sums.

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 (facility/guarantee) / Judgment After Trial
Outcome
Judgment for the Claimant against both Defendants.
Legal Topics
Letters of Credit, Guarantee, Indemnity, Strict Compliance, Good Faith, Restitution
Banking and Finance Law Contract Law Letters of Credit Guarantee Indemnity Strict Compliance Good Faith Restitution

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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 (facility/guarantee) / Judgment After Trial

Legal Issues

  1. 1 Whether the First Defendant is liable to indemnify the Claimant under the Facility for payments made under letters of credit.
  2. 2 Whether the Second Defendant is liable under the Guarantee for the same sums.
  3. 3 Whether the failure to forward bills of exchange (drafts) by the confirming bank to the Claimant precludes indemnity.

Ratio Decidendi

The First Defendant is liable to indemnify the Claimant under the Facility for payments made to NAB under the letters of credit, as the obligation arises from the Facility and the Claimant acted in good faith. The failure of NAB to forward the drafts did not preclude the Claimant’s liability to indemnify NAB, nor the First Defendant’s liability to indemnify the Claimant. The Second Defendant is liable under the Guarantee as primary obligor for the same sums.

Court Disposition

Judgment for the Claimant against both Defendants.

Orders

  • The Claimant is entitled to judgment against the First Defendant under the Facility and against the Second Defendant under the Guarantee.
  • The parties are to agree the figures for judgment, including commission and interest.