WS Tankship II BV v The Kwangju Bank Ltd & Anor [2011] EWHC 3103 (Comm) (25 November 2011)

WS Tankship II BV v The Kwangju Bank Ltd & Anor [2011] EWHC 3103 (Comm) (25 November 2011)

The guarantees in question are payable on demand and cover all advance payments under the relevant shipbuilding contracts. There was no binding variation of the contracts to permit discrete guarantees for individual instalments. The claimants are entitled to payment under the guarantees for the unpaid instalments. The defences of contract variation, estoppel, rectification, and non-disclosure fail on the facts and law. The defendants are not entitled to restitution of sums already paid.

Citation
[2011] EWHC 3103 (Comm)
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 Court Trial (high Court, Queen's Bench Division) / Judgment After Trial
Outcome
Judgment for the claimants.
Legal Topics
Refund Guarantees, Advance Payment Guarantees, Suretyship Vs Demand Guarantees, Contract Variation, Estoppel, Rectification, Restitution
Commercial Law Banking Law Contract Law Refund Guarantees Advance Payment Guarantees Suretyship Vs Demand Guarantees Contract Variation Estoppel +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 Court Trial (high Court, Queen's Bench Division) / Judgment After Trial

Legal Issues

  1. 1 Whether the refund guarantees were payable on demand or only upon proof of default (primary vs secondary liability)
  2. 2 Whether the guarantees covered all advance payments or only specific instalments
  3. 3 Whether the shipbuilding contracts were varied to permit discrete guarantees for individual instalments

Ratio Decidendi

The guarantees in question are payable on demand and cover all advance payments under the relevant shipbuilding contracts. There was no binding variation of the contracts to permit discrete guarantees for individual instalments. The claimants are entitled to payment under the guarantees for the unpaid instalments. The defences of contract variation, estoppel, rectification, and non-disclosure fail on the facts and law. The defendants are not entitled to restitution of sums already paid.

Court Disposition

Judgment for the claimants.

Orders

  • Defendants to pay the sums claimed under the guarantees for GMS-103, GMS-104, and GMS-105, plus interest.
  • Defendants' counterclaims for restitution dismissed.